CITY COUNCIL OF MONTEREY PARK
THE CITY COUNCIL ACTING ON BEHALF OF THE SUCCESSOR AGENCY OF THE FORMER
REDEVELOPMENT AGENCY, THE HOUSING AUTHORITY, THE MONTEREY PARK FINANCING
AUTHORITY AND THE MONTEREY PARK GEOLOGIC HAZARD ABATEMENT DISTRICT AGENDA
REGULAR CITY COUNCIL MEETING
MONTEREY PARK CITY HALL COUNCIL CHAMBERS
320 W. NEWMARK AVENUE, MONTEREY PARK, CA 91754
W
ednesday
May 3, 2023
6:30 p.m.
G
ENERAL INFORMATION
Documents related to an Agenda item are available to the public in the City Clerk’s Office located at 320 West Newmark Avenue, Monterey Park, CA 91754, during normal business hours and the City’s website at http://www.montereypark.ca.gov/AgendaCenter/City-Council-17.
The publ
ic may watch the meeting live on the city’s cable channel MPKTV (AT&T U -verse, channel 99 or Charter Communications, channel 182) or by visiting the city’s website at http://www.montereypark.ca.gov/133/City-Council-Meeting-Videos.
P
UBLIC PARTICIPATION
You may speak up to 5 minutes on Agenda item. You may combine up to 2 minutes of time with another person’s speaking. No person may speak more than a total of 10 minutes. The Mayor and City Council may change the amount of time allowed for speakers. Written Communication will be accepted up to 24 hours before the meeting via email to [email protected].
P
er the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please call City Hall at (626) 307-1359 for reasonable accommodation at least 24 hours before a meeting.
Council Chambers are wheelchair accessible.
CA
LL TO ORDER Mayor
FLAG SALUTE The Monterey Park Fire Explorers
ROLL CALL Henry Lo, Vinh Ngo, Jose Sanchez, Thomas Wong, Yvonne Yiu A
GENDA ADDITIONS, DELETIONS, CHANGES AND ADOPTIONS
MISSION STATEMENT
The mission of the City of Monterey Park is to provide excellent services to enhance the quality of life for our entire community.
Monterey Park City Council Agenda, May 3, 2023 - Page 2 PUBLIC COMMUNICATIONS:
Whi
le all comments are welcome, the Brown Act does not allow the City Council to take action on any item not on the agenda. The Council may briefly respond to comments after Public Communications is closed. Persons may, in addition to any other matter within the City Council's subject-matter jurisdiction, comment on Agenda Items at this time. If you provide public comment on a specific Agenda item at this time, however, you cannot later provide comments at the time the Agenda Item is considered.
ST
AFF COMMUNICATIONS:
• Library Services
• Police Department
• Recreation and Community Services
[1
.] PRESENTATION
1-A. MO
NTEREY PARK COMMUNITY HEALING FUND UPDATE
[2
.] OLD BUSINESS – None.
[3
.] CONSENT CALENDAR ITEM NOS. 3A-3K
All
items under the Consent Calendar are considered by the City Council to be routine and will be enacted by one motion. Specific items may be removed from the Consent Calendar at the request of any member of the City Council for separate consideration. 3-A. MINUTES
It is recommended that the City Council consider:
(1) Approving the minutes from the special and regular meetings of April 5, 2023, special meetings of April 8, 2023 and April 10, 2023; and
(2) Taking such additional, related, action that may be desirable. 3-B. 2021-2
022 ANNUAL COMPREHENSIVE FINANCIAL REPORT
It is recommended that the City Council consider:
(1) Receiving and filing the City’s 2021 -2022 Annual Comprehensive Financial Report (ACFR); and
(2) Taking such additional, related, action that may be desirable. 3-C. AUTHORIZING THE MAYOR TO SIGN A LETTER ON BEHALF OF THE CITY SUPPORTING ASSEMBLY BILLS 1406 (MCCARTY) AND 1420 (BERMAN)
It
is recommended that the City Council consider:
(1) Authorizing the Mayor to sign a letter on the City’s behalf supporting Assembly Bill (AB) 1406 (McCarty) and AB 1420 (Berman); and
(2) Taking such additional, related, action that may be desirable.
Monterey Park City Council Agenda, May 3, 2023 - Page 3
3-D. LAND ACKNOWLEDGMENT STATEMENT
It is recommended that the City Council consider:
(1) Approving and adopting a Land Acknowledgment statement; and (2) Taking such additional, related, action that may be desirable.
3-E. NATIONAL CORRECTIONAL OFFICERS WEEK RESOLUTION
It is recommended that the City Council consider:
(1) Adopting a Resolution declaring the week of May 7-13, 2023, to be National Correctional Officers Week in the City of Monterey Park; and
(2) Taking such additional, related, action that may be desirable.
3-F. NATIONAL POLICE WEEK RESOLUTION
It is recommended that the City Council consider:
(1) Adopting a Resolution declaring the week of May 15-21, 2023, to be National Police Week in the City of Monterey Park; and
(2) Taking such additional, related, action that may be desirable.
3-G. PUBLIC WORKS WEEK AND LOGO RESOLUTION
It is recommended that the City Council consider:
(1) Adopting a Resolution declaring the week of May 21 through 27, 2023 as Public Works Week in Monterey Park;
(2) Adopting a Resolution adopting a Public Works logo to be used by the Public Works Department for official purposes; and
(3) Taking such additional, related, action that may be desirable.
3-H. TREE MEMORIAL PROGRAM RECOMMENDATION FOR FRED SORNOSO It is recommended that the City Council consider:
(1) Authorizing the City Manager to take actions needed to honor former Mayor Pro Tem Fred Sornoso with a memorial tree; and
(2) Taking such additional, related, action that may be desirable.
3-I.
WAIVE FURTHER READING AND ADOPT AN ORDINANCE AMENDING TITLE 13, CHAPTER 12 OF THE MONTEREY PARK MUNICIPAL CODE (“MPMC”) IN ITS ENTIRETY
TO REGULATE ENCROACHMENTS WITHIN THE PUBLIC RIGHT-OF-WAY It is recommended that the City Council consider:
(1) Waiving the second reading and adopting the proposed ordinance; and (2) Taking such additional, related, action that may be desirable.
Monterey Park City Council Agenda, May 3, 2023 - Page 4
3-J. CALIFORNIA ENERGY COMMISSION CALIFORNIA AUTOMATED PERMIT PROCESSING (CALAPP) PROGRAM GRANT
It is recommended that the City Council consider:
(1) Adopting a resolution retroactively authorizing the City Manager, or designee, to apply for, receive, and appropriate grant funds for the California Energy Commission’s California Automated Permit Processing (CalAPP) Program Grant; and (2) Taking such additional, related, action that may be desirable.
3-K. HSIP CYCLE 9 GARFIELD AVENUE TRAFFIC SIGNAL IMPROVEMENTS PROJECT –
AWARD OF CONTRACT
It is recommended that the City Council consider:
(1) Authorizing the City Manager to execute a public works contract, in a form approved by the City Attorney, with PTM General Engineering Services, Inc. of Riverside in the contract amount of $428,028 for the HSIP Cycle 9 Garfield Avenue Traffic Signal Improvements, Specification No. 2022-016;
(2) Authorizing the Director of Public Works to approve change orders and contingency up to $37,572, or 9% of the contract amount; and
(3) Taking such additional, related, action that may be desirable.
CEQA (California Environmental Quality Act):
The proposed project is categorically exempt from the requirements of the California Environmental Quality Act (CEQA) pursuant to 14 California Code of Regulations §15301 as a Class 1 categorical exemption (Existing Facilities). The project results in minor alterations to existing public facilities involving no significant expansion of the existing use. The Project is not anticipated to have any significant impacts with regards to traffic, noise, air quality or water quality.
[4.] PUBLIC HEARING – None.
[5.] NEW BUSINESS
5-A. REAPPOINTMENT TO THE LIBRARY BOARD OF TRUSTEES
It is recommended that the City Council consider:
(1) Whether to reappoint one incumbent Library Board Trustee for a second term; (2) Taking such additional, related, action that may be desirable.
Monterey Park City Council Agenda, May 3, 2023 - Page 5
[6.] CITY COMMUNICATIONS (CITY COUNCIL)
6-A. A RESOLUTION DECLARING MAY 6, 2023 THE DAY OF INCLUSION OF THE 141 ST
ANNIVERSARY OF THE PASSAGE OF THE CHINESE EXCLUSION ACT AND RECOGNIZING AND HONORING THE MONTH OF MAY 2023 AS ASIAN AMERICAN AND
PACIFIC ISLANDER HERITAGE MONTH (REQUESTED BY COUNCIL MEMBER LO) It is recommended that the City Council consider:
(1) Adopting a resolution declaring May 6, 2023 the Day of Inclusion of the 141st anniversary of the passage of the Chinese Exclusion Act and recognizing and honoring the month of May 2023 as Asian American and Pacific Islander Heritage Month; and (2) Taking such additional, related, action that may be desirable.
6-B. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MONTEREY PARK DECLARING MAY 18, 2023 AS NATIONAL ASIAN AMERICAN AND PACIFIC ISLANDER DAY AGAINST
BULLYING AND HATE (REQUESTED BY MAYOR PRO TEM WONG)
It is recommended that the City Council consider:
(1) Adopting a resolution declaring May 18, 2023 as National Asian American and Pacific Islander Day Against Bullying and Hate; and
(2) Taking such additional, related, action that may be desirable.
[7.] FUTURE AGENDA ITEMS
[8.] CLOSED SESSION (IF REQUIRED; CITY ATTORNEY TO ANNOUNCE)
ADJOURN
City Council Staff Report
TO:
FROM:
The Honorable Mayor and City Council
SUBJECT: Minutes
RECOMMENDATION:
It is recommended that the City Council consider :
1. Approving the minutes from the special and regular meetings of April 5,
2023, special meetings of April 8, 2023 and April 10, 2023; and
2. Taking such additional,
related, action that may be desirable.
EXECUTIVE SUMMARY:
None.
BACKGROUND:
None.
FISCAL IMP
ACT:
None.
Respectfully submitted,
Prepared by:
Maychelle Yee
City Clerk
Helena Cho
Assistant Deputy City Clerk
Approved By:
Ron Bow
City Manager
ATTACHMENT(S):
1. Draft Minutes
Maychelle Yee, City Clerk
DATE: May 3, 2023
AGENDA ITEM NO: Consent Calendar - 3A
Staff Report
May 3, 2023
ATTACHMENT 1
Draft
Minutes
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MISSION STATEMENT
The mission of the City of Monterey Park is to provide excellent services to enhance the quality of life for our entire community
MINUTES
MONTEREY PARK CITY COUNCIL
FINANCING AUTHORITY (MPFA)
HOUSING AUTHORITY (MPHA)
GEOLOGIC HAZARD ABATEMENT DISTRICT (GHAD)
SUCCESSOR AGENCY (SA)
SPECIAL MEETING
APRIL 5, 2023
The City Council, the Financing Authority (MPFA), the Housing Authority (MPHA), the Geologic Hazard Abatement District (GHAD), and the Successor Agency (SA) of the City of Monterey Park held a Special Meeting of the Council in Room 266, Second Floor of City Hall located at 320 West Newmark Avenue in the City of Monterey Park, Tuesday , April 5, 2023 at 5:30 p.m.
CALL TO ORDER:
Mayor Sanchez called the meeting to order at 5:30 p.m.
ROLL CALL:
Mayor Sanchez called the roll:
Council Members Present: Henry Lo, Vinh Ngo, Jose Sanchez, Thomas Wong, Yvonne Yiu
Council Members Absent: None
ALSO PRESENT: City Attorney Karl Berger, City Manager Ron Bow , Assistant City Manager Inez Alvarez, and Director of Finance Martha Garcia
ORAL AND WRITTEN COMMUNICATIONS: None.
1. CLOSED SESSION
The City Council adjourned to Closed Session at 5:30 p.m.
2-A. CONFERENCE WITH REAL PROPERTY NEGOTIATORS - GOVERNMENT CODE§ 54956.8: two items
Properties:
601 Potrero Grande Drive, AIN 5265 -025-058; and 2100
Saturn Street, AIN 5265-026-055
City Negotiators: Ron Bow, City Manager
Karl H. Berger, City Attorney
Inez Alvarez, Assistant City Manager
Martha Garcia, Management Services Director
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March 8, 2023
Negotiating Party:
601 Potrero Grande Drive - BHE 601 Potrero Grande LLC/ BH Properties, LLC
2100 Saturn Street - BHE 601 Potrero Grande LLC/ BH
Properties, LLC
Under
Negotiation:
Lease terms, purchase price, and terms of payment
1-B. CONFERENCE WITH REAL PROPERTY NEGOTIATORS - GOVERNMENT CODE§ 54956.8: two items
FACTS AND CIRCUMSTANCES: Occurrences relating to January 21, 2023 Mass Casualty Incident.
RECONVENE & ADJOURNMENT
The City Council reconvened from Closed Session with all Council Members present.
The meeting was adjourned at 6:29 p.m.
Action Taken: No reportable action taken.
_______________
Maychelle Yee
City Clerk
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MISSION STATEMENT
The mission of the City of Monterey Park is to provide excellent services to enhance the quality of life for our entire community
MINUTES
MONTEREY PARK CITY COUNCIL
FINANCING AUTHORITY (MPFA)
HOUSING AUTHORITY (MPHA)
GEOLOGIC HAZARD ABATEMENT DISTRICT (GHAD)
SUCCESSOR AGENCY (SA)
REGULAR MEETING
APRIL 5, 2023
The City Council, the Financing Authority (MPFA), the Housing Authority (MPHA), the Geologic Hazard Abatement District (GHAD), and the Successor Agency (SA) of the City of Monterey Park held a Regular Meeting of the Council in the Council Chamber, located at 320 West Newmark Avenue in the City of Monterey Park, Wednesday, April 5, 2023 at 6:30 p.m.
CALL TO ORDER:
Mayor Sanchez called the meeting to order at 6:35 p.m.
FLAG SALUTE:
The Monterey Park Fire Explorers
ROLL CALL:
City Clerk Maychelle Yee called the roll:
Council Members Present: Henry Lo, Vinh Ngo, Jose Sanchez, Thomas Wong, Yvonne Yiu
Council Members Absent: None
ALSO PRESENT: City Attorney Karl Berger, City Manager Ron Bow, City Treasurer Amy Lee, Assistant City Manager Inez Alvarez, City Librarian Diana Garcia, Director of Public Works Shawn Igoe, Director of Finance Martha Garcia, Fire Chief Matthew Hallock, Director of Human Resources and Ris k Management Christine Tomikawa, Interim Director of Community Development Jessica Serrano, Police Captain Gustavo Jimenez, Finance Manager Laura Borjon, Economic Development Manager Joseph Torres, Senior Planner Beth Chow, Principal Management Analyst Xochitl Tipan, Recreation Supervisor Orlando Muro, Assistant Deputy City Clerk Helena Cho
VIRTUALLY PRESENT: Housing Element Consultant Steve Sizemore
AGENDA ADDITIONS, DELETIONS, CHANGES AND ADOPTIONS
City Attorney Berger announced that there was a supplemental staff report for Agenda Item No. 3G provided to the City Council and public.
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April 5, 2023
PUBLIC COMMUNICATIONS
- Justin Birrell, Daniel Park, and Justin Chang, Monterey Park Fire Fighters, spoke about the Fire Fighter’s Association, Local 1014’s recent BBQ fundraising event held on March 25 th at Barnes Park. The event was held to raise money for the Monterey Park Community Healing Fund and raised a total of $5,684.74. The Firefighters thanked the community and sponsors for a successful event .
Firefighter Birrell invited the community to their Fire Service Day open house event on May 20
th at Fire Station 61.
- Silvano Mendias, Southwest Mountain States Regional Council of Carpenters, Local 213, spoke about tax fraud and mentioned that on April 10th - 18th they will be joining the United Brotherhood of Carpenters in taking part in the National Tax Fraud Days of Action, a week -long series of events to raise awareness about construction industry tax fraud.
- Amy Lee gave her time to Maychelle Yee.
- Maychelle Yee, a resident, provided her viewpoint on the city’s “My Commitment to a Healthy Work Environment” form.
STAFF COMMUNICATIONS
- Recreation and Community Services : Recreation Supervisor Muro thanked everyone for a successful St. Patrick’s Day event at Langley Senior Center, Electric Park event, and Easter Egg Hunt. He reminded the community of the upcoming Cherry Blossom event on April 15-16, 2023.
- Community Development: Interim Director of Community Development Serrano provided an update on the state approved Housing Element and new online Building Division services.
- Economic Development : Economic Development Manager Torres provided information on Southern California Edison (SCE) restaurant program.
- Library: City Librarian Garcia provided updates on the various events at the library: Play Days Read and Ride program, Free Legal Assistance Clinic, Drop- in Counseling & Services, PTSD Awareness Health Seminar , extension of the 2023 Volunteer Income Tax Assistance Clinic, Dia de los Ninos Day, and National Library Week.
- Public Works: Principal Management Analyst Tipan provided information on the new Passio GO App for live Spirit Bus information and the city’s Annual Spring Cleaning Event on April 8
th. Director of Public Works Igoe provided information
on on-going projects and status update on the state’s current drought conditions.
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April 5, 2023
1. PR ESENTATION
Matters listed under presentation are informational content and for discussion only.
1-A. SAN GABRIEL VALLEY REGIONAL HOUSING TRUST OVERVIEW
Brielle Salazar, Regional Housing Trust Manager provided a PowerPoint presentation on the history of the formation of the San Gabriel Valley Regional Housing Trust, accomplishments, and how to become a member.
By consensus, the City Council requested staff to bring back this item for Council consideration in possibly joining the San Gabriel Valley Regional Housing Trust.
1-B. CITY MANAGER UPDATE ON SB 710
City Manager Bow provided an overview on the status of Senate Bill (SB) 710. By consensus, the City Council directed the City Manager to draft letters in opposition to the bill.
2. O
LD BUSINESS
2-A. SUPPORT FOR AB 28
On March 15, 2023, the City Council requested that support of AB 28 be placed on a future City Council agenda. Attached for reference is AB 28. The summary of AB 28 may be expressed in the entirety of its text: “It is the intent of the Legislature to enact legislation that would enact a tax to fund measures to protect against gun violence on firearms and ammunition purchased.” Unless otherwise directed, the City will add AB 28 to the list of gun-related legislation being endorsed by the City of Monterey Park.
D
iscussion: City Council r equested staff to provide a progress report on legislative bills that the council has either voiced support and/or opposition towards. The City Council also requested that information regarding legislative bills be available via social media for the community.
Action Taken: The City Council received and filed this report and directed the City Manager and City Attorney to express the City Council’s support of AB 28 with the California Legislature.
Motion: Moved by Mayor Pro Tem Wong and seconded by Council Member Yiu, motion carried by the following vote:
Ayes: Council Members: Lo, Yiu, Ngo, Wong, Sanchez
Noes: Council Members: None
Absent: Council Members: None
Abstain: Council Members: None
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April 5, 2023
2-B. EXTENDING A LOCAL EMERGENCY FOR THE GOODVIEWS ABATEMENT PROJECT (“GAP”); APPROVING COLOR SCHEME FOR RETAINING WALL
On December 21, 2022, the City Council adopted Resolution No. 2022-R101 that extended the GAP local emergency until March 1, 2023; on March 1, 2023, the City Council – by minute order – further extended the GAP emergency until May 1, 2023.
Since March 1
st, the City (and the State) continued to experience multiple “atmospheric river” storms that caused additional delay to completion of the GAP.
The engineer’s estimate for completion is now mid-May.
Part of the “wrap-up” for the GAP is selecting a color scheme for the retaining wall.
The 1688 West Garvey Specific Plan – approved by the City Council in 2021 – allowed for three types of wall finishes (see attached Exhibit “A” to the staff report).
The GAP utilized “Wall Finish Option 1” as part of the bid package. The question is whether the City Council prefers the stained look or the unstained look.
Discussion: City Attorney Berger provided a PowerPoint presentation on the status of the GAP project and requested the City Council to select the color scheme of the retaining wall.
Action Taken: The City Council extended the local emergency for the GAP pursuant to Section 3 of Resolution No. 2022-R101 (adopted December 21, 2022) to June 1, 2023 and selected a color scheme of unstained look for the new retaining wall constructed as part of the GAP.
Motion: Moved by Mayor Pro Tem Wong and seconded by Council Member Ngo, motion carried by the following vote:
Ayes: Council Members: Lo, Yiu, Ngo, Wong, Sanchez
Noes: Council Members: None
Absent: Council Members: None
Abstain: Council Members: None
3. CO
NSENT CALENDAR ITEMS NOS. 3A-3K
All items under the Consent Calendar are considered by the City Council to be routine and will be enacted by one motion. Specific items may be removed from the Consent Calendar at the request of any member of the City Council for separate consideration.
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April 5, 2023
Action Taken: The City Council approved and adopted Agenda Item Nos . 3A, 3B, 3C, 3F, 3H, 3J, and 3K on consent calendar, excluding item No. 3D , 3E, 3G and 3I which were pulled for discussion, separate motion, reading resolutions and ordinances by the title only and waiving further reading thereof.
Motion: Moved by Council Member Ngo and seconded by Mayor Pro Tem Wong, motion carried by the following vote:
Ayes: Council Members: Lo, Yiu, Ngo, Wong, Sanchez
Noes: Council Members: None
Absent: Council Members: None
Abstain: Council Members: None
3-A. MINUTES
Approving the minutes from the special and regular meetings of March 1 , 2023, the special meeting of March 8, 2023, and the regular meeting of March 15, 2023.
Action Taken: The City Council approved the minutes from the special and regular meetings of March 1, 2023, the special meeting of March 8, 2023, and the regular meeting of March 15, 2023 on Consent Calendar.
3-B. REPORT ON LOCAL EMERGENCIES PURSUANT TO GOVERNMENT CODE § 8630; RATIFICATION OF ACTIONS TAKEN BY THE DIRECTOR OF
EMERGENCY SERVICES; EXTENSION OF WINTER STORMS AND LOCAL
SHOOTING EMERGENCIES
On January 8, 2023 (as ratified by Resolution No. 2023- R5, adopted January 18, 2023) and, separately, on January 31, 2023 (Resolution No. 2023- R7), the City declared local emergencies. The first local emergency was in response to the 2023 Winter Storms that continue to stretch the City’s resources; the second was in response to the Mass Casualty Incident resulting in t he death of 11 people on January 21, 2023 (collectively, the “2023 Emergencies”).
The City Manager, acting in his capacity as the Emergency Services Director, undertook various actions to prioritize the use of public resources to manage the 2023 Emergencies. Among other things, public safety and public works personnel were mobilized in response to visits by the President and Vice- President of the United States; the Governor of California; and multiple, additional, dignitaries.
This report is submitted to the City Council in compliance with Government Code § 8630. It also requests that the City Council ratify several actions taken by the City Manager in accordance with his emergency powers under the 2023 Emergencies and that the 2023 Emergencies by extended to May 1, 2023.
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April 5, 2023
Action Taken: The City Council received and filed the report pursuant to Government Code § 8630 and ratified certain actions taken by the Director of Emergency Services including, without limitation, extending the effective date for issuing building permits for the Rykadan 005, LLC project (aka “Celadon”) pursuant to Development Agreement (DA-21-XX) on Consent Calendar.
3-C. RENEWAL OF THE ASSESSMENT DISTRICT FOR FISCAL YEAR 2023 -24
AND SCHEDULE A PUBLIC HEARING PURSUANT TO STREETS AND
HIGHWAYS CODE §§ 22500, ET SEQ.
In 1993 the City formed a citywide benefit assessment district to finance the operation and maintenance of public street lighting and landscaping. The district was renewed each of the past 30 years and must be renewed for 2023-24 in order for the City to continue collecting assessments. To begin the district renewal, staff recommends a public hearing be held on June 7, 2023. Scheduling the public hearing is a required process and it does not automatically renew the district. The district renewal will follow the City Council’s action at the conclusion of the June 7 th public hearing.
CEQA (CALIFORNIA ENVIRONMENTAL QU ALITY ACT):
The proposed action is exempt from review under the California Environmental Quality Act (Cal. Pub. Res. Code §§ 21000, et seq .; “CEQA”) and CEQA Guidelines (Cal. Code Regs. tit. 14, §§ 15000, et seq .) because it establishes, modifies, structu res, restructures, and approves rates and charges for meeting operating expenses; purchasing supplies, equipment, and materials; meeting financial requirements; and obtaining funds for capital projects needed to maintain service within existing service areas. The proposed action, therefore, is categorically exempt from further CEQA review under CEQA Guidelines § 15273.
Action Taken: The City Council adopted Resolution No. 2023-R22 declaring the City Council’s intent to levy and collect assessments for Fiscal Year 2023- 24 in Citywide Maintenance District No. 93 -1 pursuant to Streets and Highways Code §§ 22500, et seq. and setting a time and place for a public hearing on Consent Calendar.
Resolution No. 2023-R22
RESOLUTION DECLARING THE CITY COUNCIL’S INTENT TO LEVY AND COLLECT ASSESSMENTS FOR FISCAL YEAR 2023 -2024 IN CITYWIDE MAINTENANCE DISTRICT NO. 93 -1 PURSUANT TO STREETS AND
HIGHWAYS CODE § 22587 AND SETTING A TIME AND PLACE FOR A PUBLIC
HEARING
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April 5, 2023
3-D. SUMMARY REPORT OF THE CLASSIFICATION AND COMPENSATION STUDY
In June 2022, Ralph Andersen & Associates was retained to conduct a City-wide Classification and Compensation study to evaluate the City’s job descriptions, salary, and benefits compared to other public sector agencies of comparable size and services. This report is a summary of the compensation portion of the Classification and Compensation study. As the labor market continues to be competitive to attach and retain qualified candidates and employees, the compensation study provides useful information to assist the City.
Discussion: Director of Human Resources and Risk Management Tomikawa along with Doug Johnson, Vice President, Ralph Anderson & Associates, provided a presentation on the classification and compensation st udy. The City Council directed staff to review and make adjustments to the part-time salary and bring back for City Council’s consideration at an appropriate time.
Action Taken: The City Council received and filed this report.
Motion: Moved by Council Member Yiu and seconded by Council Member Ngo, motion carried by the following vote:
Ayes: Council Members: Lo, Yiu, Ngo, Wong, Sanchez
Noes: Council Members: None
Absent: Council Members: None
Abstain: Council Members: None
3-E. NATIONAL PUBLIC SAFETY TELECOMMUNICATORS WEEK RESOLUTION
The Monterey Park Police Department is celebrating the week of April 09-15, 2023, as National Public Safety Telecommunicators Week. This week, sponsored by the Association of Public -Safety Communications Officials (APCO) International and celebrated annually, honors the thousands of men and women who respond to emergency calls, dispatch emergency professionals and equipment, and render life-saving assistance to the citizens of the United States. We are enlisting your support in the form of a resolution to honor these men and women in our area for the work that they do every day to protect the residents of Monterey Park.
Action Taken: The City Council adopted Resolution No. 2023-R23 declaring the week of April 9 through 15, 2023 to be National Public Safety Telecommunicators Week in the City of Monterey Park.
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April 5, 2023
Motion: Moved by Mayor Pro Tem Wong and seconded by Council Member Ngo, motion carried by the following vote:
Ayes: Council Members: Lo, Yiu, Ngo, Wong, Sanchez
Noes: Council Members: None
Absent: Council Members: None
Abstain: Council Members: None
Resolution No. 2023-R23
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MONTEREY PARK DECLARING APRIL 09 -15 2023, NATIONAL PUBLIC SAFETY
TELECOMMUNICATIONS WEEK IN MONTEREY PARK
3-F. CALIFORNIA STATE LIBRARY PARKS PASS GRANT FISCAL YEAR 2022 - 2023
The Library was notified of a $32,596.00 award from the California State Library.
The grant funds will be utilized to provide trips to California State Parks and other programming encouraging residents to explore the outdoors.
Action Taken: The City Council accepted grant funds from the California State Library in the amount of $32,596.00 for State Parks programming at the Library and authorized an allocation of $32,596.00 in grant funding to the FY 22-23 budget on Consent Calendar.
3-G. 2020 STATE HOMELAND SECURITY GRANT PROGRAM – COST SAVINGS
The City of Monterey Park Fire Department (Fire Department) was notified of an approved modification for an increase of $64,360 for the 2020 State Homeland Security Grant Program (SHSP 2020 Grant). As per Resolution No. 11740 adopted by the City Council on May 6, 2015, staff is reporting to the City Council the type of money obtained and the project details.
The Fire Department completed two projects during the SHSP 2020 Grant cycle.
The First project was the purchase of $30,000 of equipment. The second project was the oversight of a Regional Training Intelligence (RTG) position for the entire Los Angeles County region. This position is a Homeland Security funded position with Monterey Park Fire Department providing contract oversight. The original contract was approved by the City Council on April 6, 2022. The initial contract amount was not to exceed $146,720 with a term ending in May 2023. Staff seeks to increase the amount of the contract, with an amount not to exceed $211,080 to incorporate a cost savings from the SHSP 2020 Grant of $64,360.
