ORANGE COVE CITY COUNCIL
REGULAR COUNCIL MEETING
Wednesday, July 09, 2025
6:30 PM
City of Orange Cove Council Chambers
633 6th St.
Orange Cove, CA 93646
ZOOM Information
https://us06web.zoom.us/j/83194900773?pwd=qqmoeU1Z941DsbYKsV68h6aT38bB3Z.1 Meeting ID: 831 9490 0773
Passcode: 883650
1. CALL TO ORDER/WELCOME
Roll Call
Invocation
Pledge of Allegiance
2. CONFIRMATION OF AGENDA
3. PRESENTATIONS
Audit Presentation-Ryan Jolley with Bryant L. Jolley, CPA.
The purpose of this presentation is to provide the City Council with a presentation of the Audited Financial Statements for the fiscal year ending June 30, 2022. The City's annual financial audit is a required component of fiscal oversight and transparency and is conducted in accordance with generally accepted accounting principles (GAAP) and applicable state and federal regulations.
4. PUBLIC COMMENT
Notice(s) to the Public: This is the opportunity for any member of the public to address the City Council on any item over which the Council has jurisdiction. No action or discussion will be taken on any item not on the agenda. Issues raised will be referred to the City Manager for review. Public members shall limit their remarks to three (3) minutes and no more than 15 minutes per topic.
5. CONSENT CALENDAR
(All items listed under the consent calendar category are considered routine. The complete consent calendar will be enacted by one motion by ROLL CALL VOTE.
For purposes of discussion, any council member may have an item removed from the consent calendar and made part of the regular agenda. The Council can then approve the remainder of the consent calendar.
Dominguez
5.a. SUBJECT: Acceptance of property dedication from Efrain Yanez Construction, Inc. to support; 1) Future / Proposed Development of Monson Tract Sub-Division (Tract 6469), and 2) Facilitate Water System Improvements associated with the Construction of new City Well / 1.0 Mgal. Storage Tank Site.
RECOMMENDATION: Staff recommends the City Council accept the subject property easement dedication associated with a portion of APN 398-021-07 totaling + 19,730 SF. The offer of dedication is being made by Efrain Yanez Construction, Inc. (EYC) for the purposes of right-of-way procurement for public streets and utilities. Upon acceptance of the dedication, the easement dedication documents will be recorded with Fresno County Accessors office.
6. REGULAR BUSINESS Dominguez
6.a. SUBJECT: Amaya AHSC Grant Improvements - Public Works Contract RECOMMENDATION: Adopt Resolution 2025-22, awarding the contract for the Amaya AHSC Grant Improvement project to MAC General Engineering, Inc. (MGE) in the amount of $1,046,389.46, and provide a $104,600.00 (~10%) contingency to deal with any unforeseen issues that might arise during the course of construction for a total encumbrance of $1,150,989.46. Staff further recommends that the Interim City Manager and / or his designee be authorized to execute the Agreement.
7. STAFF COMMUNICATIONS: Informational Only Dominguez
8. ORANGE COVE FIRE PROTECTION DISTRICT Fire Chief
SUBJECT: Department Report by
Orange Cove Fire Protection District
RECOMMENDATION: Informational Only
9. CITY MANAGER'S REPORT
10. CITY ATTORNEY'S REPORT
11. CITY COUNCIL COMMUNICATIONS
12. CLOSED SESSION
A closed session is needed to discuss the following matter:
12.a. Public Employment (§ 54957)
Title: City Manager
13. ADJOURNMENT
I hereby certify under penalty of perjury, under the laws of the State of California, that the foregoing notice was posted in accordance with the applicable legal requirements. Dated this 3rd day of July 2025. 1L0102
Cynthia Cisneros, City Clerk
ADA Notice: In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the City Clerk at (559) 626-4488 ext. 213. Notification 48 hours prior to the meeting will enable the city to make arrangements to ensure accessibility to this meeting.
Documents: Any writings or documents provided to a majority of the City Council regarding any item on this agenda will be made available for public inspection at the front counter at City Hall, Orange Cove, CA during normal business hours. In addition, most documents are postea on City's website at cityoforangecove.com.
STATEMENT ON RULES OF DECORUM AND ENFORCEMENT
The Brown Act provides that members of the public have a right to attend public meetings, to provide public comment on action items and under the public forum section of the agenda, and to criticize the policies, procedures, or services of the city or of the acts or omissions of the city council. The Brown Act also provides that the City Council has the right to exclude all persons who willfully cause a disruption of a meeting so that it cannot be conducted in an orderly fashion.
During a meeting of the Orange Cove City Council, there is a need for civility and expedition in the conducting of public business in order to ensure that the public has a full opportunity to be heard and that the Council has an opportunity to conduct business in an orderly manner. The following is provided to place everyone on notice of the rules of decorum and enforcement.
GENERAL RULES OF DECORUM
While any meeting of the City Council is in session, the following rules of decorum shall be observed:
1. All remarks shall be addressed to the City Council as a whole and not to any single member, unless in response to a question from a member of the City Council.
2. A person who addresses the City Council under public comment for a specific agenda item or under the Public Forum section of the agenda may not engage in speech or conduct (i) which is likely to provoke others to violent or riotous behavior, (i) which disturbs the peace of the meeting by loud and unreasonable noise, (iii) which is irrelevant or repetitive, or (iv) which disrupts, disturbs, or otherwise impedes the orderly conduct of any City Council meeting.
3. A person, other than members of the Council and the person, who has the floor, shall not be permitted to enter into the discussion unless requested by the mayor to speak.
4. Members of the City Council may not interrupt a person who has the floor and is making public comments. Members of the City Council shall wait until a person completes his or her public comments before asking questions or commenting. The mayor shall then ask Councilmembers if they have comments or questions.
5. No person in the audience at a Council meeting shall engage in disorderly or boisterous conduct, including the utterance of loud, threatening, or abusive language, whistling, stamping of feet or other acts which disturb, disrupt, or otherwise impede the orderly conduct of any Council meeting.
ENFORCEMENT OF DECORUM RULES
(Resolution No. 2012-16)
While the City Council is in session, all persons must preserve order and decorum. A person who addresses the city council under public comment for a specific agenda item or under the Public Forum section of the agenda may not engage in speech or conduct which is likely to provoke others to violent or riotous behavior, which disturbs the peace of the meeting by loud and unreasonable noise, which is irrelevant or repetitive, or which disrupts, disturbs, or otherwise impedes the orderly conduct of any City Council meeting.
The mayor or other presiding officer shall request that a person who is breaching the rules of decorum cease such conduct. If after receiving such a warning, the person persists in breaching the rules of decorum, the mayor or other presiding officer may order the person to leave the City Council meeting. If such person does not leave, the mayor or presiding officer may request any law enforcement officer who is on duty at the meeting as sergeant-at-arms to remove the person from the Council Chambers. In the event there is no one from law enforcement present, the mayor or presiding officer may direct the City Manager to contact law enforcement.
In accordance with the Point of Order Rule 4.6, the majority of the Council may overrule the mayor if the majority of the Council believes the mayor or other presiding officer is not applying the rules of decorum appropriately.
Miesentation
CITY OF ORANGE COVE
INDEPENDENT AUDITOR'S REPORT
AND
FINANCIAL STATEMENTS
JUNE 30, 2022
TABLE OF CONTENTS
INDEPENDENT AUDITOR'S REPORT... .. 1-3
FINANCIAL SECTION:
GOVERNMENT-WIDE FINANCIAL STATEMENTS:
Statement of Net Position....... ........4
Statement of Activities. ..5
GOVERNMENTAL FUNDS FINANCIAL STATEMENTS:
Balance Sheet - Governmental Funds... ..6
Reconciliation of Total Governmental Fund Balance to
Net Position of Governmental Activities..... 7
Statement of Revenues, Expenditures, and Changes in
Fund Balance - Governmental Funds... ..8
Reconciliation of the Statement of Revenues, Expenditures, and Changes In Fund Balances of the Governmental Funds to the Statement of Activities 9 PROPRIETARY FUNDS FINANCIAL STATEMENTS:
Statement of Net Position - Proprietary Funds .... 10
Statement of Revenues, Expenses, and Changes in
Fund Net Position - Proprietary Funds....
Statement of Cash Flow - Proprietary Funds... .12
FIDUCIARY FUND FINANCIAL STATEMENTS:
Statement of Fiduciary Net Position - Private Purpose Trust Fund - Successor Agency. 13 Statement of Changes in Fiduciary Net Position - Private Purpose Trust Fund - Successor Agency. .14
NOTES TO THE FINANCIAL STATEMENTS 15-49
TABLE OF CONTENTS (Continued)
REQUIRED SUPPLEMENTARY INFORMATION:
Budgetary Comparison Schedule - General Fund... ..50
Budgetary Comparison Schedule - Housing Grant Special Revenue Fund ..51 Budgetary Comparison Schedule - Daycare Special Revenue Fund. ...52 Schedule of the City's Proportionate Share of Net Pension Asset/Liability .. ..53 Schedule of Contributions.. ...54
Notes to Required Supplementary Information... 55-56
SUPPLEMENTARY ONLY INFORMATION:
Combining Balance Sheet - Nonmajor Governmental Funds.. .57-59 Combining Statement of Revenues, Expenditures, and
Changes in Fund Balance - Nonmajor Governmental Funds. .60-62 COMPLIANCE SECTION:
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER
MATTERS BASED ON AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS.. .63-64
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM
AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY
UNIFORM GUIDANCE.. ..65-67
Schedule of Expenditures of Federal Awards. 68
Notes to the Schedule of Expenditures of Federal Awards.. 69 Schedule of Findings and Questioned Costs ..70-73
Status of Prior Audit Findings and Questioned Costs. .74 Corrective Action Plan ..75-77
BRYANT L. JOLLEY
CERTIFIED PUBLIC ACCOUNTANTS Bryant L. Jolley C.P.A
Ryan P. Jolley C.P.A
Lan T. Kimoto
INDEPENDENT AUDITOR'S REPORT
To the Honorable Mayor and City Council
City of Orange Cove, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Orange Cove (the "City"), California, 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 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 Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Responsibilities of Management for the Financial Statements 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.
Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards 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. 90i "N" STREET. SUITE 104 FIREBAUGH. CALIFORNIA 93622 PHONE 559.659.5045 FAX 559.659.0615 In performing an audit in accordance with generally accepted auditing standards 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 statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of 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 concern for a reasonable period of time.
We are required to communicate with those charged 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.
Required Supplementary Information
Management has omitted the management's discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinions on the basic financial statements are not affected by this missing Accounting principles generally accepted in the United States of America require that the budgetary comparison information on pages 50-52, the schedule of the City's proportionate share of net pension liability on page 53, and the schedule of contributions on page 54, be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
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 accompanying combining and individual nonmajor fund financial statements, the schedule of revenue available for debt service, and schedule of expenditures of federal awards, as required by Title 2 U.S.
Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 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 statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and the schedule of expenditures of federal awards are fairly stated, in all material respects, in relation to the basic financial statements as a whole. 2 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated May 30, 2025, on our consideration of the City of Orange Cove's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering City of Orange Cove's internal control over financial reporting and compliance.
GOVERNMENT-WIDE FINANCIAL STATEMENTS
CITY OF ORANGE COVE
STATEMENT OF NET POSITION
JUNE 30, 2022
Governmental Business-Type
Activities Activities Total
ASSETS
Cash and investments $ 4,242,762 1,196,046 5,438,808
Cash and investments - restricted 149,771 149,771
Cash with fiscal agent - restricted 13,254 13,254
Accounts receivable, net 638,206 638,206
Interest receivable 328,622 1,716 330,338
Due from other governments 1,399,308 38,348 1,437,656
Related party receivable 91,276 91,276
Notes receivable 2,882,286 2,882,286
Land held for resale 874,841 874,841
Net pension asset 1,380,942 1,380,942
Capital assets, net of depreciation 9,127,037 25.631,393 Total assets 20.591.984 18.276.787 38.868.771
DEFERRED OUTFLOWS OF RESOURCES 1,509.909 129,164 1,639.073 -
LIABILITIES
Accounts payable and accrued expenses 362,433 197,983 560,416 Accrued interest 13,450 10,172 23,622
Deposits 30,600 30,600
Compensated absences 151,781 56,827 208,608
Unearned revenues 149,771 - 149,771
Long-term liabilities:
Due within one year 87,178 76,684 163,862
Due in more than one year 731,086 899,294 1,630,380
Net pension liability 481.211 208.396 689.607
Total liabilities 1.976,910 1,479.956 3,456,866
DEFERRED INFLOWS OF RESOURCES 849,511 222.928 1.072,439
NET POSITION
Net investments in capital assets 8,308,773 15,528,378 23,837,151 Restricted for debt service 483,349 13,254 496,603
Restricted for capital projects 1,528,369 1,528,369
Rested or specifi rices and programs 2,011,919 : 2,011,919
6.943,062 1.161.435 8.104.497
Total net position 19.275.472 $ 16.703.067 $ 35.978.539 See accompanying notes to the financial statements. +
CITY OF ORANGE COVE
STATEMENT OF ACTIVITIES
JUNE 30. 2022
Net Revenue/(Expense) and
Program Revenue Changes in Net Position
Capital Grants Business-
Charges for Grants and Governmental
Functions/Programs Expenses Services Contributions Contributions Activities Activities Total Primary Government
Governmental activities:
General government $ 1,128,260 $ 1,599,9715 14,355 486,066 486,066 Public safety 1,149,711 33,687 270,072 11,656 (834,296) (834,296) Public works 1,101,002 1,136,928 144,232 180,158 180,158 Planning and development 305,702 271,664 29,555 29,555
Parks and recreation 263,348 133,827 2,977 5,142 (121,402) (121,402) Day care 1,534,550 1,534,550
Debt service:
Interest and other charges (47,725) (47,725)
Total government activities 5,530.298 231,107 4,816.162 175,385 (307,644) (307,644) Business-type activities:
Water 2,087,984 1,575,90S 303,823 (208,256) (208,256)
Sewer 1,550,916 1,237,528 81,722 (231,666) (231,666)
Disposal 683.412 690,773 5,000 12,361 12,36]
Total business-type activities 4,322.312 3.504,206 5,000 385.545 (427,561) (427,561) Total primary government $ 9.852.610 • $ 3.735,313 4,821,162 560,930 (307,644) (427.561) (735,205) General Revenue
Property taxes and special assessments $60,405 560,405
Sales taxes 332,032 332,032
Franchise taxes 58,003 58,003
Business licenses 52,453 52,453
Utility users tax 634,030
Motor vehicle in-lieu 978,847
Interest and rent 32,324 3,385 35,709
Sale of land
Other
Total general revenue and transfers
Change in Net Position 3,315,653
Net Position
Beginning of year 15.959,819 17.093.261 33,053,080
End of year $ 19.275.472 $ 16.703.067 $ 35,978,539
See accompanying notes to the financial statements.
GOVERNMENTAL FUNDS FINANCIAL STATEMENTS
CITY OF ORANGE COVE
BALANCE SHEET - GOVERNMENTAL FUNDS
JUNE 30, 2022
Special Revenue Funds
Other Total
Housing Day Governmental Governmental
Gene ral ARPA Grant Care Funds Funds
ASSETS
Cash and investments $ 530,432 633,376 203.217 149.771 2,875.737 4.242,762 Cash and investments - restricted 149,771
454 131221 196,343 328,622
Interest receivable
Related party receivable 91,276 91,276
Due from other goverments 661,144 : 85,599 652,565 1,399,308 Due from other funds 318,005 318,005
Votes receivable 2.607.286 275,000 2,882,286
and held for resale 376.000 498.841 874.841
Total assets $ 1,977,311 633,980 S 2,941,724 $ 235,370 4,498,486 10,286,871
LIABILITIES
Accounts payable and accrued expenses : 117,708 21,304 S $ 65,151 158,270 S 362,433 Due to other funds 20,448 182,418 202,866
Unearned revenues 149.771 149.771
Total liabilities 117,708 21,304 235,370 340,688 715,070
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues 2,738.426 469,237 3.207.663
Total deferred inflows of resources 2,738,426 469,237 3,207.663
FUND BALANCE
Nonspendable:
Land held for resale 376,000 - 498,841 874,841
Restricted:
Public safety 53,174 53,174
Low-income housing activities 203,298 71,776 275,074
Circulation improvements 1,736.845 1,736,845
Capital improvement projects 612,676 915.693 1.528.369
Debt service 483,349 483,349
Unassigned 1,483,603 (71,117) 1,412,486
Total fund balance 1,859,603 612,676 203,298 3.688,561 6.364,138 Total liabilities, deferred inflows of
resources, and fund balance $ 1.977.311 633,980 $ 2,941.724 235,370 4.498.486 10.286.871 See accompanying notes to the financial statements.
