City of Piedmont
COUNCIL AGENDA REPORT
DATE: April 7, 2025
TO: Mayor and Council
FROM: Rosanna Bayon Moore, City Administrator
SUBJECT: Consideration of the Acceptance of the 2023-2024 Audited Financial Statements
RECOMMENDATION
Review and accept the City’s independent auditor’s reports for 2023-2024:
a) Annual Financial Statements and Independent Auditor’s Report for the Year Ended June 30, 2024 and Auditor’s Letter on Compliance and Internal Control b) Measure BB Program Financial Statements and Independent Auditor’s Report for the Year Ended June 30, 2024
c) Measure F Program Financial Statements and Independent Auditor’s Report for the Year Ended June 30, 2024
d) Appropriations Limit Calculation as of June 30, 2025 e) Letter Communicating with Those Charged with Governance
BACKGROUND
The City’s independent auditor, Badawi & Associates, has completed the audit of the City’s financial statements and provided the auditor’s reports for the fiscal year ended June 30, 2024.
Badawi & Associates was selected through a formal procurement process and this is the first year of a multi-year contract. The Finance Department is responsible for the preparation and fair presentation of the financial statements in accordance with Generally Accepted Accounting Principles (GAAP). The Audit Committee, consisting of Mayor Betsy Smegal Andersen and Vice Mayor Conna McCarthy, met with the audit partner Ahmed Badawi and City staff on April 3, 2025, to discuss the auditor’s financial report and report on internal controls.
The Annual Financial Statements and Independent Auditor’s Report for the Year Ended June 30, 2024, contains several sections. These include the Independent Auditor’s Report, Management’s Discussion and Analysis, Basic financial statements by fund type, Notes to the Basic Financial Statements, and the Required Supplemental Information.
DISCUSSION
The audit addresses the City’s general financial statements and the Measure BB, and Measure F sales tax special revenue funds. The audits found no exception to conformance with generally accepted accounting principles and the standards applicable to financial audits contained in the Government Auditing Standards issued by the Comptroller General.
Badawi & Associates opined that the general-purpose financial statements present fairly, in all material ways, the City’s financial position of the government activities, the business-type activities, each major fund, and the aggregate remaining fund information as of June 30, 2024. The audited financial statements include the statement of net position, statement of activities and changes in net position, balance sheets, statements of revenues, expenditures, and changes in fund balances, and statements of cash flows.
In summary, the City received a clean audit opinion, with no material weaknesses, no significant deficiencies, nor any compliance exceptions. For an overview of the Annual Financial Statements and Independent Auditor’s Report, see the Management’s Discussion and Analysis beginning on page 4 of the report.
By: Lisa Malek-Zadeh, Interim Finance Director
ATTACHMENTS
A. Annual Financial Statements and Independent Auditor’s Report for the Year Ended June 30, 2024 and Auditor’s Letter on Compliance and Internal Control B. Measure BB Program Financial Statements and Independent Auditor’s Report for the Year Ended June 30, 2024
C. Measure F Program Financial Statements and Independent Auditor’s Report for the Year Ended June 30, 2024
D. Appropriations Limit Calculation as of June 30, 2025 E. Letter Communicating with Those Charged with Governance Agenda Report Page 2
City of Piedmont
Financial Statements
and
Independent Auditor's Report
For the Year Ended
June 30, 2024
Attachment A Agenda Report Page 3
This page intentionally left blank
Attachment A Agenda Report Page 4
City of Piedmont
Basic Financial Statements
For the year ended June 30, 2024
Table of Contents
Page
FINANCIAL SECTION
Independent Auditor’s Report ................................................................................................................................... 1 Management’s Discussion and Analysis .................................................................................................................. 5 Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net Position ..................................................................................................................................... 19 Statement of Activities .......................................................................................................................................... 20 Fund Financial Statements:
Governmental Fund Financial Statements:
Balance Sheet ...................................................................................................................................................... 25 Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position ................................................................................. 26 Statement of Revenues, Expenditures and
Changes in Fund Balances ............................................................................................................................. 27 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities ................................................................................................................................... 28
Proprietary Fund Financial Statements:
Statement of Net Position ................................................................................................................................. 29 Statement of Revenues, Expenses and Changes in Net Position ................................................................ 30 Statement of Cash Flows ................................................................................................................................... 32 Fiduciary Fund Financial Statements:
Statement of Fiduciary Net Position................................................................................................................ 35 Statement of Changes in Fiduciary Net Position ........................................................................................... 36 Notes to the Basic Financial Statements ................................................................................................................ 39 Required Supplementary Information:
Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual – General Fund .................................................................................................................... 89 Notes to Required Supplementary Information – Budgetary Accounting and Control ................................ 90
Attachment A Agenda Report Page 5
City of Piedmont
Basic Financial Statements
For the year ended June 30, 2024
Table of Contents
Page
FINANCIAL SECTION (Continued)
Required Supplementary Information (Continued):
Defined Benefit Pension Plans:
Schedule of the City’s Proportionate Share of the Net Pension Liability Miscellaneous and Safety Plan, Cost Sharing Defined Benefit Pension Plan ........................................ 92 Schedule of Pension Plan Contributions
Miscellaneous and Safety Plan, Cost Sharing Defined Benefit Pension Plan ......................................... 94 Schedule of Funding Progress for Police and Fire Pension (Closed) Plan ................................................. 96 Other Post-Employment Benefit Plan:
Schedule of Changes in the Net OPEB Liability and Related Ratios ........................................................ 100 Schedule of OPEB Contributions ................................................................................................................... 102 Supplementary Information:
Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual – Facilities Capital – Major Capital Projects Fund .................................................. 107 Nonmajor Governmental Funds:
Combining Balance Sheet ............................................................................................................................... 110 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ............................... 112 Schedules of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual:
Streets Projects ............................................................................................................................................... 114 Schoolmates Program ................................................................................................................................... 115 Measure D ...................................................................................................................................................... 116 Measure BB Sales Tax ................................................................................................................................... 117 COPS ............................................................................................................................................................... 118 Measure F ....................................................................................................................................................... 119 Athletic Facility Preservation ...................................................................................................................... 120 Equipment Replacement .............................................................................................................................. 121 Facilities Maintenance .................................................................................................................................. 122
Internal Service Funds:
Combining Statements of Net Position ......................................................................................................... 125 Combining Statements of Revenues, Expenses, and Changes in Net Position ....................................... 126 Combining Statements of Cash Flows .......................................................................................................... 127 General Fund:
Combining Balance Sheet ............................................................................................................................... 131 Combining Statement of Revenues, Expenditures, and Changes in Fund Balance ............................... 132 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 ................................................................................... 133 Attachment A Agenda Report Page 6
INDEPENDENT AUDITOR’S REPORT
To the Honorable Mayor and Members of the City Council
of the City of Piedmont
Piedmont, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Piedmont (City), as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise City’s basic financial statements as listed in the table of contents.
In our opinion, the accompanying financial statements present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2024, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Responsibilities of Management for the Financial Statements The City’s management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of 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.
Attachment A Agenda Report Page 7
To the Honorable Mayor and Members
of the City Council of the City of Piedmont
Piedmont, California
Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS, we:
x Exercise professional judgment and maintain professional skepticism throughout the audit. x 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.
x 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. x 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.
x 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
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and budgetary comparison schedules for the General Fund and required pension and other post-employment benefit information on pages 5-14 and 89-103, 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 Attachment A Agenda Report Page 8
To the Honorable Mayor and Members
of the City Council of the City of Piedmont
Piedmont, California
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 combining and individual fund financial statements and schedules and budget comparison information for capital project funds and non-major governmental funds are presented for purposes of additional analysis and are not a required part of the basic financial statements.
The combining and individual fund financial statements and schedules and budget comparison information for capital project funds and non-major governmental funds are 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. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual fund financial statements and schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 26, 2025 on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.
Badawi & Associates, CPAs
Berkeley, California
March 26, 2025
Attachment A Agenda Report Page 9
This page intentionally left blank
Attachment A Agenda Report Page 10
CITY OF PIEDMONT
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2024
The Management’s Discussion and Analysis (MD&A) provides an overview of the City of Piedmont’s activities and financial performance for the fiscal year ending June 30, 2024. The narrative overview and analysis should be read with the accompanying Basic Financial Statements to get an overall picture of the City’s financial health.
FINANCIAL HIGHLIGHTS
Government-wide
Net position is defined as the excess of assets and deferred outflows of resources over liabilities and deferred inflows of resources. As of June 30, 2024, the City's government-wide net position amounted to a positive balance of $71,468,144. This represents an increase of $7,192,735 from the June 30, 2023, balance of $64,275,409 Governmental activities represent $53,330,529 accounts for 75% of the total net position. Business-type activities represent $18,137,615 accounts for 25% of the total net position. Deferred Outflows of Resources represent a consumption of net position or fund balance that applies to a future period. Of the $18,470,588 in Deferred Outflows of Resources, $4,588,090 includes contribution payments made to CalPERS during fiscal year 2023-24, as well as changes in the net pension liability totaling $12,882,914. As allowed by GASB No. 68, the CalPERS measurement date is June 30, 2023, and contributions after the measurement date are reflected as a deferred outflow. The remaining $999,584 in Deferred Outflows of Resources relates to changes in the Net OPEB liability.
Deferred Inflows of Resources represent an acquisition of net position or fund balance that applies to a future period and amounts to $6,109,660. The deferred Inflows include deferrals due to changes in the net pension liability and net OPEB liability and deferrals related to leases. Notes 8, 9, and 10 discuss the impacts of these changes to net position. Net position increased by $7,192,735 primarily due to the following factors:
Net investment in capital assets increased by $3,053,3354 to $50,306,144 primarily due to the following:
Governmental activities increased by $839,850 due primarily to Street paving and capital improvements of sidewalks, buildings, and parks, with the total cost offset by the depreciation. Business-type activities increased by $2,212,948 due primarily to the aquatics construction in progress and sewer replacements, with the total cost offset by the depreciation. Restricted net position increased by $15,758,022 to $23,964,568 primarily due to the following:
Community development net position increased by $1,841,079 due primarily to more project payments received for Facilities Maintenance Fund
Police and fire net pension asset needs is included in restricted net position rather than considering the net effect with net pension liability from CalPERS plan in the past As of June 30, 2024, capital assets, net of depreciation, amount to $72,737,350, as reported in the Statement of Net Position.
Attachment A Agenda Report Page 11
CITY OF PIEDMONT
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2024
Fund level
Governmental fund balances increased $2,689,352 to $34,097,649. Of this amount, the unassigned fund balance was $8,457,633, an increase of $1,076,602 from the prior year. Enterprise fund net position increased $3,610,484 to $18,137,615. Of this amount, net investment in capital assets totaled $15,502,480, an increase of $2,212,948 from the prior year.
Fiduciary funds
The trust funds net position increased $4,553,800 to $32,772,042. The trust funds represent the police and fire pension plan and OPEB for $18,555,718 and $14,216,324, respectively.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains required supplementary information and other supplementary information in addition to the basic financial statements themselves.
Government-Wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview of the City’s finances, in a manner similar to a private-sector business.
The statement of net position presents information on all the City’s assets and deferred outflows of resources and liabilities and deferred inflows of resources, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating.
The statement of activities presents information showing how the government’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).
Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include administration, public works, public safety, and recreation. The business-type activities of the City include sewer and aquatics. The government-wide financial statements can be found on pages 19 - 21 of this report.
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All the funds of the City of Piedmont can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds.
Governmental funds
Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements.
Attachment A Agenda Report Page 12
CITY OF PIEDMONT
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2024
Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.
The City maintains sixteen individual governmental funds. Information is presented separately in the governmental funds balance sheet and in the governmental funds statement of revenues, expenditures, and changes in fund balances for the General Fund, which is considered a major fund. The City also reports the Capital Facilities Fund as a major fund. Data for this fund is also presented separately. Data from the other fourteen governmental funds are combined and aggregated on the above mentioned statements. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements elsewhere in this report.
The City adopts an annual appropriated budget for its General Fund. A budgetary comparison schedule has been provided for the General Fund to demonstrate compliance with this budget.
The basic governmental fund financial statements can be found on pages 25 - 28 of the report.
Proprietary funds
The City maintains two different types of proprietary funds, enterprise funds and internal service funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements.
The City of Piedmont uses an enterprise fund to account for its sewer and aquatic activity. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City of Piedmont’s various functions. The City uses internal service funds to account for its insurance activity. The Sewer and Aquatic Funds are included within the business-type activities and Internal Service Funds have been included within governmental activities in the government-wide financial statements.
Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail.
The proprietary fund financial statements provide information on the City’s business-type activities, the Sewer and Aquatic Enterprise Funds. The City’s two internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report.
The basic proprietary fund financial statements can be found on pages 29 - 33 of this report.
Fiduciary funds
Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City of Piedmont’s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds.
The basic fiduciary fund financial statements can be found on pages 35 - 36 of this report.
Notes to the Financial Statements
The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 39 - 85 of this report.
Attachment A Agenda Report Page 13
CITY OF PIEDMONT
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2024
Required Supplementary Information
In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information consisting of budgetary comparison schedules for the General Fund, pension required schedules, and OPEB required schedules. Required supplementary information can be found on pages 89 - 103 of this report.
Other information
The combining statements referred to earlier in connection with non-major governmental funds and internal service funds are presented immediately following the required supplementary information. Combining individual fund statements and schedules can be found on pages 108 - 132 of this report.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
Net position may serve over time as a useful indicator of the government's financial position. In the case of the City of Piedmont, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $71,468,144 at the close of the most recent year.
GASB No. 68 has a material impact on the City’s financial statements, since it sets standards for measuring and recognizing assets, liabilities, and impact to net position, as well as, expands the note disclosures regarding the City’s pension systems. GASB No. 68 requires the City to include pension assets of the Police & Fire Pension Trust and the liabilities of the City’s CalPERS pension in the financial statements. The impact is shown in the positive unrestricted net position in the table below.
GASB No. 75 has a material impact on the City's financial statements, since it sets standards for measuring and recognizing assets, liabilities, and impact to net position, as well as, expands the note disclosures regarding the City's OPEB plan. GASB No. 75 requires the City to include the liabilities of the City's OPEB plan in the financial statements.
The impact is shown in the positive unrestricted net position in the table below.
The largest portion of the City’s net position reflects its investment in capital assets (e.g., land, buildings, equipment and infrastructure); less any related debt used to acquire those assets that is still outstanding. The City of Piedmont uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending.
Although the City’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.
Attachment A Agenda Report Page 14
CITY OF PIEDMONT
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2024
At the end of the fiscal year, the City can report a positive net position for Governmental and Business-type Activities and as a whole. The change in net position is mentioned in the financial highlight section above.
Governmental Activities. On a full accrual basis, governmental activities increased the City of Piedmont's net position by $3,582,251 primarily due to increased charges for services, general taxes and fees, interest and investment earnings.
Business-type Activities. Business-type activities increased the City of Piedmont's net position by $3,610,484 due to charges for fees and investment earnings.
Financial Analysis of the Government’s Funds
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.
2024 2023
Net
Change 2024 2023
Net
Change 2024 2023
Net
Change
ASSETS
Current and other
assets $ 43,094 $ 40,499 $ 2,595 $ 15,804 $ 24,310 $ (8,506) $ 58,898 $ 64,809 $ (5,911) Noncurrent assets 53,919 49,370 4,549 36,768 23,456 13,312 90,687 72,826 17,861 Total Assets 97,013 89,869 7,144 52,572 47,766 4,806 149,585 137,635 8,658 Deferred Outflows
of Resources 17,764 18,781 (1,017) 706 713 (7) 18,470 19,494 (1,024)
LIABILITIES
Current and other
liabilities 8,212 7,703 509 3,772 31,075 (27,303) 11,984 38,778 (26,794) Long-term liabilities 47,443 44,958 2,485 31,051 2,523 28,528 78,494 47,481 31,013 Total Liabilities 55,655 52,661 2,994 34,823 33,598 1,225 90,478 86,259 4,219 Deferred Inflows
of Resources 5,791 6,241 (450) 319 353 (34) 6,110 6,594 (484)
NET POSITION
Net investment in
capital assets 34,804 33,964 840 15,503 13,290 2,213 50,307 47,254 3,053 Restricted 23,965 8,206 15,759 - - - 23,965 8,206 15,759 Unrestricted (5,438) 7,578 (13,016) 2,635 1,238 1,397 (2,803) 8,816 (11,619) Total Net Position $ 53,331 $ 49,748 $ 3,583 $ 18,138 $ 14,528 $ 3,610 $ 71,469 $ 64,276 $ 7,193 Governmental Activities Total Government Business-Type Activities Statement of Net Position
As of June 30, 2024 and 2023
(in thousands)
Attachment A Agenda Report Page 15
CITY OF PIEDMONT
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2024
Governmental funds.
The focus of the City’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City's financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year.
As of the end of the current fiscal year, the City's governmental funds reported combined ending fund balances of $34,097,649, an increase of $2,689,352 compared with the prior year. A total of $8,480,579 constitutes unassigned General Fund balance.
2024 2023
Net
Change 2024 2023
Net
Change
REVENUES:
Program revenues
Charges for services $ 8,157 $ 7,820 $ 337 $ 3,097 $ 2,958 $ 139 Operating grants and contributions 3,220 3,709 (489) - - - General revenues
Taxes and fees 29,861 29,276 585 1,337 1,349 (12)
Investment earnings 2,036 810 1,226 956 559 397
Other revenue 609 485 124 8 - 8
Transfers (1,002) (1,235) 233 1,002 1,235 (233)
Total Revenues 42,881 40,865 2,016 6,400 6,101 299
EXPENSES:
Administration 4,641 3,773 868 - - -
Public works 7,383 6,072 1,311 - - -
Street improvement 829 1,193 (364) - - -
Safety: police 7,832 6,947 885 - - -
Safety: fire 8,676 6,955 1,721 - - -
Recreation 6,081 5,232 849 - - -
NonDepartmental 3,838 3,488 350 - - -
Interest 18 4 14 - - -
Sewer - - - 2,019 1,647 372
Aquatics - - - 770 886 (116)
Total Expenses 39,298 33,664 5,634 2,789 2,533 256
Change in net position 3,583 7,201 (3,618) 3,611 3,567 43 Net position - beginning 49,748 42,547 7,201 14,527 10,960 3,567 Net position - ending $ 53,331 $ 49,748 $ 3,583 $ 18,138 $ 14,527 $ 3,610 Governmental Activities Business-Type Activities
Changes in Net Position
For the Years Ended June 30, 2024 and 2023
(in thousands)
Attachment A Agenda Report Page 16
CITY OF PIEDMONT
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2024
General Fund
The General Fund is the chief operating fund of the City. At the end of the current fiscal year, the fund balance totaled $13,366,988, of which $8,480,579 was unassigned and represents an increase of $1,587,486 from the prior year.
General Fund revenues totaled $38,565,656. With reference to the $38.6 million and increases over budget, transfer tax receipts were higher than budgeted but less than the actual amount collected last year. While more homes sold this year, the average and median sales decreased, the first decline since FY 2010-11. Recreation revenue was up due to strong receipts for recreation classes and camps. Investment income exceeded the budget due to interest rates that remained high throughout FY23-24, and property taxes exceeded annual budget assumptions, driven by strong unsecured property tax receipts and supplemental assessments.
Due to the volatile nature of the real estate market, this category is budgeted conservatively each year. The table below shows the number of homes sold and the average sales price for the last ten fiscal years.
General Fund expenditures totaled $1,749,937, less than the authorized original budget for the year ending June 30, 2024. Recreation-related expenses exceeded the budget but were offset by revenue, resulting in a positive net increase.
Facilities Capital Fund
The Facilities Capital Fund established in FY 2022-23 is used to provide funding for the City's facilities, primarily, and had an ending fund balance of $10,457,363.
Proprietary Funds
The City’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. Three funds comprise the City’s proprietary funds: the Sewer Enterprise Fund, Aquatics Enterprise Fund, and the Internal Service Fund.
Sewer Fund
The Sewer Fund is used to account for the sanitary sewer and storm water systems of the City. The net position of the Sewer Fund increased $1,303,681 to $14,824,722, with $1,421,868 representing the unrestricted net position.
The City Council approved a $800,000 loan to the Sewer Fund from the Equipment Replacement Fund and the Facilities Maintenance Fund to complete the rehabilitation of the sewer system. These funds were used to design documents to apply for a State Water Resources Control Board loan that will reimburse the City for design expenses incurred and underwrite the cost of construction.
Fiscal Year # Sold Average Sales Price
Real Property
Transfer Tax
2014-15 154 1,971,270 3,901,252
2015-16 120 1,836,197 3,117,999
2016-17 127 2,138,872 3,522,078
2017-18 132 2,278,523 3,845,198
2018-19 122 2,424,600 3,819,816
2019-20 108 2,574,599 3,602,634
2020-21 170 2,847,358 6,286,601
2021-22 152 3,030,990 5,981,156
2022-23 111 3,097,797 4,464,897
2023-24 115 2,757,420 4,086,499
Attachment A Agenda Report Page 17
CITY OF PIEDMONT
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2024
Aquatics Fund
The Aquatics Fund is used to account for the operations of the Piedmont Community Pool, and at year end, the net position of the Aquatics Fund totaled $3,312,893. The former pool facility had reached end of life and closed on March 16, 2020, during the COVID-19 pandemic.
Internal Service Fund
The Internal Service Funds' net position amounted to $1,010,586, which did not change from the prior year's balance.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
The City's total capital assets for its governmental and business-type activities as of June 30, 2024, amount to $72,737,350 (net of accumulated depreciation/amortization). Capital assets include land, construction-in-progress, Subscription-based information technology arrangements, buildings, equipment, infrastructure, and Right-Of-Use (ROU) subscription assets. The major portion of infrastructure includes the pavement, sidewalk, curb and gutter, parks, and underground utility systems of the City, as well as the sewer system. The City's capital assets increased $14,797,618 from $57,939,732 to $72,737,350.
Additional information on the City of Piedmont's capital assets can be found in Note 5 on pages 62 - 63 of this report. 2024 2023 2024 2023 2024 2023
Land $ 5,683 $ 5,683 $ - $ - $ 5,683 $ 5,683
Construction in progress 728 164 19,426 6,469 20,154 6,633 SBITA work in progress - 353 - - - 353
Buildings & improvements 2,643 2,970 - - 2,643 2,970
Vehicles 1,626 1,827 978 797 2,604 2,624
Property and equipment 1,781 1,565 - - 1,781 1,565
Infrastructure 21,889 21,340 16,364 16,190 38,253 37,530 SBITA Asset 1,619 583 - - 1,619 583
Total $ 35,969 $ 34,485 $ 36,768 $ 23,456 $ 72,737 $ 57,941 Total
CAPITAL ASSETS (NET OF DEPRECIATION) (in thousands)
Governmental Activities Business type Activities
Attachment A Agenda Report Page 18
CITY OF PIEDMONT
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2024
Long-term Debt
At the end of the current fiscal year, the City had a total long-term outstanding debt of $30,618,645, an increase of $320,194 from the prior fiscal year. The City has subscription liabilities, sewer loans outstanding for Phase II, Phase III, Phase IV, and Phase V of the sewer rehabilitation project with the State of California Water Resources Control Board, and, the 2021 general obligation bond and EBCE loan.
At June 30, 2024, the City’s governmental and business-type activities had total long-term debts and obligations as scheduled below.
Additional information about the City’s long-term debt can be found in Note 6 of this report.
ECONOMIC FACTORS AND NEXT YEAR’S BUDGET
Property taxes represent the single largest revenue stream to the General Fund, approximately 70%, and the revenue source supports the City’s essential services. In combination, high inflation, elevated interest rates, and declining average sales price are important signals for modest growth in property-related revenues, including the transfer tax, which has been historically strong and is no longer increasing at the rates seen in previous years, despite a healthy real estate market. Given this reality, budgeting this revenue source conservatively.
The City’s salary and benefit costs represent the largest overall expenditure in the General Fund at $25 million, approximately 62% of the General Fund. Pension costs and retiree medical costs continue to rise at a faster pace than revenue, despite the implementation of various cost containment measures over the years. Personnel-related costs are approximately six percent higher than the prior year's projection and include the final year of approved salary increases in employee agreements. Negotiation and any subsequent financial changes resulting from new employee contracts will need to balance increased operating costs with available recurring revenue to support these additions.
To maintain a balanced budget and a minimum required General Fund reserve over the years, the City has not been able to adequately invest or set aside money to fund aging infrastructure. Many facilities, including streets, and sidewalks need substantial improvement or replacement due to age, accessibility, and safety considerations. In addition to streets and sidewalks, the City has identified tens of millions of dollars of critical renovations needed in the Police and Fire Departments, City Hall, the Veterans Memorial Building, and the Recreation Department building.
The City has been able to take advantage of good years when we outperformed estimates and transferred dollars at the end of the year into the Facilities Capital Fund. This will no longer be possible as the real estate market contracts in the way we are seeing and no additional resources result. This sets the City further back from addressing critical infrastructure. The City must continue to focus on plans to renovate, replace, or close these facilities in the coming years.
