City Council Meeting Agenda: 07-14-2026 cc Page 1
Posted: Friday, July 14, 2026
NOTICE AND CALL OF A REGULAR MEETING OF THE
TRINIDAD CITY COUNCIL
The Trinidad City Council will hold a regular meeting on TUESDAY, JULY 14, 2026, at 6:00 PM
at the Trinidad Town Hall, 409 Trinity Street, Trinidad, CA.
CLOSED SESSION BEGINS AT 5:15PM
For your convenience, this meeting will also be held via videoconference, hosted on the Zoom platform. Learn more about Zoom here: https://zoom.us
PUBLIC COMMENT: Public comment may be submitted via email in advance of the meeting, or in an orderly process during the meeting. If you do not have access to email and you would like to provide a written statement, please deliver your comments to 409 Trinity Street, Trinidad CA, by 2:00pm on the meeting day, or email to [email protected] HOW TO PARTICIPATE: You are invited to participate in person at the Trinidad Town Hall, or by Zoom. The City will publish a direct link to the Zoom teleconference, along with the participant code, on the City Calendar page online at https://www.trinidad.ca.gov/calendar
To phone in, dial 1-888-278-0296, Conference Code: 685171 Meeting ID: 830 4151 7526 Passcode: 689713 PLEASE NOTE that live meeting logistics will be prioritized. Connectivity issues on the part of the City may result in the meeting being delayed or rescheduled but technical challenges experienced by individuals will not interrupt or halt progress of the meeting.
I. CALL TO ORDER
II. PLEDGE OF ALLEGIANCE
III. CLOSED SESSION
1. Conference with Legal Counsel – Existing Litigation (Calif. Gov. Code Section 54956.9(d)(1)) (1 Case: City of Trinidad vs. Tsurai Ancestral Society, et. al, Humb. Co. Sup. Court Case No. DR180684
2. Conference with Legal Counsel – Existing Litigation (Calif. Gov. Code Section 54956.9(d)(1)) (1 Case: Yurok Tribe v.
City of Trinidad, et. al, U.S. District Court (Northern Dist.) 1:26-cv-05240)
3. Personnel Exception 54957 - City Manager Performance Evaluation IV. RECONVENE TO OPEN SESSION
V. APPROVAL OF AGENDA
VI. APPROVAL OF MINUTES – 06/09/2026 cc
VII. COUNCIL REPORTS/COMMITTEE ASSIGNMENTS.
VIII. PUBLIC SAFETY REPORT (Sheriff and Pacific Coast Security) IX. ITEMS FROM THE FLOOR
At this time, members of the public may comment on items NOT appearing on the agenda. Individual comments will be limited to 3 minutes or less. Please direct your comments to the Council as a whole, maintain decorum and avoid personal attacks on staff, members of the Council and/or other members of the public. Council and staff responses will be minimal for non-agenda item X. CONSENT AGENDA
City Council Meeting Agenda: 07-14-2026 cc Page 2
All matters on the Consent Agenda are considered routine by the City Council and are enacted in one motion. There is no separate discussion of any of these items. If discussion is requested by any Council member, that item is removed from the Consent Calendar and considered separately. A single opportunity for public comment on the Consent Agenda is available to the public.
1. Financial Statements – May 2026
2. Law Enforcement Report – June 2026.
3. Designation of the City of Trinidad’s Voting Delegate for the General Assembly at the 2026 League of California Cities Annual Conference.
DISCUSSION/ACTION AGENDA ITEMS
1. Discussion/Presentation regarding 2024 Water Rate Study & Budget Performance Technical Memorandum Issued by Rural Community Assistance Corporation (RCAC).
2. Discussion/Presentation regarding FY2025 Audit Report Audit Prepared by JJACPA.
3. November 2026 City Council Election Calendar Update.
4. Staff Activity Report – June 2026.
X. FUTURE AGENDA ITEMS
XI. ADJOURNMENT
APPROVAL OF MINUTES FOR:
JUNE 09, 2026 SCC
Supporting Documentation follows with: 6 PAGES
06-09-2026 City Council Meeting Minutes Page 1
MINUTES OF THE REGULAR MEETING OF THE TRINIDAD CITY COUNCIL TUESDAY, JUNE 09, 2026 (LIVE/HYBRID)
I. CALL TO ORDER
Mayor Kelly called the live-hybrid meeting to order at 6:00pm. Council members in attendance: Kelly, Kenny, Tuttle, Waskiewicz. Breckenridge attended closed session, but was absent for the open session. City Staff in attendance: City Clerk/Interim City Manager Gabriel Adams, Special Project Manager Angela Cather, and Administrative Assistant Anton Souza. Approximately (3) participants were present by video-conference, and (5) were present live at the beginning of the meeting.
