Sebastopol City Council
January 17, 2023

Agenda Item Number:__6__

CITY OF SEBASTOPOL

CITY COUNCIL

AGENDA ITEM
Meeting Date: January 17, 2023
To: Honorable Mayor and City Councilmembers
From: Ana Kwong – Administrative Services Director
Subject: Receive and Accept of the City’s annual audit for the year-ended June 30, 2022 Recommendation That the City Council Accept the City’s Annual Audit for the year-ended June 30, 2022
Funding: Currently Budgeted: Yes ______ No ____X___N/A
Net General Fund Cost:

If Cost to Other Fund(s),
Account Code/Costs authorized in City Approved Budget (if applicable) AK__ (verified by Administrative Services Department)
INTRODUCTION:

The item is recommending the City Council receive the financial reports by a Certified Public Accountant for the City’s annual audit for the year ended June 30, 2022.

BACKGROUND:

The Annual Comprehensive Financial Report (ACFR) is an audited summary report of the financial transactions of the City for the Fiscal Year 2021-22 (ending June 30, 2022). The report is designed to provide summary financial information for citizens, other government agencies, municipal lenders and other interested parties. The format of this report complies with the generally accepted accounting principles (GAAP) and reporting requirements of the national Governmental Accounting Standards Board (GASB). The City’s operations show signs of stability, a result of the prudent and sound management practices of the City of Sebastopol.

Each year the City of Sebastopol has an audit conducted by an independent auditing firm. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City of Sebastopol for the fiscal year ended June 30, 2022 are free of material misstatements. The independent audit involved examining, on a test basis, evidence supporting amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. Badawi & Associates is a licensed Certified Public Accountant, who specializes in governmental audits. They had audited and verified the City of Sebastopol's financial statements and have issued the City a clean audit report, and that the accompanying financial statements have no significant or unusual transactions in the City’s statement of net position and fund statements.

Following completion of the ACFR, Management has submitted the ACFR to the Governmental Finance Officers Association (GFOA) Certificate of Achievement for Excellence in Financial Reporting program. The GFOA is a nationally recognized nonprofit professional association serving more than 18,000 finance professionals in the United States and Canada, and the Certificate of Achievement is the highest form of recognition in the area of governmental accounting and financial reporting.

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City Council Meeting Packet of January 17, 2023

Agenda Item Number:__6__
DISCUSSION:

The City’s financial statements provide information about the finances of the City in its entirety, as well as information about individual funds. The ACFR is organized into the three sections summarized below.

Introductory Section
• Letter of Transmittal - which is designed to complement Management’s Discussion and Analysis (the MD&A), is prepared by management and used to communicate information on areasthat may have an impact on the City’s finances now and in the future. This includes economic factors as well as budget and managementfactors. Both should be read together to understand the City’sfinancial position.

Financial Section (the main body of the ACFR for current year information) • Independent Auditors’ Report – the City’s report card on the content of the ACFR • Management’s Discussion and Analysis (MD&A) – provides an analytical overview of the City’s financial status and results for the year
• Basic Financial Statements – reports finances at a point in time (assets - liabilities) and throughout the year (revenues - expenditures), and cash flows
o City-Wide Statements – overview of financial information including all of the City’s operations by financial activity
o Fund Financial Statements – a detailed look at funds, reporting the Balance Sheet and Statement of Revenues, Expenditures and Changes in Fund Balance o Notes to the Financial Statements (Notes) – a narrative explanation that accompanies the Basic Financial Statements
Required Supplementary Information
• Budget to Actual Comparisons – for all governmental funds with a legally adopted budget • Pension Information – schedule of changes in the pension liability and related ratios; schedule of contributions by plan
• OPEB Information – schedule showing three years of Other Post-Employment Benefits Other Than Pensions

Statistical Section (current and historical information – up to 10 years) The last section of the ACFR, which is unaudited, contains schedules of statistical data about the City of Sebastopol in five major categories:
• Financial Trends
• Revenue Capacity
• Debt Capacity
• Demographic and Economic Information
• Operating Information
These schedules, generally covering a ten-year period, provide operating context for the financial data presented in the financial section of the ACFR.

The ACFR will be available on the City’s website after tonight’s meeting, and attached to this staff report.

Copies are also available for review in the Administrative Services Department.

Analysis
The ACFR is a complex document containing a tremendous amount of information. From the auditing standpoint, our auditor has been able to provide an independent review of the City’s financial reporting Agenda Item Number 6
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processes and internal controls, and finds that the City of Sebastopol is in good financial health and is maintaining control over budgeted activities. The City’s General Fund ends with a $11.84 million fund balance, of which $3.55 million is unassigned and available for expenditure. The fund balance increase was primarily due to increase in general revenues.

Financial Considerations
The audit report provides reasonable assurance that the financial statements are free of any material misstatements and found no material weaknesses and is therefore an indication that City funds are being spent appropriately and as intended by the City Council, grantor agencies, and Federal and State laws.

This report, with no material misstatements and weaknesses, signals the City’s quality of accounting and financial reporting and are an indication that City funds are being spent appropriately and as intended by the City Council, grantor agencies, and federal and State laws. They also help maintain the City’s favorable bond ratings.

GOALS:

Goal 1: Maintain the long term financial stability and sustainability of the City of Sebastopol and Operate City government in a fiscally responsible and responsive manner.

1.1.1 Review the City Council Financial Polices to ensure they meet the needs of the City

ENVIRONMENTAL REVIEW
The proposed action is exempt from the requirements of the California Environmental Quality Act (CEQA) in accordance with CEQA Guidelines Section 15378(b)(5), and does not meet CEQA's definition of a “project,” because the action does not have the potential for resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment, and because the action constitutes organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment. and is exempt pursuant to Section 15269(c) of the CEQA Guidelines, as specific actions necessary to prevent or mitigate an emergency.

PUBLIC COMMENT:

As of the writing of this staff report, the City has not received any public comment. However, staff anticipates receiving public comment from interested parties following the publication and distribution of this staff report. Such comments will be provided to the City Council as supplemental materials before or at the meeting. In addition, public comments may be offered during the public hearing.

PUBLIC NOTICE:

This item was noticed in accordance with the Ralph M. Brown Act and was available for public viewing and review at least 72 hours prior to schedule meeting date.

FISCAL IMPACT:

No funding impacting for accepting this report tonight.

RECOMMENDATION:

That the City Council adopt by motion and minute order to receive and accept the Fiscal Year 2021-22 audited Comprehensive Annual Financial Report (ACFR).

Attachments:

Audited Annual Comprehensive Financial Report (ACFR) as of June 30, 2022 – City of Sebastopol Power Point Document
Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

CITY OF SEBASTOPOL
Annual Comprehensive Financial Report
For The Fiscal Year July 1, 2021 Through June 30, 2022
Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of
Sebastopol
Sebastopol, California
Annual Comprehensive Financial Report
For the year ended June 30, 2022
Prepared by:

Administrative Services Department
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City of Sebastopol
Annual Comprehensive Financial Report
For the year ended June 30, 2022
Table of Contents
Page
INTRODUCTORY SECTION:

Table of Contents ....................................................................................................................................................... i Letter of Transmittal .................................................................................................................................................. v Directory of City Officials ........................................................................................................................................ ix Organization Chart .................................................................................................................................................... x GFOA Certificate of Achievement for Excellence in Financial Reporting ........................................................ xi

FINANCIAL SECTION
Independent Auditors’ Report .............................................................................................................................. 1 Management’s Discussion and Analysis ............................................................................................................. 5 Basic Financial Statements:

Government-Wide Financial Statements:

Statement of Net Position ......................................................................................................................... 27 Statement of Activities .............................................................................................................................. 28 Fund Financial Statements:

Governmental Funds Financial Statements:

Balance Sheet ........................................................................................................................................ 34 Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position ............................................................... 35 Statement of Revenues, Expenditures and Changes in Fund Balances ....................................... 36 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities ................................................................................................................. 37 Proprietary Funds Financial Statements:

Statement of Net Position ................................................................................................................... 40 Statement of Revenues, Expenses and Changes in Net Position .................................................. 41 Statement of Cash Flows .................................................................................................................... 42 Notes to Basic Financial Statements ............................................................................................................... 43 Required Supplementary Information (Unaudited):

Budgets and Budgetary Accounting:

Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual: General Fund .................................................................................................... 84 Agenda Item Number 6
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City of Sebastopol
Annual Comprehensive Financial Report
For the year ended June 30, 2022
Table of Contents
Page
FINANCIAL SECTION, Continued:

Required Supplementary Information (Unaudited), Continued:

Defined Benefit Pension Plan:

Schedule of Proportionate Share of the Net Pension Liability .......................................................... 88 Schedule of Contributions ....................................................................................................................... 90 Other Postemployment Benefits Plan:

Schedule of Changes in the Total OPEB Liability and Related Ratios ............................................... 92 Supplementary Information:

Non-Major Governmental Funds:

Combining Balance Sheet ......................................................................................................................... 98 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ...................... 104 Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual:

Police Grant Special Revenue Fund ................................................................................................ 109 Gas Tax Special Revenue Fund ....................................................................................................... 110 Park in Lieu Special Revenue Fund ................................................................................................ 111 Traffic Impact Special Revenue Fund ............................................................................................. 112 Street Lighting Assessment Special Revenue Fund ..................................................................... 113 Asset Forfeiture Special Revenue Fund ......................................................................................... 114 Downtown Association Special Revenue Fund ............................................................................ 115 Art in Lieu Special Revenue Fund .................................................................................................. 116 Measure M Special Revenue Fund ................................................................................................. 117 Housing General Plan Special Revenue Fund .............................................................................. 118 Street Reserve Special Revenue Fund............................................................................................. 119 Vehicle Abatement Special Revenue Fund .................................................................................... 120 Inclusionary and Linkage Housing Special Revenue Fund ........................................................ 121 Building Permit Incremental Special Revenue Fund ................................................................... 122 Community Development Block Grant Special Revenue Fund ................................................. 123 SB1 Road and Maintenance Special Revenue Fund ..................................................................... 124 General Government Fees Special Revenue Fund ........................................................................ 125 Fire Facilities Fees Special Revenue Fund ..................................................................................... 126 Stormwater Facilities Fees Special Revenue Fund ....................................................................... 127 Supplemental Planning Grant (SB2 and LEAP) Special Revenue Fund .................................... 128 Undergrounding Capital Project Fund .......................................................................................... 129 General Capital Project Fund ........................................................................................................... 130 Woodstone Assessment District Debt Service Fund .................................................................... 131 Clean Renewable Energy Debt Service Fund ................................................................................ 132 Agenda Item Number 6
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City of Sebastopol
Annual Comprehensive Financial Report
For the year ended June 30, 2022
Table of Contents
Page
STATISTICAL SECTION (Unaudited):

Financial Trends:

Net Position by Component ................................................................................................................................ 134 Changes in Net Position ....................................................................................................................................... 136 Fund Balances of Governmental Funds ............................................................................................................. 140 Changes in Fund Balances of Governmental Funds ........................................................................................ 142 Revenue Capacity Information:

Assessed Value and Estimated Actual Value of Taxable Property ............................................................... 144 Direct and Overlapping Property Tax Rates ..................................................................................................... 145 Principal Property Taxpayers ............................................................................................................................. 146 Property Tax Levies and Collections ................................................................................................................. 147 Taxable Sales by Category ................................................................................................................................... 148 Debt Capacity Information:

Ratios of Outstanding Debt by Type .................................................................................................................. 150 Ratios of General Bonded Debt Outstanding ................................................................................................... 152 Direct and Overlapping Governmental Activities Debt ................................................................................. 153 Legal Debt Margin Information .......................................................................................................................... 154 Pledged-Revenue Coverage ................................................................................................................................ 156 Demographic and Economic Information:

Demographic and Economic Statistics ............................................................................................................... 158 Principal Employers for City of Sebastopol ...................................................................................................... 159 Operating Information:

Full-Time Equivalent City Government Employees by Function ................................................................. 160 Operating Indicators by Function ...................................................................................................................... 161 Capital Asset Statistics by Function ................................................................................................................... 162 Agenda Item Number 6
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City Council
Mayor Neysa Hinton
Vice Mayor Diana Gardner Rich
Councilmember Sandra Maurer
Councilmember Jill McLewis
Councilmember Stephen Zollman
City Manager
Larry McLaughlin
[email protected]
Assistant City Manager/City Clerk, MMC
Mary Gourley
[email protected]
December 23, 2022
Honorable Mayor, Members of the Council and Citizens of the City of Sebastopol:

City staff is pleased to present the annual comprehensive financial report for the City of Sebastopol for the fiscal year ended June 30, 2022. This report was prepared by the Administrative Service (Finance) Department, which is responsible for both the accuracy of the data presented, and the completeness of the presentation.

The annual comprehensive financial report includes a complete set of audited financial statements and related explanatory notes to the financial statements that provide additional context for reading the statements, such as accounting policies, as well as detail about summary information presented in the statements. Also, the annual comprehensive financial report includes supplemental information and statistical information to enhance readers’ understanding of the City’s financial and economic information. The City issues the annual comprehensive financial report within approximately six months after the close of each fiscal year with the intent to meet the goals of fiscal transparency and demonstrate compliance with various sources of external financing, such as state and federal regulations and bond covenants.

City management assumes full responsibility for the completeness and reliability of all of the information contained in this report; and has established a comprehensive framework of internal control to ensure that information is accurate and produced in accordance with generally accepted accounting principles. Because the cost of internal controls should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements.

The City’s independent auditor, Badawi & Associates, has issued an unmodified (“clean”) opinion on the City of Sebastopol financial statements for the fiscal year ended June 30, 2022. The independent auditor’s report is presented at the front of the financial section of this report.

Management’s discussion and analysis (MD&A) immediately follows the independent auditor’s report and provides a narrative introduction, overview, and analysis of the basic financial statements and should be read in conjunction with this letter and the financial statements and notes.

Profile of the City of Sebastopol
The City of Sebastopol has a population of approximately 7,800 residents; and is located in Sonoma County, California. Sebastopol was incorporated 1902, and operates under a council-manager form of government.

Policymaking and legislative authority are vested in the City Council consisting of the Mayor and four other elected Council members. The Council is elected on a non-partisan basis. Council members serve four year staggered terms, with two members elected every two years. The Mayor is selected by the five-member Council and serves in that capacity for one year.

The Council is responsible for, among other matters, approving and modifying ordinances, adopting the City budget, appointing committee and commission members, and hiring the City Manager and City Attorney. The City Manager is responsible for assuring compliance with the ordinances, implementing the policies and direction of the City Council, appointing department heads, hiring employees, and managing daily operations of the City.

Sebastopol is a full-service city that provides a wide variety of municipal services to its residents and visitors, including municipal utilities (Water and Wastewater); fire and police protection; construction and maintenance of City streets, storm drains, bridges, and similar infrastructure type assets; park maintenance; community recreation v
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activities; building inspections; licenses and permits; and facilities. The city also serves as a transportation and economic hub for West Sonoma County.

Sebastopol is a City that Cares:

Sebastopol is a caring community that celebrates inclusion, diversity and sustainable environmental practices; as well as the health and success of its citizens and businesses. Many visitors, from “locals” traveling from the San Francisco Bay Area to interested visitors from around the world, come to Sebastopol to enjoy the natural environment, fine dining, welcoming lodging, and a wide array of recreational and educational activities.

The City is well-known for its leadership efforts in environmental sustainability, and strives to conserve natural resources, notably energy and water. Sebastopol hosts many local events that celebrate the arts and artists, with a robust Community Center that provides an easily accessible space for many local artisans, actors and communicators. A “makers’ space” is located within the city, and a local technology company has hosted many “makers fairs.” Sebastopol seeks an environment where its citizens and visitors can learn and grow together in a caring, supportive environment.

Budget Process:

The City’s annual budget serves as the foundation for the City of Sebastopol’s financial planning and expenditure control system. All departments of the City submit requests for appropriations to the City Budget Subcommittee each year; these requests serve as a starting point for developing a proposed budget. The City Budget Subcommittee presents a proposed operating and capital budget to the City Council each year. The Council holds public hearings, generally starting in June, to review and receive input on the proposed budget before formal adoption. The budget is adopted by fund, department and account classification. During the year, the City Manager may authorize budget transfers within departments and funds, but only the City Council can approve additional appropriations. Staff provides monthly financial reports to the Council during the year and may prepare a comprehensive budget review at mid-year. Council approves adjustments to the original budget during the year to reflect changing conditions that impact revenues or expenditures.

Meaningful public involvement is needed to balance goals of continuous service improvement and fiscal sustainability. Increased nonprofit grants and local marketing initiatives helped the City maintain services while meeting budgetary reserves goals during the Covid-19 pandemic.

Budget to actual comparisons are provided in this report for each governmental fund for which an appropriated annual budget has been adopted.

Local Economy
The City is located in beautiful Sonoma County, approximately sixty miles north of San Francisco. The area attracts many visitors each year, and Sebastopol receives substantial funding form sales taxes and transient occupancy taxes. Attractive recreational opportunities, great food and wine, and specialty retail shops that offer locally made goods bring in many visitors. Warm welcomes and friendly service brings them back! Local employment prospects are strong, in relation to historical trends. However, the impacts of the Covid-19 pandemic that began in March 2020 are having a lingering impact on the labor market. Sebastopol’s recent investments in initiatives to assist local businesses in attracting visitors to the City, coupled with targeted nonprofit grants above recent years’ baseline amounts, are made with the recognition that small business activity and local employment are linked.

The FY 22-23 budget includes relatively flat projections for sales and transient occupancy taxes, even though they made gains during FY 21-22 relative to their decline in FY 20-21 caused by restrictions on public gatherings.

Property tax growth was impressive during FY21-22, with year-over-year gains attributed to above-normal real estate transactions activity.
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Sales taxes have a stronger correlation with the local economy than property taxes; and have become a larger share of total revenues. For FY 22-23 sales taxes were 41.8% of the adopted budget’s total revenues; while property taxes represented 27.5% of the total. A more conservative approach is warranted in response to changes in the revenue mix.

A detailed description of the City’s budget policy goals and strategies, as well as historical and current budget amounts is included in the FY 22-23 adopted budget that is accessible on the Administrative Services Department’s web site.

Future Challenges:

The Fiscal Year 2022-23 budget was challenging to the need to balance post-pandemic service restoration with the goals of maintaining and improving services. The City is continuing to identify issues that impact long-term fiscal stability, such as pension costs stabilization and capital asset funding. The City studied options for pension funding, overall revenue enhancement strategies and fiscal impact analysis during this current fiscal year, and will be considering the use of a Section 115 pension trust to gain increased investments stability and local control of pension funding.

Long-Term Financial Planning
The City annually updates a five-year financial forecast, incorporating both projected revenues and expenditures for the general fund. The City Council balanced the FY 22-23 budget with an appropriate use of reserves that provided for the continuation of essential services as we experience a “return to a more normal” economy as the impact of the pandemic decrease. The FY 22-23 adopted budget provides for the use of $1,153,000 in reserves to fund essential programs, while meeting the budget reserve goal of 15% unassigned fund balance as a percentage of expenditures. The unassigned balance budgeted fund balance is projected to be 16.5% of expenditures at the end of FY 22-23.

The fiscal sustainability goals and priorities that had financially-significant impacts on budget development follow:

I. Maintain core services to the public as a top priority:
a. The budget provides “baseline” funding in core areas, including police, fire, roadways, recreation and development services; and funds administrative efforts to make public communications and decisionmaking transparent and responsive. b. By policy, funding requests that are above a baseline budget (prior years’ minimum operating requirements, contractual obligation plus an inflation factor), are incorporated in departmental operating budgets based on a cost-to-service benefit analysis.
c. Create and charge fair prices for services that are delivered on an “as requested” basis, such as planning and development services which are regulated through a the user fee schedule.

II. Create and maintain appropriate operating budgetary surpluses:
a. Anticipated revenues plus beginning fund balances (financing sources) should be higher than appropriations for expenditures plus ending fund balances (financing uses). b. The City’s goal of creating and maintaining fund balances while providing for core services is intended to provide a cushion against uncontrollable spikes in costs or unanticipated short-term drops in revenue. c. Planned fund balance uses, besides providing stability when expenses spike or revenues drop, should be limited to taking care of deferred City infrastructure and equipment needs, funding one-time costs to create efficiencies in City programs, and providing pre-funding of longer-term liabilities that will save money in future years.
d. The FY 22-23 adopted operating budget meets the City Council’s fund balance policy goals when assigned and unassigned fund balance are combined; and does not fund items above the baseline policy level.

III. Debt financing is limited to achieving operating efficiencies:
a. Consistent with the City Council’s goal to provide stability for ongoing core service programs. vii
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b. The FY 22-23 operating budget provided $87,000 in additional debt financing to fund essential programs.
c. Core programs that require significant infrastructure, like Water and Wastewater may use debt financing for significant capital costs due to the long-term nature of the assets and financing plans.

Awards
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Sebastopol for its annual comprehensive financial report for the fiscal year ended June 30, 2021. The Certificate of Achievement is a prestigious national award recognizing conformance with the highest standards for preparation of state and local financial reports.

In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized annual comprehensive financial report, with contents that conform to program standards. The annual comprehensive financial report must satisfy both generally accepted accounting principles and applicable legal requirements.

A Certificate of Achievement is valid for a period of one year only. The City of Sebastopol has received the Certificate of Achievement for five consecutive years (fiscal years ended 2017 through 2021).

We believe our current report continues to meet the Certificate of Achievement Program’s requirements and we will be submitting it to GFOA to determine its eligibility for another certificate. Staff Contributions Acknowledgment
The preparation of this report would not have been possible without the teamwork and dedication within the City’s Administrative Services (Finance) Department staff, and through the cooperation of the entire City staff. City staff members have my sincere appreciation for their contributions. The Mayor and Council Members deserve recognition for their continued support and leadership in maintaining high standards of professionalism in managing the City’s finances.

Respectfully Submitted,
Ana Kwong – Administrative Services Director
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CITY OFFICIALS
(as of the date of the Financial Statements)
City Council:

Patrick Slayter, Mayor
Neysa Hinton, Vice Mayor
Una Glass
Sarah Glade Gurney
Diana Gardner Rich
City Staff:

City Manager | City Attorney……………………………………………..Lawrence McLaughlin Assistant City Manager | City Clerk ...........................................……. Mary Gourley Administrative Services Director .................……………………………Ana Kwong Building Official ...............……………………………………………….. .Vacant Engineering Manager……………………………………………………..Vacant
Fire Chief ...............................................……………………............... William Braga Planning Director ..........................…………………………………….. Kari Svanstrom Police Chief (Interim)..........................................…………………….. Ron Nelson Public Works Superintendent ............................................................ Dante Del Prete Advisory Commissions or Committees:

Planning Commission
Design Review Board
Public Arts Committee
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Citizens of
Sebastopol
FY 2022-23 Proposed Budget
City Organization
City Wide Organization Chart by Function
Council
Meeting
Municipal Code
Public Record
City Council
Larry McLaughlin
City Manager
Larry McLaughlin
City Attorney
Mary Gourley
Assistant City Mgr
City Clerk
Election
Information
Building Official
Vacant
Kari Svanstrom
Planning Director
Ana Kwong
Administrative
Services Director
Dante Del Prete
Public Works
Superintendent
Bill Braga
Fire Chief
Kevin Kilgore
Police Chief
Planning
Advance
Planning
Development
Review
Building/Code
Enforcement
Contractor’s
License
Disability
Access
Information
Technology
(Consultant)
Budget
Payroll &
Accounting
Utility
Billing
Human
Resources
(Consultant)
Business
License
Parks Planning
& Development
Consultants
Programs
Consultant
Water
Treatment
Project
Inspection
Services
Wastewater
Collection &
Pumping
Stormwater
Maintenance
Street
Maintenance &
Sidewalk
Engineering
Capital Projects
(Consultants)
Facilities (Park
& Pool)
Maintenance
Fire Protection
Prevention
Investigations
Emergency
Preparedness
EOC
Fire Marshal
Volunteer FF
Recruitment
Retention
Fire Code
Enforcement/
Inspections
Public
Education
Presentations
Crime
Preventions
Investigations
Patrol
Unit
Dispatcher &
Records
Animal
Control
Permit &
Insurance
Processing
Public
Information
Officer
Engineering
Manager
Vacant
Public
Art
Climate
Action
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Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Sebastopol
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2021
Executive Director/CEO
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INDEPENDENT AUDITOR’S REPORT
To the Honorable Mayor and Members of the City Council
Of the City of Sebastopol
Sebastopol, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Sebastopol (City), as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2022, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

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

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

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City Council Meeting Packet of January 17, 2023

To the Honorable Mayor and Members of the City Council
Of the City of Sebastopol
Sebastopol, California

Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions.

Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we:
 Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.  Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed.  Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.  Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and budgetary comparison information on pages 5–21 and 83–93 be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
2 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

To the Honorable Mayor and Members of the City Council
Of the City of Sebastopol
Sebastopol, California

Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The accompanying combining and individual nonmajor fund financial statements, and budgetary comparison information, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements.

The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and budgetary comparison information are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Information
Management is responsible for the other information included in the annual report. The other information comprises the introductory and statistical sections but does not include the basic financial statements and our auditor’s report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon.

In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 23, 2022, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering City’s internal control over financial reporting and compliance.

Badawi & Associates, CPAs
Berkeley, California
December 23, 2022
3 Agenda Item Number 6
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4 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

CITY OF SEBASTOPOL

MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2022
(Rounded to the nearest $1,000)
As management of the City of Sebastopol, California (City) we offer readers of the City’s financial statements this overview and analysis of the City’s financial activities for the fiscal year that began on July 1, 2021 and ended June 30, 2022 (FY21-22). We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal and the City’s financial statements, with related notes, which follow this section.

FINANCIAL HIGHLIGHTS
 The assets and deferred outflows of the City exceeded the liabilities and deferred inflows by $14,853,000 (net position) at June 30, 2022: Governmental activities’ net position was $7,811,000; and business-type activities’ net position was $7,042,000.
 Total government-wide net position is categorized as follows:
o $14,961,000 is the net investment in capital assets;
o $ 3,599,000 is restricted for specific purposes (restricted net position); and, o ($3,707,000) is the unrestricted net position, the residual of total net position less the other categories of net position. Unrestricted net position, when positive, is used by the city to meet its ongoing obligations to citizens and creditors.  For the fiscal year, the net position of governmental and business-type activities decreased by ($394,000) and ($998,000) respectively; accounting for a government-wide decrease in net position of ($1,392,000).
 At June 30, 2022, the city’s governmental funds reported a combined ending fund balance of $12,413,000. Governmental funds’ balances increased by $741,000 for the year reported.  The general fund reports fund balance of $10,342,000 at June 30, 2022; and it is distributed in these categories:
1) $180,000 is categorized as non-spendable, and is comprised of prepaid items. 2) $2,013,000 is reported as restricted; with $1,161,000 restricted for flood recovery; and $852,000 restricted for capital projects.
3) $4,602,000 is reported as assigned fund balance, indicating the city’s intention to use the financial resource for a particular purpose in the future, as follows:
 Buildings, equipment and infrastructure, $981,000;
 Equipment, vehicle and technology replacement, $908,000; and,  Pension and other post-employment liabilities rate stabilization, $2,713,000. 4) $3,547,000 is unassigned fund balance, which represents the residual of total fund balance less other categories. It is available for consideration in the budget process.  Proprietary funds: Within the proprietary fund type, the city reports two enterprise funds, water and wastewater. Proprietary funds report a combined net position of $7,043,000 at June 30, 2022; with $4,076,000 reported in the water fund; and $2,966,000 reported in the wastewater 5 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

CITY OF SEBASTOPOL

MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2022
(Rounded to the nearest $1,000)
fund. The city also reports an internal service fund for insurance benefits, and that fund has a balance of one thousand dollars.