Type of Indebtedness
Outstanding
June 30, 2024
Outstanding
June 30, 2023
Governmental Activities
Subscription (SBITA) liability $ 1,165,506 $ 519,550
Business-type Activities
Sewer Loan - Phase II - 138,322
Sewer Loan - Phase III 157,573 311,303
Sewer Loan - Phase IV 813,591 910,811
Sewer Loan - Phase V 3,251,985 3,440,882
2021 General Obligation Bonds 24,479,990 24,977,583
EBCE Loan 750,000 -
Total Business-type Activities 29,453,139 29,778,901
Total Outstanding Debt $ 30,618,645 30,298,451 $
Attachment A Agenda Report Page 19
CITY OF PIEDMONT
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2024
REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of the City of Piedmont's finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Office of the Finance Director, 120 Vista Avenue, City of Piedmont, California, 94611.
Attachment A Agenda Report Page 20
BASIC
FINANCIAL STATEMENTS
Attachment A Agenda Report Page 21
This page intentionally left blank
Attachment A Agenda Report Page 22
GOVERNMENT-WIDE
FINANCIAL STATEMENTS
Attachment A Agenda Report Page 23
This page intentionally left blank
Attachment A Agenda Report Page 24
City of Piedmont
Statement of Net Position
June 30, 2024
Governmental Business-type
Activities Activities Total
ASSETS
Current assets:
Cash and investments $ 34,621,206 $ 6,958,642 $ 41,579,848 Restricted cash and investments 4,798,032 9,314,886 14,112,918 Receivables:
Accounts 2,453,948 167,609 2,621,557
Interest 215,375 163,261 378,636
Leases 117,050 - 117,050
Prepaid expenses - 88,377 88,377
Internal balances 800,000 (800,000) -
Total current assets 43,093,988 15,804,398 58,898,386
Noncurrent assets:
Receivables:
Leases 152,934 - 152,934
Capital assets:
Nondepreciable 19,426,327 6,410,784 25,837,111
Depreciable 25,724,943 72,083,529 97,808,472
Accumulated depreciation (42,524,843) (8,383,390) (50,908,233) Total capital assets 36,767,880 35,969,470 72,737,350
Net Pension Asset - 17,796,602 17,796,602
Total noncurrent assets 36,767,880 53,919,006 90,686,886 Total assets 52,572,278 97,012,994 149,585,272
DEFERRED OUTFLOWS OF RESOURCES
2024 pension contributions 4,429,318 158,772 4,588,090
Changes in the net pension liability 477,424 12,405,490 12,882,914 Changes in the net OPEB liability 70,278 929,306 999,584 Total deferred outflows of resources 17,764,114 706,474 18,470,588
LIABILITIES
Current liabilities:
Accounts payable 2,567,690 2,081,884 4,649,574
Accrued wages and benefits - 642,783 642,783
Accrued interest payable 377,011 21,830 398,841
Deposits payable - 402,553 402,553
Unearned revenue - 3,222,907 3,222,907
Compensated absences - current 59,050 810,272 869,322
Claims payable - current - 597,884 597,884
Long-term debt - current 767,874 432,291 1,200,165
Total current liabilities 3,771,625 8,212,404 11,984,029 Noncurrent liabilities:
Compensated absences 18,431 252,909 271,340
Claims payable - 926,462 926,462
Net OPEB liability 636,407 6,205,853 6,842,260
Net pension liability 1,710,736 39,324,749 41,035,485
Long-term debt 28,685,265 733,215 29,418,480
Total noncurrent liabilities 47,443,188 31,050,839 78,494,027 Total liabilities 55,655,592 34,822,464 90,478,056
DEFERRED INFLOWS OF RESOURCES
Leases 264,214 - 264,214
Changes in the net pension liability 137,550 1,460,792 1,598,342 Changes in the net pension asset - police & fire 1,038,096 - 1,038,096 Changes in the net OPEB liability 181,123 3,027,885 3,209,008 Total deferred inflows of resources 5,790,987 318,673 6,109,660
NET POSITION
Net investment in capital assets 15,502,480 34,803,964 50,306,444 Restricted for:
Community development - 3,557,890 3,557,890
Public safety - 473,182 473,182
Recreation - 1,786,350 1,786,350
Street improvement - 350,544 350,544
Police and fire pension - 17,796,602 17,796,602
Total restricted - 23,964,568 23,964,568
Unrestricted (5,438,003) 2,635,135 (2,802,868)
Total net position $ 18,137,615 53,330,529 $ 71,468,144 $ Primary Government
See accompanying Notes to Basic Financial Statements
Attachment A Agenda Report Page 25
City of Piedmont
Statement of Activities
For the year ended June 30, 2024
Operating
Charges for Grants and
Functions/Programs Expenses Services Contributions Total Governmental activities:
Administration $ 4,641,423 $ 1,161,957 $ 486,926 $ 1,648,883 Public works 7,383,499 1,250,480 1,765,230 3,015,710
Street improvement 828,950 - - -
Public safety - police services 7,832,287 287,161 169,311 456,472 Public safety - fire services 8,675,853 314,966 - 314,966 Recreation 6,080,935 5,142,188 798,900 5,941,088
Nondepartmental 3,838,148 - - -
Debt interest 17,681 - - -
Total governmental activities 39,298,776 8,156,752 3,220,367 11,377,119 Business-type Activities:
Sewer 2,019,324 3,096,708 - 3,096,708
Aquatic 769,696 - - -
Total business-type activities 2,789,020 3,096,708 - 3,096,708 Total primary government $ 42,087,796 $ 11,253,460 $ 3,220,367 $ 14,473,827 General Revenues:
Taxes:
Property tax
Sales tax
Franchise tax
Utility users tax
Real property transfer tax
Business license and rental tax
Parcel tax
Paramedic tax
Total taxes
Motor vehicle license fee
Investment earnings
Other revenues
Transfers
Total general revenues and transfers
Change in net position
Net position - beginning of year
Net position - end of year
Program Revenues
See accompanying Notes to Basic Financial Statements.
Attachment A Agenda Report Page 26
Governmental Business-Type
Activities Activities Total
$ (2,992,540) $ (2,992,540) - $
(4,367,789) (4,367,789) -
(828,950) - (828,950)
(7,375,815) (7,375,815) -
(8,360,887) (8,360,887) -
(139,847) - (139,847)
(3,838,148) (3,838,148) -
(17,681) - (17,681)
(27,921,657) (27,921,657) -
1,077,384 - 1,077,384
(769,696) - (769,696)
307,688 - 307,688
(27,921,657) 307,688 (27,613,969)
18,449,197 1,336,618 19,785,815
195,561 - 195,561
601,234 - 601,234
1,446,400 1,446,400 -
4,086,499 4,086,499 -
695,495 - 695,495
2,621,746 2,621,746 -
69,538 - 69,538
28,165,670 1,336,618 29,502,288
1,695,478 1,695,478 -
2,035,833 955,547 2,991,380
609,131 8,427 617,558
(1,002,204) 1,002,204 -
31,503,908 3,302,796 34,806,704
3,582,251 3,610,484 7,192,735
49,748,278 14,527,131 64,275,409
-
$ 18,137,615 53,330,529 $ 71,468,144 $
and Changes in Net Position
Net (Expense) Revenue
Attachment A Agenda Report Page 27
This page intentionally left blank
Attachment A Agenda Report Page 28
FUND
FINANCIAL STATEMENTS
Governmental Fund Financial Statements
Proprietary Fund Financial Statements
Fiduciary Fund Financial Statements
Attachment A Agenda Report Page 29
This page intentionally left blank
Attachment A Agenda Report Page 30
City of Piedmont
Balance Sheet
Governmental Funds
June 30, 2024
Other Total
Governmental Governmental
Funds Funds
ASSETS
Cash and investments $ 11,514,156 $ 10,736,620 $ 9,785,204 $ 32,035,980 Restricted cash and investments 4,798,032 - - 4,798,032 Receivables:
Accounts receivable 2,183,881 - 270,067 2,453,948
Interest receivable 98,898 67,948 48,529 215,375
Leases receivable 269,984 - - 269,984
Prepaid expenses 88,377 - - 88,377
Due from other funds 22,946 - - 22,946
Advances to other funds - - 800,000 800,000
Total assets $ 18,976,274 $ 10,804,568 $ 10,903,800 $ 40,684,642
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities:
Accounts payable $ 1,088,828 $ 347,205 $ 595,557 $ 2,031,590 Accrued wages and benefits 630,784 - 11,999 642,783
Deposits payable 402,553 - - 402,553
Unearned revenue 3,222,907 - - 3,222,907
Due to other funds - - 22,946 22,946
Total liabilities 5,345,072 347,205 630,502 6,322,779
Deferred Inflows of Resources
Leases 264,214 - - 264,214
Total deferred inflows of resources 264,214 - - 264,214 Fund Balances:
Nonspendable 88,377 - - 88,377
Restricted 4,798,032 - 6,167,966 10,965,998
Assigned - 10,457,363 4,128,278 14,585,641
Unassigned 8,480,579 - (22,946) 8,457,633
Total fund balances 13,366,988 10,457,363 10,273,298 34,097,649 Total liabilities, deferred inflows of
resources and fund balances $ 18,976,274 $ 10,804,568 $ 10,903,800 $ 40,684,642 General Fund Facilities Capital
See accompanying Notes to Basic Financial Statements
Attachment A Agenda Report Page 31
Total Fund Balances - Total Governmental Funds $ 34,097,649 Capital assets used in governmental activities were not current financial resources. Therefore, they were not reported in the Governmental Funds Balance Sheet. Except for the internal service funds reported below, the capital assets were adjusted as follows:
GovernmentWide Statement
of Net Position Total
Nondepreciable $ 6,410,784 6,410,784
Depreciable, net 29,558,686 29,558,686
Total capital assets $ 35,969,470 35,969,470
Net pension asset related to the police and fire pension plan is not a current financial resource and therefore not reported in the funds 17,796,602
Internal service funds were used by management to charge the costs of certain activities, such as insurance, to individual funds. The assets and liabilities of the Internal service funds were included in governmental activities in the Government-Wide Statement of Net Position. 1,010,586 In the Government-Wide Financial Statements, deferred employer contributions for pension and OPEB, certain differences between actuarial estimates and actual results, and other adjustments resulting from changes in assumptions and benefits are deferred in the current year.
GovernmentWide Statement
of Net Position
Deferred outflows of resources related to pension 16,834,808 16,834,808 Deferred outflows of resources related to OPEB 929,306 929,306 Deferred inflows of resources related to pension (2,498,888) (2,498,888) Deferred inflows of resources related to OPEB (3,027,885) (3,027,885) Long-term liabilities were not due and payable in the current period. Therefore, they were not reported in the Governmental Funds Balance Sheet.
GovernmentWide Statement
of Net Position Total
Interest payable $ (21,830) (21,830) $
Compensated absences - current (810,272) (810,272)
Long-term debt - current (432,291) (432,291)
Compensated absences - noncurrent (252,909) (252,909)
Long-term debt - noncurrent (733,215) (733,215)
Net pension liability (39,324,749) (39,324,749)
Net OPEB liability (6,205,853) (6,205,853)
Total long-term liabilities $ (47,781,119) (47,781,119)
Net Position of Governmental Activities $ 53,330,529
City of Piedmont
Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position
June 30, 2024
Amounts reported for governmental activities in the statement of net position are different because:
See accompanying Notes to Basic Financial Statements
Attachment A Agenda Report Page 32
City of Piedmont
Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds
For the year ended June 30, 2024
Nonmajor Total
Governmental Governmental
Funds Funds
REVENUES:
Property tax $ 18,449,197 $ - $ - $ 18,449,197
Sales tax 195,561 - - 195,561
Franchise tax 601,234 - - 601,234
Utility users tax 1,446,400 - - 1,446,400
Real property transfer tax 4,086,499 - - 4,086,499
Business license and rental tax 695,495 - - 695,495
Gas tax - - 592,823 592,823
Licenses and permits 809,760 - - 809,760
Intergovernmental 2,481,060 - 1,270,763 3,751,823
Use of money and property 1,742,452 572,179 384,573 2,699,204 Current service charges 4,828,313 - 1,620,486 6,448,799 Parcel tax 2,621,746 - - 2,621,746
Contributions and donations 35,284 - 840,275 875,559
Other revenues 572,655 - 36,476 609,131
Total revenues 38,565,656 572,179 4,745,396 43,883,231
EXPENDITURES:
Current:
Administration 4,280,618 4,765 28,092 4,313,475
Public works 5,941,295 8,224 31,932 5,981,451
Street improvement - - 714,668 714,668
Public safety:
Police services 7,973,848 - 52,400 8,026,248
Fire services 8,278,781 - 30,593 8,309,374
Recreation 3,902,196 270,925 1,284,066 5,457,187
Nondepartmental 3,838,148 - - 3,838,148
Capital outlay 1,685,020 743,733 1,931,990 4,360,743
Debt service - principal 200,769 - - 200,769
Total expenditures 36,100,675 1,027,647 4,073,741 41,202,063
REVENUES OVER (UNDER)
EXPENDITURES 2,464,981 (455,468) 671,655 2,681,168
OTHER FINANCING SOURCES (USES):
Transfers in 84,183 322,066 1,688,810 2,095,059
Transfers out (1,972,066) (207,204) (917,993) (3,097,263) Proceeds from new SBITAs 1,010,388 - - 1,010,388
Total other financing sources (uses) (877,495) 114,862 770,817 8,184 Net change in fund balances 1,587,486 (340,606) 1,442,472 2,689,352 FUND BALANCES:
Beginning of year 11,779,502 10,797,969 8,830,826 31,408,297 End of year $ 13,366,988 $ 10,457,363 $ 10,273,298 $ 34,097,649 General Fund Facilities Capital
See accompanying Notes to Basic Financial Statements
Attachment A Agenda Report Page 33
City of Piedmont
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Government-Wide Statement of Activities For the year ended June 30, 2024
Net Change in Fund Balances - Total Governmental Funds $ 2,689,352 Governmental funds reported capital outlay as expenditures. However, in the Government-Wide Statement of Activities, the cost of those assets was allocated over their estimated lives as depreciation expense. This was the amount of capital assets recorded in the current period, net of the amount related to internal service funds. 4,237,224
Depreciation expense on capital assets was reported in the Government-Wide Statement of Activities, but did not require the use of current financial resources. Therefore, depreciation expense was not reported as expenditures in the governmental funds, net of the amount related to internal service funds. (2,755,567) Accrued compensated leave payments were reported as expenditures in the governmental funds, however expense is recognized in the Government-Wide Statement of Activities based on earned leave accruals. (22,101) Debt proceeds provide current financial resources to governmental funds, but issuing debt increased longterm liabilities in the Government-Wide Statement of Net Position. Repayment of debt was an expenditure in governmental funds, but the repayment reduced long-term liabilities in the Government-Wide Statement of Net Position.
Debt principal repayments 364,432
Issuance of new SBITAs (1,010,388)
Net change in accrued interest payable (17,681)
Pension expense is reported in the Government-Wide Statement of Activities does not require the use of current financial resources, and therefore is not reported as expenditures in governmental funds. (1,321,484) OPEB expense is reported in the Government-Wide Statement of Activities does not require the use of current financial resources, and therefore is not reported as expenditures in governmental funds. 1,418,464 Change in Net Position of Governmental Activities $ 3,582,251 Amounts reported for governmental activities in the Government-Wide Statement of Activities were different because:
See accompanying Notes to Basic Financial Statements
Attachment A Agenda Report Page 34
City of Piedmont
Statement of Net Position
Proprietary Funds
June 30, 2024
Governmental
Activities
Internal Service
Totals Funds
ASSETS
Current Assets:
Cash and investments 4,510,679 $ 2,447,963 $ 6,958,642 $ 2,585,226 $ Receivable:
Accounts, net 155,876 11,733 167,609 -
Interest 33,440 129,821 163,261 -
Total current assets 4,699,995 2,589,517 7,289,512 2,585,226 Noncurrent:
Restricted cash and investments - 9,314,886 9,314,886 - Capital assets:
Nondepreciable capital assets 284,451 19,141,876 19,426,327 - Depreciable capital assets - 25,724,943 25,724,943 -
Accumulated depreciation (8,383,390) - (8,383,390) -
Total capital assets, net 17,626,004 19,141,876 36,767,880 - Total noncurrent assets 17,626,004 28,456,762 46,082,766 - Total assets 22,325,999 31,046,279 53,372,278 2,585,226
DEFERRED OUTFLOWS OF RESOURCES
Changes in the net pension liability 12,200 623,996 636,196 - Changes in the net OPEB liability 7,391 62,887 70,278 - Total deferred outflows of resources 19,591 686,883 706,474 -
LIABILITIES
Current liabilities:
Accounts payable 565,336 2,002,354 2,567,690 50,294
Interest payable 57,094 319,917 377,011 -
Long-term debt - current portion 320,000 447,874 767,874 - Compensated absences - current 59,050 - 59,050 -
Claims payable - current - - - 597,884
Total current liabilities 1,129,354 2,642,271 3,771,625 648,178 Noncurrent liabilities:
Advances from other funds 800,000 - 800,000 -
Long-term debt 3,775,276 24,909,989 28,685,265 -
Compensated absences 18,431 - 18,431 -
Claims payable - - - 926,462
Net pension liability 75,934 1,634,802 1,710,736 -
Net OPEB liability 61,843 574,564 636,407 -
Total noncurrent liabilities 6,803,073 25,047,766 31,850,839 926,462 Total liabilities 27,690,037 7,932,427 35,622,464 1,574,640
DEFERRED INFLOWS OF RESOURCES
Changes in the net pension liability 5,661 131,889 137,550 - Changes in the net OPEB liability 57,279 123,844 181,123 - Total deferred inflows of resources 62,940 255,733 318,673 -
NET POSITION
Net investment in capital assets 13,402,854 2,099,626 15,502,480 - Unrestricted 1,421,868 1,213,267 2,635,135 1,010,586
Total net position $ 14,824,722 $ 3,312,893 $ 18,137,615 $ 1,010,586 Sewer Fund Aquatic Fund
Business-Type Activities
See accompanying Notes to Basic Financial Statements.
Attachment A Agenda Report Page 35
City of Piedmont
Statement of Revenues, Expenses and Changes in Net Position Proprietary Funds
For the year ended June 30, 2024
Governmental
Activities -
Internal Service
Totals Funds
OPERATING REVENUES:
Charges for services $ - 3,096,708 $ 3,096,708 $ - $
Total operating revenues - 3,096,708 3,096,708 -
OPERATING EXPENSES:
Contract and professional services - 358,142 358,142 -
Services and supplies - 85,403 85,403 -
Salaries and benefits - 808,325 808,325 -
Insurance and claims expense - - - 2,636,289
Depreciation - 686,635 686,635 -
Total operating expenses - 1,938,505 1,938,505 2,636,289 Operating income (loss) - 1,158,203 1,158,203 (2,636,289) NONOPERATING REVENUES (EXPENSES):
Property tax 1,336,618 - 1,336,618 -
Interest income 729,250 226,297 955,547 -
Interest expense (769,696) (80,819) (850,515) -
Other income (expense) 8,427 - 8,427 2,636,289
Total nonoperating revenues (expenses) 1,304,599 145,478 1,450,077 2,636,289 Income before contributions and transfers 1,304,599 1,303,681 2,608,280 - CONTRIBUTIONS AND TRANSFERS:
Transfers in 1,002,204 - 1,002,204 -
Total contributions and transfers 1,002,204 - 1,002,204 - Change in net position 1,303,681 2,306,803 3,610,484 -
NET POSITION:
Beginning of year 13,521,041 1,006,090 14,527,131 1,010,586 End of year $ 14,824,722 $ 3,312,893 $ 18,137,615 $ 1,010,586 Business-Type Activities
Sewer Fund Aquatic Fund
See accompanying Notes to Basic Financial Statements.
Attachment A Agenda Report Page 36
This page intentionally left blank
Attachment A Agenda Report Page 37
City of Piedmont
Statement of Cash Flows
Proprietary Funds
For the year ended June 30, 2024
Governmental
Activities -
Internal Service
Totals Funds
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers $ 3,090,466 $ 1,283 $ 3,091,749 $ - Claims and premium paid - - - (2,504,212)
Cash paid to suppliers (2,039) (1,491) (3,530) -
Cash paid to employees (835,472) (2) (835,474) -
Net cash provided by (used in)
operating activities 2,252,955 (210) 2,252,745 (2,504,212) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Other income - 8,427 8,427 2,636,289
Ad valorem tax - 1,336,618 1,336,618 -
Transfers from other funds - 1,002,204 1,002,204 -
Net cash provided by (used in)
noncapital financing activities - 2,347,249 2,347,249 2,636,289
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES:
Acquisition of capital assets (1,325,776) (11,545,524) (12,871,300) - Proceeds from long-term debt - 429,999 429,999 -
Principal paid on long-term debt (578,168) (177,593) (755,761) - Interest paid on long-term debt (86,833) (774,779) (861,612) - Net cash provided by (used in)
capital and related financing activities (1,990,777) (12,067,897) (14,058,674) - CASH FLOWS FROM INVESTING ACTIVITIES:
Interest and dividends 224,336 646,993 871,329 -
Net cash provided by (used in)
investing activities 224,336 646,993 871,329 -
Net cash flows 486,514 (9,073,865) (8,587,351) 132,077
CASH AND INVESTMENTS - Beginning of year 4,024,165 20,836,714 24,860,879 2,453,149 CASH AND INVESTMENTS - End of year $ 4,510,679 $ 11,762,849 $ 16,273,528 $ 2,585,226
RECONCILIATION OF CASH AND CASH EQUIVALENTS
TO THE STATEMENT OF NET POSITION:
Cash and investment $ 4,510,679 $ 2,447,963 $ 6,958,642 $ 2,585,226 Restricted cash and investment - 9,314,886 9,314,886 -
CASH AND INVESTMENTS - End of year $ 4,510,679 $ 11,762,849 $ 16,273,528 $ 2,585,226 - - - -
Business-Type Activities
Sewer
Fund
Aquatic
Fund
See accompanying Notes to Basic Financial Statements.
Attachment A Agenda Report Page 38
City of Piedmont
Statement of Cash Flows
Proprietary Funds (Continued)
For the year ended June 30, 2024
Governmental
Activities -
Internal Service
Totals Funds
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Operating income (loss) $ 1,158,203 $ - $ 1,158,203 (2,636,289) Adjustments to reconcile operating income (loss) to
net cash provided by (used in) operating activities:
Depreciation expense 686,635 - 686,635 -
Pension and OPEB expense (37,495) (2) (37,497) -
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (6,242) 1,283 (4,959) 1,407 (Increase) decrease in prepaid expense 7,761 - 7,761 -
Increase (decrease) in accounts payable 433,745 (1,491) 432,254 10,101 Increase (decrease) in claims payable - - - 120,569
Increase (decrease) in compensated absences 10,348 - 10,348 - Net cash provided by (used in) operating activities $ 2,252,955 $ (210) $ 2,252,745 $ (2,504,212) Business-Type Activities
Sewer Fund Aquatic Fund
Attachment A Agenda Report Page 39
This page intentionally left blank
Attachment A Agenda Report Page 40
City of Piedmont
Statement of Fiduciary Net Position
Fiduciary Funds
For the year ended June 30, 2024
Custodial Fund
ASSETS
Restricted cash $ - - $ 393,169 $
Restricted investments 18,578,386 14,216,324 -
Accounts Receivable - - 3,118
Interest Receivable - 7,104 -
Total assets 14,216,324 18,585,490 396,287
LIABILITIES
Accounts payable - 29,772 -
Total liabilities - 29,772 -
NET POSITION
Restricted for:
Police and fire pension 18,555,718 - -
OPEB 14,216,324 - -
Individuals, organizations, and other governments - - 396,287 Total Net Position $ 14,216,324 18,555,718 $ 396,287 $
Police and Fire
Pension Plan Trust OPEB Trust
2017 Underground
Refunding Bond
Fund
See accompanying Notes to Basic Financial Statements.
Attachment A Agenda Report Page 41
City of Piedmont
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the year ended June 30, 2024
Custodial Fund
ADDITIONS:
Assessments $ - - $ 354,706 $
Contributions from employees - 54,200 -
Investment income:
Net increase in fair value of investments 2,227,162 2,077,093 - Interest and dividends 435,382 - -
Total additions 2,131,293 2,662,544 354,706
DEDUCTIONS:
Pension benefits paid - 127,061 -
Administrative expenses 112,976 - 9,903
Debt service:
Principal - - 256,290
Interest - - 81,509
Total deductions - 240,037 347,702
Change in net position 2,131,293 2,422,507 7,004
NET POSITION:
Beginning of year 12,085,031 16,133,211 389,283
End of year $ 14,216,324 18,555,718 $ 396,287 $
Police and Fire
Pension Plan Trust OPEB Trust
2017 Underground
Refunding Bond
Fund
See accompanying Notes to Basic Financial Statements.
Attachment A Agenda Report Page 42
NOTES TO BASIC
FINANCIAL STATEMENTS
Attachment A Agenda Report Page 43
This page intentionally left blank.
Attachment A Agenda Report Page 44
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Piedmont is a residential community located in the East Bay Hills, approximately ten miles east of San Francisco, California. The City was incorporated as a municipal corporation in 1907; population at June 30, 2024 was approximately 10,427.
