AVAILABLE FOR REVIEW 72 HOURS
PRIOR TO THE CITY COUNCIL MEETING
AT THE SANGER LIBRARY, CITY CLERK’S
OFFICE AND THE SANGER CITY HALL
LOBBY.
AGENDA
SANGER CITY COUNCIL REGULAR MEETING
THURSDAY, NOVEMBER 6, 2025
6:00 PM
COUNCIL CHAMBER
1700 7TH Street, Sanger, California 93657
Levine Act Disclosure. Pursuant to the Levine Act (Govt Code Section 84308), any party to a permit, license, contract, or other entitlement before the City Council is required to disclose on the record any contribution, including aggregated contributions, of more than $500 made by the party or the party’s agents within the preceding 12 months to any City official. Participants and agents are requested to make this disclosure as well.
The 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. Council Members are also required to make such disclosures and recuse themselves.
Conflicts of Interest. Council Members are required to disclose conflicts of interests and recuse themselves.
Prior to action by the Council on any item on this agenda, the public may comment on that item.
A. CALL TO ORDER
B. OPENING CEREMONIES
Invocation
Flag Salute
Roll Call
C. AGENDA APPROV AL, ADDITIONS AND/OR DELETIONS
D. C
EREMONIAL MATTERS
1. I
ntroduction of new Community Development Director -Joshua Goggins
2. Introduction of Youth Council
E. P
RESENTATIONS
-NONE
1 City Council Agenda
November 6, 2025
F. PUBLIC FORUM
(This portion of the meeting is reserved for members of the public who wish to address the Council on any matter not listed on the agenda and within the subject matter jurisdiction of the City Council. Each speaker is limited to three minutes. Speakers shall address all comments to the Mayor and the Council as a body and not to any particular Council Member or member of the staff. Speakers are asked, but not required, to state their name and address. The Council is prohibited by law from taking action on items not on the agenda.)
G. CONSENT CALENDAR
(Matters listed under the consent calendar are considered routine and will be enacted by one motion and one vote. There will be no separate discussion of these items. If discussion is desired, a member of the audience or a Council Member may request an item be removed from the Consent Calendar and it will be considered separately.)
1. SUBJECT: Minutes of Regular Council Meeting and Special Meeting held on October 16, 2025
RECOMMENDATION: That the City Council approve.
2. SUBJECT: Receipt of Update on Emergency Repairs at Wastewater Treatment Plant Pursuant to Resolution No. 2025-82 and Request to Continue Declaration of Emergency
RECOMMENDATION: That the City Council adopt Resolution 2025-86 continuing the Declaration of Emergency and receive the report from City Manager Regarding Emergency repairs at Wastewater Treatment Plant per Resolution No. 2025-82.
3. SUBJECT: Amend the FY 25- 26 Budget to Authorize Appropriation for Purchase of Self-Contained Breathing Apparatus Fill Station RECOMMENDATION: That the City Council adopt Resolution 2025-87 amending the FY 25- 26 budget to authorize an appropriation for $76,506 for the purchase of self-contained breathing apparatus (SCBAs) tank fill station and related equipment and find that it is a required and appropriate use of Measure R funds.
4. SUBJECT: Memorandum of Understanding between the City of Sanger and I.U.O.E. Stationary Local 39
RECOMMENDATION: That the City Council approve the Memorandum of Understanding (MOU) between the City of Sanger and I.U.O.E. Stationary Local 39 (Local 39) for the period of July 1, 2025, through June 30, 2026, authorize the City Manager to execute the MOU, and authorize staff to update the Master Salary Schedule.
5. SUBJECT: Surface Transportation Block Grant (STBG) Program Additional Funding Academy Avenue – 4th Street to California Avenue RECOMMENDATION: That the City Council adopt Resolution No. 2025-88, committing to the receipt, obligation, support and timely use of these funds in the appropriate fiscal years.
2 City Council Agenda
November 6, 2025
6. SUBJECT: Final Acceptance for Local Streets Improvement Project CIP 23-01 RECOMMENDATION: That the City Council, approve:
1. Accept the work for the Local Streets Improvement Project CIP 23- 01 in the amount of $1,058,628.59; and
2. Authorize recordation of the Notice of Completion with the Fresno County Recorder; and
3. Authorize payment of 5% retention in the amount of $52,931.43 to Terra West Construction, Inc. upon expiration of the 35-day lien period.
7. SUBJECT: Almond Avenue Reconstruction – Bethel Avenue to Greenwood Avenue Contract Award
RECOMMENDATION: That the City Council, approve:
1. Award the contract for the project to R.J. Berry Jr., Inc, P.O. Box 468, Selma, CA, 93662, in the amount of $822,412.00, as lowest responsive and responsible bidder; and
2. Approve a construction contingency for change orders in the amount of $82,500 (10%) for this project; and
3. Authorize the City Manager to sign contract documents on behalf of the City.
4. Find and determine that a Class 1 Categorical Exemption (Existing Facilities) set forth in the California Environmental Quality Act (CEQA) Guidelines, Section 15301, applies to this Project, as the project would consist of the rehabilitation, maintenance, and minor alterations to existing roadway facilities involving negligible or no expansion of use, and that and that none of the exceptions to the exemptions in CEQA Guidelines Section 15300.2 are applicable to this project
H. DEPARTMENT REPORT
1. SUBJECT: Fiscal Year 2023 Annual Audit Financial Report and Single Audit RECOMMENDATION: That the City Council receive and file the Annual Audit Financial Reports and Single Audit for Fiscal Year 2023 as prepared by CPA firm, Bryant L. Jolley, Certified Public Accountants.
I. CITY MANAGER/STAFF COMMUNICATION
J. REPORTS AND MATTERS INITIATED BY CITY COUNCIL MEMBERS (This portion of the meeting is reserved for the Mayor and Council M embers (i) to make brief reports on boards, committees, and other public agencies, and at public events, (ii) to initiate new matters and to request updates, and to initiate new agenda items. Under this section, the Council may take action only on any items specifically agendized and which meet other requirements for action.)
3 City Council Agenda
November 6, 2025
K. A
DJOURNMENT
I certify under the penalty of perjury, under the laws of the State of California that the foregoing agenda was posted in accordance with the applicable legal requirements. Dated thi s 31st day of October 2025.
L ina Martinez, City Clerk
ADA COMPLIANCE AND REASONABLE ACCOMMODATIONS POLICY. The Council has adopted a Reasonable Accommodation Policy which is available on the City website at www.ci.sanger.ca.us or upon request by emailing the City Clerk at [email protected]. The Policy provides a procedure for receiving and resolving requests for accommodation to participate in this meeting. If you need assistance in order to attend this Council meeting or require auxiliary aids or services, e.g., hearing aids or signing services to make a presentation to the Council, please email the City Clerk or call by phone at (559) 876 -6300 extension 1350 so such aids or services can be arranged. Accommodations should be requested as early as possible as additional time may be required in order to provide the requested accommodation.
TRANSLATION SERVICES. Translation services in Spanish will be provided upon request.
NOTICE OF A V AILABILITY OF AGENDA DOCUMENTS . Writings related to the agenda are available at Sanger City Hall, 1700 7 th Street, Sanger, CA 93657 and are posted online at www.ci.sanger.ca.us. Writings provided to a majority of the City Council within 72 hours of the meeting regarding any item on this agenda will be made available for public inspection at the City Clerk’s Office located at Sanger City Hall, 1700 7 th Street, Sanger, CA 93567 and will be posted online at www.ci.sanger.ca.us.
4 Minutes for Special Council Meeting
THURS
DAY, OCTOBER 16, 2025
8:00 PM-or AFTER REGULAR MEETING
COUNCIL CHAMBER
1700 7TH Street, Sanger, California 93657
A. CALL
TO ORDER
The
City Council called their Special Meeting to order at 7:56 pm.
B. ROLL C
ALL
Pres
ent: Mayor Frank Gonzalez, Mayor Pro Tem Daniel Martinez, Council Member Esmeralda Hurtado, Council Member Michael Montelongo
Abse
nt: Council Member Dolores Melendez
C. AGENDA APP
ROVAL
By Cons
ent -The Council by motion of Council Member Montelongo approved the agenda as posted. The motion was seconded by Mayor Pro Tem Daniel Martinez, and approved by the following vote:
AYES:
GONZALEZ, MARTINEZ, HURTADO, MONTELONGO
NOES: NONE
ABSTAIN: NONE
ABSENT: MELENDEZ
D. PUBL
IC FORUM
None.
E. CLO
SED SESSION
The C
ouncil adjourned to Closed Session at 8:00 pm.
1. Purs
uant to Government Code Section 54957.6
CONFERENCE WITH LABOR NEGOTIATORS
Agency designated representatives: Shelline Bennett, Lead Negotiator, Amanda Champion, HR Manager. Employee Organizations: Sanger General Employees Organization, Sanger Middle Management Organization, Sanger Police Officers Association, Sanger Firefighters Association, Stationary Engineers Local 39, Unrepresented/Confidential Employees and Executive Employees G-1
5 City Council Special Meeting Minutes
October 16, 2025
The
Council reconvened the Special Meeting at 8:18 pm.
F. CI
TY ATTORNEY REPORT FROM CLOSED SESSION
No r
eportable Action
G. ADJOUR
NMENT
Be
ing no further business, the Council adjourned their Special Meeting at 8:19 pm.
ATTES
T:
L ina Martinez, City Clerk
6 Minutes for Regular Council Meeting
TH
URSDAY, OCTOBER 16, 2025
6:00 PM
COUNCIL CHAMBER
1700 7TH Street, Sanger, California 93657
A. CALL TO ORDER
Th
e City Council called their meeting to order at 6:02 pm.
B. OPENING CEREMONIES
Th
e invocation was offered by Garrett Martin
Th
e flag salute was led by Mayor Frank Gonzalez.
Ro
ll Call:
Pr
esent: Mayor Frank Gonzalez, Mayor Pro Tem Daniel Martinez, Council Member Esmeralda Hurtado, Council Member Michael Montelongo
Abs
ent: Council Member Dolores Melendez
C. AGENDA APPROV AL, ADDITIONS AND/OR DELETIONS
The
Council by motion of Council Member Montelongo approved the agenda as posted. The motion was seconded by Mayor Pro Tem Martinez and approved by the following vote:
AYE
S: GONZALEZ, MARTINEZ, HURTADO, MONTELONGO
NOES: NONE
ABSTAIN: NONE
ABSENT: MELENDEZ
D. PUB
LIC FORUM
• Four members of the public spoke
E. CONS
ENT CALENDAR
Counc
il Member Hurtado pulled item E-8 and E-9
7 City Council Meeting Minutes
October 16, 2025
By motion of Mayor Pro Tem Martinez, the Council approved all Consent Calendar Items with the exception of items E-8 and E-9. The motion was seconded by Council Member Montelongo and passed by the following vote:
AYE
S: GONZALEZ, MARTINEZ, HURTADO, MONTELONGO
NOES: NONE
ABSTAIN: NONE
ABSENT: MELENDEZ
1. SUBJECT: APPROVED-Minutes of Regular Council Meeting and Special Meeting held on October 2, 2025
2. SU
BJECT: APPROVED-Warrants including Check Nos. 95465 through 95649 for the month of September 2025.
3. SU
BJECT: APPROVED-Payroll for payroll for the month of September , including Direct Deposit Nos. 67734 through 67977; Payroll check Nos. 60594 through 60632; and Benefit Check Nos. 2146 through 2153.
4. SU
BJECT: APPROVED-Fire Department Monthly Report-September 2025
5. SU
BJECT: APPROVED-Police Department Monthly Report-September 2025
6. SU
BJECT: APPROVED-Receipt of U pdate on Emergency Repairs at Wastewater Treatment Plant Pursuant to Resolution No. 2025-79 and Request to Continue Declaration of Emergency
7. SU
BJECT: APPROVED-Replacement of Granular Activated Carbon at Well 7A Item E-8
8. SUBJECT: APPROVED-a Purchase Agreement (Purchase Order) with Flock Safety for the Purchase of a Fixed Location Automated License Plate Recognition (ALPR) System
Publ
ic Comment
• Three members of the public spoke
By m
otion of Council Member Montelongo, the Council approved consent item E-8. The motion was seconded by Mayor Pro Tem Martinez and passed by the following vote:
AYE
S: GONZALEZ, MARTINEZ, MONTELONGO
NOES: HURTADO
ABSTAIN: NONE
ABSENT: MELENDEZ
8 City Council Meeting Minutes
October 16, 2025
Item E-9
9. SUBJECT: APPROVED- Equipment/Software Lease-Purchase Agreement with Axon Taser for the lease -purchase of a Less Lethal Weapons and Body Camera System.
Publ
ic Comment
• Four members of the public spoke
By m
otion of Mayor Pro Tem Martinez, the Council approved consent item E-9. The motion was seconded by Council Member Montelongo and passed by the following vote:
AYE
S: GONZALEZ, MARTINEZ, HURTADO, MONTELONGO
NOES: NONE
ABSTAIN: NONE
ABSENT: MELENDEZ
F. DEP
ARTMENT REPORT
1. SUB
JECT: APPROVED- Fresno Council of Governments (COG) 2025 Call for Projects - Measure C Safe Routes to School (SRTS) Program Public Comment
• Two members of the public spoke
By m
otion of Council Member Montelongo, the Council approved item F-1, SRTS Program application. The motion was seconded by Mayor Pro Tem Martinez and passed by the following vote:
AYE
S: GONZALEZ, MARTINEZ, HURTADO, MONTELONGO
NOES: NONE
ABSTAIN: NONE
ABSENT: MELENDEZ
G. PUB
LIC HEARING
1. SUBJECT: APPROVED- C ommunity Development Block Grant (CDBG) Program 2026/2027 Fiscal Year Allocation
Public Comment
• None
9 City Council Meeting Minutes
October 16, 2025
By motion of Council Member Hurtado, the Council approved item G-1, CDBG Program for FY 2026/2027. The motion was seconded by Council Member Montelongo and passed by the following vote:
AYE
S: GONZALEZ, MARTINEZ, HURTADO, MONTELONGO
NOES: NONE
ABSTAIN: NONE
ABSENT: MELENDEZ
2. SU
BJECT: ADOPTED-Adoption of Initial Study/Mitigated Negative Declaration (IS/MND), approval of General Plan Amendment No. 2024-01 (GPA 2024-01) and Zoning Ordinance Map Amendment No. 2024-05 (ZOA 2024-05), and initiation of Annexation No. 2024-01 (ANX 2024-01) for Tract 6493.
Public Comments:
• Three members of the public spoke
By m
otion of Council Member Montelongo, the Council adopted item G-2. The motion was seconded by Mayor Pro Tem Martinez and passed by the following vote:
AYE
S: GONZALEZ, MARTINEZ, HURTADO, MONTELONGO
NOES: NONE
ABSTAIN: NONE
ABSENT: MELENDEZ
3. SU
BJECT: APPROVED-Consideration of Ordinance Repealing Article VII and Adding Article VIII of Chapter 38 of the Sanger City Code Relating to Unauthorized Camping, Sleeping, and Storage of Personal Property on Public Property.
Public Comments:
• No
ne
By motion of Council Member Montelongo, the Council approved item G-3, Ordinance 2025-08.
The motion was seconded by Mayor Pro Tem Martinez and passed by the following vote:
AYE
S: GONZALEZ, MARTINEZ, HURTADO, MONTELONGO
NOES: NONE
ABSTAIN: NONE
ABSENT: MELENDEZ
10 City Council Meeting Minutes
October 16, 2025
H. CITY MANAGER/STAFF COMMUNICATION
• Updates given by City Manager, Nathan Olson
I. REPORTS AND MATTERS INITIATED BY CITY COUNCIL MEMBERS • U
pdates given by Mayor Pro Tem Martinez, Council Member Hurtado, Council Member Montelongo, and Mayor Gonzalez
J. ADJOURNMENT
B
eing no further business, the Council adjourned their meeting at 7:55 pm.
Attest:
Lina Martinez, City Clerk
11 Prepared by: Raymond Martin____ Approved by: _____________________ REVIEW: City Manager: ______ Finance: _______ City Attorney: ______ TYPE OF ITEM: COUNCIL ACTION: APPROVED DENIED NO ACTION _X__ Consent
____ Info Item
_X__ Action Item
____ Department Report
____ Redevelopment Agency
____ Public Hearing
____ Matter Initiated by a Council Member
____ Other
____ Continued to: __________
For the Meeting of: November 06, 2025
A genda Item No.: G-2
CITY OF SANGER
REPORT TO THE CITY COUNCIL
To: Mayor and City Council Members
From: Nathan Olson, City Manager
Subject: Receipt of Update on Emergency Repairs at Wastewater Treatment Plant Pursuant to Resolution No. 2025-82 and Request to Continue Declaration of Emergency
Attachments:
1. Resolution No. 2025-82 and Resolution No. 2025-86
CONFLICT OF INTEREST:
N
one known.
RE
COMMENDATION:
S
taff recommend that the City Council r eceive Report from City Manager Regarding Emergency Repairs at Wastewater Treatment Plant per Resolution No. 2025-82 and adopt Resolution 2025-86 Continuing the Declaration of Emergency.
E
XECUTIVE SUMMARY:
T
he purpose of this staff report is to provide an updated status on the emergency repairs initiated under the Determination of Emergency to address the Sanger Domestic/Industrial Wastewater Treatment Facility (WWTF). This report summarizes the progress made, challenges encountered, and financial implications of the ongoing repair efforts. Based on the status and projected needs, it is recommended to continue with emergency actions under Resolution No. 2025-82 to ensure timely and effective completion of the repairs.
Reports on actions taken and status of the emergency will continue to be made at each regu lar meeting of the City Council.
12 B
ACKGROUND:
• July 18, 2024: City Manager Nathan Olson (as the Director of Emergency Services) declared an emergency at the Sanger Domestic/Industrial Wastewater Treatment Facility, requiring emergency repairs. Immediate emergency repairs were identified for the WWTF Digester, the Industrial/Domestic Headworks, and WWTF Bypass Pump. Reference Resolution 2024-48.
• A
ugust 2024: Repairs commenced, starting with the cleaning of the Digester, followed by work on the Industrial Headworks. The Digester was cleaned out, and its valves were replaced. • November 21, 2024: City Council reviewed and ratified agreements with Rockeez and VIS for work on the Industrial Headworks and cross-contamination emergency repairs. A new bypass pump was installed during this time to correct cross-contamination issues after the thickening clarifier. • December 2024: Repairs on the Industrial Headworks were completed, including epoxy coating, installation of a new line, concrete pit repairs, and valve replacements. Work immediately began on the Domestic Headworks.
• Early 2025: Domestic Headworks received attention due to debris buildup caused by a malfunctioning Bar Screen. The Bar Screen was under warranty; parts were ordered and fixed. • January 16, 2025 : City Council renewed the proclamation of emergency to address additional contracts required for completing emergency repairs. This renewal emphasized the necessity for continued immediate repairs without formal competitive requirements. Reference Resolution 2025-03. • March 20, 2025: City Council reviewed and ratified the agreement with Rockeez for Domestic Headworks repairs. Work began on the Primary Effluent Pump Chambers related to the clarifiers. • April 17, 2025: City Council renewed the proclamation of emergency to address additional contracts required for completing emergency repairs. This renewal emphasized the necessity for continued immediate repairs without formal competitive requirements. Reference Resolution 2025-28. • A
pril 17, 2025: Work on the Primary Effluent Pump Chambers was completed in early April. City Council reviewed and ratified the agreement with Rockeez for the Primary Effluent Pump Chambers. Reference Resolution 2025-29.
• May 15, 2025: City Council renewed the proclamation of emergency to address additional contracts required for completing emergency repairs. This renewal emphasized the necessity for continued immediate repairs without formal competitive requirements. Reference Resolution 2025-
35. • M
ay 2025: Clarifiers are being prepped for their extensive rehab and epoxy coatings. Distribution box #7 was rehabbed and epoxied.
• Ju
ne 2025: VIS spearheaded a free testing and demonstration of new sealant technology on the decayed lines of the Wastewater Treatment Facility to promising results. A contract with Telstar for Scada repairs and upgrades is in review.
• June 27, 2025: City Council renewed the proclamation of emergency to address additional contracts required for completing emergency repairs and approved a budget amendment to the 2024/25 fiscal year appropriating $800,000 in funds for the Wastewater Treatment Facility emergency repairs . The renewal emphasized the n
ecessity for continued immediate repairs without formal competitive requirements. Reference Resolution 2025-43.
• July 17, 2025: City Council renewed the proclamation of emergency to address additional contracts required for completing emergency repairs. The renewal emphasized the necessity for continued immediate repairs without formal competitive requirements. Reference Resolution 2025-
55. • Ju
ly/August 2025: Repairs are underway on Clarifier #2, which has also received extensive coating with Mainstay for enhanced durability. Preparations have begun for the Digester rehabilitation project, a comprehensive effort expected to span over 30 days. The scope includes mechanical repairs, replacement of 13 various pipes and valves, and application of Mainstay coating to the dome structure. Staff have been meeting with Telstar and are preparing to upgrade the SCADA system. • August 7, 2025: City Council approved the contract with Diamond Weld to construct a new Sludge Tank.
This addition is a key component of the broader Digester rehabilitation initiative. • August 21, 2025 : City Council renewed the proclamation of emergency to address additional contracts required for completing emergency repairs. The renewal emphasized the necessity for continued immediate repairs without formal competitive requirements. Reference Resolution 2025-70. • August 22, 2025: VIS has initiated cleaning operations on the digester in preparation for the upcoming rehabilitation project. Rockeez has placed orders for the necessary materials, and epoxy application to the digester dome is expected to last approximately five weeks, marking a key phase in completing the digester rehabilitation effort.
• September 4, 2025: City Council renewed the proclamation of emergency. The renewal emphasized the necessity for continued immediate repairs without formal competitive requirements. Reference Resolution 2025-72.
• September 18, 2025 : Diamond Weld Industries met with the City and went over scope to demolition the existing sludge tank and fabricate a new one on site. Work is scheduled to begin September 29,2025 and will last approximately 3 weeks. VIS finalized their cleaning operations of the Digester. Rockeez began the process of repairing and replacing piping, valves and gauges on the Digester as well as mobilizing for the Digester Dome rehab project. Clarifier #2 warranty work commenced and is scheduled for completion September 21 & 22, 2025. City Council renewed the proclamation of emergency. The renewal emphasized the necessity for continued immediate repairs without formal competitive requirements. Reference Resolution 2025-75.
• September 19, 2025: Clarifier #2 was reinforced with a chicken wire concrete bottom and then Mainstay coating was applied. The Mainstay has cured, and the mechanicals components and arms will be reinstalled 9/23. Ongoing repair and replacing of piping, valves and gauges on the Digester. Several parts on order and completion date depended on the arrival of said parts.
• September 30, 2025: Clarifier #2 is back in service. The sludge tank is demolished and materials are being brought for the onsite construction of the new tank to begin on 10/2. • October 2, 2025: City Council renewed the proclamation of emergency. The renewal emphasized the necessity for continued immediate repairs without formal competitive requirements. Reference Resolution 2025-79.
• October 13, 2025: Clarifier 2 was previously taken out of service for warranty repairs and is now back in service. Sludge Tank is complete and undergoing testing. Thickener Clarifier and Digester Dome rehabilitation are still on schedule for November 2025. • October 16, 2025: City Council renewed the proclamation of emergency. The renewal emphasized the necessity for continued immediate repairs without formal competitive requirements. Reference Resolution 2025-82.
October 20, 2025: Contractor commenced scaffolding set up for Digester Dome Rehab and the Draining of Thickener Clarifier commenced, with sludge temporarily routed to the sludge drying beds. 14 Note: Due to the age and condition of existing infrastructure at the Wastewater Treatment Facility, additional deficiencies may be identified as work progresses. As such, all dates and milestones are subject to revision in response to emerging operational needs, safety considerations, or unforeseen complications.
RE
ASON FOR RECOMMENDATION:
T
hese emergency repairs are critical to ensure the protection of health, safety, and welfare of City residents and to protect the Wastewater Treatment Facilities. The City’s Domestic and Industrial Wastewater Treatment Plant are still undergoing critical maintenance and repair. Remaining tasks include cleaning, inspecting, repairing, and applying new epoxy to anaerobic digester, clarifiers and the thickener, inspecting, repairing, and replacing the decayed lines leading from Headworks as well as refurbishing. Additionally, as repair and maintenance efforts progress, previously unanticipated deficiencies and infrastructure issues have continued to emerge, necessitating immediate attention to prevent further system degradation and ensure uninterrupted plant operations.
F
ISCAL IMPACT:
T
he exact fiscal impact is not fully known at this time as the work is being performed on a Time and Material basis due to the time sensitivity, but Staff will provide an updated budget for the project at further upcoming Council meetings.
A
ny additional costs for more repairs and materials will be brought back to City Council and addressed appropriately. The costs will be funded from Sewer Enterprise funds.
AL
TERNATIVES:
No
recommended alternatives. Until all repairs and maintenance are done, the Wastewater Treatment Plant remains non-compliant.
ACT
IONS FOLLOWING APPROVAL:
Per the Resolution, Staff will provide Council updates and seek ratification of any contracts at those meetings. 15 ATTACHMENT 1
16 RESOLUTION NO. 2025.82
A RESOLUTION OF T'Hlj Cl'l'Y COUNCTL Ol"l'Hll CI'I'Y Or'' SANGUR CONTINUING
THE DECLARATION PROCLAIMING THE EXISTENCE OF A LOCAL EMERGENCY
REGARDING THE SANGER DOMESTIC WASTEWATER TREATMENT FACILITY
AND THE INDUSTRIAL WASTEWATER TREATMENT FACILITY
WHEREAS, the City of Sanger operates the Sanger Domestic Wastewater Treatment Facility and the Industrial Wastewater Treatment Facility (hereafter "Domestic and Industrial Wastewater Facilities" ; and
WHEREAS, the City Manager to serve as the Director of Emergency Services issued a proclamation of local emergency for emergency repairs, which included (but is not limited to) the following: Digester repairs as needed after inspection; repairs as needed to the domestic headworks including epoxy coating to headwork; draining and inspection of all clarifiers; as well as repairing mechanical components and epoxy coating to clarifiers, and inspecting, repairing, and replacing the decayed lines leading from Headworks as well as refurbishing.; and WHEREAS, the City Council approved and renewed the Director of Emergency Services' determination on October 2,2025, pursuant to Resolution No. 2025-79; and WHEREAS, the City Council has regularly received reports regarding the emergency and reviewed the need for continuing the local emergency and intended for the same; and WHEREAS, the City Manager requests that the City Council continue the declaration of a state of local emergency for the City as impacts regarding emergency repairs to the wastewater treatment facility continue to be evaluated, repaired, and or mitigated; and WHEREAS, the existing SCADA system needs upgrading, and the status of the needed repairs include cleaning, inspecting, repairing, and applying new epoxy to anaerobic digester, clarifiers and the thickener, inspecting, repairing, and replacing the decayed lines leading from Headworks as well as refurbishing; and
WHEREAS, there is a need to continue the emergency for purposes of procurement to ensure the City is able to procure the necessary equipment, services, and supplies for those pulposes, without giving notice for bids to let contracts.
WHEREAS, the City Council desires to continue the duration of the declaration of emergency as there is a need for the same as set forth above.
NOW, THEREFORE the City Council resolves as follows:
Section 1. The recitals herein are incorporated herein by reference.
Section 2. The City Council has reviewed the need for continuing the local emergency and finds that the state of emergency conditions related to the Domestic and Industrial Wastewater 17 Facilities are ongoing and are recognized as an imminent threat to our citizens. In accordance with Public Contracts Code Section22050 and Sanger City Code Section 2-206 (h), the public interest and necessity demand the immediate expenditure of public money to sat'eguard litb, health, or property. As such, the City Council extends and continues the declaration of a local emergency regarding the Domestic Wastewater Treatment Facility and the Industrial Wastewater Treatment Facility.
Section 3. The emergency will not permit a delay resulting from a competitive solicitation for bids, and that the action is necessary to respond to the emergency.
Section 4. Per Public Contract Code Section 22050 (c ) (1) the City Council shall review the emergency action at its next regularly scheduled meeting and at every regularly scheduled meeting thereafter until the action is terminated.
Section 5. This Resolution shall become effective upon adoption.
The foregoing Resolution was considered by the City Council for the City of Sanger at a regular meeting of said Council held on the 16th day of October 2025, and approved by the following vote:
AYES:
NOES:
ABSTAIN
ABSENT:
GONZALEZ, MARTINEZ, HURTADO, MONTELONGO
NONE
NONE
MELENDEZ
ATTEST:
Lina Martinez,City
18 RESOLUTION NO. 2025-86
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANGER CONTINUING
THE DECLARATION PROCLAIMING THE EXISTENCE OF A LOCAL EMERGENCY
REGARDING THE SANGER DOMESTIC WASTEWATER TREATMENT FACILITY
AND THE INDUSTRIAL WASTEWATER TREATMENT FACILITY
WHEREAS, the City of Sanger operates the Sanger Domestic Wastewater Treatment Facility and the Industrial Wastewater Treatment Facility (hereafter “Domestic and Industrial Wastewater Facilities”; and
WHEREAS, the City Manager to serve as the Director of Emergency Services issued a proclamation of local emergency for emergency repairs, which included (but is not limited to) the following: Digester repairs as needed after inspection; repairs as needed to the domestic headworks including epoxy coating to headwork; draining and inspection of all clarifiers; as well as repairing mechanical components and epoxy coating to clarifiers, and inspecting, repairing, and replacing the decayed lines leading from Headworks as well as refurbishing.; and
WHEREAS, the City Council approved and renewed the Director of Emergency Services’ determination on October 16, 2025, pursuant to Resolution No. 2025-82; and
WHEREAS, the City Council has regularly received reports regarding the emergency and reviewed the need for continuing the local emergency and intended for the same; and
WHEREAS, the City Manager requests that the City Council continue the declaration of a state of local emergency for the City as impacts regarding emergency repairs to the wastewater treatment facility continue to be evaluated, repaired, and or mitigated; and
WHEREAS, the existing SCADA system needs upgrading, and the status of the needed repairs include cleaning, inspecting, repairing, and applying new epoxy to anaerobic digester, clarifiers and the thickener, inspecting, repairing, and replacing the decayed lines leading from Headworks as well as refurbishing; and
WHEREAS, there is a need to continue the emergency for purposes of procurement to ensure the City is able to procure the necessary equipment, services, and supplies for those purposes, without giving notice for bids to let contracts.
WHEREAS, the City Council desires to continue the duration of the declaration of emergency as there is a need for the same as set forth above.
NOW, THEREFORE the City Council resolves as follows:
Section 1. The recitals herein are incorporated herein by reference.
Section 2. The City Council has reviewed the need for continuing the local emergency and finds that the state of emergency conditions related to the Domestic and Industrial Wastewater 19 Facilities are ongoing and are recognized as an imminent threat to our citizens. In accordance with Public Contracts Code Section 22050 and Sanger City Code Section 2-206 (h), the public interest and necessity demand the immediate expenditure of public money to safeguard life, health, or property. As such, the City Council extends and continues the declaration of a local emergency regarding the Domestic Wastewater Treatment Facility and the Industrial Wastewater Treatment Facility.
S
ection 3. T he emergency will not permit a delay resulting from a competitive solicitation for bids, and that the action is necessary to respond to the emergency.
S
ection 4. Per Public Contract Code Section 22050 (c ) (1) the City Council shall review the emergency action at its next regularly scheduled meeting and at every regularly scheduled meeting thereafter until the action is terminated.
S
ection 5. This Resolution shall become effective upon adoption.
T
he foregoing Resolution was considered by the City Council for the City of Sanger at a regular meeting of said Council held on the 6 th day of November 2025, and approved by the following vote:
AYE
S:
NOES:
ABSTAIN:
ABSENT:
A
TTEST:
Lina Martinez, City Clerk
20 Prepared by: _Greg Tarascou _ Approved by: _______________________ 01484.0001 2060845.1
REVIEW: City Manager: ______ Finance: _______ City Attorney: ______ TYPE OF ITEM: COUNCIL ACTION: APPROVED DENIED NO ACTION ____ Consent
____ Info Item
_X__ Action Item
_X_ Department Report
____ Redevelopment Agency
____ Public Hearing
____ Matter Initiated by a Council Member
____ Other
____ Continued to: __________
To
: Chairperson and Committee Members
From: Greg Tarascou, Fire Chief
Subject: Amend the FY 25 -26 Budget to Authorize Appropriation for Purchase of Self-Contained Breathing Apparatus Fill Station
Attachments:
1. Invoice from Bauer Compressors
2. Resolution 2025-87
CONFLICT OF INTEREST:
None known.
RECOMMENDATION:
Adopt
a Resolution 2025-87 amending the FY 25-26 budget to authorize an appropriation for $76,506 for the purchase of self-contained breathing apparatus (SCBAs) ta nk fill station and related equipment, and find that it is a required and appropriate use of Measure R funds.
EXECUTIVE SUMMARY:
The City Council previously approved the purchase of the SCBAs; however, due to changes in fiscal years the City Council is requested to amend the FY 25-26 budget to authorize an appropriation to allow the purchase using Measure R funds. The fill station used to refill breathing air for the Fire Department’s S
CBA tanks has become obsolete having been in service for more than 25 years and was decommissioned during the Fire Station Remodel Project. It was determined that due to the age of the m
achine, servi cing and parts for this equipment were no longer provided or available nor was the m
achine compliant with current standards for purified, respirable air.
For the Meeting of: November 6, 2025
A genda Item No.: G-3
CITY OF SANGER
REPORT TO THE CITY COUNCIL
21 \\nas1\shared\Forms & Templates
01484.0001 2060845.1
T
his item was heard by the Citizen’s Oversight Committee during the February 4, 2025 meeting and was voted unanimous that this purchase was an appropriate use of Measure “R” funds which at the time had a line-item budget already in place for the purchase. The City Council subsequently approved the purchase at its meeting on March 6, 2025. Because of the delay in delivering the equipment, the funds available for the purchase were moved back into the fund balance and were not appropriated for the FY 25-26 budget. This action draws those funds from the fund balance so the purchase can be completed.
B
ACKGROUND:
D
uring the February 7, 2023, Citizen’s Oversight Committee meeting, the Committee affirmed that the purchase of self-contained breathing apparatuses was an appropriate use of Measure “S” funds. These units were purchased and have been in use since then. At that time, to refill these tanks after use the Fire Department utilized a tank fill station, or generally speaking an air compressor, to refill the breathing air in the tanks used by Firefighters. However, the fill station used to fill these tanks has become obsolete, having been in service for more than 25 years. It was determined that the old machine was no longer serviceable, and parts were no longer available. In addition, the old machine did not conform to current applicable standards for respirable air, including CGA Pamphlet G-7, Compressed Air for Human Respiration and the requirements of ANSI/CGA G -7.1, Commodity Specification for Air, Grade E. The old machine was decommissioned last year and since we have partnered with Fresno County Fire Protection District to refill our SCBA tanks.
A S
elf-Contained Breathing Apparatus (SCBA) is the backpack -style air tank/regulator system that includes a facepiece that firefighters wear during fires or any incident with potentially dangerous atmospheres. SCBAs protect firefighters and their airways from smoke, superheated gases and hazardous airborne substances. The air bottles of the system, when used, normally supply approximately 45 minutes of air to the firefighter. At a typical house fire, firefighters will often use two bottles. The SCBA system is an essential piece of equipment for firefighters to perform their duties.
T
he SCBA fill station provided by Bauer is available at a reduced cost through a Collaborative Purchasing Program with National Purchasing Partners (NPPgov) . This program is a nationwide, government procurement service of which the City of Sanger is a participating member. All contracts available to participating members of NPPgov have been awarded through a public competitive procurement process compliant with California statutes. This collaborative purchasing program meets the criteria for competitively awarded purchasing of supplies and equipment, and Sanger Municipal Code under Article V, Division 2, Section 2-214(g) authorize the City Council to waive the formal bid/proposal procedure in the instance and approve this requested purchase. Based on the Fire Department’s recommendation, compatibility with other local fire agencies and the option for discount pricing through collaborative purchasing, the Fire Department recommends the purchase of Bauer brand SCBA fill station through NPPgov. The locally approved vendor that contractually provides this equipment for Bauer Compressors out of Livermore, CA.
RE
ASON FOR RECOMMENDATION:
T
he Department’s SCBA fill station is no longer serviceable by the manufacturer and has reached its end of life as outlined by current standards.
F
ISCAL IMPACT:
S
ufficient funds are included in the Measure “R” fund balance.
Attachment: Resolution
22 RESOLUTION NO. 2025-87
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANGER
AMENDING THE FY 2025 –2026 BUDGET TO AUTHORIZE AN
APPROPRIATION OF $76,505 FOR THE PURCHASE OF A SELF -
CONTAINED BREATHING APPARATUS (SCBA) FILL STATION AND
RELATED EQUIPMENT USING MEASURE “R” FUNDS
WHERAS, the City of Sanger Annual budget requires amendments to adjust the estimated revenues and appropriations to reflect the City’s financial plan; and WHEREAS, the annual budget contains the estimated revenue and appropriations necessary to implement the City Council’s policies, goals and objectives; and WHEREAS, during the fiscal year, unforeseen circumstances, changed economic conditions or spending priorities may require budget adjustments; and WHEREAS, the City Council of the City of Sanger does hereby find that it would be in the best interest of the City to revise the estimated appropriations; and WHEREAS, a budget amendment appropriating funds in the following amounts:
$76,505 to account 208-050-101-7237
is necessary to the purchase of self -contained breathing apparatus (SCBAs) tank fill station and related equipment,
NOW THEREFORE, IT IS HERBY RESOLVED by the City Council of the City of Sanger as follows:
1. The foregoing recitals are true and correct and are incorporated by reference.
2. The Council approves the amendment to the Annual Budget as set forth in Exhibit “A” for Revenue Adjustments and Appropriation Adjustments which is attached hereto and incorporated herein by reference.
3. T he Finance Director or their designated staff is hereby authorized and directed to record the appropriate accounting entries.
4. This resolution is effective upon adoption.
***************
The foregoing Resolution was considered by the City Council for the City of Sanger, California, at a regular meeting of said Council on the 6
th day of November, 2025, and adopted by the following vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
ATTEST:
Lina Martinez, City Clerk
23 EXHIBIT A
Budget Amendment Form
24 Exhibit A
City of Sanger Accounting Use Only
Fiscal Impact of Proposed Resolution and Budget Adjustment Number:
Budget Adjustment approved by Council
Resolution Number: 2025-87
Date: 11/6/2025
Reason for change in appropriation:
Appropriate funding for the purchase of Self-Contained Breathing Apparatus Fill Station Estimated Additional Appropriations:
Fund Dept. Prgm Object Appropriation
Fund Name No. No. No. No. Amount
Measure S District Sales Tax 208 050 101 7237 76,506.00$ Total Requested Appropriation: 76,506.00$
Current 2025-2026 Appropriation: -$
Adjusted Total Appropriation: 76,506.00$
Estimated Revenues Available:
Fund Dept. Prgm Object Est. Revenue
Fund Name No. No. No. No. Amount
Total Estimated Additional Revenue: -$
Current 2025-2026 Estimated Revenue:
Adjusted Total Estimated Revenue: -$
Signature ______________________________________________________________Date: ___________________ Director's Signature ________________________________________________ Date: ___________________ Finance Director's Signature ______________________________________________Date: ___________________ \\nas1\shared\Forms Templates
25 Prepared by: Amanda Champion Approved by:
REVIEW: City Manager: Finance: MS City Attorney:
TYPE OF ITEM: COUNCIL ACTION: APPROVED DENIED NO ACTION X Consent
Informational Item
X Action Item
Department Report
Public Hearing
Matter Initiated by a Council Member
Other:
Continued to:
For the Meeting of: November 6, 2025
Agenda Item No.: G-4
CITY OF SANGER
REPORT TO THE CITY COUNCIL
To: Mayor and Council Members
From: Amanda Champion, HR Manager
Subj
ect: Memorandum of Understanding between the City of Sanger and I.U.O.E.
Stationary Local 39
Attachments: Memorandum of Understanding
CO
NFLICT OF INTEREST:
N
one known.
RE
COMMENDATION:
T
hat the City Council approve the Memorandum of Understanding (MOU) between the City of Sanger and I.U.O.E. Stationary Local 39 (Local 39) for the period of July 1, 2025, through June 30, 2026, authorize the City Manager to execute the MOU, and authorize staff to update the Master Salary Schedule.
E
XECUTIVE SUMMARY:
T
he MOU between the City of Sanger and Local 39 expired on June 30, 2025. The City’s negotiating team and representatives of Local 39 have participated in the formal process of negotiating terms and conditions of employment for a new MOU.
B
ACKGROUND:
L
ocal 39 represents employees consisting of the following classifications: Streets, Parks & Facilities Worker, Water Operator, Wastewater Operator, Chief Operator, and Graffiti Removal Operator. The parties have reached agreement for a one-year MOU and the Local 39 membership ratified the tentative MOU on October 15, 2025.
26 T
he new MOU is attached. Listed below is a summary of changes to the MOU.
1. L
egal/clarifying language updates in the following sections:
a. Management Rights: defining management rights.
b. Safety: removal of language regarding adult offenders. c. Deductions: specifying when dues/deductions are to be withheld. d. Union Meetings: specifying time allowed and notifying requirements. e. Bulletin Boards: specifying area and maintenance.
f. Anniversary Date: specifying when anniversary dates should change. g. Step Increases: specifying when regular step increases should occur. h. Workhours: correction to current work hours.
i. Holiday: defining how holiday banks function.
j. Callback: defining when callback pay applies.
k. Overtime: removal of specified clean up time.
l. Temporary Upgrade Pay: language cleans up per CalPERS regulations. m. Bilingual Pay: clarification of applicability.
n. Shift Differential: clarification of applicability.
o. And other technical or clarifying edits.