OVERVIEW OF THE FINANCIAL STATEMENTS
This annual report consists of four parts – a management’s discussion and analysis (this section); the basic financial statements, with related notes to the financial statements; required supplementary information; and a supplementary information section that presents combining statements for non-major governmental funds. The basic financial statements include two kinds of statements that present different views of the City:
 The first two statements are government-wide financial statements that provide both long-term and short-term information about the City's overall financial status.  The remaining statements are fund financial statements that focus on individual parts of the City government, reporting the City's operations in more detail than the government-wide statements.

The governmental fund’s statements tell how general government services like public safety were financed in the short term as well as what remains for future spending.

Proprietary funds’ statements offer short-term and long-term financial information about the activities the government operates like businesses, such as the water and wastewater system.

The financial statements also include notes that explain some of the information in the financial statements and provide more detailed data. The statements are followed by required supplementary information that further explains and supports the information in the financial statements. In addition to these required elements, we have included a section with combining statements that provide details about our non-major funds, each of which are added together and presented in a single column in the basic financial statements. 6 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

CITY OF SEBASTOPOL

MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2022
(Rounded to the nearest $1,000)
Figure A-1 summarizes the major features of the City's financial statements, including the portion of the City government they cover and the types of information they contain. The remainder of this overview explains the structure and content of each of the statements.

Government-Wide
Statements Governmental Funds Proprietary Funds
Entire City government
The activities of the City that are not
proprietary or fiduciary, such as police,
fire, and parks.

Activities the City operates similar
to private businesses: the water
and wastewater systems.

Statement of net position ·Balance sheet ·Statement of net position Statement of activities
·Statement of revenues, expenditures,
and changes in fund balances
·Statement of revenues expenses,
and changes in net position
· Statement of cash flows
Accrual accounting and
economic resources focus
Modified accrual accounting and
current financial resources focus
Accrual accounting and economic
resources focus
All assets and liabilities,
both financial and capital,
and short-term and longterm
Only assets expected to be used up
and liabilities that come due during
the year or soon thereafter; no capital
assets included
All assets and liabilities, both
financial and capital, and shortterm and long-term
All revenues and expenses
during year, regardless of
when cash is received or
paid
Revenues for which cash is received
during or soon after the end of the
year; expenditures when goods or
services have been received and
payment is due during the year or
soon thereafter
All revenues and expenses during
year, regardless of when cash is
received or paid
Required financial statements
Type of inflow/outflow information
Figure A-1
Type of asset/liability information
Accounting basis and
measurement focus
Scope
Major Features of City of Sebastopol’s Government-Wide and Fund Financial Statements Fund Statements
Government-wide Financial Statements are designed to provide readers with a broad overview of City finances, in a manner similar to a private-sector business. These financial statements provide both longterm and short-term information about the City’s overall financial status. 7 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

CITY OF SEBASTOPOL

MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2022
(Rounded to the nearest $1,000)
The statement of net position presents information on the City’s assets and deferred outflows; liabilities and deferred outflows; and the residual difference of those elements which is reported as net position.

Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating.

The statement of activities presents information showing how the City’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will result in cash flows in future fiscal periods, such as revenues pertaining to uncollected taxes and expenses pertaining to earned but unused vacation and sick leave.

The government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or in part a portion of their costs through user fees and charges (business-type activities). A description of the functions follows:
 Governmental activities – Most of the City's basic services are included here, such as the police, fire, public works, parks and community development departments and general administration.

Property taxes, sales taxes, transient occupancy taxes, utility user taxes, and state and federal grants finance most of these activities.
 Business-type activities – The City charges fees to customers to help it cover the costs of certain services it provides. The City's water and wastewater system are included here.

Fund Financial Statements financial information for funds, which are groupings of related accounts used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate finance-related legal compliance. All of the funds of the City can be divided into two categories: governmental funds and proprietary funds.

Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental funds’ financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year.

Such information may be useful in determining what financial resources are available in the near future to finance the City’s programs.

Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions.

Both the governmental funds’ balance sheet and the governmental funds’ statement of revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.
8 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

CITY OF SEBASTOPOL

MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2022
(Rounded to the nearest $1,000)
The City maintains individual governmental funds organized according to their type (the general fund and special revenue, capital projects and debt service funds). Information is presented separately in the governmental funds’ balance sheet and in the governmental funds’ statement of revenues, expenditures and changes in fund balances for the General Fund, which is considered to be a major fund. Data for the remaining governmental funds are combined into a single, aggregated presentation entitled “non-major governmental funds”. The individual and combining fund data for each of these non-major governmental funds is provided as supplementary information in this report.

Proprietary funds, like the government-wide statements, provide both long-and short-term financial information.

The City reports three funds within the proprietary funds category: Two enterprise funds account for water and wastewater business-like activities; and one internal service fund accounts for some insurance services. Both enterprise funds are considered to be major funds, and as such are reported in separate columns within the proprietary funds’ financial statements.

Fiduciary funds are used to account for resources held for the benefit of parties outside the government.

Fiduciary funds are not reflected in the government-wide financial statements because the resources of the funds are not available to support the government’s own programs. The City does not report fiduciary funds for the year ended June 30, 2022. In FY 2021-22 a fiduciary fund was reported for the prior Redevelopment Agency that is now dissolved.
9 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

CITY OF SEBASTOPOL

MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2022
(Rounded to the nearest $1,000)

GOVERNMENT-WIDE FINANCIAL ANALYSIS
Net Position: The City's combined net position, including both governmental activities and business-type activities is reflected in Table A-1
2022 2021 2022 2021 2022 2021
Current and other assets $ 14,622,000 $ 12,850,000 $ 7,220,000 $ 4,978,000 $ 21,842,000 $ 17,828,000 Capital assets 10,951,000 10,594,000 7,860,000 6,847,000 18,811,000 17,441,000 Total assets 25,573,000 23,444,000 15,080,000 11,825,000 40,653,000 35,269,000 Deferred outflows of Resources
Deferred Outflows Pension and OPEB 2,872,000 2,692,000 502,000 534,000 3,374,000 3,226,000 Total deferred outflows of resources 2,872,000 2,692,000 502,000 534,000 3,374,000 3,226,000 Current Liabilities 2,739,000 1,840,000 1,025,000 249,000 3,764,000 2,089,000 Long-term Liabilities 11,506,000 15,482,000 6,242,000 3,987,000 17,748,000 19,469,000 Total liabilities 14,245,000 17,322,000 7,267,000 4,236,000 21,512,000 21,558,000 Deferred inflows of Resources
Deferred inflows - Pension and OPEB 6,389,000 633,000 1,273,000 83,000 7,662,000 716,000 Total deferred inflows of resources 6,389,000 633,000 1,273,000 83,000 7,662,000 716,000 Net Position
Invested in capital assets 9,702,000 9,355,000 5,259,000 5,199,000 14,961,000 14,554,000 Restricted 3,599,000 3,067,000 - - 3,599,000 3,067,000
Unrestricted (5,490,000) (4,241,000) 1,783,000 2,841,000 (3,707,000) (1,400,000) Total net position $ 7,811,000 $ 8,181,000 $ 7,042,000 $ 8,040,000 $14,853,000 $16,221,000 Table A-1
City of Sebastopol’s Net Position
(rounded , nearest thousand dollars)
Governmental Activities Business-Type Activities Total
Total net position, (assets and deferred outflows, less liabilities and deferred inflows), was $14,853,000 at June 30, 2022. Governmental activities net position was $7,811,000; and business-type activities’ net position was $7,042,000.

The largest component of the City’s net position is invested in capital assets; and is reported at $14,961,000. This component represents 101% of total net position as of June 30, 2022. The City uses these capital assets to provide a variety of services to its citizens. Accordingly, these assets are not available for future spending. Although the City’s investment in capital assets is reported net of related debt, it should be noted that the resources used to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. 10 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

CITY OF SEBASTOPOL

MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2022
(Rounded to the nearest $1,000)
An additional portion of the City’s net position represents resources that are subject to external restrictions on how they may be used, with $3,599,000 reported as restricted at June 30, 2022.

At June 30, 2022 the City reported negative unrestricted net position for its governmental activities of ($5,490,000) and a positive unrestricted net position for business-type activities of $1,783,000.

Government-wide total unrestricted net position is negative ($3,707,000). The negative unrestricted net position reported for governmental activities is due in large part to pension and post-employment medical liabilities.

Changes in Net Position: Table A-2 reflects comparative changes in net position, for both government and business-type activities for fiscal years ended June 30, 2022 and June 30, 2021. 11 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

CITY OF SEBASTOPOL

MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2022
(Rounded to the nearest $1,000)
2022 2021 2022 2021 2022 2021
Revenues
Program revenues:

Charges for services $ 740,000 $ 936,000 $ 5,574,000 $ 5,638,000 $ 6,314,000 $ 6,574,000 Grants and contributions 549,000 800,000 549,000 800,000 Capital grants and contributions 715,000 741,000 715,000 741,000 General revenues:

Property taxes 3,334,000 3,004,000 3,334,000 3,004,000
Sales Tax 4,705,000 4,363,000 4,705,000 4,363,000
Transient Occupancy Taxes 504,000 402,000 504,000 402,000 Other Taxes 1,259,000 1,158,000 1,259,000 1,158,000
Other income 630,000 309,000 (123,000) 25,000 507,000 334,000 Total revenues 12,436,000 11,713,000 5,451,000 5,663,000 17,887,000 17,376,000 Expenses
General government 2,966,000 2,658,000 2,966,000 2,658,000 Public safety 6,742,000 6,760,000 6,742,000 6,760,000
Parks and recreation 1,031,000 965,000 1,031,000 965,000 Public works 2,103,000 1,633,000 2,103,000 1,633,000
Interest 19,000 38,000 19,000 38,000
Water 2,572,000 2,490,000 2,572,000 2,490,000
Wastewater 3,846,000 3,520,000 3,846,000 3,520,000
Total expenses 12,861,000 12,054,000 6,418,000 6,010,000 19,279,000 18,064,000 Increase in net position before
transfers and special item (425,000) (341,000) (967,000) (347,000) (1,392,000) (688,000) Transfers 31,000 31,000 (31,000) (31,000) - -
-
Increase (decrease) in net position (394,000) (310,000) (998,000) (378,000) (1,392,000) (688,000) Extraordinary Item:

Theft of investment funds - (819,000) - (381,000) - (1,200,000) Change in Net Position (394,000) (1,129,000) (998,000) (759,000) (1,392,000) (1,888,000) Net position beginning - Restated 8,205,000 9,310,000 8,040,000 8,799,000 16,245,000 18,109,000 Net position, Ending $7,811,000 $ 8,181,000 $7,042,000 $8,040,000 $14,853,000 $16,221,000 Governmental Activities Business Type Activities Total
Table A-2
Changes in City of Sebastopol’s Net Position
(rounded to nearest thousand dollars)
12 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

CITY OF SEBASTOPOL

MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2022
(Rounded to the nearest $1,000)
Governmental Activities:

Governmental Activities Revenue:

Governmental activities’ services were financed as follows:
 Those who directly benefitted from the programs paid charges for service of $740,000;  Other governments and organizations that subsidized certain programs with operating grants of $549,000 and capital grants of $715,000; and,
 Tax revenues totaling $9,802,000 were primarily comprised of support in the form of property, sales and transient occupancy taxes.
 Interest earnings, miscellaneous revenues and transfers from other funds totaled $660,000.  Tax revenue is the primary funding source for governmental activities. Sales taxes comprise approximately 38% of total governmental activities revenue, and transient occupancy taxes make up 4%. Those sources are considered to be more sensitive to short-term economic changes than property taxes, 27% of total revenue; and franchise fees and utility taxes, 10% of total revenue.

Grants and contributions; charges for services; and other income account for the remaining 21% of governmental activities’ revenue, as reflected in the following chart:

A graphical representation of the relative weights of governmental activities revenues follow Total FY 2021-22 governmental activities’ revenues of $12,436,000 are reported within two categories:

Program revenues $2,004,000, (16%); and general revenues $10,432,000, (84%). Total governmental Property Tax
27%
Sales Taxes
Transient Occupancy 38%
Taxes
4%
Franchise & Uitiliy Use
Tax
10%
Charges for services
6%
Grants & Contribution
10%
Other income
5%
Governmental Activities Revenue by Source
Fiscal Year 2021-2022
13 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

CITY OF SEBASTOPOL

MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2022
(Rounded to the nearest $1,000)
activities revenues increased by $723,000, or 6.2%, over the prior year: General revenues, primarily taxes, increased by $1,196,000; and program revenues decreased by ($473,000).

Higher tax collections caused the increase in general revenues. Reduced operating and capital grants financing attributed to the Covid pandemic response and associated economic relief caused the decrease in program revenues.

Total FY 21-22 tax revenues of $9,802,000 increased by $875,000, or 10%, over the prior year, and are reported in the following accounts:

Property taxes of $3,334,000 increased by $330,000, or 11%, over the prior year due to increased assessed values. The California constitution limits the baseline growth in assessed values used to calculate property taxes to 2%; but provides for assessed value increases upon transfers in ownership, and other specific conditions. Increases in property sales, and home prices, caused the higher assessed values and related collections. Recent increases in sales activity are attributed to lower interest rates, and buyers’ moving from more expensive metropolitan areas of California to relatively less expensive suburban areas.

Sales taxes of $4,705,000 increased by $342,000, or 7.8%, over the prior year. The change is attributed to reductions in social constraints that were imposed to protect the public from the spread of the Covid19 virus.

Transient Occupancy Taxes of $504,000 increased by $102,000, or 25.4%, over the prior year; with the increase attributed to increased social activity related to lowered Covid-19 related constraints.

Other taxes of $1,259,000 increased by $101,000, or 9.8%, over the prior year; and include utility user taxes on telecommunications bills. Revenue changes reflect increased customer demand for services, as work-from home and steaming services became more popular during the Covid-19 pandemic.

Program revenues of $2,004,000 decreased by ($473,000), or (19%), compared to the prior year.

Reductions in grant funding and charges to customer occurred due to lowered intergovernmental support as the pandemic response decreased; and lowered demand for permitting and inspection activity compared with the prior fiscal year.

Governmental Activities Expenses:

Table A-3 presents expenses for each of the City's functional areas, as well as the changes compared to the prior year:
14 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

CITY OF SEBASTOPOL

MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2022
(Rounded to the nearest $1,000)
Percentage
Change
2022 2021 2021-2022
General Government 2,966,000 2,658,000 11.59%
Public Safety 6,742,000 6,760,000 -0.27%
Parks and recreation 1,031,000 965,000 6.84%
Public Works 2,103,000 1,633,000 28.78%
Interest on Long term Debt 19,000 38,000 -50.00%
Total 12,861,000 12,054,000 6.69%
Expenses by Function
Table A-3
Cost of City Sebastopol’s Governmental Activities
(in rounded nearest one thousand dollars)
The shifts between categories reflect changes in service delivery, responses to local homeless crisis as well as the timing of deferred maintenance performed by the parks and recreation and public works functions.

Public Works’ expense increases reflect an increase in project expenses that are funded by special revenue received, primarily gas tax revenue.

Pension expense allocated to governmental functions based on payroll increased $501,000 compared to the prior year. Pension expense fluctuations are attributed to a variety of factors, including projected and actual investment returns; actuarial demographic studies of plan participants, and changes in funding methods and policies implemented by the plan administrator, CalPERS. (See note 11.C for detail).

The general government’s expenses include a marketing program launched during FY 2021-22 for the purpose of attracting more customers and visitors to the City of Sebastopol.

The public safety function’s relatively flat year-over-year expenses reflect a decrease in baseline operating expenses due to lower covid-related activity; with the savings offset in part by increased pension expense.

Decreases in interest on long-term debt reflect normal amortization of debt.

The residual amount of governmental activities’ revenues less expenses and other items is negative ($425,000) for fiscal year 2021-22. After accounting for net transfers in of $31,000, the change in net position reported for the fiscal year FY 21-22 is ($394,000). The prior year’s decrease in net position was ($310,000); and after accounting for an extraordinary item, theft of treasury funds, ($819,000), the change in net position was ($1,129,000).
15 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

CITY OF SEBASTOPOL

MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2022
(Rounded to the nearest $1,000)
As noted in our description of the differences between government-wide and fund financial statements, more detail of governmental activities is provided in the fund financial statements that focus on changes in financial resources.

Business-Type Activities:

The City’s business-type activity is comprised of transactions that occur in the water and wastewater enterprise funds.

For FY21-22 the net position of business-type activities decreased by ($998,000); with a ($159,000) decrease in the water fund and a ($839,000) decrease in the wastewater fund. The change in net position represents 12.4% of the combined funds’ beginning net position.

The decrease in net position is consistent with the prior year’s results, and is due to cost increases for the operation of the sub-regional wastewater treatment plant, and increased cost of payroll related to pensions.

Net position of the water enterprise fund was $4,076,000 and the net position of the wastewater fund was $2,966,000, for a combined net position of $7,042 for all business-type activity at June 30, 2022.

Investment in capital assets is the largest category of the business-type activities’ net position, with $5,259,000 and 74.6% of total net position. The unrestricted net position, total net position less net position invested in capital assets is $1,783,000 and 25.4% of the total.

FINANCIAL ANALYSIS OF THE CITY'S FUNDS
Governmental Funds: The focus of the City’s governmental funds is to provide information on nearterm inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City’s short-term financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for discretionary use as they represent the portion of fund balance which has not yet been limited to use for a particular purpose by either an external party or the City itself.

The City’s governmental funds include the general fund and all non-major funds which are reported in the aggregate in the financial statements. Detail for the individual non-major funds’ information is provided in the supplementary information section of this report.

At June 30, 2022, the City’s governmental funds reported total fund balances of $12,413,000, an increase of $741,000 in comparison with the prior year. The total fund balance is reported within these categories:
 $181,000 is “non-spendable” because the financial resources have been used to prepay expenditures.
 $3,599,000 is “restricted,” and is only available to spend as specified by external funding sources.  $492,000 is “committed,” and is considered available only for particular purposes already approved by the City Council. Only the City Council can change the purposes for which fund balance was committed, by taking action similar to what is needed to approve budgets.  $4,602,000 is “assigned” for a particular future use. 16 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

CITY OF SEBASTOPOL

MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2022
(Rounded to the nearest $1,000)
 $3,539,000 is “unassigned,” and as such is considered available to finance future years’ budgetary needs at the discretion of the City Council.

The June 30, 2022 total governmental funds balance is comprised of the general fund balance $10,342,000, the non-major funds’ fund balance of $2,071,000.

General Fund:

The general fund is the chief operating fund of the City. During FY 21-22, the general fund balance increased by $1,060,000; and is $10,342,000 as of June 30, 2022. Fund balance is distributed in the following categories:
 $180,000 is “non-spendable” because the financial resources were used for prepaid items.  $2,013,000 is restricted for uses specified by external funding sources or law.  $4,602,000 is “assigned” for these stated uses:
o $981,000 for buildings and infrastructure;
o $908,000 for equipment, technology and vehicle replacement; and, o $2,713,000 for pension and post-employment medical benefits.  $3,547,000 is “unassigned,” and as such is considered available to finance future years’ budgetary needs at the discretion of the City Council.

As a measure of the City Council’s general fund budgetary discretion, it may be useful to calculate unassigned fund balance as a percentage of annual expenditures: Unassigned general fund balance of $3,547,000 at June 30, 2022 represents 32% of FY 21-22 general fund expenditures of $11,086,000.

The general fund balance increased by $1,060,000 during FY 21-22. Tax revenues increased by $875,000, and were the primary contributor to the change in fund balance.

FY 21-22 general fund expenditures of $11,086,000 reflect an increase of $507,000, or 4.8%, over the prior year’s expenditures of $10,579,000. The largest increases are reported in the functional areas of general government, which experienced an increase in expenditures of $280,000, or 12.4%, caused by outside legal service supports; and public works, with an increase of $139,000, or 15.8% that is attributed to additional engineering consulting services as well as addressing homeless crisis along with projects that were impeded by the need to respond to the Covid-19 pandemic.

The general fund also reported capital outlay expenditures of $517,000 for FY 21-22, which is an increase of $373,000 over the prior year. Note 6B provides details for change asset activity.

General Fund Budgetary Highlights
The FY 21-22 general fund’s original budget anticipated a decrease in fund balance of ($1,052,000) and that budget was amended during the year to anticipate a decrease in fund balance of ($388,000).

The FY 21-22 general fund’s budgetary financing sources anticipated during the Council’s approval of the original budget were increased by $1,174,000 during the fiscal year in recognition of higher than expected tax receipts and other reimbursements.
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CITY OF SEBASTOPOL

MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2022
(Rounded to the nearest $1,000)
Appropriations for expenditures approved in the original FY 21-22 general fund budget were increased by $509,000 by Council amendment. The added appropriations were funded an economic development initiative and increased funding to support capital needs for nonprofit agencies.

Other financing sources (uses) reported in the general fund budgetary comparison schedule include the proceeds from debt issuance, transfers in, and transfers out. The FY 21-22 budgeted amounts for these accounts were not amended.

The other financing sources (uses) classification reports an overall favorable budget result of $784,000.

The favorable variance is attributed to $1,126,000 in debt issuance proceeds that were authorized by a City Council resolution, rather than a budget amendment; less net transfers out that consumed $342,000 more financial resources than budgeted. The debt proceeds and transfers were responsive to the City Council’s mid-year consideration and approval of capital projects, and grant awards to nonprofit agencies.

The FY 21-22 general fund’s actual change in fund balance exceeded the final budget estimates by $1,448,000. Revenues exceeded final estimates by $195,000; expenditures were $469,000 less than the final budget’s appropriations; and other financial sources (uses) report favorable variances of $784,000.

Favorable revenue results were due to tax collections in excess of projections. Favorable expenditure variances are attributed to project funding approved mid-year for initiatives that will carry over into the next fiscal year; and a relatively modest budgetary surplus within the public safety function.

A budgetary comparison schedule within the required supplementary information section of this report provides more detail on the original budget, final budget and actual results. The information includes a comparison between the final budget and actual results for each significant general fund revenue account and for each general fund functional area and operating department.

Non-major Governmental Funds:

Non-major governmental funds, in the aggregate reported June 30, 2022 fund balances of $2,070,000.

Aggregated information of the non-major funds is displayed in the financial statements that also include the major governmental funds. The individual fund information for non-major governmental funds is reported in the combining statements that are found in the supplemental information section of this report.

Overall, non-major funds’ aggregated fund balances decreased by ($319,000) during FY 21-22. The decrease is attributed to the appropriate use of financial resources accumulated in prior years to fulfill the purposes for which those accumulated resources were intended.

Proprietary Funds – Water and Sewer Enterprise Funds:

Proprietary fund-type activity is comprised of the water and wastewater enterprise funds, and one internal service fund used to allocate insurance costs. The combined net position at of enterprise funds at June 30, 2022 is $7,042,000; with $5,259,000 representing the net investment in capital assets and $1,783,000 reported as unrestricted net position.

The changes in these enterprise funds’ activities are described in the business-type activities’ section of this management discussion and analysis.
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CITY OF SEBASTOPOL

MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2022
(Rounded to the nearest $1,000)
Internal Service Fund:

The city also reports the insurance and benefits internal service fund within the proprietary category. The fund takes in revenues in the form of charges paid to other funds of the city, and spends those revenues to deliver insurance and other benefits. Ending fund balance was $1,000 at June 30, 2022, and was unchanged by FY 21-22 activities.

CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
At the end of 2022 the City had invested $18,811,000, (net of accumulated depreciation), in a broad range of capital assets, including equipment, vehicles, streets, buildings, park facilities, and water and wastewater systems. This amount represents a net increase of $1,371,000 for FY 21-22.

Governmental activities capital assets, net of accumulated depreciation increased by $357,000 during FY 21-22, due to additions in depreciable assets, $927,000; an increase in construction in progress, $331,000; less deletions, ($139,000) and depreciation charges, ($385,000). The asset activity primarily consisted of routine vehicle and equipment replacement and construction in progress related to energy conservation assets, and normal depreciation.

Business-type activities capital assets, net of accumulated depreciation increased by $1,014,000 during FY 21-22, due to additions in depreciable assets, $111,000; an increase in construction in progress, $1,610,000; less depreciation charges, ($707,000). The capital asset activity was related to normal replacement projects for the water and wastewater systems, and normal depreciation.

Table A-4 provides a recap of capital asset activity.

The notes to the financial statements for detail on the changes of capital assets, (Note 6 – A). 19 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

CITY OF SEBASTOPOL

MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2022
(Rounded to the nearest $1,000)
2022 2021 2022 2021 2022 2021
Land and CIP 3.28 2.95 1.78 0.18 5.06 3.13
Buildings & structures 7.85 7.50 7.85 7.50
Machinery and equipment 2.75 2.70 0.24 0.22 2.99 2.92
Reservoirs 3.92 3.92 3.92 3.92
Pipelines & water system 4.24 4.22 4.24 4.22
Pipelines & wastewater system 8.37 8.34 8.37 8.34
Vehicles 2.72 2.30 0.96 0.93 3.68 3.23
Infrastructure 8.86 8.70 8.86 8.70
Accumulated depreciation (14.51) (13.60) (11.66) (10.90) (26.17) (24.50) Total 10.95 10.55 7.85 6.91 18.80 17.46
Governmental Activities Business-type Activities Total
Table A-4
City of Sebastopol’s Capital Assets
(in millions of dollars)
Changes in Long-term Liabilities – Debt:

For the year reported, general activities’ long-term debt obligations increased by $885,000, and total $2,100,000 as of June 30, 2022. Significant transactions included the addition of a $1,126,000 finance purchase obligation to fund energy conservation assets; and $241,000 reductions in long-term obligations due to scheduled payments. Detailed information for long-term debt obligations is provided in note 7.A.

For FY 21-22 business-type long term debt obligations increased by $3,609,000, and total $5,256,000 as of June 30, 2022. Significant transactions consist of a new capital lease obligation of $3,813,000 to finance energy conservation assets used in the water and wastewater systems and normal reductions in debt obligation principal due to scheduled payments, $204,000.

Detailed information about the City's long-term obligations can be found in the “Notes to the Basic Financial Statements” under section 7 – A.

ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES:

The City is beginning to recover from the impacts of the Covid-19 pandemic that began at the end of March 2020 when sheltering in place orders went into effect. The City continues to prepare conservative budgets in order to protect the resources needed for financial stability and remain responsive to changing needs as revenues fluctuate. The City regularly reviews its revenues and expenditures to keep a pulse on its current fiscal health and ensure the adequate protection of the City’s financial resources.

The FY 22-23 operating budget was conservative in response to the need to achieve stability in pension funding and make progress in capital assets maintenance, repair and replacements. 20 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

CITY OF SEBASTOPOL

MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2022
(Rounded to the nearest $1,000)
During the current budget year, FY 22-23, the City studied alternatives for funding pensions. As funds become available to fund pensions above actuarially required contributions, the City will consider establishing a separate pension trust account that can be used to achieve rate stabilization.

