Pleasant Hill City Council
March 21, 2022

CITY OF PLEASANT HILL

CITY COUNCIL MEETING AGENDA
MARCH 21, 2022
REGULAR MEETING – 7:00 PM

VIA TELECONFERENCING
Watch on YouTube at: www.pleasanthillca.org/councilmeeting To provide comments via teleconference, click on the meeting link and enter the meeting ID and Passcode:

Meeting link: www.zoom.us
Meeting ID: 944 9941 9200
Passcode: 136373
The meeting ID and Passcode will change each meeting. See more information on Public Participation Options below.

City Council Meeting Agenda Page 1 March 21, 2022
City Offices, 100 Gregory Lane, Pleasant Hill, CA 94523 Telephone (925) 671-5267 MAYOR MICHAEL G. HARRIS COUNCILMEMBER KEN CARLSON

VICE MAYOR TIMOTHY FLAHERTY COUNCILMEMBER SUE NOACK

COUNCILMEMBER MATTHEW RINN
The meeting will be held via teleconference as allowed pursuant to City Council Resolution No. 63-21.

Options for observing the meeting and participating in public comment are provided below.

Public Communication. The public is welcome to address the City Council on items on the Consent Calendar or other items not listed on the agenda but within the Council’s jurisdiction during the general Public Comment period. There is an opportunity for the public to comment on other agenda items at the time they are discussed.

Public Participation Options
1) Watch the Meeting via Youtube Livestream
Watch the meeting live on YouTube at: www.pleasanthillca.org/councilmeeting. 2) Submit Written Comments Before the Meeting
Send written comments to [email protected] (comments received by 4:00 p.m. on the day of the meeting will be provided to the City Council before the meeting). 3) If You Wish to Make a Public Comment During the Meeting When the Mayor invites the public for general comment or comments on specific agenda items, please use the "Raise hand" feature in Zoom (or press *9 if connecting via telephone only) which will alert staff that you wish to speak, and you will be invited to speak when it is your turn. Note that there may be multiple hearing items on the same agenda. There are two ways to join the meeting and make a public comment during the meeting:

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a. Go to www.Zoom.us using your computer and entering the Meeting ID and Passcode provided near the top of this page. You will be placed into the meeting as an Attendee. You will not be seen or heard until it is your turn to speak.
b. Or by calling (669) 900-6833 and enter the Meeting ID and Passcode. Dial *9 to virtually “Raise Hand” in Zoom
We ask that you state your name and city of residence for the record when you start your comments.

When you are making a Public Comment during the meeting, please:
1) Try to be in a room or space without a lot of background noise. 2) Mute your microphone until it is your turn to speak, then mute your speakers while speaking. 3) Have a strong, reliable internet connection or cell phone signal.

If, due to a disability, a reasonable accommodation is needed to participate in this meeting, please contact the ADA Coordinator 24 hours in advance of the meeting at (925) 671-5221 or via California Relay at 711.

Materials related to an item on this agenda submitted to the Council after distribution of the agenda packet are available for public inspection by contacting the City Clerk’s office at [email protected] or calling 925-671-5221.

City Council Meeting Recordings and Broadcasts.

Recorded City Council meetings are broadcast on Comcast Channel 28, Wave Channel 29, and AT&T U-Verse Channel 99 on the Wednesday following the meeting. Video recordings are generally available within 48 hours of the meeting, and may be viewed on the City’s website at www.pleasanthillca.org/MeetingVideos and selecting “City Council” from the meeting groups.

Agendas are Available for Review on the City Hall official noticing bulletin board (100 Gregory Lane), at the Pleasant Hill Police Department (330 Civic Drive), the Pleasant Hill Senior Center (233 Gregory Lane), and on the City’s website at www.pleasanthillca.org/agendas. Agenda packets will be available to the public on the City’s website at the same time as they are made available to the City Council.

1. CALL TO ORDER

2. ROLL CALL

3. PRESENTATIONS

3.1 Proclamation Designating March as Prescription Drug Abuse Awareness Month

3.2 Proclamation Designating March as Meals on Wheels Month

3.3 Overview of the Zonehaven Emergency Communication Tool by the Contra Costa County Fire Protection District
City Council Meeting Agenda Page 3 March 21, 2022

4. CITY MANAGER COMMENTS:
(Brief updates on pending City business without discussion by the City Council.)

5. COUNCIL ANNOUNCEMENTS AND REPORTS

5.1 Reports from Councilmembers on Meetings or Conferences Attended at City Expense

5.2 Announcements from Councilmembers

6. PUBLIC COMMENT:

The public is welcome at this time to address the City Council on items on the Consent Calendar or other items not listed on the agenda but within the Council’s jurisdiction. There is an opportunity for the public to comment on other agenda items at the time they are discussed.

Comments are limited to three minutes per speaker. To participate in the teleconferenced meeting, please see the Public Participation Options above.

7. CONSENT CALENDAR: All matters listed under “Consent Calendar” are considered by the Council to be routine and will be enacted by one motion. There will be no separate Council discussion of these items unless requested by a Councilmember prior to the time Council votes on the motion to adopt.

7.1 Approve Minutes for the Regular City Council Meeting of March 7, 2022

7.2 Approve Checks Dated: March 4, 2022; March 11, 2022

7.3 Approve Appointment Recommendations to the Civic Action Commission

7.4 Adopt Ordinance No. ___ Amending Section 3.35.070 of the Pleasant Hill Municipal Code Regarding the Traffic Safety Commission

8. ADMINISTRATION AND FINANCE

8.1 Presentation of the Audited Annual Comprehensive Financial Report (ACFR) and Measure K Fund Report for the Fiscal Year Ended June 30, 2021

8.2 Introduce Ordinance No. ___ Authorizing a Special or Military Equipment Use Policy for the Pleasant Hill Police Department Pursuant to California Assembly Bill 481

9. PUBLIC WORKS AND COMMUNITY DEVELOPMENT

9.1 Adopt Resolution No. ___-22 Approving an Amended and Restated Predevelopment Loan Agreement with Satellite Affordable Housing Associates to Contribute $736,000 Toward Senior Affordable Housing Development at 490 Golf Club Road
Mitigated Negative Declaration Adopted & Exempt Pursuant to CEQA Guidelines Section 15162 and Public Resources Code Section 21166

9.2 Public Hearing and Adopt Resolution No. ___-22 and Introduce Ordinance No. ___ for Adoption of Citywide Residential Objective Design Standards and Related Ordinance Amendments Exempt Pursuant to Section 15061(b)(3)
City Council Meeting Agenda Page 4 March 21, 2022

9.3 Introduce Ordinance No. ___ Adding Section 9.45.125 (Minimum Package Size for Little Cigars and Cigars) to Article I (Regulation of Smoking) of Chapter 9.45 (Tobacco Products and Electronic Smoking Devices) of the Pleasant Hill Municipal Code

10. ADJOURNMENT
Next City Council Meeting: Special Meeting March 28, 2022

CITY COUNCIL STAFF REPORT
Meeting Date: March 21, 2022
TO: THE HONORABLE MAYOR AND CITY COUNCILMEMBERS
SUBJECT: APPROVE MINUTES FOR THE REGULAR CITY COUNCIL MEETING OF MARCH 7, 2022

RECOMMENDED CITY COUNCIL ACTION
Approve the minutes.

ATTACHMENT(S):

March 7, 2022 – Tentative Minutes
Prepared by: Carol Wu, City Clerk Recorder

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MINUTES OF THE
REGULAR MEETING – CITY COUNCIL
March 7, 2022
City Council Meeting Minutes Page 1 March 7, 2022
Mayor Harris called a Regular Meeting of the City Council to order at 7:00 PM via teleconference, complete proceedings of which were electronically recorded. The meeting agenda was posted on the City Hall outdoor bulletin board at 100 Gregory Lane, Pleasant Hill, CA on March 4, 2022, by Deputy City Clerk Juanita Davalos.

1. CALL TO ORDER

2. ROLL CALL
Attendee Name Title Status
Michael G. Harris Mayor Present
Timothy M. Flaherty Vice Mayor Absent
Ken Carlson Councilmember Present
Sue Noack Councilmember Present
Matthew Rinn Councilmember Present

3. PRESENTATIONS

3.1 Proclamation Designating March as Women's History Month Mayor Harris read and presented the proclamation to Barbara Thor, Chair of the Civic Action Commission. Commission Thor expressed her appreciation to the City Council and the City on behalf of the Commission. She made brief remarks about Women’s History Month.

3.2 Proclamation Designating March as American Red Cross Month Mayor Harris read the proclamation designating the month of March as American Red Cross Month.

3.3 Proclamations Recognizing Martha Barajas as Police Professional Staff Member of the Year and Nick Filippini as Police Officer of the Year 2021 Pleasant Hill Police Chief, Bryan Hill, expressed his appreciation for the employees of the Pleasant Hill Police Department. Chief Hill commented on the qualifications of Martha Barajas and Officer Nick Filippini. He also remarked on Ms. Barajas’ role and contributions to the Police Department.

Mayor Harris presented the proclamation recognizing Ms. Barajas as the Police Department’s Professional Staff Member of the Year. Ms. Barajas thanked the City Council and Chief Hill for the recognition and made brief remarks.

Chief Hill introduced Officer Filippini and summarized his accomplishments and contributions to the community. Mayor Harris presented the proclamation recognizing Officer Filippini as Police Officer of the Year. Officer Filippini thanked the City Council and the Pleasant Hill Police Department for the opportunity to serve the community.

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Attachment: March 7, 2022 Tentative Minutes (Minutes)
City Council Meeting Minutes Page 2 March 7, 2022

4. CITY MANAGER COMMENTS:

June Catalano, City Manager, reported that:
 Off the Grid will be returning to Pleasant Hill in April;  the City Council Goals Workshop will be held virtually on Monday, March 28, 2022, at 6:30 p.m.; and
 the Planning Commission will hold a virtual meeting on Tuesday, March 22, 2022, at 6:30 p.m. to consider the preferred land use alternative for the General Plan, including the housing opportunity sites.

Ms. Catalano expressed her appreciation to Martha Barajas and Officer Filippini.

5. COUNCIL ANNOUNCEMENTS AND REPORTS

5.1 Reports from Councilmembers on Meetings or Conferences Attended at City Expense
(A) Contra Costa Mayors Conference Hosted via Teleconference on March 3, 2022 Mayor Harris reported his attendance at the Contra Costa Mayors Conference. (B) Other Meetings Attended at City Expense
Councilmember Carlson noted the meeting was not at the City’s expense, but he attended at the League of California Cities Board of Directors meeting held February 24-25, 2022 in Walnut Creek, California.

5.2 Announcements from Councilmembers
Mayor Harris and Councilmembers Carlson and Rinn reported their participation at the Pleasant Hill Baseball Association opening day parade.

Mayor Harris reported his participation at the Coffee with the Cops event; a number of school safety meetings, a ribbon cutting ceremony; and the Pleasant Hill Chamber of Commerce Government Affairs Committee meeting.

6. PUBLIC COMMENT
Mayor Harris opened public comment.

Chris Pugliese, Pleasant Hill, encouraged the City Council to return to in-person meetings. Mr.

Pugliese also expressed concerns about Public Works maintenance efforts.

Mayor Harris noted that many of the areas are private property not maintained by the City, and that he will have staff from Public Works and Code Enforcement contact Mr. Pugliese.

Mayor Harris closed public comment.

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Attachment: March 7, 2022 Tentative Minutes (Minutes)
City Council Meeting Minutes Page 3 March 7, 2022

7. CONSENT CALENDAR
Motion (Noack/Rinn) to Approve all consent items, carried as follows:

AYES: Carlson, Noack, Rinn, Harris
ABSENT: Flaherty

7.1 Approve Minutes for the Regular City Council Meeting of February 7, 2022

7.2 Approve Checks Dated: February 4, 2022; February 11, 2022; February 18, 2022; February 25, 2022

7.3 Accept Update on Contra Costa Transportation Authority and TRANSPAC

7.4 Affirm Resolution No. 63-21 Approving Continued Teleconferencing of the Meetings of All City Legislative Bodies Pursuant to the Provisions of AB 361

7.5 Adopt Resolution No. 14-22 Approving a First Amendment to the Agreement with Stay Pleasant Hill to Serve as the Owners' Association for the Pleasant Hill Tourism Improvement District and Authorizing the City Manager to Execute the Amendment

7.6 Public Hearing and Introduce Ordinance No. ___ Amending Section 3.35.070 of the Pleasant Hill Municipal Code Regarding the Traffic Safety Commission

8. PUBLIC WORKS AND COMMUNITY DEVELOPMENT

8.1 Presentation by Bird, a Nationally Recognized Micro-Mobility Company, on the Potential for an Electric Scooter Pilot Program in Pleasant Hill.

Ethan Bindernagel, Community Development Director/Assistant City Manager, introduced Mike Butler from Bird. Mr. Butler delivered a slide show presentation on Bird which explained the use of shared electric scooters and the potential benefits to the community. Mr. Butler described the local infrastructure and pricing specific to Pleasant Hill.

Mayor Harris expressed his concerns about safety and potential clutter, to which Mr. Butler responded.

Councilmember Noack suggested that the public could use the scooters to ride from Downtown Pleasant Hill to the new library using the local trail system. Councilmember Noack and Mr.

Butler discussed helmet usage incentives.

Councilmembers and Mr. Butler discussed scooter storage and nesting areas in the community; potential elimination of traffic issues; and marketing usage to tourists and Diablo Valley College students.

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Attachment: March 7, 2022 Tentative Minutes (Minutes)
City Council Meeting Minutes Page 4 March 7, 2022
Mayor Harris asked Mr. Bindernagel about next steps. Mr. Bindernagel said that staff would conduct due diligence and then work with Bird on the terms of an agreement which would be brought back to the City Council for consideration.

8.2 Public Hearing and Adopt Resolution No. 15-22 Authorizing Transmittal of the Annual General Plan and Housing Element Implementation Report to the Governor’s Office of Planning and Research and the State Department of Housing and Community Development
Troy Fujimoto, City Planner, summarized the City’s annual status report on the General Plan and the Housing Element Implementation report. Mr. Fujimoto cited the accomplishments of the Planning Division, Engineering Division, and the Economic Development Department.

Mayor Harris thanked Mr. Fujimoto and the parties involved in the General Plan Update.

Councilmember Noack made a clarification regarding the housing allocation numbers and asked about how certain allocations are counted. Mr. Fujimoto answered Councilmember Noack’s question.

Mayor Harris opened public comment.

There was no public comment.

Mayor Harris closed public comment.

Motion (Carlson/Noack) to Approve item 8.2, carried as follows:

AYES: Carlson, Noack, Rinn, Harris
ABSENT: Flaherty

8.3 Adopt Resolution No. 16-22 Accepting the Pleasant Hill Road Sidewalk Installation Project (Pleasant View Drive to Cumberland Drive), Project No. 02- 21, as Complete and Authorizing the City Engineer to Issue and Record a Notice of Completion
Ananthan Kanagasundaram, Acting City Engineer, delivered a presentation on the Pleasant Hill Road Sidewalk Installation Project from Pleasant View Drive to Cumberland Drive. Mr.

Kanagasundaram described the construction highlights, project successes, and financial impact.

Mayor Harris thanked Mr. Kanagasundaram and staff for their work on a successful project.

Mayor Harris opened public comment.

There was no public comment.

Mayor Harris closed public comment.

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Attachment: March 7, 2022 Tentative Minutes (Minutes)
City Council Meeting Minutes Page 5 March 7, 2022
Motion (Carlson/Rinn) to Approve item 8.3, carried as follows:

AYES: Carlson, Noack, Rinn, Harris
ABSENT: Flaherty

9. ADJOURNMENT
Mayor Harris adjourned the meeting in solidarity with the country of Ukraine at 8:30 P.M. The next regular meeting will be held on Monday, March 21, 2022, beginning at 7:00 PM. ________
CAROL W. WU, CITY CLERK RECORDER

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Attachment: March 7, 2022 Tentative Minutes (Minutes)

CITY COUNCIL STAFF REPORT
Meeting Date: March 21, 2022
TO: THE HONORABLE MAYOR AND CITY COUNCILMEMBERS
SUBJECT: APPROVE CHECKS DATED: MARCH 4, 2022; MARCH 11, 2022

RECOMMENDED CITY COUNCIL ACTION
Approve the check register.

ATTACHMENT(S):

Check Register
Prepared by: Sabrina Kwan, Accounting Technician II
Approved by: Erick Cheung, Finance Manager

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Attachment: Check Register (Check Register)

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Attachment: Check Register (Check Register)

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Attachment: Check Register (Check Register)

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Attachment: Check Register (Check Register)

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Attachment: Check Register (Check Register)

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Attachment: Check Register (Check Register)

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Attachment: Check Register (Check Register)

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Attachment: Check Register (Check Register)

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Attachment: Check Register (Check Register)

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Attachment: Check Register (Check Register)

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Attachment: Check Register (Check Register)

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Attachment: Check Register (Check Register)

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Attachment: Check Register (Check Register)

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Attachment: Check Register (Check Register)

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Attachment: Check Register (Check Register)

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Attachment: Check Register (Check Register)

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Attachment: Check Register (Check Register)

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Attachment: Check Register (Check Register)

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Attachment: Check Register (Check Register)

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Attachment: Check Register (Check Register)

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Attachment: Check Register (Check Register)

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Attachment: Check Register (Check Register)

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Attachment: Check Register (Check Register)

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Attachment: Check Register (Check Register)

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Attachment: Check Register (Check Register)

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Attachment: Check Register (Check Register)

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Attachment: Check Register (Check Register)

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Attachment: Check Register (Check Register)
100 Gregory Lane, Pleasant Hill, CA 94523-3323 – (925) 671-5270 www.pleasanthillca.org

MEMORANDUM
TO: City Councilmembers
FROM: Vice Mayor Tim Flaherty, Chair
Councilmember Ken Carlson
DATE: March 21, 2022
SUBJECT: Approve Appointment Recommendations to the Civic Action Commission The City Council is requested to approve the following recommendations for appointment:

CITY BOARDS/COMMITTEES/

COMMISSIONS
TERM
Civic Action Commission 
Anthony Garcia Unfilled term through February 2023
Mike Griffitts (reappointment) March 2022 through February 2026 Michael Moore (reappointment) March 2022 through February 2026

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CITY COUNCIL STAFF REPORT
Meeting Date: March 21, 2022
TO: THE HONORABLE MAYOR AND CITY COUNCILMEMBERS
SUBJECT: ADOPT ORDINANCE NO. ___ AMENDING SECTION 3.35.070 OF THE

PLEASANT HILL MUNICIPAL CODE REGARDING THE TRAFFIC

SAFETY COMMISSION

SYNOPSIS
City staff and the Traffic Safety Commission proposed an amendment to Section 3.35.070 (Meetings) of the Pleasant Hill Municipal Code to amend the meeting day of its regular meetings. The ordinance was introduced at the City Council meeting of March 7, 2022, and the City Council is requested to consider the second reading and adopt the ordinance.

DISCUSSION
Background
The Traffic Safety Commission (“Commission”) and city staff would like to change its regular meeting day from the second Tuesday of each month to the first Tuesday of each month.

Chapter 3.35 of the Pleasant Hill Municipal Code (“PHMC”) sets the framework for establishment and operation of the Commission; the following changes to the Municipal Code are included in the proposed ordinance as introduced by the City Council at its meeting of March 7, 2022:

Current

3.35.070 – Meetings.

The commission shall meet at least once monthly for the purposes set forth in PHMC §

3.35.020. Meetings shall be held at City Hall at 6:00 p.m. on the second Tuesday of each month. These regular and any special meetings shall be conducted in conformance with the Ralph M. Brown Act, Government Code Section 54950 and following.

Proposed

3.35.070 – Meetings.

The commission shall meet on the first Tuesday of each month for the purposes set forth in PHMC § 3.35.020. Meetings shall be held at a time established through the traffic safety commission’s policies and procedures at City Hall, 100 Gregory Lane, Pleasant Hill,

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California. These regular and any special meetings shall be conducted in conformance with the Ralph M. Brown Act, Government Code Section 54950 and following.

Analysis
Community Development and Engineering Department staff attend both Planning Commission and Traffic Safety Commission meetings. The Traffic Safety Commission meeting time conflicts with the established Planning Commission meeting time in PHMC Section 3.05.080.

FISCAL IMPACT
None

PUBLIC CONTACT
Public contact was made through posting of the City Council agenda on the City’s official notice bulletin board, at the Pleasant Hill Senior Center and at the Pleasant Hill Police Department. The agenda and staff report are posted on the City’s web page.

RECOMMENDED CITY COUNCIL ACTION
Staff recommends the City Council consider the second reading and adopt the proposed ordinance.

ALTERNATIVES TO RECOMMENDED ACTION
The City Council could choose to not adopt the ordinance, and provide direction to staff.

ATTACHMENT(S):

Proposed Ordinance
Prepared by: Ananthan Kanagasundaram, Acting City Engineer Approved by: June Catalano, City Manager

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ORDINANCE NO. ____

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PLEASANT HILL AMENDING SECTION 3.35.070 OF THE PLEASANT HILL MUNICIPAL CODE

REGARDING THE TRAFFIC SAFETY COMMISSION
WHEREAS, the Traffic Safety Commission is established through Chapter 3.35 of the Pleasant Hill Municipal Code; and
WHEREAS, the Commission wishes to amend the meeting day language for the Traffic Safety Commission in Section 3.35.070 of the Municipal Code; and WHEREAS, the Commission recommends to the City Council the changes in this ordinance.

NOW, THEREFORE, the City Council of the City of Pleasant Hill does ordain as follows:

Section 1. Section 3.35.070 of the Pleasant Hill Municipal Code is repealed and replaced in its entirety to read:

3.35.070 Meetings.

The commission shall meet on the first Tuesday of each month for the purposes set forth in PHMC § 3.35.020. Meetings shall be held at a time established through the traffic safety commission’s rules and procedures at City Hall, 100 Gregory Lane, Pleasant Hill, California. These regular and any special meetings shall be conducted in conformance with the Ralph M. Brown Act, Government Code Section 54950 and following (Ord. 806 § 1, 2005) Section 2.: This ordinance shall be effective 30 days after its adoption.

Section 3. Within fifteen days after passage of this ordinance, the City Clerk shall cause it or a summary of it to be posted in the three places designation by resolution of the City Council.

The foregoing ordinance was introduced at a regular meeting of the City Council of the City of Pleasant Hill held on the 7th day of March, 2022.

ADOPTED and ordered posted at a regular meeting of the City Council of the City of Pleasant Hill, held on the 21 day of March, 2022, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:
___________________________________
MICHAEL G. HARRIS, OD, Mayor
ATTEST:

DANIELLE K. HABR, City Clerk

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Attachment: Proposed Ordinance (Traffic Safety Commission Ordinance)

CITY COUNCIL STAFF REPORT
Meeting Date: March 21, 2022
TO: THE HONORABLE MAYOR AND CITY COUNCILMEMBERS
SUBJECT: PRESENTATION OF THE AUDITED ANNUAL COMPREHENSIVE

FINANCIAL REPORT (ACFR) AND MEASURE K FUND REPORT FOR
THE FISCAL YEAR ENDED JUNE 30, 2021

SYNOPSIS
The Budget Committee reviewed the Annual Comprehensive Financial Report and the Management Letter as of June 30, 2021 on March 15, 2022 and is now presented for review and acceptance by the City Council.

DISCUSSION
Background
The City’s fiscal year operates from July 1 through June 30. The Annual Comprehensive Financial Report (ACFR) summarizes the City’s financial activities and fund balances as of June 30, 2021.

Analysis
Annual Comprehensive Financial Report (ACFR)
The Annual Comprehensive Annual Financial Report (ACFR) summarizes the City’s financial activities for fiscal year (FY) 2020/21 and fund balances as of June 30, 2021. The ACFR was prepared in accordance with generally accepted accounting principles (GAAP) as promulgated by the Governmental Accounting Standards Board (GASB). The financial statements contained within the ACFR were audited by Macias, Gini & O’Connell LLP (MGO), the City’s independent Certified Public Accountant, which issued an unmodified opinion - the highest possible rating.

The ACFR for FY 2020/21 is attached for your review and consideration for acceptance. The transmittal letter, independent auditor’s report, and management’s discussion and analysis section provide a good summary of the City’s financial activities during the year.

MGO also prepares the Management Letter to the City Council and this report provides the auditors an opportunity to inform on any audit issues and/or areas of improvement. In summary, the City had no material audit issues nor disagreements with the auditors. The auditors recommend changes to identify projects as construction-in-progress (CIP), and new projects (i.e.

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Library project) or projects that extend the life of an asset be considered fixed assets. Other projects may be either repair and/or maintenance (i.e. damaged street curb) work and those should not added to fixed assets. The Finance Department will review the CIP projects to determine if they should be included with fixed assets in the future.

FISCAL IMPACT
None

PUBLIC CONTACT
Public contact was made through posting of the City Council agenda on the City’s official notice bulletin board, at the Pleasant Hill Senior Center, and at the Pleasant Hill Police Department.

The agenda and staff report are posted on the City’s web page.

RECOMMENDED CITY COUNCIL ACTION
Accept the City of Pleasant Hill’s Annual Comprehensive Financial Report and Management Letter for the fiscal year ended June 30, 2021.

ALTERNATIVES TO RECOMMENDED ACTION
Do not accept the City of Pleasant Hill’s Annual Comprehensive Financial Report and Management Letter for the fiscal year ended June 30, 2021.

ATTACHMENT(S):

1. City of Pleasant Hill Annual Comprehensive Financial Report (ACFR) At Fiscal Year-End June 30, 2021

2. Management Letter to the City of Pleasant Hill for June 30, 2021 Prepared by: Erick Cheung, Finance Manager
Approved by: June Catalano, City Manager

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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL

ANNUAL COMPREHENSIVE FINANCIAL REPORT
YEAR ENDED JUNE 30, 2021
Prepared by

FINANCE DIVISION

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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Annual Comprehensive Financial Report
Year Ended June 30, 2021
Table of Contents
Page

INTRODUCTORY SECTION
Letter of Transmittal ............................................................................................................................................. i List of Principal Officials .................................................................................................................................... iv California Map ..................................................................................................................................................... v Organization Chart .............................................................................................................................................. vi GFOA Certificate of Achievement for Excellence in Financial Reporting ..................................................... vii

FINANCIAL SECTION
Independent Auditor’s Report ......................................................................................................................... 1 Management’s Discussion and Analysis (Required Supplementary Information - Unaudited) .............. 3 Basic Financial Statements:

Government-wide Financial Statements:

Statement of Net Position ................................................................................................................. 15 Statement of Activities ..................................................................................................................... 16 Fund Financial Statements:

Governmental Funds:

Balance Sheet ................................................................................................................................... 17 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position - Governmental Activities ................................................................. 18 Statement of Revenues, Expenditures and Changes in Fund Balances ............................................ 19 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities - Governmental Activities ............................................................................................................. 20 Statement of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual:

General Fund ............................................................................................................................... 21 Traffic Mitigation Fund ............................................................................................................... 22 Measure J Growth Management Fund ........................................................................................ 23 Gas Tax Fund .............................................................................................................................. 24 Proprietary Fund:

Statement of Fund Net Position ........................................................................................................ 25 Statement of Revenues, Expenses and Changes in Fund Net Position ............................................. 26 Statement of Cash Flows .................................................................................................................. 27 Fiduciary Funds:

Statement of Fiduciary Net Position ................................................................................................. 28 Statement of Changes in Fiduciary Net Position .............................................................................. 29 Notes to Basic Financial Statements ...................................................................................................... 31

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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Annual Comprehensive Financial Report
Year Ended June 30, 2021
Table of Contents
Page
FINANCIAL SECTION (Continued)
Required Supplementary Information (Unaudited):

Schedule of City’s Proportionate Share of the Net Pension Liability ......................................................... 63 Schedule of City Contributions .................................................................................................................... 64 Other Supplementary Information:

Nonmajor Governmental Funds:

Combining Balance Sheet ................................................................................................................ 68 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ......................... 72 Schedules of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual .......... 76 Custodial Funds:

Combining Statement of Fiduciary Net Position .............................................................................. 86 Combining Statement of Changes in Fiduciary Net Position ........................................................... 87

STATISTICAL SECTION
Financial Trends:

Net Position by Component – Last Ten Fiscal Years .................................................................................. 90 Changes in Net Position – Last Ten Fiscal Years ........................................................................................ 91 Fund Balances of Governmental Funds – Last Ten Fiscal Years ............................................................... 93 Changes in Fund Balances of Governmental Funds – Last Ten Fiscal Years ............................................ 94 Revenue Capacity:

Assessed and Estimated Actual Net Value of Taxable Property – Last Ten Fiscal Years ......................... 95 Property Tax Rates – All Direct and Overlapping Governments – Last Ten Fiscal Years ........................ 96 Principal Property Taxpayers – Current Year and Ten Years Ago ............................................................. 97 Property Tax Levies and Collections – Last Ten Fiscal Years ................................................................... 98 Debt Capacity:

Ratio of Outstanding Debt by Type – Last Ten Fiscal Years ..................................................................... 99 Computation of Direct and Overlapping Debt .......................................................................................... 100 Computation of Legal Bonded Debt Margin – Last Ten Fiscal Years ..................................................... 101 Demographic and Economic Information:

Demographic Statistics – Last Ten Calendar Years .................................................................................. 102 Top 25 Sales Tax Producers – Current Year and Nine Years Ago ........................................................... 103 Sales by Categories – Last Ten Calendar Years ........................................................................................ 104 Operating Information:

Full-Time Equivalent City Government Employees by Function – Last Ten Fiscal Years ..................... 105 Operating Indicators by Function/Program – Last Ten Fiscal Years ........................................................ 106 Capital Asset Statistics by Function/Program – Last Ten Fiscal Years .................................................... 107

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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR)) i
March 9, 2022
To the City Council and Residents of Pleasant Hill
I am pleased to submit the City of Pleasant Hill’s (City) Annual Comprehensive Financial Report (ACFR) for the fiscal year ended June 30, 2021. The ACFR, which contains the City’s basic financial statements, auditor’s report, and important supplemental information, is intended to present the reader with a comprehensive view of the City’s financial position and activities.