The City operates under the Council-Administrator form of government, with five elected Council members served by a full-time City Administrator and staff. At June 30, 2024, the City's staff was comprised of 97 full-time employees who were responsible for the following City-provided services:
Public Safety - The City employs 24 sworn and 3 non-sworn police personnel to provide round-the-clock police services from a central station, and 25 fire personnel to provide round-the-clock fire services from a central station.
Streets and Roads - The City contracts the construction and maintenance of its streets, curbs, gutters, and related public property.
Recreation, Public Works, Administration and other services are provided by a total of 42 full-time and 13 part-time employees.
In addition, the City employs approximately 104 seasonal recreational personnel.
The accounting policies of the City of Piedmont conform to accounting principles generally accepted in the United States of America as applicable to governments. Following is a summary of the more significant policies.
A. The Reporting Entity
The accompanying basic financial statements present the financial activities of the City, which has no component units.
B. Basis of Presentation
The City's basic financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. The Governmental Accounting Standards Board (GASB) is the acknowledged standard setting body for establishing accounting and financial reporting standards followed by governmental entities in the United States of America. These standards require that the financial statements described below be presented.
Government-wide Financial Statements:
The Statement of Net Position and Statement of Activities display information about the reporting government as a whole. They include the activities of the overall City government except for fiduciary activities. Eliminations have been made to minimize the double counting of internal service activities. The City's net position is reported in three parts - net investment in capital assets; restricted net position; and unrestricted net position. The City first utilizes restricted resources to finance qualifying activities.
Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange revenues. Business-type activities are financed in part by fees charged to external parties for goods or services.
Attachment A Agenda Report Page 45
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued B. Basis of Presentation, Continued
The Statement of Activities presents a comparison between direct expenses and program revenues 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 clearly identifiable to a particular function.
Program revenues include (a) charges paid by the recipients of goods or services offered by the programs, (b) grants and contributions that are restricted to meeting the operational needs of a particular program and (c) fees, grants and contributions that are restricted to financing the acquisition or construction of capital assets. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.
Fund Financial Statements:
The fund financial statements provide information about the City's funds, including fiduciary funds. Each fund is accounted for by providing a separate set of self-balancing accounts that constitute its assets, deferred outflows of resources, liabilities, deferred inflows of resources, net position, revenues and expenditures/expenses. Funds are organized into three major categories: governmental, proprietary, and fiduciary. An emphasis is placed on major funds within the governmental and proprietary categories with each major fund displayed in a separate column. A fund is considered major if it is the primary operating fund of the City or meets the following criteria:
a. Total assets and deferred outflows of resources, liabilities and deferred inflows of resources, revenues or expenditures/expenses of that individual governmental or enterprise fund are at least 10 percent of the corresponding total for all funds of that category or type; and b. Total assets and deferred outflows of resources, liabilities and deferred inflows of resources, revenues, or expenditures/expenses of the individual governmental fund or enterprise fund are at least 5 percent of the corresponding total for all governmental and enterprise funds combined.
All remaining governmental funds are aggregated and reported as nonmajor funds in a single column, regardless of their fund type.
The funds of the financial reporting entity are described below:
Governmental Funds:
General Fund - The General Fund is the general operating fund of the City and is always classified as a major fund. It is used to account for all activities except those legally or administratively required to be accounted for in other funds.
Special Revenue Funds - Special Revenue Funds are used to account for the proceeds of specific revenue sources that are restricted or committed to expenditures for specified purposes other than debt service or capital projects.
Debt Service Funds - Debt Service Funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditures for principal and interest.
Capital Project Funds - Capital Project Funds are used to account for financial resources that are restricted, committed, or assigned to expenditures for capital outlays, including the acquisition or construction of capital facilities and other capital assets.
Attachment A Agenda Report Page 46
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued B. Basis of Presentation, Continued
Proprietary Funds:
Enterprise Funds - Enterprise funds are used to account for business-like activities provided to the general public. These activities are financed primarily by user charges and the measurement of financial activity focuses on net income measurement similar to the private sector.
Internal Service Funds - Internal service funds are used to account for, and finance, services and commodities furnished by a designated department of a governmental unit to other departments of the same governmental unit. The City uses internal service funds to account for insurance activities.
Fiduciary Funds (not included in government-wide statements):
Pension (and Other Employee Benefit) Trust Funds - Pension (and Other Employee Benefit) Trust Funds are used to report resources that are required to be held in trust for the members and beneficiaries of defined benefit pension plans, defined contribution plans, other postemployment benefit plans, and other employee benefit plans.
Custodial Funds - Custodial Funds are used to report fiduciary activities that are not required to be reported in pension (and other employee benefit) trust funds, investment trust funds, or private-purpose trust funds.
Major Funds
The City reported the following major governmental funds in the accompanying financial statements:
General Fund - This is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in a separate fund.
Facilities Capital Fund - This fund is used to account for the accumulation of resources used for the maintenance of capital assets used by governmental funds.
The City reports the following major proprietary funds in the accompanying financial statements:
Sewer Fund - This fund is used to account for the operations of the sewer and storm drain systems.
Aquatic Fund - This fund is used to account for the operations of the Piedmont Community Pool.
The City also reports the following fund types:
Police and Fire Pension Plan Trust Fund - This fund accounts for the pension investment activity including retirement payments to 10 retired City employees and/or surviving spouses.
OPEB Trust Fund - This fund accounts for OPEB trust investment activity for post-employment retiree healthcare benefits.
Custodial Fund - The Custodial fund accounts for resources held by the City as an agent for individuals, private organizations, and other governmental entities. This fund accounts for amounts held for one underground utility assessment district.
Attachment A Agenda Report Page 47
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued C. Measurement Focus and Basis of Accounting
Measurement focus is a term used to describe "which" transactions are recorded within the various financial statements. Basis of accounting refers to "when" revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements regardless of the measurement focus applied.
Measurement Focus
On the government-wide Statement of Net Position and the Statement of Activities, both governmental and proprietary activities are presented using the economic resources measurement focus as defined in item "b" below.
In the fund financial statements, the "current financial resources" measurement focus or the "economic resources" measurement focus is used as appropriate:
a. All governmental funds are accounted for using a "current financial resources" measurement focus. With this measurement focus, only current assets and deferred outflows of resources, and current liabilities and deferred inflows of resources, generally are included on their balance sheets.
Their operating statements present sources and uses of available spendable financial resources during a given period. These funds use fund balance as their measure of available spendable financial resources at the end of the period.
b. All proprietary funds utilize an "economic resources" measurement focus. The accounting objectives of this measurement focus are the determination of operating income, changes in net position (or cost recovery), financial position, and cash flows. All assets and deferred outflows of resources, and all liabilities and deferred inflows of resources (whether current or noncurrent) associated with the operation of these funds are reported. Proprietary fund equity is classified as net position.
c. Fiduciary funds use the "economic resources" measurement focus and the accrual basis of accounting.
Basis of Accounting
In the government-wide Statement of Net Position and Statement of Activities, both governmental and proprietary activities are presented using the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred or economic asset is used. Revenues, expenses, gains, losses, assets and liabilities resulting from exchange and exchange-like transactions are recognized when the exchange takes place.
In the fund financial statements, governmental funds are presented on the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized when "measurable and available." Measurable means knowing or being able to reasonably estimate the amount. Available means collectible within the current period or soon enough thereafter to pay current liabilities. The City defines available to be within 60 days of year-end. Expenditures (including capital outlay) are recorded when the related fund liability is incurred, except for general obligation bond principal and interest which are reported when due. Governmental capital asset acquisitions are reported as expenditures in governmental funds.
Attachment A Agenda Report Page 48
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued C. Measurement Focus and Basis of Accounting, Continued Proceeds from governmental long-term liabilities and acquisitions under capital leases are reported as other financing sources.
Those revenues susceptible to accrual include taxes, intergovernmental revenues, interest and charges for services. Certain indirect costs are included in program expenses reported for individual functions and activities.
Grant revenues are recognized in the fiscal year in which all eligibility requirements are met. Under the terms of grant agreements, the City may fund certain programs with a combination of costreimbursement grants, categorical block grants, and general revenues. Thus, both restricted and unrestricted net position are available to finance program expenditures. The City's policy is to first apply restricted grant resources to such programs, followed by general revenues if necessary.
All proprietary funds utilize the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred, or economic asset is used. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal operations. The principal operating revenues of the enterprise and internal service funds are charges for services.
Operating expenses for proprietary funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first, then unrestricted resources as they are needed.
D. Property Taxes
The County of Alameda levies, bills, and collects property taxes and special assessments for the City as follows:
The term "unsecured" refers to taxes on personal property other than real estate, land, and buildings.
These taxes are secured by liens on the property being taxed. Property tax revenue is recognized in accordance with applicable GASB pronouncements; that is, in the fiscal year for which the taxes have been levied providing they become available. Available means due, or past due and receivable within the current period and collected within the current period or expected to be collected soon enough thereafter to be used to pay liabilities in the current period. The County remits the entire amount of the tax levy to the City (net of County administrative fees), and handles all delinquencies, retaining any interest and penalties. The County remits a property tax clean-up payment for the current period each September following the close of the fiscal year. The City makes an exception to the 60-day recognition period to recognize this revenue in the current period.
Secured Unsecured
Valuation dates March 1 March 1
Lien/levy dates January 1 January 1
Due dates 50% on November 1 and February 1 August 31
Delinquent as of December 10 and April 10 August 31
Attachment A Agenda Report Page 49
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued E. Cash and Investments
The City pools the cash of all funds, except for monies deposited with fiscal agents in accordance with related bond indentures and monies held in the police and fire pension trust, and OPEB trust. The cash and investments balance in each fund represents that fund's equity share of the City's cash and investment pool. As the City places no restrictions on the deposit or withdrawal of a particular fund's equity in the pool, the pool operates like a demand deposit account for the participating funds.
For purposes of the statement of cash flows, the City considers cash and cash equivalents as short-term highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates.
Because the only investments held by the proprietary funds are the Local Agency Investment Fund (LAIF), which meets the definition of a cash equivalent, and investments in Multi-Bank Securities, the entire pooled balance is reported as cash and investments.
F. Accounts and Interest Receivable
In the government-wide statements, receivables consist of all revenues earned at year-end and not yet received. Receivables are recorded in the financial statements net of any allowance for doubtful accounts, if applicable, and estimated refunds due. Major receivable balances for the governmental activities include sales and use taxes, franchise taxes, grants, fines, interest, and other fees. Federal and state grants are considered receivable and accrued as revenue when reimbursable costs are incurred.
In the fund financial statements, material receivables in governmental funds include revenue accruals such as sales tax, franchise tax, and grants and other similar intergovernmental revenues since they are usually both measurable and available. Nonexchange transactions collectible but not available are recorded as deferred inflows of resources in the fund financial statements in accordance with modified accrual but are not deferred in the government-wide financial statements in accordance with the accrual basis. Interest and investment earnings are recorded when earned only if paid within 60 days since they would be considered both measurable and available. Long-term loans in governmental funds are treated as expenditures in the year advanced and as revenues in the year repayment is measurable and available.
Loans receivables are recorded in the fund financial statements but are recorded as deferred inflows of resources to indicate they do not represent current financial resources. Proprietary fund material receivables consist of all revenues earned at year-end and not yet received. Service charges and interest earnings compose the majority of proprietary fund receivables.
G. Prepaid Expenses
Payments for services that will benefit periods beyond June 30, 2024, are recorded as prepaid costs in both government-wide and fund financial statements. The cost of prepaid items is recorded as expenditures/expenses when consumed rather than when purchased.
H. Capital Assets
The accounting treatment of property, plant and equipment depends on whether the assets are used in governmental fund operations or proprietary fund operations and whether they are reported in the government-wide or fund financial statements.
Attachment A Agenda Report Page 50
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued H. Capital Assets, Continued
Government-wide Financial Statements
In the government-wide financial statements, capital assets with a cost of $5,000 or more are capitalized.
All capital assets are valued at historical cost, or estimated historical cost if actual is unavailable, except for donated capital assets which are recorded at their acquisition value at the date of donation. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend the asset lives are not capitalized.
Depreciation of all exhaustible capital assets is recorded as an allocated expense in the Statement of Activities, with accumulated depreciation reflected in the Statement of Net Position. Depreciation is provided over the assets' estimated useful lives using the straight-line method of depreciation. The range of estimated useful lives by type of asset is as follows:
Major outlays for capital assets and improvements are capitalized as projects are constructed. Upon sale or retirement of capital 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.
Fund Financial Statements
In the fund financial statements, capital assets used in governmental fund operations are accounted for as capital outlay expenditures of the governmental fund upon acquisition. Capital assets used in proprietary fund operations are accounted for the same as in the government-wide financial statements.
I. Compensated Absences
A liability is calculated for all the costs of compensated absences based upon benefits earned by employees in the current period for which there is a probability of payment at termination. The salary and related payroll costs are those in effect at June 30, 2024. Compensated absences include vacation pay and compensated time off. The City's liability for compensated absences is recorded at the City-wide level in the Statement of Net Position for governmental activities or in the proprietary funds as appropriate.
Building and improvements 60 years
Vehicles 4 - 20 years
Furniture, fixtures, and equipment 7 - 25 years
Pavement system 28 years
Sidewalk, curb, and gutters 40 years
Traffic signals 25 years
Street lights 25 years
Bridges 75 years
Park facilities system 25 - 40 years
Sewer and storm drains 50 years
Attachment A Agenda Report Page 51
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued J. Long-Term Liabilities
In the government-wide financial statements and the proprietary fund types in the fund financial statements, long-term liabilities, 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. Initial issue bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method. The difference between the reacquisition price of refunding bonds and the net carrying amount of refunded debt (deferred amount on refunding) is amortized over the shorter of the lives of the refunding debt or remaining life of the refunded debt. Bond issuance costs, except for insurance, are expensed in the period incurred. Amortization of bond premiums or discounts, insurance costs, and deferred amounts on refunding are included in interest expense.
In the fund financial statements, governmental fund types recognize bond premiums, discounts, and issuance costs during the period issued. The face amount of debt issued is reported as other financing sources. Premiums received are reported as other financing sources, while discounts are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.
K. Pensions
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City’s California Public Employees’ Retirement System (CalPERS) plan (the Plan) and additions to/deductions from the Plan's fiduciary net position have been determined on the same basis as they are reported by CalPERS.
For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.
L. Section 115 Trust
In fiscal year 2017-18, the City Council approved the creation of a Section 115 Trust Agreement with U.S.
Bank National Association, Trustee, and Public Agency Retirement Services (PARS), Trust Administrator.
The Section 115 Trust was established as a means to set aside monies to fund the City's pension obligations. Contributions to the Section 115 trust are irrevocable, the assets are dedicated to providing benefits to plan members, and the assets are protected from creditors of the City. The purpose of the creation of the Section 115 Trust was to address the City's pension obligations by accumulating assets to reduce the net pension liability. However, in accordance with generally accepted accounting principles, the assets in the Section 115 Trust are not considered to have present service capacity as plan assets and are therefore considered restricted assets of the City rather than plan assets. Accordingly, the Section 115 Trust's assets are recorded as restricted for pension benefits in the City's General Fund rather than assets of the pension plan during the measurement of the net pension liability. The assets held in trust will be considered pension plan assets at the time they are transferred out of the Trust into the pension plan.
Attachment A Agenda Report Page 52
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued M. Other Postemployment Benefits (OPEB)
For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the City's plan (OPEB Plan) and additions to/deductions from the OPEB Plan's fiduciary net position have been determined on the same basis. For this purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value.
Generally accepted accounting principles require that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used:
N. Deferred Outflows/Inflows of Resources
In addition to assets, the statement of net position or balance sheet 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 assets that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The City has deferred outflows of resources related to pensions and other post-employment benefits (OPEB).
In addition to liabilities, the statement of net position or balance sheet 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 assets that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has deferred inflows of resources related to pensions, other post-employment benefits (OPEB), and leases.
O. Interfund Transactions
Interfund transactions are reflected as either loans, services provided, reimbursements, or transfers. Loans are reported as receivables and payables as appropriate, are subject to elimination upon consolidation and are referred to as either “due to/from other funds” (i.e., the current portion of interfund loans) or “advances to/from other funds” (i.e., the noncurrent portion of interfund loans). Any residual balances outstanding between the governmental activities and the business-type activities are reported in the government-wide financial statements as “internal balances”. Advances between funds, as reported in the fund financial statements, are offset by nonspendable fund balance in applicable governmental funds to indicate that they are not available for appropriation and are not available financial resources.
Services provided, deemed to be at market or near market rates, are treated as revenues and expenditures/expenses. Reimbursements are when one fund incurs a cost, charges the appropriate benefiting fund, and reduces its related cost as a reimbursement. All other interfund transactions are treated as transfers. Transfers between governmental or proprietary funds are netted as part of the reconciliation to the government-wide presentation.
Valuation Date June 30, 2024
Measurement Date June 30, 2024
Measurement Period July 1, 2023 to June 30, 2024
Attachment A Agenda Report Page 53
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued P. Equity Classifications
Government-wide Financial Statements
Net position is the excess of all the City's assets and deferred outflows of resources over all its liabilities and deferred inflows of resources, regardless of fund. Net position is divided into three categories. These categories apply only to net position, which is determined at the government-wide level, and are described below:
a. Net investment in capital assets - Consists of capital assets including restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes or other borrowings that are attributable to the acquisition, construction, or improvement of those assets.
b. Restricted net position - Consists of net position with constraints placed on the use either by (1) external groups such as creditors, granters, contributors, or laws or regulations of other governments; or (2) law through constitutional provisions or enabling legislation. c. Unrestricted net position - All other net position that does not meet the definition of "restricted" or "net investment in capital assets."
Fund Financial Statements
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:
a. Nonspendable - Amounts that cannot be spent because they are either (1) not in spendable form or (2) legally or contractually required to be maintained intact. b. Restricted - Amounts that are restricted for specific purposes when constraints placed on the use of resources are either (1) externally imposed by creditors, granters, contributors, laws, or regulations of other governments; or (2) imposed by law through constitutional provisions or enabling legislation.
c. Committed - Amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the government's highest level of decision-making authority. d. Assigned - Amounts that are constrained by the City Council's intent to be used for specific purposes through a resolution but are neither restricted nor committed. The City Council assigns fund balances for specific purposes by resolution adopting the annual budget for the upcoming fiscal year, or by an amending budget resolution during the fiscal year. e. Unassigned - Amounts representing the residual classification for the general fund or any other fund with a negative fund balance.
Further detail about the City's fund balance classification is described in Note 11.
Attachment A Agenda Report Page 54
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued Q. Leases
Lessor
The City is a lessor for several leases of property and buildings. The City recognizes a lease receivable and a deferred inflow of resources in the financial statements.
At the commencement of a lease, the City initially measures the lease receivable at the present value of payments expected to be received during the lease term. Subsequently, the lease receivable is reduced by the principal portion of lease payments received. The deferred inflow of resources is initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date. Subsequently, the deferred inflow of resources is recognized as revenue over the lease term.
Key estimates and judgments include how the City determines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) lease terms, and (3) lease receipts. The City uses its incremental borrowing rate as the discount rate for leases. The lease term includes the noncancellable period of the lease. Lease receipts included in the measurement of the lease receivable are composed of fixed payments from the lessee.
The City monitors changes in circumstances that would require a remeasurement of its leases, and will remeasure the lease receivable and deferred inflows of resources if certain changes occur that are expected to significantly affect the amount of the lease receivable.
R. Subscription-Based Information Technology Arrangements (SBITA) A SBITA is defined as a contractual agreement that conveys control of the right to use another party's (a SBITA vendor's) information technology (IT) software, alone or in combination with tangible capital assets (the underlying IT assets), as specified in the contract for a minimum contractual period of greater than one year, in an exchange or exchange-like transaction.
The City uses various SBITA assets that it contracts through cloud computing arrangements, such as software as a service and platform as a service. The related obligations are presented in amounts equal to the present value of subscription payments, payable during the remaining SBITA term. SBITA assets are reported with other capital assets and SBITA liabilities are reported with long-term debt on the statement of net position.
S. General Budget Policies
The City operates under the general laws of the State of California and annually adopts a budget for its governmental and proprietary funds to be effective July 1 for the ensuing fiscal year. From the effective date of the budget, which is adopted and controlled at the department level, the amounts stated therein as proposed expenditures become appropriations to the various City departments. Annual budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America. Encumbrances are considered to be expenditures in the year the commitment is entered into.
Budget appropriations lapse at the end of the fiscal year unless encumbered by specific Council approval.
Attachment A Agenda Report Page 55
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued T. Use of Estimates
The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from these estimates.
U. Reclassifications
Certain accounts in prior-year financial statements have been reclassified for comparative purposes to conform with the presentation in the current-year financial statements.
V. Implementation of New Governmental Accounting Standards Board Statements In 2024, the City adopted new accounting standards in order to conform to the following Governmental Accounting Standards Board Statements:
GASB Statement No. 100, Accounting Changes and Error Corrections – an Amendment of GASB Statement No. 62 – The objective of this statement is to enhance accounting and financial reporting requirements for accounting changes and error corrections to provide more understandable, reliable, relevant, consistent, and comparable information for making decisions or assessing accountability. The requirements of this statement weren’t applied to the City for the current fiscal year.
2. CASH AND INVESTMENTS
Cash and investments as of June 30, 2024, were classified in the accompanying financial statements as follows:
Restricted Cash
Cash and and
Investments Investments Total
Governmental activities $ 34,621,206 $ 4,798,032 $ 39,419,238 Business-type activities 6,958,642 9,314,886 16,273,528 Total government-wide cash and investments 41,579,848 14,112,918 55,692,766 Fiduciary activities 33,187,879 - 33,187,879
Total cash and investments $ 41,579,848 $ 47,300,797 $ 88,880,645 Attachment A Agenda Report Page 56
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
2. CASH AND INVESTMENTS, Continued
Cash and investments were carried at fair value as of June 30, 2024, and consisted of the following:
Cash on hand $ 900
Cash in banks (546,309)
Total cash (545,409)
U.S. agency securities 15,446,749
Certificates of deposit 16,636,161
Local Agency Investment Fund (LAIF) 15,877,052
Held in Trust:
Equity mutual funds 14,216,324
Fixed income securities 9,685,736
Domestic equities 16,274,698
Money market funds 1,289,334
Total investments 89,426,054
Total cash and investments $ 88,880,645
Attachment A Agenda Report Page 57
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
2. CASH AND INVESTMENTS, Continued
Authorized Investments of the City
The table below identifies the investment types that are authorized for the City by the California Government Code (or the City's investment policy, where more restrictive). This table also identifies certain provisions of the California Government Code (or the City's investment policy, where more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustees that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City's investment policy.
Maximum Minimum Maximum
Maximum Percentage of Quality Investment
Authorized Investment Type Maturity Portfolio Requirements in One Issuer Local Agency Bonds 5 years None None None
U.S. Treasury Obligations 5 years None None None
State Obligations - CA and Others 5 years None None None CA Local Agency Obligations 5 years None None None
U.S. Agency Obligations 5 years None None None
Banker's Acceptances 180 days 40% None 30%
Commercial Paper - Pooled Funds 270 days 40% of the agency's money
Highest letter and number
rating by an NRSROH
None
Commercial Paper - Non-Pooled Funds 270 days 25% of the agency's money
Highest letter and number
rating by an NRSROH
None
Negotiable Certificates of Deposit 5 years 30% None None Non-negotiable Certificates of Deposit 5 years None None None Placement Service Deposits 5 years 30% None None
Placement Service Certificates of Deposit 5 years 30% None None Repurchase Agreements 1 year None None None
Reverse Repurchase Agreements and
Securities Lending Agreements
92 days 20% of the base
value of the portfolio
None None
Medium-Term Notes 5 years 30% "A" rating category or its equivalent or better
None
Mutual Funds and Money
Market Mutual Funds
N/A 20% Multiple None
Collateralized Bank Deposits 5 years None None None
Mortgage Pass-Through Securities 5 years 20% "AA" rating category or its equivalent or better
None
County Pooled Investment Funds N/A None None None
Joint Powers Authority Pool N/A None Multiple None
Local Agency Investment Fund (LAIF) N/A None None None
Voluntary Investment Program Fund N/A None None None
Supranational Obligations 5 years 30% "AA" rating category or its equivalent or better
None
Attachment A Agenda Report Page 58
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
2. CASH AND INVESTMENTS, Continued
The City complies with the provisions of the California Government Code (or the City's investment policy, where more restrictive) pertaining to the types of investments held, institutions in which deposits were made and security requirements. The City will continue to monitor compliance with applicable statutes pertaining to public deposits and investments.
Investments Authorized by the Police and Fire Pension Board Investment of funds in the Police and Fire pension are managed by an investment advisor. The Piedmont Police and Fire Pension Fund investment policy allows the investment advisor to manage the Pension Fund in a manner consistent with the investment objectives as outlined in the April 2006 investment policy, the Prudent Expert Rule, and the provisions of the Employee Retirement Income Security Act of 1974.
