______________________________________________________________ 21900 Colorado Avenue, P.O. Box 758, San Joaquin, CA 93660 (559) 693-4311, (559) 693-2193 (fax), www.cityofsanjoaquin.org
NOTICE AND CALL OF SPECIAL MEETING AND AGENDA
CITY OF SAN JOAQUIN CITY COUNCIL
Notice is hereby given that the City Council of the City of San Joaquin will hold a special meeting beginning at 6:00 PM. on Thursday, March 26, 2026, at the San Joaquin Council Chambers, 21991 Colorado, (Ste. A), San Joaquin, CA 93660.
MEMBERS OF THE PUBLIC MAY ATTEND THIS MEETING OR
PARTICIPATE IN THE MEETING BY ZOOM, SUBMITTING WRITTEN
COMMENTS AT CITY HALL, OR BY EMAIL PRIOR TO THE MEETING AT [email protected].
ZOOM INFORMATION:
https://us02web.zoom.us/j/83254710015?pwd=1veGsDhdLbHxdt03ZbFIvQJKFLrYx4.1 MEETING ID: 832 5471 0015
PASSCODE: 846161
TELEPHONE NUMBER: 1-669-444-9171
The City Council welcomes you. All attendees are advised that pagers, cell phones, and any other communication devices should be powered off upon entering the Council meeting and to silence their devices until they speak.
The Council may consider and act on an agenda item in any order it deems appropriate.
Actual timed items may be heard later but not before the time set on agenda. Persons interested in an item listed on the agenda are advised to be present throughout the meeting to ensure their presence when the items are called.
For each agenda item considered by the Council there will first be a staff presentation followed by a presentation from the involved individuals. Public comments from those in attendance will then be taken. All comments will be limited to three minutes per person.
LEVINE ACT CONTRIBUTION PROHIBITIONS AND MANDATORY
DISCLOSURE. The Political Reform Act in Govt Code Section 84308 restricts campaign contributions over $500 to a decision-making public official from a party or participant or their agent in a proceeding involving a contract, license, permit or entitlement for use. The Act requires disclosure of the contribution and recusal where a decision-maker has received $500 or more from a party or participant to a proceeding in the prior 12 months.
A Council Member’s disclosure should be made when the agenda item is called and must include the name of the party, participant, or agent, and any other person making the contribution, the name of the recipient, the amount of the contribution, and the date the contribution was made.
CONFLICT OF INTEREST DISCLOSURES AND RECUSAL. City Council Members with a conflict of interest under the Political Reform Act are required to make disclosure when the item is called and recuse themselves.
1. CALL TO ORDER - PLEDGE OF ALLEGIANCE – ROLL CALL
Adam Flores-Cornejo Mayor
Martha Mejia Mayor Pro Tem
Cristina Covarrubia Councilmember
Abel Lua Councilmember
Rosa M. Ramirez Councilmember
2. APPROVAL OF AGENDA
3. PUBLIC COMMENTS ON THIS AGENDA. The sole business to be conducted is listed below. Members of the public will have an opportunity to address the City Council on the item(s) listed on this agenda.
4. NEW BUSINESS
A. SUBJECT: Council review of the FY 2022-2023 Audit Report, Financial Statements, and the Single Audit Report.
RECOMMENDATION: Council review and accept the Audit, Financial Statements and Single Audit Report for FY 2022-2023. (Enclosure P. 1, Action Item) B. SUBJECT: Council consideration of designating the March 31, 2026, holiday for employees as “Farmworkers Day”.
RECOMMENDATION: Council adopt Resolution No. 2026-09 to designate the March 31, 2026, holiday for city employees as “Farmworkers Day”. (Enclosure P. 77, Action Item)
C. SUBJECT: Council consideration for approving the commitment and use of funds from the well enterprise fund towards the Drinking Water Well #4 Project.
RECOMMENDATION: Council adopt Resolution No. 2026-10 approving the commitment and use of funds from the water enterprise fund towards the Drinking Water Well #4 Project. (Enclosure P. 79, Action Item)
5. ADJOURN MEETING –
NOTICE OF ADA COMPLIANCE: If you or anyone in your party needs reasonable accommodations to attend, or participate in, any City Council Meeting, please make arrangements by contacting the City Clerk’s Office at City Hall 24 hours prior to the meeting Who can be reached by calling 693-4311 or by mail at P.O. Box 758, San Joaquin, CA 93660.
NOTICE OF AVAILABILITY OF AGENDA MATERIALS: Any writings or documents provided to a majority of the City Council regarding any items on this agenda will be made available for public inspection at the City Clerk’s Office located at City Hall 21900 Colorado Avenue during normal business hours.
CERTIFICATION OF POSTING
I, Alondra Bautista, City Clerk of the City of San Joaquin, do hereby declare that the foregoing agenda for the San Joaquin City Council Special Meeting of Thursday, March 26, 2026 was posted at the following locations: City Hall, 21900 Colorado Avenue, San Joaquin Senior Center, 21991 Colorado Ave. (B) and US Post Office, 8667 Ninth Street, on Wednesday, March 25, 2026 by 5:00 p.m.
**NEXT REGULAR COUNCIL MEETING WILL BE HELD APRIL 7, 2026**
CITY OF SAN JOAQUIN
MANAGEMENT REPORT
FOR THE YEAR ENDED JUNE 30, 2023
1 TABLE OF
CONTENTS
Page
Required Communications 1 - 3
2 BRYANT L. JOLLEY
CERTIFIED PUBLIC ACCOUNTANTS Bryant L. Jolley C.P.A.
Ryan P. Jolley C.P.A.
Darryl L. Smith C.P.A.
Luis A. Perez C.P.A.
Lan T. Kimoto
901 “N” STREET, SUITE 104 FIREBAUGH, CALIFORNIA 93622 PHONE 559.659.3045 FAX 559.659.0615 To the Honorable Mayor and City Council
City of San Joaquin, California
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of San Joaquin for the year ended June 30, 2023. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards and, if applicable, Government Auditing Standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated August 30, 2024. Professional standards also require that we communicate to you the following information related to our audit.
Significant Audit Matters
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by City are described in Note 1 to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during 2023. We noted no transactions entered into by City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period.
Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the City’s financial statements were:
Management has determined the economic useful lives of fixed assets based on past history of similar types of assets, future plans as to their use, and other factors that impact their economic value to the City. We evaluated the key factors and assumptions used by management in computing depreciation expense and believe that it is reasonable in relation to the financial statements taken as a whole. Management’s estimate of the net pension liability and related deferrals is based on actuarial valuations which include significant assumptions regarding discount rate, inflation, payroll growth, projected salary increases and investment rate of return. We evaluated the key factors and assumptions used to develop the liability and related deferrals in determining that it is reasonable in relation to the financial statements taken as a whole.
3 2
Management’s estimate of the allowance for doubtful accounts is based on an evaluation of collectability primarily focused on past due accounts. We evaluated the key factors and assumptions used to develop the allowance for doubtful accounts in determining that it is reasonable in relation to the financial statements as a whole.
The financial statement disclosures are neutral, consistent, and clear.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our audit.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements. In addition, none of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate, to each opinion unit’s financial statements taken as a whole.
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter that could be significant to the financial statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of the audit.
Management Representations
We have requested certain representations from management that are included in the management representation letter dated March 24, 2026.
Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to City of San Joaquin’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants.
Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as City of San Joaquin’s auditors.
However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention.
4 3
Other Matters
We applied certain limited procedures to the Budgetary Comparison Schedules, Proportionate Share of Net Pension Liability, and Schedule of Contributions which are required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI.
We were engaged to report on supplementary information, as listed in the table of contents, which accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves.
Restriction on Use
This information is intended solely for the information and use of the City Council and management of City of San Joaquin and is not intended to be, and should not be, used by anyone other than these specified parties.
March 24, 2026
5 CITY OF SAN JOAQUIN
INDEPENDENT AUDITOR’S REPORT
AND
FINANCIAL STATEMENTS
JUNE 30, 2023
6 C O N T E N T S
Page
INDEPENDENT AUDITOR’S REPORT 1 – 3
BASIC FINANCIAL STATEMENTS:
Government-Wide Financial Statements
Statement of Net Position 4
Statement of Activities 5
Fund Financial Statements
Balance Sheet – Governmental Funds 6
Reconciliation of Total Governmental Fund Balance to
Net Position of Governmental Activities 7
Statement of Revenue, Expenditures and Changes in
Fund Balance – Governmental Funds 8
Reconciliation of Statement of Revenue, Expenditures
and Changes in Fund Balance of Governmental Funds
to the Statement of Activities 9
Statement of Net Position – Proprietary Funds 10
Statement of Revenue, Expenses and Changes in Fund Net
Position - Proprietary Funds 11
Statement of Cash Flow – Proprietary Funds 12 – 13
Statement of Fiduciary Net Position – Private Purpose Trust Fund 14 Statement of Changes in Fiduciary Net Position – Private Purpose Trust Fund 15 Notes to Basic Financial Statements 16 – 39
7 C O N T E N T S (Continued)
Page
Required Supplementary Information
Budgetary Comparison Schedule – General Fund 40
Budgetary Comparison Schedule – Housing Assistance Fund 41 Budgetary Comparison Schedule – Measure C Fund 42
Schedule of the City’s Proportionate Share of Net Pension Liability 43 Schedule of Contributions 44
Supplemental Only Information
Combining Balance Sheet – Nonmajor
Governmental Funds 45 – 47
Combining Statement of Revenue, Expenditures and
Changes in Fund Balance – Nonmajor
Governmental Funds 48 – 50
INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE AND
ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED
ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS 51 – 52
INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR
EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE 53 – 55
Schedule of Expenditures of Federal Awards 56
Notes to Schedule of Expenditures of Federal Awards 57
Schedule of Findings and Questioned Costs 58 – 61
Summary Schedule of Prior Audit Findings 62
Corrective Action Plan 63
8 BRYANT L. JOLLEY
CERTIFIED PUBLIC ACCOUNTANTS Bryant L. Jolley C.P.A.
Ryan P. Jolley C.P.A.
Darryl L. Smith C.P.A.
Luis A. Perez C.P.A.
Lan T. Kimoto
901 “N” STREET, SUITE 104 FIREBAUGH, CALIFORNIA 93622 PHONE 559.659.3045 FAX 559.659.0615 INDEPENDENT AUDITOR’S REPORT
To the Honorable Mayor and City Council
City of San Joaquin, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of San Joaquin, California, (the City) as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2023, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. 9 2
Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed. Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
Required Supplementary Information
Management has omitted the management’s discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information.
Accounting principles generally accepted in the United States of America require that the budgetary comparison information on pages 40 – 42, the Schedule of the City’s Proportionate Share of Net Pension Liability and the Schedule of Contributions on pages 43 – 44, 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 10 3
context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The accompanying combining and individual nonmajor fund financial statements and schedule of expenditures of federal awards, as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and the schedule of expenditures of federal awards are fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 24, 2026, on our consideration of the City of San Joaquin’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering City of San Joaquin’s internal control over financial reporting and compliance.