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April 5, 2023
Recommendation: It is recommended that the City Council consider: (1) Authorizing the City Manager to execute an agreement amendment with CounterRisk Inc., in a form approved by the City Attorney, to CounterRisk Inc. for amount of $64,360; and (2) Taking such additional, related, action that may be desirable.
SUPPLEMENTAL STAFF REPORT REGARDING ITEM 3 -G, 2020 STATE HOMELAND SECURITY GRANT PROGRAM – COST SAVINGS
As per Resolution No. 11740 adopted by the City Council on May 6, 2015, Section
2.B, “Acquisitions authorized by this resolution must be completely paid for using grant funds from SHSGP or UASI only. The use of general fund monies is not authorized by this resolution unless the call for projects is within sixty days before the end of a grant performance period and the City will be 100% reimbursed by SHSGP or UASI.” The performance period end date for the 2020 State Homeland Security Grant Program is May 31, 2023. Staff seeks permission to allocate $64,360 from Fiscal Year 2022-23 Budget funds for the project.
Action Taken: The City Council authorized the City Manager to execute an agreement amendment with CounterRisk Inc., in a form approved by the City Attorney, to CounterRisk Inc. for amount of $64,360 and allocated $64,360 from Fiscal Year 2022-23 Budget funds for this project.
Motion: Moved by Mayor Pro Tem Wong and seconded by Mayor Sanchez , motion carried by the following vote:
Ayes: Council Members: Lo, Yiu, Ngo, Wong, Sanchez
Noes: Council Members: None
Absent: Council Members: None
Abstain: Council Members: None
3-H. ACCEPTANCE OF SGVMWD GRANT FOR CALSENSE SYSTEMS
The San Gabriel Valley Municipal Water District (SGVMWD) is awarding the city $50,000 grant funding for Calsense Smart Irrigation Control Systems. Staff requests the City Council accept the grant funds and allocate the $50,000 in grant funds to the FY 2022-2023 budget.
Action Taken: The City Council (1) accepted grant funding in the amount of $50,000 from the San Gabriel Valley Municipal Water District (SGVMWD) for Calsense Irrigation Control Systems for City Hall and Barnes Park ; (2) authorized the City Manager to execute the Grant Agreement, in a form approved by the City Attorney, with SGVMWD for this grant p rogram; and (3) authorized the Finance Department to allocate $50,000 in grant funding to the FY2022- 2023 budget on Consent Calendar.
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3-I. LICENSE AGREEMENT WITH THE SALVATION ARMY FOR USE OF SPACE AT THE CITY’S COMMUNITY CLEAN-UP EVENTS
The City hosts community clean -up events throughout the year to provide the community an opportunity to dispose of unwanted bulky items and electronic waste through Athens Services. Items collected may include usable items such as furniture, rugs, clothing, appliances, and small electronic devices. To increase waste diversion and promote the reuse of items, staff recommends partnering with local organizations such as the Salvation Army to collect reusable items at the City’s events. Allowing the Salvation Army to participate in the clean- up events would further the City’s sustainability efforts to divert waste and encourage the community to increase their reuse and recycling practices. Athens Services would continue its current diversion efforts by collecting items and sorting recyclable material before sending the remaining waste to the landfill.
It is recommended that City Council authorize the City Manager to execute a license agreement to document the usage of space at the City’s clean- up events.
The license agreement would allow the Salvation Army to have designated space at the City’s clean -up event to collect and haul unwanted items with their own resources, helping divert waste from entering landfills.
Action Taken: The City Council authorized the City Manager, or designee, to execute a license agreement, in a form approved by the City Attorney with the Salvation Army to utilize space within the City’s Community Clean -up events to collect unwanted items from the public.
Motion: Moved by Council Member Lo and seconded by Mayor Pro Tem Wong , motion carried by the following vote:
Ayes: Council Members: Lo, Yiu, Ngo, Wong, Sanchez
Noes: Council Members: None
Absent: Council Members: None
Abstain: Council Members: None
3-J. PIPE SUPPLY PURCHASE FOR PHASE III WATER MAIN REPLACEMENT PROJECT – AWARD OF CONTRACT TO PPI AMERICA INC.
The Monterey Park Municipal Code (“MPMC”) allows purchases to occur without bidding “[w]hen the supply can be obtained from only one vendor or there are circumstances demonstrating only one vendor is best qualified to provide the supplies” (MPMC § 3.20.050(2)). Here, the Public Works Director seeks authority to purchase unique potable water piping from PPI America, Inc. for the City’s Phase III Water Main Replacement Project. Two sizes of piping are desirable: 8” and 12” pipes. PPI America, Inc.’s patented water pipes are superior to other pipeline on the market and the vendor is offering a significant discount to the City – as compared to other distributors – because, in part, of overstock supplies. While
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the City always intended to purchase these materials separately, i.e., independently of the Water Main Replacement Project which was bid in accordance with the Public Contracts Code, by -passing the bidding requirements to purchase these supplies is in the public interest.
CEQA (CALIFORNIA ENVIRONMENTAL QUALITY ACT):
The Project is Categorically Exempt as a Class 1 (Existing Facilities) project (CEQA Guidelines § 15301). Additional environmental review is not requi red because the Project is a minor alteration to an existing public facility.
Action Taken: The City Council authorized the City Manager to execute a contract, in a form approved by the City Attorney, with PPI America Inc. in an amount not to exceed $165,000 for pipe supplies for the Phase III Water Main Replacement Project on Consent Calendar.
3-K. 2023 SLURRY SEAL AT VARIOUS LOCATIONS – AWARD OF CONTRACT
Per Resolution 2022- R32, the Public Works Director solicited bids for Capital Improvement Project No. 96030. The Bid opening was held on March 16, 2023.
Staff completed review of bids and recommends that the contract be awarded to Onyx Paving Company, In c., the lowest responsible bidder, in the amount of $727,000 plus 15% contingency.
CEQA (CALIFORNIA ENVIRONMENTAL QUALITY ACT):
Since the proposed work is a minor alteration to an existing public facility, this project is Class 1 Categorically Exempt pursuant to the California Environmental Quality Act (CEQA).
Action Taken: The City Council (1) authorized the City Manager to execute a public works contract, in a form approved by the City Attorney, with Onyx Paving Company Inc. of Anaheim, CA in the contract amount of $727,000 for the 2023 Slurry Seal at Various Locations; (2) authorized the Director of Public Works to approve change orders and contingency up to $109,050, or 15% of the contract amount; and (3) appropriated $486,646 from Street Bond Fund 621 to FY 22- 23 for Project No. 96030 on Consent Calendar.
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4. PUBLIC HEARING
4-A. A PUBLIC HEARING TO CONSIDER THE FOLLOWING: 1) ZONING CODE AMENDMENT (ZCA- 22-02) TO ADOPT THE MARKET PLACE SPECIFIC PLAN (SP-22-01); 2) ZONE CHANGE (ZA-22-01) TO RE-ZONE PROPERTIES
FROM THE REGIONAL SPECIALTY CENTER (R- S) ZONE WITH THE
PLANNED DEVELOPMENT OVERLAY (P-D) ZONE TO THE MARKET PLACE SPECIFIC PLAN (MPSP) ZONE; AND 3) DEVELOPMENT AGREEMENT (DA - 22-01) TO AMEND IN ITS ENTIRETY A DEVELOPMENT AGR EEMENT
BETWEEN MONTEREY PARK RETAIL PARTNERS, LLC AND THE CITY OF
MONTEREY PARK FOR PROPERTIES COLLECTIVELY OPERATING AS THE MONTEREY PARK MARKET PLACE, LOCATED AT 2300 GREENWOOD
AVENUE AND 2000 -5500 MARKET PLACE DRIVE, ALSO IDENTIFIED BY ASSESSOR’S PARCEL NUMBERS 5275 -003-024, 025, 027, 029, 030, 031, 037, AND 038.
The Monterey Park Market Place development was originally approved through a Precise Plan (PP-12-01) that was intended to redevelop a brownfield site to help stimulate the local economy and create jobs while preserving the environment and public safety of the area. Since the creation and implementation of PP -12-01, Phase 1 is complete, but Phases 2 and 3 remains unbuilt. Phase 2 includes the wrap-around road south of the Leachate Treatment Plant ( LTP) and Thermal Destruction Facility (TDF), and Phase 3 is the built -out of the area west of the LTP/TDF. In recent years, market forces changed the way in which consumers conduct business: a decreased need for traditional brick-and-mortar stores and an increased demand for last mile facilities, warehouses, and auto dealerships emerged since the beginning of the COVID -19 pandemic. The applicant seeks to create flexibility to allow for land uses that help address the changing landscape of the commercial/service sector by providing a framework through the proposed Market Place Specific Plan (“MPSP”) to allow for such uses. No immediate construction or development is proposed at this time.
The Project includes the adoption of the MPSP to address the eventual build- out of the Market Place; it supersedes the existing Precise Plan. The Specific Plan will be identified within the Monterey Park Municipal Code (“MPMC”) and the entire Market Place Project site will be re-zoned from the Regional Specialty Center with Planned Development Overlay, to the MPSP. Further, the amended and restated Development agreement between the City and the Applicant will help ensure that the eventual build- out of the Market Place will provide a public benefit to the community.
CEQA (CALIFORNIA ENVIRONMENTAL QUALITY ACT):
The Project is consistent with the Supplemental Environmental Impact Report (“SEIR”) and Statement of Overriding Considerations certified (and adopted) by the City Council on December 19, 2012 via Resolution No. 11548 (State Clearinghouse No. 1999051058). None of the elements set forth in Public
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Resources Code § 21166 or CEQA Guidelines § 15162 exists. Accordingly, no subsequent or supplemental Environmental Impact Report, Mitigated Negative Declaration or Addendum is required to be prepared before adopting the Project.
The Notice of Consistency is attached as Exhibit “B” to the draft Ordinances.
Implementation of mitigation measures identified in the SEIR will be monitored as called for in the Mitigation Monitoring and Reporting Program adopted on December 19, 2012.
Discussion: Senior Planner Chow and Interim Director of Community Development Serrano presented a PowerPoint presentation on the project.
Action Taken: Mayor Pro Tem Wong recused himself and left the dais due to a potential conflict of interest as his employer , Southern California Edison, owns property adjacent to the project site. The City Council (1) opened the public hearing at 9:14 p.m. taking testimonial and documentary evidence and (2) after closing the public hearing at 9:30 p.m. with no registered speakers and considering the evidence submitted during that public hearing: (a) introduced and waived first reading of an Ordinance implementing a Zone Change (ZA -22-01) from the Regional Specialty Center (R-S) zone with the Planned Development Overlay (P- D) zone to the Market Place Specific Plan (“MPSP”) zone (Exhibit B , to the draft ordinance); (b) introduced and waived first reading of an Ordinance approving a Development Agreement (DA-22-01) for the subject property (Exhibit C, to the draft ordinance).
Motion: Moved by Council Member Ngo and seconded by Council Member Lo, motion carried by the following vote:
Ayes: Council Members: Lo, Yiu, Ngo, Sanchez
Noes: Council Members: None
Absent: Council Members: Wong
Abstain: Council Members: None
Ordinance 1
st Reading:
AN ORDINANCE AMENDING THE ZONING MAP (ZA-22-01) TO CHANGE THE
ZONING FROM REGIONAL SPECIALTY CENTER (R- S) ZONE WITH THE
PLANNED DEVELOPMENT OVERLAND (P- D) TO THE MARKET PLACE
SPECIFIC PLAN (MPSP) TO ALLOW CONSTRUCTION OF THE FINAL PHASE
OF THE MARKET PLACE DEVELOPMENT
Ordinance 1
st Reading:
AN ORDINANCE APPROVING AN AMENDED AND RESTATED
DEVELOPMENT AGREEMENT BETWEEN THE CITY OF MONTEREY PARK
AND MONTEREY PARK RETAIL PARTNERS, LLC TO FACILITATE THE
DEVELOPMENT OF THE MONTEREY PARK MARKET PLACE
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5. NEW BUSINESS
5-A. RECEIVE AND FILE STAFF REPORT SUMMARIZING THE PRESIDENT OF
THE UNITED STATES VISIT TO MONTEREY PARK
On January 21, 2023, 11 people were murdered, and nine were injured as the result of a shooting spree. This tragedy is unprecedented in the City’s history and will affect our community for many years in the future.
In response to the tragedy, on Wednesday, January 25, 2023, the Vice President of the United States, Kamala D. Harris, traveled to Monterey Park to visit the site, laid flowers to honor the victims of the shooting, visited with victim’s families, and met with first responders and local elected officials.
On Tuesday, March 14, 2023, the President of the United States, Joseph R. Biden, Jr.
(POTUS), traveled to Monterey Park to visit with the victim’s families, hosted a press conference regarding firearm legislation, and met with first responders and local elected officials.
In preparation for the POTUS’ visit, City staff worked diligently to create an incident action plan. It took various actions to ensure the community’s safety during this historic visit.
Staff recommends City Council consider receiving and filing this report documenting the preparation and response taken.
Discussion: Council Member Lo stated for the record that he does not have any legal conflict of interest pertaining to this item but did disclose that he currently works for the California State Assembly.
Action Taken: The City Council received and filed this staff report summarizing the President of the United States visit to Monterey Park.
Motion: Moved by Mayor Pro Tem Wong and seconded by Council Member Ngo, motion carried by the following vote:
Ayes: Council Members: Lo, Yiu, Ngo, Wong, Sanchez
Noes: Council Members: None
Absent: Council Members: None
Abstain: Council Members: None
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6. CITY COMMUNICATIONS (CITY COUNCIL)
Council Member Lo stated his attendance at the following events on March 18th:
Monterey Park Women ’s Leadership Panel at the Bruggemeyer Library , Electric Park at Barnes Park, and Boy Scout Troop 329’s Eagle Scout ceremony . The following weekend Council Member Lo announced his participation in Assembly Member Mike Fong’s community clean- up event. He also mentioned that he attended the Monterey Park Fire Fighters BBQ fundraising event, local Optimist’s Club’s Oratorical Conte st, and the Open House for the San Gabriel Valley Economic Partnership.
Council Member Yiu spoke about possible bond buyback and investments options as a future agenda item.
Council Member Ngo said he attended the following events: Electric Park at Barnes Park, Boy Scout Troop 329’s Eagle Scout ceremony, cleaned-up event at Garvey Ranch Park, Women’s Asian Pacific Islander (API) support dinner in Rosemead, Pickleball taco event, Novel-Tea at the Bruggemeyer Library, and St.
Patrick’s Day dance at Langley Senior Center.
Mayor Pro Tem Wong stated he also attended many of the events that the other Council Members attended. He mentioned that he attended a joint Monterey Park and Alhambra Chamber of Commerce’s breakfast at the Courtyard Marriott in Monterey Park, a transit study hosted by the San Gabriel Valley Council of Governments (SGVCOG) focusing on public transit in the southern part of the San Gabriel Valley, and took a tour of the city’s Public Works Department.
Mayor Sanchez said he attended the Monterey Park Women’s Leadership Panel, Electric Park, Spring Egg Hunt, and the California Academic Decathlon event with his team of students from Alhambra High School.
6-A. REQUEST FOR FUTURE AGENDA ITEM REGARDING GUN VIOLENCE RESTRAINING ORDERS (“GVRO”) AND POTENTIAL ACTIONS FOR
REDUCING WEAPONS WITHIN THE CITY’S JURISDICTION
After the mass shooting in January, the City Council took a number of actions to make a difference in reducing the incidents of gun violence within the Monterey Park community. Among other things, the City Council adopted Resolution No. 2023-R15 on March 1, 2023 (see attached) which directs the City Manager and City Attorney to draft an ordinance for the City Council’s consideration and provide a report on what more might be done to reduce gun violence.
We should do more. Attached for the City Council’s review is information regarding GVROs and how one may obtain them. We should find out if the City can do anything to help inform the public about this resource and, if so, how.
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Additionally, we should ask for a report regarding whether the City can step up efforts to legally remove weapons from the community. Since 2018, only 13 weapons were either accepted or removed (by California law) by the Police Department from individuals identified as having potential mental health issues. Is there something more that can be done? And how much would that cost?
Please join me in providing this direction to the City Manager and City Attorney.
Action Taken: The City Council received and filed this report and d irected the City Manager and City Attorney to propose potential actions on a future meeting agenda regarding what the City can do to increase public awareness regarding GVROs and/or take action to reduce the number of guns within the City’ s jurisdiction.
Motion: Moved by Mayor Sanchez and seconded by Mayor Pro Tem Wong and by consensus provided direction for staff to explore potential GVROs that can be instituted by the city and bring back a report for City Council’s consideration
7. FUTURE AGENDA ITEMS
Mayor Pro Tem Wong requested preliminary research on a city vacancy tax for commercial properties.
Mayor Sanchez requested an update on the Monterey Park Community Healing Fund.
Council Member Yiu requested staff to bring back an item for Council consideration on the possibility of bond buyback and investments options.
8. CLOSED SESSION (IF REQUIRED; CITY ATTORNEY TO ANNOUNCE) None.
ADJOURNMENT
There being no further business for consideration, the meeting was adjourned at 10 :27 p.m.
__________________________
Maychelle Yee
City Clerk
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MISSION STATEMENT
The mission of the City of Monterey Park is to provide excellent services to enhance the quality of life for our entire community.
MINUTES
MONTEREY PARK CITY COUNCIL
FINANCING AUTHORITY (MPFA)
HOUSING AUTHORITY (MPHA)
GEOLOGIC HAZARD ABATEMENT DISTRICT (GHAD)
SUCCESSOR AGENCY (SA)
SPECIAL MEETING
APRIL 8, 2023
The City Council, the Financing Authority (MPFA), the Housing Authority (MPHA), the Geologic Hazard Abatement District (GHAD), and the Successor Agency (SA) of the City of Monterey Park held a Special Meeting of the Council in the Boardroom of the Courtyard Marriott, 555 N. Atlantic Boulevard in the City of Monterey Park on Saturday, April 8, 2023 at 8:30 a.m.
CALL TO ORDER:
Mayor Sanchez called the meeting to order at 8:30 a.m.
ROLL CALL:
Deputy City Clerk Cindy Trang called the roll:
Council Members Present: Henry Lo, Vinh Ngo, Jose Sanchez , Thomas Wong, Yvonne Yiu
Council Members Absent: None
ALSO PRESENT: City Manager Ron Bow, City Attorney Karl Berger, Assistant City Manager Inez Alvarez, City Librarian Diana Garcia, Public Works Director Shawn Igoe, Finance Director Martha Garcia, Fire Chief Matthew Hallock, Police Chief Scott Weise, Director of Human Resources and Risk Management Christine Tomikawa, Recreation and Community Services Director Robert Aguirre, Interim Community Development Director Jessica Serrano, Secretary to the City Manager Diana Wong
PUBLIC COMMUNICATIONS – None.
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NEW BUSINESS
1. STRATEGIC PLANNING WORKSHOP
This is a City Council workshop to prioritize the City’s legislative and project agenda.
It is anticipated that the workshop will not result in the City Council taking any particular action. Instead, City Councilmembers and key staff members will be reviewing the City Council’s previous strategic plan; updating it; and providin g direction to the City Manager. Topics may include, without limitation, infrastructure improvements; revenue enhancement; land use challenges; sustainability efforts; redevelopment; community engagement and outreach; and municipal property needs assessment. Any direction provided by the City Council will appear on future meeting agendas. The anticipated outline of the workshop will follow this general order:
• Overview
• Benefits of Good Government
• Governing Body/Team Effectiveness
• Strategies for Creating a More Collaborative Governing Body • Refresher on the Council-Manager Form of Government
• Review Accomplishments for 2022, Explore Plans for remainder of 2023 and into 2024
• Hot Topics
• Strategic Plan
• Next Steps
RECESSED AND RECONVENED
The City Council recessed at 10 :00 a .m. and reconvened with all council members present at 10:15 a.m.
DISCUSSION: City Consultant, Patrick Ibarra of the Mejorando Group, facilitated a strategic workshop for the City Council to discuss ideas and suggestions towards the future vision of the City. The City Council ensued in discussions regarding Benefits of Good Government; Governing Body/Team Effectiveness; Strategies for Creating a More Collaborative Governing Body; Refresher on the Council-Manager form of government ; Review Accomplishments for 2022 and Explore Plans for remainder of 2023 and into 2024; Hot Topics including discussion on Community:
coordinating response on next steps, mental health services, homelessness, safety; Economic Development: Downtown Master Plan, parking structures, Atlantic Square, redevelopment; Outreach : public engagement; Infrastructure: condition of city streets; Environmental: sustainability; Housing: affordability housing; Amenities:
parking improvements, repair swimming pool; Strategic Plan and Next Steps to include periodic updates and inclusion in future council reports. City Manager Bow announced the appointment of Jess ica Serrano as the new Community Development Director.
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RECESSED AND RECONVENED
The City Council recessed at 11:50 a .m. and reconvened with all council members present at 12:20 p.m.
Action Taken: No reportable action taken.
ADJOURNMENT
There being no further business for consideration, the meeting was adjourned at 2:46 p.m.
__________________
Maychelle Yee
City Clerk
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MISSION STATEMENT
The mission of the City of Monterey Park is to provide excellent services to enhance the quality of life for our entire community
MINUTES
MONTEREY PARK CITY COUNCIL
FINANCING AUTHORITY (MPFA)
HOUSING AUTHORITY (MPHA)
GEOLOGIC HAZARD ABATEMENT DISTRICT (GHAD)
SUCCESSOR AGENCY (SA)
SPECIAL MEETING
APRIL 10, 2023
The City Council, the Financing Authority (MPFA), the Housing Authority (MPHA), the Geologic Hazard Abatement District (GHAD), and the Successor Agency (SA) of the City of Monterey Park held a Special Meeting of the Council in Room 266, Second Floor of City Hall located at 320 West Newmark Avenue in the City of Monterey Park, Monday , April 10, 2023 at 5:30 p.m.
CALL TO ORDER:
Mayor Sanchez called the meeting to order at 5:32 p.m.
ROLL CALL:
Deputy City Clerk Cindy Trang called the roll:
Council Members Present: Henry Lo, Vinh Ngo, Jose Sanchez , Thomas Wong, Yvonne Yiu
Council Members Absent: None
ALSO PRESENT: City Manager Ron Bow, Assistant City Manager Inez Alvarez, Director of Finance Martha Garcia, Director of Human Resources and Risk Management Christine Tomikawa
VIRTUALLY PRESENT: Assistant City Attorney Tim Campen, Steve Berliner of Liebert Cassidy & Whitmore (City’s special counsel for labor matters)
PUBLIC COMMUNICATIONS: None.
1. OPEN SESSION
1-A. APPOINTMENT OF REAL PROPERTY NEGOTIATORS
Action Taken: The City Council appointed the City Manager, Assistant City Manager, Director of Finance, and City Attorney as the real property negotiators for Closed Session Item No. 2-B.
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Motion: Moved by Mayo Pro Tem Wong and seconded by Council Member Yiu otion carried by the following vote:
Ayes: Council Members: Lo, Yiu, Ngo, Wong, Sanchez
Noes: Council Members: None
Absent: Council Members: None
Abstain: Council Members: None
1-B. CONSIDERATION AND POSSIBLE ACTION TO AUTHORIZE THE CITY
MANAGER OR DESIGNEE TO ENTER INTO NATIONAL O PIOID
SETTLEMENTS WITH TEVA, ALLERGAN, CVS, WALGREENS, AND
WALMART
On July 21, 2021, a $26 billion offer to settle was made by opioid manufacturer Janssen Pharmaceuticals (parent company of Johnson & Johnson) and the “big three" distributors (McKesson, AmerisourceBergen, and Cardinal Health) (“the Distributors") to resolve their liabilities in over 3,000 opioid crisis -related lawsuits nationwide. The City is participating in these settlement agreements and receives payments from the State each year that are derived from Janssen and the Distributors.
In late 2022, agreements were announced with three pharmacy chains (CVS, Walgreens, and Walmart) and two additional manufacturers (Allergan and Teva).
In January 2023, each of those pharmacy chains and manufacturers confirmed that a sufficient number of states had agreed to the settlements to move forward.
As with the 2021 National Settlements, cities that want to participate in the 2022 National Settlements now will have the opportunity to “opt in.” The greater the level of subdivision participation, the more funds will ultimately be paid out. The City must opt-in by April 18, 2023, or it will be precluded from participation.
Under both the 2021 and 2022 National Settlements, at least 85% of the funds going directly to participating cities must be used for abatement of the opioid epidemic, with the overwhelming bulk of the proceeds restricted to funding future abatement efforts by state and local governments.
Action Taken: The City Council adopted Resolution No. 2023- R24 authorizing the City Manager, or designee, to enter into National Opioid Settlements with Teva, Allergan, CVS, Walgreens, and Walmart.
Motion: Moved by Council Member Ngo and seconded by Council Member Yiu motion carried by the following vote:
Ayes: Council Members: Lo, Yiu, Ngo, Wong, Sanchez
Noes: Council Members: None
Absent: Council Members: None
Abstain: Council Members: None
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Resolution No. 2023-R24
A RESOLUTION AUTHORIZING THE CITY MANAGER, OR DESIGNEE, TO
ENTER INTO NATIONAL OPIOID SETTLEMENTS WITH TEVA, ALLERGAN,
CVS, WALGREENS, AND WALMART
2. CLOSED SESSION
The City Council adjourned to Closed Session at 5:40 p.m.
2-A. CONFERENCE WITH LABOR NEGOTIATORS, PURSUANT TO CALIFORNIA GOVERNMENT CODE § 54957.6
City Negotiators:
Steve Berliner and Christine Tomikawa
Employee
Organizations:
Confidential Employees' Association, Firefighters'
Association, Mid-Management Association, Police Captains' Association, Police Officers' Association, Police Officers' Mid- Management Association, Professional Chief Officers'
Association, and Service Employees International Union, Local 721
2-B. CONFERENCE WITH REAL PROPERTY NEGOTIATORS - GOVERNMENT CODE § 54956.8: 1 item
Property: 3500 W. Ramona Blvd. and 3700 W. Ramona Blvd.; AIN 5237-001-902
City Negotiators: Ron Bow, City Manager
Karl H. Berger, City Attorney
Inez Alvarez, Assistant City Manager
Martha Garcia, Director of Finance
Negotiating
Parties:
John Tallichet, President (Specialty Restaurants Corporation) Under
Negotiation:
Lease
2-C. CONFERENCE WITH LABOR NEGOTIATORS, PURSUANT TO CALIFORNIA GOVERNMENT CODE § 54957.6
City Negotiators:
Ron Bow, City Manager and Karl H. Berger, City Attorney Employee
Organization:
Executive Management Team - Assistant City Manager, City Librarian, Director of Community Development, Director of Human Resources & Risk Management, Director of Finance, Director of Public Works, Director of Recreation & Community Services, Fire Chief, and Police Chief
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2-D. CONFERENCE LEGAL COUNSEL, EXISTING LITIGATION - GOVERNMENT CODE SECTION 54956.9(d) - Number of Cases: 1
Mary Pat Dodson v. City of Monterey Park (filed November 12, 2021) LASC Case No. 21STCV41669
RECONVENE & ADJOURNMENT
The City Council reconvened from Closed Session with all Council Members present.
The meeting was adjourned at 8:12 p.m.
Action Taken: No reportable action taken.
__________________
Maychelle Yee
City Clerk
City Council Staff Report
DATE: May 3, 2023
AGENDA ITEM NO:
TO: The Honorable Mayor and City Council
FROM: Martha Garcia, Director of Finance
SUBJECT: 2021-2022 Annual Comprehensive Financial Report RECOMMENDATION:
It is recommended that the City Council consider:
1. Receiving and filing the City’s 2021-2022 Annual Comprehensive Financial Report (ACFR); and
2. Tak ing such additional, related, action that may be desirable.
EXECUTIVE SUMMARY:
The City’s auditor, CliftonLarsonAllen LLP (CLA), an independent auditor and one of the nation’s leading CPA firms, completed the audit of the City’s annual financial statements for the fiscal year ending June 30, 2022. The audited financial statements are incorporated into an ACFR.
This is the 7th year, CLA audited the City’s financial records. The auditor issued an unmodified (“clean”) opinion on the City’s financial statements. An unmodified opinion indicates that the financial data of the City is fairly presented in accordance with accounting principles generally accepted in the United States of America (or “GAAP”) and the standards applicable to the financial audits contained in Government Audit Standards, issued by the Comptroller General of the United States. These standards require that the auditors plan and perform the audit to obtain reasonable assurance as to whether the financial statements are free of material misstatement and accurately reflects the City’s financial position. Additionally, the auditors’ report does not indicate any negative findings, internal control deficiencies or instances of noncompliance with applicable laws and regulations.
