CITY COUNCIL REGULAR MEETING - APRIL 03, 2023 PAGE 1 OF 3
CITY COUNCIL REGULAR MEETING
Monday, April 03, 2023 at 5:00 PM
94 N. Washington Street, Sonora, CA 95370
(209) 532-4541
AGENDA
NOTICE IS HEREBY GIVEN that the Sonora City Council will have their regular meeting on Monday, April 3, 2023, at 5:00 PM in the City of Sonora Council Chambers located at 94 N. Washington Street Sonora, CA 95370.
THIS MEETING IS PHYSICALLY OPEN TO THE PUBLIC AND MEMBERS OF THE PUBLIC MAY PARTICIPATE IN THE MEETING VIA VIDEO CONFERENCING AT:
Zoom Meeting Link:
https://us06web.zoom.us/j/81193397821?pwd=UGdrRTcyaFFac3o0b2JQK2FmMTRyUT09 Dial: (669) 444-9171
Meeting ID: 811 9339 7821
Passcode: 906625
MEMBERS OF THE PUBLIC WILL BE GIVEN THE OPPORTUNITY TO PROVIDE COMMENT.
THIS MEETING WILL BE LIVE STREAMED ON THE CITY'S WEBSITE AT www.sonoraca.com.
Written comments can be submitted to be included as part of the administrative record; they will not be read during the meeting. All comments must be received by 3:00 pm on the day of the noticed meeting and can be submitted to the City Clerk at 94 N. Washington Street Sonora, CA 95370 or via email to [email protected].
CLOSED SESSION - 4:00 PM
CALL TO ORDER
ROLL CALL
PUBLIC COMMENTS
ADJOURN INTO CLOSED SESSION
1. Conference with Legal Counsel – Anticipated Litigation - Initiation of litigation pursuant to paragraph (4) of subdivision (d) of Section § 54956.9: One (1) Potential Case; Doug White, City Attorney, Melissa Eads, City Administrator.
1 CITY COUNCIL REGULAR MEETING - APRIL 03, 2023 PAGE 2 OF 3
2. Conference with Legal Counsel – Anticipated Litigation - Initiation of litigation pursuant to paragraph (4) of subdivision (d) of Section § 54956.9: One (1) Potential Case; Doug White, City Attorney, Melissa Eads, City Administrator.
3. Conference with Legal Counsel – Anticipated Litigation - Initiation of litigation pursuant to paragraph (4) of subdivision (d) of Section § 54956.9: One (1) Potential Case; Doug White, City Attorney, Melissa Eads, City Administrator.
4. Conference with Legal Counsel – Existing Litigation (Government Code section 54956.9 (d)(1)); Name of Case: Jaycee Alameda v. City of Sonora, et al., Tuolumne Superior Court Case No. CV 63114; Doug White, City Attorney.
RECONVENE INTO OPEN SESSION
OPEN SESSION - 5:00 PM
REPORT OUT OF CLOSED SESSION
PLEDGE OF ALLEGIANCE
ROLL CALL
CITY CLERK’S REPORT ON AGENDA POSTING
APPROVAL OF THE AGENDA
PUBLIC COMMENT (NON-AGENDA ITEMS)
The public may address the Council on any item of public interest not otherwise on the agenda that is within the jurisdiction of the City. No action may be taken. Matters to be addressed may be referred to City Staff or placed on a subsequent meeting Agenda. Speakers are limited to a three (3) minute presentation. If participating via Zoom, please raise your hand using the Raise Your Hand feature or dial *9 (*6 to unmute).
PRESENTATIONS
5. Introduction of Public Works Assistant Michael Rainbolt; Rachelle Kellogg, Community Development Director.
6. Introduction and Swearing in of Police Sergeant Eric Nygard; Turu VanderWiel, Police Chief.
7. Receive an update from Tuolumne County District 1 Supervisor David Goldemberg.
CONSENT CALENDAR
Items on the Consent Calendar are considered routine and will be voted on in one motion unless a Council member or member of the public has a question or wishes to discuss an item. In that case, the item will be removed from the Consent Calendar and considered separately.
8. Consider approval of disbursements in the amount of $195,734.29 for payroll, including employee salaries, employer and employee taxes, retirement contributions, miscellaneous voluntary employee deductions, holiday pay, and other adjustments, including retro-pay; Tracy Skelly, Administrative Services Officer.
2 CITY COUNCIL REGULAR MEETING - APRIL 03, 2023 PAGE 3 OF 3
9. Consider authorization to submit the 2023 Rural Fire Capacity Grant (Formally known as the VFAVolunteer Firefighter Assistance Grant), authorize the City Administrator and/or Fire Chief to execute all documents relating to the grant applications, and direct the Fire Chief to return to the City Council with the application results and to accept the awards; Aimee New, Fire Chief.
NEW BUSINESS
10. Consider acceptance and approval of the City’s Audited Annual Comprehensive Financial Report (ACFR) for the Year Ended June 30, 2022; Chris Gorsky, Administrative Services Director.
COUNCIL MEMBER/DEPARTMENT HEAD REPORTS
ADJOURNMENT
In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the City Administrator at City Hall (209) 532-4541, [email protected]. Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting (28 CFR 35.102-35.104 ADA Title II).
Materials related to an item on this Agenda submitted to the City Council after distribution of the agenda packet are available for public inspection in the City Administrator’s Office at 94 N. Washington Street, Sonora, CA 95370 during normal business hours (8:00 am - 4:00 pm, Monday through Friday, excluding holidays). The agenda and supporting public documents are also available on our City website www.sonoraca.com listed under the agenda/minutes link on the Government page. 3 CITY COUNCIL AGENDA REPORT
MEETING DATE: April 3, 2023
TO: City Council Members
FROM: Rachelle Kellogg, Community Development Director
SUBJECT: Introduction of Public Works Assistant – Michael Rainbolt
RECOMMENDATION
Introduction of Public Works Assistant Michael Rainbolt.
DISCUSSION
Michael Rainbolt has been hired to fill the vacant Public Works Assistant position. Michael was born and raised in Tuolumne County. He attended Columbia Elementary School and graduated from Sonora High School. He and his wife Stephanie have a 9 year-old daughter, Alexis. Before joining the City, he worked in maintenance at Kountry Kids Preschool for 13 years.
FISCAL IMPACT
There is no fiscal impact to the General Fund as this position was included within the Fiscal Year 2022- 2023 Budget.
4 Item 5.
CITY COUNCIL AGENDA REPORT
MEETING DATE: April 3, 2023
TO: City Council Members
FROM: Turu VanderWiel, Chief of Police
SUBJECT: Introduction of Police Sergeant
RECOMMENDATION
Introduction and Swearing in of Police Sergeant Eric Nygard.
DISCUSSION
Eric Nygard tested for the position of Police Sergeant in November of last year and meets all the requirements to work as a sworn peace officer in California. He comes to us from the Contra Costa County Office of the Sheriff and has twenty-two years of service in policing.
Eris Nygard was born and raised in Santa Clara, California. He attended Independence High School in San Jose, Ca., and later attended San Jose State University, where he studied history.
Eric Nygard joined the Contra Costa County Office of the Sheriff in 2000. While employed with the sheriff’s office, he was assigned to the detention division, where he was a jail training officer and member of the Sheriff’s Emergency Response Team (SERT). Eric then transferred to the Patrol Division, where he worked as a patrol officer, Field Training Officer, bike patrol officer and was part of the county’s Mutual Aid Mobile Field Force. Finally, in 2014, he transferred to the investigations division and gained experience in various aspects of advanced police work. While working in that capacity, Eric was assigned to the Special Victims Unit, Missing Persons, Domestic Violence, Misdemeanor Complaints, and the General Investigation teams.
After 22 years of service with the Contra Costa County Office of the Sheriff, Eric Nygard officially retired from that agency to work for Sonora. Sergeant Nygard states he is excited to be part of the Sonora Police Department and the challenges that await him.
FISCAL IMPACT
There is no fiscal impact on the General Fund as this position was previously funded. 5 Item 6.
CITY COUNCIL AGENDA REPORT
MEETING DATE: April 3, 2023
TO: City Council Members
FROM: Melissa Eads, City Administrator
SUBJECT: Supervisor David Goldemberg County Update
RECOMMENDATION
Receive an update from Tuolumne County District 1 Supervisor David Goldemberg.
DISCUSSION
District 1 Supervisor Goldemberg will present an update on County-wide issues to the City Council the first meeting of each month.
FISCAL IMPACT
No fiscal impact to the General Fund.
6 Item 7.
CITY COUNCIL AGENDA REPORT
MEETING DATE: April 3, 2023
TO: City Council Members
FROM: Tracy Skelly, Administrative Services Officer
SUBJECT: Disbursements in the amount of $195,734.29 for payroll
RECOMMENDATION
Consider approval of disbursements in the amount of $195,734.29 for payroll, including employee salaries, employer and employee taxes, retirement contributions, miscellaneous voluntary employee deductions, holiday pay, and other adjustments, including retro-pay.
DISCUSSION
This payroll was the second (2
nd) payroll of the month, which was higher than expected due to the Fire Department Pre-position Strike Team coverage and overtime for Public Works and Police due to the March storm events.
This payroll is the 19th payroll of 26 for FY22-23, we would have expected to expend 73.08% of the budgeted amount. In total, we have expended 66.74% of the Salaries and Wages for the FY 22/23 budget.
FISCAL IMPACT
Disbursements are part of the approved FY22-23 Budget.
7 Item 8.
CITY COUNCIL AGENDA REPORT
MEETING DATE: April 3, 2023
TO: City Council Members
FROM: Aimee New, Fire Chief
SUBJECT: 2023 Rural Fire Capacity Grant (Formally known as VFA grant)
RECOMMENDATION
Authorize the Sonora Fire Department to submit 2023 Rural Fire Capacity Grant (Formally known as the VFA-Volunteer Firefighter Assistance Grant), authorize the City Administrator and/or Fire Chief to execute all documents relating to the grant applications, and direct the Fire Chief to return to the City Council with the application results and to accept the awards.
DISCUSSION
The Sonora Fire Department is requesting the City Council authorize the Fire Department to submit application to receive grant funding from the State through their Rural Fire Capacity Grant. This grant program provides funding for wildland/structural firefighting personal protective equipment, wildland/structural firefighting equipment and communications equipment. The Fire Department has applied for this grant each year and has been successful each year. In 2022, the Fire Department was awarded $39,810.00 and was able to purchase structural and wildland PPE, radio equipment, and wildland firefighting equipment. If awarded, a grant identification project tracking number will be assigned. This year, the Department is applying for wildland equipment, scene lighting, Thermal Imaging camera, radios, and structural PPE.
FISCAL IMPACT
The grant allows for requests up to $40,000. The required match is 50%. The City would be required to provide a fifty percent (50%) match for the grants awarded. The Fire Department would be requesting the maximum amount of the grant. The match would come from monies recovered from emergency deployments and wound not impact the general fund.
8 Item 9.
CITY COUNCIL AGENDA REPORT
MEETING DATE: April 3, 2023
TO: City Council Members
FROM: Chris Gorsky, Administrative Services Director
SUBJECT: Fiscal Year 2022 Audited Annual Comprehensive Financial Report
RECOMMENDATION
City Staff recommends that the City Council accept and approve the City’s Audited Annual Comprehensive Financial Report (ACFR) for the Year Ended June 30, 2022.
BACKGROUND
As required by state law, each year the City engages an independent firm to audit the Financial Statements of the City of Sonora. The Annual Comprehensive Financial Report is fundamental to understanding the economic opportunities and challenges facing the City of Sonora. Included in this audit report are the reviews and verification of all financial processes. The enclosed auditor’s opinion indicates that the financial statements are presented fairly, in all material respects, the financial position of the City. The firm Gallagher Gatewood has completed the attached Fiscal Year 2022 Annual Comprehensive Financial Report. As part of the audit process the auditors performed tests for compliance with certain provisions of laws, regulations, contracts, and grant agreements. The results of the tests did not identify any deficiencies in internal controls that would be considered a material weakness and disclosed no instances of non-compliance or other matters that are required to be reported under Government Auditing Standards.
DISCUSSION
The Annual Comprehensive Financial Report (ACFR) is a set of the City’s financial statements that complies with the Generally Accepted Accounting Principals (GAAP) promulgated by the Government Accounting Standards Board (GASB). In accordance with GASB No. 34, the City’s ACFR contains Management’s Discussion and Analysis (MD&A). The format and contents of the MD&A are established by GASB. Management's discussion and analysis immediately follows the independent auditor’s report and provides a narrative introduction, overview, and analysis of the financial statements. MD&A complements this letter of transmittal and should be read in conjunction with it.
Please refer to the MD&A for additional information relating to capital assets, long-term debt and economic factors affecting the City.
In addition to the information provided in the MD&A, comments by select fund are noted below:
General Fund – The City experienced an increase in General Fund revenues in fiscal year 2022.
Revenues were $9,617,389, including transfers. Included in FY21/22 revenues were the State and Local Fiscal Recovery Funds in the amount of $581,786, received for the second of two years, an increase in Cannabis’ Public Benefit fees of $283,258 as the second dispensary became operational, and a record year for sales tax revenues which increased by $215,405, or 7%, over FY21/22. General 9 Item 10.
Fund expenditures were $9,017,677, including transfers. Expenditures were under budget by $405,629 as the City continues to face chronic unfilled positions in several departments. Revenues exceeded total expenditures and operating transfers for the year by $599,712. The City’s General fund ended the fiscal year with a fund balance of $3,496,243.
Special Sales and Use Tax (Measure I) – The passing of Measure I in August, 2004 increased the sales tax rate within the City limits by ½%, effective January 1, 2005. Measure I generated $2,347,075 in fiscal year 2022, with the Sonora Police Department receiving 60% or $1,408,245, the Sonora Fire Department receiving 25% or $586,769 and the Public Works Department receiving 15% or $352,061.
This revenue provided needed financial support to each department which allows for the hiring and retention of employees and updating tools and equipment.
FISCAL IMPACT
There is no direct fiscal impact in accepting the FY2021-22 Annual Comprehensive Financial Report.
As detailed in the ACFR, the General Fund ended the fiscal year with a fund balance of $3,496,243.
ATTCHMENTS
Fiscal Year Ending June 30, 2022, Annual Comprehensive Financial Report 10 Item 10.
CITY OF SONORA, CALIFORNIA
ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2022
11 Item 10.
CITY OF SONORA, CALIFORNIA
Table of Contents
Page
FINANCIAL SECTION
Independent Auditor’s Report 1-2
Management’s Discussion And Analysis (unaudited) 3-9
Basic Financial Statements:
Government-wide Financial Statements:
Statement Of Net Position 10
Statement Of Activities 11-12
Fund Financial Statements:
Balance Sheet – Governmental Funds 13-14
Reconciliation Of The Governmental Funds Balance Sheet
To Statement Of Net Position 15
Statement Of Revenues, Expenditures, And Changes In
Fund Balances – Governmental Funds 16-17
Reconciliation Of The Statement Of Revenues, Expenditures, And Changes In Fund Balances Of Governmental Funds To
The Statement Of Activities 18
Statement Of Revenues, Expenditures, And Changes In Fund Balances – Budget And Actual – General Fund 19-21
Statement Of Revenues, Expenditures, And Changes In Fund Balances – Budget And Actual – CDBG Fund 22
Statement Of Revenues, Expenditures, And Changes In Fund Balances – Budget And Actual – Special Sales Tax – Police Fund 23 Statement Of Revenues, Expenditures, And Changes In Fund Balances – Budget And Actual – Low/Moderate Income
d Housing Fund 24
Statement Of Revenues, Expenditures, And Changes In Fund Balances – Budget And Actual – Mitigation Fees 25
Statement Of Fiduciary Net Position – Fiduciary Funds 26 Notes To The Financial Statements 27-54
REQUIRED SUPPLEMENTAL FINANCIAL DATA
Schedule of Proportionate Share of Net Pension Liability – Miscellaneous 55 Schedule of Proportionate Share of Net Pension Liability – Safety 56 Schedule of Contributions – Miscellaneous 57
Schedule of Contributions – Safety 58
Schedule of Changes in the City’s Net OPEB Liability & Related Ratios 59 Schedule of Plan Contributions – OPEB 60
12 Item 10.
CITY OF SONORA, CALIFORNIA
Table of Contents
Page
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES:
Definitions 61-63
Combining Balance Sheet – Nonmajor Governmental Funds 64-67 Combining Statement Of Revenues, Expenditures And Changes In Fund Balances – Nonmajor Governmental Funds 68-71
OTHER REPORTS
Independent Auditor's Report On Internal Control Over Financial Reporting And On Compliance And Other Matters Based On
An Audit Of Financial Statements Performed In
Accordance With Government Auditing Standards 72-73
13 Item 10.
1 INDEPENDENT AUDITOR'S REPORT
To The City Council
City of Sonora
State Of California
We have audited the accompanying financial statements of the governmental activities, the aggregate discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of Sonora, State of California, 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.
Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the aggregate discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of Sonora, State of 14 Item 10.
2 California as of June 30, 2022, and the respective changes in financial position thereof for the year then ended, in accordance with accounting principles generally accepted in the United States of America.
Other Matters
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and budgetary comparison information on pages 3 through 10 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Sonora, State of California’s basic financial statements. The introductory section, combining and individual non-major fund financial statements are presented for purposes of additional analysis and are not a required part of the financial statements.
The combining and individual non-major fund financial statements are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and schedule of expenditures of federal awards are fairly stated, in all material respects, in relation to the basic financial statements as a whole.
The introductory section has not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on it.
Gallagher Gatewood
GALLAGHER GATEWOOD, A PROFESSIONAL ACCOUNTANCY CORPORATION Modesto, California
December 28, 2022
15 Item 10.
MANAGEMENT’S DISCUSSION AND ANALYSIS FY 2022 (UNAUDITED) 3 CITY OF SONORA
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2022
This discussion and analysis of the City of Sonora’s (City) financial performance for the fiscal year ended June 30, 2022, provides a narrative overview and comparison of current year to prior year ending results based on the government-wide statements to assist the reader in focusing on significant financial issues. Please read Management’s Discussion and Analysis in conjunction with the City’s financial statements, notes and supplementary schedules.
FINANCIAL HIGHLIGHTS
The City’s governmental activities total assets exceeded liabilities (net assets) at the close of the fiscal year by $15,923,696 a decrease of $68,310 from fiscal year 2021.
This decrease is primarily due to status-quo budgets and the conservative fiscal policies of the City.
General Fund revenues exceeded General Fund expenditures, including transfers, by $599,712. Revenues exceeded expenditures primarily due to receiving State and Local Fiscal Recovery Funds in 2022, of $581,786, without that funding and the chronically unfilled positions, the city would have been using fund balance for basic operations. City General Fund revenue totaled $9,617,389, including transfers in, and General Fund expenses totaled $9,017,677, including transfers out, for fiscal year 2022. Public safety (police and fire protection) costs comprised $5,030,392 or 56% of this amount.
The City’s General Fund ended the year with a fund balance of $3,496,243, an increase of $599,712 from the previous year. Including transfers in and out, revenues were $381,558 more than budgeted and Expenditures were $405,629 less than budgeted, the bulk of the unexpended funds were the result of budgeted, but unfilled positions.
The formation of a Special Sales and Use Tax District (Measure I) was approved by City of Sonora voters in August 2004. The passing of Measure I increased the sales tax rate within the city limits by ½%. The sales tax increase provided $2,347,075 of revenue in 2022 versus $2,152,433 in 2021, an increase of $194,642.
This revenue was used exclusively for the police, fire and public works departments.
OVERVIEW OF THE FINANCIAL STATEMENTS
This annual report consists of a series of financial statements. These statements include all activities of the City of Sonora for the period July 1, 2021 through June 30, 2022 using the integrated approach as prescribed by Governmental Accounting Standards Board (GASB) Statement No. 34. The Statement of Net Assets and Statement of Activities 16 Item 10.
MANAGEMENT’S DISCUSSION AND ANALYSIS FY 2022 (UNAUDITED) 4 provide information about the activities of the City as a whole and present a long–term view of the City’s finances. Fund financial statements show how City services are financed in the short term as well as what remains for future spending. Fund financial statements also report the City’s operations in more detail than the government-wide statements by providing information about the City’s most significant funds.
REPORTING THE CITY AS A WHOLE
Government-wide Financial Statements
The government-wide financial statements report information about the City as a whole, providing readers with a broad overview of the City’s finances. These statements include all assets and liabilities of the City using the accrual basis of accounting, which is similar to the accounting method used by most private sector companies. All the current year’s revenues and expenses are taken into account in the statement of activities regardless of when cash is received or paid.
The statement of net assets presents information on all the City’s assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as one indicator of whether the City’s financial position is improving or deteriorating.
The statement of activities presents information showing how the City’s net assets changed in the most recent fiscal year. All changes of net assets are reported as soon as the underlying event giving rise to the change occurs. Therefore, revenues and expenses are reported in this statement for some items that will result in cash flows in future fiscal years’ reporting periods.
The City’s governmental activities are reported in the government-wide financial statements. Governmental activities include police and fire protection, public works, community development (building and planning), grants and special programs, and general government. Sales tax, property tax, vehicle license fees, transient occupancy tax, user fees, franchise fees, other miscellaneous revenues and federal and state grants finance these activities.
REPORTING THE CITY’S MOST SIGNIFICANT FUNDS
Fund Financial Statements
The fund financial statements provide detailed information about the City’s most significant funds—not the City as a whole. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. Some funds are required to be established by state or federal law or by bond covenants. Management establishes other funds to control and manage money for particular purposes or to show the City is meeting legal responsibilities for using certain taxes, grants, and other funding resources. All of the funds of the City can be divided into two categories: governmental funds and fiduciary funds.
Governmental funds—Most of the City’s basic services are reported in governmental funds, which focus on how money flows in and out of those funds and the balances left at year17 Item 10.
MANAGEMENT’S DISCUSSION AND ANALYSIS FY 2022 (UNAUDITED) 5 end that are available for spending. These funds are reported using an accounting method called modified accrual accounting, which measures cash and all other financial resources that can readily be converted to cash. The governmental fund statements provide a detailed, short-term view of the City’s general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance City programs.
Because the focus of the governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for the governmental funds with similar information presented for governmental activities in the government-wide financial statements. The differences of results in the governmental funds financial statements to those in the government-wide financial statements are shown in reconciliations following the governmental funds financial statements.
Fiduciary funds—Fiduciary funds are used to account for resources held for the benefit of parties outside the City. The City is responsible for ensuring that the assets reported in these funds are used for their intended purposes. Fiduciary funds are not reflected in the City’s government-wide financial statements because the City cannot use these assets to finance its operations.
FINANCIAL ANALYSIS OF THE CITY AS A WHOLE
Net Assets
Net assets as noted earlier may serve over time as a useful indicator of the City’s financial position. Below is a table showing the City’s net assets as of June 30, 2022 and 2021. Compared to the prior year, Total net assets of the City’s governmental activities decreased by $68,310 or (1/2%). The City’s Total net assets include three City of Sonora
Changes in Net Assets
For the Years Ended June 30, 2022 and 2021
2022 2021 2022 2021
Current and Other Assets 13,801,124 12,931,285 13,801,124 12,931,285 Capital Assets, Net of Acc Depreciation 17,460,424 16,763,974 17,460,424 16,763,974 Total Assets 31,261,548 29,695,259 31,261,548 29,695,259 Deferred Outflows of Resources 1,657,947 1,590,043 1,657,947 1,590,043 Long Term Liabilities Outstanding - - - - Other Liabilities 9,892,185 13,820,412 9,892,185 13,820,412 Total Liabities 9,892,185 13,820,412 9,892,185 13,820,412 Deferred Inflow of Resources 7,103,614 1,472,884 7,103,614 1,472,884 Net Assets
Invested Capital Assets, Net of debt 17,460,424 16,763,974 17,460,424 16,763,974 Restricted 6,880,996 6,551,507 6,880,996 6,551,507
Unrestricted (8,417,724) (7,323,475) (8,417,724) (7,323,475) Total Net Assets 15,923,696 15,992,006 15,923,696 15,992,006 Total
18 Item 10.
MANAGEMENT’S DISCUSSION AND ANALYSIS FY 2022 (UNAUDITED) 6 components: Invested in capital assets, net of related debt, restricted net assets and unrestricted net assets.
Of total net assets, $17,460,424 is the City’s investment in capital assets (e.g. land, buildings and improvements, vehicles and equipment, infrastructure) less any related debt used to acquire those assets that is still outstanding. Restricted net assets of $6,880,996 represent 39% of Total net assets. Restricted net assets are those resources that are subject to external restrictions on how they may be used. These restrictions are established by bond covenants or restrictions on the use of funds by state or federal regulations.
Unrestricted net assets are those resources that may be used to meet the City’s ongoing commitments to citizens and creditors. Government-wide unrestricted net assets are ($8,417,724) and is a result of the pension liability which is now reported to comply with GASB 68.
Governmental Activities
Total governmental revenues and transfers for the year exceeded expenditures by $730,314. Below is a table showing the governmental activities of the City for the years ended June 30, 2022 and 2021.
City of Sonora
Changes in Net Assets
For the Years Ended June 30, 2022 and 2021
2022 2021 2022 2021
Revenues
Property Tax 1,154,730 1,123,091 1,154,730 1,123,091 Sales Tax 5,843,336 5,433,288 5,843,336 5,433,288 Other Taxes and Franchises 1,394,344 1,089,403 1,394,344 1,089,403 Licenses and Permits 158,994 198,344 158,994 198,344 Fines and Forfeitures 25,699 30,270 25,699 30,270 Investment Earnings 88,336 108,930 88,336 108,930
Intergovernmental 1,502,913 1,262,469 1,502,913 1,262,469 Rental Income 73,677 47,820 73,677 47,820 Service Charges And Miscellaneous 384,689 410,916 384,689 410,916 Total Revenues 10,626,718 9,704,531 10,626,718 9,704,531 Expenditures
General Government 1,612,856 3,251,844 1,612,856 3,251,844 Public Safety 5,131,452 4,736,223 5,131,452 4,736,223 Public Works 1,245,513 1,065,881 1,245,513 1,065,881
Community Development (Building & Planning) 686,634 505,651 686,634 505,651 Culture and Leisure 78,044 69,030 78,044 69,030 Principal Payment on Long Term Debt - - - - Interest on Long Term Debt - - - - Capital Outlay 1,163,355 946,918 1,163,355 946,918 Total Expenses 9,917,854 10,575,547 9,917,854 10,575,547 Excess (Deficiency) of Revenues over Expenditures 708,864 (871,016) 708,864 (871,016) Other Financing Sources (Uses) 21,450 21,453 21,450 - Fund Balance at Beginning of Fiscal Year 11,990,667 12,840,230 11,969,214 12,840,230 Prior Period Adjustment - See Note F - - - - Fund Balance at End of Fiscal Year 12,720,981 11,990,667 12,699,528 11,969,214 Total
19 Item 10.
MANAGEMENT’S DISCUSSION AND ANALYSIS FY 2022 (UNAUDITED) 7 Total governmental revenues for the year increased by $922,187 or 9.5% over fiscal year 2022. The overall increase in revenue is a result of receiving State and Local Fiscal Recovery Funds for COVID-19 relief and an increase in sales tax revenues as the pandemic subsided.
Total governmental expenses for the year were $9,917,854 a decrease of $657,693 or 6% from fiscal year 2021, primarily due status quo budgets, little project activity as the pandemic persisted, and chronically unfilled positions. Public safety, which includes police and fire protection accounts for $5,131,452 or 52% of the total governmental activities expensed. Significant changes in expense activity are a result of the following activities:
Public Safety and Public Works expenditures increased by a total of $395,229, and $179,632, respectively. The increases in both departments were primarily related to staffing related changes.
Community Development expenditures increased by $180,983 from the prior year as there was additional use of contracted positions.
FINANCIAL ANALYSIS OF THE CITY’S FUNDS
The City’s governmental funds ended the year with a combined fund balance of $12,720,979. This is an increase of $730,312 from the prior year due to limited projects initiated in fiscal year 2022.
Major fund balance changes are noted below:
General Fund revenues exceeded expenditures and transfers by $599,712 largely as a result of COVID-19 related funding and unfilled positions. General Fund revenues totaled $9,617,389 (including transfers). Police and fire protection costs were $5,030,392 or 52% of total General Fund expenditures. The creation of a Special Sales and Use Tax District (Measure I) provided sales tax revenue of $2,347,075 in fiscal year 2022. This revenue was used to support operations in the police department, fire department and public works department.
The allocation of this revenue was $1,408,245 for Police, $586,769 for Fire and $352,061 for Public Works Departments.
Significant revenues of other non-major governmental funds are comprised of gasoline tax, grant funding, including for law enforcement, reimbursements from state and federal agencies for fire suppression and ongoing road projects.
General Fund Budgetary Highlights.
At year-end, budgeted General Fund revenues were $6,781,838 while actual revenue as $7,163,396. The budgeted General Fund expenditures were $9,356,878 and actual expenditures were $8,951,252. When taking into account transfers in and out of the general fund, the city ended the year with excess revenues over expenditures of $599,712. 20 Item 10.
MANAGEMENT’S DISCUSSION AND ANALYSIS FY 2022 (UNAUDITED) 8 The excess revenues over expenditures were due to positions that continue to have vacancies and projects that were delayed until more financial clarity.
Supplemental budget amendments that either increase or decrease appropriations are approved by the City Council.
CAPITAL AND DEBT ADMINISTRATION
Capital Assets. As of June 30, 2022, the City had $17,460,422 invested in a broad range of capital assets, including land, construction in progress, buildings, equipment and infrastructure. This amount represents a net increase of $696,448 or a 4% increase from the prior year.
The table below sets forth the City’s net asset investment as of June 30, 2020 and 2019.
Long-term Debt. At year-end, the City’s governmental activities had $1,036,593 in longterm debt. No new debt was incurred during the year. The table below sets forth the City’s long-term debt as of June 30, 2022, and 2021.
Additional information on the City’s long-term debt can be found in Note G to the accompanying financial statements.
City of Sonora
Capital Assets (Net of Depreciation)
For the Years Ended June 30, 2022 and 2021
2022 2021 2022 2021
Land 3,932,356 3,804,235 3,932,356 3,804,235
Construction in Progress 944,080 562,519 944,080 562,519 Building and Improvements 1,951,231 1,768,733 1,951,231 1,768,733 Equipment and Vehicles 1,083,980 886,063 1,083,980 886,063 Infrastructure 9,548,775 9,742,424 9,548,775 9,742,424
Total 17,460,422 16,763,974 17,460,422 16,763,974
Total
City of Sonora
Long Term Debt
For the Years Ended June 30, 2022 and 2021
2022 2021 2022 2021
Compensated Absences 1,036,593 761,425 1,036,593 761,425 Total 1,036,593 761,425 1,036,593 761,425 Government Activities Total
21 Item 10.
MANAGEMENT’S DISCUSSION AND ANALYSIS FY 2022 (UNAUDITED) 9 NEXT YEAR’S BUDGETS – FISCAL YEAR 2023 ECONOMIC FACTORS In preparing the budget for fiscal year 2023, City management has taken into consideration the following economic factors:
Sales tax and other the City’s revenues are projected to slow in fiscal year 2023 as the macro economy has seen inflationary pressures and increases in interest rates.
Sales tax continues to be the largest city revenue source. Property tax revenue is projected to be increase approximately 2% in 2022 compared to 2021 as economic recovery has accelerated the increase in home values.
Increased CalPERS rates were incorporated into the budget and the City continues to plan for significant increases in CalPERS rates for the next several years. While the current years CalPERS unfunded liability improved in fiscal year 2022, CalPERS lost (6.1%) on investments. These losses will increase the required City contribution in fiscal year 2024-25
The formation of a Special Sales and Use Tax District (Measure I) was approved by City of Sonora voters in August, 2004. A ½% sales tax increase within the City limits was effective January 1, 2005 and is continuing to provide revenue for police, fire and public works activities. The special district sales tax is expected to generate approximately $2,313,000 in revenue in fiscal year 2023.
For fiscal year 2023, the City’s General Fund revenues are projected to be approximately $7,933,000 compared to 2022 actuals of $7,163,396, an increase of $769,604 as the City was successful in a sales tax measure, Measure Y, in November 2022, a 1% sales tax within the incorporated city limits and the City will see the first revenues after April 1, 2023.