II. PLEDGE OF ALLEGIANCE
III. ADJOURN TO CLOSED SESSION
1. Conference with Legal Counsel – Existing Litigation (Calif. Gov. Code Section 54956.9(d)(1)) (1 Case: City of Trinidad vs.
Tsurai Ancestral Society, et. al, Humb. Co. Sup. Court Case No. DR180684
2. Conference with Legal Counsel – Existing Litigation (Calif. Gov. Code Section 54956.9(d)(1)) (1 Case: Yurok Tribe v. City of Trinidad, et. al, U.S. District Court (Northern Dist.) 1:26-cv-05240) IV. RECONVENE TO OPEN SESSION – No reportable action taken.
V. APPROVAL OF THE AGENDA
Motion (Kenny/Kelly) to approve the agenda as submitted. Passed 4-0.
VI. APPROVAL OF MINUTES – 05/06/2026 cc
Kelly thanked staff for comprehensive minutes for both sessions.
Motion (Kelly/Tuttle) to approve the 05/06/2026 minutes as written. Passed 3-1-1. (Breckenridge absent for vote). (Kenny was absent from the 05/06/2026 meeting).
Motion (Waskiewicz/Tuttle) to approve the 05/12/2026 minutes as written. Passed 4-0-1 (Breckenridge absent).
VII. COUNCIL REPORTS/COMMITTEE ASSIGNMENTS
Tuttle: RCEA reps got a tour of the Diablo Nuclear Power Plant in San Luis Obispo, currently producing 10% of power consumed by the State. State lease recently extended. Fascinating tour.
Kenny: HCAOG made the finding there were no unmet transit needs reasonable to meet. Approved work plan, and the final RHNA number was approved for Trinidad requiring 27 new housing units by 2035.
Kelly: Attended the LAFCO meeting on May 20. Budget discussion, membership selection committee, and my last meeting serving as Trinidad’s representative.
Waskiewicz: Nothing to report.
VIII.PUBLIC SAFETY REPORT – City Manager & Law Enforcement HCSO Lt. Kyle Holt was introduced by City Manager Adams noted the low call volume, and thanked the City’s public safety team (HCSO and Pacific Coast Security) for proactive service to this community. Lt. Holt summarized service calls for the month of May. Approximately 70 calls for service in the greater Trinidad area, with two animal bite calls. HCSO also participated in public safety day at Trinidad School today.
IX. ITEMS FROM THE FLOOR.
(Three (3) minute limit per Speaker unless Council approves request for extended time.) Rodney Oien – North Coast Childrens Services
Raised $12,000 so far towards our goal of $30,000 to support Salmonberry Preschool. We have 6 preapplications for enrollment so far. We’re looking at reducing our operating costs as well. Mayor Kelly received a text message from a member of the public requesting Council support, but also acknowledged that the community is willing to support as well. Hoping to send mailer to the community with options for providing financial support.
Cecelia Linarte – Trinidad Area resident, Salmonberry parent and site representative 06-09-2026 City Council Meeting Minutes Page 2
Thanked the Council for helping raise awareness of the challenges and opportunities to support the program.
Raised close to $12,000 so far, which is 40% towards the funding goal of $30,000. Hosting a community meeting on Thursday, June 11. Read a prepared statement thanking the community for support. Offered to represent the community’s questions and comments regarding the program as we work to reach our funding goals.
X. CONSENT AGENDA
1. Financial Statements – April 2026
2. Law Enforcement Report – May 2026.
3. Resolution 2026-05; Adopting a List of Projects for Fiscal Year 2025/2026 Funded By SB-1, The Road Repair and Accountability Act of 2017.
Motion (Kenny/Tuttle) to approve the consent agenda as submitted. Passed 4-0.
Xl. DISCUSSION/ACTION AGENDA ITEMS
1. Discussion/Decision regarding Resolution 2026-06; Adopting the FY2026-2027 Budget.
Interim City Manager Adams explained that on March 10 the Council conducted a FY2026 mid-year budget review to examine assumptions, make adjustments, and peel back a layer to examine whether priorities and targets were being achieved. The takeaway from that meeting was that the City’s overall financial position was healthy, City goals and priorities were being achieved despite the unanticipated staff reduction, the General Fund was on track to build additional reserves, and the Water Fund was out of the ICU but still in transitional care.