CITY OF ORANGE COVE
RECONCILIATION OF TOTAL GOVERNMENTAL FUND BALANCE TO NET POSITION
OF GOVERNMENTAL ACTIVITIES
JUNE 30, 2022
Total governmental fund balance 6,364,138
Amounts reported for governmental activities in the Statement of Net Position are different because:
Capital assets used in governmental activities are not current financial resources and, therefore, are not reported in the funds 9,127,037 Accrued interest on long-term liabilities is not due and payable in the current period and, therefore, is not reported in the funds (13,450) Compensated absences are not due and payable in the current period and, therefore, are not reported in the funds (151,781) Deferred outflows of resources related to net pension liability/asset represent a consumption of net position or fund balance that applies to future period(s) and so will not be recognized as outflow of resources (revenue) until that time 1,509,909 Net pension liability/asset applicable to governmental activities are not due and payable in the current period and accordingly is not reported in the the funds 899,731
Deferred inflows of resources related to net pension liability represent an acquisition of net position or fund balance that applies to future periods) and so will not be recognized as inflow of resources (revenue) until that time (849,511) Other long-term assets are not available to pay for current period expenditures and, therefore, are reported as unavailable revenues in the funds 3,207,663
Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the funds (818,264)
Net position of governmental activities $ 19,275,472
See accompanying notes to the financial statements.
CITY OF ORANGE COVE
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE -
GOVERNMENTAL FUNDS
JUNE 30, 2022
Special Revenue Funds
Other Total
Housing Governmental Governmental
Ge ne ral ARPA Grant Daycare Funds Funds
Revenues
Taxes 2,160,541 1.534,550 402,776 $ 2,563,317
Intergovernmental 740,241 1,228,760 : 1,430,414 4,933,965 Charges for service 206,393 206,393
Licenses, permits and impact fees 78,928 55,821 134,749 Interest and rent 912 1,178 68,666 9,222 79,978
Other 644.317 644.317
Total revenues 3,831.332 1,229.938 i CAN ISUS 129620 1.898.233 8.562,719 Expenditures
Current:
General government 440,515 496,724 177,873 1,115,112
Public safety 2,302,265 209,652 2,511,917
Public works 297,879 531,604 829,483
Planning and development 309.064 5,111 314,175
Parks and recreation 167,063 167,063
Day care 1,534.550 1,534,550
Capital outlay 367,494 120,538 152,308 640,340
Debt service:
Principal 83,178 83,178
Interest and other charges 42.675 42.675
Total expenditures 38020 67302 19450 1.202.401 7.238,493 Revenue over/(under) expenditures (52,948) 612,676 68,666 695,832 1,324,226 Other Financing Sources/(Uses)
Proceeds from sale of land 330,886 - - 330,886
Transfers in/(out) - net 13.117 (13,507)
Total other financing sources/(uses) 344,003 (13.507) 330.886 Change in Fund Balance 291,055 612,676 69,056 (13,507) 695,832 1,655,112 Fund Balance
Beginning of year 1,568.548 134.242 13,507 2.992.729 4.709.026 End of year 1,859.603 612.676 $ 203.298 3.688,561 6364.138 See accompanying notes to the financial statements. 8
CITY OF ORANGE COVE
RECONCILIATION OF STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCE OF THE GOVERNMENTAL FUNDS TO THE STATEMENT OF
ACTIVITIES
JUNE 30, 2022
Change in fund balance - total governmental funds $ 1,655,112 Amounts reported for governmental activities in the Statement of Activities are different because:
Depreciation expense on capital assets is reported in the Statement of Activities, but it does not require the use of current financial resources. Therefore, depreciation expense is not reported as expenditures in the governmental funds (518,536) Governmental Funds report capital outlay as expenditures. However, in Statement of Activities the cost of those assets are capitalized as an asset and depreciated over the period of service 640,340
Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the governmental funds (44,218) Pension expenses reported in the Statement of Activities do not require the use of current financial resources, and therefore, are not reported as expenditures in the funds 1,457,788 Compensated absences reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in the funds 47,039
Repayment of long-term debt is an expenditure in governmental funds, but the repayment reduces long-term liabilities in the statement of net position 77,178 In the statement of activities, interest is accrued on long-term debt, whereas in governmental funds interest expenditure is reported when due 950 Change in net position of governmental activities $ 3,315,653 See accompanying notes to the financial statements. 9
CITY OF ORANGE COVE
STATEMENT OF NET POSITION - PROPRIETARY FUNDS
JUNE 30, 2022
Business-Type Activities - Enterprise Funds
Business-
Type
Water Se we r Disposal Funds
ASSETS
Current assets
Cash and investments S 926,510 $ 269,536 1,196,046
Cash with fiscal agent - restricted 13254 13,254
Accounts receivable, net 308,502 212,436 117,268 638,206 Due from other government 38,348 38,348
Interest receivable 709
838 1,716
Total current assets 360,942 1,139,655 386.973 1,887,570 Non-current assets
Property, plant and equipment
(net of allowances for depreciation) 8,888,475 7,615,881 = 16,504,356 Total noncurrent assets 8,888,475 7,615,881 16,504,356
Total assets 9,249.417 8.755.536 386.973 18.391.926
DEFERRED OUTFLOWS OF RESOURCES 73,290 55,874 129,164
LIABILITIES
Current liabilities
Accounts payable and accrued expenses 52,829 54,350 90,804 197,983 Accrued interest 10,172 10,172
Deposits 30,600 30,600
Compensated absences 37,322 19.505 56,827
Due to other funds 115,139 - 115,139
Current portion of long-term debt :
76,684 76,684
Total current liabilities 322,746 73.855 90,804 487,405 Non-current liabilities
Long-term debt 899,294 899,294
Net pension liability 118,247 90,149 208,396
Total non-current liabilities 1,017,541 90,149 1,107,690 Total liabilities 1,340,287 164,004 90,804 1,595,095
DEFERRED INFLOWS OF RESOURCES 126,493 96.435 222.928
NET POSITION
Net investment in capital assets 7,912,497 7,615,881 15,528,378 Restricted for debt service 13,254 13,254
Unrestricted (69,824) 935,090 296,169 1,161,435
Total net position $ 7,855,927 8,550,971 $ 296,169 $ 16,703,067 See accompanying notes to the financial statements.
CITY OF ORANGE COVE
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION -
PROPRIETARY FUNDS
JUNE 30, 2022
Business-Type Activities - Enterprise Funds
Business-
Type
Water Sewer Disposal Funds
Operating Revenue
Charges for service 1.575.905 1.237.528 $ 690.773 $ 3.504.206 Total operating revenue 1,575.905 1,237,528 690,773 3.504.206 Operating Expense
Contractual services and utilities 708,894 340,401 638,321 1,687,616 Personnel 519,574 473,466 993.040
Supplies and materials 263,494 264,024 45,091 572,609
Depreciation expense 561,565 473,025 1,034,590
Total operating expense 2,053,527 1,550,916 683,412 4,287,855 Operating income/(loss) (477,622) (313,388) 7,361 (783,649) Nonope rating Revenue/(Expense)
Capital grants 231,867 231,867
Development impact fees 81,722 :
71,956 153,678
Other 33,982 5,000 38,982
Interest income 1,674 1,382 329 3,385
Interest expense (34,457) (34,457)
Total nonoperating revenue/(expense) 305,022 83,104 5,329 393,455 Changes in Net Position (172,600) (230,284) 12,690 (390,194) Net Position
Beginning of year 8,028,527 8,781,255 283,479 17,093,261 End of the year 7,855.927 $ 8,550,971 296,169 $ 16,703,067 See accompanying notes to the financial statements. 11
CITY OF ORANGE COVE
STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS
JUNE 30, 2022
Business-Type Activities - Enterprise Funds
Total Business-
Water Sewer Disposal Type Funds
Operating Activities
Receipts from customers and users 1,597.924 1,278.913 688,426 3,565,263 Payments for contractual services and utilities (964,020) (330,136) (633,763) (1,927,919) Payments for employees (570,129) (502,521) (1,072,650)
Payments to suppliers (263.494) (264.024) (527,518)
Net cash provided by (used in)
operating activities (199,719) 182,232 54,663 37,176
Non-capital Financing Activities
Payments from developers 105.938 81.722 187,660
Payments received from (paid to) other funds 39,790 : : 39,790 Transfer (to)/from other funds
Net cash provided by (used in)
non-capital financing activities 145.728 81,722 227,450 Capital and Related Financing Activities
Purchase of property, plant and equipment (65,243) (98,905) (164,148) Capital grants and contributions received 218,603 5.000 223,603 Principal paid on long-term debt (89,356) - (89,356)
Interest paid on long-term debt (35,213) (35,213)
Net cash provided by (used in)
capital and related financing activities 28,791 (98.905) 5.000 (65,114) Investing Activities
Interest received 1.051 935 215 2,201
Net cash provided by (used in)
investing activities 1.051 935 215 2,201
Net Increase (Decrease) in Cash (24,149) 165,984 59,878 201,713 Cash
Beginning of year 37,403 760.526 209.658 1,007,587
End of year 13,254 926.510 269,536 1,209,300
Cash Flows from Operating Activities
Operating income (loss) (477.622) (313,388) 7,361 (783,649) Adjustments to reconcile operating income (loss)
to net cash provided (used by operating activities:
Depreciation 561,565 473,025 1,034,590
(Increase) Decrease in accounts receivable 41,385 (2347) 80,182 41,144
(Increase) Decrease in deposits (19,125) (19,125)
(Increase) Decrease in prepaids 26,635 18,013 44,678
(Increase) Decrease in deferred outflows of resources (4,569) (3,483) - (8,052) Increase (Decrease) in compensated absences (21,136) (6,628) (27,764) Increase (Decrease) in deferred inflows of resources 97,091 74,020 171,111 Increase (Decrease) in net pension liability (121,941) (92.964) (214.905) Increase (Decrease) in accounts payable
and accrued liabilities (281,761) (7.778) 49,649 (239,890) Net Cash Provided (Used) by Operating Activities (199,719) 182,232 54,663 37,176 See accompanying notes to the financial statements. 12
CITY OF ORANGE COVE
STATEMENT OF FIDUCIARY NET POSITION PRIVATE-PURPOSE TRUST FUND -
SUCCESSOR AGENCY
JUNE 30, 2022
Assets
Cash and investments
Held in City Treasury 173,972
Held with trustees 403,108
Taxes receivables 145,789
Interest receivable 677
Note receivable 200,000
Total assets 923,546
Liabilities
Accounts payable and accrued liabilities 2,563
Interest payable 50,375
Long-term debt:
Due within one year 277,432
Due in more than one year 2.990,160
Total liabilities 3,320,530
Net Position
Held in trust for other governments $ (2.396,984)
See accompanying notes to the financial statements. 13
CITY OF ORANGE COVE
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION PRIVATE-PURPOSE TRUST
FUND - SUCCESSOR AGENCY
JUNE 30, 2022
Additions
Property taxes 535,973
Investment earnings and other 27,721
Total additions 563,694
Deductions
rogram expenses 77,803
Administrative cost 30,229
Interest and fiscal agency expenses of former redevelopment agency 124,152 Total deductions 232,184
Change In Net Position 331,510
Net Position
Beginning of year (2,728,494)
End of year $ (2,396,984)
See accompanying notes to the financial statements. 14
NOTES TO THE FINANCIAL STATEMENTS
CITY OF ORANGE COVE
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
Note 1 - Summary of Significant Accounting Policies
The financial statements of the City of Orange Cove, California (the City) have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to governmental entities. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for governmental accounting and financial reporting principles.
These financial statements present the government and its component units, entities for which the City is considered to be financially accountable. Blended component units, although legally separate entities are, in substance, part of the government's operations and data from these units are combined with data of the primary government. Each blended component unit has a June 30 year-end. The City has no component units to report.
The following sections further describe the significant policies of the City.
Reporting Entity
The City was incorporated as a general law city in 1948. The City operates under a Council-Manager form of government. The City's major operations include public safety, public works, water, sewer, disposal, parks and recreation, streets, planning and community development, and general administrative services.
Basis of Presentation - Fund Accounting
Government-Wide Financial Statements - The statement of net position and the statement of activities display information about the primary government (the City) and its component units. These statements include the financial activities of the overall government, except for fiduciary activities. Eliminations have been made to minimize the double-counting of internal activities. These statements distinguish between the governmental and business-type activities of the City. Governmental activities generally are financed through taxes, intergovernmental revenues, and other non-exchange transactions. Business-type activities are financed in whole or in part by fees charged to external parties.
The Statement of Activities presents a comparison between direct expenses and program revenues for each different identifiable activity of the City's business-type activities and for each function of the City's governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are included in the program expense reported for individual functions. Certain indirect costs, which cannot be identified and broken down, are included in the program expense reported for individual functions and activities. Program revenues include, 1) fines, fees, and charges paid by the recipients of goods and services offered by the programs and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented instead as general revenues. 15 CITY OF ORANGE COVE
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
Note 1 - Summary of Significant Accounting Policies (Continued) Basis of Presentation - Fund Accounting (Continued)
Certain eliminations have been made as prescribed by GASB No. 34 in regards to interfund activities, payables and receivables. All internal balances in the statement of net position have been eliminated except those representing balances between the governmental activities and the business-type activities, which are presented as internal balances and eliminated in the total primary government column. In the statement of activities, those transactions between governmental and business-type activities have not been eliminated. The following interfund activities have been eliminated: due to/due from other funds, advances from/to other funds, and transfers in/transfers out.
Net position is restricted when constraints placed on them are either externally imposed or are imposed by constitutional provisions or enabling legislation. Internally imposed designations of resources are not presented as restricted net position. When both restricted are unrestricted resources are available for use, generally, it is the City's policy to use restricted resources first, then unrestricted resources as they are needed.
Governmental Fund Financial Statements - The fund financial statements provide information about the City's funds. Separate statements for each fund category - governmental, proprietary, and fiduciary - are presented.
The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column. All remaining governmental and enterprise funds are aggregated and reported as non-major funds. An accompanying schedule is presented to reconcile and explain the differences in funds and changes in fund balances as presented in these statements of net position and changes in net position presented in the government-wide financial statements.
Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Non-operating revenues, such as subsidies and investment earnings, result from non- exchange transactions or ancillary activities. Operating expenses are those expenses that are essential to the primary operations of the fund. All other expenses are reported as non-operating expenses.
The City reports the following major governmental funds:
General Fund - The General Fund is the general operating fund of the City. It is used for all financial resources except those required legally, or by sound financial management to be accounted for in another fund. Generally, the General Fund is used to account for those traditional governmental services of the City, such as police protection, planning and general administrative services.
ARPA Fund - The American Recovery Plan Act Fund is used to account for the ARPA funding and related expenditures.
CITY OF ORANGE COVE
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
Note 1 - Summary of Significant Accounting Policies (Continued) Basis of Presentation - Fund Accounting (Continued)
Housing Grant Special Revenue Fund - The Housing Grant Fund is used to account for grant revenues and expenditures related to housing assistance loans for low income individuals.
Daycare Special Revenue Fund - The Daycare Fund is used to account for grant revenues and expenditures related to the operation of the Daycare.
Enterprise fund financial statements include a statement of net position, a statement of revenues, expenses, and changes in net position, and a statement of cash flows for each major enterprise fund and non-major fund.
The City has three major enterprise funds, the Water, Sewer and Disposal, which are used to account for operations that are financed and operated in a manner similar to private business enterprises. In an enterprise fund, the intent of the City Council is that costs (expenses, including depreciation) of providing services to the general public, on a continuing basis, be financed or recovered primarily through user charges.
The City reports the following three major enterprise funds:
• The Water Fund is used to account for financial activity of the water utility system. • The Sewer Fund is used to account for the financial activity of the sewer utility system. • The Disposal Fund is used to account for the financial activity of the disposal utility system.
The City's fiduciary funds represent agency trust funds, which are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. The agency trust funds are accounted for on an economic resources measurement focus and the accrual basis of accounting The City reports the following fiduciary fund:
• Private-Purpose Trust Fund - The Private Purpose Trust Fund accounts for assets held by the City as trustee for Successor Agency.
17 CITY OF ORANGE COVE
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2022
Note 1 - Summary of Significant Accounting Policies (Continued) Measurement Focus, Basis of Accounting
Government-Wide, Proprietary and Fiduciary Fund Financial Statements - The government-wide, proprietary, and fiduciary fund financial statements are reported using the economic resources measurement focus. The government-wide and proprietary fund financial statements are reported using the accrual basis of accounting.
Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the City gives (or receives) value without directly receiving (or giving) equal value in exchange, include property and sales taxes, grants, entitlements and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenues from sales taxes are recognized when the underlying transactions take place. Revenues from grants, entitlements and donations are recognized in the fiscal year in which all eligibility requirements have been satisfied.
Governmental Fund Financial Statements - Governmental funds are reported using current financial resources measurement focus and the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized when measurable and available. Property and sales taxes, interest, certain state and federal grants, and charges for services are accrued when their receipt occurs within sixty days after the end of the accounting period so as to be both measurable and available. Expenditures are generally recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to claims and judgments and compensated absences, are recorded only when payment is due. General capital assets acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term debt and capital leases are reported as other financing sources.
Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of each fund. Nonoperating revenues, such as interest income, state and federal grants, and subsidies, result from nonexchange transactions or ancillary activities. Operating expenses include costs for providing services and delivering goods such as administrative expenses and depreciation on capital assets. All other expenses not meeting this definition are reported as nonoperating expenses. 18 CITY OF ORANGE COVE
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
Note 1 - Summary of Significant Accounting Policies (Continued) Assets, Liabilities and Equity
Cash and Cash Equivalents - Cash and cash equivalents represent the City's cash bank accounts including, but not limited to, certificates of deposit, money market funds and cash management pools for reporting purposes in the statement of cash flows. Additionally, investments with maturities of three months or less when purchased are included as cash equivalents in the statement of cash flows.
