Clic k here to r eturn to the agenda.
CITY OF STANTON, CALIFORNIA
ANNUAL COMPREHENSIVE FINANCIAL STATEMENT REPORT
YEAR ENDED JUNE 30, 2023
Prepared by
Finance Department
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ATTACHMENT A
CITY OF STANTON, CALIFORNIA
TABLE OF CONTENTS
YEAR ENDED JUNE 30, 2023
INTRODUCTORY SECTION
LETTER OF TRANSMITTAL I
GFOA CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN
FINANCIAL REPORTING VII
ORGANIZATION CHART VIII
PRINCIPAL OFFICIALS AS OF JUNE 30, 2023 IX
FINANCIAL SECTION
INDEPENDENT AUDITORS’ REPORT 1
MANAGEMENT’S DISCUSSION AND ANALYSIS (REQUIRED
SUPPLEMENTARY INFORMATION) 5
BASIC FINANCIAL STATEMENTS:
GOVERNMENTAL-WIDE FINANCIAL STATEMENTS:
STATEMENT OF NET POSITION 23
STATEMENT OF ACTIVITIES 24
GOVERNMENTAL FUNDS:
BALANCE SHEET 28
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE
SHEET TO THE GOVERNMENT-WIDE STATEMENT OF NET
POSITION 29
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCES 30
RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT
OF REVENUES, EXPENDITURES, AND CHANGES IN FUND
BALANCES TO THE GOVERNMENT-WIDE STATEMENT OF
ACTIVITIES 31
PROPRIETARY FUNDS:
STATEMENT OF NET POSITION 34
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET
POSITION 35
STATEMENT OF CASH FLOWS 36
FIDUCIARY FUNDS:
STATEMENT OF FIDUCIARY NET POSITION 38
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION 39
NOTES TO BASIC FINANCIAL STATEMENTS 42
ATTACHMENT A
CITY OF STANTON, CALIFORNIA
TABLE OF CONTENTS
YEAR ENDED JUNE 30, 2023
FINANCIAL SECTION (CONTINUED)
REQUIRED SUPPLEMENTARY INFORMATION
CALPERS MISCELLANEOUS PENSION PLAN
SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION
LIABILITY 94
SCHEDULE OF CONTRIBUTIONS 96
CALPERS SAFETY PENSION PLAN
SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION
LIABILITY 98
SCHEDULE OF CONTRIBUTIONS 100
OTHER POSTEMPLOYMENT BENEFIT PLAN
SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY (ASSET)
AND RELATED RATIOS 102
BUDGETARY COMPARISON SCHEDULE
GENERAL FUND 104
HOUSING AUTHORITY SPECIAL REVENUE FUND 105
LIGHTING AND MEDIAN MAINTENANCE SPECIAL REVENUE FUND 106 AMERICAN RESCUE PLAN ACT SPECIAL REVENUE FUND 107
CDBG SPECIAL REVENUE FUND 108
NOTE TO REQUIRED SUPPLEMENTARY INFORMATION 109
SUPPLEMENTARY INFORMATION
GENERAL FUND:
DESCRIPTION OF GENERAL FUNDS 114
COMBINING BALANCE SHEET 115
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES 116
OTHER GOVERNMENTAL FUNDS:
DESCRIPTION OF OTHER GOVERNMENTAL FUNDS 118
COMBINING BALANCE SHEET 120
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES 124
SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCE – BUDGET AND ACTUAL:
GAS TAX SPECIAL REVENUE FUND 128
PROTECTIVE SERVICES SPECIAL REVENUE FUND 129
ATTACHMENT A
CITY OF STANTON, CALIFORNIA
TABLE OF CONTENTS
YEAR ENDED JUNE 30, 2023
FINANCIAL SECTION (CONTINUED)
SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCE – BUDGET AND ACTUAL (CONTINUED):
SUPPLEMENTAL LAW ENFORCEMENT GRANT SPECIAL
REVENUE FUND 130
AIR QUALITY IMPROVEMENT PROGRAM SPECIAL REVENUE
FUND 131
FAMILIES AND COMMUNITIES TOGETHER (FACT) GRANT
SPECIAL REVENUE FUND 132
OTHER GRANTS SPECIAL REVENUE FUND 133
SENIOR TRANSPORTATION SPECIAL REVENUE FUND 134
MEASURE M SPECIAL REVENUE FUND 135
PUBLIC SAFETY TASK FORCE (PSTF) SPECIAL REVENUE FUND 136 DEVELOPMENT IMPACT FEES SPECIAL REVENUE FUND 137
ROAD MAINTENANCE AND REHABILITATION ACCOUNT (RMRA)
SPECIAL REVENUE FUND 138
STANTON CENTRAL PARK MAINTENANCE SPECIAL REVENUE
FUND 139
JAG GRANT SPECIAL REVENUE FUND 140
CERTIFIED ACCESS SPECIALIST PROGRAM (CASP) SPECIAL
REVENUE FUND 141
CAPITAL IMPROVEMENTS CAPITAL PROJECTS FUND 142
PARK IN LIEU FEES CAPITAL PROJECTS FUND 143
INTERNAL SERVICE FUNDS:
DESCRIPTION OF INTERNAL SERVICE FUNDS 146
COMBINING STATEMENT OF NET POSITION 147
COMBINING STATEMENT OF REVENUES, EXPENSES, AND
CHANGES IN NET POSITION 148
COMBINING STATEMENT OF CASH FLOWS 149
PRIVATE-PURPOSE TRUST FUNDS:
DESCRIPTION OF PRIVATE-PURCHASE TRUST FUNDS 152
COMBINING STATEMENT OF NET POSITION 153
COMBINING STATEMENT OF CHANGES IN NET POSITION 154
ATTACHMENT A
CITY OF STANTON, CALIFORNIA
TABLE OF CONTENTS
YEAR ENDED JUNE 30, 2023
STATISTICAL SECTION
DESCRIPTION OF STATISTICAL SECTION 157
FINANCIAL TRENDS
NET POSITION BY COMPONENT 158
CHANGES IN NET POSITION 160
FUND BALANCES OF GOVERNMENTAL FUNDS 164
CHANGES IN FUND BALANCE OF GOVERNMENTAL FUNDS 166
REVENUE CAPACITY:
ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE
PROPERTY 168
DIRECT AND OVERLAPPING PROPERTY TAX RATES 170
PRINCIPAL PROPERTY TAXPAYERS 172
PROPERTY TAX LEVIES AND COLLECTIONS 173
DEBT CAPACITY:
RATIOS OF OUTSTANDING DEBT BY TYPE 174
COMPUTATION OF DIRECT AND OVERLAPPING BONDED DEBT 175
LEGAL DEBT MARTIN INFORMATION 176
PLEDGED-REVENUE COVERAGE 178
DEMOGRAPHIC AND ECONOMIC INFORMATION:
DEMOGRAPHIC AND ECONOMIC STATISTICS 180
PRINCIPAL EMPLOYERS 181
OPERATING INFORMATION:
FULL -TIME EQUIVALENT CITY EMPLOYEES BY FUNCTIONS 182
OPERATING INDICATORS BY FUNCTIONS 184
CAPITAL ASSET STATISTICS BY FUNCTION 190
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INTRODUCTORY SECTION
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ATTACHMENT A
7800 Katella Avenue
Stanton, CA 90680
P | (714) 379-9222
F | (714) 890-1443
[email protected]
www. stantonca.gov
February 15, 2024
To the Honorable Mayor, Members of the City Council, and Citizens of Stanton:
It is a pleasure to present the Fiscal Year 2022-23 Annual Comprehensive Financial Report (ACFR) for the City of Stanton. These financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) and audited in accordance with generally accepted auditing standards.
Responsibility for the accuracy of the data, the completeness and reliability of the presentation, including all disclosures, rests with City management.
To provide sufficient reliable information for the preparation of the City’s financial statements, City staff has established a comprehensive internal control framework designed to minimize the risk of error or misstatement and the risk of loss, theft, or misuse of City assets. Because the cost of internal controls should not exceed their benefits, the City’s internal controls have been designed to provide reasonable, rather than an absolute, assurance that the financial statements will be free from material misstatement.
The City’s financial statements have been audited by Gruber and Lopez, Inc., certified public accountants. The independent audit firm concluded, based on the audit, that there was a reasonable basis for rendering an unmodified opinion (“clean opinion”) on the City’s financial statements for the fiscal year ended June 30, 2023. This means, in the auditors’ opinion, the City’s financial statements fairly present the City’s financial position in accordance with generally accepted accounting principles.
Management’s discussion and analysis (MD&A) immediately follows the independent auditor’s report and provides narrative information, overview, and analysis of the basic financial statements. MD&A complements this letter of transmittal and should be read in conjunction with it.
Profile of Stanton
Stanton is a general law City incorporated in 1956. It occupies a land area of 3.1 square miles and serves a population of approximately 39,084. The City is located in the northwestern portion of Orange County, approximately 23 miles southeast of the City of Los Angeles. It has easy freeway access and is within 12 miles of: Disneyland, Anaheim Stadium, Knotts Berry Farm, Huntington Beach and the John Wayne and Long Beach airports. State Highway 39, Beach Boulevard, runs through the center of the City. i
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The City is governed under the Council-Manager form of government, with a five-member City Council.
The City Council is elected on a non-partisan basis with staggered four-year terms. Elections are held in November on even-numbered years. The Mayor is elected at-large, and the four City Council members are elected by voters in their districts. The Mayor Pro Tem position is selected annually by a majority vote of the City Council members. The City Council appoints the City Manager to carry out the policies and direction of the City Council, oversee the day-to-day operations of the City, and appoint the heads of the various City departments.
The City provides a range of municipal services that includes public works, planning, zoning, building, sewer services, parks and recreation, code enforcement, and parking control. Stanton is a “contract city”, and contracts with other governmental entities, private firms, and individuals to provide some of these services. Police services are provided by the Orange County Sheriff’s Department. Fire services are provided by the Orange County Fire Authority. Water services are provided by Golden State Water Company.
The City is financially accountable for the Stanton Housing Authority (Housing Authority). Therefore, the Housing Authority’s activities are included in these financial statements. Additional information on the Housing Authority can be found in Note 1 to the basic financial statements. The former Stanton Redevelopment Agency (Redevelopment Agency) was dissolved on February 1, 2012. Upon the dissolution of the Redevelopment Agency, its assets and liabilities were transferred to the Successor Agency to the Stanton Redevelopment Agency (Successor Agency). The City is obligated to report the resources and activities of the Successor Agency in a separate private purpose trust fund, which is also included in these financial statements. All uses of the resources of the Successor Agency must be approved by an independent Oversight Board comprised of members appointed by various taxing entities, and the California Department of Finance (“DOF”). Additional information for the Successor Agency can be found in Note 14 to the basic financial statements.
The City uses an annual budget, which the City Council adopts prior to the beginning of every fiscal year, to manage its finances. The budget is organized by fund (e.g., General Fund), department (e.g., public safety), and division (e.g., law enforcement services). The City Manager can authorize appropriation transfers in the operating and capital budget within the same fund without limitation. Any revisions between funds and revisions that change a fund’s total approved appropriations must be approved by the City Council. The Successor Agency does not adopt a budget because its expenses are restricted to enforceable obligations approved by the DOF. Payments associated with these enforceable obligations are approved annually by the DOF through the submission of a Recognized Obligation Payment Schedule (ROPS), unless DOF has approved a Last and Final ROPS. The DOF approved the Successor Agency’s most recent Amended Last and Final ROPS on December 17, 2020. Therefore, the Successor Agency’s annual expenses are limited to the amounts identified on the Amended Last and Final ROPS.
State law mandates that Stanton can only raise local tax rates with voter approval. Use and regulatory fees must also follow procedures set forth in State law and must not exceed the estimated reasonable cost of providing services. Fees require approval by the City Council; and fees in excess of reasonable cost require voter approval.
Local Economy
Over the last ten years, property values and personal income levels within the City have steadily increased in order to support the level of municipal services and facilities that are needed by the community. The
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assessed valuation of property in the City has grown 73.0% since fiscal year 2013-14 (ten years ago). The City’s assessed valuation has been consistently increasing at an average rate of 6.4% annually over the last ten years. In fiscal year 2022-23, the City’s assessed valuation increased 5.9%, and in fiscal year 2023- 24, it increased 7.2%.
Stanton is home to approximately 3,000 businesses. Major industries include restaurants, and general retail businesses. Stanton’s unemployment rate has traditionally been below State and national levels.
The three largest employers in the City are: Rowntree Gardens, Home Depot, and Super King Market. The City’s largest employer with 314 employees, Rowntree Gardens, is a non-profit senior living community that provides a full range of services to its members, such as: memory care, assisted living, independent living, skilled nursing, therapy services, and home care. The Home Depot, the City’s second largest employer with 161 employees, is the world’s largest home improvement retailer with nearly 400,000 associates working in its more than 2,200 stores located through the United States of America and Mexico.
Super King Market, the City’s third largest employer with approximately 150 employees, is a full-service supermarket with seven stores located throughout Southern California.
The City’s diverse sales tax base is comprised of a number of companies. The City’s Top 100 sales tax producers include various industries such as: gasoline service stations, restaurants, and general retail businesses. These top sales tax producers generate approximately 85.3% of the City’s total annual sales tax revenue. Additionally, in November 2014, the City’s voters approved a one-cent transaction and use tax (the Stanton 9-1-1 Public Safety and Essential City Services Protective Measure). The City’s Top 100 tax producers also generate approximately 66.9% of the City’s total annual transaction and use tax revenue.
The City’s tax base is well diversified, with total tax revenue representing 81.5% of the City’s total General Fund revenues. Property tax revenue (which includes property tax received in-lieu of motor vehicle fees) represents 34.6% of total tax revenues. Sales tax and transaction and use tax revenues represent 47.4% of total tax revenues. The remainder of the tax base (franchise taxes, transient occupancy taxes, utility user taxes, business license taxes, cannabis taxes) contributes another 18.0% of tax revenues to the General Fund. Total tax revenue increased 8.1% from fiscal year 2021-22.
Other Relevant Financial Information
The City Council initially established a General Fund reserve policy in 2011 and has updated the policy annually since that time. On June 14, 2022, the City Council adopted Resolution No. 2022-34 to approve the City’s reserve policy for Fiscal Year 2022-23. The risk-based policy sets aside the following funds in the City’s General Fund to ensure the City’s continued financial stability:
• Economic uncertainty – $6,100,000 (target level is 20% of the General Fund’s operating expenditures);
• Capital improvement – $5,000,000;
• Emergency disaster contingency - $3,000,000 (target level is 10% of the General Fund’s operating expenditures);
• Emergency equipment and maintenance - $150,000; and,
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• Technology equipment - $150,000.
With the exception of the economic uncertainty reserve (which is included in unassigned fund balance in accordance with governmental accounting standards), these reserves are reported in the General Fund’s committed fund balance in the accompanying financial statements.
City Resolution No. 2022-34 also established the following reserves in other City Funds:
• Capital Improvement reserve set aside in the Sewer Enterprise Fund - $1,000,000;
• Vehicle Replacement reserve set aside in the Fleet Maintenance Internal Service Fund - $100,000; and,
• Pension and Other Post Employment Benefits Stabilization reserve set aside in the Employee Benefits Internal Service Fund with a target level of 50% of the City’s unfunded actuarial liability.
As of June 30, 2023, the City held $4.3 million in an irrevocable trust account held by Public Agency Retirement Services. These funds are restricted for pension and other post-employment benefit (OPEB) expenses only and are included with unrestricted net position in the Employee Benefits Internal Service Fund (to offset pension and other post-employment liabilities reported at year end). The amount held in the trust was 60.6% of the City’s unfunded actuarial liability balance for its pension plans as of the June 30, 2022 GASB 68 Accounting Report issued by the California Public Employees’ Retirement System (CalPERS). As of June 30, 2023, the City’s outstanding liability for its other post-employment benefits was $153,787, as estimated by the City’s consultant, Total Compensation Systems, Inc.
Summary of Current Year Accomplishments
Major projects completed during fiscal year 2022-23 include:
• Expended the remainder of the City’s $9.1 million in America Rescue Plan Act (ARPA) funds on public safety costs;
• Completed $2.5 million funding commitment for the State’s Homekey permanent supportive housing program (for the Riviera Motel);
• Implemented the Homelessness and Public Safety Pilot Program; • Completed construction of the Fiscal Year 2021-22 Annual Street Rehabilitation Project; • Implemented the cloud based Laserfiche Enterprise Content Management System; • Completed the Local Hazard Mitigation Plan;
• Implemented a new, more secure, Citywide phone system; • Implemented CivicRec, a new recreation software program;
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• Completed compensation study;
• Completed update of City’s purchasing ordinance; and, • Completed transition of the City’s investment portfolio management services to a third party.
Future Work Plan Initiatives
City work plan goals for fiscal year 2023-24 include the following:
• Complete construction of Family Resource Center Improvements Project (Phases I and II) (funded by Community Development Block Grant funds and ARPA Grant Fundsfrom the County of Orange) and
• Complete Family Resource Center Improvements Project (Phase II) (partially funded by ARPA gran funds from the County of Orange);
• Complete update of cannabis ordinance;
• Complete the update of the Sewer Master Plan;
• Complete 2020 Town Center Specific Plan;
• Complete the Stanton Community Center Improvement Project funded by Community Development Block Grant-Coronavirus Aid, Relief, and Economic Security (CARES) (CDBG-CV3) grant from the County of Orange;
• Complete City Rebranding project;
• Complete Parks Master Plan;
• Conduct competitive bidding processes for contracted information technology support services and managed copier machine and printer services;
• Complete work on City-wide user fee study;
• Complete an in-depth review of the City’s records retention policy; • Continue to assist cannabis businesses through permitting and construction process; • Continue to enforce City’s anti-camping regulations; and, • Continue work on sale of Tina Pacific Neighborhood.
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Acknowledgements
We would like to thank the members of the City Council for their leadership and the City’s Senior Staff for their commitment to maintaining the highest standards of professionalism in managing the City’s operations and finances. Also, the preparation of this report would not have been possible without the dedicated services of the entire staff of the City’s Finance Department, as well as the City’s independent auditors, Gruber and Lopez, Inc.
Respectfully submitted,
Hannah Shin-Heydorn Michelle Bannigan, CPA
City Manager Finance Director/City Treasurer
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Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Stanton
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2022
Executive Director/CEO
vii
ATTACHMENT A
CITY OF STANTON
Organizational Structure
as of June 30, 2023
viii
Stanton Residents
CITY COUNCIL
David J. Shawver, Mayor
Hong Alyce Van, Mayor Pro-Tem
Gary Taylor, Councilmember
Donald Torres, Council Member
Carol Warren, Council Member
CITY MANAGER
Hannah Shin-Heydorn
Administration
Information Technology
Personnel and Risk Management
City Clerk
Patricia A. Vazquez
Administration
Council Support
Elections
Records Management
Finance
Michelle Bannigan
Administration
Accounting / Payroll
Budget & Financial Planning
Business License
Debt Service
Treasury
Public Safety
James J. Wren
Administration
Ambulance Services
Animal Control
Code Enforcement
Emergency Preparedness
Homeless Services
Parking Control
Public Works
Cesar Rangel
Administration
CIP Administration
Crossing Guards
Engineering
Fleet Maintenance
Graffiti Abatement
Parks Maintenance
Public Facilities Maintenance
Sewer Maintenance
Storm Drain Maintenance
Street Lighting
Street Maintenance
Community & Economic
Development
Crystal Landavazo
Administration
Building Regulation
CDBG/Housing
Economic Development
Planning
Community
Services
Zenia Bobadilla
Administration
Public Information
Facility Rentals
FaCT Program
Recreation Programs
Senior Services
Special Events
Stanton Family Resource
Center
Fire Services (OCFA)
Chief Steve Dohman
Administration
Fire Protection
Police Services (OCSD)
Captain Charles Walters
Administration
Crime Prevention
Investigations
Parking Enforcement
Patrol
Supervision
Traffic
City Attorney
HongDao Nguyen
Best Best & Krieger LLP
ATTACHMENT A
CITY OF STANTON, CALIFORNIA
LIST OF PRINCIPAL OFFICIALS
AS OF JUNE 30, 2023
ix
City Manager ....................................................................................................... Hannah Shin-Heydorn City Clerk................................................................................................................... Patricia A. Vazquez Community & Economic Development Director ......................................................... Crystal Landavazo Community Services Director .......................................................................................... Zenia Bobadilla Finance Director/City Treasurer .................................................................................. Michelle Bannigan Public Safety Services Director ........................................................................................ James J. Wren Public Works Director/City Engineer .................................................................................. Cesar Rangel City Attorney (Best, Best & Krieger LLP) ..................................................................... HongDao Nguyen Chief of Police Services (O.C. Sheriff Department) ........................................... Captain Charles Walters Orange County Fire Authority Division Chief ................................................................... Steve Dohman
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ATTACHMENT A
FINANCIAL SECTION
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ATTACHMENT A
1 The Honorable Mayor and
Members of the City Council
of the City of Stanton, California
Stanton, California
INDEPENDENT AUDITORS’ REPORT
Opinions
We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the City of Stanton, California, as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the City of Stanton, California’s basic financial statements as listed in the table of contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activity, each major fund, and the aggregate remaining fund information of the City of Stanton, California, as of June 30, 2023, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Emphasis of Matter
As described in Note 1 to the basic financial statements, the City adopted the provisions of Governmental Accounting Standards Board Statement No. 91 and 96. Our opinion is not modified with respect to this matter.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City of Stanton, California, and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City of Stanton, California’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
438 Old Newport Blvd – Newport Beach, CA 92663
Phone (949) 346-2900 – www.gruberlopezinc.com
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The Honorable Mayor and
Members of the City Council
of the City of Stanton, California
2 In performing an audit in accordance with generally accepted auditing standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City of Stanton, California’s internal control. Accordingly, no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City of Stanton, California’s ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, the schedules of proportionate share of the net pension liability and the schedules of contributions for the CalPERS miscellaneous and safety pension plans, the schedule of changes in the net other postemployment benefit (OPEB) liability (asset) and related ratios, and the budgetary comparison schedules for the General Fund and Major Special Revenue Funds, identified as Required Supplementary Information (RSI) in the accompanying table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the RSI 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 RSI because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Stanton’s basic financial statements. The introductory section, the combining and individual fund financial statements and schedules, and statistical section, as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the basic financial statements.
Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements are fairly stated, in all material respects, in relation to the basic financial statements as a whole.
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The Honorable Mayor and
Members of the City Council
of the City of Stanton, California
3 Other Information
Management is responsible for the other information included in the annual report. The other information comprises the introductory and statistical sections but does not include the basic financial statements and our auditor’s report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon.
In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated February 14, 2024, on our consideration of the City of Stanton’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City of Stanton’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City of Stanton’s internal control over financial reporting and compliance.
Gruber and Lopez, Inc.
Newport Beach, California
February 14, 2024
Gruber and Lopez, Inc.
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5 MANAGEMENT’S DISCUSSION AND ANALYSIS
As management of the City of Stanton (City), we offer readers of the City’s financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2023. Please read it in conjunction with the accompanying transmittal letter at the front of this report, and the basic financial statements, which follow this section.
FINANCIAL HIGHLIGHTS
The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of resources on June 30, 2023, by $162.7 million. This amount is referred to as the net position of the City. Of this amount, $46.6 million is unrestricted net position and may be used to meet the City’s ongoing obligations to citizens and creditors.
During fiscal year 2022-23, the City’s overall net position increased by $7.3 million, net of a prior period adjustment reducing net position by $208,073; primarily due to the increased net pension liability as of June 30, 2023. The City’s total long-term liabilities, which includes net pension liability, increased by $6.5 million, or 288.3% during the fiscal year ended June 30, 2023, to a total outstanding amount of $8.8 million, primarily due to a $6.4 million increase in the City’s net pension liability resulting from a negative 6.1% net investment return on pension plan assets during fiscal year 2021-22.
As of June 30, 2023, the City’s governmental funds (the General Fund, Special Revenue, and Capital Projects funds) reported combined ending fund balances of $59.8 million. Governmental fund revenues and other financing sources exceeded revenues and other financing uses by $7.9 million during fiscal year 2022-23. Of the $59.8 million combined ending fund balances on June 30, 2023, $19.6 million is categorized as unassigned, $6.5 million is categorized as assigned, $10.1 million is categorized as committed, $21.3 million is categorized as restricted, and $2.3 million is categorized as non-spendable. More detailed information regarding these amounts can be found in Note 13 in the Notes to Basic Financial Statements. The combined $26.2 million of assigned and unassigned fund balance of the General Fund represented 82.3% of total General Fund revenues including transfers in.
OVERVIEW OF THE FINANCIAL STATEMENTS
The discussion and analysis are intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements comprise three components:
1) government-wide financial statements, 2) fund financial statements, and 3) notes to
ATTACHMENT A
6 the basic financial statements. This report also consists of supplementary information in addition to the basic financial statements.
Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the City’s finances, in a manner similar to a private-sector business. There are two government-wide financial statements:
the Statement of Net Position and the Statement of Activities. They present information for the government as a whole and present a longer-term view of the City’s finances.
These two statements help to answer the question: “Is the City as a whole better off or worse off as a result of this year’s activities?”
The Statement of Net Position presents information on all of the City’s assets, deferred outflows of resources, liabilities, and deferred inflows of resources with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating.
The Statement of Activities presents information showing how the government’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying events giving rise to the change occur, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in the future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).
Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include general government, public safety, community development, public works and culture and recreation. The business-type activities of the City include sewer activities.
Government-wide financial statements. The government-wide financial statements include not only the City itself (known as the primary government), but also the Stanton Housing Authority (“Housing Authority”), a legally separate entity. The Housing Authority functions for all practical purposes as an integral part of the City, and therefore, is included in the accompanying financial statements as a part of the primary government as a blended component unit.
Fund financial statements. 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. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds.
ATTACHMENT A
7 Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances on spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements.
Because the focus of governmental fund is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the governmentwide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions.
Both the governmental fund balance sheet and governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.
The City maintains various individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the: General Fund, Housing Authority Special Revenue Fund, and Lighting and Median Maintenance Special Revenue Fund, all of which are considered major funds. Data from other governmental funds are combined into a single, aggregate presentation. Individual fund data for each of these other governmental funds is provided in the form of combining statements elsewhere in this report.
The City adopts an annual budget for its governmental and proprietary funds. Annual appropriations are approved prior to the beginning of the year. A budgetary comparison schedule has been provided for each of the governmental funds for which a budget was adopted to demonstrate compliance with this budget. The definition of the General Fund for purposes of these audited financial statements is different than for budgetary purposes. For budgeting purposes, the Transaction and Use Tax Fund and the Expendable Deposits Fund are separated from the General Fund. However, these funds have been combined into the General Fund for these financial statements. Individual fund data for these funds is provided in the form of combining statements in the supplementary information section of this report.
Proprietary funds. The City maintains two different types of proprietary funds.
Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for its sewer operations. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City’s various functions. The City uses internal service funds to account for its workers’ compensation insurance activities, liability/risk management activities, employee benefits activities, and fleet maintenance activities.
ATTACHMENT A
8 Proprietary funds provide the same type of informational date as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the sewer operations, which is considered to be a major fund of the City. Conversely, all internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements in the supplementary information section of this report.
Fiduciary funds. Fiduciary Funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the governmentwide financial statement because the resources of those funds are not available to support the City’s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The City utilizes two private-purpose trust funds to account for the assets, liabilities, and activities of the Successor Agency to the dissolved Stanton Redevelopment Agency and the North Orange County Public Safety Collaborative.
Notes to Basic Financial Statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements.
Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City’s budgetary policies and supplementary information on the City’s defined benefit plans.
The combining statements referred to earlier in connection with General Funds, other governmental funds and internal service funds are presented immediately following the required supplementary information as supplementary information. The City’s supplementary information section also presents budgetary schedules for individual governmental funds and combining statements for the fiduciary funds.
FINANCIAL ANALYSIS OF THE GOVERNMENT-WIDE STATEMENTS
As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. In the case of the City, assets and deferred outflows exceeded liabilities by $162.7 million as of June 30, 2023. In comparison, net position was $155.2 million as of June 30, 2022.
The largest portion of the City’s net position on June 30, 2023, ($94.4 million or 58.0% of total net position), reflects its investment in capital assets (e.g., land, infrastructure, buildings, improvements, and equipment). The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending.
Although the City’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.
ATTACHMENT A
9 An additional $21.7 million of the City’s net position is restricted net position, representing resources that are subject to external restrictions or enabling legislation on how they may be used. The breakdown of restricted net positions by functions is as follows: 1) low- and moderate-income housing projects ($10.9 million); 2) public safety for restricted grants and fees ($0.5 million); 3) community development for restricted grants and fees ($0.3 million); 4) public works for restricted grants and fees ($5.8 million); and 5) culture and recreation for restricted grants and fees ($4.2 million).
The remaining $46.6 million is unrestricted net position, which may be used to meet the government’s ongoing obligations to citizens and creditors. Unrestricted net position increased $9.5 million, or 25.7%, from June 30, 2022.
A summary of the government-wide Statement of Net Position follows:
At the end of the current fiscal year, the City’s overall net position increased by $7.3 million, after a prior period adjustment of $208,073. The fiscal year 2022-23 governmental activities resulted in an increase in net position of $6.7 million, after a prior period adjustment to reduce net position $208,073. Refer to Note 16 for additional information regarding the restatement of beginning net position. The fiscal year 2022-23 business type activities resulted in an increase in net position of $0.6 million. Additional information has been provided below for a more detailed discussion of the City’s governmental activities and business-type activities.