On May 12 staff presented preliminary information to set the stage for the final draft, highlighting two significant pieces of the puzzle - Salary Alignment Phase II and the Water Fund. The presentation also included updated General Fund revenue and expense projections, General Fund reserve estimates, and several challenges faced during FY2026 causing variances that would carry forward into FY2027.
As summarized in the summary sheet of the budget packet, the General Fund is anticipated to operate with a slight deficit of approximately $75,000 this year, with in expenses liberally projected near $1.04 million, and revenues conservatively at $967,723. In this context, it is important to understand that the General Fund Reserve has been building over the last 6-years due to a combination of robust economic activity, rising costs, increasing tourism, increasing property values, a resilient tax base, and missed spending targets (aka underspending).
Included in this budget is Phase II of the Salary Alignment, fulfilling the Council’s ongoing commitment to balance the needs of the City while encouraging employee retention and advancement. Phase II brings all positions equitably to 10% of the market median identified in the 2025 study conducted by Regional Government Services (RGS). The budget also anticipates full-spending of the City Manager position, baked-in.
The ripple effects of this salary will be visible in the budget, and the Council will have the opportunity to strategically discuss the position in detail in the next few months.
Financial statements from FY2025 have been reconciled by Cunningham, Malone and Morton Bookkeeping Service, but the final audit has not been completed by Brett Jones of JJACPA, Inc. The City is expecting the audited financial statements to be available at any moment, and presented to the Council for acceptance in July (approximately 3 months behind the target schedule).
Along with enhancing the current service level provided to the city, the budget aims to provide a continued focus on transitional stability for the Water Department. It is important to recognize that while adopting rates and transferring $300,000 from the General Fund to the Water Fund in July 2024 was needed, recovery will take many years.
The proposed budget includes an accurate assessment of what is to come this year, projecting conservative revenues, and supporting an increased diet of City planning, legal, and environmental challenges within a highly regulated State.
06-09-2026 City Council Meeting Minutes Page 3
GENERAL FUND REVENUE SUMMARY
FY2027 Projection: $967,723
Operating Expenses: $1,041,083
Difference: ($73,360)
GENERAL FUND EXPENSES
Administration (201): The budget for this category includes a sizeable portion of in-house and consultant staff that help run the City, and their expenses are based on past experiences as to what issues the City may face in the upcoming year.
Expenses and priorities for the Administration fund include:
• Staff wages & benefits account for 2.67 FTE employees with a 3.5% COLA determined by the City Manager as per the CPI-U Index released in May 2026 by the U.S. Bureau of Labor and Statistics. • City Attorney, Planner, Building Inspector, Accountant, Auditor, and Tech Support. • Utility costs for public buildings; Town Hall, Annex, and Library. • Office Supplies, Equipment, and Technology improvements to enhance audio quality of meetings. • Website, Municipal Code, and Recordkeeping Expenses.
• Community Group support from T.O.T. Allocation.
Note: Payroll expenses in this category include full cost of the City Manager contract position that has been vacant since September 2025 ($87,546). Without this expense the overall General Fund budget deficit proposed of $73,360 would be resolved.
Public Safety (301 & COPS):
City Council approved the Second Amendment contracts with the Humboldt County Sheriff’s Office (HCSO) in May. The contract for Law Enforcement increased 10% to $66,059, Animal Control and Shelter Services increased 6% to $3,501 and $4,131.
Pacific Coast Security is budgeted to remain at $67,392 for the contract year providing 24 hours of coverage/week coverage. COPS grant funding will cover FY2027 Police, Animal Control, and Private Security expenses $141,083, continuing a second year of funding the public safety reserve (approximately $18,917).
Fire (401):
Thanks to the goodwill and dedication of life-long community resident Shawn Worth, and our Assistant Chief Dick Kieselhorst the department remains staffed and committed to providing Trinidad with emergency volunteer fire and first responder coverage. There is still a need for volunteers with an open invitation for applicants.
The City paid an $18,833 contribution FY2026 for the cooperative CSA 4 Fire Planning study. No indication has been made by LAFCO that additional funding will be required this fiscal year when the results of the study are released.
The CERT program will receive $2,000 proposed for program training and expenses, tracked through the Fire Department budget. It is important to recognize how the City’s investments in public safety benefit the community overall.
