182
To the Honorable Mayor and Members of the City Council
of the City of Pinole
Pinole, 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 determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the 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.
Santa Ana, California
December 17, 2025
6 Hutton Centre Drive, Suite 1200
Santa Ana, California 92707
December 17, 2025
To the Honorable Mayor and Members of the City Council
of the City of Pinole
Pinole, California
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 Pinole (the “City”) for the year ended June 30, 2025, and have issued our report thereon dated December 17, 2025. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards and Government Auditing Standards, as well as certain information related to the scope and timing of our audit. We have communicated such information in our letter to you dated June 1, 2025. Professional standards also require that we communicate to you the following information related to our audit.
Significant Audit Matters
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 to the basic financial statements.
New Accounting Standards
GASB Statement No. 101 – In June 2022, GASB issued Statement No. 101, Compensated Absences. The objective of this Statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated absences. That objective is achieved by aligning the recognition and measurement guidance under a unified model and by amending certain previously required disclosures. Application of this statement had a significant effect on the City’s financial reporting for the fiscal year ended June 30, 2025, resulting in a restatement of beginning net position and fund balance.
GASB Statement No. 102 - In December 2023, GASB issued Statement No. 102, Certain Risk Disclosures. The objective of this Statement is to provide users of government financial statements with essential information about risks related to a government's vulnerabilities due to certain concentrations or constraints which may limit a government's ability to acquire resources or control spending. Application of this statement did not have a significant effect on the City’s financial reporting for the fiscal year ended June 30, 2025.
The most sensitive estimates affecting the City’s financial statements were:
• Management’s estimate of the depreciation on capital assets is based on the industry standard and past experience on actual useful life of the asset groups. We evaluated the key factors and assumptions used to develop the depreciation on capital assets in determining that it is reasonable in relation to the financial statements taken as a whole.
• Management’s estimate of the net other postemployment benefits (“OPEB”) liability is based on the actuarial valuation on total OPEB liability. We evaluated the key factors and assumptions used to develop the total OPEB liability in determining that it is reasonable in relation to the financial statements taken as a whole.
• Management’s estimate for the “more likely than not” amount of sick leave to be accrued in the compensated absences liability is based on historical “days used” data determined by taking a sample of historic sick leave usage patterns.
To the Honorable Mayor and Members of the City Council
of the City of Pinole
Pinole, California
• Management’s estimate of the net pension liabilities is based on the proportionate share of actuarial valuation on total pension liability and the proportionate share of the fiduciary net position for CalPERS plans. We evaluated the key factors and assumptions used to develop the net pension liability in determining that it is reasonable in relation to the financial statements taken as a whole. • Management’s estimate of compensated absences is based on the City’s adopted methodology, consistent with the provisions of GASB 101. We evaluated the key factors and assumptions used to estimate the compensated absences determining that it is reasonable in relation to the financial statements taken as a whole.
Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the financial statements were:
• Note 1 – Summary of Significant Accounting Policies
• Note 7 – Long-Term Liabilities
• Note 9 – Deferred Benefit Pension Plan
• Note 10 – Other Post-Employment Benefits (OPEB)
• Note 12 – Fund Balance
• Note 14 – Stewardship, Compliance and Accountability
• Note 16 – Contingencies and Commitments
• Note 19 – Restatement of Beginning Net Position and Fund Balance The financial statement disclosures are neutral, consistent, and clear.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our audit.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements.
Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report.
We are pleased to report that no such disagreements arose during the course of our audit.
Management Representations
We have requested certain representations from management that are included in the management representation letter dated December 17, 2025.
Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the governmental unit’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants.
To the Honorable Mayor and Members of the City Council
of the City of Pinole
Pinole, California
Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the governmental unit’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention.
Other Matters
We applied certain limited procedures to the Management’s Discussion and Analysis, the Budgetary Comparison Schedules, the Schedule of Changes in the Net Pension Liability and Related Ratios, the Schedule of the City’s Proportionate Share of the Net Pension Liability and Related Ratios, the Schedules of the Contributions, and the Schedule of Changes in Total Other Postemployment Benefits Liability and Related Ratios, which are required supplementary information (“RSI”) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI.
We were engaged to report on the Combining and Individual Nonmajor Fund Financial Statements and Budgetary Comparison Schedules, which accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves.