The City maintains a cash and investment pool that is available for use by all funds. Interest earnings as a result of this pooling are distributed to the appropriate funds based on month end cash balances in each fund.
Investments of the pool include only those investments authorized by the California Government Code such as, United States Treasury securities, agencies guaranteed by the United States Government, registered state warrants, and other investments. Investments primarily consist of deposits in the State of California Local Agency Investment Fund. Investments are recorded at amortized cost or fair value. Fair value is based upon quoted market prices.
Investments are reported at fair value.
Accounts Receivable - Billed, but unpaid, services provided to individuals or non-governmental entities are recorded as accounts receivable. The proprietary funds include a year-end accrual for services through the end of the fiscal year which have not yet been billed. Accounts receivable are reported net of an allowance for uncollectible accounts.
Property Tax Calendar - Fresno County is responsible for the assessment, collection and apportionment of property taxes for all taxing jurisdictions. Property taxes are levied in equal installments on November 1 and February 1. They become delinquent on December 10 and April 10, respectively. The lien date is January 1 of each year. Property taxes are accounted for in the General Fund. Property tax revenues are recognized when they become measurable and available to finance current liabilities. The City considers property taxes as available if they are collected within 60 days after the year-end. Property taxes on the unsecured roll are due on July 1 and become delinquent if unpaid on August 31. However, unsecured property taxes are not susceptible to year-end accrual.
The City is permitted by Article XIIIA of the State of California Constitution (known as Proposition 13) to levy a maximum tax of $1.00 per $100 of full cash value.
Interfund Receivables/Payables - Items classified as interfund receivable/payable represent short-term lending/borrowing transactions between funds. This classification also includes the current portion of an advance to or from another fund.
19 CITY OF ORANGE COVE
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
Note 1 - Summary of Significant Accounting Policies (Continued) Assets, Liabilities and Equity (Continued)
Advances To/From Other Funds - This classification represents non-current portions of any long-term lending/borrowing transactions between funds. This amount will be equally offset by a reserve of fund balance which indicates that it does not represent available financial resources and, therefore, is not available for appropriation. The current portion of any interfund long-term loan (advance) is included as an interfund receivable/payable.
Capital Assets - Capital outlays are recorded as expenditures of the general, special revenue, and capital projects funds, and capitalized assets in the government-wide financial statements to the extent the City's capitalization threshold is met.
Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type activities column in the Government-Wide Financial Statements. Capital assets are defined by the government as assets with and initial individual cost of more than $5,000 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Betterments and major improvements which significantly increase values, change capacities or extend useful lives are capitalized. Upon sale or retirement of fixed assets, the cost and related accumulated depreciation are removed from the respective accounts and any resulting gain or loss is included in the results of operations.
Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities are included as part of the capitalized value of the assets constructed
Property, plant and equipment of the primary government, as well as the component units, are depreciated using the straight line method over the following estimated useful lives:
Buildings and improvements .. 10-50 years
Plant system. ..20-40 years
Machinery and equipment ..5-10 years
Infrastructure . 40 years
20 CITY OF ORANGE COVE
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
Note 1 - Summary of Significant Accounting Policies (Continued) Assets, Liabilities and Equity (Continued)
Compensated Absences - Accumulated unpaid vacation benefits, sick pay, and compensatory time benefits are accrued as a liability as the benefits are earned. The entire compensated absence liability is reported on the government-wide financial statements as long-term debt. For governmental funds, the current portion of unpaid compensated absences is recognized upon the occurrence of relevant events such as employee resignations and retirements that occur prior to year end that have not yet been paid with expendable available financial resources.
These amounts are reported in the fund from which the employees who have accumulated leave are paid.
Sick leave is accumulated at 12 days per year for full-time regular employees. Vacation is accumulated at 12 days per year for full-time regular employees with less than five years of service to a maximum of 25 days per year for full-time regular employees with over 20 years of service with no limit on accrual of unused hours.
Upon employment termination, unused sick leave is paid out at 5% to 25% depending on years of service, with a maximum payout of $2,500. These amounts are included as liabilities in the government-wide and enterprise fund financial statements.
Vested leave of Proprietary Funds are recorded as an expense and liability as the benefits accrue.
Interest Payable - In the government-wide financial statements, interest payable of long-term debt is recognized as the liability is incurred for governmental fund-types and proprietary fund-types. In the fund financial statements, proprietary fund-types recognize the interest payable when the liability is incurred.
Unearned Revenue - Unearned revenue is that for which asset recognition criteria have been met, but for which revenue recognition criteria have not been met. The City typically records unearned revenue related to uncollected outstanding, performing loans and intergovernmental revenues (primarily grants and subventions) received but not earned (qualifying expenditures not yet incurred). 21 CITY OF ORANGE COVE
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
Note 1 - Summary of Significant Accounting Policies (Continued) Assets, Liabilities and Equity (Continued)
Long-term Obligations - In the government-wide financial statements and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund-type statement of net position. Debt principal payments of both governmental and business-type activities are reported as decreases in the balance of the liability on the statement of net position. Bond premiums and discounts, as well as insurance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount.
In the fund financial statements, however, debt principal payments of governmental funds are recognized as expenditures when paid. Governmental fund-types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources.
Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.
Pension Plan - All full-time City employees are members of the State of California Public Employees' Retirement System. The City's policy is to fund all pension costs accrued; such as costs to be funded are determined annually as of July 1 by the System's actuary. See Note 11 for further discussion.
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City's Pension Plan and additions to/deductions from the City's Pension Plan's fiduciary net position have been determined on the same basis as they are reported by the City's Pension Plan. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms.
Encumbrances - The City does not use encumbrance accounting.
Budgetary and Budgetary Accounting - Budgets are adopted annually for the general fund, special revenue funds, capital funds, debt service funds, and enterprise funds. Formal budgetary integration is employed as a management control device during the year for these funds. The annual budgets are prepared on the basis of accounting utilized by the fund.
Expenditures may not legally exceed budgeted appropriations at the fund level. The City Manager is authorized to make budget transfers between accounts within any fund. All revisions must be reported to the City Council.
CITY OF ORANGE COVE
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
Note 1 - Summary of Significant Accounting Policies (Continued) Assets, Liabilities and Equity (Continued)
Use of Estimates - The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
Net Position - In the government-wide financial statements, net position is classified in the following categories:
Net investment in capital assets - This category groups all capital assets, including infrastructure, into one component of net position. Accumulated depreciation and the outstanding balances of debt that are attributable to the acquisition, construction or improvement of these assets reduce this category.
Restricted net position - This category presents external restrictions imposed by creditors, grantors, contributors or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabling legislation.
Unrestricted net position - This category presents the net position of assets that do not meet the definition of "net investment in capital assets" or "restricted net position".
When both restricted and unrestricted net position are available, restricted resources are depleted first before the unrestricted resources are used
Fund Balances- The governmental fund financial statements present fund balances based on classifications that comprise a hierarchy that is based primarily on the extent to which the City is bound to honor constraints on the specific purposes for which amounts in the respective governmental funds can be spent. The classifications used in the governmental fund financial statements are as follows:
• Nonspendable: This classification includes amounts that cannot be spent because they are either (a) not in spendable form or (b) are legally or contractually required to be maintained intact. • Restricted: This classification includes amounts for which constraints have been placed on the use of the resources either (a) externally imposed by creditors (such as through a debt covenant), grantors, contributors, or laws or regulations of other governments, or (b) imposed by law through constitutional provisions or enabling legislation.
• Committed: This classification includes amounts that can be used only for specific purposes pursuant to constraints imposed by formal action of the City Council. These amounts cannot be used for any other purpose unless the City Council removes or changes the specified use by taking the same type of action (ordinance or resolution) that was employed when the funds were initially committed. This classification also includes contractual obligations to the extent that existing resources have been specifically committed for use in satisfying those contractual requirements.
CITY OF ORANGE COVE
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
Note 1 - Summary of Significant Accounting Policies (Continued) Assets, Liabilities and Equity (Continued)
• Assigned: This classification includes amounts that are constrained by the City's intent to be used for a specific purpose but are neither restricted nor committed. This intent can be expressed by the City Council or through the City Council delegating this responsibility to the Finance Director through the budgetary process. This classification also includes the remaining positive fund balance for all governmental funds except for the general fund.
• Unassigned: This classification is the residual classification for the general fund and represents fund balance that has not been assigned to other funds and that has not been restricted, committed or assigned to specific purposes within the general fund. In other governmental funds it includes any negative residual amounts that may exist as a result of expenditures incurred for specific purposes in excess of amounts restricted, committed or assigned to those purposes.
The City would typically use restricted fund balances first, followed by committed resources, and then assigned resources, as appropriate opportunities arise, but reserves the right to selectively spend unassigned resources first to defer the use of these other classified funds.
Note 2 - Stewardship, Compliance and Accountability
In accordance with applicable sections of the California Government Code and the Orange Cove Municipal Code, the City prepares and legally adopts an annual balanced budget on a basis consistent with accounting principles generally accepted in the United States of America. Annual appropriated budgets are adopted for the General Fund, specific Special Revenue Funds, and specific Capital Projects Funds. Budget plans are adopted for Proprietary Funds. A proposed budget is presented to the City Council during May of each year for review.
The Council holds public hearings and may add to, subtract from, or change appropriations within the revenues and reserves estimated as available. Expenditures may not legally exceed budgeted appropriations at the fund level. Supplementary appropriations which alter the total expenditures of any fund, or expenditures in excess of total budgeted fund appropriations, must be approved by the City Council.
All annual appropriations lapse at fiscal year-end to the extent they have not been expended or encumbered. 24 CITY OF ORANGE COVE
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
Note 3 - Cash and Investments
The City pools all of its cash and investments except those funds required to be held by bond trustee or outside fiscal agents under the provisions of bond indentures. Interest income earned on pooled cash is allocated to the various funds on average cash balances. Interest income from cash investments held by bond trustee is credited directly to the related funds.
Cash and investments as of June 30, 2022 are classified in the accompanying financial statements as follows:
Statement of Net Position:
Cash and Investments 5,438,808
Cash and Investments - restricted 149,771
Cash and Investment with fiscal agent - restricted 13,254 Fiduciary Funds:
Cash and Investments 173,972
Cash and Investments with fiscal agent 403,108
Total Cash and Investments $ 6,178,913
Cash and investments as of June 30, 2022 consist of the following:
Cash on hand 2,294
Deposit with Financial Institutions 2,749,298
Local Agency Investment Fund 3,010,959
Held by Fiscal Agent:
U.S. Treasury Obligations 13,254
U.S. Government Obligations 403,108
Total Cash and Investments $ 6,178.913
Fair Value Measurements
The framework for measuring fair value provides a fair value hierarchy that categorizes the inputs to valuation techniques used to measure fair value into three levels. The fair value hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described as follows:
Level 1: Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets that a government can access at the measurement date.
Level 2: Inputs to valuation methodology include inputs - other than quoted prices included within Level 1- that are observable for an asset or liability, either directly or indirectly.
Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
CITY OF ORANGE COVE
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
Note 3 - Cash and Investments (Continued)
The asset's or liability's fair value measurement level within a fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.
Following is a description of the valuation methodologies used for assets measured at fair value.
June 30, 2022
Level l Level 2 Level 3 Balance
Investments by fair value level:
Debt Securities:
U.S. Treasury Obligations $ 13,254 $ - $ - $ 13,254
U.S. Government Obligations 403,108 403,108
Total Debt Securities 13,254 403,108 416,362
Unclassified Investments
LAIF • 3,010,959
Total Unclassified Investments 3,010,959
Cash:
Bank Deposits and Cash on Hand 2,751,592
Total Investments amortized at cost 2,751,592
Total Cash and Investments $ 6,178,913
The fair values of the U.S. treasury bonds are based on quoted market prices in active markets and are included in the Level 1 fair value hierarchy. The market for U.S. Treasury Obligations is an actively traded market given the high level of daily trading volume. The fair values of U.S. Government Obligations are determined using a matrix pricing technique that values securities based on their relationship to benchmark quoted prices and are in the Level 2 fair value hierarchy.
CITY OF ORANGE COVE
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
Note 3 - Cash and Investments (Continued)
Investments Authorized by the California Government Code and the City's Investments Policy The table below identifies the investment types that are authorized for the City by the California Government Code (or the City's investments policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the City's investment policy, where more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. The City's investment policy does not contain any specific provisions intended to limit the City's exposure to interest rate risk, credit risk, and concentration of credit risk.
This table does not address investments of debts proceeds held by bond trustee that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City's investment policy.
Maximum Maximum
Maximum Percentage Investment In
Authorized Investment Type Maturity of Portfolio One Issuer Local Agency Bonds 5 years None None
U.S. Treasury Obligations 5 years None None
U.S. Agency Securities 5 years None None
Banker's Acceptances 180 days 40% 30%
Commercial Paper 270 days 25% 10%
Negotiable Certificates of Deposit 5 years 30% None
Medium-Term Notes 5 years 30% None
Mutual Funds N/A 20% 10%
Money Market Mutual Funds N/A 20% 10%
Mortgage Pass-Through Securities 5 years 20% None
County Pooled Investment Funds N/A None None
Local Agency Investment Fund (LAIF) N/A None None
27 CITY OF ORANGE COVE
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
Note 3 - Cash and Investments (Continued)
Investments Authorized by Debt Agreements
Investments of debt proceeds held by bond trustee are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code of the City's investment policy. The table below identifies the investment types that are authorized for investments held by the bond trustee. The table also identified certain provisions of these debt agreements that address interest rate risk, credit risk, and concentration of credit risk.
Maximum Maximum
Maximum Percentage Investment In
Authorized Investment Type Maturity of Portfolio One Issuer U.S. Treasury Obligations None None None
U.S. Agency Securities None None None
Banker's Acceptances 180 days None None
Commercial Paper 270 days None None
Money Market Mutual Funds N/A None None
Investment Contracts None None None
Certificates of Deposits 1 year None None
Repurchase Agreements 30 days None None
Local Agency Investment Fund (LAIF) N/A None None
Municipal Bonds None None None
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. The City manages its exposure to interest rate risk is by investing funds in liquid, short-term investments which can be converted to cash when necessary to meet disbursement requirements. As of June 30, 2022 the City had the following investments by maturity:
Investment Type Amount Maturity Date
Local Agency Investment Fund $ 3,010,959 N/A
Held by Bond Trustee:
U.S. Treasury Obligations 13,254 N/A
U.S. Government Obligations 403,108 N/A
Total $ 3,414,067
28 CITY OF ORANGE COVE
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
Note 3 - Cash and Investments (Continued)
Disclosure Relating to 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. Presented below is the minimum rating required (where applicable) by the California Government Code, the City's investment policy, or debt agreements, and the actual rating as of year-end for each investment type.
Rating as of Year Ended
Minimum Legal
Investment Type Amount Rating Not Rated AAAm
Local Agency Investment Fund $ 3,010,959 N/A $ 3,010,959 $ - Held by Bond Trustee:
U.S. Treasury Obligations 13,254 N/A 13,254
U.S. Government Obligations 403.108 N/A 403,108
Total $ 3,427,321 $ 3,010,959 $ 416,362
Concentration of Credit Risk
The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. The City does not have any investments in any one issuer (other than U.S. Treasury securities, mutual funds, and external investment pools) that represent 5% or more of total City investments.
Custodial Credit Risk-Deposits
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 possession of an outside party. The California Government Code and the City's investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits, other than the following provisions for deposits: The California Government Code requires that a financial institution secure deposits made by the state or local government units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. As of June 30, 2022, the City's bank balance of $2,546,547 was exposed to custodial credit risk because it was uninsured and collaterized with securities held by the pledging financial institution's trust department or agent, but not in the name of the City. 29 CITY OF ORANGE COVE
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
Note 3 - Cash and Investments (Continued)
The custodial risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, a government will not be able to recover the value of its investments or collateral securities that are in possession of another party. The California Government Code and the City's investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for investments. With respect to investments, custodial credit risk generally applies only to direct investments in marketable securities. Custodial credit risk does not apply to a local government's indirect investment in securities through the use of mutual funds or government investments pools such as the Local Agency Investment Fund (LAIF).
Investment in State Investment Pool
The City is a voluntary participant in the LAIF that is regulated by the California Government Code under the oversight of the Treasurer of the State of California. The fair value of the City's investments in this pool is reported in the accompanying financial statements at amounts based upon the City's pro-rata 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.
Note 4 - Accounts Receivable
Accounts receivable balances of the City's enterprise funds, including the applicable allowance for uncollectible accounts as of June 30, 2022, are as follows:
Water Sewer Disposal Total
Accounts receivable $ 559,162 $ 347,342 $ 206,505 $ 1,113,009 Allowance for uncollectible accounts (250,660) (134,906) (89,237) (474,803) Total accounts receivable, net 308,502 $ 212,436 $ 117,268 $ 638,206 30 CITY OF ORANGE COVE
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
Note 5 - Interfund Activities
Due From/To Other Funds
Interfund receivables and payables consist of short-term loans resulting from regular transactions. These loans are expected to be repaid as soon as the borrowing fund has cash, and carry an interest rate equal to the rate earned on pooled cash. Individual fund interfund receivables and payables balances as of June 30, 2022 are as follows:
Due From Due To
Major Funds:
General Fund $ 318,005 $
20,148
Daycare Fund
Water Fund : 115,139
Nonmajor Funds:
Streets Capital Project Fund 104,560
SB2 Special Revenue Fund 77,858
$ 318,005 $ 318,005
Operating Transfers
With the City Council approval, resources may be transferred from one City fund to another. The purpose of the majority of transfers is to reimburse a fund that has made expenditures on behalf of another fund. Transfers within fund types have been eliminated with the government-wide financial statements.