2023 2022 2023 2022 2023 2022 %
Current and other assets $ 69,644,017 $ 63,800,679 $ 6,635,592 $ 6,065,859 $ 76,279,609 $ 69,866,538 9.2% Capital assets, net 89,705,314 89,960,892 4,683,660 4,827,134 94,388,974 94,788,026 -0.4% Total assets 159,349,331 153,761,571 11,319,252 10,892,993 170,668,583 164,654,564 3.7% Deferred outflows of resources 4,329,558 5,727,490 - - 5,727,490 4,329,558 32.3% Long-term liabilities 8,796,514 2,265,143 1,972 8,798,486 768 2,265,911 288.3% Other liabilities 3,044,249 5,426,647 16,840 144,805 3,061,089 5,571,452 -45.1% Total liabilities 11,840,763 7,691,790 18,812 145,573 11,859,575 7,837,363 51.3% Deferred inflows of resources 1,883,157 5,754,674 - - 1,883,157 5,754,674 -67.3% Net position:
89,705,314 89,960,892 4,683,660 4,827,134 94,388,974 94,788,026 -0.4% Restricted 21,682,348 23,551,709 - - 21,682,348 23,551,709 -7.9% Unrestricted 39,965,239 31,132,064 6,616,780 5,920,286 46,582,019 37,052,350 25.7% Total net position $ 144,644,665 151,352,901 $ 11,300,440 $ 10,747,420 $ 162,653,341 $ 155,392,085 $ 4.7% Net investment in capital assets
CITY OF STANTON
Governmental
Activities
Business-type
Activities Totals
NET POSITION AT YEAR END
ATTACHMENT A
10 A summary of the government-wide Statement of Activities follows:
Governmental activities
During the current fiscal year, the City’s net position for governmental activities increased by $7.3 million from the prior fiscal year, net of a prior period adjustment that reduced net position by $208,073. The following table summarizes and presents governmental activities revenue by source and percentages for the fiscal year ended June 30, 2023, along with the percentage changes from the prior year:
2023 2022 2023 2022 2023 2022 % Change
Revenues:
Program Revenues:
Charges for services 6,656,797 $ 5,935,844 $ 1,089,667 $ 1,312,065 $ 7,746,464 $ 7,247,909 $ 6.9% Operating grants and contributions 12,919,661 4,991,957 - 12,919,661 - 4,991,957 158.8% Capital grants and contributions 879,739 1,060,782 - - 879,739 1,060,782 -17.1% General revenues:
Taxes:
Property taxes 8,964,390 8,512,488 194,785 188,097 9,159,175 8,700,585 5.3% Sales taxes 5,321,610 5,414,556 - - 5,321,610 5,414,556 -1.7% Transaction and use taxes 6,958,521 5,993,735 - - 6,958,521 5,993,735 16.1% Transient occupancy taxes 671,096 660,504 - - 671,096 660,504 1.6% Franchise taxes 1,251,495 1,180,487 - - 1,251,495 1,180,487 6.0% Utility user taxes 2,504,823 2,122,661 - - 2,504,823 2,122,661 18.0% Other taxes 55,844 45,717 - - 55,844 45,717 22.2%
Investment earnings, unrestricted 878,675 (956,855) 116,944 (58,122) 995,619 (1,014,977) -198.1% Gain on sale of capital assets - 430,902 - - 430,902 - -100.0% Miscellaneous 93,478 49,013 - - 93,478 49,013 90.7%
Total revenues 47,156,129 35,441,791 1,401,396 1,442,040 48,557,525 36,883,831 31.6% Expenses:
General government 4,558,241 3,144,556 - - 4,558,241 3,144,556 45.0% Public safety 21,009,218 18,643,242 - 21,009,218 - 18,643,242 12.7% Community development 5,882,403 2,574,453 - - 5,882,403 2,574,453 128.5% Public works 6,552,867 2,697,686 - - 6,552,867 2,697,686 142.9% Culture and recreation 2,558,081 2,441,047 - - 2,558,081 2,441,047 4.8% Interest on long-term debt 11,020 12,943 - - 11,020 12,943 -14.9% Sewer enterprise - - 516,366 839,808 516,366 839,808 -38.5% Total expenses 40,571,830 29,513,927 516,366 839,808 41,088,196 30,353,735 35.4% Increase (decrease) in net
position before transfers 6,584,299 5,927,864 885,030 602,232 7,469,329 6,530,096 14.4% Transfers 332,010 18,776 (332,010) (18,776) - - 0.0%
Change in Net Position 6,916,309 5,946,640 553,020 583,456 7,469,329 6,530,096 14.4% Net position, beginning of year,
as restated 144,436,592 138,698,025 10,747,420 10,163,964 155,184,012 148,861,989 4.2% Net position, end of year $ 151,352,901 $ 144,644,665 $ 11,300,440 $ 162,653,341 10,747,420 $ $ 155,392,085 4.7%
CITY OF STANTON
CHANGE IN NET POSITION
Activities
Governmental Business-type
Activities Totals
ATTACHMENT A
11 Revenues increased by $11.7 million, or 33.1%, from the prior year. Charges for services increased by $720,953, or 12.1%, in fiscal year 2022-23 due to additional revenues collected from facility rentals and interest income and a one-time rebate from a utility audit performed by Southern California Edison. In addition, approximately $183,931 of the increase is attributed to the change in fair value in the City’s investment portfolio. During fiscal year 2022-23. operating grants and contributions revenue increased by $7.9 million, or 158.8%, primarily due to the City’s spending $7.7 million of grant funds received under the American Rescue Plan Act program. Capital grants and contributions revenue decreased by $181,043, or 1.9%, due to one-time Park In-Lieu developer impact fees collected in the previous fiscal year for residential projects. Sales and transaction and use taxes increased $871,840, or 7.6%, primarily due to higher fuel prices and increased online sales activity compared to the previous fiscal year. Property taxes increased $451,902, or 5.3%, which is consistent with the increase in the City’s assessed valuation for the current fiscal year. Other taxes increased $473,889, or 11.8%, primarily due to increased utility user tax revenue collected for electricity and gas services during the current fiscal year. Other revenue sources increased by $1.4 million, or 303.8%, primarily
ATTACHMENT A
12 due to increased unrestricted investment earnings realized during fiscal year 2022-23.
The average yield on the City’s investment portfolio was 3.0% during fiscal year 2022-23 compared to an average yield of 0.7% in fiscal year 2021-22.
The cost of all governmental activities during fiscal year 2022-23 was $40.6 million, an increase of $11.1 million, or 37.5%, from the previous fiscal year. The following table summarizes and presents governmental activities expenses by function and percentages for the fiscal year ended June 30, 2023, along with the percentage changes from the prior year.
General government expenses increased by $1.4 million, or 45.0%, primarily due to the increase in the cost of legal services and pension costs. During fiscal year 2022-23, the City’s cost for professional legal services increased significantly because the City increased its prosecution efforts for code enforcement and public safety related matters and incurred additional legal costs associated with labor related matters. In addition, the
ATTACHMENT A
13 increase in general government expenses is also attributed to the impact of non-cash transactions related to the estimated deferred inflows, deferred outflows, and net pension liability as determined by an actuarial valuation report as of June 30, 2022, issued by the California Public Employee’s Retirement System.
Public safety expenses increased by $2.4 million, or 12.7%, during the current fiscal year due to increases of 7.5% in the City’s law enforcement contract costs with the County of Orange and 3% in the City’s fire protection contract costs with the Orange County Fire Authority. In addition, the City spent $82,035 during the current fiscal year on a new Homelessness and Public Safety Pilot Program. This program is currently funded through June 30, 2024.
Community development expenses increased by $3.3 million, or 128.5%, primarily due to a $2.5 million affordable housing grant provided to JHC-Beach3LLC (“JHC”) and the demolition of the building located at 8861 Pacific Avenue. JHC received a grant from the City to acquire and rehabilitate the property that was formerly occupied by Riviera Motel located at 11892 Beach Boulevard in Stanton. The rehabilitated property will be used as a 21-unit affordable residential rental complex and will be operated as permanent supportive housing for individuals making less than or equal to 30% Area Median Income (AMI). During fiscal year 2022-23, the City demolished the building located at 8861 Pacific Avenue. The cost to demolish the building was $93,800 and resulted in an additional loss on disposal of $250,185 (the net book value of the assets).
Public works expenses increased by $3.9 million, or 142.9% due to increased contracted engineering costs and maintenance costs. For example, the City’s solid waste consulting contract costs increased from an annual contract cost of approximately $25,000 to an annual contract cost of approximately $180,000 to assist the City with its negotiation of a new solid waste franchise agreement with CR&R and to assist the City with its compliance of State law, SB 1383 regarding food waste. Also, during the current fiscal year, the City incurred increased maintenance costs for: repainting the police station; repairing the sewer piping at the police station, contributing the City match to the Orange County Transportation Authority for the Magnolia Street Traffic Signal Synchronization Project, and other minor street repairs (i.e. filling potholes and sidewalk repairs).
Culture and recreation expenses increased by $117,034, or 4.8% due to increased funding from the American Rescue Plan Act (ARPA) program for a new Summer Camp program and additional hours for mental health counseling services contracted through the Boys and Girls Club of Garden Grove. The temporary funding for these new programs is expected to cease in Fiscal Year 2024-25.
FINANCIAL ANALYSIS OF THE CITY’S FUNDS
As noted earlier, the City uses fund accounting to ensure compliance with finance-related legal requirements.
Governmental funds:
The focus of the City’s governmental funds is to provide information on near-term inflows,
ATTACHMENT A
14 outflows, and balances of spending resources. Such information is useful in assessing the City’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for discretionary spending as this category of fund balance represents the portion of fund balance which has not yet been limited to use for a particular purpose by either an external party, the City itself, or a group or individual that has been delegated authority to assign resources for use for particular purposes by the City Council.
As of June 30, 2023, the City’s governmental funds (as presented in the balance sheet on page 28) reported combined fund balances of $59.8 million, and increase of $7.9 million from the prior year balance of $51.9 million. Approximately, $19.6 million (32.8%) consists of unassigned fund balance, which is available for spending at the City’s discretion. The remainder of the fund balance is either nonspendable, restricted, committed or assigned to indicate that it is: 1) not in spendable form ($2.3 million), 2) legally required to be spent on specific uses or maintained intact through a federal, state, or local law or contractual obligation ($21.3 million), 3) committed for a specific purpose by City Council resolution ($10.1 million), or 4) assigned for a particular purpose ($6.5 million). Refer to Note 13 in the Notes to Basic Financial Statements for more detailed information regarding nonspendable, restricted, committed, assigned, and unassigned fund balances.
General Fund. The General Fund is the City’s chief operating fund. As of June 30, 2023, the total fund balance of the General Fund was $38.5 million, an increase of $10.0 million, or 35.2%, from the previous fiscal year. During fiscal year 2022-23, revenues increased approximately $1.5 million, or 5.1%, from the previous fiscal year, due to increased property and sales tax revenues. In addition, the City collected $998,127 in one-time transaction and use tax (Measure GG) for a business to business transaction. General Fund expenditures were $4.2 million, or 16.3%, lower in fiscal year 2022-23 than the previous fiscal year, primarily due to the funding of contracted public safety costs by the American Rescue Plan Act (ARPA) Special Revenue Fund.
The table below summarizes the various components of the General Fund’s fund balance.
The City’s nonspendable fund balance includes prepaid items, advances to other funds, and the noncurrent portion of outstanding notes and loans receivable. Nonspendable fund balance decreased by $369,200, or 14.0%, from the previous fiscal year due to repayments collected on the loan made to the Lighting and Median Maintenance Special Revenue Fund and reduction (from sales and transaction and use tax revenue) on the economic development loan provided to Rodeo 39 Public Marketplace, LLC. 2023 2022 $ Change % Change
Nonspendable $ 2,265,236 $ 2,634,436 $ (369,200) -14.0% Committed 10,105,796 9,856,296 249,500 2.5%
Assigned 6,304,522 169,585 6,134,937 3617.6%
Unassigned - contingency reserve 19,848,555 15,826,042 4,022,513 25.4% Total $ 38,524,109 $ 28,486,359 $ 10,037,750 35.2%
ATTACHMENT A
15 The City’s committed fund balance includes reserves for: emergency equipment and maintenance ($150,000); technology equipment ($150,000); emergency disaster contingency ($3.0 million); and capital improvement ($5.0 million). In addition, $1.5 million the City Council committed certain developer contributions through resolution for beautification, neighborhood preservation, and public benefit projects. During fiscal year 2022-23, committed fund balance increased by $249,500, or 2.5%, due to additional public benefit fees collected from developers during the current fiscal year and an additional $100,000 committed for the emergency disaster contingency reserve during the current fiscal year.
Assigned fund balance of $6.3 million as of June 30, 2023, represents an increase of $6.1 million, or 3617.6%, from the prior fiscal year, primarily due to a number of capital improvement projects and temporary funding for special programs designated by the City during the current fiscal year. Refer to Note 13 for additional information regarding assigned fund balance.
The City’s unassigned fund balance increased from $15.8 million as of June 30, 2022, to $19.8 million as of June 30, 2023, an increase of $4.0 million, or 25.4%. This amount includes a $6.1 million reserve for economic uncertainty.
As a measure of the General Fund’s relative fiscal health, it is useful to calculate the General Fund reserve balance as a percentage of total General Fund operating expenditures. For the purposes of this calculation the discretionary fund balance is comprised of the following balances: committed reserves of $150,000 for emergency equipment and maintenance; $150,000 for technology equipment; $3.0 million for emergency contingency; $5.0 million for capital improvements; and $15.8 million in unassigned fund balance. This amount represents 93.0% of fiscal year 2023-24 budgeted General Fund operating expenditures.
The City has four other major funds: Housing Authority Special Revenue Fund, Lighting and Median Maintenance Special Revenue Fund; American Rescue Plan Act Special Revenue Fund, and Community Development Block Grant Special Revenue Fund.
Housing Authority Special Revenue Fund. As of June 30, 2023, the Housing Authority Special Revenue Fund reported a restricted fund balance of $10.9 million, which represents a decrease of $2.6 million, or 19.2%, from the prior fiscal year. The reduction is primarily due to a $2.5 million affordable housing grant provided to JHC and the demolition of the building located at 8861 Pacific Avenue.
Lighting and Median Maintenance Special Revenue Fund. As of June 30, 2023, the Lighting and Median Maintenance Special Revenue Fund reported a restricted fund balance of $1.5 million, which represents an increase of $607,902, or 67.0%, from the prior fiscal year, primarily due to additional property tax revenue collected during the current fiscal year and a one-time rebate from Southern California Edison as a result of utility savings from the City’s LED street light conversion project that was completed a couple years ago.
ATTACHMENT A
16 American Rescue Plan Act (ARPA) Special Revenue Fund. As of June 30, 2023, the ARPA Special Revenue Fund reported a $0 fund balance. During fiscal year 2022-23, the City spent the balance of its $7.8 million in ARPA grant funding, including investment income. The funds were primarily spent on public safety contract costs.
Community Development Block Grant (CDBG) Special Revenue Fund As of June 30, 2023, the CDBG Special Revenue Fund reported a deficit fund balance of $135,113 which represents a reduction of $346,454, or 163.9%, from the prior fiscal year, primarily due to $350,000 spent for the Family Resource Center Phase 1 Improvements Project.
The deficit fund balance was replenished during fiscal year 2023-24 when the City collected its grant reimbursement from the County of Orange.
Proprietary Funds:
The proprietary funds provide the same type of information found in the government-wide financial statements, but in greater detail. The City operates one business-type activity for sewer operations.
Sewer Enterprise Fund. The Sewer Enterprise Fund’s unrestricted net position at the end of fiscal year 2022-23 was $6.6 million at June 30, 2023, an increase of $696,494, or
11.8%, from the previous year. The Sewer Enterprise Fund’s total revenues decreased by $40,644, or 2.8% from the prior fiscal year due to less sewer connection fees collected on behalf of the Orange County Sanitation District (OC San) as a result of less development activity within the City. The City’s sewer service charge has been flat since fiscal year 2021-22. A new sewer rate study project will begin pending the completion of the update to the City’s Sewer Master Plan during fiscal year 2023-24. The Sewer Enterprise Fund’s total expenses decreased by $10,208, or 1.2% during fiscal year 2022- 23, when compared to the previous year.
Internal Service Funds. As of June 30, 2023, the Internal Service Funds reported total unrestricted net position of $940,676, a reduction of $962,663 or 50.6%, from the previous year. The City’s net pension liability increased from $1.9 million to $8.3 million during fiscal year 2022-23 based on the plan information provided by California Public Employees’ Retirement System (CalPERS) based on an actuarial valuation as of June 30, 2021, rolled forward to June 30, 2022.
GENERAL FUND BUDGETARY HIGHLIGHTS
In preparing the budget, the City attempts to estimate its revenues using realistic, but conservative, methods so as to budget its expenditure appropriations and activities in a prudent manner. As a result, the City Council adopts budget adjustments during the course of the fiscal year to reflect both changed priorities and availability of revenues to allow for the expansion of existing programs, if required.
For the year ended June 30, 2023, the General Fund reported a net increase in fund balance of $10.0 million. Actual revenues exceeded final budgeted amounts by $2.0
ATTACHMENT A
17 million, or 6.9%. The three revenue categories where actual Fiscal year 2022-23 revenues exceeded the budget most significantly include: transaction and use tax revenue, utility user tax revenue (for gas); and investment income. During the last quarter of Fiscal year 2022-23, the City received $998,127 in one-time transaction and use tax (Measure GG) for a business to business transaction. Utility user tax revenue for gas increased as a result of increased customer rates charged by Southern California Gas Company. Lastly, investment income exceeded the City’s budget due to increased interest rates by the federal government, which increased the interest rates the City earned on many securities in its investment portfolio. Expenditures were less than final budgeted amounts by $2.0 million, or 8.5%; however, approximately $1.3 million was reappropriated to the fiscal year 2023-24 budget for projects that were started, but not completed during fiscal year 2022-23. The remainder of the budget savings were attributed to salary savings from underfilled and vacant positions; contracted law enforcement contract costs (due to vacancy credits); and savings from contracted building inspection services.
CAPITAL ASSET AND LONG-TERM LIABILITIES
Capital Assets
Total capital assets decreased by $399,052, or 0.4% from the prior fiscal year. Capital assets for business-type activities decreased by $143,474 or 3.0%, from the previous fiscal year, due to current year depreciation of capital assets. Capital assets for governmental activities decreased by $255,578, or 0.3%, from the previous fiscal year, primarily due to an increase in construction in progress caused by a number of capital projects in progress as of the end of fiscal year 2022-23, offset by a reduction in capital assets due to current year depreciation.
Additional information on the City’s capital assets can be found in Note 4 in the Notes to the Basic Financial Statements.
2023 2022 2023 2022 2023 2022 % Change
Land $ 38,406,365 $ 38,406,365 $ - $ 38,406,365 - $ $ 38,406,365 0.0% Construction in progress 1,093,824 426,706 - - 1,093,824 426,706 61.0% Buildings and improvements 33,219,618 34,588,473 - - 33,219,618 34,588,473 -4.0% Equipment 175,647 58,932 - - 175,647 58,932 198.1%
Vehicles 187,957 281,767 - - 187,957 281,767 -33.3%
Sanitary plant - - 4,251,464 4,381,841 4,251,464 4,381,841 -3.0% General plant - - 432,196 445,293 432,196 445,293 -2.9% Infrastructure 16,621,903 16,198,649 - 16,621,903 - 16,198,649 2.6% Totals $ 89,705,314 $ 89,960,892 $ 4,683,660 $ 4,827,134 $ 94,388,974 $ 94,788,026 -0.4%
CAPITAL ASSETS
(Net of Depreciation)
Business-type
Activities
Governmental
Activities Totals
ATTACHMENT A
18 Long-Term Liabilities
As of June 30, 2023, the City had total long-term liabilities outstanding of $8.8 million.
During fiscal year 2022-23, total long-term liabilities increased by $6.5 million, or 288.3%, primarily due to the increase of the City’s net pension liability from $1.9 million as of June 30, 2022, to $8.3 million as of June 30, 2023. Additional information on the City’s longterm liabilities can be found in Notes 7, 11 and 12 in the Notes to the Basic Financial Statements.
ECONOMIC FACTORS AND NEXT YEAR’S BUDGET
Local governments throughout the State of California are challenged with funding increasing costs of operations with constrained resources. The City maintains a conservative approach to budgeting revenues and expenditures. Management takes an active role in monitoring the application of the budget during the fiscal year to apply any necessary changes to projected revenues as well as appropriated expenditures. The budget for fiscal year 2023-24 was projected with a modest revenue growth of 3.0% and expenditure growth of 22.8%. In addition, the City Council funded $2.5 million in expenditures from assigned fund balance designated for special projects. The General Fund budget was balanced with revenues and funding from the assigned fund balance exceeding appropriations by $348,480.
REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of the City’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional information should be addressed to: Michelle Bannigan, Finance Director, 7800 Katella Avenue, Stanton, California 90680.
2023 2022 2023 2022 2023 2022
%
Change
Net pension liability $ 8,333,404 $ 1,931,124 $ - $ 8,333,404 - $ $ 1,931,124 331.5% Other post-employment benefits 153,787 - - - 153,787 100.0% - Compensated absences 309,323 320,149 1,972 311,295 768 320,917 -3.0% Claims payable - 13,870 - - - -100.0% 13,870
Totals $ 8,796,514 $ 2,265,143 $ 1,972 $ 8,798,486 768 $ $ 2,265,911 288.3%
LONG-TERM LIABILITIES
Governmental
Activities
Business-type
Activities Totals
ATTACHMENT A
19 BASIC FINANCIAL STATEMENTS
ATTACHMENT A
20 This page intentionally left blank
ATTACHMENT A
21 GOVERNMENT-WIDE FINANCIAL STATEMENTS
ATTACHMENT A
22 This page intentionally left blank
ATTACHMENT A
Governmental Business-Type
Activities Activity Total
ASSETS AND DEFERRED
OUTFLOWS OF RESOURCES
Cash and investments (Note 3) 57,036,781 $ 6,575,292 $ 63,612,073 $ Restricted cash and investments
held in pension trust (Note 3) 4,254,533 - 4,254,533
Receivables 4,118,336 60,300 4,178,636
Due from other governments 1,432,696 - 1,432,696
Prepaid items 331,096 - 331,096
Notes and loans receivable (Note 6) 2,470,575 - 2,470,575 Capital assets: (Note 4)
Non-depreciable 39,500,189 - 39,500,189
Depreciable, net 50,205,125 4,683,660 54,888,785
Total assets 159,349,331 11,319,252 170,668,583
Deferred pension related items (Note 11) 5,267,680 - 5,267,680 Deferred OPEB related items (Note 12) 459,810 - 459,810 Total deferred outflows of resources - 5,727,490 5,727,490
LIABILITIES AND DEFERRED
INFLOWS OF RESOURCES
Accounts payable 1,971,287 16,840 1,988,127
Accrued liabilities 746,756 - 746,756
Deposits payable 16,900 - 16,900
Unearned revenue 309,306 - 309,306
Long-term liabilities:
Due within one year (Note 7) 197,923 1,972 199,895
Due within more than one year (Note 7) 111,400 - 111,400 Net pension liability (Note 11) 8,333,404 - 8,333,404
Net OPEB liability (Note 12) 153,787 - 153,787
Total liabilities 11,840,763 18,812 11,859,575
Deferred Pension related items (Note 11) 1,767,139 - 1,767,139 Deferred OPEB related items (Note 12) 116,018 - 116,018 Total deferred inflows of resources - 1,883,157 1,883,157
NET POSITION
Net investment in capital assets 89,705,314 4,683,660 94,388,974 Restricted for:
Low and moderate income housing 10,856,500 - 10,856,500 Public safety 542,287 - 542,287
Community development 276,017 - 276,017
Public works 5,798,614 - 5,798,614
Culture and recreation 4,208,930 - 4,208,930
Unrestricted 39,965,239 6,616,780 46,582,019
Total net position $ 151,352,901 $ 11,300,440 $ 162,653,341
CITY OF STANTON
Statement of Net Position
June 30, 2023
Primary Government
See accompanying notes to the basic financial statements. 23 ATTACHMENT A
Operating Capital
Charges for Grants and Grants and
Expenses Services Contributions Contributions
Governmental activities:
General government 4,558,241 $ 548,950 $ -$ -$
Public safety 21,009,218 763,622 9,520,673 6,729
Community development 5,882,403 2,358,143 3,546 149,500 Public works 6,552,867 2,769,957 2,927,370 483,377
Culture and recreation 2,558,081 216,125 468,072 240,133 Interest and fiscal charges - 11,020 - -
Total governmental activities 40,571,830 6,656,797 12,919,661 879,739 Business-type activities:
Sewer enterprise 1,089,667 516,366 - -
Total 41,088,196 $ 7,746,464 $ 12,919,661 $ 879,739 $
CITY OF STANTON
Statement of Activities
For the Year Ended June 30, 2023
Program Revenues
Functions/Programs
See accompanying notes to the basic financial statements. 24 ATTACHMENT A
Governmental Business-type
Activities Activity Total
Governmental activities:
General government (4,009,291) $ - $ (4,009,291) $
Public safety (10,718,194) - (10,718,194)
Community development (3,371,214) - (3,371,214)
Public works (372,163) - (372,163)
Culture and recreation (1,633,751) - (1,633,751)
Interest and fiscal charges (11,020) - (11,020)
Total governmental activities (20,115,633) - (20,115,633) Business-type activities:
Sewer enterprise 573,301 - 573,301
Total (20,115,633) 573,301 (19,542,332)
General revenues:
Taxes:
Property taxes 8,964,390 194,785 9,159,175
Sales taxes 5,321,610 - 5,321,610
Transactions and use taxes 6,958,521 - 6,958,521
Transient occupancy taxes 671,096 - 671,096
Franchise taxes 1,251,495 - 1,251,495
Utility user taxes 2,504,823 - 2,504,823
Other taxes 55,844 - 55,844
Investment income, unrestricted 878,675 116,944 995,619 Gain on gain of sale of capital assets 12,693 - 12,693
Miscellaneous 80,785 - 80,785
Transfers 332,010 (332,010) -
Total general revenues and transfers 27,031,942 (20,281) 27,011,661 Change in net position 6,916,309 553,020 7,469,329
Net position - beginning of year,
as restated (Note 16) 144,436,592 10,747,420 155,184,012 Net position - end of year 151,352,901 $ 11,300,440 $ 162,653,341 $ Functions/Programs
CITY OF STANTON
Statement of Activities (Continued)
For the Year Ended June 30, 2023
Changes in Net Position
Net (Expenses) Revenue and
See accompanying notes to the basic financial statements. 25 ATTACHMENT A
26 This page intentionally left blank
ATTACHMENT A
27 GOVERNMENTAL FUNDS
ATTACHMENT A
Lighting American Nonmajor Total
Housing and Median Rescue Governmental Governmental
General Authority Maintenance Plan Act CDBG Funds Funds Cash and investments $ 34,166,009 $ 9,850,045 $ 2,204,702 -$ -$ $ 9,080,210 $ 55,300,966 Receivables:
Accounts 475,754 2,550 4,980 - - - 483,284
Interest 236,844 77,056 14,996 - 405 59,410 388,711
Taxes 3,218,093 - 10,048 - - 8,844 3,236,985
Prepaid costs 150,708 - - - - 130,388 281,096
Due from other funds (Note 5) 154,260 - - - - - 154,260 Due from other governments 341,270 - 19,379 - 350,000 660,945 1,371,594 Notes and loans receivable 1,452,575 1,018,000 - - - 2,470,575 - Advance to other funds (note 5) - 661,953 - - - - 661,953 Total assets $ 40,857,466 $ 10,947,651 $ - 2,254,105 $ 350,405$ $ 9,939,797 $ 64,349,424 Liabilities:
Accounts payable 1,435,401 $ 77,066 $ 57,075 $ -$ -$ $ 373,801 $ 1,943,343 Accrued liabilities 746,756 - - - - - 746,756
Deposits payable 4,000 12,900 - - - - 16,900
Due to other funds (Note 5) - - - - 135,518 18,742 154,260 Advances from other
funds (Note 5) - - 661,953 - - - 661,953
Unearned revenues 18,702 1,185 - - - 289,419 309,306
Total liabilities 2,204,859 91,151 - 719,028 135,518 681,962 3,832,518 Deferred Inflows of Resources:
Unavailable revenue 128,498 - - 19,379 350,000 210,557 708,434 Total deferred inflows
of resources - 128,498 - 19,379 350,000 210,557 708,434 Fund Balances: (Note 13)
Nonspendable 2,265,236 - - - - 2,265,236 -
Restricted - 10,856,500 1,515,698 - - 8,988,072 21,360,270 Committed 10,105,796 - - - - 10,105,796 -
Assigned 6,304,522 - - - - 181,951 6,486,473
Unassigned - 19,848,555 - - (135,113) (122,745) 19,590,697 Total fund balances 38,524,109 10,856,500 - 1,515,698 (135,113) 9,047,278 59,808,472 Total liabilities, deferred
inflows of resources
and fund balances $ 40,857,466 $ 10,947,651 $ - 2,254,105 $ 350,405$ $ 9,939,797 $ 64,349,424
LIABILITIES, DEFERRED
INFLOWS OF RESOURCES, AND
FUND BALANCES
ASSETS
CITY OF STANTON
Governmental Funds
June 30, 2023
Balance Sheet
Special Revenue Funds
See accompanying notes to the basic financial statements. 28 ATTACHMENT A
Total Fund Balances - Total Governmental Funds $ 59,808,472 Nondepreciable 39,500,189
Depreciable, net of Internal Service Fund of $187,958 50,017,167 Total capital assets 89,517,356
Deferred Outflows of Resources - OPEB Related 459,810
Deferred Inflows of Resources - OPEB Related (116,018)
Net OPEB Liability (153,787)
1,128,634
708,434
Net position of governmental activities $ 151,352,901
CITY OF STANTON
Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position
June 30, 2023
Amounts reported for governmental activities in the Statement of Net Position were reported differently because:
Certain revenues in the governmental funds are deferred inflows of resources because they are not collected within the prescribed time period after year-end. However, these revenues are included in the government-wide statements.