The ACFR was prepared by the City’s Finance Division, which assumes responsibility for its accuracy, completeness, and fairness. The City’s financial statements were audited by Macias Gini & O’Connell LLP, the City’s independent certified public accountant, in order to provide reasonable assurance that the financial statements are free of material misstatement and are fairly presented in accounting principles generally accepted in the United States of America (GAAP).

Macias Gini & O’Connell LLP issued an unmodified opinion, the highest possible rating, for the fiscal year ending June 30, 2021.

The Management’s Discussion and Analysis (MD&A) section of the ACFR provides an overview of the City’s fiscal position and activities. The MD&A complements this transmittal letter and should be read in conjunction with it.

City of Pleasant Hill Government
Pleasant Hill is a general law city incorporated in 1961. It delivers a range of municipal services under the council-manager form of government, and offers outstanding quality of life to its approximately 34,000 residents across 8.1 square miles.

City Council
The City Council consists of five members who are elected at large for staggered four-year terms.

The City Treasurer is also elected for a four-year term. The Mayor and Vice-Mayor are elected by the Council from its own ranks and serve for one-year terms. The City Council appoints the City Manager and City Attorney. The City Attorney is currently a contract position.

Budget Committee
While retaining authority to approve all actions, the City Council has established a Budget Committee to review and oversee financial matters. Staff provides the Budget Committee and Council with reports such as the ACFR, Long-Term Financial Plan, and quarterly budget-versusactual results that are utilized in evaluating the City’s financial position.

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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR)) ii
Economic Conditions and Budget Challenges
One important influence on the City’s financial position is the condition of the economy. The COVID-19 pandemic continues to cause disruption to the nation’s economy. While economically sensitive revenues, such as Sales Tax and Transient Occupancy Tax (TOT), continue to be impacted, the recovery during FY 2020/21 was more robust than anticipated. Also, the federal government approved the American Rescue Plan Act (ARPA) in March 2021 for $350 billion.

The United States Treasury provided $1.2 billion to the State of California for smaller cities, which was allocated based on population. The City’s allocation was $8.3 million, with the first tranche of $4.2 million received in July 2021 and the second tranche anticipated in the following year. The ARPA funds are eligible for a variety of uses to help the City recover from COVID-19 and must be obligated by December 31, 2024 and spent by December 31, 2026. The City Council is still considering various options to allocate these funds as the final rules for ARPA were recently released by the United States Treasury.

The City has prudently maintained or reduced costs whenever possible, but personnel costs continue to be a significant share of the City’s total expenditures. There have been significant increases in healthcare benefit costs and the City’s required contribution toward its CalPERS unfunded pension liability is expected to increase rapidly over the next few years despite the City’s best efforts on cost containment. The City will continue to work with experts in this area to analyze the City’s options for reducing the lifecycle net cost and volatility of required pension contributions.

One of the recommendations by the City Council Budget Committee towards this goal is to establish a Pension Trust Fund. The Pension Trust Fund would be under the direction of the City and could be an investment tool to offset future pension costs. Fortunately, unlike many municipalities, the City does not provide post-retirement health care benefits and therefore has no liability costs nor contributions to record.

Addressing critical capital asset and infrastructure needs continues to be a top priority. The City’s 20-year infrastructure needs assessment Capital Improvement Plan (CIP) for 2020-2025 illustrates the City’s infrastructure needs and proposes a prioritized plan for making infrastructure investments. Pleasant Hill residents recognized the need for additional local funding for capital improvements, and overwhelmingly supported the Measure K sales tax increase in November 2016. Measure K is projected to generate in excess of $4.0 million annually and can be used for important City services including repaving and maintaining neighborhood streets; maintaining and upgrading the City’s storm drains; adding new sidewalks and walking and bike paths; constructing a new community library; and funding other City projects and services that Pleasant Hill residents and the City Council have identified as key priorities. Additionally, State legislators adopted Senate Bill (SB) 1, the Road Repair and Accountability Act of 2017, which provides additional funding for local streets and other transportation projects. The value and condition of capital assets is expected to increase significantly as a result of these additional revenue streams.

Biennial Budget
During FY 2021/22, the City will prepare a biennial budget for FY 2022/23 – FY 2023/24. The goal is to create a realistic plan that addresses major revenue and expenditure issues while reflecting the priorities of the City Council and community.

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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR)) iii
Awards
The Government Finance Officers Association of the United States and Canada (GFOA) awarded the City a Certificate of Achievement for Excellence in Financial Reporting for the fiscal year ending June 30, 2020. The City has received this award for the past 29 years. To receive the award, a jurisdiction must publish an easily readable and efficiently organized ACFR that satisfies GAAP and applicable legal requirements. Staff believes that the ACFR for the fiscal year ended June 30, 2021 again meets the Certificate of Achievement Program’s requirements and will submit it to the GFOA for consideration.

Acknowledgments
This ACFR is the result of the combined efforts of the City’s Finance Division, other City departments, and Macias Gini & O’Connell LLP. Acknowledgment should also be given to the City Council Budget Committee for its thoughtful, prudent guidance and direction on the financial affairs of the City.

Respectfully submitted,

June Catalano Erick Cheung
City Manager Finance Manager

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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR)) iv

ELECTED OFFICIALS
Susan Noack, Mayor
Michael G. Harris, Vice Mayor
Kenneth Carlson, Councilmember
Timothy M. Flaherty, Councilmember
Matthew Rinn, Councilmember
Mark W. Celio, City Treasurer

CITY STAFF
June Catalano, City Manager
Janet Coleson, City Attorney
Bryan Hill, Chief of Police
Ethan Bindernagel, Community Development Director/Assistant City Manager Zach Seal, Economic Development Manager
Troy Fujimoto, City Planner
Geoff Gillette, Public Information Officer
Danielle Habr, Senior Management Analyst/Deputy City Clerk Ann James, Maintenance Superintendent
Ling King, Chief Technology Officer
Mary McCarthy, Finance Manager (Retired)
Erick Cheung, Finance Manager
Ericka Mitchell, Human Resources Manager
Mario Moreno, City Engineer
Geoffrey Simmons, Chief Building Official
Carol Wu, City Clerk

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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
v
California Map

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CITY OF PLEASANT HILL
Organization Chart

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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR)) www.mgocpa.com
Macias Gini & O’Connell LLP
2121 N. California Boulevard, Suite 750
Walnut Creek, CA 94596
1 Independent Auditor’s Report
Honorable Mayor and Members
of the City Council
City of Pleasant Hill, California
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Pleasant Hill, California (City), as of and for the year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City as of June 30, 2021, and the respective changes in financial position and, where applicable, cash flows thereof and the respective budgetary comparison for the General Fund, the Traffic Mitigation Fund, the Measure J Growth Management Fund, and the Gas Tax Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America.

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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR)) 2 Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, the schedule of City’s proportionate share of the net pension liability, and the schedule of City contributions, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The introductory section, combining and individual fund financial statements and schedules, and statistical section 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 are the responsibility of management and were derived from and relate 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.

The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 9, 2022, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

Walnut Creek, California
March 9, 2022

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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2021
3 The Management’s Discussion and Analysis (MD&A) section of the Annual Comprehensive Financial Report (ACFR) provides City management’s summary of the financial statements and assessment of the City’s financial condition.

Financial Highlights
 The City’s total net position (assets and deferred outflows of resources less liabilities and deferred inflows of resources) was $62.8 million as of June 30, 2021, compared to $57.8 million as of June 30, 2020.  The City’s General Fund reported an ending fund balance of $33.1 million, approximately $17.3 million of which was assigned, $14.4 million of which was restricted, and $1.4 million was unassigned.  The City entered into a private placement loan with the Bank of the West for $26.4 million to finance construction of a new library and a portion of the Oak Monticello Backbone Infrastructure project.

Overview of the Annual Comprehensive Financial Report
This Annual Comprehensive Financial Report is organized into five sections:
 An Introduction, which includes the Transmittal Letter;  Management’s Discussion and Analysis;
 Basic Financial Statements and Notes;
 Supplemental information; and
 Statistical information.

Basic Financial Statements
The Basic Financial Statements summarize the City’s activities and financial position. They contain the Government-Wide Financial Statements, Fund Financial Statements, and Notes to these financial statements.

Government-Wide Financial Statements
The Government-Wide Financial Statements provide an overview of the City’s complete financial activities. They include the Statement of Net Position and the Statement of Activities.

The Statement of Net Position reports the City’s capital assets and long-term liabilities on a full accrual basis of accounting similar to that used by private-sector businesses in their balance sheets. Over time, changes in net position may serve as an indication of whether the City’s financial position is improving or deteriorating.

The Statement of Activities provides information about the City’s revenues and expenses on a full accrual basis, similar to that used by private-sector businesses in their income statements, with an emphasis on measuring net revenues or expenses for each of the City’s functions. The Statement of Activities explains in detail the change in net position for the year.

The amounts in the Statement of Net Position and the Statement of Activities are separated into Governmental and Business-Type Activities, as follows:
 Governmental Activities - Governmental activities include all of the City’s basic services: general government, public safety, transportation, and community development. These services are supported by the City’s general revenues, such as taxes, and by specific program revenues, such as fees.  Business-Type Activities - The City’s only enterprise activity, Diablo Vista Water, is reported as a business-type activity. The activity is supported by fees and assessments paid by the users.

The Government-Wide Financial Statements can be found on pages 15-16 of this report.

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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2021
4 Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that are intended for specific activities or objectives. A fund is an independent accounting entity with a self-balancing set of accounts.

The City uses fund accounting to ensure compliance with finance-related legal requirements. The Fund Financial Statements provide detailed information about each of the City’s most significant funds, called major funds. All non-major funds are combined into a single column on each fund statement. The General Fund is always considered a major fund. The other funds that the City considers major funds may change from year to year based on City activities.

The Fund Financial Statements display the City’s operations in more detail than the Government-Wide Financial Statements. There are three main types of funds in governmental accounting: governmental funds, proprietary funds, and fiduciary funds, defined below.
 Governmental funds: These are the funds that support most governmental functions. The fund types in this category include general, special revenue, debt service, and capital project funds.  Proprietary funds: These funds are used to account for a government’s ongoing activities that are similar to those found in the private sector. This fund type includes Diablo Vista Water.  Fiduciary funds: These funds are used to account for assets held by a governmental unit in a trustee capacity or as a custodian for individuals, private organizations, or other government agencies.

Governmental Funds
Governmental Fund Financial Statements are prepared on the modified accrual basis of accounting, which means they measure only current financial resources and uses. Long-lived assets, such as capital assets, and long-term liabilities, such as pension and compensated absences, are only presented in the Government-Wide Financial Statements.

Because the focus of governmental funds is narrower than that of Government-Wide Financial Statements, it is useful to compare the two. Reconciliation between the Governmental Fund Balance Sheet and the Governmental Fund Statement of Revenues, Expenditures and Changes in Fund Balances facilitates this analysis.

The City normally adopts a biennial budget on or before June 30 of even-numbered years for each of the ensuing two fiscal years. The Budgetary Comparison Statements are provided to demonstrate performance against budget.

The Governmental Fund Financial Statements and Budgetary Comparison Statements can be found on pages 17- 24 of this report.

Proprietary Funds
Proprietary Funds are prepared on the full accrual basis of accounting. These statements include all of their assets and liabilities, both current and long-term.

The Proprietary Fund Financial Statements can be found on pages 25-27 of this report.

Fiduciary Funds
Fiduciary Funds are used to account for resources held for the benefit of parties outside of the City. They are not reported in the Government-Wide Financial Statements because the resources of those funds are not available to support the City’s own programs.

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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2021
5 The City has two different types of fiduciary funds: a Private-Purpose Trust Fund is used to report trusts or similar arrangements that benefit other entities, and Custodial Funds used to report resources held in a custodial capacity for other public entities.

The Fiduciary Fund Financial Statements can be found on pages 28-29 of this report.

Notes to the Financial Statements
The Notes to the financial statements provide additional information that is necessary to acquire 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 31-61 of this report.

Required Supplementary Information (RSI)
RSI is presented in addition to the basic financial statements and accompanying notes. This required information includes the schedule of City’s proportionate share of the net pension liability and the schedule of City contributions. The RSI can be found on pages 63-64 of this report.

Other Supplementary Information
The combining statements referred to earlier in connection with non-major Governmental Funds are presented immediately following the Notes to the financial statements. Combining statements and schedules can be found on pages 65-87 of this report.

Financial Analysis of Government-Wide Financial Statements The City’s total assets and deferred outflows of resources in governmental activities exceeded its liabilities and deferred outflows of resources by $61.7 million at the end of the fiscal year (“FY”), an increase in net position of $5.1 million.

Condensed Governmental Activities Net Position at June 30 ($ in Millions) 2021 2020
Cash and investments 44.9 $ 24.9 $
Other assets 8.1 7.6
Capital assets 78.8 68.7
Total assets 131.8 101.2
Deferred outflows of resources - pension items 9.6 9.8
Net pension liabilities 45.0 43.2
Long-term debt 24.8 -
Other liabilities 7.7 8.0
Total liabilities 77.5 51.2
Deferred inflows of resources - pension items 2.2 3.2
Net position:

Net investment in capital assets 68.3 68.7
Restricted 13.7 12.5
Unrestricted (20.3) (24.6)
Total net position 61.7 $ 56.6 $

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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2021
6 The largest portion of the City’s net position is its net investment in capital assets such as buildings, infrastructure (such as streets), and vehicles, less any related debt used to acquire those assets. The City uses these assets to provide services to citizens. This amount is reported separately because it cannot easily be liquidated to pay liabilities.

The restricted portion of the City’s net position represents resources that are subject to external restrictions on how they are used.

The Statement of Net Position for Government-Wide Statements includes three pension related balances: net pension liability, deferred outflows of resources, and deferred inflows of resources. Further details for the employee benefits can be found in Note 10 to the basic financial statements.

Cash and investments increased by $20.0 million and long-term debt increased by $24.8 million in FY2021 due to the loan the City entered into with the Bank of the West to finance the construction of the new library and a portion of the Oak Monticello Backbone Infrastructure project.

Governmental Activities
The table below shows that Governmental Activities net position increased by $5.1 million in FY 2020/21.

Changes in Governmental Activities Net Position ($ in Millions) 2021 2020
Expenses
General government 8.4 $ 9.8 $
Public safety 12.9 14.0
Transportation 12.3 8.2
Community development 2.4 2.3
Interest and fiscal charges 0.5 -
Total expenses 34.3 36.5
Revenue
Program revenues:

Charges for services 2.8 2.8
Operating contributions and grants 7.4 4.0
Capital contributions and grants 0.6 0.4
Subtotal program revenues 7.2 10.8
General revenues:

Property taxes 8.3 7.8
Sales taxes 10.6 9.5
Measure K transactions and use tax 4.9 4.2
Transient occupancy tax 1.6 2.2
Other taxes 5.1 5.3
Investment earnings 0.2 0.5
Miscellaneous 0.1 0.1
Subtotal general revenues 29.6 30.8
Total revenues 36.8 41.6
Changes in net position 2.5 5.1
Net position, beginning 56.6 54.1
Net Position, ending 61.7 $ 56.6 $

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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2021
7 Revenue Highlights
Total governmental revenues increased by $4.8 million to $41.6 million in FY 2020/21 due to increases in program and general revenues of $3.6 million and $1.2 million, respectively.

Program Revenues
Operating contributions and grants increased by $3.4 million. During this fiscal year, the City received significant contributions from the County of Contra Costa and Pleasant Hill Recreation & Park District related to the Backbone Infrastructure Cost Sharing Agreement. Grant revenues and contributions from other agencies typically vary year over year depending upon the stage of projects underway during the year.

General Revenues
Property taxes increased by $0.5 million due to continued recapture of Proposition 8 valuation reductions and higher assessed valuations on residential properties that have changed ownership.

Sales tax revenues increased by $1.1 million. The impact of the COVID-19 pandemic was mitigated by increased online sales that resulted in a larger pool allocation, strong auto and other durable asset sales and a greater number of business to business sales. Transient occupancy tax declined by $0.6 million during this year due to the continued effect of the pandemic on the travel industry, both for business and personal.

Expense Highlights
Expenses are classified by governmental function. Total expenses for governmental activities were $36.5 million, which was $2.2 million higher than the prior year. Major reasons for the net overall increase are explained below.

General government and public safety expenses primarily decreased as part of the City’s overall response to the economic crisis that occurred in the wake of the COVID-19 pandemic, which included widespread 5% reductions in expenditures. A primary component of these cost containments included a hiring freeze on key positions, reducing public safety and general government payroll costs. Transportation expenses were higher by $4.1 million due to the composition and timing of projects during the year primarily in the Gas Tax Fund.

The following table presents the net expense of each of the City’s governmental activities. Net expense is defined as total program cost over the revenue generated by the program through charges for services, grants, and contributions.

Net Expenses of Governmental Activities ($ in Millions) 2021 2020
General government (7.7) $ (9.4) $
Public safety (12.6) (13.7)
Transportation (4.6) (3.7)
Community development (0.5) (0.3)
Interest and fiscal charges (0.5) -
Total $ (27.1) (25.9) $

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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2021
8 Overall, program revenues collected are significantly lower than the program expenses. Consequently, the City is very dependent upon general revenues, particularly property and sales taxes. In January 2019, the City Council adopted by resolution an updated General Fund reserve policy that established a $5 million Reserve for Working Capital and a $5 million Budget Stabilization Reserve. This contingency reserve is available for working capital needs and to mitigate the impact of an economic downturn or unplanned major expenditure.

Business-Type Activities
The Statement of Net Position and Statement of Activities present a summary of the City’s Business-Type Activities, which is only comprised of the City’s Diablo Vista Water Enterprise Fund.

Condensed Business-Type Activity Net Position ($ in Millions) 2021 2020
Cash and investments 0.7 $ 0.7 $
Capital assets 0.5 0.5
Total assets 1.2 1.2
Net position:

Net investment in capital assets 0.5 0.5
Unrestricted 0.7 0.7
Total net position 1.2 $ 1.2 $
The net position of the business-type activity was $1.2 million at June 30, 2021, which consist of a $0.5 million investment in capital assets and $0.7 million of unrestricted net position. The overall net position remained consistent when compared to the prior fiscal year.

Changes in Business-type Activity Net Position ($ in Millions) 2021 2020
Expenses
Diablo Vista Water 0.4 $ 0.2 $
Revenue
Program revenues:

Charges for services 0.1 0.1
General revenues 0.3 0.3
Total revenues 0.4 0.4
Changes in net position 0.2 -
Beginning net position 1.2 1.0
Ending net position 1.2 $ 1.2 $

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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2021
9 Financial Analysis of Governmental Funds
As discussed earlier, the City uses governmental fund accounting to ensure compliance with finance-related legal requirements.

Governmental Funds
The City’s Governmental Funds Statement provides information on short term inflows, outflows and the balance of spendable resources. Unassigned fund balance illustrates the City’s net resources available for discretionary use.

As of June 30, 2021, the City’s governmental funds reported a combined fund balance of $45.9 million.

Approximately $1.4 million of the combined total fund balance is unassigned and available for spending at the City’s discretion. The remainder of the fund balance is either restricted ($26.0 million), committed (1.0 million), or assigned ($17.4 million). The restricted portion includes $14.5 million for Measure K loan proceeds for the library project, $12.4 of which relates to encumbrances. The assigned portion includes approximately $0.5 million for General Fund encumbrances, $6.9 million for capital projects, and $10.0 million for contingencies associated with cash flow, economic uncertainty or catastrophic events.

General Fund
Balance Sheet
The General Fund is the primary operating fund of the City. At the end of FY 2020/21, the fund balance for the General Fund was $33.1 million, compared to $12.4 million in the prior year. The large increase relates to the City entering into a lease financing private placement loan transaction with the Bank of the West for $26.4 million.

The proceeds from the loan will be used for the acquisition, construction, and improvement of the new City-owned community library.

Revenues
Total General Fund revenues, excluding other financing sources, decreased by $0.2 million over FY 2019/20 for a total of $30.7 million for FY 2020/21. The year-over-year change in revenue sources is noted below.

General Fund Revenues for the Year Ended June 30 ($ in Millions) 2021 2020 Incr./(Decr.)
Revenues by Sources:

Property Tax 7.7 $ 7.2 $ 0.5 $
Sales Tax 9.2 9.5 (0.3)
Measure K Transaction & Use Tax 4.8 4.2 0.6
Transient Occupancy Tax 1.6 2.2 (0.6)
Other Taxes 5.2 5.4 (0.2)
Licenses and Permits 1.0 1.0 -
Intergovernmental 0.5 0.4 0.1
Charges for Services 0.5 0.6 (0.1)
Use of Money and Property 0.1 0.3 (0.2)
Other 0.1 0.1 -
Total Revenues $ 30.9 30.7 $ (0.2) $

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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2021
10 Property taxes increased by $0.5 million year-over-year to $7.7 million. The increase was primarily due to the continued recapture of Proposition 8 valuation reductions and higher assessed valuations on residential properties that have changed ownership.

COVID-19 related business shutdowns and macroeconomic effects have negatively impacted sales tax and Measure K transactions and use tax for the fiscal year. This decline was offset by several factors: strong auto and other durable goods sales; the increase in business to business transactions; and additional taxes from marketplace facilitators, plus a surge in online sales which led to a larger pool allocation.

Transient Occupancy Tax revenues continue to be impacted by the COVID-19 pandemic. The year-over-year decline was $0.6 million and would have been more significant if a new hotel had not begun operations during the second quarter of FY 2018/19.

Intergovernmental revenue increased primarily due to the reimbursement of various shared costs of the library project infrastructure.

Licenses and permits, charges for services, use of money and property, other taxes and other revenues remained relatively consistent when compared to prior year.

Expenditures
Total General Fund expenditures increased by $9.5 million under the FY 2019/20 amount for a total of $35.6 million for FY 2020/21. The year-over-year change in significant expenditures by function is noted below.

General Fund Expenditures for the Year Ended June 30 ($ in Millions) 2021 2020 Incr./(Decr.)
Expenditures by Function and Type
General Government 7.8 $ 7.9 $ (0.1) $
Public Safety 11.3 11.3 -
Transportation 2.7 3.4 (0.7)
Community Development 1.9 2.0 (0.1)
Capital Outlay 9.8 1.5 8.3
Debt Service - Principal 1.6 - 1.6
Debt Service - Interest and
fiscal charges 0.5 - 0.5
Total Expenditures $ 26.1 35.6 $ 9.5 $
The higher capital outlay expenditures of $8.3 million were mainly due to increased construction activity for the new library project. Additionally, the increase in debt service of $2.1 relates to the first payment on the lease financing private placement loan that the City entered into during FY 2020/21. Transportation costs decreased due to large projects closing out in prior year, mainly the Pleasant Hill Road Improvements project. Other expenditures in the General Fund remained relatively consistent when compared to prior year.

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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2021
11 Other Financing Sources (Uses)
General Fund Other Financing Sources (Uses) for the Year Ended June 30 ($ in Millions) 2021 2020 Incr./(Decr.)
Other Financing Sources (Uses)
Transfers In 0.9 $ 0.1 $ 0.8 $
Transfers Out (1.8) (4.8) 3.0
Proceeds from issuance of
long term debt 26.4 - 26.4
Total Other Financing Sources (Uses) $ (4.7) 25.5 $ 30.2 $ During FY 2020/21, the City transferred $0.8 million, whereas $3.0 million was transferred during the prior year.

Transfers to other funds were $3.0 million lower than prior year transfers. The decrease in transfers to other funds is due to a reduction of Measure K fund transfers to the Gas Tax Fund. The transfer of funds fluctuates year-toyear due to the discretionary operating or capital needs among funds as directed by the managing departments.

The General Fund transferred Measure K resources of $0.8 million during this fiscal year for the Pedestrian and Bicycle Program and Oak Park Boulevard/Monticello Avenue Roadway Improvements project.

Traffic Mitigation Fund
The Traffic Mitigation fund accounts for revenues such as grants and fees assessed on new development. Traffic Mitigation funds are primarily used for the enhancement and expansion to the City’s transit, bicycle, and pedestrian facilities. Revenues vary year–to-year based on the amount of fees collected by the City. During FY 2020/21, the fund received charges for services and interest of $0.1 million, $0.5 million in intergovernmental revenue and incurred $0.6 million in expenditures. The fund balance was $0.1 million as of June 30, 2021.

Measure J Growth Management Fund
The Measure J Growth Management fund accounts for resources for transportation improvement and maintenance which are distributed to the City annually from the countywide Measure J program from Contra Costa Transportation Authority. Measure J is a one-half cent countywide transportation sales tax approved by Contra Costa County voters in 2004 to help generate funding for various transportation improvement and maintenance programs throughout Contra Costa County.

Total revenue and expenditures, including transfers between funds, were $1.1 million and $1.1 million, respectively. It is typical for revenue and expenditures to vary year-to-year due to the timing of projects and reimbursements for grants. The fund balance was $0.5 million as of June 30, 2021.

Gas Tax Fund
The Gas Tax fund accounts for gas taxes apportioned by the State and grants for capital projects. The authorization for the levy and expenditure of gas taxes is codified in the California Streets and Highway Code, Sections 2103- 2107. Gas tax is apportioned to cities based on three factors: vehicle registration, assessed valuation, and population. These funds are restricted to engineering and administrative costs related to street projects. On April 28, 2017, Senate Bill 1 (SB 1) was signed into law by the California Governor. SB 1 imposed additional fuel tax and vehicle fees to supplement funding for roadway maintenance and other transportation needs in the State. A portion of SB 1 is allocated to the City for roadway maintenance or improvement projects.

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CITY OF PLEASANT HILL
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2021
12 The Gas Tax fund had an excess of expenditures over revenues, including transfers to/from other funds, of $0.5 million during FY 2020/21. Grant revenue and gas tax apportionments were $5.5 million, transfers in from other funds were $1.0 million, and expenditures were $7.0 million. During the year, $0.8 million transferred in from the General Fund were Measure K resources. These funds were used to fund the pedestrian and bicycle program ($0.1 million) and Oak Park Boulevard/Monticello Avenue Roadway Improvements ($0.7 million). The Gas Tax fund has a fund balance of $1.9 million at June 30, 2021.

Low and Moderate Income Housing Asset Fund
Redevelopment agencies in California were dissolved effective February 1, 2012. Successor agencies and oversight boards oversee the dissolution and the winding-down of redevelopment activities. At the City Council meeting on January 9, 2012, the City Council agreed to serve as Successor Agency to the Pleasant Hill Redevelopment Agency effective February 1, 2012. Upon dissolution, the City Council also elected to serve as the Housing Successor Agency and retain the housing assets, functions, and powers performed by the former Agency. The Housing Successor Agency’s financial data and transactions are reported in the City’s Low and Moderate Income Housing Asset major governmental fund. The Low and Moderate Income Housing Asset Fund had a restricted fund balance of $5.1 million as of June 30, 2021. The fund balance remains consistent from prior years when the housing assets and liabilities were transferred to this fund.

Other Governmental Funds
These funds are not presented separately in the basic financial statements, but are individually presented as other supplementary information.

Financial Analysis of Enterprise Fund
Diablo Vista Water System Enterprise Fund
The Diablo Vista Water (“DVW”) system provides raw canal water for irrigation purposes to 474 homes. In FY 2003/04, City staff projected that the DVW system would be in a deficit cash position by July 1, 2008 without a fee increase. Increased costs for raw water, electricity, and maintenance of the system had reduced the amount of available funds over several years, and the system’s assets were getting older. In order to continue to maintain the system, a new usage fee of $150 per household per year was adopted by City Council Ordinance No. 786 on June 21, 2004, and took effect in FY 2004/05. An additional Capital Improvements fee of $135 per household per year was also approved, and was phased in over three years, beginning in FY 2004/05. The fees help to provide a financially solvent system. See analysis of the fund in the Business-type Activities analysis above.

General Fund Budgetary Highlights
Revenues and other financing sources, were originally budgeted at $54.7 million and increased to $56.5 million in the final budget. Expenditures, including transfers to other funds, were originally budgeted at $42.6 million and increased to $43.8 million in the final budget.

The FY 2020/21 final budget projected the General Fund would have a surplus of $12.7 million. Note that the General Fund includes Measure K and consequently includes financing proceeds of $26.4 for construction of the library and a portion of Oak Park Monticello backbone infrastructure. At the close of FY 2020/21, the actual surplus was $20.7 million. Significant items contributing to the net positive variance of $8.0 million are as follows:

Total revenues were $1.6 million higher than budgeted. The most significant increase was due to Measure K transactions and use tax revenue which was $1.0 million higher due to solid growth in online sales and a surge in purchases of new and used vehicles which offset declines related to COVID-19 business shutdowns.

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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2021
13 Total expenditures were $6.4 million lower than budgeted. This variance was primarily due to the timing of expenditures for the Measure K library project, in which expenditures were lower than the budgeted amount by $5.0 million.

Capital Assets
The City’s infrastructure capital assets include streets, storm drains, street lights, and traffic control devices. Each year, based on the determination of the City’s Engineering Division, completed projects that meet certain criteria are capitalized. Capitalizable projects that are under construction at fiscal year-end are recorded as constructionin-progress and are capitalized as depreciable assets in the year they are completed. Capital assets and accumulated depreciation that are recorded in the City’s financial statements are shown in the table below. Further details for the capital assets can be found in Note 7 to the basic financial statements.