2. Uniforms: Increases boot allowance from $300 to $325 and issuing it as an allowance instead of City purchase.
3. Standby Pay: Change from an hourly rate to a flat rate.
4. The term of the MOU is one year, beginning July 1, 2025, and ending June 30, 2026.
5. Wages: 3% base wage increase effective July 1, 2025.
6. Disability Insurance: Removal from private disability and application for State Disability.
7. Vacation Cash Out: update to bring into compliance with IRS Constructive Receipt Regulations.
8. Float Holiday: one additional float holiday per year.
RE
ASON FOR RECOMMENDATION:
R
epresentatives of Local 39 and the City’s negotiating team have negotiated terms and conditions of employment for a one-year MOU.
F
ISCAL IMPACT:
The total cost of the negotiated increases related to the MOU are approximately $50,000. If approved, the mid-year budget revision will be modified to include the increases.
AL
TERNATIVES:
N
one.
ACT
IONS FOLLOWING APPROVAL:
I
f approved, the City Manager will execute the Memorandum of Understanding, the agreed upon terms and conditions will be implemented, and the Master Salary Schedule will be updated. 27 1
CITY OF SANGER
AND
I.U.O.E. STATIONARY LOCAL 39
07/01/2025 THROUGH 06/30/2026
28 2
Contents
1. RECOGNITION ................................ ................................ ................................ ....... 4
2. SOLE AGREEMENT ................................ ................................ ................................ . 5
3. MANAGEMENT RIGHTS ................................ ................................ ........................... 5
4. EMPLOYEE RIGHTS ................................ ................................ ................................ 6
5. NON-DISCRIMINATION ................................ ................................ .......................... 7
6. HARASSMENT OF EMPLOYEES ................................ ................................ ................ 7
7. NEW EMPLOYEE ORIENTATION ................................ ................................ ............... 7
8. SAFETY ................................ ................................ ................................ .................. 8
9. DUES DEDUCTION - AGENCY SHOP ................................ ................................ ........ 9
10. UNION MEETINGS................................ ................................ ............................ 10
11. BULLETIN BOARDS ................................ ................................ ........................... 10
12. SHOP STEWARDS ................................ ................................ ............................. 11
13. UNIFORMS ................................ ................................ ................................ ....... 12
14. ANNIVERSARY DATE ................................ ................................ ......................... 12
15. STEP INCREASES ................................ ................................ ................................ ... 13
16. SENIORITY ................................ ................................ ................................ ....... 13
17. WORKHOURS................................ ................................ ................................ ... 13
18. TEMPORARY APPOINTMENT FOR WORK IN ANOTHER CLASSIFICATION/OUT OF CLASS APPOINTMENT ................................ ................................ ................................ ............ 16
19. CERTIFICATION INCENTIVE PROGRAM ................................ .............................. 17
20. BILINGUAL PAY ................................ ................................ ................................ . 18
21. LONGEVITY PAY ................................ ................................ ................................ 18
22. WAGE PROVISIONS ................................ ................................ .......................... 19
23. HEALTH CARE ................................ ................................ ................................ .. 20
25. VACATION LEAVE ................................ ................................ .............................. 21 26 SICK LEAVE ................................ ................................ ................................ ...... 22 27 DONATION OF VACATION OR SICK LEAVE ................................ .......................... 23
28. LEAVE FOR CHILD-RELATED ACTIVITIES ................................ ............................. 24
29. BEREAVEMENT LEAVE ................................ ................................ ....................... 24 29 3
30. PAID HOLIDAYS ................................ ................................ ................................ 24
31. JOB OPENINGS AND CLASSIFICATIONS ................................ ............................. 25
32. WORKERS' COMPENSATION LEAVE ................................ ................................ ... 26
32. COURT ORDERED SERVICE APPEARANCES ................................ ....................... 27
33. DISCIPLINE, SUSPENSION AND DISCHARGE ................................ ..................... 27
34. TUITION REIMBURSEMENT PROGRAM ................................ ............................... 27
35. RETIREMENT SYSTEM ................................ ................................ ........................ 28
36. STATE DISABILITY INSURANCE ................................ ................................ .......... 28
37. TERM OF AGREEMENT: ................................ ................................ ..................... 29
30 4
MEMORANDUM OF UNDERSTANDING CITY OF SANGER
AND
INTERNATIONAL UNION OF OPERATING ENGINEERS, STATIONARY
LOCAL NO. 39
This Memorandum of Understanding ("MOU'') is made and entered into by and between the City of Sanger, hereinafter "City" and the International Union of Operating Engineers ("IUOE"), Stationary Local No. 39, hereinafter "Union," under the authority of California Government Code Section 3500 et. and City's Employer-Employee Relations Ordinance, Article III, Chapter 46 of the Sanger City Code. The parties agree as follows:
1. RECOGNITION
City recognizes Union as the exclusively recognized employee organization for the Unit defined as:
• Streets, Parks, & Facilities Worker I, II, Senior, & Lead Construction Worker I, II, Senior, & Lead
• Mechanic I, II, Senior, & Lead Operator Trainee
• Operator I, II, III Chief Operator
• Graffiti Removal Operator
• Facility Maintenance Worker
Any other job classification the parties may agree should appropriately be incorporated into the aforementioned unit.
31 5
City agrees to meet, confer, consult and otherwise deal exclusively with Union on all matters within the scope of representation as provided in Government Code Section 3500 and City's Employer-Employee Relations Ordinance. In the event the Ordinance is modified, the modified ordinance shall apply. Union shall be notified and offered an opportunity to meet prior to any such modification, consistent with Government Code Section 3504.5.
2. SOLE AGREEMENT
2.1 The provisions of this MOU constitute the primary wages, hours and working conditions applicable to Unit. To the extent that any other City policy, ordinance, resolution or agreement is in conflict with this MOU, this MOU shall prevail. Nothing in this MOU shall be construed to abrogate, diminish or render ineffective any City employment policy, program or agreement not in conflict with this MOU.
2.2 If, during the term of this MOU, the parties should mutually agree to modify, amend or alter the provisions of this MOU, any such change shall be effective only if and when it is reduced to writing and executed by the authorized representatives of City and Union. Any such changes shall become part of this MOU.
2.3 The waiver of any breach or condition of this MOU by either party shall not constitute a precedent, which prevents the future enforcement of any of the terms and conditions of this MOU.
2.4 In the event that any of the provisions of this MOU should be declared by a court of competent jurisdiction to be unenforceable or illegal, such action shall not invalidate the remaining provisions of this MOU.
3. MANAGEMENT RIGHTS
3.1 It is understood and agreed that the City retains statutory management rights and authority to manage municipal services and the work force performing those services. It is agreed that during the term hereof, the City shall not be required to meet and confer on matters which are solely a function of management, provided that the City meet and confer over the effects or impact of management decisions to the extent required by law. These rights include, but are not limited to the exclusive right to determine the 32 6
mission of its constituent departments, commissions and boards; to determine the nature, standards, levels, and mode of delivery of services to be offered to the public; to determine whether goods or services shall be made or provided by the City, or shall be purchased, or contracted for; to set and determine employment standards; to direct its employees; to take appropriate disciplinary action against its employees; to relieve its employees from duty because of lack of work or other legitimate reasons; to maintain the efficiency of its governmental operations; to determine the methods, means and personnel by which its government operations are to be conducted; to organize its departmental structure and the duties of each department; and to exercise complete control and discretion over its organization and the technology of performing its work.
3.2 The City reserves the right to contract out any services that it may deem more cost effective to do so. follow the appropriate, lawful bidding process. City agrees to City agrees to meet and confer with the Union no later than 30 days prior to the start of initiation of such a bidding process for the purpose of discussing the impact and effects of such an action on unit members and to explore viable options to contracting out services. City agrees to follow Federal, State, or Local laws when contracting out unit member work.
4. EMPLOYEE RIGHTS
4.1 Employees have the right to form, join and participate in the activities of employee organizations of their own choosing for the purpose of representation on all matters of employer-employee relations, including but not limited to wages, hours and other terms and conditions of employment. Employees also have the right to represent themselves individually in their employment relations with City, provided that in the event City enters into an MOU with an exclusively recognized employee organization, such as the within MOU, employees are deemed to have delegated to their exclusively recognized employee organization their right to represent themselves individually in their employment relations with City, and City is not obligated to meet and confer or otherwise deal with any individual employee in Unit with respect to matters within the scope of this MOU. No employee shall be interfered with, intimidated, restrained, coerced or discriminated against by City, Union or any employee organization because of his/her exercise of these rights.
33 7
5. NON-DISCRIMINATION
5.1 Neither City nor Union shall unlawfully discriminate against any Unit member because of age, marital status, race, national origin, religion, sex, physical handicap or Union membership or activity or because of lack of Union membership or activity. This provision is not subject to the grievance procedure.
6. HARASSMENT OF EMPLOYEES
6.1 City and Union agree that every Unit member is entitled to a work environment free from unreasonable and repeated harassment. In accordance with California law, the City prohibits harassment and discrimination based on the following: race, color, religion, creed, sex, gender identity, gender expression, sexual orientation, pregnancy, childbirth, breastfeeding or related medical conditions, ethnic or national origin, ancestry, citizenship status, military and veteran status, marital status, age, medical condition, physical or mental disability, genetic information. All complaints alleging harassment shall be processed through Sanger Personnel Policies & Procedures Chapter XI. Harassment/ Discrimination/ Retaliation/Prevention, as may be amended to comply with state and federal law.
7. NEW EMPLOYEE ORIENTATION
In accordance with Assembly Bill 119 and Government Code 3555-3559, the City shall provide the designated Local 39 representative with newly hired employee information for any position covered under this bargaining unit. This information will be provided within thirty (30) days of hire or by the first pay period of the month following hire. The notification shall include the following:
a. Employee name
b. Job title
c. Department
d. Work location
e. Work, Home, and Personal Cellular telephone numbers on file f. Personal email address on file
34 8
g. Home address
The City will provide Local 39 with notice of a scheduled new hire orientation for any position covered under this bargaining agreement. On the day new hire orientation takes place, the City shall allow the designated Local 39 representative to meet with newly hired employees represented by their bargaining group for up to thirty (30) minutes. If the new employee elects not to attend, the City shall provide the name, phone number and email address of the designated Local 39 representative.
The City shall provide Local 39, via email to DataCenter@locall2._ rg, a list containing the following information at a minimum of every 120 days:
a. Employee name
b. Job title
c. Department
d. Work location
e. Work, Horne, and Personal Cellular telephone numbers on file f. Personal email address on file
g. Home address
If the City does not have all the information listed above on file, the information the City has access to shall be provided.
8. SAFETY
8.1 Unit members recognize, acknowledge, and agree to adhere to City's Safety Program. Unit members agree to use all safety equipment provided to unit members and unit members agree to wear the appropriate safety gear when so required and directed.
8.2 City agrees to provide adequate and appropriate safety training to Unit employees. In addition, City agrees to conduct safety meetings for Unit employees consistent with CAL- OSHA requirements.
8.3 City agrees to provide all safety equipment required by law or deemed necessary or appropriate in performing assigned duties.
35 9
9. DUES DEDUCTION - AGENCY SHOP
The Union may have the regular dues of its bargaining members deducted from their paychecks under procedures as follows:
9.1 The Union, not the City, will be responsible for determining member consent to Union membership and the City will honor authorizations for dues deductions as certified by the Union. The Union is solely responsible for distributing to, and collecting from, employees the dues deduction authorization forms. It is the employees' responsibility to submit requests to start or stop dues deductions directly to the Union and not to the City. The Union is responsible for maintaining the dues deduction forms from individual employees.
9.2 Copies of an individual employee's dues deduction need not be provided to the City unless a dispute arises about the existence or terms of the authorization. Should there be a dispute regarding the deduction of dues, the Union shall provide the City with a copy of the authorization(s) signed by the employee.
9.3 Questions regarding Union membership, dues amounts, and payroll deductions must be directed to the Union and not the City.
9.4 City's Processing of Dues Deductions:
9.4.1 The City will deduct dues from employees’ pay as part of the regular biweekly payroll. The City will need at least one full pay period before it can process the employees' dues deductions as certified by Onion or before it can process the cessation of Onion dues deductions as certified by Union.
9.4.2 The Union will provide to the City an updated, certified dues deduction list of bargaining unit members who have provided written authorization for regular dues deductions. The City will deduct dues for only those employees who are in the bargaining unit in accordance with such certified list. The Union will immediately notify the City of any change to an employee's dues deduction, including starting and stopping deductions, or validly cancelling or revoking a dues deduction authorization, and will promptly provide the City an updated certified dues deduction list noting any specific changes from the last list provided to the City.
9.4.3 The City shall deduct the dues upon written notice from the Union that authorization has been provided to the Union by an employee in the Onion; the City shall stop dues deductions upon written notice from the Union that authorization has been provided to the Union by an employee in the Union. 36 10
9.4.4 Dues deductions covering all authorized deductions shall be transmitted by the City's to Stationary Engineers, Local 39.
9.4.5 Dues deductions will be transmitted biweekly (24 pay periods).
9.4.6 The City agrees to provide the Union with a report that shows the total amount authorized for deduction from each member's check.
9.4.7 The member's earnings must be sufficient after other legal and required deductions are made to cover the amount of the dues deduction authorized. When a member is in non-pay status for an entire pay period, no dues deduction shall be made from future earnings to cover that pay period. In the case of a member who is in a non- pay status during only a part of the pay period and whose earnings are insufficient to cover other legal and required deductions, no dues deduction or deposit shall be made.
9.5 Indemnification: The Union shall indemnify, defend and hold the City, its officers, agents, and employees, harmless from and against any and all claims, demands, losses, defense costs, suits, or other action or liability of any kind or nature arising from this Article including claims for or related to employee authorizations, revocations, deductions made, cancelled, or changed in reliance on the Union's representations and certifications regarding employee dues deductions authorizations
10. UNION MEETINGS
10.1 City shall provide 1/2 (one-half) hour each month during the regularly scheduled workday for the purpose of allowing Union to hold membership meetings. The 1/2 (one- half) hour may be used in conjunction and together with employees regularly scheduled meal period. The one-half (1/2) hour each month shall be used that month and shall not be cumulative. Union will advise the Public Works Director or Supervisor of the date and time of said employee meetings at least 48 hours in advance. The date and time for such meetings may be preempted by the City depending upon workload demands or other hardship, upon twenty-four (24) hours advance notice to the Union.
10.2 While the parties are engaged in contract negotiations, the frequency of these meetings may be increased by mutual consent. The frequency of meetings shall revert to one per month upon negotiations concluding.
11. BULLETIN BOARDS
37 11
11.1 City will provide areas designated specifically for Union postings, such areas shall be no larger than 3 feet by 4 feet. The Union shall be responsible for the purchase, installation in the designated space, and maintenance of physical bulletin boards.
11.2 Union shall keep said bulletin boards in a neat and orderly condition. They shall be used only for the posting of the following notices:
(a) Union recreational and social activities,
(b) Union elections,
(c) Union appointments and the results of Union elections, (d) Union meetings
12. SHOP STEWARDS
12.1 The Union shall furnish the City with the names of the Stewards after their designation.
12.2 The Steward's duties, functions, and responsibilities are limited to receiving complaints from members; checking for violations of agreement, health and safety; investigating and reporting of the Business Representative. The Steward can represent his/her group during employee/management meetings and to advise his/her department concerning present and proposed policies of interest. The Steward can call to the attention of his/her department head and his/her Union representative any condition, which has caused, or is likely to cause, a breakdown in the usual harmonious relationships within the department. The Steward has no authority to seek adjustment of violation of an agreement except in accordance with the terms of such agreement, or of the International Constitution or of the By-Laws, nor shall he/she purport to have the authority, or be deemed to have the authority, nor shall he/she set to cause or attempt to cause, in any fashion whatsoever, any person, whether employee, supervisor or employer, to take any action, or any person to cease from any action in violation of, in furtherance of the agreement or the International Constitution, or of the By-Laws, but the Steward shall, instead report to the appropriate Business Representative of the Union for appropriate action. He/she may under no circumstances collect any money due or payable to the Local Union from any member or applicant for membership or any other person. He/she will not receive pay from the Union for his/her services, and will 38 12
continue to perform his/her normal work except for those times when his/her presence is necessary in performing the duties imposed upon him/her as Shop Steward.
13. UNIFORMS
13.1 City shall provide and maintain adequate uniforms and protective clothing for all unit employees. Five (5) changes per week shall be provided to uniformed members of the Onit on a 5-day, 8-hours/day workweek, and four (4) changes per week shall be provided to uniformed members of the Unit on a 4-day, 10-hours/day workweek. The City agrees that jackets shall be considered protective clothing, and one jacket of the appropriate weight shall be provided every two years and maintained per employee during the winter months and an additional light weight jacket shall be provided every two years and maintained per employee during the spring and summer months. Uniform jackets and shirts will each have a department patch sewn on the left shoulder.
During the spring and summer months unit employees will have the option of selecting either short sleeve or long sleeve shirts for their uniform.
Employees are responsible for maintaining a neat, tidy, and professional appearance while at work, including regular laundering or cleaning of provided uniforms.
13.2 The City agrees to pay up to $325.00 per employee per calendar year towards the purchase of NIOSH or OSHA approved safety boots. The allowance will be paid through payroll on the second pay date in June. The City and Union acknowledge and agree that the footwear/boot allowance is fair and adequate compensation for the purchase, repair, and/or replacement of boots or footwear needed for employees in these classifications to safely perform their duties.
14. ANNIVERSARY DATE
14.1 City shall utilize the employee's entrance-on-duty anniversary date. An employee’s anniversary date shall remain the same unless they are promoted, demoted, or reclassified, and in those instances, the anniversary date shall be the effective date of the promotion, demotion, or reclassification.
14.2 Anniversary date shall only be used for determining step increases, and shall not affect seniority, longevity calculations, or overall years of services for accrual purposes. 39 13
15. STEP INCREASES
15.1 Employee shall be eligible for their first step increase 6 months after hire date, and then annually on their anniversary date for any remaining step increases.
15.2 When promoted, employees shall be moved to the step in the new pay grade that provides a 5% increase in base pay, or step 1 of the new pay grade, whichever is greater.
16. SENIORITY
16.1 Seniority shall be the total length of service with City in years, months and days from the date of hire, exclusive of unpaid leaves. Seniority within classifications shall be the sole determination in layoffs first, seniority within City service shall be second.
Employees will be allowed to bump into former classifications if his/her classification is laid off.
16.2 Seniority is one factor considered when Unit members are eligible for promotion, but shall not be the sole criteria.
17. WORKHOURS
17.1 Workweek: The workweek is from 12:00 a.m. Saturday to 11:59 p.m. the next following Friday. The regularly assigned workweek for all Unit members shall be forty (40) hours consisting of five (5) consecutive workdays of eight (8) hours each, exclusive of a lunch period.
17.1.1 Regular workweek schedules shall include two (2) consecutive days off.
17.1.2 4-10 work shift schedules shall consist of four (4) consecutive days with three (3) consecutive days off.
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17.2 Workday: The workday is from 12:00 a.m. to 11:59 p.m. Specific starting and ending times shall be set by City for each position. Unless specifically set by City, the regular workday for unit members shall be 7:00 a.m. to 4:00 p.m.
17.2.1 All Unit members shall be allowed a lunch break (one (1) hour), and two (2) rest periods of fifteen (15) minutes each. The lunch break shall be scheduled at the approximate mid-point of the workday and the rest periods shall be scheduled at the approximate mid-point of the pre-and post-lunch work periods.
17.2.2 Lunch break is unpaid time. Any work which City requires to be performed by a Unit member during the member's lunch break shall be compensated at the overtime rate, as provided in Section 15.3; except that Unit members may arrange with their supervisor for compensatory time off in lieu of payment. The lunch break shall not exceed one (1) hour duration.
17.2.3 Rest periods are paid time. In the event a Unit member is required by City to work or resume work during a rest period, such employee shall be granted a full rest period as soon as practicable after the interruption.
17.2.4 Work schedules are established by the department/ divisions based upon the need to provide service to the public and/or other city departments. City will consult with the Union prior to implementing any changes in the work schedules. Routine seasonal changes, such as earlier summertime starting and ending times, shall be deemed a part of established work schedules.
17.3 Overtime: Overtime is work required by City to be performed in excess of eight (8) hours in any workday and/or forty (40) hours in any workweek, except when a 4-day/10-hour shift/workweek is in effect, in which case overtime shall be any work required by City to be performed in excess of ten (10) hours in any 10-hour workday.
Overtime shall be compensated at one and one-half (1-1/2) times the employee's regular rate of pay, as defined by the Fair Labor and Standards Act ("FLSA”), except as otherwise provided in this Section.
17.3.1 Compensatory Time. Notwithstanding the provisions of this section, employees may be granted compensatory time off for overtime credit at the discretion of the supervisor with due regard for the wishes of the employee and upon reasonable notice.
Employees may bank compensatory time up to a maximum of 160 hours.
17.3.2 All work required by City to be performed during a holiday, as defined herein, shall be compensated at one and one- half (1-1/2) times the employee's regular rate of pay in addition to the regular day's pay to which the employee is entitled, except that City and employee may arrange for an alternate paid day off in-lieu of receiving pay for the holiday. The in-lieu holiday shall be a day selected by the employee subject to 41 15
scheduling approval by the Department Director or Supervisor. All holiday banks will be cashed out the second pay date in December.
17.3.3 All work required by City to be performed during any vacation period, and defined herein, shall be compensated at one and one-half (1-1/2) times the employee's regular rate of pay. The employee shall be credited for the unused vacation and permitted to re- schedule the vacation time.
17.3.4 Whenever a Unit member is called back to work by City after completing the preceding work-shift and leaving the workplace, such employee shall be paid for a minimum of two (2) hours at the applicable overtime rate plus any incentive or TUP pay which is a part of the employee’s regular wage rate. Callback pay applies only to an unscheduled return to work during off duty hours and does not apply to an employee called in to an early start to the workday, or an employee required to remain at work as an extension of the workday. Employees reporting to work for a callback must be properly dressed in uniform and properly identified.
17.3.5 Overtime assignments in each division shall be distributed on a rotational basis, with the most senior qualified employee being offered the first overtime opportunity. Unit members shall not generally be required to accept an overtime assignment. If all unit members turn down the overtime assignment the Department Director or Supervisor shall assign a unit member using reverse seniority as a basis for such assignment. In the event of an emergency, the Department Director or Supervisor, shall have the authority to assign employees as he/she may deem necessary.
17.3.6 Any work required by City to be performed in excess of twelve (12) hours in any workday, shall be compensated at two (2) times the employee's regular rate of pay.
17.3.7 City will provide time off for a meal after four (4) hours overtime worked when not in conjunction with a workday. Other than emergencies during which work must be continuous, mealtime must be taken and will not be considered as hours worked.
17.3.8 Standby Pay: An employee assigned standby duty will be required to carry a City cell phone and employees shall have City cell phone turned on. Employees shall refrain from consuming alcohol or taking any substance which may impair the employee's ability to perform all required duties. Employees on standby duty are required to respond, and shall report to the work site within one-hour of being contacted by cell phone. Employees reporting to work from standby duty must be properly dressed in uniform and properly identified.
Standby assignments in each division shall be distributed on a rotational basis, with the most senior qualified unit member being offered the first standby opportunity.
Unit members shall not generally be required to accept a standby assignment. If all unit members turn down the standby assignment, the division supervisor or manager shall assign a unit member using reverse seniority as a basis for such assignment beginning 42 16
with the least senior unit member. The next standby assignment shall be offered to the most senior qualified employee. If all unit members turn down the standby assignment, the division supervisor or manager shall assign the 2nd least senior unit member. The next standby assignment shall be offered to the most senior qualified employee. If all unit members turn down the standby assignment, the division supervisor or manager shall assign the 3rd least senior unit member. The process shall be repeated until all unit members have served and the process shall then start over with the least senior unit member. Unit members selected to serve on standby may find a substitute unit member to take standby, if approved by the division supervisor or manager . In the event of an emergency, the division supervisor or manager , shall have the authority to assign employees as he/she may deem necessary. Employees who are on paid time off are ineligible for standby duty during the period of paid leave.
Employee on standby duty shall be paid $48 per day for any day in which an employee is on standby for 16 hours or less, and $72 per day for any day in which an employee is on standby for more than 16 hours, which shall be in addition to any other salary entitlements. Standby employees may be assigned a City vehicle while on standby for the sole purpose of responding to call outs. If the employee is not assigned a vehicle for standby, then the employee shall be reimbursed for mileage based on the established City mileage rate.
18. TEMPORARY APPOINTMENT FOR WORK IN ANOTHER CLASSIFICATION/OUT
OF CLASS APPOINTMENT
18.1 Temporary Upgrade Pay: Unit members who are specifically assigned to perform the duties of a higher classification position for a limited duration period of one or more full workdays, shall be paid five percent (5%) above their regular rate of pay or the ''A" step of the higher classification position, whichever is greater. The adjusted higher rate of pay shall commence upon the member's service in the higher classification position.
18.1.1 Specific designation of the temporary appointment shall be made by the Supervisor or the Department Director. Designation shall be predicated upon the Unit member being assigned to perform substantially all the duties of the higher classification. Substantially all the duties of the higher classification position means that responsibility for performance of such duties is vested in the Unit member. All duties may or may not occur during the assigned period, but the performance of such duties, should they occur, would be the responsibility of the member. An employee who merely assumes some duties of a higher classification while retaining their regular position, or 43 17
who shares the duties of a higher classification with other employees, will not be eligible for a pay incentive.
18.1.2 Unless a specific temporary appointment is made, no Unit member shall be assigned or requested to perform a major portion of the duties or tasks of a higher classification position.
18.1.3 Temporary Upgrade Pay is not reportable for CalPERS purposes for employees who are “new” members under PEPRA.
18.2 Out of Class Appointment: In accordance with Government Code section 20480, provisional appointments to a vacant position in an upgraded position or higher shall not exceed a total of 960 hours in each fiscal year. For purposes of this section, an appointment to a “vacant position” means a position that is vacant during recruitment for a permanent appointment, and does not include a position that is temporarily available due to another employee’s leave of absence.
19. CERTIFICATION INCENTIVE PROGRAM
19.1 Unit members shall be eligible for a five percent (5%) salary increase, not to exceed 15 percent of base pay, with approval of the City Manager or Department Director, for completion of a certificate program at a community college or four-year college institution; or for any certification above the minimum required in the job description which improves job skills, knowledge and general upgrading of the position.
Unit members shall obtain prior written approval of all such programs from the Department Director or City Manager.
19.2 Definitions: For purposes of this Section, the term "certification” means a diploma or other document (certificate) issued by an agency acceptable to the Department Director stating that the person to whom the certificate was issued has successfully completed the course of study and has demonstrated the knowledge and skills necessary to perform the work described in the certificate. Certificates that are approved include: Wastewater Treatment Plant Operator Certificate issued by the State of California State Water Resources Control Board; Water Treatment Plant Operator Certificates issued by the State of California State Water Resources Control Board; Water Distribution Operator Certificates issued by the State of California State Water Resources Control Board; Mechanical Technology, Electrical/Instrumentation, Collection System Maintenance, Laboratory Analyst, Industrial Waste Treatment Operator, and Environmental Compliance Inspector issued by the California Water Environment 44 18
Association; Cross Connection Program Specialist Certificate issued by the California- Nevada Section of AWWA; Backflow Prevention Assembly General Tester Certificate issued by the California-Nevada Section of AWWA; Aquatic Facility Operator Certificate issued by the National Recreation and Park Association; Pesticide/Herbicide Applicator license issued by the State of California Department of Food and Agricultural; and any other certificate approved by the Department Director and City Manager.
19.3 Upon approval of the Department Director, unit members shall receive a five (5) percent tool allowance for utilizing their personal tools on a regular basis provided the tools are valued at more than $5,000.00. The tool allowance shall be considered separate from the certification program.
19.4 Unit members shall receive an additional 5% of base pay for receiving and maintaining a Class A or Class B license not required in their job specification. Unit members promoted from a I classification to a II classification will no longer receive the additional 5% of base pay for possessing a Class A or Class B license.
20. BILINGUAL PAY
Effective the first day of the first full pay period following the employee providing Human Resources receipt of test results and documentation of eligibility unit members who have passed a test showing that they are proficient in speaking Spanish or Hmong, in addition to English, shall be entitled to additional compensation at the rate of 5% of their regular base pay.
The maximum additional compensation for bilingual pay is five percent (5%).
21. LONGEVITY PAY
Employees with twenty (20) years of service will receive an additional three and one-half percent (3.5%) salary increase immediately on the first pay period after their anniversary date.
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22. WAGE PROVISIONS
22.1 Effective on pay date November 21, 2025, unit members shall receive a 3% base wage increase retroactive to July 1, 2025, for all active employees at the time of MOU approval.
22.2 If a cost of living increase is given to any other group or association, Local 39 will receive that same increase during the term of their agreement if the increase given to any other group or association is not in exchange for an increase in an employee's contribution rate to CalPERS. If a salary increase is given to any other group or association in exchange for an increase in an employee's contribution rate to CalPERS, Local 39 will receive the opportunity to consider a salary increase in exchange for an increase in the employee's contribution rate to CalPERS during the term of this agreement. Exceptions to this clause in addition to CalPERS include: Any COLA/base wage increases given in exchange for benefits, stipends, differentials, incentives, special pays, or any classification specific increase (i.e. targeted equity adjustment). Anything that is not a stand-alone unit wide COLA/base wage increase is not included in this clause.
22.3 Payday: The payday shall be every other Friday for the two-week period ending the prior Friday.
22.4 Shift Differential: City shall compensate Unit members an additional one-dollar ($1.00) per hour shift differential when the member's shift starts before 6 a.m. or after 10:30 a.m. The shift differential applies to the member’s entire scheduled shift. It does not apply to hours worked outside a regularly scheduled shift.
22.5 Those employees whose schedules fall on either Saturday or Sunday will receive an additional one-dollar ($1.00) per hour shift differential for the day worked.
22.6 Employees in I classifications of Streets, Parks & Facilities, Construction, Sanitation, Mechanic or Operator will be promoted to the II classification provided they have received five (5) consecutive years of satisfactory performance evaluations and subject to meeting the requirements of the II classification job descriptions.
22.7 The salary range and classifications of Unit members are as listed on Attachment "A".
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22.8 Unit members shall receive a 5% step increase after their first six (6) months, and annually on their anniversary date until they reach the maximum amount authorized for the position.
22.9 At least once a year on the employee's anniversary date, the Supervisor shall review the performance of each employee within a 45 day window of the anniversary date.
Performance evaluations shall be completed within a 45 day window of the anniversary date. If an evaluation is conducted after the 45 day window, the employee shall receive a rating equivalent to meets expectations or equivalent to the last rating, whichever is higher, until the employee's next anniversary date.
23. HEALTH CARE
23.1 City shall continue to provide a Health Care Plan for all Unit Employees and their dependents. The Health Care Plan shall include medical and prescriptions, vision plan, dental plan and a Life Insurance Policy of $50,000 for each employee.
23.2 City shall pay the entire premium for the vision plan, dental plan and life insurance plan costs.
23.3 The City shall pay the rate of the lowest cost plan (Employee, Employee+l, Family) towards the premium for the medical and prescription plan. For employees who choose another option at a greater cost than the lowest cost plan, the employee shall pay the difference between the plans. Premiums are collected twice per month (24 times per year) for the month ahead (i.e. January premiums are collected from employees December paychecks.)
The City agrees to reimburse employees a fixed amount, as shown below, if the employee's dependents opt-out of the City's HMO or PPO plan:
Employee & Spouse $197.24 per month
Employee & Child(ren) $149.17 per month
Employee & Family $338.12 per month
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To receive the above reimbursement, the employee must show proof that the dependents are covered on a non-City plan. Employees will be required to show proof on an annual basis.
23.4 Employees retiring from City services in good standing under a CalPERS non disability service retirement may elect to continue coverage under the City's Health Plan at the retiring employee's sole cost, including dependent coverage.
Said coverage shall continue until such retired employee becomes eligible for Medicare benefits.
25. VACATION LEAVE
25.1 Accrual for Prior Service: Unit members who reenter City service subsequent to layoff or military service shall be credited with continuous service time accumulated prior to separation for the limited purpose of determining the appropriate vacation leave accrual rate. No other service, which preceded dismissal or resignation, shall apply.
25.2 Use of Vacation Leave for Vacation Purposes.
25.2.1 Vacation leave shall be available for use immediately upon accrual pending approval and shall be taken in 15-minute increments (.25 of an hour).
25.2.2 The times when an employee may take vacation leave shall be determined by the Department Director or Supervisor with due regard for the wishes of the employee and the needs for the City. Unit members shall be permitted to take vacation to the maximum extent consistent with the operational needs of City.
25.2.3 No paid holiday that falls during an employee's vacation shall be charged to the employee as vacation.
25.3 Vacation Leave - Members will accrue vacation leave as shown in the table below up to a maximum of 240 hours.
Vacation Leave Accrual
Vacation Hours Per
Pay Period
0-2 Years 2.4616
2-5 Years 4.3077
5-10 Years 6.1539
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10-15 Years 7.0769
15-25 Years 8.0001
25+ Years 8.6100
25.4 Each calendar year, employees may elect to receive cash in lieu of up to 60 hours of personal leave accrual each calendar year, subject to the terms and conditions set forth below. To receive cash in lieu of leave accrual, an employee must submit an irrevocable written election form no later than December 31st of the calendar year prior to the calendar year in which the employee wishes to receive cash in lieu of leave. The cash in lieu will be payable in the first pay date of December of the following calendar year, provided that after the cashout does not reduce the employee’s leave balance below eighty (80) hours. Only leave hours already accrued in the calendar year for which an election is made may be cashed out. Cash-outs for leave hours accrued in a prior calendar year are not allowed. If a Unit member for any reason would not have accrued the full amount elected for cash-out during the current year or the cash-out would reduce the employee’s remaining balance below 80 hours, the cash-out amount will be reduced accordingly.. Vacation leave cash outs shall be paid at the employee's base rate of pay.
25.5 Payment of Vacation Leave at Separation: Any Unit members who separate from City service shall receive a lump sum payment for accrued but unused vacation leave.
Lump sum payoff of unused vacation leave shall be at the base rate of pay in effect at the time of separation.
26 SICK LEAVE
26.1 Sick Leave may be used for:
1. The diagnosis, care or treatment of an existing health condition of, or preventive care for the Unit member. The diagnosis, care or treatment of an existing health condition of, or preventive care for the Unit member's family member. Family members include an employee’s child, parent, spouse, domestic partner, grandparent, grandchild, sibling, or another designated person, as defined in Labor Code section 245.5.
2. If the employee or employee’s family member is a victim of a qualifying act violence as defined in Government Code Section 12945.8, subdivision (j), paid sick leave may be used to obtain or attempt to obtain relief, assistance, or services related to the qualifying act of violence, as defined in Government Code Section 12945.8, subsections (a)(3) and (b).
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26.2 Sick Leave Accrual - Sick leave will accrue at 4 (four) hours per pay period.
26.3 DOCTOR'S STATEMENTS
The Department Director or Supervisor may, for good cause, require an employee to submit a statement and/or medical release from a California licensed physician or licensed medical practitioner when the employee's absence for illness or injury is in excess of three (3) days, prior to returning to work, and may require the employee to be examined at City expense by City appointed medical personnel.
26.4 DEPARTMENT DIRECTOR RESPONSIBILITY
The Department Director and supervisors shall send Unit members home or for medical attention when there is evidence they are either injured, too ill to work or present a hazard to themselves, co-workers or the public.
27 DONATION OF VACATION OR SICK LEAVE
27.1 Employees may donate vacation or sick leave to other City employees who are absent from work due to a catastrophic illness or injury. Catastrophic illness or injury is a severe illness or injury which is expected to incapacitate the employee for an extended period of time and which creates a financial hardship because the employee has exhausted all accumulated leave. Catastrophic illness or injury is further defined as a debilitating illness or injury of an immediate family member (i.e., the spouse, son, daughter, step-son, step-daughter, foster-son, foster-daughter, parents, grandparents, brother or sister of the employee or any other person living in the immediate household of the employee) that results in the employee being required to take time off from work for an extended period to care for the family member creating a financial hardship because the employee has exhausted all accumulated leave.
Such donations will be strictly voluntary. Any individual employee’s decision to donate or not donate are kept confidential..
Donated hours will be held in a time bank administered by the City and applied to the absent employee’s accrued time banks on an hour-for-hour basis. Only the City 50 24
Manager or designee (or Assistant City Manager) may approve an employee to receive catastrophic leave donations.
Donation of leave hours is irrevocable and irreversible. In the event the employee receiving donations does not use all donated leave for the catastrophic illness or injury, any balance will remain in that employee’s time bank. The City reserves the right to reject a donation offered if it appears the donation will not be necessary.
28. LEAVE FOR CHILD-RELATED ACTIVITIES
A Unit member who is a parent of school-age children (kindergarten to grade 12) may take up to forty (40) hours leave per year (not to exceed eight (8) hours per calendar month) to find, enroll, reenroll the Unit member's child in a school or with a licensed child care provider, or to participate in school activities of the school or licensed child care provider, provided if the Unit member, prior to taking the time off, gives reasonable notice to his/her supervisor of the planned absence. The Unit member shall utilize existing vacation leave or compensatory time off for these planned absences. A Unit member may utilize time off without pay for this purpose to the extent made available by the Unit member's supervisor.
29. BEREAVEMENT LEAVE
29.1 Unit members shall be entitled to bereavement leave without loss of pay or charge against any other paid leave benefit up to a maximum of three (3) days to attend funeral services, and up to a maximum of five (5) days if attendance requires travel of more than one-hundred twenty (120) miles, for each non-concurring death in the immediate family; provided that such leave with pay shall not be authorized for time expended in business or estate matters. Immediate family means spouse, father, mother, step- parent, son, daughter, step-children, sister, brother, sister-in- law, brother- in-law, father-in-law, mother-in-law, daughter-in-law, son-in-law, grandparent, grandchild, aunt, uncle, nephew, niece, registered domestic partner, guardian, or ward.
30. PAID HOLIDAYS
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30.1 The dates listed below which fall within the normal workweek of Monday through Friday shall be considered paid holidays and shall be observed:
1. January 1 (New Year's Day)
2. Third Monday in January (Martin Luther King Day)
3. Third Monday in February (President's Day)
4. March 31 (Caesar Chavez Day)
5. Last Monday in May (Memorial Day)
6. Juneteenth (June 19)
7. July 4 (Independence Day)
8. First Monday in September (Labor Day)
9. November 11 (Veterans Day)
10. Fourth Thursday in November (Thanksgiving Day)
11. Day after Thanksgiving
12. December 24 (Christmas Eve)
13. December 25 (Christmas Day)
14. Two (2) floating holidays
Any day proclaimed by the President or Governor or Mayor as a public fast or holiday and ratified by Council.
30.2 Employees may be required to be on duty on holidays when the public health, safety or welfare, as determined by the City Manager require that the Employee be on duty. In such event, the Employee shall be compensated at a rate of time and one half (1½) of the Employee’s regular rate of pay for hours worked, in addition to straight-time pay for the holiday.
30.3 When a holiday falls on a Sunday, the holiday shall be observed on the next regular business day (typically the following Monday unless that is already a holiday).
When a holiday falls on a Saturday, the holiday shall be observed on the preceding regular business day (typically the preceding Friday). If a holiday falls on a Unit member's vacation, the holiday shall not be charged to the member's accrued vacation.
30.4 All City observed holidays will be compensated at eight (8) hours per day regardless of an employee’s shift schedule.
31. JOB OPENINGS AND CLASSIFICATIONS
31.1 Job Classifications: It is acknowledged that there currently exist job descriptions for all job classifications listed in this MOU. The establishment of new or revised job 52 26
descriptions within the Unit covered by this MOU may be warranted because of changes in job content or the services provided by City. In the event that new or revised job classifications are created or recommended, City shall meet-and-consult with Union with respect to the appropriate assignment and classification of position(s).
31.2 Posting: All regular position vacancies in the Unit, other than entry level positions, shall be posted for a period of ten (10) workdays prior to initiating open (outside) recruitment in order to encourage incumbent personnel to apply for such positions.
Applications received from incumbent regular employees during the ten (10) day period shall be considered prior to commencing open recruitment. It shall be City's decision as to whether or not final selection will be from an open recruitment or by promotion. A City decision to exercise open recruitment shall not mean that incumbent applicants have been rejected.
31.3 Transfers: A transfer is the change of an employee from one position in the Unit to another position in the same classification within the Unit, or to another position in a different classification in the Unit with the same maximum salary and which involves a minimal change in work duties; provided that the position to which the employee is transferred is one for which the employee possesses acceptable qualifications.
Employees receiving a transfer shall suffer no loss of seniority, pay or status, but shall be deemed "transfer probationary" for a period of six ( 6) months following the transfer, during which time the employee may be released from the new position. If so released, the employee shall have the right to return to his/her pre-transfer position without loss of seniority, pay or status.
The decision to affect a transfer from one position to another within the same job classification is solely that of the City.
31.4 Promotion: A Promotion is a change from one classification to a higher classification, with a pay range in which the top step is five percent (5%) or higher than the top step of the lower classification. Employees receiving a promotion shall suffer no loss of seniority or status, but shall be deemed "promotion probationary" for a period of six (6) months following the promotion, during which time the employee may be released from the new position. If so released, the employee shall have the right to return to his/her pre-promotion position without loss of seniority, pre-promotion pay, or status.
32. WORKERS' COMPENSATION LEAVE
Employees who are injured in the course and scope of employment are placed on workers' compensation leave and receive wage benefits to which they are entitled 53 27
under California workers' compensation laws (Labor Code section 3200 et seq.).