The investment policy grants the advisor full power and authority to make purchases, sales, exchanges, conversion and trades in connection therewith as the advisor deems appropriate to the provisions of Sections 2.144 and 2.145 of the Piedmont City Code. The assets in the plan are invested in a manner that is consistent with generally accepted standards of fiduciary responsibility, to insure the security of principal, and maximum yield on all pension fund investments through a mix of well diversified, high quality, fixed income and equity securities
Authorized investments include the following:
Maximum Minimum
Percentage of Credit
Authorized Investment Type Portfolio Rating
Domestic Equities 5% per issuer N/A
Foreign Equity Investments Traded on U.S. Based Exchanges 20% N/A Cash 10% N/A
S&P Stock Index Futures None N/A
Fixed Income Securities None B/B overall
portfolo
Commercial Paper None A-2/P-2
Certificates of Deposit None None
Bankers Acceptances None None
U.S. Treasury Bonds, Notes, and Bills None None
Debt Instruments of U.S. Government Agencies None None
Repurchase Agreements with U.S. Treasury Securities as Collateral None None Repurchase Agreements with U.S. Treasury Agencies as Collateral None None Corporate Notes None B/B
Asset-Backed Securities None None
Municipal Debt None Baa/BBB
Mortgage-Backed Pass-Through Securities by GSE's and CMBS None None Collateralized Mortgage Obligations None None
Attachment A Agenda Report Page 59
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
2. CASH AND INVESTMENTS, Continued
Investments Authorized by the OPEB Trust Fund
Investment of funds in the OPEB (Other Post-employment Benefits) Trust are managed by the same investment advisor as the Police and Fire Pension Trust. The OPEB investment policy allows the investment advisor to manage the OPEB Trust Fund in a manner consistent with the investment objectives as outlined in the May 2013 investment policy.
The investment policy grants the advisor full power and authority to make purchases, sales, exchanges, conversions and trades in connection therewith as the advisor deems appropriate. The advisor is expected to operate within the Prudent Expert Rule, the provisions of the Employee Retirement Income Security Act of 1974 (ERISA) and other pertinent state and federal laws, regulations, and rulings that relate to the investment process. The assets of the Trust shall be invested in a manner that is consistent with generally accepted standards of fiduciary responsibility to insure the security of principal and maximum yield on all investments through a mix of well-diversified fixed income and equity securities. The following are the OPEB Trust Fund investment policies and guidelines:
The investment policy specified the long-term asset allocation targets:
The cash holdings should not exceed 10% of the market value in the portfolio. The asset allocation targets are to be pursued on a long-term strategic basis and may be revised when significant changes occur within the economic and/or capital market environment or in the stream of future benefits expected to be paid.
Capital market assumptions and projections shall be reviewed annually. Benefit payments shall be reviewed quarterly. Benefit liabilities and assumptions shall be reviewed no less frequently than every three years.
The equity portion of the Trust shall be invested in marketable equity securities with certain restrictions placed:
Asset Class Minimum Target Maximum
Equity 25% 60% 75%
Fixed Income 25% 40% 75%
Equity Types Restrictions
Equity mutual funds None
Individual U.S. Stocks a. 5% maximum exposure at cost
b. 10% maximum exposure at market value
c. 5% maximum of company's outstanding shares
Individual non-U.S. Stocks (including American
Depository receipts, foreign-listed securities) 25% maximum at cost Attachment A Agenda Report Page 60
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
2. CASH AND INVESTMENTS, Continued
The fixed income portion of the Trust shall be invested in marketable, fixed-income securities with certain restrictions specified below. All fixed income securities held directly must be rated B/B or better by Moody's Investors Services and Standard & Poor's Corporation.
The following investments are explicitly prohibited by the OPEB Trust Investment Policy:
Fixed-Income Types Restrictions
U.S. Treasury bonds, notes, and bills None
Debt instruments issued by U.S. Government or Agencies None Repurchase agreements with U.S. Treasury Securities and Agencies of U.S. Government as collateral None
Certificates of deposit and banker's acceptances None
Diversified fixed-income mutual funds None
Asset-backed securities None
Mortgage-backed pass through securities issued by
Government Sponsored Enterprises (GSEs) and
Commercials (CMBS) None
Collateralized Mortgage Obligations (CMOs) Has certain restrictions Commercial paper or variable rate notes
a. A-2/P-2 or higher by S&P or Moody's
b. 10% maximum exposure at market value
Private placements 5% maximum exposure at cost
Eurodollar securities and non-dollar denominated
instruments 15% maximum exposure at cost
Preferred stock 10% maximum exposure at cost
Debt for equity exchanges 5% maximum exposure at cost
Mortgage-backed derivative instruments 10% maximum exposure at cost Asset Class Prohibited Investment
Equity a. Future
b. Derivatives
c. Short sale
d. Private placements
e. Commodities
Fixed-Income a. Interest-only strips
b. Inverse floating rate notes
Attachment A Agenda Report Page 61
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
2. CASH AND INVESTMENTS, Continued
Investment Valuation
Investments are measured at fair value on a recurring basis. Recurring fair value measurements are those that Governmental Accounting Standards Board (GASB) Statements require or permit in the statement of net position at the end of each reporting period. Fair value measurements are categorized based on the valuation inputs used to measure an asset’s fair value: Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. Investments’ fair value measurements are as follows at June 30, 2024:
Investment in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the oversight of the Treasurer of the State of California. The fair value of the City's investment in this pool is reported in the accompanying financial statements at amounts based upon the City's pro-rata share of the fair value provided by LAIF for the entire 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 is recorded on an amortized cost basis. The investment balance of $15,877,052 is not subject to valuation on a recurring basis.
Disclosure 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. One of the ways that the City's interest rate risk is mitigated is by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.
Investments Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Fair Value U.S. agency securities - $ 15,446,749 $ - $ 15,446,749 $ Certificates of deposit - 16,636,161 - 16,636,161
Held in Trust:
Equity mutual funds 14,216,324 - - 14,216,324
Fixed income securities - 9,685,736 - 9,685,736
Domestic equities 16,274,698 - - 16,274,698
Money market funds 1,289,334 - - 1,289,334
Total 31,780,356 $ 41,768,646 $ - $ 73,549,002 $
Fair Value Measurements Using
Attachment A Agenda Report Page 62
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
2. CASH AND INVESTMENTS, Continued
Information about the sensitivity of the fair values of the City's investments (including investments held in trust) to market rate fluctuations is provided by the following table that shows the distribution of the City's investments by maturity as of June 30, 2024:
A. Investments with Fair Values Highly Sensitive to Interest Rate Fluctuations The City had no investments (including investments held in trust) that were highly sensitive to interest rate fluctuations as of June 30, 2024.
12 months or More than 5
Investment Type less 1-5 years years Fair Value
Police and Fire Pension Trust Fund:
Fixed income securities $ 4,798,032 $ - -$ 4,798,032 $
Domestic equities 16,274,698 - - 16,274,698
Money market funds 1,289,334 - - 1,289,334
Total Police and Fire Pension Trust Fund 22,362,064 - - 22,362,064 OPEB Trust Fund:
Equity mutual funds 14,216,324 - - 14,216,324
Total OPEB Trust Fund 14,216,324 - - 14,216,324
City and Custodial Funds:
Fixed income securities 4,887,704 - - 4,887,704
Certificates of deposit 14,218,600 2,417,561 - 16,636,161 U.S. agency securities 15,446,749 - - 15,446,749
Local Agency Investment Fund 15,877,052 - - 15,877,052
Total City and Custodial Funds 34,983,356 17,864,310 - 52,847,666 Total Investments $ 17,864,310 71,561,744 $ - $ 89,426,054 $ Remaining Maturity
Attachment A Agenda Report Page 63
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
2. CASH AND INVESTMENTS, Continued, Continued
B. Disclosures 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 by (where applicable) the California Government Code, the investment policy, or debt agreements, and the actual rating as of the fiscal year for each investment type.
C. Concentration of Credit Risk
Concentration of credit risk is the risk of loss attributed to the magnitude of the City's investment in a single issuer of securities. When investments are concentrated in one issuer, this concentration presents a heightened risk of potential loss. The City's investment policy contains limitations on the amount that can be invested in any one issuer. Investments in any one issuer (other than U.S. Treasury securities, mutual funds, and external investment pools) at June 30, 2024, that represent 5 percent or more of total City investments are as follows:
Investment Type Total S&P Moody's
Police and Fire Pension Trust Fund:
Fixed income securities $ 4,798,032 Not rated Not rated Domestic equities 16,274,698 Not rated Not rated
Money market funds 1,289,334 Not rated Not rated
OPEB Trust Fund:
Equity mutual funds 14,216,324 Not rated Not rated
City and Custodial Funds:
Fixed income securities 4,887,704 Not rated Not rated
Certificates of deposit 16,636,161 Not rated Not rated
U.S. agency securities 15,446,749 AA+ Aaa
Local Agency Investment Fund 15,877,052 Not rated Not rated Total $ 89,426,054
Rating as of Fiscal Year End
Issuer Investment Type Amount
Federal Home Loan Banks Government agency securities 12,302,395 $ Attachment A Agenda Report Page 64
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
2. CASH AND INVESTMENTS, Continued, Continued
D. Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g. broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the government 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's deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. As of June 30, 2024, the carrying amount of the City's deposits was $(546,309) and the bank balances were $1,290,702, of which $500,000 was insured by FDIC coverage limits.
E. Allocation of Interest Income Among Funds
Interest income from pooled investments is allocated to those funds which are required by law or administrative action to receive interest. Interest is allocated monthly based on the ending cash balances of the previous month in each fund receiving interest.
3. LEASES RECEIVABLE
The City is reporting leases receivable of $269,984 at June 30, 2024. For the year ended June 30, 2024, the City reported lease revenue of $105,597 and interest revenue of $8,264 related to lease payments received.
A. Buildings
On July 19, 2021, the City entered into an agreement with Piedmont Educational Foundation for the lease of a portion of a building. The lease has a term of 4.5 years and the lease receivable was discounted to a net present value at July 19, 2021 using 2.5% interest rate. On May 12, 2022, the City entered into an agreement with Piedmont Center for the Arts, Inc. for the lease of a portion of a building. The terms of this agreement include monthly rental payments increasing annually based on the Consumer Price Index (CPI) for all Urban Consumers for the San Francisco/Oakland/San Jose Metropolitan Area published by the United States Department of Labor. The lease has a term of 5 years, and the lease receivable was discounted to a net present value at May 12, 2022 using a 2.5% interest rate and CPI increase 3%.
Attachment A Agenda Report Page 65
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
2. CASH AND INVESTMENTS, Continued, Continued
B. Cell Tower Sites
On August 10, 2016, the City entered into an amendment to the microcell site lease agreement with New Cingular Wireless PCS, LLC. The terms of this agreement include base monthly payments of $1,200 increasing annually by 4% over the base rent paid during the previous year. The lease has a term of 10 years, and the lease receivable was discounted to a net present value at October 1, 2017 using a 2.5% interest rate and 4% annual increase. On August 1, 2019, the City entered into an agreement for a cell tower site with AT&T. The terms of the agreement include monthly rental payments increasing annually based on the CPI. The lease has a term of 6.5 years, and the lease receivable was discounted to a net present value at August 1, 2019 using a 2.5% interest rate and CPI increase of 3%. On March 1, 2022, the City entered into an agreement for a cell tower site with GST Towers. The terms of the agreement include monthly rental payments increasing annually based on the CPI.
The lease has a term of 5 years, and the lease receivable was discounted to a net present value at March 1, 2022 using a 2.5% interest rate and CPI increase of 3%.
Future payments due to the City under the agreements are as follows:
The City has recorded a deferred inflow of resources associated with these leases that will be recognized as revenue over the lease terms. As of June 30, 2024, the balance of the deferred inflow of resources was $264,214.
4. INTERFUND TRANSACTIONS
A. Due to/from Other Funds
Current interfund balances arise in the normal course of business and are expected to be repaid shortly after the end of the fiscal year. These balances normally represent to cover temporary shortages of cash in individual funds. The following presents a summary of current interfund balances at June 30, 2024:
Year Ended June 30 Principal Interest Total
2025 $ 5,429 117,050 $ 122,479 $
2026 2,517 101,624 99,107
2027 48,944 711 49,654
2028 4,883 21 4,905
Total $ 8,678 269,984 $ 278,662 $
Due to Fund Amount Due From Fund Amount
General Fund $ Capital Improvement Fund 22,946 22,946 $ Total $ Total 22,946 $ 22,946
Attachment A Agenda Report Page 66
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
4. INTERFUND TRANSACTIONS, Continued
B. Advances to/from Other Funds
Advances will be repaid to the advancing fund when revenue in the receiving fund is adequate. The composition of advances to/from other funds as of June 30, 2024 was as follows:
Sewer Replacement Project - In October 2014, the City approved an interfund loan to the Sewer Fund from the Equipment Replacement and Facilities Funds in the amounts of $600,000 and $200,000, respectively to meet capital requirements of the Sewer Fund. The loan bears interest based on the Local Agency Investment Fund rate, not to exceed 1.0%. Interest only payments are due during the replacement of the sewer system. Principal and interest payments begin approximately in fiscal year 2028, when phase VII loan payments begin. Under this schedule, the loan is set to retire in fiscal year 2035.
C. Interfund Transfers to/from Other Funds
Transfers between funds during the fiscal year ended June 30, 2024 were as follows:
Receivable Fund Payable Fund Description Amount
Governmental Funds:
Equipment Replacement Sewer Sewer replacement project $ 600,000 Facilities Maintenance Sewer Sewer replacement project 200,000 Total Proprietary Funds 800,000
Total Advances to/From Other Funds 800,000 $
Transfer From Transfer To Description of Transfer Amount Major Governmental Funds
General Fund Facilities Capital Funding for capital outlay $ 322,066 Equipment Replacement Funding for capital outlay 800,000 Facilities Maintenance Funding for capital outlay 850,000 Facilities Capital Aquatic Fund Capital projects 207,204 Interfund Transfers $ 2,179,270
Non-Major Governmental Funds
Projects and Services General Fund City-wide beautification $ 13,976 Projects and Services Aquatic Fund Capital projects 795,000 Projects and Services Facilities Maintenance Capital projects 8,900 Schoolmates Program Facilities Maintenance Capital projects 29,910 COPS General Fund Public Safety 45,136
Measure D Fund General Fund Administrative cost recovery 25,071 Interfund Transfers $ 917,993
Attachment A Agenda Report Page 67
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
4. INTERFUND TRANSACTIONS, Continued
D. Intra-fund Transfers between Funds
Intra-fund transfers are not presented on the Statement of Revenues, Expenditures, and Changes in Fund Balances for the governmental funds as they are presented on a net basis. Intra-fund transfers during the year ended June 30, 2024, consisted of a transfer between the General Fund and the Traffic Safety fund for $20,000.
5. CAPITAL ASSETS
Depreciation was charged to functions on their usage of the related assets as follows:
Balance at
July 1, 2023 Additions Retirements Transfers
Balance
June 30, 2024
Governmental Activities:
Capital assets not being
depreciated
Land 5,683,095 $ $ - -$ $ 5,683,095 - $
Construction in progress 163,737 563,952 - 727,689 -
SBITA work-in-progress 352,939 160,840 (513,779) - -
Total capital assets not being
depreciated 6,199,771 724,792 (513,779) - 6,410,784
Capital assets being depreciated
Buildings and Improvements 5,698,904 - - 5,698,904 -
Vehicles 4,256,682 104,847 (157,262) 4,204,267 -
Property and equipment 5,892,247 628,650 (425,354) 6,095,543 - Infrastructure 52,576,686 1,892,534 (336,038) 54,133,182 - SBITA Assets 769,872 1,010,388 (342,406) 513,779 1,951,633 Total capital assets being
depreciated 69,194,391 3,636,419 513,779 (1,261,060) 72,083,529 Less accumulated depreciation
Buildings and Improvements (2,729,196) (325,244) - (3,054,440) - Vehicles (2,429,884) (305,296) 157,262 (2,577,918) -
Property and equipment (4,327,746) (448,561) 461,479 (4,314,828) - Infrastructure (1,343,995) (31,236,712) 336,038 (32,244,669) - SBITA Assets (186,960) (332,471) 186,443 (332,988) -
Total accumulated depreciation (40,910,498) ( 1,141,222 2,755,567) (42,524,843) - Total capital assets being
depreciated, net 28,283,893 880,852 (119,838) 513,779 29,558,686 Total Capital Assets, net $ 1,605,644 34,483,664 $ (119,838) $ -$ 35,969,470 $ Attachment A Agenda Report Page 68
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
5. CAPITAL ASSETS, Continued
Depreciation was charged to functions on their usage of the related assets as follows:
Depreciation was charged to functions based on their usage of the related assets as follows:
Governmental Activities:
Administration 202,277 $
Public works 455,921
Street improvement 938,998
Public safety - police 280,525
Public safety - fire 285,745
Recreation 592,101
Total governmental activities
depreciation expense $ 2,755,567
Balance Balance
July 1, 2023 Additions Retirements June 30, 2024
Business-type Activities:
Capital assets not being depreciated
Construction in progress $ 6,469,205 $ - 12,957,122 $ 19,426,327 $ Total capital assets not being depreciated 6,469,205 - - 19,426,327 Capital assets being depreciated
Vehicles 1,788,463 399,436 (165,668) 2,022,231
Infrastructure 23,060,823 641,889 - 23,702,712
Total capital assets being depreciated 24,849,286 1,041,325 (165,668) 25,724,943 Less accumulated depreciation:
Vehicles (991,111) (219,035) 165,668 (1,044,478)
Infrastructure (6,871,312) (467,600) (7,338,912) -
Total accumulated depreciation (7,862,423) (686,635) 165,668 (8,383,390) Total capital assets being depreciated, net 16,986,863 354,690 - 17,341,553 Total Capital Assets, net $ 354,690 23,456,068 $ $ 36,767,880 - $ Business-type Activities:
Sewer 686,635 $
Total business-type activities
depreciation expense $ 686,635
Attachment A Agenda Report Page 69
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
6. LONG-TERM LIABILITIES
Governmental activities long-term liabilities issued and outstanding at June 30, 2024 were comprised of the following:
Business-type activities long-term liabilities issued and outstanding at June 30, 2024 were comprised of the following:
Authorized
and Issued
Outstanding
June 30, 2024
Subscription (SBITA) liability $ 1,165,506 1,780,260 $
Compensated absences 1,063,181
Total governmental activities 2,228,687 $
Type of Indebtedness
Authorized Outstanding
Maturity Interest Rates and Issued June 30, 2024
Sewer Rehab Loan - Phase II 2023 2.50% 2,211,812 $ -
Sewer Rehab Loan - Phase III 2025 2.50% 2,512,708 157,574 Sewer Rehab Loan - Phase IV 2031 1.00% 1,900,188 813,590 Sewer Rehab Loan - Phase V 2037 1.70% 4,397,000 3,251,985 Ava Comm Energy (EBCE) Loan 2039 0.00% 750,000 750,000
2021 General Obligation Bonds 2051 5.00% 19,500,000 19,195,000 Premium on bonds 5,284,990
Compensated absences 77,481
Total business-type activities 29,530,620
Type of Indebtedness
Attachment A Agenda Report Page 70
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
6. LONG-TERM LIABILITIES, Continued
The following is a summary of changes in the City's long-term liabilities for the fiscal year ended June 30, 2024:
A description of the long-term liabilities at June 30, 2024 follows:
A. Government Activities
Subscriptions (SBITAs) Payable
The City has entered into SBITAs involving various software as a service subscriptions. The total of the City's SBITA assets are recorded at a cost of $1,951,633 less accumulated amortization of $332,988.
Balance at
July 1, 2023 Additions Reductions
Balance
June 30,
2024
Current
Portion
Governmental Activities:
Subscription (SBITA) liability 519,550 $ $ (364,432) 1,010,388 $ $ 432,291 1,165,506 $ Total SBITAs payable 519,550 1,010,388 (364,432) 1,165,506 432,291 Other liabilities:
Compensated absences 1,041,080 815,349 (793,248) $ 810,272 1,063,181 Total Governmental Activities 1,560,630 $ 1,825,737 $ (1,157,680) $ 2,228,687 $ 1,242,563 $ Balance at
July 1, 2023 Additions Retirements
Balance
June 30, 2024
Current
Portion
Type of Indebtedness
Sewer Rehab Loan - Phase II 138,322 $ -$ (138,322) $ - $ -$ Sewer Rehab Loan - Phase III 311,303 - (153,730) 157,573 157,573 Sewer Rehab Loan - Phase IV 910,811 - (97,220) 813,591 98,193 Sewer Rehab Loan - Phase V 3,440,882 - (188,897) 3,251,985 192,108 Ava Comm Energy (EBCE) Loan 750,000 - 750,000 - 25,002
Total loans payable 4,801,318 750,000 (578,169) 4,973,149 447,874 2021 General Obligation Bond 19,500,000 (305,000) - 19,195,000 320,000 Premium on bonds 5,477,583 - (192,593) 5,284,990 -
Total bonds payable 24,977,583 (497,593) - 24,479,990 320,000 Other liabilities:
Compensated absences 67,133 61,511 (51,163) 77,481 59,050 Total Business-type Activities 29,846,034 $ 811,511 $ (1,126,925) $ 29,530,620 $ 826,924 $ Attachment A Agenda Report Page 71
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
6. LONG-TERM LIABILITIES, Continued
A. Government Activities, Continued
Future debt service payments on the SBITAs are as follows:
Compensated Absences
At June 30, 2024, compensated absences totaled $1,063,181, of which $810,272 was recorded as a current liability and the non-current portion totaled $252,909. For governmental activities, compensated absences are liquidated by the general fund.
B. Business-type Activities
Sewer Rehabilitation Loan - Phase II
In October 2003, the City entered into a loan agreement with the State of California Water Resources Control Board to provide funding for a sewer rehabilitation project (Phase II). Funds are drawn on the agreement as work is completed up to a maximum amount of $2,211,812 plus any construction period interest. The loan accrues interest at a rate of 2.5 percent annually. Principal and interest payments are due in 20 annual installments with the first payment due one year after completion of the project. The project was completed in December 2003 and the first principal installment was paid in December 2004.
Final payment is due December 2023. Net revenues, defined as all sewer enterprise fund revenues less operations and maintenance costs (excluding depreciation and amortization expenses), are pledged for future debt service.
Sewer Rehabilitation Loan - Phase III
In September 2004, the City entered into a loan agreement with the State of California Water Resources Control Board to provide funding for a sewer rehabilitation project (Phase III). Funds are drawn on the agreement as work is completed up to a maximum amount of $2,512,708 plus any construction period interest. The loan accrues interest at a rate of 2.5 percent annually. Principal and interest payments are due in 20 annual installments with the first payment due one year after completion of the project. The project was completed in May 2005 and the first principal installment was paid in May 2006. Final payment is due May 2025. Net revenues, defined as all sewer enterprise fund revenues less operations and maintenance costs (excluding depreciation and amortization expenses), are pledged for future debt service.
For the Year
Ending June 30 Principal Interest Total
2025 432,291 $ 31,353 $ 463,644 $
2026 322,660 20,321 342,981
2027 211,943 10,212 222,155
2028 115,914 3,804 119,718
2029 40,738 489 41,227
2030 41,960 38 41,998
Total 1,165,506 $ $ 1,231,723 66,217 $
Attachment A Agenda Report Page 72
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
6. LONG-TERM LIABILITIES, Continued
B. Business-type Activities, Continued
Sewer Rehabilitation Loan - Phase IV
In October 2009, the City entered into a loan agreement with the State of California Water Resources Control Board to provide funding for a sewer rehabilitation project (Phase IV). Funds are drawn on the agreement as work is completed up to a maximum amount of $1,900,188 plus any construction period interest. The loan accrues interest at a rate of 1.0 percent annually. Annual principal payments are due each September 1, commencing September 1, 2012. Final payment is due September 2031. Net revenues, defined as all sewer enterprise fund revenues less operations and maintenance costs (excluding depreciation and amortization expenses), are pledged for future debt service.
Sewer Rehabilitation Loan - Phase V
In October 2016, the City entered into a loan agreement with the State of California Water Resources Control Board to provide funding for a sewer rehabilitation project (Phase V). Funds are drawn on the agreement as work is completed up to a maximum amount of $4,397,000 plus any construction period interest. The loan accrues interest at a rate of 1.7 percent annually. Annual principal payments are due each July 31, commencing July 31, 2019. Final payment is due July 2038. Net revenues, defined as all sewer enterprise fund revenues less operations and maintenance costs (excluding depreciation and amortization expenses), are pledged for future debt service.
Future debt service payments on the sewer rehabilitation loans are as follows:
Year Ending
June 30, Principal Interest Total
2025 447,874 $ 65,769 $ 513,643 $
2026 294,548 59,157 353,705
2027 298,861 54,844 353,705
2028 303,241 50,465 353,706
2029 307,688 46,018 353,706
2030 - 2034 1,393,857 162,012 1,555,869
2035 - 2039 1,177,080 60,661 1,237,741
Total 4,223,149 $ 498,926 $ 4,722,075 $
Attachment A Agenda Report Page 73
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
6. LONG-TERM LIABILITIES, Continued
B. Business-type Activities, Continued
2021 General Obligation Bonds
In September 2021, the City authorized issuance of the 2021 General Obligation Bonds in the principal amount of $19,500,000 to provide funds to construct new pool facilities, restrooms, and related areas. The bonds are payable in annual installments of $305,000 to $1,245,000, with an interest rate of 5% and maturity on September 1, 2051.
Future debt service payments on the general obligation bonds are as follows:
Ava Comm Energy (EBCE) Loan
In October 2023, the City authorized a financed electricity service agreement in the principal amount of $750,000 to provide funds for beneficial electrification projects on municipal buildings. The loan is payable in flat, fixed monthly fee of $4,167 based on billing cycle and maturity in December 2039.