We were not engaged to report on the Introductory and Statistical Sections, which accompany the financial statements but are not RSI. We did not audit or perform other procedures on this other information and we do not express an opinion or provide any assurance on it.
Restriction on Use
This information is intended solely for the 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.
Very truly yours,
Santa Ana, California
City of Pinole
2006 Measure S Fund
Pinole, California
Independent Accountant’s Report
on Agreed-Upon Procedures Applied
to Schedule of Measure S Revenues and Expenditures
For the Year Ended June 30, 2025
6 Hutton Centre Drive, Suite 1200
Santa Ana, California 92707
INDEPENDENT ACCOUNTANT’S REPORT
ON APPLYING AGREED-UPON PROCEDURES
To the Honorable Mayor and Members of the City Council
of the City of Pinole
Pinole, California
We have performed the procedures enumerated below on the accompanying Schedule of Measure S Revenues and Expenditures (the “Schedule”) of the City of Pinole, California (the “City”) for the year ended June 30, 2025. The City is responsible for the Schedule.
The City has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of meeting the requirements of City Ordinance 2006-07, Amending Chapter 3.28 of the City’s Municipal Code, “Transactions and Use Tax” To Levy a One-Half Cent Transactions and Use Tax”. The City has agreed to and acknowledged that the procedures performed are appropriate for its 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 and the associated findings are as follows:
1. Obtained and reviewed City Ordinance 2006-07, Amending Chapter 3.28 of the City’s Municipal Code, “Transactions and Use Tax” To Levy a One-Half Cent Transactions and Use Tax”.
Finding: No exceptions were noted as a result of our procedures.
2. Obtained a Schedule of Measure S Revenues and Expenditures for the fiscal year and agreed totals reported on the schedule to the City’s trial balance.
Finding: No exceptions were noted as a result of our procedures.
3. Verify that Measure S Transactions were accounted for separately in the accounting records to allow for accountability.
Finding: No exceptions were noted as a result of our procedures.
4. Verify that the Measure S revenue was deposited in total into the City’s accounts by obtaining remittance advices from the State of California and amounts deposited into the Measure S Fund.
Finding: No exceptions were noted as a result of our procedures.
To the Honorable Mayor and Members of the City Council
of the City of Pinole
2 5. Review salary reports and expenditure details to verify that the funds expensed complied with the purpose that was specified to the registered voters of the City through election materials and City resolutions that were distributed to the voters.
Finding: No exceptions were noted as a result of our procedures.
6. Compare actual revenues and expenses to budgeted amounts to determine that variances were appropriate.
Finding: No exceptions were noted as a result of our procedures.
7. Report any findings regarding compliance with Chapter 3.28 of the City’s Municipal Code as a result of the procedures performed.
Finding: No exceptions were noted.
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 engagement, the objective of which would be the expression of an opinion or conclusion, respective on the accompanying schedule. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters 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.
Santa Ana, California
December 17, 2025
City of Pinole
Measure S Fund
Schedule of Revenues and Expenditures
For the Year Ended June 30, 2025
3 Revenues:
Sales and use taxes 2,488,123 $
Investment earnings 13,518
Total revenues $ 2,501,641
Expenditures:
Salary 428,723 $
Benefits 487,227
Insurance 46,167
Professional services 1,430,089
Administration expense 150,000
Total expenditures $ 2,542,206
*This schedule is prepared using the modified accrual basis of accounting.
City of Pinole
2014 Measure S Fund
Pinole, California
Independent Accountant’s Report
on Agreed-Upon Procedures Applied
to Schedule of Measure S Revenues and Expenditures
For the Year Ended June 30, 2025
6 Hutton Centre Drive, Suite 1200
Santa Ana, California 92707
INDEPENDENT ACCOUNTANT’S REPORT
ON APPLYING AGREED-UPON PROCEDURES
To the Honorable Mayor and Members of the City Council
of the City of Pinole
Pinole, California
We have performed the procedures enumerated below on the accompanying Schedule of Measure S Revenues and Expenditures (the “Schedule”) of the City of Pinole, California (the “City”) for the year ended June 30, 2025. The City is responsible for the Schedule.
The City has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of meeting the requirements of City Ordinance 2014-03, Amending Chapter 3.30 of the City’s Municipal Code, “Transactions and Use Tax” To Levy a One-Half Cent Transactions and Use Tax. The City has agreed to and acknowledged that the procedures performed are appropriate for its 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 and the associated findings are as follows:
1. Obtained and reviewed City Ordinance 2014-03, Amending Chapter 3.30 of the City’s Municipal Code, “Transactions and Use Tax” To Levy a One-Half Cent Transactions and Use Tax”.