Employees may request to receive prorated sick and/or vacation leave pay (to the extent that it is accrued on the books) to supplement their workers' compensation payments in an amount such that the sum of workers' compensation benefits and use of accrued leaves is equal to the employee's regular rate of pay.
32. COURT ORDERED SERVICE APPEARANCES
32.1 Unit members who are called as trial jurors or subpoenaed shall be entitled to absent themselves from their duties with City during the period of such required service or while necessarily being present in court as a result of such call. Under such circumstances, the employee shall turn over all payment received for such required services, except travel pay and meal allowances to City and shall receive full wages while performing such required duties.
32.2 City shall allow unit members one (1) hour for clean-up time and travel to the court and one (1) hour for clean-up and travel back to work.
33. DISCIPLINE, SUSPENSION AND DISCHARGE
33.1 City has authority to discipline, suspend or discharge employees for just cause in accordance with the procedures set forth in the Personnel Policies and Procedures. The Personnel Policies and Procedures notwithstanding, the City recognizes the Employees right to appeal such disciplinary actions in the proper forum as outlined in the City's Personnel Policies and Procedures, this MOU or other State or Federal guidelines.
34. TUITION REIMBURSEMENT PROGRAM
Employees shall be entitled to reimbursement of tuition in accordance with the City's Employee Educational Reimbursement Policy.
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35. RETIREMENT SYSTEM
35.1 The City is a member of the California Public Employees' Retirement System (CalPERS) and provides the 2.5% at 55 plan for miscellaneous employees Unit members shall pay the full eight percent (8%) employee's share of CalPERS.
The employee's share shall be on a pretax basis.
35.2 In accordance with PEPRA, employees hired after January 1, 2013, who meet the definition of a "new member", shall be enrolled in the 2% @ 62 CALPERS benefit formula and shall contribute the full employee's share of CalPERS, which is 50% of the normal cost rate, currently at 6.25% of reportable compensation.
36. STATE DISABILITY INSURANCE
Upon Council approval of this MOU, the City shall start the process of applying for and enrolling all Local 39 employees into the EDD State Disability Program. The Hartford deductions and SDI deductions shall overlap for one entire month, and at the conclusion of that month, the Hartford disability plans shall be terminated.
All employees represented by this unit shall have mandatory payroll deductions equivalent to the premium costs of State Disability Insurance (SDI).
The conditions of this disability insurance are subject to those established by the State of California, Employment Development Department (EDD) and the County.
The City shall integrate benefits with SDI. Employees will be required to submit to HR copies of their payments when received, and the appropriate deduction will be taken on the pay period following. This will typically result in deductions continuing to occur after the employee has returned to work. Under no circumstances will an employee be eligible to receive over 100% of their regular earnings between City payments and SDI payments.
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37. TERM OF AGREEMENT
This MOU shall have a term of one (1) year, ending June 30, 2026.
SIGNATURES ON FOLLOWING PAGE
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City of Sanger International Union of Operating
Engineers Stationary Local 39
___________________ ________________________
Nathan Olson Tim Eggen
City Manager Business Manager
________________________
Jeff Gladieux
__________________
Shelline Bennett
Legal Counsel
President
________________________
Brandy Johnson
Director of Public Employees
________________________
Jennifer Osborn
Business Representative
________________________
Paul Huerta
Shop Steward
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STATIONARY ENGINEERS Local 39
Salary Ranges
Effective July 1, 2025
POSITION Step 1 Step 2 Step 3 Step 4 Step 5 Frequency
CONSTRUCTION WORKER I 3,451 3,624 3,804 3,995 4,194 Monthly MECHANIC I 3,451 3,624 3,804 3,995 4,194 Monthly
STREETS, PKS & FAC WORKER I 3,451 3,624 3,804 3,995 4,194 Monthly GRAFFITI REMOVAL OPERATOR 3,451 3,624 3,804 3,995 4,194 Monthly WASTEWATER OPERATOR TRAINEE 3,538 3,715 3,899 3,908 4,300 Monthly WATER OPERATOR TRAINEE 3,538 3,715 3,899 3,908 4,300 Monthly CONSTRUCTION WORKER II 3,899 4,094 4,300 4,514 4,740 Monthly MECHANIC II 3,899 4,094 4,300 4,514 4,740 Monthly
STREETS, PKS & FAC WORKER II 3,899 4,094 4,300 4,514 4,740 Monthly WASTEWATER OPERATOR I 3,899 4,094 4,300 4,514 4,740 Monthly WATER OPERATOR I 3,899 4,094 4,300 4,514 4,740 Monthly SENIOR CONSTRUCTION WORKER 4,195 4,405 4,624 4,855 5,097 Monthly SENIOR MECHANIC 4,195 4,405 4,624 4,855 5,097 Monthly
SENIOR STREETS, PARKS, FACILITIES WORKER 4,195 4,405 4,624 4,855 5,097 Monthly FACILITY MAINTENANCE WORKER 4,195 4,405 4,624 4,855 5,097 Monthly WASTEWATER OPERATOR II 4,298 4,513 4,737 4,974 5,223 Monthly WATER OPERATOR II 4,298 4,513 4,737 4,974 5,223 Monthly WASTEWATER OPERATOR I/ENVIRONMENTAL COMPLIANCE INSPECTOR 4,298 4,513 4,737 4,974 5,223 Monthly LEAD CONSTRUCTION WORKER 4,858 5,101 5,355 5,623 5,904 Monthly LEAD MECHANIC 4,858 5,101 5,355 5,623 5,904 Monthly
LEAD STREETS, PARKS, FACILITIES WORKER 4,858 5,101 5,355 5,623 5,904 Monthly WASTEWATER OPERATOR III 5,100 5,355 5,622 5,903 6,199 Monthly WATER OPERATOR III 5,100 5,355 5,622 5,903 6,199 Monthly CHIEF OPERATOR 5,622 5,903 6,199 6,508 6,834 Monthly
58 Prepared by: __Joshua Rogers _ Approved by: ________________________
REVIEW: City Manager: ______ Finance: _______ City Attorney: ______ TYPE OF ITEM: COUNCIL ACTION: APPROVED DENIED NO ACTION _X__ Consent
____ Info Item
_X_ Action Item
____ Department Report
____ Redevelopment Agency
____ Public Hearing
____ Matter Initiated by a Council Member
____ Other
____ Continued to: __________
For the Meeting of: November 6, 2025
Agenda Item No.: G-5
CITY OF SANGER
REPORT TO THE CITY COUNCIL
To: Mayor and Council Members
From: Josh ua Rogers, City Engineer
Subject: Surface Transportation Block Grant (STBG) Program Additional Funding Academy Avenue – 4th Street to California Avenue
Attachments:
1. Resolution No. 2025-88 Committing to Receipt, Obligation, Support and Timely Use of Funds
2. Proposed Project Map
CONFLICT OF INTEREST:
None known.
RECOMMENDATION:
Staff recommends t hat the City Council adopt Resolution No. 2025-88 , committing to the receipt, obligation, support and timely use of these funds in the appropriate fiscal years.
EXECUTIVE SUMMARY:
Fresno COG recently received additional funding for its Surface Transportation Block Grant (STBG) program through federal budget revisions and has offered the City funding for an additional project that had been submitted in the 2025-2026 funding application cycle.
BACKGROUND:
The Fresno Council of Governments (COG) administers federal funding for local transportation projects through a competitive application process. All local agencies within Fresno County are invited to submit applications for funding programs.
59 \\nas1\shared\Forms & Templates
Earlier this year, COG announced that it was accepting applications for its Surface Transportation Block Grant (STBG) program, which is for typical roadway paving and rehabilitation projects. All applications submitted by local agencies in Fresno County are ranked by a COG-organized scoring committee made up of member agency representatives based on merit to determine which projects are funded.
Staff submitted 5 applications for consideration, with 2 being awarded funding for a total of just over $1 million. However, COG recently reached out to City staff to notify that additional funding has been made available to the STBG program. This was made possible due to Congress transferring unused funding from the Transportation Infrastructure Finance and Innovation Act (TIFIA) Program, a loan-based funding program, into their grant funding program pool.
One of Sanger’s submitted projects, the Academy Avenue Rehabilitation project between 4 th Street and
California Avenue, was on the contingency list from the most recent funding cycle. It scored well but was just below the “cut line” for available funding at the time. Now, because of the additional funding, COG plans to award the additional project funding pending a resolution stating that the City will commit to the receipt and obligation of these funds and if it can deliver the project within the original programming schedule in its application. Per the original application, the Preliminary Engineering (PE) phase will take place in FY 2026-2027, and the construction phase is planned for obligation in FY 2027-2028.
REASON FOR RECOMMENDATION:
Adoption of the resolution and commitment to the matching funds and schedule will allow the City to receive $1.1 million in funding to complete another project that aligns with the City’s goal of providing safe and reliable infrastructure to its residents.
FISCAL IMPACT:
All of the Federal Highway projects require a minimum local match of 11.47% from local Gas Tax, Measure C and/or Transportation Funds, but Staff had proposed to leverage 20% of local funds to increase scoring potential against other projects, since fund leveraging is to be considered by the Committee for extra scoring points. The City would need to commit $25,800 in PE match in FY 26/27 and $246,700 in construction match in FY 27/28. Since the proposed project would be programmed for future fiscal years, this allows time for Staff to plan for the expenditures in upcoming capital improvement budgets.
ALTERNATIVES:
None recommended if the additional funding is desired by the Council. Adoption of the resolution is required for acceptance of the applications for federal funding.
ACTIONS FOLLOWING APPROVAL:
Staff will submit the authorizing resolution prior to November 30 th, a due date that was given to staff by
COG.
60 \\nas1\shared\Forms & Templates
ATTACHMENT 1
61 RESOLUTION NO. 2025-88
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANGER
COMMITTING TO RECEIPT, OBLIGATION, SUPPORT AND TIMELY USE OF
ADDITIONAL FUNDS THROUGH THE SURFACE TRANSPORTATION BLOCK
GRANT (STBG) PROGRAM
WHEREAS, the City of Sanger is able to apply for and receive State and Federal funding under the Federal Transportation Act; and
WHEREAS, the City of Sanger applied for and received funding during the 2025 Call for Projects through the Fresno Council of Governments (COG); and
WHEREAS, the City has been made aware that additional funding is available to be programmed by Fresno COG through the STBG program due to congressional budget actions; and
WHEREAS, this additional funding is available to fund projects on the contingency list developed by Fresno COG for the aforementioned Call for Projects; and
WHEREAS, the City’s submitted project for Academy Avenue between 4 th Street and
California Avenue ranked sufficiently high on the contingency list that it may now be funded as submitted, pending submission of a resolution committing to receipt and obligation of the funds; and
WHEREAS, the City of Sanger desires to ensure that all of its projects are delivered in a timely manner to preclude the Fresno Region from losing those funds for non-delivery; and
WHEREAS, it is understood by the City of Sanger that failure for not meeting project delivery dates for any phase of a project may jeopardize Federal or State funding to the Region; and
WHEREAS, the City of Sanger must demonstrate dedicated and available local matching funds.
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF SANGER
HEREBY RESOLVES that the City of Sanger hereby agrees to ensure that all project delivery deadlines for all project phases of the proposed project will be met or exceeded.
BE IT FURTHER RESOLVED, that failure to meet project delivery deadlines may be deemed as sufficient cause for the Fresno Council of Governments Policy Board to terminate an agency’s project and reprogram Federal/State funds as deemed necessary.
62 BE IT FURTHER RESOLVED, that the City Council of the City of Sanger does direct its management and engineering staff to ensure that is project is carried out in a timely manner as per the requirements of the project funding application and the directive of the City Council of the City of Sanger.
* * * * * * * * * * * * * * * * *
I hereby certify that the foregoing was duly passed and adopted by the City Council of the City of Sanger, Fresno County, State of California, at its regular meeting thereof held on November 6 , 2025, by the following vote:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSTAIN: COUNCILMEMBERS:
ABSENT: COUNCIL MEMBERS:
ATTEST:______________________________
Lina Martinez, City Clerk
63 \\nas1\shared\Forms & Templates
ATTACHMENT 2
64 GREENWOOD AVE
RICHARD
AV
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HARRISON AVE
S BE
THEL AVE
K ST
ANNADALE AVE
OAK CT
FIFTH ST
NINTH ST
HAWLEY AVE
RECRE
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WEBSTER AVE
QUA
LITY
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EIGHTH ST
SPENCER AVE
SANTA MARIA
FLORENCE AVE
S
QUAL
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TENTH ST
N ST
THIRD ST
LORENA AVE
TAMARACK AVE
WES
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TWELFTH ST
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BENNETT
AVE
VINE ST
ALMOND AVE
BRE
HLER
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E CHURCH AVE
TAMRACK AVE
FLORENCE CT
LYNN CT
JENSEN AVE
GLENVIEW AVE
SANGER AVE
THIRTEENTH ST
FALLER CIR
FOURTEENTH ST
FALLER CT
HILL AVE
HANNAH AVE
TUCKER AVE
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IETT AV
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GR
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S ACADEMY AVE
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FOREST LN
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SECOND ST
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N COTTLE AVE
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ACACIA CT
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KELLI AVE
E KINGS CANYON RD
FIR AVE
VIRGINIA AVE
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CAMELIA AVE
ELEVENTH ST
BIRCH AVE
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LILY AVE
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DR
%Priority 3
2025-26 STBG
0 1,000 2,000
Feet
O
Call For Projects
Document Path: F:\2025\25-105\GIS\25-105.aprx
Legend
STBG Priority 3 - Academy
Avenue - California Avenue to
Fourth Street
City Limits
65 Prepared by: Joshua Rogers___ Approved by: ________________________
REVIEW: City Manager: ______ Finance: _______ City Attorney: ______ TYPE OF ITEM: COUNCIL ACTION: APPROVED DENIED NO ACTION _X_ Consent
____ Info Item
_X__ Action Item
____ Department Report
____ Redevelopment Agency
____ Public Hearing
____ Matter Initiated by a Council Member
____ Other
____ Continued to: __________
For the Meeting of: November 6, 2025
Agenda Item No.: G-6
CITY OF SANGER
REPORT TO THE CITY COUNCIL
To: Mayor and City Council
From: Joshua Rogers, City Engineer
Subject: Final Acceptance for Local Streets Improvement Project CIP 23-01
Attachments:
1. Notice of Completion
2. Contract Change Order Nos. 1 and 2
CONFLICT OF INTEREST:
None known.
RECOMMENDATION:
Staff recommends that the City Council:
1. Accept the work for the Local Streets Improvement Project CIP 23 -01 in the amount of $1,058,628.59; and
2. Authorize recordation of the Notice of Completion with the Fresno County Recorder; and
3. Authorize payment of 5% retention in the amount of $52,931.43 to Terra West Construction , Inc. upon expiration of the 35-day lien period.
EXECUTIVE SUMMARY:
The contractor, Terra West Construction, Inc., has completed all improvements for the subject project.
All work was completed in accordance with the plans, specifications , and contract documents , and performed to the satisfaction of the City Engineer.
BACKGROUND:
This project consisted of roadway improvements including pavement reconstruction, new sidewalk construction, repair of existing concrete infrastructure, upgrade of curb ramps for ADA compliance, 66 and upgrades to roadway signage and striping at the following locations:
• 14th Street from P Street to Sanger Ave;
• Edgar Avenue from P Street to Academy Ave;
• J Street from Edgar Ave to Annadale Ave;
• 5th Street from L Street to J Street.
There were two contract change orders approved for the project. Change Order No. 1 was for additional demolition work required to reconstruct a damaged drive approach on Edgar Avenue .
Change Order No. 2 was for additional construction work in the public right of way near the Rose Motel to provide for improved drainage and ADA-accessible upgrades. Total cost of all change orders was $27,417.63 which was well within the approved project contingency of $110,000.
REASON FOR RECOMMENDATION:
The project construction work has been completed by the Contractor to the satisfaction of the City Engineer.
FISCAL IMPACT:
The final construction contract cost is $1,058,628.59. Total construction phase costs , including construction management, inspection and material testing, were approximately $1,193,000. The project was funded by a combination of local Measure C Streets, Gas Tax and Transportation Development Act (TDA) funds.
ACTIONS FOLLOWING APPROVAL:
1. The Notice of Completion will be recorded.
2. The 5% retention, in the amount of $52,931.43, will be released no later than 35 calendar days following recordation of the Notice of Completion, provided no liens have been filed. 67 ATTACHMENT 1
68 RECORDING REQUESTED BY AND MAIL TO:
NAME: CITY CLERK, CITY OF SANGER
STREET: 1700 7TH STREET
CITY & STATE: SANGER, CA 93657
Exempt from fee per Government Code 6103
Exempt from fee per Government Code 27383
NOTICE OF COMPLETION
1. The City of Sanger, a municipal corporation, 1700 7th Street, Sanger, California, is the OWNER of the property hereinafter described.
2. The name of the Contractor who caused the work of improvement to be done is Terra West Construction, Inc.
3. The property on which the work of improvements was accepted is located along various streets including 14
th Street, Edgar Avenue, J Street and 5th Street in the City of Sanger, County of Fresno, California.
4. The work for the Local Streets Improvement Project CIP 23-01 included pavement reconstruction, new sidewalk construction, repair of existing concrete infrastructure, upgrade of curb ramps for ADA compliance.
5. The work of improvements as described herein was completed by the Contractor on October 16, 2025 and accepted by Sanger City Council on November 6, 2025.
6. The Security for the Labor and Material Bond is issued by Great Midwest Insurance Company, Houston, TX.
CITY OF SANGER, a municipal corporation
________________________________
Joshua D. Rogers, City Engineer
I, the undersigned say; I am the person who signed the signed notice. I have read the above notice and know its contents, and the facts stated therein are true by my own knowledge.
I declare under penalty of perjury that the foregoing is true and correct.
Executed at Sanger, California, this 6th day of November, 2025.
Joshua D. Rogers, City Engineer
69 ATTACHMENT 2
70 71
ORDER NO. 1
DATE 7/5/2024
STATE CA
COUNTY Fresno
PROJECT # 22-228
TO:
O
1.0 OWNER CITY OF SANGER
Original Contract Time: 65
Revised Contract Completion Date:
Change Order Item Scope of Work Description
9/12/2024
CHANGE ORDER 01 REMOVE DRIVE APPROACH AT EDGAR AVE
The contractor shall demo the drive approach at Edgar Avenue near STA 18+80.00. The contractor shall be paid in lump sum amount of $1,798.04 per the estimate attached. The drive approach construction shall be paid per the bid item 19, unit price of $18.00/SF.
Demo Drive Approach on Edgar Ave near Sta. 18+80.00
CONTRACTOR
Original Contract Amount: $1,070,148.00
FEDERAL PROJECT NO. N/A
CONTRACT CHANGE ORDER
LOCAL STREETS IMPROVEMENT PROJET CIP 23-01C ONTRACT FOR Revised Contract Time: 65
Original Contract Completion Date:
TERRA WEST CONSTRUCTION INC.
Change Order Amount $1,798.04
New Contract Amount $1,071,946.04
72 To: Date: June 21, 2024
City of Sanger
1700 7th Street Proposal No.: 1
Sanger, CA. 93657
(559) 876-6300 TW Job Number: 24-004
Description pf Work or Item Quantity Unit Unit Price Amount Remove Drive Approach at Edgar 1 LS $1,798.04 $1,798.04 Subtotal= $1,798.04
Mark-up Included
Total Cost= $1,798.04
Project Name: City of Sanger Local Street Improvements Terra West Construction Inc.
1030 Gettysburg Avenue, Suite 107
Clovis, CA. 93612
(559) 252-1356| (559) 390-0483
73 LOCATION OF WORK:
ITEM NAME HRS RATE AMOUNT ITEM NAME HRS RATE AMOUNT
1 Oper4man 2 95.93 191.86 1 Foreman Pick-Up 2 37.19 74.38 2 Oper4 2 89.26 178.52 2 JD 50D Mini Exc 2 43.65 87.30
3 Labor-CS 4 64.76 259.04 3 Skiploader 2 53.34 106.68
4 0.00 4 Saw 1 9.77 9.77
5 0.00 5 0.00
6 0.00 6 0.00
7 0.00 7
8 0.00 8
9 0.00 9
10 10
629.42 278.13
56.65 41.72
240.12 319.85
926.19
ITEM DESCRIPTION QTY UNIT COST AMOUNT ITEM NAME HRS RATE AMOUNT 1 0.00 1 Truck to Haul Demo 3 160.00 480.00
2 0.00 2 and on stan-by 0.00
3 3
4 4
5 5
6 6
7 7
8 8
9 9
10 10
0.00 0.00 480.00
0.00 72.00
0.00 552.00
AMOUNT
926.19
319.85
0.00 552.00
1798.04
TIME AND MATERIALS WORKSHEET
Remove Drive Approach at Edgar
LABOR EQUIPMENT
Edgar Ave. Sta. 19+00
PCO NUMBER:
DESCRIPTION OF WORK:
TBD
24-004-01
DATE:
TOTAL
MATERIAL FREIGHT/SUBCONTRACTOR
SUBTOTAL
TAX @ 8.975% SUBTOTAL
MARK-UP 15% MARK-UP 15%
SUBTOTAL SUBTOTAL
SURCHARGE 9% MARK-UP 15%
MARK-UP 35% TOTAL
T&M SHEETS MUST BE SIGNED BY THE PROJECT INSPECTOR DAILY
DESCRIPTION
LABOR
SUBCONTRACTOR EQUIPMENT
MATERIAL
FREIGHT
PROJECT INSPECTOR SUBCONTRACTOR
TOTAL
TOTALS SECTION
TOTAL TOTAL
CONTRACTOR
APPROVAL SECTION
74 1
Sergio Alvarado
From: [email protected]
Sent: Friday, June 21, 2024 9:12 AM
To: Sergio Alvarado; [email protected] Cc: Ray Martinez; Erik Delgado; Christopher Hernandez;
[email protected]
Subject: RE: 22-225 Sanger Local Streets - Edgar Ave Sta 19+00 Attachments: 24-004-01 Demo Drive Approach at Edgar.pdf Follow Up Flag: Follow up
Flag Status: Flagged
Sergio, as mentioned, attached is the cost to demo the ramp, as there is no bid item for the demolition. The grading and pouring of the ramp is included in the bid unit price of $18.00/SF.
Thank you,
Ramon Medina, CESSWI, QSP
Chief Estimator/Sr. Project Manager
Terra West Construction Inc.
Mobile: (559) 348-1086
Fax: (559) 390-0483
1030 Gettysburg Avenue, Suite 107
Clovis, CA. 93612
California License No.: 924631
DIR Number: 1000712658
DBE Number: 48176
SBE Number: 2015847
Visit us at: www.terrawestconstruction.com
This Communication and any accompanying attachments is intended only for the use of the individual(s) or entity(s) to which it is addressed and may contain information that is privileged, confidential or otherwise protected from disclosure under law. Any review, disclosure, copying, distribution, or use of this e-mail communication by others is strictly prohibited. If you are not the intended recipient, please notify us immediately by returning this message to the sender and delete all copies.
From: Sergio Alvarado
Sent: Friday, June 21, 2024 7:37 AM
To: [email protected]; [email protected] Cc: Ray Martinez ; Erik Delgado ; Christopher Hernandez ; [email protected] Subject: RE: 22-225 Sanger Local Streets - Edgar Ave Sta 19+00 75 2
Good Morning,
Please proceed with the demo and reconstruction of the drive approach on Edgar.
Regards,
Sergio Alvarado
Project Manager/Construction Manager
______________________
2985 N. Burl Ave. Suite 101 Fresno, CA 93727
O: (559) 244-3123 | M: (559)770-3794
yandhengr.com
“A committed team providing high quality engineering services for our clients and community.”
From: [email protected] <[email protected]> Sent: Thursday, June 13, 2024 1:02 PM
To: Sergio Alvarado <[email protected]>; [email protected] Cc: Ray Martinez <[email protected]>; Erik Delgado <[email protected]>; Christopher Hernandez <[email protected]>
Subject: RE: 22-225 Sanger Local Streets - Edgar Ave Sta 19+00
We can do this at unit price.
Thank you,
Ramon Medina, CESSWI, QSP
Chief Estimator/Sr. Project Manager
Terra West Construction Inc.
Mobile: (559) 348-1086
Fax: (559) 390-0483
1030 Gettysburg Avenue, Suite 107
Clovis, CA. 93612
California License No.: 924631
DIR Number: 1000712658
DBE Number: 48176
SBE Number: 2015847
Visit us at: www.terrawestconstruction.com
76 3
This Communication and any accompanying attachments is intended only for the use of the individual(s) or entity(s) to which it is addressed and may contain information that is privileged, confidential or otherwise protected from disclosure under law. Any review, disclosure, copying, distribution, or use of this e-mail communication by others is strictly prohibited. If you are not the intended recipient, please notify us immediately by returning this message to the sender and delete all copies.
From: Sergio Alvarado <[email protected]>
Sent: Thursday, June 13, 2024 11:26 AM
To: 'Ramon Medina' <[email protected]>; [email protected] Cc: Ray Martinez <[email protected]>; Erik Delgado <[email protected]>; Christopher Hernandez <[email protected]>
Subject: FW: 22-225 Sanger Local Streets - Edgar Ave Sta 19+00
Good Morning,
The City requested for this drive approach near 18+80.00 on Edgar to be removed and replaced.
Let me know if the proposed extra work can be paid per bid items 19 residential Drive App by the SF with a cost estimate for the demo. See the picture and snip of the plans below for reference, thanks
77 4
Regards,
Sergio Alvarado
Project Manager/Construction Manager
______________________
2985 N. Burl Ave. Suite 101 Fresno, CA 93727
O: (559) 244-3123 | M: (559)770-3794
yandhengr.com
78 79
ORDER NO. 2
DATE 7/1/2025
STATE CA
COUNTY Fresno
PROJECT # 22-228
TO:
O
2.0 2.1
2.2 2.3
Original Contract Completion Date: 9/12/2024
Construct Rolled Curb & Gutter and Furnish & Install Guard Rail on Time & Material Plug Paving Around Concrete Improvements on Time & Material The contractor was directed to pave back aroudn the rolled curb & gutter and around the ped ramp retaining curb per the revised plan sheet attached. The contractor performed the work on time and material. The contractor submitted their T&M supporting documentation. The contractor shall be paid in the lump sum amount of $5,358.55.
Change Order Item Scope of Work Description
The contractor was directed to demo and haul off the existing asphalt within the limits to construct the rolled curb and gutter. The contractor performed the work on time and material. The contractor submitted their T&M supporting documentation. The contractor shall be paid in the lump sum amount of $4,726.81.
The contractor was directed to construct the improvements per the revised plan sheet attached. The contractor shall furnish and install the guard rail around the pedestrian ramp per the detail included with the ramp exhibit attached. The contractor performed the work on time and material. The contractor submitted their T&M supporting documentation. The contractor shall be paid in the lump sum amount of $15,534.23.
Exisitng Asphalt Demo on Time & Material
Change Order 02 - L St & Fifth St Improvements at the South East Corner Previous Contract Amount $1,071,946.04
Change Order Amount $25,619.59
Original Contract Time: 65
New Contract Amount $1,097,565.63
OWNER CITY OF SANGER
TERRA WEST CONSTRUCTION INC.
CONTRACTOR
Original Contract Amount: $1,070,148.00
CONTRACT CHANGE ORDER
CONTRACT FOR LOCAL STREETS IMPROVEMENT PROJECT CIP 23-01 FEDERAL PROJECT NO. N/A
80 355
356
358
360
362
364
366
368
370
355
356
358
360
362
364
366
368
370
9+0010+0011+0012+0013+0014+0015+00
Ref. & Rev.PROJECT TITLE
SHEET DESCRIPTION
Dr. By:
Ch. By:
Date:
Scale:As Noted
YH Job No.
Sheet No.
of Sheets
Plot By: Edward Martinez Plot Date: 3/26/2024 File Location: f:\2022\22-225\dwg\Improvements\City Plans\22-225_SI-5TH STREET.dwg 2985 N. BURL AVENUE SUITE 101 FRESNO, CA 93727
TEL: (559) 244-3123 WEBSITE: YANDHENGR.COM
CL
CM
01/03/2023
22-225
10 20
CITY OF SANGER
LOCAL STREETS IMPROVEMENT PROJECT CIP 23-01
5TH STREET
STA: 9+50.00 TO STA: 14+50.00
L STREET
MATCHLINE - STA: 14+50.00
SEE SHEET 11
5TH STREET
L STREET
KEYNOTES:
℄
CROSS SECTION FOR 5TH STREET
LEGEND:
K STREET
K STREET
MATCHLINE - STA: 14+50.00
SEE SHEET 11
A9
17 A11
17 A10
17 A12
17 A13
18 A14
18 TRANSITION FROM FULL
HEIGHT CURB TO
ROLLED CURB AND 24"
GUTTER PAN TO 12"
GUTTER PAN IN 24"
LENGTH FROM END OF DI
CONSTRUCT 127' (+/-)
ROLLED CURB AND GUTTER
PER DETAIL PROVIDED
366.83 LIP
366.73 LIP
366.58 LIP
366.91 LIP
PLUG PAVING TO MATCH TO EXISTING
PARKING LOT. ASSUMED AT 24" WIDE
FOR PURPOSES OF INITIAL DEMO. TO
BE CONFIRMED AFTER REVIEW OF
EXISTING PARKING LOT GRADING
MATCH EXISTING
FLOWLINE GRADE
MATCH EXISTING
FLOWLINE GRADE
S = 0.0021
2.2%
TRANSITION FROM FULL
HEIGHT CURB TO ROLLED
CURB IN 24" LENGTH FROM
EXISTING CURB AND GUTTER
81 5TH STREET
L STREET
RETAINING CURB WITH PEDESTRIAN BARRIER RAIL
PEDESTRIAN BARRIER DETAIL (24" HIGH MID RAIL)
Ref. & Rev.PROJECT TITLE
SHEET DESCRIPTION
Dr. By:
Ch. By:
Date:
Scale:As Noted
YH Job No.
Sheet No.
of Sheets
Plot By: Rebecca Allen Plot Date: 9/13/2024 File Location: F:\2022\22-225\dwg\Improvements\City Plans\22-225_Ramp-Exhibit.dwg 2985 N. BURL AVENUE SUITE 101 FRESNO, CA 93727
TEL: (559) 244-3123 WEBSITE: YANDHENGR.COM
CL
CM
9/12/2024
22-225
1 1
CITY OF SANGER
LOCAL STREETS IMPROVEMENT PROJECTS CIP 23-01
22-225 RAMP EXHIBIT CHANGE ORDER
SOUTHEAST CORNER OF 5TH STREET AND L STREETA12
----
82 To: Date: March 6, 2025
City of Sanger
1700 7th Street Proposal No.: 3.1
Sanger, CA. 93657
(559) 876-6300 TW Job Number: 24-004
Description pf Work or Item Quantity Unit Unit Price Amount Remove Existing Asphalt on 12-9-24 1 LS $4,726.81 $4,726.81 Install Guard Rail and Concrete 1 LS $15,534.23 $15,534.23 Patch Back Paving 1 LS $5,358.55 $5,358.55
Subtotal= $25,619.59
Mark-up Included
Total Cost= $25,619.59
Project Name: City of Sanger Local Street Improvements Terra West Construction Inc.
1030 Gettysburg Avenue, Suite 107
Clovis, CA. 93612
(559) 252-1356| (559) 390-0483
83 LOCATION OF WORK:
ITEM NAME HRS RATE AMOUNT ITEM NAME HRS RATE AMOUNT
1 Oper4man 8 111.37 890.96 1 Foreman Pick-Up 8 37.19 297.52 2 Labor-CS 8 75.37 602.96 2 JD 50D Mini Exc 8 43.65 349.20 3 0.00 3 Trailer 8 5.55 44.40
4 0.00 4 Saw 4 9.77 39.08
5 0.00 5 0.00
6 0.00 6 0.00
7 0.00 7
8 0.00 8
9 0.00 9
10 10
1493.92 730.20
134.45 109.53
569.93 839.73
2198.30
ITEM DESCRIPTION QTY UNIT COST AMOUNT ITEM NAME HRS RATE AMOUNT 1 0.00 1 Truck to Haul Demo 8.9 165.00 1468.50
2 0.00 2 0.00
3 3
4 4
5 5
6 6
7 7
8 8
9 9
10 10
0.00 0.00 1468.50
0.00 220.28
0.00 1688.78
AMOUNT
2198.30
839.73
0.00 1688.78
4726.81
TIME AND MATERIALS WORKSHEET
Remove Existing Asphalt on 12-9-24
LABOR EQUIPMENT
L Street and 5th Street
PCO NUMBER:
DESCRIPTION OF WORK:
12/9/2024
24-004-03.1
DATE:
TOTAL
MATERIAL FREIGHT/SUBCONTRACTOR
SUBTOTAL
TAX @ 8.73% SUBTOTAL
MARK-UP 15% MARK-UP 15%
SUBTOTAL SUBTOTAL
SURCHARGE 9% MARK-UP 15%
MARK-UP 35% TOTAL
T&M SHEETS MUST BE SIGNED BY THE PROJECT INSPECTOR DAILY
DESCRIPTION
LABOR
SUBCONTRACTOR EQUIPMENT
MATERIAL
FREIGHT
PROJECT INSPECTOR SUBCONTRACTOR
TOTAL
TOTALS SECTION
TOTAL TOTAL
CONTRACTOR
APPROVAL SECTION
84 85
86 LOCATION OF WORK:
ITEM NAME HRS RATE AMOUNT ITEM NAME HRS RATE AMOUNT
1 Oper4man 3 111.37 334.11 1 Foreman Pick-Up 3 37.19 111.57 2 Labor-CS 3 75.37 226.11 2 Trailer 3 5.55 16.65
3 Labor-CS 3 75.37 226.11 3 Jumping Jack 3 5.38 16.14
4 0.00 4 0.00
5 0.00 5 0.00
6 0.00 6 0.00
7 0.00 7
8 0.00 8
9 0.00 9
10 10
786.33 144.36
70.77 21.65
299.98 166.01
1157.08
ITEM DESCRIPTION QTY UNIT COST AMOUNT ITEM NAME HRS RATE AMOUNT 1 Guard Rail 1 5300.00 5300.00 1 Concrete Rail Curb 22 30.00 660.00 2 SpecRock 1 123.99 123.99 2 Concrete Rolled Curb 145 40.00 5800.00 3 3
4 4
5 5
6 6
7 7
8 8
9 9
10 10
5423.99
473.51 6460.00
884.63 969.00
6782.13 7429.00
AMOUNT
1157.08
166.01
6782.13
7429.00
15534.23
TIME AND MATERIALS WORKSHEET
DATE: 1/15/2025
DESCRIPTION OF WORK: Install Guard Rail and Concrete
PCO NUMBER: 24-004-03.1
L Street and 5th Street
LABOR EQUIPMENT
APPROVAL SECTION
MARK-UP 15%
MARK-UP 35% TOTAL
TOTAL
MATERIAL FREIGHT/SUBCONTRACTOR
SUBTOTAL SUBTOTAL
SURCHARGE 9%
SUBTOTAL
TAX @ 8.73% SUBTOTAL
MARK-UP 15% MARK-UP 15%
TOTAL TOTAL
CONTRACTOR TOTALS SECTION
TOTAL
DESCRIPTION
LABOR
T&M SHEETS MUST BE SIGNED BY THE PROJECT INSPECTOR DAILY
SUBCONTRACTOR EQUIPMENT
MATERIAL
FREIGHT
PROJECT INSPECTOR SUBCONTRACTOR
87 88
89 90
LOCATION OF WORK:
ITEM NAME HRS RATE AMOUNT ITEM NAME HRS RATE AMOUNT
1 Oper4man 4.5 111.37 501.17 1 Foreman Pick-Up 4.5 37.19 167.36 2 OperApp 4.5 76.45 344.03 2 12K Foreman Pick-Up 4.5 41.96 188.82 3 Labor-CS 4.5 75.37 339.17 3 Hamm HD12 Roller 4.5 44.87 201.92 4 Labor-CS 4.5 75.37 339.17 4 Trailer 4.5 5.55 24.98
5 Labor-CS 4.5 75.37 339.17 5 Trailer 4.5 5.55 24.98
6 0.00 6 Cat Skidsteer 4.5 56.06 252.27
7 0.00 7
8 0.00 8
9 0.00 9
10 10
1862.69 860.31
167.64 129.05
710.61 989.36
2740.94
ITEM DESCRIPTION QTY UNIT COST AMOUNT ITEM NAME LS RATE AMOUNT 1 HMA 7 90.00 630.00 1 Truck to Haul HMA 4.5 160.00 720.00 2 Enviromental Fee 1 10 10.00 2 0.00
3 3
4 4
5 5
6 6
7 7
8 8
9 9
10 10
640.00
55.87 720.00
104.38 108.00
800.25 828.00
AMOUNT
2740.94
989.36
800.25
828.00
5358.55
TIME AND MATERIALS WORKSHEET
DATE: 1-16-2025
DESCRIPTION OF WORK: Patch Back Paving
PCO NUMBER: 24-004-03.1
L Street and 5th Street
LABOR EQUIPMENT
APPROVAL SECTION
MARK-UP 15%
MARK-UP 35% TOTAL
TOTAL
MATERIAL FREIGHT/SUBCONTRACTOR
SUBTOTAL SUBTOTAL
SURCHARGE 9%
SUBTOTAL
TAX @ 8.73% SUBTOTAL
MARK-UP 15% MARK-UP 15%
TOTAL TOTAL
CONTRACTOR TOTALS SECTION
TOTAL
DESCRIPTION
LABOR
T&M SHEETS MUST BE SIGNED BY THE PROJECT INSPECTOR DAILY
SUBCONTRACTOR EQUIPMENT
MATERIAL
FREIGHT
PROJECT INSPECTOR SUBCONTRACTOR
91 92
93 94
Prepared by: Joshua Rogers____ Approved by: ________________________
REVIEW: City Manager: ______ Finance: _______ City Attorney: ______ TYPE OF ITEM: COUNCIL ACTION: APPROVED DENIED NO ACTION _X__ Consent
____ Info Item
_X__ Action Item
____ Department Report
____ Redevelopment Agency
____ Public Hearing
____ Matter Initiated by a Council Member
____ Other
____ Continued to: __________
For the Meeting of: November 6, 2025
Agenda Item No.: G-7
CITY OF SANGER
REPORT TO THE CITY COUNCIL
To: Mayor and City Council
From: Josh ua Rogers, City Engineer
Subject: Almond Avenue Reconstruction – Bethel Avenue to Greenwood Avenue Contract Award
Attachment:
1. Contract
CONFLICT OF INTEREST:
None known.
RECOMMENDATION:
Staff recommends that the City Council:
1. Award the contract for the project to R.J. Berry Jr., Inc, P.O. Box 468, Selma , CA, 93662, in the amount of $822,412.00, as lowest responsive and responsible bidder; and
2. Approve a construction contingency for change orders in the amount of $82,500 (10%) for this project; and
3. Authorize the City Manager to sign contract documents on behalf of the City; and
4. Find and determine that a Class 1 Categorical Exemption (Existing Facilities) set forth in the California Environmental Quality Act (CEQA) Guidelines, Section 15301, applies to this Project, as the project would consist of the rehabilitation, maintenance, and minor alterations to existing roadway facilities involving negligible or no expansion of use, and that and that none of the exceptions to the exemptions in CEQA Guidelines Section 15300.2 are applicable to this project.
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EXECUTIVE SUMMARY:
This federally-funded project will construct roadway improvements, including pavement reconstruction, new sidewalk, and upgrade of curb ramps for ADA compliance on Almond Avenue between Bethel Avenue and Greenwood Avenue.
BACKGROUND:
The City was awarded competitive federal transportation funding for the subject project through the Surface Transportation Block Grant (STBG) program during the Fresno County Call for Projects in 2021. That program is primarily dedicated to road rehabilitation and maintenance projects and the City’s project was identified as one of the top-ranked projects in the region during that cycle.
The project scope includes full -depth reconstruction of the road due to the failing conditions of the pavement. Additionally, the project will add sidewalk along the north side of the road where none currently exists to close a gap from Bethel Avenue to approximately 150 feet west of Lyon Avenue and from Hawley Avenue to Greenwood Avenue. Damaged curb and gutter will be replaced as well as accessible curb ramps that are non -ADA compliant. Storm drain will be added in areas of deficient drainage and to accommodate future development north of Almond Avenue.
The City received the authorization from Caltrans to advertise for bids at the end of August 2025.
During the project bidding phase, the Notice Inviting Bids was advertised in the Mid Valley Times and circulated in the local builders’ exchanges. Additionally, other reputable contractors experienced with this type of construction were made aware of the project and invited to bid on the project as well.
On October 2, 2025 the City Clerk received and opened nine bid proposals for this project:
Contractor Bid
1. R.J. Berry, Jr., Inc. $822,412.00
2. Emmett Valley Construction $882,825.00
3. Terra West Construction, Inc. $899,171.00
4. Don Berry Construction, Inc. $936,763.00
5. Walsh Montgomery Construction, Inc. $979,052.00
6. Cal Valley Construction, Inc. $997,721.70
7. Dave Christian Construction Co, Inc. $1,012,806.00
8. MAC General Engineering, Inc. $1,084,678.20
9. GC Builders $1,101,159.61
Engineer’s Estimate $1,051,770.00
The bids were analyzed and it was determined that R.J. Berry Jr. , Inc. submitted the lowest responsive and responsible bid and as such, Staff recommends that they be awarded the contract.