Future debt service payments on the EBCE loan are as follows:
Year Ending
June 30, Principal Interest Total
2025 320,000 $ 951,750 $ 1,271,750 $
2026 340,000 935,250 1,275,250
2027 355,000 917,875 1,272,875
2028 375,000 899,625 1,274,625
2029 395,000 880,375 1,275,375
2030 - 2034 2,295,000 4,076,875 6,371,875
2035 - 2039 2,940,000 3,426,000 6,366,000
2040 - 2044 3,775,000 2,591,125 6,366,125
2045 - 2049 4,850,000 1,518,000 6,368,000
2050 - 2052 3,550,000 272,250 3,822,250
Total 19,195,000 $ 16,469,125 $ 35,664,125 $
Year Ending
June 30, Principal Interest Total
2025 $ 25,002 $ 25,002 - $
2026 50,004 50,004 -
2027 50,004 50,004 -
2028 50,004 50,004 -
2029 50,004 50,004 -
2030 - 2034 250,020 250,020 -
2035 - 2039 250,020 250,020 -
2040 24,942 24,942 -
Total 750,000 $ $ 750,000 - $
Attachment A Agenda Report Page 74
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
6. LONG-TERM LIABILITIES, Continued
B. Business-type Activities, Continued
Total Business-type Activities Long-Term Liabilities Future Debt Service:
7. ASSESSMENT DEBT WITHOUT CITY COMMITMENT
In December 2017, the City administered the issuance of the City of Piedmont Reassessment District No. 2017-1 Limited Obligation Refunding Bonds in the principal amount of $3,917,261. The proceeds from the issuance of the bonds were used to refund the Dudley/Blair Underground Utility Assessment District bonds, the Wildwood/Crocker Underground Utility Assessment District bonds and the Piedmont Hills Underground Assessment District bonds and to pay the costs of issuance of the bonds. At June 30, 2024, the outstanding principal of the bond issue was $2,495,916. The City is not liable for the repayment of this debt and is only acting as an agent for the property owners in collecting the assessments, forwarding the collections to the bondholders, and initiating foreclosure proceedings. For this reason, this debt is not reported as a long-term liability of the City.
Year Ending
June 30, Principal Interest Total
2025 792,876 $ 1,017,519 $ 1,810,395 $
2026 684,552 994,407 1,678,959
2027 703,865 972,719 1,676,584
2028 728,245 950,090 1,678,335
2029 752,692 926,393 1,679,085
2030 - 2034 3,938,877 4,238,887 8,177,764
2035 - 2039 4,367,100 3,486,661 7,853,761
2040 - 2044 3,799,942 2,591,125 6,391,067
2045 - 2049 4,850,000 1,518,000 6,368,000
2050 - 2052 3,550,000 272,250 3,822,250
Total 24,168,149 $ 16,968,051 $ 41,136,200 $
Attachment A Agenda Report Page 75
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
8. DEFINED BENEFIT PENSION PLAN
A. General Information about the Pension Plan
Plan Description
All qualified permanent and probationary employees are eligible to participate in the Public Agency CostSharing Multiple-Employer Defined Benefit Pension Plan (Plan) administered by the California Public Employees’ Retirement System (CalPERS.) The Plan consists of individual rate plans (benefit tiers) within a safety risk pool (police and fire) and a miscellaneous risk pool (all other). Plan assets may be used to pay benefits for any employer rate plan of the safety and miscellaneous pools. Accordingly, rate plans within the safety or miscellaneous pools are not separate plans under GASB Statement No. 68. Individual employers may sponsor more than one rate plan in the miscellaneous or safety risk pools. The City sponsors six rate plans (three miscellaneous and three safety). Benefit provisions under the Plan are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.
Benefits Provided
CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 (age 62 for Miscellaneous Plan members if membership date is on or after January 1, 2013) with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 5 years of service. The death benefit is one of the following: the Special Death Benefit (Safety only), the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit.
The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.
The rate plan provisions and benefits in effect at June 30, 2024 are summarized as follows:
Miscellaneous
Tier I Tier II
Tier III (PEPRA)
On or After
Hire Date Prior to January 1, 2013 Prior to January 1, 2013 to January 1, 2013 Benefit Formula 3.0% @ 60 2.0% @ 60 2.0% @ 62
Benefit Vesting Schedule 5 years service 5 years service 5 years service Benefit Payments monthly for life monthly for life monthly for life Retirement Age 50 and up 60 and up 62 and up
Monthly Benefits, as a % of
Eligible Compensation 2.0% to 3.0% 2.0% 2.0%
Required Employee Contribution
Rates 8.00% 7.00% 7.75%
Required Employer Contribution
Rates 17.26% 10.10% 7.68%
Required UAL Contribution $792,218 $0 $0
Attachment A Agenda Report Page 76
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
8. DEFINED BENEFIT PENSION PLAN, Continued
A. General Information about the 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 the July 1 following notice of a change in the rate. Funding contributions for the Plan are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. The City's contributions to the Plan for the year ending June 30, 2024 were $4,588,090.
B. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions As of June 30, 2024, the City reported a net pension liability for its proportionate share of the net pension liability of the Plan of $41,035,485.
Safety
Tier I Tier II
Tier III (PEPRA)
On or After
Hire Date Prior to January 1, 2013 Prior to January 1, 2013 to January 1, 2013 Benefit Formula 3.0% @ 50 2.0% @ 50 2.7% @ 57
Benefit Vesting Schedule 5 years service 5 years service 5 years service Benefit Payments monthly for life monthly for life monthly for life Retirement Age 50 and up 50 and up 57 and up
Monthly Benefits, as a % of
Eligible Compensation
3.0% 2.0% 2.70%
Required Employee Contribution
Rates
9.00% 9.00% 14.50%
Required Employer Contribution
Rates
29.09% 21.78% (police & fire) 14.50% (police & fire)
Required UAL Contribution $1,852,907 $0 $1,902 (police) $801 (fire)
Attachment A Agenda Report Page 77
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
8. DEFINED BENEFIT PENSION PLAN, Continued
B. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions, Continued
The City's net pension liability for the Plan is measured as the proportionate share of the net pension liability. The net pension liability of the Plan is measured as of June 30, 2023, and the total pension liability for the Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2022 rolled forward to June 30, 2023 using standard update procedures. The City's proportion of the net pension liability was based on a projection of the City's long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined.
The City's proportionate share of the net pension liability for the Plan as of June 30, 2022 and 2023 was as follows:
For the year ended June 30, 2024, the City recognized pension expense of $7,651,549. At June 30, 2024, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
$4,588,090 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2025. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
Proportion - June 30, 2022 0.32505%
Proportion - June 30, 2023 0.32893%
Change - Increase (Decrease) 0.00388%
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Pension Contributions Made Subsequent to Measurement Date 4,588,090 $ - $ Differences between Employer's Contributions and Proportionate Share of Contributions 36,022 1,319,847
Differences between Expected and Actual Experience 2,732,495 278,495 Changes in Assumptions 2,420,150 -
Change in Employer's Proportion 1,764,076 -
Differences between Projected and Actual Investment Earnings 5,930,171 - $ 1,598,342 17,471,004 $
Year Ended
June 30,
2025 3,749,642 $
2026 2,600,677
2027 4,767,142
2028 167,111
Attachment A Agenda Report Page 78
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
8. DEFINED BENEFIT PENSION PLAN, Continued
B. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions, Continued
Actuarial Assumptions
The total pension liability in the June 30, 2022 actuarial valuation was determined using the following actuarial assumptions:
Changes in Assumptions
Effective with the June 30, 2022 valuation date (2023 measurement date), the inflation rate was reduced from 2.50% to 2.30%.
Discount Rate
The discount rate used to measure the total pension liability was 6.90 percent. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members.
Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.
Long-term Expected Rate of Return
The long-term expected rate of return on pension plan investments was determined using a buildingblock method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.
Valuation Dates June 30, 2022
Measurement Date June 30, 2023
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions:
Discount Report 6.90%
Inflation 2.30%
Salary Increases Varies by Entry Age and Service
Mortality (1) Derived using CalPERS membership data for all funds.
Post Retirement Benefit Increase Contract COLA up to 2.30% until purchasing power protection allowance floor on purchasing power applies. (1) The mortality table used was developed based on Cal PERS' Membership Data for all Funds. The mortality table was developed based on CalPERS-specific data. The rates incorporate Generational Mortality to capture ongoing mortality improvement using 80 percent of scale MP 2016 published by the Society of Actuaries. For more details on this table, please refer to the 2021 experience study report available on CalPERS website.
Attachment A Agenda Report Page 79
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
8. DEFINED BENEFIT PENSION PLAN, Continued
B. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions, Continued
In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations. Using historical returns of all the Public Employees Retirement Funds’ asset classes (which includes the agent plan and two cost-sharing plans or PERF A, B, and C funds), expected compound (geometric) returns were calculated over the next 20 years using a buildingblock approach. The expected rate of return was then adjusted to account for assumed administrative expenses of 10 Basis points.
The table below reflects long-term expected real rates of return by asset class.
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate The following presents the City's proportionate share of the net pension liability for the Plan as of the measurement date, calculated using the discount rate for the Plan, as well as what the City's proportionate share of the net pension liability would be if it were calculated using a discount rate that is one-percentage point lower or one-percentage point higher than the current rate:
Pension Plan Fiduciary Net Position
Detailed information about the pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.
Asset Class
Assumed
Asset
Real Return
Years 1-10
Global Equity - Cap-weighted 30.0% 4.45%
Global Equity - Non Cap-weighted 12.0% 3.84%
Private Equity 13.0% 7.28%
Treasury 5.0% 0.27%
Mortgage-backed Securities 5.0% 0.50%
Investment Grade Corporates 10.0% 1.56%
High Yield 5.0% 2.27%
Emerging Market Debt 5.0% 2.48%
Private Debt 5.0% 3.57%
Real Assets 15.0% 3.21%
Leverage -5.0% -0.59%
(a) An expected inflation of 2.30% used for this period (b) Figures are based on the 2021-22 Asset Liability Management Study Discount Rate -1%
(5.90%)
Current Discount Rate
(6.90%)
Dount Rate +1%
(7.90%)
Net Pension Liability (Asset) 61,511,876 $ 41,035,485 $ 24,256,424 $ Attachment A Agenda Report Page 80
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
9. PIEDMONT POLICE AND FIRE PENSION PLAN (CLOSED PLAN)
A. General Information about the Pension Plan
Plan Description
The Piedmont Police and Fire Pension Plan (the Plan) is a single-employer defined benefit pension plan for the City's police and fire employees hired before July 1, 1971. The Plan is closed to new participants.
Section 26.1 of the City Ordinance grants authority to establish and manage benefit terms to the Police and Fire Pension Board (the Board). The Board is comprised of the mayor, one member of the City Council, one member of the police department, one member of the fire department, and one community representative.
As of June 30, 2024, the Plan covers 6 retired City employees or surviving spouses, who receive monthly benefits, which will continue for life.
Funding Policy
Contributions are determined by an actuarial valuation. Currently, assets exceed the total pension liability, so the contribution rate is 0%.
Benefit Terms
Benefits for service retirement - Benefit is 50% of final average salary (FAS) (average over the 12 months before retirement, 36 months if advanced in rank during the last 3 years before retirement) plus 3 1/3% x FAS for each year of service greater than 25 but less than 30 years. The maximum benefit is 66 2/3% of pay. Benefits are payable for participant's lifetime with 50% of the benefit payable to eligible spouse upon the death of the participant.
Benefits for duty related disability - Benefit is 50% of FAS plus 3 1/3% x FAS for each year of service greater than 25 but less than 30 years. The maximum benefit is 66 2/3% of pay. Benefits are payable for participant's lifetime with 50% of the benefit payable to eligible spouse or minor children upon the death of the participant.
A 2% cost-of-living adjustment is payable to certain retirees.
B. Net Pension Liability (Asset)
The City's net pension liability (asset) is measured as the total pension liability, less the pension plan's fiduciary net position. The net pension liability (asset) of the Plan is based on a valuation as of June 30, 2024. A summary of principal assumptions and methods used to determine the net pension liability (asset) follows.
Attachment A Agenda Report Page 81
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
9. PIEDMONT POLICE AND FIRE PENSION PLAN (CLOSED PLAN), Continued B. Net Pension Liability (Asset), Continued
Actuarial Assumptions
The total pension liability (asset) in the June 30, 2024 actuarial valuation was determined using the following actuarial assumptions:
Changes of Assumptions
There were no changes in assumptions.
Discount Rate
The discount rate was set equal to the long-term expected rate of return. The long-term expected rate of return was used as current assets are expected to be sufficient to cover all future benefit payments and expenses due to the magnitude of the Plan’s 2,355.90% funded ratio and the average age of the group (84).
The 5.5% long-term expected rate of return was based on an assumed long-term asset allocation of 60% equities and 40% fixed income with expected real rates of return of 4.29% and .78%. The sensitivity of the net pension liability/(asset) to a 1% change in the discount rate is shown below.
Measurement Date June 20, 2024
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions:
Discount Rate 5.50%
Inflation 2.50%
Salary Increases 2.00%
Investment Rate of Return 5.50% net of pension plan investment expenses Mortality
Service retirements and benefits California PERS mortality table for healthy recipients (based on CalPERS 2000-2019 experience study), with generational mortality projection (to recognize future mortality improvement) utilizing Society of Actuaries Scale MP-2021.
Disability California PERS mortality table for work-related disabled retirees (based on CalPERS 2000-2019 experience study), with generational mortality projection (to recognize future mortality improvement) utilizing Society of Actuaries Scale MP-2021.
1% Decrease
(4.50%)
Current Discount Rate
(5.50%)
1% Increase
(6.50%)
Net Pension Liability (Asset) 17,747,795 $ (17,796,602) $ (17,840,045) $ Attachment A Agenda Report Page 82
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
9. PIEDMONT POLICE AND FIRE PENSION PLAN (CLOSED PLAN), Continued C. Changes in the Net Pension Liability (Asset)
The changes in the net pension liability (asset) for the Plan follows:
D. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions For the year ended June 30, 2024, the City recognized pension expense/(credit) of $(1,660,338). At June 30, 2024, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
Total Pension
Liability
Plan
Fiduciary
Net Position
Net Pension
Liability
(Asset)
Balance at July 1, 2023 1,246,747 $ 16,133,211 $ (14,886,464) $ Changes in the year:
Interest 65,077 - 65,077
Actual vs. expected experience (395,874) - (395,874)
Net investment income - 2,579,341 (2,579,341)
Benefit payments (127,061) (127,061) -
Net changes (457,858) 2,452,280 (2,910,138)
Balance at June 30, 2024 788,889 $ 18,585,491 $ (17,796,602) $ Increase (Decrease)
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Net differences between projected and
actual earnings on plan investment - $ 1,038,096 $
Total $ - $ 1,038,096
Year
Ended June 30
2025 (419,380)
2026 200,674
2027 (480,290)
2028 (339,100)
Attachment A Agenda Report Page 83
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
10. OTHER POST EMPLOYMENT BENEFITS
Plan Description
The City of Piedmont Retiree Healthcare Plan (the "Plan") is a single-employer defined benefit healthcare plan administered by the City. Effective January 1, 1997, all City employees were enrolled in the PERS Health Care Plan. The City provides postretirement healthcare benefits to eligible employees who retire directly from the City. The City pays healthcare coverage up to a cap for eligible retirees and their dependents.
The City reports the financial activity of the other post-employment benefits (OPEB) in the fiduciary OPEB Trust Fund, and no separate financial report is prepared.
In fiscal 2010, the City established an OPEB irrevocable trust with the City Administrator and Finance Director acting as trustees for the OPEB Trust Fund.
Benefits Provided
Employees Covered
As of the June 30, 2024 actuarial valuation, the following current and former employees were covered by the benefit terms under the Plan:
Tier 1 • Eligibility:
Hired before May 1, 2018 or January 1, 2018 depending on the MOU group Service or disability retirement under CalPERS directly from City • Retiree cap equal active cap using PEMHCA Unequal Method • Active cap is based on 2021 Kaiser Bay Area premiums plus 50% of post-2021 changes
• Maximum yearly increase $100/month (formerly unequal method) . • 2024 Monthly Retiree Caps are $917.53, $1,827.48 and $2,047.26 for Single, Dual and Family coverages respectively
• Active Members contribute $50 semi-monthly
Tier 2 • Eligibility:
Hired before May 1, 2018 or January 1, 2018 depending on the MOU group Service or disability retirement under CalPERS directly from City • PEMHCA minimum benefit is paid monthly ($157/month in 2024, $158/month in 2025) Other
• City pays lifetime Kaiser Single Non-Medicare rate for retiree hired before October 1, 1984 with a special agreement.
• No dental, vision, or life benefits
Active employees 117
Inactive employees currently receiving benefits 80
Inactive employees entitled to, but not yet receiving benefits 10 207
Attachment A Agenda Report Page 84
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
10. OTHER POST EMPLOYMENT BENEFITS, Continued
Contributions
Following is a summary of the City's contribution policy:
The City pays retiree premiums outside of trust.
The City reimburses itself from the OPEB trust for a level % of OPEB cash benefit payments beginning Fiscal Year End 2030.
The Police and Fire Pension Plan assets are transferred to the OPEB trust once the Police and Fire Pension Plan no longer has participants. Thereafter all OPEB benefits are paid from the OPEB trust.
Net OPEB Liability
The City's net OPEB liability ("NOL") was measured as of June 30, 2024 and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation dated June 30, 2024 based on the following actuarial methods and assumptions:
Changes of Assumption
In Fiscal Year 2023/24, the discount rate was increased from 5.50% to 5.63% based on the municipal bond rate as of the measurement date and crossover test.
Actuarial Cost Method Entry Age Normal Cost, level percentage of payroll Expected Long Term Rate of Return on
Investments • 5.75% at June 30, 2024
• 5.75% at June 30, 2023
20-Year Municipal Bond • 3.93% at June 30, 2024
(Bond Buyer 20-Bond GO) • 3.65% at June 30, 2023
Discount Rate • 5.63% at June 30, 2024
• 5.50% at June 30, 2023
General Inflation 2.50% annually
Mortality, Retirement, Disability,
Termination CalPERS 2000-2019 Experience Study
Mortality Improvement Mortality projected fully generational with Scale MP-2021 Salary increases • Aggregate - 2.75% annually
• Merit - CalPERS 2000-2019 Experience Study
Medical Trend • Non-Medicare - 7.90% for 2026, decreasing to an ultimate rate of 3.45% in 2076 • Medicare:
Kaiser: 5.65% for 2026, decreasing to an ultimate rate of 3.45% in 2076 Non-Kaiser: 6.90% for 2026, decreasing to an ultimate rate of 3.45% in 2076 PEMHCA Minimum Increases Increase 3.50% annually
Participation at Retirement • Currently covered (Tier 1): 95% • Currently covered (Tier 2): 60% (eligible for PEMHCA minimum only) • Currently waived - 40%
Spouse Coverage at Retirement • Based on current election, 80% if currently waived Family Coverage at • Miscellaneous - 20% until age 65
• Safety - 35% until age 65
Attachment A Agenda Report Page 85
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
10. OTHER POST EMPLOYMENT BENEFITS, Continued
Discount Rate
The discount rate used to measure the total OPEB liability was 5.63 percent. The table below reflects longterm expected real rates of return presented as geometric means.
Changes in the Net OPEB Liability
Sensitivity of the Net OPEB Liability to Changes in the Discount Rate The following presents the Net OPEB Liability of the City if it were calculated using a discount rate that is one percentage-point lower or one percentage-point higher than the current rate, for measurement period ended June 30, 2024:
Asset Class Component
Target Allocation
Osterweis Fund
Investment Policy
Allocation
Equity 65% 4.29%
Fixed Income 35% 0.78%
Assumed Long-term Rate of Inflation 2.50%
Expected Long-term Net Rate of Return, Rounded 5.75%
Total OPEB
Liability
(a)
Plan Fiduciary
Net Position
(b)
Net OPEB
Liability/(Asset)
(c) = (a) - (b)
Balance at July 1, 2023 20,285,703 $ 12,085,030 $ 8,200,673 $ Service cost 590,983 - 590,983
Interest cost 1,115,564 - 1,115,564
Assumption changes 727,831 - 727,831
Actual vs. expected experience (474,069) - (474,069)
Contributions- employer - 1,191,070 (1,191,070)
Contributions - employee - 54,200 (54,200)
Net investment income - 2,077,094 (2,077,094)
Benefit payments (1,187,428) (1,187,428) -
Administrative expenses - (3,642) 3,642
Net change 772,881 2,131,294 (1,358,413)
Balance at June 2024 21,058,584 $ 14,216,324 $ 6,842,260 $ 1% Decrease
(4.63%)
Current Discount
Rate
(5.63%)
1% Increase
(6.63%)
Net OPEB Liability 9,451,575 $ $ 6,842,260 $ 4,681,568
Attachment A Agenda Report Page 86
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
10. OTHER POST EMPLOYMENT BENEFITS, Continued
Sensitivity of the Net OPEB Liability to Changes in the Health Care Cost Trend Rate The following represents the net OPEB liability of the City if it were calculated using health care cost trend rates that are one percentage-point lower or one percentage-point higher than the current rate (NonMedicare 7.90% decreasing to 3.75%, Medicare 6.90% decreasing to 3.45%), for measurement period ended June 30, 2024:
OPEB Expenses and Deferred Outflows/Inflows of Resources Related to OPEB For the fiscal year ended June 30, 2024, the City recognized OPEB expense/(credit) of $(346,528). As of fiscal year ended June 30, 2024, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:
Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized as follows:
1% Decrease
Current
Healthcare
Cost Trend Rate 1% Increase
Net OPEB Liability 4,713,976 $ $ 6,842,260 $ 9,464,853
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Differences between expected and actual experience - $ 1,389,468 $ Changes in assumptions 999,584 900,410
Net difference between projected and actual earnings
on plan investments - 919,130
Total 999,584 $ 3,209,008 $
For the Fiscal Year
Ending in 30, June
Recognized Net Deferred
Outflows (Inflows) of
Resources
2025 $ (1,029,429)
2026 (204,049)
2027 (788,986)
2028 (249,170)
2029 35,689
Thereafter 26,521
Attachment A Agenda Report Page 87
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
11. FUND BALANCE
GASB Statement No. 54, “Fund Balance Reporting and Governmental Fund Type Definitions” provides more clearly defined fund balance categories to make the nature and extent of the constraints placed on a government’s fund balances more transparent. The following classifications describe the relative strength of the spending constraints:
Non Spendable: Amounts that cannot be spent because they are either (a) not in spendable form (not expected to be converted to cash) or (b) legally or contractually required to be maintained intact.
Restricted: Amounts subject to externally enforceable legal restrictions or constrained for a specific purpose by external parties, constitutional provisions, or enabling legislation. This fund balance type is essentially the same definition as restricted net position under GASB Statement No. 34.
Committed: Amounts that can only be used for specific purposes pursuant to constraints imposed by the formal action of City Council. Committed amounts cannot be used for any other purpose unless the government removes or changes the specified use by taking the same type of action (legislation, resolution, ordinance) it employed to previously commit those amounts. Action to constrain resources must occur prior to year-end; however, the amount can be determined in the subsequent period.
Assigned: Amounts that are not restricted by the funding agency but are for specific purposes and assigned by City Council for that purpose. City Council's action in creating the fund is to ensure that the funds are used for their intended purpose. That purpose is not always planned for the current fiscal year as it may take several years to build up a sufficient fund balance to be able to implement the stated purpose. This classification also represents all remaining amounts (except negative balances) reported in governmental funds, other than the general fund, that are not classified as non-spendable, restricted, or committed.
Unassigned: Residual amounts in the general fund, not classified as non-spendable, restricted, committed, or assigned. For other governmental fund types, unassigned is only used when a deficit or negative fund balance occurs.
The City Council establishes (and modifies or rescinds) fund balance commitments by approval of a resolution. Currently, the City Council has not committed any fund balances. The City Council delegates authority to the Finance Director to assign amounts to be used for specific purposes. Assignments are less formal than commitments and can be changed by the Finance Director.
The accounting policies of the City consider restricted fund balance to have been spent first when an expenditure is incurred for the purposes for which both restricted and unrestricted fund balance is available. Similarly, when an expenditure is incurred for purposes for which amounts in any of the unrestricted classifications of fund balance could be used, the City considers committed amounts to be reduced first, followed by assigned amounts, as appropriate opportunities arise, but reserves the right to selectively spend unassigned resources first to defer the use of these other classified funds.
Attachment A Agenda Report Page 88
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
11. FUND BALANCE, Continued
As of June 30, 2024, fund balances were comprised of the following:
12. RISK MANAGEMENT
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions, and natural disasters. The City manages risk by participating in the public entity risk pools described below and by retaining certain risks.
Public entity risk pools are formally organized separate entities established under the Joint Exercise of Powers Act of the State of California. As separate legal entities, these risk pools exercise full powers and authorities within the scope of the related Joint Powers Agreements including the preparation of annual budgets, accountability for all funds, the power to make and execute contracts and the right to sue and be sued. Each risk pool is governed by a board consisting of representatives from member municipalities.