Capital Assets as of June 30 ($ in Millions)
2021 2020
Governmental Activities:

Land 3.4 $ 3.4 $
Construction in progress 20.8 9.7
Buildings and improvements 15.1 15.1
Equipment and furniture 10.3 9.9
Streets and roads 65.4 65.2
Curbs and gutters 16.7 16.7
Storm drains 8.0 8.0
Street lights 4.0 3.9
Traffic control devices 6.4 5.1
Less: accumulated depreciation (71.3) (68.3)
Total 78.8 $ 68.7 $
Business-type Activities:

Water system infrastructure 0.8 $ 0.8 $
Less: accumulated depreciation (0.3) (0.3)
Total 0.5 $ 0.5 $
During the current year, construction in progress increased by $11.1 million and is mainly comprised of the New City Library project and the Oak Park Boulevard/Monticello Avenue Roadway Improvements project. The City also purchased $0.5 million in equipment and furniture during the year. The City depreciates its depreciable capital assets over their estimated useful lives. Current year depreciation expenses totaled $3.1 million. Additional information on the estimated useful life of each capital asset category may be found in Note 1(H).

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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2021
14 Economic Factors
In early 2020, the COVID-19 pandemic caused significant disruption to the nation’s economy and its effects continue to be felt throughout the nation, including at the City. While economically sensitive revenues, such as Transient Occupancy Tax (TOT) continue to be impacted due to restrictions and access to businesses traveling, the recovery during FY 2020/21 was more robust than anticipated due to improved online sales tax.

In March 2021, the Congress passed the American Rescue Plan Act (ARPA) for $350 billion. Accordingly, the United States Treasury provided $1.2 million to the State of California for smaller cities like the City, which was allocated based on population. The City’s allocation was $8.3 million, and the City received the first tranche of the ARPA funds of $4.2 in July 2021, just after year-end. The City anticipates receiving the second tranche later in 2022. The ARPA funds are eligible for a variety of uses to help the City recover from COVID-19 and must be obligated by December 31, 2024 and spent by December 31, 2026. The City Council is still considering various options to allocate these funds as the final rules ARPA were recently released by the United States Treasury.

The City has prudently maintained or reduced costs whenever possible, but personnel costs continue to be a significant share of the City’s total expenditures. There have been significant increases in healthcare benefit costs and the City’s required contribution toward its CalPERS unfunded pension liability is expected to increase rapidly over the next few years despite the City’s best efforts on cost containment. The City will continue to work with experts in this area to analyze the City’s options for reducing the lifecycle net cost and volatility of required pension contributions. One of the recommendations by the City Council Budget Committee towards this goal is to establish a Pension Trust Fund. The Pension Trust Fund would be under the direction of the City and could be an investment tool to offset future pension costs.

Fortunately, unlike many municipalities, the City does not provide post-retirement health care and therefore has no liability costs nor contributions to record. Additionally, the City’s Healthcare Cost Containment Committee (HCCC) continues to work on identifying lower cost medical benefit alternatives for employees.

Addressing critical capital asset and infrastructure needs continues to be a top priority. The City’s 20-year infrastructure needs assessment Capital Improvement Plan (CIP) for 2020-2025 illustrates the City’s infrastructure needs and proposes a prioritized plan for making infrastructure investments. Pleasant Hill residents recognized the need for additional local funding for capital improvements, and overwhelmingly supported the Measure K sales tax increase in November 2016. Measure K is projected to generate in excess of $4.0 million annually and can be used for important City services including repaving and maintaining neighborhood streets; maintaining and upgrading the City’s storm drains; adding new sidewalks and walking and bike paths; constructing a new community library; and funding other City projects and services that Pleasant Hill residents and the City Council have identified as key priorities. Additionally, State legislators adopted Senate Bill (SB) 1, the Road Repair and Accountability Act of 2017, which provides additional funding for local streets and other transportation projects.

The value and condition of capital assets is expected to increase significantly as a result of these additional revenue streams.

The City will discuss these challenges and opportunities during the development of the City’s next budget.

Request for Information
This Annual Comprehensive Financial Report (ACFR) is intended to provide residents, taxpayers, investors, and creditors with a detailed overview of the City’s finances. Questions about this report should be directed to the Finance Department at 100 Gregory Lane, Pleasant Hill, CA 94523.

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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Statement of Net Position
June 30, 2021
Governmental Business-Type
Activities Activities Total
Assets:

Cash and investments held in City Treasury 44,960,093 $ 737,517 $ 45,697,610 $ Receivables:

Accounts and others 4,159,149 - 4,159,149
Grants 75,680 - 75,680
Interest 42,343 561 42,904
Advances to the Successor Agency Trust Fund 1,587,103 - 1,587,103 Notes and loans receivable, net 2,039,961 - 2,039,961
Land held for redevelopment 191,049 - 191,049
Capital assets:

Nondepreciable 24,210,686 - 24,210,686
Depreciable, net of accumulated depreciation 54,543,056 452,208 54,995,264 Total assets 131,809,120 1,190,286 132,999,406
Deferred outflows of resources - Pension items 9,609,682 - 9,609,682 Liabilities:

Accounts payable and accrued liabilities 3,096,588 26,651 3,123,239 Deposits payable 1,991,820 - 1,991,820
Interest payable 34,444 - 34,444
Compensated absences payable:

Due within one year 518,000 - 518,000
Due in more than one year 2,069,798 - 2,069,798
Noncurrent liabilities:

Long-term debt - Due within one year 2,066,668 - 2,066,668 Long-term debt - Due in more than one year 22,773,691 - 22,773,691 Net pension liability - Due in more than one year 44,998,297 - 44,998,297 Total liabilities 77,549,306 26,651 77,575,957
Deferred inflows of resources - Pension items 2,202,001 - 2,202,001 Net position:

Net investment in capital assets 68,319,097 452,208 68,771,305 Restricted for:

Special revenue:

General government 1,842,031 - 1,842,031
Public safety projects 622,885 - 622,885
Transportation projects 2,738,736 - 2,738,736
Community development projects 8,069,144 - 8,069,144
Capital projects 429,546 - 429,546
Total restricted net position 13,702,342 - 13,702,342
Unrestricted (20,353,944) 711,427 (19,642,517)
Total net position $ 61,667,495 $ 1,163,635 $ 62,831,130 See accompanying notes to basic financial statements.
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CITY OF PLEASANT HILL
Statement of Activities
For the Year Ended June 30, 2021
Net (Expense) Revenue and
Program Revenues Changes in Net Position
Operating Capital
Charges for Grants and Grants and Governmental Business-type Functions/Programs Expenses Services Contributions Contributions Activities Activities Total Governmental Activities:

General government 8,432,265 $ 169,873 $ 468,046 $ 46,115 $ $ - (7,748,231) $ $ (7,748,231) Public safety 136,890 12,925,841 193,769 - - (12,595,182) (12,595,182) Transportation 12,319,001 588,604 6,663,550 515,180 - (4,551,667) (4,551,667) Community development 1,858,417 2,360,910 32,352 - - (470,141) (470,141) Interest and fiscal charges 540,308 - - - - (540,308) (540,308) Total governmental activities 36,578,325 2,753,784 7,357,717 561,295 - (25,905,529) (25,905,529) Business-type activities:

Diablo Vista Water System 133,950 374,555 - - - (240,605) (240,605) $ 2,887,734 36,952,880 $ 7,357,717 $ 561,295 $ (25,905,529) (240,605) (26,146,134) General revenues:

Taxes:

Property taxes 247,463 8,298,137 8,545,600
Sales taxes - 10,650,037 10,650,037
Measure K transactions & use tax 4,885,076 - 4,885,076
Transient occupancy taxes - 1,601,105 1,601,105
Franchise taxes - 2,061,238 2,061,238
Other taxes - 3,177,768 3,177,768
Investment earnings 3,489 190,610 194,099
Miscellaneous - 64,350 64,350
Total general revenues 250,952 30,928,321 31,179,273
Change in net position 10,347 5,022,792 5,033,139
Net position, beginning of year 1,153,288 56,644,703 57,797,991 Net position, end of year $ 1,163,635 61,667,495 $ 62,831,130 $ See accompanying notes to basic financial statements.
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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Governmental Funds
Balance Sheet
June 30, 2021
Low and
Measure J Moderate Other
Traffic Growth Income Governmental
General Mitigation Management Gas Tax Housing Asset Funds Total Assets:

Cash and investments held in City Treasury $ 100,571 34,924,684 $ 502,326 $ 2,166,574 $ 1,911,817 $ 5,354,121 $ 44,960,093 $ Receivables:

Accounts and other 4,068,308 - 5,940 61,925 - 22,976 4,159,149 Grants 27,500 - - 48,180 - - 75,680
Interest 76 36,988 383 1,719 - 3,177 42,343
Advances to the Successor Agency Trust Fund - - - - 1,587,103 - 1,587,103 Notes and loans receivable, net - - - - 2,039,961 - 2,039,961 Land held for redevelopment - - - - 191,049 - 191,049
Total assets 39,057,480 $ 100,647 $ 508,649 $ 2,278,398 $ 5,729,930 $ 5,380,274 $ 53,055,378 $ Liabilities, Deferred Inflows of Resources
and Fund Balances:

Liabilities:

Accounts payable and
accrued liabilities 2,517,291 $ - $ 25,201 $ 334,251 $ 956 $ 218,889 $ 3,096,588 $ Deposits payable 1,991,820 - - - - - 1,991,820
Total liabilities 4,509,111 - 25,201 334,251 956 218,889 5,088,408 Deferred inflows of resources - unavailable revenue 1,446,009 - - 48,180 584,926 - 2,079,115 Fund balances (deficits):

Restricted 100,647 14,405,714 483,448 1,714,336 5,144,048 4,195,178 26,043,371 Committed - - - - - 1,004,658 1,004,658
Assigned - 17,254,645 - 181,631 - - 17,436,276
Unassigned - 1,442,001 - - - 1,403,550 (38,451)
Total fund balances (deficits) 100,647 33,102,360 483,448 1,895,967 5,144,048 5,161,385 45,887,855 Total liabilities, deferred inflows of
resources and fund balances 39,057,480 $ 100,647 $ 508,649 $ 2,278,398 $ 5,729,930 $ 5,380,274 $ 53,055,378 $ See accompanying notes to basic financial statements.
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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position - Governmental Activities June 30, 2021
Total fund balances reported on the governmental funds balance sheet 45,887,855 $ Amounts reported for governmental activities in the statement of net position are different from those reported in the governmental funds above because of the following:

Capital assets:

Capital assets used in governmental activities are not current assets or financial resources and therefore are not reported in the governmental funds. 78,753,742 Deferred outflows of resources and deferred inflows of resources:

Certain items are not financial resources, and therefore, are not reported in the governmental funds:

Deferred outflows of resources - Pension items 9,609,682 Deferred inflows of resources - Pension items (2,202,001) Receivables not available:

Certain receivables are not available to pay for current period expenditures and therefore are deferred in the governmental funds. 2,079,115 Long-term liabilities:

The liabilities below are not due and payable in the current period and therefore are not reported in the governmental funds:

Bonds payable (24,840,359)
Interest payable (34,444)
Compensated absences (2,587,798)
Net pension liability (44,998,297)
Net position of governmental activities 61,667,495 $
See accompanying notes to basic financial statements.
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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Governmental Funds
Statement of Revenues, Expenditures and Changes in Fund Balances For the Year Ended June 30, 2021
Low and
Measure J Moderate Other
Traffic Growth Income Governmental
General Mitigation Management Gas Tax Housing Asset Funds Total Revenues:

Property taxes 7,659,053 $ - $ - $ - $ - $ 639,084 $ 8,298,137 $ Sales taxes 9,231,528 - - - - - 9,231,528
Measure K transactions & use tax 4,857,576 - - - - - 4,857,576 Transient occupancy taxes 1,601,105 - - - - - 1,601,105 Other taxes and
special assessments 5,247,699 - - - - 817,253 6,064,952 Licenses and permits 979,185 - - - - - 979,185
Intergovernmental 496,869 467,000 1,098,960 5,505,142 - 345,754 7,913,725 Charges for services 556,242 135,621 - - - 244,335 936,198 Fines and forfeitures 7,498 - - - - 31,800 39,298
Use of money and property 82,863 366 1,858 5,690 81,998 17,835 190,610 Other - 21,217 - - - 18,000 39,217
Total revenues 30,740,835 602,987 1,100,818 5,510,832 81,998 2,114,061 40,151,531 Expenditures:

Current:

General government - 7,773,973 - - - 209,427 7,983,400
Public safety - 11,330,109 - - - 63,432 11,393,541
Transportation 607,499 2,749,978 1,060,172 7,063,589 - 750,533 12,231,771 Community development - 1,881,093 30,726 - 58,416 294,819 2,265,054 Capital outlay - 9,754,462 - - - 1,166,713 10,921,175
Debt service:

Principal 1,555,719 - - - - - 1,555,719
Interest and fiscal charges 505,864 - - - - - 505,864
Total expenditures 35,551,198 607,499 1,090,898 7,063,589 58,416 2,484,924 46,856,524 Excess (deficiency) of revenues
over (under) expenditures (4,810,363) (4,512) 9,920 (1,552,757) 23,582 (370,863) (6,704,993) Other financing sources (uses):

Proceeds from issuance
of long-term debt - 26,396,078 - - - - 26,396,078
Transfers in - 946,736 - 1,018,847 - 1,081,138 3,046,721 Transfers out - (1,835,985) (57,000) - - (1,153,736) (3,046,721) Total other financing
sources (uses) 25,506,829 - (57,000) 1,018,847 - (72,598) 26,396,078 Change in fund balances 20,696,466 (4,512) (47,080) (533,910) 23,582 (443,461) 19,691,085 Fund balances, beginning of year 105,159 12,405,894 530,528 2,429,877 5,120,466 5,604,846 26,196,770 Fund balances, end of year 33,102,360 $ 100,647 $ 483,448 $ 1,895,967 $ 5,144,048 $ 5,161,385 $ 45,887,855 $ See accompanying notes to basic financial statements.
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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities - Governmental Activities For the Year Ended June 30, 2021
Net change in fund balances - total governmental funds 19,691,08 $ 5 Amounts reported for governmental activities in the statement of activities are different because of the following:

Capital assets transactions:

Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is capitalized and allocated over their estimated useful lives and reported as depreciation expense.

Expenditures for capital assets reported as:

Capital outlay 10,921,175
Current transportation 5,185,402
Less current year depreciation (3,063,892)
Less current year disposal of capital assets (3,007,828) Pension transactions:

Pension contribution made subsequent to the measurement date is an expenditure in the governmental funds, but reported as a deferred outflows of resources in the government-wide financial statements 4,664,449
Pension expense reported in the statement of activities does not require the use of current financial resources and, therefore, is not reported as an expenditure in governmental funds (5,694,307) Long-term debt transactions:

Repayment of debt principal is an expenditure in the governmental funds, but in the statement of net position the repayment reduces long-term liabilities. 1,555,719 Proceeds from loans provide current financial resources to governmental funds, but issuance of debt increases long-term liabilities in the statement of net position. (26,396,078) Accrual of noncurrent items:

The amounts below included in the statement of activities do not provide or use current financial resources and therefore are not reported as revenues or expenditures in governmental funds:

Change in compensated absences (248,075)
Change in interest payable (34,444)
Change in deferred inflows of resources - unavailable revenue 1, 449,586 Change in net position of governmental activities 5,022,792 $ See accompanying notes to basic financial statements.
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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
General Fund
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2021
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
Revenues:

Property taxes 3,437,951 $ 3,662,951 $ 3,789,937 $ 126,986 $ Property tax in lieu of Vehicle License Fee 3,764,693 4,016,693 3,869,116 (147,577) Sales taxes 7,496,000 8,814,000 9,231,528 417,528
Measure K transaction & use tax 3,894,000 3,894,000 4,857,576 963,576 Transient occupancy taxes 1,347,199 1,347,199 1,601,105 253,906 Other taxes 4,628,242 4,628,242 5,247,699 619,457
Licenses and permits 672,779 672,779 979,185 306,406
Intergovernmental 858,735 858,735 496,869 (361,866)
Charges for current services 449,534 449,534 556,242 106,708 Fines and forfeitures 52,515 52,515 7,498 (45,017)
Use of money and property 242,966 242,966 82,863 (160,103) Other 519,172 519,172 21,217 (497,955)
Total revenues 27,363,786 29,158,786 30,740,835 1,582,049 Expenditures:

Current:

General government:

City Council 180,887 180,887 144,059 36,828
City Manager 699,128 639,064 713,176 (74,112)
City Attorney 489,906 489,906 448,079 41,827
City Clerk 123,288 123,288 97,881 25,407
City Treasurer 10,547 10,547 11,337 (790)
Finance 827,044 827,044 819,678 7,366
Computer services 585,898 585,898 495,110 90,788
Human Resources 704,987 711,365 637,859 73,506
Risk management 646,934 646,934 648,491 (1,557)
City Hall facility 148,474 148,474 116,377 32,097
Measure K 5,400 - 7,783 (2,383)
Non-departmental 3,613,216 3,613,216 3,634,143 (20,927) Total general government 8,030,309 7,982,023 7,773,973 208,050 Public safety:

Police 11,000,952 11,160,952 11,330,109 (169,157)
Total public safety 11,000,952 11,160,952 11,330,109 (169,157) Transportation:

Public works administration 1,270,120 1,468,520 604,025 864,495 Public works maintenance 2,157,320 2,174,747 2,145,953 28,794 Total transportation 3,427,440 3,643,267 2,749,978 893,289 Community development:

Planning 926,043 947,724 906,125 41,599
Building inspection 650,876 650,876 535,610 115,266
Community relations 378,869 378,869 114,093 264,776
Economic development 401,515 351,515 325,265 76,250
Total community development 2,378,984 2,307,303 1,881,093 497,891 Capital outlay - Measure K 13,890,122 14,727,235 9,754,462 4,972,773 Debt Service:

Principal 1,555,719 1,555,719 1,555,719 -
Interest and fiscal charges 515,331 515,331 505,864 9,467 Total debt service 2,071,050 2,071,050 2,061,583 9,467
Total expenditures 40,727,176 41,963,511 35,551,198 6,402,846 Excess of revenues over expenditures (13,363,390) (12,804,725) (4,810,363) 7,994,362 Other financing sources (uses):

Proceeds from sale of capital assets 4,635 4,635 - (4,635) Proceeds from issuance of long-term debt 26,396,078 26,396,078 26,396,078 - Transfers in 926,736 926,736 946,736 20,000
Transfers out (1,835,985) (1,835,985) (1,835,985) -
Total other financing sources (uses) 25,491,464 25,491,464 25,506,829 15,365 Change in fund balance 12,128,074 $ 12,686,739 $ 20,696,466 8,009,727 $ Fund balance, beginning of year 12,405,894
Fund balance, end of year 33,102,360 $
See accompanying notes to basic financial statements.
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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Traffic Mitigation Fund
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2021
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
Revenues:

Intergovernmental 467,000 $ 467,000 $ 467,000 $ - $
Charges for services - - 135,621 135,621
Use of money and property 1,051 1,051 366 (685)
Total revenues 468,051 468,051 602,987 134,936
Expenditures:

Current:

Transportation 673,431 688,583 607,499 81,084
Change in fund balance (205,380) $ (220,532) $ (4,512) 216,020 $ Fund balance, beginning of year 105,159
Fund balance, end of year 100,647 $
See accompanying notes to basic financial statements.
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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Measure J Growth Management Fund
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2021
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
Revenues:

Intergovernmental 525,000 $ 525,000 $ 1,098,960 $ 573,960 $ Use of money and property 10,028 10,028 1,858 (8,170)
Total revenues 535,028 535,028 1,100,818 565,790
Expenditures:

Current:

Transportation 605,000 1,504,312 1,060,172 444,140
Community development 33,600 33,600 30,726 2,874
Total expenditures 638,600 1,537,912 1,090,898 447,014
Excess (deficiency) of revenues under expenditures (103,572) (1,002,884) 9,920 1,012,804 Other financing sources (uses):

Transfers out (57,000) (57,000) (57,000) -
Change in fund balance (160,572) $ (1,059,884) $ (47,080) 1,012,804 $ Fund balance, beginning of year 530,528
Fund balance, end of year 483,448 $
See accompanying notes to basic financial statements.
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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Gas Tax Fund
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2021
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
Revenues:

Intergovernmental 6,403,906 $ 6,403,906 $ 5,505,142 $ (898,764) $ Use of money and property 4,130 4,130 5,690 1,560
Total revenues 6,408,036 6,408,036 5,510,832 (897,204)
Expenditures:

Current:

Transportation 8,358,298 10,100,552 7,063,589 3,036,963 Deficiency of revenues under expenditures (1,950,262) (3,692,516) (1,552,757) 2,139,759 Other financing sources (uses):

Transfers in 1,018,847 1,018,847 1,018,847 -
Change in fund balance (931,415) $ (2,673,669) $ (533,910) 2,139,759 $ Fund balance (deficit), beginning of year 2,429,877
Fund balance, end of year 1,895,967 $
See accompanying notes to basic financial statements.
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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Proprietary Fund
Statement of Fund Net Position
June 30, 2021
Diablo Vista
Water System
Enterprise Fund
Assets:

Current assets:

Cash and investments held in City Treasury 737,517 $
Interest receivable 561
Total current assets 738,078
Noncurrent assets:

Capital assets:

Depreciable, net of accumulated depreciation 452,208
Total assets 1,190,286
Liabilities:

Current liabilities:

Accounts payable and accrued liabilities 26,651
Net position:

Net investment in capital assets 452,208
Unrestricted 711,427
Total net position 1,163,635 $
See accompanying notes to basic financial statements.
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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Proprietary Fund
Statement of Revenues, Expenses and Changes in Fund Net Position For the Year Ended June 30, 2021
Diablo Vista
Water System
Enterprise Fund
Operating revenues:

Water district assessments and charges 133,950 $
Operating expenses:

Purchased water 192,729
Personnel services 6,719
Contract services 8,555
Administration and office utilities 23,535
Repairs and maintenance 130,749
Depreciation 12,268
Total operating expenses 374,555
Operating loss (240,605)
Nonoperating revenues:

Property taxes 247,463
Interest income 3,489
Total nonoperating revenues 250,952
Change in net position 10,347
Net position, beginning of year 1,153,288
Net position, end of year 1,163,635 $
See accompanying notes to basic financial statements.
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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Proprietary Fund
Statement of Cash Flows
For the Year Ended June 30, 2021
Diablo Vista
Water System
Enterprise Fund
Cash flows from operating activities:

Cash received from customers 133,950 $
Cash payments to suppliers for goods and services (356,363) Cash payments to other funds for services provided (6,719) Net cash used in operating activities (229,132)
Cash flows from noncapital financing activities:

Property tax received 247,463
Cash flows from investing activities:

Interest income received 5,333
Net change in cash and cash equivalents 23,664
Cash and cash equivalents, beginning of year 713,853
Cash and cash equivalents, end of year $ 737,517
Reconciliation of operating loss to
net cash used in operating activities
Operating loss (240,605) $
Adjustments to reconcile operating loss to
net cash used in operating activities:

Depreciation 12,268
Change in accounts payable and accrued liabilities (795) Net cash used in operating activities $ (229,132)
See accompanying notes to basic financial statements.
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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Fiduciary Funds
Statement of Fiduciary Net Position
June 30, 2021
Private-Purpose
Trust Fund -
Successor Custodial
Agency Funds
Assets:

Cash and investments:

Held in City Treasury 2,146,452 $ 341,997 $
Held with trustees 651,619 -
Receivables:

Interest 4,901 213
Loans receivable 201,926 -
Land held for redevelopment 86,100 -
Total assets 3,090,998 342,210
Liabilities:

Accounts payable and accrued liabilities 254 85,883
Interest payable 72,644 -
Advances from the Low and Moderate Income Housing Asset Fund 1,5 - 87,103 Long-term debt:

Due within one year 895,000 -
Due in more than one year 3,950,000 -
Total liabilities 6,505,001 85,883
Net Position (Deficit):

Restricted for Governmental entities and others - 256,327 Unrestricted held in trust (3,414,003) -
Total net position (deficit) (3,414,003) $ 256,327 $
See accompanying notes to basic financial statements.
28 8.1.a
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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR)) Private-Purpose
Trust Fund -
Successor Custodial
Agency Funds
Additions:

Redevelopment property tax revenues 3,020,521 $ - $
Investment earnings 26,416 1,766
Members contributions - 210,001
Others - 17,581
Total additions 3,046,937 229,348
Deductions:

Community development expenses 1,683,515 -
Interest and fiscal charges 233,620 -
Benefits paid to participants or beneficiaries - 233,339 Administrative and general - 232,878
Total deductions 1,917,135 466,217
Change in net position 1,129,802 (236,869)
Net position (deficit), beginning of year (4,543,805) 493,196 Net position (deficit), end of year (3,414,003) $ 256,327 $

CITY OF PLEASANT HILL
Fiduciary Funds
Statement of Changes in Fiduciary Net Position
For the Year Ended June 30, 2021
See accompanying notes to basic financial statements.
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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
31 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
The City of Pleasant Hill (City) was incorporated on November 14, 1961 under the laws of the State of California. The City operates under the Council-City Manager form of government and provides the following services: public safety, transportation, community development, and general government.

The basic financial statements include the financial activities of the City, Successor Agency to the Pleasant Hill Redevelopment Agency (Successor Agency) and the Pleasant Hill Joint Powers Financing Authority (Authority).

The Successor Agency is a separate governmental entity established on February 1, 2012 for the purpose of serving as a custodian of the assets of the former Pleasant Hill Redevelopment Agency (Agency) and winding down the former Agency’s activities subject to the direction of a Countywide Oversight Board.

The Countywide Oversight Board serves as the governing body and is comprised of seven members: 1) a County of Contra Costa (County) Supervisors representative, 2) a mayor appointed by a city selection committee, 3) a special district representative, 4) a school district representative, 5) a community college district representative, 6) a member of the public, and 7) a successor agency employee appointed from the largest employer of successor agency employees in the County. The Successor Agency’s financial transactions are accounted for in a private-purpose trust fund, a fiduciary fund type.

The Authority is a separate government entity whose purpose is to assist with the financing or refinancing of certain public capital facilities within the City. The Authority is controlled by the City and is governed by a board consisting of the City Manager, City Attorney, and Finance Manager, who also manage all accounting and administrative functions for the Authority. The Authority is a blended component unit, and is in substance part of the City’s operations and has a financial benefits and burden relationship with the City.

The Successor Agency and Authority do not issue separate financial statements and are reported in the City’s basic financial statements.

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.

Government-Wide Statements: The statement of net position and the statement of activities display information about the City’s primary government. These statements include the financial activities of the overall City government, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities, except where interfund services have been received or provided.

These statements distinguish between the governmental and business-type activities of the City.

Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions. The City’s business-type activities are financed in whole or in part by fees charged to external parties.

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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
32 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) The statement of activities presents a comparison between direct expenses and program revenues for the business-type activities of the City and for each function of the City's governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Program revenues include: (a) charges paid by the recipients for 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 and the blended component units. Separate statements for each fund categorygovernmental, proprietary, and fiduciary are presented. The emphasis of fund financial statements is on major individual governmental and enterprise funds, each of which is displayed in a separate column. All remaining governmental funds are aggregated and reported as nonmajor funds.

Proprietary fund operating revenues include charges for services provided to customers. Operating expenses for the enterprise fund 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.

C. Major Funds
Major funds are defined as funds that have either assets and deferred outflows of resources, liabilities and deferred inflows of resources, revenues or expenditures/expenses equal to ten percent of their governmental or enterprise fund-type total and five percent of the combined grand total. The General Fund is always a major fund. The City may also select other funds it believes should be presented as major funds.

The City reported the following major governmental funds in the accompanying basic financial statements.

General Fund - Accounts for all of the general revenues and financial resources of the City not specifically levied or collected for the other City funds, as well as the related expenditures.

Traffic Mitigation Fund - Accounts for contributions received and traffic mitigation fees assessed on new developments to provide for street or other traffic improvements.

Measure J Growth Management Fund - Accounts for resources provided by the one-half cent sales tax dedicated to transportation improvement projects.

Gas Tax Fund - Accounts for gas tax apportioned by the State to cities based upon three factors: vehicle registration, assessed valuation, and population. These funds are used for street construction and maintenance.

Low and Moderate Income Housing Asset Fund – Accounts for housing assets and functions related to the Low and Moderate Income Housing Program retained by the City following the dissolution of the former Agency. Revenues are generated from the housing assets, including loan repayments and proceeds from the sale of the housing assets.

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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
33 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) The City reports its only enterprise fund as a major fund in the accompanying basic financial statements.

The Diablo Vista Water System Fund - Accounts for the financing of self-supporting activities, which render irrigation water to the homeowners in a specific geographical area of the City, paid from property taxes and user charges.

The City also reports the following fiduciary funds:

Private-Purpose Trust Fund - The Successor Agency was created to serve as a custodian for the nonhousing assets and to wind down the affairs of the former Agency. This fund accounts for the receipt of property tax revenues pursuant to the Redevelopment Dissolution Act and the value of the assets transferred from the former Agency. The Successor Agency’s assets can only be used to pay enforceable obligations in existence at the date of dissolution pursuant to the Recognized Obligation Payment Schedules approved by the State Department of Finance (DOF) under the Redevelopment Dissolution Act.

Custodial Funds - Custodial funds are used to account for assets held by the City as a custodian for individuals, private organizations, and other governments. The City maintains four custodial funds.

The financial activities of these fiduciary funds are excluded from the government-wide financial statements, but are presented in separate fiduciary fund financial statements.

D. Basis of Accounting
The government-wide, proprietary, and fiduciary fund financial statements are reported using the economic resources measurement focus and the full accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place.