Capital assets used in governmental activities were not current financial resources.
Therefore, they were not reported in the Governmental Funds Balance Sheet.
The net OPEB liability applicable to the City's governmental activities is not due and payable in the current period and accordingly is not reported as fund liabilities. Deferred outflows of resources and deferred inflows of resources related to OPEB are only reported in the Statement of Net Position as the changes in these amounts effects only the government-wide statements for governmental activities.
Internal service funds are used by management to charge the costs of activities involved in rendering services to departments within the City. The assets and liabilities of the internal service funds are included in the statement of net position.
See accompanying notes to the basic financial statements. 29 ATTACHMENT A
Lighting American Nonmajor Total
Housing and Median Rescue Governmental Governmental
General Authority Maintenance Plan Act CDBG Funds Funds REVENUES:
Taxes and assessments $ 25,732,481 $ - $ 810,904 -$ -$ $ 26,543,385 - $ Licenses and permits 1,294,055 - - - - 1,294,055 -
Intergovernmental 543,729 - 7,698,966 - - 4,599,200 12,841,895 Charges for services 2,405,760 - 229,321 - - 573,631 3,208,712 Fines and forfeitures 383,517 - - - - - 383,517
Investment income 556,243 265,277 37,642 108,280 3,546 157,328 1,128,316 Rental income 164,938 671,330 - - - - 836,268
Miscellaneous 43,382 213 - 134,850 - 50,000 228,445
Total revenues 31,124,105 936,820 1,212,717 7,807,246 3,546 5,380,159 46,464,593 EXPENDITURES:
Current:
General government 3,632,542 201,254 10,247 178,136 - 4,022,179 - Public safety 12,371,532 88,181 7,084,414 - - 1,180,287 20,724,414 Community development 1,468,646 722,906 195,226 - - 2,386,778 - Public works 2,532,619 - 538,822 24,752 - 451,951 3,548,144 Culture and recreation 1,293,128 - 118,804 - - 447,516 1,859,448 Capital outlay 252,541 2,500,218 44,726 7,674 - 3,583,856 6,389,015 Debt service:
Interest and fiscal charges - - - 11,020 - - 11,020
Total expenditures 21,551,008 3,512,559 604,815 - 7,609,006 5,663,610 38,940,998
REVENUES OVER (UNDER)
EXPENDITURES 9,573,097 (2,575,739) 607,902 198,240 3,546 (283,451) 7,523,595
OTHER FINANCING
SOURCES (USES):
Transfers in (Note 5) 634,730 - - - - 3,585,706 4,220,436 Transfers out (Note 5) (170,077) - - (198,240) (350,000) (3,170,109) (3,888,426) Total other financing
sources (uses) - 464,653 - (198,240) (350,000) 415,597 332,010
NET CHANGE IN
FUND BALANCE (2,575,739) 10,037,750 607,902 - (346,454) 132,146 7,855,605 Fund balances, beginning
of year,as restated (Note 16) 28,486,359 13,432,239 - 907,796 211,341 8,915,132 51,952,867 Fund balances, end of year 38,524,109 $ $ 10,856,500 $ - 1,515,698 $ (135,113) $ $ 9,047,278 $ 59,808,472 Statement of Revenues, Expenditures, and Changes in Fund Balances
CITY OF STANTON
Governmental Funds
For the Year Ended June 30, 2023
Special Revenue Funds
See accompanying notes to the basic financial statements. 30 ATTACHMENT A
Net Change in Fund Balances - Total Governmental Funds $ 7,855,605 Governmental activities in the Statement of Activities were reported differently because:
Capital asset purchases 2,099,807
Depreciation expenses, less $93,810 of depreciation in internal service funds (2,261,576) Gain on disposition of capital assets 12,693
Total capital assets (149,076)
(59,163)
(1,069,165)
338,108
Change in net position of governmental activities $ 6,916,309 Certain revenues in the governmental funds are unavailable revenues because they are not collected within the prescribed time period after year-end. However, the revenues are included in the government-wide statements.
CITY OF STANTON
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balance to the Governmental-wide Statement of Activities For the Year Ended June 30, 2023
Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over the estimated useful lives as depreciation expense. This is the amount by which capital outlays exceed depreciation and retirements in the current period.
OPEB expenditures reported in the governmental funds includes the actuarial determined contributions. In the statement of activities, OPEB expense includes the change in the net OPEB liability (asset) and related change in OPEB amounts for deferred outflows of resources and deferred inflows of resources.
Internal service funds are used by management to charge the costs of activities involved in rendering services to departments within the City. The net income is reported with governmental activities. The assets and liabilities of the internal service funds are included in the statement of net position.
See accompanying notes to the basic financial statements. 31 ATTACHMENT A
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ATTACHMENT A
33 PROPRIETARY FUNDS
ATTACHMENT A
Business-Type Governmental
Activity Activities
Sewer Internal
Enterprise Service
Funds Funds
ASSETS
Current assets:
Cash and investments 6,575,292 $ 1,735,815 $
Restricted cash and investments held
in pension trust - 4,254,533
Receivables:
Interest 45,413 9,356
Taxes 14,887 -
Prepaids - 50,000
Due from other governments - 61,102
Total current assets 6,635,592 6,110,806
Noncurrent assets:
Capital assets - net of accumulated depreciation 4,683,660 187,958 Total noncurrent assets 4,683,660 187,958
Total assets 11,319,252 6,298,764
DEFERRED OUTFLOWS OF RESOURCES
Deferred amount from pension plan 5,267,680 -
Total deferred outflows of resources - 5,267,680
LIABILITIES
Current liabilities:
Accounts payable 16,840 27,944
Compensated absences payable 1,972 197,923
Total current liabilities 18,812 225,867
Noncurrent liabilities:
Compensated absences payable - 111,400
Net pension liability - 8,333,404
Total noncurrent liabilities - 8,444,804
Total liabilities 18,812 8,670,671
DEFERRED INFLOWS OF RESOURCES
Deferred amount from pension plan 1,767,139 -
Total deferred inflows of resources - 1,767,139
NET POSITION
Net investment in capital assets 4,683,660 187,958
Unrestricted 6,616,780 940,676
Total net position $ 11,300,440 $ 1,128,634
CITY OF STANTON
Combining Statement of Net Position
Proprietary Funds
June 30, 2023
See accompanying notes to the basic financial statements. 34 ATTACHMENT A
Business-Type Governmental
Activity Activities
Sewer Internal
Enterprise Service
Funds Funds
OPERATING REVENUES:
Charges for services 1,089,667 $ 2,191,546 $
Miscellaneous - 18,304
Total operating revenues 1,089,667 2,209,850
OPERATING EXPENSES:
Equipment maintenance and operation 130,503 88,539
Depreciation 143,474 93,810
Administrative and personnel services - 2,994,364
Insurance premiums and claims - 401,108
Contractual services 242,389 23,625
Total operating expenses 516,366 3,601,446
OPERATING INCOME 573,301 (1,391,596)
NON-OPERATING REVENUES (EXPENSES):
Property taxes 194,785 -
Investment income 116,944 322,431
Gain on sale of capital assets - 12,693
Total non-operating revenues (expenses) 311,729 335,124 INCOME BEFORE TRANSFERS 885,030 (1,056,472)
Transfers out (Note 5) (332,010) -
Total transfers - (332,010)
Change in net position (1,056,472) 553,020
Net position, beginning of year 10,747,420 2,185,106
Net position, end of year 11,300,440 $ $ 1,128,634
CITY OF STANTON
Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds
For the Year ended June 30, 2023
See accompanying notes to the basic financial statements. 35 ATTACHMENT A
Business-Type Governmental
Activity Activities
Sewer Internal
Enterprise Service
Funds Funds
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers $ 2,420,541 1,094,787 $
Cash paid to other suppliers of goods or services (370,354) (457,914) Cash paid to employees for salaries, wages, and benefits (129,299) (1,743,083) Net cash provided (used by) operating activities 595,134 219,544 CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES:
Cash paid to other funds - (332,010)
Cash received from property taxes 196,278 -
Net cash provided (used by) non-capital financing activities - (135,732) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
Proceeds from sale of capital assets - 12,692
Net cash provided (used by) capital and related financing activities - 12,692 CASH FLOWS FROM INVESTING ACTIVITIES:
Investment income (loss) 80,839 314,797
Net cash provided (used by) investing activities 80,839 314,797 Net increase (decrease) in cash and cash equivalents 540,241 547,033 Cash and equivalents, beginning of year 6,035,051 5,443,315 Cash and equivalents, end of year 6,575,292 $ $ 5,990,348
RECONCILIATION OF OPERATING INCOME (LOSS) TO
NET CASH (USED BY) OPERATING ACTIVITIES:
Operating income (loss) $ (1,391,596) 573,301 $
Adjustments to reconcile operating income (loss)
to net cash provided (used) by operating activities:
Depreciation 93,810 143,474
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable 5,120 -
(Increase) decrease in due from other governments - 210,691 (Increase) decrease in prepaid expense - 51,204
(Increase) decrease in deferred outflows of resources - (1,366,705) Increase (decrease) in accounts payable (127,965) 18,024 Increase (decrease) in claims and judgements - (13,870) Increase (decrease) in compensated absences 1,204 (10,826) Increase (decrease) in net pension liability - 6,402,280 Increase (decrease) in deferred inflows of resources - (3,773,468) Total adjustments 21,833 1,611,140
Net cash provided (used) by operating activities $ 595,134 $ 219,544
RECONCILIATION OF CASH AND CASH EQUIVALENTS
TO STATEMENT OF NET POSITION
Cash and investments $ 1,735,815 6,575,292 $
Restricted cash and investments held in pension trust - 4,254,533 Total cash and cash equivalents 6,575,292 $ $ 5,990,348
CITY OF STANTON
Statement of Cash Flows
Proprietary Funds
For the Year ended June 30, 2023
See accompanying notes to the basic financial statements. 36 ATTACHMENT A
37 FIDUCIARY FUNDS
ATTACHMENT A
PrivatePurpose
Trust
Funds
ASSETS
Current assets:
Cash and investments (Note 3) 3,947,226 $
Prepaid items 142,146
Restricted assets:
Cash held by fiscal agent (Note 3) 1,743,791
Total assets 5,833,163
DEFERRED OUTFLOWS OF RESOURCES
Deferred amount on refunding 7,014,435
Total deferred outflow of
resources 7,014,435
LIABILITIES
Current liabilities:
Accounts payable 380,922
Interest payable 164,367
Bonds payable - current portion (Note 14) 2,655,000
Total current liabilities 3,200,289
Long-term liabilities:
Bonds payable (Note 14) 49,832,734
Total long-term liabilities 49,832,734
Total liabilities 53,033,023
NET POSITION
Restricted for private purpose (40,185,425)
Total net position $ (40,185,425)
CITY OF STANTON
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2023
See accompanying notes to the basic financial statements. 38 ATTACHMENT A
PrivatePurpose
Trust
Funds
ADDITIONS:
Taxes $ 4,775,978
Investment income 124
Miscellaneous 50
Total additions 4,776,152
DEDUCTIONS:
Contractual services 46,930
Public safety 2,901,709
Interest and fiscal charges 2,434,481
Total deductions 5,383,120
CHANGE IN NET POSITION (606,968)
Net position (deficit), beginning of year (39,578,457)
Net position (deficit), end of year (40,185,425) $
CITY OF STANTON
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the year ended June 30, 2023
See accompanying notes to the basic financial statements. 39 ATTACHMENT A
40 This page intentionally left blank
ATTACHMENT A
41 NOTES TO BASIC FINANCIAL STATEMENTS
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
42 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The basic financial statements of the City of Stanton, California (the City), have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) as applied to governmental agencies. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant City accounting policies are described below.
A. Description of Government-wide Financial Statements
The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information about the reporting government as a whole, except for its fiduciary activities. All fiduciary activities are reported only in the fund financial statements. Governmental activities, which normally are supported by taxes, intergovernmental revenues, and other nonexchange transactions, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from discretely presented component units for which the primary government is financially accountable. The City has no discretely presented component units.
B. Description of Reporting Entity
The City was incorporated under the general laws of the State of California and enjoys all rights and privileges pertaining to such “general law” cities.
The Housing Authority of the City of Stanton (Housing Authority), a blended component unit, was formed on March 22, 2011, to facilitate the retention and use of transferred properties from the former Redevelopment Agency consistent with the redevelopment plan and for the purposes of ongoing maintenance of completed development projects.
Although the Housing Authority is legally separate from the City, its financial operations are the responsibility of the City. In addition, the City Council has a continuing accountability for fiscal matters of the Housing Authority. Since the City Council acts as the Board of Directors and is able to impose its will on the Housing Authority, the City is considered the primary government and the Housing Authority is a component unit of the City. Additionally, since the governing bodies of the City and the Housing Authority are the same, the financial statements of the City and the component unit are blended. For presentation within the financial statements of the governmental reporting entity, the transactions between the Housing Authority and the City are reported as interfund transactions. The Housing Authority’s financial data and activity are presented as a Special Revenue Fund. The Housing Authority issues separate financial statements that can be by sending a request to City Hall at 7800 Katella Avenue, Stanton, CA 90680.
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
43 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. Basis of Presentation
Government-Wide Financial Statements
While separate government-wide financial statements are presented, they are interrelated. The governmental activities column incorporates data from the governmental funds and internal service funds, while the business-type activity incorporates data from the government’s enterprise fund. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the fiduciary funds are excluded in the government-wide financial statements.
As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this rule are charges between the government’s sewer functions and various other functions of the government.
Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned.
Fund Financial Statements
The underlying accounting system of the City is organized and operated on the basis of separate funds, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, deferred inflows of resources, fund balance, revenues, and expenditures or expenses, as appropriate. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled.
The fund financial statements provide information about the government’s funds, including its fiduciary funds and blended component units. Separate financial statements for the government’s governmental, proprietary, and fiduciary funds are presented after the government-wide financial statements. These statements display information about major funds individually and nonmajor funds in the aggregate for governmental and enterprise funds. Fiduciary statements even though excluded from the government-wide financial statements, represent private-purpose trust funds.
The City reports the following major governmental funds:
The General Fund is the general operating fund of the City. All general tax revenues and other receipts that are not allocated by law, or contractual agreement to some other fund, are accounted for in this fund. General operating expenses not paid through other funds are paid from this fund.
Housing Authority Special Revenue Fund – To account for the accumulated resources received from the former Redevelopment Agency’s Low- and ModerateIncome Housing Special Revenue Fund, rental income, and expenses related to lowand moderate-income housing.
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
44 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. Basis of Presentation (Continued)
Fund Financial Statements (Continued)
Lighting and Median Maintenance Special Revenue Fund – To account for benefit assessments levied under the 1919 Act Stanton Municipal Lighting District and the Stanton Lighting and Landscaping District No. 1 (Landscaping and Lighting Act of 1972) for street lighting and landscaping maintenance within the City.
American Rescue Plan Act Special Revenue Fund – To account for revenues and expenditures related to funding received by the American Rescue Plan Act of 2021 approved by the federal government on March 11, 2021. These funds can be used to respond to the COVID-19 pandemic response needs, fill revenue shortfalls, and support the communities and populations hardest hit by the COIVD-19 crisis.
Community Development Block Grant (CDBG) Special Revenue Fund – To account for grants requiring segregated fund accounting, such as the Community Development Block Grant program.
The City reports the following major enterprise fund:
The Sewer Enterprise Fund is used to account for the operations of the City’s sewer system.
Additionally, the City reports the following fund types:
Governmental Funds
The Special Revenue Funds are used to account for the revenues derived from specific revenue sources, which are usually required by law or administrative regulation to be accounted for in separate funds.
The Capital Projects Funds are used to account for financial resources segregated for the development, construction, and improvement of City facilities.
Proprietary Funds
The Internal Service Funds are used to account for the financing of services provided by the following departments to other departments of the City on a costreimbursement basis:
Workers’ Compensation
Liability/Risk Management
Employee Benefits
Fleet Maintenance
Fiduciary Funds
The Private-Purpose Trust Funds are used to account for the activities of the Successor Agency to the Stanton Redevelopment Agency and North Orange County Public Safety Collaborative Fund.
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
45 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. Basis of Presentation (Continued)
Interfund Transactions
During the course of operations, the government has activity between funds for various purposes. Any residual balances outstanding at year-end are reported as due from/due to other funds and advances to/from other funds. While these balances are reported in fund financial statements, certain eliminations are made in the preparation of the government-wide financial statements. Balances between funds included in the governmental activities are eliminated so that only the net amount is included as internal balances in the governmental activities column. Similarly, balances between funds included in business-type activities are eliminated so that only the net amount is included in internal balances in the business-type activities column.
Further, certain activity occurs during the year involving transfers of resources between funds. In the fund financial statements, these amounts are reported at gross amounts as transfers in/out. While reported in the fund financial statements, certain eliminations are made in the preparation of the government-wide financial statements. Transfers between the funds included in the governmental activities column are eliminated so that only the net amount is included as transfers in the governmental activities column. Similarly, balances between funds included in business-type activities are eliminated so that only the net amount is included as transfers in the business-type activities column.
D. Measurement Focus and Basis of Accounting
The accounting and financial reporting treatment is determined by the applicable measurement focus and basis of accounting. Measurement focus indicates the type of resources being measured, such as current financial resources or economic resources.
The basis of accounting indicates the timing of transactions or events for recognition in the financial statements.
The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary and private-purpose trust fund financial statements. Under the economic resources measurement focus, all assets, deferred outflows of resources, liabilities, and deferred inflows of resources (whether current or noncurrent) associated with their activity are included on their statement of net position. Operating statements present increases (revenues) and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Revenue from property taxes is recognized in the fiscal year that the taxes are levied and collected within 60 days from the end of the fiscal year. Grants and similar items are recognized as revenues as soon as the eligibility requirements imposed by the provider have been satisfied. Unbilled receivables are recorded as revenues when services are provided.
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
46 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) D. Measurement Focus and Basis of Accounting (Continued) The governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under the current financial resources measurement focus, only current assets, current liabilities, and deferred inflows of resources are generally included on their balance sheets. The reported fund balance is considered to be a measure of available spendable resources.
Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in fund balance. Accordingly, they are said to present a summary of sources and uses of available spendable resources during a period. Noncurrent portions of long-term receivables due to governmental funds are reported on their balance sheets in spite of their spending measurement focus.
Revenues are recognized as soon as they become measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, except for principal and interest on general long-term liabilities, claims and judgments, and compensated absences which are recognized as expenditures to the extent they have matured. General capital asset acquisitions are reported as expenditures in governmental funds. Issuance of long-term debt and acquisition of leases are reported as other financing sources.
Property taxes, sales tax, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and have been recognized as revenues of the current fiscal period. Entitlements are recorded as revenues when all eligibility requirements are met, including time requirements, and the amount is received during the period or within the availability period for this revenue source (within 60 days of year-end).
Expenditure-driven grants are recognized as revenue when the qualifying expenditures have been incurred and all eligibility requirements have been met, and the amount is received during the period or within the availability period for this revenue (within 60 days of year-end). Amounts owed to the City, which are not available, are recorded as receivables and deferred inflows of resources. All other revenue items are considered to be measurable and available only when cash is received by the government.
The City’s fiduciary funds consist of private-purpose trust funds, which are reported using the economic resources measurement focus and the accrual basis of accounting.
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
47 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) E. New Accounting Pronouncements
The City adopted Statement on Governmental Accounting Standards (GASB Statements) No. 91-Conduit Debt Obligations and No. 96- Subscription Based Information Technology Software. The adoption of the GASB Nos. 91 and 96 did not significantly impact the City.
F. Deferred Outflows/Inflows of Resources
In addition to assets, the statement of net position reports a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net assets that applies to a future period and will not be recognized as an outflow of resources (expense) until that time.
The City has the following items that qualify for reporting in this category:
Deferred outflows related to pensions equal to employer contributions made after the measurement date of the net pension liability.
Deferred outflows from OPEB resulting from differences between actual and expected experience and changes in assumptions. These amounts are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with retiree healthcare benefits through the plan.
Deferred outflows from pensions resulting from differences between actual and expected experience and changes in proportion and differences between the employer’s contributions and the employer’s proportionate share of contributions.
These amounts are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with pensions through the plans.
Deferred outflows related to pensions and OPEB resulting from the net differences in projected and actual earnings on investments of the pension and OPEB plans’ fiduciary net position. These amounts are amortized over five years.
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
48 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) F. Deferred Outflows/Inflows of Resources (Continued)
In addition to liabilities, the statement of net position and governmental funds balance sheet reports a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net assets that applies to a future period and will not be recognized as an inflow of resources (revenue) until that time. The City has the following items that qualify for reporting in this category:
Deferred inflows related to OPEB for differences between actual and expected experiences. These amounts are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with retiree healthcare benefits through the plans. Deferred inflows from pensions resulting from changes in assumptions and changes in proportion and differences between the employer’s contributions and the employer’s proportionate share of contributions. These amounts are amortized over a closed period equal to the average expecting remaining service lives of all employees that are provided with pensions through the plans. Deferred inflows related to leases. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available.
G. Assets, Liabilities, Fund Balance and Net Position
Cash and Investments
The City considers all highly liquid investments, with a maturity of three months or less when purchased, to be cash equivalents. In addition, cash invested in the City’s cash management pool is considered to be cash equivalents. For purposes of the statement of cash flows of the proprietary fund types, cash and cash equivalents include all investments, as the City operates an internal cash management pool that maintains the general characteristics of a demand deposit account.
Investments are reported in the accompanying financial statements at fair value, which is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Investments that are not traded on a market, such as investments in external pools, are valued based on the stated fair value represented by the external pool (in relation to the amortized cost of that portfolio).
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
49 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) G. Assets, Liabilities, Fund Balance and Net Position (Continued) Receivables and Payables
Property, sales, use, and utility user taxes related to the current fiscal year are accrued as revenue and accounts receivable and are considered available if received within 60 days of year-end. Federal and state grants are considered receivable and accrued as revenue when reimbursable costs are incurred under the accrual basis of accounting in the government-wide statement of net position. The amount recognized as revenue, under the modified accrual basis of accounting, is limited to the amount that is deemed measurable and collectible. Loans extended from other funds are recorded as loans receivable.
Activity between funds, which is representative of lending/borrowing arrangements outstanding at the end of the fiscal year, is referred to as either due to/from other funds or advances to/from other funds. Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as internal balances.
Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure, are reported in the applicable governmental or business-type activities column in the governmentwide financial statements. Acquired assets are recorded at historical cost or estimated historical cost. Donated assets are valued at the acquisition value of the assets on the date on which they were contributed. The costs of normal maintenance and repairs that do not add value to the assets or materially extend the life are not capitalized. Capital assets are defined as assets with an initial individual cost of more than $5,000 and an estimated useful life in excess of one year with the exception of land, structures and improvements, and infrastructure, which have a threshold of $50,000.
Depreciation is charged to operations using the straight-line method of depreciation over the estimated useful lives of the assets as follows:
Buildings and Improvements 20 - 50 Years
Equipment and Vehicles 5 - 20 Years
Infrastructure 20 - 50 Years
Compensated Absences Payable
Employees can carry forward up to 360 hours of earned, but unused, vacation leave.
Upon termination, the City is obligated to compensate employees the earned, but unused, vacation time. All vacation pay is accrued when incurred in the governmentwide and proprietary fund financial statements.
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
50 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) G. Assets, Liabilities, Fund Balance and Net Position (Continued) Claims and Judgments
The City records a liability for claims, judgments, and litigation when it is probable that a liability has been incurred at year-end and the probable amount of loss (net of any insurance coverage) can be reasonably estimated. City management believes that the aggregate accrual is adequate to cover such losses, including amounts for incurred but not reported claims. Estimated claims payables are recorded in the Workers’ Compensation and Liability/Risk Management Internal Service Funds as appropriate.
Property Taxes
The assessment, levy, and collection of property taxes are the responsibility of the County of Orange (the County). The City receives property taxes pursuant to an arrangement with the County known as the Teeter Plan, whereby the County assumes responsibility for the collection of delinquent taxes and pays the full allocation to the City.
The City records property taxes as revenue when received from the County, except at year-end, when property taxes received within 60 days are accrued as revenue.
Property taxes are assessed and collected according to the following property tax calendar:
Lien Date: January 1
Levy Date: July 1 to June 30
Due Dates: November 1 – First Installment
March 1 – Second Installment
Collection Dates: December 10 – First Installment
April 10 – Second Installment
Net Position
The governmental and business-type activities in the government-wide financial statements and proprietary funds utilize a net position presentation. Net position is classified in the following categories:
Investment in Capital Assets – This amount consists of capital assets net of accumulated depreciation and would be reduced by outstanding debt and capitalrelated payables that are attributed to the acquisition, construction, or improvement of the assets; however, the City did not have any such debt or liabilities.
Restricted Net Position – This amount is restricted by external creditors, grantors, contributors, or laws or regulations of other governments.
Unrestricted Net Position – This amount is all net position that does not meet the definition of net investment in capital assets or restricted net position.
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
51 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) G. Assets, Liabilities, Fund Balance and Net Position (Continued) Net Position Flow Assumptions
Sometimes the City will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted - net position and unrestricted - net position in the government-wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied.
It is the City’s practice to consider restricted - net position to have been depleted before unrestricted - net position is applied.
Fund Balances
The fund balances reported on the fund statements consist of the following categories:
Nonspendable – This classification includes amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact.
Restricted – This classification includes amounts that can be spent only for specific purposes stipulated by constitution, external resource providers, or through enabling legislation.
Committed – This classification includes amounts for which the use of such amounts is constrained by limitations that the government imposes upon itself at its highest level of decision making, normally the governing body, and that remain binding unless removed in the same manner. The City Council is considered the highest authority for the City, and the adoption of a formal resolution prior to the end of the fiscal year is required to establish a fund balance commitment. Once adopted, the limitation imposed by the resolution remains in place until a similar action is taken (the adoption of resolution) to remove or revise the limitation.
An emergency equipment and maintenance reserve has been established through a resolution approved by the City Council. The reserve may be used to provide funding for nonscheduled capital asset repair and replacement. If used, this reserve will be replenished with future year-end operating surpluses. This emergency equipment and maintenance reserve has a balance of $150,000 as of June 30, 2023.
A technology equipment reserve has been established through a resolution approved by the City Council. The reserve may be used to provide funding for the timely replacement of technology equipment. If used, this reserve will be replenished with future year-end operating surplus. This technology equipment reserve has a balance of $150,000 as of June 30, 2023.
An emergency disaster contingency reserve has been established through a resolution approved by the City Council. The reserve is calculated at 10% of General Fund operating expenditures (rounded to the next $100,000). The reserve may be used to mitigate costs of unforeseeable emergencies, such as natural disasters, catastrophic events, or any situation requiring the declaration of an emergency as
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
52 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) G. Assets, Liabilities, Fund Balance and Net Position (Continued) Fund Balances (Continued)
defined by Stanton Municipal Code Section 2.56.050.C. If used, this reserve will be replenished with future year-end operating surpluses. This emergency disaster contingency reserve has a balance of $3,000,000 as of June 30, 2023.
A capital improvement reserve has been established through a resolution approved by the City Council. This reserve may be used for key infrastructure and capital improvement projects and to provide capital repair and replacement funding. This capital improvement reserve has a balance of $5,000,000 as of June 30, 2023.
Assigned – This classification includes amounts to be used by the government for specific purposes but do not meet the criteria to be classified as restricted or committed. In governmental funds, other than the general fund, assigned fund balance represents the remaining amount that is not restricted or committed.
Assignment of resources can be done by the highest level of decision making or by a committee or official designated for that purpose. The City Council has authorized the City Manager for that purpose. The City Manager determines the assigned amount based on encumbrances and any future budget deficits.
Unassigned – This classification includes the residual balance for the government’s general fund and includes all spendable amounts not contained in other classifications. In other funds, the unassigned classification is used only to report a deficit balance resulting from overspending for specific purposes for which amounts had been restricted.
An economic uncertainty reserve has been established through a resolution approved by the City Council. This reserve is calculated as 20% (rounded to the next $100,000) of the general fund operating expenditures. The reserve may be used to mitigate annual budget revenue shortfalls as a protection from a fluctuating economy, including financial hardship or downturns in the economy. If used or if the City’s annual operating budget grows, this reserve will be replenished with future year-end operating surpluses. This economic emergency reserve has a balance of $6,100,000 as of June 30, 2023.
Spending Policy
When expenditures are incurred for purposes for which all restricted, committed, assigned, and unassigned fund balances are available, the City’s policy is to apply in the following order, except for instances wherein an ordinance specifies the fund balance:
Restricted
Committed
Assigned
Unassigned
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
53 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) H. Program Revenues
Amounts reported as program revenues include (1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and (2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues.
I. Proprietary Funds Operating and Nonoperating Revenues and Expenses Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the sewer fund and internal service funds are charges to customers for sales and services. Operating expenses for proprietary funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.
J. Pensions
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City’s California Public Employees’ Retirement System (CalPERS) plans and additions to/deductions from the plans’ fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.