BACKGROUND:
ACFR includes the financial information for all funds of the City. The Introductory Section of the report includes a table of contents, the organization chart, a transmittal letter, and financial awards. The Financial Section contains the independent auditor’s report, the management discussion and analysis (MD&A), the financial statements, notes to the financial statements, and supplementary information. The Statistical Section provides trend financial and demographic data, which is useful for assessing the City’s financial condition. Users of the ACFR should read the financial statements in conjunction with the transmittal letter, MD&A, notes, and supplementary information to gain a full understanding of the City’s financial activities.
The City’s ACFR was prepared according to the Governmental Accounting Standard Board (GSAB) Statement, and the government-wide financial statements provide information about the City’s overall financial status with the addition of long-term perspective. The focus is on the City, as a whole organization, providing a comprehensive presentation of the City’s financial Consent Calendar - 3B
Staff Report
May 3, 2023
information from a commercial (private) business point of view. Full accrual accounting and information for capital assets (including infrastructure) and long-term obligations are required as part of the financial statements. The City’s ACFR is submitted to the Government Financial Officer’s Association of the United States and Canada (GFOA) for consideration of Award of the Certificate of Achievement for Excellence in Financial Reporting. To receive the award, a government must publish an efficiently organized report that satisfies both GAAP and applicable la
ws and regulations. The City has received this award for 33 consecutive years and staff has agai
n submitted the 2021-2022 ACFR for award consideration.
On June 30, 2022, the City’s net position totaled $44.3 mi llion in the Statement of Net Position, reflecting total assets and deferred outflow of resources for $311.9 million, and liabilities and deferred inflow of resources for $267.6 million. Net position serves as an indicator of a government’s financial position over time. The City’s financial results di splayed a positive financial position.
On June 30, 2022, The City’s governmental funds reported combined fund balances of $94.3 million, which is an increase of $38.4 million from $55.9 million on June 30, 2021. The increase is related to the receipt of the $17 million in American Rescue Plan Act funds and the issuance of $20 million in Sales Tax Revenue (Street) Bonds. The remaining increase of $1.4 million is related to ongoing operational revenues and expenditures.
Among all governmental funds, the General Fund is a major governmental fund and the most important fund of the City. General Fund’s balance has decreased by $6.2 million from $35.1 million on June 30, 2021 to $28.9 million as of June 30, 2022 .
General Fund revenues have increased $3.7 million from $45.4 million on June 30, 2021, to $49.1 million on June 30, 2022. The increase was primarily due to a strong performance of property tax and sales tax. General Fund expenses and other financing sources/(uses) in
creased $6.6 million from $45.8 million on June 30, 2021, to $52.4 million on June 30, 2022.
The increase is attributed to the increased cost for services and supplies and the Goodviews Abatement Project.
The following table details the General Fund balances breakdown:
GF Fund Balances as of June 30, 2022
Non-spendable:
Advances to Other Funds $ 82,310
Total Non-spendable: $ 82,310
Committed:
Catastrophic Event $ 4,840,000
Working Capital 3,000,000
Economic Development (2002 Bonds Proceeds) 1,886,927
Total Committed $ 9,726,927
Assigned:
Carryover POs and Capital Improvements $ 19,156,028
Total Assigned $ 19,156,028
Total Unassigned
Total GF Fund Balances $ 28,965,265
Staff Report
May 3, 2023
The $28.9 million fund balance o f the General Fund as of June 30, 2022, is comprised of $82,310 non-spendable, $9.7 million committed, and $19.1 million assigned.
FISCAL IMPACT:
There is no fiscal impact associated with this action.
Respectfully submitted by: Prepared by:
Martha Garcia
Director of Finance
Laura Borjon
Finance Manager
Approved by: Reviewed by:
Ron Bow
City Manager
Karl H. Berger
City Attorney
ATTACHMENT:
1. 2021- 2022 Annual Comprehensive Financial Report
Staff Report
May 3, 2023
ATTACHMENT 1
2021-2022 Annual Comprehensive
Financial Report
City of Monterey Park
Annual Comprehensive Financial Report
Year Ended June 30, 2022
California
This page is intentionally left blank.
City o
f Monterey Park, California
ANNUAL COMPREHENSIVE
FINANCIAL REPORT
Year ended June 30, 2022
Prepar
ed by the Management Services Department
Martha Garcia
Director of Management Services
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CITY OF MONTEREY PARK
ANNUAL COMPREHENSIVE FINANCIAL REPORT
YEAR ENDED JUNE 30, 2022
TABLE OF CONTENTS
i
INTRODUC
TORY SECTION (UNAUDITED)
TABLE OF CONTENTS I
MONTEREY PARK CITY OFFICIALS V
ORGANIZATION CHART VI
LETTER OF TRANSMITTAL VII
GFOA CERTIFICATE OF ACHIEVEMENT XIII
GFOA DISTINGUISHED BUDGET PRESENTATION AWARD XIV
CSMFO CERTIFICATE OF AWARD FOR EXCELLENCE IN OPERATIONAL
BUDGETING XV
FINANCIAL SECTION
INDEPENDENT AUDITORS’ REPORT 1
MANAGEMENT DISCUSSION AND ANALYSIS 5
BASIC FINANCIAL STATEMENTS
GOVERNMENT-WIDE FINANCIAL STATEMENTS
STATEMENT OF NET POSITION 20
STATEMENT OF ACTIVITIES 22
FUND FINANCIAL STATEMENTS
BALANCE SHEET – GOVERNMENTAL FUNDS 26
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION OF GOVERNMENTAL ACTIVITIES 28
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – GOVERNMENTAL FUNDS 29
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES 31
STATEMENT OF NET POSITION - PROPRIETARY FUNDS 34
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION - PROPRIETARY FUNDS 36
STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS 38
CITY OF MONTEREY PARK
ANNUAL COMPREHENSIVE FINANCIAL REPORT
YEAR ENDED JUNE 30, 2022
TABLE OF CONTENTS
ii
STATEMENT OF FIDUCIARY NET POSITION 42
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION 43
NOTES TO BASIC FINANCIAL STATEMENTS 45
REQUIRED SUPPLEMENTARY INFORMATION (UNAUDITED)
CALPERS AND MMRP PENSION PLANS 102
SCHEDULES OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS 102
SCHEDULE OF CONTRIBUTIONS 105
OTHER POST EMPLOYMENT BENEFIT (OPEB) PLAN
SCHEDULE OF CHANGES IN NET OPEB LIABILITY AND RELATED RATIOS 108 SCHEDULE OF CONTRIBUTIONS 109
BUDGETARY COMPARISON SCHEDULES
GENERAL FUND 110
SPECIAL REVENUE GRANTS FUND 111
SPECIAL REVENUE RETIREMENT/PENSION LIABILITY FUND 112
SPECIAL REVENUE HOUSING FUND 113
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION (UNAUDITED) 114
SUPPLEMENTARY INFORMATION
NONMAJOR FUNDS
DESCRIPTION OF NONMAJOR GOVERNMENTAL FUNDS 116
COMBINING BALANCE SHEET – NONMAJOR GOVERNMENTAL FUNDS 120
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – NONMAJOR GOVERNMENTAL FUNDS 124
NONMAJOR SPECIAL REVENUE FUNDS - BUDGETARY COMPARISON
SCHEDULES
PROPOSITION A 128
GAS TAX 129
BIKE ROUTE 130
PROPOSITION C 131
AIR QUALITY IMPROVEMENT 132
ASSET FORFEITURE 133
CITY OF MONTEREY PARK
ANNUAL COMPREHENSIVE FINANCIAL REPORT
YEAR ENDED JUNE 30, 2022
TABLE OF CONTENTS
iii
PARKS/LIBRARY/FACILITIES DIF 134
BUSINESS IMPROVEMENT AREA #1 135
MAINTENANCE DISTRICT 93-1 136
LAW ENFORCEMENT/FIRE/MEDIC DIF 137
PUBLIC SAFETY AUGMENTATION 138
MEASURE R 139
CIRCULATION DIF 140
CERCLA LIABILITY 141
SB1-RMRA 142
MEASURE M 143
SB2 – PLANNING GRANT 144
WATER UTILITY ENTERPRISE FUND
DESCRIPTION OF WATER UTILITY ENTERPRISE FUND 145
COMBINING SCHEDULE OF NET POSITION 147
COMBINING SCHEDULE OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION 148
COMBINING SCHEDULE OF CASH FLOWS 149
INTERNAL SERVICE FUNDS
DESCRIPTION OF INTERNAL SERVICE FUNDS 151
COMBINING SCHEDULE OF NET POSITION - INTERNAL SERVICE FUNDS 152
COMBINING SCHEDULE OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION - INTERNAL SERVICE FUNDS 154
COMBINING SCHEDULE OF CASH FLOWS - INTERNAL SERVICE FUNDS 156
STATISTICAL SECTION (UNAUDITED)
NET POSITION BY COMPONENTS 160
CHANGES IN NET POSITION 162
FUND BALANCES OF GOVERNMENTAL FUNDS 166
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS 168
ASSESSED VALUE OF TAXABLE PROPERTY 170
DIRECT AND OVERLAPPING PROPERTY TAX RATES 172
CITY OF MONTEREY PARK
ANNUAL COMPREHENSIVE FINANCIAL REPORT
YEAR ENDED JUNE 30, 2022
TABLE OF CONTENTS
iv
PRINCIPAL PROPERTY TAXPAYERS 174
PROPERTY TAX LEVIES AND COLLECTIONS 176
RATIOS OF OUTSTANDING DEBT BY TYPE 178
RATIOS OF GENERAL BONDED DEBT OUTSTANDING 180
DIRECT AND OVERLAPPING DEBT 182
LEGAL DEBT MARGIN INFORMATION 184
DEMOGRAPHIC AND ECONOMIC STATISTICS 186
PRINCIPAL EMPLOYERS 188
CITY EMPLOYEES BY FUNCTION 190
OPERATING INDICATORS BY FUNCTION 192
CAPITAL ASSET STATISTICS BY FUNCTION 194
WATER DISTRICT SCHEDULES FOR REVENUE CAPACITY (UNAUDITED) WATER SOLD BY TYPE OF CUSTOMER 196
WATER RATES 198
TOP TEN WATER CUSTOMERS 199
MONTER
EY PARK CITY OFFICIALS
CITY COUNCIL
Henry Lo, Mayor
Vacant, Mayor Pro Tem
Hans Liang Peter Chan Yvonne Yiu
Council Member Council Member Council Member
ELECTED OFFICIALS
Vincent D. Chang, City Clerk
Joseph Leon, City Treasurer
EXECUTIVE TEAM
Ron Bow….……………………………………………………………………………………………..City Manager Inez Alvarez……………………………………………………………………………..Assistant City Manager Karl H. Berger………………………………………………………………………………………….City Attorney Kelly Gordon………………………………………………………………………………………………Police Chief Matt Hallock…………………………………………………………………………………………………Fire Chief Martha Garcia………………………………………………………….Director of Management Services Christine Tomikawa………………………….Director of Human Resources/Risk Management Anthony Antich…………………………..…………….................Interim Director of Public Works Ste
ve Sizemore………………………………………Interim Director of Community Development Robert Aguirre…………………………………………Director of Recreation/Community Services Diana Garcia……………………………………………………………………………………………City Librarian v
City of
Monterey Park
Organization
Chart
Monterey Park
Citizens
City Clerk
Mayor &
City Council
City Manager
*Successor Agency
*Economic Development
*Media Production and Communications
*Business Improvement Area
Police Department
*Police Administration
*Traffic Bureau
*Field Services
*Investigations
*Animal Services
*Communications
*Jail
*Records
*Computer Services
*Community Engagement
Fire Department
*Fire Administration
*Fire Prevention
*Emergency Operations
*Emergency Medical Services
*Comm. Risk Reduction
*Code Compliance
Human Resources & Risk
Management
*Human Resources
*Risk Management
Management
Services
*Finance
*Information Technology
*Community Housing Assistance
*Revenue Collection
*Central Support Services
M.P. Bruggemeyer Library
*Library Administration
*Reference & Adult Services
*Technical Services
*Literacy
*Children Services
Public Works
*Community Transportation
*Street Maintenance & Street Cleaning
*Storm Drain Maintenance
*Sanitary Sewer Maintenance
*Traffic Control & Street Lighting
*Refuse Collection
*Building Maintenance
*Motor Pool Shop
*Engineering
**Parks & Parkway Maintenance
*Water & Wells
Recreation & Community
Services
*Recreation Facilities
*Aquatics
*Senior Programs
*Youth Programs
*Recreation Programs
*Special Events
*Community Transportation
Community
Developement
*Planning
*Building Safety
Boards &
Commissions
City Attorney
City
Treasurer
CITY OF MONTEREY PARK
320 West Newmark Avenue • Monterey Park • California 91754-2896 www.montereypark.ca.gov
City Council
Henry Lo
Vinh Ngo
Jose Sanchez
Thomas Wong
Yvonne Yiu
City Clerk
Maychelle Yee
City Treasurer
Amy Lee
April 18, 2023
To the Honorable Mayor, Members of the City Council and the Citizens of the City of Monterey Park, California State law requires that all general-purpose local governments publish within six months of the close of each fiscal year a complete set of financial statements presented in conformity with generally accepted accounting principles (GAAP), as promulgated by the Government Accounting Standards Board (GASB) and audited in accordance with generally accepted auditing standards by a firm of licensed certified public accountants. The City obtained approval from the Government Finance Officers Association (GFOA) to publish at eight months of close of fiscal year due to staff turnover and shortages. Therefore, we hereby submit, for your information and review, the Annual Comprehensive Financial Report for the City of Monterey Park, California, for the fiscal year ended June 30, 2022.
This report consists of management’s representations concerning the finances of the City of Monterey Park. Consequently, management assumes full responsibility for the completeness and reliability of all the information presented in this report. To provide a reasonable basis for making these representations, management has established an internal control system that is designed to protect City assets and to ensure that the accounting records provide a reliable basis for the preparation of the financial statements. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements will be free of any material misstatements. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects.
The City’s financial statements have been audited by CliftonLarsonAllen LLP, a public accounting firm fully licensed and qualified to perform audits of the State and local governments within the State of California. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City of Monterey Park for the fiscal year ending June 30, 2022, fairly state the City's financial position. The independent audit involves examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditors concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion that the City of Monterey Park’s 2021-22 financial statements are fairly presented in conformity with generally accepted accounting principles (GAAP). The independent auditors’ report is presented as the first component of the financial section of this report.
Pride in the Past
• Faith in the Future
Single Audit
Being a recipient of federal funds, the City is required to undergo an audit in accordance with the Single Audit Act of 1996 and the U.S. Office of Management and Budget Circular A-133. Information relating to the single audit, which includes the federal assistance operations as well as the non - federal assistance operations, such as the City's financial statements, internal controls, and compliance with legal requirements involving the administration of Federal awards, will be issued in a separate Single Audit Report.
Management Discussion & Analysis
A narrative introduction, overview, and analysis accompany the basic financial statements in the form of Management's Discussion and Analysis (MD&A). This letter of transmittal is designed to complement MD&A and should be read in conjunction with it. The City's MD&A immediately follows the independent auditor's report in the financial section of the CAFR.
Profile of the City of Monterey Park
The City of Monterey Park was incorporated in 1916 as a general law city. The name of "Monterey Park" was taken from old government maps that described the oak -covered inclines that made up the area as Monterey Hills. The City operates under the council -manager form o f municipal government. The City Council, which consists of five members, is elected by five districts, one representing each of the five districts, and each serves a term of four years. The City Clerk and the City Treasurer are also elected by the citizens. The City Ordinance 2096 imposes term limits, no more than two consecutive terms, on all elected officials. The City Council appoints the City Manager, who has the responsibilities of overseeing City services and operations. In addition to governing the City, the City Council serves as the governing board of the Public Financing Authority and the Housing Authority. The financial information of these component units has been included with the City. Please see Note 1 to Financial Statements for discussion of the component units.
Monterey Park is a full-service City, offering its residents a wide range of municipal services, including public safety, highways and streets, sanitation, water and sewer services, development and public infrastructure improvements, culture and leisure programming, and general government functions.
The City strives to provide high -quality public services that emphasize organizational efficiency, infrastructure investment, and economic development. In 2017, the City was listed as one of the top three best places to live in America by the Money Magazine.
Local Economic Condition
Monterey Park is located six miles east of Los Angeles at the western gateway to the San Gabriel Valley. It encompasses an area of 7.73 square miles with a population of approximately 61,000.
Monterey Park is primarily a residential community, with 78% of its land zoned for single and multiple family housing. In 2022, the median sales price of detached single-family homes in Monterey Park is $908,000. This median sales price is 8.4% above the 2021 median sales price of $838,000. Because of its desirable location, house values in Monterey Park are expected to remain strong.
Over the last few months, slight inflation improvements materialized in various industries, however real change has yet to take hold. Many remain nervous about the economy sliding into a recession.
Nevertheless, customer spending remains strong. Experts vary on whether a recession will occur and to what extent. Unemployment rates remain a key indicator of whether this adverse economic situation will occur. From a sales tax perspective, the forecast does reflect a slowdown in taxable merchandise spending as the higher cost of utilities, food and other necessities limit dollars available for discretionary and non-essential items.
Through the Federal American Rescue Plan (ARPA), the City was allocated $15 million for COVID - 19 pandemic recovery efforts. The first lump sum was received in June 2021 and the second (final) lump sum was received in June 2022. The City uses ARPA funds towards governmental services including rehiring part-time and full-time staff to its pre- pandemic levels, investing in public safety and cyber security.
Financial Overview and Policies
In FY 2021 -22, the City implemented Governmental Accounting Standards Board (GASB) 87, the objective of this Statement is to better meet the information needs of financial statement users by improving accounting and financial reporting for leases by govern ments. This Statement increases the usefulness of governments’ financial statements by requiring recognition of certain lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract. It establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset. Under this Statement, a lessee i s required to recognize a lease liability and an intangible right -to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources, thereby enhancing the relevance and consistency of information about governments’ leasing activities.
The City continues the reporting requirement per GASB Statement No. 68 and 71, for pension liabilities. The City also continues the reporting for GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, for other postemployment benefits liabilities on the face of the Statement of Net Position . Excluding all postemployment benefits (pensions and OPEB) liabilities, the City's end of year financial condition for 2021-22 displayed a positive operating position due to the City's conservative financial planning and management.
As the City’s development projects continue to expand and move forward that will generate a large number of new jobs and tax revenues for the City.
The annual budget serves as the foundation for the City’s financial planning and control. The City starts its budget process in January. The budget development is based on the City's three -year citywide goals:
❖ Create a cleaner and more attractive City
❖ Enhance community and neighborhood development
❖ Ensure quality customer service
❖ Focus on Redevelopment
❖ Improve and develop the City’s infrastructure
❖ Improve services through the effective use of technology
❖ Practice sound fiscal management
❖ Live within our means while investing in the future
❖ Invest in the City’s employees through development and recognition These goals serve as the guidelines to identify community priorities and effectively align resources to achieve our mission. The City Manager presents t he proposed budget to the City Council for review prior to the beginning of each fiscal year and the City Council holds public hearings to review and approve the proposed budget. The final adopted budget, reflecting the City Council's directions, is published no later than June 30.
Legal budgetary control for operating budgets is exercised at the department and fund level. The City is required to adopt a balanced budget for its General Fund at the beginning of the fiscal year.
Formal budgetary integration and encumbrance accounting are employed as management control devices during the year for all funds.
The 2021-22 Adopted Budget includes a conservative fiscal spending plan and reflects $28 million for infrastructure and capital improvements, specifically water, sewer, street projects and public safety equipment. The City continues improving efficiencies by aligning closely related programs to achieve long-term financial stability.
Major Accomplishments
The City of Monterey Park's major accomplishments during the fiscal year 202 1-22, which displayed significant financial impacts, included:
➢ Successfully launched Monterey Park Rewards, an innovative smartphone-based shop local app created to address the struggles that local businesses face during the pandemic by rewarding residents and visitors for shopping and dining locally; ➢ Successfully implemented the launch of the Tyler Munis Human Capital Management system allowing integration of all core functions including payroll, human resources, revenues, procurement, and financials;
➢ Organized and conducted COVID-19 Economic Recovery Task Force meetings comprised of various community stakeholders and economic development partners to provide the City with recommendations for economic recovery during and post-pandemic; ➢ Expanded the Library’s digital collection by adding access to online learning platforms for test preparation, career change, small business startup and digital skill building to provide workforce development assistance; and offered free digital access to more than 7,000 newspapers and magazines from over 120 countries in 60 different languages; ➢ Continued prudent, conservative management of the City's investment portfolio to maximize investment earning;
➢ Continued implementing the required Governmental Accounting Standards Board (GASB)
Statements, including the pension and other postemployment benefits (OPEB) liabilities on the face of the financial statements;
➢ Continued implementing solutions to reduce unfunded pension and other post-employment benefit (OPEB) liabilities, including (1) annual OPEB liability pre -funding practice; (2) Issued 2021 Bonds for pension obligations to reduce/control costs to minimize interruptions to essential City services and preserve City’s reserves – a 20-year savings of $50 million; ➢ The Community Risk Reduction division completed a technology upgrade of the EOC which included new displays, new chrome book computers for EOC disaster operations and improvement of the internet network access points; and
➢ Installation and implementation of a trunked, encrypted radio system and transition to the ICI Regional Public Safety communications system as well as Hosted Radio Management System.
The system’s 11 trunked cells and 37 repeater sites blanket virtually the entire 4,500 square miles of Los Angeles County with digital radio coverage that can be accessed by all member agencies and their resources.
Gann Spending Limitation
Article XIIIB of the Californi a Constitution, which was adopted in 1979 and amended in 1990 by Proposition 111, establishes a limit on government spending. The limit is calculated based on a government's 1978 -79 appropriations adjusted each year by the change in California per capita income or the change in nonresidential assessed valuation combined with the change in city or county population. The City's 2021-22 appropriations limit was $99.2 million and the City's actual appropriation subject to the limit was 52% below the legal limit . Based on the past trend and projected future growth, the City believes its appropriations will continue remaining within the legal limit.
Debt Administration
The primary objective of the City’s debt administration is to maintain its accessibility to capital market at the lowest possible cost; i.e. interest cost, without endangering its ability to finance essential services. The City uses debt financing only for capital improvements or projects that cannot be financed from current revenues. The City has been successful in obtaining financing for various infrastructure improvements, such as pension obligations, police 911 computer system, water treatment plants, and citywide smart meters/energy retrofit project.
Cash Management
While the City monitors its cash balance daily and invests temporarily idle funds in accordance with the Government Code and the City’s Investment Policy, there is potential to further enh ance our returns and cash management. The City's investment and cash management is through pooling of various City funds to maximize safe and efficient investment operations. Investment earnings are distributed based on average cash balance. The Finance st aff carries out the daily investment operations. At June 30, 2022, the City's investment balances, including amounts held by fiscal agent, were $112.7 million.
The City periodically submits its Investment Policy to the Municipal Treasurers Association of United States and Canada for certification to ensure the Policy meets the criteria established by the Association’s Investment Policy Certification Program. The City's Investment Policy continued being recertified for the Certificate of Excellence Award.
Risk Management
Monterey Park is self-insured for general liability and workers' compensation. The City has acquired excess coverage for both under a Joint Power Authority Agreement (JPA) with Public Risk Innovation Solutions, and Management (PRISM). PRISM is a member-directed risk sharing pool of public agencies committed to providing risk coverage programs and risk management services, which drive member stability, efficiency, and best practices. To finance risk management, the City maintains internal service funds for general liability and workers' compensation insurances. The claims payable includes incurred-but-not-reported claims. However, the claim values consider the indemnity and expense exposures and are based on known facts at the time of evaluation. The City does not warranty the ultimate values of incurred-but-not-reported claims, which could be significantly different from the final settlement. The City actively administers various risk management programs including employee accident prevention training, claims review, and monthly safety meetings to reduce the City’s exposure to loss.
Awards and Acknowledgements
The Government Finance Officers Association of the United States and Canada (GFOA) awards a Certificate of Achievement for Excellence in Financial Reporting. The City of Monterey Park has been awarded the Certificate of Achievement by GFOA for its Annual Comprehensive Financial Report (ACFR) for the fiscal year ended June 30, 2021. This was the 3 3rd consecutive year the City received this award. The Certificate of Achievement is a prestigious national award- recognizing conformance with the highest standards for the preparation of state and local government financial reports. In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized comprehensive annual financial report, whose contents conform to program standards. Such a report must satisfy both generally accepted accounting principles and applicable legal requirements.
The Certificate of Achievement for Excellence in Financial Reporting is valid for a period of one year. We believe the City's Fiscal Year 2021-22 ACFR will continue to conform to the Certificate of Achievement Program's requirements, and we are submitting it to the GFOA for award consideration. In addition, the City’s Budget has received awards for excellence in budgeting from both the Government Finance Officers Association of the United States and Canada (GFOA) and California Society of Municipal Finance Officers Association (CSMFO).
We would like to express our sincere appreciation to the entire Finance Department staff whose efficient and dedicated services have made this timely preparation of this report possible. We would also like to thank the Mayor and City Council for their unfailing support of excellence in financial reporting and fiscal integrity. The accomplishments and values for this community which are presented in this report are a testament to the leadership of the City Council and the dedication of all City employees.
Respectfully submitted,
Ron Bow Martha Garcia
City Manager Director of Finance
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Monterey Park
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2021
Executive Director/CEO
PRESENTED TO
City of Monterey Park
California
For the Fiscal Year Beginning
July 01, 2021
Executive Director
GOVERNMENT FINANCE OFFICERS ASSOCIATION
Distinguished
Budget Presentation
Award
California Society of
Municipal Finance Officers
Ce rtificate of Award
Operating Budget Excellence Award
Fiscal Year 2020-2021
Pre sented to the
City of Monterey Park
Fo
r meeting the criteria established to achieve the CSMFO Excellence Award in Budgeting January 31, 2021
Ma
rcus Pimentel Michael Manno, Chair
CSMFO President Recognition Committee
De
dicated Excellence in Municipal Financial Reporting
(1)
INDEPEND
ENT AUDITORS’ REPORT
The Honorable Mayor and
Member of the City Council
of the City of Monterey Park
Monterey Park, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial stat ements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Monterey Park, California (the City), as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business type activities, each major fund and the aggregate remaining fund information of the City, as of June 30, 2022, 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.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Emphasis of Matter
Change in Accounting Principle
As described in Note 1D to the financial statements, effective July 1, 2021, the City adopted new accounting guidance, Statement of Governmental Accounting Standards Board (GASB Statement) No. 87, Leases. Our opinions are not modified with respect to this matter.
CLA (CliftonLarsonAllen LLP) is an independent network member of CLA Global. See CLAglobal.com/disclaimer.
CliftonLarsonAllen LLP
CLAconnect.com
The Honorable Mayor and
Member of the City Council
of the City of Monterey Park
(2)
Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
Auditors’ Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material misstatement of the financial stat ements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosure s in the financial statements.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going co ncern for a reasonable period of time.
We are required to communicate with those cha rged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.
The Honorable Mayor and
Member of the City Council
of the City of Monterey Park
(3)
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, the schedules of changes in net pension liability and related ratios, and the schedules of contributions - CalPERS and MMRP pension plans, the schedule of changes in net OPEB liability and related ratios and schedule of contributions - OPEB plan, and the budgetary comparison schedules for the General Fund, Special Revenue Grants Fund, Special Revenue Retirement/Pension Liability Fund, and Special Revenue Housing Fund, identified as Required Supplementary Information (RSI) in the accompanying 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 RSI 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 RSI because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The combining statements and individual fund schedules (supplementary information) are presented for purposes of additional analysis and are 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 basic financial statements. The 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 statement s or to the basic financial statements themselves, and other additional procedures in accordance with GAAS. In our opinion, the supplementary information is fairly stated in all material respects in relation to the basic financial statements as a whole.
Other Information
Management is responsible for the other information included in the annual report. The other information comprises the introductory and statistical sections but does not include the basic financial statements and our auditors’ report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon.
In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report
The Honorable Mayor and
Member of the City Council
of the City of Monterey Park
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Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated April 18, 2023, on our consideration of the City of Monterey Park’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City of Monterey Park’s internal control over financial reporting and compliance.
CliftonLarsonAllen LLP
Irvine, Califor
nia
April 18, 2023
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MANAGEMENT DISCUSSION AND ANALYSIS
Introduction
The Management Discussion and Analysis provides a narrative introduction, analysis, and overview that will assist in understanding of the City’s financial statements. This analysis should be read in conjunction with the City’s financial statements as of June 30, 2022, the transmittal letter, and notes to the basic financial statements.
Government-wide Financial Statements
The government-wide financial statements are designed to provide information of the City’s financial activities in a manner simil ar to a private-sector company. G overnment-wide financial statements consist of the statement of net position and the stat ement of activities, which are prepared using the economic resources measurement focus and the accrual basis of accounting. These statements provide both short-term and long-term information about th e City’s financial positi on, which is helpful in assessing the City’s economic condition at the end of the fiscal year.
The statement of net position presents all of the City’s financial resources along with its capital assets and long-term obligations. The difference between the assets and the liabilities is reported as the net position.