For the Diablo Vista Water System Enterprise Fund, revenues are billed to customers by the County of Contra Costa and are included on each customer's property tax statement. Revenues for services provided but not billed at the end of a fiscal period are not considered material and are not accrued.

Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available.

Generally, the City considers all revenues, except property tax revenues, reported in the governmental funds to be available if the revenues are collected within 45 days after year-end. Property tax revenues are recognized by the City in the fiscal year they are assessed provided they become available within 60 days after year-end for governmental funds. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, claims and judgments, and compensated absences, which are recognized as expenditures to the extent they have matured. Governmental capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of governmental long-term debt and acquisitions under capital leases are reported as other financing sources.

Revenues susceptible to accrual include taxes, intergovernmental revenues, charges for services, and interest. Fines, licenses, and permits are not susceptible to accrual because they are not measurable until received in cash.

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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
34 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Non-exchange transactions, in which the City gives or receives value without directly receiving or giving equal value in exchange, include taxes, grants, entitlements, and donations. On the accrual basis, revenue from taxes is recognized in the fiscal year for which the taxes are levied or assessed. Revenue from grants, entitlements, and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.

The City may fund programs with a combination of cost-reimbursement grants, categorical block grants, and general revenues. Thus, both restricted and unrestricted net position may be 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.

Certain indirect costs are included in program expenses reported for individual functions and activities.

Transactions representing the exchange of interfund goods and services have also been included.

E. Cash and Cash Equivalents
For purposes of reporting cash flows for the City’s proprietary fund, pooled cash and investments held by City Treasury are considered cash equivalents as the proprietary fund can access pooled cash and investments in a manner similar to a demand deposit account.

F. Investments
The City's investments are stated at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The fair value measurements are categorized within the fair value hierarchy established by generally accepted accounting principles. The City adjusts the carrying value of its investments to reflect their fair value at each fiscal year end, and it includes the effects of these adjustments in income for that fiscal year.

G. Interfund Transactions
Interfund loans and balances related to unsettled service transactions are reported as receivables and payables as appropriate, and are subject to elimination upon consolidation of similar fund types, and are referred to as either “due from/to other funds” (i.e., the current portion of inter-fund loans and unsettled service transactions) or “advances to/from other funds” (i.e., the non-current 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”.

Services provided or used, deemed to be at market or near market rates, are treated as revenues and expenditures or expenses. Transactions constituting reimbursements to a fund for expenditures/expenses initially made from it that are properly applicable to another fund are recorded as expenditures/expenses in the reimbursing fund and as reductions of expenditures/expenses in the fund that is reimbursed. All other interfund transactions are treated as transfers. Transfers between governmental or proprietary funds, if any, are netted as part of the reconciliation to the government-wide presentation.

H. Capital Assets
Capital assets are valued at cost or estimated historical cost if actual cost is not available. Donated capital assets are stated at their acquisition value. Infrastructure capital assets consisting of streets, roads, curbs, gutters, storm drains, street drainage, street lights, and traffic control devices have been capitalized and depreciated. Capital assets are defined as assets with an initial individual cost of more than $1,500 and a useful life of in excess of one year.

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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
35 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Major outlays for capital assets and improvements are capitalized as projects are constructed. For the enterprise fund, interest incurred during the construction phase is reflected in the capitalized value of the asset constructed, net of interest earned on the invested proceeds over the same period. Some capital assets may be acquired using federal and state grant funds, or they may be contributed by developers or other governments. These contributions are accounted for as revenues at the time the capital assets are contributed.

Depreciation is recorded using the straight-line method over the following useful lives:

Buildings and improvements 10-50 years
Equipment and furniture 3-15 years
Streets and roads 50 years
Curbs and gutters 50 years
Storm drains 50 years
Street lights 50 years
Traffic control devices 50 years
Diablo Vista Water system infrastructure 50 years
I. Deferred Outflows and Inflows of Resources
In addition to assets, the statement of net position reports a separate section for deferred outflows of resources. This separate financial statement element represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then.

In addition to liabilities, the statement of net position reports a separate section for deferred inflows of resources. This separate financial statement element represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time.

The City reports the following deferred items:

Deferred Outflows and Inflows of Resources Related to Pensions These deferred items are recognized and measured in financial statements prepared using the economic resources measurement focus and the accrual basis of accounting. The deferral is for changes in the net pension liability that are not included in pension expense and must be amortized in a systematic and rational manner over a closed period depending on cause beginning with the current period. These causes may include changes of future economic and demographic assumptions or other inputs, differences between expected and actual experience with regard to economic or demographic factors, differences between projected and actual earnings on pension plan investments, changes in employer’s proportion, and differences between the employer’s actual and proportionate share of contributions.

Employer contributions subsequent to the measurement date of the net pension liability are also required to be reported as deferred outflows of resources.

Unavailable Revenue
Unavailable revenue is only reported in the governmental funds balance sheet. The governmental funds report unavailable revenues from sources such as housing loans, State-mandated cost reimbursements, expenditure-driven grants, etc.

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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
36 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) J. Land Held for Redevelopment
Land held for redevelopment is carried at the lower of cost, net realizable value, or agreed-upon sales price if a disposition and development agreement has been made with a developer.

K. Compensated Absences
Compensated absences are comprised of vacation and vested sick time, which are accrued as earned. The City's liability for compensated absences is recorded in governmental activities. The liability for compensated absences is determined annually. For all governmental funds, amounts expected to be permanently liquidated (matured due to termination) are recorded as fund liabilities; the long-term portion is recorded in the statement of net position.

The changes of the compensated absences were as follows for the year ended June 30, 2021:

Governmental
Activities
Beginning Balance 2,339,723 $
Additions 750,732
Payments (502,657)
Ending Balance 2,587,798 $
Current Portion 518,000 $
The compensated absences of governmental activities are liquidated primarily by the General Fund.

L. Net Pension Liability
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City’s California Public Employees’ Retirement System (CalPERS) plans (Plans) and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. The net pension liability is typically liquidated by the General Fund.

M. Property Tax
The County distributes property taxes to jurisdictions according to the “alternate method of property tax distribution” known as the Teeter Plan. Under this plan, the County remits 100% of the levied taxes to the appropriate jurisdictions by June 30 each year, pursuing delinquencies and keeping related late penalties to cover their costs. The City receives property taxes and property tax increments, respectively, on the following schedule: 55% in December, 40% in April, and 5% in June. The lien date for secured and unsecured property taxes is established as of January 1 of the preceding fiscal year.

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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
37 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Secured property tax is due in two equal installments, on November 1 and February 1. It becomes delinquent after December 10 and April 10, respectively. Unsecured property tax is due upon receipt of billing and becomes delinquent on August 31. The term “unsecured” refers to taxes not secured by real property. These taxes are secured by liens on the property being taxed.

Pursuant to the Redevelopment Dissolution Act, funds that would have been distributed to the former Agency as tax increment, hereafter referred to as redevelopment property tax revenues, are deposited into the Successor Agency’s Redevelopment Property Tax Trust Fund (Trust Fund) administered by the City for the benefit of holders of the former Agency’s enforceable obligations. Distributions from the Trust Fund are to be made on the following cycles:

Distribution Dates
Covers Recognized Obligation Payment
Schedules to be Paid
January 2 January 1 through June 30
June 1 July 1 through December 31
N. Effect of New Pronouncements
The City implemented the following GASB Statements during the year:

In January 2017, GASB issued Statement No. 84, Fiduciary Activities. The statement establishes criteria for identifying fiduciary activities of all state and local governments. The focus of the criteria generally is on (1) whether a government is controlling the assets of the fiduciary activity and (2) the beneficiaries with whom a fiduciary relationship exists. Separate criteria are included to identify fiduciary component units and postemployment benefit arrangements that are fiduciary activities. The statement provides recognition and measurement guidance for situations in which a government is a beneficiary of these agreements. The City evaluated all funds and activities in accordance with the statement and determined that the funds and activities previously reported as agency funds should be reported as custodial funds.

In August 2018, the GASB issued Statement No. 90, Majority Equity Interests, an amendment of GASB Statements No.14 and No.61. The objectives of this statement are to improve the consistency and comparability of reporting a government’s majority equity interest in a legally separate organization and to improve the relevance of financial statement information for certain component units. Implementation of this statement did not have a significant impact on the City’s financial statements for the fiscal year ended June 30, 2021.

In October 2021, the GASB issued Statement No. 98, The Annual Comprehensive Financial Report. This statement establishes the term annual comprehensive financial report and its acronym ACFR and eliminates the prior name and acronym in generally accepted accounting principles for state and local governments.

Implementation of this statement did not have a significant impact on the City’s financial statements for the fiscal year ended June 30, 2021. No changes were made to the report’s structure or financial information.

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Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
38 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) The City is currently analyzing its accounting practices to determine the potential impact on the financial statements for the following GASB Statements:

In June 2017, GASB issued Statement No. 87, Leases. The objective of this statement is to better meet the information needs of financial statement users by improving accounting and financial reporting for leases by governments. This Statement increases the usefulness of governments’ financial statements by requiring recognition of certain lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract. It establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset. Under this Statement, a lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources, thereby enhancing the relevance and consistency of information about governments’ leasing activities. The requirements of this statement are effective for the City’s fiscal year ending June 30, 2022.

In June 2018, the GASB issued Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period. The objectives of this statement are 1) to enhance the relevance and comparability of information about capital assets and the cost of borrowing for a reporting period, and 2) to simplify accounting for interest cost incurred before the end of a construction period. The requirements of this statement are effective for the City’s fiscal year ending June 30, 2022.

In May 2019, the GASB issued Statement No. 91, Conduit Debt Obligations. The objectives of this statement is to provide a single method of reporting conduit debt obligations by issuers and eliminate diversity in practice associated with (1) commitments extended by issuers, (2) arrangements associated with conduit debt obligations, and (3) related note disclosures. The requirements of this statement are effective for the City’s year ending June 30, 2023.

In January 2020, the GASB issued Statement No. 92, Omnibus 2020. The objectives of this statement are to enhance comparability in accounting and financial reporting and to improve the consistency of authoritative literature by addressing practice issues that have been identified during implementation and application of certain GASB statements. The requirements of this statement are effective for the City’s fiscal year ending June 30, 2022.

In March 2020, the GASB issued Statement No. 93, Replacement of Interbank Offered Rates. The objective of this statement is to address those and other accounting and financial reporting implications that result from the replacement of an interbank offered rate. The requirements of this statement are effective for the City’s fiscal year ending June 30, 2022.

In March 2020, the GASB issued Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements. The objective of this Statement is to improve financial reporting by addressing issues related to public-private and public-public partnership arrangements (PPPs). This statement also provides guidance for accounting and financial reporting for availability payment arrangements (APAs). As defined in this statement, an APA is an arrangement in which a government compensates an operator for services that may include designing, constructing, financing, maintaining, or operating an underlying nonfinancial asset for a period of time in an exchange or exchange-like transaction.

The requirements of this statement are effective for the City’s fiscal year ending June 30, 2023.

8.1.a
Packet Pg. 97
Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
39 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) In May 2020, the GASB issued Statement No. 96, Subscription-Based Information Technology Arrangements. This statement provides guidance on the accounting and financial reporting for subscription-based information technology arrangements (SBITAs) for government end users (governments). This statement (1) defines a SBITA; (2) establishes that a SBITA results in a right-to-use subscription asset—an intangible asset—and a corresponding subscription liability; (3) provides the capitalization criteria for outlays other than subscription payments, including implementation costs of a SBITA; and (4) requires note disclosures regarding a SBITA. The requirements of this statement are effective for the City’s fiscal year ending June 30, 2023.

In June 2020, the GASB issued Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans – an Amendment of GASB Statements No. 14 and No. 84, and a Supersession of GASB Statement No. 32. The primary objectives of this statement are to (1) increase consistency and comparability related to the reporting of fiduciary component units in circumstances in which a potential component unit does not have a governing board and the primary government performs the duties that a governing board typically would perform; (2) mitigate costs associated with the reporting of certain defined contribution pension plans, defined contribution other postemployment benefit (OPEB) plans, and employee benefit plans other than pension plans or OPEB plans (other employee benefit plans) as fiduciary component units in fiduciary fund financial statements; and (3) enhance the relevance, consistency, and comparability of the accounting and financial reporting for Internal Revenue Code (IRC) Section 457 deferred compensation plans (Section 457 plans) that meet the definition of a pension plan and for benefits provided through those plans. The requirements of this statement are effective for the City’s fiscal year ending June 30, 2022.

O. Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain amounts and disclosures. Accordingly, actual results could differ from those estimates.

8.1.a
Packet Pg. 98
Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
40 NOTE 2 – STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY A. Budgets and Budgetary Accounting
The City adopts a biennial budget on or before June 30 of even-numbered years for each of the ensuing two fiscal years generally for all funds except fiduciary funds. The Low and Moderate Income Housing Asset major governmental fund, as well as Parkland Dedication, Park and Recreation, HCD Housing Grant and CLEEP Grant nonmajor governmental funds, were not budgeted for the year ended June 30, 2021. The operating budget takes the form of a two-year budget, which is adopted in its entirety by the City Council by resolution.

The operating budget is subject to supplemental appropriations throughout its term in order to provide flexibility to meet changing needs and conditions. The City Manager may approve supplemental appropriations up to $100,000 in the General Fund in increments no larger than $25,000. Council may approve additional appropriations throughout the year as well.

The City Manager is also authorized to transfer budgeted amounts between individual departments and funds. Budget transfers between accounts within a department may be approved by the department director.

Budgeted amounts reported in the accompanying basic financial statements include original and final budget amounts. The level of budgetary control (that is, the level at which expenditures cannot exceed the appropriated amount) is established at the fund level. Budgets for governmental funds are adopted on a basis consistent with generally accepted accounting principles.

B. Deficit Fund Balance and Net Position
At June 30, 2021, the Gas Tax 2107.5 Fund has a deficit fund balance of $14,430 and the Computer Technology Replacement Fund had a deficit fund balance of $24,021. These deficits are expected to be cured in year ended June 30, 2022 through receipt of grant funding and transfers from other funds.

The Successor Agency Private-Purpose Trust Fund had a deficit net position of $3,414,003. The deficit is due to the nature of the redevelopment financing in which long-term debt were incurred for redevelopment activities. The deficit is expected to be eliminated with future redevelopment property tax revenues distributed from the Redevelopment Property Tax Trust Fund administered by the County.

C. Excess of Expenditures over Appropriations
The following funds had expenditures in excess of budget due to unanticipated expenditures for the year ended June 30, 2021, which are expected to be covered with existing fund balance and revenues in fiscal year 2022:

Amount
Nonmajor governmental funds:

Landscaping and Lighting Assessment District 22 22,761 $ Affordable Housing 225

8.1.a
Packet Pg. 99
Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
41 NOTE 3 – CASH AND INVESTMENTS
The City's dependence on property tax receipts, which are received semi-annually, requires it to maintain significant cash reserves to finance operations during the remainder of the year. The City pools cash from all sources and all funds except for cash and investments held with trustees. The City’s pooled idle funds are invested pursuant to investment policy guidelines adopted by the City Council. The objectives of the policy are to invest funds to the fullest extent possible and to invest in accordance with the provisions of the California Government Code with the priority of safety, liquidity, and return on investment. The policy addresses the safekeeping of securities, types of authorized investment instruments, diversification, maturities, and reporting requirements. The City maintains a cash and investment pool that is available for use by all funds.

Each fund type’s portion of this pool is displayed on the financial statements as “cash and investments – held in City Treasury.” Certain cash and investments are held by trustees in accordance to debt covenants for bond reserves, retirement of long-term debt, or capital projects.

A. Policies
The City invests in individual investments and in investment pools. Individual investments are evidenced by specific identifiable securities instruments, or by an electronic entry registering the owner in the records of the institution issuing the security, called the book entry system. Security instruments owned by the City are held in safekeeping by a third-party custodian acting as agent for the City under the terms of a custody agreement. The City has mitigated its exposure to custodial credit risks for investments at June 30, 2021.

California law requires banks and savings and loan institutions to pledge government securities with a fair value of 110% of the City’s cash on deposit, or first trust deed mortgage notes with a fair value of 150% of the deposit, as collateral for these deposits. Under California law, this collateral is held in a separate investment pool by another institution in the City’s name and places the City ahead of general creditors of the institution.

The City has mitigated its exposure to custodial credit risks for deposits at June 30, 2021.

B. Classification
The City's total cash and investments, at fair value, are presented on the accompanying financial statements in the following allocation:

Primary Private-Purpose Custodial
Government Trust Fund Funds Total
Cash and investments:

Held in City Treasury 45,697,610 $ 2,146,452 $ $ 48, 341,997 $ 186,059 Held with trustees - - 651,619 651,619
Total cash and investments 45,697,610 $ 2,798,071 $ $ 48, 341,997 $ 837,678 C. Investments Authorized by the California Government Code and the City's Investment Policy The City's Investment Policy and the California Government Code allow the City to invest in the following provided the credit ratings of the issuers are acceptable to the City and approved percentages and maturities are not exceeded.

8.1.a
Packet Pg. 100 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
42 NOTE 3 – CASH AND INVESTMENTS (Continued)
The table below identifies investments that are authorized under the California Government Code and the City's Investment Policy:

Minimum Maximum Maximum
Maximum Credit Percentage of Investment in
Authorized Investment Type Maturity Quality Portfolio One Issuer U.S. Treasury bills, bonds, and notes 5 years N/A 100% No Limit U.S. Government Agency Securities 5 years N/A 100% No Limit Medium Term Corporate Notes 5 years A or better 30% No Limit Repurchase Agreements 1 year N/A 100% No Limit
Negotiable Certificates of Deposits 5 years N/A 30% No Limit Money Market Mutual Funds 5 years Highest Category 20% 10% State of California Local
Agency Investment Fund (LAIF) N/A N/A Up to $75 million No Limit D. Investments Authorized by Debt Agreements
The City must maintain required amounts of cash and investments with trustees or fiscal agents under the terms of certain debt issues. These funds are unexpended bond proceeds or are pledged reserves to be used if the City fails to meet its obligations under these debt issues. The California Government Code requires these funds to be invested in accordance with City ordinances, bond indentures, or State statutes. The bond indentures contain no limitations for the maximum investment in any one issuer or the maximum percentage of the portfolio that may be invested in any one investment type. The table below identifies the investment types that are authorized for investments held by trustees under the terms of the bond indentures.

Maximum Minimum
Authorized Investment Type Maturity Credit Quality
U.S. Treasury Obligations N/A N/A
U.S. Agency Securities N/A N/A
U.S. Governmental Sponsored Enterprise N/A N/A
State Obligations:

General Obligation N/A A to AA
General Short-term Obligation N/A A to AA
Special Revenue Bonds N/A AA
Municipal Obligations N/A Two Highest Categories
Pre-funded Municipal Obligations N/A AAA
Unsecured Certificates of Deposit 30 days A-1
FDIC insured deposits N/A N/A
Repurchase Agreements 30 days A
Commercial Paper 270 days A-1 to Highest
Bankers Acceptances 360 days A-1
Certificate of Deposit N/A N/A
Collateralized Certificates of Deposit 365 days A-1
Money Market Funds N/A AAAm or AAAm-G
Investment Agreement N/A N/A
Local Agency Investment Fund N/A N/A

8.1.a
Packet Pg. 101 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
43 NOTE 3 – CASH AND INVESTMENTS (Continued)
E. Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment the greater the sensitivity of its fair value to changes in market interest rates. The City generally manages its interest rate risk by holding investments to maturity.

Information about the sensitivity of the fair values of the City's investments (including investments held by trustees) to market interest rate fluctuations is provided by the following table that shows the distribution of the City's investments by maturity or earliest call date:

Less Than 3 to 12 1 to 5
Investment Type 3 Months Months Years Total
Investments Held in City Treasury:

U.S. Treasury Securities 210,425 $ $ 1,197,411 589,984 $ 1, $ 997,820 Local Agency Investment Fund * - 37, - 263,795 37, 263,795 Money Market Mutual Funds * 32,082 - - 32,082
Medium Term Corporate Securities - 801,932 193,045 994,977 U.S. Government Agency Securities - 1,686,190 390,818 2, 077,008 Total investments held in City Treasury 242,507 38, 3,685,533 437,642 42, 365,682 Investments Held with Trustees:

Money Market Mutual Funds * 651,619 - - 651,619
Total investments 894,126 $ 38, $ 3,685,533 437,642 $ 43, 017,301 Cash and Deposits not subject to Interest Rate Risk:

Petty cash on hand 34,338
Cash in banks 5,786,039
Total cash and investments 48,837,678 $
Maturities in
* Weighted-average of maturity.

LAIF is part of the Pooled Money Investment Account (PMIA). PMIA oversight is provided by the Pooled Money Investment Board (PMIB) and an in-house Investment Committee. PMIB members are the State Treasurer, State Director of Finance, and State Controller. The Local Investment Advisory Board provides oversight for LAIF. The Board consists of five members as designated by statute. The Chairman is the State Treasurer or his designated representative. Two members are qualified by training and experience in the field of investment or finance, and the State Treasurer appoints two members who are treasurers, finance or fiscal officers, or business managers employed by any county, city, or local district or municipal corporation of this state. LAIF determines fair value on its investment portfolio based on market quotations for those securities where market quotations are readily available, and on amortized cost or best estimate for those securities where fair value is not readily available. The balance available for withdrawal by the City is based on the accounting records maintained by the State. At June 30, 2021, PMIA has a total amount of approximately $193.3 billion and of that amount, 97.69% was invested in non-derivative financial products and 2.31% in structured notes and asset-backed securities, while the weighted average maturity of LAIF was 291 days.

F. Credit Risk
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. The City manages credit risk in accordance with the City's Investment Policy.

8.1.a
Packet Pg. 102 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
44 NOTE 3 – CASH AND INVESTMENTS (Continued)
Presented below is the actual rating as of June 30, 2021 for each investment type, including those with trustees, as provided by Moody’s ratings:

Investment Type Ratings Total
Money Market Mutual Funds Aaam 683,701 $
U.S. Government Agency Securities Aaa 2,077,008
Medium Term Corporate Securities Aaa 60,708 $
Aa1 63,681
Aa3 66,410
A1 229,497
A2 383,246
A3 191,435
Total Medium Term Corporate Securities 994,977
Total rated 3,755,686
Exempt from credit rating disclosures:

U.S. Treasury Securities Exempt 1,997,820
Not rated:

Local Agency Investment Fund Not rated 37,263,795
Total investments 43,017,301 $
G. Concentration of Credit Risk
The City’s investment policy contains certain limitations on the amount that can be invested in any one issuer. No investment type held by the City accounted for more than 5% of total investments held in the City Treasury as of June 30, 2021.

H. Fair Value Hierarchy
The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure fair value of the assets. Level 1 inputs are quoted prices in an active market for identical assets; Level 2 inputs are significant other observable inputs; and Level 3 inputs are significant unobservable inputs. The City does not measure any of its investments using level 3 inputs.

The following is a summary of the fair value measurements of the City as of June 30, 2021:

Investment Type Total Level 2
Investment by fair value levels
U.S. Treasury Securities 1,997,820 $ 1,997,820 $
U.S. Government Agency Securities 2,077,008 2,077,008
Medium Term Corporate Securities 994,977 994,977
Total investment by fair value levels 5,069,805 5,069,805 $ Investment not subject to fair value levels
Money Market Mutual Funds 683,701
Local Agency Investment Fund 37,263,795
Total investment not subject to fair value levels 37,947,496 Total investments 43,017,301 $
Fair Value Measurement Hierachy

8.1.a
Packet Pg. 103 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
45 NOTE 3 – CASH AND INVESTMENTS (Continued)
Securities classified in Level 2 of the fair value hierarchy are valued using prices determined by the use of matrix pricing techniques maintained by the pricing vendors of these securities. Matrix pricing is used to value securities based on the securities’ relationship to benchmark quoted prices.

NOTE 4 – INTERFUND TRANSACTIONS
A. Advances to the Successor Agency
For fiscal years 1985-86 through 1991-92, the former Agency deferred the required 20% set aside of all tax increment received annually on the original Commons Project Area totaling $638,957, which was recorded as advances to the Low and Moderate Income Housing Fund. No interest was charged on the outstanding balance. This advance was transferred from the former Agency to the Successor Agency on February 1, 2012, when all redevelopment agencies in California ceased to exist. At June 30, 2021, the outstanding advance balance was $638,957. This obligation has been included in the FY2021-22 Successor Agency’s Recognized Obligation Payment Schedule (ROPS) and $66,122 is scheduled to be paid off in FY2021-22, and the balance of $572,835 has been submitted to the California Department of Finance for the FY2022-23 ROPS approval, and upon approval, is scheduled to be paid off in FY2022-23.

During fiscal years 2009-10 and 2010-11, the former Agency borrowed $1,906,348 from the Low and Moderate Income Housing Asset Fund for the Supplemental Educational Revenue Augmentation Fund (SERAF) payment. No interest was charged on the outstanding balance. This advance was transferred from the former Agency to the Successor Agency on February 1, 2012, when all redevelopment agencies in California ceased to exist. At June 30, 2021, the outstanding advance balance was $948,146. This obligation has been included in the FY2021-22 Successor Agency’s ROPS and is scheduled to be paid off during FY2021-22.

B. Transfers Between Funds
With Council or City Manager approval, resources may be transferred from one City fund to another. The purpose of the majority of transfers is to support capital projects activities or operating activities of another fund. The following schedule summarized the City’s transfer activities:

Amount
Fund Making Transfers Fund Receiving Transfers Transferred General Fund Gas Tax Fund 754,847 $
Nonmajor Governmental Funds 1,081,138
Measure J Growth Management Fund Gas Tax Fund 57,000
Nonmajor Governmental Funds General Fund 946,736
Gas Tax Fund 207,000
Total interfund transfers 3,046,721 $

8.1.a
Packet Pg. 104 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
46 NOTE 5 – NOTES AND LOANS RECEIVABLE
Low and Moderate Income Housing Asset Fund
A. Owner-Occupied Housing Rehabilitation Loans
The former Agency administered a housing rehabilitation loan program under which very low and lowincome homeowners were eligible to receive loans up to $60,000 to be used to construct improvements on their homes. The loan was transferred from the former Agency to the City’s Low and Moderate Income Housing Asset major governmental fund and the annual operating grant commitment was transferred to the Successor Agency on February 1, 2012, when all redevelopment agencies in California ceased to exist.

These loans bear three to five percent simple interest, have a fifteen-year term, and are secured by deeds of trust. Payments on the loans may be made monthly or may be deferred and paid at the end of the term or transfer of ownership. At June 30, 2021, principal and interest related to these loans totaled to $358,904, of which the City determined the accrued interest of $144,869 to be unavailable.

B. Grayson Creek Apartments
In fulfillment of its obligation to replace low and moderate-income housing destroyed as part of the Pleasant Hill Downtown Project, the former Agency entered into a loan agreement with Bridge Housing Corporation, a non-profit housing developer. The loan was transferred from the former Agency to the City’s Low and Moderate Income Housing Asset major governmental fund and the annual operating grant commitment was transferred to the Successor Agency on February 1, 2012, when all redevelopment agencies in California ceased to exist. The loan bears three percent simple interest and will mature in year 2032. At June 30, 2021, principal and interest related to this loan totaled to $1,445,057 of which the City determined the accrued interest of $440,057 to be unavailable.

C. Rehabilitation Services of Northern California
On October 17, 2016, the City entered into a Predevelopment Loan Agreement with Rehabilitation Services of Northern California for feasibility studies for constructing a new facility to house its current programs as well as provide long-term supportive housing to low-income seniors. The loan bears 3% simple interest for a loan amount not to exceed $236,000. The loan matures at the earliest of following dates: (1) date of loan default, (2) date of borrower’s abandonment of the housing project or sale or transfer of interest, or (3) fifty five years after the loan date. At June 30, 2021, the outstanding balance of the loan receivable is $236,000.

D. Hookston Manor Apartments
On December 8, 1998, the City entered into loan agreement with Hookston Senior Associates for the acquisition and rehabilitation of the Hookston Manor Apartments to provide low income seniors with affordable housing. The loan bears no interest and the loan amount is $500,000. The loan matures at the earliest of following dates: (1) date of loan default by the borrower, (2) the expiration of applicable cure periods under the loan agreement, or (3) January 1, 2053. At June 30, 2021, the outstanding balance of the loan receivable is $500,000 and a full allowance was recorded against the balance as the City determined the balance to be uncollectible.

8.1.a
Packet Pg. 105 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
47 NOTE 5 – NOTES AND LOANS RECEIVABLE (Continued)
Successor Agency
Jack’s Restaurant
One property in the downtown area was vacant and in need of remodeling to improve its marketability and appeal to prospective tenants. A prospective tenant, Marcovici Management Group, LLC expressed interest in opening a casual fine dining restaurant, under the trade name Jack’s Restaurant if certain improvements were made to the property. Under the California Community Redevelopment Law, the former Agency was authorized to make rehabilitation loans for the purpose of financing rehabilitation of commercial buildings and structures within the Redevelopment Project area. The former Agency entered into a Façade Loan Agreement with Marcovici Management Group, LLC for $460,000 in order to make improvements to the property. The loan bears one percent simple interest and had a final maturity date on November 25, 2019.

The loan was transferred from the former Agency to the Successor Agency on February 1, 2012, when all redevelopment agencies in California ceased to exist. $100,000 of the loan was forgiven due to Jack’s Restaurant meeting certain criteria. On June 14, 2017, the City and Jack’s Restaurant entered into a settlement agreement on improvements disputes and the loan was adjusted to $330,000. The maturity date of the promissory note was extended to May 1, 2027. At June 30, 2021, the outstanding balance of the note was $201,926.