In 2023 General fund expenditures are budgeted to be $9,577,300, an increase of $220,422 or 2% over fiscal year 2022 actual of $9,356,878. A balanced General Fund budget was adopted for fiscal year 2023.
The City continue to take a position of conservative revenue projection and modest changes to General Fund department expenditures.
CONTACTING THE CITY’S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, investors and creditors with a general overview of the City of Sonora’s finances and to demonstrate the City’s accountability for the money it receives. If you have questions about this report or need additional information, contact the City’s Administrative Services Director at:
City of Sonora
94 N. Washington Street
Sonora, California 95370
(209) 532-6331
22 Item 10.
Governmental
Activities 2022 2021
ASSETS
Cash And Investments 7,997,302 7,497,531 7,997,302
Accounts Receivable 1,180,245 884,060 1,180,245
Interest Receivable 802,085 953,792 802,085
Loans Receivable 1,771,622 1,961,987 1,771,622
Prepaid Expenses 33,274 33,274 33,274
Restricted Cash 2,016,596 1,600,641 2,016,596
Receivable From Successor RDA Fund 0 0 0
Capital Assets (Net Of Accumulated
Depreciation):
Land 3,932,356 3,804,235 3,932,356
Construction In Progress 944,080 562,519 944,080
Buildings And Improvements 1,951,232 1,768,734 1,951,232 Equipment And Vehicles 1,083,980 886,062 1,083,980
Infrastructure 9,548,776 9,742,424 9,548,776
Total Assets 31,261,548 31,261,548 29,695,259
DEFERRED OUTFLOWS OF RESOURCES 1,657,947 1,657,947 1,590,043
LIABILITIES
Accounts Payable And Other
Current Liabilities 1,080,145 1,080,145 940,618
Compensated Absences 1,036,593 1,036,593 761,425
Other Post Employment Obligations (Asset) 415,345 415,345 404,735 Net Pension Liability 7,360,102 7,360,102 11,713,634
Long-Term Liabilities:
Due Within One Year 0 0 0
Due In More Than One Year 0 0 0
Total Liabilities 9,892,185 9,892,185 13,820,412
DEFERRED INFLOWS OF RESOURCES 7,103,614 7,103,614 1,472,884
NET POSITION
Invested In Capital Assets
Net Of Related Debt 17,460,424 17,460,424 16,763,974
Restricted For
Capital Projects 2,002,906 2,077,053 2,002,906
Community Development Projects 3,662,775 3,662,775 3,456,290 Revenue Bond Debt Service 0 0 0
Other Purposes 894,795 894,795 697,644
Perpetual Care:
Expendable 164,306 164,306 164,306
Nonexpendable 156,214 156,214 156,214
Unrestricted ( 8,417,724) 8,417,724) ( 7,323,475) (
Total Net Position 15,923,696 15,923,696 15,992,006
Totals
WITH COMPARATIVE ACTUAL AMOUNTS FOR JUNE 30, 2021
Primary Government
CITY OF SONORA
STATEMENT OF NET POSITION
JUNE 30, 2022
SEE ACCOMPANYING NOTES TO BASIC FINANCIAL STATEMENTS
10 23
Item 10.
CITY OF SONORA
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2022
WITH COMPARATIVE ACTUAL AMOUNTS FOR YEAR ENDED JUNE 30, 2021 Functions/Programs Expenses
Primary Government:
Governmental Activities:
General Government 1,955,554
Public Safety 6,204,217
Public Works 1,387,341
Community Development 986,142
Culture And Leisure 214,379
Interest On Long-Term Debt 0
Total Governmental Activities 10,747,633
Total Primary Government 10,747,633
SEE ACCOMPANYING NOTES TO BASIC FINANCIAL STATEMENTS
11 24
Item 10.
Changes In Net Assets
Fines, Fees And Operating Capital
Charges Grants And Grants And Governmental
For Services Contributions Contributions Activities 2022 2021 0 896,651 0 1,058,903) ( 1,058,903) ( 3,124,327) (
161,285 160,680 0 5,882,252) ( 5,882,252) ( 4,521,319) ( 0 623,761 101,248 662,332) ( 662,332) ( 669,259) (
0 61,950 0 924,192) ( 924,192) ( 512,530) (
0 48,750 0 165,629) ( 165,629) ( 147,388) (
0 0 0 0 0 0
161,285 1,791,792 101,248 8,693,308) ( 8,693,308) ( 8,974,823) ( 161,285 1,791,792 101,248 8,693,308) ( 8,693,308) ( 8,974,823) ( General Revenues:
Taxes:
Property Tax 1,154,730 1,154,730 1,123,091
Sales Tax 5,843,336 5,843,336 5,433,288
Cannabis Public Benefit Fee 499,977 499,977 216,719
Transient Lodging Tax 559,545 559,545 518,126
Franchise Tax 141,478 141,478 187,883
Motor Fuel Tax 91,647 91,647 120,836
Other Taxes 193,344 193,344 166,675
Investment Earnings 88,336 88,336 108,930
Gain/(Loss) On Sale of Assets 0 0 2,144) (
Transfers 21,450 21,450 1,278,835
Total General Revenues And Transfers 8,593,843 8,593,843 9,152,239 Change In Net Position 99,465) ( 99,465) ( 177,416
Net Position - Beginning 15,992,006 15,992,006 15,814,590 Net Position - Ending 15,892,541 15,892,541 15,992,006
Totals
Program Revenues
Primary Government
Net (Expense) Revenue And
SEE ACCOMPANYING NOTES TO BASIC FINANCIAL STATEMENTS
12 25
Item 10.
CITY OF SONORA
Special
Sales
Tax PD
General CDBG Fund
Assets
Cash And Investments 3,124,731 1,721,194 0
Accounts Receivable 809,151 245 131,740
Interest Receivable 3,473 485,969 1,543
Loans Receivable 0 1,126,312 0
Prepaid Expenses 33,274 0 0
Restricted Cash 0 0 887,477
Due From Successor RDA Fund 0 0 0
Total Assets 3,970,629 3,333,720 1,020,760
Liabilities
Accounts Payable 166,015 0 0
Other Liabilities 308,371 0 0
Due To Other Funds 0 0 0
Total Liabilities 474,386 0 0
Fund Balances
Nonspendable 33,274 0 0
Restricted 0 3,333,720 1,020,760
Committed 0 0 0
Assigned 0 0 0
Unassigned 3,462,969 0 0
Total Fund Balances 3,496,243 3,333,720 1,020,760
Total Liabilities And Fund Balances 3,970,629 3,333,720 1,020,760
BALANCE SHEET
GOVERNMENTAL FUNDS
WITH COMPARATIVE ACTUAL AMOUNTS FOR YEAR ENDED JUNE 30, 2021 JUNE 30, 2022
SEE ACCOMPANYING NOTES TO BASIC FINANCIAL STATEMENTS
13 26
Item 10.
Low/Moderate Mitigation
Income Fees Other
Housing Fund Fund Funds 2022 2021
1,075,787 711,651 1,363,939 7,497,531 7,997,302
1,813 0 237,296 884,060 1,180,245
0 311,100 0 953,792 802,085
0 645,310 0 1,961,987 1,771,622
0 0 0 33,274 33,274
0 0 1,129,119 1,600,641 2,016,596
0 0 0 0 0
1,077,600 1,668,061 2,730,354 13,801,124 12,931,285
579,078 0 26,187 157,610 771,280
0 0 491 783,008 308,862
0 0 0 0 0
579,078 0 26,678 940,618 1,080,142
0 0 156,214 189,488 189,488
498,522 1,668,061 1,704,607 8,281,223 8,225,670
0 0 447,509 92,562 447,509
0 0 912,057 831,865 912,057
0 0 516,711) ( 2,595,529 2,946,258
498,522 1,668,061 2,703,676 12,720,982 11,990,667
1,077,600 1,668,061 2,730,354 13,801,124 12,931,285
Total Governmental Funds
SEE ACCOMPANYING NOTES TO BASIC FINANCIAL STATEMENTS
14 27
Item 10.
CITY OF SONORA
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET POSITION
JUNE 30, 2022
Total fund balances - governmental funds 12,720,979
Total net assets reported for governmental activities in the statement of net position is different because:
Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds. Those assets consist of:
Land 3,932,356
Construction in progress 944,080
Buildings and improvements, net of $5,604,131accumulated depreciation 1,951,232 Equipment and vehicles, net of $3,136,088 accumulated depreciation 1,083,980 Infrastructure, net of $3,078,643 accumulated depreciation 9,548,776 Total capital assets 17,460,424
Deferred Outlflow of Resources 1,657,947
Long-term liabilities applicable to the City's governmental activities are due and payable in the current period and accordingly are not reported as fund liabilities. All liabilities, both current and long-term, are reported in the statement of net position.
Notes payable 0
OPEB (Obligation) Asset ( 415,345)
Compensated absences ( 1,036,593)
Net Pension Liability ( 7,360,102)
Deferred Inflows of Resources ( 7,103,614)
Total long-term liabilities ( 15,915,654)
Total net position - governmental activities 15,923,696
SEE ACCOMPANYING NOTES TO BASIC FINANCIAL STATEMENTS
15 28
Item 10.
Special
Sales
Tax PD
General CDBG Fund
Revenues
Property Tax 1,146,670 0 0
Sales Tax 3,496,261 1,408,245 0
Other Tax And Franchises 1,394,344 0 0
Licenses And Permits 118,705 0 0
Fines And Forfeitures 25,699 0 0
Investment Earnings 7,636 3,080 42,008
Intergovernmental 581,768 0 0
Rental Income 61,677 0 0
Service Charges And Miscellaneous 330,636 0 0
Total Revenues 7,163,396 1,411,325 42,008
Expenditures
General Government 1,570,251 0 0
Public Safety 5,030,392 0 0
Public Works 929,838 0 0
Community Development 693,020 0 0
Culture And Leisure 42,673 0 0
Debt Service
Principal 0 0 0
Interest And Other Charges 0 0 0
Capital Outlay 685,075 0 0
Total Expenditures 8,951,249 0 0
Excess (Deficiency) Of Revenues
Over Expenditures ( 42,008 1,787,853) 1,411,325
Other Financing Sources (Uses)
Operating Transfers In 2,453,993 0 0
Operating Transfers Out ( 66,428) ( 1,300,000) 248,509) ( Total Other Financing Sources (Uses) 248,509) 2,387,565 ( 1,300,000) ( Net Change In Fund Balances 599,712 ( 111,325 206,501)
Fund Balance - Beginning 2,896,531 909,435 3,540,221
Prior Period Adjusments - See Notes 0 0 0
Fund Balance- Ending 3,333,720 3,496,243 1,020,760
WITH COMPARATIVE ACTUAL AMOUNTS FOR YEAR ENDED JUNE 30, 2021
CITY OF SONORA
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
SEE ACCOMPANYING NOTES TO BASIC FINANCIAL STATEMENTS
16 29
Item 10.
Low/Moderate Mitigation
Income Housing Fees Other
Fund Fund Funds 2022 2021
0 0 8,060 1,154,730 1,123,091
0 0 938,830 5,843,336 5,433,288
0 0 0 1,394,344 1,089,403
0 0 40,289 158,994 198,344
0 0 0 25,699 30,270
3,720 24,452 7,440 88,336 108,930
15,920 0 905,207 1,502,895 1,262,469
0 0 12,000 73,677 47,820
0 0 54,071 384,707 410,916
19,640 24,452 1,965,897 10,626,718 9,704,531
0 0 0 1,570,251 3,251,844
0 0 101,060 5,131,452 4,736,223
0 0 248,255 1,178,093 1,065,881
0 8,165 95,473 796,658 505,651
0 0 35,371 78,044 69,030
0 0 0 0 0
0 0 0 0 0
0 0 1,163,355 478,280 946,918
0 8,165 958,439 9,917,853 10,575,547
19,640 16,287 1,007,458 871,016) 708,865 (
0 0 548,387 3,002,380 3,037,370
175,000) 0 ( 1,190,993) ( 2,980,930) ( 3,015,917) (
175,000) 0 ( 642,606) ( 21,450 21,453
155,360) 16,287 ( 364,852 730,315 849,563) (
653,882 1,651,774 2,338,824 11,990,667 12,840,230
0 0 0 0 0
498,522 1,668,061 2,703,676 12,720,982 11,990,667
Total Governmental Funds
SEE ACCOMPANYING NOTES TO BASIC FINANCIAL STATEMENTS
17 30
Item 10.
CITY OF SONORA
RECONCILIATION OF THE STATEMENT OF REVENUES,
EXPENDITURES, AND CHANGES IN FUND BALANCES OF
GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2022
Net change in fund balances - total governmental funds 730,315 The changes in net assets reported for governmental activities in the statement of activities is different because:
Governmental funds report capital outlays as expenditures. However, 696,449 in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital assets ($1,163,355) exceeded depreciation ($466,906) in the current period.
The net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade-ins and contributions) is to increase net position. 0 The recording of accrued compensated absences and other post employment obligations does not require the use of current financial resources and, therefore, is not reported as expenditures in governmental funds. The liability is included in the statement of activities. 285,779) ( Repayment of the principal of long-term debt consumes the current financial resources of governmental funds. These transactions do not have any affect on net position. 0
The net change in pension expense either contributed to pension plan in current fiscal year not included on statement of activities; or expenses reported in statement of activities that do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. 1,240,450) ( Changes in net positions of governmental activities 99,465) (
SEE ACCOMPANYING NOTES TO BASIC FINANCIAL STATEMENTS
18 31
Item 10.
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
Variance
With Final
Budget
Over 2021
Original Final Actual (Under) Actual
REVENUES
Property Tax 1,092,300 1,098,000 1,146,670 54,370 1,102,669 Sales Tax 3,269,427 3,009,427 3,496,261 226,834 3,280,856 Other Tax And Franchise Fees 1,292,600 1,050,000 1,394,344 101,744 1,089,403 Licenses And Permits 121,700 121,100 118,705 2,995) ( 129,277 Intergovernmental 581,768 581,786 581,768 0 0
Fines And Forfeitures 14,800 34,700 25,699 10,899 30,270 Investment Earnings 6,000 12,000 7,636 1,636 8,194
Rental Income 57,400 66,800 61,677 4,277 35,820
Service Charges And Miscellaneous 256,640 345,825 330,636 ( 384,483 15,189) Total Revenues 6,230,453 6,781,820 7,163,396 381,576 6,060,972
EXPENDITURES
General Government 1,731,911 1,674,861 1,570,251 ( 104,610) 3,243,317 Public Safety 4,905,610 5,257,610 5,030,392 ( 227,218) 4,591,593 Transportation/Public Works 946,550 966,525 929,838 ( 36,687) 1,004,013 Community Development 547,933 660,933 693,020 32,087 424,999 Culture And Leisure 48,200 48,200 42,673 ( 5,527) 0
Capital Outlay 339,224 748,749 685,075 ( 63,674) 18,000 Debt Service
Principal 0 0 0 0 0
Interest 0 0 0 0 0
Total Expenditures 8,519,428 9,356,878 8,951,249 405,629) ( 9,281,922 Excess (Deficiency) Of Revenues
Over Expenditures ( 2,575,058) 2,288,975) ( 1,787,853) ( 787,205 3,220,950) (
OTHER FINANCING SOURCES (USES)
Transfers In 2,390,550 2,553,050 2,453,993 ( 99,057) 2,063,560 Transfers Out ( 47,000) 44,000) ( 66,428) ( ( 19,428) ( 147,243) Total Other Financing Sources And (Uses) 2,346,550 2,506,050 2,387,565 118,485) ( 1,916,317 Net Change In Fund Balance 57,575 ( 599,712 69,008) 668,720 1,304,633) ( Fund Balance - Beginning 2,896,531 2,896,531 2,896,531 0 4,201,164 Prior Period Adjustment 0 0 0 0 0
Fund Balance - Ending 2,954,106 2,827,523 3,496,243 668,720 2,896,531 Budgeted Amounts
CITY OF SONORA
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2022
WITH COMPARATIVE ACTUAL AMOUNTS FOR YEAR ENDED JUNE 30, 2021 2022
SEE ACCOMPANYING NOTES TO BASIC FINANCIAL STATEMENTS
19 32
Item 10.