The statement of activities reports the gross and net costs of various activities carried out by the City and how the City’s net position changed during the fi scal year. This statement summarizes the cost of providing services by the City and includes all current year revenues and expenses.
Both government-wide financial stat ements distinguish fu nctions of the City that are principally supported by taxes and intergovernmental revenues (i.e. governmental activities) from other functions that are intended to reco ver all or a significant po rtion of their costs thro ugh user fees and charges (i.e. business-type activities). Th e governmental activities of the City include general government, public safety, community development, culture and recreation, highways and streets, health, and debt service. The business-type activities reflect the City’s water system operations, waste management activities, and sanitary sewer activities.
The government-wide financial statements include not only the City but also those legally separate entities for which the City is financially account able. These entities include the Monterey Park Housing Authority and the Monterey Park Public Financing Authority. Fi nancial information for these component units is reported as an integral part of the City. Please refer to Note Number 1A of the Notes to the Basic Financial Statements.
Fund Financial Statements
A fund is a grouping of related accounts used to c ontrol resources that have been segregated for specific activities or objectives. The City uses fund accounting to ensure and demonstrate compliance with finance-related legal require ments. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds.
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Governmental Funds
Governmental funds are used to account for esse ntially the same government al activities in the
government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial stat ements focus on near -term inflows and outflows of expendable resources, as well as on balances of expendable re sources available at the end of the fiscal year.
Governmental funds are accounted for using the modified accrual basis of accounting, which provides a detailed view of the City’s current financial resources and the City’s ability to meet its current expenditure needs. Such information may be useful in evaluating a government's near-term financing requirements.
Because the focus of governmental funds is narrow er than that of the government-wide financial statements, it is useful to compare the informa tion presented for governmental funds with similar information presented for governmental activities in the governm ent-wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund balance sh eet and the governmental fund statement of revenues, expenditures, and changes in fund balanc es provide a reconciliati on to facilitate this comparison between governmental funds and government-wide activities.
The City maintains 23 individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for General Fund , Special Revenue Grants Fund, Special Revenue Retirement/Pension Liability Fund, Special Revenue Housing Fund and Street Capital Projects Fund, which are reported as major funds. Information for the other 17 governmental funds is combined into a single column under N onmajor Special Revenue Governmental Funds. Data for the nonmajor governmental funds is provided in the combining statements in this report.
The City adopts an annual appr opriated budget for its governmental funds. Budgeted expenditures are controlled at the fund level. Budgetary comparison statements have been provided to demonstrate compliance with this budget. Please refer to the Notes to Required Supplementary Information.
Proprietary Funds
Proprietary funds use the accrual basis of accou
nting, which is the same method used by private
businesses. Proprietary fund financ ial statements provide the same type of information as the government-wide financial statements, only in more detail.
The City maintains two different types of proprietary funds: enterp rise funds and internal service funds. The enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for the operations for its water system, waste management activities, and sanitary sewer activities. Internal service funds are used to accumulate and allocate costs internally among the City’s various functions, which include vehicle operation, workers compensati on insurance, retiree medical benefits, general liability insurance, separation be nefits, and technology de velopment. Because the internal service operations benefit both governmental and business- type functions, they have been proportionally allocated and included within the governmental a nd business-like activities in the government-wide financial statements. Individual fund data for the in ternal service funds is provided in the form of combining statements in this report.
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Fiduciary Funds
Fiduciary funds are used to account for activities when the City acts as a trust or fiduciary to hold resources for the benefit of parties outside the g overnment. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City’s programs.
Notes to the Basic Financial Statements
The notes to the basic financial statements provide additional information that is essential for a full understanding of the data provided in the government-wide and fund financial statements.
Required Supplementary Information
The required supplementary information further explains and supports the information in the financial statements. This section includes the schedules of the City’s funding for its employee pension program, other post-employment be nefits program, and the budgetary comparison for the General Fund, Special Revenue Grants Fund, Special Revenue Retirement/Pension Liability Fund, and the Special Revenue Housing Fund.
Other Supplementary Information
Other supplementary information includes combining and indi vidual budgetary comparison schedules for Nonmajor Governmental Funds, a nd combining statements for Agency Funds and Internal Service Funds.
Financial Highlights
Total 2021-22 net position increased by $11.9 million from 2020-21, which is the net of the $11.2 million increase in governmental activities and the $688 thousand increase in business-type activities. The $6 million decrease in governmental services wa s attributed to growing pension and other post-employment benefits (OPEB) costs, as well as a reduction in revenues. The $1.2 million increase in business-type activities was primarily due to steady water and refuse revenues and flat operational costs across all enterprise funds.
As of June 30, 2022, the City’s asse ts and deferred outflo w of resources exceeded its liabilities and deferred inflow of resources by $44.4 millio n, of which $96 million was related to the net investment in capital assets, $55.0 million was restricted for sp ecial revenues, and a negative $106.7 million was unrestricted.
At the 2021-22 year-end, the General Fund total fund balance was $29 million, a $6.2 million decrease from the prior year. The decrease was related to the Goodviews Abatement Project.
The City kept the residential tr ash rates at the same level as 2020-21. However, the service contract cost for the trash provider was adjusted by CPI, per the contractual agreement.
The City continued to serve as the Successor Agency for its former Redevelopment Agency, and reported the former RDA assets an d liabilities in the Fiduciary Fund as a Private Purpose Trust Fund.
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Government-wide Financial Analysis
The net position of the City is derived from the total assets and deferred outflows of resources less its liabilities and deferred inflows of resources at the end of a reporting period. It serves as an indicator of a government's financial position at a certain point in time. As of June 30, 2022, the City’s combined assets (governmental and business-type activities) totaled $305.9 million, up $79.8 million from last year. The increase was primarily attributed to $20.4 million increase in cash and investments held by fiscal agent, a $50.4 million increase in net pension assets and $9 million increase in capital assets. The City’s total deferred outflow of resources decreased $117.2 million, from $123.2 million to $6 million. The decrease was due to the City’s pension plans. The City’s liabilities totaled $222.8 million, down $88.1 million from last y ear. The City’s total deferred inflow of resources increased $38.7 million, from $6.1 million to $44.8 million. The increase was related to the City’s pension plans and the implementation of GASB 87 am ounts related to leases. As a re sult, the City’s combined net position totaled $44.4 million, up $8.8 million from last year.
Net position consists of three categories: net invest ment in capital assets, restricted fund balances, and an unrestricted fund balance. The largest por tion of the City’s net position, approximately $96 million, is the City’s investment in capital as sets, including land, buildings, equipment, and infrastructure net of accumulated depreciation and related debt for acquiring these capital assets.
Since the capital asse ts are used to provide serv ices to citizens, they ar e not available to fund the City’s day-to-day activities.
The City’s restricted net position totaled $55.0 million at June 30, 2022. These are assets subject to external restrictions, constitutional provisions, or enabling legislation that limit how these assets may be used. The restricted net posi tion includes primarily grants, retirement/pension funds, and various nonmajor special revenue funds. The unrestricted net position is available for use by the City for any legal purpose. As of June 30, 2022, the City’s total unrestricted net position was a negative $106.7 million.
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6/30/2022 6/30/2021 6/30/2022 6/30/2021 6/30/2022 6/30/2021 Assets:
Current 106,123 $ 84,852 $ 31,161 $ 35,709 $ 137,284 $ 120,561$ Non Current
Capital Assets 66,474 61,796 47,601 40,589 114,075 102,385 Other 51,912 3,207 2,637 54,549 3,207
Total Assets: 224,509 149,855 81,399 76,298 305,908 226,153 Deferred Outflow of Resources 5,397 116,613 592 6,623 5,989 123,236 Liabilities:
Current 28,156 24,038 4,957 4,802 33,113 28,840 Long-Term 171,054 259,382 18,626 22,624 189,680 282,006 Total Liablilities 199,210 283,420 23,583 27,426 222,793 310,846 Deferred Inflow of Resources 41,931 5,462 2,851 626 44,782 6,088 Net Position:
Net Investment in Capital
Assets 60,290 53,107 35,741 32,466 96,031 85,573 Restricted 52,357 22,378 2,637 - 54,994 22,378 Unrestricted (123,882) (97,899) 17,179 22,403 (106,703) (75,496) Total Net Position (11,235)$ (22,414)$ 55,557$ 54,869$ 44,322$ 32,455$ Governmental
Activities
Business-type
Activities Total
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6/30/2022 6/30/2021 6/30/2022 6/30/2021 6/30/2022 6/30/2021 Revenues
Program Revenues:
Charges for Services 12,031$ 8,733$ 24,327$ 26,266$ 36,358$ 34,999$ Operating Grants &
Contributions 14,676 12,200 - - 14,676 12,200 Captial Grants &
Contributions - - 881 94 881 94
General Revenues:
Taxes 46,432 44,888 - - 46,432 44,888
Revenues from Use of
Money and Property (1,859) 396 41 53 (1,818) 449 Other 1,445 1,339 - 2 1,445 1,341
Total Revenues: 72,725 67,556 25,249 26,415 97,974 93,971 Expenses:
General Government 4,998 16,863 - - 4,998 16,863 Public Safety 32,975 41,432 - - 32,975 41,432 Comm. Development 7,545 501 - - 7,545 501
Culture & Recreation 7,250 7,368 - - 7,250 7,368 Highway & Streets 5,301 6,349 - - 5,301 6,349 Health 234 187 - - 234 187
Interest & Fiscal Charges 3,717 1,534 - - 3,717 1,534 Water/Refuse/Sewer - - 24,087 26,829 24,087 26,829 Total Expenses: 62,020 74,234 24,087 26,829 86,107 101,063 Transfers 474 534 (474) (534) - -
Changes in Net Position 11,179 (6,144) 6
88 (948) 11,867 (7,092)
Net Position July 1 (22,414) (16,270) 54,869 55,817 32,455 39,547 Net Position June 30 (11,235)$ (22,414)$ 55,557$ 54,869$ 44,322$ 32,455$ Statement of Activities
For Fiscal Years Ended June 30, 2022 and June 30, 2021
(In thousands)
Governmental
Activities
Business-type
Activities Total
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Governmental Activities Financial Analysis
Overall governmental activities increased the City’s net position by $11.2 million. The increase in net position was due primar
ily to an increase in capital asset investments.
Governmental Funds
The City uses fund accounting to ensure and dem onstrate compliance with finance-related legal requirements. The focus of the City’s governmental funds is to provide information on near-term inflows and outflows during the fiscal year and balances of spendable resources at the end of the fiscal year. Such information is useful in assessing th e City’s financing requirements to meet the current needs. Unassigned fund balance may serve as a useful measure of the City’s net resources available for appropriation.
As of June 30, 2022, the City’s gov ernmental funds reported a co mbined ending fund balance of $73.1 million, an increase of $17.2 million from the pr ior year. The fund balance categories of the governmental funds show $126,522 as nonspendable, $44.3 million as restricted, $10 million as committed, $19.2 million as assigned, and $(424,574) as unassigned. (Please refer to Note 13 of the Notes to Basic Financial Statements for detailed breakdown.) There are five major funds in the governmental funds: General Fund, Special Revenue Grants Fund, Special Revenue Retirement/Pension Liability Fund, the Special Revenue Housing Fund and Street Capital Projects Fund.
The General Fund is the main operating fund of the Cit y, which accounts for the majority of the police, fire, recreation, parks ma intenance, public works, libra ry, community development, and general administrative services. General Fund revenues and transf ers in for 2021-22 totaled $49 million, an increase of $2.4 mi llion from 2020-21. The increase wa s primarily due to the steady economic recovery and businesses resuming normal activities as the COVID-19 regulations relaxed.
Total 2021-22 general fund expenditures and transfers out were $55.2 million, reflecting an decrease of $95.4 million from 2020-21. As of June 30, 2022, the total fund balance of the General Fund was $29 million, a decrease of $6.2 million from last year.
The Special Revenue Grants Fund reports the activities of various grants that the City received from Federal, State, and County agencies. Unspent grant funds are accumulated for expenditures in future years. Total grants received for governmental activities and transfers in for 2021-22 were $4.2 million, up $1 million from last year. Total 2021-22 grant funded expenditures and transfers out were $4.2 million, reflecting an in crease of $1.9 million fro m 2020-21. Total fund bala nce of the Special Revenue Grants Fund as of June 30, 2022 was $1.2 million, an increase of $6,000 from last year.
Special Revenue Retirement/Pension Liability Fund accounts for revenue re ceived from the voter- approved property tax levied to pr ovide for employee retirement costs. Total revenues and transfers for 2021-22 were approximately $11.8 million, an increase of $0.2 million over 2020-21. Total expenditures for 2021-22 were $9.4 million, down $11.0 million from 2020-21. The decrease in expenditures was due to payoff of the Unfunded Accrued Liability (UAL). The total fund balance in the Retirement/Pension Liability Fund as of June 30, 2022 was $2.6 million, all of which is restricted for employee retirement costs.
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The Streets Capital Projects Fund reports the bond proceeds received for street related capital projects Total bond proceeds received during the year were $21,026,121. Total 2021-22 capital related expenditures were $572,275. Total fund balance of the Streets Capital Projects Fund as of June 30, 2022 was $20.5 million.
The Special Revenue Housing Fund accounts for housing activities. The City assumed the responsibility of the housi ng assets and functions after the disso lution of the City's Redevelopment Agency. Total revenues for 2021-22 were $6,000. There were no housing expenditures for 2021-22.
As of June 30, 2022, the fund balance of the Special Revenue Housing Fund was $2.5 million.
Nonmajor Governmental Funds account for various activities including street improvement, transportation, air quality improvement, lighting a nd landscaping district, public safety activity, and development impact improvements. Total revenues and transfers-in for 2021-22 were $12 million, up $3.5 million from 2020-21. Total expenditures and tr ansfers-out for 2021-22 were $10 million, an increase of $1.6 million over 2020-21. As of June 30, 2022, the fund balance of the Nonmajor Governmental Funds totaled $17.5 million, up $0.5 million from 2020-21.
Business-type Activities Financial Analysis
The business-type ac
tivities reflect the City’s water system, which includes water operation and water treatment, waste management activities and sanitary sewer activities.
Total 2021-22 water revenues were $14.2 million, down $1.9 million from 2020-21. The decrease in water revenues was primarily due to increase d conservation measures throughout the community.
Water expenses were $14 million, down $1.9 million from 2020-21. The decrease was primarily due to a reduction in administration costs, including retirement, and costs for the water production and water treatment operations in 2021-22. The net position for the Water Fund increased by 414 thosand from the previous year to $51.2 million at June 30, 2022.
Refuse Fund revenues for 2021-22 were at $6.8 million, down $0.1 m illion from the previous year.
Operating expenditures were $6.6 m illion, up $0.1 million from last y ear. The net position for the Refuse Fund was $861,412 at June 30, 2022, an increase of $176,749 from the prior year.
Sewer Fund revenues were $3.2 million, which stayed the same as last year. Operating expenditures were $2.3 million, down $0.5 million from last year . The decrease was primarily due lower maintenance costs. The net position for the Sewe r Fund increased to $10.8 million, an increase of $0.8 million from the prior year.
General Fund Budgetary Highlights
The originally adopted General Fund budget for this fiscal year was $47.8 million. The final amended budget of $51.7 million reflecting City Council approved amendments throughout the year.
The budget amendments includ
ed additional funds for minimum wage mandates, Police Department overtime, service costs, a classification and compensation study and addition of staff.
Overall, actual revenues in the General Fund were higher than the budgeted revenues. The increase was $1.5 million. Primarily due to relaxed COVID-19 regulations causing increased tax revenue $2.7
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million higher than budgeted. Revenue from use of money and property was lower than budgeted by $3 million, licenses and permits and fines and forfeitures were also lower by $40,000 and $95,000, respectively. Actual expenses in the General Fund were under budget in a ll the major categories, except for public safety, communi ty development and debt servic e. General government was under budget $0.5 million, and culture and recreation was under budget $1.6 million. These were due to the City’s cost control measures in response to th e revenue drop and unclear economic outlook due to COVID-19. Public safety however was over budge t by $1.2 million, communi ty development was over by $5.7 million, and debt service was over by $16,000. These reflected the City’s commitment and reallocation of resources from non-urgent services to crucial and necessary services. Overall, actual expenditures were $3.4 million more than budgeted. Most of the capital outlay budget that was not spent will be rolled over into the 2022-23 budget.
Capital Asset Administration
The City’s capital assets, net of accumulated de preciation, for its governme ntal and business-type activities as of June 30, 2022, totaled $114 million, an increase of $11.6 million from prior year. The capital assets include land, buildings, improvements, machinery and equipment, parks, roads, traffic lights, and traffic signals. (Readers desiring more detailed information on capital asset activity should refer to Note 6 of the Notes to the Basic Financial Statements.)
Major capital asset additions during the fiscal year included the following:
Continued IT software and hardware upgrades for the new Enterprise Resource Planning (ERP) System implementation
Continued General Plan updates
Continued improvements at Fire Station 62
Continued street improvements
Traffic signal upgrades at Garvey/Alhambra intersection Various City Hall improvements
6/30/2022 6/30/2021 6/30/2022 6/30/2021 6/30/2022 6/30/2021 Land 8,465 $ 8,465 $ 500$ 500$ 8,965 $ 8,965$ Buildings 14,231 14,824 132 137 14,363 14,961 Improvements 20,500 15,119 29,792 27,635 50,292 42,754 Construction in Progress 4,669 6,622 14,313 9,597 18,982 16,219 Equipment 4,593 6,442 266 385 4,859 6,827 Infrastructure 13,919 10,324 2,596 2,335 16,515 12,659 Leased Assets 98 - 3 - 101 - 66,474$ 61,796 $ 47,599 $ 40,589 $ 114,076 $ 102,385 $ Capital Assets Net of Depreciation
For Fiscal Years Ended June 30, 2022 and June 30, 2021
(In thousands)
Governmental
Activities
Business-type
Activities Total
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Debt Administration
As of June 30, 2022, the City’s noncurrent portion of long-term debt increased by$21.3 million from the prior year at $159.6 million to $180.9 million was due primarily to the City’s 2021. (Please refer to note number’s 7 and 10 of the Notes to the Basic Financial Statements for detailed information.) State statutes limit the amount of general obligation debt a governmental entity may issue to 15% of its total assessed valuation. The current debt limitation for the City is $1.21 billion.
Economic Factors and Next Year's Budget
The City’s total assessed valuation is $8.8 billion, up 8.6%, or $560 million, from 2020-21. The fiscal year 2022-23 C ity Budget is balanced. The City is conservativ e in projecting future revenues. T
he City’s spending plan follows the City Council’s direction in maintaining excellent community service, enhanci ng organizational efficienc y, and funding much needed infrastructure and capital improvements. The City will conclude labor negotiations with the remaining miscellaneous bargaining units. Any potential salary and benefit contract adjustments will be considered during the mid-year budget process.
Over the last few months, slight inflation improvements materialized in various industries, however real change has yet to take hold. Many remain nervous about the economy sliding into a recession. Nevertheless, customer spending remains strong. Experts vary on whether a recession will occur and to what extent. Unemployment rates remain a key indicator of whether this adverse economic situation will occur. From a sales tax perspective, the forecast does reflect a slowdown in taxable merchandise spending as the higher cost of utilities, food and other necessities limit dollars available for discretionary and non-essential items. 6/30/2022 6/30/2021 6/30/2022 6/30/2021 6/30/2022 6/30/2021 Capital Leases 4,969 $ 5,669 $ 11,310 $ 7,915 $ 16,279 $ 13,584$ Lease Liablility 96 145 3 4 99 149
Section 108 Loan 539 1,047 - - 539 1,047
Pension Obligation Bonds 109,268 112,662 5,282 5,443 114,550 118,105 Sales Tax Revenue Bonds 17,585 - - - 17,585 -
Premium 3,167 - - - 3,167 -
Compensated Absences 5,212 5,027 224 737 5,436 5,764 Insurance Assessments
Payable 818 981 - - 818 981
Claims and Judgements 22,443 19,949 - - 22,443 19,949 164,097$ 145,480 $ 16,819 $ 14,099 $ 180,916$ 159,579$ Long-term Debt
For Fiscal Years Ended June 30, 2022 and June 30, 2021
(In thousands)
Governmental
Activities
Business-type
Activities Total
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On the November 8, 2022, voters adopted Measure MP which authorizes a ¾ cent transactions and use (sales) tax. The measure was adopted based upon a 58.14% voter approval. This tax will begin to be collected by businesses on April 1, 2023, and is projected to generate $1.2 million in FY2022-2023.
The Federal American Rescue Plan (ARPA) funds allocated to the City for COVID-19 pandemic recovery efforts continue to subsidize the General Fund.
The Courtyard by Marriott transient occupancy tax (TOT) revenue is anticipated to realize at 50% higher than previously projected.
The water, sewer, and trash rates study will be continued and new rates will be presented to the Council for approval.
Requests for Information
This financial report is designed to provide a general overview of the City’s finances for all interested persons and organizations. The report is published on the City’s official website. Questions concerning any of the informatio n provided in this report, or requests for additional financial information, should be addressed to
City of Monterey Park, Finance Department, 320 West Newmark Avenue, Monterey Park, CA 91754.
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BASIC FINANCIAL STATEMENTS
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GOVERNMENT-WIDE FINANCIAL STATEMENTS
CITY OF MONTEREY PARK
STATEMENT OF NET POSITION
JUNE 30, 2022
See accomp
anying Notes to Basic Financial Statements.
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Governmental Business-type
Activities Activities Total
ASSETS
Current Assets:
Cash and Investments 71,883,813$ 32,595,441$ 104,479,254$ Cash and Investments Held by Fiscal Agent 20,515,699 286 20,515,985 Accounts Receivable 4,737,547 5,844,893 10,582,440 Interest Receivable (25,125) 37,318 12,193
Lease Receivable 1,567,573 - 1,567,573
Prepaid Assets 126,522 - 126,522
Internal Balances 7,316,967 (7,316,967) -
Total Current Assets 106,122,996 31,160,971 137,283,967 Noncurrent Assets:
Loans Receivable, Net 1,935,342 - 1,935,342
Receivable from Successor Agency 1,033,650 - 1,033,650 Net Pension Asset 48,943,058 2,637,265 51,580,323 Capital Assets:
Not Being Depreciated 13,133,814 14,812,722 27,946,536 Being Depreciated, Net 53,340,603 32,788,382 86,128,985 Total Capital Assets 66,474,417 47,601,104 114,075,521 Total Noncurrent Assets 118,386,467 50,238,369 168,624,836 Total Assets 224,509,463 81,399,340 305,908,803
DEFERRED OUTFLOWS OF RESOURCES
Amounts Related to Pension Plans 3,147,603 173,325 3,320,928 Amounts Related to
Other Post Employment Benefits 2,249,138 418,782 2,667,920 Total Deferred Outflows of Resources 5,396,741 592,107 5,988,848 Primary Government
CITY OF MONTEREY PARK
STATEMENT OF NET POSITION (CONTINUED)
JUNE 30, 2022
See accomp
anying Notes to Basic Financial Statements.
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Governmental Business-type
Activities Activities Total
LIABILITIES
Current Liabilities:
Accounts Payable and Accrued Liabilities 2,708,939$ 2,844,155 $ 5,553,094 $ Accrued Payroll 1,230,423 45,902 1,276,325
Interest Payable 312,538 9,954 322,492
Deposits and Advances 404,872 772,357 1,177,229 Unearned Revenue 12,732,786 - 12,732,786
Due to Other Governmental Agencies 749,120 - 749,120 Long-Term Liabilities - Due Within One Year 10,017,920 1,284,212 11,302,132 Total Current Liabilities 28,156,598 4,956,580 33,113,178 Noncurrent Liabilities:
Long-Term Liabilities -
Due in More than One Year 154,078,415 15,534,878 169,613,293 Net Pension Liabilities 372,265 - 372,265
Net OPEB Liabilities 16,603,088 3,091,433 19,694,521 Total Noncurrent Liabilities 171,053,768 18,626,311 189,680,079 Total Liabilities 199,210,366 23,582,891 222,793,257
DEFERRED INFLOWS OF RESOURCES
Amounts Related to Pension Plans 34,969,193 1,852,930 36,822,123 Amounts Related to
Other Post Employment Benefits 5,362,845 998,543 6,361,388 Amounts Related to Leases 1,598,892 - 1,598,892
Total Deferred Inflows of Resources 41,930,930 2,851,473 44,782,403
NET POSITION
Net Investment in Capital Assets 60,290,327 35,740,792 96,031,119 Restricted for:
Grants 1,522,906 - 1,522,906
Retirement/Pension 8,899,163 2,637,265 11,536,428 Housing 3,644,884 - 3,644,884
Public Safety 1,640,507 - 1,640,507
Community Development 187,731 - 187,731
Culture
and Recreation 908,610 - 908,610
Highways and Streets 35,549,208 - 35,549,208
Debt Service 3,556 - 3,556
Unrestricted (Deficit) (123,881,984) 17,179,026 (106,702,958) Total Net Position (11,235,092)$ 55,557,083$ 44,321,991$ Primary Government
CITY OF MONTEREY PARK
STATEMENT OF ACTIVITIES
YEAR ENDED JUNE 30, 2022
See accomp
anying Notes to Basic Financial Statements.
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Operating Capital
Charges for Grants and Grants and
FUNCTIONS/PROGRAMS Expenses Services Contributions Contributions Governmental Activities:
General Government 4,997,877 $ 2,369,083 $ 75,188 $ - $ Public Safety 32,974,686 2,792,022 4,080,057 - Community Development 7,545,425 2,722,923 1,396,048 - Culture and Recreation 7,250,027 485,573 325,520 - Highway and Streets 5,300,500 3,661,000 8,617,228 - Health 234,375 - 181,459 -
Interest and Fiscal Charges 3,716,653 - - -
Total Governmental Activities 62,019,543 12,030,601 14,675,500 - Business-type Activities:
Water Utility 15,001,155 14,231,262 - 880,892 Refuse 6,735,166 6,843,084 - -
Sewer 2,350,934 3,252,413 - -
Total Business-type Activities 24,087,255 24,326,759 - 880,892 Total 86,106,798$ 36,357,360$ 14,675,500$ 880,892$ Program Revenues
CITY OF MONTEREY PARK
STATEMENT OF ACTIVITIES (CONTINUED)
YEAR ENDED JUNE 30, 2022
See accompanying Notes to Basic Financial Statements.
(23)
Governmental Business-type
FUNCTIONS/PROGRAMS Activities Activities Total
Governmental Activities:
General Government (2,553,606) $ - $ (2,553,606)$ Public Safety (26,102,607) - (26,102,607) Community Development (3,426,454) - (3,426,454) Culture and Recreation (6,438,934) - (6,438,934) Highway and Streets 6,977,728 - 6,977,728 Health (52,916) - (52,916) Interest and Fiscal Charges (3,716,653) - (3,716,653) Total Governmental Activities (35,313,442) - (35,313,442) Business-type Activities:
Water Utility - 110,999 110,999 Refuse - 107,918 107,918 Sewer - 901,479 901,479 Total Business-type Activities - 1,120,396 1,120,396 Total (35,313,442) 1,120,396 (34,193,046)
GENERAL REVENUES
Taxes:
Property Taxes 29,676,242 - 29,676,242 Sales Taxes 9,294,060 - 9,294,060 Utility User Taxes 3,278,449 - 3,278,449 Franchise Taxes 1,067,908 - 1,067,908 Business License Taxes 661,415 - 661,415 Transient Occupancy Taxes 2,098,921 - 2,098,921 Other Taxes 284,927 - 284,927 Vehicle In-Lieu Taxes
(Unrestricted, Intergovernmental) 69,754 - 69,754 Revenues from Use of Money and Property (1,858,601) 41,256 (1,817,345) Other 1,445,282 4 1,445,286 Total General Revenues 46,018,357 41,260 46,059,617 TRANSFERS 474,300 (474,300) -
CHANGE IN NET POSITION 11,179,215 687,356 11,866,571 Net Position (Deficit) - Beginning of Year (22,414,307) 54,869,727 32,455,420 NET POSITION (DEFICIT) - END OF YEAR (11,235,092)$ 55,557,083$ 44,321,991$ Net (Expense) Revenue and
Changes in Net Position
(24)
THIS PAGE INTENTIONALLY LEFT BLANK
(25)
FUND FINANCIAL STATEMENTS
CITY OF MONTEREY PARK
BALANCE SHEET – GOVERNMENTAL FUNDS
JUNE 30, 2022
See accomp
anying Notes to Basic Financial Statements.