March 24, 2026
11 See accompanying notes. 4
CITY OF SAN JOAQUIN
STATEMENT OF NET POSITION
JUNE 30, 2023
Governmental Business-Type
Activities Activities Total
ASSETS
Cash and investments 5,389,251 $ 293,916 $ 5,683,167 $
Accounts receivable - 252,676 252,676
Interest receivable 3,836 1,178 5,014
Due from other governments 1,898,458 822,833 2,721,291
Internal balances 135,215 (135,215) -
Notes receivable 1,706,746 - 1,706,746
Capital assets (net of allowance
for depreciation) 14,771,856 2,112,563 16,884,419
Total assets 16,007,244 11,246,069 27,253,313
DEFERRED OUTFLOWS OF RESOURCES 298,456 299,413 597,869
LIABILITIES
Accounts payable and accrued expenses 283,013 592,247 875,260 Deposits - 106,014 106,014
Long-term liabilities
Due within one year - 5,100 5,100
Due in more than one year - 262,400 262,400
Net pension liability 682,694 680,513 1,363,207
Compensated absences 22,276 16,101 38,377
Total liabilities 1,668,550 981,808 2,650,358
DEFERRED INFLOWS OF RESOURCES 49,755 49,596 99,351
NET POSITION
Net investment in capital assets 2,112,563 14,504,356 16,616,919 Restricted for capital projects - 175,924 175,924
Restricted for specific projects and programs 5,692,219 - 5,692,219 Unrestricted (92,726) 2,709,137 2,616,411
Total net position $ 14,587,554 10,513,919 $ 25,101,473 $ Primary Government
12 See accompanying notes. 5
CITY OF SAN JOAQUIN
STATEMENT OF ACTIVITIES
YEAR ENDED JUNE 30, 2023
Operating Capital
Charges for Grants and Grants and Governmental Business-Type Expense Services Contributions Contributions Activities Activities Total Primary Government
Governmental activities
General government $ 321,194 $ - $ 47 $ (321,147) - $ $ (321,147) - $ Public safety 824,085 504 314,100 (509,481) - (509,481) - Public works 612,893 492,202 - 655,287 534,596 534,596 - Parks and recreation 367,869 103,966 - (263,903) - (263,903) - Community development 845,404 36,036 34,248 (775,120) - (775,120) - Total governmental activities 2,971,445 36,540 944,563 655,287 (1,335,055) (1,335,055) - Business-type activities Water 732,765 697,433 596,744 - - 561,412 561,412
Sewer 877,703 543,896 - - (333,807) - (333,807)
Disposal 272,967 239,212 - - - (33,755) (33,755)
Total business-type activities 1,883,435 1,480,541 596,744 - - 193,850 193,850 Total primary government $ 4,854,880 $ 1,517,081 $ 944,563 $ 1,252,031 (1,335,055) 193,850 (1,141,205) General Revenue
Property taxes, levied for general purposes 442,542 442,542 - Business licenses 15,984 15,984 - Sales taxes 313,518 313,518 - Franchise and other taxes 46,467 46,467 - Interest and rent 51,379 8,058 59,437 Other 76,857 160 77,017
Transfers 12,234 (12,234) - Total general revenue 958,981 (4,016) 954,965 Change in Net Position (376,074) 189,834 (186,240)
Net Position
Beginning of year 10,889,993 14,397,720 25,287,713
End of year $ 10,513,919 $ 14,587,554 $ 25,101,473
Functions/Programs
Net Revenue/(Expense) and
Program Revenue Primary Government
Changes in Net Position
13 See accompanying notes. 6
CITY OF SAN JOAQUIN BALANCE SHEET – GOVERNMENTAL FUNDS JUNE 30, 2023 Other Total
Public Safety Housing Measure American Rescue Governmental Governmental General Grant Assistance C Plan Funds Funds
ASSETS
Cash and investments 302,326 $ 1,524,904 $ 695,350 $ 1,257,825 $ 737,068 $ 871,778 $ 5,389,251 $ Interest receivable 387 1,182 541 967 - 759 3,836
Due from other governments 828,387 - 5,074 36,493 - 1,028,504 1,898,458 Due from other funds 375,387 - - - - - 375,387
Notes receivable - - 1,706,746 - - - 1,706,746
Total assets $ 1,526,086 1,506,487 $ 2,407,711 $ 1,295,285 $ 737,068 $ 1,901,041 $ 9,373,678 $
LIABILITIES, DEFERRED INFLOWS OF RESOURCES
AND FUND BALANCE
Liabilities
Accounts payable and accrued expenses 43,814 $ 30,734 $ - $ 12,240 $ 11,686 $ 184,539 $ 283,013 $ Due to other funds - - - - - 220,172 220,172
Advance from other funds - 20,000 - - - - 20,000
Total liabilities 30,734 63,814 - 12,240 11,686 404,711 523,185 Deferred inflows of resources
Unavailable revenues - 764,072 1,711,820 - - 327,288 2,803,180 Total deferred inflows of resources - 764,072 1,711,820 - - 327,288 2,803,180 Fund Balance
Restricted
Low-income housing activities - - 695,891 - - 64,156 760,047 Public safety programs - 1,495,352 - - - 76,368 1,571,720 Circulation improvements - - - 1,283,045 - 1,139,072 2,422,117 Capital improvement projects - - - - 725,382 54,925 780,307 Landscape maintenance - - - - - 158,028 158,028
Unassigned - 678,601 - - - (323,507) 355,094
Total fund balance 678,601 1,495,352 695,891 1,283,045 725,382 1,169,042 6,047,313 Total liabilities, deferred inflows of resources and fund balance 1,506,487 $ 1,526,086 $ 2,407,711 $ 1,295,285 $ 737,068 $ 1,901,041 $ 9,373,678 $ Special Revenue Funds
14 See accompanying notes. 7
CITY OF SAN JOAQUIN
RECONCILIATION OF TOTAL GOVERNMENTAL FUND BALANCE TO NET POSITION
OF GOVERNMENTAL ACTIVITIES
JUNE 30, 2023
Total governmental fund balances $ 6,047,313
Amounts reported for governmental activities in the statement of net position are different because:
Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds 2,112,563 Net pension liability applicable to governmental activities are not due and payable in the current period and accordingly is not reported in the Statement of Activities (682,694)
Deferred outflows of resources related to net pension liability, represent an consumption of net position or fund balance that applies to future period(s) and so will not be recognized as an outflow of resources (expense) until that time 299,413 Deferred inflows of resources related to net pension liability, represent an acquisition of net position or fund balance that applies to future period(s) and so will not be recognized as an inflow of resources (revenue) until that time (49,755) Other long-term assets are not available to pay for current period expenditures and, therefore, are not reported in the fund 2,803,180
Compensated absences are not due and payable in the current period and therefore are not reported in the funds (16,101) Net position of governmental activities $ 10,513,919
15 See accompanying notes. 8
CITY OF SAN JOAQUIN STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE – GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2023 Other Total
Public Safety Housing American Rescue Governmental Governmental General Grant Assistance Measure C Plan Funds Funds
Revenue
Taxes $ 822,730 $ - $ - $ - $ - $ 29,282 $ 852,012
Intergovernmental 47 - 2,988 218,696 480,954 738,916 1,441,601 Licenses, permits and impact fees 36,076 - - - - - 36,076 Fines and forfeitures 464 - - - - - 464
Interest and rent 25,038 8,437 2,983 6,384 3,321 5,139 51,302Loan repayments 44,668 - 38,471 - - - 83,139 Other 43,201 - 141 - - - 43,342
Total revenue 972,224 8,578 225,080 44,442 484,275 773,337 2,507,936 Expenditures
Current
General government 397,706 - - - - - 397,706
Public safety 118,296 482,186 - - - 228,091 828,573
Public works 25,619 - - 110,137 - 506,468 642,224
Parks and recreation 186,244 - - - - 100,185 286,429
Community development 209,690 - 6,568 - 99,330 91,000 406,588 Capital outlay 16,069 - - - - - 16,069
Debt service
Principal 135,000 - - - - - 135,000
Interest and other charges - 7,174 - - - - 7,174
Total expenditures 482,186 1,095,798 6,568 99,330 110,137 925,744 2,719,763 Revenue over/(under) expenditures (123,574) (473,608) 37,874 114,943 384,945 (152,407) (211,827) Other Financing Sources/(Uses)
Transfers in/(out) 161,179 - - (22,945) (5,028) (120,972) 12,234 161,179 - - (22,945) (5,028) (120,972) 12,234
Change in Fund Balance 37,605 (473,608) 37,874 109,915 362,000 (273,379) (199,593) Fund Balance
Beginning of year 640,996 1,968,960 658,017 1,173,130 363,382 1,442,421 6,246,906 End of year $ 1,495,352 678,601 $ 695,891 $ 1,283,045 $ 725,382 $ 1,169,042 $ 6,047,313 $ Special Revenue Funds
16 See accompanying notes. 9
CITY OF SAN JOAQUIN
RECONCILIATION OF STATEMENT OF REVENUE, EXPENDITURES, AND CHANGES IN
FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2023
Net change in fund balance - total governmental funds $ (199,593) Amounts reported for governmental activities in the statement of activities are different because:
Depreciation expense on capital assets is reported in the Statement of Activities, but it does not require the use of current financial resources. Therefore, depreciation expense is not reported as expenditures in Governmental Funds (179,274)
Governmental funds report capital outlays as expenditures. However, in the Statement of Activities and Changes in Net Position the cost of those assets are capitalized as an asset and depreciated over the period of service 16,069
Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds (301,356)
Compensated absences costs in the Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures in Governmental Funds 7,422 Pension expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore are not reported as expenditures in the Governmental Funds 137,841
In the Statement of Activities interest is accrued on long-term debt, whereas, in governmental funds interest expenditure is reported when due 7,817
Repayment of long-term debt is an expenditure in governmental funds, but the repayment reduces long-term liabilities in the statement of net assets. Proceeds of long-term debt produces an opposite effect. 135,000 Change in net position of governmental activities $ (376,074) 17 See accompanying notes. 10
CITY OF SAN JOAQUIN
STATEMENT OF NET POSITION – PROPRIETARY FUNDS
JUNE 30, 2023
Total
Business-Type
Water Sewer Disposal Funds
ASSETS
Current assets
Cash and investments 293,916 $ $ - $ - $ 293,916
Accounts receivable 125,011 78,896 48,769 252,676
Interest receivable 507 - 671 1,178
Due from other governments 822,833 - - 822,833
Advance to other funds - 20,000 - 20,000
Total current assets 78,896 1,262,267 49,440 1,390,603
Non-current assets
Property, plant and equipment
(net of allowance for depreciation) 9,038,469 5,733,387 - 14,771,856 Total noncurrent assets 9,038,469 5,733,387 - 14,771,856 Total assets 9,117,365 6,995,654 49,440 16,162,459
DEFERRED OUTFLOWS OF RESOURCES 138,048 151,978 8,430 298,456
LIABILITIES
Current liabilities
Accounts payable and accrued expenses 494,033 58,459 39,755 592,247 Deposits 106,014 - - 106,014
Due to other funds - 126,863 28,352 155,215
Current portion of long-term debt - 4,400 - 4,400
Total current liabilities 189,722 600,047 857,876 68,107 Non-current liabilities
Long-term debt - 263,100 - 263,100
Net pension liability 346,527 314,765 19,221 680,513
Compensated absences 10,636 10,420 1,220 22,276
Total noncurrent liabilities 356,947 588,501 20,441 965,889 Total liabilities 778,223 956,994 88,548 1,823,765
DEFERRED INFLOWS OF RESOURCES 22,940 25,255 1,401 49,596
NET POSITION
Net investment in capital assets 5,733,387 8,770,969 - 14,504,356 Restricted for capital projects 175,924 - - 175,924
Unrestricted/(deficit) 256,072 (316,719) (32,079) (92,726) Total net position $ 8,454,250 6,165,383 $ (32,079) $ 14,587,554 $ Business-Type Activities - Enterprise Funds
18 See accompanying notes. 11
CITY OF SAN JOAQUIN
STATEMENT OF REVENUE, EXPENSE, AND CHANGES IN FUND NET POSITION –
PROPRIETARY FUNDS
YEAR ENDED JUNE 30, 2023
Total
Business-Type
Water Sewer Disposal Funds
Operating Revenue
Charges for services $ 543,896 697,433 $ 239,212 $ 1,480,541 $ Total operating revenue 543,896 697,433 239,212 1,480,541 Operating Expense
Contractual services and utilities 240,099 215,728 243,144 698,971 Personnel 247,623 268,732 22,311 538,666
Supplies and materials 168,826 61,607 7,512 237,945
Depreciation 319,723 76,217 - 395,940
Total operating expense 865,790 732,765 272,967 1,871,522 Operating income/(loss) (35,332) (321,894) (33,755) (390,981) Nonoperating Revenue/(Expense)
Interest income 3,747 4 4,467 8,218
Interest expense (11,913) - - (11,913)
Total nonoperating revenue/(expense) 3,747 (11,909) 4,467 (3,695) Net income/(loss) before transfers (31,585) (333,803) (29,288) (394,676) Operating Transfers In/(Out) - - (12,234) (12,234)
Income (Loss) before Contributions (31,585) (333,803) (41,522) (406,910) and Transfers
Capital Contributions - 596,744 - 596,744
Net Income/(Loss) (333,803) 565,159 (41,522) 189,834
Net Position
Beginning of year 5,600,224 8,788,053 9,443 14,397,720
End of year $ 8,454,250 6,165,383 $ (32,079) $ 14,587,554 $ Business-Type Activities - Enterprise Funds
19 See accompanying notes. 12
CITY OF SAN JOAQUIN
STATEMENT OF CASH FLOW - PROPRIETARY FUNDS
YEAR ENDED JUNE 30, 2023
Total
Business-Type
Water Sewer Disposal Funds
Operating Activities
Receipts from customers and users 629,226 $ 513,827 $ 224,379 $ 1,367,432 $ Payments for contractual services and utilities 13,519 (213,746) (224,164) (424,391) Payments to employees (320,115) (334,402) (25,601) (680,118) Payments to suppliers (61,607) (168,826) (7,512) (237,945) Net cash provided by (used in)