REASON FOR RECOMMENDATION:
Award of the contract will allow the City to proceed with the project . As described above in the Background section, the scope of work is limited to rehabilitation, maintenance and minor alterations of an existing roadway with negligible or no expansion of use. As such, CEQA Categorical Exemption 15301 can be applied. Due to federal funds, the National Environmental Protection Act (NEPA) applies 96 \\nas1\shared\Forms & Templates
to the project. Caltrans, as the lead agency for NEPA review, has determined that the project is a Categorical Exclusion under NEPA.
FISCAL IMPACT:
The estimated cost for the construction phase of the project is approximately $1,005,000, as detailed below:
• Construction - $822,412
• Construction Contingency - $ 82,500
• Construction Management/Inspection/Testing/Admin - $ 100,088
The project is being funded by a combination of federal STBG and local Measure C Street Maintenance funds. There are $633,875 of federal funds available. The remainder is to be funded by Measure C.
ALTERNATIVES:
None recommended.
ACTIONS FOLLOWING APPROVAL:
The contract will be executed, subject to the Contractor providing performance security satisfactory to the City. After issuance of the Notice to Proceed, the Contractor will have 45 working days to complete the project.
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ATTACHMENT 1
98 CONTRACT
THIS CONTRACT, is made by and between R.J. Berry Jr., Inc., hereinafter called the Contractor, and the City of Sanger, hereinafter called the Owner.
W I T N E S S E T H:
The Contractor and the Owner, for the consideration hereinafter stated, agree as follows:
1. SCOPE OF WORK.
The Contractor agrees to furnish all labor and materials, including tools, implements, and appliances required, and to perform all the work in a good and workmanlike manner, free from any and all liens and claims of mechanics, teamsters, draymen and laborers required for the
ALMOND AVENUE RECONSTRUCTION FROM
BETHEL AVENUE TO GREENWOOD AVENUE
Federal Aid Project No. STPL-5197(046)
as shown on the plans prepared by Yamabe & Horn Engineering, Inc., in strict compliance with the Plans, Drawings and Specifications therefore prepared by the Owner and other Contract Documents relating thereto.
2. CONTRACT DOCUMENTS.
The term Contract includes all “Contract Documents” which include the following:
A. Advertisement (Notice Inviting Bids)
B. Wage Scale (Prevailing Wages)
C. Standard Specifications ¹
D. Special Provisions
E. Plans and Drawings
F. Addenda and Bulletins
G. Contractors Bid Proposal hereto attached
H. This Contract
In the event of a conflict between this Contract and any portion of the Standard Specifications or Special Provisions, to the extent of such conflict, this Contract shall control.
3. COMPENSATION.
The Owner agrees to pay the Contractor for the performance of the Contract the sum of Eight hundred twenty-two thousand four hundred twelve dollars and no cents ($822,412.00).
______________________________________________________________________ ¹ This Contract shall be subject to the Claims Resolution Process under Public Contract Code Section 9204 which is effective January 1, 2017; contrary language in Standard Specifications is superseded by said Section 9204. 99 It is understood that said price is based upon the estimated quantities of materials to be used as set forth in the Proposal; and upon completion of the project, the final contract price shall be revised, if necessary, to reflect the true quantities used at the stated unit price thereof as contained in the Contractor’s Proposal hereto attached.
4. SUSPENSION OF THE WORK.
A. General: The Work may be suspended in whole or in part when determined by the Engineer that the suspension is necessary in the interest of the Owner. The Contractor shall comply immediately with any written order of the Engineer. Such suspension shall be without liability to the Contractor on the part of the Owner except as otherwise provided in subsection 7C.
B. Archaeological and Paleontological Discoveries: If discovery is made of items of archaeological or paleontological interest, the Contractor shall immediately cease excavation in the area of discovery and shall not continue until ordered by the Engineer.
Discoveries which may be encountered may include, but not be limited to, dwelling sites, stone implements or other artifacts, animal bones, human bones, and fossils. The Contractor shall be entitled to an extension of time and compensation in accordance w ith Section 7.
5. TERMINATION OF THE CONTRACT FOR DEFAULT.
A. General: If, prior to the acceptance of the Work, the Contractor:
(1) Becomes insolvent, assigns its assets for the benefit of its creditors, is unable become due, or is otherwise financially unable to complete the Work; (2) Abandons the Work by failing to report to the Work site and diligently prosecute the Work to completion;
(3) Disregards written instructions from the Engineer or materially violates provisions of the Contract Documents;
(4) Fails to prosecute the Work according to the schedule approved by the Engineer; (5) Disregards laws or regulations of any public body having jurisdiction; or (6) Commits continuous or repeated violations of regulatory or statutory safety requirements, then the Owner will consider the Contractor in default of the Contract.
B. Notices: Notices and other written communications regarding default between the Contractor, the Owner, and the Surety shall be transmitted as follows:
100
(1) Personal delivery with proof of delivery which may be made by declaration under penalty of perjury by any person over the age of 18 years. The proof of delivery shall show that delivery was performed in accordance with these provisions. Service shall be effective on the date of delivery. Notices given to the Contractor by personal delivery may be made to the Contractor’s authorized representative at the Work site; or
(2) Certified mail addressed to the mailing address of the recipient postage prepaid; return receipt requested. Service shall be effective on the date of the receipt of the mailing.
Simultaneously, the Owner may send the same notice by regular mail. If a notice that is sent by certified mail is returned unsigned, then delivery shall be effective pursuant to regular mail, provided that the notice that was sent by regular mail is not returned.
C. Notice to Cure: The Owner will issue a written notice to cure the default to the Contractor and its Surety. The Contractor shall commence satisfactory corrective actions within 5 Working Days after receipt.
D. Notice of Termination for Default: If the Contractor fails to commence satisfactory corrective action within 5 Working Days after receipt of the notice to cure, or to diligently continue satisfactory and timely correction of the default thereafter, then the Owner will recommend to the Board that the Contractor be found in default of the Contract and upon such finding by the Board:
(1) Will terminate the Contractor’s right to perform under the Contract by issuing a written notice of termination for default to the Contractor and its Surety; (2) May use any materials, equipment, tools, or other facilities furnished by the Contractor to secure and maintain the Work site; and
(3) May furnish labor, equipment, and materials the Owner deems necessary to secure and maintain the Work site.
The provisions of this subsection shall be in addition to all other legal rights and remedies available to the Owner.
E. Responsibilities of the Surety: Upon receipt of the written notice of termination for default, the Surety shall immediately assume all rights, obligations, and liabilities of the Contractor under the Contract. If the Surety fails to protect and maintain the Work site, the Owner may do so, and may recover all costs incurred. The Surety shall notify the Owner that it is assuming all rights, obligations, and liabilities of the Contractor under the Contract and all money that is due, or would become due, to the Contractor shall be payable to the Surety as the Work progresses, subject to the terms of the Contract.
Within 15 Working Days of receipt of the written notice of termination for default, the Surety shall submit to the Owner a written plan detailing the course of action it intends to take to remedy the default. The Owner will review the plan detailing and notify the Surety 101
if the plan is satisfactory. If the Surety fails to submit a satisfactory plan, or if the Surety fails to maintain progress according to the plan accepted by the Owner, the Owner may, upon 48 hours written notice, exclude the Surety from the premises, take possession of all material and equipment, and complete the Work in any way the Owner deems to be expedient. The cost of completing the Work by the Owner shall be charged against the Surety and may be deducted from any monies due, or which would become due, the Surety.
If the amounts due under the Contract are insufficient for completion, the Surety shall pay the Owner, within 30 Days after the Owner submits an invoice, all costs in excess of the remaining Contract Price.
F. Payment: The Surety will be paid for completion of the Work in accordance less the value of damages caused to the Owner by the acts of the Contractor.
6. TERMINATION OF THE CONTRACT FOR CONVENIENCE.
The Owner may terminate the Contract if it becomes impossible or impracticable to proceed, or because of conditions or events beyond the control of the Owner.
A. Notice: The Owner will issue a written notice of termination for convenience as follows:
(1) Personal delivery, with proof of delivery which may be made by declaration under penalty of perjury by any person over the age of 18 years. The proof of delivery shall show that delivery was performed in accordance with these provisions. Service shall be effective on the date of delivery. Notices given to the Contractor by personal delivery may be made to the Contractor’s authorized representative at the Work site; or
(2) Certified mail addressed to the mailing address of the recipient postage prepaid; return receipt requested. Service shall be effective on the date of the receipt of the mailing.
Simultaneously, the Owner may send the same notice by regular mail. If a notice that is sent by certified mail is returned unsigned, then delivery shall be effective pursuant to regular mail, provided that the notice that was sent by regular mail is not returned.
B. Cessation of Work: Upon receipt, the Contractor shall immediately cease work, except work the Contractor is directed to complete by the Engineer or required to complete for public safety and convenience. The Contractor shall immediately notify Subcontractors and suppliers to immediately cease their work.
C. Payment: The Contractor will be paid without duplication for:
(1) Work completed in accordance with Contract Documents prior to the effective date of termination for convenience;
(2) Reasonable costs incurred in settlement of terminated contracts with Subcontractors, suppliers and others; and
(3) Reasonable expenses directly attributable to termination.
102
The Contractor shall submit a final termination settlement proposal to the Owner no later than 90 days from the effective date of termination, unless extended, in writing, by the Owner upon written request by the Contractor.
If the Contractor fails to submit a proposal, the Owner may determine the amount, if any, due the Contractor as a result of the termination. The Owner will pay the Contractor the amount it determines to be reasonable. If the Contractor disagrees with the amount determined by the Owner as being reasonable, the Contractor shall provide notice to the Owner within 30 Days of receipt of payment. Any amount due shall be as later determined by arbitration, if the Owner and the Contractor agree thereto, or as fixed in a court of law.
7. DELAYS AND EXTENSIONS OF TIME.
A. General: If delays are caused by unforeseen events beyond the control of the Contractor, such delays will entitle the Contractor to an extension of Contract time as provided herein, but the Contractor will not be entitled to damages or additional payment due to such delays, except as otherwise specified in Subsection 7C of this Contract. Such unforeseen events may include: war, government regulations, labor disputes, strikes, fires, floods, adverse weather or elements necessitating cessation of work, inability to obtain materials, labor, or equipment, required Extra Work, or other specific events as may be further described in the Special Provisions.
No extension of time will be granted for a delay caused by the Contractor’s inability to obtain materials unless the Contractor furnishes to the Engineer documentary proof. The proof must be provided in a timely manner in accordance with the sequence of t he Contractor’s operations and the approved construction schedule.
If delays beyond the Contractor’s control are cause by events other than those mentioned above, the Engineer may deem an extension of time to be in the best interests of the Owner.
The Contractor will not be entitled to damages or additional payment due to such delays, except as otherwise specified in Subsection 7C of this Contract.
If delays beyond the Contractor’s control are caused solely by action or inaction of the Owner, such delays will entitle the Contractor to an extension of time per subsection B of this Contract.
B. Extensions of Time: Extensions of time, when granted, will be based upon the effect of delays to the Work. They will not be granted for non-controlling delays to minor portions of the Work unless it can be shown that such delays did or will delay the progress of the Work.
C. Payment for Delays: Pursuant to Public Contract Code Section 7102, the Contractor will be compensated for damages incurred due to delays for which the Owner is responsible.
Such actual costs will be determined by the Engineer. The Owner will not be liable for damages whi ch the Contractor could have avoided by any reasonable mans, such as 103
judicious handling of forces, equipment or plant. The determination of what damages the Contractor could have avoided will be made by the Engineer.
D. Written Notice and Report: If the Contractor desires payment for a delay as specified in subsection C above or an extension of time, it shall file with the Engineer a written request and report of cause within 30 Days after the beginning of the delay. The request for payment or extension must be made at least 15 days before the specified completion date.
Failure by the Contractor to file these items within the times specified will be considered grounds for refusal by the Owner to consider such a request.
E. Time of Completion: The Contractor shall complete the Work in the time specified in the Contract or the Special Provisions. The Contractor shall complete each portion of the Work within the time specified as in the Contract or the Special Provisions for such portion.
Unless otherwise specified in the Contract or the Special Provisions, the time of completion of the Contract shall be expressed in Working Days.
F. Contract Time Accounting: The Engineer will make a daily determination of each Working Day to be charged against Contract time. These determinations will be discussed and the Contractor will be furnished a periodic statement showing the allowable number of Working Days of Contract time, as adjusted at the beginning of the reporting period.
The statement will also indicate the number of Working Days charged during the reporting period and the number of Working Days of Contract time remaining. If the Cont ractor does not agree with the statement, it shall file a written protest within 15 Days after receipt, setting forth the facts of the protest. Otherwise, the statement will be deemed to have been accepted.
8. COMPLETION, ACCEPTANCE, AND WARRANTY.
A. Completion: The Contractor shall submit a written assertion that the Work has been completed. If, in the Engineer’s judgment, the Work has been completed in accordance with the Contract Documents, the Engineer will set forth in writing the date the Work was completed. This will be the date when the Contractor is relieved from responsibility to protect and maintain the Work and to which liquidated damages will be computed.
B. Acceptance: Acceptance will occur after all of the requirements contained in the Contract Documents have been fulfilled. If, in the Engineer’s judgment, the Contractor has fully performed the Contract, the Engineer will recommend to the Board that the Contractor’s performance of the Contract be accepted.
C. Warranty: The Work shall be warranted by the Contractor against defective materials and workmanship for a period of 2 years. The warranty period shall start on the date the Work was completed as determined by the Engineer.
The warranty period for specific items covered under manufacturers’ or suppliers’ warranties shall commence on the date they are placed into service at the direction of or as approved by the Engineer in writing.
104
All warranties express or implied, from subcontractors, manufacturer, or suppliers, of any tier, for the materials furnished and work performed shall be assigned, in writing, to the Owner, and such warranties shall be delivered to the Engineer prior to acc eptance of the Contractor’s performance of the Contract.
The Contractor shall replace or repair defective materials and workmanship in a manner satisfactory to the Engineer, after notice to do so from the Engineer, and within the time specified in the notice. If the Contractor fails to make such replacement or repairs within the time specified in the notice, the Owner may perform the replacement or repairs at the Contractor’s expense. If the Contractor fails to reimburse the Owner for the actual costs, the Contractor’s Surety shall be liable for the cost thereof.
9. LIQUIDATED DAMAGES.
Failure of the Contractor to complete the Work within the time allowed will result in damages being sustained by the Owner. Such damages are, and will continue to be, impracticable and extremely difficult to determine. For each consecutive calendar day in excess of the time specified for completion of the Work, as adjusted in accordance with Section 7 above, the Contractor shall pay to the Owner, or have withheld from monies due it, the sum of $500.00, unless otherwise specified in the Special Provisions.
Execution of the Contract shall constitute agreement by the Owner and the Contractor that $500.00 per day is the minimum value of the costs and actual damage caused by the failure of the Contractor to complete the Work within the allotted time. Such sum is liquidated damages and shall not be construed as a penalty, and may be deducted from payments due the Contractor if such delay occurs.
10. INDEMNIFICATION
To the maximum extent permitted by Civil Code Section 2782 et seq ., Owner shall not be liable for, and Contractor shall defend, indemnify, and hold harmless Owner and its officers, agents, engineers, architects, consultants, employees and volunteers (collectively “Owner Parties”), against any and all claims, deductibles, self -insured retentions, demands, liability, judgments, awards, fines, mechanics' liens or other liens, labor disputes, losses, damages, expenses, charges or costs of any kind or character, including attorneys' fees and court costs (collectively referred to as “Claims”), which arise out of or are in any way connected to the work covered by this Contract arising either directly or indirectly from any act, error, omission or negligence of Contractor or its officers, employees, agents, contractors, sub-contractors, licensees or servants, including, without limitation, Claims caused by the concurrent negligent act, error or omission, of Owner Parties.
However, Contractor shall have no obligation to defend or indemnify Owner Parties against Claims caused by the active negligence, sole negligence or willful misconduct of Owner Parties.
This indemnification shall apply to all liability, as provided for above, regardless of whether any insurance policies are applicable, and insurance policy limits do not act as a limitation upon the amount of the indemnification to be provided by the Contractor.
11. INSURANCE.
105
Contractor, at its sole cost and expense, shall obtain and maintain in full force and effect throughout the entire term of this Contract, the following -described insurance coverage, insuring not only Contractor and its subcontractors, if any, but also, with the exception of workers’ compensation and employer’s liability insurance, the Owner, its officers, agents, and employees of each of them:
A. MINIMUM SCOPE OF INSURANCE
Coverage shall be at least as broad as:
(1) Insurance Services Office Commercial General Liability coverage (Occurrence form CG 0001).
(2) Insurance Services Office form number CA 0001 (Ed. 1/87) covering Automobile Liability, code 1 (any auto).
(3) Worker’s Compensation insurance as required by the State of California and Employer’s Liability Insurance.
B. MINIMUM LIMITS OF INSURANCE
Contractor shall maintain limits no less than:
(1) General Liability: $ 2,000,000 per occurrence for bodily injury, personal injury, and property damage. If commercial General Liability Insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this product / loc ation or the general aggregate limit shall be twice the required occurrence limit.
(2) Automobile Liability: $2,000,000 per accident for bodily injury and property damage.
(3) Employer’s Liability: $1,000,000 per accident for bodily injury or disease.
C. DEDUCTIBLES AND SELF-INSURED RETENTIONS
Any deductible or self-insured retentions must be declared to and approved by the Owner.
At the option of the Owner, either the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the Owner, its officers, officials, employees and volunteers; or the Contractor shall procure a bond guaranteeing payment of losses and related investigations, claim administration and defense expenses.
D. OTHER INSURANCE PROVISIONS
The general liability and automobile liability policies are to contain, or be endorsed to contain, the following provisions:
106
(1) The Owner, its officers, officials, employees, agents and volunteers are to be covered as insureds as respects: liability arising out of activities performed by or on behalf of the Contractor; products and completed operations of the Contractor; premises owned, occupied or used by the Contractor; or automobiles owned, leased, hired or borrowed by the Contractor. The coverage shall contain no special limitations on the scope of protection afforded to the Owner, its officers, officials, employees, agents or volunteers.
(2) For any claims related to this project, the Contractor’s insurance coverage shall be primary insurance as respects the Owner, its officers, officials, employees, agents and volunteers. Any insurance or self -insurance maintained by the Owner, its officers, officials, employees, agents or volunteers shall be excess of the Contractor’s insurance and shall not contribute with it.
(3) Any failure to comply with reporting or other provisions of the policies including breaches of warranties shall not affect coverage provided to the Owner, its officials, employees, agents or volunteers.
(4) The Contractor’s insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer’s liability.
(5) Each insurance policy required by this clause shall be endorsed to state the coverage shall not be suspended, voided, canceled by either party, reduced in coverage or in limits except after thirty (30) days’ prior written notice by certified mail, return receipt requested, has been given to the Owner.
E. ACCEPTABILITY OF INSURERS
Insurance is to be placed with insurers with a current A.M. Best’s rating of no less the A:VII.
F. VERIFICATION OF COVERAGE
Contractor shall furnish the Owner with original endorsements effecting coverage required by this clause. The endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. The endorsements are to be on forms provided by the Owner.
All endorsements are to be received and approved by the Owner before work commences.
As an alternative to the Owner’s forms, the Contractor’s insurer may provide complete, certified copies of all required insurance policies, including endorse ments affecting the coverage required by these specifications.
G. SUBCONTRACTOR
Contractor shall include all subcontractors as insureds under its policies or shall furnish separate certificates and endorsements for each subcontractor. All coverages for subcontractors shall be subject to all of the requirements stated herein. 107
Contractors Property Damage Liability insurance shall include coverage for property damage caused by blasting, collapse, structural injuries or damage to underground utilities.
The policy shall not contain “x”, “c” or “u” exclusions.
Certificates of such insurance shall be filed with the Owner concurrently with the execution of this Contract or, with Owner’s approval, within ten (10) days thereafter. Said certificates shall be subject to the approval of the Owner.
12. WORKERS COMPENSATION.
Contractor represents that he or she has secured the payment of Worker’s Compensation in compliance with the provisions of the Labor Code of the State of California and during the performance of the work contemplated herein will continue so to comply with said provisions of said Code. Contractor shall supply the Owner with certificates of insurance, in triplicate, evidencing that Worker’s Compensation Insurance is in effect and providing that the Owner will receive ten (10) days written notice of cancellati on. If the Contractor self -insures Worker’s Compensation, Certificate of Consent of self-insured shall be provided the Owner.
13. BONDS.
The Contractor shall forthwith furnish in triplicate two bonds, each in the amount of 100 percent of the Contract price. One shall serve as security for the faithful performance of the work (hereafter “Performance Bond”). The second bond shall serve as s ecurity for the faithful performance and satisfaction of the persons furnishing materials and performing labor on the work (hereafter “Payment Bond”). Both bonds shall be written by a surety company licensed to transact surety business in the State of California and in the form prescribed by law.
The Performance Bond shall remain in force throughout the period required to complete the work and thereafter for a period of 730 calendar days after final acceptance of the work. The Payment Bond will be released 35 days after the recording date of the Notice of Completion, provided no liens are filed with the Owner. The Payment Bond shall contain provisions such that if the Contractor or its subcontractor shall fail to pay (a) amounts due under the Unemployment Insurance Code with respect to work performed under the contract, or (b) any amounts required to be deducted, withheld and paid over to the Employment Development Department from the wages of the employees of the Contractor and subcontractors pursuant to Section 13020 of the Unemployment Insurance Code with respect to such work and labor, then the surety will pay these amounts. In case suit is brought upon the payment bond, the surety will pay reasonable attorneys’ fees to be fixed by the court.
14. DEFECTIVE MATERIALS; DEFECTIVE WORK.
Should any of the materials or equipment prove defective or should the work as a whole prove defective, due to faulty workmanship, material furnished or methods of installation, or should the work or any part thereof fail to operate properly as originally intended and in accordance with the plans and specifications, due to any of the above causes, all within twenty four (24) months after date on which the completed project is accepted by the Owner, the undersigned agrees to reimburse 108
the Owner, upon demand, for its expenses incurred in restoring said work to the condition contemplated in said project, including the cost of any such equipment or materials replaced and the cost of removing and replacing any other work necessary to make such replacement or repairs, or, upon demand by the Owner, to replace any such materials and to repair said work completely without cost to the Owner so that said work will function successfully as originally contemplated.
The Owner shall have the unqualified right to make any needed replacement or repairs after a written notice to cure has been served upon the Contractor and a reasonable time to cure has expired. In the event the Owner elects to have said work performed by the undersigned, the undersigned agrees that the repairs shall be made within a reasonable time after the receipt of demand from the Owner. If the undersigned shall fail or refuse to comply with his obligations under this guaranty, the Owner shall be entitled to all costs and expenses, including attorney’s fees, reasonably incurred by reason of the said failure or refusal.
15. LABOR STANDARDS.
A. General: Contractor agrees that construction work shall be subject to the provisions of state and local regulations. In particular, Contractor agrees to comply with all applicable Labor Code requirements whether or not expressly stated herein.
B. Wages:
(1) General: The Contractor and each subcontractor engaged in the work shall pay each employee an amount not less than the rate established for each trade or occupation listed by the Director of the Department of Industrial Relations, State of California. An employee whose type of work is not covered by any of the classified wage rates shall be paid not less than the rate of wage listed for the classification which most nearly corresponds to the type of work to be performed.
(2) State: The Owner has obtained from the Department of Industrial Relations the general prevailing rate of wages in the vicinity of the work to be performed under this Contract.
These wage rates are maintained on file by Owner at its principle office and will be made available to any interested party upon request.
(3) Enforcement: These wage rates shall be enforced under Sections 1770 through 1780 of the California Labor Code. The Contractor shall be liable for forfeitures or penalties incurred from noncompliance with Labor Code provisions. (4) Payroll Records: Each Contractor and subcontractor shall keep an accurate payroll record, showing the name, address, social security number, work week, and the actual per diem wages paid to each journeyman, apprentice, worker, or other employee employed by him or her in connection with the work on the Project. Such records shall be certified and available for inspection at all reasonable hours at the principal place of the Contractor as required by Labor Code Section 1776. Certified payrolls shall be submitted weekly to Owner c/o Yamabe and Horn Engineering Inc. Electronic certified payrolls shall also be submitted weekly directly to the Labor Commissioner, Division of Labor Standards Enforcement.
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C. Preference for Resident Labor : Whenever possible in the employment of labor for performance of the work, the Contractor shall give preference to qualified persons residing within the general area of the work.
D. Hours of Labor: Pursuant to the Labor Code, eight hours of labor shall constitute a legal day's work. The Contractor or any subcontractor shall not require any more than eight hours of labor in a day from any person employed in the performance of the work under this Contract except for authorized work as provided under paragraph Subsection E below.
Failure of the Contractor to perform the work in accordance with this policy of the State of California shall be deemed a failure to comply with the provisions of this Contract.
E. Overtime Work: In accordance with Labor Code Section 1813, the Contractor shall as a penalty to the State or political subdivision on whose behalf the Contract is made or awarded, forfeit twenty -five ($25.00) for each worker employed in the execution of the Contract by the Contractor or by any subcontractor for each calendar day during which said worker is required or permitted to work more than eight hours in any one calendar day and forty hours in any one calendar week in violation of Labor Code Sections 1810-1815.
Overtime and shift work may be established as a regular procedure by the Contractor with reasonable notice and written permission of the Owner. No work other than overtime and shift work established as a regular procedure shall be performed between the hours of 6:00 p.m. and 7:00 a.m. nor on Saturdays, Sundays or holidays except such work as is necessary for the proper care and protection of the work already performed or in case of an emergency.
Contractor agrees to pay the costs of overtime inspection except those occurring as a result of overtime and shift work established as a regular procedure. Overtime inspection shall include inspection required during holidays, Saturdays, Sundays and weekdays between the hours of 6:00 p.m. and 7:00 a.m. Costs of overtime inspection will cover engineering, inspection, general supervision and overhead expenses which are directly chargeable to the overtime work. Contractor agrees that Owner shall deduct such charges from payments due the Contractor.
F. Apprentices: The Contractor and subcontractors shall comply with the requirements of Sections 1777.5 and 1777.6 of the Labor Code in the employment of apprentices.
Information relative to apprenticeship standards, wage schedules, and other requirements may be obtained from the Director of Industrial Relations, ex officio the Administrator of Apprenticeship Standards and its branch offices.
G. Compliance with SB 854: California Labor Code: Contractor represents that it has complied and will continue to comply with all applicable registration and disclosure requirements of SB 854 and acknowledges the following:
(1) No contractor or subcontractor may be listed on a bid proposal for a public works project unless registered with the Department of Industrial Relations pursuant to Labor Code section 1725.5 [with limited exceptions from this requirement for bid purposes only under Labor Code section 1771.1(a)]
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(2) No contractor or subcontractor may be awarded a contract for public work on a public works project unless registered with the Department of Industrial Relations pursuant to Labor Code section 1725.5.
(3) This project is subject to compliance monitoring and enforcement by the Department of Industrial Relations.
(4) No bid proposals will be accepted nor any contract entered into with a contractor without proof of registration described above.
(5) Contractor must post any job site notices required by regulation. It is the Contractor’s responsibility to know the current regulations.
(6) Contractor must furnish electronic certified payroll records to the Division of Labor Standards Enforcement (“Labor Commissioner”) as required. The Contractor is responsible for checking with the Department of Industrial Relations for any notices regarding this requirement.
16. LAWS, REGULATIONS AND PERMITS.
A. General: The Contractor shall give the notices required by law and comply with all laws, ordinances, rules and regulations pertaining to the conduct of the work. The Contractor shall be liable for violations of the law in connection with work provided by the Contractor.
If the Contractor observes that the drawings, specifications are at variance with any laws, ordinances, rules or regulations, the Contractor shall promptly notify the Engineer in writing of such variance. The Owner shall promptly review the matter and, if necessary, shall issue a change order or take any other action necessary to bring about compliance with the law, ordinance, rule or regulation in question. Contractor agrees not to perform work known to be contrary to any laws, ordinances, rules, or regulations.
B. Permits and Licenses : Unless otherwise specified herein, permits and licenses from governmental agencies which are necessary only for and during the prosecution of the work and the subsequent guarantee period shall be secured and paid for by the Contractor.
Permits and lice nses of regulatory agencies which are necessary to be maintained after completion of the guarantee period shall be secured and paid for by the Owner.
C. Patents and Royalties : The costs involved in fees, royalties or claims for any patented invention, article, process or method that may be used upon or in a manner connected with the work under this Contract or with the use of completed work by the Owner, shall be paid by the Contractor. The Contractor and Contractor's sureties shall protect, defend, and hold Owner together with Owner's officers, agents and employees, harmless against any and all demands made for such fees or claims brought or made by the holder of any invention or patent. Before final payment is made on the account of this Contract, the Contractor shall, if requested by the Owner, furnish acceptable proof of a proper release from all such fees or claims.
Should the Contractor, agent, employee or any of them be enjoined from furnishing or using any invention, article, material or plans supplied or required to be supplied or used 111
under this contract, the Contractor shall promptly pay such royalties and secure the requisite licenses; or, subject to acceptance by the Owner, substitute other articles, materials or appliances in lieu thereof which are of equal efficiency, quality, fini sh, suitability and market value to those planned or required under the Contract. Descriptive information of these substitutions shall be submitted to the Engineer for determination of general conformance to the design concept and the construction Contract. Should the Owner elect to refuse the substitution, the Contractor agrees to pay such royalties and secure such valid licenses as may be requisite for the Owner, Owner's officers, agents and employees or any of them, to use such invention, article, mate rial or appliance without being disturbed or in any way interfered with by any proceeding in law or equity on account thereof.
17. CALIFORNIA LAW AND VENUE.
The terms of this Contract shall be governed by and construed in accordance with the laws of the State of California applicable to contracts entered into and to be performed in California. In the event any part of this Contract shall be held to be invalid, void, or otherwise unenforceable for any reason, the Contract shall be modified rather that voided, if possible, in order to achieve the intent of the parties to the extent possible and in any event, all other provisions of this Contract shall remain valid and enforceable.
18. MUTUAL NEGOTIATION.
Contractor acknowledges that the provisions herein have been mutually negotiated and neither party shall be construed to be the drafter of this Contract.
19. ATTORNEY’S FEES.
In the event of litigation concerning this Contract the prevailing party shall be awarded reasonable attorney fees and costs of suit, in addition to appropriate compensatory damages or other relief ordered for the benefit of the prevailing party.
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IN WITNESS WHEREOF, the parties have executed this Contract as set forth below.
CITY OF SANGER
R.J. BERRY JR., INC.
(OWNER) (CONTRACTOR)
By: By:
Nathan Olson, City Manager
Date: _______________________________ Title:
Approved as to Form:
Federal Taxpayer I.D. No.
City Attorney Date: _______________________________
Date: _______________________________
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Prepared by: _Virginia Harmon _ Approved by: _Nathan Olson______________
REVIEW: City Manager: _NCO_____ Finance: ___VH____ City Attorney: ___ TYPE OF ITEM: COUNCIL ACTION: APPROVED DENIED NO ACTION ____ Consent
____ Info Item
_ X Action Item
__X Department Report
____ Public Hearing
____ Matter Initiated by a Council Member
____ Other
____ Continued to: __________
For the Meeting of: November 6, 2025
Agenda Item No.: H-1
CITY OF SANGER
REPORT TO THE CITY COUNCIL
To: Mayor and Councilmembers
From: Virginia Harmon, Finance Director
Subject: Fiscal Year 2023 Annual Audit Financial Report and Single Audit
Attachments: (1) 2023 Financial Statements
(2) 2023 Single Audit, Related Reports & Corrective Action Plan (3) 2023 Management Letter
(4) 2023 Gann Report
(5) 2023 Conclusion Letter
CONFLICT OF INTEREST:
None known.
RECOMMENDATION:
That the City Council receive and file the Annual Audit Financial Reports and Single Audit for Fiscal Year 2023 as prepared by CPA firm, Bryant L. Jolley, Certified Public Accountants.
EXECUTIVE SUMMARY:
These financial statements have been prepared in accordance with generally accepted auditing standards using the accounting principles, 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.
BACKGROUND:
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The city is required to conduct an outside audit of its financial statements and processes. Additionally, as the City received more than $750,000 in federal grants, a Single Audit is also required of federal grant funding. A member of Bryant L. Jolley, Certified Public Accountants will attend the council meeting and present the financial statements and findings to the City Council and the public.
REASON FOR RECOMMENDATION:
It is required by City of Sanger Municipal Code that the financial records be audited and accepted by the City Council each year, as well as being a prudent financial management tool. It is also required that if a city receives federal grant funds over $750,000, a single audit be conducted and filed with the California State Controller’s office
FISCAL IMPACT:
None noted
COUNCIL OPTIONS:
None noted
ACTIONS FOLLOWING APPROVAL:
Upon receipt of the annual audit, materials will be posted to the City’s website for public use.
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Attachment 1
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City of Sanger | CA
Financial Statements
For the Year Ended June 30, 2023
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CITY OF SANGER | FOR THE YEAR ENDED JUNE 30, 2023
Financial Statements
TABLE OF CONTENTS
PAGE
FINANCIAL SECTION
Independent Auditor’s Report ............................................................................................................................................ 1
Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net Position ............................................................................................................................................ 6 Statement of Activities ................................................................................................................................................. 7
Fund Financial Statements:
Governmental Funds:
Balance Sheet ......................................................................................................................................................... 9 Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Position ................................................................................................... 10 Statement of Revenues, Expenditures and Changes in
Fund Balances .................................................................................................................................................... 11 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Government-Wide Statement of Activities ............................................ 12
Proprietary Funds:
Statement of Net Position .................................................................................................................................... 13 Statement of Revenues, Expenses and Changes in Net Position ......................................................................... 14 Statement of Cash Flows ...................................................................................................................................... 15
Fiduciary Funds:
Statement of Fiduciary Net Position .................................................................................................................... 17 Statement of Changes in Fiduciary Net Position .................................................................................................. 18
Notes to the Basic Financial Statements ............................................................................................................................ 20
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CITY OF SANGER | FOR THE YEAR ENDED JUNE 30, 2023
Financial Statements
TABLE OF CONTENTS (Continued)
PAGE
Required Supplementary Information:
Budgetary Comparison Schedules:
General Fund ............................................................................................................................................................... 62 Measure S Sales Tax – Major Special Revenue Fund .................................................................................................. 63 Notes to the Budgetary Comparison Schedules .......................................................................................................... 64 Pension Plan:
Cost Sharing Defined Benefit Pension Plan – Miscellaneous and Safety Plan:
Schedule of the City’s Proportionate Share of the Net Pension Liability .................................................................... 66 Schedule of Contributions ........................................................................................................................................... 67
Combining Fund Financial Statements
Nonmajor Governmental Funds:
Description of Nonmajor Funds .................................................................................................................................. 69 Combining Balance Sheet ............................................................................................................................................ 72 Combining Statement of Revenues, Expenditures and Changes in Fund Balances .................................................... 73 Nonmajor Special Revenue Funds:
Combining Balance Sheet ............................................................................................................................................ 74 Combining Statement of Revenues, Expenditures and Changes in Fund Balances .................................................... 78 Nonmajor Debt Service Fund:
Combining Balance Sheet ............................................................................................................................................ 82 Combining Statement of Revenues, Expenditures and Changes in Fund Balance ...................................................... 83 Internal Service Funds:
Description of Internal Service Funds ......................................................................................................................... 84 Combining Statement of Net Position......................................................................................................................... 85 Combining Statement of Revenues, Expenses and Changes in Net Position .............................................................. 86 Combining Statement of Cash Flows ........................................................................................................................... 87
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FINANCIAL SECTION
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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
To the City Council
City of Sanger, 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 informatio n of the City of Sanger, (the “City”), as of and for the year ended June 30, 2023, and the related notes to th e financial statements, which collectively comprise the City of Sanger’s basic financial statements as listed in the table of contents.
In our opinion, the financial statements referred to above present fairly, in all mater ial respects, the respective financial position of the governmental activities, the bus iness-type activities, each major fund, and the aggregate remaining fund information of the City of Sanger, as of June 30, 20 23, 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 standa rds 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 standa rds 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 of Sanger and to meet our othe r ethical responsibilities, in accordance with the relevant ethical requirements relating to our aud it. 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 requi red to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City of Sanger’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about wh ether 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 ge nerally accepted auditing standards and Government Auditing Standards will always detect a material misstate ment when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from erro r, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal c ontrol. Misstatements are considered material if there is 121
2 a substantial likelihood that, individually or in the a ggregate, 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 res ponsive 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 of Sanger’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 of Sanger’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 financia l 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 operati onal, 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 St ates of America require that the budgetary comparison information on pages 62-63 and the schedule of the City’s proportionate share of the net pension liability and schedule of contributions on pages 66-67 be presented to supplement th e basic financial statements. Such information is the responsibility of ma nagement and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board w ho considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic , or historical context.
We have applied certain limited procedures to the required supplementary in formation in accordance with auditing standards generally accepted in the United States of Am erica, which consisted of i nquiries of management about the methods of preparing the information and compari ng the information for consis tency 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 of Sanger’s basic financial statements. The accompanying combining and individual nonmajor fund financial statements are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsi bility 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 a pplied in the audit of the b asic 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 fina ncial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United 122
3 States of America. In our opinion, the combining and individual nonmajor fund financial statements 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 October 22, 2025, on our consideration of the City of Sanger’s internal control over financial repor ting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financia l reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City of Sanger’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering City of Sanger’s intern al control over financial reporting and compliance.
October 22, 2025
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4 Basic Financial Statements
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5 Government-Wide Financial Statements
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CITY OF SANGER | JUNE 30, 2023
Statement of Net Position
The notes to the basic financial statements are an integral part of this statement. 6 Governmental Business-Type
ASSETS Activities Activities Total
Cash and investments 28,155,461$ 20,272,806$ 48,428,267$ Cash with fiscal agents 8,759,775 656 8,760,431 Accounts receivable, net 498,179 3,911,438 4,409,617 Due from other governments 4,787,382 62,077 4,849,459 Notes receivable 2,888,403 - 2,888,403 Interest receivable 101,668 60,860 162,528 Leases receivable 451,451 - 451,451 Inventory 24,779 - 24,779 Land held for resale 712,000 - 712,000 Prepaid expenses 21,307 - 21,307 Internal balances 40,646 (40,646) - Capital assets (net of accumulated depreciation/amortization):
Non-depreciable 3,121,283 4,027,216 7,148,499 Depreciable 42,695,844 26,793,991 69,489,835 Total assets 92,258,178 55,088,398 147,346,576
DEFERRED OUTFLOWS OF RESOURCES
Pension related 13,588,879 2,431,416 16,020,295 Loss on refunding - 166,549 166,549 Total deferred outflows of resources 13,588,879 2,597,965 16,186,844
LIABILITIES
Current liabilities:
Accounts payable 1,260,005 914,359 2,174,364 Accrued payroll and benefits 595,677 - 595,677 Interest payable 286,979 61,763 348,742 Deposits 303,093 265,764 568,857 Unearned revenue 4,247,936 - 4,247,936 Current portion of long-term liabilities 1,041,961 1,252,356 2,294,317 Current portion of lease liability 65,613 - 65,613 Current portion of compensated absences 568,108 46,573 614,681 Total current liabilities 8,369,372 2,540,815 10,910,187 Noncurrent liabilities:
Long-term liabilities 23,914,558 24,151,632 48,066,190 Lease liability 68,947 - 68,947 Compensated absences 159,221 2,117 161,338 Net pension liability 6,824,169 988,868 7,813,037 Total noncurrent liabilities 30,966,895 25,142,617 56,109,512 Total liabilities 39,336,267 27,683,432 67,019,699
DEFERRED INFLOWS OF RESOURCES
Pension related 14,360,313 3,189,367 17,549,680 Lease related 623,595 - 623,595 Total deferred inflows of resources 14,983,908 3,189,367 18,173,275
NET POSITION
Investment in capital assets 36,062,318 8,741,756 44,804,074 Restricted 26,722,498 656 26,723,154 Unrestricted (11,257,934) 18,071,152 6,813,218 Total net position 51,526,882 $ 26,813,564 $ 78,340,446 $ 126
CITY OF SANGER | FOR THE YEAR ENDED JUNE 30, 2023
Statement of Activities
The notes to the basic financial statements are an integral part of this statement. 7 Net (Expense) Revenue
Program Revenues and Changes in Net Position
Operating Capital
Charges Grants and Grants and Governmental Business-Type Functions/Programs Expenses for Services Contributions Contributions Activities Activities Total Primary Government:
Governmental activities:
City Council 421,107 $ - $ - $ 4,539$ (416,568)$ - $ (416,568)$ Administrative services 2,243,732 - - - (2,243,732) - (2,243,732) Community services 1,327,079 199,265 10,252 - (1,117,562) - (1,117,562) Police department 10,566,511 366,509 459,583 5,057,725 (4,682,694) - (4,682,694) Fire and emergency services 7,616,659 2,980,200 16,875 4,663 (4,614,921) - (4,614,921) Development services 2,565,932 - 274,245 - (2,291,687) - (2,291,687) Public works 7,004,166 791,287 2,230,643 4,189,603 207,367 - 207,367 Nondepartmental 52,166 28,480 - - (23,686) - (23,686) Interest and fiscal charges 669,799 - - - (669,799) - (669,799) Total governmental activities 32,467,151 4,365,741 2,991,598 9,256,530 (15,853,282) - (15,853,282) Business-Type activities:
Water 4,653,327 3,287,228 - 147,429 - (1,218,670) (1,218,670) Sewer 5,290,065 5,254,190 - - - (35,875) (35,875) Disposal 3,182,946 3,214,146 - - - 31,200 31,200 Total business-type activities 13,126,338 11,755,564 - 147,429 - (1,223,345) (1,223,345) Total primary government 45,593,489 $ 16,121,305 $ 2,991,598 $ 9,403,959 $ (15,853,282) (1,223,345) (17,076,627) General revenues:
Property taxes 3,416,504 - 3,416,504 Sales and use taxes 7,272,464 - 7,272,464 Motor vehicle in-lieu 3,076,288 - 3,076,288 Franchise taxes 623,225 - 623,225 Transient occupancy taxes 12,282 - 12,282 Utility users taxes 1, 867,735 - 1,867,735 Business license tax 597,630 - 597,630 Investment income (loss) 631,140 209,695 840,835 Fees and other revenue 702,792 37,414 740,206 Transfers (417,024) 417,024 -
Total general revenues 17,783,036 664,133 18,447,169 Change in net position 1,929,754 (559,212) 1,370,542 Net position - beginning (restated) 49,597,128 27,372,776 76,969,904 Net position - ending 51,526,882 $ 26,813,564 $ 78,340,446 $ 127
8 Fund Financial Statements
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CITY OF SANGER | JUNE 30, 2023
Governmental Funds
Balance Sheet
The notes to the basic financial statements are an integral part of this statement. 9 Special Revenue
Fund
Measure S Nonmajor Total
District Capital Projects Governmental Governmental
General Sales Tax Fund Funds Funds
ASSETS
Cash and investments 10,935,042$ 1,965,430$ 4,972,792$ 10,162,056$ 28,035,320$ Cash with fiscal agents - - 8,258,919 500,856 8,759,775 Accounts receivable, net 425,036 - - 73,130 498,166 Due from other governments 916,469 651,555 - 3,219,358 4,787,382 Due from other funds 3,458,082 - - - 3,458,082 Notes receivable - - - 2,888,403 2,888,403 Interest receivable 42,684 5,844 17,513 35,627 101,668 Leases receivable 451,451 - - - 451,451 Land held for resale - - - 712,000 712,000 Prepaid expenses 19,366 - - - 19,366 Total assets 16,248,130 $ 2,622,829 $ 13,249,224 $ 17,591,430 $ 49,711,613 $
LIABILITIES
Accounts payable 810,155 $ 110,501 $ 6,299 $ 92,285 $ 1,019,240$ Accrued payroll and benefits 571,158 - - - 571,158 Due to other funds - - - 3,287,775 3,287,775 Deposits payable 303,093 - - - 303,093 Unearned revenue 3,889,554 - - 358,382 4,247,936 Total liabilities 5,573,960 110,501 6,299 3,738,442 9,429,202
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues - - - 4,499,850 4,499,850 Lease related 623,595 - - - 623,595 Total deferred inflows of resources 623,595 - - 4,499,850 5,123,445
FUND BALANCES (DEFICITS)
Nonspendable - - - 712,000 712,000 Restricted 303,093 2,512,328 13,242,925 10,664,152 26,722,498 Committed 4,890,174 - - - 4,890,174 Unassigned 4,857,308 - - (2,023,014) 2,834,294 Total fund balances (deficits) 10,050,575 2,512,328 13,242,925 9,353,138 35,158,966 Total liabilities, deferred inflows of resources,
and fund balances (deficits) 16,248,130 $ 2,622,829 $ 13,249,224 $ 17,591,430 $ 49,711,613 $
129
CITY OF SANGER | FOR THE YEAR ENDED JUNE 30, 2023
Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Position
The notes to the basic financial statements are an integral part of this statement. 10 Amounts reported for governmental activities in the Statement of Net Position are different because:
Total fund balances of governmental funds 35,158,966 $
Capital assets used in governmental activities are not financial resources and therefore are not reported in governmental funds, net of accumulated depreciation and amortization of $72,211,587. 45,817,127
Long-term liabilities are not due in the current period and, therefore are not reported in the governmental funds.