(26)
Reti
rement/
General Grants Pension Liability Housing
ASSETS
Cash and Investments 28,812,346$ 13,937,500$ 2,254,049$ 1,423,613$ Cash and Investments Held
by Fiscal Agents 6,076 - 34,439 -
Accounts Receivable 3,196,118 317,277 277,296 -
Interest Receivable (45,299) 1,711 - 1,399
Lease Receivable 1,567,573 - - -
Prepaid Items 82,310 - - -
Due from Other Funds 639,069 - - -
Loans Receivable, Net - 749,120 - 1,186,222
Receivable from Successor Agency - - - 1,033,650
Total Assets 34,258,193$ 15,005,608$ 2,565,784$ 3,644,884$
LIABILITIES, DEFERRED INFLOW OF
RESOURCES, AND FUND BALANCES
LIABILITIES
Accounts Payable and
Accrued Liabilities 2,121,193$ 214,570$ 9$ -$ Accrued Payroll 1,154,998 22,534 - -
Deposits and Advances 404,872 - - -
Unearned Revenue - 12,732,786 - -
Due to Other Funds - - - -
Due to Other Governmental Agencies - 749,120 - -
Total Liabilities 3,681,063 13,719,010 9 -
DEFERRED INFLOW OF RESOURCES
Unavailable Revenue 12,973 64,056 - 1,186,222
Related to Leases 1,598,892 - - -
Total Deferred
Inf
low of Resources 1,611,865 64,056 - 1,186,222
FUND BALANCES
Nonspendable 82,310 - - -
Restricted - 1,222,542 2,565,775 2,458,662
Committed 9,726,927 - - -
Assigned 19,156,028 - - -
Unassigned - - - -
Total Fund Balances 28,965,265 1,222,542 2,565,775 2,458,662 Total Liabilities, Deferred Inflow of
Resources, and Fund Balances 34,258,193$ 15,005,608$ 2,565,784$ 3,644,884$ Major Funds
Special Revenue
CITY OF MONTEREY PARK
BALANCE SHEET – GOVERNMENTAL FUNDS (CONTINUED)
JUNE 30, 2022
See accomp
anying Notes to Basic Financial Statements.
(27)
Street Capital Nonmajor Total
Projects Governmental Governmental
Funds Funds Funds
ASSETS
Cash and Investments -$ 17,361,811$ 63,789,319$ Cash and Investments Held
by Fiscal Agents 20,471,006 3,556 20,515,077
Accounts Receivable - 931,354 4,722,045
Interest Receivable - 17,064 (25,125)
Lease Receivable - - 1,567,573
Prepaid Items - 44,212 126,522
Due from Other Funds - - 639,069
Loans Receivable, Net - - 1,935,342
Receivable from Successor Agency - - 1,033,650
Total Assets 20,471,006$ 18,357,997$ 94,303,472$
LIABILITIES, DEFERRED INFLOW OF
RESOURCES, AND FUND BALANCES
LIABILITIES
Accounts Payable and
Accrued Liabilities 12,900$ 205,537$ 2,554,209$ Accrued Payroll - 20,399 1,197,931
Deposits and Advances - - 404,872
Unearned Revenue - - 12,732,786
Due to Other Funds 4,260 424,574 428,834 Due to Other Governmental Agencies - - 749,120
Total Liabilities 17,160 650,510 18,067,752
DEFERRED INFLOW OF RESOURCES
Unavailable Revenue - 252,083 1,515,334
Related to Leases - - 1,598,892
Total Deferred
Inflow of Resources - 252,083 3,114,226
FUND BALANCES
Nonspendable - 44,212 126,522
Restricted 20,453,846 17,558,957 44,259,782
Committed - 276,809 10,003,736
Assigned - - 19,156,028
U
nassigned - (424,574) (424,574)
Total Fund Balances 20,453,846 17,455,404 73,121,494 Total Liabilities, Deferred Inflow of
Resources, and Fund Balances 20,471,006$ 18,357,997$ 94,303,472$
CITY OF MONTEREY PARK
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE
STATEMENT OF NET POSITION OF GOVERNMENTAL ACTIVITIES
JUNE 30, 2022
See accompanying Notes to Basic Financial Statements.
(28)
73,121,494$
(6,359,753)
63,063,204
48,943,058
(139,295,241)
(312,538)
(372,265)
2,363,579
Total Fund Balance of Governmental Funds in Fund Statements Internal service funds are used by management to charge the costs of separation benefits, workers' compensation, vehicle, technology and general liability to individual funds. The assets and liabilities of internal service funds are reported with governmental activities in the statement of net position.
Total net deficit is $(13,676,720) plus the portion of net deficit allocated to business-type activities of $7,316,967.
Capital assets used in governmental activities are not financial resources and therefore are not reported in the governmental funds. (Total governmental assets of $66,474,417 less internal service funds of $3,411,213, which has already been accounted for in the reconciliation of internal service funds elimination).
Net pension asset is not available to pay for current period expenditures of the governmental funds and, therefore, is not reported as an asset in the gov ernmental funds.
Long-term liabilities in the amount of $164,346,437, excluding net pension liabilities and net other post employment benefit (OPEB) liabilities, are not due and payable in the current period and therefore are not reported in the governmental funds, net of $24,650,792 included in reconciliation of internal service funds.
Interest on long-term liabilities are not due and payable in the current period and therefore are not reported in the governmental funds.
Net pension liability is not due and payable in the current period and therefore is not reported in the governmental funds.
Pension contributions made during the year after the measurement date are reported as expenditures in governmental funds and as deferred outflow of resources in the government-wide financial statements.
Other deferred outflows and inflows of resources related to the net pension liability are reported only in the government-wide financial statements:
Net difference between projected and actual earnings on pension plan investments (32,366,536) Difference between expected and actual experience (1,818,633) Net OPEB liability is not due and payable in the current period and therefore is not reported in the governmental funds. (16,603,088)
OPEB contributions made during the year after t he measurement date are reported as expenditures in governmental funds and as deferred outflow of resources in the government-wide financial statements. 2,249,138
Other deferred outflows and inflows of resources related to the net OPEB liability are reported only in the government-wide financial statements:
Net difference between projected and actual earnings on OPEB plan investments (1,220,167) Difference between expected and actual experience (3,517,316) Changes in assumptions (625,362)
Revenues earned but not available to pay for current expenditures for governmental funds are unavailable. 1,515,334
Net Position of Governmental Activities (11,235,092)$
CITY OF MONTEREY PARK
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES –
GOVERNMENTAL FUNDS
YEAR ENDED JUNE 30, 2022
See accomp
anying Notes to Basic Financial Statements.
(29)
Retirem
ent/
General Grants Pension Liability Housing
REVENUES
Taxes 37,402,738$ -$ 8,367,523$ -$
Licenses and Permits 2,153,956 - - -
Intergovernmental Revenues - 4,100,308 - -
Charges for Services 9,345,381 - - -
Revenues from
Use of Money and Property (1,879,661) 81,786 1,236 6,238 Fines and Forfeitures 346,514 - - -
Other Revenue 1,703,030 - 12,800 -
Total Revenues 49,071,958 4,182,094 8,381,559 6,238
EXPENDITURES
Current:
General Government 7,057,405 809,186 255,690 - Public Safety 30,587,146 1,060,533 1,916,468 - Community Development 7,354,396 - 35,684 -
Culture and Recreation 4,479,305 813,482 147,585 - Highways and Streets 859,688 20,523 10,130 - Health - - - -
Capital Outlay 1,644,809 990,193 - -
Debt Service:
Debt Issuance Costs - - - -
Principal Retirement 348,311 508,001 3,394,136 - Interest and Fiscal Charges 103,061 19,175 3,625,129 - Total Expenditures 52,434,121 4,221,093 9,384,822 -
EXCESS (DEFICIENCY) OF
REVENUES OVER EXPENDITURES (3,362,163) (38,999) (1,003,263) 6,238
OTHER FINANCING
SOURCES (USES)
Transfers In - 45,264 3,487,200 -
Transfers Out (2,809,664) - - -
Iss
uance of Debt - - - -
Total Other
Financing Sources (Uses) (2,809,664) 45,264 3,487,200 - NET CHANGE IN FUND BALANCES (6,171,827) 6,265 2,483,937 6,238 Fund Balances, Beginning of Year 35,137,092 1,216,277 81,838 2,452,424 FUND BALANCES, END OF YEAR 28,965,265$ 1,222,542$ 2,565,775$ 2,458,662$ Special Revenue
Major Funds
CITY OF MONTEREY PARK
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES –
GOVERNMENTAL FUNDS (CONTINUED)
YEAR ENDED JUNE 30, 2022
See accomp
anying Notes to Basic Financial Statements.
(30)
Street Capital Nonmajor Total
Projects Governmental Governmental
Funds Funds Funds
REVENUES
Taxes -$ 1,086,630$ 46,856,891$
Licenses and Permits - - 2,153,956
Intergovernmental Revenues - 9,598,113 13,698,421
Charges for Services - 378,499 9,723,880
Revenues from
Use of Money and Property - 55,428 (1,734,973)
Fines and Forfeitures - 249,101 595,615
Other Revenue - - 1,715,830
Total Revenues - 11,367,771 73,009,620
EXPENDITURES
Current:
General Government - 5,232 8,127,513
Public Safety - 240,881 33,805,028
Community Development - 34,768 7,424,848
Culture and Recreation - 819,763 6,260,135
Highways and Streets - 3,503,417 4,393,758
Health - 234,375 234,375
Capital Outlay 234,963 5,326,160 8,196,125
Debt Service:
Debt Issuance Costs 337,312 - 337,312
Principal Retirement - 165,000 4,415,448
Interest and Fiscal Charges - 448,627 4,195,992
Total Expenditures 572,275 10,778,223 77,390,534
EXCESS (DEFICIENCY) OF
REVENUES OVER EXPENDITURES (572,275) 589,548 (4,380,914)
OTHER FINANCING
SOURCES (USES)
Transfers In - 613,627 4,146,091
Transfers Out - (774,327) (3,583,991)
Issuance of Debt 21,026,121 - 21,026,121
Total Other
Fi
nancing Sources (Uses) 21,026,121 (160,700) 21,588,221 NET CHANGE IN FUND BALANCES 20,453,846 428,848 17,207,307 Fund Balances, Beginning of Year - 17,026,556 55,914,187 FUND BALANCES, END OF YEAR 20,453,846$ 17,455,404$ 73,121,494$
CITY OF MONTEREY PARK
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2022
See accompanying Notes to Basic Financial Statements.
(31)
Net Change in Fund Balance - Total Governmental Funds 17,207,307$ Amount reported for governmental activities in the statement of activities are different because:
Internal service funds are used by management to charge the costs of separation benefits, workers' compensation, vehicle, technology and general liability to individual funds. The net income/(expense) of certain activities of internal service fund is reported with governmental activities. This amount excludes $(733,821) charged to the Water and Refuse Enterprise Funds. (2,714,290)
Governmental funds report capital outlays as expenditures. However, in the statement of Activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense:
Capitalizable capital outlay, net of internal service fund capital additions of $746,100 8,831,630 Depreciation expense, net of internal service fund depreciation expense of $781,216 (4,263,025) Revenues that do not provide current financial resources are not recognized as revenues in the governmental funds. 18,839
Bond and other debt proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net position.
Repayment of bond and other debt principal is an expenditure in the governmental funds, but repayment reduces long-term liabilities in the statement of net position.
Principal paid on debt 4,415,448
Issuance of bonds - governmental activities portion (21,026,121) Amortization of premium 109,203
Changes in net pension liability and related deferred outflows and inflows of resources reported in the statement of activities does not require the use of current financial resources and, therefore, is not reported as an expenditure in governmental funds. 6,577,039
Changes in compensated absences which are not due and payable in the governmental funds are charged to expenses in the statement of activities. (170,932) Changes in net OPEB liability and related deferred outflows and inflows of resources reported in the statement of activities does not require the use of current financial resources and, therefore, is not reported as an expenditure in governmental funds. 1,771,123
Interest on long-term liabilities are not due and payable in the current period and therefore are not reported in the governmental funds. 422,994 Change in Net Position of Governmental Activities 11,179,215$
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THIS PAGE INTENTIONALLY LEFT BLANK
(33)
PROPRIETARY FUND FINANCIAL STATEMENTS
CITY OF MONTEREY PARK
STATEMENT OF NET POSITION – PROPRIETARY FUNDS
JUNE 30, 2022
See accomp
anying Notes to Basic Financial Statements.
(34)
Water Utility Refuse Sewer Total
ASSETS
Current Assets:
Cash and Investments 22,798,566$ 1,220,618$ 8,576,257$ 32,595,441$ Cash and Investments Held by Fiscal Agent 198 43 45 286 Accounts Receivable 4,664,644 781,890 398,359 5,844,893 Interest Receivable 27,836 1,124 8,358 37,318
Total Current Assets 27,491,244 2,003,675 8,983,019 38,477,938 Noncurrent Assets:
Net Pension Assets 1,843,689 403,335 390,241 2,637,265 Nondepreciable Capital Assets 14,812,722 - - 14,812,722 Depreciable Capital Assets, Net of
Accumulated Depreciation 29,575,220 15,558 3,197,604 32,788,382 Total Noncurrent Assets 46,231,631 418,893 3,587,845 50,238,369 Total Assets 73,722,875 2,422,568 12,570,864 88,716,307
DEFERRED OUTFLOWS OF RESOURCES
Amounts Related to Pension Plans 121,170 26,508 25,647 173,325 Amounts Related to
Other Post Employment Benefit Plans 305,414 50,462 62,906 418,782 Total Deferred Outflows of Resources 426,584 76,970 88,553 592,107
LIABILITIES
Current Liabilities:
Accounts Payable 2,803,996 32,819 7,340 2,844,155
Accrued Payroll 30,980 3,120 11,802 45,902
Interest Payable 6,959 1,556 1,439 9,954
Deposits and Advances 731,411 - 40,946 772,357
Due to Other Funds - - - -
Insurance Assessments Payable -
Due within One Year - - - -
Claims and Judgments Payable - Due within One Year - - - - Loan Payable - Due within One Year 1,063,725 - - 1,063,725 Lease Liability - Due within One Year 779 - - 779 C
ompensated Absences Payable - Due within One Year 5,788 1,581 15,037 22,406 Bonds Payable - Due within One Year 137,946 30,204 29,152 197,302 Total Current Liabilities 4,781,584 69,280 105,716 4,956,580 Noncurrent Liabilities:
Insurance Assessments Payable -
Due in More than One Year - - - -
Claims and Judgments Payable -
Due in More than One Year - - - -
Loan Payable - Due in More than One Year 10,246,310 - - 10,246,310 Lease Liability - Due in More than One Year 2,109 - - 2,109 Compensated Absences Payable - Due within One Year 52,090 14,228 135,333 201,651 Bonds Payable - Due within One Year 3,555,105 778,406 751,297 5,084,808 Net OPEB Liabilities 2,254,551 372,509 464,373 3,091,433 Total Noncurrent Liabilities 16,110,165 1,165,143 1,351,003 18,626,311 Total Liabilities 20,891,749 1,234,423 1,456,719 23,582,891
DEFERRED INFLOWS OF RESOURCES
Amounts Related to Pension Plans 1,295,367 283,381 274,182 1,852,930 Amounts Related to Other Post Employment Benefit Plans 728,227 120,322 149,994 998,543 Total Deferred Inflows of Resources 2,023,594 403,703 424,176 2,851,473
NET POSITION
Net Investment in Capital Assets 32,624,413 15,558 3,100,821 35,740,792 Restricted for Pension Benefts 1,843,689 403,335 390,241 2,637,265 Unrestricted 16,766,014 442,519 7,287,460 24,495,993 Total Net Position 51,234,116$ 861,412$ 10,778,522$ 62,874,050$ Adjustment to Reflect the Consolidation of Internal Service Funds Activities to Related Enterprise Fund (6,415,914) (901,053) - (7,316,967) Net Position of Business-type Activities 44,818,202$ (39,641)$ 10,778,522$ 55,557,083$
Enterprise
CITY OF MONTEREY PARK
STATEMENT OF NET POSITION – PROPRIETARY FUNDS (CONTINUED) JUNE 30, 2022
See accomp
anying Notes to Basic Financial Statements.
(35)
Internal
Service
ASSETS
Current Assets:
Cash and Investments 8,094,494$
Cash and Investments Held by Fiscal Agent 622
Accounts Receivable 15,502
Interest Receivable -
Total Current Assets 8,110,618
Noncurrent Assets:
Net Pension Assets -
Nondepreciable Capital Assets 1,604,656
Depreciable Capital Assets, Net of
Accumulated Depreciation 1,806,557
Total Noncurrent Assets 3,411,213
Total Assets 11,521,831
DEFERRED OUTFLOWS OF RESOURCES
Amounts Related to Pension Plans -
Amounts Related to
Other Post Employment Benefit Plans -
Total Deferred Outflows of Resources -
LIABILITIES
Current Liabilities:
Accounts Payable 154,730
Accrued Payroll 32,492
Interest Payable -
Deposits and Advances -
Due to Other Funds 210,235
Insurance Assessments Payable -
Due within One Year 163,514
Claims and Judgments Payable - Due within One Year 3,635,479 Loan Payable - Due within One Year 379,204
Lease Liability - Due within One Year 25,069
Compensated Absences Payable - Due within One Year 13,212 Bonds Payable - Due within One Year -
Total Current Liabilities 4,613,935
Noncurrent Liabilities:
Insurance Assessments Payable -
Due in More than One Year 654,057
Claims and Judgments Payable -
Due in More than One Year 18,807,227
Loan Payable - Due in More than One Year 1,002,198
Lease Liability - Due in More than One Year 2,229
Compensated Absences Payable - Due within One Year 118,905 Bonds Payable - Due within One Year -
Net OPEB
Liabilities -
Total Noncurrent Liabilities 20,584,616
Total Liabilities 25,198,551
DEFERRED INFLOWS OF RESOURCES
Amounts Related to Pension Plans -
Amounts Related to Other Post Employment Benefit Plans - Total Deferred Inflows of Resources -
NET POSITION
Net Investment in Capital Assets 3,029,780
Restricted for Pension Benefts -
Unrestricted (16,706,500)
Total Net Position (13,676,720)$
CITY OF MONTEREY PARK
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION –
PROPRIETARY FUNDS
YEAR ENDED JUNE 30, 2022
See accomp
anying Notes to Basic Financial Statements.
(36)
Water Utility Refuse Sewer Total
OPERATING REVENUES
Charges for Services 14,089,633$ 6,843,084$ 3,252,413$ 24,185,130$ Meter Installations 141,629 - - 141,629
Other Revenue 4 - - 4
Total Operating Revenues 14,231,266 6,843,084 3,252,413 24,326,763
OPERATING EXPENSES
Administration 842,223 290,294 - 1,132,517
Commercial - Water 1,326,338 - - 1,326,338
Production - Water 4,333,075 - - 4,333,075
Distribution - Water 3,107,366 - - 3,107,366 Treatment Plant 2,768,689 - - 2,768,689
Street Maintenance - Refuse - 6,561 - 6,561
Storm Drain Maintenance - Refuse - 14,169 - 14,169
Refuse Collection - 6,303,564 - 6,303,564
Sanitary Sewer Maintenance - - 2,118,564 2,118,564
Depreciation 1,652,171 1,427 209,254 1,862,852 Salaries and Benefits - - - -
Materials and Supplies - - - -
Insurance and Claims - - - -
Miscellaneous - - - -
Total Operating Expenses 14,029,862 6,616,015 2,327,818 22,973,695 Operating Income (Loss) 201,404 227,069 924,595 1,353,068
NONOPERATING REVENUES (EXPENSES)
Interest Revenue 9,787 3,291 28,178 41,256
Interest Expense (334,312) (22, 311) (23,116) (379,739) Total Nonoperating
Revenues (Expenses) 305,560 (19,020) 5,062 291,602
Net Income (Loss) Before Capital
Contributions and Transfers 506,964 208,049 929,657 1,644,670 Capital Contributions 250,807 - - 250,807
Transfers Out (343,200) (31,300) (99,800) (474,300)
CHANGE IN NET POSITION 414,571 176,749 829,857 1,421,177 Net Position, Beginning of Year 50,819,545 684,663 9,948,665 61,452,873 NET POSITION, END OF YEAR 51,234,116$ 861,412$ 10,778,522$ 62,874,050$ Changes in Net Position 414,571$ 176,749$ 829,857$ 1,421,177$ Adjustment to Reflect the Consolidation of
Internal Service Fund Activities to
Related Enterprise Fund (636,981) (96,840) - (733,821)
Changes in Net Position
of Business-type Activities (222,410)$ 79,909$ 829,857$ 687,356$ Enterprise
CITY OF MONTEREY PARK
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION –
PROPRIETARY FUNDS (CONTINUED)
YEAR ENDED JUNE 30, 2022
See accomp
anying Notes to Basic Financial Statements.
(37)
Internal
Service
OPERATING REVENUES
Charges for Services 10,648,659$
Meter Installations -
Other Revenue 185,974
Total Operating Revenues 10,834,633
OPERATING EXPENSES
Administration -
Commercial - Water -
Production - Water -
Distribution - Water -
Treatment Plant -
Street Maintenance - Refuse -
Storm Drain Maintenance - Refuse -
Refuse Collection -
Sanitary Sewer Maintenance -
Depreciation 781,216
Salaries and Benefits 2,524,774
Materials and Supplies 1,754,238
Insurance and Claims 8,722,108
Miscellaneous 359,750
Total Operating Expenses 14,142,086
Operating Income (Loss) (3,307,453)
NONOPERATING REVENUES (EXPENSES)
Interest Revenue -
Interest Expense (52,858)
Total Nonoperating
Revenues (Expenses) (52,858)
Net Income (Loss) Before Capital
Contributions and Transfers (3,360,311)
Capital Contributions -
Transfers Out (87,800)
CHANGE IN NET POSITION (3,448,111)
Net Position, Beginning of Year (10,228,609)
NET POSTION, END OF YEAR (13,676,720)$
CITY OF MONTEREY PARK
STATEMENT OF CASH FLOWS – PROPRIETARY FUNDS
YEAR ENDED JUNE 30, 2022
See accomp
anying Notes to Basic Financial Statements.
(38)
Water Utility Refuse Sewer Total
CASH FLOWS FROM OPERATING ACTIVITIES
Cash Receipts from Customers 14,805,163$ 6,884,905$ 3,294,447$ 24,984,515$ Cash Receipts from Interfund Services Provided - - - - Cash Receipts from Reimbursements and
Other Operating Revenue - - - -
Cash Payments to Suppliers for Goods and Services (11,059,550) (6,589,264) (2,043,925) (19,692,739) Cash Payments to Employees for Services (2,226,004) (203,953) (695,022) (3,124,979) Cash Payments for Insurance Premiums
and Self-Insurance Claims - - - -
Net Cash Provided (Used) by
Operating Activities 1,519,609 91,688 555,500 2,166,797
CASH FLOWS FROM NONCAPITAL AND
RELATED FINANCING ACTIVITIES
Proceeds from Bonds Payable - - - -
Cash Received from Other Funds - - - -
Cash Paid to Other Funds (343,200) (31,300) (99,800) (474,300) Net Cash Provided (Used) by
Noncapital and Related Financing Activities (343,200) (31,300) (99,800) (474,300)
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES
Acquisition and Construction of Capital Assets (8,549,603) - (321,736) (8,871,339) Grant Proceeds 630,085 - - 630,085
Capital Contributions 250,807 - - 250,807
Proceeds from loans 4,000,000 - - 4,000,000
Principal Paid on Bonds (112,471) (24,626) (23,767) (160,864) Principal Paid on Loans and Lease Financing (605,861) - - (605,861) Interest Paid on Debt (338,571) (23,211) (24,048) (385,830) Net Cash Used by Capital and
Related Financing Activities (4,725,614) (47,837) (369, 551) (5,143,002)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest Received 5,777 3,137 26,350 35,264
Net Cash Provided by Investing Activities 5,777 3,137 26,350 35,264
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS (3,543,428) 15,688 112,499 (3,415,241) Cash and Cash Equivalents, Beginning of Year 26,342,192 1,204,973 8,463,803 36,010,968 CASH AND CASH EQUIVALENTS, END OF YEAR 22,798,764$ 1,220,661$ 8,576,302$ 32,595,727$ Cash and Investments 22,798,566$ 1,220,618$ 8,576,257$ 32,595,441$ Cash and Investments with Fiscal Agent 198 43 45 286
Total Cash and Cash Equivalents 22,798,764$ 1,220,661$ 8,576,302$ 32,595,727$ Enterprise Funds
CITY OF MONTEREY PARK
STATEMENT OF CASH FLOWS – PROPRIETARY FUNDS (CONTINUED) YEAR ENDED JUNE 30, 2022
See accompanying Notes to Basic Financial Statements.
(39)
Internal
Service
CASH FLOWS FROM OPERATING ACTIVITIES
Cash Receipts from Customers -$
Cash Receipts from Interfund Services Provided 10,633,157 Cash Receipts from Reimbursements and
Other Operating Revenue 185,974
Cash Payments to Suppliers for Goods and Services (2,221,252) Cash Payments to Employees for Services (2,493,166)
Cash Payments for Insurance Premiums
and Self-Insurance Claims (6,370,625)
Net Cash Provided (Used) by
Operating Activities (265,912)
CASH FLOWS FROM NONCAPITAL AND
RELATED FINANCING ACTIVITIES
Proceeds from Bonds Payable -
Cash Received from Other Funds 210,235
Cash Paid to Other Funds (87,800)
Net Cash Provided (Used) by
Noncapital and Related Financing Activities 122,435
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES
Acquisition and Construction of Capital Assets (746,101) Grant Proceeds -
Capital Contributions -
Proceeds from loans -
Principal Paid on Bonds -
Principal Paid on Loans and Lease Financing (400,769)
Interest Paid on Debt (52,858)
Net Cash Used by Capital and
Related Financing Activities (1,199,728)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest Received -
Net Cash Provided by Investing Activities -
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS (1,343,205)
Cash and Cash Equivalents, Beginning of Year 9,438,321
CASH AND CASH EQUIVALENTS, END OF YEAR 8,095,116$
Cash and Investments 8,094,494$
Cash and Investments with Fiscal Agent 622
Total Cash and Cash Equivalents 8,095,116$
CITY OF MONTEREY PARK
STATEMENT OF CASH FLOWS – PROPRIETARY FUNDS (CONTINUED) YEAR ENDED JUNE 30, 2022
See accomp
anying Notes to Basic Financial Statements.
(40)
Water Utility Refuse Sewer Total
RECONCILIATON OF OPERATING INCOME (LOSS) TO
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES
Operating Income (Loss) 201,404$ 227,069$ 924,595$ 1,353,068$ Adjustments to Reconcile Operating Income (Loss) to
Net Cash Provided (Used) by Operating Activities:
Depreciation 1,652,171 1,427 209,254 1,862,852 Changes in Assets and Liabilities:
(Increase) Decrease in Accounts Receivable 337,677 41,821 25,947 405,445 (Increase) Decrease in Inventory - - - -
(Increase) Decrease in Deferred Outflows of
Resources - Pension Plans 4,185,902 915,729 886,002 5,987,633 (Increase) Decrease in Deferred Outflows of
Resources - OPEB Plan 31,280 5,169 6,443 42,892
Increase (Decrease) in Accounts Payable 25,077 5,964 (568,304) (537,263) Increase (Decrease) in Accrued Payroll (121,046) 369 2,351 (118,326) Increase (Decrease) in Deposits and Advances 236,220 - 16,087 252,307 Increase (Decrease) in
Insurance Assessment Payable - - - -
Increase (Decrease) in Claims and
Judgments Payable - - - -
Increase (Decrease) in
Compensated Absences Payable (342,175) (95,079) 43,622 (393,632) Increase (Decrease) in Net Pension Liabilities (5,710,486) (1,249,256) (1,208,700) (8,168,442) Increase (Decrease) in Net OPEB Liability (543,684) (89,831) (111,983) (745,498) Increase (Decrease) in Deferred Inflows of
Resources - Pension Plans 1,295,367 283,381 274,182 1,852,930 Increase (Decrease) in Deferred Inflows of
Resources - OPEB Plan 271,902 44,925 56,004 372,831 Total Adjustments 1,318,205 (135,381) (369,095) 813,729 Net Cash Provided (Used) by
Operating Activities 1,519,609$ 91,688$ 555,500$ 2, 166,797$
Enterprise Funds
CITY OF MONTEREY PARK
STATEMENT OF CASH FLOWS – PROPRIETARY FUNDS (CONTINUED) YEAR ENDED JUNE 30, 2022
See accomp
anying Notes to Basic Financial Statements.