NOTE 6 – LAND HELD FOR REDEVELOPMENT
The former Agency purchased parcels of land in order to develop or redevelop blighted properties within the redevelopment areas. Land held for redevelopment in the amount of $191,049 and $86,100 were transferred from the former Agency to the City’s Low and Moderate Income Housing Asset major governmental fund and the Successor Agency, respectively, on February 1, 2012, when all redevelopment agencies in California ceased to exist. There were no additions or sales activities for the year ended June 30, 2021. At June 30, 2021, the land held for redevelopment was $191,049 and $86,100 for the City’s Low and Moderate Income Housing Asset major governmental fund and the Successor Agency, respectively.

8.1.a
Packet Pg. 106 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
48 NOTE 7 – CAPITAL ASSETS
A. Capital Asset Additions and Retirements
A summary of changes in capital assets for the year ended June 30, 2021 is as follows:

Balance, Balance,
June 30, 2020 Additions Retirements Transfers June 30, 2021 Governmental activities
Capital assets, not being depreciated:

Land and improvements 3,406,821 $ - $ - $ - $ 3,406,821 $ Construction in progress 9,691,040 15,617,153 (3,007,828) (1,496,500) 20,803,865 Total capital assets, not being depreciated 13,097,861 15,617,153 (3,007,828) (1,496,500) 24,210,686 Capital assets, being depreciated:

Buildings and improvements 15,108,347 - - - 15,108,347
Equipment and furniture 9,923,622 489,424 (78,395) - 10,334,651 Streets and roads 65,179,374 - - 175,000 65,354,374
Curbs and gutters 16,737,612 - - - 16,737,612
Storm drains 8,017,593 - - - 8,017,593
Street lights 3,835,483 - - 100,000 3,935,483
Traffic control devices 5,132,012 - - 1,221,500 6,353,512 Total capital assets, being depreciated 123,934,043 489,424 (78,395) 1,496,500 125,841,572 Less accumulated depreciation for:

Buildings and improvements (9,355,051) (290,047) - - (9,645,098) Equipment and furniture (7,731,138) (609,871) 78,395 - (8,262,614) Streets and roads (31,172,924) (1,219,542) - - (32,392,466) Curbs and gutters (9,676,354) (334,752) - - (10,011,106) Storm drains (6,588,685) (266,986) - - (6,855,671)
Street lights (1,301,506) (131,122) - - (1,432,628)
Traffic control devices (2,487,361) (211,572) - - (2,698,933) Total accumulated depreciation (68,313,019) (3,063,892) 78,395 - (71,298,516) Total capital assets, being depreciated, net 55,621,024 (2,574,468) - 1,496,500 54,543,056 Governmental activities, capital assets, net 68,718,885 $ 13,042,685 $ (3,007,828) $ - $ 78,753,742 $ Business-type activity
Capital assets, being depreciated:

Water system infrastructure 781,443 $ - $ - $ - $ 781,443 $ Less accumulated depreciation for:

Water system infrastructure (316,967) (12,268) - - (329,235) Total capital assets, being depreciated, net 464,476 (12,268) - - 452,208 Business-type activity, capital assets, net 464,476 $ (12,268) $ - $ - $ 452,208 $ B. Construction in Progress
Project
Expended to
June 30, 2021
New Library 14,127,799 $
Oak Park & Monticello Improvement 6,671,481
Other Construction in Progress 4,585
Total Construction in Progress 20,803,865 $

8.1.a
Packet Pg. 107 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
49 NOTE 7 – CAPITAL ASSETS (Continued)
C. Depreciation Allocation
Depreciation expense was charged to functions and programs based on their usage of the related assets. For the year ended June 30, 2021, depreciation expense was charged to each function or program for governmental and the business-type activities as follows:

Governmental activities
General government 300,453 $
Public safety 509,863
Transportation 2,253,576
Total depreciation expense - governmental activities 3,063,892 $ Business-type activity
Diablo Vista Water 12,268 $
Total depreciation expense - business-type activities 12,268 $ NOTE 8 –LONG-TERM DEBT
A. Composition and Changes
A summary of changes in long-term debt of the City’s governmental activities for the year ended June 30, 2021 is as follows:

Amount
Balance Balance Due Within
June 30, 2020 Additions Retirements June 30, 2021 One Year 2020 Lease Financing Private Placement, New Library - $ 26,396,078 $ (1,555,719) $ 24,840,359 $ 2,066,668 $ Interest 1.75% per annum, due 6/1/2032
Total long-term debt - governmental activities $ 26,396,078 - $ (1,555,719) $ 24,840,359 $ 2,066,668 $ A summary of changes in long-term debt of the Successor Agency for the year ended June 30, 2021 is as follows:

Amount
Balance Balance Due Within
June 30, 2020 Retirements June 30, 2021 One Year
Tax Allocation Refunding Bonds, Series 2002 1,220,000 $ (595,000) $ 625,000 $ 625,000 $ Special Tax Refunding Bonds,
Subordinated Series 2002 4,480,000 (260,000) 4,220,000 270,000 Total long-term debt - Successor Agency $ (855,000) 5,700,000 $ 4,845,000 $ 895,000 $

8.1.a
Packet Pg. 108 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
50 NOTE 8 –LONG-TERM DEBT (Continued)
B. Summary of Debt Terms
2020 Lease Financing Private Placement, New Library
The City is financing the construction of a new library building, a portion of the Oak Park Monticello Backbone Infrastructure Improvements, and incidental expenses in the amount of $26,396,078 through a lease financing private placement loan with Bank of the West executed on August 1, 2020. The interest rate on the private placement is 1.75% per annum. Payments are to be made semiannually on December 1 and June 1 with final maturity on June 1, 2032. The loan’s debt service payments will be funded with Measure K revenues.

The financing is being provided through a lease/leaseback structure. Under this structure, the City leases real property consisting of City Hall, Police Headquarters Building and Downtown Parking Garage to the Authority in return for a one-time site lease payment equal to the proceeds of the lease that were received on the closing date from Bank of the West. This amount is being used to finance the Project and pay the costs of issuance of the transaction. The Authority is a separate government entity authorized to assist with the financing or refinancing of certain capital public improvements within the City. As of June 30, 2021, total debt service requirements remaining on the Lease Financing are $27,416,089.

Tax Allocation Refunding Bonds Series 2002
On September 18, 2002, the former Agency issued Tax Allocation Refunding Bonds Series 2002 (Series 2002 Bonds) in the amount of $8,860,000 to refund the Tax Allocation Refunding Bonds Series 1991.

Interest is payable semi-annually on September 1 and March 1, and principal is payable each September 1 with final maturity on September 1, 2021.

The outstanding principal of the Series 2002 Bonds were transferred from the former Agency to the Successor Agency on February 1, 2012, when all redevelopment agencies in California ceased to exist.

Redevelopment property tax revenues (i.e. former tax increment) are pledged for the repayment of the Series 2002 Bonds. Total debt service requirements remaining on the bonds are $638,281 payable through September 1, 2021. The redevelopment property tax revenues recognized during the year ended June 30, 2021 were $3,020,521 as against the total debt service payments made by the Successor Agency of $634,206.

Special Tax Refunding Bonds, Subordinated Series 2002
On November 20, 2002, the City assisted the Pleasant Hill Downtown Community Facilities District No. 1 (District) by issuing $7,290,000 of Special Tax Refunding Bonds, Subordinated Series 2002 (Special Tax Series 2002 Bonds) to refund Special Tax Bonds, Series 1998A. Interest ranged from 2.4% to 6.0% and is payable semi-annually on March 1 and September 1, and principal is payable each September 1 with final maturity on September 1, 2032. Property tax revenues allocated to the former Agency are pledged for the repayment of the Special Tax Series 2002 Bonds.

The outstanding principal of the Special Tax Series 2002 Bonds were transferred from the former Agency to the Successor Agency on February 1, 2012, when all redevelopment agencies in California ceased to exist. Total debt service requirements remaining on the Special Tax Series 2002 bonds are $5,489,182 payable through September 1, 2032. The redevelopment property tax revenues recognized during the year ended June 30, 2021 were $3,020,521 as against the total debt service payments paid by the Successor Agency of $460,361.

8.1.a
Packet Pg. 109 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
51 NOTE 8 – LONG-TERM DEBT (Continued)
C. Debt Service Requirements
Annual debt service requirements are shown below for the City’s governmental activities and the Successor Agency:

Governmental Activities:

For the Year
Ending June 30, Principal Interest
2022 2,066,668 $ 425,704 $
2023 2,102,993 389,379
2024 2,139,956 352,416
2025 2,177,569 314,803
2026 2,215,843 276,528
2027-2031 11,677,293 784,565
2032 2,460,037 32,335
$ 2,575,730 24,840,359 $
Successor Agency:

For the Year
Ending June 30, Principal Interest Principal Interest
2022 625,000 $ 13,281 $ 270,000 $ 188,155 $
2023 - - 285,000 175,373
2024 - - 300,000 161,901
2025 - - 310,000 147,853
2026 - - 325,000 133,228
2027-2031 - - 1,860,000 422,140
2032-2033 - - 870,000 40,532
$ 13,281 625,000 $ 4,220,000 $ 1,269,182 $
Series 2002 Bonds Special Tax Series 2002 Bonds
Lease Financing Private Placement - New
Library Loan
D. Events of Default and Acceleration Clauses
Generally, the City and Successor Agency are considered to be in default if the City or Successor Agency fail to pay the principal of and interest on the outstanding long-term debt when become due and payable.

For the Series 2002 Bonds and the Lease Financing Library Loan, if an event of default has occurred and is continuing, the principal of the debt, together with the accrued interest, may be declared due and payable immediately. For the Special Tax Series 2002 Bonds, there are no provision allowing for the acceleration of the debt service payments in the event of default.

8.1.a
Packet Pg. 110 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
52 NOTE 9 – NET POSITION AND FUND BALANCES
Net position is measured on the full accrual basis while fund balances are measured on the modified accrual basis.

A. Net Position
The government-wide, proprietary, and fiduciary fund financial statements utilize a net position presentation. Net position is categorized as follows:

Net Investment in Capital Assets – This category groups all capital assets including, infrastructure, into one component of net position. Accumulated depreciation and outstanding balances of debt and any debt-related deferred outflows and inflows of resources that are attributable to the acquisition, construction or improvement of these assets reduce the balance in this category.

Restricted – This category consists of restricted assets reduced by liabilities and deferred inflows of resources related to those assets. Enabling legislation authorizes the City to assess, levy, charge, or otherwise mandate payment of resources and includes a legally enforceable requirement that those resources be used only for the specific purposes stipulated in the legislation. A legally enforceable enabling legislation restriction is one that a party external to a government—such as citizens, public interest groups, or the judiciary - can compel a government to honor. At June 30, 2021, the government-wide statement of net position reported restricted net position of $13,702,342 in governmental activities, of which $937,300 are restricted by enabling legislation.

Unrestricted – This category represents net position of the City that does not meet the definition of “net investment in capital assets” or “restricted.”
B. Fund Balances
As prescribed by GASB Statement No. 54, governmental funds report fund balance in classifications based primarily on the extent to which the City is bound to honor constraints on the specific purposes for which amounts in the funds can be spent. Fund balances for governmental funds are made up of the following:

Nonspendable Fund Balance – includes amounts that are (a) not in spendable form, or (b) legally or contractually required to be maintained intact. The “not in spendable form” criterion includes items that are not expected to be converted to cash, i.e., prepaid items. There were no funds with nonspendable fund balance as of June 30, 2021.

Restricted Fund Balance – includes amounts that can be spent only for the specific purposes stipulated by external resource providers, constitutionally or through enabling legislation. Restrictions may effectively be changed or lifted only with the consent of resource providers.

Committed Fund Balance – includes amounts that can only be used for the specific purposes determined by a formal action of the City’s highest level of decision-making authority. The City Council is the highest level of decision-making authority for the City that can commit fund balances by adoption of an ordinance.

Commitments may be changed or lifted only by the City Council taking the same formal action that imposed the constraint originally.

8.1.a
Packet Pg. 111 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
53 NOTE 9 – NET POSITION AND FUND BALANCES (Continued)
Assigned Fund Balance – comprises amounts intended to be used by the City for specific purposes that are neither restricted nor committed. Intent is expressed by the City Council or the City Manager to whom the City Council has delegated the authority to assign amounts to be used for specific purposes by adoption of a resolution.

Unassigned Fund Balance – is the residual classification for the General Fund and includes all amounts not contained in the other classifications. Unassigned amounts are technically available for any purpose. Other governmental funds may only report a negative unassigned balance that was created after classification in one of the other four fund balance categories.

In circumstances when an expenditure may be made for which amounts are available in multiple fund balance classifications, fund balance is depleted in the order of restricted, committed, assigned, and unassigned.

The City Council has established reserve policy levels for contingency purposes. At June 30, 2021, $10,000,000 is reported as part of General Fund’s assigned fund balance.

Fund balances for all major and nonmajor governmental funds as of June 30, 2021, were classified as follows: Measure J Low and Moderate Other
Traffic Growth Income Governmental
General Mitigation Management Gas Tax Housing Asset Funds Total Restricted for:

General government - $ - $ - $ - $ - $ 423,522 $ 423,522 $ Public safety - - - - - 622,885 622,885
Transportation - 100,647 483,448 1,714,336 - 406,555 2,704,986 Community development - - - - 5,144,048 2,312,670 7,456,718 Capital projects - new library 14,405,714 - - - - 429,546 14,835,260 Subtotal 14,405,714 100,647 483,448 1,714,336 5,144,048 4,195,178 26,043,371 Committed to:

Capital projects - - - - - 1,004,658 1,004,658
Assigned to:

Contingency reserve 10,000,000 - - - - - 10,000,000
Encumbrances - others 435,292 - - - - - 435,292
Capital projects 6,819,353 - - 181,631 - - 7,000,984
Subtotal 17,254,645 - - 181,631 - - 17,436,276
Unassigned: - 1,442,001 - - - (38,451) 1,403,550
Total 33,102,360 $ 100,647 $ 483,448 $ 1,895,967 $ 5,144,048 $ 5,161,385 $ 45,887,855 $ NOTE 10 – EMPLOYEE BENEFITS
A. Sick Leave Conversion Benefits
Employees hired before certain dates (ranging from August 2011 to November 2011) as stated in the applicable Memorandum of Understanding are entitled to a sick leave conversion benefit. Specific terms of the conversion differ for each employee group. In general, when employees with more than 20 years of service retire, they may convert the net present value of their unused sick leave hours to a Retirement Health Savings plan in accordance with the terms of their bargaining group’s Memorandum of Understanding. A scaled down conversion plan exists for employees with a service retirement of 15 to 19 years of City employment for certain bargaining groups. Employees of the Police Officers Association bargaining groups were provided limited reimbursements for medical insurance based on the unused sick leave hours on the employee’s date of retirement. For the year ended June 30, 2021, the City provided medical benefits for 6 retirees from the converted sick leave bank and total benefits expended on a pay-as-you-go basis and amounted to $40,180.

8.1.a
Packet Pg. 112 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
54 NOTE 10 – EMPLOYEE BENEFITS (Continued)
B. Deferred Compensation Plan
City employees may defer a portion of their compensation under a City sponsored Deferred Compensation Plan created in accordance with Internal Revenue Code Section 457. Under this plan, participants are not taxed on the deferred portion of their compensation until it is distributed to them as defined by the plan.

The laws governing deferred compensation plan assets require plan assets to be held by a trust for the exclusive benefit of plan participants and their beneficiaries. Since the assets held under these plans are not the City's property and are not subject to City control, they have been excluded from these financial statements.

The City has a contract with International City Managers' Association (ICMA) to manage and invest the assets of the Deferred Compensation Plan; ICMA pools the assets of the Deferred Compensation Plan with those of other participants and does not make separate investments for employees.

The City's contract with ICMA was amended January 1, 1997 to substitute a separate trust for the City as owner of the assets in the plan, with the City becoming a trustee, but with no power over investment decisions. As a result, the assets in the Deferred Compensation Plan are not subject to claims by creditors of the City and are not reflected in the City's financial statements.

C. CalPERS Safety and Miscellaneous Employees Plans
Plan Description
The City participates in a cost-sharing multiple-employer pension plan that is administered by the CalPERS.

All qualified permanent and probationary employees are eligible to participate in the City’s CalPERS plan.

The City participates in six rate plans within the Miscellaneous and Safety Risk Pools of the CalPERS Public Agency Cost-Sharing Plan as follows:

CalPERS Plan Participants
Miscellaneous Plan All non-sworn employees who began employment between July 1, 1963 and April 15, 2012
Miscellaneous Tier 2 Plan
All non-sworn employees who began employment between April 16, 2012 and December 31, 2012, or on or after January 1, 2013 but were previously members of CalPERS through another agency.

Miscellaneous PEPRA
Plan
All non-sworn employees who began employment on or after January 1, 2013 but were not previously members of CalPERS through another agency.

Safety Plan All sworn employees who began employment between July 1, 1963 and April 15, 2012
Safety Tier 2 Plan
All sworn employees who began employment between April 16, 2012 and December 31, 2012, or on or after January 1, 2013 but were previously members of CalPERS through another agency.

Safety PEPRA Plan All sworn employees who began employment on or after January 1, 2013 but were not previously members of CalPERS through another agency.

8.1.a
Packet Pg. 113 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
55 NOTE 10 – EMPLOYEE BENEFITS (Continued)
CalPERS acts as a common investment and administrative agent for its participating member employers.

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 at www.calpers.ca.gov.

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 a final average compensation period of 12 months or 36 months. The cost of living adjustments for the CalPERS plans are applied as specified by the Public Employees’ Retirement Law. The California Public Employees’ Pension Reform Act (PEPRA), which took effect in January 2013, changes the way CalPERS retirement and health benefits are applied, and places compensation limits on members. As such, members who established CalPERS membership on or after January 1, 2013 are known as “PEPRA” members.

The CalPERS provisions and benefits in effect at June 30, 2021 for each rate plan are summarized as follows:

Miscellaneous PEPRA
Miscellaneous Second Miscellaneous
Plan Tier Plan Plan
Hire date Between
July 1, 1963 and
April 15, 2012
Between
April 16, 2012 and
December 31, 2012
On or after
January 1, 2013
Benefit formula 2% @ 55,
2% @ 60 2% @ 60 2% @ 62
Benefit vesting schedule 5 yrs of service 5 yrs of service 5 yrs of service Benefit payments monthly for life monthly for life monthly for life Retirement age 55 - 60 60 62
Required employee contribution rates 7.00% 7.00% 6.75%
Required employer contribution rates 44.020% 9.318% 8.010% Miscellaneous
Safety PEPRA
Safety Second Safety
Plan Tier Plan Plan
Hire date Between
August 1, 1969 and
April 15, 2012
Between
April 16, 2012 and
December 31, 2012
On or after
January 1, 2013
Benefit formula 2% @ 50,
3% @ 50 3% @ 55 2.7% @ 57
Benefit vesting schedule 5 yrs of service 5 yrs of service 5 yrs of service Benefit payments monthly for life monthly for life monthly for life Retirement age 50 55 57
Required employee contribution rates 9.00% 9.00% 13.00% Required employer contribution rates 81.369% 21.373% 13.465% Safety

8.1.a
Packet Pg. 114 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
56 NOTE 10 – EMPLOYEE BENEFITS (Continued)
Contributions
For the year ended June 30, 2021, the City’s contractually required contributions, which are actuarially determined, were as follows:

Miscellaneous - All Plans 2,158,305 $
Safety - All Plans 2,506,144
Total 4,664,449 $
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 both Plans are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees.

Net Pension Liability
At June 30, 2021, the City’s proportionate share of the net pension liability of Miscellaneous Plans and Safety Plans were 0.18845%, or $20,503,976 and 0.22512% or $24,494,321, respectively. The total net pension liability for the City was $44,998,297.

The City’s net pension liability was based on the proportionate shares (in dollars) determined by CalPERS based on individual actuarial measurements specific to each rate plan in the Miscellaneous and the Safety Risk Pools. The City’s total proportionate share of the cost-sharing plan pension amounts is the sum of the pension amounts allocated to each of the City’s Miscellaneous and Safety rate plans. The City’s net pension liability is measured as of June 30, 2020, using annual actuarial valuations as of June 30, 2019 rolled forward to June 30, 2020 using standard update procedures. The City’s proportions of the net pension liability for the Miscellaneous Plans and Safety Plans were actuarially determined as of the valuation dates.

The City’s proportionate share in the percentage of the net pension liability for the Miscellaneous Plans decreased by 0.01493% while that for the Safety Plans increased by 0.00701%, from the previous measurement date.

8.1.a
Packet Pg. 115 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
57 NOTE 10 – EMPLOYEE BENEFITS (Continued)
Pension Expense, Deferred Outflows of Resources and Deferred Inflows of Resources For the year ended June 30, 2021, the City recognized pension expense of $5,694,307. At June 30, 2021, the City reported deferred outflows of resources and deferred inflows of resources related to pension from the following sources:

Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date 4,664,449 $ - $ Differences between expected and actual experience - 227,834 Change in assumptions 2,956,041 -
Net differences between projected
and actual earnings on plan investments 1,141,468 -
Changes in employer's proportion 847,724 985,123
Difference between the employer's contributions
and the employer's proportionate share of contributions - 989,044 $ 2,202,001 9,609,682 $
$4,664,449 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, 2022.

Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

For the Year Ending June 30,
Deferred
Outflows/(Inflows)
of Resources
2022 242,816 $
2023 1,100,127
2024 841,402
2025 558,887
$ 2,743,232

8.1.a
Packet Pg. 116 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
58 NOTE 10 – EMPLOYEE BENEFITS (Continued)
Actuarial Assumptions
A summary of the actuarial assumptions and methods used to calculate the total pension liability as of June 30, 2020 are as follows:

Valuation date June 30, 2019
Measurement date June 30, 2020
Measurement period July 1, 2019 to June 30, 2020
Actuarial cost method Entry-age normal cost method
Actuarial assumptions:

Discount rate 7.15%
Inflation 2.50%
Payroll growth 2.75%
Salaries increase Varies by entry age and service
Mortality Derived using CalPERS Membership Data for all funds (1) Post Retirement Benefit Increase The lessor of contract COLA or 2.50% until Purchasing Power Protection Allowance Floor on Purchasing Power applies,

2.50% thereafter.
(1) The mortality table used was developed based on CalPERS’ specific data. The probabilities of mortality are based on the 2017 CalPERS Experience Study from 1997 to 2015. Pre-retirement and post-retirement mortality rates includes 15 years of projected mortality improvements using 90% of Scale MP-2016 published by the Society of Actuaries. For more details on the table, refer to the 2017 CalPERS Experience Study available on the CalPERS website.

All other actuarial assumptions used in the June 30, 2019 valuation were based on the 2017 CalPERS Experience Study for the period 1997 to 2015, including updates to salary increase, mortality and retirement rates. Further details of the 2017 CalPERS Experience Study can be found on the CalPERS website under Forms and Publications.

Discount Rate
The discount rate used to measure the total pension liability was 7.15 percent for each Plan. The projection of cash flows used to determine the discount rate assumed that the contributions from plan members will be made at the current member contributions rates and that the 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.

The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.

8.1.a
Packet Pg. 117 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
59 NOTE 10 – EMPLOYEE BENEFITS (Continued)
In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all the funds’ asset classes, expected compound geometric returns were calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the rounded single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equal to the single equivalent rate calculated and adjusted to account for assumed administrative expenses.

The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation. The long-term expected real rate of return by asset class and the target allocation adopted by the CalPERS Board effective on July 1, 2019, are as follows:

New Strategic Real Return Real Return
Asset Class Allocation Years 1 - 10 (a) Years 11+ (b)
Global Equity 50.00% 4.80% 5.98%
Fixed Income 28.00% 1.00% 2.62%
Inflation Assets 0.00% 0.77% 1.81%
Private Equity 8.00% 6.30% 7.23%
Real Assets 13.00% 3.75% 4.93%
Liquidity 1.00% 0.00% -0.92%
(a) An expected inflation of 2.00% used for this period. (b) An expected inflation of 2.92% used for this period Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability of the City’s proportionate share of the net pension liability of the plan as of the measurement date, calculated using the discount rate of 7.15 percent, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage-point lower (6.15 percent) or 1 percentage-point higher (8.15 percent) than the current rate:
-1% (6.15%) Current (7.15%) +1% (8.15%)
Net Pension Liability $ 44,998,297 65,999,316 $ 27,711,985 $ Discount 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.

8.1.a
Packet Pg. 118 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
60 NOTE 11 – RISK MANAGEMENT
Municipal Pooling Authority
The City is a member of the Municipal Pooling Authority (MPA), a joint powers agency that provides coverage against the following types of loss risks:

Type of Coverage Deductible Coverage Limits
Liability Program $25,000 $29,000,000
Vehicle Physical Damage $3,000 for police vehicles $250,000 $2,000 for all others
Workers' Compensation No deductible Statuory excess of $50,000,000 All Risk Fire & Property Including Flood $25,000 $800,000,000 Boiler & Machinery $5,000 $100,000,000
Cyber Liability $50,000 $2,000,000
Public Entity Pollution Liability $100,000 $1,000,000
Government Crime Coverage $2,500 $5,000,000
Employment Liability $50,000 $2,000,000
The MPA is governed by the MPA Board consisting of representatives from member municipalities. The MPA Board controls the operations of the MPA, including selection of management and approval of operating budgets, independent of any influence by member municipalities beyond their representation on the MPA Board. The City's premium payments to the MPA are calculated in accordance with formulas established by the MPA. 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. Financial statements may be obtained from MPA at 1911 San Miguel Drive, Suite 200, Walnut Creek, CA 94596.

For the year ended June 30, 2021, the City paid MPA net premiums of $1,122,055.

Liability for Uninsured Claims
Municipalities are required to record their liability for uninsured claims and to reflect the current portion of this liability as expenditure in the fund financial statements. The City has insurance coverage for such claims, but it has retained the risk for the deductible or uninsured portion of these claims.

The City's liability for uninsured claims is incurred and expected to be repaid within the next fiscal year and was recorded under accounts payable and accrued liabilities in the General Fund. Settlements have not exceeded insurance coverage in the past five years. Changes in the balances of uninsured claims liabilities during the years ended June 30, 2021 and 2020 are as follows:
2021 2020
Uninsured claims, beginning of year 26,811 $ 48,099 $
Incurred claims and changes in estimate 130,981 17,179
Claim payments (75,981) (38,467)
Uninsured claims, end of year 81,811 $ 26,811 $

8.1.a
Packet Pg. 119 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
61 NOTE 12 – COMMITMENTS AND CONTINGENCIES
A. Contingent Liabilities
The City is subject to litigation arising in the normal course of business. In the opinion of the City Attorney there is no pending litigation which is likely to have a material adverse effect on the financial position of the City.

The City participates in Federal and State grant programs. These programs are audited by the City's independent accountants in accordance with the provisions of the Federal Single Audit Act as amended in 1996, Uniform Guidance and applicable State requirements. 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.

B. Encumbrances
Under encumbrance accounting, purchase orders, contracts and other commitments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation. Encumbrance accounting is employed as an extension of formal budgetary integration in all budgeted funds.

Unencumbered operating appropriations lapse at year-end and may be reappropriated in the following year.

Encumbrances outstanding at year-end are not accounted for as expenditures and liabilities, but as part of fund balance.

As of June 30, 2021, the City had outstanding encumbrances for the following governmental funds by fund balance categories:

Fund Balance
Amount Classification
General Fund 12,403,456 $ * Restricted
General Fund 435,292 Assigned
Traffic Mitigation 8,932 Restricted
Measure J Growth Management 86,029 Restricted
Gas Tax 202,534 Restricted
Gas Tax 181,631 Assigned
Nonmajor Governmental Funds 507,097 Restricted
Nonmajor Governmental Funds 257,330 Committed
Total encumbrances 14,082,301 $
* General fund restricted fund balance relates to encumbrances for construction commitments that remain outstanding as of June 30, 2021 for the New Library construction project.

8.1.a
Packet Pg. 120 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR)) 62 This page is left intentionally blank.

8.1.a
Packet Pg. 121 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR)) Fiscal year 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 Measurement period 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14 City's proportion of the net pension liability (NPL) 0.41357% 0.42149% 0.41428% 0.40312% 0.40112% 0.39264% 0.39231% City's proportionate share of the NPL 44,998,297 $ 43,189,907 $ 39,921,703 $ 39,978,270 $ 34,709,774 $ 26,950,065 $ 24,412,267 $ City's covered payroll 11,569,693 $ 11,527,431 $ 11,198,394 $ 10,760,992 $ 10,723,402 $ 10,610,000 $ 10,107,834 $ City's proportionate share of the NPL
as a percentage of its covered payroll 388.93% 374.67% 356.49% 371.51% 323.68% 254.01% 241.52% Plan's fiduciary net position as a percentage of the
Plan's total pension liability 75.10% 75.26% 75.26% 73.31% 74.06% 78.40% 80.43% Note to schedule:
*
Benefit Changes - The figures above do not include any liability impact that may have resulted from plan changes, which occurred after the June 30, 2019 valuation date.

This applies for voluntary benefit changes as well as any offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes).

Change in assumptions - During measurement period 2014, the discount rate was 7.50%. During measurement period 2015, the discount rate was increased from 7.50 percent to 7.65 percent. There was no change in assumptions during measurement period 2016. During measurement period 2017, the discount rate was reduced from 7.65 percent to 7.15 percent. During measurement period 2018, demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and Review of Actuarial Assumptions December 2017. There were no changes in assumptions during measurement periods 2019 and 2020.

Fiscal year ended June 30, 2015 was the first year of implementation of GASB Statement No. 68, therefore only seven years of information is shown.