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
Variance
With Final
Budget
Over 2021
General Government Original Final Actual (Under) Actual Legislative
Employee Services 8,400 8,500 8,402 ( 98) 8,607
Supplies And Services 269,900 254,800 213,528 ( 41,272) 263,479 Total Legislative 278,300 263,300 221,930 41,370) ( 272,086 Administration
Employee Services 1,013,761 961,486 939,192 ( 22,294) 735,455 Supplies And Services 347,050 356,025 320,258 ( 35,767) 1,995,607 Capital Outlay 223,724 378,724 378,121 603) ( 2,000
Total Administration 1,584,535 1,696,235 1,637,571 58,664) ( 2,733,062 Opera Hall
Employee Services 21,100 20,800 17,719 ( 3,081) 25,941
Supplies And Services 27,100 27,400 24,954 ( 2,446) 21,696 Total Opera Hall 48,200 48,200 42,673 5,527) ( 47,637
Sunrise Hills
Supplies And Services 0 0 0 0 0
Total Sunrise Hills 0 0 0 0 0
Non-Departmental
Facilities
Supplies And Services 21,500 22,750 30,427 7,677 16,705 Capital Outlay 0 0 0 0 0
Total Facilities 21,500 22,750 30,427 7,677 16,705
Cemetery
Employee Services 40,850 39,950 30,081 9,869) ( 24,541
Supplies And Services 9,000 9,900 6,913 ( 2,987) 9,330
Capital Outlay 0 0 0 0 0
Total Cemetery 49,850 49,850 36,994 12,856) ( 33,871
Successor Agency Administration
Employee Services 21,450 21,450 21,450 0 21,099
Supplies And Services 0 0 0 0 350
Total Successor Agency Admin 21,450 21,450 21,450 0 21,449 Total General Government 2,003,835 2,101,785 1,991,045 110,740) ( 3,124,810 2022
Budgeted Amounts
CITY OF SONORA
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2022
SEE ACCOMPANYING NOTES TO BASIC FINANCIAL STATEMENTS
20 33
Item 10.
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
Variance
With Final
Budget
Over 2021
Original Final Actual (Under) Actual
Public Safety
Police
Employee Services 3,045,160 3,214,160 3,111,749 102,411) ( 2,873,991 Supplies And Services 386,850 448,850 403,734 45,116) ( 352,795 Capital Outlay 229,000 115,500 175,616 53,384) ( 16,000 Total Police 3,892,010 3,547,510 3,691,099 200,911) ( 3,242,786 Fire
Employee Services 1,328,350 1,408,250 1,346,131 ( 62,119) 1,224,063 Supplies And Services 145,250 186,350 168,778 ( 17,572) 140,744 Capital Outlay 0 0 0 0 0
Total Fire 1,594,600 1,473,600 1,514,909 79,691) ( 1,364,807 Total Public Safety 5,486,610 5,021,110 5,206,008 280,602) ( 4,607,593 Transportation
Public Works
Employee Services 690,300 667,725 633,626 ( 34,099) 749,830 Supplies And Services 219,100 261,650 251,486 ( 10,164) 219,325 Capital Outlay 0 85,025 85,024 ( 1) 0
Total Public Works 1,014,400 909,400 970,136 44,264) ( 969,155 Parks Landscape
Supplies And Services 26,650 26,650 33,083 6,433 25,255 Total Parks Landscape 26,650 26,650 33,083 6,433 25,255 Parking Lots
Supplies And Services 10,500 10,500 11,643 1,143 9,603
Total Parking Lots 10,500 10,500 11,643 1,143 9,603
Total Transportation 1,051,550 946,550 1,014,862 36,688) ( 1,004,013 Community Development
Building And Planning
Employee Services 386,033 318,933 327,476 8,543 292,817 Supplies And Services 121,900 192,000 218,571 26,571 94,482 Capital Outlay 56,000 0 46,314 0 0
Total Building And Planning 566,933 507,933 592,361 35,114 387,299 Engineering
Supplies And Service 40,000 40,000 36,950 ( 3,050) 37,700 Total Engineering 40,000 40,000 36,950 3,050) ( 37,700
Visit Tuolumne County 95,000 110,000 110,023 23 120,507 Total Visit Tuolumne County 110,000 95,000 110,023 23 120,507 Total Community Development 716,933 547,933 739,334 32,064 545,506 Total General Fund 9,356,878 8,519,428 8,951,249 405,629) ( 9,281,922
CITY OF SONORA
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2022
Budgeted Amounts
WITH COMPARATIVE ACTUAL AMOUNTS FOR YEAR ENDED JUNE 30, 2021 2022
SEE ACCOMPANYING NOTES TO BASIC FINANCIAL STATEMENTS
21 34
Item 10.
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
Variance
With Final
Budget
Over 2021
Original Final Actual (Under) Actual
REVENUES
Interest Income 36,700 33,000 42,008 5,308 52,872
Intergovernmental 0 0 0 0 0
Rental Income 0 0 0 0 0
Miscellaneous 0 0 0 0 0
Total Revenues 36,700 33,000 42,008 52,872 5,308
EXPENDITURES
Salaries 0 0 0 0 0
Benefits 0 0 0 0 0
Supplies And Services 0 0 0 0 822
Capital Outlay 0 0 0 0 0
Bad Debt Expense 0 0 0 0 67,079
Total Expenditures 0 0 0 0 67,901
Excess (Deficiency) Of Revenues
Over Expenditures 36,700 33,000 42,008 5,308 15,029) (
Other Financing Sources (Uses)
Operating Transfers In 0 0 0 0 612,922
Operating Transfers Out 251,207) 0 ( ( 248,509) ( 2,698) ( 735,348) Total Other Financing Sources (Uses) 0 ( 251,207) ( 2,698) 248,509) ( 122,426) ( Net Change In Fund Balance 33,000 214,507) ( 206,501) ( 8,006 137,455) ( Fund Balance - Beginning 3,540,221 3,540,221 3,540,221 0 3,677,676 Prior Period Adjustment 0 0 0 0 0
Fund Balance - Ending 3,325,714 3,573,221 3,333,720 8,006 3,540,221
CITY OF SONORA
CDBG SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30, 2022
Budgeted Amounts
WITH COMPARATIVE ACTUAL AMOUNTS FOR YEAR ENDED JUNE 30, 2021 2022
SEE ACCOMPANYING NOTES TO BASIC FINANCIAL STATEMENTS
22 35
Item 10.
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
Variance
With Final
Budget
Over 2021
Original Final Actual (Under) Actual
REVENUES
Investment Earnings 5,000 5,000 3,080 1,920) ( 3,995
Sales Tax 1,276,500 1,276,500 1,408,245 131,745 1,291,459 Miscellaneous 0 0 0 0 0
Total Revenues 1,281,500 1,281,500 1,411,325 129,825 1,295,454
EXPENDITURES
Salaries 0 0 0 0 0
Benefits 0 0 0 0 0
Supplies And Services 0 0 0 0 0
Capital Outlay 0 0 0 0 0
Total Expenditures 0 0 0 0 0
Excess (Deficiency) Of Revenues
Over Expenditures 1,281,500 1,281,500 1,411,325 129,825 1,295,454 Other Financing Sources (Uses)
Operating Transfers In 0 0 0 0 23,134
Operating Transfers Out ( 1,300,000) 1,300,000) ( ( 1,300,000) 0 ( 1,100,000) Total Other Financing Sources (Uses) ( 1,300,000) ( 1,300,000) ( 0 1,300,000) 1,076,866) ( Net Change In Fund Balance 18,500) ( 18,500) ( 111,325 129,825 218,588 Fund Balance - Beginning 909,435 909,435 909,435 0 690,847 Fund Balance - Ending 890,935 890,935 1,020,760 129,825 909,435
CITY OF SONORA
WITH COMPARATIVE ACTUAL AMOUNTS FOR YEAR ENDED JUNE 30, 2021 2021
Budgeted Amounts
SPECIAL SALES TAX POLICE FUND
FOR THE YEAR ENDED JUNE 30, 2022
SEE ACCOMPANYING NOTES TO BASIC FINANCIAL STATEMENTS
23 36
Item 10.
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
Variance
With Final
Budget
Over 2021
Original Final Actual (Under) Actual
REVENUES
Property Tax Increments 0 0 0 0 0
Rental Income 0 0 0 0 0
Investment Earnings 24,500 24,500 24,452 48) ( 26,748
Total Revenues 24,500 24,500 24,452 48) ( 26,748
EXPENDITURES
Salaries 5,000 1,868 5,000 3,132) ( 0
Benefits 2,900 619 1,400 781) ( 738
Supplies And Services 550 5,678 3,100 2,578 1,507
Capital Outlay 0 0 0 0 148,837
Total Expenditures 8,450 9,500 8,165 1,335) ( 151,082
Excess (Deficiency) Of Revenues
Over Expenditures 16,050 15,000 16,287 1,287 124,334) ( Other Financing Sources (Uses)
Operating Transfers In 0 0 0 0 0
Operating Transfers Out 0 160,000 0 ( 160,000) 0
Total Other Financing Sources (Uses) 0 160,000 160,000) 0 ( 0 Net Change In Fund Balance 16,050 145,000) ( 16,287 161,287 124,334) ( Fund Balance - Beginning 1,651,774 1,651,774 1,651,774 0 1,776,108 Fund Balance - Ending 1,667,824 1,506,774 1,668,061 161,287 1,651,774
CITY OF SONORA
LOW/MODERATE INCOME HOUSING FUND
JUNE 30, 2022
WITH COMPARATIVE ACTUAL AMOUNTS FOR YEAR ENDED JUNE 30, 2021 2022
Budgeted Amounts
SEE ACCOMPANYING NOTES TO BASIC FINANCIAL STATEMENTS
24 37
Item 10.
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
Variance
With Final
Budget
Over 2021
Original Final Actual (Under) Actual
REVENUES
Investment Earnings 7,000 7,000 3,720 3,280) ( 6,353
Intergovernmental 75,000 75,000 15,920 59,080) ( 74,634 Miscellaneous 0 0 0 0 0
Total Revenues 82,000 82,000 19,640 62,360) ( 80,987
EXPENDITURES
Salaries 0 0 0 0 0
Benefits 0 0 0 0 0
Supplies And Services 0 0 0 0 0
Capital Outlay 0 0 0 0 0
Total Expenditures 0 0 0 0 0
Excess (Deficiency) Of Revenues
Over Expenditures 82,000 82,000 19,640 62,360) ( 80,987 Other Financing Sources (Uses)
Operating Transfers In 0 0 0 0 0
Operating Transfers Out ( 175,000) 175,000) ( ( 175,000) 0 0 Total Other Financing Sources (Uses) ( 175,000) 175,000) ( ( 0 175,000) 0 Net Change In Fund Balance 93,000) ( 93,000) ( 155,360) ( 62,360) ( 80,987 Fund Balance - Beginning 653,882 653,882 653,882 0 572,895 Fund Balance - Ending 560,882 560,882 498,522 62,360) ( 653,882
CITY OF SONORA
MITIGATION FEES
JUNE 30, 2020
WITH COMPARATIVE ACTUAL AMOUNTS FOR YEAR ENDED JUNE 30, 2021 2022
Budgeted Amounts
SEE ACCOMPANYING NOTES TO BASIC FINANCIAL STATEMENTS
25 38
Item 10.
CITY OF SONORA
STATEMENT OF FIDUCIARY NET POSITION
FIDUCIARY FUNDS
JUNE 30, 2022
Successor
Sunrise RDA RDA
Hills Fund Fund 2022 2021
Assets
Cash And Investments 51,151 89,551 0 140,702 286,326
Accounts Receivable 0 301,855 0 301,855 55,813
Capital Assets, net 0 0 0 0 0
Total Assets 391,406 51,151 0 442,557 342,139
Liabilities
Accounts Payable 0 78,955 0 78,955 0
Due To Other Government Funds 0 0 0 0 0
Bonds Payable 0 51,151 0 51,151 51,139
Total Liabilities 78,955 51,151 0 130,106 51,139
Net Position 312,451 0 0 312,451 291,000
(Memorandum Only)
Totals
Agency
Fund
WITH COMPARATIVE ACTUAL AMOUNTS FOR YEAR ENDED JUNE 30, 2021
SEE ACCOMPANYING NOTES TO BASIC FINANCIAL STATEMENTS
26 39
Item 10.
CITY OF SONORA
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
27 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The basic financial statements of the City of Sonora, California (City) have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). The Governmental Accounting Standards Board (GASB) is the accepted standardsetting body for establishing governmental accounting and financial reporting principles. In June 1999, the GASB unanimously approved Statement No. 34, Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments. Certain of the significant changes in the Statement include the following:
The financial statements include:
A Management and Discussion and Analysis (MD&A) section providing an analysis of the City’s overall financial position and results of operations. Financial statements prepared using the full accrual accounting for all of the City’s activities, including infrastructure (roads, streets, bridges, etc.). A change in the fund financial statements to focus on the major funds.
These and other changes are reflected in the accompanying financial statements (including notes to financial statements).
The more significant of the City’s accounting policies are described below:
A. Financial Reporting Entity
The accompanying basic financial statements present the financial activity of the City of Sonora (primary government) and its component units, entities for which the government is considered to be financially accountable. Blended component units, although legally separate entities, are, in substance, part of the government’s operations. Discretely presented component units represent other legally separate organizations for which the primary government is financially accountable or for which the nature and significance of their relationship to the primary government are such that exclusion would cause the City’s reporting entity to be misleading or incomplete. The City’s component units are blended; there are no discretely presented component units in the Financial Reporting Entity.
City of Sonora
The City (primary government) was incorporated in 1851 under the general laws of the State of California. The City provides the full range of municipal services as contemplated by statute.
Services provided include public safety (police and fire), street construction and maintenance, culture-recreation, public improvements, planning and zoning, and general administrative and support services.
40 Item 10.
CITY OF SONORA
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
28 City of Sonora (continued)
The City operates under a Council-Manager form of government. The City Council consists of five members elected at large for overlapping four year terms. The Mayor is selected from the City Council members and serves a two-year term. The City’s only other elected official is the City Clerk/Treasurer whose term of office is four years. The City Council appoints a City Administrator and City Attorney. In addition, the City Council appoints the members of the following advisory Commissions and Boards:
Community Development Committee Finance Committee
Parks, Recreation and Beautification Committee Personnel Committee Public Safety Committee Public Works Committee
Amador-Tuolumne County Community Action Agency Cable 8 Committee Central Sierra Planning Council Local Agency Formation Commission Governmental Affairs Committee Sierra Conservation Center Committee Local Transportation Commission “Yes” Council Committee Solid Waste Committee Parking and Traffic Commission
Planning Commission
In addition to sitting as the governing board of the City, the City Council also acts as the Board of Directors of one blended component unit: the Redevelopment Agency of the City of Sonora through January 31, 2012. On February 1, 2012 all Redevelopment Agencies (RDA) statewide were dissolved. The City elected to be the Successor Agency of the dissolved Redevelopment Agency of the City of Sonora and is charged with the winding down of operations. The Successor Agency funds are now reported as a fiduciary fund in the City’s financial statements.
The City also elected to assume the housing function previously performed by the Redevelopment Agency. The non-cash assets and encumbered cash of the Redevelopment Housing Capital Projects Fund were transferred to the Low/Moderate Income Housing Fund.
B. Government-wide and fund financial statements
The government-wide financial statements (i.e., the statement of net position and the statement of changes in net position) report information on all of the non-fiduciary activities of the primary government and its component units. 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. 41 Item 10.
CITY OF SONORA
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
29 B. Government-wide and fund financial statements (continued) Taxes and other items not properly included among program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements (note that the City has no proprietary funds). Major individual governmental funds are reported as separate columns in the fund financial statements.
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 fiduciary 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 City 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, are recorded only when payment is due.
Property taxes and taxpayer-assessed tax revenues (e.g., franchise taxes, sales taxes, motor vehicle fees, etc.) net of estimated refunds and uncollectible amounts, and interest associated with the current fiscal period are all considered susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are considered measurable and available only when cash is received by the City. 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, except those required to be accounted for in another fund.
The CDBG Fund accounts for resources provided by the Federal Housing and Community Development Act of 1974 for the elimination of slums and blight, housing conservation and improvements of community services.