(41)
Internal
Service
RECONCILIATON OF OPERATING INCOME (LOSS) TO
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES
Operating Income (Loss) (3,307,453)$
Adjustments to Reconcile Operating
Income (Loss) to Net Cash Provided
Depreciation 781,216
Changes in Assets and Liabilities:
(Increase) Decrease in Accounts Receivable (15,502)
(Increase) Decrease in Inventory -
(Increase) Decrease in Deferred Outflows of
Resources - Pension Plans -
(Increase) Decrease in Deferred Outflows of
Resources - OPEB Plan -
Increase (Decrease) in Accounts Payable (86,319)
Increase (Decrease) in Accrued Payroll 17,599
Increase (Decrease) in Deposits and Advances -
Increase (Decrease) in
Insurance Assessment Payable (163,515)
Increase (Decrease) in Claims and
Judgments Payable 2,494,053
Increase (Decrease) in
Compensated Absences Payable 14,009
Increase (Decrease) in Net Pension Liabilities -
Increase (Decrease) in Net OPEB Liability -
Increase (Decrease) in Deferred Inflows of
Resources - Pension Plans -
Increase (Decrease) in Deferred Inflows of
Resources - OPEB Plan -
Total Adjustments 3,041,541
Net Cash Provided (Used) by
Operating Activities (265,912)$
CITY OF MONTEREY PARK
STATEMENT OF FIDUCIARY NET POSITION
JUNE 30, 2022
See accomp
anying Notes to Basic Financial Statements.
(42)
Private-Purpose
Trust Fund
CURRENT ASSETS
Cash and Investments 550,878$
Cash and Investments with Fiscal Agent 1,926,650
Total Assets 2,477,528
CURRENT LIABILITIES
Accounts Payable 2,250
Interest Payable 150,404
Current Portion of Noncurrent Liabilities 2,216,108
Total Current Liabilities 2,368,762
NONCURRENT LIABILITIES
Advances from City of Monterey Park 1,033,651
Bonds Payable, Net of Current Portion 8,650,774
Tax Increment Deferred Loans 81,057,609
Low/Mod Housing Deferred Loans 1,186,222
Total Noncurrent Liabilities 91,928,256
Total Liabilities 94,297,018
NET POSITION (DEFICIT)
Net Position (Deficit) Held in Trust for
Debt Service and Certain Administrative Expenses (91,819,490)$
CITY OF MONTEREY PARK
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
YEAR ENDED JUNE 30, 2022
See accomp
anying Notes to Basic Financial Statements.
(43)
Private-Purpose
Trust Fund
ADDITIONS
Redevelopment Property Tax Trust Fund 2,903,743$
Investment Income 597
Total Additions 2,904,340
DEDUCTIONS
Administration 189,999
Interest Expense and Fiscal Charges 5,628,259
Total Deductions 5,818,258
CHANGE IN NET POSITION (2,913,918)
Net Position, Beginning of Year (88,905,572)
NET POSITION, END OF YEAR (91,819,490)$
(44)
THIS PAGE INTENTIONALLY LEFT BLANK
CITY OF MONTEREY PARK
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(45)
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Description of Reporting Entity
The City of Monterey Park, California (the City) was incorporated May 29, 1916 un der the general laws of the State of California a nd enjoys all the right s and privileges pertaining to General Law cities. The City is governed by an elected fi ve-member City Council. As required by generally accepted accounting principles in the United States of America, the financial statements include the fin ancial activities of the City (the primary government), the Mont erey Park Public Financing Authority, and the Monterey Park Housing Authority. These blended component units are discussed below and are included in the reporting entity because of the significance of their operational and financial relationship with the City.
Blended Component Units
The Monterey Park Public Financing Authority
The Monterey Park Public Financing Authority (the Financing Authority) was organized in May 1989 under a joint exercise of power agreement to provide for the financing of public capital improvements for the City and the former Redevelopment Agency of Monterey Park. The members of the City Council act as the governing board of the Financing Authority and there is a financial benefit or burden relationship between the City and the Financing Authority. The Financing Authority does not issue separate financial statements.
The Monterey Park Housing Authority
The Monterey Park Housing Authority (the Housing Authority) was established in September 1992 to provide affordable housing within the City. The members of the City Council act as the governing board of the Housing Authority and there is a financial benefit or burden relationship between the City and the Housing Authority.
The Housing Authority does not issue separate financial statements.
B. Government-Wide and Fund Financial Statements
The govern ment-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. The effect of interfund activity has been removed from these statements and eliminations have been made to minimize the double counting of inte rnal activities. Governmental activiti es, 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.
The statement of activit ies demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues.
CITY OF MONTEREY PARK
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(46)
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
B. Government-Wide and Fund Financial Statements (Continued) Separate fin ancial statements are provided for governmental funds, proprietary fu nds and fiduciar y funds, even though the latter are excluded from the government-wide financial st atements. Major individual governmental funds and the major individual enterprise fund are reported as separate columns in the fund financial statements.
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The City’s financial sta tements are prepared in accordance with accounting prin ciples generally a ccepted in the United States of America. The Governmental Accoun ting Standards Board (GASB) is the acknowledged standard setting body for establishing accounting and financial reporting standards followed by governmental entities in the United States.
The government-wide and proprietary fund financial statements are reported using the “economic resources” measurement focus and the accrual basis of accounting.
Revenues are recorded when earned and expenses are recorded when the liab ility is incurred, re gardless of the timing of the related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.
Governmental fund financial statements are reported using the “current fina ncial resources” measurement focus and the modified accrual basis of accoun ting. Under this method, re venues are recognized when measurable a nd available. Revenues are considered to be available when they are collectible within the current period or soon enough the reafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal year. Expenditures generally are recorded when a liability is incurred. However, debt service expenditures, as well as expenditures relate d to compensated absences and claims and judgments are reco rded only when payment is due.
The primary revenue sources susceptible to accrual are property taxes, sales taxes, state gas tax subventions, franchise fees, transient occupancy tax, charges for serv ices, and interests associated with the current fiscal period and so have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the government.
The City reports the following major governmental funds:
The General Fund is the general operating fund of the City. All general tax revenues and other receipts that are not allocate d by law or contractual agreement to some other funds are accounted for in this fund. General operating expen ses and capital improvement costs which are not paid through other funds, are paid from this fund.
CITY OF MONTEREY PARK
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(47)
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
C. Measurement Focus, Basis of Accounting, and Financ ial Statement Presentation (Continued)
The Special Revenue Grants Fund was established to acco unt for the grants requiring segregated fund accounting. Financing is provided by federal, state and county agencies.
The Special Revenue Retirement/Pension Liability Fund was establishe d to account for revenue received from voter-approved prope rty tax levied to provide for employee retirement costs, as established pursuant to Monterey Park Municipal Code Section
2.40.060 and to account for the financial resources provided by the City in anticipation of estimated increases in retirement costs.
The Special Revenue Housing Fund is used to account for housing activities for the City and revenue received fro
m housing loan repayments and rental income.
The Capital Projects Streets Fund is used to account for funds accumulated for street related capital projects.
The City reports the following major proprietary funds:
The Water Utility Enterprise Fund is used to account for op erations that are financed and
operated in a manner similar to private business enterprises and where the intent of the City is that the costs (expenses, including depreciation) of providing goods services to the general public on a continuing basis be financed or recovered primarily through user charges. The City accounts for its water utility in this fund.
The Refuse Enterprise Fund is used to account for receipts and expenditures relatin g to waste management activities including refuse collection, disposal and reduction.
The Sewer Enterprise Fund
is used to account for receipts and expenses for
construction and improvement to deficient sanitary mains identified in the Sewer Master Plan.
Additionally, the City reports the following fund types:
Nonmajor Governmental Funds
The Special Revenue Funds are used to account for proceeds of specific revenue sources that are legally restricted or otherwise designated for specific purposes.
Proprietary Fund (Internal Service Funds)
The Internal Service Funds are utilized to finance and account for activities involved in rendering services to departments within the City. Costs of services are accumulated in these funds and charged to user departments as such costs are incurred. The City maintains five internal service funds for general liability claims, workers’ compensation claims, auto shop operations, separation benefits, and technology development.
CITY OF MONTEREY PARK
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(48)
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
C. Measurement Focus, Basis of Accounting, and Financ ial Statement Presentation (Continued)
Fiduciary Fund
The Private Purpose Trust Fund is used to account for activities of the Successor Agency to the Former Monterey Park Redevelopment Agency (the Successor Agency).
The private-purpose trust fund is reported using the accrual basis of accounting and the economic resources measurement focus.
As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are payments-in- lieu of taxe s and other charges paid by the government’s enterprise funds to 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 members, customers or applicants f or goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special asse ssments.
Internally dedicated resources are reported as general revenues rather than as prog ram revenues. Likewise, general revenues include all taxes.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses genera lly 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 Water Utility Enterprise Fund, Refuse Enterprise Fund, Sewer Enterprise Fund, and of the government’s internal service funds are charges to customers for sales and services. Operating expenses for enterprise f unds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and exp enses not meeting this definition are reported as nonoperating revenues and expenses.
D.
Property
Taxes
Under California law, property taxes are assessed and collected by the counties at 1% of assessed value plus other increases approved by the voters. Property taxes collected go into a pool and are then allocated to the cities based on a predetermined formula. The City accrues only those taxes which are received from the County of Los Angeles within 60 days after year-end.
Lien Date: January 1
Levy Date: June 30
Due Dates: November 1, February 1
Delinquent Dates: December 11, April 11
CITY OF MONTEREY PARK
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(49)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) E. Cash and Cash Equivalents
For purposes of the statements of cash flows, the City considers cash and all highly liquid investments with original maturities of three months or less from date purchased as cash and cash equivalents. In addition, funds invested in the City’s cash management pool are considered cash equivalents.
F. Investments
Investments are reported in the accompanying financial statements at fair value which is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Investments in external pools are valued based on the stated fair value represented by the external pool.
G. Inventories and Prepaid Assets
Inventories held by the Internal Service Funds are recorded at cost on a first-in, first-out basis. The inventories consist primarily of repair parts, fuel and oil. The City uses the consumption method for inventory control. The treatment accorded prepaid assets in the governmental funds is the consumption method.
H. Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure assets (roads, sidewalks, drainage systems, lighting systems, etc.), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. These assets are valued at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are valued at their acquisition value. Leased assets, which include equipment, follow the same capitalization thresholds as capital assets. Leased assets are recorded at the amount of the initial measurement of the lease liabilities and m odified by any lease payments made to the lessor at or before the commencement of the lease term.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend the life of assets are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. The capitalization threshold for property, plant and equipment is $5,000 and for infrastructure assets is $200,000. Depreciation is recorded in the government-wide financial statements on a straight-line basis over the useful life of the assets.
CITY OF MONTEREY PARK
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(50)
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
H. Capit al Assets (Continued)
Depreciation is charged to operations, using a straight-line method based on the following average useful lives of the assets:
Equipment 5 to 20 years
Buildings 40 to 50 years
Improvements 10 to 50 years
Water Meters 20 years
Water Mains 40 to 75 years
Water Hydrants 40 years
Wells 40 years
Other Water Equipment 5 to 40 years
Infrastructure:
Roadway 25 years
Bridge 40 years
Sewer System 50 years
Streetlight 20 years
Traffic Signal 20 years
I. Compensated Absences
The cost of earned but unused vacation and sick leave, for which the City has a future obligation to pay, is recognized in the government-wide financial statements. A liability for these amounts is reported in governmental funds only if they become due and payable as a result of employee resignations or retirements.
J. Pensions
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expe nse, information about the fiduciary ne t position of the plans and additions to/deductions from the pl ans’ fiduciary net position have been determined on the same basis as they are reporte d by the plans (N ote 10). For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with benefit terms.
Investments are reported at fair value.
Gains and losses re lated to changes in total pension liability and fiduciary net po sition are recognized in pen sion expense systematically over time. The first amortized amounts are recognized in pension expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflow s of resources related to pensions and are to be recognized in future pension expense. The amortization period differs depending on the source of the gain or loss. The difference between projected and actual earnings is amortized straight-line over five years. All other amounts are amortized stra ight-line over the average expected remaining se rvice lives of a ll members that are provided with benefits (active, inactive, and retired) as of the beginning of the measurement period.
CITY OF MONTEREY PARK
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(51)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) K. Other Post-Employment Benefits (OPEB)
For purposes of measuring the net OPEB liability and deferred outflows/inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the City’s California Public Employees Medical and Hospital Care Act (PEMCHA) plans (OPEB Plans) and additions to/deductions from the OPEB Plans’ fiduciary net position have been determined on the same basis as they are reporte d by PEMCHA. For this purpose, the City’s O PEB Plan recognizes benefit payments when due and payable in accordance with the benefit terms. Investments are reported at fair value.
Gains and losses related to changes in total OPEB liability and fiduciary net position are recognized in OPEB expense systematically over time. The first amortized amounts are recognized in OPEB expense for the year the gain or loss occurs. The remain ing amounts are categorized as deferred outflows and deferred inflows of resources rela ted to OPEB and are to be recognized in future pension expense. The am ortization period differs depe nding on the source of the gain or loss. The difference between projected and actual earnings is amortized straight-line over five years. All othe r amounts are amortized straight-line over the average expected remaining service lives of all members that are pro vided with benefits (active, inactive, and retired) as of the beginning of the measurement period.
L. Claims and Judgments
The accrual for workers’ compensation and general liability claims is based upon pa st experience which has been modified for current trends and information. While the ultimate amount of lo sses incurred through June 30, 2021 is dependent on future developments, based on information from the plan administrators, City management believes that the aggregate accrual is adequate to cover such losses, including amou nts for incurred but not reported claims (Note 12).
M. Unearn ed Revenue
Unearned revenues are reported in connection with resources that ha ve been received but not yet earned.
N. Fund Equity and Net Position
In the governmental fund financial statements, fund balances are classified as follows:
Nonspendable Fund Balance - This amount indicates the portion of fund balances which cannot be spent because they are either not in spendable form, such as prepaid items, inventories or loans receivable, or legally or contractually required to be maintained intact, such as the principal portion of an endowment.
Restricted Fund Balance - This amount indicates the portion of fund balances which has been restricted a) externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments; or b) imposed by law through constitutional provisions or enabling legislation.
CITY OF MONTEREY PARK
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(52)
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
N. Fund Equity and Net Position (Continued)
Committed Fund Balance - This amount indicates the portion of fund balances which can only be used for specific purposes pursuant to formal resolution or ordinance of the City Council. The City Council is considered the highest authority for the City.
Adoption of a resolution by the City Council is required to commit resources or to rescind the commitment.
Assigned Fund Balance - This amount indicates the portion of fund balances which is constrained by the City’s intent to be used for specific purpose, but is neither restricted nor committed. The City Manager is authorized by the City Council by resolution to determine and define the amount of assigned fund balances.
Unassigned Fund Balance - This amount indicates the portion of fund balances that do not fall into one of the above categories. The general fund is the only fund that reports a positive unassigned fund balance amount. In other governmental funds, it is not appropriate to report a positive unassigned fund balance amount.
When expenditures are incurred for purposes in which both restricted and unrestricted fund balances are available, the City’s policy is to apply restricted fund balances first, and then unrestricted fund balances as they are needed.
When expenditures are incurred for purposes where only unrestricted fund balances are available, the City uses the unrestricted resources in the following order: committed, assigned, and unassigned.
Net position represents the difference between all other elements in the statement of net position and should be displayed in the following three components:
Net Investment in Capital Assets - This component of net position consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of liabilities that are attributable to the ac quisition, construction, or improvement of those assets.
Restricted - This component of net position consists of restricted amounts by external creditors, grantors, contributors, or laws or regulations of other governments.
Unrestricted - This component of net position is the amount of the assets, deferred outflows of resources, liabilities, and deferred inflows of resources that are not included in the determination of net investment in capital assets or the restricted component of net position.
When expenses are incurred for purposes in which both restricted and unrestricted components of net position are available, the City’s policy is to apply the restricted component of net position assets first.
CITY OF MONTEREY PARK
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(53)
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
O. Use of Estimates
The preparation of the basic financial statements in accordance with accoun ting principles generally accepted in the United St ates of America (U.S. GAAP) requ ires management to make estimates and assumptions that affect certain re ported amounts and disclosures. Accordingly, actual results could differ from these estimates.
P. Implementation of New Accounting Pronouncements
In June 2017, the Governmental Accounting Standards Board (GASB) issued GASB Statement No. 87, Leases. This stan
dard requires the recognition of certain lease assets
and liabilitie s for leases that previously were classified as operating leases an d as inflows of r esources or outflows of resources recognized 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. Under this standard, a lessee is required to recognize a lease liability an d an intangible right-to-use lease asset, and a lessor is required to recognize a leas e receivable and a deferred inflow of resources.
NOTE 2 CASH AND INVESTMENTS
Cash and Investments
Cash and investments at June 30, 2022, are classified in the accompanying financial statements as follows:
Governmental Business-Type Fiduciary
Activities Activities Total Funds Total
Cash and Investments 71,883,813$ 32,595,441$ 104,479,254$ 550,878$ 105,030,132$ Cash and Investments
Held by Fiscal Agent 20,515,699 286 20,515,985 1,926,650 22,442,635 Total Cash and
Investments 92,399,512$ 32,595,727$ 124,995,239$ 2,477,528$ 127,472,767$ Government-Wide
Cash and investments a
t June 30, 2022, consisted of the following:
Deposits:
Cash on Hand 28,550 $
Demand Deposits with Financial Institutions 14,517,343
Time Certificates of Deposit 250,000
Total Cash 14,795,893
Investments:
Negotiable Certificates of Deposit 5,869,891
Local Agency Investment Fund (LAIF) 43,294,388
Los Angeles County Treasury Pool 41,069,964
Money Market Mutual Fund 22,442,631
Total Investments 112,676,874
Total Cash and Investments 127,472,767$
CITY OF MONTEREY PARK
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(54)
NOTE 2
CASH AND INVESTMENTS (CONTINUED)
Cash and Investments (Continued)
The City follows the practice of pooling cash and investments of all funds except for funds required to be held by outside fiscal agents under the provisions of bond indentures.
Interest income earned on pooled cash and investments is allocated quarterly to the General Fund and cert ain design
ated Special Revenue Funds based on the month-end
cash and investment balances. Proceeds obtained from long-term debt issuances including construction, lease payment and reserve fund balances are held by the City or by fiscal agents on behalf of the City and invested in the City’s name. Interest income on proceeds of debt is credited directly to the related fund, as defined by the Bond Indenture.
Tax allocation bonds reserve balances held by fiscal agents were transferred to the Successor Agency from the Former Monterey Park Redevelopment Agency and were reported in the Fiduciary Fund.
Deposits
At June 30, 2022, the carrying amount of the City’s demand deposits was $14,517,343 and the bank balance was $18,602,055. The $4,084,712 difference represents outstanding checks, deposits in transit, and other reconciling items.
Investments Authorized by the City’s Investment Policy
Under provisions of the City’s investment policy and in accordance with Section 53601 of the California Government Code, the City may invest in the types of investments listed in the table below. The table also identifies certain provisions intended to limit the City’s exposure to interest rate risk, credit risk, and concentration of credit risk.
Investment Type Maximum
Maturity
Maximum
Specified % of
Portfolio
Minimum Quality
Requirements
Local Agency Bonds 5 years None None
U.S. Treasury Obligations 5 years None None
State Obligations - CA and Others 5 years None None
U.S. Agency Obligations 5 years None None
Collateralized Bank Deposits 5 years None None
Medium Term Notes issued by
Corporations
5 years 30% "A" or better ranking by
nationally recognized rating
service; U.S. domiciled
corporations or licensed
depository
Local Agency Investment Funds
(LAIF)
N/A None None
CITY OF MONTEREY PARK
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
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NOTE 2
CASH AND INVESTMENTS (CONTINUED)
Investments Authorized by the City’s Investment Policy (Continued) Investment Type Maximum
Maturity
Maximum
Specified % of
Portfolio
Minimum Quality
Requirements
Los Angeles County Pooled
Investment Fund
None 10% of LACPIF
pool balance
None
Mutual Funds & Money Market
Mutual Funds
N/A
20% Highest ranking by not less
than 2 largest rating services,
have an SEC registered
investment advisor with 5+
years experience, assets
under management >$500
million
Banker's Acceptance 180 days 40% of portfolio
(no more than
30% in any once
commercial
bank)
None
Commercial Paper 270 days 40% of portfolio
for counties,
cities, and other
local agencies
(no more than
10% of agency's
money in the
commercial
paper)
"A" or higher rating for
issuer's debt within U.S.
corporations and have assets
in excess of $500 million.
Repurchase Agreements Not
allowable
Not allowable Not allowable
Negotiable Certificates of Deposit 5 years 30% None
Financial Futures & Financial
option contracts
5 years None None
Reverse Repurchase Agreements
& Securities Lending Agreements Not
allowable Not allowable Not allowable
Mortgage Pass-Through Securities 5 years 20% "A" or better ranking by nationally recognized rating
service
CITY OF MONTEREY PARK
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
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NOTE 2
CASH AND INVESTMENTS (CONTINUED)
Investments Authorized by Debt Agreements
In addition to the investment types listed above, the City may also invest appropriate funds in money market mutual funds and LAIF in accordance with bond indentures.
Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. LAIF, LACPIF, and negotiable certificates of deposit do not have a rating provided by a nationally recognized statistical rating organization. U.S. treasury bills are not required to be rated.
Concentration of Credit Risk
The investment policy of the City, as summarized above, contains certain limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. There are no investments in any one issuer that represent more than 5% of total City investments.
Custodial 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 (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The City’s investment policy contains the following policy requirements that would limit the exposure to custodial credit risk for deposits: The City’s investment policy limits investments in Certificates of Deposit to those insured up to $250,000 by the Federal Deposit Insurance Corporation.
The California Government Code requires California banks and savings and loan associations to secure a City’s deposits by pledging government securities as collateral. The market value of pledged securities must equal at least 110% of the face value of the deposits. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the City’s total deposits. The City may waive collateral requirements for deposits which are fully insured by federal depository insurance. However, the City has not waived the collateralization requirements. At June 30, 2022, City deposits were either insured by federal depository insurance or collateralized.
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates.
CITY OF MONTEREY PARK
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(57)
NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Disclosures Relating to Interest Rate Risk (Continued)
Information about the sensitivity of the fair values of the City’s investments to market interest rate fluctuations is provided by the following table that shows the remaining maturity of each investment:
Minimum
and Actual Fair Value 12 Months 1 to 2 2 to 3
Rating June 30, 2022 or Less Years Years
Investments:
Negotiable Certificates of Deposit N/A 5,869,891$ 5,869,891$ -$ -$ LAIF N/A 43,294,388 43,294,388 - - Los Angeles County Treasury Pool N/A 41,069,964 41,069,964 - - Total Treasury Investments 90,234,243 90,234,243 - - Investments Held by Fiscal Agents:
Money Market Mutual Fund AAA 22,442,631 - 1,667,917 20,774,714 Total Investments Held by Fiscal Agents 22,442,631 - 1,667,917 20,774,714 Total Investments 112,676,874$ 90,234,243$ 1,667,917$ 20,774,714$ Maturity
Investment in State Investment Pool
The City is a voluntary participant in LAIF which is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the state of California. The fair value of the City’s investment in this pool is reported in the accompanying financial statements at amounts based upon the City’s prorated share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis.
The City’s investments with LAIF at June 30, 2022, included a portion of the pool funds invested in Structured Notes and Asset-Backed Securities:
Structured Notes – Debt securities (other than asset-backed securities) whose cash flow characteristics (coupon rate, redemption amount, or stated maturity) depend upon one or more indices and/or that have embedded forwards or options.
Asset-Backed Securities – Generally mortgage-backed securities that entitle their purchasers to receive a share of the cash flows from a pool of assets such as principal and interest repayments from a pool of mortgages (for example, Collateralized Mortgage Obligations) or credit card receivables.
As of June 30, 2022, the City had $43,294,388 invested in LAIF, which had invested 1.88% of the pool investment funds in Structured notes and Medium-term Asset-backed Securities.
CITY OF MONTEREY PARK
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
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NOTE 2
CASH AND INVESTMENTS (CONTINUED)
Investment in Los Angeles County Investment Pool
The City is a voluntary participant in the Los Angeles County Investment Pool pursuant to Government Code Section 53684. The cash flow needs of participants are monitored daily to ensure that sufficient liquidity is maintained to meet the needs of those participants. At the time deposits are made, the Los Angeles County Investment Pool’s Treasurer may require the depositing entity to provide annual cash flow projections or an anticipated withdrawal schedule for deposits in excess of $1 million. Projections are to be performed no less than semi-annually. In accordance with Government Code Section 27136, all requests for withdrawal of funds for the purpose of investing or depositing the funds elsewhere shall be evaluated to ensure the proposed withdrawal will not adversely affect the principal deposits of the other participants. At June 30, 2022, the City had $41,069,964 invested in the Los Angeles County Investment Pool.
Fair Value Measurements
The City categorizes its fair value measurement 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 assets. Level 1 inputs are quoted prices in active markets for identical assets, Level 2 inputs are quoted prices of similar assets in active markets, and Level 3 inputs are significant unobservable inputs.
The fair value of the City’s investments in negotiable certificates of deposit were determined using Level 2 inputs (quoted prices of similar assets in active markets). The City’s other investments were not subject to the fair value hierarchy requirement.
CITY OF MONTEREY PARK
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
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NOTE 3
RECEIVABLES
Receivables of the City as of June 30, 2022, were:
Governmental Business-Type
Activities Activities Total
Accounts Receivable:
Property Taxes 1,420,277 $ - $ 1,420,277$
Sales Taxes 1,842,866 - 1,842,866
Utility Taxes 273,902 - 273,902
Water, Sewer, and Refuse Sales - 5,844,893 5,844,893
Subvention and Grants 731,841 - 731,841
Other 468,661 - 468,661
Total Accounts Receivable 4,737,547$ 5,844,893$ 10,582,440$ Interest Receivable (25,125)$ 37,318$ 12,193$ Loans Receivable, Net:
Residential Rehabilitation (CDBG) (Note 9) 48,015$ -$ 48,015$ SERA Program (Note 9) 4,322 - 4,322
Pacific Housing Loan (Note 9) 262,045 - 262,045 Pacific Bridge Loan (Note 9) 434,738 - 434,738 First-Time Homebuyers (Housing) 51,009 - 51,009 Critical Maintenance (Housing) 42,771 - 42,771 Critical Maintenance (Grants) 898,171 - 898,171 Abajo del Sol Loan (Grants) 2,281,606 - 2,281,606 LINC Community Development (Housing) 2,477,432 - 2,477,432 LINC Community Development (Grants) 994,366 - 994,366 Low/Mod Housing Deferred Loans 1,186,222 - 1,186,222 Subtotal 8,680,697 - 8,680,697
Less: Allowance for Uncollectible Loans (6,745,355) - (6,745,355) Total Loans Receivable, Net 1,935,342$ -$ 1,935,342$ T
otal Receivables 6,647,764$ 5,882,211$ 12,529,975$ Following is the detail of Loans Receivable:
A. Residential Rehabilitation – The City provided low interest financing for the rehabilitation of residential sites within the City through the Community Development Block Grant program. The amount of outstanding loan balance at June 30, 2022, is $48,015 and has been recorded as notes receivable in the Special Revenue Grants Fund.
B. SERA Program – The City participated in the State Earthquake Rehabilitation Assistance (SERA) program to assist residents with the application and loan proces ses for resident ial repairs and rehabilitation following the October 1987 Whittier-Narrows earthquake. The outstanding balance of loans placed through the program is $4,322 at June 30, 2022, and has been recorded as notes receivable in the Special Revenue Grants Fund.
CITY OF MONTEREY PARK
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
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NOTE 3
RECEIVABLES (CONTINUED)
C. Pacific Housing Loan – On July 21, 2004, the City entered into an agreement to provide a loan to Pacific Housing Development Corporation for the purpose of construction and renovation of an affordable housing facility for persons with developmental disabilities.
The loan, funded in April 2005, consists of a permanent residual receipts loan in the amount of $175,000 and a subordinated construction loan in the amount of $225,000.
The subordinated construction loan has been paid off by Pacific Housing in 2008-09.
Other remaining amounts bear interest at the rate of 3% per annum until paid. The loan was funded by use of Federal HOME Program funds and is reported in the Sp ecial Revenue Grants Fund. At June 30, 2022, outstanding principal and interest are $175,000 and $87,045, respectively.
D. Pacific Bridge Loan – In 1995, the former Redevelopment Agency entered into a thirty- year loan agreement with Pacific Bridge Housing Corporation for the purpose of construction and renovation of a disabled adult affordable housing facility. In the agreement the former Redevelopment Agency agreed to loan to Pacific Bridge Housing Corporation up to the maximum sum of $240,478 bearing interest at the rate of 3% per annum until paid. Principal and interest payments are due in annual installments commencing upon February 15 of the first full calendar year following the date of the initial o ccupancy of the facility and continuing annually thereafter on each succe ssive February 1 5 through and including the date which is thirty (30) years after the Repayment Commencement Date. The amount of such annual instal lments payable by Borrower is based on the Annual Residential Receipt Installments as described in the agreement. During 1996-97, the loan was funded by the use of federal HOME Prog ram funds, and is reported in the Special Revenue Grants Fund. At June 30, 2022, outstanding principal and interest are $240,478 and $194,260, respectively.