operating activities (95,928) 153,804 (32,898) 24,978
Non-capital Financial Activities
Payments received from (paid to) other funds 20,000 126,863 16,118 162,981 Net cash provided by (used in)
noncapital financing activities 126,863 20,000 16,118 162,981 Capital and Related Financing Activities
Capital grants 169,375 - - 169,375
Purchase of property, plant and equipment (613,140) (16,069) - (629,209) Principal paid on long-term debt (4,800) - - (4,800)
Interest paid on long-term debt (11,913) - - (11,913)
Net cash provided by (used in)
capital and related financing activities (32,782) (443,765) - (476,547) Investing Activities
Interest received 8 3,307 3,842 7,157
Net cash provided by (used in)
investing activities 8 3,307 3,842 7,157
Net Increase (Decrease) in Cash and Investments (1,839) (266,654) (12,938) (281,431) Cash and Investments
Beginning of year 1,839 560,570 12,938 575,347
End of year $ - 293,916 $ - $ 293,916 $
Business-Type Activities - Enterprise Funds
20 See accompanying notes. 13
CITY OF SAN JOAQUIN
STATEMENT OF CASH FLOW - PROPRIETARY FUNDS (CONTINUED)
YEAR ENDED JUNE 30, 2023
Total
Business-Type
Water Sewer Disposal Funds
Cash Flows from Operating Activities
Operating income (loss) (35,332) $ (321,894) $ (33,755) $ (390,981) $ Adjustments to reconcile operating income (loss) to
net cash provided (used) by operating activities:
Depreciation 76,217 319,723 - 395,940
(Increase) Decrease in Accounts Receivable (62,968) (35,012) (14,833) (112,813) (Increase) Decrease in Due from other Governments - 4,943 - 4,943 (Increase) Decrease in Deferred Outflows of Resources (87,068) (79,088) (4,830) (170,986) Increase (Decrease) in Compensated absences (2,526) (2,117) 592 (4,051) Increase (Decrease) in Net Pension Liability 163,021 148,079 9,042 320,142 Increase (Decrease) in Deferred Inflows of Resources (145,919) (132,544) (8,094) (286,557) Increase (Decrease) in Deposits (5,239) - - (5,239)
Increase (Decrease) in Accounts Payable
and Accrued Liabilities 1,982 253,618 18,980 274,580
Net Cash Provided (Used) by Operating Activities $ (95,928) 153,804 $ (32,898) $ 24,978 $ Business-Type Activities - Enterprise Funds
21 See accompanying notes. 14
CITY OF SAN JOAQUIN
STATEMENT OF FIDUCIARY NET POSITION
PRIVATE-PURPOSE TRUST FUND – SUCCESSOR AGENCY
JUNE 30, 2023
Assets
Cash and investments
Held in City Treasury $ -
Total assets -
Liabilities
Cash overdraft held in City Treasury 18,674
Long-term debt
Due to City of San Joaquin in more than one year 764,072 Total liabilities 782,746
Net Position
Held in trust for other governments (782,746) $
22 See accompanying notes. 15
CITY OF SAN JOAQUIN
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
PRIVATE-PURPOSE TRUST FUND – SUCCESSOR AGENCY
JUNE 30, 2023
Additions
Property taxes $ 25,994
Total additions 25,994
Deductions
Administrative costs -
Total deductions -
Change In Net Position 25,994
Net Position
Beginning of year (808,740)
End of year $ (782,746)
23 16
CITY OF SAN JOAQUIN
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 1 – Summary of Significant Accounting Policies
The financial statements of the City of San Joaquin (the City) have been prepared in conformity with Accounting Principles Generally Accepted in the United States of America (GAAP) as applicable to governmental entities. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles.
These financial statements present the government and its component units, entities for which the City is considered to be financially accountable. Blended component units, although legally separate entities are, in substance, part of the government’s operations and data from these units is combined with data of the primary government. Each blended component unit has a June 30 fiscal year end. There are no discretely presented component units included in these financial statements. The following sections further describe the significant accounting policies of the City.
Reporting Entity
The City of San Joaquin, State of California (the "City"), was incorporated February 14, 1920. The City operates under a Council-Manager form of government. The City's major operations include public safety; highways and streets; water, sewer and refuse collection; parks and recreation; building inspection; public improvements; planning and zoning, and general administrative services.
Basis of Presentation – Fund Accounting
Government-Wide Financial Statements - The Government-Wide Financial Statements (the Statement of Net Position and the Statement of Activities and Changes in Net Position) report information of all of the nonfiduciary activities of the primary government and its component units. For the most part, eliminations have been made to minimize the double counting of internal activities. These statements distinguish between the governmental and business-type activities of the City and between the City and its discretely presented component unit. Governmental activities, which normally are supported by taxes and inter-governmental revenues, are reported separately from business-type activities, which rely significantly on fees charged to external parties.
The Statement of Activities and Changes in Net Position presents a comparison between direct expenses and program revenues for each segment of 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 are clearly identifiable to a particular function. Program revenues include 1) charges paid by the recipients of goods or services offered by the programs and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.
Net position are restricted when constraints placed on them are either externally imposed or are imposed by constitutional provisions or enabling legislation. Internally imposed designations of resources are not presented as restricted Net position. When both restricted and unrestricted resources are available for use, generally, it is the City’s policy to use restricted resources first, then unrestricted resources as they are needed.
24 17
CITY OF SAN JOAQUIN
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 1 – Summary of Significant Accounting Policies (Continued) Governmental Fund Financial Statements - The Governmental Fund Financial Statements provide information about the City’s funds, including fiduciary funds and the blended component unit. Separate statements for each fund category - governmental, proprietary and fiduciary - are presented. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column. All remaining governmental funds are separately aggregated and reported as non-major funds.
Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Non-operating revenues, such as subsidies and investment earnings, result from non-exchange transactions or ancillary activities.
The City reports the following major governmental funds:
General Fund – The General Fund is the general operating fund of the City. It is used for all financial resources except those required legally, or by sound financial management to be accounted for in another fund. Generally, the General Fund is used to account for those traditional governmental services of the City, such as police and fire protection, planning and general administrative services.
Public Safety Grant Fund – The Public Safety Grant Fund was established to account for the monies received for public safety services.
Housing Assistance Fund – The Housing Assistance Fund was established to account for the monies received from various sources which are to be used for down payment loans for home buyers that meet certain requirements.
Measure C Fund – The Measure C Fund was established to account for the monies received from the County of Fresno for street maintenance and projects.
American Rescue Plan Fund – The American Rescue Plan Fund was established to account for the monies received from the State of California for covid related costs and capital improvements.
The City reports the following additional fund types:
Private-Purpose Trust Funds – The Private-Purpose Trust Fund accounts for assets held by the City as trustee for the Successor Agency.
Basis of Accounting
The Government-Wide and Proprietary Fund Financial Statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the City gives (or receives) value without directly receiving (or giving) equal value in exchange, include property and sales taxes, grants, entitlements and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenues from sales tax are recognized when the underlying transactions take place.
Revenues from grants, entitlements and donations are recognized in the fiscal year in which all eligible requirements have been satisfied.
25 18
CITY OF SAN JOAQUIN
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 1 – Summary of Significant Accounting Policies (Continued) 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. Property and sales taxes, interest, certain state and federal grants and charges for services are accrued when their receipt occurs within sixty days after the end of the accounting period so as to be both measurable and available. Expenditures are generally recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments are recorded only when payment is due. General capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term debt and capital leases are reported as other financing sources.
Proprietary Funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a Proprietary Fund’s principal ongoing operations. Revenues and expenses not meeting this definition are reported as non-operating.
Financial Statement Amounts
Cash and Investments – Cash and investments represent the City's cash bank accounts including but not limited to certificates of deposit, money market funds and cash management pools for reporting purposes in the Statement of Cash Flows. Additionally, investments with maturities of three months or less when purchased are included as cash equivalents in the Statement of Cash Flows.
The City maintains a cash and investment pool that is available for use by all funds. Interest earnings as a result of this pooling are distributed to the appropriate funds based on month end cash balances in each fund.
Investments of the pool include only those investments authorized by the California Government Code such as, United States Treasury securities, agencies guaranteed by the United States Government, registered state warrants, and other investments. Investments primarily consist of deposits in the State of California Local Agency Investment Fund. Investments are stated at approximate fair value.
Accounts Receivable – Billed but unpaid services provided to individuals or non-governmental entities are recorded as accounts receivable. The Proprietary Funds include a year-end accrual for services through June 30, 2023, which have not yet been billed.
26 19
CITY OF SAN JOAQUIN
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 1 – Summary of Significant Accounting Policies (Continued) Fresno County is responsible for the assessment, collection and apportionment of property taxes for all taxing jurisdictions. Property taxes are levied in equal installments on November 1 and February 1. They become delinquent on December 10 and April 10, respectively. The lien date is March 1 of each year.
Property taxes are accounted for in the General Fund. Property tax revenues are recognized when they become measurable and available to finance current liabilities. The City considers property taxes as available if they are collected within 60 days after year end. Property tax on the unsecured roll are due on the March 1 lien date and become delinquent if unpaid on August 31. However, unsecured property taxes are not susceptible to year end accrual.
The City is permitted by Article XIIIA of the State of California Constitution (known as Proposition 13) to levy a maximum tax of $1.00 per $100 of full cash value.
Interfund Receivables/Payables – Items classified as interfund receivable/payable represent short-term lending/borrowing transactions between funds. This classification also includes the current portion of an advance to or from another fund.
Advances To/From Other Funds – This classification represents non-current portions of any long-term lending/borrowing transactions between funds. This amount will be equally offset by a reserve of fund balance which indicates that it does not represent available financial resources and therefore, is not available for appropriation. The current portion of any interfund long-term loan (advance) is included as an interfund receivable/payable.
Capital Assets - Capital outlays are recorded as expenditures of the General, Special Revenue, and Capital Projects Funds and as assets in the Government-Wide Financial Statements to the extent the City’s capitalization threshold are met.
Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type activities columns in the Government-Wide Financial Statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $5,000 (amount not rounded) and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Betterments and major improvements which significantly increase values, change capacities or extend useful lives are capitalized. Upon sale or retirement of fixed assets, the cost and related accumulated depreciation are removed from the respective accounts and any resulting gain or loss is included in the results of operations.
Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed.
27 20
CITY OF SAN JOAQUIN
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 1 – Summary of Significant Accounting Policies (Continued) Property, plant, and equipment of the primary government, as well as the component units, are depreciated using the straight line method over the following estimated useful lives:
Years
Buildings 40
Improvements other than buildings 40
Utility plant 40
Furniture and equipment 7
Automobiles and trucks 5
Compensated Absences – It is the City's policy to permit all employees to accumulate earned but unused vacation, sick leave and compensatory time benefits. Those employees on shift work schedules may also accumulate hours for holiday time benefits.
Vested or accumulated vacation, holiday, sick leave and any compensation time on the Governmental Funds are not expected to be paid with expendable available financial resources and are reported in the Government-Wide Financial Statements.
Vested leave of Proprietary Funds are recorded as an expense and liability as the benefits accrue.
Long-Term Obligations - In the Government-Wide Financial Statements, and Proprietary Fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or Proprietary Fund Type Statement of Net Position. Debt principal payments of both government and business-type activities are reported as decreases in the balance of the liability on the Statement of Net Position. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt.
In the fund financial statements, however, debt principal payments of Governmental Funds are recognized as expenditures when paid. Governmental Fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.
Non-Current Governmental Assets/Liabilities - GASB Statement No. 34 eliminates the presentation of account groups, but provides for these records to be maintained and incorporates the information into the Governmental Activities column in the Government-Wide Statement of Net Position.
Pension – For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City’s California Public Employee Retirement System (CalPERS) plan and additions to/deduction from the Plan’s fiduciary net position have been determined on the same basis as they are reported by CalPERS.
For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. 28 21
CITY OF SAN JOAQUIN
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 1 – Summary of Significant Accounting Policies (Continued) Net Position/Fund Balance – The government-wide and business-type activities fund financial statements utilize a net position presentation. Net positions are categorized as net investment in capital assets, restricted and unrestricted.
Net Investment in Capital Assets – This category groups all capital assets, including infrastructure, into one component of net position. Accumulated depreciation and the outstanding balances of debt that are attributable to the acquisition, construction or improvement of these assets reduce the balance in this category.
Restricted Net Position – This category presents external restrictions on net position imposed by creditors, grantors, contributors or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabling legislation. Unrestricted Net Position – This category represents net position of the City, not restricted for any project or other purpose.
Fund Balance – In the fund financial statements, governmental fund balance is made up of the following components:
Nonspendable fund balance typically includes inventories, prepaid items, and other items that must be maintained intact pursuant to legal or contractual requirements, such as endowments. Restricted fund balance category includes amounts that can be spent only for specific purposes imposed by creditors, grantors, contributors, or laws or regulations of other governments or through enabling legislations.
Committed fund balance classification includes amounts that can be used only for the specific purposes determined by a formal action of the City Council. The City Council has the authority to establish, modify, or rescind a fund balance commitment. Assigned fund balance are amounts designated by the City Council for specific purposes and do not meet the criteria to be classified as restricted or committed. Unassigned fund balance is the residual classification that includes all spendable amounts in the General Fund not contained in other classifications.
When expenditures are incurred for purposes for which both restricted and unrestricted (committed, assigned, or unassigned) fund balances are available, the City’s policy is to apply restricted first. When expenditures are incurred for purposes for which committed, assigned, or unassigned fund balances are available, the City’s policy is to apply committed fund balance first, then assigned fund balance, and finally unassigned fund balance.
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 the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates. 29 22
CITY OF SAN JOAQUIN
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 2 – Stewardship, Compliance and Accountability
California law authorizes the City to invest in obligations of the United States Treasury, agencies and instrumentalities, certificates of deposit or time deposits in banks and savings and loan associations which are insured by the Federal Deposit Insurance Corporation.
In accordance with applicable sections of the California Government Code and the San Joaquin Municipal Code, the City prepares and legally adopts an annual balanced budget on a basis consistent with accounting principles generally accepted in the United States of America. Annual appropriated budgets are adopted for the General Fund, specific Special Revenue Funds, and specific Capital Projects Funds.
Budget plans are adopted for Proprietary Funds. A proposed budget is presented to the City Council during June of each year for review. The Council holds public hearings and may add to, subtract from, or change appropriations within the revenues and reserves estimated as available. Expenditures may not legally exceed budgeted appropriations at the fund level. Supplementary appropriations which alter the total expenditures of any fund, or expenditures in excess of total budgeted fund appropriations, must be approved by the City Council.
All annual appropriations lapse at fiscal year end to the extent they have not been expended or encumbered.
Note 3 – Cash and Investments
The City pools all of its cash and investments except those funds required to be held by outside fiscal agents under the provisions of bond indentures. Interest income earned on pooled cash is allocated to the various funds on average cash balances. Interest income from cash investments held with fiscal agents is credited directly to the related funds.
Cash and investments as of June 30, 2023 are classified in the accompanying financial statements as follows:
Statement of Net Position:
Cash and Investments $ 5,683,167
Fiduciary Funds:
Cash and Investments (18,674)
Total Cash and Investments $ 5,664,493
Cash and investments as of June 30, 2023 consist of the following:
Cash on hand $ 1,280
Deposits with Financial Institutions 5,024,108
Local Agency Investment Fund 638,786
Held by Fiscal Agent:
Cash 319
Total Cash and Investments $ 5,664,493
30 23
CITY OF SAN JOAQUIN
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 3 – Cash and Investments (Continued)
Fair Value Measurements
The framework for measuring fair value provides a fair value hierarchy that categorizes the inputs to valuation techniques used to measure fair value into three levels. The fair value hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described as follows:
Level 1: Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets that a government can access at the measurement date.
Level 2: Inputs to valuation methodology include inputs – other than quoted prices included within Level 1 – that are observable for an asset or liability, either directly or indirectly.
Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
The asset’s or liability’s fair value measurement level within a fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.
Following is a description of the valuation methodologies used for assets measured at fair value.
LAIF is valued based on the City’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (Level 2 input).
31 24
CITY OF SAN JOAQUIN
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 3 – Cash and Investments (Continued)
Investments Authorized by the California Government Code and the City’s Investment Policy The table below identifies the investment types that are authorized for the City by the California Government Code (or the City’s investment policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the City’s investment policy, where more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. The City’s investment policy does not contain any specific provisions intended to limit the City’s exposure to interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City’s investment policy.
Maximum Maximum
Maximum Percentage Investment
Maturity of Portfolio In One Issuer
Local Agency Bonds 5 years None None
U.S. Treasury Obligations 5 years None None
U.S. Agency Securities 5 years None None
Banker's Acceptances 180 days 40% 30%
Commercial Paper 270 days 25% 10%
Negotiable Certificates of Deposit 5 years 30% None
Medium-Term Notes 5 years 30% None
Mutual Funds N/A 20% 10%
Money Market Mutual Funds N/A 20% 10%
Mortgage Pass-Through Securities 5 years 20% None
County Pooled Investment Funds N/A None None
Local Agency Investment Fund (LAIF) N/A None None
Authorized Investment Type
32 25
CITY OF SAN JOAQUIN
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 3 – Cash and Investments (Continued)
Investments Authorized by Debt Agreements
Investments of debt proceeds held by bond trustee are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City’s investment policy.
The table below identifies the investment types that are authorized for investments held by the bond trustee. The table also identifies certain provisions of these debt agreements that address interest rate risk, credit risk, and concentration of credit risk.
Maximum Maximum
Maximum Percentage Investment
Maturity of Portfolio In One Issuer
U.S. Treasury Obligations None None None
U.S. Agency Securities None None None
Banker's Acceptances 180 days None None
Commercial Paper 270 days None None
Money Market Mutual Funds N/A None None
Investment Contracts None None None
Certificates of Deposits 1 year None None
Repurchase Agreements 30 days None None
Local Agency Investment Fund (LAIF) N/A None None
Municipal Bonds None None None
Authorized Investment Type
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. As of June 30, 2023 the City had the following investments.
Maturity Date
Local Agency Investment Fund $ 638,786 N/A
Total $ 638,786
Investment Type
33 26
CITY OF SAN JOAQUIN
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 3 – Cash and Investments (Continued)
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the California Government Code, the City’s investment policy, or debt agreements, and the actual rating as of year-end for each investment type.
Minimum Rating as of Year End
Legal Not
Rating Rated
Local Agency Investment Fund $ 638,786 N/A $ 638,786
Total $ 638,786 $ 638,786
Investment Type
Concentration of Credit Risk
The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. There are no investments in any one issuer that represent 5% or more of total City investments.
Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits.
34 27
CITY OF SAN JOAQUIN
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 3 – Cash and Investments (Continued)
The custodial risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for investments. With respect to investments, custodial credit risk generally applies only to direct investments in marketable securities. Custodial credit risk does not apply to a local government’s indirect investment in securities through the use of mutual funds or government investment pools (such as LAIF).
Investment in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the oversight of the Treasurer of the State of California. The fair value of the City’s investment in this pool is reported in the accompanying financial statements at amounts based upon the City’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis.
Note 4 – Notes Receivables
The City is the recipient of Community Development Block Grant and Home Program Funds. The funds are provided to use for housing and business loans to qualified recipients at various below market interest rates ranging from 0 to 4%. The terms of the loans range between fifteen and thirty years. All loans are secured by deeds of trust. The amount outstanding as of June 30, 2023 is $1,706,746.
Note 5 – Interfund Receivables and Payables/Advances To and From Interfund receivables and payables consist of short-term loans resulting from regular transactions. These loans are expected to be repaid as soon as the borrowing fund has cash, and carry an interest rate equal to the rate earned on pooled cash.
Individual fund interfund receivables and payables balances as of June 30, 2023 are as follows:
Due From Due To
Major Governmental Funds:
General Fund $ 375,387 $ -
Major Enterprise Funds:
Sewer Fund - 126,863
Disposal Fund - 28,352
Nonmajor Governmental Funds:
Streets Fund - 57,264
CDBG Gang Prevention Grant Fund - 105,388
Rural Energy Program Grant Fund - 3,024
Local Early Action Planning Grant - 26,075
COVID 28,421 -
$ 375,387 375,387 $
35 28
CITY OF SAN JOAQUIN
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 5 – Interfund Receivables and Payables/Advances To and From (continued) In November 2018, the City Council approved an advance from the Water Fund to the General Fund of $100,000 at 2% interest to be repaid back in 5 annual payments, with a maturity date of July 1, 2023.