Finding: No exceptions were noted as a result of our procedures.
2. Obtained a Schedule of Measure S Revenues and Expenditures for the fiscal year and agreed totals reported on the schedule to the City’s trial balance.
Finding: No exceptions were noted as a result of our procedures.
3. Verify that Measure S Transactions were accounted for separately in the accounting records to allow for accountability.
Finding: No exceptions were noted as a result of our procedures.
4. Verify that the Measure S revenue was deposited in total into the City’s accounts by obtaining remittance advices from the State of California and amounts deposited into the Measure S Fund.
Finding: No exceptions were noted as a result of our procedures.
To the Honorable Mayor and Members of the City Council
of the City of Pinole
2 5. Review salary reports and expenditure details to verify that the funds expensed complied with the purpose that was specified to the registered voters of the City through election materials and City resolutions that were distributed to the voters.
Finding: No exceptions were noted as a result of our procedures.
6. Compare actual revenues and expenses to budgeted amounts to determine that variances were appropriate.
Finding: No exceptions were noted as a result of our procedures.
7. Report any findings regarding compliance with Chapter 3.30 of the City’s Municipal Code as a result of the procedures performed.
Finding: No exceptions were noted.
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 engagement, the objective of which would be the expression of an opinion or conclusion, respective on the accompanying schedule. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters 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.
Santa Ana, California
December 17, 2025
City of Pinole
Measure S Fund
Schedule of Revenues and Expenditures
For the Year Ended June 30, 2025
3 Revenues:
Sales and use taxes 2,481,928 $
Investment earnings 37,236
Miscellaneous 180
Other revenue 4,192
Total revenues $ 2,523,536
Expenditures:
Salary $ 92,939
Benefits 15,873
Improvements 11,584
Capital outlay 984,893
Insurance 6,805
Admin expense 748,017
Professional services 1,530,219
Total expenditures $ 3,390,330
*This schedule is prepared using the modified accrual basis of accounting.
City of Pinole
2024 Measure I Fund
Pinole, California
Independent Accountant’s Report
on Agreed-Upon Procedures Applied
to Schedule of Measure I Revenues and Expenditures
For the Year Ended June 30, 2025
6 Hutton Centre Drive, Suite 1200
Santa Ana, California 92707
INDEPENDENT ACCOUNTANT’S REPORT
ON APPLYING AGREED-UPON PROCEDURES
To the Honorable Mayor and Members of the City Council
of the City of Pinole
Pinole, California
We have performed the procedures enumerated below on the accompanying Schedule of Measure I Revenues and Expenditures (the “Schedule”) of the City of Pinole, California (the “City”) for the year ended June 30, 2025. The City is responsible for the Schedule.
The City has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of meeting the requirements of City Ordinance 2024-11, Amending Chapter 3.32 of the City’s Municipal Code, “Transactions and Use Tax” To Pinole Municipal Code establishing an additional 1/2 cent Sales Tax. The City has agreed to and acknowledged that the procedures performed are appropriate for its 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 and the associated findings are as follows:
1. Obtained and reviewed City Ordinance 2024-11, Amending Chapter 3.32 of the City’s Municipal Code, “Transactions and Use Tax” To Pinole Municipal Code establishing an additional 1/2 cent Sales Tax.
Finding: No exceptions were noted as a result of our procedures.
2. Obtained a Schedule of Measure I Revenues and Expenditures for the fiscal year and agreed totals reported on the schedule to the City’s trial balance.
Finding: No exceptions were noted as a result of our procedures.
3. Verify that Measure I Transactions were accounted for separately in the accounting records to allow for accountability.
Finding: No exceptions were noted as a result of our procedures.
4. Verify that the Measure I revenue was deposited in total into the City’s accounts by obtaining remittance advices from the State of California and amounts deposited into the Measure I Fund.
Finding: No exceptions were noted as a result of our procedures.
To the Honorable Mayor and Members of the City Council
of the City of Pinole
2 5. Review salary reports and expenditure details to verify that the funds expensed complied with the purpose that was specified to the registered voters of the City through election materials and City resolutions that were distributed to the voters.
Finding: No exceptions were noted as a result of our procedures.