E. First Time Homebuyers – Beginning 1996-97, the City provided second mortgage loans through the First-Time Homebuyer Program to assist qualified first-time homebuyers to purchase residences. All second loans will be fixed at an interest rate of five per cent (5%) and fo r a term of thirty (30) years. If the buyer retains the property for thirty ( 30) years, both principal and interest will be forgiven. The loans were tran sferred from the former Red evelopment Agency’s Housing Capital Projects Fund to the City’s Special Revenue Housing Fun d on February 1, 2012 due to the dissolution of the fo rmer Redevelopment Agency. At June 30, 2022, $51,009 is the amount of outstanding loan balances, and has been reported as notes receivable with an offset of allowance for uncollectible notes in the Special Revenue Housing Fund in the fund level fina ncial statements and in the government-wide statements.
CITY OF MONTEREY PARK
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
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NOTE 3 RECEIVABLES (CONTINUED)
F. Critical Maintenanc e – Beginning in 1997-98, the City offered low interest rate loans through the Critical Maintenance Loan Program to assist low and moderate income homeowners for essential or emergency repairs. At June 30, 2022, the loans outstanding
totaled $940,942. Of this amount, $42,771 is funded by the former Redevelopment Agency’s Housing Capital Projects Fund and $898,171 is funded by the Federal
HOME Program Grants Fund. The outstanding loan balance of $42,771 was transferred from the former Redevelopment Agency’s Housing Set Aside Fund to the City’s Special Revenue Housing Fund and has been reported as notes receivable with an offset of allowance for uncollectible notes in the fund level financial statements and in the government-wide statements. The outstanding loan balance of $898,171 has been reported as notes receivable with
an offset of allowance for uncollectible notes in the
Special Revenue Grants Fund in the fund level financial statements and in the government-wide statements.
G. Abajo del
Sol – In 1998, the Housing Authority and the Abajo del Sol, Limited Partnership had entered into a housing development agreement. Under the agreement, the Authority provided to the Developer a $1.2 million loan bearing interest at the rate of
5.1% per annum for the construction
of 60 units of affordable housing for senior citizens.
On or before March 15 th of each year, the Borrower shall pay lender an amount equal to the applicable percentage of the Net Cash Flow attributable to the prior calendar year.
The loan is funded by the Federal HOME Program Grants Fund. At June 30, 2022, outstanding principal and interest being recorded as notes receivable are $1,187,344 and $1,094,262, respectively, in the Special Revenue Grants Fund with an offset of allowance for uncollectible notes in the fund level financial statement and in the government-wide statements.
H. LINC Community Development – In 2015, the Monterey Park Successor Housing Agency and City entered into a housing development agreement with LINC Community Development Corporation (LINC). Under the agreement, the Monterey Park Successor Housing Agency sold 5
properties to the developer in exchange for a $2,080,000 loan bearing compound interest at the rate
of 2.41% per annum for 5 units of affordable rental
housings. At June 30, 2022, outstanding principal and interest being recorded as notes receivable are $2,080,000 and $397,432, respectively, in the Housing Fund with an offset of allowance for uncollectible notes in the fund level financial statement and in the government-wide statements. The properties were purchased with former Redevelopment Agency’s Housing Set Aside fund. As a result, the loan was reported in the City’s
Special Revenue Housing Fund and with an offset of allowance for uncollectible notes in the fund level financial statements and in the government-wide statements.
As part of the development agreement, the City also sold one of the City’s parking lots to the LINC for development of a 6-unit affordable rental housing. The City also used the Federal HOME Program Grants Fund to provide construction loan bearing simple interest at the rate of 3% per annum. As of June 30, 2022, $994,366 has been
funded and is reported as loans receivables in the Special Revenue Grants Fund with an offset of allowance for uncollectible notes in the fund level financial statement and in the government-wide statements.
CITY OF MONTEREY PARK
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
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NOTE 3
RECEIVABLES (CONTINUED)
I. Low/Mod Housing Defe rred Loans – State law requires redevelopment agencies to set aside 20% of their tax increment revenues for low/mod h ousing. In 1997, the former Redevelopment Agency approved a plan to set aside future tax incr ement revenue in addition to the regular 20% set aside requirements. The form er Redevelopment Agency was dissolved on February 1, 2012. This commitment became a liabilit y to the Successor Agency due to the City’s Special Revenue Housing Fund. A summary of the repayment plan is presented below:
For the Years Ending June 30, Amount
2024 - 2029 500,000$
2030 - 2034 450,000
2035 - 2039 236,222
1,186,222$
NOTE 4
INTERFUND TRANSACTIONS
Individual interfund receivables and payables were as follows at June 30, 2022:
Due to/from Other Funds
Due from Other Funds Due to Other Funds Amount
General Fund Street Capital Projects Fund 4,260$
General Fund Nonmajor Governmental Funds 424,574
General Fund Internal Service Funds 210,235
639,069$
The interfund balances resulted from borro wing of cash for temporary purposes. All balances ar
e expected to be reimbursed within the subsequent year.
Transfers
Transfers In Transfers Out Amount
Grants Special Revenue Fund General Fund 45,264$
Retirement/Pension Liability Special Revenue Fund General Fund 2,764,400 Retirement/Pension Liability Special Revenue Fund Water Utilities Enterprise Fund 343,200 Retirement/Pension Liability Special Revenue Fund Refuse Enterprise Fund 31,300 Retirement/Pension Liability Special Revenue Fund Sewer Enterprise Fund 99,800 Retirement/Pension Liability Special Revenue Fund Nonmajor Governmental Funds 160,700 Retirement/Pension Liability Special Revenue Fund Inter nal Service Funds 87,800 Nonmajor Governmental Funds Nonmajor Governmental Funds 613,627 4,146,091$
CITY OF MONTEREY PARK
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(63)
NOTE 4 INTERFUND TRANSACTIONS (CONTINUED)
Transfers (Continued)
Transfers are used to move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to expend. In 2021-22, transfers to the Retirement/Pension Liability Special Revenue Fund were council-approved pension and OPEB contributions. The transfer of $45,264 from the General Fund to the Special Revenues Grant Fund was to classify qualifying grant expenditures. The transfer of $613,267 Nonmajor Special Revenue Sales Tax Bond Fund from Other Nonmajor Special Revenues Funds (Measure R, Measure M and Proposition C) were to fund debt service.
NOTE 5 RECEIVABLES FROM SUCCESSOR AGENCY
In 2009, the State passed legislation in ta king away redevelopment funds from local Agencies as part of an effort to address its budget deficit. Furthermore, SB 68 was signed into law which allowed agencies to use accumulated housing funds to pay for the State required Supplemental Educational Revenue Augmentation Funds (SERAF) payments. On August 4, 2010, the former Redevelopment Agency passed two resolutions, RA 661 and 662, authorizing the Takeaway Loan to be made from the former Redevelopment Agency Capital Projects Fund (Housing Set Aside Fund) to the former Redevelopment Agency Debt Service Fund (Atlantic-Garvey and Merged Project Areas), in an amount of $1,459,258 and $1,142,640, respectively, without interest.
On May 4, 2011, the former Redevelopment Agency passed two resolutions, RA 682 and 683, authorizing additional Takeaway Loans to be made from the Redevelopment Agency Capital Projects Fund (Housing Set Aside Fund) to the Redevelopment Agency Debt Service Fund (Atlantic-Garvey and Merged Project Areas), in an amount of $300,436 and $235,249, respectively. The interest is accumulated at LAIF rate.
On February 1, 2012, $2,617,203 was transferred from the former Redevelopment Agency Debt Service Fund to the Successor Agency due to the dissolution of the former Redevelopment Agency.
The Receivable from Successor Agency bal ance at June 30, 2022, amounted to $1,033,650. This loan will be paid back to the Special Revenue Housing Fund according to a specific formula through the Recognized Ob ligation Payment Schedule distribution per the State of California Department of Finance (DOF).
CITY OF MONTEREY PARK
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(64)
NOTE 6 CAPITAL ASSETS
At June 30, 2022, the capital assets balances for the City are as follows:
Governmental Business-Type
Activities Activities Total
Capital Assets, Not Being Depreciated:
Land 8,465,051 $ 499,975 $ 8,965,026 $
Construction in Progress 4,668,763 14,312,747 18,981,510 Total Capital Assets,
Not Being Depreciated 13,133,814 14,812,722 27,946,536 Capital Assets, Being Depreciated:
Buildings 30,391,663 285,050 30,676,713 Improvements 28,501,442 59,388,553 87,889,995 Equipment 30,903,878 3,690,041 34,593,919 Infrastructure 39,271,505 12,043,370 51,314,875 Leased Asset 145,316 3,537 148,853 Total Capital Assets,
Being Depreciated 129,213,804 75,410,551 204,624,355 Less Accumulated Depreciation:
Buildings (16,160,927) (152,811) (16,313,738) Improvements (8,001,964) (29,597,019) (37,598,983) Equipment (26,310,405) (3,460,649) (29,771,054) Infrastructure (25,352,593) (9,411,105) (34,763,698) Less Accumulated Amortization:
Leased Asset (47,312) (585) (47,897) Total Accumulated Depreciation (75,873,201) (42,622,169) (118,495,370) Total Capital Assets,
Being Depreciated, Net 53,340,603 32,788,382 86,128,985 Total Capital Assets, Net 66,474,417 $ 47,601,104 $ 114,075,521 $
CITY OF MONTEREY PARK
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(65)
NOTE 6 CAPITAL ASSETS (CONTINUED)
Governmental Activities
A summary of changes in capital asset activity for the year ended June 30, 2022, is as follows:
Balance at Balance at
July 1, 2021 Additions Deletions Transfers June 30, 2022 Capital Assets, Not Being Depreciated:
Land 8,465,051$ -$ -$ -$ 8,465,051$ Construction in Progress 6,622,326 9,418,309 - (11,371,872) 4,668,763 Total Capital Assets,
Not Being Depreciated 15,087,377 9,418,309 - (11,371,872) 13,133,814 Capital Assets, Being Depreciated:
Buildings 30,391,663 - - - 30,391,663 Improvements 22,259,677 38,244 - 6,203,521 28,501,442 Equipment 30,896,545 121,178 (113,845) - 30,903,878 Infrastructures 34,103,154 - - 5,168,351 39,271,505 Leased Assets 145,316 - - - 145,316 Total Capital Assets,
Being Depreciated 117,796,355 159,422 (113,845) 11,371,872 129,213,804 Less Accumulated Depreciation:
Buildings (15,567,995) (592,932) - - (16,160,927) Improvements (7,140,643) (861,321) - - (8,001,964) Equipment (24,454,416) (1,969,834) 113,845 - (26,310,405) Infrastructures (23,779,752) (1,572,841) - - (25,352,593) Less Accumulated Amortization:
Leased Assets - (47,312) - - (47,312) Total Accumulated Depreciation (70,942,806) (5,044,240) 113,845 - (75,873,201) Total Capital Assets,
Being Depreciated, Net 46,853,549 (4,884,818) - 11,371,872 53,340,603 Total Capital Assets, Net 61,940,926$ 4,533,491$ -$ -$ 66,474,417$
CITY OF MONTEREY PARK
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(66)
NOTE 6 CAPITAL ASSETS (CONTINUED)
Business-Type Activities
A summary of changes in capital asset activity for the year ended June 30, 2022, is as follows:
Balance at Balance at
July 1, 2021 Additions Deletions Transfers June 30, 2022 Capital Assets, Not Being Depreciated:
Land 499,975$ -$ -$ -$ 499,975$ Construction in Progress 9,596,602 8,836,127 - (4,119,982) 14,312,747 Total Capital Assets,
Not Being Depreciated 10,096,577 8,836,127 - (4,119,982) 14,812,722 Capital Assets, Being Depreciated:
Buildings 285,050 - - - 285,050 Improvements 55,649,214 26,053 - 3,713,286 59,388,553 Equipment 3,690,041 - - - 3,690,041 Infrastructures 11,627,514 9,160 - 406,696 12,043,370 Leased Assets 3,537 - - - 3,537 Total Capital Assets,
Being Depreciated 71,255,356 35,213 - 4,119,982 75,410,551 Less Accumulated Depreciation:
Buildings (147,969) (4,842) - - (152,811) Improvements (28,013,864) (1,583,155) - - (29,597,019) Equipment (3,305,419) (155,230) - - (3,460,649) Infrastructures (9,292,065) (119,040) - - (9,411,105) Less Accumulated Amortization:
Leased Assets - (585) - - (585) Total Accumulated Depreciation (40,759,317) (1,862,852) - - (42,622,169) Total Capital Assets,
Being Depreciated, Net 30,496,039 (1,827,639) - 4,119,982 32,788,382 Total Capital Assets, Net 40,592,616$ 7,008,488$ -$ -$ 47,601,104$
Depreciation expense was charged to the following functions:
Governmental Business-Type
Activities Activities Total
General Government 199,430 $ - $ 199,430$ Public Safety 1,907,756 - 1,907,756 Public Safety/Shop 359,014 - 359,014 Community Development 41,736 - 41,736 Culture and Recreation 792,229 - 792,229 Street and Highways 1,744,075 - 1,744,075 Water Utility - 1,652,171 1,652,171 Refuse 1,427 1,427
Sewer - 209,254 209,254 Total 5,044,240 $ 1,862,852 $ 6,907,092 $
CITY OF MONTEREY PARK
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(67)
NOTE 7 LONG-TERM LIABILITIES
Changes in long-term liabilities for the City for the year June 30, 2022, are as follows:
Due in
Balance at Balance at Due Within More Than
Governmental Activities June 30, 2021 Additions Deletions June 30, 2022 One Year One Year Direct Borrowings:
Loans 5,668,732 $ -$ (699,521)$ 4,969,211$ 727,275$ 4,241,936$ Lease Liability 145,316 - (49,557) 95,759 43,726 52,033 HUD Section 108
Loans Payable 1,047,000 - (508,000) 539,000 539,000 - Total Direct Borrowings 6,861,048 - (1,257,078) 5,603,970 1,310,001 4,293,969 Other Debt:
2004 Taxable Pension
Obligation Bonds 11,770,000 - (425,000) 11,345,000 425,000 10,920,000 2021 Taxable Pension
Obligation Bonds 100,892,026 - (2,969,136) 97,922,890 3,657,698 94,265,192 2022 Sales Tax Revenue Bonds - 17,750,000 (165,000) 17,585,000 305,000 17,280,000 Premium - 3,276,121 (109,204) 3,166,917 - 3,166,917 Total Other Debt 112,662,026 21,026,121 (3,668,340) 130,019,807 4,387,698 125,632,109 Other Long-term Liabilities:
Compensated Absences 5,027,340 190,015 (5,074) 5,212,281 521,228 4,691,053 Insurance Assessments
Payable (Note 12) 981,086 - (163,515) 817,571 163,514 654,057 Claims and Judgments (Note 12) 19,948,654 5,448,145 (2,954,093) 22,442,706 3,635,479 18,807,227 Total Other
Long-term Liabilities 25,957,080 5,638,160 (3,122,682) 28,472,558 4,320,221 24,152,337 Total Governmental
Activities 145,480,154$ 26,664,281$ (8,048,100)$ 164,096,335$ 10,017,920$ 154,078,415$
Due in
Balance at Balance at Due Within More Than
Business-Type Activities June 30, 2021 Additions Deletions June 30, 2022 One Year One Year Direct Borrowings:
Loans 7,915,247 $ 4,000,000 $ (605,212) $ 11,310,035 $ 1,063,725 $ 10,246,310 $ Lease Liability 3,537 - (649) 2,888 779 2,109 Total Direct Borrowings 7,918,784 4,000,000 (605,861) 11,312,923 1,064,504 10,248,419 Other Debt:
2021 Taxable Pension
Obligation Bonds 5,442,974 - (160,864) 5,282,110 197,302 5,084,808 Total Other Debt 5,442,974 - (160,864) 5,282,110 197,302 5,084,808 Other Long-term Liabilities:
Compensated Absences 736,529 - (512,472) 224,057 22,406 201,651 Total Other
Long-term Liabilities 736,529 - (512,472) 224,057 22,406 201,651 Total Business-Type
Activities 14,098,287 $ 4,000,000 $ (1,279,197) $ 16,819,090 $ 1,284,212 $ 15,534,878 $
Internal service funds predominately serve the governmental funds. Accordingly, long-term liabilities are included as part of the above totals for governmental activities. At June 30, 2022, $132,117 in compensated absences, $27,298 in lease liability, $22,442,706 in claims and judgments, and $817,571 in insurance assessments payable, all related to internal service funds, are included as part of the totals of long-term debt for governmental activities.
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NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
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NOTE 7 LONG-TERM LIABILITIES (CONTINUED)
Typically, the General Fund has been used to liquidate the liability for compensated absences, net pension liabilities and net OPEB li ability for the governmental activities. The General Liability and Workers’ Compensation Internal Service Funds have been used to liquidate the liabilities for claims and judgements. The General Liability Internal Service Fund is used to liquidate the liabilities for the insurance assessments.
Loan Obligations
Siemens Loan
On September 23, 2014, the City and Siemens Public, Inc. entered into a finance-purchase agreement for an amount of $10,511,901. The City used the monies for energy efficiency improvements throughout city parks, facilities and infrastructure. The term of the agreement is 15 years, commencing on September 23, 2014 through June 23, 2030, at an interest rate of 2.80%. Principal and interest payments are due quarterly in amounts ranging from $140,217 to $325,545 over the term of the agreement. The transactions are shared by the General Fund and the Water Utility Fund. At June 30, 2022, the outstanding balance for the agreement was $7,626,972 of which $1,144,049 is reported in governmental type activities and $6,482,923 is reported in business-type activities.
The annual debt service requirements on the agreement are as follows:
Year Ending June 30, Principal Interest Total
2023 689,167$ 206,361$ 895,528$
2024 760,474 186,320 946,794
2025 836,888 164,229 1,001,117
2026 905,023 140,085 1,045,108
2027 978,435 113,978 1,092,413
2028 1,055,929 85,773 1,141,702
2029 1,138,523 55,345 1,193,868
2030 1,262,533 21,983 1,284,516
Total 7,626,972$ 974,074$ 8,601,046$
Motorola Loan
On March 16, 2021, the City and Motorola Solutions, Inc. entered into a finance-purchase agreement for police radios, dispatch consoles and station equipment in the amount of $2,682,300. The term of the agreement is ten years through April 2, 2031, at an interest rate of 2.58%. Annual principal and interest payments of $307,745 are due April 1 st of each year
commencing in 2022.
CITY OF MONTEREY PARK
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
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NOTE 7 LONG-TERM LIABILITIES (CONTINUED)
Loan Obligations (Continued)
Motorola Loan (Continued)
The annual debt service requirements on the agreement are as follows:
Year Ending June 30, Principal Interest Total
2023 244,696$ 63,049$ 307,745$
2024 251,008 56,737 307,745
2025 257,485 50,260 307,745
2026 264,127 43,618 307,745
2027 270,943 36,802 307,745
2028 277,932 29,813 307,745
2029 285,104 22,641 307,745
2030 292,459 15,286 307,745
2031 300,005 7,740 307,745
Total 2,443,759$ 325,946$ 2,769,705$
Fire Engine Loan
On September 28, 2018, the City and Banc of America Public Capital Corporation entered into a finance-purchase agreement for fire engine in the amount of $2,618,000. The term of the agreement is 30 years at an interest rate of 4.0702%. Principal and interest payments totaling $210,129 are due quarterly over the term of the agreement.
The annual debt service requirements on the agreement are as follows:
Year Ending June 30, Principal Interest Total
2023 379,204$ 41,053$ 420,257$
2024 391,393 28,864 420,257
2025 403,974 16,283 420,257
2026 206,831 3,298 210,129
Total 1,381,402$ 89,498$ 1,470,900$
La Loma Highland Loan
On January 1, 2001, the City and California Infrastructure and Economic Development Bank entered into a finance-purchase agreement for an amount of $2,000,000. The City used the monies for facility improvements. The term of the agreement is thirty years through August 1, 2030, at an interest rate of 4.07%. Semiannual principal and interest payments of ranging from $50,450 to $120,953 are due February 1
st and August 1st of each year.
CITY OF MONTEREY PARK
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
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NOTE 7 LONG-TERM LIABILITIES (CONTINUED)
Loan Obligations (Continued)
La Loma Highland Loan (Continued)
The annual debt service requirements on the agreement are as follows:
Year Ending June 30, Principal Interest Total
2023 77,933$ 32,078$ 110,011$
2024 81,103 28,841 109,944
2025 84,405 25,473 109,878
2026 87,841 21,968 109,809
2027 91,416 18,320 109,736
2028 95,136 14,524 109,660
2029 99,008 10,573 109,581
2030 103,038 6,461 109,499
2031 107,232 2,182 109,414
Total 827,112$ 160,420$ 987,532$
Lease Liability
The City leases office equipment for vari ous lease terms under long-term, noncancelable lease agreements. The leases expire at various dates through 2027. This liability, amounting to $95,759 at June 30, 2022, will be paid in future years.
The annual debt service requirements on the agreements are as follows:
Year Ending June 30, Principal Interest Total
2023 43,726$ 401$ 44,127$
2024 18,439 271 18,710
2025 16,311 169 16,480
2026 14,448 71 14,519
2027 2,835 6 2,841 Total 95,759$ 918$ 96,677$
HUD Section 108 Loan Program
In August 2002, the City participated in the U.S. Department of Housing and Urban Development (HUD) Section 108 Loan Guarantee Program and received note proceeds of $6,500,000. The City uses the proceeds for the development of the Market Place project.
The annual debt service payments are funded through the City’s Community Development Block Grant funds. On May 28, 2015, the City participated in the HUD refinancing program and refinanced the Section 108 Loan for a fixed rate note (Series 2015 A Certificates).
Interest payments are made semiannually on August 1 and February 1. Principal payments are made on August 1 of each year and continue until August 2022. The outstanding balance of the HUD Section 108 Loan was $539,000 at June 30, 2022.
CITY OF MONTEREY PARK
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
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NOTE 7 LONG-TERM LIABILITIES (CONTINUED)
HUD Section 108 Loan Program (Continued)
The annual debt service requirements on the HUD Section 108 Loan are as follows:
Year Ending June 30, Principal Interest Total
2023 539,000$ 6,603$ 545,603$
Total 539,000$ 6,603$ 545,603$
2004 Taxable Pension Obligation Bonds
On June 29, 2004, the City pursuant to an Agreement with the California Statewide Communities Development Authority, issued $17,405,000 in Taxable Pension Obligation Bonds, 2004 Series A-1. These Bonds were issued to fund the unfunded liabilities of the City’s Safety Plan to the California Public Employees’ Retirement System (CALPERS). The City is contractually obligated to appropriate and make payments to CALPERS arising as a result of retirement benefits accruing to members of CALPERS. The City’s obligation includes, among others, the requirement to amortize the unfunded accrued actuarial liability over a multi-year period. On June 29, 2004, the City contributed $17,012,841 of the bond proceeds to CALPERS to fund a portion of the unfunded liability for the Safety Plan that provides retirement benefits to the City’s sworn Police Officers and Firefighters.
Bond interest is payable semi-annually on June 1 and December 1 commencing December 1, 2004. The rate of interest varies from 4.510% to 6.076% per annum. Principal is payable in annual installments ranging from $25,000 to $1,350,000 commencing on June 1, 2009 and ending on June 1, 2034. On or before August 1st of each year, the City is required to deposit with the trustee the amount equal to the next year’s debt service payment in lieu of a reserve requirement.
Optional Redemption: The bonds maturing on or before June 1, 2016 were not subject to optional redemption. The bonds maturing on June 1, 2024 and on June 1, 2034 are subject to optional redemption prior to maturity at the option of the Authority, in whole or in part on any date at a redemption price equal to the greater of (1) 100% of principal to be redeemed or (2) present value of the remaining debt service discounted at Treasury Rate plus 10.0 basis points for the 2024 Term Bonds or plus 12.5 basis points for the 2034 Term Bonds.
Bonds will be selected for redemption on a pro rata basis for both the optional and mandatory sinking fund redemption.
The outstanding balance of the 2004 Taxable Pension Obligation Bonds was $11,345,000 at June 30, 2022.
CITY OF MONTEREY PARK
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
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NOTE
7 LONG-TERM LIABILITIES (CONTINUED)
2004 Taxable Pension Obligation Bonds (Continued)
The annual debt service requirements on the 2004 Taxable Pension Obligation Bonds are as follows:
Year Ending June 30, Principal Interest Total
2023 425,000$ 687,819$ 1,112,819$
2023 410,000 662,761 1,072,761
2024 795,000 638,588 1,433,588
2025 845,000 590,283 1,435,283
2027 895,000 538,941 1,433,941
2028 - 2032 5,350,000 2,406,399 7,756,399 2033 - 2034 2,625,000 774,994 3,399,994 Total 11,345,000$ 6,299,785$ 17,644,785$
2021 Taxab
le Pension Obligation Bonds
On February 16, 2021, the City issued $106,335,000 in Taxable Pension Obligation Bonds, 2021 Series A. These Bonds were issued to fund the unfunded liabilities of the City’s Miscellaneous and Safety Plans to the California Public Employees’ Retirement System (CALPERS). The City is contractually obligated to appropriate and make payments to CALPERS arising as a result of retirement benefits accruing to members of CALPERS. The City’s obligation includes, among others, the requirement to amortize the unfunded accrued actuarial liability over a multi-year period. On February 16, 2021, the City contributed $105,545,217 ($41,146,631 to the Miscellaneous Plan and $64,398,586 to the Safety Plan) of the bond proceeds to CALPERS to fund a portion of the unfunded liability for the Miscellaneous and Safety Plans that provides retirement benefits to the City’s eligible employees. This transaction and future debt service requirements on the bonds are being shared between the City’s general fund and enterprise funds.
Bond interest is payable semi-annually on June 1 and December 1 commencing December 1, 2021. The rate of interest varies from 0.213% to 3.021% per annum. Principal is payable in annual installments ranging from $3,130,000 to $7,135,000 commencing on June 1, 2022 and ending on June 1, 2043. On or before August 1st of each year, the City is required to deposit with the trustee the amount sufficient to pay debt service on the bonds, the 2004 Bonds and any additional bonds and refunding obligations as may be issued on a parity basis in accordance with the Trust Agreement.
Optional Redemption: The bonds maturing on or before June 1, 2032 may be redeemed at the option of the City from any source of funds on any date on or after June 1, 2031 in whole or in part at a redemption price equal to the principal amount to be redeemed, together with accrued interest to the date of redemption, without premium. The bonds are also subject to redemption prior to June 1, 2031 at the option of the City, in whole or in part, at any time, at a redemption price equal to the greater of: (1) 100% of principal amount to be redeemed or (2) the su m, calculated by the City, of the present value of the remaining scheduled payments of principal and interest on the bonds to be redeemed discounted to the date of redemption on a semiannual basis at a Treasury Rate plus 15 basis points, plu s accrued and unpaid interest on the bonds being redeemed to the date fixed for redemption.
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NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
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NOTE 7 LONG-TERM LIABILITIES (CONTINUED)
2021 Taxable Pension Obligation Bonds (Continued)
The outstanding balance of the 2021 Taxable Pension Obligation Bonds was $106,335,000 at June 30, 2022, of which $99,172,992 is reported in governmental type activities and $5,032,008 is reported in business-type activities.
The annual debt service requirements on the 2021 Taxable Pension Obligation Bonds are as follows:
Year Ending June 30, Principal Interest Total
2023 3,855,000$ 2,369,602$ 6,224,602$
2024 3,910,000 2,355,608 6,265,608
2025 3,575,000 2,331,132 5,906,132
2026 3,605,000 2,299,422 5,904,422
2027 3,645,000 2,260,235 5,905,235
2028 - 2032 19,170,000 10,374,338 29,544,338 2033 - 2037 25,670,000 8,175,495 33,845,495 2038 - 2042 32,640,000 4,094,814 36,734,814 2043 7,135,000 215,548 7,350,548
Total 103,205,000$ 34,476,194$ 137,681,194$
CITY OF MONTEREY PARK
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
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NOTE 7 LONG-TERM LIABILITIES (CONTINUED)
Changes in long-term debt for the Successor Agency for the year ended June 30, 2022, are as follows:
Due in
Balance at Balance at Due Within More Than
Successor Agency July 1, 2021 Additions Deletions June 30, 2022 One Year One Year Other Debt:
Bonds Payable:
2013A Tax Refunding Bonds -
Atlantic-Garvey Project
Redevelopment Project 7,140,000 $ - $ (1,115,000)$ 6,025,000 $ 1,175,000 $ 4,850,000 $ 2013B Tax Refunding Bonds -
Merged Redevelopment
Project 4,300,000 - (460,000) 3,840,000 480,000 3,360,000 11,440,000 - (1,575,000) 9,865,000 1,655,000 8,210,000 Add Deferred Amounts:
Bond Premium 534,191 - (93,417) 440,774 - 440,774 Total Bonds Payable 11,974,191 - (1,668,417) 10,305,774 1,655,000 8,650,774 Advances from the
City of Monterey Park (Note 5) 1,170,993 - (137,342) 1,033,651 - 1,033,651 Total Other Debt 13,145,184 - (1,805,759) 11,339,425 1,655,000 9,684,425 Direct Borrowings:
Tax Increment Deferred Loan -
Atlantic/Garvey Project 13,817,811 967,247 - 14,785,058 - 14,785,058 Tax Increment Deferred Loan -
Merged Project 63,011,758 4,290,090 (468,189) 66,833,659 561,108 66,272,551 Low/Mod Housing
Deferred Loans 1,186,222 - - 1,186,222 - 1,186,222 Total Direct Borrowings 78,015,791 5,257,337 (468,189) 82,804,939 561,108 82,243,831 Total Successor Agency 91,160,975$ 5,257,337 $ (2,273,948) $ 94,144,364 $ 2,216,108 $ 91,928,256 $
Tax Allocation Bonds
Tax Allocation Refunding Bond, Series 2013A (Atlantic-Garvey Redevelopment Project No. 1)
On December 1, 2013, the County of Los Angeles Redevelopment Refunding Authority assisted the Successor Agency to issue the $13,835,000 Tax Allocation Refunding Bond, Series 2013A, for the Atlantic-Garvey Redevelopment Project No. 1. These Bonds were issued to redeem the outstanding 2002 Tax Allocation Revenue Bonds. The Bonds are secured by a pledge of the tax revenues from the Project area with interest rates ranging from 3.0% to 5.0%. Interest payments are payable semiannually on September 1 and March 1. Principal payments are made on September 1 of each year and continue until the year 2026.