Advance To Advance From
General Fund $ 20,000 $ -
Water Fund - 20,000
$ 20,000 20,000 $
Note 6 – Capital Assets
Capital asset activity for the year ended June 30, 2023, was as follows:
Balance Balance
July 1, 2022 Additions Retirements June 30, 2023
Governmental Activities
Capital assets, not being depreciated
Land $ - 340,670 $ $ - $ 340,670
Total capital assets, not being depreciated - 340,670 - 340,670 Capital assets, being depreciated
Buildings and improvements 2,712,521 - 2,712,521 -
Infrastructure 1,234,302 - 1,234,302 -
Machinery and equipment 16,069 1,298,003 - 1,314,072
Total capital assets, being depreciated 5,244,826 16, - 069 5,260,895 Less accumulated depreciation for:
Buildings and improvements (1,782,156) (105,640) - (1,887,796) Infrastructure (377,847) (30,401) - (408,248)
Machinery and equipment (43,233) (1,149,725) - (1,192,958) Total accumulated depreciation (179,274) (3,309,728) - (3,489,002) Total capital assets, being depreciated, net (163,205) 1,935,098 - 1,771,893 Governmental activities capital assets, net $ (163,205) 2,275,768 $ - $ $ 2,112,563 36 29
CITY OF SAN JOAQUIN
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 6 – Capital Assets (Continued)
Balance Balance
July 1, 2022 Additions Retirements June 30, 2023
Business-Type Activities
Capital assets, not being depreciated
Land 124,854 $ - $ - $ 124,854 $
Construction in progress 575,641 2,962,267 - 3,537,908
Total capital assets, not being depreciated 575,641 3,087,121 - 3,662,762 Capital assets, being depreciated
Plant and equipment 53,568 15,377,275 - 15,430,843
Total capital assets, being depreciated 15,377,275 53,568 - 15,430,843 Less: accumulated depreciation (395,940) (3,925,809) - (4,321,749) Total capital assets, being depreciated, net 11,451,466 (342,372) - 11,109,094 Business-type activities capital assets, net $ 233,269 14,538,587 $ - $ 14,771,856 $ Depreciation expense was charged to the following functions in the Statement of Activities:
Governmental Functions:
General Government 4,783 $
Public Safety 2,150
Public Works 61,022
Parks and recreation 111,319
$ 179,274
Business-Type Functions:
Water 76,217 $
Sewer 319,723
$ 395,940
37 30
CITY OF SAN JOAQUIN
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 7 – Long-Term Debt
Balance Balance Current
July 1, 2022 Additions Retirements June 30, 2023 Portion Governmental Activity Long Term Debt
Direct Placement:
Public Finance Authority Bonds
92-1 and 92-2 $ 135,000 - $ (135,000) $ - $ - $
$ 135,000 - $ (135,000) $ - $ - $
Business-Type Activity Long Term Debt
Direct Financing:
Loan Payable
USDA Sewer Loan $ 272,300 - $ $ 267,500 (4,800) $ 5,100 $ $ 272,300 - $ $ 267,500 (4,800) $ 5,100 $
Compensated Absences
Government Activities $ - 23,523 $ $ 16,101 (7,422) $
Business-Type Activities $ - 26,327 $ $ 22,276 (4,051) $ Net Pension Liability
Government Activities $ 321,168 361,526 $ $ 682,694 - $ Business-Type Activities $ 320,142 360,371 $ $ 680,513 - $ Public Finance Authority – The City has assumed full responsibility for the payment of two revenue bonds issued by the San Joaquin Public Finance Authority. The bonds were issued in 1993 to fund several special assessment districts and the General, Water and Sewer capital leases. As these funds are reporting their proportionate share of the debt, the remaining portion is reported as a general City obligation. The City retired a portion of the Series 1992 revenue bonds during the fiscal year ending June 30, 2010.
During the fiscal year ending June 30, 2013 the Water and Sewer funds retired their portion of the debt by transferring $195,000 to the General Fund. The full amount of the debt is now payable by the General Fund. Interest on the remaining Series 1992 revenue bond is 8%. The balance was paid off during the fiscal year ended June 30, 2023.
USDA Sewer Loan Payable - In 2011 the City entered into an agreement with the USDA to partially finance the sewer plant expansion. The loan agreement is for an amount not to exceed $315,000 and bears interest at 4.375% with semi-annual payments on October 1st and April 1st. At June 30, 2023 the loan outstanding amounts to $267,500.
38 31
CITY OF SAN JOAQUIN
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 7 – Long-Term Debt (continued)
The annual requirement to amortize the principal and interest on all long-term debt at June 30, 2023 are as follows:
Years ending June 30, Principal Interest
2024 $ 5,100 $ 11,704
2025 5,300 11,480
2026 5,500 11,248
2027 5,700 11,008
2028 6,000 10,758
2029-2033 34,100 49,618
2034-2038 42,300 41,470
2039-2043 52,400 31,380
2044-2048 64,900 18,864
2049-2050 46,200 4,104
$ 267,500 $ 201,634
Business-Type Activities
Note 8 – Interfund Transfers
In general, the City uses interfund transfers to (1) move revenues from the funds that collect them to the funds that statute or budget requires to expend them, (2) use unrestricted revenues collected in the General Fund to help finance various programs and capital projects accounted for in other funds in accordance with budgetary authorization, and (3) move cash to debt service funds from the funds responsible for payment as debt service payments become due. In general, the effect of the interfund activity has been eliminated from the government-wide financial statements.
Transfers In Transfers Out
Major Governmental Funds:
General Fund $ 161,179 $ - Measure C - 5,028
American Rescue Plan - 22,945
Major Enterprise Funds:
Disposal Fund - 12,234
Nonmajor Governmental Funds:
Safety Fund - 126,000
Streets 5,028 - $ 166,207 $ 166,207
Transfer out of $126,000 from the Public Safety Fund to the General Fund to cover public safety costs. Transfer out of $12,234 from the Disposal Fund to the General Fund is to close out a grant. 39 32
CITY OF SAN JOAQUIN
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 9 – Deferred Outflows and Deferred Inflows of Resources In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial element, deferred outflows of resources, represents a consumption of net position or fund balance that applies to future period(s) and thus, will not be recognized as an outflow of resources (expense/expenditure) until then. The City has two items to report in this category:
The City has $597,869 in pension related items that qualify to be reported in deferred outflows of resources. The pension related deferred outflows of resources are described in Note 10.
In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represent an acquisition of net position or fund balance that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has one item to report in this category:
The City has $99,350 in pension related items that qualify to be reported in deferred inflows of resources. The pension related deferred inflows of resources are described in Note 10.
Unavailable revenues arise only under a modified accrual basis of accounting and is reported only in the governmental funds balance sheet. The City has $1,706,746 in notes and loans receivable reported in the Housing Assistance Fund, $764,072 in receivable due from Successor Agency in the General Fund, $152,755 in Streets Capital Project Fund, $20,517 in the Rural Energy Program Grant, $26,075 in the Local Early Action Planning Grant, and $127,941 in the CDBG Gang Prevention Program as deferred inflows of resources reported for unavailable revenues.
Note 10 – Pension Plan
Plan Description - The City contributes to the California Public Employees' Retirement System (PERS), an agent multiple-employer public employee defined benefit pension plan. PERS provides retirement and disability benefits, annual cost-of-living adjustments and death benefits to plan members and beneficiaries. PERS acts as a common investment and administrative agent for participating public entities within the State of California. Benefit provisions and all other requirements are established by state statute and city ordinance. Copies of PERS' annual financial report may be obtained from their Executive Office - 400 P Street - Sacramento, CA 95814.
Funding Policy - Participants are required to contribute seven percent of their annual covered salary.
The City makes the contributions required of City employees on their behalf and for their account.
The City is required to contribute at an actuarially determined rate; the current rate is 7.47 – 10.320 percent for non-safety employees of annual covered payroll. The contribution requirements of plan members and the City are established and may be amended by PERS. 40 33
CITY OF SAN JOAQUIN
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 10 – Pension Plan (Continued)
The Plans’ provisions and benefits in effect at June 30, 2023, are summarized as follows:
Miscellaneous
Classic
PEPRA
Miscellaneous
Hire Date
Prior to
January 1, 2013
After or On
January 1, 2013
Benefit Formula 2.0% at 55;
maximum 2%
COLA
2.0% at 62;
maximum 2%
COLA
Benefit Vesting Schedule 5 years service 5 years service Benefit Payments monthly for life monthly for life
Retirement Age 55 62
Monthly Benefits, as a % of Eligible Compensation 2.00% 2.00% Required Employee Contribution Rates 7.00% 6.25%
Required Employer Contribution Rates 10.320% 7.470%
Contributions – Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on July 1 following notice of a change in the rate. Funding contributions for both Plans are determined annually on an actuarial basis as of June 30 by 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.
For the year ended June 30, 2023, $149,963 of contributions was recognized as part of the pension expense.
Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions
As of June 30, 2023, the City reported net pension liabilities for its proportionate shares of the net pension liability of each Plan as follows:
Proportionate Share of
Net Pension Liability
Miscellaneous $ 1,363,207
41 34
CITY OF SAN JOAQUIN
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 10 – Pension Plan (Continued)
The City’s net pension liability for each Plan is measured as the proportionate share of the net pension liability. The net pension liability of each of the Plans is measured as of June 30, 2022, and the total pension liability for each Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2021 rolled forward to June 30, 2022 using standard update procedures. The City’s proportion of the net pension liability was based on a projection of the City’s long-term share of contributions to the pension plans relative to the projected contributions of all participating employers, actuarially determined. The City’s proportionate share of the net pension liability for each Plan as of June 30, 2022 and 2023 was as follows:
Miscellaneous
Proportion – June 30, 2022 0.03802%
Proportion – June 30, 2023 0.02913%
Change – Increase/(Decrease) -0.00889%
For the year ended June 30, 2023, the City recognized pension expense of $101,878. At June 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related to pension from the following sources:
Deferred Outflows
of Resources
Deferred Inflows of
Resources
Pension contributions subsequent to
measurement date $ 173,362 $ -
Change in employer's proportion 7,738 (50,678)
Differences between employer's contributions and
proportionate share of contributions - (30,339)
Differences between expected and actual
experience 27,376 (18,334)
Changes of assumptions 139,689 -
Differences between projected and actual
investment earnings 249,704 -
Total $ 597,869 (99,351) $
$173,362 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, 2024. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
Year Ended
June 30
2024 75,077 $
2025 62,962
2026 34,388
2027 152,727
Thereafter -
42 35
CITY OF SAN JOAQUIN
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 10 – Pension Plan (Continued)
Actuarial Methods and Assumptions – The collective total pension liability for the June 30, 2022 measurement period was determined by an actuarial valuation as of June 30, 2021, with update procedures used to roll forward the total pension liability to June 30, 2022. The collective total pension liability was based on the following assumptions:
Valuation Date June 30, 2021
Measurement Date June 30, 2022
Actuarial Cost Method Entry-Age Normal Cost Method in
accordance with the requirements of
GASB Statement No. 68
Actuarial Assumptions:
Discount Rate 6.90%
Inflation 2.50%
Payroll Growth 2.50%
Salary Increases Varies by Entry Age and Service
Mortality Rate Table Derived using CalPERS' Membership
Date for all Funds
1 Post Retirement Benefit IncreaContract COLA up to 2.75% until Purchasing Power Protection
Allowance Floor on Purchasing Power
applies, 2.75% thereafter
1 The mortality table used was developed based on CalPERS-specific data. The table includes 15 years of mortality improvements using Society of Actuaries Scale 90% of scale MP 2016. For more details on this table, please refer to the December 2017 experience study report (based on CalPERS demographic data from 1997 to 2015) that can be found on the CalPERS website.
43 36
CITY OF SAN JOAQUIN
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 10 – Pension Plan (Continued)
All other actuarial assumptions used in the June 30, 2019 valuation was based on the results of an December 2017 experience study report (based on CalPERS demographic data from 1997 to 2015), including updates to salary increase, mortality and retirement rates. The Experience Study can be obtained at CalPERS’ website.
Change of assumptions – None.
Discount rate – The discount rate used to measure the total pension liability for PERF C was 7.15%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability. The long-term expected rate of return on pension plan investments was determined using a building-block method in which bestestimate ranges of expected future real rates of return (expected rate of returns, net of pension plan investment expense and inflation) are developed for each major asset class.
In determining the long-term expected rate of return, CalPERS took into account both short-term and longterm 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 equivalent to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses.
The long-term expected real rates of return by asset class can be found in CalPERS’ Comprehensive Annual Financial Report for the fiscal year ended June 30, 2022. 44 37
CITY OF SAN JOAQUIN
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 10 – Pension Plan (Continued)
The table below reflects long-term expected real rates of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation. The geometric rates of return are net of administrative expenses.