Transfers in and out for the year ended June 30, 2022 consisted of the following:
Transfer
Transfer In Out
Major Governmental Funds:
General $ 13,117 $
Housing Grant 390
Daycare - 13,507
Nonmajor Governmental Funds:
Measure C 5,550
5550
Streets Capital Project
19.057 $ 19.057
Transfer out of the Daycare Fund of $13,117 to the General Fund was to cover costs.
Transfer out of Measure C to the Streets Capital Project Fund of $5,550 was to cover street costs. 31 CITY OF ORANGE COVE
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
Note 6 - Notes Receivable
Notes receivable at June 30, 2022 are as follows:
Housing Grant Notes - Through the grant, the City has loaned $1,290,000 to forty-three families at 1% interest.
The loan proceeds were used by these low and moderate income families to purchase homes. The loans are payable in thirty years or when property ownership is transferred. The proceeds for the loans are provided through a State Housing Grant. As of June 30, 2022, the notes receivable balance was $1,229,000. Deferred interest receivable on these notes was $131,140 as of June 30, 2022.
The City loaned four loans totaling $239,957 at 0% interest. The loan proceeds were used by these low and moderate income families to purchase homes. The loans are payable in thirty to forty-five years or when property ownership is transferred. The proceeds for the loans are provided through a Federal Housing Grant.
As of June 30, 2022, the City loaned forty-eight loans totaling $1,138,329 at 0% interest. The loan proceeds were used by these low and moderate income families to purchase homes. The loans are payable in thirty years or when property ownership is transferred. The proceeds for the loans are provided through a State Housing Grant.
Low and Moderate Housing Notes - Note receivable is due from Citrus Gardens '98 LP, to assist in the construction of low income apartment complex. The note incurs interest at three percent and requires annual payments of 50% of residual receipts" (revenues less debt service, property tax and maintenance and operating expenses). To date, there have been no payments on the note. The note is due in full in November 2029 with interest. The balance due on the note at June 30, 2022 was $275,000. Deferred interest receivable on the note at June 30, 2022 was $194,237.
Valley Small Business Development Note - A note receivable is due from Valley Small Business Development Corporation (Valley") in which funds were used to assist Valley in retaining control of a community medical clinic (Orchard Medical Center) in the City of Orange Cove and enable the property to again be used as a financially viable medical clinic. The note is due if and when Valley sells the Property. The first $200,000 of net appreciation would be due to the Successor Agency in addition to 25% of any excess appreciation. The balance due on the note at June 30, 2022 was $200,000.
32 CITY OF ORANGE COVE
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
Note 7 - Capital Assets
Capital assets activity of the governmental activities for the year ended June 30, 2022 was as follows:
Balance Balance
Governmental Activities July 1. 2021 Additions Retirements June 30. 2022 Capital assets, not being depreciated:
Land 1.302,411 $ - - 1,302,411
Construction in progress 493,664 288,832 (493,664) 288,832 Total capital assets, not being depreciated 1.796.075 288,832 (493.664) 1.591.243 Capital assets, being depreciated:
Buildings and improvements 10,853,433 732,130 11,585,563 Machinery and equipment 2,195,912 113,042 2,308,954
Total capital assets, being depreciated 13.049.345 845.172 13,894,517 Less accumulated depreciation for:
Buildings and improvements (4,109,530) (373,164) : (4,482,694) Machinery and equipment (1.730,657) (145.372) (1,876,029) Total accumulated depreciation (5,840,187) (518,536) (6,358,723) Total capital assets, being depreciated, net 7.209,158 326,636 7,535,794 Governmental activities capital assets, net $ 9.005.233 615,468 S (493.664) 9,127.037 Depreciation expense was charged to governmental functions as follows:
Governmental Activities Functions:
General Government $ 78,444
Public Safety 45,636
Public Works 135,388
Parks and Recreation 96,932
Streets 164,027
$ 520,427
33 CITY OF ORANGE COVE
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
Note 7 - Capital Assets (Continued)
Capital assets activity of the business-type activities for the year ended June 30, 2022 was as follows:
Balance Balance
Business-Type Activities July 1. 2021 Additions Retirements June 30, 2022 Capital assets, not being depreciated:
Land 769,772 - 769,772
Construction in progress 2,116,824 6.090 (995.501) 1,127,413 Total capital assets, not being depreciated 2,886.596 6,090 (995,501) 1,897,185 Capital assets, being depreciated:
Buildings and improvements 25,200,261 1,153,559 26,353,820 Machinery and equipment 3,140,773 3,140,773
Total capital assets, being depreciated 28,341,034 1,153,559 29,494,593 Less accumulated depreciation for:
Buildings and improvements (12,349,046) (605,045) - (12,954,091) Machinery and equipment (1,503,786) (429,545) (1,933,331) Total accumulated depreciation (13,852.832) (1,034,590) (14,887.422) Total capital assets being depreciated, net 14.488.202 118,969 14,607,171 Business-type activities capital assets, net $ 17.374.798 125,059 (995,501) $ 16,504,356 Depreciation expense was charged to business-type functions as follows:
Business-Type Functions:
Water $ 561,565
Sewer 473,025
$ 1,034,590
34 CITY OF ORANGE COVE
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
Note 8 - Long-term Debt
The City generally incurs long-term debt to finance projects or purchase assets which will have useful lives equal to or greater than the related debt.
In government fund-types, debt discounts and issuance costs are recognized in the current period. Debt discounts incurred in proprietary funds are deferred and amortized over the term of the debt using the bonds- outstanding method, which approximates the effective interest method. The City's debt activities are summarized below and discussed in detail thereafter:
Balance Balance Current
July 1, 2021 Additions Retirements June 30, 2022 Portion Governmental Activities:
Direct Placement:
Special Assessment Bonds $ 888,000 - (75,000) S 813,000 $ 85,000 Direct Borrowing:
PG&E Streetlights Loan 7,442 (2,178) 5,264 2,178
Total Governmental Activities Debt 895.442 17,178) 818,264 $ 87,178 Business-Type Activities:
Direct Placements:
Bonds Payable:
1995 Water System Improvement Project (38.657) 445,207 $ 26,500 2005 COP Water Loan 337,300
Direct Borrowing:
Notes Payable:
California Department of Water Resource (42,699) 201.471 41,884 Total Business-Type Activities Debt $ 1.065.334 (89.356) 975,978 $ 76.684 Net Pension Liability/(Asset):
Governmental Activities
Net Pension Asset $ (803.253) S(577,689) S $ (1,380,942) (496212) 1 5 481.211
Net Pension Liability 977.453 $ $
Business-Type Activities
Net Pension Liability $ 423.301 $ $ (214,905) ) $ 208.396
CITY OF ORANGE COVE
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
Note 8 - Long-term Debt (Continued)
Long-term debt at June 30, 2022 was comprised of the following individual issues:
Governmental Activities
Special Assessment Bond Payable - In March 1990, the City issued $2,450,684 in special assessment bonds with interest rates at 5% payable semi-annually. The proceeds were used to finance a sewer plant expansion project. These bonds are payable from assessments on the property owners within the City. The principal payments range from $21,000 to $120,000 and are due annually through 2029. At June 30, 2022, bonds payable outstanding amounts to $813,000.
Annual debt service requirements for Special Assessment Bond Payable are as follows:
Years ending in June 30, Principal Interest Total
2023 $ 85,000 S 38,225 $ 123,225
2024 88,000 33,900 121,900
2025 93,000 29,375 122,375
2026 98,000 24,600 122,600
2027 102,000 19,600 121,600
2028-2030 347,000 26,175 373,175
813,000 171,875 984,875
PG&E Street Lights Loan - In 2015, the City financed $21,238 from Pacific Gas & Electric for the LED Street Lights project. The principal payments of $182 are due monthly through November 2024. At June 30, 2022, the note payable outstanding amounts to $5,264.
Annual debt service requirements for PG&E Street Lights Loan are as follows:
Years ending in June 30, Principal Interest Total
2023 $ 2,178 $ 2,178
2024 2,178 2,178
2025 908 908
$ 5,264 $ 5.264
36 CITY OF ORANGE COVE
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
Note 8 - Long-term Debt (Continued)
Business-Type Activities
1995 Orange Cove Public Financing Authority Revenues Bond Payable - In 1995, the City issued $907,650 in revenue bonds with interest rates at 4.5% payable semi-annually thru 2035. The proceeds were used to finance a Water System Improvement Project. The City signed a lease agreement with the Authority with loan payments plus interest due semiannually. The principal payments range from $8,650 to $47,000 and are due annually through 2035. At June 30, 2022, the bonds payable outstanding amounts to $445,207.
Annual debt service requirements for the 1995 Orange Cove Public Financing Authority Revenue Bonds Payable are as follows:
Years ending in June 30, Principal Interest Total
2023 26,500 $ 22,061 48,561
2024 28,000 20,835 48,835
2025 29,000 19,553 48,553
2026 30,500 18,214 48,714
2027 32,000 16,807 48,807
2028-2032 181,000 60,817 241,817
2033-2036 118,207 16.303 134.510
$ 445,207 174,590 S 619,797
37 CITY OF ORANGE COVE
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
Note 8 - Long-term Debt (Continued)
2005 Certificate of Participation Water Loan - In July 2005, the City borrowed $425,000 from the U.S.
Government to facilitate water plant improvements. The interest rates is at 4.125% payable semi-annually. The principal payments in amounts from $4,300 to $21,000 are due annually through 2045. At June 30, 2022, the bonds payable outstanding amounts to $329,300.
Annual debt service requirements for the 2005 Certificate of Participation Water Loan are as follows:
Years ending in June 30, Principal Inte rest Total
2023 8,300 13,413 $ 21,713
2024 8,600 13,064 21,664
2025 9,000 12,701 21,701
2026 9,400 12,322 21,722
2027 9,700 11,928 21,628
2028-2032 55,100 53,141 108,241
2033-2037 67,400 40,548 107,948
2038-3042 82,600 25,135 107,735
2043-2047 79,200 6,700 85,900
$ 329,300 188,952 518,252
Department of Water Resource Note Payable - In 1996, the City borrowed $943,280 from the California Department of Water Resource to finance water system improvements. The interest rates is at 2.955% payable semi-annually. The principal payments in amounts from $9,900 to $23,800 are due annually through 2026. At June 30, 2022, the note payable outstanding amounts to $201,471.
Annual debt service requirements for the Department of Water Resource Note Payable are as follows:
Years ending in June 30, Principal Interest Total
2023 41,884 $ 7,472 $ 48,145
2024 43,121 6,261 48,145
2025 44,421 5,024 48,144
2026 45,736 3,723 48,144
2027 26,309 2,419 28,728
$ 201.471 $ 24,899 $ 221,306
38 CITY OF ORANGE COVE
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
Note 9 - Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position or fund balance that applies to a future period(s) and thus, will not be recognized as an outflow of resources (expense/expenditure) until then. The City reports $1,639,073 in deferred outflow of resources related to net pension liability in the Statement of Net Position, see Note 11 for more details.
In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position or fund balance that applies to a future periods) and so will not be recognized as an inflow of resources (revenue) until that time. The City reports $1,072,439 in deferred inflows related to net pension in the Statement of Net Position, see Note 11 for more details.
The City also has one type of item, which arises only under a modified accrual basis of accounting that qualifies for reporting as deferred inflows of resources. Accordingly, that item, unavailable revenues, is reported only in the governmental funds balance sheet. The City reports in the governmental funds $3,207,663 as unavailable revenues in the governmental funds:
Low-
Moderate
Housing Housing
Fund Asset Total
Unavailable revenues:
Interest income 131,140 $ 194,237 325,377
Loan repayments 2,607,286 275,000 2,882,286
$ 2,738,426 $ 469,237 $ 3,207,663
Note 10 - Deficit Fund Balances
The following is a summary of deficit fund balances and net position as of June 30, 2022:
The deficit fund balance of $2,396,984 in the Successor Agency is due to a bond payable, which will be paid down with future tax increments.
The deficit fund balance of $71,117 in the Streets Capital Project Fund is due to operating expenditures exceeding operating revenues in the current year.
39 CITY OF ORANGE COVE
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
Note 11 - Defined Benefit Pension Plan
Plan Description - The City contributes to the California Public Employees' Retirement System (PERS), an agent multiple-employer public employee defined benefit pension plan. PERS provides retirement and disability benefits, annual cost-of-living adjustments and death benefits to plan members and beneficiaries. PERS acts as a common investment and administrative agent for participating public entities within the State of California.
Benefit provisions and all other requirements are established by state statute and city ordinance. Copies of PERS annual financial report may be obtained from their Executive Office - 400 P Street - Sacramento, CA 95814.
Fund Policy - Active plan members in the Plan are required to contribute 5% of their covered salary for miscellaneous members and 9% to 11.5% for safety members. The City makes the employees' contributions on their behalf. The City is required to contribute the actuarially determined remaining amounts necessary to fund the benefits for its members. The actuarial methods and assumptions used are those adopted by the CaPERS Board of Administration. The contribution requirements of plan members are established by State statute and the employer contribution is established and may be amended by PERS.
The Plans' provisions and benefits in effect at June 30, 2022, are summarized as follows:
Miscellaneous Classic Safety Classic
Prior to Prior to
Hire Date January 1, 2013 January 1, 2013
Benefit Formula 2% @ 60; 2.0% at 50;
maximum 2% maximum 2%
COLA COLA
Benefit Vesting Schedule 5 years 5 years
Benefit Payments monthly for life monthly for life
Retirement Age 60 50
Monthly Benefits, as a % of Eligible Compensation 2% 2% Required Employee Contribution Rates 7% 9%
Required Employer Contribution Rates 8.650% 19.250%
PEPRA Miscellaneous PEPRA Safety
Prior to Prior to
Hire Date January 1, 2013 January 1, 2013
Benefit Formula 2% @ 62; 2.0% at 57;
maximum 2% maximum 2%
COLA COLA
Benefit Vesting Schedule 5 years 5 years
Benefit Payments monthly for life monthly for life
Retirement Age 62 57
Monthly Benefits, as a % of Eligible Compensation 2% 2% equired Employee Contribution Rate 6.25% 11.50%
equired Emplover Contribution Rate 7.590% 13.130%
40 CITY OF ORANGE COVE
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
Note 11 - Defined Benefit Pension Plan (Continued)
Contributions - Section 20814(c) of the California Public Employees' Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on July 1 following notice of a change in the rate. Funding contributions for both Plans are determined annually on an actuarial basis as of June 30 by CaPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees.
For the year ended June 30, 2022, the contributions recognized as part of the pension expense was $299,510.
Pension Liability/(Asset), Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions
As of June 30, 2022, the City reported net pension liability/(asset) for its proportionate shares of the net pension liability/(asset) of each Plan as follows:
Proportionate Share of
Net Pension Liability (Asset)
Miscellaneous $ 689,607
Safety ($1,380,942)
The City's net pension liability/(asset) for each Plan is measured as the proportionate share of the net pension liability/(asset). The net pension liability/(asset) of each of the Plan is measured as of June 30, 2020, and the total pension liability/(asset) for each Plan used to calculate the net pension liability/(asset) was determined by an actuarial valuation as of June 30, 2020 rolled forward to June 30, 2021 using standard update procedures.
The City's proportion of the net pension liability/(asset) was based on a projection of the City's long-term share of contributions to the pension plans relative to the projected contributions of all participating employers, actuarially determined. The City's proportionate share of the net pension liability/(asset for each Plan as of June 30, 2021 and 2022 was as follows:
Miscellaneous Safety
Proportion - June 30, 2021 0.03321% -(0.01206%)
Proportion - June 30, 2022 0.03632% -(0.03935%)
Change - Increase/(Decrease) 0.00311% -(0.02729%)
CITY OF ORANGE COVE
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
Note 11 - Defined Benefit Pension Plan (Continued)
For the year ended June 30, 2022, the City recognized a pension credit of $1,121,576. At June 30, 2022, the City reported deferred outflows of resources and deferred inflows of resources related to pension from the following sources:
Deferred Outflows Deferred Inflows of
of Resources Resources
Pension contributions subsequent to
measurement date $ 387,969 $
:
Change in employer's proportion 351,900
Difference between expected and actual
experience 77,332 (235,917)
Difference between projected and actual
contributions : (234,532)
Changes in assumptions or other inputs
Net differences between projected and
actual earnings on pension plan investments 821.872 (601,990) Total 1,639,073 $ (1,072.439)
The $387,969 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability/(asset) in the year ended June 30, 2023. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
Year Ended
June 30
2023 10,788
2024 41,146
2025 66,922
2026 59,809
$ 178,665
42 CITY OF ORANGE COVE
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
Note 11 - Defined Benefit Pension Plan (Continued)
Actuarial Assumptions - The total pension liability in the June 30, 2020 actuarial valuations were determined using the following actuarial assumptions:
Valuation Date June 30, 2020
Measurement Date June 30, 2021
Actuarial Cost Method Entry-Age Normal Cost Method in
accordance with the requirements of
GASB Statement No. 68
Amortization Method Level Percent of Payroll
Asset Valuation Method Market Value
Actuarial Assumptions:
Discount Rate 7.15%
Inflation 2.50%
Payroll Growth 2.50%
Projected Salary Increase Varies by Entry Age and Service Investment Rate of Return 7.15%
Mortality Derived using CalPERS' Membership 1
Data for all Funds
Post Retirement Benefit Increase Contract COLA up to 2.75% until urchasing Power Protectio
llowance Floor on Purchasing Powe
applies
'The mortality table used was developed based on CaPERS' specific data. The table includes 20 years of mortality improvements using Society of Actuaries Scale BB. For more details on this table, please refer to the 2014 experience study report.