6. Compare actual revenues and expenses to budgeted amounts to determine that variances were appropriate.
Finding: No exceptions were noted as a result of our procedures.
7. Report any findings regarding compliance with Chapter 3.32 of the City’s Municipal Code as a result of the procedures performed.
Finding: No exceptions were noted.
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 engagement, the objective of which would be the expression of an opinion or conclusion, respective on the accompanying schedule. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters 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.
Santa Ana, California
December 17, 2025
City of Pinole
Measure I Fund
Schedule of Revenues and Expenditures
For the Year Ended June 30, 2025
3 Revenues:
Sales and use taxes 612,233 $
Total revenues $ 612,233
Expenditures:
Salary $ 2,804
Administration expense 600,000
Benefits 395
Total expenditures $ 603,199
*This schedule is prepared using the modified accrual basis of accounting.
City of Pinole
Pinole, California
Independent Accountants’ Report on
Agreed-Upon Procedures Applied to
Appropriations Limit Schedule
For the Year Ending June 30, 2025
200 E. Sandpointe Avenue, Suite 600
Santa Ana, California 92707
INDEPENDENT ACCOUNTANTS’ REPORT ON
APPLYING AGREED-UPON PROCEDURES
To the Honorable Mayor and Members of City Council
of the City of Pinole
Pinole, California
We have performed the procedures enumerated below on the accompanying Appropriations Limit Schedule of the City of Pinole, California (the “City”) for the year ending June 30, 2025. The management at the City is responsible for the Appropriations Limit Schedule.
The City has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of meeting the requirements set forth in Section 1.5 of Article XIII-B of the California Constitution. The procedures, which were suggested by the League of California Cities and presented in the publication entitled Agreed-upon Procedures Applied to the Appropriations Limitation Prescribed by Article XIII-B of the California Constitution were performed solely to assist you in meeting the requirements. 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 and the associated findings are as follows:
1. We obtained the completed worksheets used by the City to calculate its appropriations limit for the year ending June 30, 2025, and compared the limit and annual calculation factors that were adopted by resolution of City Council. We also compared the population and inflation options that were selected by a recorded vote of the 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 compared the resulting amount to the current year’s limit.
Finding: No exceptions were noted as a result of our procedures.
3. We compared 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 compared the appropriations limit presented in the accompanying Appropriations Limit Schedule to the appropriations limit adopted by the City Council.
Finding: No exceptions were noted as a result of our procedures.
To the Honorable Mayor and Members of City Council
of the City of Pinole
Pinole, California
2 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 engagement, the objective of which would be the expression of an opinion or conclusion, respective on the accompanying Appropriation Limit Schedule. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters 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.
Santa Ana, California
September 5, 2024
City of Pinole
Appropriations Limit Schedule
For the Year Ending June 30, 2025
3 Amount Source
A. Appropriations Limit FY 2023-2024 164,056,561 $ Prior year B. Adjustment Factors:
1) Growth in County Population 1.0012 State Department of Finance 2) California per Capita Personal Income Growth 1.0362 State Department of Finance 3) Adjustment Factor 1.0374 (B1*B2)
C. Annual Adjustment Increase 6,142,842 [A*(B3-1)]
D. Other Adjustments:
1) Loss responsibility (-) - N/A
2) Transfer to private (-) - N/A
3) Transfer to fees (-) - N/A
4) Assumed responsibility (+) - N/A
E. Total Adjustments 6,142,842 (C+D)
F. Appropriations Limit FY 2024-2025 170,199,403 $ (A+E) See accompanying Notes to Appropriations Limit Schedule.
City of Pinole
Notes to Appropriations Limit Schedule
For the Year Ending June 30, 2025
4 Note 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.
Note 2 – Method of Calculation
Under Section 10.5 of Article XIIIB, for fiscal years beginning on or after July 1, 1990, the appropriations limit is required to be calculated based on the limit for the fiscal year 1986-87, adjusted for the inflation and population factors discussed in Notes 3 and 4 below.
Note 3 – Population Factors
A California governmental agency may use as its population factor either the annual percentage change of the jurisdiction’s own population or the annual percentage change in population of the county where the jurisdiction is located. The factor adopted by the City for the year 2024-2025 represents the annual percentage change in population for the County.
Note 4 – Inflation Factors
A California governmental agency may use as its inflation factor 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 for the year 2024-2025 represents the percentage change in California per capita personal income.
Note 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 City had no such adjustments for the year 2024-2025.