K. Postemployment Benefits Other Than Pensions (OPEB)
For purposes of measuring the net OPEB liability and deferred outflows/inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the City’s OPEB plan and additions to/deductions from the OPEB plan’s fiduciary net position have been determined on the same basis as they are reported by the plan. For this purpose, the City’s OPEB plan recognizes benefit payments when due and payable in accordance with the benefit terms. Investments are reported at fair value.
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
54 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) L. Leases Payable and Subscription Agreements Payable
Lessee: The City recognizes a lease or subscription agreements liability and an intangible right-to-use lease asset (lease asset) in the government-wide financial statements. The City recognizes lease and subscription agreements liabilities with an initial, individual value of $50,000 or more.
At the commencement of a lease, the City initially measures the lease or subscription agreements liability at the present value of payments expected to be made during the lease term. Subsequently, the lease or subscription agreements liability is reduced by the principal portion of lease payments made. The lease and subscription agreements asset is initially measured as the initial amount of the lease and subscription agreements liability, adjusted for lease payments made at or before the lease commencement date, plus certain initial direct costs. Subsequently, the lease and subscription agreements asset is amortized on a straight-line basis over its useful life.
Key estimates and judgments related to leases include how the City determines (1) the discount rate it uses to discount the expected lease payments to present value, (2) lease term, and (3) lease payments. The City uses the interest rate charged by the lessor as the discount rate. When the interest rate charged by the lessor is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate for leases.
The lease term includes the noncancellable period of the lease. Lease payments included in the measurement of the lease and subscription agreements liability are composed of fixed payments and purchase option price that the City is reasonably certain to exercise.
The City monitors changes in circumstances that would require a remeasurement of its lease and will remeasure the lease and subscription agreements asset and liability if certain changes occur that are expected to significantly affect the amount of the lease liability.
Lease and subscription agreements assets are reported with other capital assets and lease liabilities are reported with long-term debt on the Statement of Net Position.
Currently ,the City has no lease or subscription assets/liabilities that met the City’s threshold and/or criteria of GASB No. 87.
Lessor: The City is a lessor for a noncancellable leases of a portion of real property, as well as, building and roof space. The City recognizes a lease receivable and a deferred inflow of resources in the government-wide and governmental fund financial statements.
At the commencement of a lease, the City initially measures the lease receivable at the present value of payments expected to be received during the lease term. Subsequently, the lease receivable is reduced by the principal portion of the lease payments received.
The deferred inflow of resources is initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date. Subsequently, the deferred inflow of resources is recognized as revenue over the life of the lease term.
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
55 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) L. Leases Payable and Subscription Agreements Payable (continued) Key elements and judgement include how the City determines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) lease term, and (3) lease receipts. The City uses it estimated incremental borrowing rate as the discount rate for leases. The lease term includes the noncancellable period of the lease. Lease receipts included In the measurement of the lease receivable is composed of fixed payments from the lessee.
The City monitors changes that would require a remeasurement of its lease and will remeasure the lease receivable and deferred inflows of resources if certain changes occur that are expected to significantly affect the amount of the lease receivable.
M. Use of Estimates
The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amount of assets, deferred outflows of resources, liabilities, deferred inflows of resources and disclosure of contingent assets and liabilities at the statement of net position date and reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates.
NOTE 2 STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
A. Deficit Fund Balances
The following funds had deficit fund balances at June 30, 2023:
Major Governmental Fund:
CDBG Special Revenue Fund $ (135,113)
Nonmajor Governmental Fund:
Other Grants Special Revenue Fund $ (122,745)
The CDBG and Other Grants Special Revenue Funds have deficit fund balances due to intergovernmental revenues not being collected within the City’s period of availability.
B. Excess of Expenditures over Appropriations
The following fund reported expenditures exceeding appropriations at June 30, 2023:
Final Variance with
Budget Actual Final Budget
Nonmajor Governmental Fund:
Protective Services
Tax Special
Revenue Fund $ 3,000 $ 3,012 $ (12)
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
56 NOTE 3 CASH AND INVESTMENTS
Cash and Investments
Cash and investments as of June 30, 2023, were classified in the accompanying financial statements as follows:
Government-Wide Fiduciary
Statement of Statement of
Net Position Net Position Total
Unrestricted Assets:
Cash and Investments:
City $ 63,612,073 $ - $ 63,612,073
Private-Purpose Trust Funds - 3,947,226 3,947,226
Restricted Assets:
Cash and Investments Held in
Pension Trust:
City 4,254,533 - 4,254,533
Cash and Investments With
Fiscal Agents:
Private-Purpose Trust Funds - 1,743,791 1,743,791
Total Cash and Investments $ 67,866,606 $ 5,691,017 $ 73,557,623 Cash and investments at June 30, 2023, consisted of the following:
Cash in Hand $ 600
Deposits With Financial Institutions 4,887,170
Investments 68,669,853
Total Cash and Investments $ 73,557,623
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
57 NOTE 3 CASH AND INVESTMENTS (CONTINUED)
Investments Authorized by the City’s Investment Policy
The City’s Investment Policy is reviewed and adopted by the City Council each year.
Regarding allowable investment types, the investment policy is more conservative and restrictive than the investment vehicles authorized by Section 53600.5 of the California Government Code. Investment vehicles not specifically mentioned in the City’s investment policy are not authorized unless the policy is amended by the City Council or is approved as part of the provisions of the bond indentures. This table does not address investments of debt proceeds held by bond trustees that are governed by provisions of the debt agreements. This table also does not address investments of the pension trust through Public Agency Retirement Services’ (PARS) pooled trust, that are governed by the agreement between the City and the trustee. Investments are limited to the following:
Maximum Maximum
Investment Types Authorized by State Law Maximum Percentage Investment in or the City’s Investment Policy Maturity* of Portfolio One Issuer United States Treasury Notes 5 Years 100% None
United States Government-Sponsored
Agency Securities Noncallable 5 Years 100% 25%
United States Government-Sponsored
Agency Securities Callable 5 Years 20% 25%
Local Agency Securities 5 Years 100% 5%
Collateralized Time Deposits (Nonnegotiable
Certificates of Deposit) 5 Years 20% None
Banker’s Acceptances 180 Days 40% 5%
Commercial Paper 270 Days 25% 5%
Medium-Term Corporate Notes 5 Years 30% 5%
Negotiable Certificates of Deposits 5 Years 30% 5%
Certificate of Deposit Placement Service
(CDARS) 5 Years 30% None
Money Market Mutual Funds N/A 20% None
Asset-Backed and Mortgage-Backed
Securities 5 Years 20% 5%
Supranational 5 Years 30% 10%
Local Government Investment Pools N/A 100% None
* Excluding amounts held by bond trustees that are not subject to California Government Code restrictions.
N/A - Not Applicable
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
58 NOTE 3 CASH AND INVESTMENTS (CONTINUED)
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. The City manages its exposure to interest rate risk by purchasing a combination of shorter-term and longer-term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.
Information about the sensitivity of the fair values of the City’s investments (including investments held by bond trustees) to market interest rate fluctuations is provided by the following table that shows the distribution of the City’s investments by maturity as of June 30, 2023:
Remaining Investment Maturities
12 Months 13 to 24 25 to 36 37 to 60
Investment Type or Less Months Months Months Total
Local Agency Investment
Fund (LAIF) $34,920,488 $ - $ - $ - $34,920,488
U.S. Treasury 537,023 3,131,858 2,475,079 3,486,433 9,630,393 Corporate Notes - 1,814,769 1,089,733 3,516,077 6,420,579 Federal Agency Securities 635,820 1,276,806 642,023 1,351,851 3,906,500 Collateralized Mortgage
Obligations - - 333,447 2,255,206 2,588,653
Asset Backed Securities - 396,472 - 1,844,791 2,241,263 Commercial Paper 246,531 - - - 246,531
Money Market Fund 137,033 - - - 137,033
Negotiable Certificates of
Deposit 2,677,732 956,704 - - 3,634,436
Municipal Bonds 492,125 197,319 - - 689,444
Held by Fiscal Agent:
Pension Trust – Public Agency
Retirement Services 4,254,533 - - - 4,254,533
Total $43,901,285 $7,773,928 $4,540,282 $12,454,358 $68,669,853
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
59 NOTE 3 CASH AND INVESTMENTS (CONTINUED)
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the California Government Code, the City’s investment policy or debt agreements, and the actual rating by Standard & Poor’s and Moody’s as of year-end for each investment type:
Total as of
Investment Type June 30, 2023
Minimum
Legal
Rating S&P Rating
Moody's
Rating
Local Agency Investment Fund
U.S. Treasury
(LAIF) $ 34,920,488
9,630,393
None
None
Not Rated
AA+
Not Rated
Aaa
Corporate Notes 1,115,755 A A A1
Corporate Notes 1,256,439 A A- A1
Corporate Notes 946,176 A A+ A1
Corporate Notes 235,215 A AA A1
Corporate Notes 727,936 A A A2
Corporate Notes 821,668 A A- A2
Corporate Notes 236,703 A A A3
Corporate Notes 242,278 A A- A3
Corporate Notes 362,674 A A+ A3
Corporate Notes 234,901 A A Aa3
Corporate Notes 240,836 A AA- Aa3
Federal Agency Securities 3,906,500 None AA+ Aaa
Collateralized Mortgage Obligations 1,824,426 AA Not Rated Not Rated Collateralized Mortgage Obligations 471,593 AA AAA Not Rated Collateralized Mortgage Obligations 292,632 AA Not Rated Aaa Asset Backed Securities 687,790 AA AAA Aaa
Asset Backed Securities 1,304,163 AA AAA Not Rated
Asset Backed Securities 249,310 AA Not Rated Aaa
Commercial Paper 246,531 A A-1 P-1
Money Market Fund 137,033 AA2/AAA AAA Aaa
Negotiable Certificates of Deposit 3,634,436 A/A2 Not Rated Not Rated Municipal Bonds 197,319 A A Not Rated
Municipal Bonds 243,408 A AA Not Rated
Municipal Bonds
Held by Fiscal Agents:
248,717 A A- Not Rated
Pension Trust-Public Agency
Retirement Services 4,254,533 None Not Rated Not Rated
Total Investments $ 68,669,853
Concentration of Credit Risk
The investment policy of the City contains limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. There are no investments in any one nongovernment sponsored issuer (other than external investment pools) that represent 5 % or more of total City investments.
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
60 NOTE 3 CASH AND INVESTMENTS (CONTINUED)
Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of 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 deposits or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the 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 deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. Any deposits in excess of depository insurance limits at the end of the year are collateralized by securities held at the depository financial institution’s trust department.
Investment in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The 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 multiplied by a fair value factor provided by LAIF). The balance available for withdrawal is based on the accounting records maintained by LAIF.
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
61 NOTE 3 CASH AND INVESTMENTS (CONTINUED)
Cash and Investments - Pension Trust
The City established a trust account with the Public Agency Retirement Services (PARS) to hold assets that are legally restricted for use in funding future contributions to the City’s pension plan. The pension trust’s specific cash and investments are managed by a third-party portfolio manager under guidelines approved by the City.
Those guidelines are as follows:
Risk Tolerance: Moderate
Risk Management: The portfolio is constructed to control risk through four layers of diversification - asset classes (cash, fixed income, equity), investment styles (large cap, small cap, international, value growth), managers, and securities. Disciplined mutual fund selection and monitoring process help to drive return potential while reducing portfolio risk.
Investment Objective: To provide current income and moderate capital appreciation. It is expected that dividend and interest income will comprise a significant portion of total return, although growth through capital appreciation is equally important.
Strategic Ranges: 0% - 20% Cash
40% - 60% Fixed income
40% - 60% Equity
Fair Value Measurements
The City categorizes its fair value measurement within the fair value hierarchy established by GAAP. The hierarchy is based on the valuation inputs used to measure the fair value of the assets. Level 1 inputs are quoted prices in active markets for identical assets, Level 2 inputs are quoted price of similar assets in active markets, and Level 3 inputs are significant unobservable inputs.
Negotiable certificates of deposit, United States Government-Sponsored Agency Securities, and Municipal Bonds classified in Level 2 of the fair value hierarchy are valued using a matrix pricing technique. Matrix pricing is used to value securities based on the securities’ relationship to benchmark quoted prices.
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
62 NOTE 3 CASH AND INVESTMENTS (CONTINUED)
Fair Value Measurements (Continued)
The City has the following recurring fair value measurements as of June 30, 2023:
Quoted Observable Unobservable
Prices Inputs Inputs
Level 1 Level 2 Level 3 Total
U.S. Treasury $ - $ 9,630,393 $ - $ 9,630,393
Corporate Notes - 6,420,579 - 6,420,579
Federal Agency Securities - 3,906,500 - 3,906,500
Collateralized Mortgage Obligations - 2,588,653 - 2,588,653 Asset Backed Securities - 2,241,263 - 2,241,263
Commercial Paper - 246,531 - 246,531
Negotiable Certificates of Deposits - 3,634,436 - 3,634,436 Municipal Bonds - 689,444 - 689,444
Total Leveled Investments $ - $29,357,799 $ - 29,357,799 Investments Not Subject to
Fair Value Hierarchy:
Local Agency Investment
Fund (LAIF)
34,920,488
Money Market Fund 137,033
Held by Fiscal Agent:
Pension Trust – Public Agency
Retirement Services
4,254,533
Total $68,669,853
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
63 NOTE 4 CAPITAL ASSETS
Governmental Activities
A summary of changes in governmental activities - capital assets at June 30, 2023, is as follows:
Beginning Ending
Description Balance Additions Deletions Balance
Non-depreciable:
Land $ 38,406,365 $ - $ - $38,406,365
Construction in process 426,706 2,567,377 (1,900,259) 1,093,824 Total non-depreciable 38,833,071 2,567,377 (1,900,259) 39,500,189 Depreciable:
Buildings and improvements 47,970,032 - (391,595) 47,578,437 Equipment 893,156 159,787 (204,991) 847,952
Vehicles 959,841 - (139,243) 820,598
Infrastructure 43,773,464 1,810,596 (1,106,094) 44,477,966 Total depreciable
capital assets 93,596,493 1,970,383 (1,841,923) 93,724,953 Less accumulated
depreciation for:
Buildings and improvements (13,381,559) (1,118,669) 141,409 (14,358,819) Equipment (834,224) (17,759) 179,678 (672,305)
Vehicles (678,074) (93,810) 139,243 (632,641)
Infrastructure (27,574,815) (1,125,148) 843,900 (27,856,063) Total accumulated
depreciation (42,468,672) (2,355,386) 1,304,230 (43,519,828) Total depreciable
capital assets, net 51,127,821 (385,003) (537,693) 50,205,125 Total capital assets, net $ 89,960,892 $ 2,182,374 $(2,437,952) $89,705,314 Depreciation expense was charged in the following functions in the Statement of Activities:
General Government $ 151,625
Public Safety 181,317
Community Development 272,816
Public Works 1,330,036
Culture and Recreation 419,592
Total $2,355,386
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
64 NOTE 4 CAPITAL ASSETS (CONTINUED)
Business-Type Activity
A summary of changes in the business-type activity - capital assets at June 30, 2023, is as follows:
Beginning Ending
Description Balance Additions Deletions Balance
Depreciable:
Sanitary plant $ 6,748,710 $ - $ - $6,748,710
General plant 654,840 - - 654,840
Total depreciable
capital assets 7,403,550 - - 7,403,550
Less accumulated
depreciation for:
Sanitary plant (2,366,869) (130,377) - (2,497,246)
General plant (209,547) (13,097) - (222,644)
Total accumulated
depreciation (2,576,416) (143,474) - (2,719,890)
Total depreciable
capital assets, net 4,827,134 (143,474) - 4,683,660
Total capital assets, net $ 4,827,134 $(143,474) $ - $4,683,660 Depreciation expense of $143,474 was charged to the sewer function/program.
NOTE 5 INTERFUND TRANSACTIONS
Due From/DueTo Other Funds
Receivable Fund
Payable Fund
Total
Outstanding
General Fund CDBG Major Special Revenue Fund $135,518
Nonmajor Governmental Funds 18,742
$154,260
The amounts due to the General Fund is a result of short-term cash deficit balances in grant funds that will be remedied when reimbursements are received from granting agencies during the subsequent fiscal year.
Advances To/Advances From Other Funds
Receivable Fund
Payable Fund
Total
Outstanding
General Fund
Lighting and Median
Maintenance Major Special
Revenue Fund
$661,953
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
65 NOTE 5 INTERFUND TRANSACTIONS (CONTINUED)
Advances To/Advances From Other Funds (CONTINUED)
On March 23, 2021, the City Council authorized a loan from the General Fund to the Lighting Maintenance District Special Revenue Fund in a principal amount not to exceed $959,440 at an interest rate of 1.5% per year. The loan was formally acknowledged with a promissory note approved by Resolution No. 2021-09 on April 13, 2021. The loan will be repaid in semi-annual payments on June 30, and December of each year, beginning on December 31, 2021, and will mature on June 30, 2028. The proceeds of the loan were used to pay off the City’s lease agreement with Bank of the West that was secured to fund the purchase of streetlights from Southern California Edison.
Interfund Transfers
The composition of interfund transfers for the year ended June 30, 2023, is as follows:
Transfers To
Transfers From
General
Fund
Nonmajor
Governmental
Funds(7)(8)(9) Total
General Fund (1)(2) $ - $ 170,077 $ 170,077
ARPA Special Revenue Fund (6) - 198,240 198,240
CDBG Special Revenue Fund (7) - 350,000 350,000
Nonmajor Governmental
Funds (3)(4) 634,730 2,535,379 3,170,109
Sewer Enterprise Funds (3)(4) - 332,010 332,010
Total $ 634,730 $3,585,706 $4,220,436
During the fiscal year ended June 30, 2023, interfund transfers were made for the following purposes:
(1) $118,611 was transferred from the General Fund to the Nonmajor Governmental Funds (Families and Communities Together (FaCT) Grant Special Revenue Fund, Senior Transportation Special Revenue Fund, and Stanton Central Park Maintenance Special Revenue Fund) for the difference between program expenditures and the maximum funding provided by grants or donors. (2) $51,466 was transferred from the General Fund to the Nonmajor Governmental Funds (Capital Projects Fund) to provide funding various capital projects. (3) $634,730 was transferred from Nonmajor Governmental Funds (Gas Tax Special Revenue Fund, Protective Services Tax Special Revenue Fund, and Supplemental Law Enforcement Grants Special Revenue Fund) to reimburse the General Fund for street maintenance, law enforcement, and fire protection costs.
(4) $3,083,619 was transferred from various Nonmajor Governmental Funds to the Nonmajor Governmental Funds (Capital Projects Fund) to provide funding for various capital projects. (5) $332,010 was transferred from the Sewer Enterprise Fund to Nonmajor Governmental Funds (Capital Projects Fund) to provide funding for the Sewer Master Plan Update project. (6) $198,240 was transferred from the ARPA Special Revenue Fund to Nonmajor Governmental Funds (Capital Projects Fund) to provide funding for the Park Master Plan and Americans with Disabilities Act (ADA) Transition Plan projects.
(7) $350,000 was transferred from the CDBG Special Revenue Fund to Nonmajor Governmental Funds (Capital Projects Fund) to provide funding for the Family Resource Improvements (Phase 1) project.
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
66 NOTE 6 NOTES AND LOANS RECEIVABLE
The notes and loans receivable balance at June 30, 2023, was as follows:
Rodeo 39 Marketplace LLC $ 1,368,147
Stanton Accessible Apartments Construction 398,932
Housing 84,035
First-Time Home Buyer 40,000
Housing Rehabilitation 978,000
Employee Computer 393
Allowance for Doubtful Accounts (398,932)
Total $ 2,470,575
In April 2021, the City entered into a public benefit agreement with Rodeo 39 Marketplace, LLC (“Rodeo 39”) to support and encourage economic and business development in the community with the purpose of generating municipal revenues to provide necessary public services and facilities. The City provided Rodeo 39 with a forgivable loan of $2,250,000 for the Rodeo 39 Public Market and Shops. The City agreed to credit the outstanding amount due on the loan by 50% of the sales tax, including transaction and use tax, revenue payable to the City that is generated by the Rodeo 39 Public Market (and the Raising Cane’s and InN-Out restaurants located in its parking lot) from its inception in September 2019 through October 1, 2030. In exchange for providing the economic development subsidy loan, Rodeo 39 is required to operate the site as a commercial retail center for at least ten years. During the fiscal year ended June 30, 2023, the City reduced the amount due on the loan by $151,254 to account for 50% of the sales tax and transaction and use tax revenue that was generated by the Rodeo 39 Public Market and Shops. As of June 30, 2023, the outstanding balance on the loan was $1,368,147.
In November 2004, the former Redevelopment Agency entered into a Residual Receipts Promissory Note with Stanton Accessible Apartments Construction. Under the terms of the agreement, the former Redevelopment Agency loaned $258,261 to Stanton Accessible Apartments Construction. The note commenced on May 5, 2005, and bears interest at 3% per year. The note was transferred to the Housing Authority on February 1, 2012. The total amount outstanding, including accrued interest at June 30, 2023, was $398,932, with an allowance for the forgivable amount of $398,932.
Housing loans receivable of $84,035 consists of various low-interest home loans made to low-income families and funded from small cities housing monies.
The First Time Home Buyer Assistance Program, or HOMES, was created by the former Redevelopment Agency in order to help existing and new residents purchase their first home. The HOMES program provides up to $40,000 in down payment assistance for eligible first-time home buyers of low to moderate income. Assistance is in the form of a 45-year loan with interest and payments deferred for the first 10 years of the loan. The HOMES loan is secured by a second trust deed in conjunction with a first mortgage offered by a participating lender. The loan was transferred to the Housing Authority on February 1, 2012.
The total amount outstanding at June 30, 2023, was $40,000.
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
67 NOTE 6 NOTES AND LOANS RECEIVABLE (CONTINUED)
The Housing Rehabilitation Loan Program offers loans of up to $50,000 for newer homes and up to $75,000 for pre-1960 homes to low- and moderate-income households. The purpose of the program is to assist Stanton’s homeowners with addressing code violations and eliminating blighted, unsafe, unsanitary, and deteriorating living conditions. The loans are interest free with deferred payments until the property is sold, refinanced, or a change in title occurs. The loans were transferred to the Housing Authority on February 1, 2012. The total amount outstanding at June 30, 2023, was $978,000.
Employees have the opportunity to purchase a personal computer with an interest-free twoyear loan from the City. Full-time employees, who have completed the one-year probationary period, or part-time employees, who have been employed with the City for over one year, are eligible to participate in this program. The total amount outstanding at June 30, 2023, was $393.
NOTE 7 LONG-TERM LIABILITIES
Governmental Activities
The following is a summary of long-term liability transactions as of June 30, 2023:
Amounts
Beginning Ending Due within
Balance Additions Deletions Balance One Year
Claims payable $ 13,870 $ - $(13,870) $ - $ -
Compensated absences 320,149 216,266 (227,092) 309,323 197,923 Total $ 334,019 $216,266 $(240,962) $309,323 $197,923
Claims Payable
The amount of claims payable for governmental activities at June 30, 2023, was $0. This liability is being liquidated in the Workers’ Compensation and Liability/Risk Management Internal Service Funds.
Compensated Absences
The City’s liability for vested and unpaid compensated absences (accrued vacation and compensation time pay) in the governmental activities has been accrued and amounted to $309,323 at June 30, 2023. This liability is being liquidated in the Employee Benefits Internal Service Fund.
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
68 NOTE 7 LONG-TERM LIABILITIES (CONTINUED)
Business-Type Activity
The following is a summary of long-term debt transactions of the business-type activity as of June 30, 2023:
Amounts
Beginning Ending Due within
Balance Additions Deletions Balance One Year
Compensated absences $ 768 $ 1,396 $ (192) $1,972 $1,972 Total $ 768 $ 1,396 $ (192) $1,972 $1,972
In proprietary funds, the liability for vested and unpaid compensated absences (accrued vacation and compensation time pay) is reported in the sewer enterprise fund as the benefits are vested and earned. The compensated absences accrued in the Sewer Enterprise Fund amounted to $1,972 at June 30, 2023
NOTE 8 RISK MANAGEMENT
Risk Pool Membership
The City is a member of the California Joint Powers Insurance Authority (Authority). The Authority is composed of 124 California public entities and is organized under a joint powers agreement pursuant to California Government Code §6500 et seq. The Authority arranges and administers programs for the pooling of self-insured losses, purchases excess insurance and reinsurance, and arranges for group purchased insurance for property and other lines of coverage. The California JPIA began covering claims of its members in 1978.
Each member government has an elected official as its representative on the Authority’s Board of Directors. The Board operates through a nine-member Executive Committee.
Excess Liability Program
Liability coverage includes auto liability, employment practices liability, public officials’ errors and omissions, bodily injury, personal injury, third-party property damage, advertising injury, and employee benefit administration liability. The City has a retained limit of $100,000 per occurrence. The overall coverage limit for each member, including all layers of coverage, is $50 million per occurrence. The coverage structure is composed of a combination of pooled self-insurance, reinsurance, and excess insurance. Additional information concerning the coverage structure is available on the Authority’s website: https://cjpia.org/coverage/risksharing-pools/.
Excess Workers’ Compensation Program
The City has a retained limit of $100,000 per occurrence for workers’ compensation claims.
The Authority’s pooled retention is $1 million per occurrence with reinsurance to statutory limits under California Workers’ Compensation Law. Employer’s Liability losses are pooled among members to $1 million. Coverage from $1 million to $5 million is purchased through reinsurance policies, and Employer’s Liability losses from $5 million to $10 million are pooled among members.
Purchased Insurance
The City also participates in the following coverage programs provided by the Authority:
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
69 NOTE 8 RISK MANAGEMENT (CONTINUED)
(A) All-Risk Property Protection Program. This insurance protection is underwritten by several insurance companies. The City’s property is currently insured according to a schedule of covered property submitted by the City to the Authority. The total insured value of scheduled City property is $42,836,816. There is a $10,000 deductible per occurrence except for nonemergency vehicle insurance which has a $2,500 deductible. (B) Earthquake and Flood Insurance. This coverage is part of the Property Protection Program. The City has total insured values of $19,599,700 scheduled for coverage under this program. There is a deductible of 5% per unit of value with a minimum deductible of $100,000.
(C) Pollution Legal Liability Insurance Program. The policy covers sudden and gradual pollution of scheduled property, streets, and storm drains owned by the City. Coverage is on a claims-made basis. There is a $250,000 deductible. The Authority has an aggregate limit of $20 million.
(D) Crime Insurance Program. Formerly called Blanket Fidelity Bond, this policy covers faithful performance, depositor’s forgery, theft of money and securities, and computer fraud related to the transfer of money. The policy limit is $3,000,000, and the deductible is $2,500. (E) Special Event Tenant User Liability Insurance. This coverage protects against liability damages by requiring tenant users of certain property to purchase low-cost tenant user liability insurance for certain activities on City property. The insurance premium is paid by the tenant user and is paid to the City according to a schedule. The City then pays the insurance broker and/or carrier. The insurance is facilitated by the Authority.
Claims Activity and Adequacy of Protection
Claim expenditures and liabilities are reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. As of June 30, 2023, the amount of these liabilities was $0. This liability is the City’s best estimate based on available information.
During the past three fiscal (claims) years, none of the above programs for protection have experienced settlements or judgments that exceeded pooled or insured coverage. There were also no significant reductions in pooled or insured liability coverage in 2022-2023.
A summary of the changes in claims liabilities for the past two fiscal years is as follows:
Year Ended
June 30,
Claims Payable
July 1
Fiscal Year Claims
and Changes
in Estimates
Claims
Payments
Claims Payable
June 30
2022 $ 203,214 $ 13,870 $ (203,214) $ 13,870
2023 13,870 - (13,870) -
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
70 NOTE 9 COMMITMENTS
On September 15, 1994, the former Redevelopment Agency entered into a Revenue Sharing Agreement with the City of Anaheim related to the development and operation of an automobile recycling facility by Pick Your Part. The location of the project is equally split between the cities of Stanton and Anaheim. All sales tax revenue for the project is collected in Stanton. Additionally, the City receives a recycling fee equal to $5 per automobile recycled by Pick Your Part at the project site. Under the terms of the agreement, the City of Anaheim will be compensated so as to mitigate the environmental impacts under CEQA associated with the project. Sales tax revenue generated by the project has been determined to be an appropriate measure of the impacts associated with the project. The City will pay to the City of Anaheim a portion of the recycling fee revenue equal to one-half of the sales tax revenue received by the City for the project on a calendar-year basis. In accordance with the agreement, the City paid the City of Anaheim $41,906 during the fiscal year ended June 30, 2023.
NOTE 10 ORANGE COUNTY FIRE AUTHORITY – JOINT VENTURE
In January 1995, the City entered into a joint powers agreement with 18 other cities and the County to create the Orange County Fire Authority (Fire Authority). The purpose of the Fire Authority is to provide for mutual fire protection, prevention and suppression services, and related and incidental services including, but not limited to, emergency medical and transport services, as well as providing facilities and personnel for such services. The Fire Authority’s governing board consists of one representative from each member city and two from the County. The operations of the Fire Authority are funded with structural fire fees collected by the County through the property tax roll or with cash contributions based on the Fire Authority’s annual budget. The City pays a cash contribution each year to the Fire Authority. The County pays all structural fire fees it collects to the Fire Authority. During the fiscal year ended June 30, 2023, the City paid $5,263,154 to the Fire Authority.
No determination has been made as to each participant’s proportionate share of fund equity as of June 30, 2023. Upon dissolution of the Fire Authority, all surplus money and property of the Fire Authority will be conveyed or distributed to each member in proportion to all funds provided to the Fire Authority by that member or by the County on behalf of that member during its membership. Complete financial statements may be obtained from the Orange County Fire Authority, 1 Fire Authority Road, Irvine, CA 92602.