All other actuarial assumptions used in the June 30, 2015 valuation were based on the results of an actuarial experience study for fiscal years 1997-2011, including updates to salary increase, mortality and retirement rates. The Experience Study can be obtained at CaPERS' website under Forms and Publications.
Change of assumptions - There were no changes of assumptions during the measurement period ended June 30, 2021.
CITY OF ORANGE COVE
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
Note 11 - Defined Benefit Pension Plan (Continued)
Discount rate - The discount rate used to measure the total pension liability was 7.15 percent.
The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected rate of returns, net of pension plan investment expense and inflation) are developed for each major asset class.
In determining the long-term expected rate of return, staff took into account both short-term and long-term market return expectations as well as the expected pension fund (Public Employees' Retirement Fund) cash flows. Such cash flows were developed assuming that both members and employers will make their required contributions on time and as scheduled in all future years. 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 (11-60 years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated. The expected nominal rate of return was set by calculating the 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 equivalent to the single equivalent rate calculated above and rounded down to the nearest one quarter of one percent.
The long-term expected real rates of return by asset class can be found in CaPERS Comprehensive Annual Financial Report for the fiscal year ended June 30, 2021. 44 CITY OF ORANGE COVE
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
Note 11 - Defined Benefit Pension Plan (Continued)
The table below reflects long-term expected real rates of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation. The geometric rates of return are net of administrative expenses.
New Strategic Real Return 2 Real Return 34
Asset Class' Allocation Years 1-10 Years 11+
Public Equity 50% 4.80% 5.98%
Fixed Income 28% 1.00% 2.62%
Inflation Assets 0% 0.77% 1.81%
Private Equity 8% 6.30% 7.23%
Real Estate 13% 3.75% 4.93%
Liquidity 1% 0.00% -0.92%
Total 100%
' An expected inflation of 2.5% used for this period
2 An expected inflation of 3.0% used for this period
Sensitivity of the Proportionate Share of the Net Pension Liability/(Asset) to Changes in the Discount Rate The following presents the City's proportionate share of the net pension liability/(asset) for each Plan, calculating using the discount rate of each Plan, as well as what the City's proportionate share of the net pension liability/(asset) would be if it were calculated using a discount rate that is 1-percentage point lower (6.15%) or 1-percentage point higher (8.15%) than the current rate:
Current
1% Decrease Discount Rate 1% Increase
(6.15%) (7.15%) (8.15%)
Miscellaneous 1,594,263 689,607 $ 58,259
Safety $ (1,007,222) $ (1,380,942) (1,687,743)
Pension Plan Fiduciary Net Position - Detailed information about each pension plan's fiduciary net position is available in the separately issued CaPERS financial reports.
Payable to the Pension Plan - At June 30, 2022, the City has no outstanding amount of contributions to the pension plan required for the year ended June 30, 2022. 45 CITY OF ORANGE COVE
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
Note 12 - Risk Management
The City participates with other public entities in a joint venture under a joint powers agreement which establishes the Central San Joaquin Valley Risk Management Authority (CSJVRMA). The relationship between the City and CSJVRMA is such that CSJVRMA is not a component unit of the City for financial reporting purposes.
The City is a member of the Central San Joaquin Valley Risk Management Authority (CSJVRA), which is a joint powers authority established under the provisions of California Government Code Section 6500, et. seq.
The CSJVRMA is comprised of 54 member cities, and is governed by a Board of Directors which meets three times per year. The Board is comprised of one Board member and one alternate Board member appointed by each member city. The day-to-day business is handled by a management firm under contract with the CSJVRMA. The audited financial statements of the CJVRMA are available at 1750 Creekside Oaks Drive, Suite 200, Sacramento, CA 95833.
The City purchases liability coverage through the CSJVRMA at a $10,000 self-insured retention. This risk sharing pool covers the first $1 million of losses (CSJVRMA's retained limit). The CSJVRMA is a member of the California Affiliated Risk Management Authorities (CARMA) for the purpose of obtaining excess coverage in a risk sharing pool. CARMA provides coverage in excess of the CSJVRMA's retained limit up to $29 million.
As of June 30, 2022, 54 cities participated in the CSJVRMA's liability program. The City also purchases workers' compensation coverage through the CSJVRMA at a $10,000 self-insured retention. This risk sharing pool covers the first $500,000 of losses (CSJVRMA's retained limit). The CSJVRMA is a member of the Local Agency Workers' Compensation Excess Joint Powers Authority (LAWCX) for excess workers' compensation coverage. LAWCX provides $4.5 million of coverage in excess of the CSJVRMA's retained limit and participates in the California State Association of Counties Excess Insurance Authority (SAC-EIA) for coverage in excess of $5 million up to statutory. As of June 30, 2022, 51 cities participated in the CSJVRMA's workers' compensation program.
For both the liability and workers' compensation coverage, expected claims are actuarially determined and deposited with the CSJVRMA along with all estimated operating costs each program year. Each program year is retrospectively adjusted five years following its conclusion and any funds remaining in excess of the minimum funding requirements established by the Board are returned to the member city. Any funding shortfalls are collected from the member city.
The City also purchases various property coverage programs. Deductibles and limits per property type can be obtained from the City Manager.
CITY OF ORANGE COVE
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
Note 12 - Risk Management (Continued)
The latest audited financial information and the most current information available for CSJVRMA for fiscal year ended June 30, 2022 is as follows:
Total assets 150,837,823
Total liabilities 118,663,929
Total equities $ 32,173,894
Total revenues 66,885,024
Total expenses $ 55,557,907
Revenues over (under) expenses $ 11,327,117
Note 13 - Contingencies
The City participates in several federal and state grant programs. These programs have been audited, as needed, in accordance with the provisions of federal Single Audit Act of 1984 and applicable state requirements. No cost disallowances were proposed as of results of these audits. However, these programs are still subject to further examination by the grantors and the amount, if any, of expenditures, which may be disallowed by the granting agencies, cannot be determined at this time. The City expects such amounts, if any, to be immaterial.
The City is a defendant in various lawsuits and claims. The City attorney anticipates that actual or potential claims against the City, not covered by insurance, would not materially affect the financial position of the City.
Note 14 - Julia A. Lopez Day Care
The City operates a full day care program funded by the State of California Department of Education. The City was awarded the contract not to exceed $1,502,446 for child care reimbursements. The City sub-contracts the daily operation to Target 8 Advisory Council, a non-profit that operates another day care program in the City.
The following administrative costs, not to exceed 15% of the grant were incurred:
Accounting and oversight: $104,990
Note 15 - Successor Agency Trust Fund
On January 18, 2012, the City Council elected to become the Successor Agency for the former redevelopment agency in accordance with Assembly Bill 1X26 (the "Bill") which dissolved all redevelopment agencies in the State of California.
Under the control of an oversight board, remaining assets can only be used to pay enforceable obligations in existence at the date of dissolution of the redevelopment agency (including the completion of any unfinished projects that were subject to legally enforceable contractual commitments).
CITY OF ORANGE COVE
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
Note 15 - Successor Agency Trust Fund (Continued)
Successor agencies are only allocated revenue in the amount that is necessary to pay estimated annual installment payments on enforceable obligations of the former redevelopment agency until all enforceable obligations of the prior redevelopment agency have been paid in full and all assets have been liquidated.
Management believes, in consultation with legal counsel, that the obligations of the former redevelopment agency due to the City are valid enforceable obligations payable by the successor agency trust under the requirements of the Bill. The City's position on this issue is not a position of settled law and there is considerable uncertainty regarding this issue. It is reasonably possible that a legal determination may be made at a later date by an appropriate judicial authority that would resolve this issue favorably for the City.
After the date of the dissolution, the assets and activities of the dissolved redevelopment agency are reported in a fiduciary fund (private-purpose trust fund) in the financial statements of the City.
Long-term Debt
Long-term debt reported in the Successor Agency Trust Fund at June 30, 2022 was comprised of the following individual issue:
Orange CoveRDA Tax Refunding Bonds - The former Redevelopment Agency of the City of Orange Cove issued a tax allocation bond payable in annual installments ranging from $55,340 to $396,299 with interest payable semi-annually at a rate between 3.7% per annum. At June 30, 2022, the bond outstanding amounts to $3,267,592.
Annual debt service requirements to maturity for the Orange Cove RDA Tax Refunding Bonds are as follows:
Principal Interest Total
2023 277,432 $ 118,334 $ 395,766
2024 286,027 107,990 394,017
2025 294,468 97,329 391,797
2026 307,796 86,311 394,107
2027 320,911 74,801 395,712
2028-2032 1,780,958 186,265 1.967,223
$ 3,267,592 $ 671,030 $ 3,938,622
48 CITY OF ORANGE COVE
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
Note 16 - Subsequent Event
The City evaluated subsequent events for recognition and disclosure through May 30, 2025, the date which these financials were available to issue.
On April 15, 2025, an employee was terminated by the City and the total severance and compensated absences payout was $203,752.
On October 27, 2022, a contractor filed a claim with the City and in April 2025, the City settled with that contractor in the amount of $312,214.
Starting in fiscal year 2023, the City had a series of fraudulent bank charges in a electronic debits totaling $465,337. The City has only recovered $30,545 as of May 30, 2025. The City is exploring options and have contacted the appropriate authorities.
49 REQUIRED SUPPLEMENTARY INFORMATION
CITY OF ORANGE COVE
BUDGETARY COMPARISON SCHEDULE
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2022
Variance with
Budgeted Amounts Final Budget
-
Actual Positive/
Original Final A mounts (Negative)
-
Revenues
Taxes $ 1,893,475 $ 1,893,475 $ 2,160,541 $ 267,066
Intergovernmental 3,482,000 3,482,000 740,241 (2,741,759) Charges for service 178,076 178,076 206,393 28,317
Licenses, permits and impact fees 156,730 156,730 78,928 (77,802) Interest and rent 6,000 6,000 912 (5,088)
Other 119,650 119,650 644,317 524,667
Total revenues 5,835,931 5,835,931 3,831,332 (2,004,599) Expenditures
Current:
General government 1,103,791 1,103,791 440,515 663,276
Public safety 1,888,662 1,888,662 2,302,265 (413,603)
Public works 190,526 190,526 297,879 (107,353)
Planning and development 149,017 149,017 309,064 (160,047) Parks and recreation 166,284 166,284 167,063 (779)
Capital outlay 64,000 64,000 367,494 (303,494)
Total expenditures 3,562,280 3,562,280 3,884,280 (322,000) Revenue over/(under) expenditures 2,273,651 2,273,651 (52,948) (2,326,599) Other Financing Sources/(Uses)
Proceeds from sale of land - 330,886 330,886
Transfers in/(out) - net 32,000 32,000 13,117 (18,883)
Total other financing sources/(uses) 32,000 32,000 344,003 312,003 Change in Fund Balance $ 2,241,651 $ 2,241,651 291,055 $ (2,014,596) Fund Balance
Beginning of year 1,568,548
End of year $ 1,859,603
50 CITY OF ORANGE COVE
BUDGETARY COMPARISON SCHEDULE
HOUSING GRANT SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30, 2022
Variance with
Budgeted Amounts Final Budget
Actual Positive/
Original Final A mount (Negative)
Revenues
Interest and rent $ 68.666 $ 68,666
Total revenues 68,666 68,666
Expenditures
Current:
Planning and development
Total expenditures
Revenue over/(under) expenditures - - 68,666 68,666
Other Financing Sources/(Uses)
Transfers in/(out) - net 390 390
Total other financing sources/(uses) 390 390
Change in Fund Balance $ 69,056 69,056
Fund Balance
Beginning of year 134,242
End of year $ 203,298
51 CITY OF ORANGE COVE
BUDGETARY COMPARISON SCHEDULE
DAY CARE SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30, 2022
Variance
with Final
- Budgeted Amount Budget
Actual Positive/
Original Final Amount (Negative)
Revenues
Intergovernmental $ 1,440,647 $ 1,440,647 $ 1,534,550 $ 93,903 Other 950 950 (950)
Total revenues 1.41.597 1,441,597 1,534,550 92,953
Expenditures
Current:
Day care 1,440,647 1,440,647 1,534,550 (93,903)
Total expenditures 1,440,647 1,440,647 1,534,550 (93,903) Revenue over/(under) expenditures 950 950 - 950
Other Financing Sources/(Uses)
Transfers in/(out) - net (13.507)
Total other financing sources/(uses) (13.507)
Change in Fund Balance 950 $ 950 (13,507) 950
Fund Balance
Beginning of year 13,507
End of year $
52 CITY OF ORANGE COVE
SCHEDULE OF THE CITY'S PROPORTIONATE SHARE OF NET PENSION LIABILITY/(ASSET) LAST 10 YEARS*
FOR THE YEAR ENDED JUNE 30, 2022
Proportionate share of the
net pension liability as a
Proportionate percentage of Plan's fiduciary net position as share of the net Covered - covered-employee Plan's fiduciary a percentage of the Total Proportion of the net pension liability pension liability employee payroll payroll net position Pension Liability Miscellaneous
2015 0.01071% 666,533 1092,158 65.32% 3.917.081 85.46%
2016 0.02037% 558,760 1.041.735 53.64% 4.202,928 99,12% 2017 0.02559% 888,986 852,798 104.24% 4,235,032 82.65%
2018 0.02784% 1,097,391 877,360 125.08% 4,622,119 80.81% 2019 0.02870% 1.081.502 773.792 139.77% 4.965,531 82.12% 2020 0,03093% 1.238.376 776,655 159.45% 5,340,241 81.18% 2021 0.03321% 1,400,755 781,468 179.25% 5.264.916 78.99% 2022 0.03632% 689,607 905,182 76.18% 6.162,241 89.94%
Safety
2015 -0.01254% (780,109) 762,323 - 102.33% 1,568,579 198.94% 2016 -0.02013% (829,606) 739,296 -112.22% 2229,193 133.71% 2017 -0.01404% (727,001) 720,786 - 100.86% 2,223,046 148.59% 2018 -0.01276% (762,676) 734,007 -103.91% 2,551,526 142.63% 2019 -0.01432% (840,277) 763,507 -110.05% 2,871,423 141.37% 2020 -0.01350% (842,730) 750,151 -112.34% 3,193,989 135.84% 2021 -0.01206% (803,253) 800,023 - 100.40% 3,355,850 131.47% 2022 -0.03935% (1.380.942) S 823.864 -167.62% 4.156.528 149.75% *Fiscal year 2014-15 was the first year of implementation, therefore only eight years are shown. 53 CITY OF ORANGE COVE
SCHEDULE OF CONTRIBUTIONS
LAST 10 YEARS*
FOR THE YEAR ENDED JUNE 30, 2022
Contributions in
relation to the Contributions as a
actuarially percentage of
Contractually required contribution determined Contributions covered-employee (actuarially determined) contributions deficiency (excess)_Covered-employee payroll payroll Ilaneous
70.820 S (70,820) S $ 1.092,158 6.48%
S 62,311 (62,311) S 1,041,735 5.98%
68.123 (68,123) S 852,798 7.99%
84,070 (84,070) 877,360 9.58%
89,462 (89,462) S 773,792 11.56%
103.360 (103,360) 776,655 13.31%
120.367 $ (120,367) 781,468 15.40%
164,984 (164,984) 905,182 18.23%
59,090 S (59,090) S 762.323 7.75%
44.824 S (44,824) $ 739,296 6.06%
87.083 S (87,083) 720,786 12.08%
102,006 (102,006) 734,007 13.90%
105,577 (105,577) 763,507 13.83%
103.755 (103,755) 750,151 13.83%
116,069 S (116,069) S 800,023 14.51%
134,526 S (134,526) S 823,864 16.33%
*Fiscal year 2014-15 was the first year of implementation, therefore only eight years are shown.
CITY OF ORANGE COVE
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2022
Note 1 - Budgetary Information
The City follows the following procedures, annually, in establishing the budgetary data reflected in the budgetary comparison schedules:
1. The City Manager submits to the City Council a proposed budget for the fiscal year commencing the following July 1. The budget includes proposed expenditures and the means of financing them.
The City Council reviews the proposed budget at specially scheduled sessions, which are open to the public. The Council also conducts a public hearing on the proposed budget to obtain comments from interested persons.
3. Prior to July 1, the budget is legally adopted through passage of an ordinance. This budget is reported as Original Budget in the budgetary comparison schedules.
4. During the fiscal year, changes to the adopted budget may be authorized as follows:
a. Items requiring City Council action - appropriation of fund balance reserves; transfers of appropriations between funds; appropriation of any non-departmental revenue; new interfund loans or advances; and creation of new capital projects or increases to existing capital projects. b. Items delegated to the City Manager - transfers between departments within funds; appropriation of unbudgeted departmental revenues; and approval of transfers which increase salary and benefit appropriations.
c. Items delegated to the department head - allocation of departmental appropriations to line item level.