Long-term liabilities, net of premiums and discounts (24,956,519) Compensated absences (727,329)
Lease liability (134,560)
(25,818,408)
Net pension liability and pension-related deferred outflows and inflows of resources are not due in the current period and therefore are not reported in the funds. These amounts consist of:
Net pension liability (6,824,169)
Deferred outflows of resources 13,588,879
Deferred inflows of resources (14,360,313) (7,595,603) Certain notes, loans, and interest receivables are not available to pay for current period expenditures and therefore are offset by deferred inflows of resources in the governmental funds. 2,883,059
Accrued interest payable from the current portion of interest due on long-term liabilities has not been reported in the governmental funds. (286,979) Long-term assets are not available to pay for current period expenditures and, therefore, are reported as unavailable revenue in the fund financial statements. 1,616,791 Internal service funds are used by management to charge costs of certain activities such as equipment replacement, to individual funds. The assets and liabilities of the internal service funds are included in the governmental activities of the Statement of Net Position. (248,071)
Net position of governmental activities 51,526,882 $
130
CITY OF SANGER | FOR THE YEAR ENDED JUNE 30, 2023
Governmental Funds
Statement of Revenues, Expenditures and Changes in Fund Balances
The notes to the basic financial statements are an integral part of this statement. 11 Special Revenue
Fund
Measure S Nonmajor Total
District Capital Projects Governmental Governmental
General Sales Tax Fund Funds Funds
REVENUES
Taxes 12,095,319 $ 3,303,954 $ - $ 1,022,181$ 16,421,454 $ License and permits 444,674 - - - 444,674 Intergovernmental 633,474 - 5,000,000 5,063,134 10,696,608 Charges for services 3,464,182 - - 901,559 4,365,741 Fines and forfeitures 393,080 - - - 393,080 Investment income 133,824 22,831 271,399 169,043 597,097 Loan repayments - - - 103,900 103,900 Other revenues 309,712 - - - 309,712 Total revenues 17,474,265 3,326,785 5,271,399 7,259,817 33,332,266
EXPENDITURES
Current:
City council 438,633 - - - 438,633 Community services 758,747 - - 7,500 766,247 Police department 5,624,566 1,423,099 - 1,140,952 8,188,617 Fire and emergency services 3,841,515 1,126,218 33,474 403,640 5,404,847 Development services 1,310,019 - - 398,531 1,708,550 Public works 1,803,093 - - 1,255,705 3,058,798 Nondepartmental 52,166 - - - 52,166 Capital outlay 153,786 742,121 - 3,655,232 4,551,139 Debt service:
Principal 177,210 131,375 - 786,505 1,095,090 Interest and fiscal charges 336,030 13,046 - 357,797 706,873 Total expenditures 14,495,765 3,435,859 33,474 8,005,862 25,970,960 Excess (deficiency) of revenues over
(under) expenditures 2,978,500 (109,074) 5,237,925 (746,045) 7,361,306
OTHER FINANCING SOURCES (USES)
Proceeds from long-term debt - 49,386 - - 49,386 Transfers in 2,810 - - 1,497,723 1,500,533 Transfers out (1,246,756) (177,939) - (492,862) (1,917,557) Total other financing sources (uses) (1,243,946) (128,553) - 1,004,861 (367,638) Net change in fund balances 1,734,554 (237,627) 5,237,925 258,816 6,993,668 Fund balances (deficit) - beginning (restated) 8,316,021 2,749,955 8,005,000 9,094,322 28,165,298 Fund balances (deficit) - ending 10,050,575$ 2,512,328 $ 13,242,925 $ 9,353,138 $ 35,158,966 $
131
CITY OF SANGER | FOR THE YEAR ENDED JUNE 30, 2023
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities
The notes to the basic financial statements are an integral part of this statement. 12 Amounts reported for governmental activities in the Statement of Activities are different because:
Net change in fund balances – total governmental funds 6,993,668 $ Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost of these assets are capitalized and allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation/amortization expense in the current period. 1,105,874 Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. 1,460,220
Repayment of bond, leases, and other debt principal is an expenditure in the governmental funds, but repayment reduces long-term liabilities in the Statement of Net Position. Also governmental funds report the effect of premium, discounts, and s imilar items when debt is first issued, whereas these amounts are deferred and amortized in the Statement of Activities.
Principal paid on long-term liabilities 1,045,735
Principal paid on leases 30,100
1,075,835
Compensated absences expenditures reported in the Statement of Activities do not require the use of current financial resources; and therefore, are not reported as expenditures in a governmental fund. 38,465
The distribution of housing loans, interest earned, and corresponding payments that were recognized in the governmental funds are not recognized in the Statement of Activities. 21,476
Accrued interest on long-term debt obligations is reported in the governmental activities but is not reported in the governmental fund statements. 5,011 Changes to net pension liability and pension related deferred outflows and inflows of resources do not require the use of current financial resources, and therefore are not reported as expenditures in governmental funds. (8,798,100) The net revenue (expense) of internal service funds is reported with governmental activities. 27,305
Change in net position of governmental activities 1,929,754 $
132
CITY OF SANGER | JUNE 30, 2023
Proprietary Funds
Statement of Net Position
The notes to the basic financial statements are an integral part of this statement. 13 Governmental
Business-Type Activities - Enterprise Funds Activities
Total Internal
Enterprise Service
ASSETS Water Sewer Disposal Funds Funds
Current assets:
Cash and investments 8,181,989 $ 8,851,959 $ 3,238,858 $ 20,272,806 $ 120,141 $ Cash with fiscal agents 49 607 - 656 - Accounts receivable, net 1,070,517 2,089,202 751,719 3,911,438 13 Intergovernmental receivable 62,077 - - 62,077 - Interest receivable 18,842 30,582 11,436 60,860 - Inventory - - - - 24,779 Prepaid expenses - - - - 1,941 Total current assets 9,333,474 10,972,350 4,002,013 24,307,837 146,874 Noncurrent assets:
Capital assets:
Land 451,282 1,308,257 - 1,759,539 - Construction in progress 2,170,986 96,691 - 2,267,677 - Buildings and improvements 29,928,586 31,223,405 - 61,151,991 - Machinery and equipment 4,405,460 3,486,092 1,208,894 9,100,446 280,450 Less accumulated depreciation/amortization (18,333,858) (24,241,976) (882,612) (43,458,446) (280,450) Total noncurrent assets 18,622,456 11,872,469 326,282 30,821,207 - Total assets 27,955,930 22,844,819 4,328,295 55,129,044 146,874
DEFERRED OUTFLOWS OF RESOURCES
Pension related 529,045 1,529,763 372,608 2,431,416 - Loss on refunding 74,306 92,243 - 166,549 - Total deferred outflows of resources 603,351 1,622,006 372,608 2,597,965 -
LIABILITIES
Current liabilities:
Accounts payable 606,251 61,211 246,897 914,359 240,765 Accrued payroll and benefits - - - - 24,519 Interest payable 15,605 41,482 4,676 61,763 - Due to other funds 40,646 - - 40,646 129,661 Deposits 265,764 - - 265,764 - Current portion of long-term debt 169,997 1,059,725 22,634 1,252,356 - Current portion of compensated absences 10,886 26,611 9,076 46,573 - Total current liabilities 1,109,149 1,189,029 283,283 2,581,461 394,945 Noncurrent liabilities:
Long-term debt 4,578,582 19,160,920 412,130 24,151,632 - Compensated absences - - 2,117 2,117 - Net pension liability 215,013 622,288 151,567 988,868 - Total noncurrent liabilities 4,793,595 19,783,208 565,814 25,142,617 - Total liabilities 5,902,744 20,972,237 849,097 27,724,078 394,945
DEFERRED INFLOWS OF RESOURCES
Pension related 703,010 2,001,157 485,200 3,189,367 - Total deferred inflows of resources 703,010 2,001,157 485,200 3,189,367 -
NET POSITION
Investment in capital assets 14,927,762 (6,512,288) 326,282 8,741,756 - Restricted 49 607 - 656 - Unrestricted 7,025,716 8,005,112 3,040,324 18,071,152 (248,071) Total net position 21,953,527$ 1,493,431 $ 3,366,606 $ 26,813,564 $ (248,071) $ 133
CITY OF SANGER | FOR THE YEAR ENDED JUNE 30, 2023
Proprietary Funds
Statement of Revenues, Expenses and Changes in Net Position
The notes to the basic financial statements are an integral part of this statement. 14 Governmental
Business-Type Activities - Enterprise Funds Activities
Total Internal
Enterprise Service
Water Sewer Disposal Funds Funds
Operating revenues:
Charges for services 3,287,228 $ 5,254,190 $ 3,214,146 $ 11,755,564 $ 5,982,831 $ Other revenue 11,322 23,523 2,569 37,414 - Total operating revenues 3,298,550 5,277,713 3,216,715 11,792,978 5,982,831 Operating expenses:
Salaries and benefits 427,730 1,448,158 371,185 2,247,073 4,323,252 Vehicle operations 17,352 23,681 - 41,033 - Supplies and services 2,154,461 1,504,578 2,386,264 6,045,303 1,469,096 General and administrative 753,285 624,436 388,825 1,766,546 163,178 Depreciation and amortization 1,100,051 970,886 26,284 2,097,221 - Total operating expenses 4,452,879 4,571,739 3,172,558 12,197,176 5,955,526 Operating income (loss) (1,154,329) 705,974 44,157 (404,198) 27,305 Nonoperating revenues (expenses):
Intergovernmental 147,429 - - 147,429 - Investment income 65,269 108,454 35,972 209,695 - Interest expense (200,448) (718,326) (10,388) (929,162) - Total nonoperating revenues (expenses) 12,250 (609,872) 25,584 (572,038) - Income (loss) before transfers (1,142,079) 96,102 69,741 (976,236) 27,305 Transfers in 536,193 22,760 - 558,953 - Transfers out (141,929) - - (141,929) - Total transfers 394,264 22,760 - 417,024 - Changes in net position (747,815) 118,862 69,741 (559,212) 27,305 Net position (deficit) - beginning (restated) 22,701,342 1,374,569 3,296,865 27,372,776 (275,376) Net position (deficit) - ending 21,953,527 $ 1,493,431 $ 3,366,606 $ 26,813,564 $ (248,071) $
134
CITY OF SANGER | FOR THE YEAR ENDED JUNE 30, 2023
Proprietary Funds
Statement of Cash Flows
The notes to the basic financial statements are an integral part of this statement. 15 Governmental
Business-Type Activities - Enterprise Funds Activities
Total Internal
Enterprise Service
Water Sewer Disposal Funds Funds
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers 3,102,932$ 5,109,202$ 3,106,736$ 11,318,870$ 5,983,528$ Cash paid to suppliers (2,000,337) (1,762,945) (2,732,080) (6,495,362) (1,426,035) Cash paid to employees (303,307) (862,025) (211,641) (1,376,973) (4,800,111) Cash paid for general administrative services (753,285) (624,436) (388,825) (1,766,546) (163,178) Other operating revenue 11,322 23,523 2,569 37,414 - Net cash provided by (used for) operating activities 57,325 1,883,319 (223,241) 1,717,403 (405,796)
CASH FLOWS FROM NONCAPITAL AND RELATED FINANCING ACTIVITIES Transfers (to)/from other funds 394,264 22,760 - 417,024 - Loans from/(to) other funds 40,646 - - 40,646 129,661 Interest paid on long-term liabilities (23,405) (41,639) (10,387) (75,431) - Net cash provided by (used for) noncapital and related financing activities 411,505 (18,879) (10,387) 382,239 129,661
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Grant revenue 85,354 - (3,346) 82,008 - Acquisition of capital assets (1,820,180) (303,248) - (2,123,428) - Principal paid on long-term liabilities (98,320) (979,520) (22,333) (1,100,173) - Interest paid on long-term liabilities (170,372) (657,006) 4,675 (822,703) - Net cash provided by (used for) capital and related financing activities (2,003,518) (1,939,774) (21,004) (3,964,296) -
CASH FLOWS FROM INVESTING ACTIVITIES
Investment income 46,427 77,872 24,536 148,835 - Net cash provided by (used for) investing activities 46,427 77,872 24,536 148,835 - Increase (decrease) in cash and cash equivalents (1,488,261) 2,538 (230,096) (1,715,819) (276,135) Cash and cash equivalents - beginning (restated) 9,670,299 8,850,028 3,468,954 21,989,281 396,276 Cash and cash equivalents - ending 8,182,038$ 8,852,566 $ 3,238,858 $ 20,273,462 $ 120,141 $
135
CITY OF SANGER | FOR THE YEAR ENDED JUNE 30, 2023
Proprietary Funds
Statement of Cash Flows
(Continued)
The notes to the basic financial statements are an integral part of this statement. 16 Governmental
Business-Type Activities - Enterprise Funds Activities
Total Internal
Enterprise Service
Water Sewer Disposal Funds Funds
Reconciliation of cash and cash equivalents to the Statement of Net Position:
Cash and investments 8,181,989$ 8,851,959$ 3,238,858$ 20,272,806$ 120,141$ Cash with fiscal agent 49 607 - 656 - Cash and cash equivalents - ending 8,182,038$ 8,852,566 $ 3,238,858 $ 20,273,462 $ 120,141 $ Reconciliation of operating income (loss) to net cash provided by (used for) operating activities:
Operating income (loss) (1,154,329) $ 705,974 $ 44,157 $ (404,198)$ 27,305 $ Adjustments to reconcile operating income (loss) to net cash provided by operating activities:
Depreciation and amortization expense 1,100,051 970,886 26,284 2,097,221 - Changes in operating assets, liabilities and deferred outflows/inflows of resources:
(Increase) decrease in accounts receivable, net (195,214) (144,988) (107,410) (447,612) 697 (Increase) decrease in inventory - - - - (20,168) (Increase) decrease in prepaid expenses - - - - (1,941) (Increase) decrease in pension related deferred outflows of resources 574,063 595,233 68,533 1,237,829 - Increase (decrease) in accounts payable 171,476 (234,686) (345,816) (409,026) 65,170 Increase (decrease) in accrued payroll and benefits (8,758) (22,768) (5,942) (37,468) (476,859) Increase (decrease) in deposits 10,918 - - 10,918 - Increase (decrease) in compensated absences (1,553) 1,722 3,120 3,289 - Increase (decrease) in net pension liability (474,544) (706,442) (124,112) (1,305,098) - Increase (decrease) in pension related deferred inflows of resources 35,215 718,388 217,945 971,548 - Net cash provided by (used for) operating activities 57,325$ 1,883,319$ (223,241) $ 1,717,403 $ (405,796) $ 136
CITY OF SANGER | JUNE 30, 2023
Fiduciary Funds
Statement of Fiduciary Net Position
The notes to the basic financial statements are an integral part of this statement. 17 Private-Purpose Custodial
Trust Fund Fund
South Kings
Successor Groundwater
Agency Sustainability
ASSETS
Cash and investments 445,204 $ 1,696,874$
Interest receivables - 5,936
Due from other governments - 64,049 Land held for resale 1,172,598 -
Total assets 1,617,802 1,766,859
LIABILITIES
Accounts payable - 1,201,605
Total liabilities - 1,201,605
NET POSITION
Held in trust for private purposes 1,617,802 - Restricted for:
Individuals, organizations, and other governments - 565,254 Total net position 1,617,802 $ 565,254 $
137
CITY OF SANGER | FOR THE YEAR ENDED JUNE 30, 2023
Fiduciary Funds
Statement of Changes in Fiduciary Net Position
The notes to the basic financial statements are an integral part of this statement. 18 Private-Purpose Custodial
Trust Fund Fund
South Kings
Successor Groundwater
Agency Sustainability
ADDITIONS
Taxes - $ 1,662,052$
Interest - 15,769
Other revenues - 1,843
Total additions - 1,679,664
DEDUCTIONS
Administrative costs - 1,655,251 Total deductions - 1,655,251
Changes in fiduciary net position - 24,413 Net position (deficit) - beginning (restated) 1,617,802 540,841 Net position (deficit) - ending 1,617,802 $ 565,254 $
138
19 Notes to the Basic Financial Statements
139
CITY OF SANGER | JUNE 30, 2023
Notes to the Basic Financial Statements
20 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The combined financial statements of the City of Sanger, California (the City) have been prepared in conformity with accounting principles applicable to governmental units which ar e generally accepted in the Un ited States of America. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles.
A. Reporting Entity
The City of Sanger (the City) was incorporated in 1911 under the General Laws of the State of California. The City operates under a Council-Manager form of government governed by a five-member council and provides the following services:
public safety (police, fire, and paramedic), community serv ices, street construction and maintenance, planning and zoning, street cleaning, transit, sanitation, and general administration.
The accompanying basic financial statements present the financia l activities of the City along with the financial activities of its blended component units, which are entities for which the City is financially accountable. Together these entities comprise the primary government for reporting purposes. Alth ough they are separate lega l entities, blended component units are in substance part of the City's operations and are reported as an integral part of the City's financial statements.
The City's component units, which are described below, are all blended.
Sanger Public Financing Authority
The Sanger Public Financing Authority (the Financing Authority) was establish ed in 1995 pursuant to California Government Code, Section 6500. The Fina ncing Authority was establish ed to provide a financing mechanism for the City and former Redevelopment Agency's various public projects. As all debt issued by the Sanger Public Financing Authority has been paid off or refunded, there was no activity in the fund in the current year. There are no separate financial statements prepared for the Sanger Public Financing Authority.
Sanger Housing Authority
The Sanger Housing Authority (the Housing Authority) was reactivated on February 3, 2011 in accordance with California Housing Authority Law (Health and Safety Code Section 34200). Certain assets of the former Redevelopment Agency's Low and Moderate Income Housing Funds were transferred to th e Housing Authority on February 1, 2012. The activity of the Housing Authority is reported in the Special Revenue Funds. There are no separate financial statements prepared for the Housing Authority.
Sanger Financing Authority
The Sanger Financing Authority (the Sanger Financing Authority) is a public agency duly organized and existing pursuant to a Joint Exercise of Powers Agreement (the JPA Agreement) between the City and California Municipal Finance Authority (CMFA), dated September 20, 2013. The Sanger Financing Authority is governed by a board of directors comprised of the five members of City Council. The Sanger Financing Authority is statutorily authorized by Article 4 of Chapter 5 of Division 7 of Title 1 of the California Governme nt Code and is empowered under the JPA Agreement to issue its bonds for, among other things, the purposes of the plan of financing describe d herein. The transactions are reported in the debt service fund. There are no separate financial statements prepared for the Sanger Financing Authority.
B. Basis of Presentation
The accounts of the City are organized based on funds. A fund is an independent fiscal and ac counting entity with a self- balancing set of accounts. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating complianc e with finance-related legal and contractual provisions. The minimum number of funds is maintained consistently with legal and managerial requirements.
140
CITY OF SANGER | JUNE 30, 2023
Notes to the Basic Financial Statements
21 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C. Basis of Presentation (Continued)
Government-Wide Financial Statements
The Statement of Net Position and Statement of Activities display information about the reporting government as a whole. They include the activities of the overall City govern ment except for fiduciary activities. Eliminations have been made to minimize the double counting of internal service activities. Interfund services provided and used are not eliminated in the process of consolidatio n. The City's net position is reported in three parts - net investment in capital assets; restricted net position; and unre stricted net position. The City first ut ilizes restricted resources to finance qualifying activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange revenues. Business-type activities are financed in part by fees charged to external parties for goods or services.
The Statement of Activities presents a comparison between direct expenses and program revenues for each function of the City's governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Program revenues include (a) charges paid by the recipients of goods or services offered by the programs, (b) grants and contributions that are restricted to meeting the operational needs of a particular program and (c) fees, gran ts and contributions that are restricted to financing the acquisition or construction of capital assets. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.
Fund Financial Statements
The fund financial statements provide information about the City's funds, including fiduciary funds and blended component units. Each fund is accounted for by providing a separate set of self-balancing accounts that constitute its assets, deferred outflows of resources, liabilities, deferred inflows of resources, net position, revenues and expenditure/expenses. Funds are organized into three major ca tegories: governmental, proprietary, and fiduciary. An emphasis is placed on major funds within the governmental and proprietary categories with each major fund displayed in a separate column. A fund is considered major if it is the primary operating fund of the City or meets the following criteria:
a. Total assets and deferred outflows of resources, liab ilities and deferred inflow of resources, revenues or expenditures/expenses of that individual governmental or enterprise fund are at least 10 percent of the corresponding total for all funds of that category or type; and
b. Total assets and deferred outflows of resources, liabilities and deferred inflows of resources, revenues, or expenditures/expenses of the individual governmental f und or enterprise fund are at least 5 percent of the corresponding total for all governmental and enterprise funds combined.
All remaining governmental funds are aggregated and reported as nonmajor funds in a single column, regardless of their fund type.
The funds of the financial reporting entity are described below:
Governmental Funds
General Fund - The General Fund is the general op erating fund of the City and is alwa ys classified as a major fund. It is used to account for all activities except those legally or administratively required to be accounted for in other funds.
141
CITY OF SANGER | JUNE 30, 2023
Notes to the Basic Financial Statements
22 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
B. Basis of Presentation (Continued)
Fund Financial Statements (Continued)
Governmental Funds (Continued)
Special Revenue Funds - Special Revenue Funds are used to account for the proceeds of specific revenue sources that are restricted or committed to expenditures for specified purposes other than debt service or capital projects
Capital Project Funds - Capital Project Funds are used to account for capital projects including construction, renovation, and major infrastructure improvements.
Debt Service Funds - Debt Service Funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditures for principal and interest.
Proprietary Funds
Enterprise Funds - Enterprise funds are used to account for busine ss-like activities provided to the general public.
These activities are financed primarily by user charges and the measurement of financial activity focuses on net income measurement similar to the private sector.
Internal Service Funds - Internal service funds are used to account for, and finance, services and commodities furnished by a designated department of a governmental uni t to other departments of the same governmental unit.
The City's internal service funds account for the financing of special activities that prov ide services within the City.
These activities include administration, equipment maintenance, and self-insurance programs.
Fiduciary Funds (not included in government-wide statements)
Private-Purpose Trust Funds - Private-Purpose Trust Funds are used to report all other trust arrangements under which principal and income benefit individuals, private organizations, or other governments. These include activities of the Successor Agency to the Redevelopment Agency of the City of Sanger.
Custodial Funds - Custodial funds are used to report fiduciary activities that are not required to be reported in pension (and other employee benefit) trust funds, investment trust funds, or private-purpose trust funds.
Major Funds
The City reported the following major governmental funds in the accompanying financial statements:
General Fund - This is the general operat ing fund of the City. It is used to account for all financia l resources except those required to be accounted for in a separate fund.
Measure S District Sales Tax - A 3/4 cent District sales tax imposed in th e City to fund police, fire, paramedic, 9-1-1 emergency, and gang/drug prevention services.
Capital Projects Fund - This fund accounts for capital projects related to the City’s fire station remodel and dispatch center.
142
CITY OF SANGER | JUNE 30, 2023
Notes to the Basic Financial Statements
23 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
B. Basis of Presentation (Continued)
Fund Financial Statements (Continued)
Major Funds (Continued)
The City reports the following major proprietary funds in the accompanying financial statements:
Water Fund - This fund accounts for the operations related to the City's water delivery system.
Sewer Fund - This fund accounts for the financial activity relate d to the construction, maintenance and repair of the sanitary sewer system.
Disposal Fund - This fund accounts for activities related to refu se collection, street sweeping and City recycling services.
The City also reports the following fund types:
Successor Agency Private-Purpose Trust Fund - This fund is a private-purpose trust fund and was created as a result of the State order to dissolve California Redevelopment Agencies. As the Successor Agency, this fund is used to track the activity of the Oversight Board and the Department of Finance to dissolve the Agency.
South Kings Groundwater Sustainability Trust Custodial Fund - In September of 2014, Senate Bills 1168 and 1319 and Assembly Bill 1739 were signed into law as the Sustainab le Groundwater Management Act (SGMA), which requires the establishment of Groundwater Sustainability Agencies (GSAs) by June 30, 2017. The Ci ty of Sanger was appointed Treasurer for this agency, and the fund was created to account for all monies.
C. Measurement Focus and Basis of Accounting
The accounting and financial reportin g treatment is determined by the applicable measurement focus and basis of accounting. Measurement focus indicates the type of resources being measured such as current financial resources or economic resources. The basis of accounting indicates the timing of transactions or events for recognition in the financial statements.
Government-Wide, Proprietary, and Fiduciary Fund Financial Statements
These financial statements are reported using the econom ic resources measurement focus. The government-wide and proprietary fund financial stat ements are reported using the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at th e time liabilities are incurred, regardless of when the related cash flow takes place. Nonexchange transactions, in which the City gives (or receives) value without directly receiving (or giving) equal value in exchange, include property ta xes, grants, entitlements, and donation s. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from grants, entitlements, and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
143
CITY OF SANGER | JUNE 30, 2023
Notes to the Basic Financial Statements
24 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C. Measurement Focus and Basis of Accounting (Continued)
Governmental Fund Financial Statements
The governmental fund financial statements are reported u sing the current financial resources measurement focus and the modified basis of accounting. Revenues , except for grants, are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City consider s revenues to be available if they are collected within 60 days of the end of the current fiscal year. Expenditures ge nerally are recorded when a liability is incurred as under accrual accounting. However, debt serv ice expenditures, as well as expenditures related to compensated absences, are recorded only when payment is due. General capital asset acquisitions are reported as expenditures in governmental funds. Issuance of long-term de bt and acquisitions under capital leases are reported as other financing sources.
Property taxes, sales taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been re cognized as revenue of the current fiscal year. Entitlements are recorded as revenues when all eligib ility requirements are met, including any time requirement, and the amount is received during the period or within th e availability period for this revenue re source (within 60 days of year-end).
Expenditure-driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other eligibility requirements have been met. All other revenues it ems are considered to be measurable and available only when cash is received by the City.
The proprietary and private-purpose trust funds are reported using the economic resources measurement focus and the accrual basis of accounting. The agency fund has no measur ement focus but utilizes the ac crual basis of accounting for reporting its assets and liabilities.
Proprietary funds distinguish operating revenues and expens es from nonoperating items. Operating revenues and expenses generally result from providin g services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operatin g revenues of the City’s proprietary funds are charges to customers for sales and services. Operat ing expenses for proprietary funds incl ude the cost of sales and services, administrative expenses, and depreciation/amortization on ca pital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses.
D. Property Taxes
The County of Fresno levies, bills, and co llects property taxes for the City. Property taxes levied are recorded as revenue when received, except at year-end when available taxes, or thos e collected within 60 days of fiscal year end, are accrued pursuant to the modified accrual basis of accounting.
Tax collections are the responsibility of the County Tax Collector. Taxes and assessments on secured and utility rolls which constitute a lien against the property, may be paid in two installments; the first is due November 1 of the fiscal year and is delinquent if not paid by December 10; and the second is due on February 1 of the fiscal year and is delinquent if not paid by April 10. Unsecured personal property taxes do not cons titute a lien against real property unless the tax becomes delinquent. Significant penalties are imposed by the County for late payment.
Property valuations are established by the Assessor of the County of Fresno fo r the secured and unsecured property tax rolls. Under the provisions of Article XIIIA of the State Cons titution, properties are assesse d at 100% purchase price or value in 1978 whichever is later. From this base assessment, subsequent annual increases in valuation are limited to a maximum of 2 percent. However, increases to full value are allowed for property improv ements or upon change in ownership. Personal property is excluded from these limitations, and is subject to annual reappraisal. 144
CITY OF SANGER | JUNE 30, 2023
Notes to the Basic Financial Statements
25 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. Property Taxes (Continued)
Tax levy dates are attached annually on January 1 preceding the fiscal year for which the taxes are levied. The fiscal year begins July 1 and ends June 30 of the following year. Taxes ar e levied on both real and unsecured personal property, as it exists at that time. Liens against real estate, as well as the tax on personal property, are not relieved by subsequent renewal or change in ownership.
E. Cash and Investments
Under the City's cash management program, cash in excess of operating requirements from a ll funds is pooled with the purpose of maximizing interest through investment activities , and is deposited in savings accounts or invested in bank certificates of deposit, bank money market accounts and the State of California Local Agency Investment Fund (LAIF).
Interest income earned on pooled cash and investments is allocated monthly to the various funds based on month-end balances and is adjusted at fiscal year-end.
For purposes of the statement of cash flows, the City has defined cash and cash equivalents to be change and petty cash funds and highly liquid investments with a maturity of three months or less when purchased. All cash and investments of the enterprise funds are pooled with the City's pooled cash and investments.
F. Restricted Assets
Cash with fiscal agents is used to report resources set a side for potential deficiencies in the repayment ability of the enterprise funds, and for payment of construction projects undertaken by the City.
G. Interfund Transactions
Interfund transactions are reflected as lo ans, services provided or used, reimburse ments or transfers. Loans reported as receivables and payables, as appropriate, are subject to elimination upon consolidation and are referred to as either “due to/from other funds” (i.e. the current portion of interfund loans) or “advances to/from other funds” (i.e. the noncurrent portion of interfund loans). Any residual balance between the go vernmental activities and the business-type activities are reported in the government-wide financial statement as “internal balances”. Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable governmental funds to indicate that they are not available for appropriation and are not available financial resources.
Services provided or used, deemed to be at market or near market rates, are treated as revenues and expenditures or expenses. Reimbursements occur when one fund incurs a cost, charges the appropriate benefiting fund and reduces its related cost as a reimbursement. All other interfund transactions are treated as transfers. Transfers between governmental or proprietary funds are netted as part of the reconciliation to the government-wide presentation.
H. Accounts and Interest Receivables
In the government-wide statements, rece ivables consist of all revenues earned at year-end and not yet received.
Receivables are recorded in the financial statements net of any allowance for doubtful accounts if ap plicable, and estimated refunds due. Major receivable balances for the governmental activities include sa les and use taxes, franchise taxes, grants, fines, interest, and other fees. Federal and st ate grants are considered receivable and accrue as revenue when reimbursable costs are incurred.
145
CITY OF SANGER | JUNE 30, 2023
Notes to the Basic Financial Statements
26 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
H. Accounts and Interest Receivables (Continued)
In the fund financial statements, material receivables in governmental funds include revenue accruals such as sales tax, franchise tax, and grants and other similar intergovernmenta l revenues since they are usually both measurable and available. Nonexchange transactions collectible but not available are recorded as outflows of resources in the fund financial statements in accordance with modified accrual, but not deferred in the government-wide financial statements in accordance with the accrual basis. Interest and investment earnings are recorded when earn ed only if paid within 60 days since they would be considered both measurable and av ailable. Long-term loans in governmental funds are treated as expenditures in the year advanced and as revenues in the year repayment is measurable and available. Loans receivable are recorded in the fund statements, but are record ed as deferred inflows of resources to indicate they do not represent current financial resources. Proprietary fund material receivables consist of all revenues earned at year-end and not yet received. Utility accounts receivable and interest earnings compose the majority of proprietary fund receivables.
Enterprise fund statements report an allowance for uncollectible accounts agains t the account receivables. All customers are billed monthly. The estimated value of services prov ided, but unbilled at year-end, has been included in the accompanying financial statements.
I. Capital Assets
Government-Wide Statements
The accounting treatment over capital assets depends on whether the assets are used in governmental fund operations or proprietary fund operations and whether they are reported in the government-wide or fund financial statements.
In the government-wide financial statements, capital outlay with a cost of $5,000 or more and a useful life of one year or longer are capitalized. All capital assets are valued at historic al cost, or estimated historical cost if actual is unavailable , except for donated capital assets which are recorded at their estimated fair value at the date of donation. The cost of normal maintenance and repairs that do not add to the valu e of the asset or materially extend the asset lives are not capitalized.
Depreciation is provided over the assets' estimated useful li ves using the straight-line meth od of depreciation. The range of estimated useful lives by type of asset is as follows:
Description Estimated Lives
Machinery and equipment 5—20 years
Buildings and improvements 15—40 years
Infrastructure 35—50 years
The City defines infrastructure as capital assets that are stationary and have expected useful lives significantly in excess of most capital assets. The assets include the street system, sewer collection and treatment system, park and recreation improvements, storm water conveyance system, and permanent monuments and signage.
Fund Financial Statements
In the fund financial statements, capital assets used in governmental fund operations are accounted for as capital outlay expenditures of the governmental fund upon acquisition. Ca pital assets used in proprietary fund operations are accounted for the same as in the government-wide statements. 146
CITY OF SANGER | JUNE 30, 2023
Notes to the Basic Financial Statements
27 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
J. Right-to-use Lease Assets
Right-to-use assets are recorded at the amount of the initial measurement of the lease liabilities and mo dified by any lease payment made to the lessor at or before the commencem ent of the lease term, less an y lease incentives received from the lessor at or before the commencement of the lease te rm along with any initial direct costs that are ancillary charges necessary to place the lease assets into service.
Right-to-use assets are amortized using th e straight-line method over the shorter of the lease term or the useful life on the underlying asset, unless the lease contains a purchase opti on that the City has determined is reasonably certain of being exercised.
K. Leases
Lessee: The City is a lessee for noncancellable leases of equipment. The lessee recognizes a lease liability and an intangible right-to-use lease asset (right-to-use a sset) in the government-wid e financial statements. Th e City recognizes lease liabilities with an initial, individual value of $5,000 or more.
At the commencement of a lease, the City initially measure the lease liability at the present value of payments expected to be made during the lease term. Subse quently, the lease liability is reduced by the principal portion of lease payments made. The lease asset is initially measured as the initial amount of the lease liability, adjusted for lease payments made at or before the lease commencement date, plus certain initial indirect costs. Subsequently, the lease asset is amortized on a straight-line basis over its useful life.
Key estimates and judgments related to leases include how the Ci ty determines (1) the discount rate it uses to discount the expected lease payments to present value, (2) lease term, and (3) lease payments.
The City uses the interest rate charged by the lessor as the discount rate. When the interest rate charged by the lessor is not provided, the City generally uses its estimate d incremental borrowing rate as the discount rate for leases, which it has determined is the prime rate at the inception of the lease.
The lease term includes the noncancella ble period of the lease. Lease payments included in the measurement of the lease liability are composed of fixed payments and purc hase option price that the City is reasonably certain to exercise.
The City monitors changes in circumstances that would require a remeasurement of its lease and will remeasure the lease asset and liability if certain changes occur that are expected to signifi cantly affect the amount of the lease liability. Lease assets are reported with other capital assets and lease liabilities are reported with long-term debt on the Statement of Net Position.
Lessor: The City is a lessor for noncancellable leases of land. The City recogn izes a lease receivable and a deferred inflow of resources in the government-wide and governmental and enterprise fund financial statements.
At the commencement of a lease, the City initially measures the lease receivab le at the present value of payments expected to be received during the lease term. Subsequently, the lease receivable is reduced by the principal portion of lease payments received. The deferred in flow of resources is initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or be fore the lease commencement date. Subsequently, the deferred inflow of resources is recognized as revenue over the life of the lease term. 147
CITY OF SANGER | JUNE 30, 2023
Notes to the Basic Financial Statements
28 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
K. Leases (Continued)
Key estimates and judgments include how the City determines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) lease term, and (3) lease receipts.
The City uses the interest rate charged to the lessees as the discount rate. When the interest rate charged to the lessees is not provided, the City generally uses the implied rate of return as the discount rate for leases. When the implied rate of return cannot be determined, the City uses its estimated incremental borrowing rate which it has determined is the prime rate at the inception of the lease.
The lease term includes the noncancellable period of th e lease. Lease receipts included in the measurement of the lease receivable are composed of fixed payments from the lessee.
The City monitors changes in circumstances that would require a remeasurement of its lease and will remeasure the lease receivable and deferred inflows of resources if certain changes occur that are expected to significantly affect the amount of the lease receivable.
L. Subscription Based Information Technology Arrangements (SBITAs)
Upon commencement of a subscription, the City recognizes subscription liability as an intangible right-to-use subscription asset (subscription asset) in the govern ment-wide financial statements. Subscription liabilities are recognized when their initial individual values are $25,000 or more. The subscription liability is initia lly measured at the present value of payments expected to be made during the subscription term and is subsequently reduced by the principal portion of subscription payments made. The subscription asset is initially measured as the initial amount of the subscription liability, adjusted for subscription payments made at or before the subscription commencement date, and any directly attributable initial costs. The subscription asset is amortized on a straight-line basis over its useful life.
Key estimates and judgments related to SBITAs include dete rmining the discount rate us ed to discount expected subscription payments to present value, the subscription term, and the composition of subscription payments.
The City generally uses the interest rate charged by the subscription provider as the discount rate. When the interest rate charged by the provider is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate for SBITAs, which is the prime rate at the inception of the subscription.
The subscription term includes the noncancellable period of the subscription and subscription payments that the City is reasonably certain to make.
The measurement of subscription liability excludes any variab le payments such as payments based on the number of user seats unless they depend on an index or a rate or are fixed in substance.
The City monitors changes in circumstances that would re quire a remeasurement of its SBITAs and will remeasure the subscription asset and liability if cert ain changes occur that are expected to significantly affect the amount of the subscription liability. Subscription assets are reported with other intangible assets, and subscription liabilities are reported as liabilities on the statement of net position.
This disclosure provides info rmation on the accounting polic ies related to Subscription-Based Information Technology Arrangements (SBITAs) in accordance with GASB Statement No. 96 and should be read in conjunction with the accompanying financial statements.
148
CITY OF SANGER | JUNE 30, 2023
Notes to the Basic Financial Statements
29 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
M. Compensated Absences
A liability is calculated for all the costs of compensated absences based upon benefits earned by employees in the current period for which there is a probability of payment at termination. The salary and re lated payroll costs are those in effect at June 30, 2023. Accumulated unpaid vacation is accrued when earned and generally does not exceed the amount earned for one year; however, an employee may accumulate up to a maximum of 240 hours of earned vacation time after which no further vacation accrues to the employee, with th e exception of fire employees, which can accrue up to 298 hours.
Upon termination, the City is not liable to pay for accrued sick leave; therefore, sick leave is recorded as an expenditure in the year used. The amounts accrued for financial statemen t purposes represent 100% of the administrative leave, professional leave, compensatory time off and vacation pay liabilities at June 30, 2023.
N. Unearned Revenues
Unearned revenue is a cash receipt for wh ich asset recognition criteria have be en met, but asset revenue recognition criteria have not been met. The City typically records in tergovernmental revenues (primary grants and subventions) received but not earned (qualifying expenditures not yet incurred) as unearned revenue.