Public Works (501):
The Public Works Fund has been the recipient of significant offsets in employee labor costs over the past few years. Otherwise known as “grant payroll allocations” these offsets are a result of grants that have eligible amounts programmed in to cover staff time involved in executing the projects. This will change in FY2027 with no money programmed for Public Works or Water Department staff. The result is a higher wage burden on those funds, but also with a benefit list shifting to other projects of community interest.
Expenses and priorities for the Public Works fund include:
• Staff wages & benefits for 2.48 FTE employees with a 3.5% COLA determined by the City Manager. 06-09-2026 City Council Meeting Minutes Page 4
• Annual Stormwater Discharge Permit Reporting to the State Water Resources Control Board. • City Engineer expertise in public works projects, technical advisory committees, regional transportation, and funding allocations by State and Local agencies.
• Right-of-Way and ongoing trail maintenance.
• Vehicle fuel and maintenance.
• Public building and facility maintenance, including $3,500 allocated for front entry landscape improvements.
• Resolve Boardwalk Project land tenure issue with Rancheria.
SPECIAL REVENUE – WATER FUND
The Council adopted a new rate plan in October 2024 that helped add much needed revenue to stabilize the fund. In addition, Council voted to give a one-time transfer of $300,000 to forgive the debt incurred due to several years of Water Fund deficit spending.
Water Fund expenses are generally divided into two categories, hard and soft costs; Hard costs include general operating expenses such as energy costs to run the plant, in-house licensed personnel, treatment technology, filters, hardware, vehicle and machinery, treatment processes, etc.
Soft costs include technical and engineering consultants required to evaluate more complex data, planning, and regulatory tasks, along with and interim costs to transition back to in-house staff Plant operation.
CPO/T3 Update: Since March 2025, Chief Plant Operator costs decreased significantly to $4k/month while the City invested in the home-grown, in-house staff. One of our operators passed his T3 exam this year and applied to the State Water regulator to receive his license. His first application was denied with the State requesting an additional 1800 hours to be served. He sent a protest letter to the regulator arguing his college education background was equivalent to on-the-job training. He received his license on June 02, concluding a long road of working from scratch within the City’s ranks to achieve this milestone. The budget assumes this promotion, on a half-time basis. The City Manager will be working with the employee, department staff, and regulators to determine how to best utilize the new asset.
Rate Study Review Update: The rate study follow-up awarded to the City of Trinidad through RCAC was paused in May due to many unknown financial assumptions, mainly triggered by variances recorded in the current fiscal year financial reports (January 03 Scenic Drive leak, Measure Z $40k equipment investment, and higher than anticipated contracted services). Budget construction that occurred over the past two weeks unveiled answers to questions that stalled out the review. Staff has reengaged with RCAC staff with the final results pending release to the Council in July.
Revenue Projections: Rates will increase 10% for the second of four consecutive programmed increases, resulting in approximately $42,000 in additional revenue. $37,500 in new connection revenue is also expected from (2) outside city connections on Mill Creek Lane, and (5) from the Yurok Indian Housing Project on Westhaven Drive. Each new account will bring a minimum of $960/year in revenue ($6,720/year combined).
Expense summary: Contracted staff budget will decline significantly as staff begins the transition back to inhouse Chief Plant Operator coverage. Status quo funding of routine hard costs is included, along with contingency funds included for an emergency water line repair, valve replacements, and personnel investments in tech and communication improvements – based on feedback received and documented during the January and April water leaks post-incident reports. Including the salary adjustment Phase II, staff propose a budget that calls for a 22% spending reduction compared with FY2026.
Other information for consideration: With the one-time connection fees ($37,500) and City Manager’s salary (-$43,120) included, the fund net gain is anticipated to reach $34,267 as compared to the Rate Study anticipated a net gain of $28,950. However, the Reserves (Operating, Emergency, Debt, and Capital Assets) remain underfunded by $112,767.
06-09-2026 City Council Meeting Minutes Page 5
The cost of operating a small water system, maintaining its efficiency, in a very desirable area to live, while functioning to provide a vital resource to a community that has emphasized a desire to live “within its means” (and local watershed), will prove to be a challenge for the rate payers.