The City also launched an initiative to evaluate capital assets and related financing. The evaluation will consider assets’ service capabilities; remaining service life; maintenance costs; and expected future replacement costs, with a goal of identifying requirements to establish service-level stability within a financially sustainable budget environment.

For the 2023 fiscal year, (starts July 1, 2022 and ends June 30, 2023) the following budgetary highlights are noted:
 The FY 2022-23 general fund budget anticipates a fund balance decrease of ($1.2 million); based upon estimated revenues and transfers in of $11.4 million less expenditures and transfers out of $12.5 million. The end-of-year fund balance projections meet the city council’s minimum budgetary reserve policy that requires maintaining general fund unassigned balance equal to 15% of expenditures.
 The FY 2022-23 requested enterprise fund operating expenses and transfers out total $3,989,000 for the water fund, and $5,004,000 for the wastewater fund. The FY 2022-23 estimated change in net position is a deficit of $1,533,000 for the water fund and deficit of $1,589,000 for the wastewater fund.
 The City of Sebastopol invites interested readers to review the detailed operating budget by visiting the website:
https://www.ci.sebastopol.ca.us/City-Government/Departments-Services/Finance/City-Audits CONTACTING THE CITY’S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, and investors and creditors with a general overview of the City's finances and to demonstrate the City's accountability for the money it receives. If you have questions about this report or need additional financial information, contact the City Treasurer/Administrative Services Director at the City of Sebastopol, 7120 Bodega Avenue, Sebastopol, CA 95472, (707) 823-7863.
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BASIC

FINANCIAL STATEMENTS
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GOVERNMENT-WIDE

FINANCIAL STATEMENTS
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City of Sebastopol
Statement of Net Position
June 30, 2022
Governmental Business-Type
Activities Activities Total
ASSETS
Current assets:

Cash and investments $ 3,151,376 11,191,974 $ 14,343,350 $ Restricted cash and investments with fiscal agents 889,036 2,654,751 3,543,787 Receivables (net of allowances for uncollectibles):

Accounts receivable 249,981 1,117,239 1,367,220
Taxes receivable 1,163,259 - 1,163,259
Interest receivable 18,392 8,646 27,038
Assessment receivable 35,000 - 35,000
Lease receivable 35,268 - 35,268
Prepaid items 540,931 289,230 830,161
Total current assets 7,221,242 14,123,841 21,345,083
Noncurrent assets:

Notes receivable 196,408 - 196,408
Leases receivable 302,354 - 302,354
Capital assets:

Non-depreciable 3,284,738 1,788,083 5,072,821
Depreciable, net 7,666,379 6,072,040 13,738,419
Total capital assets 7,860,123 10,951,117 18,811,240
Total noncurrent assets 7,860,123 11,449,879 19,310,002 Total assets 25,573,720 15,081,365 40,655,085

DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows of resources - pension 2,664,409 501,662 3,166,071 Deferred outflows of resources - OPEB 208,005 - 208,005 Total deferred outflows of resources 2,872,414 501,662 3,374,076

LIABILITIES
Current liabilities:

Accounts payable 538,844 471,044 1,009,888
Accrued interest payable 9,145 5,446 14,591
Accrued liabilities 267,321 - 267,321
Deposits payable 91,654 56,230 147,884
Unearned revenues 741,307 50,000 791,307
Compensated absences - due within one year 750,000 4,000 754,000 Long term debt - due within one year 340,891 438,471 779,362 Total current liabilities 2,739,162 1,025,191 3,764,353 Noncurrent liabilities:

Compensated absences - due in more than one year 270,612 49,716 320,328 Long term debt - due in more than one year 1,759,548 4,817,220 6,576,768 Total OPEB liability 2,186,427 - 2,186,427
Net pension liability 7,289,678 1,375,331 8,665,009
Total noncurrent liabilities 11,506,265 6,242,267 17,748,532 Total liabilities 14,245,427 7,267,458 21,512,885

DEFERRED INFLOWS OF RESOURCES
Deferred inflows of resources - pension 5,266,120 1,273,472 6,539,592 Deferred inflows of resources - OPEB 788,584 - 788,584
Deferred inflows of resources - leases 334,731 334,731
Total deferred inflows of resources 6,389,435 1,273,472 7,662,907

NET POSITION
Net investment in capital assets 9,702,362 5,259,183 14,961,545 Restricted for:

Flood recovery - 1,161,558 1,161,558
Housing - 145,389 145,389
Streets - 1,133,784 1,133,784
Other purposes - 1,158,472 1,158,472
Total restricted - 3,599,203 3,599,203
Unrestricted (5,490,293) 1,782,914 (3,707,379)
$ 7,042,097 7,811,272 $ 14,853,369 $
Primary Government
Total net position
See accompanying Notes to Basic Financial Statements.
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City of Sebastopol
Statement of Activities
For the year ended June 30, 2022
Operating Capital
Charges for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions Total Primary Government:

Governmental activities:

General government 2,966,273 $ 212,591 $ 333,677 $ - $ 546,268 $ Public safety 6,741,592 109,257 215,289 - 324,546
Public works 2,102,767 394,056 - 715,013 1,109,069
Parks and recreation 1,030,936 24,383 - - 24,383
Interest on long-term debt 19,063 - - - -
Total governmental activities 12,860,631 740,287 548,966 715,013 2,004,266 Business-type activities:

Water Services 2,572,104 2,519,592 - - 2,519,592
Wastewater Services 3,845,631 3,053,622 - - 3,053,622
Total business-type activities 6,417,735 5,573,214 - - 5,573,214 Total primary government $ 6,313,501 19,278,366 $ 548,966 $ 715,013 $ 7,577,480 $ General Revenues and Transfers:

Taxes:

Property taxes
Sales taxes
Transient occupancy taxes
Other taxes
Total taxes
Investment earnings
Miscellaneous
Transfers
Total general revenues and transfers
Change in net position
Net position - beginning of year, as restated
Net position - end of year
Program Revenues
See accompanying Notes to Basic Financial Statements.
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Governmental Business-Type
Activities Activities Total
$ (2,420,005) $ (2,420,005) - $
(6,417,046) (6,417,046) -
(993,698) (993,698) -
(1,006,553) (1,006,553) -
(19,063) (19,063) -
(10,856,365) (10,856,365) -
(52,512) - (52,512)
(792,009) - (792,009)
(844,521) - (844,521)
(10,856,365) (844,521) (11,700,886)
3,333,749 3,333,749 -
4,705,343 4,705,343 -
504,292 504,292 -
1,259,110 1,259,110 -
9,802,494 9,802,494 -
(298,155) (122,740) (420,895)
927,480 927,480 -
31,024 (31,024) -
10,462,843 (153,764) 10,309,079
(393,522) (998,285) (1,391,807)
8,204,794 8,040,382 16,245,176
$ 7,811,272 $ 7,042,097 $ 14,853,369
and Changes in Net Position
Net (Expense) Revenue
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FUND

FINANCIAL STATEMENTS
Governmental Fund Financial Statements
Proprietary Fund Financial Statements
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GOVERNMENTAL FUND FINANCIAL STATEMENTS
General Fund is the City's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. 33 Agenda Item Number 6
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City of Sebastopol
Balance Sheet
Governmental Funds
June 30, 2022
Non-Major Total
Governmental Governmental
General Fund Funds Funds
ASSETS
Cash and investments 9,093,186 $ 2,098,785 $ 11,191,971 $ Restricted cash and investments 851,684 37,352 889,036
Accounts receivable 211,040 38,943 249,983
Taxes receivable 1,101,883 61,376 1,163,259
Accrued interest receivable 15,596 2,798 18,394
Assessment receivable - 35,000 35,000
Notes receivable - 196,408 196,408
Leases receivable 337,622 - 337,622
Due from other funds 49,650 - 49,650
Prepaid items 180,191 555 180,746
Total assets $ 11,840,852 $ 2,471,217 $ 14,312,069

LIABILITIES AND FUND BALANCES
Liabilities:

Accounts payable $ 142,016 335,801 $ 477,817 $
Due to other funds - 18,865 18,865
Unearned revenues 733,414 7,893 741,307
Deposits 91,654 - 91,654
Total liabilities 168,774 1,160,869 1,329,643
Deferred inflows of resources:

Unavailable revenues 2,891 231,486 234,377
Deferred inflow of resources - leases 334,731 - 334,731 Total deferred inflow of resources 231,486 337,622 569,108 Fund Balances:

Nonspendable 180,191 555 180,746
Restricted:

Flood recovery - 1,161,558 1,161,558
Highways and streets 1,133,784 - 1,133,784
Affordable housing - 145,389 145,389
Capital projects 851,684 - 851,684
Other 306,788 - 306,788
Total restricted 2,013,242 1,585,961 3,599,203
Committed:

Street projects 492,217 - 492,217
Total committed 492,217 - 492,217
Assigned:

Buildings, facilities, and infrastructure 981,241 981,241 - Equipment, technology, and vehicle replacement 907,599 907,599 - Pension and OPEB 2,712,976 2,712,976 -
Total assigned 4,601,816 4,601,816 -
Unassigned 3,547,112 (7,776) 3,539,336
Total fund balances 10,342,361 2,070,957 12,413,318
Total liabilities, deferred inflows of
resources, and fund balances $ 11,840,852 $ 2,471,217 $ 14,312,069 Major Funds
See accompanying Notes to Basic Financial Statements.
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Total Fund Balances - Total Governmental Funds $ 12,413,318 Non-depreciable $ 3,284,738
Depreciable, net 7,666,379
Total capital assets 10,951,117
Unavailable revenue recorded in the fund financial statements resulting from activities in which revenues were earned but funds were not available are reclassified as revenues in the GovernmentWide Financial Statements. 234,377 Interest payable on long-term debt did not require current financial resources. Therefore, interest payable was not reported as a liability in the Governmental Funds Balance Sheet. (9,145) Internal service funds were used by management to charge the costs of certain activities, such as employee benefits, to individual funds. The assets and liabilities of the Internal service funds were included in governmental activities in the Government-Wide Statement of Net Position. 1,051 In the Government-Wide Financial Statements, employer contributions made for pension and OPEB subsequent to the measurement date, certain differences between actuarial amounts and actual results for pension are deferred and are applied to the net pension and OPEB liabilities or amortized in future periods, however these items do not impact the Governmental Funds Balance Sheet:

Deferred outflows of resources - pension 2,664,409
Deferred outflows of resources - OPEB 208,005
Deferred inflows of resources - pension (5,266,120)
Deferred inflows of resources - OPEB (788,584)
Long-term liabilities were not due and payable in the current period. Therefore, they were not reported in the Governmental Funds Balance Sheet.

Compensated absences - due within one year (750,000)
Long term debt - due within one year (340,891)
Compensated absences - due in more than one year (270,612) Long term debt - due in more than one year (1,759,548)
Net OPEB liability (2,186,427)
Net pension liability (7,289,678)
Total long-term liabilities (12,597,156)
Net Position of Governmental Activities $ 7,811,272
Capital assets used in governmental activities were not current financial resources. Therefore, they were not reported in the Governmental Funds Balance Sheet. The capital assets were adjusted as follows:

Amounts reported for governmental activities in the Statement of Net Position are different because:

City of Sebastopol
Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position
June 30, 2022
See accompanying Notes to Basic Financial Statements.
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Statement of Revenues, Expenditures and Changes in Fund Balances Major Funds Non-Major Total
Governmental Governmental
General Fund Funds Funds
REVENUES:

Property taxes 3,202,351 $ 131,397 $ 3,333,748 $
Sales and use taxes 5,550,101 194,060 5,744,161
Transient occupancy tax 504,292 - 504,292
Franchise fees 405,507 - 405,507
Licenses and permits 445,597 8,724 454,321
Fines and forfeitures 27,452 - 27,452
Intergovernmental 428,731 642,298 1,071,029
Interest and rents (215,164) (42,203) (257,367)
Charges for services 197,582 63,492 261,074
Miscellaneous 725,010 202,470 927,480
Total revenues 1,200,238 11,271,459 12,471,697
EXPENDITURES:

Current:

General government 2,550,705 127,480 2,678,185
Public safety 6,059,990 - 6,059,990
Parks and recreation 799,261 - 799,261
Public works 1,016,459 277,076 1,293,535
Capital outlay 516,521 1,280,515 1,797,036
Debt service:

Principal 131,687 109,245 240,932
Interest 10,959 8,104 19,063
Total expenditures 1,802,420 11,085,582 12,888,002
REVENUES OVER (UNDER) EXPENDITURES (602,182) 185,877 (416,305) OTHER FINANCING SOURCES (USES):

Proceeds from debt 1,126,307 - 1,126,307
Transfers in 144,000 1,367,475 1,511,475
Transfers out (395,940) (1,084,511) (1,480,451)
Total other financing sources (uses) 874,367 282,964 1,157,331 Net change in fund balances 1,060,244 (319,218) 741,026 FUND BALANCES:

Beginning of year 9,282,117 2,390,175 11,672,292
End of year $ 10,342,361 $ 2,070,957 $ 12,413,318
City of Sebastopol
Governmental Funds
For the year ended June 30, 2022
See accompanying Notes to Basic Financial Statements.
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Net Change in Fund Balances - Total Governmental Funds $ 741,026 Governmental funds reported capital outlay as expenditures. However, in the GovernmentWide Statement of Activities, the cost of those assets was allocated over their estimated useful lives as depreciation expense. This was the amount of capital assets recorded in the current period. 1,397,724
Depreciation expense on capital assets was reported in the Government-Wide Statement of Activities, but they did not require the use of current financial resources. Therefore, depreciation expense was not reported as expenditures in the governmental funds. (901,254) In the Government-Wide Statement of Activities, only the gain or (loss) on the sale of capital assets is reported, whereas in the governmental funds, proceeds from sales increases financial resources. This amount represents the difference between proceeds and the loss on disposal of capital assets. (139,467)
Employer contributions for pension and OPEB paid after the measurement date were recorded as expenditures in the governmental funds. However, in the Government-Wide Financial Statemements these contributions are deferred. 1,593,438 OPEB expenses reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in the governmental funds. 122,554 Long-term debt proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net position. Repayment of principal is an expenditure in the governmental funds, but the repayment reduced long-term liabilities in the statement of net position.
- Proceeds from long-term liabilities (1,126,307)
- Principal repayments on long-term liabilities 240,932 Accruals of compensated absences are not recognized as expenditures in the governmental funds, as they do not require the use of current financial resources. Instead, governmental funds report the usage of accumulated compensated absences as expenditures. This amount represents the change in compensated absence leave balances during the year. (12,611) Revenues that are not considered to be available are reported as unavailable revenues in the governmental funds, however, these amounts are recognized in the Government-Wide Statement of Activities. This amount represents the change in unavailable revenues. (35,612) Pension expense is recorded as incurred in the Government-Wide Statement of Activities, however pension expense does not required the use of current financial resources, and is not recognized in the governmental funds. (2,273,945)
Change in Net Position of Governmental Activities $ (393,522) Amounts reported for governmental activities in the Statement of Activities are different because:

City of Sebastopol
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities For the year ended June 30, 2022
See accompanying Notes to Basic Financial Statements.
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PROPRIETARY FUND FINANCIAL STATEMENTS
Water Service Fund accounts for the activities associated with providing water services.

Wastewater Fund accounts for the wastewater treatment plant and wastewater pumping stations and collection systems.
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City of Sebastopol
Statement of Net Position
Proprietary Funds
June 30, 2022
Insurance and
Benefits Internal
Water Wastewater Total Service Fund
ASSETS
Current assets:

Cash and investments 2,078,127 $ 1,073,249 $ 3,151,376 $ - $ Restricted cash and investments 1,590,308 1,064,443 2,654,751 - Accounts receivable 476,707 640,532 1,117,239 -
Interest receivable 5,366 3,280 8,646 -
Prepaids 169,342 119,888 289,230 360,185
Total current assets 4,319,850 2,901,392 7,221,242 360,185 Noncurrent assets:

Capital assets:

Non-depreciable 1,068,879 719,204 1,788,083 -
Depreciable, net 2,471,687 3,600,353 6,072,040 -
Total capital assets 4,669,232 3,190,891 7,860,123 -
Total noncurrent assets 4,669,232 3,190,891 7,860,123 - Total assets 8,989,082 6,092,283 15,081,365 360,185

DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows of resources - pension 257,263 244,399 501,662 - Total deferred outflows of resources 257,263 244,399 501,662 -

LIABILITIES
Current liabilities:

Accounts payable 204,245 266,799 471,044 328,349
Accrued interest payable 2,881 2,565 5,446 -
Deposits payable 56,230 56,230 - -
Due to other funds - - - 30,785
Unearned revenues 50,000 - 50,000 -
Compensated absences, due within one year 2,000 2,000 4,000 - Long term debt, due within one year 278,056 160,415 438,471 - Total current liabilities 605,966 419,225 1,025,191 359,134 Noncurrent liabilities:

Compensated absences, due in more than one year 19,486 30,230 49,716 - Long term debt, due in more than one year 3,186,738 1,630,482 4,817,220 - Net pension liability 705,298 670,033 1,375,331 -
Total noncurrent liabilities 3,911,522 2,330,745 6,242,267 - Total liabilities 4,517,488 2,749,970 7,267,458 359,134

DEFERRED INFLOWS OF RESOURCES
Deferred inflows of resources - pension 653,063 620,409 1,273,472 - Total deferred inflows of resources 653,063 620,409 1,273,472 -

NET POSITION
Net investment in capital assets 2,794,746 2,464,437 5,259,183 - Unrestricted 1,281,048 501,866 1,782,914 1,051
Total net position $ 4,075,794 $ 2,966,303 $ 7,042,097 $ 1,051 Enterprise Funds
See accompanying Notes to Basic Financial Statements.
40 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Statement of Revenues, Expenses and Changes in Fund Net Position Proprietary Funds
For the year ended June 30, 2022
Insurance and
Benefits Internal
Water Wastewater Total Service Fund
OPERATING REVENUES:

Charges for services $ 2,294,638 $ 2,936,238 $ 5,230,876 $ 1,015,716 Other revenues 224,954 117,384 342,338 -
Total operating revenues 3,053,622 2,519,592 5,573,214 1,015,716 OPERATING EXPENSES:

Personnel services 495,575 457,548 953,123 -
Interfund charges for services 1,182,152 981,322 2,163,474 - Contractual and other services 144,869 144,270 289,139 - Intergovernmental treatment costs 1,650,401 - 1,650,401 - Utilities 220,561 48,032 268,593 -
Supplies 180,798 52,549 233,347 -
Insurance, claims, and expenses 76,545 49,658 126,203 1,015,716 Depreciation 247,069 459,962 707,031 -
Total operating expenses 3,843,742 2,547,569 6,391,311 1,015,716 OPERATING INCOME (27,977) (790,120) (818,097) -
NONOPERATING REVENUES (EXPENSES):

Interest expense (24,535) (1,889) (26,424) -
Interest and investment revenue (75,185) (47,555) (122,740) - Total nonoperating revenues (expenses) (99,720) (49,444) (149,164) - INCOME (LOSS) BEFORE TRANSFERS (127,697) (839,564) (967,261) - Transfers out (31,024) - (31,024) -
Total transfers (31,024) - (31,024) -
Change in net position (158,721) (839,564) (998,285) -

NET POSITION
Beginning of year 4,234,515 3,805,867 8,040,382 1,051
End of year $ 4,075,794 $ 2,966,303 $ 7,042,097 $ 1,051 Enterprise Funds
See accompanying Notes to Basic Financial Statements.
41 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Statement of Cash Flows
Proprietary Funds
For the year ended June 30, 2022
Insurance and
Benefit Internal
Water Wastewater Total Service Fund
CASH FLOWS FROM OPERATING ACTIVITIES:

Cash received from customers 2,321,692 $ 2,916,364 $ 5,238,056 $ - $ Cash payments from other funds - - - 1,015,716
Cash received from others 224,954 117,384 342,338 -
Cash payments to suppliers for goods and services (535,587) (1,890,560) (2,426,147) (1,447,498) Cash payments to other funds for services (1,182,152) (981,322) (2,163,474) - Cash paid to employees (412,013) (378,018) (790,031) -
Net cash provided by (used in) operating activities (216,152) 416,894 200,742 (431,782) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:

Temporary loans from other funds - - - 30,785
Transfers out - (31,024) (31,024) -
Net cash provided by noncapital financing activities - (31,024) (31,024) 30,785 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:

Acquisition of capital assets (984,701) (736,208) (1,720,909) - Receipt of capital grants - 50,000 50,000 -
Proceeds from long term debt 2,251,121 1,561,463 3,812,584 - Long-term debt repayment (133,663) (70,070) (203,733) - Interest paid and fiscal charges (24,535) (1,889) (26,424) - Net cash (used in) capital and related financing activities 803,296 1,108,222 1,911,518 - CASH FLOWS FROM INVESTING ACTIVITIES:

Investment income received (77,642) (48,623) (126,265) - Net cash (used in) investing activities (48,623) (77,642) (126,265) - NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,416,450 538,521 1,954,971 (400,997) CASH AND CASH EQUIVALENTS - Beginning of year 1,599,171 2,251,985 3,851,156 400,997 CASH AND CASH EQUIVALENTS - End of year $ 2,137,692 3,668,435 $ 5,806,127 $ - $ FINANCIAL STATEMENT PRESENTATION:

Cash and investments 2,078,127 $ 1,073,249 $ 3,151,376 - $ Restricted cash and investments 1,590,308 1,064,443 2,654,751 - Total $ 2,137,692 3,668,435 $ 5,806,127 $ - $

RECONCILIATION OF OPERATING INCOME TO NET
CASH PROVIDED BY OPERATING ACTIVITIES:

Operating income (27,977) $ (790,120) $ (818,097) $ - $ Adjustments to reconcile operating income
to net cash provided by operating activities:

Depreciation 459,962 247,069 707,031 -
Changes in assets and liabilities:

Accounts receivable 25,309 (19,874) 5,435 -
Prepaids (169,342) (119,888) (289,230) (358,008)
Deferred outflows - pension 16,629 15,798 32,427 -
Accounts payable 256,528 174,238 430,766 (73,774)
Deposits payable 1,745 - 1,745 -
Compensated absences 265 398 663 -
Net pension liability (543,795) (516,605) (1,060,400) - Deferred inflows - pension 610,463 579,939 1,190,402 -
Total adjustments 444,871 573,968 1,018,839 (431,782)
Net cash provided by operating activities $ 416,894 $ (216,152) $ 200,742 $ (431,782) Enterprise Funds
See accompanying Notes to Basic Financial Statements.
42 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

NOTES TO BASIC

FINANCIAL STATEMENTS
43 Agenda Item Number 6
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44 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Notes to Basic Financial Statements
For the year ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The basic financial statements of the City of Sebastopol, California, (City) have been prepared in conformity with Generally Accepted Accounting Principles (GAAP) as applied to governmental agencies. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The more significant of the City’s accounting policies are described below.

A. Financial Reporting Entity
The City of Sebastopol is a municipal corporation governed by an elected five member City Council.

The accompanying financial statements present the government and its component units, entities for which the government is considered to be financially accountable. The City of Sebastopol has no component units.

B. Basis of Accounting and Measurement Focus
The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity with its own self-balancing set of accounts that comprise its assets, deferred outflows of resources, liabilities, deferred inflows of resources, fund equity, revenues and expenditures or expenses. These funds are established for the purpose of carrying out specific activities or certain objectives in accordance with specific regulations, restrictions or limitations. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled.

Government-Wide Fund Financial Statements
The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the City. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely, to a significant extent on fees and charges for support.

The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds and proprietary funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. 45 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Notes to Basic Financial Statements
For the year ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued C. Measurement Focus, Basis of Accounting and Financial Statement Presentation The Government-Wide Financial Statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the Proprietary Fund Financial Statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

Governmental Fund Financial Statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues 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 government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due.

Property taxes, sales taxes, other taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. The City reports the following major governmental funds:

The City reports the following major governmental funds:

The General Fund is the City’s primary operating fund. It accounts for all financial resources of the general government.

The City reports the following proprietary funds as major:

The Water Fund accounts for the operations of the City’s water treatment and distribution system.

The Wastewater Fund accounts for the operations of the City’s wastewater treatment and distribution system.

As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are payments-in-lieu of taxes and other charges between the City's water and wastewater function and other functions of the City. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned.

Amounts reported as program revenues include (1) charges to customers for services, (2) operating grants and contributions, and (3) capital grants and contributions, including special assessments.

Internally dedicated resources are reported as general revenues rather than as program revenues.

Likewise, general revenues include all taxes.
46 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Notes to Basic Financial Statements
For the year ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued C. Measurement Focus, Basis of Accounting and Financial Statement Presentation, Continued Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the proprietary and internal service funds are charges to customers for sales and services. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses.

D. Cash, Cash Equivalents, and Investments
The City is authorized to invest in the State of California Local Agency Investment Fund, the Sonoma County Treasurer's Pool, U.S. Treasury bonds, bills, and notes, obligations issued by US Government agencies, bankers acceptances, repurchase agreements, certain money market and mutual funds, time deposits and savings and demand accounts. The City's cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturities of three months or less from the date of acquisition.

Fair Value Measurements - The City categorizes its fair value measurements within the hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted market prices in active markets for identical assets; Level 2 inputs are significant other observable inputs, and level 3 inputs are significant unobservable inputs. The City has no significant separately held investments and its funds are invested primarily in the Sonoma County Treasurer's Investment Pool.

For the purpose of the statement of cash flows, the City considers all pooled cash and investments (consisting of cash and investments and restricted cash and investments) held by the City as cash and cash equivalents because the pool is used essentially as a demand deposit account from the standpoint of the funds. The City also considers all non-pooled cash and investments (consisting of cash with fiscal agent and restricted cash and investments held by fiscal agent) as cash and cash equivalents because investments meet the criteria for cash equivalents defined above.

E. Receivables and Payables
All trade and property tax receivables are not shown net of an allowance for uncollectable.

Property taxes are levied as of March 1 on property values assessed as of the same date. State statutes provide that the property tax rate be limited generally to one percent of fair value, be levied by only the County, and be shared by applicable jurisdictions. The County of Sonoma collects the taxes and distributes them to taxing jurisdictions on the basis of assessed valuations subject to voter -approved debt. Property taxes are due on November 1 and March 1, and become delinquent on December 10 and April 10. The City receives property taxes pursuant to an arrangement with the County known as the "Teeter Plan". Under the plan, the County assumes responsibility for the collection of delinquent taxes and pays the full allocation to the City. The City recognizes property tax revenues in the fiscal year in which they are due to the City.
47 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Notes to Basic Financial Statements
For the year ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued F. Interfund Balances/Internal Balances
Advances to and advances from other funds represent interfund loans in the fund financial statements.

Advances between funds are offset by a non-spendable fund balance classification in the applicable governmental funds to indicate that they are not available financial resources.

All other outstanding balances between funds are reported as due to and due from other funds. These are generally repaid within the following fiscal year.

Any residual balances outstanding between the governmental activities and business-type activities are reported in the Government-Wide Financial Statements as “internal balances.” G. Inventories and Prepaid Items
All inventories are valued at cost using the first-in/first-out (FIFO) method. Inventories of governmental funds are recorded as expenditures when used or consumed. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. The City uses the consumption method of accounting for prepaid items.

H. Leases - Lessor
The City is a lessor for a noncancellable lease of land. The City recognizes a lease receivable and a deferred inflow of resources in the government-wide and governmental fund financial statements.