CITY OF PLEASANT HILL
Required Supplementary Information (Unaudited)
Schedule of the City's Proportionate Share of the Net Pension Liability Last Seven Fiscal Years*
63 8.1.a
Packet Pg. 122 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR)) Fiscal Year Ended 2021 2020 2019 2018 2017 2016 2015 2014 Contractually required contributions
(actuarially determined) (CRC) 4,664,449 $ 4,191,149 $ 3,701,227 $ 3,127,536 $ 2,771,458 $ 2,419,864 $ 1,797,824 $ 1,787,116 $ Contributions in relation to the CRC (4,664,449) (4,191,149) (3,701,227) (3,127,536) (2,771,458) (2,419,864) (1,797,824) (1,787,116) Contribution deficiency (excess) - $ - $ - $ - $ - $ - $ - $ - $ Covered payroll 11,974,531 $ 11,569,693 $ 11,527,431 $ 11,198,394 $ 10,760,992 $ 10,723,402 $ 10,610,000 $ 10,107,834 $ Contributions as a percentage of
covered payroll 38.95% 36.23% 32.11% 27.93% 25.75% 22.57% 16.94% 17.68% ADC for fiscal year June 30, 2021
Actuarial valuation date June 30, 2018
Actuarial cost method Entry-Age Normal Cost Method
Asset valuation method Actuarial value of assets
Inflation 2.50%
Salary increases Varies by entry age and services
Payroll growth 2.75%
Investment rate of return
Retirement age
Mortality
*

7.00%, net of pension plan investment expenses, includes inflation.

The probabilities of retirement are based on the 2017 CalPERS Experience Study for the period 1997 to 2015.

The probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015. Pre-retirement and Post-retirement mortality rates include 15 years of projected mortality improvement using 90% of Scale MP-2016 published by the Society of Actuaries.

Fiscal year ended June 30, 2015 was the first year of implementation of GASB Statement No. 68, therefore only eight years of information is shown.

The actuarial methods and assumptions used to set the actuarially determined contributions for the fiscal year ended June 30, 2021 were as follows:

CITY OF PLEASANT HILL
Required Supplementary Information (Unaudited)
Schedule of City Contributions
Last Eight Fiscal Years*
64 8.1.a
Packet Pg. 123 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Other Nonmajor Governmental Funds
Year Ended June 30, 2021
65 All funds not considered as major funds on the Fund Financial Statements are consolidated in one column entitled “Other Governmental Funds.” These nonmajor funds are identified and included in this supplementary section and includes all of the City’s Special Revenue Funds and Capital Project Funds SPECIAL REVENUE FUNDS:

The Special Revenue Funds are used to account for the proceeds of specific revenue sources that are restricted, committed or assigned to expenditures for specified purposes other than debt service or capital projects.

Traffic Safety Fund - accounts for fines collected from misdemeanor traffic violations involving a moving vehicle. These funds are used to provide crossing guards at major streets near elementary schools.

Gas Tax 2107.5 Fund - accounts for gas tax apportioned by the State to cities based on population. This fund is used for engineering and administrative costs only.

Unified Street Lighting Fund - accounts for an allocation of property taxes used to provide street lighting.

Parkland Dedication Fund – accounts for Parkland dedication fees paid by developers, which are distributed quarterly to the Pleasant Hill Recreation and Park District for parkland purposes.

Commercial Landscaping and Lighting District 20 Fund - accounts for assessments on commercial property that pay for landscape maintenance, street lighting and sidewalk repair costs within commercial districts.

NPDES Fund - accounts for storm water utility fees assessed to property owners citywide on their property tax bills. The funds are used to pay for the “National Pollution Discharge Elimination System,” mandated by the Federal government to prevent further polluting of streams and bays.

Supplemental Law Enforcement Service Fund - accounts for funds allocated by the State for front-line municipal police services.

Waste Management/Recycling Fund - accounts for activities to implement AB939, which mandates a decrease in the volume of landfill waste, as well as for household hazardous waste programs.

Police Special Services Fund - accounts for asset forfeitures from drug-related convictions. These funds may only be used for drug-related education and enforcement activities.

Park and Recreation Fund - accounts for funds received from the Pleasant Hill Recreation and Park District and from any park-related revenue source. Proceeds will be used for park-related and recreationrelated purposes.

Landscaping and Lighting Assessment District 22 Fund - accounts for assessments received from Grayson Woods and Gallery Walk property owners to pay for landscaping and lighting costs in these developments.

Senior Van Services Fund - accounts for donations and fare revenues, as well as City-paid expenses of operating a van service for transporting non-driving Pleasant Hill seniors to medical and dental appointments in the local area, shopping within Pleasant Hill, and to the Pleasant Hill Senior Center for social activities.

8.1.a
Packet Pg. 124 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Other Nonmajor Governmental Funds
Year Ended June 30, 2021
66 CLEEP (California Law Enforcement Equipment Program) Grant Fund - accounts for State grant funds to be used for law enforcement-related equipment purchases.

Vehicle Abatement Fund - accounts for funds received quarterly from the County of Contra Costa for vehicle abatement (based on the number of vehicles abated), as well as an annual year-end transfer from the General Fund to cover expenses beyond the amount of the County's contribution. On an annual basis, 40% of the Code Enforcement investigator's salary and benefits are charged to this fund to approximate the amount of time spent on vehicle abatement.

Affordable Housing Fund - accounts for fees received from developers in lieu of providing affordable housing in their project, as is otherwise required. The City is developing a plan to use these funds to provide assistance to low-income families and individuals in acquiring housing.

Traffic Congestion Relief Fund – accounts for the funds received from the State as a result of AB 2928 and SB 1662 (Statutes of 2000) and the related expenditures. These funds are to be used for maintenance, rehabilitation, and reconstruction projects for public streets and roads.

Disability Access Fund - accounts for funds collected through $1 fee from business license application and renewal for the purpose of increasing certified access specialist services and facilitate compliance with construction-related disability requirements.

General Plan Fee Fund- accounts for the accumulation of revenue levied on building permits for payment of expenditures related to the City’s General Plan Update and Housing Element Update.

HCD Housing Grant Fund- accounts for housing related activities for the City. The fund supports the update of the City of Pleasant Hill Housing Element Update required by the State of California and also supports the streamlining of the permitting of various types of housing projects throughout the City. These funds are supported by the State of California Department of Housing and Community Development grants.

CAPITAL PROJECTS FUNDS:

Capital Projects Funds account for the financial resources that are restricted or committed to expenditure for capital outlays, including the acquisition or construction of capital facilities and other capital assets.

Capital Outlay Fund - also known as Bedroom Tax Fund. Accounts for acquiring, building, improving or expanding public property and facilities.

Computer Technology Replacement Fund - accounts for scheduled and unscheduled replacement of computer-related technology (such as servers, computer, printers, etc.) for City Hall and the Corporation Yard. A flat amount is transferred from General Fund annually for that purpose.

Public Educational and Governmental Access Capital Grant Fund (PEG) - accounts for PEG grant revenues to be used to fund capital costs associated with acquiring PEG capital equipment Vehicles and Equipment Replacement Fund - accounts for acquiring City vehicles, and communication gear, and is funded by General Fund transfers.

8.1.a
Packet Pg. 125 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Other Nonmajor Governmental Funds
Year Ended June 30, 2021
67 Police Technology Fund - accounts for scheduled and unscheduled replacement of radios, copiers, and computer-related technology (such as servers, computers, printers, etc.) for the Police Department.

Annually, a flat amount is transferred from General Fund for that purpose.

Capital Projects Fund - accounts for making capital improvements and funding large maintenance projects.

8.1.a
Packet Pg. 126 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2021
Special Revenue Funds
Commercial
Landscaping
Gas Tax Unified Street Parkland and Lighting
Traffic Safety 2107.5 Lighting Dedication District 20 NPDES Assets:

Cash and investments:

Held in City Treasury 79,993 $ (14,430) $ 423,200 $ 72,140 $ 293,999 $ 1,172,274 $ Receivables:

Accounts and other - - - - - -
Interest 57 - 322 55 231 893
Total assets 80,050 $ (14,430) $ 423,522 $ 72,195 $ 294,230 $ 1,173,167 $ Liabilities and fund balances:

Liabilities:

Accounts payable and accrued liabilitie $ - - $ - $ 72,195 $ 41,507 $ 5,243 $ Fund balances:

Restricted 80,050 - 423,522 - 252,723 1,167,924
Committed - - - - - -
Unassigned - (14,430) - - - -
Total fund balances (deficits) 80,050 (14,430) 423,522 - 252,723 1,167,924 Total liabilities and fund balances 80,050 $ (14,430) $ 423,522 $ 72,195 $ 294,230 $ 1,173,167 $ 68 8.1.a
Packet Pg. 127 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2021
Special Revenue Funds
Supplemental Landscaping
Law Waste and Lighting
Enforcement Management/ Police Special Park and Assessment Senior Van CLEEP Vehicle Services Recycling Services Recreation District 22 Services Grant Abatement $ 275,140 237,969 $ 158,508 $ 2 $ 74,827 $ 18,084 $ 6 $ 146,036 $ 13,681 - - - - - - -
209 196 120 - 60 13 - -
$ 289,030 238,165 $ 158,628 $ 2 $ 74,887 $ 18,097 $ 6 $ 146,036 $ $ 11,911 - $ - $ - $ - $ - $ - $ - $
277,119 238,165 158,628 2 74,887 18,097 6 146,036
- - - - - - - -
- - - - - - - -
277,119 238,165 158,628 2 74,887 18,097 6 146,036
$ 289,030 238,165 $ 158,628 $ 2 $ 74,887 $ 18,097 $ 6 $ 146,036 $ (Continued)
69 8.1.a
Packet Pg. 128 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR)) Traffic
Affordable Congestion Disability General HCD Housing
Housing Relief Fund Access Plan Fee Grant
Assets:

Cash and investments:

Held in City Treasury 568,413 $ 78,945 $ 56,762 $ 295,756 $ - $ Receivables:

Accounts and other - - - - -
Interest 433 - 43 225 -
Total assets 568,846 $ 78,945 $ 56,805 $ 295,981 $ - $
Liabilities and fund balances:

Liabilities:

Accounts payable and accrued liabilities $ - 225 $ 55,106 $ 16,773 $ - $ Fund balances:

Restricted 568,621 78,945 1,699 279,208 -
Committed - - - - -
Unassigned - - - - -
Total fund balances (deficits) 568,621 78,945 1,699 279,208 - Total liabilities and fund balances 568,846 $ 78,945 $ 56,805 $ 295,981 $ - $ Special Revenue Funds

CITY OF PLEASANT HILL
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2021
70 8.1.a
Packet Pg. 129 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR)) Public
Educational and
Computer Governmental Vehicles and
Technology Access Capital Equipment Police
Capital Outlay Replacement Grant Replacement Technology Capital Projects Total $ (15,362) 41,038 $ 378,893 $ 311,259 $ 536,501 $ 164,168 $ 5,354,121 $ - - 9,295 - - - 22,976
- 31 289 - - - 3,177
$ (15,362) 41,069 $ 388,477 $ 311,259 $ 536,501 $ 164,168 $ 5,380,274 $ $ 8,659 - $ - $ - $ 7,270 $ - $ 218,889 $
- 41,069 388,477 - - - 4,195,178
- - - 311,259 529,231 164,168 1,004,658
(24,021) - - - - - (38,451)
(24,021) 41,069 388,477 311,259 529,231 164,168 5,161,385 $ (15,362) 41,069 $ 388,477 $ 311,259 $ 536,501 $ 164,168 $ 5,380,274 $ (Concluded)
Capital Projects Funds

CITY OF PLEASANT HILL
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2021
71 8.1.a
Packet Pg. 130 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures and Changes in Fund Balances For the Year Ended June 30, 2021
Special Revenue Funds
Commercial
Landscaping
Gas Tax Unified Street Parkland and Lighting
Traffic Safety 2107.5 Lighting Dedication District 20 NPDES Revenues:

Property taxes - $ - $ 639,084 $ - $ - $ - $
Other taxes and special assessments - - - - 394,421 362,650 Intergovernmental - 6,000 - - - -
Charges for services - - - - - -
Fines and forfeitures 31,800 - - - - -
Use of money and property 310 7 1,042 - 1,410 4,814
Other - - - - - -
Total revenues 32,110 6,007 640,126 - 395,831 367,464
Expenditures:

Current:

General government - - 209,427 - - -
Public safety - - - - - -
Transportation - 19,791 - - 540,451 -
Community development - - - - - 82,192
Capital outlay - - - - - 118,971
Total expenditures - 19,791 209,427 - 540,451 201,163
Excess (deficiency) of revenues
over (under) expenditures 32,110 (13,784) 430,699 - (144,620) 166,301 Other financing sources (uses):

Transfers in - - - - 97,946 -
Transfers out - - (358,500) - - (435,236)
Total other financing sources (uses) - - (358,500) - 97,946 (435,236) Change in fund balances 32,110 (13,784) 72,199 - (46,674) (268,935) Fund balances, beginning of year 47,940 (646) 351,323 - 299,397 1,436,859 Fund balances, end of year 80,050 $ (14,430) $ 423,522 $ - $ 252,723 $ 1,167,924 $ 72 8.1.a
Packet Pg. 131 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures and Changes in Fund Balances For the Year Ended June 30, 2021
Special Revenue Funds
Supplemental Landscaping
Law Waste and Lighting
Enforcement Management/ Police Special Park and Assessment Senior Van CLEEP Vehicle Services Recycling Services Recreation District 22 Services Grant Abatement $ - - $ - $ - $ - $ - $ - $ - $
- - - - 58,562 - - -
13,742 156,727 33,352 - - 53,448 - 17,760
122,907 - - - - 165 - -
- - - - - - - -
1,383 1,081 839 - 358 78 - -
- - - - - - - -
138,032 157,808 34,191 - 58,920 53,691 - 17,760
- - - - - - - -
- 37,498 24,635 - - - - -
- - - - 70,386 - - -
136,129 - - - - 57,888 - -
- - - - - - - -
136,129 37,498 24,635 - 70,386 57,888 - -
1,903 120,310 9,556 - (11,466) (4,197) - 17,760
- - - - 4,692 - - -
- (20,000) - - - - - -
- (20,000) - - 4,692 - - -
1,903 100,310 9,556 - (6,774) (4,197) - 17,760
275,216 137,855 149,072 2 81,661 22,294 6 128,276
$ 277,119 238,165 $ 158,628 $ 2 $ 74,887 $ 18,097 $ 6 $ 146,036 $ (Continued)
73 8.1.a
Packet Pg. 132 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR)) Traffic
Affordable Congestion Disability General HCD Housing
Housing Relief Fund Access Plan Fee Grant
Revenues:

Property taxes - $ - $ - $ - $ - $
Other taxes and special assessments - - - - -
Intergovernmental - - - - 18,610
Charges for services - - - 121,263 -
Fines and forfeitures - - - - -
Use of money and property 2,808 - 171 1,452 -
Other - - - - -
Total revenues 2,808 - 171 122,715 18,610
Expenditures:

Current:

General government - - - - -
Public safety - - - - -
Transportation 225 - - 117,280 -
Community development - - - - 18,610
Capital outlay - - - - -
Total expenditures 225 - - 117,280 18,610
Excess (deficiency) of revenues
over (under) expenditures 2,583 - 171 5,435 -
Other financing sources (uses):

Transfers in - - - - -
Transfers out - - - - -
Total other financing sources (uses) - - - - -
Change in fund balances 2,583 - 171 5,435 -
Fund balances, beginning of year 566,038 78,945 1,528 273,773 - Fund balances, end of year 568,621 $ 78,945 $ 1,699 $ 279,208 $ - $ Special Revenue Funds

CITY OF PLEASANT HILL
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures and Changes in Fund Balances For the Year Ended June 30, 2021
74 8.1.a
Packet Pg. 133 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR)) Public
Educational and
Computer Governmental Vehicles and
Capital Technology Access Capital Equipment Police Capital Outlay Replacement Grant Replacement Technology Projects Total $ - - $ - $ - $ - $ - $ 639,084 $
- 1,620 - - - - 817,253
- - 46,115 - - - 345,754
- - - - - - 244,335
- - - - - - 31,800
- 198 1,884 - - - 17,835
- - - 18,000 - - 18,000
- 1,818 47,999 18,000 - - 2,114,061
- - - - - - 209,427
- - - - - 1,299 63,432
- - - - - 2,400 750,533
- - - - - - 294,819
471,686 - 13,129 38,542 457,261 67,124 1,166,713
471,686 - 13,129 38,542 457,261 70,823 2,484,924
(471,686) 1,818 34,870 (20,542) (457,261) (70,823) (370,863) 391,400 - - - 587,100 - 1,081,138
- - (340,000) - - - (1,153,736)
391,400 - (340,000) - 587,100 - (72,598)
(80,286) 1,818 (305,130) (20,542) 129,839 (70,823) (443,461) 56,265 39,251 693,607 331,801 399,392 234,991 5,604,846 $ (24,021) 41,069 $ 388,477 $ 311,259 $ 529,231 $ 164,168 $ 5,161,385 $ (Concluded)
Capital Projects Funds

CITY OF PLEASANT HILL
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures and Changes in Fund Balances For the Year Ended June 30, 2021
75 8.1.a
Packet Pg. 134 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Nonmajor Governmental Funds
Schedules of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
For the Year Ended June 30, 2021
Traffic Safety Gas Tax 2107.5
Variance Variance
Final Positive Final Positive
Budget Actual (Negative) Budget Actual (Negative)
Revenues:

Property taxes - $ - $ - $ - $ - $ - $
Other taxes and special assessments - - - - - -
Intergovernmental - - - 6,000 6,000 -
Charges for services - - - - - -
Fines and forfeitures 78,307 31,800 (46,507) - - -
Use of money and property 758 310 (448) 957 7 (950)
Other - - - - - -
Total revenues 79,065 32,110 (46,955) 6,957 6,007 (950) Expenditures:

Current:

General government - - - - - -
Public safety 85,975 - 85,975 - - -
Transportation - - - 25,041 19,791 5,250
Community development - - - - - -
Capital outlay - - - - - -
Total expenditures 85,975 - 85,975 25,041 19,791 5,250
Excess (deficiency) of revenues
over (under) expenditures (6,910) 32,110 39,020 (18,084) (13,784) 4,300 Other financing sources (uses):

Transfers in - - - - - -
Transfers out - - - - - -
Total other financing sources (uses) - - - - - -
Change in fund balances (6,910) $ 32,110 39,020 $ (18,084) $ (13,784) 4,300 $ Fund balances, beginning of year 47,940 (646)
Fund balances, end of year 80,050 $ (14,430) $
76 8.1.a
Packet Pg. 135 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Nonmajor Governmental Funds
Schedules of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
For the Year Ended June 30, 2021
Unified Street Lighting NPDES
Variance Variance Variance
Final Positive Final Positive Final Positive
Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative) $ 639,084 599,474 $ 39,610 $ - $ - $ - $ - $ - $ - $
- - - 394,421 394,421 - 350,000 362,650 12,650
- - - - - - - - -
- - - - - - - - -
- - - - - - - - -
1,042 2,450 (1,408) 13,805 1,410 (12,395) 9,731 4,814 (4,917) - - - - - - - - -
640,126 601,924 38,202 408,226 395,831 (12,395) 359,731 367,464 7,733 209,427 261,291 51,864 - - - - - -
- - - - - - - - -
- - - 587,477 540,451 47,026 1,000 - 1,000
- - - - - - 536,073 82,192 453,881
- - - - - - 248,904 118,971 129,933
209,427 261,291 51,864 587,477 540,451 47,026 785,977 201,163 584,814 430,699 340,633 90,066 (179,251) (144,620) 34,631 (426,246) 166,301 592,547 - - - 97,946 97,946 - - - -
(358,500) (358,500) - - - - (435,236) (435,236) -
(358,500) (358,500) - 97,946 97,946 - (435,236) (435,236) - $ 72,199 (17,867) 90,066 $ (81,305) $ (46,674) 34,631 $ (861,482) $ (268,935) 592,547 $ 299,397 351,323 1,436,859
$ 252,723 423,522 $ 1,167,924 $
(Continued)
Commercial Landscaping and
Lighting District 20
77 8.1.a
Packet Pg. 136 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR)) Supplemental Law
Enforcement Services Management/Recycling
Variance Variance
Final Positive Final Positive
Budget Actual (Negative) Budget Actual (Negative)
Revenues:

Property taxes - $ - $ - $ - $ - $ - $
Other taxes and special assessments - - - - - -
Intergovernmental 100,000 156,727 56,727 9,632 13,742 4,110 Charges for services - - - 104,232 122,907 18,675
Fines and forfeitures - - - - - -
Use of money and property - 1,081 1,081 4,317 1,383 (2,934) Other - - - - - -
Total revenues 100,000 157,808 57,808 118,181 138,032 19,851 Expenditures:

Current:

General government - - - - - -
Public safety 100,000 37,498 62,502 - - -
Transportation - - - - - -
Community development - - - 231,131 136,129 95,002
Capital outlay - - - - - -
Total expenditures 100,000 37,498 62,502 231,131 136,129 95,002 Excess (deficiency) of revenues
over (under) expenditures - 120,310 120,310 (112,950) 1,903 114,853 Other financing sources (uses):

Transfers in - - - - - -
Transfers out - (20,000) (20,000) - - -
Total other financing sources (uses) - (20,000) (20,000) - - - Change in fund balances - $ 100,310 100,310 $ (112,950) $ 1,903 114,853 $ Fund balances, beginning of year 137,855 275,216
Fund balances, end of year 238,165 $ 277,119 $
Waste

CITY OF PLEASANT HILL
Nonmajor Governmental Funds
Schedules of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
For the Year Ended June 30, 2021
78 8.1.a
Packet Pg. 137 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR)) Police Special Services Senior Van Services
Variance Variance Variance
Final Positive Final Positive Final Positive
Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative) $ - - $ - $ - $ - $ - $ - $ - $ - $
- - - 58,562 58,562 - - - -
33,352 5,055 28,297 - - - 55,000 53,448 (1,552)
- - - - - - 2,910 165 (2,745)
- - - - - - - - -
839 2,932 (2,093) 618 358 (260) 586 78 (508)
- - - - - - - - -
34,191 7,987 26,204 59,180 58,920 (260) 58,496 53,691 (4,805) - - - - - - - - -
24,635 37,765 13,130 - - - - - -
- - - 47,625 70,386 (22,761) - - -
- - - - - - 59,758 57,888 1,870
- - - - - - - - -
24,635 37,765 13,130 47,625 70,386 (22,761) 59,758 57,888 1,870 9,556 (29,778) 39,334 11,555 (11,466) (23,021) (1,262) (4,197) (2,935) - - - 4,692 4,692 - - - -
- - - - - - - - -
- - - 4,692 4,692 - - - -
$ 9,556 (29,778) 39,334 $ 16,247 $ (6,774) (23,021) $ (1,262) $ (4,197) (2,935) $ 81,661 149,072 22,294
$ 74,887 158,628 $ 18,097 $
(Continued)
Landscaping and Lighting
Assessment District 22

CITY OF PLEASANT HILL
Nonmajor Governmental Funds
Schedules of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
For the Year Ended June 30, 2021
79 8.1.a
Packet Pg. 138 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR)) Vehicle Abatement Affordable Housing
Variance Variance
Final Positive Final Positive
Budget Actual (Negative) Budget Actual (Negative)
Revenues:

Property taxes - $ - $ - $ - $ - $ - $
Other taxes and special assessments - - - - - -
Intergovernmental 17,457 17,760 303 - - -
Charges for services 1,011 - (1,011) - - -
Fines and forfeitures - - - - - -
Use of money and property - - - 12,334 2,808 (9,526)
Other - - - - - -
Total revenues 18,468 17,760 (708) 12,334 2,808 (9,526) Expenditures:

Current:

General government - 5,202 5,202 - - -
Public safety - - - - - -
Transportation - - - - 225 (225)
Community development - - - - - -
Capital outlay - - - - - -
Total expenditures 5,202 - 5,202 - 225 (225)
Excess (deficiency) of revenues
over (under) expenditures 13,266 17,760 4,494 12,334 2,583 (9,751) Other financing sources (uses):

Transfers in - - - - - -
Transfers out - - - - - -
Total other financing sources (uses) - - - - - -
Change in fund balances 13,266 $ 17,760 4,494 $ 12,334 $ 2,583 (9,751) $ Fund balances, beginning of year 128,276 566,038
Fund balances, end of year 146,036 $ 568,621 $
For the Year Ended June 30, 2021

CITY OF PLEASANT HILL
Nonmajor Governmental Funds
Schedules of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
80 8.1.a
Packet Pg. 139 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR)) Traffic Congestion Relief
Variance Variance Variance
Final Positive Final Positive Final Positive
Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative) $ - - $ - $ - $ - $ - $ - $ - $ - $
- - - - - - - - -
- - - - - - - - -
- - - - - - 130,548 121,263 (9,285)
- - - - - - - - -
- - - - 171 171 5,548 1,452 (4,096)
- - - - - - - - -
- - - - 171 171 136,096 122,715 (13,381)
- - - - - - - - -
- - - - - - - - -
- - - - - - 422,312 117,280 305,032
- - - - - - - - -
- - - - - - - - -
- - - - - - 422,312 117,280 305,032
- - - - 171 171 (286,216) 5,435 291,651
- - - - - - - - -
- - - - - - - - -
- - - - - - - - -
$ - - - $ - $ 171 171 $ (286,216) $ 5,435 291,651 $
1,528 78,945 273,773
$ 1,699 78,945 $ 279,208 $
(Continued)
Disability Access General Plan Fee

CITY OF PLEASANT HILL
Nonmajor Governmental Funds
Schedules of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
For the Year Ended June 30, 2021
81 8.1.a
Packet Pg. 140 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR)) Computer Technology and
Capital Outlay Replacement
Variance Variance
Final Positive Final Positive
Budget Actual (Negative) Budget Actual (Negative)
Revenues:

Property taxes - $ - $ - $ - $ - $ - $
Other taxes and special assessments - 1,620 1,620 - - - Intergovernmental - - - - - -
Charges for services - - - - - -
Fines and forfeitures - - - - - -
Use of money and property 800 198 (602) - - -
Other - - - - - -
Total revenues 800 1,818 1,018 - - -
Expenditures:

Current:

General government - - - - - -
Public safety - - - - - -
Transportation - - - - - -
Community development - - - - - -
Capital outlay - - - 658,633 471,686 186,947
Total expenditures - - - 658,633 471,686 186,947
Excess (deficiency) of revenues
over (under) expenditures 800 1,818 1,018 (658,633) (471,686) 186,947 Other financing sources (uses):

Transfers in - - - 391,400 391,400 -
Transfers out - - - - - -
Total other financing sources (uses) - - - 391,400 391,400 - Change in fund balances 800 $ 1,818 1,018 $ (267,233) $ (80,286) 186,947 $ Fund balances, beginning of year 39,251 56,265
Fund balances, end of year 41,069 $ (24,021) $

CITY OF PLEASANT HILL
Nonmajor Governmental Funds
Schedules of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
For the Year Ended June 30, 2021
82 8.1.a
Packet Pg. 141 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR)) Police Technology
Variance Variance Variance
Final Positive Final Positive Final Positive
Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative) $ - - $ - $ - $ - $ - $ - $ - $ - $
- - - - - - - - -
46,115 58,580 (12,465) - - - - - -
- - - - - - - - -
- - - - - - - - -
1,884 8,136 (6,252) - - - - - -
- - - 6,079 18,000 11,921 - - -
47,999 66,716 (18,717) 6,079 18,000 11,921 - - -
- - - - - - - - -
- - - - - - - - -
- - - - - - - - -
- - - - - - - - -
13,129 16,705 3,576 271,684 38,542 233,142 667,842 457,261 210,581 13,129 16,705 3,576 271,684 38,542 233,142 667,842 457,261 210,581 34,870 50,011 (15,141) (265,605) (20,542) 245,063 (667,842) (457,261) 210,581 - - - - - - 587,100 587,100 -
(340,000) (340,000) - - - - - - -
(340,000) (340,000) - 6,066 - (6,066) 587,100 587,100 - $ (305,130) (289,989) (15,141) $ (259,539) $ (20,542) 238,997 $ (80,742) $ 129,839 210,581 $ 331,801 693,607 399,392
$ 311,259 388,477 $ 529,231 $
(Continued)

CITY OF PLEASANT HILL
Nonmajor Governmental Funds
Schedules of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
For the Year Ended June 30, 2021
Capital Grant Replacement
Public Educational and
Governmental Access Vehicles and Equipment
83 8.1.a
Packet Pg. 142 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR)) Capital Projects
Variance
Final Positive
Budget Actual (Negative)
Revenues:

Property taxes - $ - $ - $
Other taxes and special assessments - - -
Intergovernmental - - -
Charges for services - - -
Fines and forfeitures - - -
Use of money and property - - -
Other - - -
Total revenues - - -
Expenditures:

Current:

General government - - -
Public safety - 1,299 (1,299)
Transportation 747 2,400 (1,653)
Community development - - -
Capital outlay 80,365 67,124 13,241
Total expenditures 81,112 70,823 10,289
Excess (deficiency) of revenues
over (under) expenditures (81,112) (70,823) 10,289
Other financing sources (uses):

Transfers in - - -
Transfers out - - -
Total other financing sources (uses) - - -
Change in fund balances (81,112) $ (70,823) 10,289 $
Fund balances, beginning of year 234,991
Fund balances, end of year 164,168 $
(Concluded)

CITY OF PLEASANT HILL
Nonmajor Governmental Funds
Schedules of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
For the Year Ended June 30, 2021
84 8.1.a
Packet Pg. 143 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Custodial Funds
Year Ended June 30, 2021
85 Custodial funds are used to account for assets held by the City in a fiduciary capacity on behalf of others.