Water Fund expenses and priorities for FY25/26 include:
• Budget adjustments, and modified staffing plan developed to better align with the adopted 5-year rate plan. • Staff wages & benefits for 2.75 FTE total employees with a 3.5% COLA determined by the City Manager. • Focus on investing in staff that are vital to delivering quality drinking water to customers. • Recognizing that the water fund is far from out of the woods this early in the 5-year rate plan. • Continue to develop, incentivize, and train operators. • Complete the Rate Analysis review and continue to reduce costs while buying time to delay needing any loan funding from the General Fund until the full impact of the new rate is allowed to develop and results are determined.
• Support the TA application for the Water System Comparative Analysis Grant Project. • Continue to pursue grant funding for more expensive capital improvements and resiliency projects.
Council comments/questions included:
Kelly: Thankful for the presentation slide breaking down the City Planner’s expense categories this past year.
May need to have a joint meeting to get more direction from the Planning Commission on unfinished projects needing attention, and for the Council to consider a full time, in-house staff planner with Trever Parker’s expertise and guidance. We’re also underfunding the Water Fund capital reserves and may need to revisit the water rates in the next year. The community also appreciates when its city invests in and improves facilities.
Kenny: If we are short on something, capital improvement budget is the place to be underfunded. There are grants and low-interest loans to help backfill those areas if needed.
Tuttle: Can we add more water customers? How about adding ADU’s? Kelly explained that LAFCO would get involved in connection requests that are outside our water service area.
There were no public comments.
Motion (Kelly/Kenny) to adopt Resolution 2026-06; Adopting the FY2026-2027 Budget. Passed 4-0.
2. November 2026 City Council Election Calendar Update
Interim City Manager Adams presented the Council with a list of key dates associated with the November 2026 general election. Information item only. No decision was made.
3. Discussion/Decision regarding July, August Meeting Schedule.
The Council agreed, by consensus, to cancel the August meeting.
4. Staff Activity Report – May 2026.
Interim City Manager Adams included the full report in the packet, but highlighted challenges and problem-solving hours dedicated to fulfilling the needs of the community, ongoing commitments, partnerships, and projects.
Report only. No decision was made.
FUTURE AGENDA ITEMS
- ADU Dan Program to streamline permitting, and increase water connection revenue.
ADJOURNMENT: 8:30pm.
Submitted by: Approved by:
_____________________________ _____________________________ Gabriel Adams Cheryl Kelly
Trinidad City Clerk Mayor
CONSENT AGENDA ITEM 1
SUPPORTING DOCUMENTATION ATTACHED
1. Financial Statements – May 2026
CONSENT AGENDA ITEM 2
SUPPORTING DOCUMENTATION ATTACHED
2. Law Enforcement Report – June 2026.
CONSENT AGENDA ITEM 3
SUPPORTING DOCUMENTATION ATTACHED
3. Designation of the City of Trinidad’s Voting Delegate for the General Assembly at the 2026 League of California Cities Annual Conference.
CITY OF TRINIDAD STAFF REPORT
DATE: Tuesday, July 14, 2026
TO: Mayor and City Council
FROM: Angela Cather, Special Projects Manager
AGENDA ITEM: Designation of the City of Trinidad’s Voting Delegate for the General Assembly at the 2026 League of California Cities Annual Conference
STAFF RECOMMENDATION:
• Designate Special Projects Manager, Angela Cather, as the City of Trinidad’s Voting Delegate for the General Assembly at the 2026 League of California Cities Annual Conference BACKGROUND: Annually the League of California Cities, a member-driven organization that represents the state’s 482 incorporated cities, holds a conference, which features keynote speakers and presentations on key topics for local leaders, plus peer-to-peer sharing with fellow California city officials.
During the conference, the League of California Cites also convenes a member-driven General Assembly, which will take place this year on Friday, Sept. 25, 2026. The General Assembly is comprised of voting delegates appointed by each member city; every city has one voting delegate. The General Assembly is an important opportunity where city officials can directly participate in the development of Cal Cities policy.
Member cities of the League of California Cities will receive a resolution packet prior to the annual conference, so city councils can review them and provide direction to their designated voting delegate. The resolution packet will include background materials and proposed policy changes.
Delegate Roles and Responsibilities: If appointed, Special Projects Manager, Angela Cather, will vote on resolutions, on behalf of the City as directed by the City Council.