Asset Class1
New Strategic
Allocation
Real Return2
Years 1-10
Real
Return3
Years 11+
Global Equity 50% 4.80% 5.98%
Fixed Income 28% 1.00% 2.62%
Inflation Assets 0% 0.77% 1.81%
Private Equity 8% 6.30% 7.23%
Real Estate 13% 3.75% 4.93%
Infrastructure and Forestland 0% 0.00% 0.00%
Liquidity 1% 0.00% -0.92%
Total 100%
1 In the System’s CAFR, Fixed Income is included in Global Debt Securities; Liquidity is included in Short-term Investments; Inflation Assets are included in both Global Equity Securities and Global Debt Securities 2 An expected inflation of 2.0% used for this period
3 An expected inflation of 2.92% used for this period
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate – The following presents the City’s proportionate share of the net pension liability for each Plan, calculating using the discount rate of each Plan, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower (5.90%) or 1-percentage point higher (7.90%) than the current rate:
1% Decrease
(5.90%)
Current
Discount
Rate
(6.90%)
1% Increase
(7.90%)
Net Pension Liability 1,999,179 $ $ 1,363,207 $ 839,961 Pension Plan Fiduciary Net Position – Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.
Payable to the Pension Plan – At June 30, 2023, the City has no outstanding amount of contributions to the pension plan required for the year ended June 30, 2023. 45 38
CITY OF SAN JOAQUIN
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 11 – Concentrations
The Successor Agency owes the City $782,746 from cash pool overdrafts. Should the Agency be unable to repay the City debt in the future, this could create financial difficulties for the City. Management believes that the obligations of the former redevelopment agency due to the City are valid enforceable obligations payable by the successor agency trust under the requirements of the Bill.
Note 12 – Risk Management
The City participates with other public entities in a joint venture under a joint powers agreement which establishes the Central San Joaquin Valley Risk Management Authority (CSJVRMA). The relationship between the City and CSJVRMA is such that CSJVRMA is not a component unit of the City for financial reporting purposes.
The City is covered for the first $1,000,000 of each general liability claim through the CSJVRMA. The City has the right to receive dividends or the obligation to pay assessments based on a formula which, among other expenses, charges the City's account for liability losses under $50,000. The CSJVRMA purchases excess reinsurance from $1,000,000 to $15,000,000.
The CSJVRMA is a consortium of 55 cities in San Joaquin Valley, California. It was established under the provisions of California Government Code Section 6500, et. seq. The CSJVRMA is governed by a Board of Directors, which meets three to four times each year, consisting of one member appointed by each member city. The day-to-day business is handled by a management group employed by the CSJVRMA.
The financial statements of CSJVRMA can be obtained at 1831 K Street, Sacramento, CA 95814.
The latest audited financial information and the most current information available for CSJVRMA for fiscal year ended June 30, 2023 is as follows:
Total assets $ 153,984,502
Total liabilities 120,022,096
Net position $ 33,962,406
Total revenues $ 73,088,767
Total expenses 71,300,255
Increase/(decrease) in net position $ 1,788,512
Note 13 – Contingencies
Federal and State Government Programs - The City participates in several federal and state grant programs. These programs have been audited, as needed, in accordance with the provisions of the federal Single Audit Act of 1984 and applicable state requirements. No cost disallowances were proposed as a result of these audits. However, these programs are still subject to further examination by the grantors and the amount, if any, of expenditures, which may be disallowed by the granting agencies, cannot be determined at this time. The City expects such amounts, if any, to be immaterial. 46 39
CITY OF SAN JOAQUIN
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
Note 14 – Subsequent Events
The City evaluated subsequent events for recognition and disclosure through March 24, 2026, the date which these financial statements were available to be issued. Management concluded that no material subsequent events have occurred since June 30, 2023 that required recognition or disclosure in such financial statements.
Note 15 – Deficit Fund Balance
The following is a summary of deficit fund balances as of June 30, 2023:
Major Enteprise Fund
Disposal Fund $ (32,079)
Nonmajor Special Revenue Funds
Streets Fund $ (152,755)
Rural Energy Action Program Grant $ (20,517)
Local Early Action Planning Grant $ (26,075)
CDBG Gang Prevention Grant $ (127,941)
This deficit is expected to be relieved from future revenues or transfers from other funds.
Note 16 – Excess of Expenditures over Appropriations
The excess of expenditures over appropriations are as follows:
General Fund:
Current:
Parks and recreation $ 10,956
Capital outlay $ 6,069
Housing Assistance Fund:
Current:
Community Development $ 6,568
The excess of expenditures over appropriations are covered by excess revenues over appropriations and available fund balance in the corresponding funds.
47 REQUIRED SUPPLEMENTARY INFORMATION
48 40
CITY OF SAN JOAQUIN
BUDGETARY COMPARISON SCHEDULE
GENERAL FUND
YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Budgeted Amounts Actual Positive/
Original Final Amounts (Negative)
Revenue
Taxes 660,350 $ 660,350 $ 822,730 $ 162,380 $
Intergovernmental - 331,000 47 (330,953)
Licenses, permits and impact fees 99,400 99,400 36,076 (63,324) Fines and forfeitures 3,500 3,500 464 (3,036)
Interest and rents 52,070 52,070 25,038 (27,032)
Loan repayments 79,000 79,000 44,668 (34,332)
Other 40,834 40,834 43,201 2,367
Total revenue 1,266,154 935,154 972,224 (293,930)
Expenditures
Current
General government 480,608 480,608 397,706 82,902
Public safety 165,624 165,624 118,296 47,328
Public works 32,224 32,224 25,619 6,605
Parks and recreation 175,288 175,288 186,244 (10,956)
Community development 250,245 250,245 209,690 40,555
Capital outlay 10,000 10,000 16,069 (6,069)
Debt service
Principal - 155,000 135,000 20,000
Interest and other charges - 7,249 75 7,174
Total expenditures 1,276,238 1,113,989 1,095,798 180,440 Revenue over (under)expenditures (178,835) (10,084) (123,574) (113,490) Other Financing Sources/(Uses)
Transfers in/(out) 340,000 340,000 161,179 (178,821)
340,000 340,000 161,179 (178,821)
Net Change in Fund Balance $ 329,916 161,165 $ 37,605 $ (292,311) Fund Balance
Beginning of year 640,996
End of year $ 678,601
49 41
CITY OF SAN JOAQUIN
BUDGETARY COMPARISON SCHEDULE
HOUSING ASSISTANCE FUND
YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Budgeted Amounts Actual Positive/
Original Final Amounts (Negative)
Revenue
Intergovernmental - $ - $ 2,988 $ 2,988 $
Interest 3,106 3,106 2,983 (123)
Loan repayments - - 38,471 38,471
Total revenue 3,106 3,106 44,442 41,336
Expenditures
Current
Community development - - 6,568 (6,568)
Total expenditures - - 6,568 (6,568)
Net Change in Fund Balance $ 3,106 3,106 $ 37,874 $ 34,768 Fund Balance
Beginning of year 658,017
End of year $ 695,891
50 42
CITY OF SAN JOAQUIN
BUDGETARY COMPARISON SCHEDULE
MEASURE C FUND
YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Budgeted Amounts Actual Positive/
Original Final Amounts (Negative)
Revenue
Intergovernmental 214,361 $ 214,361 $ 218,696 $ 4,335 $ Interest and rent 2,000 2,000 6,384 4,384
Total revenue 216,361 216,361 225,080 8,719
Expenditures
Current
Public works 215,114 215,114 110,137 104,977
Total expenditures 215,114 215,114 110,137 104,977
Revenue over (under)expenditures 1,247 1,247 114,943 113,696 Other Financing Sources/(Uses)
Transfers in/(out) - - (5,028) (5,028)
Net Change in Fund Balance $ 1,247 1,247 $ 109,915 $ 108,668 Fund Balance
Beginning of year 1,173,130
End of year $ 1,283,045
51 43
CITY OF SAN JOAQUIN SCHEDULE OF THE CITY’S PROPORTIONATE SHARE OF NET PENSION LIABILITY LAST 10 YEARS* YEAR ENDED JUNE 30, 2023 Proportion of the
net pension liability
Proportionate share of
the net pension liability
Covered -
employee payroll
Proportionate share of the
net pension liability as a
percentage of
covered-employee
payroll
Plan's fiduciary net
position
Plan's fiduciary net position as
a percentage of the Total
Pension Liability
2015 0.01380% 341,032 $ 594,000 $ 57.41% 2,970,654 $ 89.70% 2016 0.02251% 617,597 $ 618,152 $ 99.91% 2,730,765 $ 81.56% 2017 0.02381% 827,211 $ 530,623 $ 155.89% 2,750,531 $ 76.88% 2018 0.02469% 973,316 $ 629,110 $ 154.71% 2,976,364 $ 75.36% 2019 0.02546% 959,351 $ 589,677 $ 162.69% 3,199,251 $ 76.93% 2020 0.02646% 1,059,753 $ 500,973 $ 211.54% 3,285,227 $ 76.93% 2021 0.02745% 1,157,914 $ 638,493 $ 181.35% 3,178,650 $ 73.30% 2022 0.03802% 721,897 $ 1,047,854 $ 68.89% 3,734,199 $ 83.80%2023 0.02913% 1,363,207 $ 1,513,849 $ 90.05% 3,302,145 $ 70.78% Miscellaneous
*Fiscal year 2014-15 was the first year of implementation, therefore only nine years are shown. Changes of Assumptions: None. 52 44
CITY OF SAN JOAQUIN SCHEDULE OF CONTRIBUTIONS LAST 10 YEARS* YEAR ENDED JUNE 30, 2023 Contractually
required
contribution
(actuarially
determined)
Contributions in relation
to the actuarially
determined contributions
Contributions
deficiency
(excess) Covered-employee payroll
Contributions as a
percentage of coveredemployee payroll
2015 58,000 $ (58,000) $ - $ 561,000 $ 10.28%2016 65,492 $ (65,492) $ - $ 618,152 $ 10.59%2017 74,548 $ (74,548) $ - $ 530,623 $ 14.05%2018 75,592 $ (75,592) $ - $ 629,110 $ 12.02%2019 84,001 $ (84,001) $ - $ 589,677 $ 14.25%2020 86,565 $ (86,565) $ - $ 500,973 $ 17.28%2021 111,348 $ (111,348) $ - $ 638,493 $ 17.44% 2022 128,759 $ (128,759) $ - $ 1,047,854 $ 12.29%
2023 149,963 $ (149,963) $ - $ 1,513,849 $ 9.91%
Miscellaneous
*Fiscal year 2014-15 was the first year of implementation, therefore only nine years are shown. 53 SUPPLEMENTAL ONLY INFORMATION
54 CITY OF SAN JOAQUIN
COMBINING BALANCE SHEETNON-MAJOR GOVERNMENTAL FUNDS (continued)JUNE 30, 2023 Rural Energy Local Early
for America Action Planning Low Moderate Landscape
COVID Program Grant Grant Housing Asset Maintenance
ASSETS
Cash and investments - $ - $ - $ 61,570 $ 134,586 $
Interest receivable - - 48 104
Due from other governments 20,517 28,421 26,075 - -
Total assets $ 20,517 28,421 $ 26,075 $ 61,618 $ 134,690 $
LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCE
Liabilities
Accounts payable and accrued expense - 17,493 - - 662
Due to other funds 3,024 28,421 26,075 - -
Total liabilities 20,517 28,421 26,075 - 662
Deferred Inflows of Resources
Unavailable revenues - 20,517 26,075 - -
Total deferred inflows of resources 20,517 - 26,075 - - Fund Balance
Restricted
Low-income housing activities - - - 61,618 -
Public safety programs - - - - -
Circulation improvements - - - - -
Capital improvement projects - - - - -
Landscape maintenance - - - - 134,028
Unassigned - (20,517) (26,075) - -
Total fund balance - (20,517) (26,075) 61,618 134,028
Total liabilities, deferred inflows of resources and fund balance $ 20,517 28,421 $ 26,075 $ 61,618 $ 134,690 $ Special Revenue Funds
46 55
CITY OF SAN JOAQUIN
COMBINING BALANCE SHEETNON-MAJOR GOVERNMENTAL FUNDS (continued)JUNE 30, 2023 Total
CDBG CDBG Low Income CDBG Non-major
Self-Sufficiency Gang Prevention Household Water Small Business Governmental Program Program Assistance Program Assistance Program Funds ASSETS
Cash and investments 3,781 $ - $ 2,538 $ 24,000 $ 871,778 $ Interest receivable - - - - 759Due from other governments 127,941 - - - 1,028,504 Total assets $ 127,941 3,781 $ 2,538 $ 24,000 $ 1,901,041 $
LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCE
Liabilities
Accounts payable and accrued expense - 22,553 - - 184,539 Due to other funds 105,388 - - - 220,172
Total liabilities 127,941 - - - 404,711
Deferred Inflows of Resources
Unavailable revenues 127,941 - - - 327,288
Total deferred inflows of resources - 127,941 - - 327,288 Fund Balance
Restricted
Low-income housing activities - - 2,538 - 64,156