42 Item 10.
CITY OF SONORA
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
30 C. Measurement Focus, Basis of Accounting and Financial Statement Presentation (continued)
The Police Sales Tax Fund – To account for the collection of the ½ cent voter approved sales tax. The sales tax revenue can be used for hiring additional personnel, wages and benefits, and equipment in the police department.
The Low/Moderate Income Housing Fund was created when the City elected to assume the housing function previously performed by the Redevelopment Agency. The non-cash assets and encumbered cash of the Redevelopment Housing Capital Projects Fund were transferred to this fund.
The Mitigation Fees – To account for traffic impact fees collected against new construction. The fees are based upon estimated costs for regional traffic circulation improvements previously identified by the Sonora City Council and the Tuolumne County Board of Supervisors.
Additionally, the City reports the following fund types:
The Sunrise Hills Assessment District Agency Fund accounts for resources received for the administration of the district. The City is limited to acting as an agent for the assessed property owners and Certificate of Beneficial interest holders.
The Successor RDA Agency Fund accounts for the apportionment of property tax revenues used to pay the recognized obligations of the dissolved redevelopment agency until all recognized obligations of the dissolved redevelopment agency have been paid in full and all assets have been liquidated.
Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in the government-wide financial statements to the extent that those standards do not conflict with or contradict guidance of the GASB.
As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements.
Amounts reported as program revenues include 1) charges to customers, for applicants, for goods, services or privileges provided, 2) operating grants and contributions and 3) capital grants and contributions. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes.
When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, then unrestricted resources, as they are needed. 43 Item 10.
CITY OF SONORA
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
31 D. Assets, Liabilities, Net Position or Equity
1. Cash and Investments
In order to maximize the flexibility of its investment program and to aid in cash budgeting, the City pools the cash of all funds, except for monies deposited with fiscal agents in accordance with related bond indentures.
The cash and investments balance in each fund represents that fund’s equity share of the City’s cash and investment pool. As the City places no restrictions on the deposit or withdrawal of a particular fund’s equity in the pool, the pool operates like a demand deposit account for the participating funds.
Interest income earned on pooled cash and investments is allocated quarterly. Interest income on restricted cash and investments with fiscal agents is credited directly to the related fund.
In accordance with the State of California Government Code, the City adopts an investment policy that, among other things, authorizes types of investments. Authorized investments include:
Securities of the U.S. government or its agencies
Certificates of Deposit (or time deposits) placed with commercial banks and/or savings and loan associations
State Treasurer’s Local Agency Investment Fund (LAIF) Passbook savings account demand deposits
Shares of money market funds
Investments for the City, as well as its component units, are reported at fair value. LAIF operates in accordance with appropriate state laws and regulations. The reported value of the pool is the same as the fair value of the pool shares.
2. Receivables and Payables
Activity between funds that are representative of lending/borrowing arrangement outstanding at the end of the fiscal year are referred to as either "interfund receivables/payables" (i.e. the current portion of interfund loans) or advances to/from other funds (i.e. the non-current portion of interfund loans). All other outstanding balances between funds are reported as due to/from other funds.
Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources.
All trade and tax receivables are shown net of an allowance for uncollectible accounts and estimated refunds due.
44 Item 10.
CITY OF SONORA
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
32 2. Receivables and Payables (continued)
Property taxes are levied on the first day of March by the County Assessor, and are payable to the County Tax Collector in two installments.
The first installment is due November 1st, and delinquent December 10th, the second installment is due February 1st and delinquent April 10th. Taxes become a lien on the property on March 1st, and on the date of transfer of title, and the date of new construction.
The minimum property value which is taxed is $2,000; however, tax bills are prepared for properties valued at less than $2,000 if there is a special assessment to be collected.
Article 13A of the California Constitution states, “The maximum amount of any advalorem tax on real property shall not exceed one percent (1%) of the full cash value of such property. The one percent tax is to be collected by the counties and apportioned according to law to the districts within the counties.”
The City has elected under state law (Teeter) to receive all of the annual property assessments in three installments as follows:
December 55%
April 40%
June 5%
100%
3. Prepaid Items
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.
4. Capital Assets
Capital assets, which include property, plant, equipment and infrastructure assets (e.g. roads, bridges, sidewalks, traffic lights and signals, street lights and similar items), are reported in the applicable governmental columns in the government-wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of $5,000 for property, plant and equipment, and $25,000 for infrastructure. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at their estimated fair value at the date of donation. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized.
Major outlays for capital assets and improvements are capitalized as projects are constructed. 45 Item 10.
CITY OF SONORA
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
33 4. Capital Assets (continued)
Property, plant and equipment of the City are depreciated using the straight-line method over the following estimated useful lives:
Assets Years
Buildings 32
Building Improvements 10 to 25
Cemetery 32
Infrastructure 15 to 50
Equipment and Furnishings 7 to 15
Computer Equipment 3
Vehicles 3 to 7
5. Compensated Absences
It is the City’s policy to permit employees to accumulate earned but unused vacation and sick leave benefits. All vacation and sick leave benefits are accrued as earned by employees. Management employees, after 10 years of service, are eligible for a maximum payout of 520 hours of sick leave.
All vacation and sick leave pay is accrued when incurred in the government-wide 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 resignation and retirements.
6. Pensions And Other Postemployment Benefits (OPEB)
For purposes of measuring the net pension and OPEB liabilities, deferred outflows/inflows of resources related to pensions, OPEB, pension and OPEB expense, information about the fiduciary net position of the City of Sonora’s California Public Employees’ Retirement System (CalPERS) plans and Other Post-Employment Benefits (Plans), and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis 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.
Generally accepting 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, 2020
Measurement Date June 30, 2021
Measurement Period June 30, 2020 to June 30, 2021
46 Item 10.
CITY OF SONORA
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
34 7. Long-Term Obligations
In the government-wide financial statements, long-term debt and other long-term obligations are reported as liabilities in the statement of net position.
Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt.
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.
8. Net Position and Fund Equity
In the government-wide financial statements, net position are reported in three categories: net position invested in capital assets, net of related debt; restricted net position and unrestricted net position.
Restricted net position represent net position restricted by parties outside the City (such as creditors, grantors, contributors, laws and regulations of other governments) and include unspent proceeds of bonds issued to acquire or construct capital assets. The nonexpendable portion of permanent trust funds and endowments is reported as permanently restricted. The City’s other restricted net position are temporarily restricted (ultimately expendable assets). All other net position are considered unrestricted.
In the fund financial statements, fund balance is reported in classifications that comprise a hierarchy based on the extent to which the City is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. The classifications of fund balance are Non-spendable, Restricted, Committed, Assigned, and Unassigned. Non-spendable and Restricted fund balances represent the restricted classifications, and Committed, Assigned, and Unassigned represent the unrestricted classifications.
Non-spendable fund balance includes amounts that cannot be spent because either 1) it is not in a spendable form, such as inventory or prepaid items or 2) legally or contractually required to be maintained intact.
Restricted fund balance includes amounts that are constrained for specific purposes which are externally (outside the City) imposed by creditors, grantors, contributors, laws and regulations of other governments, or laws through constitutional provisions or enabling legislation. Committed fund balance includes amounts that are constrained for specified purpose that are internally imposed by the government through formal action of the highest level of decision making authority and does not lapse at year-end.
Assigned fund balance represents limitations imposed by management. 47 Item 10.
CITY OF SONORA
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
35 8. Net Position and Fund Equity (continued)
Unassigned fund balance represents the residual net resources in excess of the other classifications. The General Fund is the only fund that can report a positive unassigned fund balance and any governmental fund can report a negative unassigned fund balance.
When both restricted and unrestricted resources are available for specific expenditures, restricted resources are considered spent before unrestricted resources, unless there are legal documents/contracts that prohibit doing this, such as a grant agreement requiring dollar for dollar spending. Within unrestricted resources, committed and assigned are considered spent (if available) before unassigned amounts.
As of June 30, 2022, the fund balance details by classification are listed below:
Special
Sales Low/Moderate Total
Tax PD Income Mitigation Other Governmental
General CDBG Fund Housing Fees Funds Funds
Fund Balances:
Nonspendable:
Perpetual Care 156,214 156,214
Long-Term Advances 33,274 33,274
Restricted:
CDBG 3,333,720 3,333,720
Public Safety 1,020,760 716,673 1,737,433
Community Development 498,522 498,522
Public Housing 1,668,061 1,668,061
Transportation 429,303 429,303
Public Works 733,631 733,631
Committed To:
Historic Preservation 2,834 2,834
In-Lieu Parking 10,439 10,439
Compensated Abs Reserve 259,236 259,236
Assigned To:
Vehicle Abatement 29,086 29,086
Landscaping 127,372 127,372
RSTP 34,799 34,799
Farmers Market 0 0
Road Maintenance 298,086 298,086
South Sonora 212,829 212,829
Other Purposes 0 209,885 209,885
Unassigned: 0 3,462,966 516,711) ( 2,946,255
Total Fund Balances 3,333,720 3,496,240 1,020,760 1,668,061 498,522 2,703,676 12,720,979
9. 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. 48 Item 10.
CITY OF SONORA
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
36 II. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. Budgetary Information
The City Council is required to adopt an annual budget resolution by July 1 of each fiscal year for the General Fund, and special revenue, capital projects and permanent funds. These budgets are adopted and presented for reporting purposes on a basis consistent with generally accepted accounting principles.
The appropriated budget is prepared by fund, function, and department. The City Administrator may authorize transfers of appropriations within the budget or supplemental appropriations for items less than $10,000. The transfer of appropriations or supplemental appropriations that are greater than $10,000 must be approved by the City Council. The legal level of budgetary control (i.e., the level at which expenditures may not legally exceed appropriations) is the department level. The council made several supplemental budgetary appropriations throughout the year.
B. Excess of Expenditures over Appropriations
For the year ended June 30, 2022 expenditures exceeded appropriations in a few services as follows:
General Fund Services
Visitors Bureau 23 Facilities 7,677
Parks Landscaping 6,433
Parking Lots 1,143
Building And Planning 25,353
The General Fund’s other expenditures were less than appropriated, therefore, allowing for an increase in spending. The Administration Fund has written off the note receivable from the former RDA as it was closed as of the end of the fiscal year.
C. Deficit Fund Equity
The Self Insurance fund has a deficit fund balance of $696 as of June 30, 2022 will be reimbursed with future funds. The Business Improvement Benefit Fund has a deficit fund balance of $58,969 as of June 30, 2022. Future annual collections of Benefit Zone fees and lower allocations of personnel costs for sponsored events would reduce the deficit in the Business Improvement Benefit Fund, however such reductions would likely impact that number of special events that the City could continue to sponsor. Caltrans Federal fund has a deficit fund balance of $3,484 as of June 30, 2022, will be reimbursed by future reimbursements. Washington/Elkins fund has a deficit fund balance of $394,338 as of June 30, 2022, will be future reimbursements. Farmers Market fund has a deficit fund balance of $4,891 as of June 30, 2022, will be reimbursed with future revenues. SB2 Planning Grant fund has a deficit fund balance of $10,083 as of June 30, 2022, will be reimbursed 49 Item 10.
CITY OF SONORA
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
37 C. Deficit Fund Equity (continued)
with future funds. Regional Early Action Planning fun has a deficit fund balance of $44,250 as of June 30, 2022, will be reimbursed with future funds.
III. DETAILED NOTES ON ALL FUNDS
A. Cash and Investments
Cash and investments as of June 30, 2022 are classified in the accompanying financial statements as follows:
Cash and investments 8,138,004 Restricted Cash 2,016,596 Total cash and investments 10,154,600 Investment in Local Agency Investment Fund (LAIF) 7,570,394 Deposits with financial institutions 2,584,006 Cash on hand 200 Total cash and investments 10,154,600
The City’s investment policy does not contain any specific provisions intended to limit the City’s exposure to interest rate risk, credit risk, and concentration of credit risk.
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in the market interest rates. As of year-end, the weighted average maturity of the investments contained in the LAIF investment pool is 10.22 months.
Maturity Date
State investment pool $ 7,570,394 10.22 months average maturity Total $ 7,570,394
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. LAIF does not have a rating provided by a nationally recognized statistical rating organization.
50 Item 10.
CITY OF SONORA
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
38 Concentration of Credit Risk
The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code.
Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits.
The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for investments. With respect to investments, custodial credit risk generally applies only to direct investments in marketable securities. Custodial credit risk does not apply to a local government’s indirect investment in securities through the use of mutual funds or government investment pools (such as LAIF).
Investment in State Investment Pool
The City is a voluntary participant in the California State Treasurer's Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the oversight of the Treasurer of the State of California. The fair value of the City’s investment in this pool is reported in the accompanying financial statements at amounts based upon the City’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis.
Restricted Cash and Investments
The City maintains cash and investments restricted under the terms of an endowment trust agreement. The earnings from this money, accounted for in the City’s permanent fund, may be spent in accordance with the endowment trust restrictions. The money is included in the City’s pooled cash and investment program.
51 Item 10.
CITY OF SONORA
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
39 Restricted Cash and Investments
Restricted cash and investments as of June 30, 2022 is $1,600,641. This consists of the Cemetery Fund endowment $156,214, the Special Sales Tax Police Fund of $767,433, the Special Sales Tax Fire Fund of $210,057 and the Special Sales Tax Public Works Fund of $466,937. .
Deferred Compensation Plan
The City offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The City deposits deferred compensation plan assets with the California Public Employees Retirement System (PERS) and VALIC. Federal legislation requires that the assets of such plans be held in trust for the exclusive benefit of the plan participants and their beneficiaries. PERS and VALIC act as the trustees for the plan assets and the City is considered to have limited fiduciary responsibility for the plan assets. As such, the City does not report the deferred compensation plan assets on its financial statements. (See Note 4C to the basic financial statements for additional information about this plan.) B. Notes Receivable
The City is the recipient of Community Development Block Grant Funds and elected to assume the housing function previously performed by the dissolved redevelopment agency. Funds are provided to use for housing and business loans to qualified recipients at various below market interest rates ranging from 0 to 5%. The terms of the loans range between fifteen and thirty-one years. All loans are secured by deeds of trust. The amounts outstanding as of June 30, 2022 are $1,126,312 (CDBG Fund) and $645,310 (Low/Moderate Income Housing Fund).
However, the City has recorded an allowance for uncollectible accounts totaling $96,241 and $24,055 respectively, therefore reporting $1,030,071 and $621,255, respectively on the City’s financial statements.
52 Item 10.
CITY OF SONORA
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
40 C. Receivables
Receivables as of June 30, 2022 for the City’s individual major funds and non-major funds in the aggregate, including applicable allowances for uncollectible accounts, are as follows. All receivables are expected to be collected within one year.
General CDBG
Special
Sales Tax
PD Fund
LMIH
Fund
Mitigation
Fees
Non-Major
Governmental
Funds Total
Interest 3,473 485,969 1,543 311,100 0 0 802,085
Taxes 809,151 0 131,740 0 0 237,296 1,178,187
Grants 0 0 0 0 0 0 0
Accounts 0 245 0 0 1,813 0 2,058
Total 812,624 486,214 133,283 311,100 1,813 237,296 1,982,330 D. Capital Assets
Capital asset activity for the year ended June 30, 2022 was as follows:
Beginning Ending
Balance Increases Decreases Balance
Governmental Activities:
Capital assets not being depreciated:
Land 3,804,235 128,121 0 3,932,356
Construction in progress 562,519 381,561 0 944,080
Total capital assets not being
depreciated
4,366,754 509,682 0 4,876,436
Capital assets being depreciated:
Buildings and improvements 7,372,864 346,719 0 7,719,583 Equipment and vehicles 4,022,151 306,954 ( 60,843) 4,268,262 Infrastructure 12,821,067 0 0 12,821,067
Total capital assets being depreciated 24,216,082 653,673 ( 60,843) 24,808,912 Less accumulated depreciation for:
Buildings and improvements ( 5,604,131) ( 164,221) 0 ( 5,768,352) Equipment and vehicles ( 3,136,088) ( 109,037) 60,843 ( 3,184,282) Infrastructure ( 3,078,643) ( 193,649) 0 ( 3,272,292)
Total accumulated depreciation ( 11,818,862) ( 466,907) 60,843 ( 12,224,926) Net capital assets being depreciated 12,397,220 186,766 0 12,583,986 Total net capital assets - governmental 16,763,974 696,448 0 17,460,422 53 Item 10.