O. Unavailable Revenues
In the fund financial statements, unavailable revenue is recorded when transactions have not yet met the revenue recognition criteria based on the modified accrual basis of accounting. The City reco rds unavailable revenue for transactions for which revenues have been earned, but for which funds are not available to meet current financial obligations.
P. Long-Term Liabilities
In the government-wide financial statements and the proprietary fund types in the fund financial statements, long-term liabilities, and other long term obligations are reported as liabilities in the app licable governmental activities, business- type activities, or proprietary fund type statement of net position. Initial issue bond premiums and discounts, are deferred and amortized over the life of the bonds using the straight-line method. The difference between the reacquisition price of refunding bonds and the net carrying amount of refunded de bt (deferred amount on refunding) is amortized over the shorter of the lives of the refunding debt or remaining lif e of the refunded debt. Bond issuance costs, except for insurance, are expensed in the period incurred. Amortizati on of bond premiums or discounts, insurance costs, and deferred amounts on refunding is included in interest expense.
In the fund financial statements, governmental fund types recognize bond premiums, discounts, and issuance costs during the period issued. The face amount of debt issued is reported as other financing sources. Premiums received are reported as other financing sources, while discounts are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. 149
CITY OF SANGER | JUNE 30, 2023
Notes to the Basic Financial Statements
30 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Q. Deferred Outflows/Inflows of Resources
In addition to assets, the statement of net position or balance sheet will sometimes report a separate section for deferred outflows of resources. This separate financial statemen t element, deferred outflows of resources, represents a consumption of net assets or fund balance that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The City has the following items that qualify for reporting in this category:
Deferred loss on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the life of the refunding debt. Deferred outflows related to employer contributions made after the measurement date of the net pension liability.
Deferred outflows related to the changes in the net pension liability.
In addition to liabilities, the statemen t of net position or balance sheet will sometimes report a separate section for deferred inflows of resources. This separate financial statem ent element, deferred inflows of resources, represents an acquisition of net assets or fund balance th at applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has the following items that qualify for reporting in this category:
Unavailable revenue is reported only in the governmental funds. The governmental funds report unavailable revenues from notes receivable and grants. This amount is deferred and recognized as an inflow of resources in the period that the amounts become available.
Deferred inflows related to the changes in the net pension liability. Deferred inflows related to leases.
R. Pensions
In the government-wide financial statements, pensions are recognized and disclosed using the accrual basis of accounting (see Note 10 and the RSI section immediately following the no tes to financial statements), regardless of the amount recognized as pension expenditures on the modified accrual basis of accounting. The City recognizes a net pension liability of the qualified pension plan in which it participates, which represents the exce ss of the total pension liability over the fiduciary net position of the qualified pension plan, measured as of the City’s fiscal year-end or the City’s proportionate share thereof in the case of a cost-shari ng multiple-employer plan. Changes in the net pension liability during the period are recorded as pension expense, or as deferred inflows of resources or deferred outflows of resources depending on the nature of the change, in the period incu rred. Those changes in net pension liability that are recorded as deferred inflows of resources or deferred outflows of resources that arise from changes in actuarial assu mptions or other inputs and differences between expected or actual experience are amorti zed over the weighted average remaining service life of all participants including retirees, in the respective qualified pension plan and recorded as a component of pension expense beginning with the period in which they arose. Projected earnings on qualified pension plan investments are recognized as a component of pension expense. Differences between projected and actual investment earnings are reported as deferred inflows of resources or deferred outflows of resources and amortized as a component of pension expense on a closed basis over a five-year period beginning with the period in which the difference occurred.
For purposes of measuring the net pension liability and deferre d outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net positio n of the City’s California Public Employees’ Retirement System (CalPERS) plan (the Plan) and additions to/deductions from the Plan's fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this purpose, benefit pa yments (including refunds of employee contributions) are recognized when due and payable in accord ance with the benefit terms. Investments are reported at fair value.
150
CITY OF SANGER | JUNE 30, 2023
Notes to the Basic Financial Statements
31 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
S. Fund Balance/Net Position
Fund Balances – Governmental Funds
Fund balances of the governmental funds are classified as follows:
Nonspendable – represents amounts that cannot be spent because they are either not in spendable form (such as inventory or prepaid insurance) or legally required to remain intact (such as notes receivable or principal of a permanent fund).
Restricted – represents amounts that are constrained by exte rnal parties, constitutional provisions or enabling legislation.
Committed – represents amounts that can only be used for specific purposes because of a formal action by the City Council. Committed amounts cannot be used for any other purpose unless the City Council removes those constraints by taking the same type of formal action. Committed fund balance amounts may be used for other purposes with appropriate due process by the City Council. Commitments are typically made through adoption and amendment of the budget. Committed fund balance amounts differ from restrict ed balances in that the constraints on their use do not come from outside parties, constitutional provisions, or enabling legislation.
Assigned – represents amounts which the City intends to use for a specific purpose, but that do not meet the criteria to be classified as restricted or committed. Intent may be stipulated by the City Council or by an official or body to which the City Council delegates author ity. Specific amounts that are not restricted or committed in a special revenue, capital projects, debt service or permanent fund are assigned for purposes in accordance with the nature of their fund type or the fund’s primary purpose. Assignments within the general fund convey that the intended use of those amounts is for a specific purpose that is narrower than the general purposes of the City itself.
Unassigned – represents amounts which are unconstrained in that they may be spent for any purpose. Only the general fund reports a positive unassigned fund balance. Othe r governmental funds might report a negative balance in this classification because of overspending for specific purposes for which amounts had been restricted, committed or assigned.
When an expenditure is incurred for which committed, assigne d, or unassigned fund balances are available, the City considers amounts to have been spen t first out of committed funds, then assigned funds, and finally unassigned funds.
Net Position
In the government-wide financial statem ents and proprietary fund financial st atements, net position is classified as follows:
Net Investment in Capital Assets – This component of net position consists of capital assets, net of accumulated depreciation/amortization, re duced by the outstanding balances of debt that are attributable to the acquisition, construction, or improvement of those assets.
Restricted – This component of net position is th e amount of the assets, deferred outflows of resources, liabilities, and deferred inflows of resources that are not included in the determination of net investment in capital assets reduced by liabilities and deferred inflows of resources related to those assets.
Unrestricted – This component of net position is the amount of the assets, deferred outflows of resources, liabilities, and deferred inflows of resources that are not included in the determination of net investment in capital assets or the restricted component of net position.
151
CITY OF SANGER | JUNE 30, 2023
Notes to the Basic Financial Statements
32 Fund Balance/Net Position (Continued)
Net Position (Continued)
When expenses are incurred for purposes for which both re stricted and unrestricted co mponents of net position are available, the City’s policy is to apply th e restricted component of net position firs t, then the unrestricted component of net position as needed.
S. Use of Estimates
The preparation of financial statements in accordance wi th generally accepted accounting principles requires management to make estimates and assumptions that affect th e reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements an d the reported amounts of revenue and expenses/expenditures during the reporting period. Accordingly, actual results could differ from these estimates.
NOTE 2 – CASH AND INVESTMENTS
Cash and investments as of June 30, 2023 were classified in the accompanying financial statements as follows:
Statement of net position:
Cash and investments 48,428,267 $
Restricted cash and investments with fiscal agent 8,760,431 Fiduciary funds:
Cash and investments 2,142,078
Total cash and investments 59,330,776 $
Cash and investments were carried at fair value as of June 30, 2023 and consisted of the following:
Cash:
Cash on hand 3,990 $
Cash in banks 34,350,253
Total cash 34,354,243
Investments:
Negotiable certificates of deposit 2,083,754
State investment pool 21,456,604
CAM investment pool 1,436,175
Total investments 24,976,533
Total cash and investments 59,330,776 $
152
CITY OF SANGER | JUNE 30, 2023
Notes to the Basic Financial Statements
33 NOTE 2 – CASH AND INVESTMENTS (Continued)
A. Authorized Investments of the City
The table below identifies the investment types that are authorized by the City's investment policy:
Maximum Maximum
Maximum Percentage of Investment in
Authorized Investment Type Maturity Portfolio* One Issuer U.S. Treasury obligations 5 years None None
U.S. Government Sponsored Agency securities 5 years None None Certificates of deposit or time deposits 5 years 30% None Negotiable certificates of deposit 5 years 30% None
Local Agency Investment Fund (LAIF) N/A None $75 million Medium-term corporate notes 5 years 30% None
Money Market Mutual Funds N/A 20% None
* Excluding amounts held by bonded trustee that are no subject to California Government Code restrictio n
The City complies with the provisions of California Governme nt Code (or the City's inve stment policy, where more restrictive) pertaining to the types of investments held, institutions in which deposits were made and security requirements. The City will cont inue to monitor compliance wi th applicable statues pertai ning to public deposits and investments.
B. Investments Authorized by Debt Agreements
Investment 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 Agency's investment policy. Th e table below identifies the investment types that are authorized by bond trustee. The table also identi fies certain provisions of these debt agreements that address interest rate risk, credit risk, and concentration of credit risk.
Maximum Maximum
Maximum Percentage of Investment in
Authorized Investment Type Maturity Portfolio One Issuer U.S. Treasury obligations None None None
U.S. Agency securities None None None
Money market funds rated "Aam" or "Aam-G" None None None Certificates of deposit 365 days None None
Guaranteed investment agreements None None None
Commercial Paper rated "A-1+" or better 365 days None None State municipal bonds None None None
Bankers acceptances rated "A-1+" or better 365 days None None Local Agency Investment Fund (LAIF) None None None
153
CITY OF SANGER | JUNE 30, 2023
Notes to the Basic Financial Statements
34 NOTE 2 – CASH AND INVESTMENTS (Continued)
C. Investment Valuation
Investments are measured at fair valu e on a recurring basis. Re curring fair value measurements are those that Governmental Accounting Standards Board (GASB) Statements require or permit in the statement of net position at the end of each reporting period. Fair value measurements are categorized based on the valuation inputs used to measure an asset’s fair value: Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. Investments’ fair value measurements are as follows at June 30, 2023:
Fair Value Measurements Using
Investments Fair Value Level 1 Inputs Level 2 Inputs Level 3 Inputs CAM investment pool 1,436,175$ 1,436,175$ -$ -$ Negotiable certificates of deposit 2,083,754 - 2,083,754 - Total Investments 3,519,929$ 1,436,175 $ 2,083,754 $ - $
D. Investment in State Investment Pool
The City is a voluntary partic ipant in the Local Agency In vestment 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 port folio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which is recorded on an amortized cost basis. The investment balance of $21,456,604 is not subject to valuation on a recurring basis.
E. Disclosure Relating to Interest Rate Risk
Interest rate risk is the risk that change s in market interest rates will adversely affect the fair value of an investment.
Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the City's interest rate risk is mitigated is by purchasing a combination of shorter term and longer term investments and by timing cash flows from ma turities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.
Information about the sensitivity of the fair values of the City's investments (incl uding investments held by bond trustee) to market rate fluctuations is provided by the following ta ble that shows the distribution of the City's investments by maturity as of June 30, 2023:
Remaining Maturity (in months)
12 Months 13-24 25-36
Fair Value or Less Months Months
CAM investment pool 1,436,175$ 1,436,175$ -$ -$ Negotiable certificates of deposit 2,083,754 986,888 - 1,096,866 State investment pool 21,456,604 21,456,604 - - Total Investments 24,976,533 $ 23,879,667 $ - $ 1,096,866$
F. Investments with Fair Values Highly Sensitive to Interest Rate Fluctuations
The City had no investments (including investments held by bond trustees) that were highly sensitive to interest rate fluctuations as of June 30, 2023.
154
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Notes to the Basic Financial Statements
35 NOTE 2 – CASH AND INVESTMENTS (Continued)
G. 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 rati ng by a nationally recognized statistic al rating organization. Presented below is the minimum rating required by (where applicable) the California Government Code, the investment policy, or debt agreements, and the actual rating as of the fiscal year for each investment type.
Rating as of Fiscal Year End
Total AAA Not Rated
CAM investment pool 1,436,175$ -$ 1,436,175$ Negotiable certificates of deposit 2,083,754 224,583 1,859,171 State investment pool 21,456,604 - 21,456,604 Total Investments 24,976,533 $ 224,583 $ 24,751,950$
H. 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 were no investments in any one issuer (other than mutual funds and external investment pools) that represented 5% or more of total City investments.
I. 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 custodia l credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g. broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the posse ssion of another party. The California Go vernment Code and the City investment policy do not contain legal or policy requirements that would lim it the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits:
The California Government Code requires that a financia l institution secure deposit s made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the government unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amou nt deposited by the public agencies. California law also allows financial institutions to secure City's deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits.
As of June 30, 2023, the carrying amount of the City's deposits was $25,589,822 and bank balances were $26,532,462.
The City's deposits with financ ial institutions in excess of federal depository insurance limits were held in collateralized accounts.
155
CITY OF SANGER | JUNE 30, 2023
Notes to the Basic Financial Statements
36 NOTE 3 – LOANS RECEIVABLE
Loans receivable of at June 30, 2023 were comprised of the following:
Balance
July 1, 2022 Balance
(Restated) Additions Deletions June 30, 2023
Low-income housing loans 228,726$ 2,770$ (33,051)$ 198,445$ Down payment assistance loan program 733,625 2,574 (70,849) 665,350 BEGIN program loans 438,126 - - 438,126 Affordable housing project 1,552,406 34,076 - 1,586,482 Total loans 2,952,883 $ 39,420 $ (103,900)$ 2,888,403 $
A. Low-Income Housing Loans
At June 30, 2023, the City was owed $198,445 from variou s non-interest and low-interest bearing low income housing loans, secured by deeds of trust. Maturities vary according to terms and disposition of property.
B. Down Payment Assistance Loan Program
At June 30, 2023, the City was owed $665,350 under the provisions of the Down Payment Assistance Loan Program, which provides non-interest and low-interest loans to low and mo derate income first-time home buyers for down payments required to purchase a new or existing home in the City. The lo ans are secured by deeds of trust and are recorded against the subjected property.
C. BEGIN Program Loans
At June 30, 2023, the City was owed $438,126 under the provisions of the Build ing Equity and Growth in Neighborhoods loan program, which provides non-intere st and low-interest bearing loans to lo w and moderate income first-time home buyers to purchase a new homeowner unit in a BEGIN Program project within the City. The loans are secured by deeds of trust and liens are recorded against the subjected property at no lower than second position.
D. Affordable Housing Project
At June 30, 2023, the City was owed $1,5 86,482 under the provisions of the Affordable Housing Project, with the purpose to construct affordable housing consistin g of an 81 unit apartment complex within the City. The loan is secured by the property and a deed of trust and assignment of rents.
156
CITY OF SANGER | JUNE 30, 2023
Notes to the Basic Financial Statements
37 NOTE 4 - INTERFUND TRANSACTIONS
A. Due To/From Other Funds
Balances due to and due from other funds at June 30, 2023, consisted of the following, each of which consist of short- term cash deficits expected to be recouped through gr ant reimbursements, additional program revenue exceeding expenditures, or through a subsidy from the General Fund.
Due from Due to
Other Funds Other Funds
Governmental Funds
Major Funds:
General Fund 3,458,082$ -$
Nonmajor Funds:
Special Revenue Funds:
Area Agency on Aging Grant - 4,068 Bulletproof Vest Grant - 5,888
Community Development Block Grant - 162,416 Community Facilities District - 92,573 Federal Grants - 63,740
Local Public Safety - 52,758
State Grants - 1,687,402
State Homeland Security Grant - 224 Transportation Equity Act (TEA) 21 - 1,094,813 Debt Service Funds:
Sanger Financing Authority - 123,893 Enterprise Funds
Major Funds:
Water Fund - 40,646
Internal Service Funds
Nonmajor Funds:
Self-Insurance Programs - 129,661 Total 3,458,082$ 3,458,082 $
All amounts due are scheduled to be repaid within one year and are a result of deficit cash balances. 157
CITY OF SANGER | JUNE 30, 2023
Notes to the Basic Financial Statements
38 NOTE 4 - INTERFUND TRANSACTIONS (Continued)
B. Interfund Transfers to/from Other Funds
Transfers between funds during the fiscal year ended June 30, 2023 were as follows:
Transfers
In Out
Governmental Funds
Major Funds:
General Fund 2,810 $ 1,246,756 $
Measure S District Sales Tax - 177,939 Nonmajor Funds:
Special Revenue Funds:
Area Agency on Aging Grant - 2,812 Community Facilities District - 94,176 State Gas Tax - 353,421
Local Public Safety - 26,433
Supplemental Law Enforcement - 16,020 Transportation Equity Act (TEA) 21 353,421 - Debt Service Funds:
Sanger Financing Authority 1,144,302 -
Enterprise Funds
Major Funds:
Water Fund 536,193 141,929
Sewer Fund 22,760 -
Total 2,059,486$ 2,059,486 $
Total Transfers - Governmental Activities 1,500,533$ 1,917,557$ Total Transfers - Business-Type Activities 558,953 141,929 Total Transfers 2,059,486$ 2,059,486 $
C. Internal Balances
Internal balances are presented in the government-wide financial statements only. They represent the net interfund receivables and payables remaining after the elimination of all such balances within governmental and business-type activities.
158
CITY OF SANGER | JUNE 30, 2023
Notes to the Basic Financial Statements
39 NOTE 5 – CAPITAL ASSETS
Capital asset activity of the governmental activities for the year ended June 30, 2023 was as follows:
Balance at
July 1, 2022 Balance at
(Restated) Additions Retirements Transfers June 30, 2023 Governmental Activities
Capital assets not being depreciated/amortized:
Land 434,923 $ - $ - $ - $ 434,923$ Construction-in-progress 852,832 3,959,252 (2,125,724) - 2,686,360 Total capital assets not being depreciated/amortized 1,287,755 3,959,252 (2,125,724) - 3,121,283 Capital assets being depreciated/amortized:
Buildings and improvements 25,298,901 85,155 - - 25,384,056 Machinery and equipment 12,121,332 829,091 - - 12,950,423 Infrastructure 74,073,482 2,209,180 - - 76,282,662 Right to use assets 240,904 49,386 - - 290,290 Total capital assets being depreciated/amortized 111,734,619 3,172,812 - - 114,907,431 Less accumulated depreciation/amortization:
Buildings and improvements (12,626,499) (1,008,166) - - (13,634,665) Machinery and equipment (9,123,645) (743,572) - - (9,867,217) Infrastructure (46,500,751) (2,093,386) - - (48,594,137) Right to use assets (60,226) (55,342) - - (115,568) Total accumulated depreciation/amortization (68,311,121) (3,900,466) - - (72,211,587) Total capital assets being depreciated/amortized, net 43,423,498 (727,654) - - 42,695,844 Total capital assets, net 44,711,253 $ 3,231,598 $ (2,125,724)$ - $ 45,817,127$
Depreciation and amortization expense in governmental activi ties for capital assets for the year ended June 30, 2023 totaled $3,900,466. Depreciation and amortization were charge d to functions based on their usage of the related assets as follows:
Governmental Activities:
City Council 3,222 $
Administrative services 109,809
Community services 213,341
Police department 414,250
Fire and emergency services 387,945
Development services 3,071
Public works 2,768,828
Total governmental activities depreciation expense 3,900,466 $ 159
CITY OF SANGER | JUNE 30, 2023
Notes to the Basic Financial Statements
40 NOTE 5 – CAPITAL ASSETS (Continued)
Capital asset activity of the business-type activities for the year ended June 30, 2023 was as follows:
Balance at
July 1, 2022 Balance at
(Restated) Additions Retirements Transfers June 30, 2023 Business-Type Activities
Capital assets not being depreciated/amortized:
Land 1,404,809$ 354,730$ -$ -$ 1,759,539$ Construction-in-progress 967,394 1,300,283 - - 2,267,677 Total capital assets not being depreciated/amortized 2,372,203 1,655,013 - - 4,027,216 Capital assets being depreciated/amortized:
Buildings and improvements 60,936,191$ 215,800$ -$ -$ 61,151,991$ Machinery and equipment 8,847,831 252,615 - - 9,100,446 Total capital assets being depreciated/amortized 69,784,022 468,415 - - 70,252,437 Less accumulated depreciation/amortization
Buildings and improvements (37,090,216) (1,666,984) - - (38,757,200) Machinery and equipment (4,271,009) (430,237) - - (4,701,246) Total accumulated depreciation/amortization (41,361,225) (2,097,221) - - (43,458,446) Total capital assets being depreciated/amortized, net 28,422,797 (1,628,806) - - 26,793,991 Total capital assets, net 30,795,000 $ 26,207 $ - $ - $ 30,821,207$
For the year ended June 30, 2023, business-type activity depr eciation and amortization expense on capital assets were charged as follows:
Business-Type Activities
Water 1,100,051 $
Sewer 970,886
Disposal 26,284
Total business-type activities depreciation/amortization expense 2,097,221$ 160
CITY OF SANGER | JUNE 30, 2023
Notes to the Basic Financial Statements
41 NOTE 6 – LONG-TERM LIABILITIES
A. Governmental Activities
The following is a summary of ch anges in the governmental activities long-ter m liabilities for the fiscal year ended June 30, 2023:
Balance at
July 1, 2022 Balance at Due Within
(Restated) Additions Reductions June 30, 2023 One Year
Governmental Activities
Direct borrowings and direct placements:
2020A Lease Revenue Bonds 7,330,000 $ - $ (140,000)$ 7,190,000 $ 145,000 $ Add Issuance Premium 1,090,124 - (38,703) 1,051,421 - 2021 Pension Obligation Bonds 16,102,728 - (786,505) 15,316,223 790,645 Less Issuance Discount (120,875) - 6,362 (114,513) - 2022 Lease Revenue Bonds 1,384,000 - (35,000) 1,349,000 53,000 Financed Purchase 216,277 - (51,889) 164,388 53,316 Total direct borrowings and direct placement s 26,002,254 - (1,045,735) 24,956,519 1,041,961 Other liabilities
Lease liability 164,660 49,386 (79,486) 134,560 65,613 Compensated absences 765,794 791,594 (830,059) 727,329 568,108 Total other liabilities 930,454 840,980 (909,545) 861,889 633,721 Total governmental activities 26,932,708 $ 840,980 $ (1,955,280)$ 25,818,408 $ 1,675,682 $
A description of the long-term liabilities related to governmental activities at June 30, 2023 follows:
Series 2020A Lease Revenue Bonds
On September 1, 2020, the Sanger Financing Authority issued Series 2020A Lease Revenue Bond s with a face value of $1,128,826. The bonds were issued to finance the costs of improvements to and expansion of the City's fire station; establish a debt service reserve fund; and to pay the cost s incurred in connection with the issuance. The bonds bear interest ranging from 3.00% - 4.00% and are payable semi-annually on February 1 and August 1 of each year, commencing February 1, 2021. The maturity date of the bonds is February 1, 2051. The Series 2020A bonds are secured by all the moneys in the reserve fund. The annual debt service requirements to amortize the bonds are as follows:
For the Year
Ending June 30 Principal Interest Total
2024 145,000$ 285,450$ 430,450$
2025 150,000 279,650 429,650
2026 155,000 273,650 428,650
2027 165,000 267,450 432,450
2028 170,000 260,850 430,850
2029-2033 955,000 1,196,850 2,151,850 2034-2038 1,155,000 999,050 2,154,050 2039-2043 1,400,000 751,000 2,151,000 2044-2048 1,705,000 448,200 2,153,200 2049-2053 1,190,000 96,600 1,286,600 Total 7,190,000$ 4,858,750 $ 12,048,750 $ 161
CITY OF SANGER | JUNE 30, 2023
Notes to the Basic Financial Statements
42 NOTE 6 – LONG-TERM LIABILITIES (Continued)
A. Governmental Activities (Continued)
Series 2020A Lease Revenue Bonds (Continued)
Net capitalized premiums on bonds related to the above issuance have been recorded in the amount of $1,051,421, and netted with the balance of the bonds as presented on the government-wide financial statements. The balance is amortized using the straight-line method over the bond term. Net amortization for the year ended June 30, 2023 totaled $38,703.
2021 Pension Obligation Bonds
During fiscal year 2022, the Sanger Financing Authority issued Series 2021 Pension Obligation Bonds for $19,450,000 as part of an overall strategy to fund th e unfunded portion of the City's pension lia bility. The bonds bear interest ranging from .356% - 3.24% and are payable semi-annually on January 15 and July 15 of each year, commencing July 15, 2022. The maturity date of the bonds is July 15, 2040. The Series 2021 Pension Obligation Bonds are secured by all the moneys in the reserve fund. The bonds were split amongst the governmental and business-type funds. Annual debt service requirements to amortize the governmental portion of the bonds are as follows:
For the Year
Ending June 30 Principal Interest Total
2024 790,645$ 354,594 $ 1,145,239$
2025 794,784 349,851 1,144,635
2026 794,784 342,694 1,137,478
2027 811,342 333,037 1,144,379
2028 823,761 320,838 1,144,599
2029-2033 4,363,033 1,350,979 5,714,012 2034-2038 4,433,405 738,566 5,171,971 2039-2043 2,504,469 109,576 2,614,045 Total 15,316,223$ 3,900,135 $ 19,216,358 $
Net capitalized discount on the bonds re lated to the above issuance has been recorded in the amount of $114,513 and netted with the balance of the bonds as presented on the government-wide financial statements. The balance is amortized using the straight-line method over the bond term. Net amortization for the year ended June 30, 2023 totaled $6,362.
Series 2022 Lease Revenue Bonds
During fiscal year 2022, th e Sanger Financing Authority issued Series 2022 Lease Reve nue Bonds in th e amount of $1,423,000. The bonds were issu ed to refinance the 2013 Lease Revenue bonds; and to pay the costs incurred in connection with the issuance. The 2022 Leas e Revenue Bonds will provide an average fiscal year savings of $8,200 until final maturity. Total savings are $169,118 and the net present value savings are $126,781 or 8.91%. The bonds bear an interest rate of 3.25% and are payable semi-annually on June 15 and December 15 of each year, commencing June 15, 2022. The maturity date of the bonds is June 15, 2043. The Series 2022 Lease Revenue bonds are secured by all the moneys in the reserve fund.
162
CITY OF SANGER | JUNE 30, 2023
Notes to the Basic Financial Statements
43 NOTE 6 – LONG-TERM LIABILITIES (Continued)
A. Governmental Activities (Continued)
Series 2022 Lease Revenue Bonds (Continued)
The annual debt service requirements to amortize the bonds are as follows:
For the Year
Ending June 30 Principal Interest Total
2024 53,000$ 35,749 $ 88,749 $
2025 53,000 34,344 87,344
2026 53,000 32,940 85,940
2027 53,000 31,535 84,535
2028 58,000 30,131 88,131
2029-2033 308,000 126,988 434,988 2034-2038 361,000 83,369 444,369 2039-2043 410,000 33,125 443,125 Total 1,349,000$ 408,181 $ 1,757,181$
Financed Purchase
In October 2020, the City entered into a financed pur chase agreement for the purchase of a new ambulance. The agreement calls for five equal payments of $57,837 annually which includes an interest rate of 2.75%. The financed purchase is due October 2025. The ambulance was delivered to the City during the current year and is included in capital assets at a net book value of $54,571, with accumulated depreciation of $218,288 as of June 30, 2023.
For the Year
Ending June 30 Principal Interest Total
2024 53,316$ 4,521 $ 57,837 $ 2025 54,783 3,054 57,837 2026 56,289 1,548 57,837 Total 164,388$ 9,123 $ 173,511$
Total Government Activities Future Debt Service
For the Year
Ending June 30 Principal Interest Total
2024 1,041,961$ 680,314$ 1,722,275$
2025 1,052,567 666,899 1,719,466
2026 1,059,073 650,832 1,709,905
2027 1,029,342 632,022 1,661,364
2028 1,051,761 611,819 1,663,580
2029-2033 5,626,033 2,674,817 8,300,850 2034-2038 5,949,405 1,820,985 7,770,390 2039-2043 4,314,469 893,701 5,208,170 2044-2048 1,705,000 448,200 2,153,200 2049-2053 1,190,000 96,600 1,286,600 Total 24,019,611$ 9,176,189 $ 33,195,800 $
163
CITY OF SANGER | JUNE 30, 2023
Notes to the Basic Financial Statements
44 NOTE 6 – LONG-TERM LIABILITIES (Continued)
A. Governmental Activities (Continued)
Compensated Absences
The City's policy relating to compensated absences is described in Note 1. This obligation is expected to be paid in future years from then available resources derived from their respective funds to which the employee services are rendered.
B. Business-Type Activities
The following is a summary of changes in the business-type activity's long-term liabilities for the fiscal year ended June 30, 2023:
Balance at
July 1, 2022 Balance at Due Within
(Restated) Additions Reductions June 30, 2023 One Year
Business-Type Activities
Direct borrowings and direct placements:
2021 Pension Obligation Bonds 3,345,272 $ - $ (163,495)$ 3,181,777 $ 164,356 $ Less Issuance Discount (25,111) - 1,322 (23,789) - 2022A Wastewater Lease Revenue Refunding 12,880,000 - (755,000) 12,125,000 780,000 2022B Wastewater Lease Revenue Refunding 6,487,000 - (135,000) 6,352,000 189,000 2022A Water Refunding 3,817,000 - (48,000) 3,769,000 119,000 Total direct borrowings and direct placement s 26,504,161 - (1,100,173) 25,403,988 1,252,356 Other liabilities
Compensated absences 45,401 73,817 (70,528) 48,690 46,573 Total business-type activities 26,549,562 $ 73,817 $ (1,170,701)$ 25,452,678 $ 1,298,929 $
A description of the long-term liabilities related to business-type activities at June 30, 2023 follows:
2021 Pension Obligation Bonds
During fiscal year 2022, the Sanger Financing Authority issued Series 2021 Pension Obligation Bonds for $19,450,000 as part of an overall strategy to fund th e unfunded portion of the City's pension lia bility. The bonds bear interest ranging from .356% - 3.24% and are payable semi-annually on January 15 and July 15 of each year, commencing July 15, 2022. The maturity date of the bonds is July 15, 2040. The Series 2021 Pension Obligation Bonds are secured by all the moneys in the reserve fund. The bonds were split amongst the governmental and business-type funds. Annual debt service requirements to amortize the business-type portion of the bonds are as follows:
For the Year
Ending June 30 Principal Interest Total
2024 164,356$ 73,712$ 238,068$
2025 165,216 72,726 237,942
2026 165,216 71,237 236,453
2027 168,658 69,230 237,888
2028 171,240 66,695 237,935
2029-2033 906,967 280,835 1,187,802 2034-2038 921,596 153,530 1,075,126 2039-2043 518,528 22,777 541,305 Total 3,181,777$ 810,742 $ 3,992,519$
164
CITY OF SANGER | JUNE 30, 2023
Notes to the Basic Financial Statements
45 NOTE 6 – LONG-TERM LIABILITIES (Continued)
B. Business-Type Activities (Continued)
2021 Pension Obligation Bonds (Continued)
Net capitalized discount on the bonds re lated to the above issuance has been re corded in the amo unt of $23,789 and netted with the balance of the bonds as presented on the government-wide financial statements. The balance is amortized using the straight-line method over the bond term. Net amortization for the year ended June 30, 2023 totaled $1,322.
2022A Wastewater Lease Revenue Refunding Bonds
During fiscal year 2022, the Sanger Financing Authority is sued Series 2022A Wastewater Lease Revenue Refunding Bonds in the amount of $13,655,000. The bond s were issued to refinance the 2014 Le ase Revenue Refunding Bonds; and to pay the costs incurred in connection with the issuance. The bonds will provide an averag e fiscal year savings of approximately $89,500 until final maturity. Total saving s are $1,165,422, and net present value savings are $976,409, or 7.82%. The bonds bear interest ranging from 2.15% to 2.95%, are payable semi-annually on June 15 and December 15 of each year, commencing June 15, 2022. The maturity date of the bonds is June 15, 2036. The Series 2022A Lease Revenue Refunding Bonds are secured by a revenue pledge of the City's wastewater system. The annual debt service requirements to amortize the bonds are as follows:
For the Year
Ending June 30 Principal Interest Total
2024 780,000$ 357,688$ 1,137,688$
2025 840,000 334,678 1,174,678
2026 855,000 309,898 1,164,898
2027 875,000 284,675 1,159,675
2028 895,000 258,863 1,153,863
2029-2033 4,760,000 886,918 5,646,918 2034-2036 3,120,000 185,553 3,305,553 Total 12,125,000$ 2,618,273 $ 14,743,273 $
2022B Wastewater Lease Revenue Refunding Bonds
During fiscal year 2022, the Sanger Financing Authority issued Series 2022B Wastewater Lease Revenue Refunding Bonds in the amount of $6,4 87,000. The bonds were issued to refinance the 2013 Subord inate Wastewater Lease Revenue Bonds; and to pay the costs incurred in connection with the issuance. The bonds will provide an average fiscal year savings of approximately $61,500 until the final maturity. Total savings are $1,250 ,445, and net present value savings are $901,310, or 14.4%. The bonds bear interest ranging from 2.96% to 4.05% are payable semi-annually on June 15 and December 15 of each year, commencing June 15, 2022. The maturity date of the bonds is June 15, 2043. The Series 2022B Wastewater Lease Revenue Refunding Bonds are secured by a revenue pledge of the City's wastewater system. The annual debt service requirements to amortize the bonds are as follows:
165
CITY OF SANGER | JUNE 30, 2023
Notes to the Basic Financial Statements
46 NOTE 6 – LONG-TERM LIABILITIES (Continued)
B. Business-Type Activities (Continued)
2022B Wastewater Lease Revenue Refunding Bonds (Continued)
For the Year
Ending June 30 Principal Interest Total
2024 189,000$ 188,019$ 377,019$
2025 195,000 182,425 377,425
2026 244,000 176,653 420,653
2027 254,000 169,430 423,430
2028 261,000 161,912 422,912
2029-2033 1,483,000 686,010 2,169,010 2034-2038 1,726,000 452,229 2,178,229 2039-2043 2,000,000 181,152 2,181,152 Total 6,352,000$ 2,197,830 $ 8,549,830 $
2022A Water Refunding Bonds
During fiscal year 2022, the Sanger Fi nancing Authority issued 2022 Water Refunding Bonds in the amount of $3,817,000.
The bonds were issued to refinance the 2013 Water Lease Revenue Bonds and to pay the cost s incurred in connection with the issuance. The bonds will provide an average fiscal year savings of a pproximately $27,000 until final maturity.
Total savings are $543,695, and net present value savings of $379,726, or 10.4%. The bonds bear interest ranging from
3.22% to 4.09% are payable semi-annually on June 15 and De cember 15 of each year, commencing June 15, 2022. The maturity date of the bonds is June 15, 2043. The Series 20 22 Water Refunding Bonds are secured by a revenue pledge of the City's water system. The annual debt service requirements to amortize the bonds are as follows:
For the Year
Ending June 30 Principal Interest Total
2024 119,000$ 121,663$ 240,663$
2025 120,000 117,822 237,822
2026 125,000 113,948 238,948
2027 130,000 109,913 239,913
2028 136,000 105,717 241,717
2029-2033 737,000 460,474 1,197,474 2034-2038 1,106,000 318,604 1,424,604 2039-2043 1,296,000 128,249 1,424,249 Total 3,769,000$ 1,476,390 $ 5,245,390 $
166
CITY OF SANGER | JUNE 30, 2023
Notes to the Basic Financial Statements
47 NOTE 6 – LONG-TERM LIABILITIES (Continued)
B. Business-Type Activities (Continued)
Total Business-Type Activities Future Debt Service
For the Year
Ending June 30 Principal Interest Total
2024 1,252,356$ 741,082$ 1,993,438$
2025 1,320,216 707,651 2,027,867
2026 1,389,216 671,736 2,060,952
2027 1,427,658 633,248 2,060,906
2028 1,463,240 593,187 2,056,427
2029-2033 7,886,967 2,314,237 10,201,204 2034-2038 6,873,596 1,109,916 7,983,512 2039-2043 3,814,528 332,178 4,146,706 Total 25,427,777$ 7,103,235 $ 32,531,012 $
Compensated Absences
The City's policy relating to compensated absences is described in Note 1. This obligation is expected to be paid in future years from then available resources derived from their respective funds to which the employee services are rendered.
NOTE 7 – LEASES
A. Leases as Lessor
In January 2020, the City leased 1,370 square feet of property to a third party. The lease, which is recorded in the General Fund, has an initial lease term of five years with four five-y ear extensions, all of which the City anticipates exercising. The City receives an average monthly payment of $1,450 for the lease with an annual increase of 3.00%. The City recognized $13,475 in lease revenue and $15,711 in interest revenue during the current fiscal year related to this lease. As of June 30, 2023, the City’s receivable for lease payments was $329,387. Also, the City has a deferred inflow of resources associated with this lease that will be recognized as revenue over the lease term. As of June 30, 20 23, the balance of the deferred inflow of resources was $289,716.
In August 2018, the City leased three ea sement areas to a third party. The lease, which is recorded in the General Fund, has an initial lease term of 20 years. The City received a one-time, lump-sum payment in the amount of $300,000 for the lease. The City recognized $15,000 in le ase revenue and $0 in interest revenue during the current fiscal year related to this lease. As of June 30, 2023, the City’s receivable for lease payments was $0. Also, the City has a deferred inflow of resources associated with this lease that will be recognized as revenue over th e lease term. As of June 30, 2023, the balance of the deferred inflow of resources was $227,500.
In July 2021, the City leased real proper ty to a third party. The lease, which is re corded in the General Fund, has an initial lease term of four years. The City receives an average a nnual payment of $56,478 for the lease. The City recognized $53,190 in lease revenue and $5,017 in inte rest revenue during the current fiscal year related to this lease. As of June 30, 2023, the City’s receivable for lease payments was $122,064. Also, the City has a deferred inflow of resources associated with this lease that will be recognized as revenue over the lease term. As of June 30, 20 23, the balance of the deferred inflow of resources was $106,379.
167
CITY OF SANGER | JUNE 30, 2023
Notes to the Basic Financial Statements
48 NOTE 7 – LEASES (Continued)
B. Leases as Lessee
In December 2022, the City entered into a three-year lease ag reement as lessee for police body worn cameras. This lease is recorded in the Measure S Fund and had an initial lease liability in the amount of $49,386. As of June 30, 2023, the value of the lease liability was $23,016. Th e City is required to make annual princi pal and interest payments of $14,018.
The lease has an interest rate of 14.23%. The body worn camera s have an estimated useful life of four years. The value of the right-to-use asset as of the end of the current fiscal year was $42,225 and had accumulated amortization of $7,161.
In April 2021, the City entered into a five-year lease agr eement as lessee for police body worn cameras. This lease is recorded in the Measure S Fund and had an initial lease liability in the amount of $240,904. As of June 30, 2023, the value of the lease liability was $111,544. The City is required to make annual princi pal and interest payments of $58,547. The lease has an interest rate of 3.25%. The body worn cameras ha ve an estimated useful life of five years. The value of the right-to-use asset as of the end of the current fiscal year was $132,497 and had accumulated amortization of $108,407.
The future principal and interest lease payments as of June 30, 2023, are as follows:
For the Year
Ending June 30 Principal Interest Total
2024 65,613$ 6,952$ 72,565$ 2025 68,947 3,618 72,565 Total 134,560$ 10,570 $ 145,130 $
NOTE 8 – RISK MANAGEMENT
The City is exposed to various risks and losses related to torts; theft or, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disaster. Risk of loss is primarily handled th rough the Central San Joaquin Valley Risk Management Authority (CSJVRMA). CSJVRMA is a consortium of fifty- four (54) cities in the San Joaquin Valley, California. It was established under th e provisions of California Government Co de Section 6500 et seq. Central San Joaquin Valley Risk Management Author ity is governed by a Board of Direct ors, which meets 3-4 times per year, consisting of one member appointed by each member city. The day-to-day business is handled by a management group employed by CSJVRMA. It is not a component unit of the City.
A. General Liability Insurance
Annual deposits are paid by member cities and are adjusted re troactively to cover costs. Each member city has a specific retention level. The City has a retentio n level of $50,000 and pays 100% of all losses incurred under $50,000. The City does not share or pay for losses of other cities under $50,000. Losses of $50,000 to $500,000 are prorated among all participating cities on a payroll basis. Losses in excess of $500,000 are covered by excess insurance purchased by the participating cities, as a part of the pool, to a limit of $5 million. This cost is also prorated on a payroll basis.
B. Workers Compensation
Annual deposits are paid by member cities and are adjusted re troactively to cover costs. Each member city has a specific retention level. The City has a retentio n level of $50,000 and pays 100% of all losses incurred under $50,000. The City does not share or pay for losses of other cities under $50, 000. Losses of $50,000 to $500,000 are prorated among all participating cities on a payroll basis. Losses in excess of $500,000 are covered by excess insurance purchased by the participating cities, as a part of the pool, to a limit of $5 million. This cost is also prorated on a payroll basis. 168
CITY OF SANGER | JUNE 30, 2023
Notes to the Basic Financial Statements
49 NOTE 8 – RISK MANAGEMENT (Continued)
B. Workers Compensation (Continued)
Actual surpluses or losses are shared according to a formul a developed from overall loss costs and spread to member entities on a percentage basis after a retrospective rating.
The City’s total claims liability as of June 30, 2023 was $24,519.
NOTE 9 – FUND BALANCE
The following classifications describe the relative strength of the spending constraints of fund balance:
Nonspendable – Amounts that cannot be spent because they are either (a) not in spendable form (not expected to be converted to cash) or (b) legally or contractually required to be maintained intact.