Specific custodial funds are as follows:

Acme Landfill Closure Fund - accounts for funds collected by Pleasant Hill Bayshore Disposal Company from their Pleasant Hill ratepayers prior to February 8, 1993 and turned over to the City on that date for the purpose of covering future costs of the closure of the Acme Landfill. In addition, from November 1994 through June 1997, savings from the Keller Canyon Landfill rate reduction were deposited into this fund.

Transpac Fund - accounts for contributions from TRANSPAC member agencies in central County of Contra Costa and the use of those funds for transportation planning and information purposes.

TDM Fund - accounts for transportation funds advanced and reimbursed to TRANSPAC for Transportation Demand Management projects in central County of Contra Costa.

Asset Forfeiture Holding Fund - accounts for cash seized in drug cases, the distribution of which is determined later by the court. Distribution is most often among the law enforcement agencies involved in the arrest and investigation. If the City receives a portion, it is transferred to the Police Special Services Fund.

8.1.a
Packet Pg. 144 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR)) Acme Landfill Asset Forfeiture
Closure Transpac TDM Holding Fund Total
Assets:

Cash and investments held in City Treasury 70,938 $ 208,610 $ 813 $ 61,636 $ 341,997 $ Interest receivable 54 159 - - 213
Total Assets 70,992 208,769 813 61,636 342,210
Liabilities:

Accounts payable and accruals - 85,233 650 - 85,883
Net Position:

Restricted for:

Governmental entities and others 70,992 123,536 163 61,636 256,327 Total net position 70,992 $ 123,536 $ 163 $ 61,636 $ 256,327 $

CITY OF PLEASANT HILL
Custodial Funds
Combining Statement of Fiduciary Net Position
For the Year Ended June 30, 2021
86 8.1.a
Packet Pg. 145 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR)) Acme Landfill Asset Forfeiture
Closure Transpac TDM Holding Fund Total
Additions:

Members contributions - $ 210,001 $ - $ - $ 210,001 $
Investment earnings 19 1,747 - - 1,766
Others 331 - - 17,250 17,581
Total additions 350 211,748 - 17,250 229,348
Deductions:

Benefits paid to participants or beneficiaries - 150,481 - 82,858 233,339 Administrative and general - 232,878 - - 232,878
Total deductions - 383,359 - 82,858 466,217
Changes in net position 350 (171,611) - (65,608) (236,869) Net position, beginning of year 70,642 295,147 163 127,244 493,196 Net position, end of year 70,992 $ 123,536 $ 163 $ 61,636 $ 256,327 $

CITY OF PLEASANT HILL
Custodial Funds
Combining Statement of Changes in Fiduciary Net Position For the Year Ended June 30, 2021
87 8.1.a
Packet Pg. 146 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR)) 88 This page is left intentionally blank.

8.1.a
Packet Pg. 147 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Statistical Section
Year Ended June 30, 2021
89 This part of the City’s Annual Comprehensive Financial Report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City’s overall financial health. In contrast to the financial section, the statistical section information is not subject to independent audit.

Financial Trends
These schedules contain trend information to help the reader understand how the City’s financial performance and well being have changed over time:

1. Net Position by Component

2. Changes in Net Position

3. Fund Balances of Governmental Funds

4. Changes in Fund Balances of Governmental Funds
Revenue Capacity
These schedules contain information to help the reader assess the City’s most significant local revenue source, the property tax:

1. Assessed and Estimated Actual Net Value of Taxable Property

2. Property Tax Rates, All Direct and Overlapping Governments

3. Principal Property Taxpayers

4. Property Tax Levies and Collections
Debt Capacity
These schedules present information to help the reader assess the affordability of the City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future:

1. Ratio of Outstanding Debt by Type

2. Computation of Direct and Overlapping Debt

3. Computation of Legal Bonded Debt Margin
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader understand the environment within which the City’s financial activities take place:

1. Demographic Statistics

2. Top 25 Sales Tax Producers

3. Taxable Sales by Category
Operating Information
These schedules contain service and infrastructure data to help the reader understand how the information in the City’s financial report relates to the services the City provides and the activities it performs:

1. Full-Time Equivalent City Government Employees by Function

2. Operating Indicators by Function/Program

3. Capital Asset Statistics by Function/Program
Sources
Unless otherwise noted, the information in these schedules is derived from the Annual Comprehensive Financial Reports for the relevant year.

8.1.a
Packet Pg. 148 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
June 30,
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Governmental activities
Net investment in capital assets 57,645,233 $ 59,197,790 $ 66,029,250 $ 65,099,649 $ 66,114,333 $ 66,589,844 $ 63,663,298 $ 65,031,586 $ 68,718,885 $ 68,319,097 $ Restricted 11,971,498 11,608,039 11,586,938 11,474,912 12,279,862 8,990,013 10,184,878 10,926,436 12,540,185 13,702,342 Unrestricted 10,446,896 10,601,225 12,351,893 (19,918,513) (18,511,367) (20,106,826) (17,751,134) (21,879,791) (24,614,367) (20,353,944) Total governmental activities net position $ 81,407,054 80,063,627 $ 89,968,081 $ 56,656,048 $ 59,882,828 $ 55,473,031 $ 56,097,042 $ 54,078,231 $ 56,644,703 $ 61,667,495 $ Business-type activities
Net investment in capital assets 440,297 $ 449,206 $ 418,115 $ 532,590 $ 524,375 $ 508,158 $ 491,941 $ 479,673 $ 464,476 $ 452,208 $ Unrestricted 477,887 522,825 593,780 530,294 641,480 752,682 481,814 570,177 688,812 711,427 Total business-type activities net position $ 972,031 918,184 $ 1,011,895 $ 1,062,884 $ 1,165,855 $ 1,260,840 $ 973,755 $ 1,049,850 $ 1,153,288 $ 1,163,635 $ Primary government
Net investment in capital assets 58,085,530 $ 59,626,996 $ 66,447,365 $ 65,632,239 $ 66,638,708 $ 67,098,002 $ 64,155,239 $ 65,511,259 $ 69,183,361 $ 68,771,305 $ Restricted 11,971,498 11,608,039 11,586,938 11,474,912 12,279,862 8,990,013 10,184,878 10,926,436 12,540,185 13,702,342 Unrestricted 10,924,783 11,124,050 12,945,673 (19,388,219) (17,869,887) (19,354,144) (17,269,320) (21,309,614) (23,925,555) (19,642,517) Total primary government net position $ 82,359,085 80,981,811 $ 90,979,976 $ 57,718,932 $ 61,048,683 $ 56,733,871 $ 57,070,797 $ 55,128,081 $ 57,797,991 $ 62,831,130 $ (40,000)
(20,000)
0 20,000
40,000
60,000
80,000
100,000
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Thousands
Primary Government Net Position
Net investment in capital assets Restricted Unrestricted 90 8.1.a
Packet Pg. 149 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Changes in Net Position
Last Ten Fiscal Years
(Accrual Basis of Accounting)
For the Fiscal Year Ended June 30,
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Expenses:

Governmental Activities:

General Government $ 4,235,267 4,145,899 $ 4,486,256 $ 4,800,859 $ 4,586,389 $ 5,701,798 $ 7,804,038 $ 7,507,044 $ 9,741,367 $ 8,432,265 $ Public Safety 9,777,992 10,916,374 8,931,818 8,789,637 10,061,265 11,729,664 11,259,884 12,791,053 14,033,317 12,925,841 Transportation 7,947,704 7,597,694 6,618,300 16,701,264 9,105,613 14,220,552 13,224,055 13,283,195 8,187,274 12,319,001 Community Development 2,898,886 7,547,857 2,550,154 2,450,528 2,927,165 3,206,118 3,010,100 3,015,887 2,333,180 2,360,910 Interest and fiscal charges 118,921 238,204 223,433 176,388 120,227 60,991 17,092 - - 540,308 Total Governmental Activities Expenses 24,628,760 30,796,038 22,809,961 32,918,676 26,800,659 34,919,123 35,315,169 36,597,179 34,295,138 36,578,325 Business-Type Activities:

Water 240,045 171,473 225,220 253,159 217,928 244,104 639,196 293,878 277,436 374,555 Total Primary Government Expenses $ 24,868,805 30,967,511 $ 23,035,181 $ 33,171,835 $ 27,018,587 $ 35,163,227 $ 35,954,365 $ 36,891,057 $ 34,572,574 $ 36,952,880 $ Program Revenues:

Governmental Activities:

Charges for Services:

General Government $ 471,143 261,533 $ 166,671 $ 166,381 $ 192,303 $ 211,572 $ 170,460 $ 184,576 $ 193,465 $ 169,873 $ Public Safety 155,901 154,651 157,498 159,012 184,889 138,235 171,815 144,705 168,603 136,890 Transportation 590,617 403,149 663,656 401,395 404,750 689,386 459,815 517,371 443,989 588,604 Community Development 1,641,652 1,615,948 1,813,011 1,279,317 1,559,622 1,497,427 2,338,500 1,894,162 1,976,711 1,858,417 Operating Grants and Contributions 1,956,723 4,533,379 1,870,975 4,021,630 2,956,236 1,957,507 4,003,002 2,920,746 3,976,194 7,357,717 Capital Grants and Contributions 2,716,363 60,230 7,382,654 6,784,859 2,863,421 2,516,719 1,822,233 56,542 398,901 561,295 Total Governmental Activities Program Revenues 7,344,931 7,216,358 12,054,465 12,812,594 8,161,221 7,010,846 8,965,825 5,718,102 7,157,863 10,672,796 Business-Type Activities:

Charges for Services:

Diablo Vista Water System 134,520 134,520 134,520 134,520 134,235 134,235 133,950 133,950 133,950 133,950 $ 7,479,451 7,350,878 $ 12,188,985 $ 12,947,114 $ 8,295,456 $ 7,145,081 $ 9,099,775 $ 5,852,052 $ 7,291,813 $ 10,806,746 $ Net (Expense)/Revenue
Governmental Activities $ (17,283,829) (23,579,680) $ (10,755,496) $ (20,106,082) $ (18,639,438) $ (27,908,277) $ (26,349,344) $ (30,879,077) $ (27,137,275) $ (25,905,529) $ Business-Type Activities (105,525) (36,953) (90,700) (118,639) (83,693) (109,869) (505,246) (159,928) (143,486) (240,605) Total Primary Government Net Expense $ (17,389,354) (23,616,633) $ (10,846,196) $ (20,224,721) $ (18,723,131) $ (28,018,146) $ (26,854,590) $ (31,039,005) $ (27,280,761) $ (26,146,134) $ Total Primary Government Program Revenues
91 8.1.a
Packet Pg. 150 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Changes in Net Position (continued)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Governmental Activities:

Taxes:

Property Taxes $ 5,342,185 5,145,048 $ 5,706,908 $ 5,975,571 $ 6,231,850 $ 6,619,240 $ 6,986,641 $ 7,257,893 $ 7,817,772 $ 8,298,137 $ Incremental Property Tax - 2,666,870 - - - - - - - -
Sales Taxes 6,454,256 7,060,791 7,508,399 7,736,714 8,598,230 8,437,462 8,547,152 8,595,458 9,498,892 10,650,037 Measure K Transaction and Use Tax - - - - - 913,316 3,934,343 4,419,035 4,182,302 4,885,076 Other Taxes (a) 5,701,901 6,050,845 6,036,889 6,510,044 6,830,548 7,120,733 7,238,645 7,739,278 7,626,265 6,840,111 Investment Earnings 81,307 200,884 18,997 137,025 113,924 117,561 168,458 657,998 472,936 190,610 Miscellaneous 92,128 52,172 45,330 46,688 91,666 290,168 98,116 190,604 105,580 64,350 Total Governmental Activities 18,627,256 20,221,131 19,316,523 20,406,042 21,866,218 23,498,480 26,973,355 28,860,266 29,703,747 30,928,321 Business-Type Activities:

Property Taxes 137,890 141,108 149,214 168,073 184,412 199,345 209,118 222,338 234,529 247,463 Investment Earnings 1,482 1,531 1,350 1,555 2,252 5,509 9,043 13,685 12,395 3,489 Total Business-Type Activities 139,372 142,639 150,564 169,628 186,664 204,854 218,161 236,023 246,924 250,952 Total Primary Government $ 18,766,628 20,363,770 $ 19,467,087 $ 20,575,670 $ 22,052,882 $ 23,703,334 $ 27,191,516 $ 29,096,289 $ 29,950,671 $ 31,179,273 $ Extraordinary item:

Extraordinary gain from the dissolution of the
Redevelopment Agency - 7,576,450 - - - - - - - -
Change in Net Position
Governmental Activities $ 7,871,760 10,513,752 $ (789,559) $ 1,766,604 $ 21,866,218 $ 23,498,480 $ 26,973,355 $ 1,722,991 $ 29,703,747 $ 5,022,792 $ Business-Type Activities 48,672 37,114 31,925 85,935 186,664 204,854 218,161 92,537 246,924 10,347 Total Primary Government $ 7,920,432 10,550,866 $ (757,634) $ 1,852,539 $ 22,052,882 $ 23,703,334 $ 27,191,516 $ 1,815,528 $ 29,950,671 $ 5,033,139 $ (a) Includes franchise, transient occupancy, and other taxes General Revenues and
Other Changes in Net Position
92 8.1.a
Packet Pg. 151 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR)) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
General Fund
Nonspendable 48,000 $ 6,718 $ - $ - $ - $ - $ - $ - $ - $ - $ Restricted 647,518 890,703 890,703 890,703 890,703 890,703 - - - 14,405,714 Assigned 8,373,037 8,373,037 8,088,146 8,138,277 8,244,143 9,079,046 12,403,387 11,923,505 11,829,908 17,254,645 Unassigned 2,418,563 4,286,921 5,087,502 5,031,285 5,175,170 3,386,999 2,955,251 386,350 575,986 1,442,001 Total General Fund $ 13,557,379 11,487,118 $ 14,066,351 $ 14,060,265 $ 14,310,016 $ 13,356,748 $ 15,358,638 $ 12,309,855 $ 12,405,894 $ 33,102,360 $ All Other Governmental Funds
Nonspendable 37,727 $ 207,482 $ 124,489 $ 41,496 $ 217,163 $ 128,707 $ 41,750 $ - $ - $ - $ Restricted 10,372,370 9,657,855 9,918,262 10,267,097 10,752,993 8,764,911 9,786,935 10,443,105 11,911,302 11,637,657 Committed 2,221,244 1,483,869 1,349,207 1,167,308 789,585 742,454 1,105,078 773,160 1,022,449 1,004,658 Assigned - - - - - - - 676,000 857,771 181,631
Unassigned (75,789) (223,195) (273,571) (292,053) (349) (2,442,390) (250,125) (122,615) (646) (38,451) Total all other governmental funds 12,555,552 $ 11,126,011 $ 11,118,387 $ 11,183,848 $ 11,759,392 $ 7,193,682 $ 10,683,638 $ 11,769,650 $ 13,790,876 $ 12,785,495 $ Notes:

The change in total fund balance for the General Fund and other governmental funds is explained in the Management's Discussion and Analysis section.

June 30,

CITY OF PLEASANT HILL
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
‐
5,000
10,000
15,000
20,000
25,000
30,000
35,000
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Thousands
General Fund
Nonspendable Restricted Assigned Unassigned
93 8.1.a
Packet Pg. 152 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
Fiscal Year Ended June 30,
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Revenues
Taxes 18,287,026 $ 19,171,702 $ 20,020,926 $ 21,004,157 $ 22,430,711 $ 23,702,930 $ 27,678,904 $ 28,803,232 $ 29,894,153 $ 30,053,298 $ Licenses, permits and fees 419,220 494,091 583,804 532,040 713,527 672,519 937,122 935,597 992,074 979,185 Intergovernmental revenues 6,792,744 4,744,826 9,688,815 10,994,559 5,845,401 3,432,676 6,929,650 3,023,531 4,432,153 7,913,725 Charges for services 813,671 1,107,016 1,250,908 553,551 660,785 931,803 1,221,440 888,450 871,529 936,198 Fines and forfeitures 143,965 138,148 109,892 136,499 161,505 196,481 122,079 112,911 97,347 39,298 Use of money and property 200,884 81,307 18,997 137,025 113,923 117,560 168,458 657,993 472,935 190,610 Other 489,006 204,705 58,310 32,808 58,241 274,902 79,873 159,503 51,431 39,217 Total Revenues 27,146,516 25,941,795 31,731,652 33,390,639 29,984,093 29,328,871 37,137,526 34,581,217 36,811,622 40,151,531 Expenditures
Current:

General government 3,835,547 4,195,631 4,184,701 4,519,012 4,562,647 5,345,224 6,913,938 7,150,693 8,143,854 7,983,400 Public safety 10,033,011 9,322,450 8,545,697 8,854,439 9,602,520 10,376,494 9,901,567 11,136,367 11,475,213 11,393,541 Transportation 8,667,962 8,566,692 12,454,552 14,431,482 8,881,519 12,915,352 10,119,727 11,056,926 9,834,764 12,231,771 Community development 4,295,427 2,226,519 2,540,791 2,527,121 2,985,366 3,058,412 2,934,130 2,908,926 2,289,434 2,265,054 Intergovernmental 3,166,094 647,518 - - - - - - - -
Capital outlay 1,156,634 589,959 946,311 1,325,838 1,472,864 1,425,460 899,411 4,305,349 2,977,497 10,921,175 Debt service:

Principal repayment 1,225,000 660,000 1,458,000 1,499,000 1,550,000 1,668,000 872,000 - - 1,555,719 Interest and fiscal charges 429,424 120,425 220,609 179,575 123,524 64,593 18,283 - - 505,864 Total Expenditures 32,809,099 26,329,194 30,350,661 33,336,467 29,178,440 34,853,535 31,659,056 36,558,261 34,720,762 46,856,524 Excess (deficiency) of revenues over
(under) expenditures (5,662,583) (387,399) 1,380,991 54,172 805,653 (5,524,664) 5,478,470 (1,977,044) 2,090,860 (6,704,993) Other Financing Sources (Uses)
Transfers in 4,871,630 4,785,497 2,930,815 3,243,517 3,271,101 4,315,992 3,912,300 7,184,244 6,237,614 3,046,721 Transfers (out) (4,871,630) (4,785,497) (2,930,815) (3,243,517) (3,271,101) (4,315,992) (3,912,300) (7,184,244) (6,237,614) (3,046,721) Proceeds from issuance of long term debt - 4,087,000 - - - - - - 26,396,078 Proceeds from sale of capital assets 6,134 10,940 11,060 5,203 19,642 5,686 13,376 14,273 26,405 - Total other financing sources (uses) 6,134 4,097,940 11,060 5,203 19,642 5,686 13,376 14,273 26,405 26,396,078 Extraordinary item:

Extraordinary (loss) from
dissolution of the Redevelopment
Agency (3,753,550) (3,960,524) - - - - - - - -
Net change in fund balances (9,409,999) $ (249,983) $ 1,392,051 $ 59,375 $ 825,295 $ (5,518,978) $ 5,491,846 $ (1,962,771) $ 2,117,265 $ 19,691,085 $ Debt service as a percentage of
noncapital expenditures 5.3% 3.4% 7.7% 5.9% 7.2% 5.7% 3.0% 0.0% 0.0% 6.7% 94 8.1.a
Packet Pg. 153 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Assessed and Estimated Actual
Net Value of Taxable Property
Last Ten Fiscal Years
Real Property Total Real Total
Fiscal Residential Commercial Industrial Secured Unsecured Total Estimated Direct Year Property Property Property Other Property Property Assessed (a) Full Market (a) Tax Rate (b) 2012 $3,469,368,975 $738,612,634 $15,030,486 $51,866,721 $4,274,878,816 $112,085,059 $4,386,963,875 $4,386,963,875 5.66% 2013 3,404,271,566 704,915,306 15,341,949 53,574,570 4,178,103,391 105,936,525 4,284,039,916 4,284,039,916 5.66% 2014 3,638,619,711 736,703,106 14,875,080 55,498,231 4,445,696,128 105,093,519 4,550,789,647 4,550,789,647 5.66% 2015 4,046,306,836 760,045,593 13,317,659 77,930,272 4,874,257,873 107,861,285 4,982,119,158 4,982,119,158 5.66% 2016 4,328,068,359 804,447,646 15,245,789 59,799,203 5,207,537,997 110,394,079 5,317,935,076 5,317,935,076 5.66% 2017 4,561,291,596 821,147,666 15,478,279 73,434,814 5,471,352,355 110,532,287 5,581,884,642 5,581,884,642 5.66% 2018 4,809,775,559 883,832,421 15,787,834 61,281,511 5,770,677,325 105,018,890 5,875,696,215 5,875,696,215 5.66% 2019 5,045,097,655 941,272,641 24,799,843 57,874,754 6,069,044,893 103,265,968 6,172,310,861 6,172,310,861 5.66% 2020 5,412,543,931 982,813,017 25,295,829 87,548,623 6,508,201,400 108,631,243 6,616,832,643 6,616,832,643 5.66% 2021 5,692,653,247 1,077,462,192 25,801,736 65,424,606 6,861,341,781 103,580,600 6,964,922,381 6,964,922,381 5.66% Source: Contra Costa County Assessor Combined Tax Rolls-report provided by HdL Companies (a) The State Constitution requires property to be assessed at one hundred percent of the most recent purchase price, plus an increment of no more than two percent annually, plus any local over-rides.
(b) California cities do not set their own direct tax rate. The State Constitution establishes the rate at 1% and allocates a portion of that amount, by an annual calculation, to all the taxing entities within a tax rate area.

Exempt Values are not included in totals.
‐
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Millions
Assessed Value
Unsecured Property Secured Property
95 8.1.a
Packet Pg. 154 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Property Tax Rates (1)
All Direct And Overlapping Governments
Last Ten Fiscal Years
##
Contra Schools and Miscellaneous Total
Fiscal Costa College Special Direct
Year County City (2) Districts Districts Rate
2012 0.1030 0.0566 0.5349 0.3055 1.0000
2013 0.1030 0.0566 0.5349 0.3055 1.0000
2014 0.1030 0.0566 0.5349 0.3055 1.0000
2015 0.1030 0.0566 0.5349 0.3055 1.0000
2016 0.1030 0.0566 0.5349 0.3055 1.0000
2017 0.1030 0.0566 0.5349 0.3055 1.0000
2018 0.1030 0.0566 0.5349 0.3055 1.0000
2019 0.1030 0.0566 0.5349 0.3055 1.0000
2020 0.1030 0.0566 0.5349 0.3055 1.0000
2021 0.1030 0.0566 0.5349 0.3055 1.0000
Source: County Auditor/Controller's Office
(1) Per $1,000 assessed value
(2) The rates shown are not levied rates, but rather "rate-equivalents." The County, in the application of the Tax Equity Allocation (TEA) formula specified by the 1987 amendments to the Trial Court Funding Act, created these rates to accomplish the property tax shift required by the law. See Note (1) on the "Property Values and Tax Levies and Collections" page for a more detailed explanation.

0.0 0.2

0.4 0.6
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Property Tax Rates (per $1000 Assessed Value)
City Contra Costa County Miscellaneous Special District Schools and College Districts 96 8.1.a
Packet Pg. 155 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR)) Percentage Percentage
of Total City of Total City
Taxable Taxable Taxable Taxable
Assessed Assessed Assessed Assessed
Taxpayer Value Rank Value Value Rank Value
PH Crescent Drive Investors 111,594,534 $ 1 1.60% n/a n/a n/a IMT Capital IV Pleasant Hill 93,033,904 2 1.34% n/a n/a n/a FW California PH Shopping Center LLC 72,240,313 3 1.04% $62,727,182 2 1.43% WM Villa Montanaro LLC 54,013,917 4 0.78% 35,974,141 5 0.82% Terra Hospitality-SFMSA LLC 45,207,459 5 0.65% n/a n/a n/a Grupe Real Estate Investors 39,764,699 6 0.57% 34,024,017 6 0.78% Q Van Ness LLC 38,146,000 7 0.55% n/a n/a n/a
Tilden Ellinwood LLC 37,740,000 8 0.54% n/a n/a n/a
Villa Benedict 37,284,244 9 0.54% n/a n/a n/a
Peninsular Realty LLC 37,000,000 10 0.53% n/a n/a n/a
Loja Pleasant Hill LLC n/a n/a n/a 81,000,000 1 1.85%
Lexford Properties LP n/a n/a n/a 37,874,058 3 0.86%
Grosvenor USA Limited n/a n/a n/a 36,392,590 4 0.83%
Beaufort Partners LP n/a n/a n/a 31,826,769 7 0.73%
EQR Watson General Partnership n/a n/a n/a 31,157,644 8 0.71% GCCFC 2005-GG5 Buskirk Ave n/a n/a n/a 31,150,000 9 0.71% Gallup and Whalen Santa Maria n/a n/a n/a 23,727,173 10 0.54% Total Ten Total 566,025,070 $ 8.13% 405,853,574 $ 9.25% City Total 6,964,922,381 $ 4,386,963,875 $

Source: County Assessor Fiscal Year Combined Tax Rolls.

CITY OF PLEASANT HILL
Principal Property Taxpayers
Current Year and Ten Years Ago
2020-2021 2011-2012
97 8.1.a
Packet Pg. 156 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Property Tax Levies and Collections
Last Ten Fiscal Years (1)
2004
Collections
Total Tax as of the end
Levied and of the Levy Year
Fiscal Year Collected as a % of Levy
2012 5,357,749 $ 100%
2013 5,342,185 100%
2014 5,706,908 100%
2015 5,975,571 100%
2016 6,231,850 100%
2017 6,619,240 100%
2018 6,986,641 100%
2019 7,257,893 100%
2020 7,817,772 100%
2021 8,298,137 100%
Source: City of Pleasant Hill Annual Comprehensive Financial Reports and Contra Costa County Please note the County distributes property taxes to jurisdications under the "alternate method of property tax distribution known as the Teeter Plan Under this plan the County remits 100% of the levied taxes to the City by June 30 of each year. (1) Pleasant Hill was incorporated in 1961 as a "No-Property Tax" city. The citizens wanted a minimum-service city that could be supported by revenues other than property taxes. Annexations over the years brought a minimum amount of annual property tax revenue to the City from Contra Costa County, as required by the annexation process. Beginning in fiscal year 1989-90, and due to State legislation in 1988 which was designed to bring some relief to no/low property tax cities, the County shifted some of its property taxes to Pleasant Hill in exchange for state trial court funding. The shift was designed to be phased in over seven years, starting at 1% and increasing 1% per year for seven years, leveling out at 7%.

Due to later ERAF legislation, the shift was adjusted to level out at 6.09% instead of 7% and will remain there unless the law changes. The annual shift is a result of a formula specified in the law, and is included in the amounts listed here. In addition, the Redevelopment Agency has received property tax increments since 1975 to service debt and, as required by law since 1977, to fund low and moderate housing and rehabilitation; only the amount used for debt service is included here. $1.0
$2.0
$3.0
$4.0
$5.0
$6.0
$7.0
$8.0
$9.0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Millions
Taxes Levied and Collected
Taxes Levied
98 8.1.a
Packet Pg. 157 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Ratio of Outstanding Debt by Type
Last Ten Fiscal Years
Tax 2013 CalPERS Bank of the West Lease
Allocation Refunding Loan Loan for Revenue
Fiscal Year Refunding Bonds with Umpqua Bank Library Project Refunding Total 2012 n/a (a) $ - n/a 3,620,000 $ 3, $ 620,000
2013 n/a (a) 4,087,000 n/a 2,960,000 7, 047,000
2014 n/a (a) 3,319,000 n/a 2,270,000 5, 589,000
2015 n/a (a) 2,530,000 n/a 1,560,000 4, 090,000
2016 n/a (a) 1,715,000 n/a 825,000 2, 540,000
2017 n/a (a) 872,000 n/a - 872,000
2018 n/a (a) n/a - - -
2019 n/a (a) n/a - - -
2020 n/a (a) n/a - - -
2021 n/a (a) - - 24,840,359 24,840,359
Fiscal Year
Total Primary
Government
Percentage of
Personal Income Per Capita
2012 3,620,000 $ 0.27% 108.25
2013 7,047,000 0.50% 209.53
2014 5,589,000 0.40% 165.00
2015 4,090,000 0.28% 120.59
2016 2,540,000 0.17% 74.54
2017 872,000 0.06% 25.16
2018 n/a n/a n/a
2019 n/a n/a n/a
2020 n/a n/a n/a
2021 24,840,359 (b) 1.26% 727.75
Sources: Reported as calendar year provided by HdL Companies report based on the following sources:

Population: California Department of Finance
Unemployment Data: California Employment Development Department (a)
(b)
Income, Age and Education Data: ESRI-Demographic estimates based on the last available Census. Projections are developed by incorporating all of the prior census data released to date. Post census trends in the population are extracted from a variety of date sources. Demographic Data is totaled form Census Block Groups that overlap the City's boundaries.

During fiscal year 20/21, the City entered into loan financing with Bank of the West for the library project.

During fiscal year 11/12, these bonds are transferred to the Successor Agency to the Pleasant Hill Redevelopment Agency upon dissolution of the former Agency.