CITY OF SONORA
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
41 D. Capital Assets (continued)
Depreciation was charged to functions/programs of governmental activities for the year ended June 30, 2022 as follows:
General Government 144,759
Public Safety 83,388
Public Works 11,844
Community Development 91,395
Culture and Leisure 135,520
Total Depreciation Expense – Governmental 466,906
54 Item 10.
CITY OF SONORA
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
42 E. Transfers
Interfund transfers for the year ended June 30, 2022 consisted of the following amounts:
Transfer Transfer
Fund In Out
General Fund 2,453,993 66,428 CDBG Fund 0 248,509 Special Sales Tax-Police 0 1,300,000 Mitigation Fees 0 175,000 Gas Tax Fund 0 89,000 SLESF 0 125,000 LTF 0 94,237 Special Sales Tax-Fire 0 500,000 Special Sales Tax-Public Works 0 315,000 Fire Fighters Code 5 Fund 58,450 58,450 BSCC Fund 0 5,719 Vision Sonora Fund 207 0 Medical Cannabis Fund 3,428 0 SRO Fund 75,128 0
FEMA CAL/OES Fund 20,132 0
Greenley Road Extension Project 175,000 0
Self-Insurance Fund 36,296 0
Compensated Absences Fund 179,746 0
Cemetery Perpetual Care Fund 0 3,587
Totals 3,002,380 2,980,930
Redevelopment 0 21,450
3,002,380 3,002,380
55 Item 10.
CITY OF SONORA
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
43 F. Payables
Payables at June 30, 2022 for the City’s individual major funds and non-major funds in the aggregate are as follows:
General CDBG
Special
Sales Tax
PD Fund
LMIH
Fund
Mitigation
Fees
Non-major
Governmental Total
Governmental
Activities:
Vendors 166,015 0 0 0 0 26,187 192,202
Intergovernmental 0 0 0 0 0 0 0
Accrued Interest 0 0 0 0 0 0 0
Other 308,374 0 0 0 579,078 491 887,943
Total 474,389 0 0 0 579,078 26,678 1,080,145
G. Long-Term Debt
The following is a summary of changes in the City’s long-term debt and other long-term liabilities during the year ended June 30, 2022:
Beginning Ending Due Within
Balance Additions Deductions Balance One Year
Compensated Absences 761,425 275,168 0 1,036,593 185,587) ( Long-Term Liabilities of
Governmental Activities 761,425 275,168 0 1,036,593 185,587) (
H. Sunrise Hills Assessment District
The City acts as agent on behalf of the Sunrise Hills Assessment District Bond Issue. At the time of issuance of the bonds for this district, the City made an election under the Streets & Highways Code Section 8769 not to obligate the City to advance available funds from the City treasury to cure any deficiencies in the redemption fund for the bonds. Thus, the bonds are “limited obligation bonds” secured solely by the assessment installments paid by the property owners, the reserve fund established for the bonds at the time of their issuance and the proceeds, if any, of foreclosure sales.
The bond issue of $7,590,000 is due in principal installments ranging from $150,000 to $730,000 annually beginning in 1998 and matured in 2019.
Interest at 7% is payable in semiannual installments due in September and March. The bond transactions are accounted for in the Agency Fund.
56 Item 10.
CITY OF SONORA
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
44 H. Sunrise Hills Assessment District (continued)
During fiscal year ended June 30, 1998 the City conducted a foreclosure sale on certain property in the district, which had been delinquent for several years. No bids were received and therefore no funds were deposited in the redemption fund with respect to that property.
As a result of the above, the reserve fund did not have enough money to make further debt service payments and the City declared an “ultimate loss” on the bonds as of January 18, 2000. The assessment district bonds were either tendered in lieu of delinquent assessments, penalties and interest for a Certificate of Beneficial Interest.
During the fiscal year ended June 30, 2022, the bond issue matured and any obligation has now been terminated.
I. Evaluation of Subsequent Events
The City has evaluated subsequent events through December 28, 2022, the date which the financial statements were available to be issued.
IV. OTHER INFORMATION
A. Risk Management
The City of Sonora participates with other public entities in a joint exercise of powers agreement which establishes the Central San Joaquin Valley Risk Management Authority (CSJVRMA). The relationship between the City and CSJVRMA is such that CSJVRMA is not a component unit of the City for financial reporting purposes.
The City is covered for the first $1,000,000 of each general liability claim and $250,000 of each workers’ compensation claim through the CSJVRMA. The City has the right to receive dividends or the obligation to pay assessments based on a formula which, among other expenses, charges the City’s account for liability losses under $25,000 and workers’ compensation losses under $25,000.
The CSJVRMA participates in an excess pool which provides general liability coverage from $1,000,000 to $10,000,000. The CSJVRMA participates in an excess pool which provides Workers’ Compensation coverage from $250,000 to $500,000 and purchases excess insurance above the $500,000 to the statutory limit.
57 Item 10.
CITY OF SONORA
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
45 A. Risk Management (continued)
The CSJVRMA is a consortium of fifty-four (54) cities in San Joaquin Valley, California. It was established under the provisions of California Government Code Section 6500 et seq. The CSJVRMA is governed by a Board of Directors, which meets 3-4 times per year, consisting of one member appointed by each member city. The day-to-day business is handled by a management group employed by the CSJVRMA. The financial position and results of operations for the CSJVRMA, as of June 30, 2021, are presented below:
Total Assets 150,837,823
Total Liabilities 118,663,929 Total Net Assets 32,173,894 Total Liabilities & Net Assets 150,837,823
Total Revenues for Year 58,911,480 Total Expenses for Year 47,584,363 Net Income for Year 11,327,117
At the termination of the joint powers agreement and after all claims have been settled, any excess deficit will be divided among the cities in accordance with its governing documents.
B. Commitments and Contingencies
The City of Sonora is a defendant in various lawsuits. Although the outcome of some of these lawsuits is not presently determinable, it is the opinion of the City's legal counsel that a resolution of these matters will not have a material adverse effect on the financial condition of the City.
C. Employee Deferred Compensation Plan
The City offers an Employee Deferred Compensation Plan created in accordance with Internal Revenue Code Section 457 to its employees, allowing them to defer or postpone receipt of income.
Amounts so deferred may not be paid to the employee during employment with the City except for a catastrophic circumstance creating an undue financial hardship for the employee.
Effective January 1, 1999, Federal legislation (Small Business Job Protection Act of 1996) requires the Section 457 plan assets to be placed in trust for the exclusive use of the plan participants and their beneficiaries. The City’s deferred compensation administrator, CalPERS and VALIC qualifies as the plan trustees to meet Federal requirements. Since the plan assets are no longer considered the property and rights of the City, such assets are no longer reflected in the accompanying basic financial statements.
58 Item 10.
CITY OF SONORA
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
46 D. Post-Retirement Benefit Plan
Plan Description
The City provides post-retirement medical coverage to eligible employees (and their dependents).
Management employees who retire at age 50 (Fire, Police) or age 55 (Other) or older with at least 10 years of service with the City, are eligible for benefits. The City Administrator is eligible for benefits after 5 years of service with the City. The City pays a portion of the cost of the benefit, up to a predetermined cap. The excess carrier is responsible for the costs in excess of the City's self-insured amount ($55,000). The retiree is responsible for either 50% or 25% of the excess carrier's premium amount, depending on their age, less than 60, 50%, 60 or greater, 25%. Coverage ends when the retiree/dependent becomes eligible for Medicare.
Employees Covered by Benefit Terms
At June 30, 2022, the following City employees were covered by the benefit terms:
Retirees currently receiving benefits 3
Active employees 5
8 Contributions
The City is currently financing the OPEB liability on a pay-as-you-go basis. The City only contributes the required retiree benefits when due. For the year ended June 30, 2021, the City contribution to the plan was $89,067. Employees are not required to contribute to the plan.
Net OPEB Liability
The City’s net OPEB liability of $415,345 was measured as of June 30, 2021 and was determined by an actuarial valuation as of that date.
59 Item 10.
CITY OF SONORA
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
47 D. Post-Retirement Benefit Plan (Continued)
Actuarial Assumptions and Other Inputs
The total OPEB liability in the June 30, 2022 actuarial valuation was determined using the following actuarial assumptions and other inputs, applied to all periods included in the measurement, unless otherwise specified:
Valuation Date June 30, 2020
Measurement Date June 30, 2021
Funding Method Entry Age Normal Cost, level percent of pay Asset Valuation Method Market value of assets ($0; plan is not yet funded) Discount Rate 2.66% as of June 30, 2020
2.18% as of June 30, 2021
Participants Valued Only current active employees and retired participants and covered dependents are valued. No future entrants are
considered in this valuation
Salary Increase 3.00% per year, since benefits do not depend on salary, this is used only to allocate the cost of benefits between service years Assumed Wage Inflation 3.0% per year; a component of assumed salary increases General Inflation Rate 2.5% per year
Discount Rate
When a city finances retiree benefits on a pay-as-you-go basis, GASB 75 requires the use of a discount rate equal to a 20-year high grade municipal bond rate. The discount rate used in the valuation was based on the S&P Municipal Bond 20 Year High Grade Index. As of the beginning and end of the Measurement Period, use of this index results in discount rates of 2.66% as of June 30, 2020 and
2.18% as of June 30, 2021.
60 Item 10.
CITY OF SONORA
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
48 D. Post-Retirement Benefit Plan (Continued)
Changes in the Net OPEB Liability
Increase (Decrease)
Total OPEB Plan Fiduciary Net OPEB
Liability Net Position Liability/(Asset)
Balance at June 30, 2020 404,735 $ 0 $ 404,735 $
Changes in the year:
Service Cost 18,577 0 18,577 Interest Cost 10,076 10,076 Employer Contributions 0 89,067 (89,067) Benefit Payments (89,067) (89,067) 0 Differences Between Expected and Actual Experience 2,830 0 2,830 Assumption Changes 68,194 0 68,194 Net Changes in Fiscal Year 2020-2021 10,610 0 10,610 Balance at Fiscal Year Ending 6/30/21 415,345 $ 0 $ 415,345 $ Sensitivity of the Net OPEB Liability to Changes in the Discount Rate The following presents the net OPEB liability of the City, as well as what the City’s Net OPEB would be if it were calculated using a discount rate that is 1-percentage-point lower or 1-percentage-point higher than the current discount rate:
Change in Current - 1% Current Rate Current + 1%
Discount Rate 1.18% 2.18% 3.18%
Net OPEB Liability (Asset) 432,547 415,346 398,711
Sensitivity of the Net OPEB Liability to changes in the Healthcare Cost Trend Rates The following presents the net OPEB liability of the City, as well as what the City’s Net OPEB would be if it were calculated using a healthcare cost trend rate that is 1-percentage-point lower or 1- percentage-point higher than the current healthcare cost trend rate:
Change in Heathcare Current Trend Current Current Trend Cost Tred Rate -1% Trend +1%
Net OPEB Liability (Asset) 391,704 415,345 441,167
61 Item 10.
CITY OF SONORA
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
49 D. Post-Retirement Benefit Plan (Continued)
OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB
For the year ended June 30, 2022, the City recognized OPEB expense of $89,067. At June 30, 2022, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Changes of Assumptions 54,182 $ 0 $
Differences Between Expected
and Actual Experience 2,215 956 Net Difference Between Projected and Actual Earnings on Investments 0 0 Deferred Contributions 65,409 0 Total 121,806 $ 956 $
The City will recognize the Deferred Contributions in the next fiscal year. In addition, future recognition of these deferred resources is shown below:
Recognized Net
Year Ending Deferred Outflows
June 30, (Inflows) of Resources
2023 15,187 $
2024 15,550 2025 15,440
2026 9,264 2027 0 Thereafter 0
E. Employee Retirement Systems and Plans
The City contributes to the California Public Employees’ Retirement System (CalPERS), an agent multiple-employer public employee defined benefit pension plan. All qualified permanent and probationary employees are eligible to participate in the Local Government’s separate Safety (police and fire) and Miscellaneous (all other) Employee Pension Plans, cost-sharing multiple employer defined benefit pension plans administered by the California Public Employees’ Retirement System (CalPERS). Benefit provisions under the Plans are established by State statute and Local Government resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.
62 Item 10.
CITY OF SONORA
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
50 E. Employee Retirement Systems and Plans (Continued) 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 50 with statutorily reduced benefits. All members are eligible for non-duty 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 Employees’ Retirement Law.
The Plans’ provisions and benefits in effect at June 30, 2018, are summarized as follows:
Miscellaneous
Hire date
Prior to January 1,
2013
On or After January
1, 2013
Benefit formula 2.7 @ 55 2.0 @ 62
Benefit vesting schedule 5 years of service 5 years of service Benefit payments Monthly for life Monthly for life
Retirement age 50-55 52-63
Monthly benefits, as of % of eligible compensation 2.000% to 2.700% 1.000% to 2.500% Required employee contribution rates 8.00% 6.50%
Required employer contribution rates 36.174% 0.00%
Safety
Hire date
Prior to January 1,
2013
On or After January
1, 2013
Benefit formula 3.0 @ 50 2.7 @ 57
Benefit vesting schedule 5 years of service 5 years of service Benefit payments Monthly for life Monthly for life
Retirement age 50-55 50-57
Monthly benefits, as of % of eligible compensation 3.00% 2.000% to 2.700% Required employee contribution rates 9.00% 11.50%
Required employer contribution rates - Fire 40.122% N/A Required employer contribution rates - Police 50.236% N/A Contributions – Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contributions rates for all public employees be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for both Plans are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during that year, with an additional amount to finance any unfunded accrued liability. The Local Government is required to contribute the difference between actuarially determined rate and the contribution rate of employees. 63 Item 10.
CITY OF SONORA
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
51 E. Employee Retirement Systems and Plans (Continued) Effective January 1, 2013, the Public Employees’ Pension Reform Act (PEPRA) implemented new benefit formulas, final compensation period, and new contribution requirements for new employees hired on or after January 1, 2013, who meet the definition of new member as per PEPRA.
For the year ended June 30, 2022, the contribution recognized as part of pension expense for each Plan were as follows:
Miscellaneous Safety
Contributions - employer 149,907 $ 322,088 $
Contributions - employee (paid by employer) 0 0 Lump Sum Contributions 410,214 565,705 Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
As of June 30, 2022, the Local Government reported net pension liabilities for its proportionate shares of the net pension liability of each Plan as follows:
Proportionate Share
of Net Pension Liability
Miscellaneous 3,526,243 $
Safety 3,833,859 Total Net Pension Liability 7,360,102 $ The Local Government’s net pension liability for each Plan is measured as the proportionate share of the net pension liability. The net pension liability of each of the Plans is measured as on June 30, 2021, and the total pension liability for each Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2020 rolled forward to June 30, 2021 using standard update procedures. The Local Government’s proportion of the net pension liability was based on a projection of the Local Government’s long-term share of contributions to the pension plans relative to the projected contributions of all participating employers, actuarially determined. 64 Item 10.
CITY OF SONORA
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
52 E. Employee Retirement Systems and Plans (Continued) The Local Government’s proportionate share of the net pension liability for each Plan as of June 30, 2021 and 2022 was as follows:
Miscellaneous Safety Total
Proportion - 6/30/21 0.12563% 0.09628% 0.10766%
Proportion - 6/30/22 0.18571% 0.10924% 0.13609%
Change - Increase/(Decrease) 0.06008% 0.01296% 0.02843% Note: Due to the nature of calculating proportionate share of the Net Pension Liability/(asset), total proportion for all employer plans will not equal the sum of the miscellaneous proportion % and the safety proportion %.
At June 30, 2022, the Local Government reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Changes in Assumptions 0 $ 0 $
Differences Between Expected and Actual Experience 1,050,442 0 Differences Between Projected and Actual Investment Earnings 0 5,360,107 Differences Between Employer's Contributions and Proportionate Share of Contributions 0 1,458,506
Change in Employer's Proportion 8,453 284,046 Pension Contributions Made Subsequent to Measurement Date 0 471,995 $ 7,102,659 1,530,890 $ $1,530,890 reported as deferred outflows of resources relation to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2022. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
Fiscal Year Ending June 30: Miscellaneous Safety Total
2023 (921,065) $ (716,983) $ (1,638,048) $
2024 (860,094) (656,547) (1,516,641) 2025 (799,729) (610,741) (1,410,470) 2026 (850,662) (627,942) (1,478,604)
2027 - - - Thereafter - - - $ (2,612,213) (3,431,550) $ (6,043,763) $
65 Item 10.
CITY OF SONORA
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
53 Actuarial Assumptions – The total pension liabilities was determined by rolling forward the total pension liability determined in the June 30, 2020 actuarial accounting valuations to June 30, 2021.