Restricted – Amounts subject to externally enforceable legal restrictions or constrained for a specific purpose by external parties, constitutional provision, or enabling legislation. This fund balance ty pe is essentially the same definition as restricted net position under GASB Statement No. 34.
Committed – Amounts that can only be used for specific pur poses pursuant to constraints imposed by the formal action of the government’s highest level of decision-maki ng authority. Committed amounts cannot be used for any other purpose unless the government removes or changes the specified use by taking the same type of action (legislation, resolution, ordina nce) it employed to previously commit thos e amounts. Action to constrain resources must occur prior to year-end; however, the amount can be determined in the subsequent period. The City Council establishes (and modifies or rescinds) fund balance commitments by passage of an ordinance.
Assigned – Amounts that are not restricted by the funding agency but are for specific purp oses and assigned by City Council for that purpose. City Council' s action in creating the fund is to en sure that the funds are used for their intended purpose. That purpose is not always planned for the current fiscal year as it may take several years to build up a sufficient fund balance to be able to implement the stated purpose. This classification also represents all remaining amounts (except negative balances) reported in governmental funds, other than the general fund, that are not classified as nonspendable, restricted, or committed.
Unassigned – Residual amounts in the general fund, not classified as nonspendable, re stricted, committed, or assigned. For other governmental fund types, unassigned is only used when a deficit or negative fund balance occurs.
The accounting policies of the City consider restricted fund balance to have been spent first when an expenditure is incurred for the purposes for which both restricted and unrestricted fund balance is available. Similarly, when an expenditure is incurred for purposes for which amounts in any of the unrestricted classifications of fund balance could be used, the City considers committed amounts to be reduced first, followed by assigned amounts, as appropriate opportunities arise, but reserves the right to selectively spend unassigned resources first to defer the use of these other classified funds.
It is the policy of the City Council to ma intain a General Fund restricted reserve for catastrophic events and emergency situations. The restricted reserve shall be 25% of the average prior three years' total general fund expenditures less any expenditures related to a debt-funded capital improvement pr oject. The General Fund restricted reserve may only be used for emergencies designated by a vote of four-fifths of the City Council and the reserve account cannot be used to fund or supplement operating expenses.
169
CITY OF SANGER | JUNE 30, 2023
Notes to the Basic Financial Statements
50 NOTE 9 – FUND BALANCE (Continued)
As of June 30, 2023, fund balances were comprised of the following:
Measure S Non-Major Total
District Capital Projects Governmental Governmental
General Fund Sales Tax Fund Funds Funds
Nonspendable
Land held for resale - $ - $ - $ 712,000$ 712,000 $ Total nonspendable - - - 712,000 712,000 Restricted
Deposits 303,093 - - - 303,093 Streets - - - 5,263,762 5,263,762 Capital projects - - 13,242,925 4,055,560 17,298,485 Police services - 1,256,164 - 110,221 1,366,385 Fire services - 1,256,164 - 4,140 1,260,304 Affordable housing - - - 712,316 1,968,480 Community service - - - 141,190 141,190 Debt service - - - 376,963 376,963 Total restricted 303,093 2,512,328 13,242,925 10,664,152 27,978,662 Committed
Emergency contingencies 4,890,174 - - - 4,890,174 Total committed 4,890,174 - - - 4,890,174 Unassigned 4,857,308 - - (2,023,014) 2,834,294 Total fund balances (deficits) 10,050,575$ 2,512,328 $ 13,242,925 $ 9,353,138 $ 35,158,966 $
Fund Balance/Net Position Deficits
As of June 30, 2023, the following funds had a fund balance/net position deficit:
Deficit Amounts
Governmental Funds
Nonmajor Funds:
Special Revenue Funds:
Area Agency on Aging Grant 60 $
Community Development Block Grant 65,073
Community Facilities District 88,116
Federal Grants 44,092
Local Public Safety 18,617
State Grants 1,428,165
Transportation Equity Act (TEA) 21 378,891
Internal Service Funds
Nonmajor Funds:
Self-Insurance Programs 275,375
These deficits were a result of expenditures incurred in ad vance of receipt of revenue an d will be eliminated through future revenues.
170
CITY OF SANGER | JUNE 30, 2023
Notes to the Basic Financial Statements
51 NOTE 10 – DEFINED BENEFIT PENSION PLAN
A. General Information
Plan Description
All qualified permanent and probationary employees are eligible to participate in the Public Agency Cost-Sharing Multiple- Employer Defined Benefit Pension Plan (Plan) administered by the California Public Employees’ Retirement System (CalPERS.) The Plan consists of individual rate plans (benefit tiers) within a safety risk p ool (police and fire) and a miscellaneous risk pool (all other.) Plan assets may be used to pay benefits for any employer rate plan of the safety and miscellaneous pools. Accordingly, rate pl ans within the safety or miscellaneous pools are not separate plans under GASB Statement No. 68. Individual employers may sponsor more than on e rate plan in the miscellane ous or safety risk pools.
The City sponsors seven plans (two miscellaneous and five safety). Benefit provisions under the Plan are established by State statute and City resolution. CalPERS issues publicly available reports that in clude a full description of the pension plan regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.
Benefits Provided
CalPERS provides service retirement and disability benefits, an nual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of tota l service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disabilit y benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or th e Optional Settlement 2W Death Benefit.
The cost of living adjustments for each plan are applied as specified by the Public Employee's Retirement Law.
The rate plan provisions and benefits in effect at June 30, 2023, are summarized as follows:
Tier I PEPRA
Prior to On or after
Hire date January 1, 2013 January 1, 2013
Benefit formula 2.0% @ 55 2.0% @ 62
Benefit vesting schedule 5 years service 5 years service Benefit payments monthly for life monthly for life
Retirement age 50 and up 52 and up
Monthly benefits, as a % of eligible
compensation 1.426% to 2.418% 1.0% to 2.5%
Required employee contribution rates 8.00% 6.75%
Required employer contribution rates* 11.590% 7.470%
Tier I PEPRA
Prior to On or after
Hire Date January 1, 2013 January 1, 2013
Benefit formula 2.0% @ 55 2.7% @ 57
Benefit vesting schedule 5 years service 5 years service Benefit payments monthly for life monthly for life
Retirement age 50 and up 50 and up
Monthly benefits, as a % of eligible
compensation 2.0% to 2.7% 2.0% to 2.7%
Required employee contribution rates 9.00% 13.00%
Required employer contribution rates* 18.170% 12.780%
Miscellaneous
Safety – Police
171
CITY OF SANGER | JUNE 30, 2023
Notes to the Basic Financial Statements
52 NOTE 10 – DEFINED BENEFIT PENSION PLAN (Continued)
A. General Information (Continued)
Benefits Provided (Continued)
Safety – Fire
Tier I Tier II PEPRA
On or after On or after On or after
Hire Date September 1, 2008 October 1, 1985 January 1, 2013 Benefit formula 3.0% @ 55 3.0% @ 55 2.7% @ 57
Benefit vesting schedule 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life Retirement age 50 and up 50 and up 50 and up
Monthly benefits, as a % of eligible
compensation 2.0% to 2.7% 2.0% to 2.7% 2.0% to 2.7%
Required employee contribution rates N/A 9.00% 13.00%
Required employer contribution rates* N/A 20.640% 12.780% * The employer contribution rate is the sum of the Pl an's employer normal cost rate plus the employer unfunded accrued liability.
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 annu al basis by the actuary and shall be effective on July 1 following notice of a change in the rate. Funding contributions for the Plan are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated am ount necessary to finance the costs of benefits earned by employees during the year, with an additi onal amount to finance an y unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees.
The City's contributions to the Plan recognized as pension expense for the year ended June 30, 2023 were $21,802,443.
B. Pension Liabilities, Pension Expense, and Deferred Outflows/Inflows of Resources Related to Pensions
As of June 30, 2023, the City reported a net pension liability for its proportionate share of the net pension liability of the Plan of $7,813,037.
The City's net pension liability for the Plan is measured as the proportionate share of the net pension liability. The net pension liability of the Plan is measured as of June 30, 2022, and the total pension liability for the Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30 , 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 plan relative to the projected contributions of all participating employers, actuarially determined. The City's propor tionate share of the net pension liabilit y for the Plan as of the measurement periods June 30, 2021 and June 30, 2022 was as follows:
Proportion - June 30, 2021 0.2364%
Proportion - June 30, 2022 0.0676%
Change - Increase (Decrease) -0.1688%
172
CITY OF SANGER | JUNE 30, 2023
Notes to the Basic Financial Statements
53 NOTE 10 – DEFINED BENEFIT PENSION PLAN (Continued)
B. Pension Liabilities, Pension Expense, and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
For the year ended June 30, 2023, the City recognized pension expense of $10,894,026. At June 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to the measurement date 1,191,647$ -$ Difference between actual contributions made by employer and the employer's proportionate share of the risk pool's total contributi o 12,319,354 497,828 Differences between actual and expected experience 255,086 93,146 Changes in assumptions 793,048 -
Changes in employer's proportion 146,433 16,958,706 Net differences between projected and actual earnings on plan investments 1,314,727 -
Total 16,020,295 $ 17,549,680 $
$1,191,647 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2024. Other amounts reported as deferred outflows of resources and deferred inflows of reso urces related to pensions w ill be recognized as pension expense as follows:
Year Ended
June 30
2024 (1,311,055)$
2025 (1,324,894)
2026 (888,033)
2027 802,950
C. Actuarial Assumptions
The total pension liabilities in the June 30, 2021 actuarial valuations were determined using the followi ng actuarial assumptions:
Miscellaneous & Safety Plans
Valuation Date June 30, 2021
Measurement Date June 30, 2022
Actuarial Cost Method Entry- Age Normal Cost Method
Actuarial Assumptions:
Discount Rate 6.90%
Inflation 2.50%
Payroll Growth 2.80%
Projected Salary Increase Varies by Entry Age and Service Investment Rate of Return 6.90%
Mortality(1)
Derived using CalPERS'
Membership Data for all Funds
(1) The mortality table was developed based on CalPERS-specific data. The includes 15 years of mortality improvements using Society of Actuaries 90 percent 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) available on CalPERS website.
173
CITY OF SANGER | JUNE 30, 2023
Notes to the Basic Financial Statements
54 NOTE 10 – DEFINED BENEFIT PENSION PLAN (Continued)
C. Actuarial Assumptions (Continued)
All other actuarial assumptions used in the June 30, 2021 valuation were based on the results of an actuarial experience study for the fiscal years 1997 to 2015, including updates to salary increases, mortality and retirement rates. The Experience Study report can be obtained at CalPERS' website under Forms and Publications.
Changes in Assumptions
Effective with the June 30, 2021 valuation date (2022 measurement date), the accounting discount rate was reduced from
7.15% to 6.90%. In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash fl ows. Projected returns for all asset classes are estimated, combined with risk estimates, and are used to project co mpound (geometric) returns over the long term. The discount rate used to discount liabilities was in formed by the long-term projected port folio return. In addition, demographic assumptions and the inflation ra te assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions.
D. Discount Rate
The discount rate used to measure the total pension liabilit y was 6.90 percent. The projection of cash flows used to determine the discount rate assumed that contributions from plan memb ers 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 fiduciar y net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.
Long-term Expected Rate of Return
The long-term expected rate of return on pension plan in vestments was determined usin g a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.
In determining the long-term expected rate of return, CalPER S took into account both short-term and long-term market return expectations as well as the expected pension fund (PERF) cash flows. Using historical returns of all of the funds’ asset classes, expected compound (geometr ic) returns were calculated over the shor t-term (first 10 years) and the long- term (11+ years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the rounded single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses.
The table below reflects long-term expected real rates of return by asset class. The rates of return were calculated using the capital market assumptions applied to determine the discount ra te and asset allocation. These geometric rates of return are net of administrative expenses.
174
CITY OF SANGER | JUNE 30, 2023
Notes to the Basic Financial Statements
55 NOTE 10 – DEFINED BENEFIT PENSION PLAN (Continued)
D. Discount Rate (Continued)
Long-term Expected Rate of Return (Continued)
New Strategic
Asset Class (a) Allocation Real Return(a,b)
Global Equity - Cap-weighted 30.00% 4.54%
Global Equity - Non-Cap-weighted 12.00% 3.84%
Private Equity 13.00% 7.28%
Treasury 5.00% 0.27%
Mortgage-backed Securities 5.00% 0.50%
Investment Grade Corporates 10.00% 1.56%
High Yield 5.00% 2.27%
Emerging Market Debt 5.00% 2.48%
Private Debt 5.00% 3.57%
Real Assets 15.00% 3.21%
Leverage -5.00% -0.59%
Total 100.00%
(a) An expected inflation of 2.30% used for this period (b) Figures are based on the 2021-22 Asset Liability Management study.
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 th e Plan, calculated using the discount rate for the Plan, as well as wh at 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 or 1-percentage point higher than the current rate:
Discount Rate -1% Current Discount Rate Discount Rate +1%
5.90% 6.90% 7.90%
20,232,099$ 7,813,037 $ (2,364,092) $
Detailed information about the pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.
NOTE 11 – CONTINGENCIES AND COMMITMENTS
Grant Awards
The City participates in certain fede ral and state assisted grant programs. Th ese programs are subject to program compliance audits by the grantors or their representatives. Any liability for reimbursement wh ich may arise as the result of these audits is not believed to be material.
Litigation
The City is subject to litigation arising from the normal course of business. In the opinion of the City attorney there is no pending litigation which is likely to have a material adverse effect on the financial position of the City. 175
CITY OF SANGER | JUNE 30, 2023
Notes to the Basic Financial Statements
56 NOTE 12 – FIDUCIARY FUND DISCLOSURES
The City is acting in a fiduciary capacity for the assets and liabilities of the Successor Agency of the former Redevelopment Agency of the City of Sanger and the South Kings Groundwater Sustainability Custodial Fund. Disclosures related to these transactions are as follows:
Restatement of Net Position
During the fiscal year ended 2023, the City restated net position for the So uth Kings Groundwater Sustainability Custodial Fund for the prior year capital asset activity improperly repo rted in the City’s fiduciary fund. The City serves as a Depositary to the South Kings Groundwate r Sustainability Agency Joint Powers Auth ority (the Authority) and therefore acts as the custodian of all the money for the Authority.
NOTE 13 – PRIOR PERIOD ADJUSTMENTS
The City has determined that certain transactions were recorded incorrectly in the prior year. These adjustments resulted in a change to the opening fund balances of the funds and net positions of the government-wide financial statements as follows:
A. Fund Reclassification
During fiscal year 2022, the City reclassified the EDA Grant Water Projec t Fund from a special reve nue fund to the Water Enterprise Fund to better reflect the nature of the activi ty. Accordingly, the beginning net position of the Water Enterprise Fund was decreased by $123,750, and governmental fund balance increased by the same amount. 176
CITY OF SANGER | JUNE 30, 2023
Notes to the Basic Financial Statements
57 NOTE 13 – PRIOR PERIOD ADJUSTMENTS (Continued)
B. Governmental and Business-Type Activities
Description
Governmental
Activities
Business-Type
Activities Total
Net position, June 30, 2022, as previously reported 56,819,399$ 18,292,142 $ 75,111,541 $ Fund reclassification 123,750 (123,750) - Prior period adjustments:
Cash and investments (1,425,000) 2,850,000 1,425,000 Receivables:
Accounts, net 89,742 - 89,742 Leases 491,185 - 491,185 Due from other governments (523,047) - (523,047) Capital assets (net of accumulated depreciation):
Depreciable (3,549,244) 3,890,786 341,542 Deferred outflows of resources - pension related 1,236,875 (1,529,811) (292,936) Accounts payable (23,347) - (23,347) Interest payable 30,010 - 30,010 Retention payable 1,995 - 1,995 Deposits (12,632) - (12,632) Unearned revenue 47,825 17,786 65,611 Unavailable revenue 774,213 123,750 897,963 Noncurrent liabilities:
Long-term debt (23,111) 25,113 2,002 Lease liability (164,660) - (164,660) Net pension liability (2,144,709) 2,144,709 - Deferred inflows of resources - pension related (1,446,856) 1,682,051 235,195 Deferred inflows of resources - lease related (705,260) - (705,260) Total prior period adjustments (7,346,021) 9,204,384 1,858,363 Net position, July 1, 2022, as restated 49,597,128 $ 27,372,776 $ 76,969,904 $ 177
CITY OF SANGER | JUNE 30, 2023
Notes to the Basic Financial Statements
58 NOTE 13 – PRIOR PERIOD ADJUSTMENTS (Continued)
C. Fund Financial Statements
Governmental Funds
Major Funds Non-Major
Capital Projects Governmental
Description General Fund Funds
Fund Balance, June 30, 2022, as previously reported 8,452,986$ - $ 16,136,219$ Fund reclassification - - 123,750 Prior period adjustments:
Cash and investments - - (1,425,000) Cash with fiscal agents - 8,005,000 (8,005,000) Receivables:
Accounts, net 89,742 - - Leases 491,185 - - Due from other governments - - (523,047) Accounts payable - - (23,347) Retention payable - - 1,995 Deposits (12,632) - - Unearned revenue - - 47,825 Unavailable revenue - - 2,760,927 Deferred inflows of resources - lease related (705,260) - - Total prior period adjustments (136,965) 8,005,000 (7,165,647) Fund Balance, July 1, 2022, as restated 8,316,021 $ 8,005,000 $ 9,094,322 $
178
CITY OF SANGER | JUNE 30, 2023
Notes to the Basic Financial Statements
59 NOTE 13 – PRIOR PERIOD ADJUSTMENTS (Continued)
B. Fund Financial Statements (Continued)
Proprietary Funds
Enterprise Funds
Description Water Sewer Disposal
Net position, June 30, 2022, as previously repoorted 15,868,975$ (509,874) $ 2,933,041 $ Fund reclassification (123,750) - - Prior period adjustments:
Cash and investments 2,850,000 - - Receivables:
Accounts, net (828,543) 828,543 -
Capital assets, net 4,077,584 (213,400) 26,602 Deferred outflows of resources - pension related (509,618) (745,565) (274,628) Unearned revenue 5,916 8,524 3,346 Unavailable revenue 123,750 - - Noncurrent liabilities:
Long-term debt 7,792 13,865 3,456 Net pension liability 687,302 1,122,001 335,406 Deferred inflows of resources - pension related 541,934 870,475 269,642 Total prior period adjustments 6,956,117 1,884,443 363,824 Net position, July 1, 2022, as restated 22,701,342 $ 1,374,569 $ 3,296,865 $
179
60 REQUIRED SUPPLEMENTARY INFORMATION
180
61 BUDGETARY COMPARISON SCHEDULES
181
CITY OF SANGER | FOR THE YEAR ENDED JUNE 30, 2023
Budgetary Comparison Schedules
General Fund
62 Budgeted Amounts Variance with
Original Final Actual Final Budget
REVENUES
Taxes 11,475,800 $ 11,475,800 $ 12,095,319 $ 619,519 $ License and permits 351,000 351,000 444,674 93,674 Intergovernmental 767,985 767,985 633,474 (134,511) Charges for services 3,426,300 3,426,300 3,464,182 37,882 Fines and forfeitures 202,800 202,800 393,080 190,280 Investment income 31,800 31,800 133,824 102,024 Other revenues 206,200 206,200 309,712 103,512 Total revenues 16,461,885 16,461,885 17,474,265 1,012,380
EXPENDITURES
Current:
City council 1,081,174 1,081,174 438,633 642,541 Community services 569,947 569,947 758,747 (188,800) Police department 6,146,592 6,146,592 5,624,566 522,026 Fire and emergency services 4,359,941 4,359,941 3,841,515 518,426 Development services 1,331,922 1,331,922 1,310,019 21,903 Public works 1,468,744 1,468,744 1,803,093 (334,349) Nondepartmental 102,100 102,100 52,166 49,934 Capital outlay 705,485 705,485 153,786 551,699 Debt service:
Principal 837,818 837,818 177,210 660,608 Interest and fiscal charges - - 336,030 (336,030) Total expenditures 16,603,723 16,603,723 14,495,765 2,107,958 Excess (deficiency) of revenues over
(under) expenditures (141,838) (141,838) 2,978,500 3,120,338
OTHER FINANCING SOURCES (USES)
Transfers in - - 2,810 2,810 Transfers out - - (1,246,756) (1,246,756) Total other financing sources (uses) - - (1,243,946) (1,243,946) Net change in fund balances (141,838) $ (141,838) $ 1,734,554 1,876,392 $ Fund balances (deficits) - beginning (restated) 8,316,021 Fund balances (deficits) - ending 10,050,575 $
182
CITY OF SANGER | FOR THE YEAR ENDED JUNE 30, 2023
Budgetary Comparison Schedules
Measure S District Sales Tax – Major Special Revenue Fund
63 Budgeted Amounts Variance with
Original Final Actual Final Budget
REVENUES
Taxes 3,090,000$ 3,090,000$ 3,303,954$ 213,954$ Investment income 6,300 6,300 22,831 16,531 Total revenues 3,096,300 3,096,300 3,326,785 230,485
EXPENDITURES
Current:
Police department 1,588,113 1,588,113 1,423,099 165,014 Fire and emergency services 862,736 862,736 1,126,218 (263,482) Capital outlay 802,900 802,900 742,121 60,779 Debt service:
Principal 69,051 69,051 131,375 (62,324) Interest and fiscal charges - - 13,046 (13,046) Total expenditures 3,322,800 3,322,800 3,435,859 (113,059) Excess (deficiency) of revenues over
(under) expenditures (226,500) (226,500) (109,074) 117,426
OTHER FINANCING SOURCES (USES)
Proceeds from long-term debt - - 49,386 49,386 Transfers out - - (177,939) (177,939) Total other financing sources (uses) - - (128,553) (128,553) Net change in fund balances (226,500) $ (226,500) $ (237,627) (11,127) $ Fund balances (deficits) - beginning 2,749,955
Fund balances (deficits) - ending 2,512,328 $
183
CITY OF SANGER | FOR THE YEAR ENDED JUNE 30, 2023
Notes to the Budgetary Comparison Schedules
64 NOTE 1 – BUDGETARY INFORMATION
The City uses the following procedures annually to establish the budget data reflected in the budgetary comparison schedules:
1) The City Manager submits to the City Council a proposed budget for the fiscal year commencing the following July 1. The budget includes proposed expenditures and the means of financing them. 2) The City Council reviews the proposed budget at specially scheduled sessio ns, which are open to the public. The Council also conducts a public hearing on the proposed budget to obtain comments from interest persons. 3) Prior to July 1, the budget is legally adopted through passage of a resoluti on. This budget is reported as Original Budget in the budgetary comparison schedules.
4) During the fiscal year, changes to the ad opted budget may be authorized as follows:
a. Items requiring City Council action - appropriation of fund balance reserves; transfers of appropriations between funds; appropriation of any nondepartmental revenue; new interfund loans or advances; and creation of new capital projects or increases to existing capital projects. b. Items delegated to the City Manager - transfers between departments within funds; appropriation of unbudgeted departmental revenues; and approval of transfers which increase salary and benefit appropriations.
c. Items delegated to department heads - allocation of departmental appropriations to line item levels. 5) Formal budgetary integration is employed as a management tool for all funds. Annual budgets are legally adopted and amended as required for the General Fund, certain Special Revenue Funds, and Enterprise Funds.
Project length budgets are adopted for the Capital Proj ect Funds. All budgets are pr epared on a basis consistent with generally accepted accounting principles (GAAP), and budgetary comparison information. A debt service payment schedule for the Debt Service Funds is also approved as part of the budget process. 6) Budget amounts are reflected after a ll authorized amendments and revisions. This budget is reported as the Final Budget in the budgetary comparison schedules.
7) For each legally adopted operating budget, expenditures may not exceed budgeted appropriations at the activity level. The legal appropriation basis is at the level calle d "department." A "departmen t" for legal appropriation purposes may be a single organization, or an entire department having multiple organizations within the same fund, or an entire fund.
NOTE 2 – EXCESS EXPENDITURES OVER APPROPRIATIONS
Excess
Expenditures
General Fund
Current:
Community services 188,800 $
Public works 334,349
Debt service:
Interest and fiscal charges 336,030
Measure S
Current:
Fire and emergency services 263,482
Debt service:
Principal 62,324
Interest and fiscal charges 13,046
184
65 PENSION PLAN
185
CITY OF SANGER | FOR THE YEAR ENDED JUNE 30, 2023
Cost Sharing Defined Benefit Pension Plan – Miscellaneous and Safety Plan Schedule of the City’s Proportionate Share of the Net Pension Liability Last 10 Years*
66 2015 2016 2017 2018 2019 2020 2021 2022 2023
0.0890% 0.2369% 0.2271% 0.2164% 0.2175% 0.2071% 0.2022% 0.2364% 0.0676% 5,588,247$ 16,263,018$ 19,652,795$ 21,464,893$ 20,959,271$ 21,225,445$ 22,001,601$ 12,784,201$ 7,813,037$ 5,645,111$ 5,552,266$ 5,713,477$ 6,525,459$ 7,029,487$ 7,194,486$ 7,517,297$ 7,452,075$ 6,551,039$
98.99% 292.91% 343.97% 328.94% 298.16% 295.02% 292.68% 171.55% 119.26%
77.90% 74.63% 70.26% 70.29% 72.15% 73.41% 73.65% 85.07% 91.36%
NOTES TO THE SCHEDULE
*Fiscal year 2015 was the 1st year of implementation, therefore only nine years are shown.
Proportion of the net pension liability
Proportionate share of the net pension liability
Covered payroll
Changes of Assumptions- Effective with the June 30, 2021 valuation date (2022 Measurement date), the accounting discount rate was reduced from 7.15% to 6.90%. In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. Projected returns for all ass et classes are estimated, combined with risk estimates, and are used to project compound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long-term project ed portfolio return. In addition, demographic assumptions and the inflation rate assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumpt ions.
Changes in Benefit Terms - In 2022, SB 1168 increased the standard retiree lump sum death benefit from $500 to $2,000 for any death occurring on or after July 1, 2023. The impact fro m this change is deemed to be immaterial and is included in Differences Between Expected and Actual Experience Proportionate share of the net pension liability as
percentage of covered payroll
Plan fiduciary net position as a percentage of the total pension liability
186
CITY OF SANGER | FOR THE YEAR ENDED JUNE 30, 2023
Cost Sharing Defined Benefit Pension Plan – Miscellaneous and Safety Plan Schedule of Contributions
Last 10 Years*
67 2015 2016 2017 2018 2019 2020 2021 2022 2023
1,710,588$ 2,021,209$ 2,037,970$ 2,087,768$ 3,421,080$ 2,585,500$ 2,714,196$ 2,064,820$ 1,191,647$ 1,710,588 2,021,209 2,037,970 2,087,768 3,421,080 3,335,500 2,714,196 21,159,820 1,191,647 -$ - $ - $ - $ - $ (750,000)$ - $ (19,095,000)$ - $ 5,552,266$ 5,713,477 $ 6,525,459 $ 7,029,487 $ 7,194,486 $ 7,517,297 $ 7,452,075 $ 6,551,039 $ 7,273,361 $
30.81% 35.38% 31.23% 29.70% 47.55% 34.39% 36.42% 31.52% 16.38% *Fiscal year 2015 was the 1st year of implementation, therefore only nine years are shown.
Contribution deficiency (excess)
Covered payroll
Contributions as a percentage of covered payroll
Actuarially required contribution (actuarially
determined)
Contributions in relation to the actuarially determined contributions
187
68 COMBINING FUND FINANCIAL STATEMENTS
188
69 NONMAJOR GOVERNMENTAL FUNDS
The following funds are reported in total on the Governmental Fund Financial Statements under the column Nonmajor Governmental Funds.
SPECIAL REVENUE FUNDS
State Gas Tax – The funds are used to account for receipts and expenditures of monies apportioned to the City under the Streets and Highways Case Section 2105, 2106, 2107, 2107.5 of the State of California.
Landscape and Lighting – Accounts for maintenance expenditures made with assessment money received from district property owners.
Measure C EXT - Pedestrian – These funds are used for pedestrian facilit ies including sidewalks, paths, walkways, or equivalent facilities. Funding is provided by the countywide 1/ 2 cent transportation sales tax imposed in Fresno County for twenty years.
Measure C EXT - Bicycle – These funds are used for bicycle facilities includi ng accommodations for bicycle travel either by a shared roadway of by bike lane. Funding is provided by the countywide 1/2 cent transpor tation sales tax imposed in Fresno County for twenty years.
Measure C EXT - American Disability Act (ADA ) – These funds are used for the Amer ican Disability Act compliance for street construction and maintenance including curb cuts and ramps to remove barriers, as well as other special transportation services. Funding is provid ed by the countywide 1/2 cent transp ortation sales tax imposed in Fresno County for twenty years.
Measure C EXT - Street – These funds are used for the street maintenance for street improvements that address the aging street and road systems. Funding is prov ided by the countywide 1/2 cent transp ortation sales tax imposed in Fresno County for twenty years.
Measure C EXT - Flexible – These funds are used for any transportation project they feel is warra nted (example: transit, pothole, repair and maintenance of existing alleys). Funding is provided by the countywide 1/ 2 cent transportation sales tax imposed in Fresno County for twenty years.
189
70 SPECIAL REVENUE FUNDS (Continued)
Transportation and Street Maintenance – Accounts for the construction and maintenance of the street network system of the City. Financing is provided by allocations from the County Local Transportation Funds created by the Transportation Development Act.
Developer Fees – Accounts for fees placed on the development of land. Fees are an offset to the future impact that the development will have on infrastructure.
Asset Forfeiture – Accounts for receipt and expenditure seized asse ts (property and/or cash) of persons suspected of engaging in criminal enterprise pursuant to California Health & Safety Codes sections 11366 through 11491.
Local Public Safety – These funds are used to account for the revenues from Proposition 172, a 1993 measure which collects a 1/2 cent sales tax for local public safety.
Air Quality Projects – This fund is used to account for clean air fees collected by the State and distributed by the California Air Quality Management District for clean air projects.
Community Development Block Grant (CDBG) – Accounts for expenditures for approved projects that have been funded by federal Community Development Block Grant funds received through county funding.
Federal Grants – Federal funding for various local projects and programs including an emergency food distribution program to support certain groups of individuals affected by COVID-19.
Transportation Equity Act (TEA) 21 – Accounts for improving safety due to in creasing traffic levels and protects and enhances the community and the natural environment.
Private Grants – Funding from independent 3rd party organization for various local projects and programs including a mattress recycling program.
Supplemental Law Enforcement Grant – State Supplements Law Enforcement Services Fund (SLESF) provided for front line municipal police services including anti-gang and community crime prevention programs.
Community Facilities District – Community Facilities District 2005-1 levies a special tax in the District comprised of developing areas. The tax provides for the financing of additional demands for public safety and park maintenance services as a result of development.
Sanger Housing Authority – Authorized by Housing Authority Law commen cing with Section 34200 of the health and Safety Code for the development and construction of low and moderate income housing.
State Homeland Security Grant – State Homeland Security Grant provides the first responders with the tools they need should a WMD incident occur in the Urban Area.
Cal Home Grant – Accounts for California Department of Housing and Community Development grant to provide first time low income homebuyers down payment assistance and low income homeowners rehabilitation assistance.
State Grants Fund – This fund accounts for financial activity related to grants received from state agencies. 190
71 SPECIAL REVENUE FUNDS (Continued)
CalOES Grants – Accounts for grants awarded by the California Govern or's Office of Emergency Services (Cal OES) that cover numerous risks and threats related to natural disasters, public health, and public safety. Cal OES also works as a regional pass-through entity for FEMA disaster relief funds as they get distributed to the City.
Area Agency on Aging Grant – This fund accounts for revenues received from the Fresno-Madera Area Agency on Aging, on behalf of the U.S. Department of Health and Human Services, for the purposes of the Sanger Senior Center.
Bulletproof Vest Grant – Accounts for grants awarded by the U.S. Department of Justice for the purchase of body armor vests purchased for law enforcement officers.
DEBT SERVICE FUND
Sanger Financing Authority – This fund accounts for debt service activity related to the City's various bond issuances.
191
CITY OF SANGER | JUNE 30, 2023
Nonmajor Governmental Funds
Combining Balance Sheet
72 Special Revenue Debt Service Total Nonmajor
Funds Fund Funds
ASSETS
Cash and investments 10,162,056 $ -$ 10,162,056$ Cash with fiscal agents - 500,856 500,856 Accounts receivable, net 73,130 - 73,130 Due from other governments 3,219,358 - 3,219,358 Notes receivable 2,888,403 - 2,888,403 Interest receivable 35,627 - 35,627 Land held for resale 712,000 - 712,000 Total assets 17,090,574 $ 500,856 $ 17,591,430$
LIABILITIES
Accounts payable 92,285 $ -$ 92,285$ Due to other funds 3,163,882 123,893 3,287,775 Unearned revenue 358,382 - 358,382 Total liabilities 3,614,549 123,893 3,738,442
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues 4,499,850 - 4,499,850 Total deferred inflows of resources 4,499,850 - 4,499,850
FUND BALANCES (DEFICITS)
Nonspendable 712,000 - 712,000 Restricted 10,287,189 376,963 10,664,152 Unassigned (2,023,014) - (2,023,014) Total fund balances (deficits) 8,976,175 376,963 9,353,138 Total liabilities, deferred inflows of resources,
and fund balances (deficits) 17,090,574 $ 500,856 $ 17,591,430$
192
CITY OF SANGER | JUNE 30, 2023
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
73 Special Revenue Debt Service Total Nonmajor
Funds Fund Funds
REVENUES
Taxes 1,022,181 $ - $ 1,022,181$ Intergovernmental 5,063,134 - 5,063,134 Charges for services 901,559 - 901,559 Investment income 126,072 42,971 169,043 Loan repayments 103,900 - 103,900 Total revenues 7,216,846 42,971 7,259,817
EXPENDITURES
Current:
Community services 7,500 - 7,500 Police department 1,140,952 - 1,140,952 Fire and emergency services 403,640 - 403,640 Development services 398,531 - 398,531 Public works 1,255,705 - 1,255,705 Capital outlay 3,655,232 - 3,655,232 Debt service:
Principal - 786,505 786,505 Interest and fiscal charges - 357,797 357,797 Total expenditures 6,861,560 1,144,302 8,005,862 Excess (deficiency) of revenues over
(under) expenditures 355,286 (1,101,331) (746,045)
OTHER FINANCING SOURCES (USES)
Transfers in 353,421 1,144,302 1,497,723 Transfers out (492,862) - (492,862) Total other financing sources (uses) (139,441) 1,144,302 1,004,861 Net change in fund balances 215,845 42,971 258,816 Fund balances (deficits) - beginning (restated) 8,760,330 333,992 9,094,322 Fund balances (deficits) - ending 8,976,175 $ 376,963 $ 9,353,138$
193
CITY OF SANGER | JUNE 30, 2023
Nonmajor Special Revenue Funds
Combining Balance Sheet
74 Community Community
Air Quality Area Agency on Asset Bulletproof Cal Home Cal OES Development Facilities Projects Aging Grant Forfeiture Vest Grant Grant Grants Block Grant District ASSETS
Cash and investments 18,824 $ - $ 32,563$ - $ 256,740$ 336,299 $ - $ - $ Accounts receivable, net - - - - 13,130 - - - Due from other governments - 10,252 - 5,888 - - 99,924 4,457 Notes receivable - - - - 952,500 - - - Interest receivable 66 - 114 - 897 1,174 - - Land held for resale - - - - - - - - Total assets 18,890 $ 10,252 $ 32,677 $ 5,888 $ 1,223,267$ 337,473 $ 99,924 $ 4,457 $
LIABILITIES
Accounts payable - $ 6,244$ - $ - $ 1,635$ - $ 2,581$ - $ Due to other funds - 4,068 - 5,888 - - 162,416 92,573 Unearned revenue - - - - - 333,333 - - Total liabilities - 10,312 - 5,888 1,635 333,333 164,997 92,573
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues - - - - 949,926 - - - Total deferred inflows of resources - - - - 949,926 - - -
FUND BALANCES (DEFICITS)
Nonspendable - - - - - - - - Restricted 18,890 - 32,677 - 271,706 4,140 - - Unassigned - (60) - - - - (65,073) (88,116) Total fund balances (deficits) 18,890 (60) 32,677 - 271,706 4,140 (65,073) (88,116) Total liabilities, deferred inflows of resources,
and fund balances (deficits) 18,890 $ 10,252 $ 32,677 $ 5,888 $ 1,223,267$ 337,473 $ 99,924 $ 4,457 $
194
CITY OF SANGER | JUNE 30, 2023
Nonmajor Special Revenue Funds
Combining Balance Sheet
(Continued)
75 Transportation
Developer Federal State and Street Landscape and Local Public Measure C Ext - Measure C Ext - Fees Grants Gas Tax Maintenance Lighting Safety ADA Bicycle ASSETS
Cash and investments 4,022,498 $ - $ 454,735$ 1,267,496$ 146,218 $ - $ 46,205$ 166,002 $ Accounts receivable, net - - 60,000 - - - - - Due from other governments - 19,648 117,002 1,605,511 5,336 34,141 3,819 6,891 Notes receivable - - - - - - - - Interest receivable 14,172 - 1,616 4,458 382 - 163 585 Land held for resale - - - - - - - - Total assets 4,036,670 $ 19,648 $ 633,353 $ 2,877,465$ 151,936 $ 34,141 $ 50,187 $ 173,478 $
LIABILITIES
Accounts payable - $ - $ 8,818$ 10,740 $ 10,746 $ - $ - $ - $ Due to other funds - 63,740 - - - 52,758 - - Unearned revenue - - - - - - - - Total liabilities - 63,740 8,818 10,740 10,746 52,758 - -
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues - - - 1,596,791 - - - - Total deferred inflows of resources - - - 1,596,791 - - - -
FUND BALANCES (DEFICITS)
Nonspendable - - - - - - - - Restricted 4,036,670 - 624,535 1,269,934 141,190 - 50,187 173,478 Unassigned - (44,092) - - - (18,617) - - Total fund balances (deficits) 4,036,670 (44,092) 624,535 1,269,934 141,190 (18,617) 50,187 173,478 Total liabilities, deferred inflows of resources,
and fund balances (deficits) 4,036,670 $ 19,648 $ 633,353 $ 2,877,465$ 151,936 $ 34,141 $ 50,187 $ 173,478 $
195
CITY OF SANGER | JUNE 30, 2023
Nonmajor Special Revenue Funds
Combining Balance Sheet
(Continued)
76 Measure C Ext - Measure C Ext - Measure C Ext - Private Grants Sanger Housing State Homeland Supplemental Law Flexible Pedestrian Street Fund Authority State Grants Security Enforcement ASSETS
Cash and investments 756,222 $ 581,952 $ 1,566,636$ 6,955 $ 437,249$ - $ - $ 65,462$ Accounts receivable, net - - - - - - - - Due from other governments 113,237 27,739 117,056 20,000 - 261,532 11,570 20,000 Notes receivable - - - - 1,935,903 - - - Interest receivable 2,664 2,050 5,636 22 1,471 - - 157 Land held for resale - - - - 712,000 - - - Total assets 872,123 $ 611,741 $ 1,689,328$ 26,977 $ 3,086,623$ 261,532 $ 11,570 $ 85,619 $
LIABILITIES
Accounts payable 7,878 $ - $ 19,686$ 1,349 $ 880 $ 2,295 $ - $ - $ Due to other funds - - - - - 1,687,402 224 - Unearned revenue - - - 25,049 - - - - Total liabilities 7,878 - 19,686 26,398 880 1,689,697 224 -
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues - - - - 1,933,133 - - 20,000 Total deferred inflows of resources - - - - 1,933,133 - - 20,000
FUND BALANCES (DEFICITS)
Nonspendable - - - - 712,000 - - - Restricted 864,245 611,741 1,669,642 579 440,610 - 11,346 65,619 Unassigned - - - - - (1,428,165) - - Total fund balances (deficits) 864,245 611,741 1,669,642 579 1,152,610 (1,428,165) 11,346 65,619 Total liabilities, deferred inflows of resources,
and fund balances (deficits) 872,123 $ 611,741 $ 1,689,328$ 26,977 $ 3,086,623$ 261,532 $ 11,570 $ 85,619 $
196
CITY OF SANGER | JUNE 30, 2023
Nonmajor Special Revenue Funds
Combining Balance Sheet
(Continued)
77 Transportation Total Nonmajor
Equity Act Special Revenue
(TEA) 21 Funds
ASSETS
Cash and investments - $ 10,162,056$ Accounts receivable, net - 73,130 Due from other governments 735,355 3,219,358 Notes receivable - 2,888,403 Interest receivable - 35,627 Land held for resale - 712,000 Total assets 735,355 $ 17,090,574$
LIABILITIES
Accounts payable 19,433 $ 92,285 $
Due to other funds 1,094,813 3,163,882
Unearned revenue - 358,382
Total liabilities 1,114,246 3,614,549
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues - 4,499,850 Total deferred inflows of resources - 4,499,850
FUND BALANCES (DEFICITS)
Nonspendable - 712,000
Restricted - 10,287,189
Unassigned (378,891) (2,023,014)
Total fund balances (deficits) (378,891) 8,976,175 Total liabilities, deferred inflows of resources,
and fund balances (deficits) 735,355 $ 17,090,574$
197
CITY OF SANGER | FOR THE YEAR ENDED JUNE 30, 2023
Nonmajor Special Revenue Funds
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
78 Community Community
Air Quality Area Agency on Asset Bulletproof Cal Home Cal OES Development Facilities Projects Aging Grant Forfeiture Vest Grant Grant Grants Block Grant District
REVENUES
Taxes -$ -$ -$ -$ -$ -$ -$ 808,188$ Intergovernmental - 10,252 - 5,888 - - 238,616 - Charges for services - - - - - - - - Investment income 232 - 401 - 5,735 4,140 - 110 Loan repayments - - - - 61,450 - - - Total revenues 232 10,252 401 5,888 67,185 4,140 238,616 808,298
EXPENDITURES
Current:
Community services - 7,500 - - - - - - Police department - - - 5,888 - - - 428,592 Fire and emergency services - - - - - - - 398,898 Development services - - - - 12,882 - 236,035 - Public works - - - - - - 2,581 103,883 Capital outlay - - - - - - - - Total expenditures - 7,500 - 5,888 12,882 - 238,616 931,373 Excess (deficiency) of revenues over
(under) expenditures 232 2,752 401 - 54,303 4,140 - (123,075)
OTHER FINANCING SOURCES (USES)
Transfers in - - - - - - - - Transfers out - (2,812) - - - - - (94,176) Total other financing sources (uses) - (2,812) - - - - - (94,176) Net change in fund balances 232 (60) 401 - 54,303 4,140 - (217,251) Fund balances (deficits) - beginning (restated) 18,658 - 32,276 - 217,403 - (65,073) 129,135 Fund balances (deficits) - ending 18,890 $ (60) $ 32,677$ - $ 271,706$ 4,140 $ (65,073)$ (88,116) $ 198
CITY OF SANGER | FOR THE YEAR ENDED JUNE 30, 2023
Nonmajor Special Revenue Funds
Combining Statement of Revenues, Expenditures and Changes in Fund Balances (Continued)
79 Transportation
Developer Federal State and Street Landscape and Local Public Measure C Ext - Measure C Ext - Fees Grants Gas Tax Maintenance Lighting Safety ADA Bicycle
REVENUES
Taxes -$ -$ -$ -$ -$ 213,993$ -$ -$ Intergovernmental - 42,757 1,272,321 - - - 13,935 22,796 Charges for services 561,513 - - - 340,046 - - - Investment income 46,764 - 8,466 15,075 1,742 - 522 1,967 Loan repayments - - - - - - - - Total revenues 608,277 42,757 1,280,787 15,075 341,788 213,993 14,457 24,763
EXPENDITURES
Current:
Community services - - - - - - - - Police department - 34,705 - - - 294,411 - - Fire and emergency services - - - - - - - - Development services - - - - - - - - Public works 47,825 5,292 511,501 - 495,779 - - - Capital outlay - - 53,557 1,029,385 - - - - Total expenditures 47,825 39,997 565,058 1,029,385 495,779 294,411 - - Excess (deficiency) of revenues over
(under) expenditures 560,452 2,760 715,729 (1,014,310) (153,991) (80,418) 14,457 24,763
OTHER FINANCING SOURCES (USES)
Transfers in - - - - - - - - Transfers out - - (353,421) - - (26,433) - - Total other financing sources (uses) - - (353,421) - - (26,433) - - Net change in fund balances 560,452 2,760 362,308 (1,014,310) (153,991) (106,851) 14,457 24,763 Fund balances (deficits) - beginning (restated) 3,476,218 (46,852) 262,227 2,284,244 295,181 88,234 35,730 148,715 Fund balances (deficits) - ending 4,036,670 $ (44,092) $ 624,535 $ 1,269,934$ 141,190 $ (18,617) $ 50,187 $ 173,478 $ 199
CITY OF SANGER | FOR THE YEAR ENDED JUNE 30, 2023
Nonmajor Special Revenue Funds
Combining Statement of Revenues, Expenditures and Changes in Fund Balances (Continued)
80 Measure C Ext - Measure C Ext - Measure C Ext - Private Grants Sanger Housing State Homeland Supplemental Law Flexible Pedestrian Street Fund Authority State Grants Security Enforcement
REVENUES
Taxes - $ - $ - $ - $ - $ - $ -$ -$ Intergovernmental 405,319 91,727 419,253 44,951 - 307,685 16,088 145,271 Charges for services - - - - - - - - Investment income 8,075 6,851 17,012 37 8,356 - - 587 Loan repayments - - - - 42,450 - - - Total revenues 413,394 98,578 436,265 44,988 50,806 307,685 16,088 145,858
EXPENDITURES
Current:
Community services - - - - - - - - Police department - - - 412 - 221,533 - 155,411 Fire and emergency services - - - - - - 4,742 - Development services - - - - 96,948 52,666 - - Public works 84,847 - - 3,997 - - - - Capital outlay 40,354 - 109,550 40,000 - - - - Total expenditures 125,201 - 109,550 44,409 96,948 274,199 4,742 155,411 Excess (deficiency) of revenues over
(under) expenditures 288,193 98,578 326,715 579 (46,142) 33,486 11,346 (9,553)
OTHER FINANCING SOURCES (USES)
Transfers in - - - - - - - - Transfers out - - - - - - - (16,020) Total other financing sources (uses) - - - - - - - (16,020) Net change in fund balances 288,193 98,578 326,715 579 (46,142) 33,486 11,346 (25,573) Fund balances (deficits) - beginning (restated) 576,052 513,163 1,342,927 - 1,198,752 (1,461,651) - 91,192 Fund balances (deficits) - ending 864,245$ 611,741 $ 1,669,642$ 579 $ 1,152,610$ (1,428,165) $ 11,346 $ 65,619 $ 200
CITY OF SANGER | FOR THE YEAR ENDED JUNE 30, 2023
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued)
81 Transportation Total Nonmajor
Equity Act Special Revenue
(TEA) 21 Funds
REVENUES
Taxes - $ 1,022,181$
Intergovernmental 2,026,275 5,063,134
Charges for services - 901,559 Investment income - 126,072
Loan repayments - 103,900
Total revenues 2,026,275 7,216,846
EXPENDITURES
Current:
Community services - 7,500
Police department - 1,140,952 Fire and emergency services - 403,640 Development services - 398,531 Public works - 1,255,705
Capital outlay 2,382,386 3,655,232
Total expenditures 2,382,386 6,861,560
Excess (deficiency) of revenues over
(under) expenditures (356,111) 355,286
OTHER FINANCING SOURCES (USES)
Transfers in 353,421 353,421
Transfers out - (492,862)
Total other financing sources (uses) 353,421 (139,441) Net change in fund balances (2,690) 215,845 Fund balances (deficits) - beginning (restated) (376,201) 8,760,330 Fund balances (deficits) - ending (378,891) $ 8,976,175 $ 201
CITY OF SANGER | FOR THE YEAR ENDED JUNE 30, 2023
Nonmajor Debt Service Fund
Combining Balance Sheet
82 Sanger
Financing
Authority
ASSETS
Cash with fiscal agents 500,856 $
Total assets 500,856 $
LIABILITIES
Due to other funds 123,893 $
Total liabilities 123,893
FUND BALANCES (DEFICITS)
Restricted 376,963
Total fund balances (deficits) 376,963
Total liabilities, deferred inflows of resources,
and fund balances (deficits) 500,856 $
202
CITY OF SANGER | FOR THE YEAR ENDED JUNE 30, 2023
Nonmajor Debt Service Fund
Combining Statement of Revenues, Expenditures and Changes in Fund Balance
83 Sanger
Financing
Authority
REVENUES
Investment income 42,971 $
Total revenues 42,971
EXPENDITURES
Debt service:
Principal 786,505
Interest and fiscal charges 357,797
Total expenditures 1,144,302
Excess (deficiency) of revenues over
(under) expenditures (1,101,331)
OTHER FINANCING SOURCES (USES)
Transfers in 1,144,302
Total other financing sources (uses) 1,144,302
Net change in fund balances 42,971
Fund balances (deficits) - beginning (restated) 333,992 Fund balances (deficits) - ending 376,963 $
203
84 INTERNAL SERVICE FUNDS
Internal service funds are used to account for the financing of goods or services provided by one department or agency to other departments or agencies of the government and to other government units, on a cost reimbursement basis. The internal service funds used by the City are shown below:
Administrative Services – Accounts for the city manager, city clerk, and finance departments systems which include acquisition, replacement and support services for both hardware and software.