Governmental Activities-includes General, Redevelopment and Special Assessment Debt (excludes Successor Agency) $‐
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Thousands
Amount of Outstanding Debt
Governmental Activities
99 8.1.a
Packet Pg. 158 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Computation of Direct and Overlapping Debt
June 30, 2021
2020-21 Assessed Valuation $ 6,964,922,381
Percentage Amount
Net Applicable Applicable
Debt To City of To City of
OVERLAPPING TAX AND ASSESSMENT DEBT: Outstanding Pleasant Hill (1) Pleasant Hill Bay Area Rapid Transit District $ 0.813% 15,218,466 1,871,890,000 $ East Bay Regional Park District 1.301% 1,732,542 133,170,000 Contra Costa Community College District 596,325,000 3.088% 18,414,516 Mount Diablo Unified School District 403,264,615 15.065% 60,751,814 Mount Diablo Unified School District Community Facilities District No. 1 5,665,000 15.073% 853,885 Pleasant Hill Recreation and Park District 23,620,000 76.580% 18,088,196 TOTAL GROSS DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT $ 115,059,419 3,033,934,615 $ TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT $ 115,059,419 DIRECT AND OVERLAPPING GENERAL FUND DEBT:

Contra Costa County General Fund Obligations 254,570,000 $ 3.078% 7,835,665 $ Contra Costa Pension Obligations 3.078% 1,382,792 44,925,000 Mount Diablo Unfiied School District Certificates of Participation 16,865,000 15.065% 2,540,712 Pleasant Hill Recreation and Park District Certificates of Participation 5,616,000 76.580% 4,300,733 Contra Costa County Fire Protection District Pension Obligations 26,670,000 6.673% 1,779,689 City of Pleasant Hill General Fund Obligation 24,840,359 100.000% 24,840,359 TOTAL OVERLAPPING GENERAL FUND OBLIGATION DEBT $ 42,679,950 373,486,359 $ Less: Contra Costa County self-supported 1,261,448
NET DIRECT AND OVERLAPPING GENERAL FUND DEBT $ 41,418,502 OVERLAPPING TAX INCREMENT DEBT (Successor Agency) 4,875,000 $ 100.000% 4,875,000 $ TOTAL DIRECT DEBT $ 24,840,359
TOTAL GROSS OVERLAPPING DEBT $ 137,774,010
TOTAL NET OVERLAPPING DEBT $ 136,512,562
GROSS COMBINED TOTAL DEBT $ 162,614,369
NET COMBINED TOTAL DEBT $ 161,352,921 (1) Percentage of overlapping agency's assessed valuation located within boundaries of the City.

RATIOS TO 2020-21 ASSESSED VALUATION:

Total Overlapping Tax and Assessment Debt 1.65%
Total Direct Debt ($24,840,359) 0.36%
Gross Combined Total Debt 2.33%
Net Combined Total Debt 2.32%
RATIOS TO REDEVELOPMENT SUCCESSOR AGENCY INCREMENTAL VALUE ($707,943,794):

Total Overlapping Tax Increment Debt 0.69%
Source: California Municipal Statistics, Inc.

Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds and non-bonded capital lease obligations. 100

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Packet Pg. 159 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Computation of Legal Bonded Debt Margin
Last Ten Fiscal Years
ASSESSED VALUATION:

Secured property assessed value, net of exempt real property $ 6,964,922,381 BONDED DEBT LIMIT (3.75% OF ASSESSED VALUE) (a) $ 261,184,589 AMOUNT OF DEBT SUBJECT TO LIMIT (b): (24,840,359)
LEGAL BONDED DEBT MARGIN $ 236,344,230
Total net debt
Total Net Debt Legal applicable to the limit
Fiscal Debt Applicable to Debt as a percentage
Year Limit Limit Margin of debt limit
2012 164,510,131 3,620,000 160,890,131 2.25%
2013 160,651,497 2,960,000 157,691,497 1.88%
2014 170,654,612 2,270,000 168,384,612 1.35%
2015 186,829,468 1,560,000 185,269,468 0.84%
2016 198,597,565 825,000 197,772,565 0.42%
2017 209,320,674 - 209,320,674 0.00%
2018 220,338,608 - 220,338,608 0.00%
2019 231,461,657 - 231,461,657 0.00%
2020 248,131,224 - 248,131,224 0.00%
2021 261,184,589 24,840,359 236,344,230 10.51%
NOTE:
(a)
(b)
California Government Code, Section 43605 sets the debt limit at 15%. The Code section was enacted prior to the change in basing assessed value to full market value when it was previously 25% of market value. Thus, the limit shown as 3.75% is onefourth the limit to account for the adjustment of showing assessed valuation at full cash value.

Includes special assessment bonds and all debt supported by general fund revenues, including capital lease obligations, general obligations, street bonds, and refunding lease revenue bonds. Excludes Pleasant Hill Redevelopment Agency tax allocation refunding bonds.
101

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Packet Pg. 160 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Demographic Statistics
Last Ten Calendar Years
Calendar
Year
City
Population
Personal Income
(in thousands)
Per Capita
Personal
Income
Unemployment
Rate
Rank in Size
of California
Cities
2011 33,440 1,359,369 $ 40,651 $ 8.5% 224
2012 33,633 1,404,279 41,753 5.7% 225
2013 33,872 1,396,373 41,225 4.9% 225
2014 33,917 1,442,083 42,518 5.1% 225
2015 34,077 1,474,841 43,280 4.2% 225
2016 34,657 1,480,283 42,712 3.7% 224
2017 35,068 1,619,591 46,184 3.0% 225
2018 35,055 1,736,518 49,537 2.8% 225
2019 34,267 1,810,977 49,593 2.8% 225
2020 34,133 1,974,023 57,833 7.5% 225
Source: Reports as of calendar year provided by the HdL Companies 32,500
33,000
33,500
34,000
34,500
35,000
35,500
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
City Population
$‐
$20,000
$40,000
$60,000
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Per Capita Personal Income

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Unemployment Rate
102

8.1.a
Packet Pg. 161 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Top 25 Sales Tax Producers
Current Year and Nine Years Ago
* Business in Top 25 of the Sales Tax Producers
Business Name Business Category 2020-21 2011-12
A to Z Motors Service Stations x
AT&T Mobility Electronics/Appliance Stores x
Back Forty Texas BBQ Casual Dining x
Bed Bath & Beyond Home Furnishings x x
Best Buy Electronics/Appliance Stores x x
Burlington Family Apparel x
Buskirk Chevron Service Stations x
Carmax Used Automobile Dealer x
Dicks Sporting Goods Sporting Goods/Bike Stores x
Expert Auto Care Service Stations x
Friedman's Appliances Electronics/Appliance Stores x x
Golf Galaxy Sporting Goods/Bike Stores x
Harbor Freight Tools Building Materials x x
Home Goods Home Furnishings x
In N Out Burgers Quick-Service Restaurants x
Jacks Restaurant Casual Dining x x
JC Penney Department Stores x
K Mart Discount Department Stores x
Kohls Department Stores x x
Lookingpoint Office Equipment x
Magnolia Home Theater Electronics/Appliance Stores x
Marshalls Family Apparel x x
Michaels Arts & Crafts Art/Gift/Novelty Store x x
New U Life Drugs/Chemicals x
Nordstrom Rack Department Stores x
Pacific States Petroleum Petroleum Prod/Equipment x
Pleasant Hill Chevron Service Stations x
Ross Family Apparel x x
Safeway Grocery Stores x x
Safeway Fuel Service Stations x x
Sun Valley Shell Service Stations x x
Target Discount Department Stores x x
TJ Maxx Family Apparel x
Total Wine & More Convenience Stores/Liquors x
Toys R Us Speciality Store x
USA Gas Service Stations x
Verizon Wireless Electronics/Appliance Stores x
Source: State Board of Equalization, California Department of Taxes and Fees Administration, the HdL Companies. 103

8.1.a
Packet Pg. 162 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR)) 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Apparel Stores 38,461 $ 46,443 $ 51,402 $ 52,931 $ 57,028 $ 57,330 $ 53,357 $ 49,873 $ 56,879 $ 37,498 $ General Merchandise 73,976 72,484 79,481 92,507 94,199 93,452 96,134 91,850 83,496 60,526 Food Stores 25,374 29,166 31,117 31,741 30,307 30,301 28,409 28,115 28,658 30,966 Eating and Drinking Places 89,153 95,386 102,038 108,416 118,021 122,786 123,193 126,116 126,773 95,093 Building Materials 25,743 27,532 29,894 28,809 29,659 34,630 36,010 35,637 31,577 33,627 Auto Dealers and Supplies 8,264 8,314 10,492 12,491 14,137 18,909 16,100 14,014 30,670 58,551 Service Stations 58,691 86,488 87,660 83,705 70,013 60,648 68,811 81,523 82,861 51,464 Other Retail Stores 202,964 210,604 221,877 239,354 252,676 251,976 255,171 257,938 262,508 241,132 All Other Outlets 132,305 140,525 152,005 161,076 185,780 193,997 202,043 199,286 273,885 308,496 Total 654,931 $ 716,942 $ 765,966 $ 811,030 $ 851,820 $ 864,029 $ 879,228 $ 884,352 $ 977,307 $ 917,353 $ Sources: State Board of Equalization, California Department of Taxes and Fees Administration, State Contoller's Office, the HdL Companies Note: Due to confidentiality issues, the names of the ten largest revenue payers are not available. The categories presented are intended to provide alternative information regarding the sources of the City's revenue.

CITY OF PLEASANT HILL
Taxable Sales by Category
Last Ten Calendar Years
(Dollars in thousands)
Adjusted for Economic Data
104

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Packet Pg. 163 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Full-Time Equivalent City Government Employees by Function Last Ten Fiscal Years
#
Adopted for Fiscal Year Ended June 30,
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Function
General government 21.75 16.50 16.75 17.75 16.00 17.00 20.00 17.00 17.00 17.00 Public safety 62.00 55.00 54.00 55.00 56.00 58.00 56.00 57.00 58.00 58.00 Public works 24.00 23.00 23.00 23.00 27.00 24.00 26.00 28.00 25.00 24.00 Community development 10.00 11.00 11.00 11.00 8.00 7.00 7.00 7.00 7.00 6.00 Total 115.25 117.75 105.50 104.75 106.75 107.00 106.00 109.00 107.00 105.00 Source: City of Pleasant Hill
‐

20.00 40.00

60.00 80.00
100.00
120.00
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
FTE's
Number of Employees
General government Public safety Public works Community development 105

8.1.a
Packet Pg. 164 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Operating Indicators by Function/Program
Last Ten Fiscal Years
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Function/Program
Public safety: (a)
Incident numbers issued 18,690 20,700 19,582 20,685 20,054 21,145 21,473 27,185 25,634 22,921 Traffic citations issued 4,793 4,449 3,964 5,626 5,126 5,940 3,176 5,282 912 943 Violent Crimes 238 208 195 217 235 221 217 74 97 75
Willful homicide 1 - - - - - 1 - - -
Forcible rape 3 1 3 2 3 4 6 10 5 1
Robbery 40 40 30 37 44 37 32 42 50 34
Aggravated assaults 55 38 50 48 41 37 27 25 42 59
Property Crimes 1,560 1,590 1,564 1,854 1,511 1,623 1,536 1,439 1,476 1,220 Burglary 290 249 233 211 142 169 143 104 191 119
Motor Vehicle theft 125 165 158 189 198 170 77 86 153 132 Public works:

Miles of paved streets 110 110 110 110 110 110 110 110 110 110 Number of street lights 1,966 1,966 1,966 1,966 1,966 1,966 1,966 1,966 1,966 1,966 General Government:

Business Licenses renewals (excludes Out of City) 3,500 3,400 2,961 3,011 3,320 3,250 3,400 3,450 3,300 3,495 Business License Out of City Contractor 2,950 2,500 2,523 2,700 2,400 2,100 2,200 2,300 2,100 1,900 Community Development:

Building permits issued 902 1,054 1,074 2,217 2,145 1,428 1,564 1,558 1,492 1,784 Approximate value of building permits 25,483,018 27,497,070 29,054,093 31,562,332 43,311,461 32,110,238 52,602,460 38,848,143 58,981,804 83,578,342 Building inspections conducted 5,339 5,863 7,013 7,225 7,453 5,915 5,585 N/A 5,682 5,844 Source: City of Pleasant Hill
(a) Covers twelve months period November to November.
106

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Packet Pg. 165 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Capital Asset Statistics by Function/Program
Last Ten Fiscal Years
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Function/Program
Public safety:

Police stations 1 1 1 1 1 1 1 1 1 1
Public works:

Miles of streets 110 110 110 110 110 110 110 110 110 110 Street lights 1,966 1,966 1,966 1,966 1,966 1,966 1,966 1,966 1,966 1,966 Pavement Condition
Index 67 66 66 66 66 66 68 68 68 70
Recreation:

Open space acres 207 207 207 207 207 207 207 207 207 207 Number of parks owned 11 11 11 11 11 11 11 11 11 11
Number of acres 66.2 66.2 66.2 66.2 66.2 66.2 66.2 66.2 66.2 66.2 Fire protection:

Number of stations 2 2 2 2 2 2 2 2 2 2
Source: City of Pleasant Hill
107

8.1.a
Packet Pg. 166 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR)) 108
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8.1.a
Packet Pg. 167 Attachment: Annual Comprehensive Financial Report FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Report to the City Council
For the Year Ended June 30, 2021

8.1.b
Packet Pg. 168 Attachment: Pleasant Hill Management Letter FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Report to the City Council
For the Year Ended June 30, 2021
Table of Contents
Page
Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards .............................................................. 1 Required Communications ............................................................................................................................ 3 Schedule of Findings and Responses ............................................................................................................ 7 Summary of Uncorrected Financial Statements Misstatements .................................................................... 8

8.1.b
Packet Pg. 169 Attachment: Pleasant Hill Management Letter FY2021 (Annual Comprehensive Financial Report (ACFR)) www.mgocpa.com
Macias Gini & O’Connell LLP
2121 N. California Boulevard, Suite 750
Walnut Creek, CA 94596
1 Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards Honorable Mayor and Members
of the City Council
City of Pleasant Hill, 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 Pleasant Hill, California (City), as of and for the year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated March 9, 2022.

Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) 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. We did identify a deficiency in internal control, described in the accompanying schedule of findings and responses as item 2021-001, that we consider to be a significant deficiency.

8.1.b
Packet Pg. 170 Attachment: Pleasant Hill Management Letter FY2021 (Annual Comprehensive Financial Report (ACFR)) 2 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 Finding
The City’s response to the finding identified in our audit is described in the accompanying schedule of findings and responses. The City’s response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the 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.

Walnut Creek, California
March 9, 2022

8.1.b
Packet Pg. 171 Attachment: Pleasant Hill Management Letter FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Report to the City Council
For the Year Ended June 30, 2021
3 REQUIRED COMMUNICATIONS
We have audited the financial statements of the City as of and for the fiscal year ended June 30, 2021, and have issued our report thereon dated March 9, 2022. 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 June 21, 2021, our responsibility, as described by professional standards, is to form and express opinions 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 we previously communicated to you. The timing of our audit was delayed due to the transition of management in the finance department.

Compliance with All Ethics Requirements Regarding Independence The engagement team, others in our firm, as appropriate, our firm, and our network firms have complied with all relevant ethical requirements regarding independence.

Qualitative Aspects of the City’s Significant Accounting Practices Significant Accounting Policies
Management has the responsibility to select and use appropriate accounting policies. A summary of the significant accounting policies adopted by the City is included in Note 1 to the financial statements. As described in Note 1(N) to the City’s basic financial statements, the City implemented Governmental Accounting Standards Board (GASB) Statement No. 84, Fiduciary Activities. The City evaluated all funds and activities in accordance with the statement and determined that the funds and activities previously reported as agency funds should be reported as custodial funds. The City also implemented GASB Statement No. 90, Majority Equity Interests, an amendment of GASB Statements No. 14 and No. 61, and Statement No. 98, The Annual Comprehensive Financial Report. Implementation of these statements did not have a significant impact on the City’s financial statements for the fiscal year ended June 30, 2021.

8.1.b
Packet Pg. 172 Attachment: Pleasant Hill Management Letter FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Report to the City Council
For the Year Ended June 30, 2021
4 REQUIRED COMMUNICATIONS (Continued)
No matters have come to our attention that would require us, under professional standards, to inform you about (1) the methods used to account for significant unusual transactions and (2) the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus.

Significant Accounting Estimates
Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s current judgments. Those judgments are normally based on knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ markedly from management’s current judgments.

The most sensitive estimates affecting the financial statements were:
 Fair value of investments. The City’s investments are generally carried at fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. All of the City’s investments are measured using level 2 inputs, except for investments in California Local Agency Investment Fund and money market mutual funds which are not subject to fair value hierarchy.  Estimated allowance for losses on notes and loans receivable. The allowance for losses on notes and loans receivable was based on management’s estimate regarding the likelihood of collectability.  Depreciation estimates for capital assets, including depreciation methods and useful life assigned to depreciable assets. The estimated useful lives of capital assets were determined based on the nature of the capital assets and management’s estimate of the economic life of the assets.  Accrual of compensated absences. The accruals of compensated absences were based on accrued eligible hours of vacation and other compensated leave for eligible employees.  Net pension liabilities, contributions, expenses, and other related balances. These balances are based on actuarial valuations performed by the California Public Employees’ Retirement System’s independent actuaries.
 Claims loss reserve. The City is exposed to a variety of risks of loss due to general liability, workers’ compensation and other claims, and records an estimate of these losses based on actuarial studies performed by third-party actuaries. These studies are prepared based on the City’s prior claims history, which is used as a basis for extrapolating losses for known and incurred but not reported claims. Actual loss experience may vary from these estimates.

We evaluated the key factors and assumptions used to develop the accounting estimates described above and determined that it is reasonable in relation to the basic financial statements taken as a whole and in relation to the applicable opinion units.

Financial Statement Disclosures
Certain financial statement disclosures involve significant judgment and are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the financial statements were the disclosures of the Employee Benefits in Note 10 and Risk Management in Note 11.

8.1.b
Packet Pg. 173 Attachment: Pleasant Hill Management Letter FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Report to the City Council
For the Year Ended June 30, 2021
5 REQUIRED COMMUNICATIONS (Continued)
Significant Difficulties Encountered during the Audit
We encountered no significant difficulties in dealing with management relating to the performance of the audit.

Corrected and Uncorrected Misstatements
For purposes of this communication, professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that we believe are trivial, and communicate them to the appropriate level of management. Further, professional standards require us to also communicate the effect of uncorrected misstatements related to prior periods on the relevant classes of transactions, account balances or disclosures, and the financial statements as a whole and each applicable opinion unit. The accompanying Summary of Uncorrected Financial Statements Misstatements summarizes uncorrected financial statements misstatements whose effects in the current and prior periods, as determined by management, are immaterial to the financial statements taken as a whole and each applicable opinion unit.

In addition, professional standards require us to communicate to you all material, corrected misstatements that were brought to the attention of management as a result of our audit procedures. None of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate, to the financial statements as a whole and each applicable opinion unit.

Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter, which could be significant to the City’s financial statements or the auditor’s report. No such disagreements arose during the course of the audit.

Representations Requested from Management
We have requested certain written representations from management, which are included in the letter dated March 9, 2022.

Management’s Consultations with Other Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting matters. Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing and accounting matters.

Other Significant Matters, Findings, or Issues
In the normal course of our professional association with the City, we generally discuss a variety of matters, including the application of accounting principles and auditing standards, operating and regulatory conditions affecting the entity, and operational plans and strategies that may affect the risks of material misstatement. None of the matters discussed resulted in a condition to our retention as the City’s auditors.

8.1.b
Packet Pg. 174 Attachment: Pleasant Hill Management Letter FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Report to the City Council
For the Year Ended June 30, 2021
6 REQUIRED COMMUNICATIONS (Continued)
Other Matters
Pursuant to professional standards, our responsibility as auditors for other information in documents containing the City’s audited financial statements does not extend beyond the financial information identified in the audit report, and we are not required to perform any procedures to corroborate such other information. However, in accordance with such standards:

Required Supplementary Information
We applied certain limited procedures to the management’s discussion and analysis, and the schedules related to the pension plans, 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.

Supplementary Information and Other Sections
We were engaged to report on the combining and individual fund statements and 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 or supplementary information. 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.

Our responsibility also includes communicating to you any information which we believe is a material misstatement of fact. Nothing came to our attention that caused us to believe that such information, or its manner of presentation, is materially inconsistent with the information, or manner of its presentation, appearing in the financial statements.

The report is intended solely for the information and the use of the Mayor, City Council, and City’s management and is not intended to be and should not be used by anyone other than these specified parties.

8.1.b
Packet Pg. 175 Attachment: Pleasant Hill Management Letter FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Report to the City Council
For the Year Ended June 30, 2021
7 SCHEDULE OF FINDINGS AND RESPONSES
Item 2021-001 Significant Deficiency
Improve Internal Controls over Capital Asset Accounting During our audit, MGO observed that the City retired significant balances in their capital assets, construction-in-progress (CIP) account. The purpose of the CIP account is to accumulate costs that the City incurs in the progress of constructing capital assets. Therefore, the City should only include costs that will be capitalized at the completion of a capital project. In FY2020-21, the City identified within the CIP account significant transportation costs incurred during prior years that were not ultimately capitalized as road improvements within capital assets, such as infrastructure. Therefore, the CIP and net position balances were overstated in prior year, as these costs should have resulted in the recognition of repairs and maintenance type expenses in the period incurred, rather than capitalized as part of CIP.

We recommend the City re-evaluate its capital asset policies and procedures and develop adequate internal controls over the identification of costs that meet the definition of capital outlay and that should be included in the capital asset financial reporting process. The City should conduct regular reviews of the CIP account to ensure costs within CIP are capitalizable in nature. The City should communicate the policies and procedures to department staff, such as the engineering division, who oversee the CIP projects in order to assist them in better understanding the expectations of management for financial reporting purposes. The City should also monitor the effect of these changes to ensure that the policies and procedures are designed appropriately and are operating effectively.

Management Response
The City concurs with the auditor’s finding and recommendation that construction-in-progress (CIP) should only be used for projects that will be capitalized when completed. The City Finance Department will work with the Engineering Department to review ongoing projects and verify if they should be capitalized as CIP or be considered as repair/maintenance for financial reporting purposes.

8.1.b
Packet Pg. 176 Attachment: Pleasant Hill Management Letter FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY OF PLEASANT HILL
Report to the City Council
For the Year Ended June 30, 2021
8 SUMMARY OF UNCORRECTED FINANCIAL STATEMENTS MISSTATEMENTS Number Accounts/Adjustment Descriptions Debit Credit
#1 Sales Tax Revenue 722,087 $
Net Position $ 722,087
#2 Loans Receivable 22,212
Interest Revenue 22,212
(Successor Agency Private Purpose Trust Fund - to record the impact of accruing interest on loans receivable)
#3 Loans Receivable 33,630
Interest Revenue 33,630
#4 Expenditures 19,194
Accounts Payable 19,194
#5 Expenditures 4,204
Accounts Payable 4,204
#6 Expenditures 12,106
Accounts Payable 12,106
#7 Beginning Net Position 3,007,828
Expenses - Transportation 3,007,828
(Governmental Activities - to adjust expenses for capital assets improperly capitalized in prior years and written off during the year ended June 30, 2021.

The net position and capital assets balances were corrected as of June 30, 2021.
(Governmental Activities - to record the impact of not accruing the FY 2020 sales tax payment from the State Board of Equalization) (Low and Moderate Income Housing Asset Fund / Governmental Activities - to record the impact of accruing interest on loans receivable) (Gas Tax Fund / Governmental Activities - to record expenditures incurred as of June 30, 2021)
(Measure J Growth Management Fund / Governmental Activities - to record expenditures incurred as of June 30, 2021)
(Diablo Vista Water System Enterprise Fund / Business-Type Activities - to record expenditures incurred as of June 30, 2021)

8.1.b
Packet Pg. 177 Attachment: Pleasant Hill Management Letter FY2021 (Annual Comprehensive Financial Report (ACFR))

CITY COUNCIL STAFF REPORT
Meeting Date: March 21, 2022
TO: THE HONORABLE MAYOR AND CITY COUNCILMEMBERS
SUBJECT: INTRODUCE ORDINANCE NO. ___ AUTHORIZING A SPECIAL OR

MILITARY EQUIPMENT USE POLICY FOR THE PLEASANT HILL

POLICE DEPARTMENT PURSUANT TO CALIFORNIA ASSEMBLY
BILL 481
The proposed ordinance establishes guidelines for the acquisition, funding, use and reporting of special or “military equipment,” as defined in California Government Code section 7070, within the City of Pleasant Hill. The ordinance and accompanying policy, if approved, will fulfill the obligations set forth in Assembly Bill No. 481. These obligations include, but are not limited to, seeking approval on specific items deemed to be military equipment and requirements related to compliance, annual reporting, cataloging, and accepting complaints regarding these items.

DISCUSSION
Background
In September of 2021, the California State Legislature passed Assembly Bill 481 titled, “Law enforcement and state agencies: military equipment: funding, acquisition, and use.” The Bill was approved by Governor Newsom on September 30, 2021, and amended California Government Codes §7070 – 7075, effective January 1, 2022. As amended, California Government Code §7071(b) now requires that law enforcement agencies submit a proposed Military Equipment Use Policy to their governing body for approval.

California Government Code §7070(d) describes a military equipment Use Policy as a publicly released, written document that includes, at a minimum, all of the following:

1. A description of each type of military equipment, the quantity sought, its capabilities, expected lifespan, and product descriptions from the manufacturer of the military equipment.

2. The purposes and authorized uses for which the law enforcement agency or the state agency proposes to use each type of military equipment.

3. The fiscal impact of each type of military equipment, including the initial costs of obtaining the equipment and estimated annual costs of maintaining the equipment.

4. The legal and procedural rules that govern each authorized use.

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5. The training, including any course required by the Commission on Peace Officer Standards and Training, that must be completed before any officer, agent, or employee of the law enforcement agency or the state agency is allowed to use each specific type of military equipment to ensure the full protection of the public's welfare, safety, civil rights, and civil liberties and full adherence to the military equipment use policy.

6. The mechanisms to ensure compliance with the military equipment use policy, including which independent persons or entities have oversight authority, and, if applicable, what legally enforceable sanctions are put in place for violations of the policy.

7. For a law enforcement agency, the procedures by which members of the public may register complaints or concerns or submit questions about the use of each specific type of military equipment, and how the law enforcement agency will ensure that each complaint, concern, or question receives a response in a timely manner.

Analysis
The Pleasant Hill Police Department (PHPD) seeks City Council introduction of the attached ordinance and Specialized or Military Equipment Use Policy (Exhibit B), in order to allow PHPD to continue to use the specified vital equipment. Many of the items deemed to be military equipment by AB 481 are standard law enforcement equipment utilized throughout the state and the country. These tools have been tested in the field, and are used by law enforcement agencies to enhance citizen and officer safety. Loss of these items would jeopardize the welfare of citizens and police officers within the City of Pleasant Hill.

The term military equipment, as used in AB 481 does not necessarily indicate equipment that has been used by or obtained from the military. If fact, PHPD does not own any equipment obtained from the military. An exhaustive list of military equipment as defined in California Government Code § 7070(c) can be found in Exhibit C.

PHPD is committed to using contemporary tools and equipment to safeguard the citizens of Pleasant Hill. Many of items deemed to be military equipment by AB 481 are in fact employed by PHPD, and law enforcement agencies across the country, in order to specifically reduce risk to community members. These items provide police officers with a greater ability to safely resolve volatile situations, which, without their use, otherwise might rise to the level of a lethal force encounter. To this end, the items at issue in the proposed ordinance, and accompanying Specialized or Military Equipment Use Policy, provide PHPD police officers with vital tools that help facilitate compliance within the confines of its existing stringent use of force policy.

There is substantial interest in ensuring that law enforcement continues to have access to equipment that will provide police officers as many options as possible to safeguard lives, ensure safety, and protect civil liberties. The use of the tools identified in the proposed policy are vital to PHPD’s mission and will continue to be strictly regulated through internal processes, policies and oversight built into this new bill.

AB 481 further requires agencies to submit an annual military equipment report to their governing body for as long as the equipment is available for use and whenever new equipment is purchased. In addition, the bill requires agencies to hold at least one community engagement meeting within 30

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days of submitting the proposed policy and publicly release an annual report. To encourage as much transparency as possible, the department intends on accomplishing this requirement via an annual Special and Military Equipment Use staff report and presentation at a regularly scheduled Council meeting. Further, AB 481 requires the posting of the military equipment inventory and Policy to the department’s website. This will be accomplished by posting this information to the department’s Transparency Portal. Lastly, agencies are required to establish procedures by which members of the public may register complaints or concerns or submit questions about the use of each specific type of military equipment. This will be accomplished by posting the below contact information for to the department’s Transparency Portal.  Via email to: [email protected]
 Via phone call to: (925) 288--4600
 Via mail sent to: Pleasant Hill Police Department
Attn: Military Equipment Use Coordinator
330 Civic Drive
Pleasant Hill, CA 94523

FISCAL IMPACT
There are no new financial considerations for the Pleasant Hill Police Department’s existing special or military equipment.

PUBLIC CONTACT
Public contact was made through posting of the City Council agenda on the City’s official notice bulletin board, at the Pleasant Hill Senior Center and at the Pleasant Hill Police Department. The agenda and staff report are posted on the City’s web page.

RECOMMENDED CITY COUNCIL ACTION
Staff recommends the City Council introduce the proposed ordinance authorizing a special or military equipment use policy for the Pleasant Hill Police Department.

ALTERNATIVES TO RECOMMENDED ACTION
Council may decide to not approve all or part of the special or military equipment list prohibiting use of some or all items. However, staff is not aware of alternative equipment that will achieve the same objectives of safeguarding community and officer safety. There are no reasonable alternatives that will allow the department to legally continue to utilize the listed military equipment without Council approval.

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ATTACHMENT(S):

Proposed Specialized or Military Equipment Use Ordinance (uncodified) Exhibit A –
Pleasant Hill Police Department Policy 706 (Special or Military Equipment Use Policy) Exhibit 1 - California Government Code § 7070(c) Military Equipment List Exhibit 2 - PHPD Specialized and Military Equipment Inventory List Prepared by: Scott Vermillion, Police Captain
Reviewed by: Bryan Hill, Chief of Police
June Catalano, City Manager

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