FISCAL IMPACT
• Is there a Fiscal Impact: All cost associated with the conference are budgeted for FY 26-27. • Where is it Budgeted: 201 General Fund
ATTACHMENTS
• League of California Cities Request for Council Action to Designate Voting Delegates and Alternates 1400 K Street, Suite 400, Sacramento, CA 95814 • 916.658.8200 • calcities.org DATE: Wednesday, May 13, 2026
TO: Mayors, Council Members, City Clerks, and City Managers RE: DESIGNATION OF VOTING DELEGATES AND ALTERNATES
League of California Cities Annual Conference and Expo, Sept. 23-25, 2026 Anaheim Convention Center
Every year, the League of California Cities convenes a member-driven General Assembly at the Cal Cities Annual Conference and Expo. The General Assembly is an important opportunity where city officials can directly participate in the development of Cal Cities policy.
Taking place on Friday, Sept. 25, 2026 the General Assembly is comprised of voting delegates appointed by each member city; every city has one voting delegate. Your appointed voting delegate plays an important role during the General Assembly by representing your city and voting on resolutions.
To cast a vote during the General Assembly, your city must designate a voting delegate and up to two alternate voting delegates, one of whom may vote if the designated voting delegate is unable to serve in that capacity. Voting delegates may either be an elected or appointed official.
Action by Council Required. Consistent with Cal Cities bylaws, a city’s voting delegate and up to two alternates must be designated by the city council. Please note that designating the voting delegate and alternates must be done by city council action and cannot be accomplished by individual action of the mayor or city manager alone.
Following council action, please submit your city’s delegates through the online submission portal by Tuesday, Sept. 1, 2026. When completing the Voting Delegate submission form, you will be asked to attest that council action was taken. You will need to be signed in to your My Cal Cities account when submitting the form.
Submitting your voting delegate form by the deadline will allow us time to establish voting delegate/alternate records prior to the conference and provide pre-conference communications with voting delegates.
Conference Registration Required. The voting delegate and alternates must be registered to attend the conference. They need not register for the entire conference; they may register for Friday only. Conference registration opens June 2.
For a city to cast a vote, one voter must be present at the General Assembly and in possession of the voting delegate card and voting tool. Voting delegates and Council Action Advised by September 1, 2026
alternates need to pick up their conference badges before signing in and picking up the voting delegate card at the voting delegate desk. This will enable them to receive the special sticker on their name badges that will admit the voting delegate into the voting area during the General Assembly.
Please view Cal Cities’ event and meeting policy in advance of the conference.
Transferring Voting Card to Non-Designated Individuals Not Allowed. The voting delegate card may be transferred freely between the voting delegate and alternates, but only between the voting delegate and alternates. If the voting delegate and alternates find themselves unable to attend the General Assembly, they may not transfer the voting card to another city official.
Seating Protocol during General Assembly. At the General Assembly, individuals with a voting card will sit in a designated area. Admission to the voting area will be limited to the individual in possession of the voting card and with a special sticker on their name badge identifying them as a voting delegate.
The voting delegate desk, located in the conference registration area of the Anaheim Convention Center, will be open at the following times: Wednesday, Sept. 23, 8:00 a.m.-6:00 p.m. and Thursday, Sept. 24, 7:30 a.m.-4:00 p.m. On Friday, Sept. 25, the voting delegate desk will be open at the General Assembly, starting at 7:30 a.m., but will be closed during roll calls and voting.
The voting procedures that will be used at the conference are attached to this memo.
Please share these procedures and this memo with your council and especially with the individuals that your council designates as your city’s voting delegate and alternates.
Once again, thank you for submitting your voting delegate and alternates by Tuesday, Sept. 1. If you have questions, please contact Zach Seals at [email protected].
Attachments:
• General Assembly Voting Guidelines
• Information Sheet: Cal Cities Resolutions and the General Assembly 1400 K Street, Suite 400, Sacramento, CA 95814 • 916.658.8200 • calcities.org General Assembly Voting Guidelines
1. One City One Vote. Each member city has a right to cast one vote on matters pertaining to Cal Cities policy.
2. Designating a City Voting Representative. Prior to the Cal Cities Annual Conference and Expo, each city council may designate a voting delegate and up to two alternates; these individuals are identified on the voting delegate form provided to the Cal Cities Credentials Committee.
3. Registering with the Credentials Committee. The voting delegate, or alternates, may pick up the city's voting card at the voting delegate desk in the conference registration area. Voting delegates and alternates must sign in at the voting delegate desk. Here they will receive a special sticker on their name badge and thus be admitted to the voting area at the General Assembly.