At the commencement of a lease, the City initially measures the lease receivable at the present value of payments expected to be received during the lease term. Subsequently, the lease receivable is reduced by the principal portion of lease payments received. The deferred inflow of resources is initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date. Subsequently, the deferred inflow of resources is recognized as revenue over the life of the lease term.

Key estimates and judgments include how the City determines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) lease term, and (3) lease receipts.  The City uses its estimated incremental borrowing rate as the discount rate for leases.  The lease term includes the noncancellable period of the lease. Lease receipts included in the measurement of the lease receivable is 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. 48 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Notes to Basic Financial Statements
For the year ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued I. Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental-type or business-type activities columns in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $ 1,000 ($50,000 for infrastructure type assets) and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed.

Donated capital assets are recorded at acquisition value at the date of donation. Under the GASB 34 Implementation Rules, the City is a Phase 3 entity and was not required to record infrastructure assets existing or acquired prior to July 1, 2003 at the date these new financial reporting standards were implemented; and the City has not recorded such assets. The costs of normal maintenance and repairs that do not add to the value of asset or materially extend assets lives are not capitalized.

Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of the business-type activities is included as part of the capitalized value of the assets constructed.

Depreciation has been provided on a straight-line basis over the following useful lives:

Years
Public domain infrastructure 50
Buildings and structures 40
System infrastructure 15-40
Vehicles and equipment 5-15
J. Deferred Outflows/Inflows of Resources
In addition to assets, the Statement of Net Position will report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net assets that applies to future periods and so will not be recognized as an outflow of resources until then.

In addition to liabilities, the Statement of Net Position will report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net assets that applies to future periods and so will not be recognized as an inflow of resources (revenue) until that time.
49 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Notes to Basic Financial Statements
For the year ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued K. Compensated Absences
It is the government policy to permit employees to accumulate earned but unused vacation and sick pay benefits. There is a liability for a portion of unpaid accumulated sick leave since the City does have a policy to pay certain amounts when employees separate from service with the City. All vacation pay and applicable sick leave is accrued when incurred in the government-wide and proprietary fund financial statements. A liability for these amounts is reported in the governmental funds only if they have matured, for example, as a result of employee resignations and retirements. The General Fund has typically been used to liquidate the liability for compensated absences.

L. Unearned Revenue
In the Government-Wide Financial Statements, unearned revenue is recorded for transactions for which revenues have not been earned. In the Fund Financial Statements, unearned revenue is recorded when transactions have not yet met the revenue recognition criteria based on the modified accrual basis of accounting.

M. Long-Term Liabilities
In the Government-Wide Financial Statements and Proprietary Fund Financial Statements, long-term debt and other financed obligations are reported as liabilities in the appropriate activities. Bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable premium or discount.

In the Fund Financial Statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of the debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs are reported as expenditures.

N. Net Position and Fund Equity
Government-Wide Financial Statements
In the Government-Wide Financial Statements, net position is classified in the following categories:

Net Investment in Capital Assets – This amount consists of capital assets net of accumulated depreciation and reduced by outstanding debt that is attributed to the acquisition, construction, or improvement of the assets.

Restricted Net Position – This amount is restricted by external creditors, grantors, contributors, or laws or regulations of other governments.

Unrestricted Net Position – This amount is all net position that does not meet the definition of “net investment in capital assets” or “restricted net position.” 50 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Notes to Basic Financial Statements
For the year ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued M. Net Position and Fund Equity, Continued
Fund Financial Statements
In the Fund Financial Statements, the following classifications describe the relative strength of the spending constraints placed on the purposes for which resources can be used:

Nonspendable fund balance – This includes amounts that cannot be spent because they are either not spendable in form or legally or contractually required to remain intact.

Restricted fund balance – This includes amounts with constraints placed on their use by those external to the City, including creditors, grantors, contributors or laws and regulations of other governments.

It also includes constraints imposed by law through constitutional provisions or enabling legislation.

Committed fund balance – This includes amounts that can only be used for specific purposes determined by formal action of the City Council and that remain binding unless removed in the same manner. The underlying action that imposed the limitation needs to occur no later than the close of the reporting period.

Assigned fund balance – This includes amounts that are constrained by the City’s intent to be used for specific purposes. The intent can be established at either the highest level of decision making or by a body or an official designated for that purpose.

Unassigned fund balance – This is the residual classification that includes amounts not contained in the other classifications. The General Fund is the only fund that reports a positive unassigned fund balance. In other governmental funds other than the General Fund, if expenditures are incurred for specific purposes exceed the amounts that are restricted, committed, or assigned for those purposes, it may be necessary to report a negative unassigned fund balance in that fund.

The City Council establishes, modifies or rescinds fund balance commitments and assignments by action, which includes passage of a resolution adopting the budget and appropriating revenue for the fiscal year.

O. Net Position and Fund Equity Flow Assumptions
Government-Wide Financial Statements
When an expense is incurred for purposes for which both restricted and unrestricted net position is available, the City’s policy is to apply restricted net position first.

Fund Financial Statements
When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available, the City’s policy is to apply restricted funds first. Committed, assigned, and unassigned fund balances are considered unrestricted. When an expenditure is incurred, if committed, assigned, or unassigned fund balances are available, the City considers amounts to have been spent first out of committed funds, then assigned funds, and finally unassigned funds, as needed. 51 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Notes to Basic Financial Statements
For the year ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued P. Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates and assumptions.

Q. Pension
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City’s California Public Employees’ Retirement System (CalPERS) plan (Plan) and additions to/deductions from the Plan’s fiduciary net position have been determined on the same basis as they are reported by CalPERS.

For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.

R. Other Post Employment Health Care Benefits (OPEB)
For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the City’s plan (OPEB Plan) and additions to/deductions from the OPEB Plan’s fiduciary net position have been determined on the same basis. For this purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms.

Generally accepted accounting principles require that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used:

Valuation Date June 30, 2021
Measurement Date June 30, 2021
Measurement Period July 1, 2020 to June 30, 2021
S. New Accounting Pronouncements
In 2022, the City adopted the new accounting standards to conform to the following Governmental Accounting Standards Board Statements:

GASB Statement No. 87, Leases – The objective of this statement is to recognize in the financial statements certain lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract. The City recognized a lease receivable and related deferred inflow of resources for a cell tower lease. In addition, long-term debt disclosures were reviewed and updated to reflect leaseleaseback financing transactions. 52 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Notes to Basic Financial Statements
For the year ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued S. New Accounting Pronouncements, Continued
GASB Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period – The objective this statement is to (1) to enhance the relevance and comparability of information about capital assets and the cost of borrowing for a reporting period and (2) to simplify accounting for interest cost incurred before the end of a construction period. This statement establishes accounting requirements for interest costs incurred before the end of a construction period. This Statement requires that interest cost incurred before the end of a construction period be recognized as expense in the period in which the cost is incurred for financial statements prepared using the economic resources measurement focus. As a result, interest cost incurred before the end of a construction period will not be included in the historical cost of a capital asset reported in a business-type activity or enterprise fund. There was no impact on net position as a result of implementation of this statement.

GASB Statement No. 92, Omnibus – The objectives of this statement are to enhance comparability in accounting and financial reporting and to improve the consistency of authoritative literature by addressing practice issues that have been identified during implementation and application of certain GASB Statements. This Statement addresses a variety of topics and includes specific provisions about leases, intra-entity transfers between primary government and pension or OPEB plans, other pension plan reporting, fiduciary activities relating to postemployment benefit arrangements, asset retirement obligations, reporting for public entity risk pools, fair value measurement, and derivative instruments.

The requirements of this statement did not have an impact on the City’s net position for the year ended June 30, 2022.

GASB Statement No. 99, Omnibus 2022 – The primary objectives of this statement are to enhance the comparability in accounting and financial reporting and to improve the consistency of authoritative literature by addressing practice issues that have been identified during the implementation and application of certain GASB Statements. The requirements of this statement did not apply for the current fiscal year.

2. CASH AND INVESTMENTS
Cash and investments are reported in the accompanying financial statements as follows:

Governmental Business-Type
Activities Activities Total
Cash and investments 11,191,974 $ 3,151,376 $ 14,343,350 $ Restricted cash and investments 889,036 2,654,751 3,543,787 Total cash and investments $ 5,806,127 12,081,010 $ 17,887,137 $ Government-Wide Statement of Net Position
53 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Notes to Basic Financial Statements
For the year ended June 30, 2022

2. CASH AND INVESTMENTS, Continued
A. Summary of Cash and Investments
Cash and investments as of June 30, 2022 consist of the following:

B. Cash Deposits
At June 30, 2022, the carrying amount of the City’s cash and cash equivalents were comprised of the general checking account, which had a book balance of $2,328,508 and petty cash of $1,075. The bank balance in the City’s general checking was $2,866,405, fully insured and collateralized with securities held by the pledging financial institutions in the City’s name as discussed below. The difference between the bank balance and the carrying amount represents outstanding checks and deposits in transit.

The California Government Code requires California banks and savings and loan associations to secure the City’s cash deposits by pledging securities as collateral. This Code states that collateral pledged in this manner shall have the effect of perfecting a security interest in such collateral superior to those of a general creditor. Thus, collateral for cash deposits is considered to be held in the City’s name. The fair value of pledged securities must equal at least 110% of the City’s cash deposits. California law also allows institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the City’s total cash deposits. The City’s cash deposit was fully insured up to $250,000 by the Federal Deposit Insurance Corporation. The remaining amount was collateralized with securities held by the pledging financial institutions in the City’s name.

Deposits:

Cash on hand $ 1,075
Deposits with financial institution 2,328,508
Total cash on hand and deposits 2,329,583
Investments
County of Sonoma investment pool 131,629
Local Agency Investment Pool (LAIF) 4,943,736
Certificates of deposit 3,751,972
Money market 59,614
U.S. Treasury securities 1,886,768
U.S. government bonds 1,240,048
Total investments 12,013,767
Total City Treasury 14,343,350
Restricted cash and investments:

Cash with fiscal agent 3,543,787
Total restricted cash and investments 3,543,787
Total cash and investments $ 17,887,137
54 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Notes to Basic Financial Statements
For the year ended June 30, 2022

2. CASH AND INVESTMENTS, Continued
C. Investments
The City is authorized by State statutes to invest in the following:
* U.S. Treasury and U.S. Agency Issues
* Certificates of Deposit
* California Local Agency Investment Fund (LAIF)
* Government Bonds and Notes
* Passbook Savings
* Bankers Acceptances
* Commercial Paper (Corporations)
* Medium-Term Corporate Notes
* Repurchase Agreements
* Mutual Funds
D. Risk Disclosures
Interest Rate Risk: Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, an investment with a longer maturity date has a greater sensitivity of its fair value to be subject to changes in market interest rates. In accordance with the City’s investment policy, exposure to interest rate risk is mitigated by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.

Cash and investments, including cash with fiscal agents, held in the City by maturity date at June 30, 2022 are shown below:

Credit Risk: Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization.

Investment Type Fair Value
Less than 1
year
More than 1
year less than 5
years
Investments:

County of Sonoma investment pool $ 131,629 $ 131,629 $ - Local Agency Investment Pool (LAIF) 4,943,736 4,943,736 - Certificates of deposit 3,751,972 494,268 3,257,704
Money market 59,614 59,614 -
U.S. Treasury securities 1,886,768 1,886,768 -
U.S. government bonds 1,240,048 1,240,048 -
Total $ 12,013,767 $ 5,629,247 $ 6,384,520
Investment Maturities (in years)
55 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Notes to Basic Financial Statements
For the year ended June 30, 2022

2. CASH AND INVESTMENTS, Continued
D. Risk Disclosures, Continued
Presented below is the June 30, 2022 rating which meets the minimum rating required by (where applicable) the California Government Code, the City’s Investment Policy, or debt agreements:

Concentration of Credit Risk: The investment policy of the City of Sebastopol contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. At June 30, 2022 the City did not have investments (other than in external investment pools) that represented 5% or more of the City’s total investments.

Custodial Credit Risk: Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of failure of the counter party (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City’s Investment Policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the City). The fair value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits
E. Fair Value of Investments
GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, requires that the City’s investments be carried at fair value instead of cost. If material, the City adjusts the carrying value of its investments to reflect their fair value at each fiscal year-end and the effects of these adjustments are included in income for that fiscal year.

Investment Type Fair Value Aaa
Investments:

U.S. Treasury securities $ 1,886,768 $ 1,886,768
U.S. government bonds 1,240,048 1,240,048
Total Investment subject to ratings 3,126,816 $ 3,126,816 Assets not subject to credit ratings:

County of Sonoma investment pool 131,629
Local Agency Investment Pool (LAIF) 4,943,736
Certificates of deposit 3,751,972
Money market 59,614
Total investments $ 12,013,767
56 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Notes to Basic Financial Statements
For the year ended June 30, 2022

2. CASH AND INVESTMENTS, Continued
E. Fair Value of Investments, Continued
Investments (except for money market accounts, time deposits, and commercial paper) are measured at fair value on a recurring basis. Recurring fair value measurements, are those that Governmental Accounting Standards Board (GASB) Statements require or permit in the statement of net position at the end of each reporting period. Fair value measurements are categorized based on the valuation inputs used to measure an asset’s fair value. Inputs are assumptions that market participants use when pricing an asset or liability. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs, such as bond valued by a pricing service that uses matrix pricing, three-year option on exchange-traded shares, or valuation multiple; Level 3 inputs are significant unobservable inputs. The City’s investment in Sonoma County’s investment pool and money market were not subject to the levelling disclosure.

Investment fair value measurements at June 30, 2022 are described below:

F. Cash and Investments with Fiscal Agents
Funds deposited with fiscal agents can be held in cash or invested in various securities. The fiscal agents can invest in securities as outlined in trust agreements, provided the investments are within the limits imposed by state statutes. These investments include federal securities, investment agreements, interest-bearing demand or time deposits, commercial paper rated “AA-” or better by Moody’s, and money market mutual funds which are rated in the highest category by Moody’s. At June 30, 2022, cash and investments with fiscal agents totaled $3,543,787.

G. County of Sonoma Investment Pool
The City is a voluntary participant in the County of Sonoma Investment Pool (County Pool) regulated by the County’s Investment Policy under the oversight of the Treasury of the County. The County does provide the City with a fair value factor, and the City’s fair value of its position in the pool is the same as the value of the pool shares.

Investment Type Fair Value Level 1 Level 2 Level 3
Certificates of deposit $ 3,751,972 $ 3,751,972 - $ $ - U.S. Treasury securities 1,886,768 1,886,768 - -
U.S. government bonds 1,240,048 1,240,048 - -
Total investments subject to levelling 6,878,788 $ 6,878,788 - $ $ - Assets not subject to fair value levelling:

Money market 59,614
County of Sonoma investment pool 131,629
Local Agency Investment Pool (LAIF) 4,943,736
Total investments 12,013,767 $
Fair Value Measurement Using
57 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Notes to Basic Financial Statements
For the year ended June 30, 2022

2. CASH AND INVESTMENTS, Continued
H. Investment in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The balance is available for withdrawal on demand. The City’s investment with LAIF at June 30, 2022 includes a portion of the pool funds invested in Structured Notes and Asset-Backed Securities. These investments include the following:

Structured Notes are debt securities (other than asset-backed securities) whose cash flow characteristics (coupon rate, redemption amount, or stated maturity) depend upon one or more indices and/or have embedded forwards or options.

Asset-Backed Securities, the bulk of which are mortgage-backed securities, entitle their purchasers to receive a share of the cash flows from a pool of assets such as principal and interest repayments from a pool of mortgages (such as collateralized mortgage obligations) or credit card receivables.

As of June 30, 2022, the City had $4,943,736 invested in LAIF, which had invested 1.88% of the pool investment funds in Structured Notes and Asset-Backed Securities as compared to 2.31% in the previous year.

3. LOANS AND NOTES RECEIVABLE
At June 30, 2022, the City had the following loans and notes receivable:

The $196,408 solar equipment installation loans are repayable in equal bi-monthly installments over a period of about 32 years by the homeowners, and repayments are made through the City's enterprise utility billing and collection system.

4. LEASE RECEIVABLE
In implementing GASB Statement No. 87 – Leases, the City recognized lease receivables and deferred inflows of resources for the leasing of attachment space for cellular communications. In fiscal year ended June 30, 2022, the City recognized $35,002 in revenues for applicable leases.

City Cell Tower – The City entered into an agreement with a telecommunications company in 2001 to lease space on a tower. The lease term is 30 years, made up of an initial 15-year term plus three 5-year options.

The City considers each optional term to likely be exercised by the lessee. The monthly payments are $3,413.

The City used an annual incremental borrowing rate of 1.77%. The lease receivable as of June 30, 2022 was $337,622, and related deferred inflow of resources as of June 30, 2022 was $334,731.

Party to Loan Purpose of Loan Amount
Governmental Activities:

Individual property owners Solar power equipment installation loans 196,408 $ 58 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Notes to Basic Financial Statements
For the year ended June 30, 2022

4. LEASES RECEIVABLE, Continued
Future minimum rental payments are as follows:

5. INTERFUND TRANSACTIONS
A. Due To and Due From
At June 30, 2022, the City had the following short-term interfund receivables and payables:

Amounts shown as due to and from other funds represent interfund balances that arise in the normal course of operation and are expected to be repaid shortly after the end of the fiscal year.

Year Ending
June 30, Principal Interest Total
2023 35,268 $ 5,691 $ 40,959 $
2024 35,897 5,061 40,958
2025 36,538 4,421 40,959
2026 37,190 3,769 40,959
2027 37,853 3,105 40,958
2028-2031 154,876 5,545 160,421
Total 337,622 $ 27,592 $ $365,214
Current 35,268 $ 5,691 $ 40,959 $
Noncurrent 302,354 21,901 324,255
Total 337,622 $ 27,592 $ 365,214 $
Due From
Due to General Fund Other Funds
Non-major funds $ 18,865
Internal service funds 30,785
Total $ 49,650
59 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Notes to Basic Financial Statements
For the year ended June 30, 2022

5. INTERFUND TRANSACTIONS, Continued
B. Interfund Transfers
The composition of interfund transfers for the year ended June 30, 2022 is as follows:

Transfers represent funding of various City operations, funding for capital projects, lease payments or debt service.

6. CAPITAL ASSETS
A. Government-Wide Financial Statements
At June 30, 2022, the City’s capital assets consisted of the following:

General
Non-Major Govt
Funds Total
Transfer Out
General Fund $ - $ 395,940 $ 395,940
Non-major govtl Funds 144,000 940,511 1,084,511
Total Governmental 144,000 1,336,451 1,480,451
Water - 31,024 31,024
Total Enterprise - 31,024 31,024
Total Transfers out $ 144,000 $ 1,367,475 $ 1,511,475
Transfer In
Governmental Business-Type
Activities Activities Total
Non-depreciable assets:

Land and improvements 2,151,948 $ 86,440 $ 2,238,388 $
Construction in progress 1,132,790 1,701,643 2,834,433
Total non-depreciable assets 3,284,738 1,788,083 5,072,821 Depreciable assets:

Buildings and structures 7,851,895 - 7,851,895
Machinery and equipment 2,751,741 240,178 2,991,919
Reservoirs - 3,917,184 3,917,184
Pipelines and water distribution system - 4,241,289 4,241,289 Pipelines and wastewater colletion system - 8,374,315 8,374,315 Vehicles 2,717,579 961,781 3,679,360
Infrastructure 8,856,790 - 8,856,790
Total depreciable assets 22,178,005 17,734,747 39,912,752 Total accumulated Depreciation (14,511,626) (11,662,707) (26,174,333) Total depreciable assets, net 6,072,040 7,666,379 13,738,419 Total $ 7,860,123 10,951,117 $ 18,811,240 $
60 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Notes to Basic Financial Statements
For the year ended June 30, 2022

6. CAPITAL ASSETS, Continued
B. Governmental Activities
The following is a summary of changes in governmental activity capital assets for the year ended June 30, 2022:

Governmental activities depreciation expense for capital assets for the year ended June 30, 2022 was as follows:

Balance Adjustment/ Balance
July 1, 2021 Additions Deletions Reclassification June 30, 2022 Non-depreciable assets:

Land and improvements $ 2,151,948 $ - $ - $ 2,151,948 - $ Construction in progress 801,976 881,203 (139,467) (410,922) 1,132,790 Total non-depreciable assets 2,953,924 881,203 (139,467) (410,922) 3,284,738 Depreciable assets:

Buildings and structures 7,548,378 16,478 - 287,039 7,851,895 Machinery and equipment 2,694,728 57,013 - - 2,751,741
Vehicles 2,298,524 419,055 - - 2,717,579
Infrastructure 8,708,932 23,975 - 123,883 8,856,790
Total depreciable assets 21,250,562 516,521 - 410,922 22,178,005 Less accumulated depreciation:

Buildings and structures (5,711,245) (202,490) - (5,913,735) - Machinery and equipment (2,349,071) (102,686) - (2,451,757) - Vehicles (1,577,087) (143,456) - (1,720,543) -
Infrastructure (3,972,969) (452,622) - (4,425,591) -
Total accumulated depreciation (13,610,372) (901,254) - (14,511,626) - Total depreciable assets, net 7,640,190 (384,733) - 410,922 7,666,379 Total governmental activities, net 10,594,114 $ $ 496,470 $ (139,467) $ 10,951,117 - $ General government $ 133,459
Public safety 229,202
Public works 394,756
Parks and recreation 143,837
Total depreciation expense $ 901,254
61 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Notes to Basic Financial Statements
For the year ended June 30, 2022

6. CAPITAL ASSETS, Continued
C. Business-Type Activities
The following is a summary of changes in business-type activity capital assets for the year ended June 30, 2022:

Business-type activities depreciation expense for capital assets for the year ended June 30, 2022 was as follows:

Balance Adjustment/ Balance
July 1, 2021 Additions Retirements Reclassification June 30, 2022 Non-depreciable assets:

Land $ 86,440 $ - $ - $ 86,440 - $
Construction in progress 92,139 1,662,467 - (52,963) 1,701,643 Total non-depreciable assets 178,579 1,662,467 - (52,963) 1,788,083 Depreciable assets:

Reservoirs 3,917,184 - - 3,917,184
Pipelines and water distribution system 4,224,172 - - 17,117 4,241,289 Pipelines and wastewater collection system 8,338,469 - - 35,846 8,374,315 Machinery and equipment 218,632 21,546 - - 240,178
Vehicles 924,885 36,896 - - 961,781
Total depreciable assets 17,623,342 58,442 - 52,963 17,734,747 Less accumulated depreciation:

Reservoirs (1,465,536) (138,436) - - (1,603,972)
Pipelines and water distribution system (3,236,752) (71,836) - - (3,308,588) Pipelines and wastewater collection system (5,763,873) (415,906) - - (6,179,779) Machinery and equipment (14,057) (14,003) - - (28,060)
Vehicles (475,458) (66,850) - - (542,308)
Total accumulated depreciation (10,955,676) (707,031) - - (11,662,707) Total depreciable assets, net 6,667,666 (648,589) - 52,963 6,072,040 Total capital assets $ 6,846,245 $ 1,013,878 $ - $ 7,860,123 - $ Water $ 247,069
Wastewater 459,962
Total depreciation expense $ 707,031
62 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Notes to Basic Financial Statements
For the year ended June 30, 2022

7. LONG-TERM DEBT
A. Governmental Activities
The following is a summary of governmental activity long-term debt transactions during the year ended June 30, 2022:

Special Assessment Bonds
The special assessment bonds were issued in an original amount of $732,475 for the purpose of facilitating improvements to the Woodstone Center. The bonds are secured by assessments levied against property owners within the assessment district and from monies on deposit in a reserve fund.

The bonds consist of 4.25 to 6.7 percent serial bonds maturing through September 2, 2023.

The annual debt service requirements on the special assessment bonds are as follows:

Lease-leaseback Agreement - Refunding Lease 2021 – Truist Bank In the 2006 fiscal year, the city entered into a financing arrangement to obtain $2,880,000 in funds for future capital projects. The general fund is responsible for paying debt service on the governmental activities portion of the lease obligation, which is about 41 percent of the total obligation. The water and wastewater enterprises are responsible for paying the other 59 percent of the obligation. In fiscal year 2021, the City entered into a lease agreement with Truist Bank to refund the 2006 lease obligation. The agreement was for $1,139,952, bears interest at 1.10 percent on the basis of a 360-day year, is repayable in annual installments of $211,550, and matures in 2026. The City has pledged the Fire Station as collateral for the refunding lease agreement.

Due in
Balance Balance Due Within More than
July 1, 2021 Additions Retirements June 30, 2022 One Year One Year Special assessment bonds 65,000 $ $ (30,000) - $ $ 35,000 $ 35,000 $ - Lease-leaseback agreements
Refunding lease 2021 - Truist 420,626 (82,362) 338,264 83,180 255,084 Renewable energy 390,356 (97,589) - 292,767 97,589 195,178 Mobile home park 332,254 (24,152) - 308,102 50,094 258,008 Finance purchase agreements
Energy conservation measures - 1,126,307 - 1,126,307 75,028 1,051,279 Vactor truck 6,829 - (6,829) - - -
Total $ 1,215,065 $ 1,126,307 $ (240,932) $ 2,100,440 $ 340,891 $ 1,759,549 Year Ending
June 30, Principal Interest Total
2023 35,000 $ 1,941 $ 36,941$
Total $ 35,000 $ 1,941 $36,941
63 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Notes to Basic Financial Statements
For the year ended June 30, 2022

7. LONG-TERM DEBT, Continued
A. Governmental Activities, Continued
Lease-leaseback Agreement - Refunding Lease 2021 – Truist Bank, Continued The annual debt service requirements for governmental activities (41%) are as follows:

Lease-leaseback Agreements – Clean Renewable Energy
The City entered into a capital lease arrangement with Municipal Finance Corporation pursuant to approval from the Internal Revenue Service for the issuance of Clean Renewable Energy Bonds in the principal amount of $2,074,000 for the purpose of obtaining zero interest financing for renewable energy projects of the City. The arrangement provides for the lease of the projects to Municipal Finance Corporation by the City and the sublease of the projects back to the City by Municipal Finance Corporation in exchange for the rental payments by the City. The City's lease payments to Municipal Finance Corporation are payable from any source of legally available funds.

The annual debt service requirements are as follows
Lease-leaseback Agreements – Mobile Home Park
The City entered into a similar lease financing arrangement with the Municipal Finance Corporation for the purpose of obtaining partial financing for the purchase of an existing mobile home park as part of an open space program of the City. The lease was for $817,500 and it also is payable from any source of legally available funds.

Year Ending
June 30, Principal Interest Total
2023 83,180 $ $ 3,492 $ 86,672
2024 84,097 2,575 86,672
2025 85,025 1,647 86,672
2026 85,962 709 86,671
Total $ 338,264 $ 8,423 $346,687
Year Ending
June 30, Principal Interest Total
2023 97,589 $ $ 97,589 - $
2024 97,589 - 97,589
2025 97,589 - 97,589
Total $ 292,767 $ 292,767 - $
64 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Notes to Basic Financial Statements
For the year ended June 30, 2022

7. LONG-TERM DEBT, Continued
A. Governmental Activities, Continued
Lease-leaseback Agreements – Mobile Home Park, Continued The annual debt service requirements are as follows
Finance Purchase Agreement – Energy Conservation Measures In fiscal year 2022, the City entered into an equipment purchase agreement with Signature Public Funding Group to acquire various equipment and improvements, consisting of primarily energy efficiency and conservation project, which includes equipment, design, build and installation work and various implementation measurement and verification services related to guaranteed energy savings.