Formal budgetary integration is employed as a management tool for all funds. Annual budgets are legally adopted and amended as required for the general, special revenue, and enterprise funds. Project-length budgets are adopted for the capital projects funds. All budgets are prepared on a basis consistent with generally accepted accounting principles (GAAP), and budgetary comparisons for the general and major special revenue funds are presented on that basis in the required supplementary information. A debt service payment schedule for the debt service funds is also approved as part of the budget process.
6. Budget amounts are reflected after all authorized amendments and revisions. This budget is reported as the Final Budget in the budgetary comparison schedules.
For each legally adopted operating budget, expenditures may not exceed budgeted appropriations at the ctivity level. The legal appropriation basis is at the level called "department". A "department" for leg ppropriation purposes may be a single organization or an entire department having multiple organization within the same fund, or an entire fund.
55 CITY OF ORANGE COVE
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2022
Note 2 - Excess of Expenditures over Appropriations
The excess of expenditures over appropriations are as follows:
General Fund:
Current:
Public safety $ 413,603
Public works $ 107,353
Planning and development $ 160,047
Parks and recreation $ 779
The excess of expenditures over appropriations are covered by the available fund balance in the General Fund.
Daycare Special Revenue Fund:
Current:
Day care $ 93,903
56 OTHER SUPPLEMENTARY INFORMATION
CITY OF ORANGE COVE
COMBINING BALANCE SHEET- NON-MAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
Special Revenue Funds
Low-Moderate
Housing Asset Streets Measure O Gas Tax
ASSETS
Cash and investments 71,776 29,339 89,302 332,149
Interest receivable 194,237 79 193
Due from other governments 51,421
Notes receivable 275,000
Land held for resale
Total assets 541,013 29,418 89,302 383,763
LIABILITIES AND FUND BALANCE
Liabilities:
Accounts payable and accrued expenses 36,128 3,653
Due to other funds
Total liabilities 36,128 3.653
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues 469.237
Total deferred inflows of resources 469,237
Fund Balance
Nonspendable:
Land held for resale
Restricted:
Public safety 53,174
71,776
Low-income housing activities -
Circulation improvements 29,418 380,110
Capital improvement projects :
Debt service
Unassigned
Total fund balance 71.776 29.418 53.174 380.110
Total liabilities, deferred inflows of
resources, and fund balance 541,013 29,418 89,302 383,763 57 CITY OF ORANGE COVE
COMBINING BALANCE SHEET- NON-MAJOR GOVERNMENTAL FUNDS (CONTINUED) FOR THE YEAR ENDED JUNE 30, 2022
Special Revenue Funds
Community Local
Development Traffic Congestion Transportation Fund SB2
ASSETS
Cash and investments 202,156 S 10,758 520,350 S
Interest receivable 232 375
Due from other governments 34,422 338,174 77,858
Notes receivable
Land held for resale 498.841
Total assets 735,651 10.758 858,899 77.858
LIABILITIES AND FUND BALANCE
Liabilities:
Accounts payable and accrued expenses 38,908 2,491
Due to other funds 77,858
Total liabilities 38,908 2,491 77,858
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues
Total deferred inflows of resources
Fund Balance
Nonspendable:
Land held for resale 498,841 -
Restricted:
Public safety 10.758 856,408
Circulation improvements
Capital improvement projects 197,902
Debt service
Unassigned
Total fund balance 696.743 10.758 856.408
Total liabilities, deferred inflows of resources,
and fund balance 735,651 10.758 858,899 77,858
58 CITY OF ORANGE COVE
COMBINING BALANCE SHEET- NON-MAJOR GOVERNMENTAL FUNDS (CONTINUED) FOR THE YEAR ENDED JUNE 30, 2022
Special Revenue Funds Capital Project Fund Debt Service Fund Total Non-major
Development Streets Capital General Debt Govermental
Impact Fees Measure C Project Service Funds
ASSETS
Cash and investments 717,267 417,210 485,430 2,875,737
:
Interest receivable S24 264 439 196,343
Due from other governments 48,894 101,796 .. 652,565
Notes receivable 275,000
Land held for resale 498.841
Total assets 717.791 466,368 101.796 485,869 4.498,486
LIABILITIES AND FUND BALANCE
Liabilities:
Accounts payable and accrued expenses 6,217 68,353 2,520 158,270 Due to other funds 104.560 1. 182.418
Total liabilities 6.217 172.913 2.520 340,688
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues 469.237
Total deferred inflows of resources 469.237
Fund Balance
Nonspendable:
Land held for resale 498.841
Restricted:
Public safety 53,174
Low-income housing activities 71,776
Circulation improvements 460,151 1.736,845
Capital improvement projects 717,791 915,693
483349 483,349
Debt service
Unassigned (7L.117) (71.117)
Total fund balance 717,791 460,151 (71.117) 483,349 3.688.561 Total liabilities, deferred inflows of resources,
and fund balance 717,791 466,368 101.796 485,869 4.98.486 59 CITY OF ORANGE COVE
COMBINING STATEMENT OF REVENUE, EXPENDITURES AND CHANGE IN FUND BALANCE
NON-MAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
Special Revenue Funds
Low-Moderate
Housing Asset Streets Measure O Gas Tax
Revenues
Taxes 260,490
: 419,969
Intergovernmental
Licenses, permits and impact fees
Interest and rent 154 375
Total revenues 154 260,490 420.344
Expenditures
Current:
Public safety 209,652
Public works 1ST,1S6
Planning and development : :
Capital outlay
Debt service:
Principal 1,089
Interest and other charges
Total expenditures 209,652 152,245
Revenue over/(under) expenditures 154 50,838 268,099
Other financing sources/(uses)
Operating transfers in/(out) - net
Total other financing sources/(uses)
Change in Fund Balance 154 50,838 268,099
Fund Balance
Beginning of year 71.776 29261 2,336 112.011
End of year 71.776 29,418 53,174 380.110
60 CITY OF ORANGE COVE
COMBINING STATEMENT OF REVENUE, EXPENDITURES AND CHANGE IN FUND BALANCE
NON-MAJOR GOVERNMENTAL FUNDS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2022
Special Revenue Funds
Community
Development Traffic Congestion Local Transportation SB2 Revenues
Taxes
177,872 315,989
Intergovernmental
Licenses, permits and impact fees
Interest and rent 453 507
Total revenues 178,325 316,496
Expenditures
Current:
General government 177,873
Public safety
Public works 87,098
Planning and development
Capital outlay 80,911
Debt service:
Principal
Interest and other charges
Total expenditures 177,873 168,009
Revenue over/(under) expenditures 452 148,487
Other financing sources/(uses)
Operating transfers in/ (out) - net
Total other financing sources/(uses)
Change in Fund Balance 452 148,487
Fund Balance
Beginning of year 696.291 10.758 707.921
End of year 696.743 10.758 856,408
61 CITY OF ORANGE COVE
COMBINING STATEMENT OF REVENUE, EXPENDITURES AND CHANGE IN FUND BALANCE
NON-MAJOR GOVERNMENTAL FUNDS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2022
Special Revenue Funds Capital Project Fund Debt Service Fund Total Non-major
Development Gove mmental
Impact Fees Measure C Streets Capital Project General Debt Service Funds Revenues
Taxes 142,286 402,776
Intergovernmental 400,970 115,614 1,430,414
Licenses, permits and impact fees 55,821 55,821
Interest and rent 1.021 4.178 2,534 9.222
Total revenues 56,842 405.148 1155614 144,820 1.898.233 Expenditures
Current:
General government 177,873
Public safety 209,652
Public works 2933350 531,604
... 5,111
Planning and development
: 71.397 152,308
Capital outlay -
Debt service:
Principal 1,089 81,000 83,178
Interest and other charges 42.675 42,675
Total expenditures 294.439 71.397 128,786 1,202,401
Revenue over/(under) expenditures 56,842 110,709 44,217 16,034 695,832 Other financing sources/(uses)
Operating transfers in (out) - net (5.550) 5.550
Total other financing sources/(uses) (5.550) 5.550
Change in Fund Balance 56,842 105,159 49,767 16,034 695,832 Fund Balance
Beginning of year, restated 660,919 354.902 (120,884) 467.315 2.992.729 End of year 717,791 460.151 (71.117) 483,349 3.688.561
62 COMPLIANCE SECTION
BRYANT L. JOLLEY
CERTIFIED PUBLIC ACCOUNTANTS Bryant L. Jolley C.P.A.
Ryan P. Jolley C.P.A.
Darryl L. Smith C.P.A
Luis A. Perez C.P.A.
Lan T. Kimoto
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER
MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Honorable Mayor and City Council
City of Orange Cove, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Orange Cove (the City) as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise City's basic financial statements, and have issued our report thereon dated May 30, 2025.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do not express an opinion on the effectiveness of the City's internal control.
Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as described in the accompanying schedule of findings and questioned costs, we identified certain deficiencies in internal control that we consider to be material weaknesses and significant deficiencies.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. We consider the deficiencies described in items 2022- 01 through 2022-02 to be material weaknesses.
A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. We consider the deficiencies described in the accompanying schedule of findings and questioned costs as items 2021-03 through 2022-04 to be significant deficiencies.
901"" STREET. SUITE 10% FIREBAUGH, CALIFORNIA 93622 PHONE 559.659.3045 FAX 559.639.0615 Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing City of Orange Cove, CA Response to Findings
City of Orange Cove, California's response to the findings identified in our audit is described in the accompanying schedule of findings and questioned costs. The City's response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the result of that testing, and not to provide an opinion on the effectiveness of the City's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
64 BRYANT L. JOLLEY
CERTIFIED PUBLIC ACCOUNTANTS
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR
EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE
REQUIRED BY THE UNIFORM GUIDANCE
To the Honorable Mayor and City Council
City of Orange Cove, California
Report on Compliance for Each Major Federal Program
Opinion on Each Major Federal Program
We have audited City of Orange Cove (the "City"), California's compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on each of the City's major federal programs for the year ended June 30, 2022. The City's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs.
In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2022.
Basis for Opinion on Each Major Federal Program
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditor's Responsibilities for the Audit of Compliance section of our report.
We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with elevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained i ufficient and appropriate to provide a basis for our opinion on compliance for each major federal program Our audit does not provide a legal determination of the City's compliance with the compliance requirements referred to above.
Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to the City's federal programs.
901 "N" STREET, SUITE 104 FIREBAUGH, CALIFORNIA 93622 PHONE 559.659.3045 FAX 559.659.0615 Auditor's Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City's compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the City's compliance with the requirements of each major federal program as a whole.
In performing an audit in accordance with generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material noncompliance, 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 City's compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances.
Obtain an understanding of the City's internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control over compliance. Accordingly, no such opinion is expressed.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit.
Report on Internal Control over Compliance
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the Auditor's Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed
66 The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance.
Accordingly, this report is not suitable for any other purpose. 67 CITY OF ORANGE COVE
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2022
Federal
Assistance Agency or
Listing Pass-through Federal
Number Number Expenditures
U.S. Department of Transportation
Passed through from the California Deparinent of Transportation Highway Planning and Construction 20.205 CML-5301(024) 93.413 U.S. Department of Housing and Urban Development
Passed through from the State Department of Housing and Community Development
14.218 20-CDBG-CV-2-3-00007
Community Development Block Grant 20-CDBG-CV-2-3-00002
177,872
U.S. Department of Economic Development Administration
Investments for Public Works and Economic Development Facilities 11,300 07-01-07532 22.201 U.S. Department of Federal Emergency Management Agency
Passed through the County of Fresno
Homeland Security Grant Program 97.067 HSGP-SHSP 8.197
U.S. Department of Treasury
Passed through California Department of Finance
COVID-19 Coronavirus State and Local Fiscal Recovery Funds American Rescue Plan Act 21.027 N/A 617,263
Total Federal Expenditures 918.946
68 CITY OF ORANGE COVE
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED JUNE 30, 2022
Note 1 - Significant Accounting Policies
The accompanying Schedule of Expenditures of Federal Awards (SEFA) presents the activity of all federal award programs of the City of Orange Cove, California (the City). Federal awards received directly from federal agencies as well as tederal awards passed through other nonfederal agencies, primarily the State of California, are included in the SEFA. The City's reporting entity is defined in Note 1 to the City's basic financial statements.
Note 2 - Basis of Accounting
The accompanying SEA is presented using the modified accrual basis of accounting for grants accounted for in the governmental fund types and the accrual basis of accounting for grants accounted for in the proprietary fund types, as described in Note 1 to the City's basic financial statements. The information in the SEA is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (FR) part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).
Therefore, some amounts presented in, or used in the preparation of, the SEA may differ from amounts presented in the basic financial statements.
Note 3 - Assitance Listing Numbers
The Assistance Listing Numbers included in the accompanying SEA were determined based on program name, review of grant contract information, and the Office of Management and Budget's Catalog of Federal Domestic Assistance.
Note 4 - Relationship to the Financial Statements
Expenditures of federal awards are reported in the City's basic financial statements as expenditures/expenses in the General Fund, nonmajor special revenue funds, nonmajor capital project funds, and the enterprise funds.
Note 5 - Indirect Cost Rate
The City did not elect to use the 10% de minimus cost rate as covered in 2 CFR §200.414. 69 CITY OF ORANGE COVE
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2022
A. Summary of Auditor's Results
Financial Statements
Type of auditor's report issued: Unmodified
Internal control over financial reporting:
• Material weaknesses identified? Yes • No
Significant deficiencies identified that are
not considered to be material weaknesses? X Yes None reported • Non-compliance material to financial
statements noted? Yes No
Federal Awards
Internal control over major programs:
Material weaknesses identified? Yes No
• Significant deficiencies identified that are
not considered to be material weaknesses? Yes None reported Type of auditor's report issued on compliance for
major programs: Unmodified
Any audit findings disclosed that are required to
be reported in accordance with 2 CFR
200.516(a)? • Yes X No
Identification of Major Programs
Assistance Listing Number Name of Federal Program or Cluster
21.027 COVID-19 Coronavirus State and Local Fiscal
Recovery Funds
Dollar threshold used to distinguish between
Type A and Type B programs: $750,000
Auditee qualified as low-risk auditee? Yes No
70 CITY OF ORANGE COVE
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2022
B. Findings - Financial Statements Audit
2022-01 Year-End Closing Process (Material Weakness)
Condition: As described in the California State Controllers *2015 Internal Control Guidelines" an effective internal control system and timely financial reporting of all financial activity provides reasonable assurance for the safeguarding of assets, the reliability of financial information, and compliance with laws and regulations.
Criteria: The City's year-end financial closing process was not timely, complete or accurate. The lack of a complete and proper close resulted in numerous audit adjustments and significant delays in completing the annual audit.
Cause: The City's Finance Director, who also serves as the City Manager, oversees the closing of the City's general ledger while balancing the duties as City Manager. In addition to these responsibilities, there were numerous other financial statement, compliance, and control environment matters to resolve that were inherited from accounting errors and decisions made in previous fiscal years. Additionally, during the closing process, the City's accounting department lost experienced staff positions, which had to be replaced with new staff requiring significant training. Lastly, the City has had significant disruptions as a result of the COVID-19 pandemic.
Effect: Various areas of the financial statements, including fund balance/net position, governmental and enterprise accounts receivable, accounts payable, unavailable revenue, and revenue were materially misstated, which required journal entries to be posted subsequent to receiving the City's final trial balance.
Recommendation: We recommend that the City perform the following steps in order to address the matters described above:
• Create a closing checklist to assist with the preparation of audit schedules that are complete, accurate, and reconcile to the City's general ledger account balances. Additionally, ensure that a system is in place to allow the City to perform this in a timely matter.
• Provide additional assistance to the Finance Department through the hiring of additional competent personnel. • Provide additional training in accounting specific to governmental entities to Finance Department staff in order to ensure that they are current with all financial accounting and reporting requirements as directed by the Governmental Accounting Standards Board.
Management's Response: See client's corrective action plan as listed in the table of contents. 71 CITY OF ORANGE COVE
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2022
B. Findings - Financial Statements Audit (continued)
2021-02 Bank Reconciliations (Material Weakness)
Condition: Cash was not reconciled to the general ledger on a monthly basis. Bank statements accumulated for several months before they were reconciled to the appropriate general ledger accounts.
Criteria: A strong system of internal controls and management review requires that bank reconciliations be performed on a timely basis.
Cause: The City hired an outside consultant to perform the bank reconciliations, however, this resulted in delays in rectifying any unreconciled differences. In addition, the demands placed on the Finance Director (loss of experienced staff, audit preparation, and other matters) prevented the timely completion of the bank reconciliation process.
Effect: By not reconciling the bank accounts to the general ledger on a monthly basis, errors or other problems might not be recognized and resolved on a timely basis.
Recommendation: Timely preparation of complete and accurate bank reconciliations is key to maintaining adequate internal control over cash. Bank reconciliations should be performed on all bank accounts in a timely manner after month-end. The bank reconciliations should be formally approved. Any discrepancies should be investigated, and all errors and omissions should be posted to the general ledger.
Management's Response: See client's corrective action plan as listed in the table of contents. 2022-03 Emplovee/Board Medical Reimbursements (Significant Deficienev) Condition: The City is not in line with its medical reimbursement policy.