Each board controls the operations of the respective risk pool, including selection of management and approval of operating budgets, independent of any influence by member municipalities beyond their representation on the board. Obligations and liabilities of these risk pools are the City’s responsibility.
Nonmajor Total
General Facilities Governmental Governmental
Classifications Fund Capital Funds Funds
Nonspendable:
Prepaid expenses 88,377 $ - $ - $ 88,377 $
Total Nonspendable - 88,377 - 88,377
Restricted:
Projects and services - - 1,210,293 1,210,293
Street projects - - 246,688 246,688
Schoolmates program - - 1,786,350 1,786,350
Measure D - - 61,930 61,930
Measure BB sales tax - - 1,709,357 1,709,357
COPS - - 421,068 421,068
Measure F - - 103,856 103,856
Athletic facility preservation - - 576,310 576,310
Abandoned vehicle - - 52,114 52,114
Section 115 Trust 4,798,032 - - 4,798,032
Total Restricted 4,798,032 6,167,966 - 10,965,998
Assigned
Facilities maintenance 10,457,363 - 377,728 10,835,091
Equipment replacement - 3,730,562 - 3,730,562
Sidewalk repair - 19,988 - 19,988
Total Committed 10,457,363 - 4,128,278 14,585,641
Unassigned: 8,480,579 (22,946) - 8,457,633
Total Unassigned 8,480,579 (22,946) - 8,457,633
Total Fund Balances $ 13,366,988 $ 10,457,363 $ 10,273,298 $ 34,097,649 Attachment A Agenda Report Page 89
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
12. RISK MANAGEMENT, Continued
A. Risk Pools
General Liability - Bay Cities Joint Powers Insurance Authority (BCJPIA) covers general liability claims, including excess liability, in an amount up to $34,500,000. The City has a deductible or uninsured liability of up to $25,000 per claim. Once the City's deductible is met, BCJPIA becomes responsible for payment of all claims up to the limit. During the fiscal year ended June 30, 2024, the City contributed $1,060,587 for current year coverage.
Workers' Compensation - BCJPIA also covers workers' compensation liability in an amount up to $1,000,000 per claim. The City has a deductible or uninsured liability of up to $150,000 per claim. The Local Agency Workers' Compensation Excess Insurance Joint Powers Authority (LAWCX) covers workers' compensation claims in excess of $1,000,000 per claim up to $300,000,000. During the fiscal year ended June 30, 2024, the City contributed $583,740 for current year coverage.
Financial statements for BCJPIA and LAWCX may be obtained from Bickmore & Associates, 1750 Creekside Oaks Drive, Suite 200, Sacramento, CA 95833.
The City’s contribution with each risk pool equals the ratio of the City’s payroll to the total payrolls of all entities participating in the same layer of each program, in each program year. Actual surpluses or losses are shared according to a formula developed from overall loss costs and spread to member entities on a percentage basis after a retrospective rating.
B. Liability for Uninsured Claims
The City has retained the risk for the uninsured portion of the above claims as discussed above. Activity for the City's liability for uninsured claims was as follows for the year ended June 30, 2024:
2024 2023 2024 2023 2024 2023
Beginning balance 216,778 $ 87,267 $ 1,187,000 $ $1,014,000 1,403,778 $ $1,101,267 Incurred claims 109,248 238,893 557,903 405,015 667,151 643,908 Claims paid (74,680) (109,382) (471,903) (232,015) (546,583) (341,397) Ending Balance 251,346 $ 216,778$ 1,273,000 $ 1,187,000$ 1,524,346 $ 1,403,778 $ Current portion 73,587 $ 80,150$ $ 524,297 371,002$ 597,884$ $ 451,152 General Liability Workers' Compensation Total
Attachment A Agenda Report Page 90
City of Piedmont
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
13. PARCEL TAX
The City of Piedmont is required by the Municipal Code to refund or reduce subsequent taxes regarding any excess of the ending General Fund unencumbered fund balance over 25 percent of that year's General Fund expenditures. This calculation applies only to the City's General Fund and excludes the Deposits and Bonds, Traffic Safety, and Pension Rate Stabilization Trust Funds which are combined into the General Fund for financial reporting purposes. The unencumbered General Fund balance at June 30, 2024 did not exceed the 25 percent of expenditures limitation.
14. EXCESS EXPENDITURES OVER APPROPRIATIONS
No funds incurred expenditures in excess of appropriations in the following amounts for the year ended June 30, 2024.
15. CONTINGENCIES AND COMMITMENTS
Grant Awards
The City participates in certain federal and state assisted grant programs. These programs are subject to program compliance audits by the granters or their representatives. Any liability for reimbursement which may arise as the result of these audits is not believed to be material.
Litigation
The City is involved in several pending lawsuits of a nature common to many similar jurisdictions. City management estimates that potential claims against the City, not covered by insurance, will not have a material adverse effect on the financial statements of the City.
Contracts
At June 30, 2024, the City had construction contracts outstanding of approximately $14,642,158 related to various construction projects.
Amounts
General fund expenditures 36,100,675 $
Fund balance limitation, 25% of expenditures 9,025,169
Unencumbered General fund balance at year end 8,527,211 Amount below fund balance limitation 497,958 $
Attachment A Agenda Report Page 91
This page intentionally left blank
Attachment A Agenda Report Page 92
REQUIRED
SUPPLEMENTARY INFORMATION
Attachment A Agenda Report Page 93
This page intentionally left blank
Attachment A Agenda Report Page 94
City of Piedmont
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual General Fund
For the year ended June 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:
Property tax $ 18,110,000 $ 18,110,000 $ 18,449,197 $ 339,197 Sales tax 250,000 250,000 195,561 (54,439)
Franchise tax 607,000 607,000 601,234 (5,766)
Utility users tax 1,415,000 1,415,000 1,446,400 31,400
Real property transfer tax 3,400,000 3,400,000 4,086,499 686,499 Business license and rental tax 691,000 691,000 695,495 4,495 Licenses and permits 757,000 757,000 809,760 52,760
Intergovernmental 4,163,332 4,163,332 2,481,060 (1,682,272) Use of money and property 975,400 975,400 1,742,452 767,052 Current service charges 4,494,500 4,494,500 4,828,313 333,813 Parcel tax 2,622,000 2,622,000 2,621,746 (254)
Contributions and donations 28,000 28,000 35,284 7,284
Other revenues 497,900 497,900 572,655 74,755
Total revenues 38,011,132 38,011,132 38,565,656 554,524 EXPENDITURES:
Current:
Administration 4,425,281 4,443,252 4,280,618 162,634
Public works 7,554,984 7,570,334 5,941,295 1,629,039
Police services 8,197,633 8,197,633 7,973,848 223,785
Fire services 8,272,967 8,397,967 8,278,781 119,186
Recreation 3,583,567 3,583,567 3,902,196 (318,629)
Nondepartmental 3,947,471 3,947,471 3,838,148 109,323
Capital outlay 1,710,388 1,710,388 1,685,020 25,368
Debt service - principal - - 200,769 (200,769)
Total expenditures 37,692,291 37,850,612 36,100,675 1,749,937
REVENUES OVER (UNDER)
EXPENDITURES 318,841 160,520 2,464,981 2,304,461
OTHER FINANCING SOURCES (USES):
Transfers in - - 84,183 84,183
Transfers out (4,524,264) (4,524,264) (1,972,066) 2,552,198 Total other financing sources (uses) (4,524,264) (4,524,264) (877,495) 3,646,769 Net change in fund balances $ (4,205,423) $ (4,363,744) 1,587,486 $ 5,951,230 FUND BALANCES:
Beginning of year 11,779,502
End of year $ 13,366,988
Budgeted Amounts
Attachment A Agenda Report Page 95
City of Piedmont
Notes to Required Supplementary Information
Budgetary Accounting and Control
For the year ended June 30, 2024
BUDGETARY INFORMATION
BUDGETARY CONTROLS
The amounts reported as the original budgeted amounts in the budgetary schedules reflect the amounts when the original appropriations were adopted. The amounts reported as the final budgeted amounts in the budgetary schedules reflect the amounts after all budget amendments have been accounted for. The City did not formally adopt a budget for the Projects and Services, Abandoned Vehicle, Capital Improvement, and Sidewalk Repair nonmajor capital project funds.
Budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America. The City Council approves total appropriations on a department basis. Budgetary comparison schedules are presented for all funds. The budgetary comparison schedules present both the original adopted budget and the final budget with all amendments.
Attachment A Agenda Report Page 96
This page intentionally left blank
Attachment A Agenda Report Page 97
City of Piedmont
Required Supplementary Information
For the year ended June 30, 2024
Schedule of the City's Proportionate Share of the Net Pension Liability - Last Ten Fiscal Years Miscellaneous and Safety Plan, Cost Sharing Defined Benefit Pension Plan Measurement Date 2014 2015 2016 2017
Plan's proportion of the net pension liability 0.24773% 0.24111% 0.25701% 0.2620% Plan's proportionate share of
the net pension liability $ 15,419,642 $ 16,549,792 $ 22,238,992 $ 25,982,764 Plan's covered payroll $ 8,752,938 $ 9,157,966 $ 9,305,356 $ 9,471,727 Plan's proportionate share of
the net pension liability as percentage
of its covered payroll 176.17% 180.71% 238.99% 274.32%
Fiduciary net position as a percentage of the
total pension liability 79.82% 78.40% 74.06% 73.29%
Notes to the schedule:
Changes in assumptions. In 2023, the inflation rate was reduced from 2.50 percent to 2.30 percent. In 2022, the accounting discount rate was reduced from 7.15 percent to 6.90 percent. In 2021, 2020 and 2019, there were no changes in assumptions. In 2018, assumptions for individual salary increases and overall payroll growth are reduced from 3.00 percent to 2.75 percent. In 2017, the accounting discount rate was reduced from 7.65 percent to
7.15 percent. In 2016, there were no changes. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pension administrative expense). In 2014, amounts reported were based on the 7.5 percent discount rate.
Attachment A Agenda Report Page 98
2018 2019 2020 2021 2022 2023
0.2700% 0.2790% 0.2900% 0.3300% 0.3250% 0.3289%
$ 26,035,468 $ 28,550,576 $ 31,550,977 $ 17,867,729 $ 37,545,626 $ 41,035,485 $ 10,265,025 $ 10,517,384 $ 10,804,215 $ 11,098,592 $ 10,824,143 $ 12,213,712 253.63% 271.46% 292.02% 160.99% 346.87% 335.98%
75.30% 75.30% 75.10% 88.29% 76.68% 76.21%
Attachment A Agenda Report Page 99
City of Piedmont
Required Supplementary Information
For the year ended June 30, 2024
Schedule of Pension Plan Contributions - Last 10 Fiscal Years Miscellaneous and Safety Plan, Cost Sharing Defined Benefit Pension Plan Fiscal Year Ended 2015 2016 2017 2018
Actuarially determined contribution $ 1,934,849 $ 2,072,601 $ 2,295,957 $ 2,521,862 Contributions in relation to actuarially
deemed contributions (1,934,849) (2,072,601) (2,295,957) (2,521,862) Contribution deficiency (excess) $ - $ - $ - $ -
Covered payroll $ 9,157,966 $ 9,305,356 $ 9,471,727 $ 10,265,025 Contributions as a percentage of
covered payroll 21.13% 22.27% 24.24% 24.57%
Attachment A Agenda Report Page 100
2019 2020 2021 2022 2023 2024
$ 2,920,619 $ 3,367,402 $ 3,776,944 $ 4,176,329 $ 4,457,038 $ 4,588,090 (2,920,619) (3,367,402) (3,776,944) (4,176,329) (4,457,038) (4,588,090) $ - $ - $ - $ - $ - $ -
$ 10,517,384 $ 10,804,215 $ 11,098,592 $ 10,824,143 $ 12,213,712 $ 13,034,190
27.77% 31.17% 34.03% 38.58% 36.49% 35.20%
Attachment A Agenda Report Page 101
City of Piedmont
Required Supplementary Information
For the year ended June 30, 2024
Schedule of Funding Progress for Police and Fire Pension (Closed) Plan - Last Fiscal 10 Years Measurement Date 2015 2016 2017 2018
TOTAL PENSION LIABILITY
Interest $ 148,653 $ 141,412 $ 119,038 $ 112,356
Differences between expected and
actual experience (270,454) - 74,556 -
Changes in assumptions - - (93,912) -
Benefit payments, including refunds of employee
contributions (287,175) (251,005) (233,036) (227,770)
Net change in the total pension liability (138,522) (380,047) (113,998) (134,770) Total pension liability - beginning 2,619,053 2,480,531 2,100,484 1,986,486 Total pension liability - ending (a) $ 2,480,531 $ 2,100,484 $ 1,986,486 $ 1,851,716
PLAN FIDUCIARY NET POSITION
Net investment income $ 213,159 $ (539,063) $ 1,321,041 $ 649,249 Benefit payments (287,175) (251,005) (233,036) (227,770) Administrative expense (2,025) - (7,183) (3,405)
Net change in plan fiduciary net position (74,016) (792,093) 1,080,822 418,074 Plan fiduciary net position - beginning 11,719,273 11,645,257 10,853,164 11,933,986 Plan fiduciary net position - ending (b) $ 11,645,257 $ 10,853,164 $ 11,933,986 $ 12,352,060 Net pension liability - ending (a) - (b) $ (9,164,726) $ (8,752,680) $ (9,947,500) $ (10,500,344) Plan fiduciary net position as a percentage of the
total pension liability 469% 517% 601% 1115%
Covered employee payroll $ - $ - $ - $ -
Net pension liability as a percentage of covered
payroll N/A N/A N/A N/A
Attachment A Agenda Report Page 102
2019 2020 2021 2022 2023 2024
$ 104,393 $ 97,631 $ 93,213 $ 83,881 $ 68,827 $ 65,077
25,239 - (168,860) - (395,874) -
(15,617) - 46,239 (23,006) - -
(223,674) (210,488) (151,293) (184,495) (146,959) (127,061) (119,281) (103,235) (11,841) (292,480) (78,132) (457,858) 1,851,716 1,732,435 1,629,200 1,617,359 1,324,879 1,246,747 $ 1,732,435 $ 1,629,200 $ 1,617,359 $ 1,324,879 $ 1,246,747 $ 788,889 $ 833,644 $ 902,277 $ 3,914,153 (2,452,693) 1,514,029 2,579,341 (223,674) (210,488) (151,293) (184,495) (146,959) (127,061) (12,000) (1,350) - - - -
597,970 690,439 3,762,860 (2,637,188) 1,367,070 2,452,280 12,352,060 12,950,030 13,640,469 17,403,329 14,766,141 16,133,211 $ 12,950,030 $ 13,640,469 $ 17,403,329 $ 14,766,141 $ 16,133,211 $ 18,585,491 $ (11,217,595) $ (12,011,269) $ (15,785,970) $ (13,441,262) $ (14,886,464) $ (17,796,602) 1076% 837% 748% 667% 1294.02% 2355.91%
$ - $ - $ - $ - $ - $ -
N/A N/A N/A N/A N/A N/A
Attachment A Agenda Report Page 103
City of Piedmont
Required Supplementary Information
For the year ended June 30, 2024
Schedule of Funding Progress for Police and Fire Pension (Closed) Plan - Last Fiscal 10 Years Employer Actuarially Determined Contribution for fiscal year June 30, 2024:
Actuarially
Determined Contribution
Actuarial Contribution Employer Deficiency ADC as a % of Valuation Date (ADC) Contributions (Excess) Covered Payroll Covered Payroll 2015 $ - $ - $ - $ N/A -
2016 - - - N/A -
2017 - - - N/A -
2018 - - - N/A -
2019 - - - N/A -
2020 - - - N/A -
2021 - - - N/A -
2022 - - - N/A -
2023 - - - N/A -
2024 - - - N/A -
The actuarially determined contribution is based on the same assumptions as the net pension liability (asset).
Attachment A Agenda Report Page 104
This page intentionally left blank
Attachment A Agenda Report Page 105
City of Piedmont
Required Supplementary Information
For the year ended June 30, 2024
Schedule of Changes in the Net OPEB Liability and Related Ratios - Last 10 Fiscal Years* (Amounts in 000's) Measurement Date 2018 2019 2020 2021
Total OPEB Liability
Service cost $ 944 1,179 $ 948 $ 675 $
Interest 1,155 1,361 1,225 1,155
Changes of benefit terms - (1,104) - -
Differences between expected and actual experience - (4,473) (1,743) - Changes of assumptions 355 (2,016) (2,620) 1,331
Benefit payments (641) (562) (772) (832)
Net change in the total OPEB liability (5,615) 1,813 (2,962) 2,329 Total OPEB liability - beginning 25,842 20,227 22,040 19,078 Total OPEB liability - ending (a) 20,227 22,040 19,078 21,407 Plan Fiduciary Net Position
Contribution - employer 1,028 642 774 834
Contributions - employee - 161 89 97
Net investment income 441 597 580 2,886
Benefit payments (562) (641) (772) (832)
Administrative expense (2) (1) (2) (2)
Net change in plan fiduciary net position 758 905 669 2,983 Plan fiduciary net position - beginning 7,171 8,076 8,834 9,503 Plan fiduciary net position - ending (b) 8,076 8,834 9,503 12,486 Net OPEB liability/asset - ending (a) - (b) $ 12,151 $ 13,206 $ 9,575 $ 8,921 Plan fiduciary net position as a percentage
of the total OPEB liability 39.93% 40.08% 49.81% 58.33% Covered-employee payroll 11,022 $ 11,344 $ 12,373 $ 13,111 $ Net OPEB liability as a percentage of coveredemployee payroll 110.24% 116.41% 77.39% 68.04% Notes to Schedule:
Changes of assumptions: For the measurement period ended June 30, 2024, the 20-Year Municipal Bond rate was changed from
3.65% to 3.93% and the discount rate was changed from 5,50% to 5.63%. For the measurement period ended June 30, 2023, the discount rate was changed from 5.47% to 5.50%. For the measurement period ended June 30, 2021, general inflation was lowered from 2.75% to 2.5%, the long-term rate of return was lowered from 6.5% to 5.5% based on capital market assumption review and the lower inflation rate, and the discount rate was updated based on crossover test from 5.22% to 5.47%. For the measurement period ended June 30, 2020, the discount rate was updated based on the crossover test, the long-term rate of return was updated due to change in the target asset allocation, Kaiser Medicare Health Trend was updated, Medicare eligibility and family coverage at retirement rates were updated based on the City's experience, and the mortality improvement scale was updated to Scale MP-2019. For the measurement period ended June 30, 2019, the discount rate was changed from 5.54 percent (net of administrative expense) to 5.42 percent. * Schedule is intended to show information for ten years. Fiscal year 2018 was the first year of implementation, therefore only seven years are shown. Additional years' information will be displayed as it becomes available.
Attachment A Agenda Report Page 106
2022 2023 2024
$ 754 $ 579 $ 591
1,132 1,084 1,115
247 - -
(1,626) - (474)
(1,168) (68) 728
(949) (1,106) (1,188)
(1,610) 489 772
21,407 19,797 20,287
19,797 20,287 21,059
952 1,109 1,191
73 61 54
(1,728) 1,193 2,077
(949) (1,106) (1,187)
(2) (3) (4)
(1,654) 1,254 2,131
12,486 10,832 12,086
10,832 12,086 14,216
$ 8,965 $ 8,201 $ 6,842
54.72% 59.58% 67.50%
$ 14,167 13,657 $ 14,886 $
65.64% 57.89% 45.96%
Attachment A Agenda Report Page 107
City of Piedmont
Required Supplementary Information
For the year ended June 30, 2024
Schedule of OPEB Contributions - Last 10 Fiscal Years* (Amounts in 000's) Fiscal Year Ended June 30, 2018 2019 2020 2021
Actuarially determined contribution 1,028 $ 642 $ 774 $ 834 $ Contributions in relation to the actuarially
determined contribution (1,028) (642) (774) (834)
Contribution deficiency (excess) - $ - $ - $ - $
Covered employee payroll 11,022 $ 11,344 $ 12,373 $ 13,111 $ Contributions as a percentage of
covered employee payroll -9.33% -5.66% -6.26% -6.36%
* Schedule is intended to show information for ten years. Fiscal year 2018 was the first year of implementation, therefore only six years are shown. Additional years' information will be displayed as it becomes available. ** The City contributes $100 per month for every Tier 1 active employee in addition to contributing the pay-as-you go cost
Attachment A Agenda Report Page 108
2022 2023 2024
$ 951 $ 1,109 $ 1,191
(951) (1,109) (1,191)
$ - $ - $ -
$ 13,657 $ 14,167 $ 14,886
-6.96% -7.83% -8.00%
Attachment A Agenda Report Page 109
This page intentionally left blank
Attachment A Agenda Report Page 110
SUPPLEMENTARY INFORMATION
Attachment A Agenda Report Page 111
This page intentionally left blank
Attachment A Agenda Report Page 112
City of Piedmont
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Facilities Capital - Major Capital Projects Fund
For the year ended June 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:
Use of money and property $ 92,000 $ 92,000 $ 572,179 $ 480,179 Total revenues 92,000 92,000 572,179 480,179
EXPENDITURES:
Current:
Administration - - 4,765 (4,765)
Public works 100,000 100,000 8,224 91,776
Recreation 525,000 525,000 270,925 254,075
Capital outlay 5,561,000 5,561,000 743,733 4,817,267
Total expenditures 6,186,000 6,186,000 1,027,647 5,158,353
REVENUES OVER (UNDER)
EXPENDITURES (6,094,000) (6,094,000) (455,468) 5,638,532 OTHER FINANCING SOURCES (USES):
Transfers in 2,184,264 2,184,264 322,066 (1,862,198)
Transfers out (400,000) (400,000) (207,204) 192,796
Total other financing sources (uses) 1,784,264 1,784,264 114,862 (1,669,402) Net change in fund balances $ (4,309,736) $ (4,309,736) (340,606) $ 3,969,130 FUND BALANCES:
Beginning of year 10,797,969
End of year $ 10,457,363
Budgeted Amounts
Attachment A Agenda Report Page 113
This page intentionally left blank
Attachment A Agenda Report Page 114
City of Piedmont
Nonmajor Governmental Funds
The following funds are reported in total on the Governmental Fund Financial Statements under the column Other Governmental Funds.
Special Revenue Funds
Streets Projects
Accounts for revenues and expenditures associated with the maintenance and improvements of the City's roads and street landscaping that is funded through the receipt of the City's share of gas tax.
Schoolmates Program
Accounts for the operating of the before-and-after school child care program for elementary school age children operated by the Piedmont Recreation Department.
Projects and Services
Accounts for the Private Contribution Fund. The Private Contribution Fund is used to account for all citizen and other private contributions and donations to the City.
Measure D
Accounts for surcharges collected for the continuation and expansion of municipal recycling programs.
Abandoned Vehicle
Accounts for abandoned vehicle abatement funding as the City is a participant in the Alameda County Abandoned Vehicle Program for receiving reimbursement of expenses arising from the investigation of reported abandoned vehicles.
Measure BB Sales Tax
Accounts for a tax approved by Alameda County voters in November 2014 to provide for the direct funding for local streets projects and bicycle and pedestrian projects based on population and road mileage.
COPS
Accounts for revenues and expenditures of the State of California funded Supplemental Law Enforcement Services grant.
Measure F
Accounts for the additional $10 fee associated with registering a vehicle in the County. Fees are restricted to reduce traffic congestion and vehicle related pollution.
Athletic Facility Preservation
Accounts for funds to be used for repairing, refurnishing, and replacing City athletic facilities.
Capital Projects Funds
Capital Improvement
Accounts for the City's major capital projects.
Sidewalk Repair
Accounts for the sidewalk reimbursement revenue associated with the repair/replacement of City sidewalks under article V, section
18.26 of the City code.
Equipment Replacement Fund
Accounts for the accumulation of resources used for the replacement of capital assets used by governmental funds.
Facilities Maintenance Fund
Accounts for the accumulation of resources for the maintenance of capital assets used by governmental funds.