The total equipment cost and proceeds received from Signature Public Funding Corp totaled $4,938,891.

Annual debt service requirements of $374,650 is due July 1st each year, commencing on July 1st, ,2022 and final payment due on July 1st, 2036. Annual interest charged on the financing agreement is 1.770%.

The annual debt service requirements for governmental activities (22.8%) are as follows:

Year Ending
June 30, Principal Interest Total
2023 50,094 $ 14,490 $ 64,584$
2024 52,580 12,004 64,584
2025 55,186 9,398 64,584
2026 57,925 6,659 64,584
2027 60,797 3,787 64,584
2028 31,520 772 32,292
Total 308,102 $ 47,110 $ $355,212
Year Ending
June 30, Principal Interest Total
2023 75,028 $ 10,411 $ 85,439 $
2024 66,831 18,608 85,439
2025 68,014 17,425 85,439
2026 69,217 16,221 85,438
2027 70,443 14,996 85,439
2028-2032 371,362 55,829 427,191
2033-2037 405,412 21,780 427,192
Total 1,126,307 $ 155,270 $ $1,281,577
65 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Notes to Basic Financial Statements
For the year ended June 30, 2022

7. LONG-TERM DEBT, Continued
B. Business-type Activities
The following is a summary of business-type activity long-term debt transactions during the year ended June 30, 2022:

Refunding Loan 2021 – Truist Bank
The City in fiscal 2015 entered into an installment sale agreement with Municipal Finance Corporation for obtaining financing to assist in the removal of arsenic from water well seven and its treatment system. The agreement was for $1,200,000, bears interest at 4.10 percent on the basis of a 360 day year, is repayable in annual installments of $89,082, and matures in 20 years. The installment agreement was a special obligation of the City repayable solely from the net revenues of its water system; and the City pledged its water system net revenues for this purpose and for any other parity obligations.

In fiscal year 2021, the City entered into a loan agreement with Truist Bank to refund the installment sale agreement. The agreement was for $1,019,462, bears interest at 2.09 percent on the basis of a 360-day year, is repayable in annual installments of $83,955, and matures in 2035. The loan agreement is a special obligation of the City repayable solely from the net revenues of its water system, and the City pledged its water system net revenues for this purpose and for any other parity obligations. The difference in debt service requirements between the installment sale agreement and the loan agreement was $71,782 and resulted in an economic gain of $67,445.

The loan agreement includes the following financial debt covenants:

Covenant Regarding Gross Revenues: The City shall collect rates, fees, and charges for services furnished by the Water Fund during each fiscal year to pay all maintenance and operation costs, loan repayments, and all principal and interest on any parity obligations, which are payable from net revenues, and all payments required to meet any other obligations of the City.

Covenant Regarding Net Revenues: The City shall collect rates, fees, and charges for services furnished by the Water Fund during each fiscal year, which are sufficient to yield net revenues equal to 120% of the loan repayments and any parity obligations which are payable from the net revenues.

Due in
Balance Balance Due Within More than
July 1, 2021 Additions Retirements June 30, 2022 One Year One Year Refunding loan 2021 - Truist 1,019,462 $ - $ (63,728) $ 955,734 $ 64,655 $ 891,079 $ Lease-leaseback agreements
Refunding lease 2021 - Truist 606,042 - (118,667) 487,375 119,846 367,529 Finance purchase agreements
Energy conservation measures 3,812,582 - 3,812,582 - 253,970 3,558,612 Vactor truck 21,338 - (21,338) - - -
Total $ 3,812,582 1,646,842 $ $ (203,733) $ 5,255,691 $ 4,817,220 438,471 $ 66 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Notes to Basic Financial Statements
For the year ended June 30, 2022

7. LONG-TERM DEBT, Continued
B. Business-type Activities, Continued
Refunding Loan 2021 – Truist Bank, Continued
Gross revenues, net revenues, and total debt service for the Water Fund were $2,519,592, $219,092, and $158,198 respectively for fiscal year 2022. Net revenues were equal 138% of total debt service for the Water Fund for fiscal year 2022.

The annual debt service requirements for the installment sale agreement are as follows:

Refunding Lease 2021 – Truist Bank
In the 2006 fiscal year, the city entered into a financing arrangement to obtain $2,880,000 in funds for future capital projects. The general fund was responsible for paying debt service on the governmental activities portion of the lease obligation, which is about 41 percent of the total obligation. The water and wastewater enterprises was responsible for paying the other 59 percent of the obligation.

In fiscal year 2021, the City entered into a lease agreement with Truist Bank to refund the 2006 lease obligation. The agreement was for $1,139,952, bears interest at 1.10 percent on the basis of a 360-day year, is repayable in annual installments of $211,550, and matures in 2026. The difference in debt service requirements between the 2006 lease obligation agreement and the refunding lease agreement was $75,092 and resulted in an economic gain of $71,126. The City has pledged the Fire Station as collateral for the refunding lease agreement. No deferred loss on refunding was reported as a result of the transaction, because the amount recognized was deemed to be trivial to the financial statements.

The annual debt service requirements for business-type activities (59%) are as follows:

Year Ending
June 30, Principal Interest Total
2023 64,655 $ $ 19,300 $ 83,955
2024 66,021 17,934 83,955
2025 67,415 16,540 83,955
2026 68,839 15,116 83,955
2027 70,293 13,662 83,955
2027-2031 374,372 45,398 419,770
2032-2035 244,139 7,724 251,863
Total $ 955,734 $ 1,091,408 135,674 $
Year Ending
June 30, Principal Interest Total
2023 119,846 $ $ 5,032 $ 124,878
2024 121,168 3,709 124,877
2025 122,505 2,373 124,878
2026 123,856 1,022 124,878
Total $ 487,375 $ 12,136 $499,511
67 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Notes to Basic Financial Statements
For the year ended June 30, 2022

7. LONG-TERM DEBT, Continued
B. Business-type Activities, Continued
Finance Purchase Agreement – Energy Conservation Measures In fiscal year 2022, the City entered into an equipment purchase agreement with Signature Public Funding Group to acquire various equipment and improvements, consisting of primarily energy efficiency and conservation projects, which includes equipment, design, build and installation work and various implementation measurement and verification services related to guaranteed energy savings.

The total equipment cost and proceeds received from Signature Public Funding Corp totaled $4,938,891.

Annual debt service requirements of $374,650 is due July 1st each year, commencing on July 1st, ,2022 and final payment due on July 1st, 2036. Annual interest charged on the financing agreement is 1.770%.

The annual debt service requirements for governmental activities (77.2%) are as follows:

8. COMPENSATED ABSENCES
It is the City’s policy to permit employees to accumulate earned but unused vacation and sick pay benefits.

There is a liability for a portion of unpaid accumulated sick leave since the City does have a policy to pay certain amounts when employees separate from service with the City.

A summary of changes in compensated absences for the year ended June 30, 2022 is as follows:

Year Ending
June 30, Principal Interest Total
2023 253,970 $ 35,241 $ 289,211 $
2024 226,224 62,987 289,211
2025 230,228 58,983 289,211
2026 234,303 54,908 289,211
2027 238,450 50,761 289,211
2028-2032 1,257,074 188,983 1,446,057
2033-2037 1,372,333 73,723 1,446,056
Total 3,812,582 $ 525,586 $ $4,338,168
Due Due in
Balance Balance Within More than
July 1, 2021 Additions Retirements June 30, 2022 One Year One Year Governmental activities 1,008,001 $ 763,094 $ (750,483) $ 1,020,612 $ 750,000 $ 270,612 $ Business-type activities 53,053 40,162 (39,499) 53,716 4,000 49,716 Total $ 803,256 1,061,054 $ (789,982) $ 1,074,328 $ 754,000 $ 320,328 $ 68 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Notes to Basic Financial Statements
For the year ended June 30, 2022

9. OTHER FUND DISCLOSURES
A. Deficit Balances
At June 30, 2022, the funds below had the following deficit fund balance or net position. The deficit balance is caused by expenditures reported in the current year that will be reimbursed in subsequent years.

10. RISK MANAGEMENT
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters for which the City carries insurance. The City, due to the costs of available coverage, participates as a member of the California Intergovernmental Risk Authority Joint Powers Authority (CIRA). CIRA provides joint protection programs for public entities covering automobile, general liability, errors and omissions, property and workers compensation claims. Under the program, the City has a $5,000 retention limit similar to a deductible with the CIRA being responsible for losses above that amount up to $500,000 for liability losses, $1,000,000 for workers compensation claims, and $25,000 for property damage. The Fund carries purchased excess commercial liability insurance of $39.5 million in excess of its $500,000 limit, and a commercial property policy for $300 million. Financial information pertaining to CIRA can be obtained from its administrative offices at 414 W. Napa Street, Sonoma, California 95476.

Liabilities of the City are reported in the statement of net position when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. Liabilities include an amount for claims that have been incurred but not reported (IBNRs). The result of the process to estimate the claims liability is not an exact amount as it depends on many complex factors, such as inflation, changes in legal doctrines, and damage awards. Accordingly, claims are reevaluated periodically to consider the effects of inflation, recent claim settlement trends (including frequency and amount of pay-outs), and other economic and social factors. The City's only exposure to claim liabilities would be for losses, if any, not covered by CIRA.

There have been no significant changes in insurance coverages in fiscal 2022. Settlements have not exceeded coverage for each of the past three fiscal years. The City has no significant uninsured claim liabilities at June 30, 2022.

Non-major governmental Funds:

General Capital Project $ 7,776
69 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Notes to Basic Financial Statements
For the year ended June 30, 2022

11. PENSION PLANS
A. 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 pool (police and fire) and a miscellaneous risk pool (all other.) Plan assets may be used to pay benefits for any employer rate plan of the safety and miscellaneous risk pools.

Accordingly, rate plans within the safety or miscellaneous pools are not separate plans under GASB Statement No. 68. Individual employers may sponsor more than one rate plan in the miscellaneous or safety risk pools. The City sponsors two miscellaneous rate plans and four safety rate plans. Benefit provisions under the Plan are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.

B. Benefits Provided
CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 55 with statutorily reduced benefits. All members are eligible for nonduty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employee’s Retirement Law. 70 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Notes to Basic Financial Statements
For the year ended June 30, 2022

11. PENSION PLANS, Continued
B. Benefits Provided, Continued
The rate plan provisions and benefits in effect at June 30, 2022 are summarized as follows:

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 actuarial basis, annually and is 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 amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. The General Fund has typically been used to liquidate pension liabilities for governmental funds.

The City’s contributions to the Plan for the measurement period ended June 30, 2021 were $1,686,413.

The City’s contributions to the Plan for the fiscal year ended June 30, 2022 were $1,827,570.

Safety
Miscellaneous PEPRA
Miscellaneous Safety Fire
Hire date Prior to January 1,
2013
On or after
January 1, 2013
Prior to January 1
2013
Benefit formula 2.0% @ 55 2.0% @ 62 3% @ 50
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 - 55 50 - 55 50 - 55
Monthly benefits, as a % of eligible compensation 2.0% to 2.5% 2.0% to 2.5% 2.0% Required employee contribution rates 7.000% 6.750% 9.000% Required employer contribution rates 10.880% 7.590% 22.480% Required unfunded liability payment 588,300 $ 5,853 $ 67,362 $ Safety Police PEPRA
Safety Fire
PEPRA
Safety Police
Hire date - Fire
Prior to January 1
2013
On or after
January 1, 2013
On or after
January 1, 2013
Benefit formula 3% @ 50 2.7% @ 57 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 - 55 50 - 57 50 - 57

2.0% 2.0% to 2.7% 2.0% to 2.7%

9.000% N/A 12.000%

22.480% 13.130% 13.130%
$ - 646,960 $ 4,019 $
Miscellaneous
Monthly benefits, as a % of eligible compensation
Required employee contribution rates
Required employer contribution rates
Required unfunded liability payment
Safety
71 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Notes to Basic Financial Statements
For the year ended June 30, 2022

11. PENSION PLANS, Continued
C. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions
As of June 30, 2022, the City reported a net pension liability for its proportionate share of the net pension liability of the Plan of $8,665,009.

The City’s net pension liability for the Plan is measured as the proportionate share of the total net pension liability of the Plan. The net pension liability of the Plan is measured as of June 30, 2021, and the total pension liability for the Plan used to calculate the net pension liability was determined by actuarial valuations as of June 30, 2020 rolled forward to June 30, 2021 using standard update procedures. The City’s proportionate share of the net pension liability was based on the City’s plan liability and assetrelated information where available, and proportional allocations of individual plan amounts as of the valuation date where not available.

The City’s proportionate share of the net pension liability for each Plan as of measurement dates June 30, 2020 and 2021 were as follows:

For the year ended June 30, 2022, the City recognized pension expense of $2,765,976. At June 30, 2022, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Proportion - June 30, 2020 0.12743%
Proportion - June 30, 2021 0.16022%
Change - Increase (Decrease) 0.03279%
Deferred Outflows
of Resources
Deferred Inflows
of Resources
Pension contributions subsequent to
measurement date $ 1,827,570 $ -
Changes of assumptions - -
Differences between expected and
actual experience 1,273,369 -
Changes in employer's proportion 45,722 180,574
Differences between the employer's
contribution and the employer's
proportionate share of contributions 19,410 222,172
Net differences between projected
and actual earnings on plan
investments - 6,136,846
Total $ 6,539,592 3,166,071 $
72 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Notes to Basic Financial Statements
For the year ended June 30, 2022

11. PENSION PLANS, Continued
C. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions, Continued
$1,827,570 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 ending June 30, 2023. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

Actuarial Assumptions – The total pension liability in the June 30, 2020 actuarial valuations were determined using the following actuarial assumptions:

The mortality table used was developed based on CalPERS-specific data. The table includes 15 years of mortality improvements using Society of Actuaries Scale 90% of scale MP 2016. Further details of the December 2017 Experience Study can be found on the CalPERS website www.calpers.ca.gov.

Discount Rate – The discount rate used to measure the total pension liability was 7.15% for the Plan.

To determine whether the municipal bond rate should be used in the calculation of a discount rate for the Plan, CalPERS stress tested plans that would most likely result in a discount rate that would be different from the actuarially assumed discount rate. Based on the testing, none of the tested plans run out of assets. Therefore, the current 7.15 percent discount rate is adequate and the use of the municipal bond rate calculation is not necessary. The long term expected discount rate of 7.15 percent will be applied to all plans in the Public Employees Retirement Fund (PERF). The stress test results are presented in a detailed report that can be obtained from the CalPERS website.

Fiscal Year
Ending June 30:
2023 $(1,001,415)
2024 (1,136,713)
2025 (1,370,610)
2026 (1,692,353)
Valuation Date June 30, 2020
Measurement Date June 30, 2021
Actuarial Cost Method Entry-Age Normal Cost
Method
Actuarial Assumptions:

Discount Rate 7.15%
Inflation 2.50%
Projected Salary Increase Varies by entry age and
service
Investment Rate of Return (1) 7.15%
Mortality Derived by CalPERS
membership data for all
funds
(1) Net of pension plan investment expenses.
73 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Notes to Basic Financial Statements
For the year ended June 30, 2022

11. PENSION PLANS, Continued
C. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions, Continued
The long-term expected rate of return on pension plan investments was determined using a buildingblock method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.

In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all the funds’ asset classes, expected compound returns were calculated over the short-term (first 10 years) and the long-term (11-60 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 single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both shortterm and long-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and rounded down to the nearest one quarter of one percent.

The table below reflects the long-term expected real rate of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation. These rates of return are net of administrative expenses.

New
Strategic Real Return Real Return
Asset Class Allocation Years 1 - 10 (a) Years 11+ (b)
Global Equity 50.00% 4.80% 5.98%
Global Fixed Income 28.00% 1.00% 2.62%
Inflation Sensitive 0.00% 0.77% 1.81%
Private Equity 8.00% 6.30% 7.23%
Real Estate 13.00% 3.75% 4.93%
Liquidity 1.00% 0.00% -0.92%
Total 100.00%
(a)
An expected inflation of 2.0% used for this period.
(b) An expected inflation of 2.92% used for this period. 74 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Notes to Basic Financial Statements
For the year ended June 30, 2022

11. PENSION PLANS, Continued
C. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions, Continued
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate – The following presents the City’s proportionate share of the net pension liability for the Plan, calculated using the discount rate for the Plan, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1- percentage point higher than the current rate:

Pension Plan Fiduciary Net Position – Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.

Payable to the Pension Plan
At June 30, 2022, the City reported no payable for outstanding amount of contributions to the pension plan required for the year ended June 30, 2022.

12. OTHER POSTEMPLOYMENT HEALTH CARE BENEFITS
A. Plan Description
The City administers the City's retired employees' healthcare plan, a single employer defined benefit health care plan. The plan provides medical benefits to eligible retired employees and their beneficiaries. City resolutions and agreements assign the authority to establish and amend benefit provisions to the City. A separate OPEB trust account has not been established by the City for the Plan.

B. Employees Covered
As of the June 30, 2021 actuarial valuation, the following current and former employees were covered by the benefit terms under the Retiree Health Plan:

Active employees 15
Inactive employees or beneficiaries currently receiving benefits 28 Total 43
1% Decrease 6.15%
Net Pension Liability $ 15,309,869
Current Discount Rate 7.15%
Net Pension Liability $ 8,665,009
1% Increase 8.15%
Net Pension Liability $ 3,189,168
75 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Notes to Basic Financial Statements
For the year ended June 30, 2022

12. OTHER POSTEMPLOYMENT HEALTH CARE BENEFITS, Continued C. Contribution
The contribution requirements of plan members and the City are established and may be amended by the City. The required contribution is based on a projected pay-as-you-go financing requirements, with additional amounts to prefund benefits determined annually by the City Council. For the measurement period ended June 30, 2021, the City contributed $102,849 of current year premiums (100% of total premiums) and zero to prefund benefits. Plan members receiving benefits contributed no amounts to the total premiums. The General Fund has typically been used to liquidate OPEB liabilities for governmental funds.

D. Total OPEB Liability
The City’s total OPEB liability was measured as of June 30, 2021 and was determined by an actuarial valuation dated June 30, 2021 actuarial methods and assumptions:
(1) Pre-retirement mortality information was derived from data collected during 1997 to 2015 CalPERS Experience Study dated December 2017 and post-retirement mortality information was derived from the 2007 to 2015 CalPERS Experience Study. The Experience Study Reports may be accessed on the CalPERS website www.calpers.ca.gov under Forms and Publications.

E. Change of Assumption
The discount rate used to measure the total OPEB liability was changed from 2.66% to 2.19% for measurement date June 30, 2020.

F. Discount Rate
The discount rate used to measure the total OPEB liability was 2.19%. The City’s OPEB Plan is an unfunded plan, therefore the discount rate was set to the rate of tax-exempt, high quality 20-year municipal bonds, as of the valuation date.

Valuation Date June 30, 2021
Measurement Date June 30, 2021
Actuarial Cost Method Entry-Age Normal Cost Method
Discount Rate 2.19%
Inflation 2.50%
Salary Increases 2.80%
Mortality(1) Derived by CalPERS
membership data for all funds
Healthcare cost trend rates: 4.04% to 6.00%
76 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Notes to Basic Financial Statements
For the year ended June 30, 2022

12. OTHER POSTEMPLOYMENT HEALTH CARE BENEFITS, Continued G. Changes in the Total OPEB Liability
The changes in the total OPEB liability for the OPEB Plan are as follows:

H. Sensitivity of the Total OPEB Liability to Changes in the Discount Rate The following presents the total OPEB liability of the City if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2021:

Total OPEB
Liability
Balance at June 30, 2020 $ 2,730,476
Changes in the year:

Service cost 27,917
Interest on the total OPEB liability 72,014
Differences between actual and expected experience (551,283) Changes in assumptions 10,152
Benefits paid to retirees (102,849)
Net changes (544,049)
Balance at June 30, 2021 $ 2,186,427
1% Decrease - 1.19%
Total OPEB liability 2,497,320 $
Current Discount Rate - 2.19%
Total OPEB liability $ 2,186,427
1% Increase - 3.19%
Total OPEB liability $ 1,933,291
77 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Notes to Basic Financial Statements
For the year ended June 30, 2022

12. OTHER POSTEMPLOYMENT HEALTH CARE BENEFITS, Continued I. Sensitivity of the Total OPEB Liability to Changes in the Health Care Cost Trend Rates The following presents the total OPEB liability of the City if it were calculated using health care cost trend rates that are one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2021:

J. OPEB Expense and Deferred Outflows/(Inflows) of Resources Related to OPEB For the fiscal year ended June 30, 2022, the City recognized OPEB income of $122,554. For the fiscal year ended June 30, 2022, the City reported deferred outflows of resources related to OPEB from the following sources:

The $95,469 reported as deferred outflows of resources related to contributions subsequent to the June 30, 2021 measurement date will be recognized as a reduction of the Total OPEB liability during the fiscal year ending June 30, 2023. Other amounts reported as deferred outflows and deferred inflows of resources related to OPEB will be recognized as expense as follows:
1% Decrease -
Total OPEB liability 2,108,836 $
Current Rate -
Total OPEB liability 2,186,427 $
1% Increase -
Total OPEB liability 2,282,309 $
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
OPEB contributions subsequent to
measurement date $ 95,469 $ -
Differences between expected and
actual experience - 704,389
Changes of assumptions 112,536 84,195
Total $ 208,005 $ 788,584
Fiscal Year
Ending June 30:
2023 $ (222,485)
2024 (228,880)
2025 (54,899)
2026 (54,899)
2027 (54,894)
Thereafter (59,991)
78 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Notes to Basic Financial Statements
For the year ended June 30, 2022

13. JOINTLY GOVERNED ORGANIZATIONS AND OPERATING AGREEMENTS Jointly governed organizations are legal entities or other organizations that result from a contractual arrangement and that are owned, operated, or governed by two or more participants as a separate and specific activity subject to joint control in which the participants retain an ongoing financial interest or ongoing financial responsibility. The City is a participant in the following organizations other than the insurance authority described in the preceding notes. The City is a party to the following agreement:

Santa Rosa Subregional Wastewater System - The City has an agreement with System for the treatment of wastewater as the City does not own or operate its own wastewater treatment plant. The City's obligations under the agreement are to pay to the System its share of the costs of operating the system and treatment of wastewater. The City records these payments as operating expenses in its wastewater enterprise fund.

14. PRIOR PERIOD ADJUSTMENTS
The City recorded the following prior period corrections to restate lease liability outstanding for the mobile home park, and previously reported fiduciary net position of the Successor Agency Private Purpose Trust Fund that was dissolved in fiscal year 2021. As a result, fiduciary fund financial statements for the private purpose trust fund are not reported in fiscal year 2022.

Net Position Net Position
Previously Long-term as
Reported Investments Debt Restated
Governmental Activities $ 8,181,219 $ 23,575 - $ 8,204,794 Fiduciary Fund - Private Purpose Trust Fund $ 818 $ (818) $ - $ - 79 Agenda Item Number 6
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80 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

REQUIRED

SUPPLEMENTARY INFORMATION
81 Agenda Item Number 6
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82 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Required Supplementary Information
For the year ended June 30, 2022

1. BUDGETS AND BUDGETARY ACCOUNTING
Annual budgets are adopted on a basis consistent with generally accepted accounting principles for all government funds. Appropriations lapse at fiscal year-end. The appropriated budget is prepared by fund, function and department. The City manager may make transfers of appropriations within a department.

Transfers between departments and other changes require City Council approval. The legal level of control is the department and fund level. The Council made supplemental appropriations during the fiscal year.

Encumbrance accounting is not employed in governmental funds.

The following are the budget comparison schedule for the General Fund 83 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Required Supplementary Information
For the year ended June 30, 2022

1. BUDGETS AND BUDGETARY ACCOUNTING, Continued
Budgetary Comparison Schedule - General Fund
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Taxes:

Property $ 3,070,534 2,780,700 $ 3,142,858 $ 72,324 $
Real property transfer 50,000 41,000 59,493 9,493
Transient occupancy tax 400,000 400,000 504,292 104,292 Sales and use 4,716,600 5,299,200 5,550,101 250,901
Franchises 335,500 355,000 405,507 50,507
Subtotal 8,273,800 9,174,734 9,662,251 487,517
Licenses, permits and fees:

Business licenses 130,000 135,000 149,175 14,175
Animal licenses 12,900 12,900 14,820 1,920
Building permits 150,000 200,000 281,602 81,602
Subtotal 292,900 347,900 445,597 97,697
Fines, forfeitures and penalties:

Vehicle code 20,000 15,000 15,868 868
Parking fines 15,000 15,000 11,584 (3,416)
Subtotal 35,000 30,000 27,452 (2,548)
Interest and rentals:

Investment earnings 23,000 125,000 (255,949) (278,949)
Rent - cell tower 40,000 40,000 35,002 (4,998)
Rent - other 5,500 5,500 5,783 283
Subtotal 170,500 68,500 (215,164) (283,664)
Intergovernmental:

State motor vehicle in-lieu tax 3,500 3,500 8,846 5,346 Reimbursements 21,100 20,500 7,021 (13,479)
Other 917,850 997,850 412,864 (584,986)
Subtotal 942,450 1,021,850 428,731 (593,119)
Charges for current services:

Sales of publications 300 300 579 279
Planning fees 30,000 25,000 24,010 (990)
Building inspection - - 734 734
Encroachment permits 30,000 40,000 21,725 (18,275)
Public works services 1,500 500 12,980 12,480
Public safety services 32,500 14,000 34,011 20,011
Fire inspection fees 30,000 30,000 30,942 942
Other charges 12,800 4,300 72,601 59,801
Subtotal 128,600 122,600 197,582 74,982
Donations and miscellaneous:

Donations and contributions - - 30,500 30,500
Sale of land/building - - 4,171 4,171
Miscellaneous 60,000 311,250 690,339 379,089
Subtotal 60,000 311,250 725,010 413,760
Total revenues 11,076,834 9,903,250 11,271,459 194,625
Budget Amounts
84 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Required Supplementary Information
For the year ended June 30, 2022

1. BUDGETS AND BUDGETARY ACCOUNTING, Continued
Budgetary Comparison Schedule - General Fund, Continued Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
EXPENDITURES:

Current:

General Government:

City Council 290,990 285,070 323,556 (38,486)
City Manager 366,894 431,694 236,807 194,887
City Attorney 238,050 146,050 354,650 (116,600)
City Clerk 346,142 313,791 311,507 34,635
Finance and accounting 342,073 306,073 309,429 32,644
Planning 588,574 588,574 518,688 69,886
Building inspection 197,510 197,510 188,060 9,450
General government non-departmental 353,572 366,194 308,008 58,186 Subtotal 2,563,454 2,795,307 2,550,705 244,602
Public safety:

Police protection 5,145,800 5,085,800 4,961,008 184,792 Animal control 22,100 22,100 21,456 644
Fire protection 1,246,569 1,134,568 1,053,814 192,755
Fire emergency procedures 18,800 18,800 23,712 (4,912)
Subtotal 6,261,268 6,433,269 6,059,990 373,279
Public works:

Corporation Yard 85,302 101,252 98,794 2,458
Streets Maintenance 490,550 498,550 485,813 12,737
Parking Lots Maintenance 128,200 128,200 107,607 20,593 Engineering 302,646 279,846 324,245 (21,599)
Subtotal 983,898 1,030,648 1,016,459 14,189
Parks and recreation:

Parks & Landscaping Maintenance 422,250 422,250 322,405 99,845 Ives Pool 119,300 119,300 149,447 (30,147)
Recreation administration and programs 351,600 351,600 327,409 24,191 Subtotal 893,150 893,150 799,261 93,889
Capital outlay 226,993 168,800 516,521 (289,528)
Debt service:

Principal 145,689 145,689 131,687 14,002
Interest 29,423 29,423 10,959 18,464
Subtotal 175,112 175,112 142,646 32,466
Total expenditures 11,554,479 11,045,682 11,085,582 468,897

REVENUES OVER (UNDER)
EXPENDITURES (1,142,432) (477,645) 185,877 663,522
Budget Amounts
85 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Required Supplementary Information
For the year ended June 30, 2022

1. BUDGETS AND BUDGETARY ACCOUNTING, Continued
Budgetary Comparison Schedule - General Fund, Continued Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
OTHER FINANCING SOURCES (USES):

Proceeds from debt issuance - - 1,126,307 1,126,307
Transfers in 211,000 211,000 144,000 (67,000)
Transfers out (121,000) (121,000) (395,940) (274,940)
Total other financing sources (uses) 90,000 90,000 874,367 784,367 Net change in fund balances $ (1,052,432) $ (387,645) 1,060,244 $ 1,447,889 FUND BALANCES:

Beginning of year 9,282,117
End of year $ 10,342,361
Budget Amounts
86 Agenda Item Number 6
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87 Agenda Item Number 6
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City of Sebastopol
Required Supplementary Information
For the Year Ended June 30, 2022
2022 2021 2020 2019
Measurement date 6/30/2021 6/30/2020 6/30/2019 6/30/2018 Proportionate share of the net pension liability $ 8,665,009 $ 13,864,877 $ 13,028,541 $ 12,272,694 Proportion of the net pension liability 0.16022% 0.12743% 0.12714% 0.12736% Covered payroll $ 4,679,847 $ 4,407,536 $ 4,277,495 $ 4,075,272 Proportionate share of the net pension liability as
percentage of covered payroll 185.16% 314.57% 304.58% 301.15% Plan fiduciary net position as a percentage of the total pension liability 88.29% 75.10% 75.26% 75.26%
Notes to Schedule
*Fiscal year 2015 was the 1st year of implementation, therefore only seven years are shown.