4. Signing Initiated Resolution Petitions. Only those individuals who are voting delegates (or alternates), and who have picked up their city’s voting card by providing a signature to the credentials committee at the voting delegate desk, may sign petitions to initiate a resolution.
5. Voting. To cast the city's vote, a city official must have in their possession the city's voting card and voting tool; and be registered with the credentials committee. The voting card may be transferred freely between the voting delegate and alternates but may not be transferred to another city official who is neither a voting delegate nor alternate.
6. Voting Area at General Assembly. At the General Assembly, individuals with a voting card will sit in a designated area. Admission to the voting area will be limited to the individual in possession of the voting card and with a special sticker on their name badge identifying them as a voting delegate.
7. Resolving Disputes. In case of dispute, the credentials committee will determine the validity of signatures on petitioned resolutions and the right of a city official to vote at the General Assembly.
Sixty days before the
Annual Conference
and Expo, Cal Cities
members may submit
policy proposals on
issues of importance
to cities. The resolution must
have the concurrence of at least
five additional member cities or
individual members.
How it works: Cal Cities
Resolutions and the General Assembly
General Assembly
General Resolutions Policy Committees
Developing League of California Cities policy is a dynamic process that engages a wide range of members to ensure Cal Cities represents cities with one voice. These policies directly guide Cal Cities’ advocacy to promote local decision-making, and lobby against statewide policies that erode local control.
The resolutions process and General Assembly is one way that city officials can directly participate in the development of Cal Cities policy. If a resolution is approved at the General Assembly, it becomes official Cal Cities policy. Here’s how resolutions and the General Assembly work.
The petitioned
resolution is an
alternate method
to introduce policy
proposals during
the annual conference. The
petition must be signed by
voting delegates from 10% of
member cities, and submitted to
the Cal Cities President at least
24 hours before the beginning
of the General Assembly.
Petitioned Resolutions
The Cal Cities
President assigns
general resolutions
to policy committees
where members
review, debate, and recommend
positions for each policy proposal.
Recommendations are forwarded
to the Resolutions Committee.
Who’s who
The Resolutions Committee
includes representatives
from each Cal Cities
diversity caucus, regional
division, municipal
department, and policy
committee, as well as
individuals appointed by
the Cal Cities president.
Voting delegates
are appointed by each
member city; every city
has one voting delegate.
The General Assembly is a
meeting of the collective
body of all voting
delegates —one from
every member city.
Seven policy committees
meet throughout the year
to review and recommend
positions to take on bills
and regulatory proposals.
Policy committees include
members from each Cal
Cities diversity caucus,
regional division, and
municipal department,
as well as individuals
appointed by the Cal
Cities president.
During the General Assembly, voting delegates
debate and consider general and petitioned
resolutions forwarded by the Resolutions
Committee. Potential Cal Cities bylaws
amendments are also considered at this meeting.
Cal Cities policy
development is a memberinformed process,
grounded in the voices and
experiences of city officials
throughout the state.
For more information visit www.calcities.org/general-assembly Prior to the Annual Conference and Expo
Resolutions Committee
The Resolutions
Committee considers
all resolutions. General
Resolutions approved1 by
either a policy committee
or the Resolutions Committee are next
considered by the General Assembly.
General resolutions not approved, or
referred for further study by both a
policy committee and the Resolutions
Committee do not go to the General
Assembly. All Petitioned Resolutions
are considered by the General
Assembly, unless disqualified.2
During the Annual Conference and Expo
1 The Resolution Committee can amend a general resolution prior to sending it to the General Assembly. 2 Petitioned Resolutions may be disqualified by the Resolutions Committee according to Cal Cities Bylaws Article VI. Sec. 5(f).
DISCUSSION AGENDA ITEM 1
SUPPORTING DOCUMENTATION ATTACHED
1. Discussion/Presentation regarding 2024 Water Rate Study & Budget Performance Technical Memorandum Issued by Rural Community Assistance Corporation (RCAC).
To: City Council, City of Trinidad
Prepared by: Samantha Ryan and Jessica Olson, Rural Community Assistance Corporation (RCAC) Date: July 8th, 2026
Subject: Water Fund Budget Review
Executive Summary
RCAC reviewed the City of Trinidad Water Fund’s current financial performance compared with the assumptions developed in the 2024 water rate study. Overall, the Water Fund appears to be in a stronger near-term position than originally projected, primarily due to reduced contract operator costs, supplemented by non-water sales revenue in FYE 2026 and unexpected connection fee revenue projected in FYE 2027. As a result, the General Fund loan assumed in the 2024 rate study is not expected to be necessary to balance the budget during the current planning period, barring an emergency or significant change in operating conditions.