Optional Redemption: The Bonds maturing on or before September 1, 2024, are not subject to optional redemption prior to maturity. The Bonds maturing on and after September 1, 2024, are subject to optional redemption on any date on and after September 1, 2023, in integral multiples of $5,000, from any available source of funds, at the times, at a redemption price equal to the principal amount of the Bonds to be redeemed, together with accrued interest thereon to the date fixed for redemption, without premium.
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NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
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NOTE 7 LONG-TERM LIABILITIES (CONTINUED)
Tax Allocation Bonds (Continued)
Tax Allocation Refunding Bond, Series 2013A (Atlantic-Garvey Redevelopment Project No. 1) (Continued)
The Bonds are secured by a first and prior lien on tax increment revenues, excluding any portion of revenues that are required to be deposited to the Rebate Fund. Annual principal and interest payments on the Bonds are expected to require less than 90% of net revenues. The amount of principal and interest outstanding at June 30, 2022, totaled $8,105,821. Interest paid for the current year is $354,506, and the net tax increment revenue is collected and withheld by the County of Los Angeles due to the dissolution of the former Redevelopment Agency.
The annual debt service requirements on the Tax Allocation Refunding Bond, Series 2013A (Atlantic-Garvey Redevelopment Project No. 1) are as follows:
Year Ending June 30, Principal Interest Total
2023 1,175,000$ 242,756$ 1,417,756$
2024 1,165,000 184,256 1,349,256
2025 1,220,000 130,731 1,350,731
2026 1,210,000 80,619 1,290,619
2027 1,255,000 27,453 1,282,453
Total 6,025,000$ 665,815$ 6,690,815$
Tax Allocation Refunding Bond, Series 2013B (Merged Redevelopment Project Area) On December 1, 2013, the County of Los Angeles Redevelopment Refunding Authority assisted the Successor Agency to issue this $7,080,000 Tax Allocation Refunding Bond, Series 2013B, for the Merged Redevelopment Project No. 1. These Bonds were issued to redeem the outstanding 1998 Tax Allocation Revenue Bonds. The Bonds are secured by a pledge of the tax revenues from the Project area with interest rates ranging from
3.0% to 5.0%. Interest payments are payable semiannually on September 1 and March
1. Principal payments are made on September 1 of each year and continue until the year 2028.
Optional Redemption: The Bonds maturing on or before September 1, 2024, are not subject to optional redemption prior to maturity. The Bonds maturing on and after September 1, 2024, are subject to optional redemption on any date on and after September 1, 2023, in integral multiples of $5,000, from any available source of funds, at the times, at a redemption price equal to the principal amount of the Bonds to be redeemed, together with accrued interest thereon to the date fixed for redemption, without premium.
The Bonds are secured by a first and prior lien on tax increment revenues, excluding any portion of revenues that are required to be deposited to the Rebate Fund. Annual principal and interest payments on the bonds are expected to require less than 90% of net revenues. The amount of principal and interest outstanding at June 30, 2022, totaled $5,150,884. Interest paid for the current year is $212,956 and the net tax increment revenue is collected and withheld by the County of Los Angeles due to the dissolution of the former Redevelopment Agency.
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NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
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NOTE
7 LONG-TERM LIABILITIES (CONTINUED)
Tax Allocation Bonds (Continued)
Tax Allocation Refunding Bond, Series 2013B (Merged Redevelopment Project Area) (Continued)
The annual debt services requirement on the Tax Allocation Refunding Bond, Series 2013B (Merged Redevelopment Project Area) are as follows:
Year Ending June 30, Principal Interest Total
2023 480,000$ 167,081$ 647,081$
2024 505,000 142,456 647,456
2025 530,000 119,231 649,231
2026 545,000 97,050 642,050
2027 565,000 73,109 638,109
2028 - 2029 1,215,000 61,375 1,276,375 Total 3,840,000$ 660,302$ 4,500,302$
Tax Increment Deferred Loan (Atlantic/Garvey Project)
On August 20, 1987, the former Redevelopment Agency entered into an agreement for reimbursement of tax increment funds with the County of Los Angeles (the County). In the Agreement, the County agreed to loan its portion of the tax increment revenues received from the amended area (88 Annex) to the former Redevelopment Agency at a 7% compound interest rate, beginning fiscal year 1989-90. The percentage distribution from the basic tax levy for the 88 Annex areas for the County and the former Redevelopment Agency is 43.7% and 56.3% respectively. The former Redevelopment Agency will commence repayment of this loan annually beginning with the fiscal year in which the former Redevelopment Agency’s share of tax increment revenues (excluding Housing Fund contributions) from the 88 Annex areas exceeds $800,000.
The outstanding balance of the Tax Increment Deferred L oan (Atlantic/Garvey Project) was $14,785,058 at June 30, 2022.
The former Redevelopment Agency and the County Taxing Entities (the County of Los Angeles, the Los Angeles County Flood Control District, and the Los Angeles County Office of Education) entered into four agreements for reimbursement of the tax increment deferred amounts. In the Agreements, the County Taxing Entities agreed to loan their portions of the tax increment revenues received from the Southeast Project area, Freeway `99 Annex area, Central Commercial Project area, and Merged Monterey Pass Road area to the former Redevelopment Agency at specified interest rates ranging from 0% to 7%. The percentage distribution fr om the basic tax levy and the repayment schedule of the deferred loans are also based on a specified formula for each taxing entity.
The outstanding balance of the Tax Increment Deferred Loan (Merged Project) was $66,833,659 at June 30, 2022.
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NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
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NOTE 7 LONG-TERM LIABILITIES (CONTINUED)
Tax Allocation Bonds (Continued)
Low/Mod Housing Deferred Loans
State law required former redevelopment agencies to set aside 20% of their tax increment revenues for low/mod housing. In 1997, the former Redevelopment Agency approved a plan to set aside future tax increment revenue in addition to the regular 20% set aside requirements. On February 1, 2012, the commitment was transferred to the Successor Agency due to the dissolution of the former Redevelopment Agency and was approved by the DOF as a payable to the City’s Special Revenue Housing Fund.
A summary of the repayment plan is presented below:
For the Years Ending June 30, Amount
2024 - 2029 500,000 $
2030 - 2034 450,000
2035 - 2039 236,222
1,186,222$
NOTE 8 DUE TO OTHER GOVERNMENTAL AGENCIES
In the Special Revenue Grants Fund, an amount equal to the total outstanding balance of the identified loans
receivable for the CDBG Residential Rehabilitation Program in the amount of $48,015, State Earthquake Rehabilitation Assistance (SERA) Program in the amount of $4,322, the Pacific Housing Corporation loan in the amount of $262,045, and the Pacific Bridge Loan in the amount of $434,738, described in Note 3 at June 30, 2022, have been recorded as Due to Other Governmental Agencies. As these notes are repaid, the repayment
proceeds must be returned to the applicable government agency.
Description Amount
Due to Other Governmental Agencies:
CDBG Residential Rehabilitation Program 48,015$
SERA Program 4,322
Pacific Housing Corporation Loan 262,045
Pacific Bridge Loan 434,738
Total 749,120$
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NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
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NOTE 9 PENSION PLANS
The following is a summary of pension related items for the year ended June 30, 2022.
Deferred Deferred
Pension Outflows Inflows
Liability (Asset) of Resources of Resources
CalPERS Miscellaneous (20,078,555)$ 1,319,591$ (14,107,098)$ CalPERS Safety (31,501,768) 1,264,857 (22,715,025) Subtotal (51,580,323) 2,584,448 (36,822,123) Massachusetts Mutual Retirement Plan 372,265 736,480 - Total (51,208,058)$ 3,320,928$ (36,822,123)$
A. Defined Benefit Pension Plans
a. California Public Employees’ Retirement System Plan
General Information about the Pension Plan
Plan Description
All qualified permanent and probationary employees are eligible to participate in the City’s separate Safety (police and fire) and Miscellaneous (all other) Plans, agent multiple-employer defined benefit pension plans administered by the California Public Employees’ Retirement System (C alPERS). Benefit provisions under the Plans are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.
Benefit Provided
CalPERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. A classic CalPERS member or PEPRA Safety member becomes eligible for Service Retirement upon attainment of age 55 with at least 5 years of credited service. PEPRA miscellaneous members become eligible for service retirement upon attainment of age 62 with at least 5 years of service. The service retirement benefit is a monthly allowance equal to the product of the benefit factor, years of service, and final compensation. The final compensation is the monthly average of the member’s highest 36 or 12 consecutive months’ full-time equivalent monthly pay.
Retirement benefits for classic miscellaneous employees are calculated as 2% to
2.7% of the average final 12 months compensation. Retirement benefits for PEPRA miscellaneous employees are calculated as 2% of the average final 36 months compensation. Retirement benefits for clas sic safety employees are calculated as 3% of the average final 12 months compensation. Retirement benefits for PEPRA safety employees are calculated as 2.7% of the average final 36 months compensation.
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NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
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NOTE 9 PENSION PLANS (CONTINUED)
A. Defined Benefit Pension Plans (Continued)
a. California Public Employees’ Retirement System Plan (Continued) General Information about the Pension Plan (Continued)
Benefit Provided (Continued)
Participant is eligible for non-industrial disability retirement if becomes disabled and has at least 5 years of credited service. There is no special age requirement. The standard non-industrial disability retirement benefit is a monthly allowance equal to
1.8% of final compensation, multiplied by service.
Industrial disability benefits are not offered to miscellaneous employees. The City provides industrial disability retirement benefit to safety employees. The industrial disability retirement benefit is a monthly allowance equal to 50% of final compensation.
An employee’s beneficiary may receive the basic death benefit if the employee dies while actively employed. The employee must be actively employed with the City to be eligible for this benefit. An employee’s survivor who is eligible for any other pre- retirement death benefit may choose to receive that death benefit instead of this basic death benefit. The basic death benefit is a lump sum in the amount of the employee’s accumulated contributions, where interest is currently credited at 7.15% per year, plus a lump sum in the amount of one month’s salary for each completed year of current service, up to a maximum of six months’ salary. For purposes of this benefit, one month’s salary is defined as the member’s average monthly full-time rate of compensation during the 12 months preceding death. Upon the death of a retiree, a one-time lump sum payment of $5,000 will be made to the retiree’s designated survivor(s), or to the retiree’s estate.
Benefit terms provide for annual cost-o f-living adjustments to each employee’s retirement allowance. Beginning the second calendar year after the year of retirement, retirement and survivor allowances will be annually adjusted on a compound basis by 2%.
Employees Covered by Benefit Terms
At June 30, 2021, the measurement date, the following employees were covered by the benefit terms:
Miscellaneous Safety
Active Employees 192 120
Transferred and Terminated Employees 333 104 Retired Employees and Beneficiaries 341 251 Total 866 475
Plans
CITY OF MONTEREY PARK
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
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NOTE 9 PENSION PLANS (CONTINUED)
A. Defined Benefit Pension Plans (Continued)
a. California Public Employees’ Retirement System Plan (Continued) General Information about the Pension Plan (Continued)
Contributions
Section 20814(c) of the California Public Employees’ Retirement Law (PERL) requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate.
The total plan contributions are determined through CalPERS’ annual actuarial valuation process. 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. City contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contributions requirements are classified as plan member contributions. For the current year, employer required contributions made were $1,264,858 and $2,582,210 to the miscellaneous and safety plans, respectively. The net pension liability for governmental activities is primarily liquidated from the general fund and the net pension liability for business-type activities is liquidated from the applicable enterprise funds.
Net Pension Liability
Actuarial Methods and Assumptions Used to Determine Total Pension Liability The City’s net pension liability for each Plan is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of each of the Plans is measured as of June 30, 2021 using an annual actuarial valuation as of June 30, 2020 rolled forward to June 30, 2021, using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is shown below.
CITY OF MONTEREY PARK
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NOTE 9 PENSION PLANS (CONTINUED)
A. Defined Benefit Pension Plans (Continued)
a. California Public Employees’ Retirement System Plan (Continued) Net Pension Liability (Continued)
Actuarial Methods and Assumptions Used to Determine Total Pension Liability (Continued)
The total pension liability in the June 30, 2020 actuarial valuations was determined using the following actuarial methods and assumptions:
Actuarial Cost Method
Actuarial Assumptions:
Discount Rate 7.15%
Inflation 2.50%
Salary Increases Varies by entry age and service.
Mortality Rate Table
Post Retirement Benefit
Increase
Entry-Age Normal in accordance with the requirement of
GASB Statement No. 68
The mortality table used was developed based on CalPERS -
specific data. The probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from 1997
to 2015. Pre-retirement and Post-retirement motality rates include 15 years of projected mortality improvement using 90% of Scale MP-2016 published by the Society of
Actuaries. For more details on this table, please refer to the CalPERS Experience Study and Review of Actuarial
Assumptions report from December 2017 that can be found on the CalPERS website.
Contract COLA up to 2.5% until Purchasing Power
Protection Allowance Floor on Purchasing Power applies,
2.50% thereafter.
Discount Rate
The discount rate used to measure the total pension liability was 7.15%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.
Long-term Expected Rate of Return
The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.
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NOTE 9 PENSION PLANS (CONTINUED)
A. Defined Benefit Pension Plans (Continued)
a. California Public Employees’ Retirement System Plan (Continued) Net Pension Liability (Continued)
Long-term Expected Rate of Return (Continued)
In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all the funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the rounded single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses. The table below reflects the long-term expected real rate of return by asset class.
Asset Class (1) Allocation 1 - 10 (2) 11+ (3)
Global Equity 50.00% 4.80% 5.98%
Fixed Income 28.00% 1.00% 2.62%
Inflation Assets 0.00% 77.00% 1.81%
Private Equity 8.00% 6.30% 7.23%
Real Assets 13.00% 3.75% 4.93%
Infrastructure and Forestland 0.00% 0.00% 0.00%
Liquidity 1.00% 0.00% -0.92%
Total 100.00%
(2) An expected inflation of 2.0% used for this period. (3) An expected inflation of 2.92% used for this period. (1) In the System's ACFR, fixed income is included in global debt securities; liquidity is included in short-term investments; inflation assets are included in both global equity securities and global debt securities.
Subsequent Events
On July 12, 2021, CalPERS reported a preliminary 21.3% net return on investments for fiscal year 2020-2021. Based on the thresholds specified in CalPERS Funding Risk Mitigation policy, the excess return of 14.3% prescribes a reduction in investment volatility that corresponds to a reduction in the discount rate used for funding purposes of 0.20%, from 7.00% to 6.80%. Since CalPERS was in the final stages of the four-year Asset Liability Management (ALM) cycle, the board elected to defer any changes to the asset allocation until the ALM process concluded, and the board could make its final decision on the asset allocation in November 2021.
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NOTE 9 PENSION PLANS (CONTINUED)
A. Defined Benefit Pension Plans (Continued)
a. California Public Employees’ Retirement System Plan (Continued) Net Pension Liability (Continued)
Subsequent Events (Continued)
On November 17, 2021, the board adopted a new strategic asset allocation. The new asset allocation along with the new capital market assumptions, economic assumptions and administrative expense assumption support a discount rate of
6.90% (net of investment expense but without a reduction for administrative expense) for financial reporting purposes. This includes a reduction in the price inflation assumption from 2.50% to 2.30% as recommended in the November 2021 CalPERS Experience Study and Review of Actuarial Assumptions. This study also recommended modifications to retirement ra tes, termination rates, mortality rates and rates of salary increases that were adopted by the board. These new assumptions will be reflected in the GASB 68 accounting valuation reports for the June 30, 2022, measurement date.
Changes in the Net Pension Liability
The following table shows the changes in net pension liability recognized over the measurement period.
Total Plan Net Pension
Pension Fiduciary Liability
Liability Net Position (Asset)
(a) (b) (c) = (a) - (b)
Balance at June 30, 2020 (Measurement Date) 149,696,499$ 107,585,435$ 42,111,064$ Changes Recognized for the
Measurement Period:
Service Cost 2,148,048 - 2,148,048 Interest on the Total Pension Liability 10,443,716 - 10,443,716 Differences Between Expected and
Actual Experience (746,806) - (746,806) Plan to Plan Resource Movement - - - Contributions from the Employer - 45,650,016 (45,650,016) Contributions from Employees - 878,774 (878,774) Net Investment Income - 27,613,258 (27,613,258) Benefit Payments, Including Refunds of
Employee Contributions (7,915,523) (7,915,523) - Administrative Expenses - (107,471) 107,471 Net Changes During July 1, 2020 to June 30, 2021 3,929,435 66,119,054 (62,189,619) Balance at June 30, 2021 (Measurement Date) 153,625,934$ 173,704,489$ (20,078,555)$ Increase (Decrease)
Miscellaneous Plan
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NOTE 9
PENSION PLANS (CONTINUED)
A. Defined Benefit Pension Plans (Continued)
a. California Public Employees’ Retirement System Plan (Continued) Changes in the Net Pension Liability (Continued)
Total Plan Net Pension
Pension Fiduciary Liability
Liability Net Position (Asset)
(a) (b) (c) = (a) - (b)
Balance at June 30, 2020 (Measurement Date) 232,391,748$ 166,998,365$ 65,393,383$ Changes Recognized for the
Measurement Period:
Service Cost 3,628,780 - 3,628,780
Interest on the Total Pension Liability 16,292,437 - 16,292,437 Differences Between Expected and
Actual Experience (986,638) - (986,638)
Contributions from the Employer - 71,158,474 (71,158,474) Contributions from Employees - 1,701,579 (1,701,579)
Net Investment Income - 43,136,498 (43,136,498)
Benefit Payments, Including Refunds of
Employee Contributions (10,706,492) (10,706,492) - Administrative Expenses - (166,821) 166,821
Net Changes During July 1, 2020 to June 30, 2021 8,228,087 105,123,238 (96,895,151) Balance at June 30, 2021 (Measurement Date) 240,619,835$ 272,121,603$ (31,501,768)$ Increase (Decrease)
Safety Plan
Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability of the Plan as of the measurement date, calculated using the discount rate of 7.15%, as well as what 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:
Miscellaneous Safety
1% Decrease 6.15% 6.15%
Net Pension Liability (550,022)$ 544,729$
Current Discount Rate 7.15% 7.15%
Net Pension Liability (20,078,555)$ (31,501,768)$
1% Increase 8.15% 8.15%
Net Pension Liability (36,251,372)$ (57,869,373)$
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NOTE 9 PENSION PLANS (CONTINUED)
A. Defined Benefit Pension Plans (Continued)
a. California Public Employees’ Retirement System Plan (Continued) Changes in the Net Pension Liability (Continued)
Pension Plan Fiduciary Net Position
Detailed information about the plan’s fiduciary net position is available in the separately issued CalPERS financial report.
Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions
For the measurement period ended June 30, 2021, the City incurred a pension expense/(income) of $(1,230,395) and $(2,687,388) for the miscellaneous plan and safety plan, respectively.
As of measurement date of June 30, 2021, the City has deferred outflows and deferred inflows of resources related to pensions as follows:
Deferred Deferred
Outflows Inflows
of Resources of Resources
Contributions Made After the Measurement Date 1,264,858$ -$ Difference Between Expected and
Actual Experience 54,733 (407,349)
Changes of Assumptions - -
Net Differences Between Projected and Actual
Earnings on Pension Plan Investments - (13,699,749) Total 1,319,591$ (14,107,098)$
Miscellaneous Plan
Deferred Deferred
Outflows Inflows
of Resources of Resources
Contributions Made After the Measurement Date 1,264,857$ -$ Difference Between Expected and
Actual Experience - (1,512,332)
Changes of Assumptions - -
Net Differences Between Projected and Actual
Earnings on Pension Plan Investments - (21,202,693) Total 1,264,857$ (22,715,025)$
Safety Plan
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NOTE 9
PENSION PLANS (CONTINUED)
A. Defined Benefit Pension Plans (Continued)
a. California Public Employees’ Retirement System Plan (Continued) Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions (Continued)
For the miscellaneous plan and safety plan, $1,264,858 and $2,582,210, respectively, reported as deferred outflows of resources related to pensions resulting from City’s contributions subsequent to the measurement date, will be recognized as a reduction of the net pension liability in the year ending June 30, 2023. Other amounts reported as deferred inflows of resources related to pensions will be recognized in future pension expense as follows:
Measurement Period
Miscellaneous Safety
Year Ending June 30, Plan Plan
2022 (3,762,668)$ (6,619,967)$
2023 (3,277,489) (5,179,591)
2024 (3,299,015) (5,118,501)
2025 (3,713,193) (5,796,966)
2026 - -
Thereafter - -
Amounts
Payable to the Pension
Plans
At June 30, 2022, the City had no outstanding amount of contributions to the pension plans required for the year ended June 30, 2022.
b. Massachusetts Mutual Retirement Plan - Defined Benefit Plan General Information about the Pension Plan
Plan Description
Certain miscellaneous employees are covered by a retirement plan through the Massachusetts Mutual Life Insurance Company (MMRP), a single-employer defined benefit pen sion plan. All miscellaneous employees who were employed prior to April 1, 1976 participated in the MMRP. Miscellaneous employees under the age of 55 joined CalPERS on and after April 1, 1976. However, these employees still remain vested under the MMRP an d are eligible to receive retirement benefits at th e time of retirement. Miscellaneous employees over the age of 55 (on or before April 1, 1976) could not participate in CalPERS and remain wholly in the MMRP.
The City does not issue a publicly available financial report for the MMRP.
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NOTE 9 PENSION PLANS (CONTINUED)
A. Defined Benefit Pension Plans (Continued)
b. Massachusetts Mutual Retirement Plan - Defined Benefit Plan (Continued) General Information about the Pension Plan (Continued)
Benefits Provided
The MMRP was amended in 1976 to provide equivalent retirement benefits to all miscellaneous employees, whether totally vested in CalPERS, totally vested in the MMRP or partially vested in both plans. Eligibility requirements for the MMRP are the same as those for CalPERS.
Employee Covered by Benefit Terms
MMRP is a closed plan. As of the measurement date, June 30, 2022, there are 38 individuals in the plan, all of whom are no longer employed by the City or are currently participating in PERS. The City’s payroll for employees covered by the MMRP was zero for the measurement period July 1, 2021 to June 30, 2022.
Contributions
MMRP is a contributory plan deriving funds from employer contributions and earnings from investments. Employer contributions were based upon the actuarial methods and assumptions. For the current year, the City did not make contributions to the MMRP.
Net Pension Liability
Actuarial Methods and Assumptions Used to Determine Total Pension Liability For the measurement period ended June 30, 2022, the total pension liability was determined by rolling forward the June 30, 2021 total pension liability to June 30, 2022, based on actual benefit payments.
The total pension liability was based on the following actuarial methods and assumptions:
Actuarial Cost Method
Valuation Date June 30, 2021
Actuarial Assumptions:
Discount Rate 3.54%
Expected Long-term
Rate of Return on Investment 3.00%
Inflation 2.50%
Mortality Rate CalPERS 1997-2015 experience study
Mortality Improvement Scale
Cost of Living Adjustment/PPPA 2%; PPPA valued for each annuitant Entry Age Normal
Fully generational projection with Scale MP-21
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NOTE 9
PENSION PLANS (CONTINUED)
A. Defined Benefit Pension Plans (Continued)
b. Massachusetts Mutual Retirement Plan - Defined Benefit Plan (Continued) Net Pension Liability (Continued)
Discount Rate
Plan assets currently invested in Mass Mutual general investment account. Expected long term return on assets was 4.50% for June 30, 2021 valuation and rounded to nearest 0.25%. Noninvestment expenses of $25,000 were added to actuarially determined contribut ion amount. Cross-over analysis sh owed benefit payments always fully funded by plan assets based on 4.50% discount rate.
Changes in the Net Pension Liability
The following table shows the changes in net pension liability recognized over the measurement period.
Total Plan Net Pension
Pension Fiduciary Liability
Liability Net Position (Asset)
(a) (b) (c) = (a) - (b)
Balance at June 30, 2021 5,185,000$ 5,299,000$ (114,000)$ Changes Recognized for the Measurement Period:
Service Cost - - -
Interest on the Total Pension Liability 224,352 - 224,352 Changes in Benefit Terms - - -
Differences Between Expected and
Actual Experience (882,892) - (882,892)
Changes in Assumptions 233,362 - 233,362
Contributions from the Employer - - -
Contributions from Employees - - -
Net Investment Income - (896,110) 896,110
Benefit Payments, Including Refunds (398,781) (398,781) - Administrative Expense - (15,333) 15,333
Net Changes (823,959) (1,310,224) 486,265 Balance at June 30, 2022 (Measurement Date) 4,361,041$ 3,988,776$ 372,265$ Increase (Decrease)
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NOTE 9 PENSION PLANS (CONTINUED)
A. Defined Benefit Pension Plans (Continued)
b. Massachusetts Mutual Retirement Plan - Defined Benefit Plan (Continued) Changes in the Net Pension Liability (Continued)
Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability of the Plan as of the measurement date, calculated using the discount rate of 3.54%, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage point lower (2.54%) or 1 percentage point higher (4.54%) than the current rate:
1% Decrease 2.54%
Net Pension Liability 729,000$
Current Discount Rate 3.54%
Net Pension Liability 372,265$
1% Increase 4.54%
Net Pension Liability 65,709$
Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions
For the measurement period ending June 30, 2022, the City incurred a pension expense/(income) of $441,215 for MMRP. As of measurement date of June 30, 2022, the City has deferred outflows and deferred inflows of resources related to pensions as follows:
Deferred Deferred
Outflows Inflows
of Resources of Resources
Difference Between Expected and
Actual Experience -$ -$
Changes of Assumptions - -
Net Differences Between Projected and
Actual Earnings on Pension Plan Investments 736,480 - Total 736,480$ -$
Amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in future pension expense as follows:
Measurement Period Amount
Year Ending June 30,
2023 142,870$
2024 161,870
2025 206,870
2026 224,870
2026 -
Thereafter -
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NOTE 9
PENSION PLANS (CONTINUED)
A. Defined Benefit Pension Plans (Continued)
c. Aggregate Amount of Pension Expenses
The aggregate amount of pension income for all defined benefit pension plans for the fiscal year ended June 30, 2022 totaled $(4,358,998).
B. Defined Contribution Pension Plan
Monterey Park Part-Time Retirement Plan
During the 1991-1992 fiscal year, the City established the Monterey Park Part-Time Retirement Plan, a defined contribution retirement plan, for all non benefited, part- time employees in accordance with Internal Revenue Code Section 457, to conform to Section 3121(b)(7)(F) of the Internal Revenue Code added by the Omnibus Budget Reconciliation Act of 1990. The plan is administered by Empower Inc. The plan was established by the authority of the City Council who retains the authority to amend the plan.
A defined contribution pension plan provides pension benefits in return for services rendered, provides an individual account for each participant, and specifies how contributions to the individual’s account are to be determined instead of specifying the amount of benefits the individual is to receive. Under a defined contribution pension plan, the benefits a participant will receive depend solely on the amount contributed to the participant’s account and the returns earned on investments of the contributions.
Part-time, non benefited, nonpersable employees of the City must participate in the plan. During the year ended June 30, 2022, 109 part-time employees participated in the plan. All contributions to the plan vest immediately. An employee who leaves the City is entitled to all contributions, including contributions made by the City, and earnings applied to the individual’s account through the date of separation, less legally required income tax withholding. Participants that become full-time employees and enter the CalPERS retirement plan will have the amount in their individual accounts transferred from this plan into a Section 457, Deferred Compensation Plan, subject to all the rules governing Section 457 plans, including substantial penalties for withdrawal prior to the age of normal retirement. Contribution levels into the deferred compensation plan were established by City Council resolution at 4% and
3.5% for the City and non benefited, nonpersable part-time employees, respectively.
During the year, the City contributed $ 30,424 to the plan.