The CalPERS discount rate was increased from 7.5% to 7.65% in fiscal year 2016, and then decreased from 7.65% to 7.15% in fiscal year 2018.

The CalPERS mortality assumptions were adjusted in fiscal year 2019.

A. Schedule of the City's Proportionate Share of the Net Pension Liability - Last 10 Years*

2. DEFINED BENEFIT PENSION PLAN
88 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

2018 2017 2016 2015
6/30/2017 6/30/2016 6/30/2015 6/30/2014
$ 12,460,116 $ 11,055,177 $ 8,978,404 $ 8,365,442

0.12564% 0.12776% 0.13081% 0.13444%
$ 3,959,602 $ 3,816,628 $ 3,636,221 $ 3,289,261
314.68% 289.66% 246.92% 254.33%

73.31% 74.06% 78.40% 79.82%
89 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Required Supplementary Information
For the Year Ended June 30, 2022
2022 2021 2020 2019
Contractually required contribution
(actuarially determined) $ 1,827,570 $1,686,413 $1,530,553 $1,343,860 Contribution in relation to the actuarially
determined contributions (1,827,570) (1,686,413) (1,530,553) (1,343,860) Contribution deficiency (excess) $ - $ - $ - $ -
Covered payroll $ 4,820,242 $ 4,679,847 $ 4,407,536 $ 4,277,495 Contributions as a percentage of covered payroll 37.91% 36.04% 34.73% 31.42% Notes to Schedule
*Fiscal year 2015 was the 1st year of implementation, therefore only seven years are shown.

Methods and assumptions used to determine contribution rates:

Valuation date : 6/30/2019 6/30/2018 6/30/2017 6/30/2016 Actuarial cost method: Entry Age Entry Age Entry Age Entry Age Amortization method: (1) (1) (1) (1)
Assets valuation method: Market Value Market Value Market Value Market Value Inflation: 2.50% 2.50% 2.63% 2.75%
Salary increases: (2) (2) (2) (2)
Investment rate of return: 7.00% 7.00% 7.25% 7.375%
Retirement age: (3) (3) (3) (3)
Mortality: (4) (4) (4) (4)
(1) Level percentage of payroll, closed
(2) Depending on age, service, and type of employment
(3) 50 for all plans, with the exception of 52 for Miscellaneous PEPRA 2%@62
(4)
B. Schedule of Contributions - Last 10 Years*
Mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study adopted by the CalPERS Board.

2. DEFINED BENEFIT PENSION PLAN, Continued
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City Council Meeting Packet of January 17, 2023

2018 2017 2016 2015
$1,187,535 $1,099,458 $920,324 $796,771
(1,187,535) (1,099,458) (920,324) (796,771)
$ - $ - $ - $ -
$ 4,075,272 $ 3,959,602 $ 3,816,628 $ 3,636,221

29.14% 27.77% 24.11% 21.91%
6/30/2015 6/30/2014 6/30/2013 6/30/2012
Entry Age Entry Age Entry Age Entry Age
(1) (1) (1) (1)
Market Value Market Value Market Value 15 Year
Smoothed
Market
Method

2.75% 2.75% 2.75% 2.75%
(2) (2) (2) (2)

7.50% 7.50% 7.50% 7.50%
(3) (3) (3) (3)
(4) (4) (4) (4)
91 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Required Supplementary Information
For the Year Ended June 30, 2022
2022 2021 2020
Measurement Date 6/30/2021 6/30/2020 6/30/2019
Total OPEB Liability
Service Cost $ 27,917 $ 27,295 $ 56,412
Interest on the total OPEB liability 72,014 73,479 89,484 Differences between expected and actual experience (551,283) - (492,345) Changes of assumptions 10,152 44,769 75,694
Benefit payments, including refunds of employee contributions (102,849) (97,430) (99,403) Net change in total OPEB liability (544,049) 48,113 (370,158) Total OPEB Liability - beginning 2,730,476 2,682,363 3,052,521 Total OPEB Liability - ending (a) $ 2,186,427 $ 2,730,476 $ 2,682,363 Covered-employee payroll** 4,348,774 $ $ 4,272,937 $ 4,137,211 Total OPEB liability as a percentage of covered-employee payroll 50.28% 63.90% 64.84% Notes to Schedule
* Historical information is required only for measurement periods for which GASB 75 is applicable.

Changes of assumptions:
2021 - Discount rate was changed to 2.19%.
2020 - Discount rate was changed to 2.66%.
2018 - Discount rate was changed to 2.98%.

A. Schedule of Changes in the City's Total OPEB Liability and Related Ratios - Last 10 Years*
Fiduciary Net Position - There are currently no assets accumulated in a trust that meets the criteria of GASB codification P22.101 or P52.101 to pay related benefits for the OPEB plan. 2019 - Discount rate was changed to 2.79%. Mortality rates were updated based on CalPERS 2015 Experience Study.

3. OTHER POSTEMPLOYMENT HEALTHCARE BENEFITS
92 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

2019 2018
6/30/2018 6/30/2017
$ 54,769 $ 58,870
90,545 81,308
- -
57,987 (168,395)
(87,182) (71,368)
116,119 (99,585)
2,936,402 3,035,987
$ 3,052,521 $ 2,936,402
$ 3,956,662 $ 3,982,276

77.15% 73.74%
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SUPPLEMENTARY INFORMATION
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Police Grant Fund accounts for accounts for the revenues and expenditures of State and Federal grants such as State SLESF (Supplemental Law Enforcement Services Fund).

Gas Tax Fund accounts for funds from the State of California under the Street and Highway Code Sections 2103, 2105, 2106, 2107 and 2107.5. The use of funds is restricted to street related projects, which can include related public facilities for non-motorized traffic, e.g. bike and pedestrian paths.

Park in Lieu receives revenue from new residential and hotel development,to mitigate the impact of such new development on City park and recreation facilities. The use of revenues from the Fund is restricted to park and recreation capital improvements.

Traffic Impact was established to reduce the traffic impacts caused by new development within the City limits and certain public improvements (transportation system infrastructure) and revenue collected from these fees shall be used solely to pay for the City’s future construction of facilities or services or reimburse the City for facilities constructed by the City with funds advanced by the City from other sources.

Street Lighting Assessment is established to receive special assessment district monies used for maintenance and or servicing of existing and future public lighting facilities, and the installation or construction of public lighting for the maintenance of servicing thereof, including grading, clearing, removal of debris, the installation of curbs and gutters, walls, sidewalks or paving or water, irrigation, drainage or electrical facilities.

Asset Forfeiture is used for specified police activities (excluding regular salary) from confiscated assets of convicted drug felons.

Downtown Association is used to account for revenues and expenditures for the Downtown Association District.

Art in Lieu accounts for developer contributions in lieu of installation of public art on project sites and income received from art programs and events to fund public artwork, cultural programs, maintenance/conservation, and administrative costs relating to the Art in Public Places Program.

Measure M receives funding from the County for construction of eligible transportation projects that improve the quality of roads, sidewalks and bike lanes.

Housing General Plan identifies the City’s housing conditions and needs, establishes the goals, objectives, and policies that are the foundation of the City’s housing and growth strategy.

Street Reserve accounts for the tax reserved for local streets and roads.

Vehicle Abatement accounts for monies for inspection, mark, or tow the vehicles that appear to be abandoned, non-operable, or not registered.

NON-MAJOR GOVERNMENTAL FUNDS

SPECIAL REVENUE FUNDS
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City Council Meeting Packet of January 17, 2023

Inclusionary and Linkage Housing accounts for revenue receives from fee payment to be used for the exclusive purpose of providing housing affordable to low and moderate income households in the City for construction of three or more new dwelling units, or for the division or subdivision of land into three or more lots for residential use.

Building Permit Incremental Fund accounts for revenue receives from construction inspection and plan checks to fund training, certification exams and courses.

Community Development Block Grant accounts for revenue and expenditures of CDBG funds awarded by the Department of Housing and Urban Development.

SB1 Road and Maintenance Fund accounts for revenue and expenditures of SB1 monies.

General Government Facilities Fee Fund accounts for general government facilities fees and related expenses.

Fire Facilities Fee Fund accounts for fire facilities fees and related expenses.

Stormwater Facilities Fee Fund accounts for stormwater facilities fees and related expenses.

Supplemental Planning Grant (SB2 and LEAP) Fund accounts for revenue and expenditures of SB2 and LEAP supplemental planning grant monies.

Undergrounding is an in-lieu fee paid by development projects, where the City Engineer has determined physical undergrounding of overhead utilities is not practical. The Fund is used for general City utility undergrounding projects.

General Capital Projects Fund accounts for financial resources to be used for the acquisition or construction of major capital facilities.

Woodstone Assessment District is the bonds which were issued to finance construction including street improvements, drainage, streets lights and signalization to the Fairfield Inn (formerly Holiday Inn), and acquisition of certain public improvements specically benefitting properties located within the boundaries of City Assessement District 1992-1 (Woodstone Center).

Clean Renewable Energy Bonds is used for projects include solar panels to generate electricity at the City Hall/Library complex, the Police station and at the sewer lift station, and funds to implement projects for pedestrian safety contained in the Street Smart Study.

CAPITAL PROJECTS FUNDS

DEBT SERVICE FUNDS

NON-MAJOR GOVERNMENTAL FUNDS

SPECIAL REVENUE FUNDS, CONTINUED
97 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Combining Balance Sheet
Non-Major Governmental Funds
June 30, 2022
Police Park in Traffic
Grants Gas Tax Lieu Impact
ASSETS
Cash and investments $ 9,122 $ 3,200 $ 3,551 $ 211,633
Restricted cash and investments - - - -
Accounts receivable 24,463 14,477 - -
Taxes receivable - - - -
Accrued interest receivable 58 7 19 313
Assessment receivable - - - -
Notes receivable - - - -
Prepaid items - - - -
Total assets $ 33,643 $ 17,684 $ 3,570 $ 211,946

LIABILITIES, DEFERRED INFLOWS OF

RESOURCE AND FUND BALANCES
Liabilities:

Accounts payable - - - -
Due to other funds - - - -
Unearned revenues - - - -
Total liabilities - - - -
Deferred inflows of resources:

Unavailable revenue - - - -
Fund Balances:

Nonspendable for prepaid items - - - -
Restricted for :

Highways and streets - - 211,946 -
Public safety 33,643 17,684 - -
Debt service - - - -
Affordable housing - - - -
Parks and recreation - - 3,570 -
Other - - - -
Committed for street projects - - - -
Unassigned - - - -
Total fund balances 33,643 17,684 3,570 211,946
Total liabilities, deferred inflows
of resources, and fund balances $ 33,643 $ 17,684 $ 3,570 $ 211,946 Special Revenue
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City Council Meeting Packet of January 17, 2023

Street Lighting Asset Downtown Art in Housing
Assessment Forfeiture Association Lieu Measure M General Plan Street Reserve $ 22,844 $ 9,879 $ 1,736 $ 106,989 $ 342,536 $ 48,531 $ 431,951 - - - - - - -
- - - - - - -
606 - - - 47,168 - -
30 14 2 164 473 112 615
- - - - - - -
- - - - - - -
- - - - - - -
$ 23,480 $ 9,893 $ 1,738 $ 107,153 $ 390,177 $ 48,643 $ 432,566 - - - - - 27,133 -
- - - - - - -
- 7,893 - - - - -
- 7,893 - - - 27,133 -
- - - - - - -
- - - - - - -
23,480 - - 390,177 - - -
- 2,000 - - - - -
- - - - - - -
- - - - - 21,510 -
- - 107,153 - - - -
- - 1,738 - - - -
- - - - - 432,566 -
- - - - - - -
23,480 2,000 1,738 107,153 390,177 21,510 432,566
$ 23,480 $ 9,893 $ 1,738 $ 107,153 $ 390,177 $ 48,643 $ 432,566 Special Revenue
99 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Combining Balance Sheet
Non-Major Governmental Funds
June 30, 2022
Inclusionary Building Permit Community
Vehicle and Linkage Incremental Development
Abatement Housing Fund Block Grant
ASSETS
Cash and investments 4,977 $ 123,702 $ 59,570 $ 101,668 $ Restricted cash and investments - - - -
Accounts receivable - - - -
Taxes receivable - - - -
Accrued interest receivable 10 177 81 -
Assessment receivable - - - -
Notes receivable - - - -
Prepaid items - - - -
Total assets $ 123,879 4,987 $ 59,651 $ 101,668 $

LIABILITIES, DEFERRED INFLOWS OF

RESOURCE AND FUND BALANCES
Liabilities:

Accounts payable - - - -
Due to other funds - - - -
Unearned revenues - - - -
Total liabilities - - - -
Deferred inflows of resources:

Unavailable revenue - - - -
Fund Balances:

Nonspendable for prepaid items - - - -
Restricted for :

Highways and streets - - - -
Public safety 4,987 - - -
Debt service - - - -
Affordable housing 123,879 - - -
Parks and recreation - - - -
Other - - 101,668 -
Committed for street projects - - 59,651 -
Unassigned - - - -
Total fund balances 4,987 123,879 59,651 101,668
Total liabilities, deferred inflows
of resources, and fund balances $ 4,987 $ 123,879 $ 59,651 $ 101,668 Special Revenue
100 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

General Supplemental
SB1 Road and Government Fire Stormwater Planning Grant General Capital Maintenance Facilities Fee Facilities Fee Facilities Fee (SB2 & LEAP) Undergrounding Project $ 254,555 $ 2,986 $ 990 $ 5,486 $ 239,301 - $ $ 107,107 - - - - - - -
- 2 1 - - - -
13,602 - - - - - -
383 - - - - 340 -
- - - - - - -
- - - - - - -
- - - - - - -
$ 268,540 $ 2,988 $ 991 $ 5,486 $ 239,641 - $ $ 107,107 - - - - - 114,883 -
- - - - - - -
- - - - - - -
- - - - - 114,883 -
- - - - - - -
- - - - - - -
268,540 - - - 239,641 - -
- - - - - - -
- - - - - - -
- - - - - - -
- - - - - - -
- 2,988 991 5,486 - - -
- - - - - - -
- - - - - - (7,776)
268,540 2,988 991 5,486 239,641 - (7,776)
$ 268,540 $ 2,988 $ 991 $ 5,486 $ 239,641 - $ $ 107,107 Special Revenue Capital Project
101 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Combining Balance Sheet
Non-Major Governmental Funds
June 30, 2022
Total
Woodstone Clean Non-Major
Assessment Renewable Governmental
District Energy Bonds Funds
ASSETS
Cash and investments - $ 6,471 $ 2,098,785 $
Restricted cash and investments 37,352 - 37,352
Accounts receivable - - 38,943
Taxes receivable - - 61,376
Accrued interest receivable - - 2,798
Assessment receivable 35,000 - 35,000
Notes receivable - 196,408 196,408
Prepaid items 555 - 555
Total assets $ 202,879 72,907 $ 2,471,217 $

LIABILITIES, DEFERRED INFLOWS OF

RESOURCE AND FUND BALANCES
Liabilities:

Accounts payable - - 142,016 $
Due to other funds 18,865 - 18,865
Unearned revenues - - 7,893
Total liabilities - 18,865 168,774
Deferred inflows of resources:

Unavailable revenue 35,000 196,486 231,486
Fund Balances:

Nonspendable for prepaid items 555 - 555
Restricted for :

Highways and streets - - 1,133,784
Public safety - - 58,314
Debt service 18,487 6,393 24,880
Affordable housing - - 145,389
Parks and recreation - - 110,723
Other - - 112,871
Committed for street projects - - 492,217
Unassigned - - (7,776)
Total fund balances 19,042 6,393 2,070,957
Total liabilities, deferred inflows
of resources, and fund balances $ 72,907 $ 202,879 $ 2,471,217 Debt Service
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City of Sebastopol
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non-Major Governmental Funds
For the year ended June 30, 2022
Police Park in Traffic
Grants Gas Tax Lieu Impact
REVENUES:

Property taxes $ - $ - $ - $ -
Sales and use taxes - - - -
Licenses and permits - - - -
Intergovernmental 121,347 187,366 - -
Interest and rents (750) (77) (328) (4,846)
Charges for services - - 11,393 14,737
Miscellaneous 780 - - -
Total revenues 121,377 187,289 11,065 9,891
EXPENDITURES:

Current:

General Government - - 45 -
Public works 169,657 - - -
Capital outlay - - - -
Debt service:

Principal - - 27,923 -
Interest - - 1,508 -
Total expenditures 169,657 - 29,476 -

REVENUES OVER
(UNDER) EXPENDITURES 121,377 17,632 (18,411) 9,891
OTHER FINANCING SOURCES (USES):

Transfers in - - - -
Transfers out (112,000) - (7,142) (177,428)
Total other financing sources (uses) (112,000) - (7,142) (177,428) Net change in fund balances 9,377 17,632 (25,553) (167,537) FUND BALANCES:

Beginning of the year, as restated 24,266 52 29,123 379,483 End of year $ 33,643 $ 17,684 $ 3,570 $ 211,946
Special Revenue
104 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

Street Lighting Asset Downtown Art in Housing
Assessment Forfeiture Association Lieu Measure M General Plan Street Reserve $ - 98,266 $ - $ - $ - $ - $ - $
- - - - 194,060 - -
- - 8,724 - - - -
- - - - - - -
(199) (480) (30) (2,326) (6,771) (1,596) (8,704)
- - - - - 5,753 -
- - - - - - -
(199) 97,786 8,694 (2,326) 187,289 4,157 (8,704)
- 13,284 7,300 16,680 - 33,385 -
- 104,419 - - - - -
- - - - - - -
- - - - - - -
- - - - - - -
117,703 - 7,300 16,680 - 33,385 -
(19,917) (199) 1,394 (19,006) 187,289 (29,228) (8,704)
- - - - - - -
- - - (184,758) - (56,786) (1,661)
- - - (184,758) - (56,786) (1,661)
(19,917) (199) 1,394 (19,006) 2,531 (86,014) (10,365)
43,397 2,199 344 126,159 387,646 107,524 442,931
$ 23,480 $ 2,000 $ 1,738 $ 107,153 $ 390,177 $ 21,510 $ 432,566 Special Revenue
105 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non-Major Governmental Funds
For the year ended June 30, 2022
Inclusionary Building Permit Community
Vehicle and Linkage Incremental Development
Abatement Housing Fund Block Grant
REVENUES:

Property taxes - $ - $ - $ - $
Sales and use taxes - - - -
Licenses and permits - - - -
Intergovernmental - - 192,635 -
Interest and rents (137) (2,512) (1,129) (1,593)
Charges for services 1,112 - 12,394 -
Miscellaneous - - 201,690 -
Total revenues 975 (2,512) 11,265 392,732
EXPENDITURES:

Current:

General Government - - - -
Public works - - - -
Capital outlay - - - -
Debt service:

Principal - - - -
Interest - - - -
Total expenditures - - - -

REVENUES OVER
(UNDER) EXPENDITURES 975 (2,512) 11,265 392,732
OTHER FINANCING SOURCES (USES):

Transfers in - - - -
Transfers out (4,000) (6,527) (216,323) -
Total other financing sources (uses) (4,000) (6,527) (216,323) - Net change in fund balances (3,025) (9,039) 11,265 176,409 FUND BALANCES:

Beginning of the year, as restated 8,012 132,918 48,386 (74,741) End of year $ 123,879 4,987 $ 59,651 $ 101,668 $
Special Revenue
106 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

General Supplemental
SB1 Road and Government Fire Stormwater Planning Grant General Capital Maintenance Facilities Fee Facilities Fee Facilities Fee (SB2 & LEAP) Undergrounding Project $ - - $ - $ - $ - $ - $ - $
- - - - - - -
- - - - - - -
- 140,950 - - - - -
(29) (5,802) (9) (80) - (4,812) -
3,017 - 1,000 5,566 - - -
- - - - - - -
2,988 135,148 991 5,486 - (4,812) -
- - - - 56,786 - -
- 3,000 - - - - -
- - - - - - 1,280,515
- - - - - - -
- - - - - - -
3,000 - - - 56,786 1,280,515 -
132,148 2,988 991 5,486 (56,786) (4,812) (1,280,515)
- - - - 56,786 1,279,665 -
(317,886) - - - - - -
(317,886) - - - 56,786 1,279,665 -
(185,738) 2,988 991 5,486 - (4,812) (850)
454,278 - - - 244,453 - (6,926)
$ 268,540 $ 2,988 $ 991 $ 5,486 $ 239,641 - $ $ (7,776) Special Revenue Capital Project
107 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non-Major Governmental Funds
For the year ended June 30, 2022
Total
Woodstone Clean Non-Major
Assessment Renewable Governmental
District Energy Bonds Funds
REVENUES:

Property taxes 33,131 $ - $ 131,397 $
Sales and use taxes - - 194,060
Licenses and permits - - 8,724
Intergovernmental - 642,298 -
Interest and rents 7 - (42,203)
Charges for services - 8,520 63,492
Miscellaneous - 202,470 -
Total revenues 33,138 8,520 1,200,238
EXPENDITURES:

Current:

General Government - 127,480 -
Public works - 277,076 -
Capital outlay - 1,280,515 -
Debt service:

Principal 30,000 51,322 109,245
Interest 6,596 - 8,104
Total expenditures 36,596 51,322 1,802,420

REVENUES OVER
(UNDER) EXPENDITURES (3,458) (42,802) (602,182)
OTHER FINANCING SOURCES (USES):

Transfers in - 31,024 1,367,475
Transfers out - (1,084,511) -
Total other financing sources (uses) - 31,024 282,964
Net change in fund balances (3,458) (11,778) (319,218)
FUND BALANCES:

Beginning of the year, as restated 22,500 18,171 2,390,175 End of year $ 19,042 $ 6,393 $ 2,070,957
Debt Service
108 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Police Grants
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Intergovernmental $ 110,000 $ 110,000 $ 121,347 $ 11,347 Interest and rents 160 160 (750) (910)
Miscellaneous - - 780 780
Total revenues 110,160 110,160 121,377 11,217
EXPENDITURES:

Current:

Public safety - - - -
Total expenditures - - - -

REVENUES OVER
(UNDER) EXPENDITURES 110,160 110,160 121,377 11,217
OTHER FINANCING SOURCES (USES):

Transfers out (127,000) (127,000) (112,000) 15,000
Total other financing sources (uses) (127,000) (127,000) (112,000) 15,000 Net change in fund balances $ (16,840) $ (16,840) 9,377 $ 26,217 FUND BALANCES:

Beginning of the year 24,266
End of year $ 33,643
Budget Amounts
109 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Gas Tax
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Intergovernmental $ 203,100 $ 203,100 $ 187,366 $ (15,734) Interest and rents - - (77) (77)
Total revenues 203,100 203,100 187,289 (15,811)
EXPENDITURES:

Current:

Public works 189,325 189,325 169,657 19,668
Total expenditures 189,325 189,325 169,657 19,668

REVENUES OVER
(UNDER) EXPENDITURES 13,775 13,775 17,632 3,857
OTHER FINANCING SOURCES (USES):

Transfers in - - - -
Total other financing sources (uses) - - - -
Net change in fund balances $ 13,775 13,775 $ 17,632 3,857 $ FUND BALANCES:

Beginning of the year 52
End of year $ 17,684
Budget Amounts
110 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Park in Lieu
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Interest and rents $ 300 $ 300 $ (328) $ (628)
Charges for services 30,000 30,000 11,393 (18,607)
Miscellaneous 28,000 28,000 - (28,000)
Total revenues 58,300 58,300 11,065 (47,235)
EXPENDITURES:

Current:

General Government - - 45 45
Debt service:

Principal 22,944 22,944 27,923 (4,979)
Interest 6,405 6,405 1,508 4,897
Total expenditures 29,349 29,349 29,476 (37)

REVENUES OVER
(UNDER) EXPENDITURES 28,951 28,951 (18,411) (47,362)
OTHER FINANCING SOURCES (USES):

Transfers out (346,850) (346,850) (7,142) 339,708
Total other financing sources (uses) (346,850) (346,850) (7,142) 339,708 Net change in fund balances $ (317,899) $ (317,899) (25,553) $ 292,346 FUND BALANCES:

Beginning of the year 29,123
End of year $ 3,570
Budget Amounts
111 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Traffic Impact
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Interest and rents $ 3,000 $ 3,000 $ (4,846) $ (7,846)
Charges for services 20,000 20,000 14,737 (5,263)
Total revenues 23,000 23,000 9,891 (13,109)
EXPENDITURES:

Current:

Public safety - - - -
Total expenditures - - - -

REVENUES OVER
(UNDER) EXPENDITURES 23,000 23,000 9,891 (13,109)
OTHER FINANCING SOURCES (USES):

Transfers out (35,000) (35,000) (177,428) (142,428)
Total other financing sources (uses) (35,000) (35,000) (177,428) (142,428) Net change in fund balances $ (12,000) $ (12,000) (167,537) $ (155,537) FUND BALANCES:

Beginning of the year 379,483
End of year $ 211,946
Budget Amounts
112 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Street Lighting Assessment
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Property taxes $ 99,138 $ 99,138 $ 98,266 $ (872)
Interest and rents 100 100 (480) (580)
Total revenues 99,238 99,238 97,786 (1,452)
EXPENDITURES:

Current:

General government 13,200 13,200 13,284 (84)
Public works 109,400 109,400 104,419 4,981
Total expenditures 122,600 122,600 117,703 4,897
Net change in fund balances $ (23,362) $ (23,362) (19,917) $ 3,445 FUND BALANCES:

Beginning of the year 43,397
End of year $ 23,480
Budget Amounts
113 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Asset Forfeiture
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Interest and rents $ - $ - $ (199) $ (199)
Total revenues - - (199) (199)
EXPENDITURES:

Current:

Public safety - - - -
Total expenditures - - - -
Net change in fund balances $ - - $ (199) $ (199)
FUND BALANCES:

Beginning of the year 2,199
End of year $ 2,000
Budget Amounts
114 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Downtown Association
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Licenses and permits $ 8,700 $ 8,700 $ 8,720 $ 20
Interest and rents - - (26) (26)
Total revenues 8,700 8,700 8,694 (6)
EXPENDITURES:

Current:

General government 8,700 8,700 7,300 1,400
Total expenditures 8,700 8,700 7,300 1,400
Net change in fund balances $ - - $ 1,394 1,394 $
FUND BALANCES:

Beginning of the year 344
End of year $ 1,738
Budget Amounts
115 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Art in Lieu
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Interest and rents $ - $ - $ (2,326) $ (2,326)
Charges for services 1,000 1,000 - (1,000)
Total revenues 1,000 1,000 (2,326) (3,326)
EXPENDITURES:

Current:

General government 5,500 5,500 16,680 (11,180)
Total expenditures 5,500 5,500 16,680 (11,180)

REVENUES OVER
(UNDER) EXPENDITURES (4,500) (4,500) (19,006) (14,506)
OTHER FINANCING SOURCES (USES):

Transfers out (55,000) (55,000) 55,000 -
Total other financing sources (uses) (55,000) (55,000) 55,000 - Net change in fund balances $ (59,500) $ (59,500) (19,006) $ 40,494 FUND BALANCES:

Beginning of the year 126,159
End of year $ 107,153
Budget Amounts
116 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Measure M
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Sales and use taxes $ 153,300 $ 153,300 $ 194,060 $ 40,760 Interest and rents 500 500 (6,771) (7,271)
Total revenues 153,800 153,800 187,289 33,489
EXPENDITURES:

Capital outlay - - - -
Total expenditures - - - -

REVENUES OVER
(UNDER) EXPENDITURES 153,800 153,800 187,289 33,489
OTHER FINANCING SOURCES (USES):

Transfers out (224,048) (224,048) (184,758) 39,290
Total other financing sources (uses) (224,048) (224,048) (184,758) 39,290 Net change in fund balances $ (70,248) $ (70,248) 2,531 $ 72,779 FUND BALANCES:

Beginning of the year, as restated 387,646
End of year $ 390,177
Budget Amounts
117 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Housing General Plan
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Interest and rents 1,500 $ 1,500 $ (1,596) $ (3,096) $
Charges for services 12,000 12,000 5,753 (6,247)
Total revenues 13,500 13,500 4,157 (9,343)
EXPENDITURES:

Current:

General government - 33,385 - 33,385
Total expenditures - - 33,385 33,385
Net change in fund balances $ 13,500 13,500 $ (86,014) $ (99,514) FUND BALANCES:

Beginning of the year 107,524
End of year $ 21,510
Budget Amounts
118 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Street Reserve
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Interest and rents $ 500 $ 500 $ (8,704) $ (9,204)
Total revenues 500 500 (8,704) (9,204)
EXPENDITURES:

Capital outlay - - - -
Total expenditures - - - -

REVENUES OVER
(UNDER) EXPENDITURES 500 500 (8,704) (9,204)
OTHER FINANCING SOURCES (USES):

Transfers out (78,000) (78,000) (1,661) 76,339
Total other financing sources (uses) (78,000) (78,000) (1,661) 76,339 Net change in fund balances $ (77,500) $ (77,500) (10,365) $ 67,135 FUND BALANCES:

Beginning of the year 442,931
End of year $ 432,566
Budget Amounts
119 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Vehicle Abatement
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Interest and rents $ 50 $ 50 $ (137) $ (187)
Charges for services - - 1,112 1,112
Total revenues 50 50 975 925
EXPENDITURES:

Current:

General government - - - -
Total expenditures - - - -
Net change in fund balances $ (3,950) $ (3,950) (3,025) $ 925 FUND BALANCES:

Beginning of the year 8,012
End of year $ 4,987
Budget Amounts
120 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Inclusionary and Linkage Housing
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Interest and rents $ 200 $ 200 $ (2,512) $ (2,712)
Charges for services 8,000 8,000 - (8,000)
Total revenues 8,200 8,200 (2,512) (10,712)
EXPENDITURES:

Current:

General government - - - -
Total expenditures - - - -

REVENUES OVER
(UNDER) EXPENDITURES 8,200 8,200 (2,512) (10,712)
OTHER FINANCING SOURCES (USES):

Transfers out - - (6,527) (6,527)
Total other financing sources (uses) - - (6,527) (6,527) Net change in fund balances $ 8,200 8,200 $ (9,039) $ (17,239) FUND BALANCES:

Beginning of the year 132,918
End of year $ 123,879
Budget Amounts
121 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Building Permit Incremental Fund
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Interest and rents $ - $ - $ (1,129) $ (1,129)
Charges for services 6,000 12,000 12,394 394
Total revenues 6,000 12,000 11,265 (735)
EXPENDITURES:

Current:

General government - - - -
Total expenditures - - - -
Net change in fund balances $ 12,000 6,000 $ 11,265 $ (735) FUND BALANCES:

Beginning of the year 48,386
End of year $ 59,651
Budget Amounts
122 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Community Development Block Grant
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Intergovernmental $ 180,000 $ 180,000 $ 192,635 $ 12,635 Interest and rents - - (1,593) (1,593)
Miscellaneous - - 201,690 201,690
Total revenues 180,000 180,000 392,732 212,732
EXPENDITURES:

Current:

General government - - - -
Total expenditures - - - -

REVENUES OVER
(UNDER) EXPENDITURES 180,000 180,000 392,732 212,732
OTHER FINANCING SOURCES (USES):

Transfers out (180,000) (180,000) (216,323) (36,323)
Total other financing sources (uses) (180,000) (180,000) (216,323) (36,323) Net change in fund balances $ - - $ 176,409 176,409 $
FUND BALANCES:

Beginning of the year, as restated (74,741)
End of year $ 101,668
Budget Amounts
123 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual SB1 Road and Maintenance
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Intergovernmental $ 154,100 $ 154,100 $ 140,950 $ (13,150) Interest and rents - - (5,802) (5,802)
Total revenues 154,100 154,100 135,148 (18,952)
EXPENDITURES:

Current:

General government - - - -
Total expenditures - - 3,000 3,000

REVENUES OVER
(UNDER) EXPENDITURES 154,100 154,100 132,148 (21,952)
OTHER FINANCING SOURCES (USES):

Transfers out (9,200) (9,200) (317,886) (308,686)
Total other financing sources (uses) (9,200) (9,200) (317,886) (308,686) Net change in fund balances $ 144,900 144,900 $ (185,738) $ (330,638) FUND BALANCES:

Beginning of the year, as restated 454,278
End of year $ 268,540
Budget Amounts
124 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual General Government Facilities Fee
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Interest and rents $ - $ - $ (29) $ (29)
Charges for services - - 3,017 3,017
Total revenues - - 2,988 2,988
EXPENDITURES:

Current:

General government - - - -
Total expenditures - - - -
Net change in fund balances $ - - $ 2,988 2,988 $
FUND BALANCES:

Beginning of the year -
End of year $ 2,988
Budget Amounts
125 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Fire Facilities Fee
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Interest and rents - - (9) (9)
Charges for services - - 1,000 1,000
Total revenues - - 991 991
EXPENDITURES:

Current:

Public safety - - - -
Total expenditures - - - -
Net change in fund balances $ - - $ 991 991 $
FUND BALANCES:

Beginning of the year -
End of year $ 991
Budget Amounts
126 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Stormwater Facilities Fee
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Interest and rents $ - $ - $ (80) $ (80)
Charges for services - - 5,566 5,566
Total revenues - - 5,486 5,486
EXPENDITURES:

Current:

Public works - - - -
Total expenditures - - - -
Net change in fund balances $ - - $ 5,486 5,486 $
FUND BALANCES:

Beginning of the year -
End of year $ 5,486
Budget Amounts
127 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Supplemental Planning Grant (SB2 and LEAP)
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Intergovernmental $ - $ - $ - $ -
Total revenues - - - -
EXPENDITURES:

Current:

General government - 56,786 - (56,786)
Total expenditures - - 56,786 (56,786)

REVENUES OVER
(UNDER) EXPENDITURES - - (56,786) (56,786)
OTHER FINANCING SOURCES (USES):

Transfers in - - 56,786 56,786
Total other financing sources (uses) - - 56,786 56,786
Net change in fund balances $ - - $ - - $
FUND BALANCES:

Beginning of the year -
End of year $ -
Budget Amounts
128 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Undergrounding
For the year ended June 30, 2021
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Interest and rents $ - $ - $ (4,812) $ (4,812)
Total revenues - - (4,812) (4,812)
EXPENDITURES:

Capital outlay - - - -
Total expenditures - - - -
Net change in fund balances $ - - $ (4,812) $ (4,812)
FUND BALANCES:

Beginning of the year 244,453
End of year $ 239,641
Budget Amounts
129 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual General Capital Projects
For the year ended June 30, 2021
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Miscellaneous $ - $ - $ - $ -
Total revenues - - - -
EXPENDITURES:

Capital outlay - - 1,280,515 (1,280,515)
Total expenditures - - 1,280,515 (1,280,515)

REVENUES OVER
(UNDER) EXPENDITURES - - (1,280,515) (1,280,515)
OTHER FINANCING SOURCES (USES):

Transfers in 1,021,098 1,021,098 1,279,665 258,567
Total other financing sources (uses) 1,021,098 1,021,098 1,279,665 258,567 Net change in fund balances $ 1,021,098 1,021,098 $ (850) $ (1,021,948) FUND BALANCES:

Beginning of the year (6,926)
End of year $ (7,776)
Budget Amounts
130 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Woodstone Assessment District
For the year ended June 30, 2021
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Property taxes $ 34,000 $ 34,000 $ 33,131 $ (869)
Total revenues 34,000 34,000 33,138 (862)
EXPENDITURES:

Debt service:

Principal 30,000 30,000 30,000 -
Interest 6,550 6,550 6,596 (46)
Total expenditures 36,550 36,550 36,596 (46)
Net change in fund balances $ (2,550) $ (2,550) (3,458) $ (908) FUND BALANCES:

Beginning of the year 22,500
End of year $ 19,042
Budget Amounts
131 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Clean Renewable Energy Bonds
For the year ended June 30, 2021
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Charges for services $ - $ - $ 8,521 $ 8,521
Total revenues - - 8,521 8,521
EXPENDITURES:

Principal $ 20,299 20,299 51,323 (31,024)
Total expenditures 20,299 20,299 51,323 (31,024)

REVENUES OVER
(UNDER) EXPENDITURES (20,299) (20,299) (42,802) (22,503) OTHER FINANCING SOURCES (USES):

Transfers in - - 31,024 31,024
Total other financing sources (uses) - - 31,024 31,024
Net change in fund balances $ (20,299) $ (20,299) (11,778) $ 8,521 FUND BALANCES:

Beginning of the year 18,171
End of year $ 6,393
Budget Amounts
132 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

Index
Financial Trends
Revenue Capacity
Debt Capacity
Demographic and Economic Information
Operating Information
These schedules contain service and infrastructure data to help the reader understand how the information in the City’s financial report relates to the services the City provides and the activities it performs.

STATISTICAL SECTION
This part of the City of Sebastopol’s annual comprehensive financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City.

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

These schedules contain information to help the reader assess the City’s most significant local revenue source, the property tax.

These schedules present information to help the reader assess the affordability of the City’s current levels of outstanding debt and the City’s ability issues additional debt in the future.

These schedules offer demographic and economic indicators to help the reader understand the environment within which the City’s financial activities take place. 133 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

2013 2014 2015 2016
Governmental Activities
Net Investment In Capital Assets $ 7,351,269 $ 7,657,875 $ 8,085,194 $ 8,017,313 Restricted 7,314,525 7,398,898 4,128,962 4,314,008
Unrestricted 1,512,494 1,926,598 (4,937,921) (3,524,869) Total Governmental Activities Net Position $ 16,178,288 $ 16,983,371 $ 7,276,235 $ 8,806,452 Business-Type Activities
Net Investment In Capital Assets $ 5,237,342 5,232,877 $ $ 4,566,315 $ 4,799,099 Restricted 576,831 523,783 1,544,038 1,404,798
Unrestricted 1,786,572 2,413,672 1,051,968 1,691,465
Total Business-Type Activities Net Position $ 7,600,745 8,170,332 $ $ 7,162,321 $ 7,895,362 Primary Government
Net Investment In Capital Assets $ 12,588,611 12,890,752 $ $ 12,651,509 $ 12,816,412 Restricted 7,891,356 7,922,681 5,673,000 5,718,806
Unrestricted 3,299,066 4,340,270 (3,885,953) (1,833,404) Total Primary Government Net Position $ 23,779,033 25,153,703 $ $ 14,438,556 $ 16,701,814 Note: The City implemented GASB Statement No. 68 in FY 2015, which required the City to record their net pension liability in the statement of net position.

Source: Basic Financial Statements- City of Sebastopol, California

CITY OF SEBASTOPOL

NET POSITION BY COMPONENT

LAST TEN FISCAL YEARS
(Accrual Basis of Accounting)
Fiscal Year
134 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

2017 2018 2019 2020 2021 2022
$ 8,461,885 $ 9,242,243 $ 9,448,772 $ 9,494,832 $ 9,355,475 $ 9,702,362 2,279,908 1,660,668 1,450,299 2,827,215 3,067,342 3,599,203 (847,289) (3,254,719) (2,485,538) (3,011,697) (4,241,598) (5,490,293) $ 9,894,504 $ 7,648,192 $ 8,413,533 $ 9,310,350 $ 8,181,219 $ 7,811,272 $ 4,705,054 $ 5,956,258 $ 5,966,945 $ 5,594,545 $ 5,199,403 $ 5,259,183 1,468,204 - - - - -
2,900,417 3,430,964 3,563,944 3,204,183 2,840,979 1,782,914 $ 9,073,675 $ 9,387,222 $ 9,530,889 $ 8,798,728 $ 8,040,382 $ 7,042,097 $ 13,166,939 $ 15,198,501 $ 15,415,717 $ 15,089,377 $ 14,554,878 $ 14,961,545 3,748,112 1,660,668 1,450,299 2,827,215 3,067,342 3,599,203 2,053,128 176,245 1,078,406 192,486 (1,400,619) (3,707,379) $ 18,968,179 $ 17,035,414 $ 17,944,422 $ 18,109,078 $ 16,221,601 $ 14,853,369 Fiscal Year
135 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

2013 2014 2015 2016
Expenses
Governmental Activities
General government $ 907,290 $ 1,327,123 $ 1,451,524 $ 1,761,437 Public safety 4,002,741 4,154,787 4,397,921 4,193,457
Community development 89,926 141,771 34,936 9,155
Education SERAF - - - -
Public works 962,578 1,207,688 1,331,944 1,376,165
Parks and recreation 684,115 771,708 644,813 1,066,267
Interest on long-term debt 113,226 103,767 91,304 83,446 Total Governmental Activities Expenses 6,759,876 7,706,844 7,952,442 8,489,927 Business-Type Activities
Water 1,320,990 1,298,601 1,368,427 1,669,223
Wastewater 2,335,916 2,605,752 2,795,925 2,887,638
Total Business-Type Activities Expenses 3,656,906 3,904,353 4,164,352 4,556,861 Total Primary Government Net Expenses $ 10,416,782 $ 11,611,197 $ 12,116,794 $ 13,046,788 Program Revenues
Governmental Activities
Charges for services
General government $ 476,923 $ 435,632 $ 342,911 $ 915,735 Public safety 274,025 248,479 278,638 240,886
Community development 41,325 19,942 14,390 162,652
Public works 107,687 193,334 182,878 305,614
Parks and recreation 114,637 130,691 89,971 100,630
Operating Contributions and Grants 813,943 553,751 579,188 484,480 Capital Contributions and Grants 7,331 288,575 742,670 446,248 Total Governmental Activities Program Revenues 1,835,871 1,870,404 2,230,646 2,656,245 Business-Type Activities
Charges for services
Water 1,427,249 1,709,463 1,933,720 2,061,253
Wastewater 2,374,980 2,688,194 2,959,002 3,116,767
Capital Contributions and Grants 260,514 107,307 30,356 142,905 Total Business-Type Activities Program Revenues 4,062,743 4,504,964 4,923,078 5,320,925 Total Primary Government Program Revenues $ 5,898,614 $ 6,375,368 $ 7,153,724 $ 7,977,170 Source: Basic Financial Statements- City of Sebastopol, California Fiscal Year

CITY OF SEBASTOPOL

CHANGES IN NET POSITION

LAST TEN FISCAL YEARS
(Accrual Basis of Accounting)
136 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

2017 2018 2019 2020 2021 2022
$ 2,278,030 2,055,024 $ 2,000,974 $ 2,609,862 $ 2,657,999 $ 2,966,273 $ 5,260,822 5,397,701 5,813,782 6,263,272 6,760,025 6,741,592 00 - - - -
- - - - - -
938,036 1,301,865 1,220,155 1,448,514 1,633,132 2,102,767 749,005 801,006 976,489 1,159,950 965,252 1,030,936
80,566 72,765 72,530 70,118 37,858 19,063
9,083,453 9,851,367 10,083,930 11,551,716 12,054,266 12,860,631 1,716,237 1,893,951 1,933,059 2,393,602 2,490,214 2,572,104 2,889,787 3,090,686 3,333,798 3,562,838 3,519,884 3,845,631 4,606,024 4,984,637 5,266,857 5,956,440 6,010,098 6,417,735 $ 13,689,477 $ 14,836,004 $ 15,350,787 $ 17,508,156 $ 18,064,364 $ 19,278,366 $ 180,139 $ 208,574 $ 188,613 $ 214,999 $ 205,711 $ 212,591 190,018 171,292 179,531 152,232 134,888 109,257
0- - - - -
539,617 324,193 345,425 421,397 520,283 394,056
66,739 44,247 26,588 50,605 75,314 24,383
209,472 348,082 239,765 1,856,224 799,896 548,966
525,005 473,052 380,700 477,809 741,050 715,013
1,710,990 1,569,440 1,360,622 3,173,266 2,477,142 2,004,266 2,457,698 2,270,224 2,229,367 2,295,614 2,613,289 2,519,592 3,324,934 3,028,330 3,104,920 2,895,155 3,024,497 3,053,622 0- - - - -
5,782,632 5,298,554 5,334,287 5,190,769 5,637,786 5,573,214 $ 7,493,622 $ 6,867,994 $ 6,694,909 $ 8,364,035 $ 8,114,928 $ 7,577,480 Fiscal Year
137 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

2013 2014 2015
Net (Expense)/Revenue
Governmental Activities $ (4,924,005) $ (5,836,440) $ (5,721,796) Business-Type Activities 405,837 600,611 758,726
Total Primary Government Net Expense (4,518,168) (5,235,829) (4,963,070) General Revenues and Other Changes in Net Position
Governmental Activities
Taxes
Property taxes 1,602,494 1,392,443 1,393,021
Sales and use taxes 1,673,360 1,713,697 1,748,368
Motor vehicle in lieu taxes 566,513 591,353 621,440
Transient lodging taxes 329,577 359,892 482,164
Other taxes 1,924,257 2,273,971 2,761,809
Incremental property taxes - - -
Investment Earnings- - -
Unrestricted interest and rents (5,330) 22,017 10,492
Miscellaneous 269,884 257,126 327,178
Transfers 31,023 31,024 31,024
Special item: Dissolution of redevelopment agency - - - Special item: Contribution of long-term loans to Sonoma County - - (3,602,937) Extraordinary item: Theft of investment funds - - -
Total Governmental Activities 6,391,778 6,641,523 3,772,559 Business-Type Activities
Investment Earnings- - -
Transfers (31,023) (31,024) (31,024)
Extraordinary item: Theft of investment funds - - -
Total Business-Type Activities (31,023) (31,024) (31,024) Total Primary Government 6,360,755 6,610,499 3,741,535
Change in Net Position
Governmental Activities 555,338 919,727 (2,061,123)
Business-Type Activities 569,588 727,702 733,040
Total Primary Government $ 1,124,926 $ 1,647,429 $ (1,328,083) Source: Basic Financial Statements- City of Sebastopol, California Fiscal Year

CITY OF SEBASTOPOL

CHANGES IN NET POSITION

LAST TEN FISCAL YEARS
(Accrual Basis of Accounting)
138 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

2016 2017 2018 2019 2020 2021 2022
$ (5,833,682) $ (7,372,463) $ (8,281,927) $ (8,723,308) $ (8,378,450) $ (9,577,124) $ (10,856,365) 764,064 1,176,608 313,917 67,430 (765,671) (372,312) (844,521) (5,069,618) (6,195,855) (7,968,010) (8,655,878) (9,144,121) (9,949,436) (11,700,886) 2,459,296 2,478,979 2,618,913 2,891,222 2,981,745 3,004,264 3,333,749 2,069,199 3,923,850 3,714,794 3,958,244 3,697,726 4,362,811 4,705,343 - - - - - - -
483,738 514,225 529,810 631,742 518,175 402,255 504,292 2,246,817 1,134,089 1,097,589 1,153,243 1,100,380 1,158,279 1,259,110 - - - - - - -
- 67,458 57,812 259,216 343,753 (7,279) (298,155)
73,826 - - - - - -
- 260,341 523,614 563,958 602,464 315,678 927,480
31,023 31,023 32,259 31,024 31,024 31,024 31,024
- - - - - - -
- - - - - - -
- - - - - (819,039) -
7,363,899 8,409,965 8,574,791 9,488,649 9,275,267 8,447,993 10,462,843 - 32,728 31,889 107,261 91,655 25,951 (122,740)
(31,023) (31,023) (32,259) (31,024) (31,024) (31,024) (31,024) - - - - - (380,961) -
(31,023) 1,705 (370) 76,237 60,631 (386,034) (153,764)
7,332,876 8,411,670 8,574,421 9,564,886 9,335,898 8,061,959 10,309,079 (8,564) 128,038 (148,517) 1,110,199 (301,857) (2,408,372) (393,522) 1,145,585 315,622 67,060 (689,434) (311,681) (1,230,555) (998,285) $ 1,137,021 $ 443,660 $ (81,457) $ 420,765 $ (613,538) $ (3,638,927) $ (1,391,807) Fiscal Year
139 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

2013 2014 2015
General Fund
Nonspendable $ - $ - $ -
Restricted - - -
Committed 1,195,000 458,000 1,015,000
Assigned - - -
Unassigned 697,762 1,113,028 2,077,523
Total General Fund $ 1,892,762 $ 1,571,028 $ 3,092,523
All Other Governmental Funds
Nonspendable $ - $ - $ -
Restricted 3,025,676 3,169,424 3,573,382
Committed 364,291 471,226 595,718
Unassigned - - -
Total All Other Governmental Funds 3,389,967 3,640,650 4,169,100 Total Governmental Funds $5,282,729 $5,211,678 $7,261,623 Source: Basic Financial Statements- City of Sebastopol, California

CITY OF SEBASTOPOL

FUND BALANCES OF GOVERNMENTAL FUNDS

LAST TEN FISCAL YEARS
(Modified Accrual Basis of Accounting)
Fiscal Year
140 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

2016 2017 2018 2019 2020 2021 2022
$ 11,127 - $ $ 46,392 $ 28,818 $ 76,529 $ 42,386 $ 180,191 - - - 1,186,330 - 1,161,558 2,013,242
1,015,000 185,000 185,000 - - - -
2,785,000 - 3,335,000 3,579,535 4,610,435 5,049,534 4,601,816 3,265,624 3,669,067 3,882,742 4,993,434 4,269,513 3,028,639 3,547,112 $ 4,280,624 $ 6,650,194 $ 7,449,134 $ 8,601,787 $ 10,142,807 $ 9,282,117 $ 10,342,361 $ - $ - $ - $ - $ 2,651 $ - $ 555
3,827,777 2,279,908 1,660,668 1,450,299 1,640,885 1,905,784 1,585,961 464,800 154,351 279,229 436,477 475,327 491,317 492,217 (79,673) - (48,819) (113,745) (10,535) (6,926) (7,776)
4,292,577 2,354,586 1,891,078 1,773,031 2,108,328 2,390,175 2,070,957 $8,573,201 $9,004,780 $9,340,212 $10,374,818 $12,251,135 $11,672,292 $12,413,318 Fiscal Year
141 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

2013 2014 2015 2016
Revenues
Property taxes $ 1,602,494 $ 1,392,443 $ 1,393,024 $ 2,459,296 Sales and use taxes 2,812,420 3,214,480 3,652,138 3,940,169 Other taxes 1,010,312 1,070,444 1,218,306 -
Transient occupany taxes - - 483,738 -
Franchise fees - - 351,568 -
Licenses and permits 364,654 290,026 314,693 488,234
Fines and forfeits 124,941 117,358 158,380 122,235
Intergovernmental 1,337,164 1,412,805 1,443,193 979,119 Interest and rents 12,529 76,670 43,433 92,985
Charges for services 676,416 922,178 843,764 717,270
Miscellaneous 79,048 54,189 67,948 434,506
Total Revenues 8,019,978 8,550,593 9,134,879 10,069,120 Expenditures
Current
General Government 876,686 1,308,096 1,501,999 1,628,362 Public Safety 3,950,740 3,746,490 4,175,290 4,329,264
Community development 88,735 140,258 35,436 9,600
Parks and recreation 374,110 679,488 544,596 524,035
Public works 809,017 1,124,226 1,073,855 1,443,331
Education SERAF - - - -
Capital Outlay 228,939 240,332 80,472 554,243
Intergovernmental - - - -
Debt Service:

Principal 349,214 357,250 358,175 302,357
Interest 114,692 105,278 93,135 82,796
Cost of debt issuance - - - -
Total Expenditures 6,587,883 7,905,668 7,862,958 8,873,988 Excess of Revenues Over (Under) Expenditures 1,432,095 644,925 1,271,921 1,195,132 Other Financing Sources (Uses)
Capital lease financing - - - 85,423
Sale of property - 269,883 - -
Proceeds from debt - - - -
Payment to escrow - - - -
Sales of capital assets - - - -
Transfers In 265,144 256,529 256,301 417,645
Transfers Out (234,121) (225,505) (225,277) (386,622)
Total Other Financing Sources (Uses) 300,906 31,024 31,024 116,446 Extraordinary/Special Items - - - -
Net Change In Fund Balances $1,733,001 $675,949 $1,302,945 $1,311,578 Debt Service as a percentage
of non-capital expenditures 7.3% 6.0% 5.8% 4.6%
Source: Basic Financial Statements- City of Sebastopol, California Fiscal Year

CITY OF SEBASTOPOL

CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS

LAST TEN FISCAL YEARS
(Modified Accrual Basis of Accounting)
142 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

2017 2018 2019 2020 2021 2022
$ 2,618,914 2,681,062 $ 2,891,222 $ 2,981,746 $ 3,004,264 $ 3,333,748 $ 4,686,751 4,454,450 4,907,892 4,609,379 5,321,931 5,744,161 - - - - - -
529,810 514,225 631,742 518,175 402,255 504,292
323,496 359,466 358,299 336,738 363,167 405,507
304,268 412,678 324,928 458,640 507,434 454,321
82,605 88,747 55,501 48,171 30,439 27,452
765,572 676,542 540,760 2,213,385 1,401,853 1,071,029
106,357 112,795 309,812 390,766 38,129 (257,367)
320,219 428,703 318,062 293,920 361,904 261,074
523,223 294,146 563,549 602,471 315,177 927,480
10,261,215 10,022,814 10,901,767 12,453,391 11,746,553 12,471,697 1,879,155 2,272,637 1,933,038 2,216,083 2,308,287 2,678,185 4,780,975 4,429,352 4,998,720 5,448,918 6,292,688 6,059,990 - - - - - -
605,061 639,930 826,945 970,013 792,038 799,261
930,256 868,491 1,051,102 1,062,194 1,161,841 1,293,535 - - - - - -
1,188,516 1,471,598 766,230 590,256 680,072 1,797,036
- - - - - -
233,469 245,128 249,619 250,516 275,351 240,932
80,566 72,766 72,531 70,118 37,858 19,063
- - - 12,842 - -
9,739,857 9,958,043 9,898,185 10,608,098 11,560,977 12,888,002 282,957 303,172 1,003,582 1,845,293 185,576 (416,305)
66,250 - - - - -
- - - - - -
- - - 420,626 - 1,126,307
- - - (397,030) - -
799 - - - - -
198,741 1,396,214 2,912,182 632,536 632,536 1,511,475
(167,718) (1,363,955) (2,881,158) (601,512) (601,512) (1,480,451) 98,072 32,259 31,024 31,024 54,620 1,157,331
- - - (819,039) - -
$381,029 $335,431 $1,034,606 $1,876,317 ($578,843) $741,026

3.6% 3.7% 3.5% 3.2% 3.0% 2.3%
Fiscal Year
143 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

Total Taxable Estimated
Fiscal Secured Unsecured SBE Assessed Actual Taxable Total Direct Year Property Property Nonunitary Value1 Value2 Tax Rate3 2013 936,099,537 $ 32,978,628 $ 20,260 $ 969,057,905 $ - $ 1.1247% 2014 984,165,141 33,736,420 - 1,017,901,561 - 1.1247%
2015 1,030,201,370 33,857,950 - 1,064,059,320 - 1.1157% 2016 1,101,325,085 34,718,413 - 1,136,043,498 - 1.1152% 2017 1,159,102,311 36,169,711 - 1,195,272,022 - 1.1247% 2018 1,213,563,175 40,451,873 - 1,254,015,048 1,506,046,992 1.1322% 2019 1,293,160,893 41,422,754 - 1,334,583,647 - 1.1322% 2020 1,346,424,183 39,548,176 - 1,385,972,359 1,769,357,484 1.1570% 2021 1,396,730,880 40,985,208 - 1,437,716,088 1,787,188,307 1.1560% 2022 1,442,646,754 42,502,411 - 1,485,149,165 1,939,139,162 1.1776% 1 Article XIIIA, added to the California Constitution by Proposition 13 in 1978, fixed the base for valuation of property subject to taxes at the full cash value as it appeared on the Assessor's 1975-76 assessment roll.