Attachment A Agenda Report Page 115
City of Piedmont
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2024
ASSETS
Cash and investments 224,500$ $ 1,790,341 $ 1,210,293 53,826$ 51,795$ $ 1,524,152 Receivables:
Accounts Receivable 77,163 - 7,609 - 177,928 -
Interest Receivable 910 11,654 495 - 319 9,516
Advances to other funds - - - - - -
Total assets 302,573$ $ 1,801,995 $ 1,210,293 61,930$ 52,114$ $ 1,711,596 Liabilities:
Accounts payable 55,885$ $ 3,646 $ - -$ $ 2,239 - $
Accrued wages and benefits - 11,999 - - - -
Due to other funds - - - - - -
Total liabilities 55,885 15,645 - - 2,239 -
Deferred Inflows of Resources
Total deferred inflows of resources - - - - - -
Fund Balances:
Restricted 246,688 1,786,350 1,210,293 61,930 52,114 1,709,357 Assigned - - - - - -
Unassigned - - - - - -
Total fund balances 246,688 1,786,350 1,210,293 61,930 52,114 1,709,357 Total liabilities, deferred inflows of
resources and fund balances 302,573$ $ 1,801,995 $ 1,210,293 61,930$ 52,114$ $ 1,711,596 Special Revenue Funds
Streets
Projects
Schoolmates
Program
Projects and
Services Measure D
Abandoned
Vehicle
Measure BB
Sales Tax
Attachment A Agenda Report Page 116
Total Nonmajor
Governmental
Funds
431,094$ 95,910$ $ 572,755 $ 19,988$ - $ 3,143,077 $ 667,473 $ 9,785,204 - 7,367 - - - - - 270,067
3,064 579 3,555 - - 14,901 3,536 48,529
- - - - - 600,000 200,000 800,000
434,158$ 103,856$ $ 576,310 $ 19,988$ - $ 3,757,978 $ 871,009 $ 10,903,800 13,090$ -$ $ - $ - -$ 27,416 $ $ 493,281 $ 595,557
- - - - - - - 11,999
- - 22,946 - - - - 22,946
13,090 - 22,946 - - 27,416 493,281 630,502
- - - - - - - -
421,068 103,856 576,310 - - - 6,167,966 -
- - - 19,988 - 3,730,562 377,728 4,128,278
- - (22,946) - - - - (22,946)
421,068 103,856 576,310 (22,946) 19,988 3,730,562 377,728 10,273,298 434,158$ 103,856$ $ 576,310 $ 19,988$ - $ 3,757,978 $ 871,009 $ 10,903,800 Special Revenue Funds
COPS Measure F
Athletic
Facility
Preservation
Capital Projects
Capital
Improvement
Sidewalk
Repair
Equipment
Replacement
Facilities
Maintenance
Attachment A Agenda Report Page 117
City of Piedmont
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds
For the year ended June 30, 2024
REVENUES:
Gas tax 592,823$ $ - $ - -$ $ - $ -
Intergovernmental - - - - 3,132 1,054,436
Use of money and property 18,398 80,744 3,357 - 2,628 57,163 Current service charges - 1,546,448 - - - -
Contributions and donations - 804,000 - - - -
Other revenues - - 36,476 - - -
Total revenues 611,221 1,627,192 804,000 39,833 5,760 1,111,599 EXPENDITURES:
Current:
Administration - - - - - -
Public works - - 7,337 - - -
Street improvement 714,668 - - - - -
Public Safety:
Police services - - - - - -
Fire services - - - - - -
Recreation 1,027,294 - - - - -
Capital outlay - - - - - 141,423
Total expenditures 714,668 1,027,294 7,337 - 141,423 -
REVENUES OVER (UNDER)
EXPENDITURES (103,447) 599,898 804,000 32,496 5,760 970,176 OTHER FINANCING SOURCES (USES):
Transfers in - - - - - -
Transfers out - (29,910) (817,876) (25,071) - -
Total other financing sources (uses) - (29,910) (817,876) (25,071) - - Net change in fund balances (103,447) 569,988 (13,876) 7,425 5,760 970,176 FUND BALANCES:
Beginning of year 350,135 1,216,362 1,224,169 54,505 46,354 739,181 End of year $ 246,688 $ 1,786,350 $ 1,210,293 $ 61,930 $ 52,114 $ 1,709,357 Special Revenue Funds
Streets
Projects
Schoolmates
Program
Projects and
Services Measure D
Abandoned
Vehicle
Measure BB
Sales Tax
Attachment A Agenda Report Page 118
Total Nonmajor
Governmental
Funds
-$ -$ $ - $ - -$ $ - $ - $ 592,823
169,311 43,884 - - - - 1,270,763 -
27,753 3,908 27,860 (108) - 146,800 16,070 384,573
- - 74,038 - - - 1,620,486 -
- - 36,275 - - - - 840,275
- - - - - - - 36,476
197,064 47,792 138,173 (108) - 146,800 16,070 4,745,396 - - - - - 4,994 23,098 28,092
- - - 3,480 - 21,115 - 31,932
- - - - - - - 714,668
38,500 - - - - 13,900 - 52,400
- - - - - 30,593 - 30,593
- - - - - 256,772 - 1,284,066
196,887 - 50,000 - - 790,600 753,080 1,931,990
235,387 - 50,000 - 3,480 795,594 1,098,558 4,073,741
(38,323) 47,792 138,173 (50,108) (3,480) (648,794) (1,082,488) 671,655 - - - - - 800,000 888,810 1,688,810
(45,136) - - - - - (917,993) -
(45,136) - - - - 800,000 888,810 770,817
(83,459) 47,792 138,173 (50,108) (3,480) 151,206 (193,678) 1,442,472 504,527 56,064 438,137 27,162 23,468 3,579,356 571,406 8,830,826 $ 421,068 $ 103,856 $ 576,310 $ (22,946) $ 19,988 $ 3,730,562 $ 377,728 $ 10,273,298 Special Revenue Funds
COPS Measure F
Athletic
Facility
Preservation
Capital Projects
Capital
Improvement
Sidewalk
Repair
Equipment
Replacement
Facilities
Maintenance
Attachment A Agenda Report Page 119
City of Piedmont
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Streets Projects - Special Revenue Fund
For the year ended June 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:
Gas tax $ 600,904 $ 600,904 $ 592,823 $ (8,081)
Use of money and property (545,000) (545,000) 18,398 563,398 Total revenues 55,904 55,904 611,221 555,317
EXPENDITURES:
Current:
Street improvement 280,000 280,000 714,668 (434,668)
Total expenditures 280,000 280,000 714,668 (434,668)
REVENUES OVER (UNDER)
EXPENDITURES (224,096) (224,096) (103,447) 120,649
Net change in fund balances $ (224,096) $ (224,096) (103,447) $ 120,649 FUND BALANCES:
Beginning of year 350,135
End of year $ 246,688
Budgeted Amounts
Attachment A Agenda Report Page 120
City of Piedmont
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Schoolmates Program - Special Revenue Fund
For the year ended June 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:
Use of money and property $ 15,000 $ 15,000 $ 80,744 $ 65,744 Current service charges 1,410,000 1,410,000 1,546,448 136,448 Total revenues 1,425,000 1,425,000 1,627,192 202,192
EXPENDITURES:
Current:
Public safety:
Recreation 1,433,377 1,433,377 1,027,294 406,083
Total expenditures 1,433,377 1,433,377 1,027,294 406,083
REVENUES OVER (UNDER)
EXPENDITURES (8,377) (8,377) 599,898 608,275
OTHER FINANCING SOURCES (USES):
Transfers out (170,000) (170,000) (29,910) 140,090
Total other financing sources (uses) (170,000) (170,000) (29,910) 140,090 Net change in fund balances $ (178,377) $ (178,377) 569,988 $ 748,365 FUND BALANCES:
Beginning of year 1,216,362
End of year $ 1,786,350
Budgeted Amounts
Attachment A Agenda Report Page 121
City of Piedmont
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Measure D - Special Revenue Fund
For the year ended June 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:
Use of money and property $ 1,000 $ 1,000 $ 3,357 $ 2,357 Other revenues 35,000 35,000 36,476 1,476
Total revenues 36,000 36,000 39,833 3,833
EXPENDITURES:
Current:
Public works 35,000 35,000 7,337 27,663
Public safety:
Total expenditures 35,000 35,000 7,337 27,663
REVENUES OVER (UNDER)
EXPENDITURES 1,000 1,000 32,496 31,496
OTHER FINANCING SOURCES (USES):
Transfers out - - (25,071) (25,071)
Total other financing sources (uses) - - (25,071) (25,071) Net change in fund balances $ 1,000 $ 1,000 7,425 $ 6,425 FUND BALANCES:
Beginning of year 54,505
End of year $ 61,930
Budgeted Amounts
Attachment A Agenda Report Page 122
City of Piedmont
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Measure BB Sales Tax - Special Revenue Fund
For the year ended June 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:
Intergovernmental $ 1,160,000 $ 1,160,000 $ 1,054,436 $ (105,564) Use of money and property 4,000 4,000 57,163 53,163
Total revenues 1,164,000 1,164,000 1,111,599 (52,401)
EXPENDITURES:
Current:
Public safety:
Capital outlay 1,800,000 1,800,000 141,423 1,658,577
Total expenditures 1,800,000 1,800,000 141,423 1,658,577
REVENUES OVER (UNDER)
EXPENDITURES (636,000) (636,000) 970,176 1,606,176
Net change in fund balances $ (636,000) $ (636,000) 970,176 $ 1,606,176 FUND BALANCES:
Beginning of year 739,181
End of year $ 1,709,357
Budgeted Amounts
Attachment A Agenda Report Page 123
City of Piedmont
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual COPS - Special Revenue Fund
For the year ended June 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:
Intergovernmental $ 130,000 $ 130,000 $ 169,311 $ 39,311 Use of money and property 7,000 7,000 27,753 20,753
Total revenues 137,000 137,000 197,064 60,064
EXPENDITURES:
Current:
Public safety:
Police services 380,000 380,000 38,500 341,500
Capital outlay - - 196,887 (196,887)
Total expenditures 380,000 380,000 235,387 144,613
REVENUES OVER (UNDER)
EXPENDITURES (243,000) (243,000) (38,323) 204,677
OTHER FINANCING SOURCES (USES):
Transfers out - - (45,136) (45,136)
Total other financing sources (uses) - - (45,136) (45,136) Net change in fund balances $ (243,000) $ (243,000) (83,459) $ 159,541 FUND BALANCES:
Beginning of year 504,527
End of year $ 421,068
Budgeted Amounts
Attachment A Agenda Report Page 124
City of Piedmont
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Measure F - Special Revenue Fund
For the year ended June 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:
Intergovernmental $ 40,000 $ 40,000 $ 43,884 $ 3,884
Use of money and property 1,000 1,000 3,908 2,908
Total revenues 41,000 41,000 47,792 6,792
EXPENDITURES:
Current:
Capital outlay 90,000 90,000 - 90,000
Total expenditures 90,000 90,000 - 90,000
REVENUES OVER (UNDER)
EXPENDITURES (49,000) (49,000) 47,792 96,792
Net change in fund balances $ (49,000) $ (49,000) 47,792 $ 96,792 FUND BALANCES:
Beginning of year 56,064
End of year $ 103,856
Budgeted Amounts
Attachment A Agenda Report Page 125
City of Piedmont
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Athletic Facility Preservation - Special Revenue Fund
For the year ended June 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:
Use of money and property $ 7,000 $ 7,000 $ 27,860 $ 20,860 Current service charges 65,000 65,000 74,038 9,038
Contributions and donations - - 36,275 36,275
Total revenues 72,000 72,000 138,173 66,173
EXPENDITURES:
Current:
Public safety:
Recreation 40,000 40,000 - 40,000
Total expenditures 40,000 40,000 - 40,000
REVENUES OVER (UNDER)
EXPENDITURES 32,000 32,000 138,173 106,173
Net change in fund balances $ 32,000 $ 32,000 138,173 $ 106,173 FUND BALANCES:
Beginning of year 438,137
End of year $ 576,310
Budgeted Amounts
Attachment A Agenda Report Page 126
City of Piedmont
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Equipment Replacement - Capital Projects
For the year ended June 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:
Use of money and property $ 50,000 $ 50,000 $ 146,800 $ 96,800 Total revenues 50,000 50,000 146,800 96,800
EXPENDITURES:
Current:
Administration 64,000 64,000 4,994 59,006
Public safety:
Capital outlay 1,975,000 1,975,000 790,600 1,184,400
Total expenditures 2,039,000 2,039,000 795,594 1,243,406
REVENUES OVER (UNDER)
EXPENDITURES (1,989,000) (1,989,000) (648,794) 1,340,206 OTHER FINANCING SOURCES (USES):
Transfers in 690,000 690,000 800,000 110,000
Total other financing sources (uses) 690,000 690,000 800,000 110,000 Net change in fund balances $ (1,299,000) $ (1,299,000) 151,206 $ 1,450,206 FUND BALANCES:
Beginning of year 3,579,356
End of year $ 3,730,562
Budgeted Amounts
Attachment A Agenda Report Page 127
City of Piedmont
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Facilities Maintenance - Capital Projects
For the year ended June 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:
Use of money and property $ 19,000 $ 19,000 $ 16,070 $ (2,930) Total revenues 19,000 19,000 16,070 (2,930)
EXPENDITURES:
Current:
Administration 85,000 85,000 23,098 61,902
Public works 43,000 43,000 21,115 21,885
Public safety:
Police services 38,000 38,000 13,900 24,100
Fire services 155,000 155,000 30,593 124,407
Recreation 751,500 751,500 256,772 494,728
Capital outlay 700,000 700,000 753,080 (53,080)
Total expenditures 1,772,500 1,772,500 1,098,558 673,942
REVENUES OVER (UNDER)
EXPENDITURES (1,753,500) (1,753,500) (1,082,488) 671,012 OTHER FINANCING SOURCES (USES):
Transfers in 1,610,000 1,610,000 888,810 (721,190)
Total other financing sources (uses) 1,610,000 1,610,000 888,810 (721,190) Net change in fund balances $ (143,500) $ (143,500) (193,678) $ (50,178) FUND BALANCES:
Beginning of year 571,406
End of year $ 377,728
Budgeted Amounts
Attachment A Agenda Report Page 128
City of Piedmont
Internal Service Funds
Internal service funds are used to account for the financing of goods or services provided by one department or agency to other departments or agencies of the government and to other government units, on a cost reimbursement basis.
The concept of major funds does not extend to internal service funds because they do not do business with outside parties. For the Statement of Activities, the net revenues and expenses of each internal service fund are eliminated by netting them against operations of the City departments that generated them. The remaining balance sheet items are consolidated with these same funds in the Statement of Net Position. However, internal service funds are still presented separately in the fund financial statements.
Attachment A Agenda Report Page 129
This page intentionally left blank
Attachment A Agenda Report Page 130
City of Piedmont
Combining Statement of Net Position
Internal Service Funds
June 30, 2024
Totals
ASSETS
Current Assets:
Cash and investments 2,071,561 $ 513,665 $ 2,585,226 $
Total current assets 2,071,561 513,665 2,585,226
Total assets 513,665 2,071,561 2,585,226
LIABILITIES
Current liabilities:
Accounts payable 49,892 402 50,294
Claims payable - current 524,297 73,587 597,884
Total current liabilities 574,189 73,989 648,178
Noncurrent liabilities:
Claims payable 748,703 177,759 926,462
Total noncurrent liabilities 748,703 177,759 926,462
Total liabilities 1,322,892 251,748 1,574,640
NET POSITION
Unrestricted 748,669 261,917 1,010,586
Total net position $ 748,669 $ 261,917 $ 1,010,586
Workers'
Compensation
Insurance
Liabilities
Attachment A Agenda Report Page 131
City of Piedmont
Combining Statement of Revenues, Expenses and Changes in Net Position Internal Service Funds
For the year ended June 30, 2024
Totals
OPERATING REVENUES:
Total operating revenues $ - - $ - $
OPERATING EXPENSES:
Insurance and claims expense 1,456,612 1,179,677 2,636,289 Total operating expenses 1,456,612 1,179,677 2,636,289
Operating income (loss) (1,456,612) (1,179,677) (2,636,289) NONOPERATING REVENUES (EXPENSES):
Other income (expense) 1,456,612 1,179,677 2,636,289
Total nonoperating revenues (expenses) 1,456,612 1,179,677 2,636,289 Income before contributions and transfers - - -
CONTRIBUTIONS AND TRANSFERS:
Total contributions and transfers - - -
Change in net position - - -
NET POSITION:
Beginning of year 748,669 261,917 1,010,586
End of year $ 748,669 $ 261,917 $ 1,010,586
Workers'
Compensation
Insurance
Liabilities
Attachment A Agenda Report Page 132
City of Piedmont
Combining Statement of Cash Flows
Internal Service Funds
For the year ended June 30, 2024
Totals
CASH FLOWS FROM OPERATING ACTIVITIES:
Claims and premiums paid (1,043,957) $ (1,460,255) $ $ (2,504,212) Net cash provided by (used in) operating activities (1,460,255) (1,043,957) (2,504,212) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Other income 1,456,612 1,179,677 2,636,289
Net cash provided by (used in)
noncapital financing activities 1,456,612 1,179,677 2,636,289 Net cash flows (3,643) 135,720 132,077
CASH AND INVESTMENTS - Beginning of year 517,308 1,935,841 2,453,149 CASH AND INVESTMENTS - End of year $ 513,665 2,071,561 $ 2,585,226 $
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Operating income (loss) (1,179,677) $ (1,456,612) $ (2,636,289) $ Adjustments to reconcile operating income (loss) to
net cash provided by (used in) operating activities:
Changes in assets and liabilities:
(Increase) decrease in accounts receivable 1,407 - 1,407 Increase (decrease) in accounts payable 48,312 (38,211) 10,101 Increase (decrease) in claims payable 86,001 34,568 120,569 Net cash provided by (used in) operating activities $ (1,460,255) (1,043,957) $ (2,504,212) $ Insurance
Liabilities
Workers'
Compensation
Attachment A Agenda Report Page 133
This page intentionally left blank
Attachment A Agenda Report Page 134
City of Piedmont
General Fund
The following funds are reported in total on the Governmental Fund Financial Statements under the column General Fund.
General Fund
The general operating fund of the City and is used to account for all financial resources.
Deposits and Bonds
Accounts for the receipt and use of deposits held by the City.
Traffic Safety
Accounts for City revenue from vehicle code fines and parking ticket citation fees. The revenue comes from Alameda County and the Superior Court of California as a result of vehicle code violations and parking enforcement efforts by the Police Department. At the end of each fiscal year, revenue in the fund is transferred to the General Fund.
Pension Rate Stabilization
Accounts for funds held in a Section 115 Trust with the Public Agency Retirement Services (PARS) to aid in funding future pension expense and allow the City to smooth the effect of rising pension costs.
Attachment A Agenda Report Page 135
This page intentionally left blank
Attachment A Agenda Report Page 136
City of Piedmont
Combining Balance Sheet
General Fund
For the year ended June 30, 2024
Total
General Fund
ASSETS
Cash and investments $ 11,041,364 $ 429,704 $ 43,088 $ 11,514,156 - $ Restricted cash and investments - - 4,798,032 - 4,798,032 Receivables:
Accounts receivable 2,183,588 - 293 2,183,881 -
Interest receivable 98,898 - - - 98,898
Leases receivable 269,984 - - - 269,984
Prepaid expenses 88,377 - - - 88,377
Due from other funds 22,946 - - - 22,946
Total assets $ 13,705,157 $ 429,704 $ 43,381 $ 4,798,032 $ 18,976,274
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities:
Accounts payable 1,057,501 $ 29,691 $ 1,636 $ - $ 1,088,828 $ Accrued wages and benefits 630,784 - - - 630,784
Deposits payable 2,540 400,013 - - 402,553
Unearned revenue 3,222,907 - - - 3,222,907
Total liabilities 429,704 4,913,732 1,636 - 5,345,072
Deferred Inflows of Resources:
Leases 264,214 - - - 264,214
Total deferred inflows of resources - 264,214 - - 264,214 Fund Balances:
Nonspendable 88,377 - - - 88,377
Restricted - - - 4,798,032 4,798,032
Unassigned 8,438,834 - 41,745 - 8,480,579
Total fund balances - 8,527,211 41,745 4,798,032 13,366,988 Total liabilities, deferred inflows of
resources and fund balances $ 429,704 13,705,157 $ 43,381 $ 4,798,032 $ 18,976,274 $ General Fund
Deposits and
Bonds Traffic Safety
Pension Rate
Stabilization
Attachment A Agenda Report Page 137
City of Piedmont
Combining Statement of Revenues, Expenditures, and Changes in Fund Balance General Fund
For the year ended June 30, 2024
Total
General Fund
REVENUES:
Property tax $ - 18,449,197 $ $ - $ 18,449,197 - $
Sales tax 195,561 - - - 195,561
Franchise tax 601,234 - - - 601,234
Utility users tax 1,446,400 - - - 1,446,400
Real property transfer tax 4,086,499 - - - 4,086,499
Business license and rental tax 695,495 - - - 695,495
Licenses and permits 809,760 - - - 809,760
Intergovernmental 2,481,060 - - - 2,481,060
Use of money and property 1,260,678 - 35 481,739 1,742,452 Current service charges 4,828,313 - - - 4,828,313
Parcel tax 2,621,746 - - - 2,621,746
Contributions and donations - - 35,284 - 35,284
Other revenues 572,655 - - - 572,655
Total revenues 38,048,598 - 35,319 481,739 38,565,656
EXPENDITURES:
Current:
Administration 4,280,618 - - - 4,280,618
Public works 5,941,295 - - - 5,941,295
Public safety:
Police services 7,961,258 - 12,590 - 7,973,848
Fire services 8,278,781 - - - 8,278,781
Recreation 3,902,196 - - - 3,902,196
Nondepartmental 3,838,148 - - - 3,838,148
Capital outlay 1,685,020 - - - 1,685,020
Debt service - principal 200,769 - - - 200,769
Total expenditures 36,088,085 - 12,590 - 36,100,675
REVENUES OVER (UNDER)
EXPENDITURES 1,960,513 - 22,729 481,739 2,464,981
OTHER FINANCING SOURCES (USES)
Transfers in 104,183 - - - 104,183
Transfers out (1,972,066) - (20,000) - (1,992,066)
Proceeds from long-term debt 1,010,388 - - - 1,010,388
Total other financing sources (uses) (857,495) - (20,000) - (877,495) Net change in fund balances 1,103,018 - 2,729 481,739 1,587,486 FUND BALANCES:
Beginning of year 7,424,193 - 39,016 4,316,293 11,779,502 End of year $ 8,527,211 $ - $ 41,745 $ 4,798,032 $ 13,366,988 General Fund
Deposits and
Bonds Traffic Safety
Pension Rate
Stabilization
Attachment A Agenda Report Page 138
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
Independent Auditor’s Report
To the Honorable Mayor and Members of City Council
of the City of Piedmont
Piedmont, 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 Piedmont, California (City), as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements and have issued our report thereon dated March 26, 2025.
Report on 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.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. We identified one deficiency in internal control, described in the accompanying schedule of findings and questioned costs as item 2024-001 that we considered to be a significant deficiency.
Attachment A Agenda Report Page 139
To the Honorable Mayor and Members of City Council
of the City of Piedmont
Piedmont, California
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 financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
City’s Response to Findings
Government Auditing Standards requires the auditor to perform limited procedures on the City’s response to findings identified in our engagement and described in the accompanying schedule of findings and questioned costs. The City’s response was not subjected to the other auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on the response.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Badawi & Associates, CPAs
Berkeley, California
March 26, 2025
Attachment A Agenda Report Page 140
To the Honorable Mayor and Members of City Council
of the City of Piedmont
Piedmont, California
Section II – Current Year Findings
A. Financial Statement Audit Finding
2024-001: Information Technology Control (Significant Deficiency) Criteria:
The City is responsible for an effective internal control system for software applications that involve financial transactions.
Condition:
As part of our audit, we noted the following matters related to the City’s general information technology controls across critical applications, such as Caselle in the Finance Division, Community Pass in the Recreation Department, and ComDev in the Planning and Building Department:
1. User Provisioning and Termination Process
The lack of a formal process for granting and revoking access to the aforementioned applications increases the risk of inappropriate access, particularly when employees join, leave, or change roles.
Without formal procedures, there is no guarantee that user access is appropriately managed, monitored, and terminated in a timely manner, potentially leaving sensitive data vulnerable to misuse.
2. Password Security in ComDev
The current version of the ComDev application does not enforce password requirements that align with minimum or best industry practices. This oversight weakens the security posture of the system, exposing it to higher risks of unauthorized access and potential data breaches.
3. Segregation of Duties (SOD) Risk
The Finance Director is currently designated as the super user with admin-level access to all the aforementioned applications. This role concentration creates a conflict of interest and introduces segregation of duties (SOD) risks, as the individual responsible for overseeing financial activities also has the ability to configure and manage the applications. This overlap between administrative and financial duties can lead to unauthorized changes to financial data or the system, circumventing critical controls that are meant to protect the integrity of financial reporting.
4. Absence of SOC Report Evaluations
There is no evidence that management or the IT contractor performs SOC (System and Organization Controls) report evaluations over the control objectives, audit opinions, and complementary user entity controls for the SaaS applications in use. Without a thorough evaluation of the relevant SOC reports, management cannot be assured that third-party service providers are maintaining the necessary security and control measures to safeguard data and operations.
Cause:
The City’s internal controls for financial transactions involving its software applications are not comprehensive and raise the concern of inappropriate access.
Attachment A Agenda Report Page 141
To the Honorable Mayor and Members of City Council
of the City of Piedmont
Piedmont, California
Effect:
The identified issues create multiple vulnerabilities, including unauthorized access, potential data breaches, and inadequate security controls. The lack of a formalized access management process and the absence of industry-standard password protections expose the City to a higher likelihood of data compromise. The concentration of admin-level access with the Finance Director creates a significant risk of conflicts of interest, which could result in manipulation or misuse of sensitive financial information. Moreover, failure to review SOC reports means that management cannot ensure that their third-party service providers maintain adequate controls to protect critical data.
Recommendation:
1. Implement a formal user provisioning and termination process for all aforementioned applications, ensuring that access is granted, modified, and revoked in a timely and controlled manner. This should include role-based access controls (RBAC) and a mechanism to ensure that no users retain access after their employment or role changes.
2. Update the ComDev application to enforce strong password policies, aligning with best industry practices for password length, complexity, and expiration.