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
71 NOTE 11 RETIREMENT PLANS
A. General Information about the Pension Plans
Plan Descriptions
All qualified permanent and probationary employees are eligible to participate in the City’s separate Safety and Miscellaneous (all other) Employee Pension Plans which are cost-sharing multiple-employer defined benefit pension plans administered by CalPERS.
Benefit provisions under the plans are established by state statute and City 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 at https://www.calpers.ca.gov/page/employers/ actuarial-resources/gasb.
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 fulltime employment. Members with five years of total service are eligible to retire at age 50 to 62 with statutorily reduced benefits. For employees hired into a plan with the 1.5% at 65 formula, eligibility for service retirement is age 55 with at least five years of services.
PEPRA miscellaneous members become eligible for service retirement upon attainment of age 52 with at least five years of service. All members are eligible for nonduty disability benefits after five 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. Safety members can receive a special death benefit if the member dies while actively employed and the death is job related. Fire members may receive the alternate death benefit in lieu of the Basic Death Benefit or the 1957 Survivor Benefit if the member dies while actively employed and has at least 20 years of total CalPERS service. The cost-of-living adjustments for each plan are applied as specified by the California Public Employees’ Retirement Law.
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
72 NOTE 11 RETIREMENT PLANS (CONTINUED)
A. General Information about the Pension Plans (Continued) Benefits Provided (Continued)
The plans’ provisions and benefits in effect at the measurement date ended June 30, 2022, are summarized as follows:
Miscellaneous
Tier I Tier II Tier III - PEPRA
On or Prior to After On or After
Hire Date August 27, 2011 August 27, 2011 January 1, 2013 Benefit Formula 2%@55 2%@60 2%@62
Benefit Vesting Schedule 5 Years of Service 5 Years of Service 5 Years of Service Benefit Payments Monthly for Life Monthly for Life Monthly for Life Retirement age 50 - 67 50 - 67 52 - 67
Monthly Benefits, as a % of Eligible
Compensation 1.426% to 2.418% 1.092% to 2.418% 1.0% to 2.5% Required Employee Contribution
Rates 7.000% 7.000% 6.750%
Required Employer Contribution
Rates:
Normal Cost Rate 10.870% 8.630% 7.470%
Payment of Unfunded Liability
and Extra Payments $ 595,521 $ 2,784 $ 6,286
Safety
Hire Date Closed
Benefit Formula 1/2%@55
Benefit Vesting Schedule 5 Years of Service
Benefit Payments Monthly for Life
Retirement Age 50 - 65
Monthly Benefits, As A % Of Eligible
Compensation 1.783% to 2.5%
Required Employee Contribution Rates (1) 0%
Required Employer Contribution $ 173,625
(1) The City currently outsources the safety function to the County. There are no members of the safety plan that are active employees of the city. Therefore, there are no required employee contribution rates. Instead, the required employer contribution is a dollar amount provided by CalPERS.
Contributions
Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers are determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate.
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
73 NOTE 11 RETIREMENT PLANS (CONTINUED)
A. General Information about the Pension Plans (Continued) Contributions (Continued)
The total plan contributions are determined through CalPERS’s annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. City contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contributions requirements are classified as plan member contributions. The City made contributions of $843,262 and $173,625 to the Miscellaneous and Safety Plans, respectively, in the current fiscal year.
B. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions
The City’s balances for the miscellaneous and safety plans are shown in the statement of net position as follows:
Governmental
Activities
Deferred Outflows of Resources:
Miscellaneous Plan $3,021,044
Safety Plan 2,246,636
Total Deferred Outflows of Resources $5,267,680
Deferred Inflows of Resources:
Miscellaneous Plan $ 568,039
Safety Plan 1,199,100
Total Deferred Inflows of Resources $1,767,139
Net Pension Liability (Asset):
Miscellaneous Plan $7,023,242
Safety Plan 1,310,162
Total Net Pension Liability (Asset) $8,333,404
Pension Expense (Credit):
Miscellaneous Plan $ (140,801)
Safety Plan 2,420,857
Total Pension Expense (Credit) $ 2,280,056
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
74 NOTE 11 RETIREMENT PLANS (CONTINUED)
B. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
As of June 30, 2023, the City reported net pension liabilities for its proportionate shares of the net pension liability of each plan as follows:
Proportionate
Share of Net
Pension
Liability (Asset)
Miscellaneous $ 7,023,242
Safety 1,310,162
Total Net Pension Liability $ 8,333,404
The City’s net pension liability for each plan is measured as the proportionate share of the net pension liability. The net pension liability of each of the plans is measured as of June 30, 2022, and the total pension liability for each plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2021, rolled forward to June 30, 2022, using standard update procedures. The City’s proportionate share of the net pension liability was based on a projection of the City’s long-term share of contributions to the pension plans relative to the projected contributions of all participating employers, actuarially determined.
The City’s proportionate share of the net pension liability for each plan as of the measurement date ended June 30, 2021 and 2022, was as follows:
Miscellaneous Safety
Proportion - June 30, 2021 0.18344% (0.04423)%
Proportion - June 30, 2022 0.15009% 0.01907%
Change - Increase (Decrease) (0.03335)% 0.06330%
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
75 NOTE 11 RETIREMENT PLANS (CONTINUED)
B. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
At June 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
Miscellaneous
Deferred Outflows
of Resources
Deferred Inflows
of Resources
Pension contributions subsequent to
measurement date
$ 843,262
$ -
Change in proportion 30,592 (180,921)
Difference in actual contributions vs.
proportionate share of contributions
-
(292,655)
Difference between expected and
actual experience
141,040
(94,463)
Differences between projected and
actual earnings on plan investments
1,286,472
-
Change in assumptions 719,678 -
Total $3,021,044 $ (568,039)
Safety
Deferred Outflows
of Resources
Deferred Inflows
of Resources
Pension contributions subsequent to
measurement date
$ 173,625
$ -
Change in proportion 1,679,792 -
Difference in actual contributions vs.
proportionate share of contributions
-
(1,184,873)
Difference between expected and
actual experience
54,223
(14,227)
Differences between projected and
actual earnings on plan investments
206,893
-
Change in assumptions 132,103 -
Total $ 2,246,636 $ (1,199,100)
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
76 NOTE 11 RETIREMENT PLANS (CONTINUED)
B. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
The amount of $843,262 and $173,625 in the miscellaneous and safety plans, respectively, which is reported as deferred outflows of resources related to contributions subsequent to the measurement date, will be recognized as a reduction of the net pension liability in the year ending June 30, 2024. Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
Year Ended
June 30
Miscellaneous
Safety
2024 $ 348,700 $ 194,879
2025 306,310 332,860
2026 167,883 219,966
2027 786,850 126,207
$1,609,743 $ 873,912
Actuarial Assumptions
The total pension liability was based on the following assumptions:
Miscellaneous Safety
Valuation Date June 30, 2021 June 30, 2021
Measurement Date June 30, 2022 June 30, 2022
Actuarial Cost Method Entry-Age Normal Entry-Age Normal Cost Method Cost Method
Actuarial Assumptions:
Discount Rate 6.90% 6.90%
Inflation 2.50% 2.50%
Salary Increase (1) (1)
Mortality Rate Table (2) (2)
Postretirement Benefit Increase (3) (3)
(1) Varies by entry age and service.
(2) The mortality table used was developed based on CalPERS-specific data. The probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015. Pre-retirement and postretirement mortality rates includes:
15 years of projected mortality improvement using 90% of Scale MP-2016 published by the Society of Actuaries. For more details on this table, please refer to the CalPERS Experience Study and Review of Actuarial Assumptions report from December 2017, that can be found on the CalPERS website. (3) The less of contract COLA or 2.50% until Purchasing Power Protection Allowance Floor on purchasing power applies, 2.50% thereafter.
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
77 NOTE 11 RETIREMENT PLANS (CONTINUED)
B. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
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 longterm market return expectations, as well as the expected pension fund cash flows.
Projected returns for all asset classes are estimated and, combined with risk estimates, are used to project compound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long-term projected portfolio return.
The expected real rates of return by asset class are as follows:
Assumed
Asset Real
Asset Class (a) Allocation Return (b) (c)
Public Equity 18.00% 4.50%
Fixed Income 45.00% 1.40%
TIPS 20.00% 0.50%
Commodities 3.00% 1.10%
REITs 14.00% 3.70%
Total 100.00%
(a) Commodities and REITs are included in Public Equity; TIPS are included in fixed Income.
(b) An expected inflation of 2.3% used for this period. (c) Figures are based on the 2021-22 Asset Liability Management study.
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
78 NOTE 11 RETIREMENT PLANS (CONTINUED)
B. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
Discount Rate
The discount rate used to measure the total pension liability was 6.90%. 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.
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate
The following presents the City’s proportionate share of the net pension liability for each plan, calculated using the discount rate for each plan, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate:
Miscellaneous Safety
1% Decrease 5.90% 5.90%
Net Pension Liability $ 10,596,672 $ 3,462,430
Current Discount Rate 6.90% 6.90%
Net Pension Liability (Asset) $ 7,023,242 $ 1,310,162
1% Increase 7.90% 7.90%
Net Pension Liability (Asset) $ 4,083,195 $ (448,832)
Pension Plans Fiduciary Net Position
Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.
C. Payable to the Pension Plans
The City had no outstanding amount of contributions to the pension plans required for the year ended June 30, 2023.
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
79 NOTE 12 OTHER POSTEMPLOYMENT BENEFITS (OPEB) PLAN
A. General Information about the OPEB Plan
The City provides postretirement medical benefits to retirees under CalPERS and the California Public Employees Medical and Hospital Care Act (PEMHCA). The City has entered into an agreement with California Employers’ Retiree Benefit Trust (CERBT) to prefund the City’s net OPEB liability. The program is an agent multiple-employer defined benefit health-care plan that provides health-care insurance for eligible retirees. To be eligible for postretirement benefits, employees must complete at least five years of continuous service and be a minimum of 50 years of age. The plan issues a publicly available financial report that includes financial statements and required supplementary information for the plan. Those reports may be obtained by writing or calling the plans at the following address or telephone number: CalPERS Member Services Division; P.O.
Box 942704, Sacramento, CA 94229-2704; 1-888-225-7377.
Employees Covered
As of the measurement date of June 30, 2022, the following current and former employees were covered by the benefit terms under the plan:
Active employees 41
Inactive employees or beneficiaries currently
receiving benefits 19
Total 60
Benefits
The City pays the greater of $215 per month or the PEMHCA minimum. The PEMHCA minimum was $149 and $151 for 2022 and 2023, respectively.
Contributions
Contribution requirements are established by City policy and may be amended by the City Council through negotiations with the respective unions. For the fiscal year ended June 30, 2023, the City made contributions of $38,485, which represents the implicit subsidy. The fiduciary net position of the plan was utilized to meet the remaining contribution requirements.
B. Net OPEB Liability
The City’s net OPEB liability was measured as of June 30, 2022, and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation dated June 30, 2022, rolled forward to June 30, 2023, using standard update procedures. A summary of the principal assumptions and methods used to determine the total OPEB liability is shown below.
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
80 NOTE 12 OTHER POSTEMPLOYMENT BENEFITS (OPEB) PLAN (CONTINUED) B. Net OPEB Liability (Continued)
Actuarial Assumptions (Continued)
The total OPEB liability in the June 30, 2022 actuarial valuation was determined using the following actuarial assumptions:
Valuation Date June 30, 2021
Measurement Date June 30, 2022
Entry-Age Normal Cost Method,
Actuarial Cost Method Level Percent of Pay
Actuarial Assumptions:
Discount Rate 6.25%
Inflation 2.50%
Projected Salary Increase 2.75% Per Year
Expected Long-Term Investment Rate of Return 6.25%
Health-Care Cost Trend Rates 4.00% Per Year
Pre-Retirement Turnover Derived from 2017 CalPERS
turnover for miscellaneous
employees
Mortality Derived from 2017 CalPERS active
mortality for miscellaneous
employees and 2017 CalPERS
mortality for retired safety
employees
The actuarial assumptions used in the June 30, 2021 valuation were based on a standard set of assumptions the actuary has used for similar valuations, modified as appropriate for the City.
Long-Term Expected Rate of Return
The long-term expected rate of return was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of OPEB plan investment expense and inflation) are developed for each major asset class. The asset class percentages are taken from the current composition of CERBT, and the expected yields are taken from a recent CalPERS publication for the pension fund:
Asset Class
Percentage
of Portfolio
Long-Term
Expected Real
Rate of Return
All Equities 40.00% 7.545%
All Fixed Income 43.00% 4.250%
Real Estate Investment Trusts 8.00% 7.250%
All Commodities 4.00% 7.545%
Treasury Inflation Protected Securities 5.00% 3.000%
Total 100.00%
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
81 NOTE 12 OTHER POSTEMPLOYMENT BENEFITS (OPEB) PLAN (CONTINUED) B. Net OPEB Liability (Continued)
Discount Rate
The discount rate used to measure the total OPEB liability was 6.25%. This is the expected long-term rate of return on City assets using investment strategy 2 within CERBT. The rate used for a funded plan is the real rate of return expected for plan assets plus long-term inflation assumption. This method was used to determine the discount rate assuming that the City’s contributions will be made on an ad hoc basis, but in an amount sufficient to fully fund the obligation over a period not to exceed 33 years.
Based on those assumptions, the plan’s fiduciary net position was projected to be available to make all projected OPEB payments for current active and inactive employees and beneficiaries. Therefore, the long-term expected rate of return on the plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability.
C. Changes in the Net OPEB Liability
The changes in the net OPEB liability (asset) are as follows:
Increase (Decrease)
Total
OPEB
Liability
(a)
Plan
Fiduciary
Net Position
(b)
Net OPEB
Liability/
(Asset)
(c)=(a)-(b)
Balance at Fiscal Year Ending 6/30/21
Measurement Date 6/30/21 $ 979,040 $1,013,692
$ (34,652)
Changes During the Period:
Service Cost 34,727 - 34,727
Interest Cost 59,894 - 59,894
Expected Investment Income - 62,004 (62,004)
Employer Contributions - 25,495 (25,495)
Changes of Benefit Terms - - -
Administrative Expenses - (258) 258
Actual minus expected benefit payments (7,697) - (7,697) Benefit Payments (68,495) (68,495) -
Assumption Changes - - -
Plan Experience - - -
Investment Experience - (188,756) 188,756
Recognized Deferred Resources - - -
Employer Contributions Subsequent
to Measurement Date - -
-
Net Changes in Fiscal Year 2021-22 18,429 (170,010) 188,439 Balance at Fiscal Year Ending 6/30/22
Measurement Date 6/30/22 $ 997,469 $ 843,682
$ 153,787
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
82 NOTE 12 OTHER POSTEMPLOYMENT BENEFITS (OPEB) PLAN (CONTINUED) C. Changes in the Net OPEB Liability (Continued)
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 liability would be if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current discount rate:
1% Decrease 5.25%
Net OPEB Liability $267,627
Current Discount Rate 6.25%
Net OPEB Liability (Asset) $153,787
1% Increase 7.25%
Net OPEB Liability (Asset) $ 59,470
Sensitivity of the Net OPEB Liability to Changes in Health-Care Cost Trend Rates The following presents the net OPEB liability of the City, as well as what the City’s net OPEB liability would be if it were calculated using health-care cost trend rates that are one percentage point lower or one percentage point higher than the current health-care cost trend rates:
1% Decrease Trend 1% Lower
Net OPEB Liability $ 79,373
Current Trend Valuation Trend
Net OPEB Liability (Asset) $153,787
1% Increase Trend 1% Higher
Net OPEB Liability (Asset) $244,505
D. OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB For the year ended June 30, 2023, the City recognized OPEB expense of $84,658. At June 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:
Deferred
Outflows
of Resources
Deferred
Inflows
of Resources
Difference between expected and
actual experience $ 91,563 $ (116,018)
Change of assumptions 285,626 -
Net difference between projected and
actual earnings on investments 82,621 -
Total $ 459,810 $ (116,018)
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
83 NOTE 12 OTHER POSTEMPLOYMENT BENEFITS (OPEB) PLAN (CONTINUED) D. OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB (Continued)
Amounts reported as deferred outflows and deferred inflows of resources will be recognized as OPEB expense as follows:
Year Ended
June 30
2024 $ 51,584
2025 52,531
2026 50,906
2027 74,464
2028 36,716
Thereafter 77,591
$343,792
E. Payable to the OPEB Plan
The City had no outstanding amount of contributions to the OPEB plan as required for the year ended June 30, 2023.
NOTE 13 CLASSIFICATION OF FUND BALANCES
The City has adopted the provisions of GASB Statement No. 54, Fund Balance and Governmental Fund Type Definitions. GASB 54 establishes fund balance classifications based largely upon the extent to which a government is bound to observe constraints imposed upon the use of the resources reported in governmental funds. The governmental funds statements conform to this classification. The various fund balance classifications established as of June 30, 2023, were as follows:
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
84 NOTE 13 CLASSIFICATION OF FUND BALANCES (CONTINUED)
General
Fund
Housing
Authority
Special
Revenue
Fund
Lighting and
Median Maint
Special
Revenue
Fund
CDBG
Nonmajor
Governmental
Funds
Total
Nonspendable:
Prepaid items $ 150,708 $ - $ - $ - $ - $ 150,708
Notes and loans receivable 1,452,575 - - - - 1,452,575
Advances to other funds 661,953 - - - - 661,953
Total nonspendable 2,265,236 - - - - 2,265,236
Restricted for:
Low-and moderate income
housing -
10,856,500
-
-
-
10,856,500
Park projects - - - - 3,955,968 3,955,968
Street lighting and median
maintenance -
-
1,515,698
-
-
1,515,698
Streets and roads
Maintenance and capital
projects -
-
-
-
4,018,547
4,018,547
Public safety programs - - - - 292,352 292,352
Traffic signal projects - - - - 1,295 1,295
Pollution remediation - - - - 242,042 242,042
New community center - - - - 176,828 176,828
New police services facility - - - - 159,775 159,775
Fire protection - - - - 4,001 4,001
Senior mobility program - - - - 76,134 76,134
Disability access program - - - - 61,130 61,130
Total restricted - 10,856,500 1,515,698 - 8,988,072 21,360,270 Committed for:
Emergency equipment
and maintenance 150,000
-
-
-
-
150,000
Technology equipment 150,000 - - - - 150,000
Emergency disaster
contingency 3,000,000
-
-
-
-
3,000,000
Capital improvement 5,000,000 - - - - 5,000,000
Beautification projects 190,000 - - - - 190,000
Neighborhood preservation
projects 108,000
-
-
-
-
108,000
Other public benefit projects 1,507,796 - - - - 1,507,796 Total committed 10,105,796 - - - - 10,105,796
Assigned for:
Capital improvement projects 3,438,563 - - - 181,951 3,620,514 Information technology
Upgrades and projects 399,016
-
-
-
-
399,016
Mental health counseling
Program 158,180
-
-
-
-
158,180
Summer camp program 56,400 - - - - 56,400
Temporary staff 1,565,625 - - - - 1,565,625
City rebrand and
implementation 80,200
-
-
-
-
80,200
Public Safety Pilot program 505,251 - - - - 505,251
2020 Town Center
Specific plan 48,905
-
-
-
-
48,905
Other purposes 52,382 - - - - 52,382
Total assigned 6,304,522 - - - 181,951 6,486,473
Unassigned for:
Economic uncertainty 6,100,000 - - - - 6,100,000
Unassigned 13,748,555 - - - (122,745) 13,490,697
Total unassigned 19,848,555 - - - (122,745) 19,590,697
$38,524,109 $10,856,500 $ 1,515,698 $(135,113) $ 9,047,278 $59,808,472
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
85 NOTE 14 SUCCESSOR AGENCY DISCLOSURES
The assets and liabilities of the former Redevelopment Agency (Agency) were transferred to the Successor Agency to the City of Stanton Redevelopment Agency on February 1, 2012, as a result of the dissolution of the Agency. The City is acting in a fiduciary capacity for the assets and liabilities. Disclosures related to notes receivable and long-term liabilities are stated below:
Long-Term Liabilities
Long-term liability transactions for the year ended June 30, 2023, were as follows:
Beginning Ending Due within
Balance Additions Deletions Balance One Year
Bonds Payable
Tax Allocation Bonds
(TAB) 2016 Series A $ 5,440,000 $ - $ (380,000) $ 5,060,000 $ 300,000 Add Bond Premium 366,753 - (30,563) 336,190 -
TAB, 2016 Series B 10,055,000 - (690,000) 9,365,000 575,000 Less Issuance
Discounts (62,857) - 5,238 (57,619) -
TAB, 2016 Series C 9,695,000 - - 9,695,000 -
Add Bond Premium 644,643 - (35,813) 608,830 -
TAB, 2016 Series D 20,540,000 - (1,205,000) 19,335,000 1,240,000 Less Issuance
Discounts (404,613) - 22,479 (382,134) -
TAB, 2020-A Payable 7,670,000 - (360,000) 7,310,000 540,000 Add Bond Premium 1,417,026 - (199,559) 1,217,467 -
Total $55,360,952 $ - $(2,873,218) $52,487,734 $2,655,000
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
86 NOTE 14 SUCCESSOR AGENCY DISCLOSURES (CONTINUED)
Tax Allocation Refunding Bonds, 2016 Series A
On February 2, 2016, the Agency issued Tax Allocation Refunding Bonds, 2016 Series A, in the amount of $7,115,000. The purpose of the bonds was to refinance certain outstanding obligations of the Agency and provide for the costs of issuing the bonds.
The bonds bear interest rates between 2.00% to 5.00%, are due June 1 and December 1 of each year, and mature December 1, 2035. The bonds maturing on or after December 1, 2027, are subject to optional redemption prior to maturity at the option of the Agency on any date on or after December 1, 2027, as a whole or in part at a redemption price equal to the principal amount of bonds to be redeemed, together with accrued interest thereon to the date fixed for redemption, without premium.
Tax revenues are pledged for the payment of principal and interest on the bonds until the bonds and any parity debt have been paid or until monies have been set aside irrevocably for that purpose. With the issuance of the bonds, a municipal bond insurance policy was issued, which guarantees the scheduled payment of principal and interest on the bonds when due. This insurance policy serves as the reserve account.
The outstanding balance of the bonds was $5,060,000 at June 30, 2023.
The annual debt service requirements on these bonds are as follows:
Year Ending June 30, Principal Interest Total
2024 $ 300,000 $ 185,275 $ 485,275
2025 310,000 170,025 480,025
2026 325,000 154,150 479,150
2027 345,000 137,400 482,400
2028 360,000 119,775 479,775
2029-2033 2,045,000 369,381 2,414,381
2034-2036 1,375,000 64,094 1,439,094
Total $ 5,060,000 $ 1,200,100 $ 6,260,100
Taxable Tax Allocation Refunding Bonds, 2016 Series B
On February 2, 2016, the Agency issued Taxable Tax Allocation Refunding Bonds, 2016 Series B, in the amount of $13,220,000. The purpose of the bonds was to refinance certain outstanding obligations of the Agency and provide for the costs of issuing the bonds.
The bonds bear interest rates between 1.00% to 3.50%, are due June 1 and December 1 of each year, and mature December 1, 2035. The bonds maturing on or after December 1, 2027, are subject to optional redemption prior to maturity at the option of the Agency on any date on or after December 1, 2027, as a whole or in part at a redemption price equal to the principal amount of bonds to be redeemed, together with accrued interest thereon to the date fixed for redemption, without premium. The bonds are subject to mandatory sinking account redemption in amounts ranging from $655,000 to $900,000 as outlined in the official statements.
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
87 NOTE 14 SUCCESSOR AGENCY DISCLOSURES (CONTINUED)
Taxable Tax Allocation Refunding Bonds, 2016 Series B (CONTINUED) Tax revenues are pledged for the payment of principal and interest on the bonds until the bonds and any parity debt have been paid or until monies have been set aside irrevocably for that purpose. With the issuance of the Bonds, a municipal bond insurance policy was issued, which guarantees the scheduled payment of principal and interest on the bonds when due. This insurance policy serves as the reserve account.
The outstanding balance of the bonds was $9,365,000 at June 30, 2023.
The annual debt service requirements on these bonds are as follows:
Year Ending June 30, Principal Interest Total
2024 $ 575,000 $ 351,500 $ 926,500
2025 595,000 333,578 928,578
2026 615,000 314,288 929,288
2027 630,000 293,269 923,269
2028 655,000 269,144 924,144
2029-2033 3,700,000 921,719 4,621,719
2034-2036 2,595,000 163,453 2,758,453
Total $ 9,365,000 $ 2,646,951 $ 12,011,951
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
88 NOTE 14 SUCCESSOR AGENCY DISCLOSURES (CONTINUED)
Tax Allocation Refunding Bonds, 2016 Series C
On December 15, 2016, the Agency issued Tax Allocation Refunding Bonds, 2016 Series C, in the amount of $10,030,000. The purpose of the bonds was to refinance certain outstanding obligations of the Agency and provide for the costs of issuing the bonds. The 2010 Series A have been partially paid off as of June 30, 2019.
The bonds bear interest rates between 2.00% to 5.00%, are due June 1 and December 1 of each year, and mature December 1, 2040. The bonds maturing on or after December 1, 2026, are subject to optional redemption prior to maturity at the option of the Agency on any date on or after December 1, 2026, as a whole or in part at a redemption price equal to the principal amount of bonds to be redeemed, together with accrued interest thereon to the date fixed for redemption, without premium.
Tax revenues are pledged for the payment of principal and interest on the bonds until the bonds and any parity debt have been paid or until monies have been set-aside irrevocably for that purpose. With the issuance of the bonds, a municipal bond insurance policy was issued, which guarantees the scheduled payment of principal and interest on the bonds when due. This insurance policy serves as the reserve account.
The outstanding balance of the bonds was $9,695,000 at June 30, 2023.
The annual debt service requirements on these bonds are as follows:
Year Ending June 30, Principal Interest Total
2024 $ - $ 484,750 $ 484,750
2025 - 484,750 484,750
2026 - 484,750 484,750
2027 - 484,750 484,750
2028 - 484,750 484,750
2029-2033 - 2,423,750 2,423,750
2034-2038 3,595,000 2,246,375 5,841,375
2039-2040 6,100,000 467,500 6,567,500
Total $ 9,695,000 $ 7,561,375 $ 17,256,375
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
89 NOTE 14 SUCCESSOR AGENCY DISCLOSURES (CONTINUED)
Tax Allocation Refunding Bonds, 2016 Series D
On December 15, 2016, the Agency issued Tax Allocation Refunding Bonds, 2016 Series D, in the amount of $26,080,000. The purpose of the bonds was to refinance certain outstanding obligations of the Agency and provide for the costs of issuing the bonds.
The bonds bear interest rates between 2.00% to 5.00%, are due June 1 and December 1 of each year, and mature December 1, 2040. The bonds maturing on or after December 1, 2026, are subject to optional redemption prior to maturity at the option of the Agency on any date on or after December 1, 2026, as a whole or in part at a redemption price equal to the principal amount of bonds to be redeemed, together with accrued interest thereon to the date fixed for redemption, without premium.
Tax revenues are pledged for the payment of principal and interest on the bonds until the bonds and any parity debt have been paid or until monies have been set aside irrevocably for that purpose. With the issuance of the bonds, a municipal bond insurance policy was issued, which guarantees the scheduled payment of principal and interest on the bonds when due. This insurance policy serves as the reserve account.
The outstanding balance of the bonds was $19,335,000 at June 30, 2023.
The annual debt service requirements on these bonds are as follows:
Year Ending June 30, Principal Interest Total
2024 $ 1,240,000 $ 725,775 $ 1,965,775
2025 1,280,000 687,175 1,967,175
2026 1,320,000 645,725 1,965,725
2027 1,360,000 601,325 1,961,325
2028 1,410,000 550,175 1,960,175
2029-2033 6,505,000 1,898,575 8,403,575
2034-2038 4,080,000 840,850 4,920,850
2039-2040 2,140,000 136,638 2,276,638
Total $ 19,335,000 $ 6,086,238 $ 25,421,238
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
90 NOTE 14 SUCCESSOR AGENCY DISCLOSURES (CONTINUED)
Taxable Tax Allocation Refunding Bonds, 2020 Series A
In August 2020, the Agency issued 2020A Tax Allocation Refunding Bonds in the amount of $7,935,000 to refund the 2010A Tax Allocation Bonds and provide for the costs of issuing the bonds.
The bonds bear interest at a rate of 4% that is payable on a semi-annual basis beginning June 1, 2021. Principal is payable December 1 of each year with a maturity date of December 1, 2035. The bonds maturing on or after December 1, 2030, are subject to optional redemption prior to maturity at the option of the Agency on any date on or after December 1, 2030, as a whole or in part at a redemption price equal to the principal amount of bonds to be redeemed, together with accrued interest thereon to the date fixed for redemption, without premium.
Tax revenues are pledged for the payment of principal and interest on the bonds until the bonds and any parity debt have been paid or until monies have been set aside irrevocably for that purpose. With the issuance of the bonds, a municipal bond insurance policy was issued, which guarantees the scheduled payment of principal and interest on the bonds when due. This insurance policy serves as the reserve account.
The outstanding balance of the bonds was $7,310,000 at June 30, 2023.
The annual debt service requirements on these bonds are as follows:
Year Ending June 30, Principal Interest Total
2024 $ 540,000 $ 281,600 $ 821,600
2025 560,000 259,600 819,600
2026 580,000 236,800 816,800
2027 605,000 213,100 818,100
2028 635,000 188,300 823,300
2029-2033 2,925,000 559,100 3,484,100
2034-2036 1,465,000 89,300 1,554,300
Total $ 7,310,000 $ 1,827,800 $ 9,137,800
ATTACHMENT A
CITY OF STANTON
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
91 NOTE 15 CONTINGENT LIABILITIES
Lawsuits
The City is a defendant in certain legal actions arising in the normal course of operations. In the opinion of management and legal counsel, any liability resulting from these actions will not result in a material adverse effect on the City’s financial position.