Thereafter, full cash value can be increased to reflect:
a) annual inflation up to 2 percent
b) current market value at time of ownership change;
c) market value for new construction
2 3 Total direct tax rate is represented by TRA 05-001, 05-022.

Source: Sonoma County Assessor data, Avenu Insights & Analytics Estimated Actual Value is derived from a series of calculations comparing median assessed values from 1940 to current median sale prices. Based on these calculations a multiplier value was extrapolated and applied to current assessed values.

CITY OF SEBASTOPOL

ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY

LAST TEN FISCAL YEARS
144 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

Agency 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Basic Levy 1 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 Palm Drive Health Care District 0.00550 0.00550 0.00520 0.00520 0.00520 0.00520 0.00520 0.00300 0.00300 0.00260 Sebastopol Elementary Bonds 0.03810 0.03810 0.03700 0.03500 0.03300 0.03550 0.03450 0.03350 0.03600 0.06600 Sonoma County Junior College 0.02100 0.02100 0.01800 0.01600 0.01500 0.01400 0.03600 0.01300 0.01300 0.01300 Sonoma County Junior College 2014 0.00000 0.00000 0.00000 0.00000 0.02500 0.02300 0.00000 0.02400 0.02400 0.02400 Twin Hills Elementary 0.03700 0.03700 0.03300 0.03300 0.03200 0.03050 0.03000 0.03000 0.02900 0.02500 West Sonoma County Unified High 0.01610 0.01610 0.01550 0.01900 0.01750 0.01700 0.04850 0.04650 0.04400 0.04000 West Sonoma Russian River Project 0.00700 0.00700 0.00700 0.00700 0.00700 0.00700 0.00700 0.00700 0.00700 0.00700 Total Direct & Overlapping Tax Rates2

1.12470 1.12470 1.11570 1.11520 1.13470 1.13220 1.16120 1.15700 1.15600 1.17760 Note:

Source: Sonoma County Assessor data, Avenu Insights & Analytics ¹ In 1978, California voters passed Proposition 13 which set the property tax rate at a 1.00% fixed amount. This 1.00% is shared by all taxing agencies for which the subject property resides within. In addition to the 1.00% fixed amount, property owners are charged taxes as a percentage of assessed property values for the payment of any voter approved bonds.
³ City's Share of 1% Levy is based on the City's share of the general fund tax rate area with the largest net taxable value within the City. ERAF general fund tax shifts may not be included in tax ratio figures.

Fiscal Year

CITY OF SEBASTOPOL

DIRECT AND OVERLAPPING PROPERTY TAX RATES

LAST TEN FISCAL YEARS
² Overlapping rates are those of local and county governments that apply to property owners within the City. Not all overlapping rates apply to all city property owners.
145 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

Percent Of Percent Of
Total Total
Taxable Assessed Taxable Assessed
Taxpayer Assessed Value Valuation Assessed Value1 Valuation Barlow Star LLC 30,600,884 $ 2.06% N/A N/A
H-1 Real Estate LLC 14,943,224 1.01% N/A N/A
Longs Drug Stores California 9,791,037 0.66% 2,870,684 0.30% Duckhorn Wine Company 7,751,750 0.52% N/A N/A
970 Gravenstein Hwy LLC 7,515,926 0.51% N/A N/A
Redwood Marketplace 7,301,337 0.49% 6,292,114 0.66%
Maxwell Myers Co & Maxwell A M 5,796,322 0.39% N/A N/A
LOK Sebastopol Hotel Co LLC 5,760,105 0.39% 5,165,603 0.54% Sonoma Specialty Hospital LLC 5,253,872 0.35% N/A N/A
Pendergast Charles R Tr 5,159,004 0.35% 4,788,120 0.50% Total Top 10 Taxpayers 99,873,461 6.72% $ 19,116,521 1.99% Total Taxable Value $ 1,485,149,165 100.00% 958,552,965 $ 100.00% Source: Sonoma County Assessor data, Avenu Insights & Analytics Fiscal Year 2013

CITY OF SEBASTOPOL

PRINCIPAL PROPERTY TAXPAYERS

CURRENT YEAR AND NINE YEARS AGO
Fiscal Year 2022
146 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

Fiscal RDA/Successor Percent of
Year City Agency Total1 Amount Levy
2017 $ 2,523,397 $ 825,365 $ 3,348,762 $ 3,348,762 100.00% 2018 2,433,418 827,985 3,261,403 3,261,403 100.00%
2019 2,714,491 743,087 3,457,578 3,457,578 100.00%
2020 2,781,985 656,366 3,438,351 3,438,351 100.00%
2021 2,909,941 319,262 3,229,203 3,229,203 100.00%
2022 3,202,351 3,202,351 - 3,202,351 100.00%
1 Schedule excludes unitary tax.
2 * The schedule is intended to show information for ten years, additional years will be displayed as it becomes available.

Source: Sonoma County Tax Collector/Treasurer
The City of Sebastopol participates in the County of Sonoma "Teeter Plan" for property tax distributions. This plan distributes 100% of the secured taxes to participants; and in turn, allows the County to keep related penalties and interest for late tax payments.

CITY OF SEBASTOPOL

PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS*
Taxes Levied for the Fiscal Year
Collections within the
Fiscal Year of the Levy
147 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City of Sebastopol - Bradley Burns
Category 2022* 2021 2020 2019 2018 2017 2016 2015 2014 2013 Eating and Drinking Places 46,707$ 43,265$ 33,525$ 44,326$ 39,036$ 36,947$ 32,746$ 31,626$ 29,686$ 27,472$ Food Stores 37,920 35,126 32,999 39,915 44,478 41,357 39,236 39,368 23,074 23,996 Apparel Stores 2,870 2,659 2,840 3,636 3,883 3,784 3,904 3,873 1,044 3,589 Auto Dealers and Supplies 11,884 11,008 9,243 8,837 8,706 9,284 8,252 8,344 158,109 160,409 Service Stations 20,970 19,424 16,734 21,926 19,190 16,825 17,131 20,449 430 530 Other Retail Stores 38,703 35,851 31,820 34,202 32,551 31,599 28,826 28,248 3,399 5,154 All Other Outlets 33,022 30,589 27,608 29,984 21,972 21,472 23,529 23,206 31,304 31,065 Total $ 192,076 177,922$ 154,769$ 182,826$ 169,816$ 161,268$ 153,624$ 155,114$ 247,046$ 252,215$ City of Sebastopol - Measure Y
Category 2022* 2021 2020 2019 2018 2017 2016 2015 2014 2013 Other Retail Stores 44,173$ 40,918$ 33,530$ 42,500$ 39,595$ 37,812$ 33,664$ 32,472$ 30,213$ $ 27,985 Food Stores 42,326 39,207 37,929 36,364 38,928 46,502 45,444 42,966 39,635 34,827 Auto Dealers and Supplies 6,642 6,153 5,246 6,158 6,347 6,617 6,082 6,039 4,927 3,431 Eating and Drinking Places 46,111 42,713 33,695 41,567 40,655 44,128 44,342 40,581 40,226 42,462 Service Stations 21,388 19,812 17,067 22,144 19,423 17,087 17,278 20,768 21,865 23,891 Apparel Stores 76,085 70,478 58,119 53,108 52,730 49,989 47,017 43,383 40,170 40,942 All Other Outlets 85,972 79,636 66,631 68,219 60,406 57,036 56,561 56,255 54,724 56,461 Total $ 322,697 298,917$ 252,217$ 270,060$ 258,084$ 259,171$ 250,388$ 242,464$ 231,760$ 229,999$ City of Sebastopol - Measure T
Category 2022* 2021 2020 2019 2018 2017 2016 2015 2014 2013 Other Retail Stores 44,114$ 40,863$ 33,537$ 42,423$ 39,585$ 37,757$ 33,618$ 32,338$ 29,203$ 14,531$ Food Stores 42,374 39,251 37,966 36,386 38,962 46,524 44,990 42,992 39,556 16,055 Auto Dealers and Supplies 6,700 6,207 5,293 6,201 6,298 6,676 6,093 6,069 4,950 1,636 Eating and Drinking Places 45,858 42,478 33,575 41,451 40,643 44,124 41,412 40,325 40,242 19,979 Service Stations 21,389 19,813 17,106 22,139 19,419 17,085 17,183 19,886 22,676 12,104 Apparel Stores 76,259 70,639 58,284 53,109 52,863 50,032 47,131 43,757 39,932 19,278 All Other Outlets 86,647 80,262 66,878 68,588 60,692 57,283 56,718 55,486 54,916 27,580 Total $ 323,341 299,513$ 252,639$ 270,297$ 258,462$ 259,481$ 247,145$ 240,853$ 231,475$ 111,163$ City of Sebastopol - Total
Category 2022* 2021 2020 2019 2018 2017 2016 2015 2014 2013 Eating and Drinking Places 134,993 $ 125,046$ 100,593$ 129,249$ 118,216$ 112,516$ 100,029$ $ 96,436 89,102$ 69,988$ Food Stores 122,620 113,584 108,895 112,665 122,367 134,383 129,670 125,326 102,265 74,878 Apparel Stores 16,213 15,018 13,380 15,995 16,528 17,077 16,080 15,980 10,921 8,656 Auto Dealers and Supplies 103,852 96,199 76,513 91,855 90,004 97,536 94,005 89,250 238,577 222,850 Service Stations 63,747 59,050 50,907 66,208 58,032 50,997 51,592 61,102 44,970 36,524 Other Retail Stores 191,047 176,969 148,224 140,420 138,145 131,621 122,975 115,389 83,500 65,374 All Other Outlets 205,640 190,487 161,117 166,791 143,070 135,790 136,807 134,947 140,945 115,105 Total $ 838,113 776,353$ 659,628$ 723,183$ 686,363$ 679,920$ 651,158$ 638,431$ 710,281$ 593,374$ * Categories of sales activity, and amounts displayed for the current reporting period are estimated based on prior years' activity. Actual amounts and categories are updated when consultant's analysis of sales taxes become available Calendar Year
Calendar Year
Calendar Year

CITY OF SEBASTOPOL

TAXABLE SALES BY CATEGORY

LAST TEN CALENDAR YEARS (IN THOUSANDS OF DOLLARS)
Calendar Year
148 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

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149 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

Capital Capital
Special Lease/ Finance Lease- Lease/ Finance
Fiscal Assessment Purchase CEC Leaseback Installment Purchase Year Bonds Agreements Loan Agreements Total2 Agreement Agreements 2013 240,000 $ 3,057,583 $ 38,131 $ - $ 3,335,714 $ - $ 1,349,964 $ 2014 225,000 3,001,169 12,974 - 3,239,143 - 1,244,969
2015 205,000 2,415,429 - 2,620,429 - 1,200,000 1,150,336 2016 185,000 2,273,334 - 2,458,334 1,160,118 1,130,420
2017 160,000 2,075,657 - 2,235,657 - 1,118,601 1,147,458 2018 140,000 1,850,529 - 1,990,529 - 1,075,382 990,710
2019 115,000 1,625,911 - 1,740,911 - 1,030,391 859,552
2020 90,000 1,400,395 - 1,490,395 - 983,555 737,003
2021 65,000 1,173,640 - 1,238,640 - - 627,380
2022 35,000 1,126,307 933,133 - 2,094,440 3,812,582 -
Note: Details regarding the City's outstanding debt can be found in the Notes to the Financial Statements. 1 See Demographic and Economic Indicators schedule for personal income and population data. 2 Totals do not include other post-employment benefits payable or compensated absences. 3 In fiscal year 2022, capital leases were reclassified to finance purchase and lease-leaseback related payables. n/a: not available
Source: Basic Financial Statements - City of Sebastopol, California

LAST TEN FISCAL YEARS

CITY OF SEBASTOPOL

RATIOS OF OUTSTANDING DEBT BY TYPE
Governmental Activities Business-Type Activities
150 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

Lease- Refunding State Total Percentage
Leaseback Loan Payable Drinking CEC Primary of Personal Per Agreements Truist Water Loan Loan Total2 Government Income1 Capita1 $ - - $ - $ 17,689 $ 1,367,653 $ 4,703,367 $ 1.80% 632
- - - 6,193 1,251,162 4,490,305 1.82% 604
- - 142,819 - 2,493,155 5,113,584 1.97% 686
- - 170,415 - 2,460,953 3,761,788 1.42% 500
- - 249,339 - 2,515,398 3,912,195 1.38% 516
- - 148,328 - 2,214,420 3,353,458 1.10% 435
- - 98,863 - 1,988,806 2,947,221 0.97% 382
- - 75,481 - 1,796,039 2,608,523 0.84% 337
1,019,462 - - - 1,646,842 3,293,684 1.00% 430
955,734 487,375 - - 5,255,691 10,511,382 2.83% 1,404
Business-Type Activities
151 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

Percentage of
Percentage Total Taxable
Fiscal of Personal Assessed Per
Year Total Income1 Value2 Capita1
2013 $ 0.00% - 0.00% -
2014 0.00% - 0.00% -
2015 0.00% - 0.00% -
2016 0.00% - 0.00% -
2017 0.00% - 0.00% -
2018 0.00% - 0.00% -
2019 0.00% - 0.00% -
2020 N/A - N/A -
2021 N/A - N/A -
2022 N/A - N/A -
1 See Demographic and Economic Indicators schedule for personal income and population data. 2 See Assessed Value and Actual Value of Taxable Property schedule for property value data.

Source: Basic Financial Statements - City of Sebastopol, California Debt Outstanding
General Bonded

CITY OF SEBASTOPOL

RATIOS OF GENERAL BONDED DEBT OUTSTANDING

LAST TEN FISCAL YEARS
152 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

City's
Share of
Total Debt Percent Debt as of
June 30, 2022 Applicable1 June 30, 2022
OVERLAPPING TAX AND ASSESSMENT DEBT:

Sonoma County Joint Community College District $ 324,890,000 1.450% 4,710,905 $ West Sonoma County Union High School District 58,218,055 13.494% 7,855,944 Sebastopol Union School District 15,765,600 59.104% 9,318,100 Twin Hills Union Shool District 3,139,964 0.758% 23,801 Palm Drive Healthcare District 2,520,530 12.693% 319,931 Palm Drive Healthcare District Parcel Tax Obligations 10,902,678 12.693% 1,383,877 City of Sebastopol 1915 Act Bonds 100.000% 35,000 35,000 TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT $ 23,647,558
DIRECT AND OVERLAPPING GENERAL FUND DEBT:

Sonoma County Certificates of Participation $ 9,189,000 1.461% 134,251 $ Sonoma County Pension Obligation Bonds 247,880,000 1.461% 3,621,527 Sonoma County Office of Education Certificates of Participation 3,228,084 1.461% 47,162 West Sonoma County Union High School District General Fund Obligations 13.494% 116,556 863,760 Sebastopol Union School District Certificates of Participation 59.104% 87,105 147,376 Twin Hills Union School District Certificates of Participation 124,928 0.758% 947 City of Sebastopol Obligations 2,059,440 100.000% 2,059,440 TOTAL DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT $ 6,066,988 COMBINED TOTAL DEBT $ 29,714,547
TOTAL DIRECT DEBT $ 2,059,440
TOTAL OVERLAPPING DEBT 27,655,107
COMBINED TOTAL DEBT $ 29,714,547 2
1 The percentage of overlapping debt applicable to the City is estimated using taxable assessed property value.

Applicable percentages were estimated by determinating the portion of the overlapping district's assessed value that is within the boundaries of the City divided by the district's total taxable assessed value. 2 Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue, and non-bonded capital lease obligations RATIOS TO 2021-22 ASSESSED VALUATION:

Total Overlapping Tax and Assessment Debt 1.58%
Combined Direct Debt 0.14%
Combined Total Debt 1.99%

CITY OF SEBASTOPOL

DIRECT AND OVERLAPPING DEBT GOVERNMENTAL ACTIVITIES DEBT AS OF JUNE 30, 2022
153 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

2013 2014 2015 2016
Total assessed value of all real
and personal property $ 969,098,425 $ 1,017,901,561 $ 1,064,059,320 $ 1,136,043,498 Debt limit percentage 3.75% 3.75% 3.75% 3.75%
Total debt limit 36,341,191 38,171,309 39,902,225 42,601,631 Amount applicable to debt limit 3,335,714 3,239,143 2,620,429 2,458,334 Legal debt margin $ 33,005,477 $ 34,932,166 $ 37,281,796 $ 40,143,297 Total net debt applicable to the limit as a
percentage of debt limit 9.18% 8.49% 6.57% 5.77%
Note: California Government Code, Section 43605 sets the debt limit at 15%. The Code section was enacted when assessed valuations were based on 25% of full market value. This has since changed to 100% of full market value. Thus the limit shown is 3.75% (1/4 of 15%).

Source: Basic Financial Statements - City of Sebastopol, California Fiscal year

CITY OF SEBASTOPOL

LEGAL DEBT MARGIN INFORMATION

LAST TEN FISCAL YEARS
154 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

2017 2018 2019 2020 2021 2022
$ 1,195,272,022 $ 1,254,015,048 $ 1,293,160,893 $ 1,346,424,183 $ 1,442,646,754 $ 1,442,646,754

3.75% 3.75% 3.75% 3.75% 3.75% 3.75%
44,822,701 47,025,564 48,493,533 50,490,907 54,099,253 54,099,253 - 1,990,529 1,740,911 1,490,395 1,238,640 2,059,440
$ 44,822,701 $ 45,035,035 $ 45,035,035 $ 49,000,512 $ 52,860,613 $ 52,039,813

0.00% 4.23% 3.59% 2.95% 2.29% 3.81%
Fiscal year
155 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

Fiscal Special
Year Assessments Principal Interest Coverage
2013 30,602 $ 15,000 $ 21,302 $ 0.84
2014 32,121 15,000 19,924 0.92
2015 31,082 20,000 17,004 0.84
2016 32,420 20,000 15,312 0.92
2017 31,194 25,000 11,455 0.86
2018 32,344 20,000 10,005 1.08
2019 33,315 25,000 9,686 0.96
2020 31,712 25,000 6,868 1.00
2021 32,512 25,000 8,371 0.97
2022 33,131 30,000 6,596 0.91
Note: Details regarding the City's outstanding debt can be found in the notes to the basic financial statements.

Note: As of June 30, 2013, pledged revenue for tax allocation bonds was zero, due to transfer of liabilities to Successor Agency.

Source: Basic Financial Statements - City of Sebastopol, California Special Assessment Bonds

CITY OF SEBASTOPOL

PLEDGED REVENUE COVERAGE

GOVERNMENTAL FUNDS

LAST TEN FISCAL YEARS
156 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

Adjusted Net
Fiscal Operating Operating Available
Year Revenue Expenses Revenue Principal Interest Coverage 2013 n/a n/a n/a n/a n/a n/a
2014 n/a n/a n/a n/a n/a n/a
2015 1,933,720 (1,194,003) 739,717 - - n/a
2016 2,061,253 (1,493,267) 567,986 39,881 49,201 6.38
2017 2,467,685 (1,538,204) 929,481 41,517 47,565 10.43
2018 2,284,764 (1,763,844) 520,920 101,011 45,217 3.56
2019 2,280,988 (1,737,823) 543,165 93,902 48,047 3.83
2020 2,343,362 (2,159,899) 183,463 97,338 45,177 1.29
2021 2,613,289 (2,245,148) 368,141 74,943 117,541 1.91
2022 2,519,592 (2,300,500) 219,092 133,663 24,535 1.38
Note: There were no pledges of non-general obligation debt from 20013 to 2014.

Note: Details regarding the City's outstanding debt can be found in the notes to the basic financial statements. Operating expenses do not include interest, depreciation or amortization.

Source: Basic Financial Statements - City of Sebastopol, California Refunding Loan Payable - Truist, Refunding Lease Agreement, and Finance Purchase Agreements

CITY OF SEBASTOPOL

PLEDGED REVENUE COVERAGE

PROPRIETARY FUNDS

LAST TEN FISCAL YEARS
Installment Sale Agreement, State Drinking Water Loan,
157 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

CITY OF SEBASTOPOL

DEMOGRAPHIC STATISTICS

LAST TEN FISCAL YEARS
% of Pop 25+ % of Pop 25+
Fiscal Total Per with High with Bachelors Unemployment Median Year Population (in thousands) Capita School Degree Degree Rate Age 2013 7,440 247,209 33,227 92.50% 35.50% 3.3% 48.90
2014 7,454 259,973 34,877 94.90% 39.20% 4.8% 48.70
2015 7,527 264,433 35,131 94.70% 42.90% 3.8% 49.70
2016 7,579 283,772 37,441 93.80% 41.20% 3.4% 51.30
2017 7,709 305,392 39,615 96.10% 48.30% 3.4% 51.30
2018 7,885 303,177 38,449 96.10% 48.30% 4.1% 47.90
2019 7,826 314,018 40,125 93.10% 38.60% 2.4% 47.20
2020 7,745 328,140 42,368 95.70% 43.80% 20.7% 47.60
2021 7,657 330,501 43,163 95.50% 44.90% 11.90% 46.80
2022 7,489 351,291 49,578 96.10% 44.60% 2.6% 48.50
Source:

Population: California State Department of Finance. Unemployment Data: California Employment Development Department.
2000-2009 Income, Age, and Education Data: ESRI - Demographic Estimates are based on the last available Census. Projections are developed by incorporating all of the prior census data released to date. Demographic Data is totaled from Census Block Groups that overlap the City's boundaries 2010 and later - Income, Age and Education Data - US Census Bureau, most recent American Community Survey Personal Income
158 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

Percent of Percent of
Total Total
Employer Employees Employment Rank Employees Employment Rank Sonoma Specialty Hospital 178 4.68% 1 N/A N/A N/A
Apple Valley Post Acute Rehab 149 3.92% 2 N/A N/A N/A
Traditional Medicinals 131 3.45% 3 N/A N/A N/A
Safeway 121 3.18% 4 N/A N/A N/A
TLC Child and Family Services 105 2.76% 5 N/A N/A N/A
West Sonoma County Union High Sch 92 2.42% 6 N/A N/A N/A Whole Foods Market 84 2.21% 7 N/A N/A N/A
Gravenstein Union District 82 2.16% 8 N/A N/A N/A
Greenacres Homes & Schools 71 1.87% 9 N/A N/A N/A
Sebastopol Hardware Center 61 1.61% 10 N/A N/A N/A
1,074 28.26%
Source: MuniServices, LLC/Avenu Insights & Analytics

CITY OF SEBASTOPOL

PRINCIPAL EMPLOYERS

CURRENT YEAR AND NINE YEARS AGO
Fiscal Year 2021 Fiscal Year 2013
159 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023

2017 2018 2019 2020 2021 2022
Governmental Activities
General Government
City Council 6.00 6.00 6.00 5.00 6.00 6.00
City Manager 0.75 0.75 0.75 0.75 0.75 0.75
City Attorney 0.25 0.25 0.25 0.25 0.25 0.25
City Clerk 1.00 1.00 1.00 1.00 1.00 1.00
Finance 4.00 4.00 4.00 4.00 4.00 4.00
Building Inspection 1.50 1.50 1.50 0.50 1.50 0.50
Planning 3.00 3.00 3.00 3.00 3.00 3.00
Public Safety
Police 34.75 34.75 34.75 24.75 25.75 23.00
Fire 33.50 33.50 35.50 34.50 35.50 35.50
Public Works and facilities
Administration 2.75 2.75 2.75 2.75 2.75 2.75
Water 1.00 1.00 1.00 1.00 1.00 1.00
Laborer 4.00 4.00 4.00 3.00 3.00 3.00
Engineering 1.75 1.75 1.75 1.75 1.75 1.75
Maintenance 4.00 6.00 6.00 7.00 7.00 7.00
Total Full-Time Equivalent Employees 98.25 100.25 102.25 89.25 93.25 89.50 * The schedule is intended to show information for ten years, additional years will be displayed as it becomes available.

Source: City of Sebastopol Finance Department

CITY OF SEBASTOPOL

FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES

BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS*
Fiscal Year
160 Agenda Item Number 6
City Council Meeting Packet of January 17, 2023