The June 30, 2021, total pension liability was based on the following actuarial methods and assumptions:
E. Employee Retirement Systems and Plans (Continued)
Valuation Date June 30, 2020
Measurement Date June 30, 2021
Acturarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions:
Discount Rate 7.15%
Inflation 2.50%
Salary Increases Varied by Entry Age and Service
Mortality Rate Table Derived using CalPERS' membership data for all funds Post Retirement Benefit Contract COLA up to 2.50% until purchasing power Increase Protection allowance floor on power applies, 2.50% thereafter The mortality table used was developed based on CalPERS’ specific data. The table includes 15 years of mortality improvements using Society of Actuaries Scale 90% of scale MP 2016. For more details on this table, please refer to the December 2017 experience study report (based on CalPERS demographic data from 1997 to 2015) that can be found on the CalPERS website.
Discount Rate – The discount rate used to measure the total pension liability was 7.15%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.
Long-term Expected Rate of Return – The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.
In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund (PERF) cash flows.
Using historical returns of all funds’ asset classes, expected compound (geometric) returns were 66 Item 10.
CITY OF SONORA
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
54 E. Employee Retirement Systems and Plans (Continued) calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the rounded single equivalent expected return that arrived at the same present value of benefits of cash flows as the one calculated using both short-term and long-term returns.
The expected rate of return was then set equivalent to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses. The expected real rates of return by asset class are as followed:
New Strategic Real Return Real Return
Allocation Years 1 - 10 (2) Years 11+ (3)
Global Equity 50.0% 4.80% 5.98%
Global Fixed Income 28.0% 1.00% 2.62%
Inflation Sensitive 0.0% 0.77% 1.81%
Private Equity 8.0% 6.30% 7.23%
Real Estate 13.0% 3.75% 4.93%
Liquidity 1.0% 0.00% -0.92%
(1) In the System CAFR, Fixed Income is included in Global Debt Securities; Liquidity is included in Short-term Investments; Inflation Assets are included in both Global Equity Securities and Global Debt Securities.
(2) An expected inflation of 2.00% used for this period. (3) An expected inflation of 2.92% used for this period.
Asset Class
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate – The following presents the Local Government’s proportionate share of the net pension liability for each Plan, calculated using the discount rate for each Plan, as well as what the Local Government’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:
Current Discount
Summary Discount Rate -1% Rate Discount Rate +1%
Misc Plans 5,813,188 3,526,243 1,635,659 Safety Plans 6,985,193 3,833,859 1,245,428 Total 12,798,381 7,360,102 2,881,087
Pension Plan Fiduciary Net Position – Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports. 67 Item 10.
REQUIRED SUPPLEMENTAL FINANCIAL DATA
68 Item 10.
CITY OF SONORA
SCHEDULE OF THE LOCAL GOVERNMENT'S PROPORTIONATE
SHARE OF THE NET PENSION LIABILITY - MISCELLANOUS
JUNE 30, 2022
2021 2020 2019 2018 2017 2016 2015 2014
Proportion of the net pension liability 0.0868% 0.1256% 0.1277% 0.1299% 0.1285% 0.1318% 0.0863% 0.08141% Proportion share of the net pension liablity 3,526,243 $ 3,613,773 $ 5,111,834 $ 4,896,082 $ 5,065,626 $ 4,577,489 $ 2,366,853 $ 2,011,976 $ Covered - employee payroll 3,338,126 $ 3,220,723 $ 3,115,149 $ 3,493,914 $ 3,444,512 $ 3,013,131 $ 1,199,319 $ 1,133,953 $ Proportionate share of the net pension liability as 108.26% 158.72% 157.17% 144.98% 132.89% 151.92% 197.35% 177.43% percentage of covered-employee payroll
Plan's fiduciary net position 13,795,038 $ 14,000,988 $ 11,027,177 $ 10,660,670 $ 10,124,468 $ 9,477,208 $ 6,141,333 $ 6,302,141 $ Plan fiduciary net position as a percentage of the total pension liability 79.64% 79.48% 68.33% 68.53% 66.65% 67.43% 72.18% 75.80% Notes to Schedule:
Change in assumptions. In 2016, amounts reported as changes in assumptions resulted primarily from adjustments to expected retirement ages of general employees. 55 69
Item 10.
CITY OF SONORA
SCHEDULE OF THE LOCAL GOVERNMENT'S PROPORTIONATE
SHARE OF THE NET PENSION LIABILITY - SAFETY
JUNE 30, 2022
2021 2020 2019 2018 2017 2016 2015 2014
Proportion of the net pension liability 0.0893% 0.1828% 0.0965% 0.0976% 0.0970% 0.1023% 0.1054% 0.04351% Proportion share of the net pension liablity 3,833,859 $ 6,414,463 $ 6,022,098 $ 5,725,212 $ 5,798,526 $ 4,213,686 $ 4,344,646 $ 1,632,087 $ Covered - employee payroll 3,770,036 $ 3,741,442 $ 3,633,288 $ 3,490,120 $ 3,505,165 $ 3,226,023 $ 1,120,793 $ 1,199,112 $ Proportionate share of the net pension liability as 101.69% 171.44% 165.75% 164.04% 165.43% 130.62% 387.64% 136.11% percentage of covered-employee payroll
Plan's fiduciary net position 19,577,224 $ 16,313,562 $ 15,823,749 $ 15,148,617 $ 14,608,321 $ 13,015,069 $ 13,050,377 $ 4,948,867 $ Plan fiduciary net position as a percentage of the total pension liability 83.62% 71.78% 72.43% 72.57% 71.59% 75.54% 75.02% 75.20% Notes to Schedule:
Benefit Changes. In 2016, benefit terms were modified to base public safety employee pensions on a final three-year average salary instead of a final five-year average salary.
Change in assumptions. In 2016, amounts reported as changes in assumptions resulted primarily from adjustments to expected retirement ages of general employees. 56 70
Item 10.
CITY OF SONORA
SCHEDULE OF CONTRIBUTIONS - MISCELLANEOUS
JUNE 30, 2022
2021 2020 2019 2018 2017 2016 2015 2014
Contractually required contribution (actuarially determined) 1,466,900 $ 1,237,781 $ 1,051,911 $ 1,089,254 $ 814,632 $ 684,457 $ 364,596 $ 296,470 $ Contributions in relation to the actuarially determined contributions (1,912,140) $ (1,528,096) (1,251,042) (1,152,240) (802,074) (765,021) (364,596) (296,470) Contribution deficiency (excess) (445,240) $ (290,315) $ (199,131) $ (62,986) $ 12,558 $ (80,564) $ - $ - $ Covered - employee payroll 3,338,126 $ 3,220,723 $ 3,115,149 $ 3,493,914 $ 3,444,512 $ 3,013,131 $ 1,199,319 $ 1,133,953 $ Contributions as a percentage of covered-employee payroll 43.94% 38.43% 33.77% 31.18% 23.65% 22.72% 30.40% 26.14% percentage of covered-employee payroll
Notes to Schedule:
Valuation Date: 6/30/2020 6/30/2019 6/30/2018 6/30/2017 6/30/2016 6/30/2015 6/30/2014 6/30/2013 Methods and assumptions used to determine cotnribution rates:
Actuarial Cost Method Entry age
Amortization method Level Percentage of Payroll and Direct Rate Smoothing Asset valuation method Market Value
Inflation 2.63%
Salay increases Varies by Entry Age and Service
Investment rate of return 7.25%, net of pension plan investment and administrative expense, including inflation
57 71
Item 10.
CITY OF SONORA
SCHEDULE OF CONTRIBUTIONS - SAFETY
JUNE 30, 2022
2021 2020 2019 2018 2017 2016 2015 2014
Contractually required contribution (actuarially determined) 1,656,698 $ 1,437,902 $ 1,226,874 $ 1,106,876 $ 828,977 $ 732,817 $ 527,765 $ 486,250 $ Contributions in relation to the actuarially determined contributions (2,159,546) $ (1,775,155) (1,459,126) (1,327,402) (921,165) (819,073) (527,765) (486,250) Contribution deficiency (excess) (502,848) $ (337,253) $ (232,252) $ (220,526) $ (92,188) $ (86,256) $ - $ - $ Covered - employee payroll 3,770,036 $ 3,741,442 $ 3,633,288 $ 3,490,120 $ 3,505,165 $ 3,226,023 $ 1,120,793 $ 1,199,112 $ Contributions as a percentage of covered-employee payroll 43.94% 38.43% 33.77% 31.71% 23.65% 22.72% 47.09% 40.55% percentage of covered-employee payroll
Notes to Schedule:
Valuation Date: 6/30/2020 6/30/2019 6/30/2018 6/30/2017 6/30/2016 6/30/2015 6/30/2014 6/30/2013 Methods and assumptions used to determine cotnribution rates:
Actuarial Cost Method Entry age
Amortization method Level Percentage of Payroll and Direct Rate Smoothing Asset valuation method Market Value
Inflation 2.63%
Salary increases Varies by Entry Age and Service
Investment rate of return 7.25%, net of pension plan investment and administrative expense, including inflation
58 72
Item 10.
CITY OF SONORA
SCHEDULE OF CHANGES IN THE CITY'S
NET OPEB LIABILITY AND RELATED RATIOS
JUNE 30, 2022
Measurement
Period
2021
Total OPEB Liability
Service Cost 18,577 $
Interest on total OPEB liability 10,076
Changes of benefit terms 0
Differences between expected and actual experience 0
Changes of assumptions 0
Benefit payments (89,067)
Assumption Changes 68,194
Plan Experience 2,830
Net change in total OPEB liability 10,610
Total OPEB liability - beginning 404,735
Total OPEB liability - ending (a) $ 415,345
Plan Fiduciary Net Position
Contributions - employer 89,067 $
Net investment income 0
Benefit payments (89,067)
Net change in plan fiduciary net position 0
Plan fiduciary net position - beginning 0
Plan fidiciary net position - ending (b) $ 0
Net OPEB liability - ending (a) - (b) $ 415,345
Covered-employee payroll $ 600,630
Net OPEB liability as a percentage of
covered-employee payroll 69.15%
59 73
Item 10.
CITY OF SONORA
SCHEDULE OF PLAN CONTRIBUTIONS
FOR THE CITY'S OPEB PLAN
JUNE 30, 2022
Contributions in
Relation to the Contributions
Actuarially Actuarially Contribution Covered as a % of
Determined Determined Deficiency/ Employee Covered
Fiscal Year Contributions Contributions (Excess) Payroll Employee Payroll 2021 89,067 89,067 0 600,630 14.83%
60 74
Item 10.
COMBINING AND INDIVIDUAL FUND
STATEMENTS AND SCHEDULES
75 Item 10.
61 COMBINING FINANCIAL STATEMENTS
NON-MAJOR GOVERNMENTAL FUNDS
Special Revenue Funds
Abandoned Vehicle Abatement - To account for state grants and other monies received and disbursed for the disposition of abandoned vehicles.
Gas Tax Funds - To account for state gas tax revenues collected based on population. The revenues may be expended only for street and road repair, maintenance, design, construction and traffic signal design and installation.
COPS AB11 Fund – Government grant established to provide law enforcement agencies with the funding to hire and re-hire career law enforcement professionals in order to preserve jobs, increase community policing capacities and support crime prevention efforts.
Local Transportation Fund - To account for the City's allocation of local transportation revenues collected for streets, roads, and sidewalk improvements.
Business Improvement Benefit Fund - To account for monies collected and expended for business improvement.
Highway Users’ Tax Fund – To separately account for HUT apportionments received through Section 2103 of the State of California Streets and Highways Code.
Historic Preservation Fund – To account for donations received for the preservation of historical documents and memorabilia.
Sunrise Hills Landscaping District – To account for monies collected and expended within district for landscaping.
Asset Forfeit Fund – To account for forfeited assets collection and remittance to the appropriate agencies.
Special Sales & Use Tax Funds accounts for the collection of a ½ percent increase in sales tax, as approved by the voters. The sales tax revenue can be used for hiring additional personnel, wage and benefit enhancements, and equipment in the, police, fire and public works departments.
Firefighters /Code 5 – To account for money received for fire fighting services on areas outside the city’s limits. The funds are used for personnel and equipment cost.
RSTP Exchange Fund – To account for monies received from the Tuolumne County Transportation Council for the Regional Surface Transportation Program.
In Lieu Parking – To account for funds collected when a new business is opened or an existing business expands. The funds are used for the acquisition of new parking facilities or major repairs to currently owned parking facilities.
76 Item 10.
62 COMBINING FINANCIAL STATEMENTS
NON-MAJOR GOVERNMENTAL FUNDS
Certified Access Specialist Program Fund – To account for monies collected upon issuance or renewal of a business license. This portion of the fee is set aside to increase training of certified access specialists (CASP) and strengthen CASP programs in local building departments.
Community Revitalization Plan Fund – To account for sub-recipient grant funds used to develop a plan to improve traffic circulation and other street related aspects of the downtown Sonora area.
Board of State and Community Corrections (BSCC) Fund – To account for funds received from the State of California which supports the City’s law enforcement as a result of AB 109-2011 Public Safety Realignment.
USDA Comm FAC 3 Fund – To account for grant funds from the U.S.D.A Community Facilities Grant to fund Police Vehicle’s equipment outfitting.
Caltrans Federal Fund – To account for monies from Caltrans grants to improve the Washington/Stockton Corridor.
Economic Development Fund - To account for monies collected and expended for economic development in the City of Sonora.
Community Transformation Fund – To account for sub-recipient grant funds provided to the Tuolumne County Public Health Department through the U.S. Department of Health and Human Services, used to develop the Dragoon Gulch Trail Master Plan.
Medical Cannabis Fund – In November of 2016, the voters of California approved Proposition 64, entitled the "Control, Regulate and Tax Adult Use of Marijuana" ("AUMA"). AUMA legalized the adult-use, possession, and retail sale of cannabis by persons 21 years of age and older. This fund was to account for fees generated by the opening of cannabis businesses in the City.
Road Maintenance and Rehabilitation Fund (SB1) – To account for the state gas tax revenues collected based on an increase in the per gallon tax. The revenues are to be used to address deferred maintenance on the State Highway System and Local Street and Road System.
Dragoon Gulch Fund - To account for the monies and expenditures for the operation of the Dragoon Gulch Trail.
PEG Capital Fees Fund – To collect a fee for public, educational and government channel access, in accordance with the digital infrastructure and video competition act.
SB2 Grant Program - Funding and technical assistance to local governments in California to help cities and counties prepare, adopt, and implement plans and process improvements that streamline housing approvals and accelerate housing production. 77 Item 10.
63 Regional Early Action Planning Grant - Grant is a key part of the state’s strategic investments toward a more sustainable, resilient, and inclusive future. The program focus by integrating housing and climate goals, and allowing for broader planning and implementation investments.
COMBINING FINANCIAL STATEMENTS
NON-MAJOR GOVERNMENTAL FUNDS
Capital Projects
Mono Way Reimbursement Fund – To account for reimbursements of costs incurred for widening Mono Way, covered by the cooperative agreement between the City and Tuolumne County.
Washington/Elkins Fund – For monies collected and expended to improve the Washington and Elkin intersection for improved safety.
Farmers Market/Restroom Fund - To account for monies collected and expended to convert an existing building to bathrooms for the Farmers Market.
Greenley Road Extension Grant -
Internal Service
Self-Insurance Fund – To account for all medical and dental claims paid by the City through the City of Sonora Employee Benefit Plan. Funds are transferred into this fund to cover the claim payments from all other funds based on the budgeted per employee per month cost for each fund.
Compensated Absences Fund – To account for the resources and liabilities for compensated absences of the city’s employees.
Permanent
Cemetery Perpetual Care Fund - To account for the principal trust amounts and related interest income. The interest income can be used to maintain the cemetery, while the principal may not be spent.