Public safety programs - - - - 76,368Circulation improvements - - - - 1,139,072Capital improvement projects - - - - 54,925Landscape maintenance - - - 24,000 158,028Unassigned (127,941) 3,781 - - (323,507) Total fund balance 3,781 (127,941) 2,538 24,000 1,169,042 Total liabilities, deferred inflows of resources and fund balance 3,781 $ 127,941 $ 2,538 $ 24,000 $ 1,901,041 $ Special Revenue Funds
47 56
CITY OF SAN JOAQUIN
COMBINING STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCENON-MAJOR GOVERNMENTAL FUNDSYEAR ENDED JUNE 30, 2023 Public Gas Local Impact
Safety SB-1 Tax Transportation Streets Fees
Revenue
Taxes - $ - $ - $ - $ - $
Intergovernmental 186,159 82,552 96,713 77,594 63,227 - Interest 1,125 621 1,253 - 1,113 275
Total revenue 83,677 186,780 97,966 78,707 63,227 275
Expenditures
Current
Public safety 100,150 - - - - -
Public works - 201 115,893 127,263 221,010 -
Park and recreation - - - - - -
Community development - - - - - -
Total expenditures 201 100,150 115,893 127,263 221,010 -Revenue over (under) expenditures 86,630 83,476 (17,927) (48,556) (157,783) 275 Other financing sources/(uses)
Operating transfers in/(out) - net - (126,000) - - 5,028 - (126,000) - - - 5,028 -
Change in Fund Balance 83,476 (39,370) (17,927) (48,556) (152,755) 275 Fund Balance
Beginning of year 168,010 115,738 249,128 704,941 - 54,650 End of year 76,368 $ 251,486 $ 231,201 $ 656,385 $ (152,755) $ 54,925 $ Special Revenue Funds Capital Project Funds
48 57
CITY OF SAN JOAQUIN
COMBINING STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCENON-MAJOR GOVERNMENTAL FUNDS (continued)YEAR ENDED JUNE 30, 2023 Rural Energy Local Early
for America Action Planning Low Moderate Landscape
COVID Program Grant Grant Housing Asset Maintenance
Revenue
Taxes - $ $ - $ - $ - $ 29,282
Intergovernmental 41,173 - - 11,167 -
Interest - - - 283 469
Total revenue 41,173 - - 29,751 11,450
Expenditures
Current
Public safety - - - - - Public works - 19,215 13,075 1,618 8,193 Park and recreation 41,173 - - - - Community development - - - - - Total expenditures 19,215 41,173 13,075 1,618 8,193
Revenue over (under) expenditures - (19,215) (13,075) 9,832 21,558 Other financing sources/(uses)
Operating transfers in/(out) - net - - - - -
- - - - -
Change in Fund Balance - (19,215) (13,075) 9,832 21,558 Fund Balance
Beginning of year - (1,302) 51,786 (13,000) 112,470
End of year $ - $ (20,517) $ 61,618 (26,075) $ 134,028 $ Special Revenue Funds
49 58
CITY OF SAN JOAQUIN
COMBINING STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCENON-MAJOR GOVERNMENTAL FUNDS (continued)YEAR ENDED JUNE 30, 2023 Total
CDBG CDBG Low Income CDBG Non-major
Self-Sufficiency Gang Prevention Household Water Small Business Governmental Program Program Assistance Program Assistance Program Funds Revenue
Taxes - $ - $ - $ - $ 29,282 $
Intergovernmental 62,793 - 2,538 115,000 738,916
Interest - - - - 5,139
Total revenue - 62,793 2,538 115,000 773,337
Expenditures
Current
Public safety - 127,941 - - 228,091
Public works - - - - 506,468
Park and recreation 59,012 - - - 100,185
Community development - - - 91,000 91,000
Total expenditures 127,941 59,012 - 91,000 925,744
Revenue over (under) expenditures 3,781 (127,941) 2,538 24,000 (152,407) Other financing sources/(uses)
Operating transfers in/(out) - net - - - - (120,972)
- - - - (120,972)
Change in Fund Balance (127,941) 3,781 2,538 24,000 (273,379) Fund Balance
Beginning of year - - - - 1,442,421
End of year $ (127,941) 3,781 $ 2,538 $ 24,000 $ 1,169,042 $ Special Revenue Funds
50 59
CITY OF SAN JOAQUIN
COMBINING BALANCE SHEETNON-MAJOR GOVERNMENTAL FUNDSJUNE 30, 2023 Public Gas Local Impact
Safety SB-1 Tax Transportation Streets Fees
ASSETS
Cash and investments $ 142 $ 236,837 $ 227,312 $ - 126,124 $ 54,888 $ Interest receivable 67 183 172 - 148 37
Due from other governments 14,466 76,159 10,872 192,857 531,196 - Total assets $ 251,486 76,368 $ 238,356 $ 657,468 $ 192,857 $ 54,925 $
LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCE
Liabilities
Accounts payable and accrued expense - - 7,155 1,083 135,593 -Due to other funds - - - - 57,264 - Total liabilities - - 7,155 1,083 192,857 -
Deferred Inflows of Resources
Unavailable revenues - - - - 152,755 -
Total deferred inflows of resources - - - - 152,755 -
Fund Balance
Restricted
Low-income housing activities - - - - - -
Public safety programs 76,368 - - - - -
Circulation improvements - 251,486 231,201 656,385 - -
Capital improvement projects - - - - - 54,925
Landscape maintenance - - - - - -
Unassigned - - - - (152,755) -
Total fund balance 76,368 251,486 231,201 656,385 (152,755) 54,925 Total liabilities, deferred inflows of resources and fund balance 76,368 $ 251,486 $ 238,356 $ 657,468 $ 192,857 $ 54,925 $ Special Revenue Funds Capital Project Funds
45 60
OVERALL COMPLIANCE, INTERNAL CONTROLS
AND FEDERAL AWARDS SECTION
61 901 “N” STREET, SUITE 104 FIREBAUGH, CALIFORNIA 93622 PHONE 559.659.3045 FAX 559.659.0615 BRYANT L. JOLLEY
CERTIFIED PUBLIC ACCOUNTANTS Bryant L. Jolley C.P.A.
Ryan P. Jolley C.P.A.
Darryl L. Smith C.P.A.
Luis A. Perez C.P.A.
Lan T. Kimoto
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER
MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Honorable Mayor and City Council
City of San Joaquin, 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 businesstype activities, each major fund, and the aggregate remaining fund information of the City of San Joaquin, California, (the “City”) as of and for the year ended June 30, 2023, 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 24, 2026.
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 the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.
Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified.
However, as described in the accompanying schedule of findings and questioned costs, we identified certain deficiencies in internal control that we consider to be material weaknesses and significant deficiencies.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. We consider the deficiencies described in the accompanying schedule of findings and questioned costs as items 2023-001 and 2023-002 to be material weaknesses.
A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. We consider the deficiencies described in the accompanying schedule of findings and questioned costs as item 2023- 003 to be a significant deficiency.
62 52
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial 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 of San Joaquin’s Response to Findings
Government Auditing Standards requires the auditor to perform limited procedures on the City of San Joaquin’s response to the findings identified in our audit and described in the accompanying schedule of findings and questioned costs. City of San Joaquin’s response was not subjected to the other auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on the response.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the 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.
March 24, 2026
63 BRYANT L. JOLLEY
CERTIFIED PUBLIC ACCOUNTANTS Bryant L. Jolley C.P.A.
Ryan P. Jolley C.P.A.
Darryl L. Smith C.P.A.
Luis A. Perez C.P.A.
Lan T. Kimoto
John P. Burt
901 “N” STREET, SUITE 104 FIREBAUGH, CALIFORNIA 93622 PHONE 559.659.3045 FAX 559.659.0615 INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR
EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE
REQUIRED BY THE UNIFORM GUIDANCE
To the Honorable Mayor and City Council
City of San Joaquin, California
Report on Compliance for Each Major Federal Program
Opinion on Each Major Federal Program
We have audited City of San Joaquin (the “City”), California’s compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on each of the City’s major federal programs for the year ended June 30, 2023. The City’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs.
In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2023.
Basis for Opinion on Each Major Federal Program
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report.
We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal program.
Our audit does not provide a legal determination of the City’s compliance with the compliance requirements referred to above.
Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to the City’s federal programs.
64 54
Auditor’s Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about City’s compliance with the requirements of each major federal program as a whole.
In performing an audit in accordance with generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance, we:
Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the City’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances. Obtain an understanding of the City’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control over compliance. Accordingly, no such opinion is expressed.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit.
Other Matters
The results of our auditing procedures disclosed instances of noncompliance which are required to be reported in accordance with the Uniform Guidance and which are described in the accompanying schedule of findings and questioned costs as item 2023-004. Our opinion on each major federal program is not modified with respect to these matters.
Government Auditing Standards requires the auditor to perform limited procedures on City of Sanger’s response to the noncompliance findings identified in our compliance audit described in the accompanying schedule of findings and questioned costs. City of Sanger’s response was not subjected to the other auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response.
Report on Internal Control over Compliance
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a 65 55
deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified.
Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.
March 24, 2026
66 56
CITY OF SAN JOAQUIN
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2023
Assistance Agency or
Federal Grantor/Pass-through Listing Pass-through Federal Grantor/Program Title Number Number Expenditures
U.S. Department of Housing and Urban Development:
Passed through State Department of Housing and
Community Development
Community Development Block Grant/Brownfields Economic Development Initiative 14.246 18-CDBG-12917 373,388 $ Community Development Block Grant/State's Program 14.228 20-CDBG-CVI0026 62,793 Community Development Block Grant/State's Program 14.228 21-CDBG-NH-2001 127,941 Community Development Block Grant/State's Program 14.228 20-CDBG-12059 202,253 Total U.S. Department of Housing and Urban Development 766,375 U.S. Department of Transportation
Pass-through State of California Department of Transportation Highway Planning and Construction 20.205 ATPL 5245(017) 7,488 Highway Planning and Construction 20.205 RSTPCML-5240(019) 152,755 Highway Planning and Construction 20.205 CML-5245(019) 46,580 Highway Planning and Construction 20.205 CML-5245(018) 21,674 Total U.S. Department of Transportation 228,497
U.S Department of Protection Agency
Passed through State Water Resources Control Board
Drinking Water State Revolving Fund - Water Meter Installation 66.468 DWSRF 1010034 25,511 Total U.S Department of Protection Agency 25,511
U.S. Department of the Treasury
Passed thru the Department of Finance
Coronavirus Relief Fund 21.019 N/A 99,330
Coronavirus Relief Fund 21.019 N/A 91,000
Coronavirus Relief Fund 21.019 N/A 5,074
Total U.S. Department of Treasury 195,404
Total Federal Expenditures $ 1,215,787
67 57
CITY OF SAN JOAQUIN
NOTES SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2023
Note 1 – Significant Accounting Policies
The accompanying Schedule of Expenditures of Federal Awards (SEFA) presents the activity of all federal award programs of the City of San Joaquin, California (the City). Federal awards received directly from federal agencies as well as federal awards passed through other nonfederal agencies, primarily the State of California, are included in the SEFA. The City’s reporting entity is defined in Note 1 to the City’s basic financial statements.