Equipment Maintenance – Accounts for bulk gasoline and consumption by the departments of the City.
Self-Insurance Programs – Accounts for the City's self-insured risks for the workers' compensation and liability programs.
204
CITY OF SANGER | JUNE 30, 2023
Internal Service Funds
Combining Statement of Net Position
85 Administrative Equipment Self-Insurance Total Internal Services Maintenance Programs Service Funds
ASSETS
Current assets:
Cash and investments 100,113 $ 20,028 $ - $ 120,141$ Accounts receivable, net - - 13 13 Inventory - 24,779 - 24,779 Prepaid expenses - - 1,941 1,941 Total current assets 100,113 44,807 1,954 146,874 Noncurrent assets:
Capital assets:
Machinery and equipment 280,450 - - 280,450 Less accumulated depreciation/amortization (280,450) - - (280,450) Total noncurrent assets - - - - Total assets 100,113 44,807 1,954 146,874
LIABILITIES
Current liabilities:
Accounts payable 92,977 24,639 123,149 240,765 Accrued payroll and benefits - - 24,519 24,519 Due to other funds - - 129,661 129,661 Total current liabilities 92,977 24,639 277,329 394,945 Total liabilities 92,977 24,639 277,329 394,945
NET POSITION
Unrestricted 7,136 20,168 (275,375) (248,071) Total net position 7,136$ 20,168 $ (275,375)$ (248,071) $ 205
CITY OF SANGER | FOR THE YEAR ENDED JUNE 30, 2023
Internal Service Funds
Combining Statement of Revenues, Expenses and Changes in Net Position
86 Administrative Equipment Self-Insurance Total Internal Services Maintenance Programs Service Funds
Operating revenues:
Charges for services 2,152,616 $ 263,388 $ 3,566,827$ 5,982,831 $ Total operating revenues 2,152,616 263,388 3,566,827 5,982,831 Operating expenses:
Salaries and benefits 1,123,039 - 3,200,213 4,323,252 Supplies and services 729,016 243,220 496,860 1,469,096 General and administrative 293,425 - (130,247) 163,178 Total operating expenses 2,145,480 243,220 3,566,826 5,955,526 Operating income (loss) 7,136 20,168 1 27,305 Changes in net position 7,136 20,168 1 27,305 Net position (deficit) - beginning - - (275,376) (275,376) Net position (deficit) - ending 7,136 $ 20,168 $ (275,375)$ (248,071) $ 206
CITY OF SANGER | FOR THE YEAR ENDED JUNE 30, 2023
Internal Service Funds
Combining Statement of Cash Flows
87 Administrative Equipment Self-Insurance Total Internal Services Maintenance Programs Service Funds
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers 2,152,616 $ 263,388 $ 3,567,524$ 5,983,528 $ Cash paid to suppliers (767,015) (280,418) (378,602) (1,426,035) Cash paid to employees (1,152,735) - (3,647,376) (4,800,111) Cash paid for general administrative services (293,425) - 130,247 (163,178) Net cash provided by (used for) operating activities (60,559) (17,030) (328,207) (405,796)
CASH FLOWS FROM NONCAPITAL AND RELATED FINANCING ACTIVITIES Loans from/(to) other funds - - 129,661 129,661 Net cash provided by (used for) noncapital and related financing activities - - 129,661 129,661 Increase (decrease) in cash and cash equivalents (60,559) (17,030) (198,546) (276,135) Cash and cash equivalents - beginning (restated) 160,672 37,058 198,546 396,276 Cash and cash equivalents - ending 100,113$ 20,028 $ - $ 120,141$ Reconciliation of operating income (loss) to net cash provided by (used for) operating activities:
Operating income (loss) 7,136 $ 20,168 $ 1 $ 27,305$ Changes in operating assets, liabilities and deferred outflows/inflows of resources:
(Increase) decrease in accounts receivable, net - - 697 697 (Increase) decrease in inventory - (20,168) - (20,168) (Increase) decrease in prepaid expenses - - (1,941) (1,941) Increase (decrease) in accounts payable (37,999) (17,030) 120,199 65,170 Increase (decrease) in accrued payroll and benefits (29,696) - (447,163) (476,859) Net cash provided by (used for) operating activities (60,559)$ (17,030) $ (328,207)$ (405,796) $ 207
Attachment 2
208
City of Sanger | CA
Single Audit Report
For the Year Ended June 30, 2023
209
CITY OF SANGER | FOR THE YEAR ENDED JUNE 30, 2023
Single Audit Report
TABLE OF CONTENTS
PAGE
Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ................................................................. 1 Independent Auditor’s Report on Compliance for Each Major Program and on Internal Control Over Compliance Required by the Uniform Guidance ........................................................................................................................................................ 3 Schedule of Expenditures of Federal Awards ....................................................................................................................... 6 Notes to the Schedule of Expenditures of Federal Awards .................................................................................................. 7 Schedule of Findings and Questioned Costs ........................................................................................................................ 8 Summary Schedule of Prior Audit Findings ........................................................................................................................ 12 Corrective Action Plan ........................................................................................................................................................ 16 210
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 City Council of
the City of Sanger
Sanger, California
We have audited, in accordance with the auditing stan dards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States,
the financial statements of the governmental activities, the business- type activities, each major fund, and the aggregate remaini ng fund information of City of Sanger, as of and for the year ended June 30, 2023, and the related notes to the financial statements, wh ich collectively comprise City of Sanger’s basic financial statements, and have issued our report thereon dated October 22, 2025.
Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial st atements, we considered City of Sanger’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opin ions on the financial st atements, but not for the purpose of expressing an opinion on the effectiveness of City of Sanger’s internal c ontrol. Accordingly, we do not express an opinion on the effectiveness of City of Sanger’s internal control.
Our consideration of internal control was for the lim ited 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 assi gned 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 corr ected, on a timely basis. We consider the deficiencies described in the accompanying schedule of findings and questioned costs as it ems 2023-001 and 2023-002 to be material weaknesses.
A significant deficiency is a deficiency, or a combination of deficien cies, in internal control that is less severe than a material weakness, yet important enough to mer it 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.
211
2 Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether City of Sanger’s financial statements are free from material misstatement, we performed tests of its comp liance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with whic h could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed an instance of noncompliance or other matters that is required to be reported under Government Auditing Standards and which is described in the accompanying schedule of findings and questioned costs at item 2023-004.
City of Sanger’s Response to Findings
Government Auditing Standards requires the auditor to perform limited procedures on the City of Sanger’s response to the findings identified in our audit and d escribed in the accompanying schedule of findings and questioned costs. City of Sanger’s response was not subj ected 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 opini on on the effectiveness of the entity’s internal control or on compliance. This report is an integral pa rt 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.
October 22, 2025
212
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 COMPLIANCE
FOR EACH MAJOR PROGRAM AND ON
INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE
To the City Council
of the City of Sanger
Sanger, California
Report on Compliance for Each Major Federal Program
Opinion on Each Major Federal Program
We have audited City of Sanger’s compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and materia l effect on each of City of Sanger’s major federal programs for the year ended June 30, 2023. The City of Sanger’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, City of Sanger complied, in all materia l 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 standard s generally accepted in the United States of America; the standards applicab le to financial audits contained in Government Auditing Standards , issued by the Comptroller General of the United St ates; 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 City of Sanger and to meet our other ethical responsibilities, in accordance with relevant ethical requirements rela ting to our audit. We believe that th e 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 City of Sanger’s compliance with the compliance requirements referred to above.
Responsibilities of Management for Compliance
Management is responsible for compliance with the re quirements referred to above and for the design, implementation, and maintenance of effective internal c ontrol over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to City of Sanger’s federal programs.
Auditor’s Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonabl e assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on City of Sanger’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute 213
4 assurance and therefore is not a guarantee that an aud it 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 involv e collusion, forgery, intentional om issions, misrepresentations, or the override of internal control. Noncompliance with the co mpliance 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 a bout City of Sanger’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. Su ch procedures include examining, on a test basis, evidence regarding City of Sanger’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 City of Sanger’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 City of Sanger’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 deficien cies 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 noncomplia nce 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 2023-005. Our opinion on each major federal program is not modified with respect to these matters.
Government Auditing Standards requires the auditor to perform limite d procedures on City of Sanger’s response to the noncompliance findings identified in our comp liance audit described in the accompanying schedule of findings and questioned costs. City of Sanger’s respon se 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 possib ility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.
Our consideration of internal contro l 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 w eaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify a ny deficiencies in internal control 214
5 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.
Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of City of Sanger, as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise City of Sanger’s basic financial statements. We issued our report thereon dated Octobe r 22, 2025, which contained unmodified opinions on those financial statements. Our audit was performed for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the Uniform Guidance and is 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 th e basic financial statements.
The information has been subjected to the auditing procedures applied in the au dit of the 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 fina ncial 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 schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole.
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 complian ce is solely to describe the scope of our testing of internal control over compliance and the results of th at testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.
October 25, 2022
215
CITY OF SANGER | FOR THE YEAR ENDED JUNE 30, 2023
Schedule of Expenditures of Federal Awards
See the accompanying notes to the schedule of expenditures of federal awards and the independent auditor’s report on compliance for each major program and on internal control over compliance required by the Uniform Guidance. 6 Federal Pass-Through
Assistance Listing Grantor's Federal
Number Number Expenditures
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD)
Direct Programs:
Community Development Block Grant – Coronavirus (CDBG-CV) 14.218 20-CDBG-CV2-3 236,035$ Passed through the County of Fresno
Community Development Block Grants / Entitlement Grants 14.218 N22611 2,581 Subtotal Community Development Block Grant - Entitlement Grants Cluster 238,616 Total U.S. Department of Housing and Urban Development (HUD) 238,616 U.S. DEPARTMENT OF JUSTICE
Direct Programs:
Bulletproof Vest Partnership Program (BVP) 16.607 5,888 Total U.S. Department of Justice 5,888
U.S. DEPARTMENT OF TRANSPORTATION
Passed through California Office of Traffic Safety
Highway Safety Cluster:
State and Community Highway Safety 20.600 PT23065 37,465 Subtotal Highway Safety Cluster 37,465
Passed through California Department of Transportation:
Highway Planning and Construction Cluster:
Highway Planning and Construction 20.205 CML-5197(031) 38,192 Highway Planning and Construction 20.205 CML-5197(038) 124,751 Highway Planning and Construction 20.205 STPL-5197(040) 657,685 Highway Planning and Construction 20.205 STPL-5197(041) 1,095,491 Highway Planning and Construction 20.205 CML-5197(042) 13,135 Highway Planning and Construction 20.205 CML-5197(043) 13,496 Highway Planning and Construction 20.205 CML-5197(044) 12,772 Highway Planning and Construction 20.205 HIPSTPL-5197(045) 30,221 Highway Planning and Construction 20.205 STPL-5197(046) 40,453 Subtotal Highway Planning and Construction Cluster 2,026,196 Total U.S. Department of Transportation 2,063,661
U.S. DEPARTMENT OF TREASURY
Direct Programs:
Coronavirus State and Local Fiscal Recovery Funds (SLFRF) 21.027 547,023 Total U.S. Department of Treasury 547,023
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES (HHS)
Passed through Fresno-Madera Area Agency on Aging
Aging Congregate Nutrition Services for Older Adults 93.045 22-0191 ARP 10,252 Total U.S. Department of Health and Human Services (HHS) 10,252 U.S. DEPARTMENT OF HOMELAND SECURITY
Passed through the California Office of Emergency Services Disaster Grants – Public Assistance 97.036 FEMA-4683-DR-CA 5,292 Passed through the County of Fresno
Homeland Security Grant Program 97.067 DHS-20-GPD-067-00-01 4,663 Total U.S. Department of Homeland Security 9,955
TOTAL EXPENDITURES OF FEDERAL AWARDS 2,875,395$
Federal Grantor/Pass-Through Grantor/Program Title
216
CITY OF SANGER | FOR THE YEAR ENDED JUNE 30, 2023
Notes to the Schedule of Expenditures of Federal Awards
7 NOTE 1 – GENERAL
The accompanying Schedule of Expenditures of Federal Awards (SEFA) presents the activity of all federal award programs of the City of Sanger, California (the City). Federal awards received directly from federal agencies, as well as federal awards passed through other government agencies are included in the schedule. The in formation in this SEFA is presented in accordance with the 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).
NOTE 2 – BASIS OF ACCOUNTING
The accompanying SEFA is presented using the modified accrual basis of accounting except for programs recorded in the City’s enterprise funds, which are pres ented using the accrual basis of accounting , which is described in Note 1 of the City’s basic financial statements.
NOTE 3 – RELATIONSHIP TO BASIC FINANCIAL STATEMENTS
Federal award expenditures agree or can be reconciled with the amounts reported in the City’s basic financial statements.
NOTE 4 – INDIRECT COST RATE
The City has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. 217
CITY OF SANGER | FOR THE YEAR ENDED JUNE 30, 2023
Schedule of Findings and Questioned Costs
8 FINANCIAL STATEMENTS
Type of auditor's report issued:
Internal control over financial reporting:
Material weaknesses identified? X Yes No
Significant deficiencies identified -
not considered to be material weaknesses? X Yes None reported Noncompliance material to financial statements noted? Yes X No
FEDERAL AWARDS
Internal control over major programs:
Material weaknesses identified? Yes X No
Significant deficiencies identified -
not considered to be material weaknesses? Yes X None reported Type of auditor's report issued on compliance for
major programs:
Any audit findings disclosed that are required
to be reported in accordance with
2 CFR 200.516(a)? X Yes No
IDENTIFICATION OF MAJOR PROGRAMS:
Assistance Listing Number(s)
20.205 Highway Planning and Construction
Dollar threshold used to distinguish
between Type A and Type B programs:
Auditee qualified as low-risk auditee? Yes X No
$750,000
SECTION I ‒ SUMMARY OF AUDITOR'S RESULTS
Unmodified
Unmodified
Name of Federal Program or Cluster
218
CITY OF SANGER | FOR THE YEAR ENDED JUNE 30, 2023
Schedule of Findings and Questioned Costs
(Continued)
9 SECTION II – FINANCIAL STATEMENT FINDINGS
Finding 2023-001: Financial Close (Material Weakness)
Criteria: An effective internal control system and timely fina ncial reporting provides re asonable assu rance 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 reco nciliations and financial reporting of financial activity for the fiscal year were not effective, which contributed to the delayed accounting close of the City's tria l balance and unpreparedness for the audit. The year-end audit for the June 30, 2023 fiscal year began in July 2025. The City's final financial statements were provided in October 2025. Specific financial statement areas that required corrections and adjustments throughout the process included:
Cash & investments - See material weakness 2023-002.
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 othe r 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 accura tely and timely for the J une 30, 2023 fiscal year.
Bank reconciliations for the fiscal year were not completed until October 2025.
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 re conciliation process led to inconsistencies in how transactions were being recorded.
Effect: Untimely preparation and review of ba nk reconciliations increases the risk th at 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 invest ment reconciliations should include tests of mechanical accuracy and tracing of items on the reconciliation to relevant source document s. Bank reconciliations for th e current month should be completed in the subsequent month.
Management’s Response: See Corrective Action Plan.
219
CITY OF SANGER | FOR THE YEAR ENDED JUNE 30, 2023
Schedule of Findings and Questioned Costs
(Continued)
10 SECTION II – FINANCIAL STATEMENT FINDINGS (Continued)
Finding 2023-003: Grant Reconciliation (Significant Deficiency)
Cause: Certain deficiencies in the internal control system over financial reporting could adversel y affect an entity's ability to record, process, summarize, and report financial data consistent with the asse rtions of management in the financial statements.
Condition: In addition, the City is not timely submitting claims fo r reimbursement of eligible expenditures to the relevant granting agency resulting in un available 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
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.
Finding 2023-004: SB 341 Successor Agency Compliance (Compliance)
Criteria: Senate Bill (SB) 341 requires that all successor entities, starting with fiscal year ended June 30, 2014, comply with annual report requirements within six months after the end of each fiscal year. The annual report must be posted to the City's website and contain all of the required items as descri bed in the Health and Safety Code Section 34176.1 beginning with subsection (f).
Condition: The City did not post the required annual report for the fiscal year ended June 30, 2023, by the deadline of December 31, 2023.
Cause: There were various accounting issues note d in findings 2023-001 - 2023-003 that caused delays in the completion of the fiscal year 2023 audit.
Effect: The posting of the annual financial report is past its 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.
220
CITY OF SANGER | FOR THE YEAR ENDED JUNE 30, 2023
Schedule of Findings and Questioned Costs
(Continued)
11 SECTION III – FEDERAL AWARD FINDINGS
Finding 2023-005: Financial Reporting Timeliness (Compliance)
Criteria: In accordance with CFR section 200.512 of the Unifor m 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 note d in findings 2023-001 - 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.
221
CITY OF SANGER | FOR THE YEAR ENDED JUNE 30, 2023
Summary Schedule of Prior Audit Findings
12 FINANCIAL STATEMENT FINDINGS
Finding 2022-001: Financial Close (Material Weakness)
Criteria: An effective internal control system and timely fina ncial reporting provides re asonable assu rance 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 reco nciliations and financial reporting of financial activity for the fiscal year were not effective, which contributed to the delayed accounting close of the City's tria l balance and unpreparedness for the audit. The year-end audit fo r the June 30, 2022 fiscal year began in June 2023. Over the course of a year, the auditors received 3 versions of the trial balance to be audited. Fo r each version received, it was audited as if it was the City's final representation of year-end figures. However, audi t schedules and reconciliations received each time were either lacking or not prepared accurately resulting in numerous journal entries and corrections to be proposed to each version of the trial balance. The City 's final trial balance was provid ed in August 2024. Specific financial statement areas that required corrections and adjustments throughout the process included:
Cash & investments - See material weakness 2022-002.
Accounts receivable - The City does not maintain a proper reconciliation or schedule that list s amounts due to the City at year-end.
Interest receivable - Interest receivable and related revenue was overstated. Notes receivable - The City id entified a deferred loan that was not record ed in the general ledger or included in their loan schedules. This resulted in a $642,000 governme nt-wide prior period adjustment. In addition, a loan payment received was double booked.
Due to/from - Several funds have recurring and/or increasing overdrawn cash balances. See significant deficiency 2022-004 related to grants.
Deposits - Numerous deposit account balances have no t changed from previous years. The City has not performed a full assessment on these accounts.
Net pension liability - Pension contributions subsequent to the measurement date were incorrectly recorded and allocated between governmental and business-type funds. Long-term liabilities - See material weakness 2022-003. Fund balance - Activity was posted to a fund that should have been closed in a prior year.
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 othe r 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.
Status: Not implemented.
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CITY OF SANGER | FOR THE YEAR ENDED JUNE 30, 2023
Summary Schedule of Prior Audit Findings
(Continued)
13 FINANCIAL STATEMENT FINDINGS (Continued)
Finding 2022-002: 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 accura tely and timely for the J une 30, 2022 fiscal year.
Bank reconciliations for the fiscal year were not completed until April 2024. We noted one bank account that was not reconciled until December 2024, upon audit inquiry.
Cause: The overall process for cash and investment reconciliations was not being completed properly. Bank reconciliations were not being prepared or reviewed timely. Unfamilia rity with the bank reconc iliation process led to inconsistencies in how transactions were being recorded.
Effect: Untimely preparation and review of ba nk 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 me chanical 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.
Status: Not implemented.
Finding 2022-003: Long-Term Liabilities (Material Weakness)
Criteria: GASB Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments Certain deficiencies in the internal control system over financial reporting could adversely affect an entity's ability to record, process, summari ze, and report financial data consistent with the assertions of management in the financial statements.
Condition: During fiscal year 2022, the City issued new pension obligation bonds and re funded 4 prior issuances. The activity related to these transactions was not recorded. Further, upon review of the initial pension bond correction, we noted the bond was not properly allocated between governmental and business-type funds. Other transactions related to current long-term liabilities were also not re corded such as true-up of capital lease balances, true-up of bond premium accretion, and recording of issuance discount amortization.
Cause: The City did not have adequate technical resources to record such transactions. In addition, as noted in 2022-002, reconciliations for all cash accounts, including those that were related to the bonds, were not being performed.
Effect: The financial statements as initially presented to the auditors contai ned material misstatements that required adjustments.
Recommendation: We recommend that the City institute a program to methodically identify and document its significant operational and accounting processes, which should include the potential of non-recurring transactions such as debt issuances and refunding’s. Documenting a process involves identifying and gaining an understanding of the events or transactions that trigger performance of the process, the automated or manual procedures used in performing the process, the person(s) or position(s) responsible for performing the procedures, the source documents used or generated, the procedures for approval and review and correction of any e rrors detected, and the financial or operational entries or reports summarizing the result of the process.
Status: Implemented.
223
CITY OF SANGER | FOR THE YEAR ENDED JUNE 30, 2023
Summary Schedule of Prior Audit Findings
(Continued)
14 FINANCIAL STATEMENT FINDINGS (Continued)
Finding 2022-004: Grant Reconciliation (Significant Deficiency)
Cause: Certain deficiencies in the internal control system over financial reporting could adversel y affect an entity's ability to record, process, summarize, and report fi nancial data consistent with the assert ions of management in the financial statements.
Condition: The City's grant revenues, expenditur es, receivables, and unearned revenue are not being properly reconciled for financial reporting purposes at year-end. In addition, the Ci ty is not timely submitting claims for reimbursement of eligible expenditures to the relevant granting agency resulting in unavailable reve nues 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: There were numerous errors identified to properly matc h grant revenues, expenditures, unearned revenue, and receivables within the fiscal year. Grant funds have overdr awn 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
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.
Status: Not implemented.
224
CITY OF SANGER | FOR THE YEAR ENDED JUNE 30, 2023
Summary Schedule of Prior Audit Findings
(Continued)
15 FINANCIAL STATEMENT FINDINGS (Continued)
Finding 2022-005: SB 341 Successor Agency Compliance (Compliance)
Criteria: Senate Bill (SB) 341 requires that all successor entities, starting with fiscal year ended June 30, 2014, comply with annual report requirements within six months after the end of each fiscal year. The annual report must be posted to the City's website and contain all of the required items as de scribed in the Health and Safety Code Section 34176.1 beginning with subsection (f).
Condition: The City did not post the required annual report for the fiscal year ended June 30, 2022, by the deadline of December 31, 2022.
Cause: There were various accounting issues note d in findings 2022-001 - 2022-004 that caused delays in the completion of the fiscal year 2022 audit.
Effect: The posting of the annual financial report is past its due date.
Recommendation: As noted in finding 2022-001, 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.
Status: Not implemented.
FEDERAL AWARD FINDINGS
Finding 2022-006: Financial Reporting Timeliness (Compliance)
Criteria: In accordance with CFR section 200.512 of the Unifor m 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 2022 Single Audit reporting package and data collection form have not been submitted to the Federal Audit Clearinghouse by the deadline of March 31, 2023.
Cause: There were various accounting issues note d in findings 2022-001 - 2022-004 that caused delays in the completion of the fiscal year 2022 audit.
Effect: The filing of the Single Audit Reporting package and data collection form is past the due date.
Recommendation: As noted in finding 2022-001, 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.
Status: Not implemented.
225
CITY OF SANGER | FOR THE YEAR ENDED JUNE 30, 2023
Corrective Action Plan
16 226
Attachment 3
227
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
October 22, 2025
To the City Council of the
City of Sanger
Sanger, California
In planning and performing our audit of the financial statements of the City of Sanger (the City) as of and for the year ended June 30, 2023, in accordance with auditing standards generally accepted in the United States of America, we considered the City's internal control over financial reporting (internal control) as a basis for designing auditing procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do not express an opinion on the effectiveness of the City's internal control.
However, during our audit we became aware of defici encies in internal control other than significant deficiencies and material weaknesses and matters that are opportunities for strengthening internal controls and operating efficiency. The memorandum that accompanies this letter summarizes our comments and suggestions regarding those matters. A separate letter dated October 22, 2025, contains our communication of significant deficiencies or material weaknesses in the City's internal control.
This letter does not affect our report dated October 22, 2025, on the financial statements of the City.
We will review the status of these comments duri ng our next audit engagement. We have already discussed many of these comments and suggestions with various City personnel, and we will be pleased to discuss them in further detail at your convenience, to perform any additional study of these matters, or to assist you in implementing the recommendations.
This communication is intended solely for the information and use of management, City Council, and others within the City, and is not intended to be, and should not be, used by anyone other than those specified parties. or revenue-enhancement plan.
Sincerely,
October 22, 2025
228
Attachment A
City of Sanger
Summary of Control Deficiencies June 30, 2023
Indirect Costs (Repeat Finding)
As a result of a prior year audit recommendation, the City implemented a cost allocation plan. The City adequately recorded internal admin charges amongst funds in accordance with the plan; however, these were based on budgeted figures, not actual. We recommend the City perform an evaluation at year-end to determine if the charges for internal admin recorded require a true-up to actual.
In addition, we observed charges labeled as "taxes in lieu" in the amounts of $103,000, $103,000, and $44,000 to the water, sewer, and disposal funds respectively, being charged from the general fund with no basis or supporting documentation. We recommend the City develop and document a basis for the charges or to end allocation of the charges if they cannot be supported.
Capital Assets (Repeat Finding)
During our review of the capital asset schedule, we noted multiple old, fully depreciated assets. Per management, an updated inventory of capital assets has not been performed in recent years. We recommend the City inspect all fully depreciated assets to determine if assets are still in use. The City may want to consider performing a physical inventory count of property and equipment to help improve tracking of assets for disposal or impairment purposes.
Financial Reporting (Repeat Finding)
During our testing of operating effectiveness of internal controls over financial reporting, we noted the monthly treasurer's report was not presented to City Council for four of the four months requested. In addition, City Council was not presented with the financial update report for four of the four months selected for testing. In order to maintain fiscal transparency and accountability, we recommend these financial reports are completed accurately and presented to City Council on a timely basis.
229
3 Attachment B
City of Sanger
Summary of Prior Year Control Deficiencies June 30, 2023 Stale Dated Checks (Repeat Finding)
Upon review of the City's cash reconciliations, we noted approximately $19,733 in stale dated checks on the outstanding check list, some dating back to 2011. We recommend the City develop procedures for monitoring and reissuing stale dated checks and that the City review the State of California Unclaimed Property Holder handbook to determine if property should be remitted back to the State.
Status: Implemented.
Indirect Costs (Repeat Finding)
As a result of a prior year audit recommendation, the City implemented a cost allocation plan. The City adequately recorded internal admin charges amongst funds in accordance with the plan; however, these were based on budgeted figures, not actual. We recommend the City perform an evaluation at year-end to determine if the charges for internal admin recorded require a true-up to actual.
In addition, we observed charges labeled as "taxes in lieu" in the amounts of $103,000, $103,000, and $44,000 to the water, sewer, and disposal funds respectively, being charged from the general fund with no basis or supporting documentation. We recommend the City develop and document a basis for the charges or to end allocation of the charges if they cannot be supported.
Status: Partially implemented.
Capital Assets
During our review of the capital asset schedule, we noted multiple old, fully depreciated assets. Per management, an updated inventory of capital assets has not been performed in recent years. We recommend the City inspect all fully depreciated assets to determine if assets are still in use. The City may want to consider performing a physical inventory count of property and equipment to help improve tracking of assets for disposal or impairment purposes.
Status: Not implemented.
Financial Reporting
During our testing of operating effectiveness of internal controls over financial reporting, we noted the monthly treasurer's report was not presented to City Council for three of the four months requested. In addition, City Council was not presented with the financial update report for three of the four months selected for testing. In order to maintain fiscal transparency and accountability, we recommend these financial reports are completed accurately and presented to City Council on a timely basis. 230
4 Credit Cards
As a result of testing a sample of credit card transactions, we noted there were missing receipts for four out of fifteen items selected for testing. We recommend management adhere to current policy to ensure that credit card transactions are all supported by receipts prior to processing for approval and payment.
Status: Implemented.
Subsequent Receipts
During our search for unrecorded receivables, we found one item out of twenty-eight tested that should have been accrued into accounts receivable. We recommend management perform a thorough review of subsequent receipts received to ensure any amounts relating to the fiscal year are properly accrued.
Status: Implemented.
231
Attachment 4
232
City of Sanger
Appropriations Limit Calculation
As of June 30, 2023
233
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
Independent Accountant’s Report on Applying Agreed-Upon Procedures To the City Council of the
City of Sanger
Sanger, California
We have performed the procedures enumerated below on the Appropriations Limit Calculation of the City of Sanger for the year ended June 30, 2023. The C ity of Sanger’s management is responsible for the Appropriations Limit Calculation.
The City of Sanger has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of meeting the requirements of Section 1.5 Article XIIIB of the California Constitution. Additionally, the League of California Cities (as presented in the publication entitled Agreed- Upon Procedures Applied to Appropriations Limitati on Prescribed By Article XIII-B of the California Constitution) has agreed to and acknowledged that the procedures performed are appropriate for its purposes. The report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes.
The procedures and associated findings are as follows:
1. We obtained the completed internal calculations and compared the limit and annual adjust ment
factors included in those calculations to t
he limit and annual adjustment factors that were adopted by a resolution of the City Council. We compared the population and inflation options included in the aforement
ioned calculations to those that were selected by a recorded vote of the City Council.
Findin
g: The inflation adjustment factor w as incorrectly inputted as 1.0775, instead of
1.0755, which resulted in a difference of $68,685, current year’s appropriation limit should be $36,934,775 instead of the amount adopted of $37,003,460. City was still within the appropriation subjected to limit of $10,558,000.
2. For the Appropriation Limit Calculation, we added June 30, 2022’s appropriation limit to the annual permitted adjustments and agreed the resulting am
ount to the June 30, 2023 appropriation limit.
Findin
g: The inflation adjustment factor w as incorrectly inputted as 1.0775, instead of
1.0755, which resulted in a difference of $68,685, current year’s appropriation limit should 234
3 be $36,934,775 instead of the amount adopted of $37,003,460. City was still within the appropriation subjected to limit of $10,558,000.
3. We compared the current year information presented in the appropriations limit calculation to supporting worksheets.
Finding: The inflation adjustment factor w as incorrectly inputted as 1.0775, instead of
1.0755, which resulted in a difference of $68,685, current year’s appropriation limit should be $36,934,775 instead of the amount adopted of $37,003,460. City was still within the appropriation subjected to limit of $10,558,000.
4. We compared the June 30, 2022 appropriations limit presented in the appropriations limit calculation to the prior year appropriations limit adopted by the City Council during the prior year.
Finding: No exceptions were noted as a result of our procedures.
We were engaged by the City to perform this agreed-upon procedures e ngagement and conducted our engagement in accordance with attestation standards established by the American Institute of Certified Public Accountants. We were not engaged to and did not conduct an examination or review engagement, the objective which would be the expression of an opinion or conclusion, respectively, on the Appropriation Limit Calculation. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.
We are required to be independent of the City and to meet our ethical responsibilities, in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement.
No procedures have been performed with respect to the determination of the appropriation limit for the base year, as defined by Article XIIIB of the California Constitution.
This report is intended solely for the information an d use of the specified users listed above and is not intended to be and should not be used by anyone other than those specified parties. However, this report is a matter of public record and its distribution is not limited.
October 22, 2025
235
4 City of Sanger
Appropriations Limit Calculation
June 30, 2023
Amount Source
A. Prior year's appropriation limit (at June 30, 2022) 34,674,836$ B. Adjustment factors for the current fiscal year:
1. Population change 0.9904 *State Finance
2. Inflation (per capita personal income change) 1.0755 *State Finance Total adjustments 0.0652 *[(B1xB2)-1.0]
C. Annual adjustment 2,259,939 AxB D. Other adjustments
Lost responsibility (-) -
Transfers to fees (-) -
Assumed responsibility (+) -
E. Total adjustments 2,259,939
C+D
F. Current year's appropriation limit (at June 30, 2023) 36,934,775$ A+E *Rounded to the nearest ten thousandth
236
Attachment 5
237
CITY OF SANGER
MANAGEMENT REPORT
FOR THE YEAR ENDED JUNE 30, 2023
238
TABLE OF
CONTENTS
Page
Required Communications ................................................................................................................. 1 - 3 239
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
October 22, 2025
City Council
City of Sanger
1700 7th Street
Sanger, CA 93657
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 Sanger 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 Government Auditing Standards and the Uniform Guidance, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated January 13, 2025. Professional sta ndards also require that we communicate to you the following information related to our audit.
Significant Audit Matters
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City of Sanger are describ ed 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 of Sanger during the year for which there is a l ack 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 fina ncial statements prepared by management and are based on management’s knowledge and experience about past and cu rrent 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 signifi cantly from those expected. The most sensitive estimate(s) 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 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.
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.
The financial statement disclosures are neutral, consistent, and clear.
240
2 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 comm unicate 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 i ndividually or in the aggregate, to each opinion unit’s financial statements taken as a whole.
Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounti ng, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit.
Management Representations
We have requested certain representations from management that are included in the management representation letter dated October 22, 2025.
Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other account ants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the City of Sanger’s financial stat ements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards requi re the consulting accountant to check with us to determine that th e consultant has all the relevant fact s. 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 reten tion as the City of Sanger’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention.
Other significant matters discussed with management include the material weaknesses and significant deficiencies issued for the year ended June 30, 2023, which were reported in the Schedule of Findings and Questioned Costs included in the Single Audit and Relate d Reports package. The material weaknesses and significant deficiencies indicate there is a high risk that potential errors may not be prevented, or detected and corrected, on a timely basis.
Other Matters
We applied certain limited procedures to the budgetary sch edules, schedule of the City’s proportionate share of net pension liability, and schedule of contributions, whic h are required supplementary information (RSI) that supplements the basic financial statements. Our procedur es consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consis tency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI.
We were engaged to report on the nonmajor combining statements, which accompany the financial statements but are not RSI. With respect to this supplementary inform ation, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to de termine 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 appr opriate and complete in re lation 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. 241
3 Restriction on Use
This information is intended solely for the information and use of the City Council and management of the City of Sanger and is not intended to be, and should not be, used by anyone other than these specified parties.
Very truly yours,
Bryant L. Jolley, CPA
242