78 Item 10.
CITY OF SONORA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2022
WITH COMPARATIVE ACTUAL AMOUNTS FOR JUNE 30, 2021
Special Revenue
Business Sunrise
Aban- Local Improve- Highway Historic Hillls
doned SLESF Trans- ment Users' Preser - Land- Asset
Vehicle Gas Tax Cops portation Benefit Tax vation scaping Forfeit Funds Funds Fund Fund Fund Fund Fund Fund Fund
Assets
Cash And Investments 26,277 1,986 159,508 129,796 58,848) ( 175,821 2,834 127,158 1,372 Accounts Receivable 2,809 8,230 0 101,020 50 2,876 0 214 2 Loans Receivable 0 0 0 0 0 0 0 0 0
Prepaid Expense 0 0 0 0 0 0 0 0 0
Restricted Cash 0 0 0 0 0 0 0 0 0
Due From Other Funds 0 0 0 0 0 0 0 0 0
Total Assets 10,216 29,086 159,508 230,816 58,798) ( 178,697 2,834 127,372 1,374 Liabilities And Fund Balances
Liabilities
Accounts Payable 0 0 0 0 171 9,962 0 0 0
Other Liabilities 0 0 0 0 0 0 0 0 0
Due To Other Funds 0 0 0 0 0 0 0 0 0
Total Liabilities 0 0 0 0 171 9,962 0 0 0
Fund Balances
Nonspendable 0 0 0 0 0 0 0 0 0
Restricted 0 10,216 159,508 230,816 0 168,735 0 0 1,374 Committed 0 0 0 0 0 0 2,834 0 0
Assigned 29,086 0 0 0 0 0 0 127,372 0
Unassigned 0 0 0 0 58,969) ( 0 0 0 0
Total Fund Balances 10,216 29,086 159,508 230,816 58,969) ( 168,735 2,834 127,372 1,374 Total Liabilities
And Fund Balances 10,216 29,086 159,508 230,816 58,798) ( 178,697 2,834 127,372 1,374 64 79
Item 10.
Certified
Special Special Fire- Access USDA Stockton
Sales Sales Fighters RSTP In Lieu Specialist PD Washington Vision Tax Fire Tax PW Code 5 Exchange Parking Program BSCC Grants Transit Sonora Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund Total 0 0 140,612 34,740 10,439 17,026 0 0 2,704) ( 28,553 794,570 33,696 55,459 19,893 59 0 0 0 0 0 0 224,308
0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0
507,632 301,492 0 0 0 0 0 0 0 0 809,124
0 0 0 0 0 0 0 0 0 0 0
541,328 356,951 160,505 34,799 10,439 17,026 0 0 2,704) ( 28,553 1,828,002 0 0 0 0 0 0 0 0 780 0 10,913
0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 780 0 10,913
0 0 0 0 0 0 0 0 0 0 0
541,328 356,951 160,505 0 0 0 0 0 0 1,629,433
0 0 0 0 10,439 0 0 0 0 0 13,273
0 0 0 34,799 0 17,026 0 0 0 28,553 236,836
0 0 0 0 0 0 0 0 3,484) ( 0 62,453) (
541,328 356,951 160,505 34,799 10,439 17,026 0 0 3,484) ( 28,553 1,817,089 541,328 356,951 160,505 34,799 10,439 17,026 0 0 2,704) ( 28,553 1,828,002 Special Revenue
65 80
Item 10.
CITY OF SONORA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2022
WITH COMPARATIVE ACTUAL AMOUNTS FOR JUNE 30, 2021
Special Revenue Capital
Projects
PEG
Medical FEMA PSPS Road Dragoon Capital Washington
Cannabis SRO CAL/OES Grant Maintenance Gulch Fees Elkington Fund Fund Fund Fund Fund Fund Fund Fund
Assets
Cash And Investments 0 0 0 38,335 288,214 19,553 17,273 381,683) ( Accounts Receivable 0 0 0 0 9,872 0 30 0
Loans Receivable 0 0 0 0 0 0 0 0
Prepaid Expense 0 0 0 0 0 0 0 0
Restricted Cash 0 0 0 0 0 0 0 0
Due From Other Funds 0 0 0 0 0 0 0 0
Total Assets 0 0 0 38,335 298,086 19,553 17,303 381,683) ( Liabilities And Fund Balances
Liabilities
Accounts Payable 0 0 0 0 0 17 0 12,655
Other Liabilities 0 0 0 0 0 0 0 0
Due To Other Funds 0 0 0 0 0 0 0 0
Total Liabilities 0 0 0 0 0 17 0 12,655
Fund Balances
Nonspendable 0 0 0 0 0 0 0 0
Restricted 0 0 0 38,335 0 19,536 17,303 0
Committed 0 0 0 0 0 0 0 0
Assigned 0 0 0 0 298,086 0 0 0
Unassigned 0 0 0 0 0 0 0 394,338) (
Total Fund Balances 0 0 0 38,335 298,086 19,536 17,303 394,338) ( Total Liabilities
And Fund Balances 0 0 0 38,335 298,086 19,553 17,303 381,683) ( 66 81
Item 10.
Capital Internal Permanent
Projects Service Fund
Cemetery SB2 Regional Early
Farmers South Greenley Rd Self Compensated Perpetual Planning Action Planning Market Sonora Extension Insurance Absences Care Grant Grant Fund Fund Project Fund Fund Fund Fund Fund 2022 2021
( 211,931 4,963) 175,000 259,148 894 0 ( 44,250) 10,083) ( 1,363,939 1,409,772 898 1,575 0 88 0 525 0 0 237,296 140,702
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 319,995 0 0 1,129,119 833,208
0 0 0 0 0 0 0 0 0 0
( 212,829 3,388) 175,000 894 259,236 320,520 10,083) ( 44,250) ( 2,730,354 2,383,682 0 1,012 0 0 1,590 0 0 0 26,187 44,858
0 491 0 0 0 0 0 0 491 0
0 0 0 0 0 0 0 0 0 0
0 1,503 0 1,590 0 0 0 0 26,678 44,858
0 0 0 0 0 156,214 0 0 156,214 156,214
0 0 0 0 0 0 0 0 1,704,607 1,525,911
0 0 175,000 0 259,236 0 0 0 447,509 92,562
212,829 0 0 0 0 164,306 0 0 912,057 831,865
( 0 4,891) 0 696) ( 0 0 ( 44,250) 10,083) ( 516,711) ( ( 267,728) ( 212,829 4,891) 175,000 696) ( 259,236 320,520 10,083) ( 44,250) ( 2,703,676 2,338,824 ( 212,829 3,388) 175,000 894 259,236 320,520 10,083) ( 44,250) ( 2,730,354 2,383,682 Funds
Total
Non-Major
Governmental
67 82
Item 10.
CITY OF SONORA
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
Business Sunrise
Aban- Local Improve- Highway Historic Hillls
doned SLESF Trans- ment Users' Preser - LandVehicle Gas Tax Cops portation Benefit Tax vation scaping Funds Funds Fund Fund Fund Fund Fund Fund
Revenues
Investment Earnings 0 162 0 628 0 551 427
Intergovernmental 0 91,647 161,285 155,510 0 38,902 0 0 Property Taxes 0 0 0 0 0 0 0 0
Sales Taxes 0 0 0 0 0 0 0 0
Rent 0 0 0 0 0 0 0 0
Licenses And Permits 0 0 0 0 36,750 0 0 0
Miscellaneous 0 5,832 0 0 0 0 0 0
Total Revenues 91,809 5,832 161,285 156,138 36,750 39,453 0 427 Expenditures
General Government 0 0 0 0 0 0 0 0
Public Safety 0 0 0 0 0 0 0 0
Public Works 0 0 0 0 0 0 0 0
Community Development 0 0 0 0 0 9,962 0 2,057
Culture And Leisure 0 0 0 0 24,311 0 0 0
Capital Outlay 0 0 0 0 0 0 0 0
Debt Service
Principal 0 0 0 0 0 0 0 0
Interest And Other Charges 0 0 0 0 0 0 0 0
Total Expenditures 0 0 0 0 24,311 9,962 0 2,057
Excess(Deficiency) Of Revenues
Over Expenditures 91,809 5,832 161,285 156,138 12,439 29,491 0 1,630) ( Other Financing Sources (Uses)
Operating Transfers In 0 0 0 0 0 0 0 0
Operating Transfers Out 89,000) 0 ( 125,000) ( 94,237) ( 0 0 0 0 Total Other Financing Sources (Uses) 89,000) 0 ( 125,000) ( 94,237) ( 0 0 0 0 Extraordinary Gain (Loss) - RDA 0 0 0 0 0 0 0 0
Net Change In Fund Balances 5,832 2,809 36,285 61,901 12,439 29,491 0 1,630) ( Fund Balance - Beginning 23,254 7,407 123,223 168,915 71,408) ( 139,244 2,834 129,002 Prior Period Adjustment 0 0 0 0 0 0 0 0
Fund Balance - Ending 10,216 29,086 159,508 230,816 58,969) ( 168,735 2,834 127,372
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE WITH COMPARATIVE ACTUAL AMOUNTS FOR YEAR ENDED JUNE 30, 2021 Special Revenue
68 83
Item 10.
Certified
Special Special Access USDA Stockton
Asset Sales Sales Fire- RSTP In Lieu Specialist Comm Washington Vision Forfeit Tax Fire Tax PW Fighters Exchange Parking Program BSCC Fac 3 Transit Sonora Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund Total 1,058 4 1,593 0 116 0 0 0 0 0 0 4,539
0 0 0 82,296 0 0 0 0 0 101,248 0 630,888
0 0 0 0 0 0 0 0 0 0 0 0
586,769 0 352,061 0 0 0 0 0 0 0 0 938,830
0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 3,539 0 0 0 0 40,289
0 0 0 0 0 0 0 0 0 0 0 5,832
587,827 4 353,654 82,296 116 0 3,539 0 0 101,248 0 1,620,378 0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 74,928 0 0 0 0 0 6,000 0 80,928
0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 12,019
0 0 0 0 0 0 0 0 0 0 0 24,311
0 0 0 0 0 0 0 0 0 22,287 0 22,287
0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 74,928 0 0 0 0 0 28,287 0 139,545
587,827 4 353,654 7,368 116 0 3,539 0 0 72,961 0 1,480,833 0 0 0 58,450 0 0 0 0 0 0 207 58,657
500,000) 0 ( 315,000) ( 58,450) ( 0 0 0 5,719) ( 0 0 0 1,187,406) ( 500,000) 0 ( 315,000) ( 0 0 0 0 5,719) ( 0 0 207 1,128,749) ( 0 0 0 0 0 0 0 0 0 0 0 0
87,827 4 38,654 7,368 116 0 3,539 5,719) ( 0 72,961 207 352,084 269,124 1,370 502,674 153,137 34,683 10,439 13,487 5,719 0 76,445) ( 28,346 1,465,005 0 0 0 0 0 0 0 0 0 0 0 0
356,951 1,374 541,328 160,505 34,799 10,439 17,026 0 0 3,484) ( 28,553 1,817,089 Special Revenue
69 84
Item 10.
CITY OF SONORA
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
WITH COMPARATIVE ACTUAL AMOUNTS FOR YEAR ENDED JUNE 30, 2021 Special Revenue
Medical FEMA PSPD SB2 Regional Early Road Dragoon
Cannabis SRO CAL/OES Grant Planning Action Planning Maintenance Gulch Fund Fund Fund Fund Grant Fund Grant Fund Fund Fund
Revenues
Investment Earnings 0 0 0 0 0 0 888 0
Intergovernmental 0 0 0 0 0 0 99,319 0
Property Taxes 0 0 0 0 0 0 0 0
Sales Taxes 0 0 0 0 0 0 0 0
Rent 0 0 0 0 0 0 0 12,000
Licenses And Permits 0 0 0 0 0 0 0 0
Miscellaneous 0 0 0 0 0 0 0 11,650
Total Revenues 0 0 0 0 0 0 100,207 23,650
Expenditures
General Government 0 0 0 0 0 0 0 0
Public Safety 0 0 20,132 0 0 0 0 0
Public Works 0 0 0 0 0 0 35,355 0
Community Development 0 0 0 0 10,083 44,250 0 0
Culture And Leisure 0 0 0 0 0 0 0 11,060
Capital Outlay 0 0 0 96,719 0 0 0 0
Debt Service
Principal 0 0 0 0 0 0 0 0
Interest And Other Charges 0 0 0 0 0 0 0 0
Total Expenditures 0 0 20,132 96,719 10,083 44,250 35,355 11,060 Excess(Deficiency) Of Revenues
Over Expenditures 0 0 20,132) ( 96,719) ( 10,083) ( 44,250) ( 64,852 12,590 Other Financing Sources (Uses)
Operating Transfers In 3,428 75,128 20,132 0 0 0 0 0
Operating Transfers Out 0 0 0 0 0 0 0 0
Total Other Financing Sources (Uses) 75,128 3,428 20,132 0 0 0 0 0 Extraordinary Gain (Loss) - RDA 0 0 0 0 0 0 0 0
Net Change In Fund Balances 3,428 75,128 0 96,719) ( 10,083) ( 44,250) ( 64,852 12,590 Fund Balance - Beginning 3,428) ( 75,128) ( 0 135,054 0 0 233,234 6,946 Prior Period Adjustment 0 0 0 0 0 0 0 0
Fund Balance - Ending 0 0 0 38,335 10,083) ( 44,250) ( 298,086 19,536 70 85
Item 10.
Capital Internal Permanent
Projects Service Fund
PEG Cemetery
Capital Washington Farmers South Greenley Rd Self Compensated Perpetual Fees Elkington Market Sonora Extension Insurance Absences Care Fund Fund Fund Fund Project Fund Fund Fund 2022 2021
0 55 0 700 0 0 201 1,057 7,440 10,768
0 0 0 0 175,000 0 0 0 905,207 1,187,835
0 0 0 8,060 0 0 0 0 8,060 20,422
0 0 0 0 0 0 0 0 938,830 860,973
0 0 0 0 0 0 0 0 12,000 12,000
0 0 0 0 0 0 0 0 40,289 69,067
0 5,754 28,305 0 0 0 0 2,530 54,071 26,433
0 5,809 28,305 8,760 175,000 0 201 3,587 1,965,897 2,187,498 0 0 0 0 0 0 0 0 0 8,527
0 0 0 0 0 0 0 0 101,060 144,630
0 1,604 0 0 175,000 36,296 0 0 248,255 61,868
0 0 27,637 1,484 0 0 0 0 95,473 10,506
0 0 0 0 0 0 0 0 35,371 69,030
359,274 0 0 0 0 0 0 0 478,280 780,081
0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
359,274 1,604 27,637 1,484 175,000 36,296 0 0 958,439 1,074,642 359,274) 4,205 ( 668 7,276 0 36,296) ( 201 3,587 1,007,458 1,112,856 0 0 0 0 175,000 36,296 179,746 0 548,387 337,754
0 0 0 0 0 0 0 3,587) ( 1,190,993) ( 1,033,326) (
0 0 0 0 175,000 36,296 179,746 3,587) ( 642,606) ( 695,572) ( 0 0 0 0 0 0 0 0 0 0
359,274) 4,205 ( 668 7,276 175,000 0 179,947 0 364,852 417,284 35,064) 13,098 ( 5,559) ( 205,553 0 696) ( 79,289 320,520 2,338,824 1,921,540 0 0 0 0 0 0 0 0 0 0
394,338) 17,303 ( 4,891) ( 212,829 175,000 696) ( 259,236 320,520 2,703,676 2,338,824 Governmental
Funds
Total Non-Major
71 86
Item 10.
OTHER REPORTS
87 Item 10.
72 REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING AND ON COMPLIANCE AND OTHER
MATTERS BASED ON AN AUDIT OF FINANCIAL
STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
To The City Council
City of Sonora
State of California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the aggregate discretely presented component unit, each major fund, and the aggregate remaining fund information of City of Sonora, State of California, as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the City of Sonora, State of California’s basic financial statements and have issued our report thereon dated December 28, 2022.
Internal Control over Financial Reporting
In planning and performing our audit, we considered the City of Sonora, State of California’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of City of Sonora, State of California’s internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City of Sonora, State of California’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. 88 Item 10.
73 Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses.
However, material weaknesses may exist that have not been identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City of Sonora, State of California’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Gallagher Gatewood
GALLAGHER GATEWOOD, A PROFESSIONAL ACCOUNTANCY CORPORATION Modesto, California
December 28, 2022
89 Item 10.