Federal and State Grant Programs
The City has received federal grants for specific purposes that are subject to review and audit by the federal government. Although such audits could result in expenditure disallowance under grant terms, any required reimbursements are not expected to be material.
NOTE 16 PRIOR PERIOD ADJUSTMENT
During June 20, 2023, two revenue recognition errors resulted in adjustment to and restatements of beginning net position and fund balance as follows:
Governmental
Activities
Total
Governmental
Funds
Net position and fund balance at July 1, 2022,
as originally reported $144,644,665
$52,160,940
Gas Tax Nonmajor Governmental Special Revenue Fund
was restated to correct revenue recognized in the wrong accounting period. (92,166)
(92,166)
Public Safety Task (PSTF) Nonmajor Governmental Special Revenue Fund was restated to correct revenue recognized in the wrong accounting period. (115,907)
(115,907)
Net position and fund balance at July 1, 2022,
as restated $144,436,592
$51,952,867
NOTE 17 SUBSEQUENT EVENTS
Management has evaluated subsequent events through February 14, 2024 which is the date the financial statements were available to be issued, and has determined that there are no transactions that will have a significant impact on the City.
ATTACHMENT A
92 This page intentionally left blank
ATTACHMENT A
93 REQUIRED SUPPLEMENTARY INFORMATION
(UNAUDITED)
ATTACHMENT A
Fiscal year ended June 30 2023 2022 2021 2020 2019
Measurement period June 30 2022 2021 2020 2019 2018
Proportion of the net pension liability 0.15009% 0.18344% 0.14298% 0.13918% 0.13424% Proportionate share of the net pension
liability $ 7,023,242 $ 3,483,253 $ 6,031,096 $ 5,573,525 $ 5,059,084 Covered payroll $ 3,562,190 $ 3,145,319 $ 2,740,004 $ 2,544,215 $ 2,644,646 Proportionate Share of the net pension
liability as percentage of covered payroll 197.16% 110.74% 220.11% 219.07% 191.30% Proportionate Share of the Fiduciary
Net Position as a percentage
of the Total Pension Liability 73.21% 85.91% 74.82% 76.17% 75.26% Notes to schedule:
Benefit changes:
There were no changes in benefits.
Changes in assumptions:
From fiscal year June 30, 2015 to June 30, 2016:
GASB 68, paragraph 68 states that the long-term expected rate of return should be determined net of pension plan investment expense but without reduction for pension plan administrative expense. The discount rate of 7.50% used for the June 30, 2014 measurement date was net of administrative expenses.
The discount rate of 7.65% used for the June 30, 2015 measurement date is without reduction of pension plan.
From fiscal year June 30, 2016 to June 30, 2017:
There were no changes in assumptions.
From fiscal year June 30, 2017 to June 30, 2018:
The discount rate was reduced from 7.65% to 7.15%.
From fiscal year June 30, 2018 to June 30, 2021:
There were no significant changes in assumptions.
From fiscal year June 30, 2021 to June 30, 2022:
The discount rate was reduced from 7.15% to 6.90%.
* - Fiscal year 2015 was the 1st year of implementation, therefore only nine years are shown.
CITY OF STANTON
Schedule of Proportionate Share of the Net Pension Liability - CalPERS Miscellaneous Pension Plan Year Ended June 30, 2023
Last 10 Fiscal Years *
94 ATTACHMENT A
Fiscal year ended June 30 2018 2017 2016 2015
Measurement period June 30 2017 2016 2015 2014
Proportion of the net pension liability 0.13038% 0.12626% 0.11916% 0.14740% Proportionate share of the net pension
liability $ 5,139,562 $ 4,386,167 $ 3,269,137 $ 3,642,924 Covered payroll $ 2,188,343 $ 2,097,117 $ 1,968,200 $ 1,884,740 Proportionate Share of the net pension
liability as percentage of covered payroll 234.86% 209.15% 166.10% 193.29% Proportionate Share of the Fiduciary
Net Position as a percentage
of the Total Pension Liability 73.31% 74.06% 82.31% 80.06%
CITY OF STANTON
Schedule of Proportionate Share of the Net Pension Liability - CalPERS Miscellaneous Pension Plan Last 10 Fiscal Years * (Continued)
Year Ended June 30, 2023
95 ATTACHMENT A
Fiscal year ended June 30 2023 2022 2021 2020 2019
Contractually required contribution
(actuarially determined) $ 843,262 $ 740,035 $ 645,052 $ 601,444 $ 469,444 Contributions in relation to the actuarially
determined contributions (893,262) (841,240) (695,052) (601,444) (469,444) Contribution deficiency (excess) (50,000) $ $ (101,205) $ - (50,000) $ - $ Covered payroll 3,914,558 $ 3,562,190 $ 3,145,319 $ 2,740,004 $ 2,544,215 $ Contributions as a percentage of covered payroll 22.82% 23.62% 22.10% 21.95% 18.45% Notes to schedule:
Valuation date 6/30/2020 6/30/2019 6/30/2018 6/30/2017 6/30/2016 Methods and assumptions used to
determine contribution rates:
Actuarial cost method Entry Age Entry Age Entry Age Entry Age Entry Age Amortization method (1) (1) (1) (1) (1)
Asset valuation method Fair Value Fair Value Fair Value Fair Value Fair Value Inflation 2.500% 2.500% 2.500% 2.625% 2.750%
Salary increases 2.75% (2) (2) (2) (2) (2)
Investment rate of return 7.00% (3) 7.00% (3) 7.00% (3) 7.25% (3) 7.375% (3) Retirement age (4) (4) (4) (4) (4)
Mortality (5) (5) (5) (5) (5)
(1) Level percentage of payroll, closed
(2) Depending on age, service, and type of employment
(3) Net of pension plan investment expense, including inflation (4) 50 for all plans with exception of 52 for Miscellaneous 2% @62 (5) Mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study adopted by the CalPERS Board.
* - Fiscal year 2015 was the 1st year of implementation, therefore only nine years are shown.
Year Ended June 30, 2023
CITY OF STANTON
Schedule of Contributions - CalPERS Miscellaneous Pension Plan Last 10 Fiscal Years *
96 ATTACHMENT A
Fiscal year ended June 30 2018 2017 2016 2015
Contractually required contribution
(actuarially determined) 402,799 $ 327,584 $ 288,043 $ 745,208 $ Contributions in relation to the actuarially
determined contributions (402,799) (327,584) (288,043) (745,208) Contribution deficiency (excess) - $ - $ - $ - $
Covered payroll 2,644,646 $ 2,188,343 $ 2,097,117 $ 1,968,200 $ Contributions as a percentage of covered payroll 15.23% 14.97% 13.74% 37.86% Notes to schedule:
Valuation date 6/30/2015 6/30/2014 6/30/2013 6/30/2012
Methods and assumptions used to
determine contribution rates:
Actuarial cost method Entry Age Entry Age Entry Age Entry Age Amortization method (1) (1) (1) (1)
Asset valuation method Fair Value Fair Value Fair Value 15 Year
Smoothed
Fair Value
Method
Inflation 2.750% 2.750% 2.750% 2.750%
Salary increases (2) (2) (2) (2)
Investment rate of return 7.50% (3) 7.50% (3) 7.50% (3) 7.50% (3) Retirement age (4) (4) (4) (4)
Mortality (5) (5) (5) (5)
Year Ended June 30, 2023
CITY OF STANTON
Schedule of Contributions - CalPERS Miscellaneous Pension Plan Last 10 Fiscal Years * (Continued)
97 ATTACHMENT A
Fiscal year ended June 30 2023 2022 2021 2020 2019
Measurement period June 30 2022 2021 2020 2019 2018
Proportion of the net pension liability 0.01907% -0.04423% 0.00935% 0.00763% 0.09504% Proportionate share of the net pension
liability (asset) $ 1,310,162 $ (1,552,129) $ 622,970 $ 476,073 $ 5,576,370 Covered payroll $ - -$ $ - -$ -$
Proportionate Share of the net pension
liability as percentage of covered payroll 0.00% 0.00% 0.00% 0.00% 0.00% Proportionate Share of the Fiduciary
Net Position as a percentage
of the Total Pension Liability (Asset) 91.58% -109.72% 96.21% 97.30% 68.32% Notes to schedule:
Benefit changes:
There were no changes in benefits.
Changes in assumptions:
From fiscal year June 30, 2015 to June 30, 2016:
GASB 68, paragraph 68 states that the long-term expected rate of return should be determined net of pension plan investment expense but without reduction for pension plan administrative expense. The discount rate of 7.50% used for the June 30, 2014 measurement date was net of administrative expenses.
The discount rate of 7.65% used for the June 30, 2015 measurement date is without reduction of pension plan.
From fiscal year June 30, 2016 to June 30, 2017:
There were no changes in assumptions.
From fiscal year June 30, 2017 to June 30, 2018:
The discount rate was reduced from 7.65% to 7.15%.
From fiscal year June 30, 2018 to June 30, 2021:
There were no significant changes in assumptions.
From fiscal year June 30, 2021 to June 30, 2022:
The discount rate was reduced from 7.15% to 6.90%.
* - Fiscal year 2015 was the 1st year of implementation, therefore only nine years are shown.
Year Ended June 30, 2023
CITY OF STANTON
Schedule of Proportionate Share of the Net Pension Liability - CalPERS Safety Pension Plan Last 10 Fiscal Years *
98 ATTACHMENT A
Fiscal year ended June 30 2018 2017 2016 2015
Measurement period June 30 2017 2016 2015 2014
Proportion of the net pension liability 0.09231% 0.09501% 0.09572% 0.08756% Proportionate share of the net pension
liability $ 5,515,903 $ 4,920,618 $ 3,944,111 $ 3,284,432 Covered payroll $ - -$ -$ -$
Proportionate Share of the net pension
liability as percentage of covered payroll 0.00% 0.00% 0.00% 0.00% Proportionate Share of the Fiduciary
Net Position as a percentage
of the Total Pension Liability 68.32% 71.79% 77.44% 81.42% Year Ended June 30, 2023
CITY OF STANTON
Schedule of Proportionate Share of the Net Pension Liability - CalPERS Safety Pension Plan Last 10 Fiscal Years * (Continued)
99 ATTACHMENT A
Fiscal year ended June 30 2023 2022 2021 2020 2019
Contractually required contribution (actuarially determined) 173,625 $ 103,850$ $ 80,284 -$ 559,861 $ Contributions in relation to the actuarially
determined contributions (173,625) (103,850) - (80,284) (5,540,542) Contribution deficiency (excess) -$ - $ - $ - $ (4,980,681) $ Covered payroll -$ -$ -$ -$ -$
Contributions as a percentage of covered payroll 0.00% 0.00% 0.00% 0.00% 0.00% Notes to schedule:
Valuation date 6/30/2020 6/30/2019 6/30/2018 6/30/2017 6/30/2016 Methods and assumptions used to
determine contribution rates:
Actuarial cost method Entry Age Entry Age Entry Age Entry Age Entry Age Amortization method (1) (1) (1) (1) (1)
Asset valuation method Fair Value Fair Value Fair Value Fair Value Fair Value Inflation 2.500% 2.500% 2.500% 2.625% 2.750%
Salary increases 2.75% (2) (2) (2) (2) (2)
Investment rate of return 7.00% (3) 7.00% (3) 7.00% (3) 7.25% (3) 7.375% (3) Retirement age (4) (4) (4) (4) (4)
Mortality (5) (5) (5) (5) (5)
(1) Level percentage of payroll, closed
(2) Depending on age, service, and type of employment
(3) Net of pension plan investment expense, including inflation (4) 50 for all plans with exception of 52 for Miscellaneous 2% @62 (5) Mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study adopted by the CalPERS Board.
* - Fiscal year 2015 was the 1st year of implementation, therefore only nine years are shown.
CITY OF STANTON
Schedule of Contributions - CalPERS Safety Pension Plan Last 10 Fiscal Years *
Year Ended June 30, 2023
100
ATTACHMENT A
Fiscal year ended June 30 2018 2017 2016 2015
Contractually required contribution (actuarially determined) 469,366 $ 226,818$ 188,537$ $ 157,551 Contributions in relation to the actuarially
determined contributions (469,366) (226,818) (188,537) (157,551) Contribution deficiency (excess) -$ - $ - $ - $
Covered payroll -$ -$ -$ -$
Contributions as a percentage of covered payroll 0.00% 0.00% 0.00% 0.00% Notes to schedule:
Valuation date 6/30/2015 6/30/2014 6/30/2013 6/30/2012
Methods and assumptions used to
determine contribution rates:
Actuarial cost method Entry Age Entry Age Entry Age Entry Age Amortization method (1) (1) (1) (1)
Asset valuation method Fair Value Fair Value Fair Value 15 Year
Fair Value
Method
Inflation 2.750% 2.750% 2.750% 2.750%
Salary increases (2) (2) (2) (2)
Investment rate of return 7.50% (3) 7.50% (3) 7.50% (3) 7.50% (3) Retirement age (4) (4) (4) (4)
Mortality (5) (5) (5) (5)
CITY OF STANTON
Schedule of Contributions - CalPERS Safety Pension Plan Last 10 Fiscal Years * (Continued)
Year Ended June 30, 2023
101
ATTACHMENT A
Fiscal Year End 6/30/2023 6/30/2022 6/30/2021 6/30/2020 6/30/2019 Measurement Date 6/30/2022 6/30/2021 6/30/2020 6/30/2019 6/30/2018 Total OPEB Liability
Service cost 34,727 $ 20,853 $ 20,295 $ 11,308 $ 11,005 $ Interest on the total OPEB Liability 59,894 64,483 64,039 33,517 33,513 Actual and expected experience difference (7,697) (110,610) - 124,860 - Changes in assumptions - 61,360 - 353,544 -
Actual minus expected benefit payment - (6,685) (659) 14,271 - Benefit payments (68,495) (70,646) (77,577) (52,347) (51,136) Net change in total OPEB liability 18,429 (41,245) 6,098 485,153 (6,618) Total OPEB liability - beginning 979,040 1,020,285 1,014,187 529,034 535,652 Total OPEB liability - ending (a) 997,469 $ $ 979,040 $ 1,020,285 $ 1,014,187 $ 529,034 Plan Fiduciary Net Position
Contribution - employer 25,495 $ 26,356 $ 25,640 $ -$ -$ Net investment income (loss) (126,752) 173,850 47,942 60,321 54,438 Benefit payments (68,495) (70,646) (77,577) (52,347) (51,136) Administrative expense (258) (322) (437) (189) (1,623)
Net change in plan fiduciary net position (170,010) 129,238 (4,432) 7,785 1,679 Plan fiduciary net position - beginning 1,013,692 884,454 888,886 881,101 879,422 Plan fiduciary net position - ending (b) 843,682 $ $ 1,013,692 $ 884,454 $ 888,886 $ 881,101 Net OPEB liability (asset) - ending (a)-(b) 153,787 $ $ (34,652) $ 135,831 $ 125,301 $ (352,067) Plan fiduciary net position as a percentage
of the total OPEB liability (asset) 84.58% 103.54% 86.69% 87.65% 166.55% Employee payroll $ 3,562,190 $ 3,145,319 $ 2,740,004 $ 2,544,215 $ 2,664,646 Net OPEB liability (asset) as a
percentage of employee payroll 4.32% -1.10% 4.96% 4.92% -13.21% Notes to Schedule
Changes in assumptions:
There were no significant changes in assumptions for the measurement dates June 30, 2017 and 2018.
The following were the significant changes in assumptions for the measurement date June 30, 2019:
The implicit rate subsidy that includes using the claims or age-adjusted premiums approximating claims costs to determine that plan's liability was utilized for the measurement date June 30, 2019, and was not included.
* - Fiscal year 2017-18 was the 1st year of implementation, therefore only six years are shown.
CITY OF STANTON
Schedule of Changes in the Net OPEB Liability (Asset) and Related Ratios Year Ended June 30, 2023
Last 10 Fiscal Years *
102
ATTACHMENT A
Fiscal Year End 6/30/2018
Measurement Date 6/30/2017
Total OPEB Liability
Service cost 10,710 $
Interest on the total OPEB Liability 33,968
Actual and expected experience difference -
Changes in assumptions -
Actual minus expected benefit payment -
Benefit payments (52,812)
Net change in total OPEB liability (8,134)
Total OPEB liability - beginning 543,786
Total OPEB liability - ending (a) 535,652 $
Plan Fiduciary Net Position
Contribution - employer 52,812 $
Net investment income (loss) 59,303
Benefit payments (52,812)
Administrative expense (432)
Net change in plan fiduciary net position 58,871
Plan fiduciary net position - beginning 820,551
Plan fiduciary net position - ending (b) 879,422 $
Net OPEB liability (asset) - ending (a)-(b) (343,770) $ Plan fiduciary net position as a percentage
of the total OPEB liability (asset) 164.18%
Employee payroll 2,188,343 $
Net OPEB liability (asset) as a
percentage of employee payroll -15.71%
CITY OF STANTON
Schedule of Changes in the Net OPEB Liability (Asset) and Related Ratios Last 10 Fiscal Years * (Continued)
Year Ended June 30, 2023
103
ATTACHMENT A
Original Final Actual Variance with
Budget Budget Amounts Final Budget
REVENUES
Taxes and assessments 23,817,650 $ 24,386,160 $ 25,732,481 $ 1,346,321 $ Licenses and permits 1,119,400 1,109,900 1,294,055 184,155 Intergovernmental 357,200 514,550 543,729 29,179
Charges for services 2,270,455 2,270,564 2,405,760 135,196 Fines and forfeitures 351,700 351,700 383,517 31,817
Investment income 228,020 228,020 556,243 328,223
Rental income 93,335 99,335 164,938 65,603
Miscellaneous 163,460 166,960 43,382 (123,578)
Total revenues 28,401,220 29,127,189 31,124,105 1,996,916
EXPENDITURES
Current:
General government 3,383,960 3,908,127 3,632,542 275,585 Public safety 18,949,930 12,806,134 12,371,532 434,602
Community development 2,013,895 2,186,417 1,468,646 717,771 Public works 2,635,195 2,734,333 2,532,619 201,714
Culture and recreation 1,283,290 1,619,149 1,293,128 326,021 Capital outlay 330,340 291,378 252,541 38,837
Total expenditures 28,596,610 23,545,538 21,551,008 1,994,530
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (195,390) 5,581,651 9,573,097 3,991,446
OTHER FINANCING SOURCES
(USES)
Transfers in 737,000 744,730 634,730 (110,000)
Transfers out (296,715) (1,202,095) (170,077) 1,032,018 Total other financing sources (uses) 440,285 (457,365) 464,653 922,018 Net change in fund balance $ 244,895 $ 5,124,286 10,037,750 $ 4,913,464 Fund balance, beginning of year 28,486,359
Fund balance, end of year 38,524,109 $
CITY OF STANTON
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual General Fund
For the Year Ended June 30, 2023
104
ATTACHMENT A
Original Final Actual Variance with
Budget Budget Amounts Final Budget
REVENUES
Investment income 25,000 $ 25,000 $ 265,277 $ 240,277 $ Rental income 560,000 610,000 671,330 61,330
Miscellaneous 1,000 1,000 213 (787)
Total revenues 586,000 636,000 936,820 300,820
EXPENDITURES
Current:
General government 431,975 434,725 201,254 233,471
Public safety 104,055 103,385 88,181 15,204
Community development 739,865 833,665 722,906 110,759
Capital outlay - 2,500,220 2 2,500,218
Total expenditures 1,275,895 3,871,995 3,512,559 359,436 Net change in fund balance $ (689,895) $ (3,235,995) (2,575,739) $ 660,256 Fund balance, beginning of year 13,432,239
Fund balance, end of year 10,856,500 $
CITY OF STANTON
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Housing Authority Special Revenue Fund
For the Year Ended June 30, 2023
105
ATTACHMENT A
Original Final Actual Variance with
Budget Budget Amounts Final Budget
REVENUES
Taxes and assessments 654,000 $ 751,200 $ 810,904 $ 59,704 $ Charges for services 208,000 217,650 229,321 11,671
Investment income 8,000 8,000 37,642 29,642
Miscellaneous - 129,870 134,850 4,980
Total revenues 870,000 1,106,720 1,212,717 105,997
EXPENDITURES
Current:
General government 9,500 9,500 10,247 (747)
Public works 731,500 746,150 538,822 207,328
Capital outlay 75,000 75,000 44,726 30,274
Debt service:
Principal retirement 133,460 133,460 - 133,460
Interest and fiscal charges 11,020 11,020 - 11,020
Total expenditures 960,480 975,130 604,815 370,315
Net change in fund balance $ (90,480) $ 131,590 607,902 $ 476,312 Fund balance, beginning of year 907,796
Fund balance, end of year 1,515,698 $
CITY OF STANTON
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Lighting and Median Maintenance Special Revenue Fund
For the Year Ended June 30, 2023
106
ATTACHMENT A
Original Final Actual Variance with
Budget Budget Amounts Final Budget
REVENUES
Intergovernmental 4,561,830 $ 5,664,981 $ 7,698,966 $ 2,033,985 $ Investment income - - 108,280 108,280
Total revenues 4,561,830 5,664,981 7,807,246 2,142,265
EXPENDITURES
Current:
General government 217,495 178,130 178,136 (6)
Public safety 615,520 7,084,414 7,084,414 -
Community development 224,115 195,226 195,226 -
Public works 51,185 24,752 24,752 -
Culture and recreation 71,545 118,811 118,804 7
Capital outlay - 7,674 - 7,674
Total expenditures 1,179,860 7,609,007 1 7,609,006
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 3,381,970 (1,944,026) 198,240 2,142,266
OTHER FINANCING SOURCES
(USES)
Transfers out - (198,240) - (198,240)
Total other financing sources (uses) - (198,240) - (198,240) Net change in fund balance $ 3,381,970 $ - (2,142,266) 2,142,266 $ Fund balance, beginning of year -
Fund balance, end of year -$
CITY OF STANTON
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual American Rescue Plan Act (ARPA) Special Revenue Fund
For the Year Ended June 30, 2023
107
ATTACHMENT A
Original Final Actual Variance with
Budget Budget Amounts Final Budget
REVENUES
Intergovernmental -$ $ 850,000 -$ (850,000) $
Investment income 5,000 5,000 3,546 (1,454)
Total revenues 5,000 855,000 3,546 (851,454)
EXPENDITURES
Current:
Community development 13,290 - 13,290 13,290
Total expenditures 13,290 - 13,290 13,290
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (8,290) 841,710 3,546 (838,164)
OTHER FINANCING SOURCES
(USES)
Transfers out - (850,000) (350,000) 500,000
Total other financing sources (uses) - (850,000) (350,000) 500,000 Net change in fund balance $ (8,290) $ (8,290) (346,454) $ (338,164) Fund balance, beginning of year 211,341
Fund balance (deficit), end of year (135,113) $
CITY OF STANTON
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Community Development Block Grant (CDBG) Special Revenue Fund For the Year Ended June 30, 2023
108
ATTACHMENT A
CITY OF STANTON
NOTE TO REQUIRED SUPPLEMENTARY INFORMATION
109
JUNE 30, 2023
NOTE 1 BUDGET AND BUDGETARY ACCOUNTING
The City adopts an annual budget prepared on the modified accrual basis for all of its governmental funds. The City Manager is required, under City Code Section 2.08.050, to prepare and submit to the City Council the annual budget of the City and administer it after adoption. Legally, expenditures may not exceed total appropriations at the fund level. The City Manager is authorized to transfer budgeted amounts within the accounts of any fund; however, any revisions between funds must be approved by the City Council. Prior-year appropriations lapse, unless they are encumbered at year-end, and reappropriated through the formal budget process.
The budgetary information shown for revenues and expenditures represent the original adopted budget adjusted for any changes made by the City Council or City Manager.
ATTACHMENT A
110
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ATTACHMENT A
111
SUPPLEMENTARY INFORMATION
ATTACHMENT A
112
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ATTACHMENT A
113
GENERAL FUND
ATTACHMENT A
114
CITY OF STANTON
DESCRIPTION OF GENERAL FUNDS
JUNE 30, 2023
General – The main operating fund of the City and is used to account for all financial resources except those required to be accounted for in another fund.
Transaction and Use Tax – To account for sales taxes provided by Measure GG, which imposes an additional 1% sales tax available for general purposes.
Expendable Deposits Fund – To account for refundable deposits collected from developers to fund developer funded activities.
ATTACHMENT A
Transaction Total
and Use Expendable General
General Tax Deposits Fund
ASSETS
Cash and investments 34,995,723 $ (794,992) $ (34,722) $ 34,166,009 $ Receivables:
Accounts 412,497 - 63,257 475,754
Interest 236,844 - - 236,844
Taxes 1,234,120 1,983,973 - 3,218,093
Prepaid costs 150,708 - - 150,708
Due from other funds 154,260 - - 154,260
Due from other governments 341,270 - - 341,270
Notes and loans receivable 1,452,575 - - 1,452,575
Advances to other funds - 661,953 - 661,953
Total assets $ 39,639,950 $ 1,188,981 $ 28,535 $ 40,857,466
LIABILITIES, DEFERRED
INFLOWS OF RESOURCES,
AND FUND BALANCES
Liabilities:
Accounts payable 1,114,462 $ 320,725 $ 214 $ 1,435,401 $ Accrued liabilities 746,756 - - 746,756
Deposits payable 4,000 - - 4,000
Unearned revenue - 18,702 - 18,702
Total liabilities 1,883,920 320,725 2,204,859 214
Deferred inflows of resources:
Unavailable revenue 90,249 - 38,249 128,498
Total deferred inflows
of resources - 90,249 38,249 128,498
Fund Balances (Deficits):
Nonspendable 2,265,236 - - 2,265,236
Committed 10,105,796 - - 10,105,796
Assigned 6,304,522 - - 6,304,522
Unassigned 18,990,227 868,256 19,848,555 (9,928)
Total fund balances 37,665,781 868,256 38,524,109 (9,928) Total liabilities, deferred inflows
of resources and fund balances $ 39,639,950 $ 1,188,981 $ 28,535 $ 40,857,466
CITY OF STANTON
Combining Balance Sheet
General Fund
June 30, 2023
115
ATTACHMENT A
Transaction Total
and Use Expendable General
General Tax Deposits Eliminations Fund
REVENUES
Taxes and assessments 18,773,960 $ 6,958,521 $ - $ -$ 25,732,481 $ Licenses and permits 1,294,055 - - - 1,294,055
Intergovernmental 543,729 - - - 543,729
Charges for services 2,273,405 - 132,355 - 2,405,760
Fines and forfeitures 383,517 - - - 383,517
Investment income 556,243 - - - 556,243
Rental income 164,938 - - - 164,938
Miscellaneous - 43,382 - - 43,382
Total revenues 24,033,229 6,958,521 132,355 - 31,124,105
EXPENDITURES
Current:
General government 3,508,647 4,511 119,384 - 3,632,542
Public safety 6,044,232 6,327,300 - - 12,371,532
Community development 1,468,646 - - - 1,468,646
Public works 2,532,619 - - - 2,532,619
Culture and recreation 1,293,128 - - - 1,293,128
Capital outlay - 252,541 - - 252,541
Total expenditures 15,099,813 6,331,811 119,384 - 21,551,008
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 8,933,416 626,710 12,971 - 9,573,097
OTHER FINANCING
SOURCES (USES)
Transfers in 913,919 - - (279,189) 634,730
Transfers out (170,077) - (279,189) 279,189 (170,077)
Total other financing
sources (uses) 743,842 - (279,189) - 464,653
Net change in fund balance 9,677,258 347,521 12,971 - 10,037,750 Fund balance (deficit),
beginning of year 27,988,523 520,735 - (22,899) 28,486,359 Fund balance (deficit),
end of year 37,665,781 $ $ 868,256 $ - (9,928) $ 38,524,109 $
CITY OF STANTON
Combining Schedule of Revenues, Expenditures, and Changes in Fund Balance General Fund
For the Year Ended June 30, 2023
116
ATTACHMENT A
NONMAJOR GOVERNMENTAL FUNDS
117
ATTACHMENT A
CITY OF STANTON
118
DESCRIPTION OF NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2023
SPECIAL REVENUE FUNDS
Gas Tax – To account for the receipts and expenditures of money apportioned under the Streets and Highways Code Sections 2103, 2105, 2106, 2017, and 2017.5 of the State of California. These funds are earmarked for maintenance, rehabilitation or improvement of public streets.
Protective Services Tax – To account for a special tax approved by the voters in August 1985 for fire protection and prevention services.
Supplemental Law Enforcement Grant – To account for revenues and expenditures related to funding received under the State Citizens Option for Public Safety (COPS) program.
Air Quality Improvement Program – To account for the City’s share of additional motor vehicle registration fees, imposed by the South Coast Air Quality Management District, to finance the implementation of mobile source emission reduction programs and the provisions of the California Clean Air Act.
Families and Communities Together (FaCT) Grant – To account for revenues and expenditures related to funding received by the County of Orange, through the federal government, for the Family Preservation and Support Program.
Other Grants – To account for revenues and expenditures associated with project-specific grants. The use of the revenues is restricted according to the terms of the grant agreement and/or program.
Senior Transportation – To account for the City’s share of funds identified as 1% of Renewed Measure M (M2) net sales tax revenue to be allocated to all local jurisdictions based upon the City’s respective percentage of senior population for the entire County of Orange.