Criteria: The City offers medical reimbursements for out-of-pocket costs to employees and officers who waive coverage through the City's health plan. These reimbursements must not exceed the cost of the medical health plan's annual premium per family member, per year. The City's medical reimbursement policy states, "the City should have a uniform Claim Form that is completed for each request and should not make payment based on receipts only" Additionally, the policy also states, "the City should maintain a running total for each person to ensure the annual amount is not exceeded".
Cause: The City's latest medical reimbursement policy was implemented in 2011. Over the years, the City has had significant turnover which created difficulties in overseeing eligibility and enforcing the policy.
Effect: Of 7 reimbursements selected for testing:
• 1 reimbursements were approved using previously submitted documentation for the reimbursement of medical premiums
• The City did not maintain a cumulative reimbursement log for any of the claimants tested. • 2 reimbursements had no supporting documentation
• 1 reimbursement had no signature from the claimant
72 CITY OF ORANGE COVE
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED)
FOR THE YEAR ENDED JUNE 30, 2022
B. Findings - Financial Statements Audit (continued)
2022-03 Employee/Board Medical Reimbursements (Significant Deficiency) (continued) Recommendation: We recommend the City follow its medical reimbursement plan. • Ensure all claimants remain eligible for reimbursement under the policy • Create a medical reimbursement claim form with appropriate approvals that lists all requirements for reimbursement. This allows the claimant and approver to ensure all requisites are met prior to reimbursement. • Ensure supporting documentation received from claimant is up-to-date and not previously submitted and is eligible under the City's policy.
• Maintain a log of annual reimbursements per claimant to ensure the total does not exceed the threshold as stated in the policy.
Management's Response: See client's corrective action plan as listed in the table of contents.
Finding 2022-004 Credit Card Authorization and Documentation (Significant Deficiency) Condition: During our audit, we noted the City's process in ensuring credit card charges were approved and included supporting documentation was not effective. Our review of credit card charges found that charges made on the City's credit cards did not always have supporting documentation or documented approvals.
Criteria: Per the City's credit card policy, all credit card charges must include a receipt for all charges. Additionally, the City requires an expense and reimbursement report for all credit card charges.
Cause: The City had not enforced documentation or claim forms for the month tested as required by the City's credit card policy.
Effect: Of the 2 months that were selected for testing, we found five transactions that did not have any supporting receipts or approval documentation.
Recommendation: We recommend the City actively monitor the use of credit cards and require all cardholders to submit receipts of all charges and indicate the nature of charges. Cardholders should be given no more than 30 days after the charge to submit their receipts. Documentation and a brief description of all transactions help detect any questionable charges paid via credit card.
Management's Response: See client's corrective action plan as listed in the table of contents. 73 CITY OF ORANGE COVE
STATUS OF PRIOR AUDIT FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2022
Summary Schedule of Prior Audit Findings
Finding 2021-001 Year-End Closing Process (Material Weakness) - Not implemented, see Finding 2022-001 Finding 2021-002 Bank Reconciliation (Material Weakness) - Not implemented, see Finding 2022-002 Finding 2021-003 Employee/Board Medical Reimbursements (Significant Deficiency) - Not implemented, see Finding 2022-003
Finding 2021-004 Credit Card Authorization and Documentation (Significant Deficiency) - Not implemented, see Finding 2022-004
74 Mayor. Dario Dominguez
Diana Guerra Silva Interim City Manager
(559) 626-4488
Mayor Pro Tem:
Gilbert Garcia
Finance Director
Danny Jimenez
City Council Members: (559) 626-4488 ext. 220
Cassy Ortiz
Jacob Del Bosque Municipal City Clerk:
Esperanza Rodriguez Cynthia Cisneros
Incorporated January 20,1948 (559) 626-4488 ext. 213
633 6ih St. Orange Cove, CA 93646 | Phone: (559) 626-4488 | FAX: (559) 626-4653
CITY OF ORANGE COVE
CORRECTIVE ACTION PLAN
YEAR ENDED JUNE 30, 2022
2022-01 Year-End Closing Process (Material Weakness)
Management's Corrective Action Response: The City acknowledges the continued concern related to year-end closing procedures. As a rural municipality with limited tax revenue and staffing challenges, the City has faced ongoing difficulties attracting and retaining qualified finance personnel. During the period under audit there were major turnover and transitions in leadership followed by nearly a year vacancy for the Finance Director position. These disruptions delayed audit preparation and required incoming staff to reconstruct prior-year activities and procedures, many of which were incomplete or inconsistent.
In response, the City has developed a formal year-end closing checklist, which is being refined through the FY 2024-25 audit cycle. The City has also taken additional steps to make supporting documentation more consistent and auditable. With key Finance positions now filled and internal workflows stabilizing, the City anticipates substantial improvement in the timeliness and completeness of future audit deliverables.
Responsible Party: Finance Director
Timeline: Fully implemented by FY 2024-25 audit
2021-02 Bank Reconciliations (Material Weakness)
Management's Corrective Action Response: While a prior effort to address this finding involved outsourcing bank reconciliations to an external consultant, the approach introduced new inefficiencies-namely, reliance on suspense accounts rather than resolving discrepancies directly in the ledger. Following the departure of the former Finance Director, the City hired a new consultant to assist with audit support, full reconciliation of all bank statements to the general ledger, and elimination of interim suspense accounts.
As of FY 2023-24, bank reconciliations are current, and the suspense account is no longer used.
Reconciliations are being prepared monthly and reviewed by City staff. While staffing remains a challenge, the City anticipates this area will show marked improvement by the FY 2024-25 audit.
Responsible Party: Finance Director
Timeline: Fully compliant for FY 2024-25 audit
2022-03 Emplovee/Board Medical Reimbursements (Significant Deficiency) Management's Corrective Action Response: The City agrees that historical medical reimbursement practices have not aligned with policy requirements. The policy, last updated in 2011, became difficult to enforce due to staff turnover, lack of centralized oversight, and gaps in documentation.
The City is currently evaluating corrective options to ensure compliance. These may include reinstating standardized claim forms, centralized logs to track reimbursement totals, and periodic eligibility checks. Alternatively, the City Council may consider transitioning to a simpler and more compliant structure, such as a Flexible Spending Account (FSA) program or similar arrangement.
Responsible Party: Finance Director
Timeline: Policy options will be presented to Council prior to the next open enrollment period in November 2025, with implementation expected the same fiscal year Finding 2022-004 Credit Card Authorization and Documentation (Significant Deficiency) Management's Corrective Action Response: The City concurs with the finding regarding inadequate documentation and approvals for credit card transactions. Historically, receipts and claim forms were inconsistently enforced, particularly during periods of limited staffing and competing operational demands.
Since the audit period, the City has taken steps to reinforce compliance with its credit card policy. Staff responsible for card use have received updated instructions on receipt submission, documentation requirements, and timelines for reporting. A revised internal review process has been implemented to ensure that all transactions are accompanied by itemized receipts and approval documentation within 30 days of the charge. Missing or late submissions are now escalated to the Finance Director for resolution.
Responsible Party: Finance Director
Timeline: Procedures implemented in FY 2024-25; ongoing enforcement and periodic review are in place.
70 Dario Dominguez
Interim City Manager
CITY OF ORANGE COVE
MANAGEMENT REPORT
FOR THE YEAR ENDED JUNE 30, 2022
TABLE OF
CONTENTS
Page
Introduction 1
Required Communications 2-4
Summary of Control Deficiencies 5 - 6
BRYANT L. JOLLEY
CERTIFIED PUBLIC ACCOUNTANTS Bryant L. Jolley C.P.A.
Ryan P. Jolley C.P.A
Darryl L. Smith C.P.A.
Luis A. Perez C.P.A.
Lan T. Kimoto
May 30, 2025
City of Orange Cove
633 6' Street
Orange Cove, California 93646
n planning and performing our audit of the financial statements of the City of Orange Cove (the City) a of and for the year ended June 30, 2022, in accordance with auditing standards generally accepted in th United States of America, we considered the City's internal control over financial reporting (internal control) as a basis for designing auditing procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do not express an opinion on the effectiveness of the City's internal control.
However, during our audit we became aware of deficiencies in internal control other than significant deficiencies and material weaknesses and matters that are opportunities for strengthening internal controls and operating efficiency. The memorandum that accompanies this letter summarizes our comments and suggestions regarding those matters. A separate letter dated May 30, 2025, contains our communication of significant deficiencies or material weaknesses in the City's internal control. This letter does not affect our report dated May 30, 2025, on the financial statements of the City.
We will review the status of these comments during our next audit engagement. We have already discussed many of these comments and suggestions with various City personnel, and we will be pleased to discuss them in further detail at your convenience, to perform any additional study of these matters, or to assist you in implementing the recommendations.
This communication is intended solely for the information and use of management, City Council, and others within the City, and is not intended to be, and should not be, used by anyone other than those specified parties.
Sincerely,
Bryant L. Jolley, CPA
901 "N" STREET, SUITE 104 FIREBAUGH, CALIFORNIA 93622 PHONE 559.659.3045 FAX 559.659.0615 BRYANT L. JOLLEY
CERTIFIED PUBLIC ACCOUNTANTS Bryant L. Jolley C.P.A.
Ryan P. Jolley C.P.A.
Darryl L. Smith C.P.A.
Luis A. Perez C.P.A.
Lan I. Kimoto
To the Honorable Mayor and City Council
City of Orange Cove, California
We have audited the financial statements of the governmental activities, the business-type applicable, Government Auditing Standards and the Uniform Guidance, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated August 22, 2022. Professional standards also require that we communicate to you the following information related to our audit.
Significant Audit Findings
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by City are described in Note 1 to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during 2022. We noted no transactions entered into by City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period.
Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates aftecting the City's financial statements were:
• Management has determined the economic useful lives of fixed assets based on past history of similar types of assets, future plans as to their use, and other factors that impact their economic value to the City. We evaluated the key factors and assumptions used by management in computing depreciation expense and believe that it is reasonable in relation to the financial statements taken as a whole.
• Management's estimate of the allowance for doubtful accounts is based on an evaluation of collectability primarily focused on past due accounts. We evaluated the key factors and assumptions used to develop the allowance for doubtful accounts in determining that it is reasonable in relation to the financial statements as a whole. 901 "N" STREET, SUITE 104 FIREBAUGH, CALIFORNIA 93622 PHONE 559.659.3045 FAX 559.659.0615 • Management's estimate of the net pension liability/asset and related deferrals is based on actuarial valuations which include significant assumptions regarding discount rate, inflation, payroll growth, projected salary increases and investment rate of return. We evaluated the key factors and assumptions used to develop the liability and related deferrals in determining that it is reasonable in relation to the financial statements taken as a whole.
We evaluated the key factors and assumptions used to develop the estimates in determining that they are reasonable in relation to the financial statements taken as a whole.
The financial statement disclosures are neutral, consistent, and clear.
Difficulties Encountered in Performing the Audit
The completion of our audit was delayed due to the absence of proper reconciliations and closing procedures for financial activity and reporting for the year ended June 30, 2022. Upon starting the audit, it was evident that additional work was needed to resolve various issues.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements. In addition, none of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate, to each opinion unit's financial statements taken as a whole.
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter that could be significant to the financial statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of the audit.
Management Representations
We have requested certain representations from management that are included in the management representation letter dated May 30, 2025.
Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an accounting principle to City of Orange Cove's financial statements or a determination of the type of auditor's opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants.
Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as City of Orange Cove's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention.
Other significant matters discussed with management include the material weaknesses and significant deficiencies issued for the year ended June 30, 2022, which were reported in the Schedule of Findings and Questioned Costs. The material weaknesses and significant deficiencies indicate there is a high risk that potential errors may be not prevented, or detected and corrected, on a timely basis.
Other Matters
We applied certain limited procedures to the Budgetary Comparison Schedules, Proportionate Share of Net Pension Liability/(Asset), and Schedule of Contributions which are required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding 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 did not audit the RSI and do not express an opinion or provide any assurance on the RSI.
We were engaged to report on supplementary information, as listed in the table of contents, which accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves.
Restriction on Use
This information is intended solely for the information and use of the City Council and management of City of Orange Cove and is not intended to be, and should not be, used by anyone other than these specified parties.
City of Orange Cove
Summary of Control Deficiencies June 30, 2022
Stale Dated Checks
Upon review of the City's cash reconciliations, we noted approximately $34,530.06 in stale dated checks on the outstanding check list, some dating back to 2016. We recommend the City develop procedures for monitoring and reissuing stale dated checks and that the City review the State of California Unclaimed Property Holder handbook to determine if property should be remitted back to the State.
Grant Accounting and Reimbursements
Per review of the City's grant schedule, it was observed that various claims submitted for reimbursement in the prior year had not yet been collected, along with new claims in the current year.
Per further investigation and conversations with management, it appears that reimbursement requests are not being filed timely which could result in cash flow challenges for the City. Further, during our procedures related to the grant schedule we noted two adjusting entries needed to true-up accounts receivable and deferred revenue.
We recommend that procedures be put in place for timely filing of grant reimbursement requests.
Further, we recommend the City review all criteria to determine proper recording of grants based on the period of collection of the receipt.
Accounts Receivables
We noted that the miscellaneous accounts receivable is not routinely reconciled with the general ledger.
This practice serves as a check on the accuracy of the record-keeping process and maintains the accounts receivable on a more timely and accurate basis. The detail listing of accounts receivable should be reconciled to the general ledger control accounts at the end of each month. Any differences should be investigated and resolved as soon as possible. Also invoices were not sent out routinely to ensure collections. For the year ended June 30, 2022, the City had to write off $35,000 in uncollected franchise fees.
We recommend the City track and review accounts receivable billing every month to ensure collections and follow-up on past due bills.
The City does not maintain an adequate system for business license billings resulting in inadequate attention given to collection. This resulted in a 38% decline in current year business license receipts.
Without an adequate billing and enforcement system, business owners simply choose not to pay their license fees, resulting in loss revenues to the City. We recommend that the City review all possible entities doing business in Orange Cove have a valid business license with the City.
Collect on Old Outstanding Loans
We noted that the City is owed $4,918 from business loans made to the Chapa Automotive. As of June 30, 2022, no payments have been made to the City. We recommend the City take legal action to collect on these loans, or if the loans are determined to be uncollectible and worthless, to write off the loans from the City's books.
5 Journal Entry Approval
Through out the audit, it came to our attention that journal entries were drafted and posted with no secondary review and/or authorization as to regards for accuracy and proper recording of journal entries to the general ledger. We recommend that the City review and approve all journal entries prior to posting and that it is properly documented.
CalPers Employee Contributions Deduction
It came to our attention that CalPers employee contributions that were deducted from employees' paychecks are not reconciled to Callers submission reports for accuracy. We recommend that employees' deductions with third parties be reconciled every pay period.
For the Meeting of July 9, 2025
CITY OF ORANGE COVE
REPORT TO CITY COUNCIL
To: Orange Cove City Council
From: Dario Dominguez, Interim City Manager
Subject: Acceptance of property dedication from Efrain Yanez Construction, Inc. to support; 1) Future / Proposed Development of Monson Tract Sub-Division (Tract 6469), and 2) Facilitate Water System Improvements associated with the Construction of new City Well / 1.0 Mgal. Storage Tank Site.
Attachments: Certification of Acceptance, Easement Dedication Documentation for a portion of APN 398-021-07 and Preliminary Tentative Tract Map 6469 (Reference Only) RECOMMENDATION:
Staff recommends the City Council accept the subject property easement dedication associated with a portion of APN 398-021-07 totaling + 19,730 SF. The offer of dedication is being made by Efrain Yanez Construction, Inc. (EYC) for the purposes of right-of-way procurement for public streets and utilities.
Upon acceptance of the dedication, the easement dedication documents will be recorded with Fresno County Accessors office.
BACKGROUND:
City staff has negotiated the subject dedication from EY so that the proposed extension of Tangerine Avenue may be constructed. The dedication will allow for the proposed extension to be constructed to its full width and length. The construction of Tangerine Avenue will improve accessibility and allow for construction of off-site improvements to serve the proposed water well and 1.0 M gallon tank site located directly to the south of the property owned by EYC.
The property owned by EYC (APN: 398-021-07) consists of ~ 18.4 Acres of unimproved property located SE of the intersection of South and Monson Avenues. A Tentative Tract Map (Tract 6469) for the EYC property was submitted to City Planning for sub-division development review in December 2023. The sub-division, as preliminarily laid out, will bring ninety-three (93) new single family residential housing units to the City of Orange Cove in the future. The sub-division review and annexation efforts are currently on hold until the City resolves its water supply reliability issues.
The dedication has benefits for both the City and EYC. The dedication provides the City with the needed rights-of-way (ROW) for the City to complete needed construction associated with on going water system improvements. The dedication also establishes a roadway for which the proposed subdivision will utilize for ingress and egress at its southern boundary.
ENVIRONMENTAL REVIEW:
Not Applicable
CONFLICTS OF INTEREST:
None
Acceptance of Property Dedication for Public Improvements APN: 378-021-07
FISCAL IMPACT:
None - The dedication is being made at no cost to the City.