Note 2 – Basis of Accounting
The accompanying SEFA is presented using the modified accrual basis of accounting for grants accounted for in the governmental fund types and the accrual basis of accounting for grants accounted for in the proprietary fund types, as described in Note 1 to the City’s basic financial statements. The information in the SEFA is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Therefore, some amounts presented in, or used in the preparation of, the SEFA may differ from amounts presented in the basic financial statements.
Note 3 – Relationship to the Financial Statements
Expenditures of federal awards are reported in the City’s basic financial statements as expenditures/expenses in the General Fund, nonmajor special revenue funds, nonmajor capital project funds, and the enterprise funds.
Note 4 – Indirect Cost Rate
The City did not elect to use the 10% de minimus cost rate as covered in 2 CFR §200.414. 68 58
CITY OF SAN JOAQUIN
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2023
A. Summary of Auditor’s Results
Financial Statements
Type of auditor’s report issued: Unmodified
Internal control over financial reporting:
Material weaknesses identified? Yes No
Significant deficiencies identified that are
not considered to be material weaknesses? Yes None reported Non-compliance material to financial
statements noted? Yes No
Federal Awards
Internal control over major programs:
Material weaknesses identified? Yes No
Significant deficiencies identified that are
not considered to be material weaknesses? Yes None reported Type of auditor’s report issued on compliance for
major programs: Unmodified
Any audit findings disclosed that are required to
be reported in accordance with 2 CFR
200.516(a)? Yes No
Identification of Major Programs
Assistance Listing Number Name of Federal Program or Cluster
14.228 Community Development Block Grant/State’s
Program
14.246 Community Development Block
Grant/Brownsfield Economic Development
Initiative
Dollar threshold used to distinguish between
Type A and Type B programs: $750,000
Auditee qualified as low-risk auditee? Yes No
69 59
CITY OF SAN JOAQUIN
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2023
B. Findings – Financial Statements Audit
Finding 2023-001: Financial Close (Material Weakness)
Criteria: An effective internal control system and timely financial reporting provides reasonable assurance for the safeguarding of assets, the reliability of financial information, and compliance with laws and regulations.
Condition: During the performance of the audit, processes utilized for year-end reconciliations and financial reporting of financial activity for the fiscal year were not effective, which contributed to the delayed accounting close of the City's trial balance and unpreparedness for the audit. The year-end audit for the June 30, 2023 fiscal year began in June 2025. The City's final financial statements were provided in January 2026. Specific financial statement areas that required corrections and adjustments throughout the process included:
Cash & investments - See material weakness 2023-002.
Grant reconciliation – See material weakness 2023-003.
Cause: The City did not have adequate controls and procedures in place for the year-end close process.
Effect: The financial statements as initially presented to the auditors contained material misstatements that required adjustments.
Recommendation: We recommend the City develop checklists or other guidance documents over the year-end closing process to ensure all closing entries are captured in the City's general ledger in a timely manner, and supporting schedules agree and reconcile to respective account balances prior to the trial balance being provided for the audit.
Management’s Response: See Corrective Action Plan.
Finding 2023-002: Cash & Investments (Material Weakness) Criteria: Certain deficiencies in the internal control system over financial reporting could adversely affect an entity's ability to record, process, summarize, and report financial data consistent with the assertions of management in the financial statements.
Condition: There was a failure to perform bank reconciliations accurately and timely for the June 30, 2023 fiscal year. Bank reconciliations for the fiscal year were not completed until January 2026.
Cause: The overall process for cash and investment reconciliations was not being completed properly.
Bank reconciliations were not being prepared or reviewed timely. Unfamiliarity with the bank reconciliation process led to inconsistencies in how transactions were being recorded. 70 60
CITY OF SAN JOAQUIN
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2023
B. Findings – Financial Statements Audit (continued)
Finding 2023-002: Cash & Investments (Material Weakness) (continued) Effect: Untimely preparation and review of bank reconciliations increases the risk that errors go undetected. Cash and investment balances as presented are not reflective of their true balances.
Recommendation: We recommend the City review their cash and investment reconciliation procedures to ensure timely and accurate completion. Cash and investment reconciliations should include tests of mechanical accuracy and tracing of items on the reconciliation to relevant source documents. Bank reconciliations for the current month should be completed in the subsequent month.
Management’s Response: See Corrective Action Plan.
Finding 2023-003: Grant Reconciliation (Significant Deficiency) Cause: Certain deficiencies in the internal control system over financial reporting could adversely affect an entity's ability to record, process, summarize, and report financial data consistent with the assertions of management in the financial statements.
Condition: In addition, the City is not timely submitting claims for reimbursement of eligible expenditures to the relevant granting agency resulting in unavailable revenues in the period of expenditure causing the City's general fund to up-front the cash payments. In some instances, receivables for reimbursement grants were not recorded.
Cause: The City did not have adequate controls and procedures in place for reconciling grants. It also appears there is not enough formalized communication between department heads who manage grants and the Finance Department who is responsible for reconciling all activity. Cash flow for these grant funds was not being monitored.
Effect: Grant funds have overdrawn cash balances causing payments to be made from the City's general fund.
Recommendation: We recommend the City ensure proper procedures are in place to reconcile grants.
With assistance from department heads/grant managers, summarized grant information and program information should be provided to the Finance Department such as:
Copies of grant agreements and budgets
Copies of material expenditures with proper approvals of coding and application Copies of reimbursement requests submitted
Monitoring of grant cash flow
71 61
CITY OF SAN JOAQUIN
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2023
B. Findings – Financial Statements Audit (continued)
Finding 2023-003: Grant Reconciliation (Significant Deficiency) (continued) The Finance Department should then be able to prepare a reconciliation of grant revenues, expenditures, unearned revenue, cash received, and receivables at year-end. Claims for reimbursement should be processed timely, in the same year the expenditures were incurred.
Management’s Response: See Corrective Action Plan.
C. Findings and Questioned Costs – Major Federal Award Programs Audit Finding 2023-004: Financial Reporting Timeliness (Compliance) Criteria: In accordance with CFR section 200.512 of the Uniform Guidance, the audit must be completed and the data collection form and reporting package must be submitted to the Federal Audit Clearinghouse within the earlier of 30 calendar days after receipt of the auditors report(s), or nine months after the end of the audit period.
Condition: The 2023 Single Audit reporting package and data collection form have not been submitted to the Federal Audit Clearinghouse by the deadline of March 31, 2024.
Cause: There were various accounting issues noted in findings 2023-001 through 2023-003 that caused delays in the completion of the fiscal year 2023 audit.
Effect: The filing of the Single Audit Reporting package and data collection form is past the due date.
Recommendation: As noted in finding 2023-001, we recommend the City strive to close the year-end with properly prepared reconciliations within 3-4 months after year-end in order to complete the annual financial audit timely.
Management’s Response: See Corrective Action Plan.
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CITY OF SAN JOAQUIN
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
YEAR ENDED JUNE 30, 2023
Summary Schedule of Prior Audit Findings
There were no prior year audit findings.
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with appropriate documentation maintained to support all balances and adjustments. 2023-003: Grant Reconciliation The City of San Joaquin will enhance grant reconciliation processes by performing regular reconciliations between the general ledger, grant reports, and supporting documentation. A grant tracking system will be maintained, and coordination between Finance, engineering, and other departments will be strengthened to ensure timely and accurate reporting. Finance Department/ City Engineers/ Department Heads / Fiscal Year 2025-2026 75 76
RESOLUTION NO. 2026-09
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN JOAQUIN DESIGNATING THE MARCH 31, 2026, HOLIDAY FOR CITY EMPLOYEES AS “FARMWORKERS DAY”
WHEREAS, the City Council believes firmly in supporting City employees; and WHEREAS, in appreciation of City employees’ hard work, the City provides a certain number of holidays for City employees; and
WHEREAS, City employees provide valuable services to the City of San Joaquin and its residents; and
WHEREAS, under San Joaquin Municipal Code Section 11.02 (A) (15) one of the holidays provided to City employees is “March 31, known as Cesar Chavez Day; and WHEREAS, the recent allegations of abuse by Cesar Chavez uncovered in The New York Times’ investigation are reprehensible, shocking, and inexcusable. These actions go against what we stand for in efforts to empower community.
WHEREAS, we are deeply saddened for the victims and their families who have been affected by the horrendous acts; and
WHEREAS, the victims dedicated their lives, made many sacrifices supporting farmworkers, and were silenced for decades; and
WHEREAS, we honor the brave women who have stepped forward and have refused to be silenced; and
WHEREAS, we applaud the NY Times investigators for shedding bright light on the dark history of abuse; and
WHEREAS, no one should condone the sexual abuse of girls and women caused by Cesar Chavez.
NOW,THEREFORE, the City Council of the City of San Joaquin resolves as follows:
1. The foregoing recitals are true and correct and are incorporated by reference.
2. The Council hereby resolves to name the City employees’ holiday scheduled for March 31, 2026, as Farmworkers Day.
3. The City Council directs that an ordinance amendment be prepared to formally amend the San Joaquin Municipal Code designation of holidays. 77 4. This resolution is effective upon adoption.
The foregoing resolution was adopted at a special meeting of the City Council of the City of San Joaquin March 26, 2026, and passed at said meeting by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
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Adam Flores-Cornejo, Mayor
ATTEST:
_______________________________
Alondra Bautista, City Clerk
78 RESOLUTION NO. 2026-10
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN JOAQUIN
APPROVING THE COMMITMENT AND USE OF FUNDS FROM THE WATER ENTERPRISE FUND TOWARDS THE DRINKING WATER WELL #4 PROJECT Whereas, the City collects monthly water fees from users that are held in the water enterprise fund; and
Whereas, these funds are intended to support the operation of the water distribution system; and
Whereas, the City is also applying to the 2025 State CDBG program for funding for the majority of this project.
Now, Therefore, the City Council of the City of San Joaquin resolves as follows:
1. The foregoing recitals are true and correct and incorporated by reference; and
2. The City of San Joaquin commits to contribute $35,000 from the Water Enterprise Fund toward the rehabilitation of the Drinking Water Well #4 Project to offset construction costs.
3. The City Manager is authorized to execute any documents to implement this resolution.
4. This resolution is effective upon adoption.
This resolution was passed and adopted at a special meeting of the City Council of the City of San Joaquin held on 3/26/2026 by the following vote:
AYES: Enter # of votes
NOES: Enter # of votes
ABSENT: Enter # of absences
ABSTAIN: Enter # of abstentions
Adam Flores-Cornejo, Mayor
City Council
STATE OF CALIFORNIA
City of San Joaquin
(Certification on following page)
79 I, Alondra Bautista, City Clerk of the City of San Joaquin, State of California, hereby certify the above and foregoing to be a full, true and correct copy of a resolution adopted by said City Council on this 26th day of March, 2026 and that said resolution has not been amended, modified, repealed, or rescinded since its date of adoption and is in full force and effect as of the date hereof.
______________________________________
By: Alondra Bautista, City Clerk
City of
San Joaquin
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