Measure M – To account for funds received by the City as a result of the voter-approved ballot measure in 1990 and extended by voter approval in 2006 to increase sales tax by ½ percent in Orange County to fund transportation projects.
Public Safety Task Force (PSTF) – To account for funds used for the purpose of violence prevention and intervention activities.
Development Impact Fees – To account for street, traffic signal, community center, and police services impact fees.
Road Maintenance and Rehabilitation Account (RMRA) – To account for the receipts and expenditures of Road Maintenance and Rehabilitation Account (RMRA) funds resulting from the Road Repair and Accountability Act of 2017 (SB1). Funds are restricted for maintenance, rehabilitation or improvement of streets, freeways, bridges and other transit related improvements.
ATTACHMENT A
CITY OF STANTON
119
DESCRIPTION OF NONMAJOR GOVERNMENTAL FUNDS (CONTINUED)
JUNE 30, 2023
SPECIAL REVENUE FUNDS (CONTINUED)
Stanton Central Park Maintenance – To account for donations received for maintenance of the central park.
Justice Assistant Grant (JAG) – To account for proceeds received from the United States Department of Justice for the Edward Byrne Memorial Justice Assistance Grant Program to fund the Homeless Outreach and Proactive Engagement Center (HOPE Center) to align homeless outreach and engagement in the North Orange County area
Certified Access Specialist Program (CASP) – To account for the state-mandated $4 fee that is required by Senate Bill 1186 to be collected with each business license issued by the City in order to fund certified access specialist programs.
CAPITAL PROJECTS FUNDS
Capital Improvements – To account for financial resources segregated for the acquisition of major general City capital facilities, other than those financed by Proprietary or Special Revenue Funds.
Park in Lieu Fees – To account for the financial resources segregated for park or recreational purposes, pursuant to Stanton Municipal Code Section 19.42.090.
ATTACHMENT A
Supplemental Air
Protective Law Quality
Services Enforcement Improvement FaCT
Gas Tax Tax Grant Program Grant
Cash and investments $ 1,799,122 $ 290,295 - $ $ 227,459 -$ Receivables:
Interest 11,432 - 2,057 1,484 -
Taxes - 8,844 - - -
Prepaid costs - - - - -
Due from other governments - 87,506 86,159 13,099 33,738 Total assets $ 1,898,060 378,511 8,844$ $ $ 242,042 $ 33,738 Liabilities:
Accounts payable 46,738 $ -$ -$ -$ 19,839 $
Unearned revenues - - - - -
Due to other funds 4,843 - - - 13,899
Total liabilities 46,738 - 4,843 - 33,738
Deferred inflows of resources:
Unavailable revenue - - 86,159 - -
Total deferred inflows
of resources - - 86,159 - -
Fund Balances (Deficits):
Restricted 1,851,322 4,001 292,352 242,042 -
Assigned - - - - -
Unassigned - - - - -
Total fund balances 1,851,322 292,352 4,001 - 242,042
Total liabilities, deferred
inflows and fund balances $ 1,898,060 378,511 8,844$ $ $ 242,042 $ 33,738 Special Revenue Funds
CITY OF STANTON
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2023
LIABILITIES, DEFERRED
ASSETS
AND FUND BALANCES
INFLOWS OF RESOURCES,
120
ATTACHMENT A
Development
Other Senior Impact
Grants Transportation Measure M PSTF Fees
Cash and investments 81,083$ $ 68,080 $ 922,123 83,000$ $ 444,439 Receivables:
Interest 2,591 484 6,049 - 3,015
Taxes - - - - -
Prepaid costs - - - - -
Due from other governments 124,398 7,570 - 115,050 -
Total assets 208,072$ $ 76,134 $ 1,043,222 83,000$ $ 447,454 Liabilities:
Accounts payable -$ $ - $ - -$ -$
Unearned revenues 206,419 - 83,000 - -
Due to other funds - - - - -
Total liabilities - 206,419 - 83,000 -
Deferred inflows of resources:
Unavailable revenue 124,398 - - - -
Total deferred inflows
of resources - 124,398 - - -
Fund Balances (Deficits):
Restricted - 76,134 1,043,222 - 447,454
Assigned - - - - -
Unassigned - (122,745) - - -
Total fund balances (122,745) 76,134 1,043,222 - 447,454 Total liabilities, deferred
inflows and fund balances 208,072$ $ 76,134 $ 1,043,222 83,000$ $ 447,454 Special Revenue Funds
CITY OF STANTON
Combining Balance Sheet (Continued)
Nonmajor Governmental Funds
June 30, 2023
LIABILITIES, DEFERRED
ASSETS
INFLOWS OF RESOURCES,
AND FUND BALANCES
121
ATTACHMENT A
Stanton
Central
Park JAG
RMRA Maintenance Grant CASP
Cash and investments $ 855,373 $ 5,679 -$ 61,130 $
Receivables:
Interest 5,482 - - -
Taxes - - - -
Prepaid costs - - - -
Due from other governments - 153,592 39,833 -
Total assets $ 1,014,447 $ 5,679 $ 39,833 $ 61,130
Liabilities:
Accounts payable -$ $ 5,679 $ 39,833 -$
Unearned revenues - - - -
Due to other funds - - - -
Total liabilities - 5,679 - 39,833
Deferred inflows of resources:
Unavailable revenue - - - -
Total deferred inflows
of resources - - - -
Fund Balances (Deficits):
Restricted 1,014,447 - - 61,130
Assigned - - - -
Unassigned - - - -
Total fund balances - 1,014,447 - 61,130
Total liabilities, deferred
inflows and fund balances $ 1,014,447 $ 5,679 $ 39,833 $ 61,130
CITY OF STANTON
Combining Balance Sheet (Continued)
Nonmajor Governmental Funds
June 30, 2023
ASSETS
INFLOWS OF RESOURCES,
AND FUND BALANCES
Special Revenue Funds
LIABILITIES, DEFERRED
122
ATTACHMENT A
Total
Park in Nonmajor
Capital Lieu Governmental
Improvements Fees Funds
Cash and investments $ 313,275 $ 3,929,152 $ 9,080,210
Receivables:
Interest 26,816 - 59,410
Taxes - - 8,844
Prepaid costs 130,388 - 130,388
Due from other governments - - 660,945
Total assets $ 443,663 $ 3,955,968 $ 9,939,797
Liabilities:
Accounts payable 261,712 $ -$ 373,801 $
Unearned revenues - - 289,419
Due to other funds - - 18,742
Total liabilities - 261,712 681,962
Deferred inflows of resources:
Unavailable revenue - - 210,557
Total deferred inflows
of resources - - 210,557
Fund Balances (Deficits):
Restricted - 3,955,968 8,988,072
Assigned 181,951 - 181,951
Unassigned - - (122,745)
Total fund balances 181,951 3,955,968 9,047,278
Total liabilities, deferred
inflows and fund balances $ 443,663 $ 3,955,968 $ 9,939,797 Capital Projects Fund
CITY OF STANTON
Combining Balance Sheet (Continued)
Nonmajor Governmental Funds
June 30, 2023
ASSETS
INFLOWS OF RESOURCES,
AND FUND BALANCES
LIABILITIES, DEFERRED
123
ATTACHMENT A
Supplemental Air
Protective Law Quality
Services Enforcement Improvement FaCT
Gas Tax Tax Grant Program Grant
REVENUES:
Intergovernmental 999,436 $ -$ 165,271 $ 64,861 $ 352,031 $ Charges for services - 389,013 - - -
Investment income 31,620 - 7,673 3,876 -
Miscellaneous - - - - -
Total revenues 1,031,056 389,013 172,944 68,737 352,031 EXPENDITURES:
Current:
Public safety - 3,012 99,100 - -
Public works 316,036 - - - -
Culture and recreation - - - - 407,460
Capital outlay 49,716 - - - 4,752
Total expenditures 365,752 3,012 99,100 4,752 407,460
REVENUES OVER
(UNDER) EXPENDITURES 665,304 386,001 73,844 63,985 (55,429)
OTHER FINANCING
SOURCES (USES):
Transfers in - - - - 55,429
Transfers out (198,243) (389,730) - (150,000) -
Total other financing
sources (uses) (198,243) (389,730) - (150,000) 55,429
NET CHANGE IN FUND
BALANCES (3,729) 467,061 (76,156) 63,985 -
Fund balances, beginning of
year, as restated 1,384,261 7,730 368,508 - 178,057
Fund balances (deficits),
end of year 1,851,322 $ $ 4,001 $ 292,352 $ - 242,042 $
CITY OF STANTON
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds
For the Year Ended June 30, 2023
Special Revenue Funds
124
ATTACHMENT A
Development
Other Senior Impact
Grants Transportation Measure M PSTF Fees
REVENUES:
Intergovernmental 314,437 $ 46,851 $ 701,618 $ 32,907$ -$ Charges for services - - - - 15,168
Investment income 8,457 1,244 14,036 - 7,979
Miscellaneous - - - - -
Total revenues 322,894 48,095 715,654 32,907 23,147
EXPENDITURES:
Current:
Public safety - - - 32,907 -
Public works 29,503 - - - -
Culture and recreation - 40,056 - - -
Capital outlay - - - - -
Total expenditures 29,503 - 40,056 32,907 -
REVENUES OVER
(UNDER) EXPENDITURES 293,391 8,039 - 715,654 23,147
OTHER FINANCING
SOURCES (USES):
Transfers in - 6,769 - - -
Transfers out - (354,726) (813,510) - -
Total other financing
sources (uses) (354,726) 6,769 - (813,510) -
NET CHANGE IN FUND
BALANCES 14,808 (61,335) (97,856) - 23,147
Fund balances, beginning of
year, as restated (61,410) 61,326 - 1,141,078 424,307
Fund balances (deficits),
end of year (122,745) $ $ 76,134 $ - 1,043,222 $ 447,454$ Special Revenue Funds
CITY OF STANTON
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds
For the Year Ended June 30, 2023
125
ATTACHMENT A
Stanton
t Central
Park JAG
RMRA Maintenance Grant CASP
REVENUES:
Intergovernmental 876,520 $ -$ 1,045,268 $ - $
Charges for services - - - 7,933
Investment income 11,267 - - -
Miscellaneous 50,000 - - -
Total revenues 887,787 1,045,268 50,000 7,933
EXPENDITURES:
Current:
Public safety - - 1,045,268 -
Public works - 106,412 - -
Culture and recreation - - - -
Capital outlay - - - -
Total expenditures 106,412 - - 1,045,268
REVENUES OVER
(UNDER) EXPENDITURES 887,787 - (56,412) 7,933
OTHER FINANCING
SOURCES (USES):
Transfers in - 56,412 - -
Transfers out - (1,079,603) - -
Total other financing
sources (uses) (1,079,603) - 56,412 -
NET CHANGE IN FUND
BALANCES - (191,816) - 7,933
Fund balances, beginning of
year, as restated - 1,206,263 - 53,197
Fund balances (deficits),
end of year 1,014,447 $ - $ - $ 61,130 $
CITY OF STANTON
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds
For the Year Ended June 30, 2023
Special Revenue Funds
126
ATTACHMENT A
Total
Park in Nonmajor
Capital Lieu Governmental
Improvements Fees Funds
REVENUES:
Intergovernmental - $ -$ 4,599,200 $
Charges for services - 161,517 573,631
Investment income - 71,176 157,328
Miscellaneous - - 50,000
Total revenues 232,693 - 5,380,159
EXPENDITURES:
Current:
Public safety - - 1,180,287
Public works - - 451,951
Culture and recreation - - 447,516
Capital outlay 3,529,388 - 3,583,856
Total expenditures - 3,529,388 5,663,610
REVENUES OVER
(UNDER) EXPENDITURES (3,529,388) 232,693 (283,451)
OTHER FINANCING
SOURCES (USES):
Transfers in 3,467,096 - 3,585,706
Transfers out - (184,297) (3,170,109)
Total other financing
sources (uses) 3,467,096 (184,297) 415,597
NET CHANGE IN FUND
BALANCES 48,396 (62,292) 132,146
Fund balances, beginning of
year, as restated 244,243 3,907,572 8,915,132
Fund balances (deficits),
end of year 181,951 $ $ 3,955,968 $ 9,047,278
CITY OF STANTON
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds
For the Year Ended June 30, 2023
Capital Projects Fund
127
ATTACHMENT A
Original Final Actual Variance with
Budget Budget Amounts Final Budget
REVENUES
Intergovernmental 1,097,170 $ 1,015,130 $ 999,436 $ (15,694) $ Investment income 5,000 5,000 31,620 26,620
Total revenues 1,102,170 1,020,130 1,031,056 10,926
EXPENDITURES
Current:
Public works 268,265 351,265 316,036 35,229
Capital outlay - 50,000 49,716 284
Total expenditures 268,265 401,265 365,752 35,513
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 833,905 618,865 665,304 46,439
OTHER FINANCING SOURCES
(USES)
Transfers out (232,763) (614,704) (198,243) 416,461
Total other financing sources (uses) (232,763) (614,704) (198,243) 416,461 Net change in fund balance $ 601,142 $ 4,161 467,061 $ 462,900 Fund balance, beginning of year, as restated 1,384,261
Fund balance, end of year $ 1,851,322
CITY OF STANTON
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Gas Tax Special Revenue Fund
For the Year Ended June 30, 2023
128
ATTACHMENT A
Original Final Actual Variance with
Budget Budget Amounts Final Budget
REVENUES
Charges for services $ 385,000 $ 385,000 $ 389,013 $ 4,013 Total revenues 385,000 385,000 389,013 4,013
EXPENDITURES
Current:
Public safety 3,000 3,000 3,012 (12)
Total expenditures 3,000 3,000 3,012 (12)
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 382,000 382,000 386,001 4,001
OTHER FINANCING SOURCES
(USES)
Transfers out (382,000) (389,730) - (389,730)
Total other financing sources (uses) (382,000) (389,730) - (389,730) Net change in fund balance -$ $ (7,730) (3,729) $ 4,001 Fund balance, beginning of year 7,730
Fund balance, end of year 4,001 $
CITY OF STANTON
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Protective Services Tax Special Revenue Fund
For the Year Ended June 30, 2023
129
ATTACHMENT A
Original Final Actual Variance with
Budget Budget Amounts Final Budget
REVENUES
Intergovernmental 150,000 $ 160,000 $ 165,271 $ 5,271 $ Investment income - - 7,673 7,673
Total revenues 150,000 160,000 172,944 12,944
EXPENDITURES
Current:
Public safety 123,300 123,300 99,100 24,200
Total expenditures 123,300 123,300 99,100 24,200
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 26,700 36,700 73,844 37,144
OTHER FINANCING SOURCES
(USES)
Transfers out (150,000) (150,000) - (150,000)
Total other financing sources (uses) (150,000) (150,000) - (150,000) Net change in fund balance $ (123,300) $ (113,300) (76,156) $ 37,144 Fund balance, beginning of year 368,508
Fund balance, end of year 292,352 $
CITY OF STANTON
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Supplemental Law Enforcement Grant Special Revenue Fund For the Year Ended June 30, 2023
130
ATTACHMENT A
Original Final Actual Variance with
Budget Budget Amounts Final Budget
REVENUES
Intergovernmental 45,000 $ 45,000 $ 64,861 $ 19,861 $
Investment income 2,000 2,000 3,876 1,876
Total revenues 47,000 47,000 68,737 21,737
EXPENDITURES
Current:
General government 1,000 1,000 - 1,000
Public works 5,000 245 - 245
Capital outlay 90,000 134,755 4,752 130,003
Total expenditures 96,000 136,000 4,752 131,248
Net change in fund balance $ (49,000) $ (89,000) 63,985 $ 152,985 Fund balance, beginning of year 178,057
Fund balance, end of year $ 242,042
CITY OF STANTON
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Air Quality Improvement Program Special Revenue Fund
For the Year Ended June 30, 2023
131
ATTACHMENT A
Original Final Actual Variance with
Budget Budget Amounts Final Budget
REVENUES
Intergovernmental $ 300,000 $ 370,800 $ 352,031 $ (18,769) Total revenues 300,000 370,800 352,031 (18,769)
EXPENDITURES
Current:
Culture and recreation 346,470 417,270 407,460 9,810
Total expenditures 346,470 417,270 407,460 9,810
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (46,470) (46,470) (55,429) (8,959)
OTHER FINANCING SOURCES
(USES)
Transfers in 46,470 46,470 55,429 8,959
Total other financing sources (uses) 46,470 46,470 55,429 8,959 Net change in fund balance - -$ $ - -$
Fund balance, beginning of year -
Fund balance, end of year -$
CITY OF STANTON
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Families and Communities Together (FaCT) Grant Special Revenue Fund For the Year Ended June 30, 2023
132
ATTACHMENT A
Original Final Actual Variance with
Budget Budget Amounts Final Budget
REVENUES
Intergovernmental 1,107,976 $ 9,319,894 $ 314,437 $ (9,005,457) $ Investment income - 8,455 2 8,457
Total revenues 1,107,976 9,328,349 322,894 (9,005,455)
EXPENDITURES
Current:
Public works - 34,519 29,503 5,016
Total expenditures - 34,519 29,503 5,016
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 1,107,976 9,293,830 293,391 (9,000,439)
OTHER FINANCING SOURCES
(USES)
Transfers out (1,107,976) (9,232,421) (354,726) 8,877,695 Total other financing sources (uses) (1,107,976) (9,232,421) (354,726) 8,877,695 Net change in fund balance -$ $ 61,409 (61,335) $ (122,744) Fund balance (deficit), beginning of year (61,410)
Fund balance (deficit), end of year (122,745) $
CITY OF STANTON
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Other Grants Special Revenue Fund
For the Year Ended June 30, 2023
133
ATTACHMENT A
Original Final Actual Variance with
Budget Budget Amounts Final Budget
REVENUES
Intergovernmental 25,430 $ 25,430 $ 46,851 $ 21,421 $
Investment income 500 500 1,244 744
Total revenues 25,930 25,930 48,095 22,165
EXPENDITURES
Current:
Culture and recreation 57,725 57,725 40,056 17,669
Total expenditures 57,725 57,725 40,056 17,669
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (31,795) (31,795) 8,039 39,834
OTHER FINANCING SOURCES
(USES)
Transfers in 11,045 11,045 6,769 (4,276)
Total other financing sources (uses) 11,045 11,045 6,769 (4,276) Net change in fund balance $ (20,750) $ (20,750) 14,808 $ 35,558 Fund balance, beginning of year 61,326
Fund balance, end of year 76,134 $
CITY OF STANTON
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Senior Transportation Special Revenue Fund
For the Year Ended June 30, 2023
134
ATTACHMENT A
Original Final Actual Variance with
Budget Budget Amounts Final Budget
REVENUES
Intergovernmental 675,000 $ 690,000 $ 701,618 $ 11,618 $ Investment income 5,000 5,000 14,036 9,036
Total revenues 680,000 695,000 715,654 20,654
EXPENDITURES - - - -
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 680,000 695,000 715,654 20,654
OTHER FINANCING SOURCES
(USES)
Transfers out (1,064,239) (1,720,284) (813,510) 906,774 Total other financing sources (uses) (1,064,239) (1,720,284) (813,510) 906,774 Net change in fund balance $ (384,239) $ (1,025,284) (97,856) $ 927,428 Fund balance, beginning of year 1,141,078
Fund balance, end of year $ 1,043,222
CITY OF STANTON
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Measure M Special Revenue Fund
For the Year Ended June 30, 2023
135
ATTACHMENT A
Original Final Actual Variance with
Budget Budget Amounts Final Budget
REVENUES
Intergovernmental - -$ $ $ 32,907 $ 32,907
Total revenues - - 32,907 32,907
EXPENDITURES
Current:
Public safety - 115,907 32,907 83,000
Total expenditures - 115,907 32,907 83,000
Net change in fund balance (115,907) -$ $ - 115,907 $
Fund balance, beginning of year, as restated -
Fund balance, end of year -$
CITY OF STANTON
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Public Safety Task Force (PSTF) Special Revenue Fund
For the Year Ended June 30, 2023
136
ATTACHMENT A
Original Final Actual Variance with
Budget Budget Amounts Final Budget
REVENUES
Charges for services 30,000 $ 30,000 $ 15,168 $ (14,832) $ Investment income 2,000 2,000 7,979 5,979
Total revenues 32,000 32,000 23,147 (8,853)
EXPENDITURES - - - -
Net change in fund balance $ 32,000 $ 32,000 23,147 $ (8,853) Fund balance, beginning of year 424,307
Fund balance, end of year 447,454 $
CITY OF STANTON
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Development Impact Fees Special Revenue Fund
For the Year Ended June 30, 2023
137
ATTACHMENT A
Original Final Actual Variance with
Budget Budget Amounts Final Budget
REVENUES
Intergovernmental 876,310 $ 851,805 $ 876,520 $ 24,715 $ Investment income 5,000 5,000 11,267 6,267
Total revenues 881,310 856,805 887,787 30,982
EXPENDITURES - - - -
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 881,310 856,805 887,787 30,982
OTHER FINANCING SOURCES
(USES)
Transfers out (1,011,998) (2,063,068) (1,079,603) 983,465 Total other financing sources (uses) (1,011,998) (2,063,068) (1,079,603) 983,465 Net change in fund balance $ (130,688) $ (1,206,263) (191,816) $ 1,014,447 Fund balance, beginning of year 1,206,263
Fund balance, end of year $ 1,014,447
CITY OF STANTON
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Road Maintenance and Rehabilitation Account (RMRA) Special Revenue Fund For the Year Ended June 30, 2023
138
ATTACHMENT A
Original Final Actual Variance with
Budget Budget Amounts Final Budget
REVENUES
Miscellaneous $ 50,000 $ 50,000 $ - 50,000 $
Total revenues 50,000 50,000 - 50,000
EXPENDITURES
Current:
Public works 109,200 109,200 106,412 2,788
Total expenditures 109,200 109,200 106,412 2,788
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (59,200) (59,200) (56,412) 2,788
OTHER FINANCING SOURCES
(USES)
Transfers in 59,200 59,200 56,412 (2,788)
Total other financing sources (uses) 59,200 59,200 56,412 (2,788) Net change in fund balance - -$ $ - -$
Fund balance, beginning of year -
Fund balance, end of year -$
CITY OF STANTON
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Stanton Central Park Maintenance Special Revenue Fund
For the Year Ended June 30, 2023
139
ATTACHMENT A
Original Final Actual Variance with
Budget Budget Amounts Final Budget
REVENUES
Intergovernmental 5,008,940 -$ $ $ 1,045,268 $ (3,963,672) Total revenues - 5,008,940 1,045,268 (3,963,672)
EXPENDITURES
Current:
Public safety - 5,008,940 1,045,268 3,963,672
Total expenditures - 5,008,940 1,045,268 3,963,672
Net change in fund balance - -$ $ - -$
Fund balance, beginning of year -
Fund balance, end of year -$
CITY OF STANTON
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual JAG Grant Special Revenue Fund
For the Year Ended June 30, 2023
140
ATTACHMENT A
Original Final Actual Variance with
Budget Budget Amounts Final Budget
REVENUES
Charges for services $ 10,000 $ 10,000 $ 7,933 $ (2,067) Total revenues 10,000 10,000 7,933 (2,067)
EXPENDITURES
Current:
Public safety 5,000 - 5,000 5,000
Total expenditures 5,000 - 5,000 5,000
Net change in fund balance $ 5,000 $ 5,000 7,933 $ 2,933 Fund balance, beginning of year 53,197
Fund balance, end of year 61,130 $
CITY OF STANTON
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Certified Access Specialist Program (CASP) Special Revenue Fund For the Year Ended June 30, 2023
141
ATTACHMENT A
Original Final Actual Variance with
Budget Budget Amounts Final Budget
REVENUES - -$ $ - $ - $
EXPENDITURES
Current:
Culture and recreation - 2,000 - 2,000
Capital outlay 4,541,690 17,595,027 3,529,388 14,065,639 Total expenditures 4,541,690 17,597,027 3,529,388 14,067,639
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (17,597,027) (4,541,690) (3,529,388) (14,067,639)
OTHER FINANCING SOURCES
(USES)
Transfers in 4,475,690 17,358,102 3,467,096 (13,891,006) Total other financing sources (uses) 4,475,690 17,358,102 3,467,096 (13,891,006) Net change in fund balance $ (66,000) $ (238,925) (62,292) $ (27,958,645) Fund balance, beginning of year 244,243
Fund balance, end of year 181,951 $
CITY OF STANTON
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Capital Improvements Capital Projects Fund
For the Year Ended June 30, 2023
142
ATTACHMENT A
Original Final Actual Variance with
Budget Budget Amounts Final Budget
REVENUES
Charges for services 50,000 $ 50,000 $ 161,517 $ 111,517 $ Investment income 10,000 10,000 71,176 61,176
Total revenues 60,000 60,000 232,693 172,693
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 60,000 60,000 232,693 172,693
OTHER FINANCING SOURCES
(USES)
Transfers out (533,714) (978,794) (184,297) 794,497
Total other financing sources (uses) (533,714) (978,794) (184,297) 794,497 Net change in fund balance $ (473,714) $ (918,794) 48,396 $ 967,190 Fund balance, beginning of year 3,907,572
Fund balance, end of year 3,955,968 $
CITY OF STANTON
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Park in Lieu Fees Capital Projects Fund
For the Year Ended June 30, 2023
143
ATTACHMENT A
144
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ATTACHMENT A
145
INTERNAL SERVICE FUNDS
ATTACHMENT A
CITY OF STANTON
DESCRIPTION OF INTERNAL REVENUE FUNDS
JUNE 30, 2023
146
Workers’ Compensation - To account for the City’s workers’ compensation insurance, including claims, legal, and other expenses.
Liability/Risk Management - To account for the City’s general liability insurance, including claims, legal, and other expenses.
Employee Benefits - To account for the employee benefits costs, including vacation, sick, and holiday hours.
Fleet Maintenance - To account for costs related to operations and fleet maintenance for the City’s vehicles.
ATTACHMENT A
Liability/
Workers' Risk Employee Fleet
Compensation Management Benefits Maintenance Total
ASSETS
Current assets:
Cash and investments 822,988 $ 32,711 $ 370,568 $ 509,548 $ 1,735,815 $ Restricted cash and investments held
in pension trust - - 4,254,533 - 4,254,533
Receivables:
Interest 5,556 378 - 3,422 9,356
Prepaids - 50,000 - - 50,000
Due from other governments - 21,914 - 39,188 61,102
Total current assets 828,544 55,003 4,714,289 512,970 6,110,806 Noncurrent assets:
Capital assets - net of accumulated depreciation - - - 187,958 187,958 Total noncurrent assets - - - 187,958 187,958
Total assets 828,544 55,003 4,714,289 700,928 6,298,764
DEFERRED OUTFLOWS OF RESOURCES
Deferred amount from pension plan - - 5,267,680 - 5,267,680 Total deferred outflows of resources - - 5,267,680 - 5,267,680
LIABILITIES
Current liabilities:
Accounts payable 744 4,654 19,097 3,449 27,944
Compensated absences payable - - 196,983 197,923 940
Total current liabilities 744 4,654 216,080 4,389 225,867 Noncurrent liabilities:
Compensated absences payable - - 111,400 - 111,400
Net pension liability - - 8,333,404 - 8,333,404
Total noncurrent liabilities - - 8,444,804 - 8,444,804
Total liabilities 744 8,660,884 4,654 8,670,671 4,389
DEFERRED INFLOWS OF RESOURCES
Deferred amount from pension plan - - 1,767,139 - 1,767,139 Total deferred inflows of resources - - 1,767,139 - 1,767,139
NET POSITION
Net investment in capital assets - - - 187,958 187,958
Unrestricted 827,800 50,349 (446,054) 508,581 940,676
Total net position $ 827,800 $ 50,349 $ (446,054) $ 696,539 $ 1,128,634
CITY OF STANTON
Combining Statement of Net Position
All Internal Service Funds
June 30, 2023
147
ATTACHMENT A
Liability/
Workers' Risk Employee Fleet
Compensation Management Benefits Maintenance Elimination Total OPERATING REVENUES:
Charges for services 96,024 $ 245,108 $ 1,729,212 $ 168,022 $ (46,820) $ 2,191,546 $ Miscellaneous - - - - 18,304 18,304
Total operating revenues 96,024 245,108 1,729,212 186,326 (46,820) 2,209,850 OPERATING EXPENSES:
Equipment maintenance and operation - - - 88,539 - 88,539 Depreciation - - - 93,810 - 93,810
Administrative and personnel services - 3,032,721 - 8,463 (46,820) 2,994,364 Insurance premiums and claims 83,598 317,510 - - - 401,108 Contractual services - - - 23,625 - 23,625
Total operating expenses 83,598 317,510 3,056,346 190,812 (46,820) 3,601,446 OPERATING INCOME 12,426 (72,402) (1,327,134) - (4,486) (1,391,596) NON-OPERATING REVENUES (EXPENSES):
Investment income 14,130 1,495 297,971 8,835 - 322,431
Gain on sale of capital assets - - - - 12,693 12,693
Total non-operating revenues
(expenses) 14,130 1,495 297,971 - 21,528 335,124
Change in net position (70,907) 26,556 (1,029,163) 17,042 - (1,056,472) Net position, beginning of year 801,244 121,256 583,109 - 679,497 2,185,106 Net position (deficit), end of year 827,800 $ $ 50,349 $ (446,054) $ - 696,539 $ 1,128,634 $
CITY OF STANTON
Combining Statement of Revenues, Expenses, and Changes in Net Position All Internal Service Funds
For the year ended June 30, 2023
148
ATTACHMENT A
Liability/
Workers' Risk Employee Fleet
Compensation Management Benefits Maintenance Elimination Total CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers 324,817 $ 223,194 $ 1,733,024 $ 186,326 $ (46,820) $ 2,420,541 $ Cash paid to other suppliers of goods or services (83,154) (326,726) 46,676 (94,710) - (457,914) Cash paid to employees for salaries, wages, and benefits - - (1,780,826) (9,077) 46,820 (1,743,083) Net cash provided (used by) operating activities 241,663 (103,532) (1,126) - 82,539 219,544 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
Proceeds from sale of capital assets - - - - 12,692 12,692 Net cash provided (used by) capital and
related financing activities - - - - 12,692 12,692
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment income (loss) 9,469 1,313 297,971 - 6,044 314,797 Net cash provided (used by) investing activities 9,469 1,313 297,971 - 6,044 314,797 Net increase (decrease) in cash and cash equivalents 251,132 (102,219) 296,845 101,275 - 547,033 Cash and equivalents, beginning of year 571,856 134,930 4,328,256 - 408,273 5,443,315 Cash and equivalents, end of year 822,988 $ $ 32,711 $ 4,625,101 $ - 509,548 $ 5,990,348 $
RECONCILIATION OF OPERATING INCOME (LOSS) TO
NET CASH (USED BY) OPERATING ACTIVITIES:
Operating income (loss) 12,426 $ (72,402) $ (1,327,134) $ (4,486) $ -$ (1,391,596) $ Adjustments to reconcile operating income (loss)
to net cash provided (used) by operating activities:
Depreciation - - - 93,810 - 93,810
Changes in operating assets and liabilities:
(Increase) decrease in due from other
governments 228,793 (21,914) 3,812 - - 210,691
(Increase) decrease in prepaid expense - - 51,204 - - 51,204 (Increase) decrease in deferred outflows
of resources - (1,366,705) - - - (1,366,705)
Increase (decrease) in accounts payable 444 4,654 19,097 (6,171) - 18,024 Increase (decrease) in claims and judgements - (13,870) - - - (13,870) Increase (decrease) in compensated absences - (10,212) - (614) - (10,826) Increase (decrease) in net pension liability - 6,402,280 - - - 6,402,280 Increase (decrease) in deferred inflows
of resources - - (3,773,468) - - (3,773,468)
Total adjustments 229,237 (31,130) 1,326,008 - 87,025 1,611,140 Net cash provided (used) by operating activities $ 241,663 $ (103,532) $ (1,126) $ - 82,539 $ 219,544 $
CITY OF STANTON
Combining Statement of Cash Flows
All Internal Service Funds
For the year ended June 30, 2023
149
ATTACHMENT A
150
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ATTACHMENT A
151
PRIVATE-PURPOSE TRUST FUNDS
ATTACHMENT A
CITY OF STANTON
DESCRIPTION OF PRIVATE-PURPOSE TRUST FUNDS
JUNE 30, 2023
152
Successor Agency to the Stanton Redevelopment Agency Fund - To account for the receipt of property tax revenues pursuant to the Dissolution Act and the value of assets transferred from the Former Redevelopment Agency. The fund accounts for the expenses incurred during the reporting year pursuant to the Recognized Obligation Payment Schedules (ROPS) approved by the State Department of Finance under the Dissolution Act (Assembly Bill 26 - Section 34177).