REVIEW: City Manager: Dario Dominguez Finance: City Attorney:
TYPE OF ITEM: COUNCIL ACTION: APPROVED DENIED NO ACTION _X_ Consent - Public Hearing
Info Item _ Matter Initiated by a Council Member
Action Item Other
Department Report Continued to:
_Redevelopment Agency
Office of the City Clerk
CERTIFICATE OF ACCEPTANCE
THIS IS TO CERTIFY, that the interest in real property conveyed by the Grant Deed dated May 21, 2025, from EFRAIN YANEZ CONSTRUCTION, INC., Owner, to the City of Orange Cove, a Municipal Corporation of the State of California, was duly accepted by the City Council of the City of Orange Cove on July 9, 2025, and by the same order of the City Council of the City of Orange Cove, the City Manager was authorized to execute this Certificate of Acceptance to be recorded with the Grant Deed.
CITY OF ORANGE COVE
By:
City Manager
ATTEST:
Chief Deputy City Clerk
633 Sixth Street Orange Cove, California 93646 • 559.626.4488 • Fax 559.626.4653 Recording Requested By and Return To:
City Clerk
City of Orange Cove
633 Sixth Street Orange Cove, CA 93646
No Fee-Govt. Code Sections
6103 and 27383
Documentary Transfer Tax: $0.00
Exemption (R&T Code): 11922
Explanation: Conveyance to a
Government Agency
Signature of Declarant Determining Tax
SPACE ABOVE THIS LINE FOR RECORDER'S USE
APN: 378-021-07 (portion)
DEED OF EASEMENT
For a valuable consideration, receipt of which is hereby acknowledged, EFRAIN YANEZ CONSTRUCTION, INC., a California corporation, GRANTOR, hereby GRANTS to the CITY OF ORANGE COVE, a California municipal corporation, GRANTEE, an easement and right-of-way for public street purposes over, under, through and across all that real property situated in the City of Fresno, County of Fresno, State of California, more particularly described in Exhibit "A" and shown on Exhibit "B" which are attached and incorporated herein.
EFRAIN YANEZ CONSTRUCTION, INC., a California corporation 5-21-2025
Date
ATTACH NOTARY ACKNOWLEDGEMNT
EXHIBIT "А"
APN 378-021-07
Public Street Easement
The land referred to herein below is situated in the City of Orange Cove, County of Fresno, State of California, and is described as follows:
That portion of Lot 4 in Section 23, Township 15 South, Range 24 East, Mount Diablo Base and Meridian, of Map of Orange Cove Tract No. 1, according to the map thereof recorded in Book 9 of Record of Surveys, Page 33, Fresno County Records, described as follows:
COMMENCING at the Southwest corner of said Lot 4, thence South 89° 32' 56" East, along the South line of said Lot 4, a distance of 20.00 feet to the TRUE POINT OF BEGINNING:
thence
1) North 00° 00° 00" East, along a line that is parallel with and 20.00 feet east of the West line of the Northeast quarter of said Section 23, a distance of 40.60 feet; thence 2) North 90° 00' 00" East, a distance of 22.00 feet; thence 3) South 44° 46' 28" East, a distance of 15.29 feet; thence 4) South 89° 32' 56" East, along a line that is parallel with and 30.00 feet north of the South line of said Lot 4, a distance of 313.47 feet; thence
5) North 45° 27' 04" East, a distance of 13.38 feet; thence 6) South 89° 32' 56" East, a distance of 50.00 feet; thence 7) South 44° 32' 56" East, a distance of 13.38 feet; thence 8) South 89° 32' 56" East, along a line that is parallel with and 30.00 feet north of the South line of said Lot 4, a distance of 213.95 feet to the East line of said Lot 4; thence 9) South 00° 07 13" East, along said East line, a distance of 30.00 feet to the Southeast corner of said Lot 4; thence
10) North 89° 32' 56 West, along the South line of said Lot 4, a distance of 629.18 feet to the True Point of Beginning.
Contains an area of: 19,730 Sq. Ft., more or less.
SURVEYOR
* Exp. Date 6-30-25 / *
CALIFORNIA
OF
LAND EXHIBIT 'B'
¡CENSED SURVEY
LEGEND:
LOT 3 (PORTION)
LS 5096 ORANGE COVE EXISTING R/W
* TRACT NO. 1
BOOK 9 OF RECORD OF EXISTING PARCEL LINE
FORNIA SURVEYS, PAGE 33 SECTION LINE
F.C.R.
OF C Col F.C.R. FRESNO COUNTY RECORDS
APN: 378-021-55 P.O.C. POINT OF COMMENCEMENT
T.P.O.B. TRUE POINT OF BEGINNING
S0'07'13"E 30.00*- -SE COR.
LOT 4 NDICATES AREA OF EASEMEN
O BE GRANTED TO THE CI
= ORANGE COVE FOR PUBL
TREET RIGHT-OF--WA
PURPOSES.
AREA OF ‡ 19,730 S.F.
S89 3256*E 213.95
PARCEL 2
PARCEL MAP NO. 97-03
S44'32'56"E 13.38'~ BK. 58 OF PARCEL MAPS
PGS. 49-51
5893256" 50.00' F.C.R.
APN: 378-021-46T
629.18'
N4527'04"E 13.38"-
LOT 4
ORANGE COVE TRACT NO. 1
BOOK 9 OF RECORD OF N89'32'56
: 582025 10 3553401 SURVEYS, PAGE 33
F.C.R.
APN: 378-021-07
313.47
S89'32'56"E
SCALE 1"= 100
50° 100°
S44'46'28"E 15.29*
N90'00'00*E 22.00'
У-Т.Р.О.В.
NO'O0'00"E 40.60" • S89'32'58"E 20.00'
P.o.c.- NO 00100E
20" PREVIOUSLY DEDICATED
N. QTR COR. SW COR. LOT 4 PER ORANGE COVE CTR. QTR. COR- SEC 23 15/24 SOUTH MONSON AVENUE TRACT NO. 1 SEC 23 15/24 EXHIBIT PROJECT NAME: FIGURE
PRECISI DESCRIPTION: STREET DEDICATION
1 PORTION OF NE 1/4 SECTION
CIVIL ENGINEERING, ING
23, T. 15 S., R. 24 E., M.D.B.&M. 5/5/2025 23-232.008.0 CALIFORNIA ACKNOWLEDGMENT CIVIL CODE § 1189
80308188888889858888080888830808080988380898880808 88808880838880880828880808080808290908@9080988980908080860628 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
State of California
County of FresnO
on May 23, 2025 _ before me, Alysia Malia Mender, Notary PUbliC.
Date Here Insert Name and Title of the Officer
personally appeared Efrain Yaner
Name(s) of Signers)
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the
ALYSSA MALIA MENDEZ laws of the State of California that the foregoing Notary Public - California paragraph is true and correct.
Fresno County
Commission # 2369679
My Comm. Expires Aug 4, 2025 WITNESS my hand and official seal.
Amender
Signature
Place Notary Seal and/or Stamp Above Signature of Notary Public - OPTIONAL
Completing this information can deter alteration of the document or fraudulent reattachment of this form to an unintended document.
Description of Attached Document
Title or Type of Document: _
Document Date: _ Number of Pages:_
Signer(s) Other Than Named Above:
Capacity(ies) Claimed by Signer(s)
Signer's Name: Signer's Name:
• Corporate Officer - Title(s): • Corporate Officer - Titles):
• Partner - • Limited • General • Partner - • Limited • General • Individual • Attorney in Fact • Individual • Attorney in Fact • Trustee • Guardian or Conservator • Trustee • Guardian or Conservator • Other: • Other:
Signer is Representing: Signer is Representing:
0 p 900882858089808393808008209083858586989908908
©2019 National Notary Association
EXHIBIT 'B'
LOT 3 (PORTION) LEGEND:
ORANGE COVE
TRACT NO. 1 EXISTING /W
BOOK 9 OF RECORD EXISTING PARCEL LINE
OF SURVEYS,
PAGE 33 SECTION LINE
F.C.R. F.C.R. FRESNO COUNTY RECORDS
APN: 378-021-55
P.O.C. POINT OF COMMENCEMENT
T.P.O.B. TRUE POINT OF BEGINNING
S007 13"E 30.00* -SE COR.
LOT 4 INDICATES AREA OF EASEMENT
TO BE GRANTED TO THE CITY
OF ORANGE COVE FOR PUBLIC
STREET RIGHT-OF-WAY
PURPOSES.
AREA OF + 19,730 S.F.
S89'32'56"E 213.95'
PARCEL 2
PARCEL MAP NO. 97-03
S44'32'56"E 13.38 BK. 58 OF PARCEL MAPS
PGS. 49-51
58932565 50.00 F.C.R.
APN: 378-021-46T
629.18'
N45'27'04*E 13.38'
LOT 4
ORANGE COVE TRACT NO. 1
BOOK 9 OF RECORD OF N89:321M
SURVEYS, PAGE 33
F.C.R.
APN: 378-021-07
313,470
30°
5893215615
SCALE 1" = 100'
50° 100°
S44'46'28"E 15.29
N9000'00"E 22.00
LT.P.O.B.
NO'O0'00"E 40.60* S89'32'58"E 20.00*
P.O.C.- NOO'00'00"E 20" PREVIOUSLY DEDICATED
-N. QTR COR. SW COR. LOT 4 PER ORANGE COVE CTR. QTR. COR- SEC 23 15/24 SOUTH MONSON AVENUE TRACT NO. 1 SEC 23 15/24 EXHIBIT PROJECT NAME: FIGURE
PRECISION DESCRIPTION: STREET DEDICATION 1
CIVIL ENGINEERING, INC PORTION OF NE 1/4 SECTION
23, T. 15 S., R. 24 E., M.D.B.&M. 5/5/2025 23-232.008.0 GENERAL NOTES UTILITY NOTES SITE INFORMATION PREPARED BY:
TENTATIVE TRACT MAP NO. 6469
SO OF OR AGE COME SOURCE OF GAS: 1 AN 375021-07
SOCAL GAS
A VESTING MAP IN THE CITY OF ORANGE COVE, COUNTY OF FRESNO, STATE OF CALIFORNIA 2. ADORESS:
TO BE REMOVED, UNLESS NOTED OTHERWISE SOURCE OF SEWAGE: SOURCE OF CATV: SEC OF E. SOUTH AVE & S. MONSON AVE
CITY OF ORANGE COVE COMCAST
THIS AREA IS NOT SUBECT TO FLOOD INUNGATION. CONSISTING OF ONE SHEET 3. LOT INFO
SOURCE ON TACTICA
LEGAL DESCRIPTION OWNER / SUBDIVIDER:
42931 ROSCONSTUCTION, INC
4. ALL PROPOSED SEWER, WATER, STORM DRAIN FLOOD HAZARD ZONE A DENSITY O18QUA PAVEMENT, STREET S ZONING:
1000 NUANCE RATE ADD 0. 40-C0. DOTAG 120 EUTALYAS
WE RATE MA NO. 06019027021 PER THE APN: 378-021-07
ETECTIVE OATE OF FEBRUARY 18. 2001. 6 AREA: 18.41 ACRES (GROSS) AUG 1 6 2024
NO 111205503007
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107.21 174.8z PARK
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37.5 г 87.5% 87.51 873
255.01 STREET C s21.52
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50.12 50.0 t 50.0 g 50.01 50.0°г 50.0':
1300 50.0 г S0.0- 5001 50.0гg S00
NO 0001" E 1290.70
N89'3154'W 22.00
SOUTH MONSON AVENUE
Coa.
For the Meeting of July 9, 2025
CITY OF ORANGE COVE
REPORT TO CITY COUNCIL
To: Orange Cove City Council
From: Dario Dominguez, Interim City Manager
Subject: Amaya AHSC Grant Improvements - Public Works Contract Award Attachments: Resolution 2025-22 "Award of AHSC Grant Improvements" Exhibit A - Project Limits of Construction Map
RECOMMENDATION:
Adopt Resolution 2025-22, awarding the contract for the Amaya AHSC Grant Improvement project to MAC General Engineering, Inc. (MGE) in the amount of $1,046,389.46, and provide a $104,600.00 (~10%) contingency to deal with any unforeseen issues that might arise during the course of construction for a total encumbrance of $1,150,989.46. Staff further recommends that the Interim City Manager and / or his designee be authorized to execute the Agreement.
BACKGROUND:
On June 25, 2025, a public bid opening was held and seven (7) bid proposals were received. The top four (4) responsive bidders and the corresponding bid results are listed as follows; 1) MAC General Engineering, Inc. (MGE) $2,004,266.71 / $1,046,389.46 (Base Bid) 2) Clean Cut Landscape, Inc. (CCLI) $2,105,916.00 / $1,163,323.00 (Base Bid) 3) Cal Valley Construction, Inc. (CVC) $2,130,288.00 / $1,250,658.00 (Base Bid) 4) Katch Environmental, Inc. (KEI) $2,392,786.96 / $1,418,539.16 (Base Bid) The Engineer's Estimate (EE) for the project was $2,074,500 without contingency. The EE included a base bid scope of construction work, as well as two adaptive alternate bids. The remaining / available grant funding stands at ~$1,180,000 which is sufficient to fund the base bid component of the project.
The HousiniteD Arable Housing Community Development (AHSC) program; Agreement No. 19-AHSC-12757 grant, used to fund the project has a remaining balance of ~$1,180,000 after the Park Blvd. Infrastructure project was awarded by council on June 25, 2025. The AHSC component of the Park Blvd. Infrastructure was $980,254.
Major items and improvements addressed in the bid proposal; includes but are not limited to the construction / installation of; 1) ~10,000 LF Class Il bicycle lanes, 2) ~2600 LF curb, gutter and sidewalk, 3) 2 bus shelters and benches, 4) street highlighting pull infrastructure, 5) 8 bike stations, 7) 5 trash receptacles, 8) ~2,900 LF storm water pipeline, etc.
The low bid submittal was thoroughly vetted and it is the opinion of staff that the bid submitted by MGE should be accepted and a Notice of Award issued.
Contract Award - AHSC Grant Improvements
HISTORICAL CONTEXT:
The AHSC grant was secured in March of 2020 to support active transportation and access improvements to serve the residents of the 80 unit - affordable housing apartment complex known as the Amaya Village, as well as the at large residents of Orange Cove. The total grant amount available to finance the improvements totals $2,140,000, of which $980,254 will be allocated to the Park Bivd.
Improvement project and $1,046,389. The remaining balance $113,357 has been allocated to engineering, inspections, administration, contingency, etc, ENVIRONMENTAL REVIEW:
The project work is taking place in existing City / County Rights-of-Way. Staff has determined a formal Environmental Clearance is not required provided Best Construction Practices are followed and enforced. As no significant effect on the environment is anticipated we believe the project to be categorically exempt from the provisions of CEQA under Sections 15301 and 15304 of the California Code of Regulations (CCR).
CONFLICTS OF INTEREST:
None
FISCAL IMPACT:
The available grand funding is sufficient to cover $1,046,389 of the project cost, with a reserve of ~ 113,357 to cover the ancillary project costs as described above.
REVIEW: City Manager: Dario Dominguez Finance: City Attorney: _ TYPE OF ITEM: COUNCIL ACTION: APPROVED DENIED NO ACTION Consent Public Hearing
Info Item Matter Initiated by a Council Member
_X_ Action Item Other
Department Report Continued to:
_Redevelopment Agency
RESOLUTION NO. 2025-22
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ORANGE COVE
AWARDING THE CONTRACT FOR THE AHSC GRANT
IMPROVEMENTS PROJECT
WHEREAS, plans and specifications were prepared for a project to construct / install bike lanes, new concrete curb and gutter, bus shelters and benches, bike stations, trash receptacles, storm water drainage improvements. Said project was advertised for bid; and WHEREAS, the Bid Opening occurred on Wednesday, June 25, 2025; and seven (7) bids were submitted and opened; and
WHEREAS, the low base bid of $1,046.389.46 was submitted by MAC General Engineering, Inc.; and
WHEREAS, MAC General Engineering, Inc. bid was determined to be in compliance with all pertinent requirements;
WHEREAS, MAC General Engineering, Inc. is properly licensed to perform said work.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Orange Cove, as follows:
1. The above radicals are true and correct and are adopted as the findings of the City Council
2. The contract for the Park Boulevard Improvements project is hereby awarded to the low bidder, MAC General Engineering, Inc., in the amount of $1,046,389.46 and the Interim City Manager and / or his designee is authorized to execute the contract.
3. A contingency in the amount of $104,600.00 (~10% of the base bid amount) is hereby established to account for any work resulting from unforeseen conditions.
4. The provisions of this Resolution are serviceable and if any provision, clause, sentence, word, or part thereof is held illegal, invalid, unconstitutional, or inapplicable to any person or circumstances, such illegality, invalidity, unconstitutionality, or inapplicability shall not affect or impair any of the remaining provisions, clauses, sentences, sections, words or parts thereof of the Resolution or their applicability to other persons or circumstances.
5. The City Clerk shall certify to the adoption of this Resolution and that the same shall be in full force and effect.
PASSED, APPROVED AND ADOPTED this 9th day of July 2025, at a regular meeting of the Orange Cove City Council by the following vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
APPROVED:
Diana Guerra Silva, Mayor
ATTEST:
Cynthia Cisneros, City Clerk
EXHIBIT A - PROJECT LIMITS OF CONSTRUCTION (PCE P# 23-232.037.0) • STeVENS
CE SME
L LAUS LEVE STRET
SEE MAPOIEVENTS
S-22T R 9 20C 10) SEE
MEET 20
E STREET STRUT -20 S727
S72E7
S45ETS 12
440 15
CHOR -SWE
ANCHOR HENLE STEE
MRRSIENENTI
SITE MAP
504E T- 007
CWH, 7/1/2025