3. Limit admin-level access to the IT team or designated control owners who are independent of financial operations to mitigate SOD risks. Conduct a comprehensive review of access permissions to ensure that users have only the necessary privileges to perform their job functions.
4. Implement a process for evaluating SOC reports for all relevant SaaS providers, ensuring that their controls meet the City’s security and compliance requirements. Management should evaluate the SOC reports at least annually or whenever there are significant changes in the service providers' systems or controls.
Management Response:
Terminations: By August 30, 2025, the City will deny all access for terminated employees by setting the account to inactive, locking the account, and enabling the deny access option to ensure proper access control.
Passwords: The City will work with the its IT team to develop a plan to address the establishment of 4-digit passwords. Since this change will impact all users and require update to existing passwords, the City will develop a plan for implementation no later than December 30, 2025.
Admin Level – Finance Director: The City will work with its IT team to develop a plan consistent with Caselle’s recommendation and that will address the segregation of duties conflict by the end of December 2025.
Attachment A Agenda Report Page 142
City of Piedmont
Measure BB Funds
Piedmont, California
Financial Statements and
Independent Auditor’s Reports
For the year ended June 30, 2024
Attachment B Agenda Report Page 143
Attachment B Agenda Report Page 144
City of Piedmont
Measure BB Fund
For the year ended June 30, 2024
Table of Contents
Page
Independent Auditor’s Report .............................................................................................................................. 1 Financial Statements:
Balance Sheet .......................................................................................................................................................... 5 Statement of Revenues, Expenditures and
Changes in Fund Balances .................................................................................................................................... 6 Notes to Financial Statements .............................................................................................................................. 7 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 ......................................................................................................................... 9 Report on Compliance and on Internal Control
over Compliance for Measure F.......................................................................................................................... 11 Attachment B Agenda Report Page 145
This page intentionally left blank.
Attachment B Agenda Report Page 146
INDEPENDENT AUDITOR’S REPORT
To the Honorable Mayor and Members of the City Council
of the City of Piedmont
Piedmont, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the Measure BB Fund of the City of Piedmont, California (City), as of and for the year ended June 30, 2024, and the related notes to the financial statements as listed in the table of contents.
In our opinion, the accompanying financial statements present fairly, in all material respects, the respective financial position of the Measure BB Fund of the City, as of June 30, 2024, and the respective changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Measure BB Fund 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 opinion.
Emphasis of Matter
As discussed in Note 2, the financial statements present only the Measure BB Fund and do not purport to, and do not, present fairly the financial position of the City as of June 30, 2024, and changes in its financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter.
Management has omitted a 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 financial statements in an appropriate operational, economic, or historical context.
Our opinion on the basic financial statements is not affected by this missing information.
Attachment B Agenda Report Page 147
To the Honorable Mayor and Members of the City Council
of the City of Piedmont
Piedmont, California
Responsibilities of Management for the Financial Statements The City’s management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of 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 Measure BB Fund’ 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 GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS, 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 Measure BB Fund’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 Measure BB Fund’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.
2 Attachment B Agenda Report Page 148
To the Honorable Mayor and Members of the City Council
of the City of Piedmont
Piedmont, California
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 27, 2024 on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.
Badawi and Associates, CPAs
Berkeley, California
December 27, 2024
3 Attachment B Agenda Report Page 149
This page intentionally left blank.
4 Attachment B Agenda Report Page 150
City of Piedmont
Measure BB Fund
Balance Sheet
June 30, 2024
Streets and Bikes and
Roads Pedestrians Total
ASSETS:
Cash and investments $ 1,524,152 $ - $ 1,524,152
Due from bikes & pedestrians 2,043 - 2,043
Other receivables 165,782 12,147 177,929
Accrued interest receivable 9,516 - 9,516
Total assets $ 1,701,493 $ 12,147 $ 1,713,640
LIABILITIES AND FUND BALANCES:
Accounts payable $ 2,239 $ - $ 2,239
Due to streets & roads - 2,043 2,043
Total liabilities 2,239 2,043 4,282
Fund Balances:
Restricted for Measure BB capital projects 1,699,254 10,104 1,709,358 Total fund balances 1,699,254 10,104 1,709,358
Total liabilities and fund balances $ 1,701,493 $ 12,147 $ 1,713,640 See accompanying Notes to Financial Statements.
5 Attachment B Agenda Report Page 151
City of Piedmont
Measure BB Fund
Statement of Revenues, Expenditures and Changes in Fund Balances Streets and Bikes and
Roads Pedestrians Total
REVENUES:
Measure BB pass-through revenues
pass-through allocation $ 982,452 $ 71,984 $ 1,054,436
Interest income 57,163 - 57,163
Total revenues 1,039,615 71,984 1,111,599
EXPENDITURES:
Public works 75,226 66,196 141,422
Total expenditures 75,226 66,196 141,422
NET CHANGE IN FUND BALANCE 964,389 5,788 970,177
FUND BALANCES:
Beginning of year 734,865 4,316 739,181
End of year $ 1,699,254 $ 10,104 $ 1,709,358
For the year ended June 30, 2024
See accompanying Notes to Financial Statements.
6 Attachment B Agenda Report Page 152
City of Piedmont
Measure BB Fund
Notes to Financial Statements
For the year ended June 30, 2024
1. BACKGROUND – MEASURE BB
Measure BB is a tax that was approved by the voters of Alameda County in November 2014, which implemented a 30-year Transportation Expenditure Plan. The measure extended Measure B which was the original 0.5 percent transportation sales tax approved in 2000 from ending April 1, 2022, to April 1, 2045, and increased the tax by 0.5 percent. This resulted in a 1 percent total sales tax in the County dedicated to transportation expenses. The City receives a portion of the proceeds to be used for transportation-related expenditures. The Measure BB Fund accounts for the direct funding from the measure for local street projects and bicycle and pedestrian projects based on population and road mileage provided by the additional 0.5 percent.
Projects funded by Measure BB during the year were as follows:
Street Resurfacing - To improve, repair, and overlay cities streets.
Bike and Pedestrian - To provide sidewalk and ADA improvements and to implement the bikeway network.
The pool of funds held by the County is allocated among the cities in the County, based on the cities' populations and the number of roads within their city limits for other transportation-related projects.
Funds allocated for streets and roads, bike lanes and pedestrian lanes are recorded as a special revenue fund.
2. SUMMARY OF SIGNIFICNAT ACCOUNTING POLICIES
A. Reporting Entity
All transactions of the Measure BB Fund of the City of Piedmont, California are included as separate special revenue and capital project funds in the basic financial statements of the City. The financial statements are intended to present the financial position, results of operations and cash flows of only transactions recorded under the Measure BB Fund. The fund itself is included in the financial statements of the City.
B. Basis of Presentation
The Measure BB Fund's basic financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. The Government Accounting Standards Board is the acknowledged standard setting body for establishing accounting and financial reporting standards followed by governmental entities in the United States of America. 7 Attachment B Agenda Report Page 153
City of Piedmont
Measure BB Fund
Notes to Financial Statements
For the year ended June 30, 2024
2. SUMMARY OF SIGNIFICNAT ACCOUNTING POLICIES, Continued C. Basis of Accounting
Measurement focus is a term used to describe "which" transactions are recorded within the various financial statements. Basis of accounting refers to "when" revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements regardless of the measurement focus applied.
All governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recorded when measurable and available and expenditures are recorded at the time liabilities are incurred, regardless of when the related cash flows take place.
D. Use of Estimates
The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
3. CASH AND INVESTMENTS
The Measure BB fund participates in the City's cash and investment pool. See the City's Basic Financial Statements for disclosures related to cash and investments and the related custodial risk categorization.
4. COMMITMENTS AND CONTINGENCIES
The City participates in several grant programs. These programs did not require a Single Audit during the year ended June 30, 2024. However, these programs are 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. 8 Attachment B Agenda Report Page 154
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
Independent Auditor’s Report
To the Honorable Mayor and Members
of City Council of the City of Piedmont
Piedmont, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the Measure BB Fund of the City of Piedmont, California (City), as of and for the year ended June 30, 2024, and the related notes to the financial statements, and have issued our report thereon dated December 27, 2024.
Report on 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 in relation to Measure BB Fund (internal control) as a basis for designing 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.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
Attachment B Agenda Report Page 155
To the Honorable Mayor and Members
of City Council of the City of Piedmont
Piedmont, California
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Measure BB Fund’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 financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’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 entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Badawi and Associates, CPAs
Berkeley, California
December 27, 2024
10 Attachment B Agenda Report Page 156
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL
OVER COMPLIANCE FOR MEASURE BB
Independent Auditor’s Report
To the Honorable Mayor and Members
of the City Council of the City of Piedmont
Piedmont, California
Report on Compliance for Measure BB
Opinion on Compliance for Measure BB
We have audited City of Piedmont’s (City) compliance with the types of compliance requirements described in the agreement between the City and Alameda County Transportation Commission that could have a direct and material effect on its Measure BB Fund for the year ended June 30, 2024.
In our opinion, the City complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on its Measure BB Fund for the year ended June 30, 2024.
Basis for Opinion on Measure BB
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America (GAAS); the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards); and the agreement between the City and Alameda County Transportation Commission. Our responsibilities under those standards and 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 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 opinion on compliance for the City’s Measure BB Fund.
Our audit does not provide a legal determination of the Measure BB Fund’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 Measure BB Fund.
Attachment B Agenda Report Page 157
To the Honorable Mayor and Members
of the City Council of the City of Piedmont
Piedmont, California
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 Measure BB Fund’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 GAAS, Government Auditing Standards, and the agreement between the City and Alameda County Transportation Commission 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 Measure BB Fund’s compliance with the requirements of the agreement between the City and Alameda County Transportation Commission.
In performing an audit in accordance with GAAS, Government Auditing Standards, and the agreement between the City and Alameda County Transportation Commission, 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 Measure BB Fund’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 agreement between the City and Alameda County Transportation Commission, but not for the purpose of expressing an opinion on the effectiveness of 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.
Other Matters
Under Measure BB, approved by the voters of Alameda County in 2014, the City has received a total of 12 months of revenue from July 2023 through June 2024. The Local Street and Roads program has received $982,452and the Bike and Pedestrians program has received $71,984. 12 Attachment B Agenda Report Page 158
To the Honorable Mayor and Members
of the City Council of the City of Piedmont
Piedmont, California
Report on Internal Control over Compliance
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 below. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified.
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 the agreement between the City and the Alameda County Transportation Commission on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of the agreement between the City and the Alameda County Transportation Commission 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 the agreement between the City and the Alameda County Transportation Commission 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 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.
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 agreement between the City and the Alameda County Transportation Commission. Accordingly, this report is not suitable for any other purpose.
Badawi and Associates, CPAs
Berkeley, California
December 27, 2024
13 Attachment B Agenda Report Page 159
City of Piedmont
Measure F Fund
Piedmont, California
Financial Statements and
Independent Auditor’s Reports
For the year ended June 30, 2024
Attachment C Agenda Report Page 160
Attachment C Agenda Report Page 161
City of Piedmont
Measure F Fund
For the year ended June 30, 2024
Table of Contents
Page
Independent Auditor’s Report .............................................................................................................................. 1 Financial Statements:
Balance Sheet .......................................................................................................................................................... 5 Statement of Revenues, Expenditures and
Changes in Fund Balances .................................................................................................................................... 6 Notes to Financial Statements .............................................................................................................................. 7 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 ......................................................................................................................... 9 Report on Compliance and on Internal Control
over Compliance for Measure F.......................................................................................................................... 11 Attachment C Agenda Report Page 162
This page intentionally left blank.
Attachment C Agenda Report Page 163
INDEPENDENT AUDITOR’S REPORT
To the Honorable Mayor and Members of the City Council
of the City of Piedmont
Piedmont, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the Measure F Fund (Fund) of the City of Piedmont, California (City), as of and for the year ended June 30, 2024, and the related notes to the financial statements as listed in the table of contents.
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Fund of the City, as of June 30, 2024, and the changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Fund of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Emphasis of Matter
As discussed in Note 2, the financial statements present only the Measure F Fund and do not purport to, and do not, present fairly the financial position of the City, as of June 30, 2024, or the change in its financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter.
Responsibilities of Management for the Financial Statements The City’s management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of 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.
Attachment C Agenda Report Page 164
To the Honorable Mayor and Members of the City Council
of the City of Piedmont
Piedmont, California
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 Fund’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 are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS, 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 Fund’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 Fund’s ability to continue as a going concern for a reasonable period.
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.
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 27, 2024, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of internal 2 Attachment C Agenda Report Page 165
To the Honorable Mayor and Members of the City Council
of the City of Piedmont
Piedmont, California
control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.
Badawi and Associates, CPAs
Berkeley, California
December 27, 2024
3 Attachment C Agenda Report Page 166
This page intentionally left blank.
4 Attachment C Agenda Report Page 167
City of Piedmont
Measure F Fund
Balance Sheet
June 30, 2024
Local Road
Improvement
and Repair
Program
ASSETS:
Cash and investments $ 95,910
Other receivable 7,367
Accrued interest receivable 580
Total assets $ 103,857
Fund Balance:
Restricted for Measure F capital projects 103,857
Total fund balance 103,857
Total liabilities and fund balance $ 103,857
See accompanying Notes to Financial Statements.
5 Attachment C Agenda Report Page 168
City of Piedmont
Measure F Fund
Statement of Revenues, Expenditures and Changes in Fund Balance Local Road
Improvement
and Repair
Program
REVENUES:
Measure F pass-through revenues
pass-through allocation $ 43,884
Interest income 3,909
Total revenues 47,793
47,793
FUND BALANCE:
Beginning of year 56,064
End of year $ 103,857
For the year ended June 30, 2024
CHANGE IN FUND BALANCE
See accompanying Notes to Financial Statements.
6 Attachment C Agenda Report Page 169
City of Piedmont
Measure F Fund
Notes to Financial Statements
For the year ended June 30, 2024
1. BACKGROUND – MEASURE F
The Measure F Alameda County Vehicle Registration Fee (Measure F) was approved by the voters in November 2010, with 63 percent of the vote. The fee will generate about $10.7 million per year by a $10 per year vehicle registration fee. The collection of the $10 per year vehicle registration fee started in the first week of May 2011. The goal of Measure F is to sustain the County's transportation network and reduce traffic congestion and vehicle related pollution. The program includes the following four categories of projects:
Local Road Improvement and Repair Program (60 percent) Transit for Congestion Relief (25 percent)
Local Transportation Technology (10 percent)
Pedestrian and Bicyclist Access and Safety Program (5 percent) The Alameda County Transportation Commission administers the program and distributes an equitable share of funds among the four planning areas of the county over successive five-year cycles. Geographic equity will be measured by a formula, weighted 50 percent by population of the planning area and 50 percent of registered vehicles of the planning area.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
All transactions of the Measure F Fund of the City of Piedmont, California (City) are included as a separate capital project fund in the basic financial statements of the City.
The accompanying financial statements are intended to present the financial position and results of operations of only transactions recorded under the Measure F Fund. The fund itself is included in the financial statements of the City.
B. Basis of Presentation
The Measure F Fund's basic financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. The Government Accounting Standards Board is the acknowledged standard setting body for establishing accounting and financial reporting standards followed by governmental entities in the United States of America.
C. Basis of Accounting
Measurement focus is a term used to describe "which" transactions are recorded within the various financial statements. Basis of accounting refers to "when" revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements regardless of the measurement focus applied.
7 Attachment C Agenda Report Page 170
City of Piedmont
Measure F Fund
Notes to Financial Statements
For the year ended June 30, 2024
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued C. Basis of Accounting, Continued
All governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recorded when measurable and available and expenditures are recorded at the time liabilities are incurred, regardless of when the related cash flows take place.
D. Description of Fund
The accounts are maintained on the basis of fund accounting. A fund is a separate accounting entity with a self-balancing set of accounts. The City uses special revenue funds to account for the proceeds of specific revenues (other than for capital projects) that are legally restricted to be expended for specified purposes.
E. Use of Estimates
The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
3. CASH AND INVESTMENTS
The Measure F fund participates in the City's cash and investment pool. See the City's Basic Financial Statements for disclosures related to cash and investments and the related custodial risk categorization.
4. COMMITMENTS AND CONTINGENCIES
The City participates in several grant programs. These programs did not require a Single Audit during the year ended June 30, 2024. However, these programs are subject to further examination by the granters 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. 8 Attachment C Agenda Report Page 171
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
Independent Auditor’s Report
To the Honorable Mayor and Members
of City Council of the City of Piedmont
Piedmont, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the Measure F Fund (Fund) of the City of Piedmont, California (City), as of and for the year ended June 30, 2024, and the related notes to the financial statements, and have issued our report thereon dated December 27, 2024.
Report on 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) as a basis for designing 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.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
9 Attachment C Agenda Report Page 172
To the Honorable Mayor and Members
of City Council of the City of Piedmont
Piedmont, California
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Measure F Fund’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 financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Auditing Standards Government .
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’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 entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Badawi and Associates, CPAs
Berkeley, California
December 27, 2024
10 Attachment C Agenda Report Page 173
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL
OVER COMPLIANCE FOR MEASURE F
Independent Auditor’s Report
To the Honorable Mayor and Members
of the City Council of the City of Piedmont
Piedmont, California
Report on Compliance for Measure F
Opinion on Compliance for Measure F
We have audited City of Piedmont’s (City) compliance with the types of compliance requirements described in the agreement between the City and Alameda County Transportation Commission that could have a direct and material effect on its Measure F Fund for the year ended June 30, 2024.
In our opinion, the City complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on its Measure F Fund for the year ended June 30, 2024.
Basis for Opinion on Measure F
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America (GAAS); the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards); and the agreement between the City and Alameda County Transportation Commission. Our responsibilities under those standards and 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 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 opinion on compliance for the City’s Measure F Fund.
Our audit does not provide a legal determination of the Measure F Fund’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 Measure F Fund.
11 Attachment C Agenda Report Page 174
To the Honorable Mayor and Members
of the City Council of the City of Piedmont
Piedmont, California
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 Measure F Fund’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 GAAS, Government Auditing Standards, and the agreement between the City and Alameda County Transportation Commission 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 Measure F Fund’s compliance with the requirements of the agreement between the City and Alameda County Transportation Commission.
In performing an audit in accordance with GAAS, Government Auditing Standards, and the agreement between the City and Alameda County Transportation Commission, 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 Measure F Fund’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 agreement between the City and Alameda County Transportation Commission, but not for the purpose of expressing an opinion on the effectiveness of 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
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 below. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified.
12 Attachment C Agenda Report Page 175
To the Honorable Mayor and Members
of the City Council of the City of Piedmont
Piedmont, California
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 the agreement between the City and the Alameda County Transportation Commission on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of the agreement between the City and the Alameda County Transportation Commission 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 the agreement between the City and the Alameda County Transportation Commission 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 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.
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 agreement between the City and the Alameda County Transportation Commission. Accordingly, this report is not suitable for any other purpose.
Badawi and Associates, CPAs
Berkeley, California
December 27, 2024
12 Attachment C Agenda Report Page 176
Piedmont, California
Independent Accountants’ Report on
Agreed-Upon Procedures Applied to
Appropriations Limit Schedule
For the fiscal year ending June 30, 2025
Attachment D Agenda Report Page 177
Attachment D Agenda Report Page 178
INDEPENDENT ACCOUNTANTS’ REPORT
To the Honorable Mayor and Members of City Council of the City of Piedmont Piedmont, California
We have performed the procedures enumerated below on the accompanying Appropriations Limit Schedule of the City of Piedmont (City) for the fiscal year ending June 30, 2025. The City’s management is responsible for the accompanying Appropriations Limit Schedule.
The City has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of the requirements of Section 1.5 of Article XIII-B of the California Constitution.
Additionally, the League of California Cities (as presented in the publication entitled Agreed-upon Procedures Applied to the Appropriations Limitation Prescribed by Article XIII-B of the California Constitution) has agreed to and acknowledged that the procedures performed are appropriate for their purposes. This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes.
The procedures performed and our findings are described below:
1. We obtained the completed worksheets used by the City to calculate its appropriations limit for the fiscal year ending June 30, 2025, and determined that the limit and annual calculation factors were adopted by resolution of City Council. We also determined that the population and inflation options were selected by a recorded vote of City Council.
Finding: No exceptions were noted as a result of our procedures.
2. For the accompanying Appropriations Limit Schedule, we added the prior year’s limit to the total adjustments, and agreed the resulting amount to the current year’s limit.
Finding: No exceptions were noted as a result of our procedures.
3. We agreed the current year information presented in the accompanying Appropriations Limit Schedule to corresponding information in worksheets used by the City.
Finding: No exceptions were noted as a result of our procedures.
4. We agreed the prior year appropriations limit presented in the accompanying Appropriations Limit Schedule to the prior year appropriations limit adopted by the City Council during the prior year.
Finding: No exceptions were noted as a result of our procedures.
Attachment D Agenda Report Page 179
To the Honorable Mayor and Members of City Council
of the City of Piedmont
Piedmont, California
We were engaged by the City to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the American Institute of Certified Public Accountants. We were not engaged to and did not conduct an examination or review, the objective of which would be the expression of an opinion or conclusion, respectively, on the accompanying Appropriation Limit Schedule. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.
We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement.
This report is intended solely for the information and use of the City Council and management of the City and is not intended to be and should not be used by anyone other than these specified parties. However, this report is a matter of public record, and its distribution is not limited.
Badawi & Associates, CPAs
Berkeley, California
April 3, 2025
Attachment D Agenda Report Page 180
City of Piedmont
Appropriations Limit Schedule
Amount Source
Appropriations limit for the year ended June 30, 2024 $ 31,474,529 Prior year schedule Revised prior year Measure Y voter approved increase 2,622,000 Client's budget A. Revised Appropriations limit for the year ended,
June 30, 2024 28,852,529
B. Calculation Factors:
1. Population increase % State Department of Finance 0.9946
2. Inflation increase % 1.0362 State Department of Finance
3. Total adjustment factor % 1.0306 B1*B2
C. Annual Adjustment Increase $ 883,018 [(B3-1)*A)]
D. Other Adjustments
Voter Approved Increase 2,690,000 Client's budget
E. Total Adjustments 3,573,018 (C+D)
F. Appropriations limit for the year ending June 30, 2025 $ 32,425,416 (A+E) For the fiscal year ending June 30, 2025
3 Attachment D Agenda Report Page 181
City of Piedmont
Notes to Appropriations Limit Schedule
For the fiscal year ending June 30, 2025
1. PURPOSE OF LIMITED PROCEDURES REVIEW
Under Article XIIIB of the California Constitution (the Gann Spending Limitation Initiative), California governmental agencies are restricted as to the amount of annual appropriations from proceeds of taxes.
Effective for years beginning on or after July 1, 1990, under Section 1.5 of Article XIIIB, the annual calculation of the appropriations limit is subject to a limited procedures review in connection with the annual audit.
2. METHOD OF CALCULATION
Under Section 10.5 of Article XIIIB, for fiscal years beginning on or after July 1990, the appropriations limit is required to be calculated based on the limit for the fiscal year 1986-1987, adjusted for the inflation and population factors discussed in Notes 3 and 4 below.
3. INFLATION FACTORS
A California governmental agency may adjust its appropriations limit by either the annual percentage change in the 4th quarter per capita personal income (which percentage is supplied by the State Department of Finance), or the percentage change in the local assessment roll from the preceding year due to the change of local nonresidential construction. The factor adopted by the City of Piedmont for the fiscal year 2024- 2025 represents the change in per capita income in the State of California.
4. POPULATION FACTORS
A California governmental agency may adjust its appropriations limit by either the annual percentage change of the jurisdiction’s own population, or the annual percentage change in population in the County where the jurisdiction is located. The factor adopted by the City of Piedmont for fiscal year 2024-2025 represents the annual percentage change in population for the County.
5. OTHER ADJUSTMENTS
A California government agency may be required to adjust its appropriations limit when certain events occur, such as the transfer of responsibility for municipal services, to, or from, another government agency or private entity. The adjustments made for fiscal year ending June 30, 2025 was the Measure Y voter approved increase.
Attachment D Agenda Report Page 182
City of
Piedmont
Piedmont, California
Auditor’s Communication with
Those Charged with Governance
For the year ended June 30, 2024
Attachment E Agenda Report Page 183
Attachment E Agenda Report Page 184
March 26, 2025
To the Honorable Mayor and Members
of the City Council of the City of Piedmont
Piedmont, California
We have audited the financial statements of the City of Piedmont (City) as of and for the year ended June 30, 2024, and have issued our report thereon dated March 26, 2025. Professional standards require that we advise you of the following matters relating to our audit.
Our Responsibility in Relation to the Financial Statement Audit As communicated in our engagement letter dated October 28, 2024, our responsibility, as described by professional standards, is to form and express an opinion(s) about whether the financial statements that have been prepared by management with your oversight are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America.
Our audit of the financial statements does not relieve you or management of your respective responsibilities.
Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain reasonable, rather than absolute, assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, as part of our audit, we considered the internal control of the City solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control.
We are also responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process.
However, we are not required to design procedures for the purpose of identifying other matters to communicate to you.
Planned Scope and Timing of the Audit
We conducted our audit consistent with the planned scope and timing we previously communicated to you.
Attachment E Agenda Report Page 185
To the Honorable Mayor and Members
of the City Council of the City of Piedmont
Piedmont, California