North Orange County Public Safety Collaborative Fund - To account for activities with other governmental agencies related to the North Orange County Public Safety Collaborative to address youth violence prevention and intervention in K-12 schools, promote and enhance successful re-entry of offenders into the community, and address homeless outreach and intervention efforts.
ATTACHMENT A
Successor
Agency
to the Stanton
Redevelopment NOCPSC
Agency PrivatePrivate-Purpose Purpose
Trust Fund Trust Fund Total
ASSETS
Current assets:
Cash and investments 3,362,301 $ 584,925 $ 3,947,226 $
Prepaid items - 142,146 142,146
Restricted assets:
Cash held by fiscal agent 1,743,791 - 1,743,791
Total assets 5,106,092 727,071 5,833,163
DEFERRED OUTFLOWS OF RESOURCES
Deferred amount on refunding - 7,014,435 7,014,435
Total deferred outflow of
resources - 7,014,435 7,014,435
LIABILITIES
Current liabilities:
Accounts payable - 380,922 380,922
Interest payable 164,367 - 164,367
Bonds payable - current portion 2,655,000 - 2,655,000
Total current liabilities 2,819,367 380,922 3,200,289
Long-term liabilities:
Bonds payable 49,832,734 - 49,832,734
Total long-term liabilities 49,832,734 - 49,832,734
Total liabilities 52,652,101 380,922 53,033,023
NET POSITION
Restricted for private purpose (40,531,574) 346,149 (40,185,425) Total net position (deficit) $ (40,531,574) $ 346,149 $ (40,185,425) June 30, 2023
CITY OF STANTON
Combining Statement of Net Position
All Private-Purpose Trust Funds
153
ATTACHMENT A
Successor
Agency
to the Stanton
Redevelopment NOCPSC
Agency PrivatePrivate-Purpose Purpose
Trust Fund Trust Fund Total
ADDITIONS:
Taxes 4,775,978 $ - $ 4,775,978 $
Investment income 124 - 124
Miscellaneous 50 - 5 0
Total additionas - 4,776,152 4,776,152
DEDUCTIONS:
Contractual services 46,930 - 46,930
Public safety - 2,901,709 2,901,709
Interest and fiscal charges 2,434,481 - 2,434,481
Total deductions 2,481,411 2,901,709 5,383,120
CHANGE IN NET POSITION (2,901,709) 2,294,741 (606,968)
Net position (deficit), beginning of year (42,826,315) 3,247,858 (39,578,457) Net position (deficit), end of year (40,531,574) $ $ 346,149 $ (40,185,425) For the year ended June 30, 2023
CITY OF STANTON
Combining Statement of Changes in Net Position
All Private-Purpose Trust Funds
154
ATTACHMENT A
155
STATISTICAL SECTION (UNAUDITED)
ATTACHMENT A
156
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ATTACHMENT A
Contents Page
Financial Trends - These schedules contain information to help the reader to understand how the City's financial performance and well-being have changed over time. 1 Net Position by Component 158
2 Changes in Net Position 160
3 Fund Balances of Governmental Funds 164
4 Changes in Fund Balances - Governmental Funds 166
Revenue Capacity - These schedules contain information to help the reader assess the City's most significant own-source revenue.
6 Assessed Value and Estimated Actual Value of Taxable Property 168 7 Direct and Overlapping Property Tax Rates 170
8 Principal Property Tax Payers 172
9 Property Tax Levies and Collections 173
Debt Capacity - These schedules present information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future. 10 Ratios of Outstanding Debt by Type 174
11 Direct and Overlapping Debt 175
12 Legal Debt Margin Information 176
13 Pledged - Revenue Coverage 178
Demographic and Economic Information - These schedules offer demographic and economic 14 Demographic and Economic Statistics 180
15 Principal Employers 181
Operating Information - These schedules contain service and infrastructure data to help the reader understand how the information in the City's financial report relates to the services the City provides and the activities it performs.
16 Full-Time Equivalent Employees by Function 182
17 Operating Indicators by Functions 184
18 Capital Asset Statistics by Function 190
This section of the City of Stanton’s Annual Comprehensive Financial Report (ACFR) presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City’s overall financial heath. The statistical information presented herein is un-audited.
CITY OF STANTON
STATISTICAL SECTION (UNAUDITED)
June 30, 2023
indicators to help the reader understand the environment within which the City's financial activities take place.
157
ATTACHMENT A
2013-14 2014-15 2015-16 2016-17
Governmental activities:
Net investment in capital assets $ 79,209,329 87,225,759 $ 88,342,750 $ 87,079,003 $ Restricted 22,114,070 20,219,980 19,166,303 23,062,147
Unrestricted 22,726,068 14,875,639 15,861,417 12,719,777 Total governmental activities net position 132,065,897 114,304,948 123,370,470 122,860,927 Business-type activities:
Net investment in capital assets 5,135,853 5,238,330 5,003,312 4,877,897 Unrestricted 2,308,704 2,604,629 3,216,884 3,666,352
Total business-type activities net position 7,547,034 7,740,482 8,220,196 8,544,249 Primary government:
Net investment in capital assets 84,345,182 92,464,089 93,346,062 91,956,900 Restricted 22,114,070 20,219,980 19,166,303 23,062,147
Unrestricted 25,034,772 17,480,268 19,078,301 16,386,129 Total primary government net position 139,612,931 $ 122,045,430 $ 131,590,666 $ 131,405,176 $ *
Source: City Finance Department
Fiscal Year
Certain amounts presented in the prior year financial statements have been reclassified in order to be consistent with the current year's presentation and/or to reflect prior period adjustments for correction of errors.
CITY OF STANTON
NET POSITION BY COMPONENT
LAST TEN FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING)
158
ATTACHMENT A
2017-18 2018-19 2019-20* 2020-21 2021-22 2022-23
$ 88,374,103 $ 88,077,568 $ 96,374,328 $ 92,106,906 $ 89,960,892 $ 89,705,314 27,536,678 28,086,476 22,693,282 21,411,322 23,551,709 21,682,348 13,014,515 17,774,619 21,403,422 25,179,797 31,132,064 39,965,239 128,925,296 133,938,663 140,471,032 138,698,025 144,644,665 151,352,901 5,250,434 5,107,553 4,964,679 4,970,607 4,827,134 4,683,660 3,595,542 4,064,319 4,398,961 5,193,357 5,920,286 6,616,780 8,845,976 9,171,872 9,363,640 10,163,964 10,747,420 11,300,440 93,624,537 93,185,121 101,339,007 97,077,513 94,788,026 94,388,974 27,536,678 28,086,476 22,693,282 21,411,322 23,551,709 21,682,348 16,610,057 21,838,938 25,802,383 30,373,154 37,052,350 46,582,019 $ 137,771,272 $ 143,110,535 $ 149,834,672 $ 148,861,989 $ 155,392,085 $ 162,653,341 Fiscal Year
159
ATTACHMENT A
2013-14* 2014-15* 2015-16* 2016-17*
Expenses:
Governmental activities:
General government $ 3,043,005 2,976,011 $ 3,468,099 $ 3,726,949 $ Public safety 13,460,725 12,390,690 15,831,683 16,162,642 Community development 1,818,001 1,709,355 1,747,416 2,083,114 Health and welfare 4,265 3,476 3,512 67,305
Public works 2,358,073 1,762,185 1,235,617 1,598,743
Culture and recreation 1,198,807 1,162,126 1,592,769 2,030,052 Interest and fiscal charges - - - -
Transfer of land to successor agency - 10,192,858 - -
Total governmental activities expenses 30,938,705 21,140,872 23,879,096 25,668,805 Business-type activities:
Sewer 839,850 862,865 643,739 737,939
Total business-type activities expenses 862,865 839,850 643,739 737,939 Total primary government expenses 31,801,570 21,980,722 24,522,835 26,406,744 Program revenues:
Governmental activities:
Charges for services:
General government 458,286 433,374 488,128 527,561
Public safety 896,383 882,480 913,203 1,375,973
Community development 1,240,666 1,254,023 1,198,820 1,244,909 Public works 14,966 11,608 10,032 -
Culture and recreation 448,528 417,748 357,585 95,746
Operating grants and contributions 3,058,470 2,960,253 2,961,296 2,876,853 Capital grants and contributions 316,226 294,210 2,350,764 - Total governmental activities
program revenues 6,296,493 6,390,728 8,279,828 6,121,042 Business-type activities:
Charges for services:
Sewer 1,075,714 1,108,357 1,016,363 935,798
Total business-type activities
program revenues 1,108,357 1,075,714 1,016,363 935,798
Total primary government
program revenues 7,404,850 7,466,442 9,296,191 7,056,840 Note:
*
Source: City Finance Department
Certain amounts presented in the prior year financial statements have been reclassified in order to be consistent with the current year's presentation and/or to reflect prior period adjustments for correction of errors.
CITY OF STANTON
CHANGES IN NET POSITION-EXPENSES AND PROGRAM REVENUES
LAST TEN FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING)
Fiscal Year
160
ATTACHMENT A
2017-18* 2018-19* 2019-20* 2020-21* 2021-22* 2022-23
$ 1,666,776 3,135,756 $ 3,739,756 $ 4,848,332 $ 3,144,556 $ 4,558,241 $ 21,730,025 17,294,863 18,712,309 21,046,456 18,643,242 21,009,218 1,235,126 4,746,591 3,000,334 3,696,528 2,574,453 5,882,403 16,795 37,250 - - - -
1,870,833 1,299,051 2,404,139 4,652,371 2,697,686 6,552,867 1,933,953 1,181,246 2,120,218 2,301,778 2,441,047 2,558,081 - - 24,223 25,823 12,943 11,020
- - - - - -
29,019,246 27,129,019 30,000,979 36,571,288 29,513,927 40,571,830 926,631 1,152,003 1,436,274 1,531,447 839,808 516,366
926,631 1,152,003 1,436,274 1,531,447 839,808 516,366
29,945,877 28,281,022 31,437,253 38,102,735 30,353,735 41,088,196 345,485 487,870 359,865 85,717 627,458 548,950
1,751,036 1,754,200 1,899,756 2,088,690 908,006 763,622 2,116,525 3,283,119 3,908,877 5,107,540 1,772,601 2,358,143 47,389 48,076 59,849 68,258 2,486,467 2,769,957
571,210 550,144 1,428,477 1,565,463 141,312 216,125
3,383,242 3,586,655 4,655,790 5,697,844 4,991,957 12,919,661 1,353,727 - 3,423,482 35,081 1,060,782 879,739
9,568,614 9,710,064 15,736,096 14,648,593 11,988,583 20,456,197 1,052,745 1,267,440 1,305,410 2,235,352 1,312,065 1,089,667 1,052,745 1,267,440 1,305,410 2,235,352 1,312,065 1,089,667 10,621,359 10,977,504 17,041,506 16,883,945 13,300,648 21,545,864 Fiscal Year
161
ATTACHMENT A
2013-14* 2014-15* 2015-16* 2016-17*
Net revenues (expenses)
Governmental activities (24,642,212) (14,750,144) (15,599,268) (19,547,763) Business activities 245,492 235,864 372,624 197,859
Total net revenues (expenses) (24,396,720) (14,514,280) (15,226,644) (19,349,904) General revenues and other
changes in net position:
Governmental activities:
Taxes:
Property taxes $ 5,613,269 $ 5,314,329 $ 5,507,417 $ 5,435,415 Sales taxes 3,925,839 4,012,917 4,169,215 4,152,378
Transactions and use taxes - 792,300 3,591,594 4,105,593 Transient occupancy taxes 323,938 375,876 437,676 512,550 Franchise taxes 1,031,034 964,450 1,011,630 992,798
Utility users taxes 2,189,068 2,177,807 2,015,948 1,980,854 Other taxes 308,544 413,999 487,593 461,745
Investment earnings (loss), unrestricted 199,807 132,205 227,705 119,772 Miscellaneous 744,002 725,215 714,613 1,277,115
Gain on sale of capital assets - 475,282 - -
Transfers in - - - -
Extraordinary item (1) - - 6,501,399 -
Special item (2) - (3,393,141) - -
Total governmental activities 14,335,501 11,991,239 24,664,790 19,038,220 Business-type activities:
Taxes:
Property taxes 90,282 105,749 90,532 99,852
Investment earnings (loss) 10,430 7,760 16,558 26,342
Miscellaneous - - - -
Transfers out - - - -
Total business-type activities 100,712 113,509 107,090 126,194 Total primary government 14,449,010 12,091,951 24,771,880 19,164,414 Changes in net position
Governmental activities (10,306,711) (2,758,905) 9,065,522 (509,543) Business-type activities 359,001 336,576 479,714 324,053 Total primary government $ (9,947,710) $ (2,422,329) $ 9,545,236 $ (185,490) Notes:
Source: City Finance Department
CITY OF STANTON
CHANGES IN NET POSITION-GENERAL REVENUES
LAST TEN FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING)
(1) FY 15/16 extraordinary gain relates to payment of bond proceeds to the City from the Successor Agency for building Stanton Central Park.
(2) FY 18/19 special item relates to reinstatement of a General Fund loan to the Successor Agency; FY 14/15 special item relates to write-down of land held for resale by Housing Authority to net realizable value. * Certain amounts presented in the prior year financial statements have been reclassified in order to be consistent with the current year's presentation and/or to reflect prior period adjustments for correction of errors.
Fiscal Year
162
ATTACHMENT A
2017-18* 2018-19* 2019-20* 2020-21* 2021-22* 2022-23
(19,450,632) (17,418,955) (14,264,883) (21,922,695) (17,525,344) (20,115,633) 115,437 126,114 (130,864) 703,905 472,257 573,301
(19,324,518) (17,303,518) (14,395,747) (21,218,790) (17,053,087) (19,542,332) $ 6,071,733 $ 6,433,535 $ 6,816,387 $ 7,561,831 $ 8,512,488 $ 8,964,390 4,204,519 4,327,842 4,278,141 4,682,029 5,414,556 5,321,610 4,122,756 4,057,037 4,537,734 4,991,100 5,993,735 6,958,521 514,102 483,233 512,492 569,293 660,504 671,096
1,088,226 1,026,619 1,055,791 1,105,276 1,180,487 1,251,495 1,986,236 1,850,880 1,791,516 1,990,690 2,122,661 2,504,823 524,570 433,541 364,751 345,315 45,717 55,844
135,059 1,325,735 1,167,877 959,781 (956,855) 878,675
649,678 413,900 272,563 95,045 49,013 80,785
6,000,100 - - - 430,902 12,693
- - - 81,616 18,776 332,010
- - - - - -
- 2,080,000 - - - -
25,296,979 22,432,322 20,797,252 22,381,976 23,471,984 27,031,942 124,950 131,641 147,159 165,692 188,097 194,785
50,663 78,818 167,573 12,343 (58,122) 116,944
- - 7,900 - - -
- - - (81,616) (18,776) (332,010)
210,459 175,613 322,632 96,419 111,199 (20,281)
22,642,781 25,472,592 21,119,884 22,478,395 23,583,183 27,011,661 5,013,367 5,846,347 6,532,369 459,281 5,946,640 6,916,309 325,896 301,727 191,768 800,324 583,456 553,020
$ 5,339,263 6,148,074 $ 6,724,137 $ 1,259,605 $ 6,530,096 $ 7,469,329 $ Fiscal Year
163
ATTACHMENT A
2013-14* 2014-15* 2015-16* 2016-17*
General Fund:
Nonspendable 8,379,173 $ 6,730,051 $ 5,398,081 $ 3,992,852 $ Restricted - - - 3,065,186
Committed 3,965,209 4,317,883 4,677,019 11,150,000
Assigned 38,751 - 7,200 -
Unassigned 8,181,723 9,391,105 11,811,587 4,566,919
Total General Fund $ 20,564,856 $ 20,439,039 $ 21,893,887 $ 22,774,957 All other governmental funds:
Restricted 22,118,786 $ $ 20,232,644 $ 19,166,303 $ 19,996,961 Assigned 683,276 756,521 790,528 682,470
Unassigned (51,385) (526,651) (790,292) (303,957)
Total all other governmental funds 22,750,677 $ $ 20,462,514 $ 19,166,539 $ 20,375,474 Note:
*
Source: City Finance Department
Certain amounts presented in the prior year financial statements have been reclassified in order to be consistent with the current year's presentation and/or to reflect prior period adjustments for correction of errors.
CITY OF STANTON
FUND BALANCES OF GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
Fiscal Year
164
ATTACHMENT A
2017-18* 2018-19* 2019-20 2020-21 2021-22 2022-23
$ 1,806,958 1,387,690 $ 146,069 $ 2,488,780 $ 2,634,436 $ 2,265,236 $ 3,735,741 3,501,556 - - - -
12,022,695 13,261,735 10,074,410 8,661,735 9,856,296 10,105,796 - - 123,935 356,687 169,585 6,304,522
5,895,617 3,509,177 10,277,670 12,691,577 15,826,042 19,848,555 $ 22,807,558 $ 22,313,611 $ 20,622,084 $ 24,198,779 $ 28,486,359 $ 38,524,109 $ 24,035,122 $ 24,350,735 $ 22,636,555 $ 21,212,537 $ 23,491,748 $ 21,360,270 908,996 1,117,693 320,739 278,929 244,243 181,951
(27,464) (29,247) (41,723) - (61,410) (257,858)
$ 24,916,654 $ 25,439,181 $ 22,915,571 $ 21,491,466 $ 23,674,581 $ 21,284,363 Fiscal Year
165
ATTACHMENT A
2013-14* 2014-15* 2015-16* 2016-17*
Revenues:
Taxes and assessments 14,062,751 $ 14,730,740 $ 17,838,271 $ 18,697,469 $ Licenses and permits 419,298 417,780 357,381 321,935
Intergovernmental 2,765,837 1,916,432 4,844,423 2,772,489 Charges for services* 2,363,378 2,349,520 2,361,663 2,190,769 Fines and forfeitures 279,542 292,505 296,607 360,662
Interest income (loss) 202,857 195,526 227,707 119,771
Rental income 700,811 706,265 619,977 605,377
Gain on sale of land held for resale - - - -
Miscellaneous 55,883 17,955 71,754 684,711
Contribution from Successor Agency - - - -
Total Revenues 20,850,357 20,626,723 26,617,783 25,753,183 Expenditures:
Current:
General government 2,461,666 2,615,927 2,900,169 2,879,492 Public safety 12,047,794 13,176,004 15,453,062 15,597,673 Community development 1,475,104 1,424,634 1,368,795 1,518,145 Public works 2,098,897 1,548,644 951,650 1,175,017
Culture and recreation 921,302 948,585 1,331,178 1,606,326 Health and welfare 4,265 3,476 3,512 67,305
Capital outlay 475,187 1,131,626 10,951,943 819,220
Debt Service:
Principal - - - -
Interest and fiscal charges - - - -
Total Expenditures 19,484,215 20,848,896 32,960,309 23,663,178 Excess (Deficiency) of Revenues
Over (Under Expenditures 1,366,142 (222,173) (6,342,526) 2,090,005 Other financing sources (Uses):
Proceeds from long-term debt - - - -
Sale of capital assets - - - -
Transfers in 1,884,218 624,942 599,348 633,550
Transfers out (611,924) (824,942) (599,348) (633,550)
Total other financing sources (uses) 1,272,294 (200,000) - - Net change in fund balance before
special/extraordinary item 2,638,436 (422,173) (6,342,526) 2,090,005 Special/Extraordinary items (1) - (2,082,812) 6,501,399 - Net change in fund balances $ 2,638,436 $ (2,504,985) $ 158,873 $ 2,090,005 Debt service as a percentage of
noncapital expenditures 0% 0% 0% 0%
Notes:
*
(1) Reinstatement of advance to Successor Agency
Source: City Finance Department
Certain amounts presented in the prior year financial statements have been reclassified in order to be consistent with the current year's presentation and/or to reflect prior period adjustments for correction of errors.
Fiscal Year
CITY OF STANTON
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
166
ATTACHMENT A
2017-18* 2018-19* 2019-20* 2020-21 2021-22 2022-23
$ 19,821,063 $ 20,541,371 $ 21,167,374 $ 23,160,509 $ 25,471,470 $ 26,543,385 664,964 714,474 1,132,116 2,091,517 1,037,171 1,294,055 2,691,518 1,815,443 3,462,782 3,992,601 4,811,604 12,841,895 3,182,541 3,438,846 4,444,656 5,015,265 3,737,992 3,208,712 460,794 410,443 411,644 524,705 468,222 383,517
116,130 2,026,619 1,565,134 151,183 (516,680) 1,128,316 589,631 624,406 637,676 579,024 700,487 836,268
6,000,100 - - - - -
70,083 286,946 211,217 96,605 101,787 228,445
- - 3,377,369 - - -
33,596,824 29,858,548 36,409,968 35,611,409 35,812,053 46,464,593 2,535,059 2,605,958 2,706,193 4,367,607 3,715,597 4,022,179 16,894,400 22,350,545 18,023,261 20,682,528 18,732,182 20,724,414 4,346,128 1,855,646 2,303,811 3,168,880 2,838,526 2,386,778 1,570,486 1,714,628 1,477,485 1,835,882 1,738,520 3,548,144 1,760,921 1,646,637 1,603,432 1,721,498 2,458,165 1,859,448 37,250 16,795 - - - -
1,878,799 1,719,759 11,829,522 882,099 489,773 6,389,015 - - 55,754 1,069,246 - -
- - 14,906 35,140 12,943 11,020
29,023,043 31,909,968 38,014,364 33,762,880 29,985,706 38,940,998 4,573,781 (2,051,420) (1,604,396) 1,848,529 5,826,347 7,523,595 - - 1,125,000 - - -
- - - 210,100 756,902 -
828,000 757,400 604,623 1,985,777 2,336,767 4,220,436
(828,000) (757,400) (4,340,364) (1,904,161) (2,449,321) (3,888,426) - - (2,610,741) 291,716 644,348 332,010
4,573,781 (2,051,420) (4,215,137) 2,140,245 6,470,695 7,855,605 - 2,080,000 - - - -
$ 4,573,781 $ 28,580 $ (4,215,137) $ 2,140,245 $ 6,470,695 $ 7,855,605 0% 0% 0.2% 3.3% 0.0% 0.0%
Fiscal Year
167
ATTACHMENT A
Fiscal Year Taxable Incremental
Ended SBE Assessed Assessed
June 30 Secured Unsecured Nonunitary Value (1) Secured Unsecured Value 2014 2,071,296 $ 74,078$ 684$ 2,146,058 $ $ 2,039,488 $ 72,219 $ 2,111,707 2015 2,214,413 83,904 684 2,299,001 2,179,143 83,691 2,262,834 2016 2,350,787 81,734 684 2,433,205 2,309,529 82,056 2,391,585 2017 2,479,654 85,974 684 2,566,312 1,569,439 20,147 1,589,586 2018 2,602,487 75,735 684 2,678,906 1,677,650 7,246 1,684,896 2019 2,747,552 85,798 1,255 2,834,605 1,816,986 17,805 1,834,791 2020 2,921,963 91,619 1,255 3,014,837 1,988,330 23,148 2,011,478 2021 3,094,828 90,155 109,371 3,294,354 2,266,923 29,439 2,296,362 2022 3,330,318 166,399 130,955 3,627,672 2,522,570 105,282 2,627,852 2023 3,611,586 95,824 134,405 3,841,815 2,799,849 32,313 2,832,162 Notes:
(1) City amounts include the Redevelopment Agency assessed values. (2) The State of California dissolved Redevelopment Agencies effective January 31, 2012.
Sources: Orange County Auditor-Controller
HdL, Coren & Cone
CITY OF STANTON
City Redevelopment Agency (2)
In 1978, the voters of the State of California passed Proposition 13 which limited property taxes to a total maximum rate of 1% based upon the assessed value of the property being taxed. Each year, the assessed value of the property may be increased by an inflation factor (limited to a maximum of 2%). With few exceptions, property is only reassessed at the time it is sold to a new owner. At that point, the new assessed value is reassessed at the purchase price of the property sold. The assessed valuation data shown above represents the only data currently available with respect to the actual market value of taxable property and is subject to the limitations described above.
LAST TEN FISCAL YEARS
ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY (AMOUNTS EXPRESSED IN THOUSANDS)
168
ATTACHMENT A
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169
ATTACHMENT A
2013-14 2014-15 2015-16
Basic Levy (1) 1.00000 1.00000 1.00000
Overlapping Rates (2):
Anaheim Union High School District 0.02620 0.02412 0.04948 Coast Community College District 0.02899 0.03015 0.03092 Garden Grove Unified School District 0.03703 0.04148 0.04656 Magnolia Elementary School District 0.02737 0.02497 0.02349 Metropolitan Water District 0.00350 0.00350 0.00350
North Orange County
Community College District 0.01704 0.01758 0.03043
Savanna School District 0.05557 0.05443 0.05501
Total Direct and Overlapping Tax Rates 1.19570 1.19623 1.23939 City's Share of 1% Levy Per Prop 13
(3) 0.10940 0.10940 0.10940
Redevelopment Rate (4) 0.00000 0.00000 0.00000
Total Direct Rate (5) 0.13707 0.13703 0.13701
Notes:
Source: HdL, Coren & Cone
CITY OF STANTON
DIRECT AND OVERLAPPING PROPERTY TAX RATES
LAST TEN FISCAL YEARS
(RATE PER $100 OF ASSESSED VALUE)
Fiscal Year .
(1) In 1978, the voters of the State of California passed Proposition 13, which limited property taxes to a total maximum rate of 1% fixed amount. This 1% is shared by all taxing agencies for which the subject property resides within.
(2) Overlapping rates are those of local and county governments that apply to property owners within the City. Not all overlapping rates apply to all city property owners. (3) The City's share of the 1% levy is based on the City's share of the general fund tax rate area with the largest net taxable value within the City. The ERAF portion of the City's levy has been subtracted where known.
(4) The Redevelopment Rate is based on the largest RDA tax rate area and only includes rates(s) from indebtedness adopted prior to 1989 per California State statute. RDA direct and overlapping rates are applied only in incremental property values. The approval of ABX1 26 eliminated Redevelopment from the State of California for the fiscal year 2012-13 and years thereafter. (5) Total Direct Rate is the weighted average of all individual direct rates applied by the City/Agency preparing the statistical section information and excludes revenues derived from aircraft. Beginning in 2013-14, the Total Direct Rate no longer includes revenues derived from the former redevelopment tax rate areas. Challenges to recognized enforceable obligations are assumed to have been resolved during fiscal year 2012-13. For the purposes of this report, residual revenue is assumed to be distributed to City/Agency in the same proportions as general fund revenue. 170
ATTACHMENT A