The updated projections indicate that annual revenues are generally sufficient to cover operation and maintenance expenses through FYE 2030. However, the analysis also shows that the Water Fund is not expected to fully fund recommended operating, emergency, and capital reserves under the current rate schedule. While the Water Fund is projected to make a net transfer to reserves of approximately $96,946 from FYE 2025 through FYE 2031, the projected reserve funding shortfall over the same period is approximately $938,580.
Based on these findings, the City should continue annual budget monitoring, track reserve balances separately from annual operating performance, and begin planning for an updated water rate study in 2029. The next rate study should establish a new five-year rate schedule for FYE 2030 through FYE 2034 and evaluate whether additional reserve funding should be incorporated while maintaining consideration for customer affordability.
1. Purpose
1.1 Background
In May 2024, RCAC completed a 5-year water rate study for the City’s Water System. The rate study evaluated the financial sustainability of the utility and developed a 5-year financial plan designed to provide sufficient revenue for operations and maintenance as well as establish a modest reserve of $256,390 to minimize impact to customers.
A significant component of the financial plan relied on several operational assumptions intended to reduce long-term operating costs. The most notable assumption was the anticipated transition from contract operations to an in-house certified operator. Because operator expenses represented one of the system's largest operating costs, the projected savings from this transition played a key role in the development of the recommended revenue requirements and resulting rate adjustments.
Even with these expected cost reductions it was assumed that the Water Fund would need to receive a $300,000 payment from the General Fund. Additionally, a $250,000 General Fund Loan was expected to be needed through FYE 2026 – FYE 2029.
Recognizing that these assumptions would require implementation over time, RCAC recommended periodically reviewing actual financial performance to determine whether the utility remained on track with the financial projections contained in the rate study.
1.2 Purpose of this Memorandum
The purpose of this memorandum is to evaluate whether the Water Fund’s current financial performance remains consistent with the assumptions used in the 2024 rate study and to identify whether any budget, reserve, or future rate-planning adjustments should be considered. Specifically, this review assesses:
• Progress toward implementation of the operational assumptions included in the financial plan. • Actual operating revenues and expenditures.
• Significant deviations from projected budgets.
• The financial impact of those deviations.
• Whether the utility remains on track to achieve the financial objectives established in the rate study.
• Recommendations for maintaining long-term financial sustainability.
This review is intended to determine whether the assumptions used during the rate study remain reasonable or whether adjustments to future budgeting, operations, or rate planning should be considered.
2. Scope of Review
This review was limited to evaluating the financial assumptions contained in the 2024 rate study and comparing them with current operating conditions. The review is not intended to replace a comprehensive rate study or establish new water rates. The following information was reviewed as part of this assessment:
• FYE 2025 statement of revenue and expenditures
• FYE 2026 statement of revenue and expenditures through January 1st, 2026 • FYE 2026 and FYE 2027 operating budget
• Current contract operator costs
• Utility revenues
• Major operating expenses
• Discussions with utility staff and management regarding current operations and future plans
3. 2024 Rate Study Financial Plan
3.1 General Overview
During the 2024 water rate study, RCAC reviewed the water system’s actuals for FYE 2023 and the budget for FYE 2024 to determine projected revenue requirements of FYE 2025 – FYE 2029. These revenue requirements were used to develop the adopted rates.
City of Trinidad Water Rates in Resolution 2024-17
Standard Rates
2025 2026 2027 2028 2029
Base Rate $66.20 $72.82 $80.10 $88.11 $96.92
Rate per 100 CF $5.85 $6.44 $7.08 $7.79 $8.56
3.2 Revenues
The rate study projected that with the newly adopted rates, water sales revenue in FYE 2026 would be $420,903 and in FYE 2027 would be $464,550. The rate study did not use non-water sales revenue to balance the budget. To balance the budget, it was assumed that money would be gifted or borrowed from the general fund, noted in yellow on the table below. The general fund loans would gradually decrease over the planning period.
City of Trinidad Projected Water Fund Revenue from 2024 Rate Study Revenue 2025 2026 2027 2028 2029
Sales Revenue $381,353 $420,903 $464,550 $512,717 $565,871 Uncollectable Receivables -$763 -$842 -$929 -$1,025 -$1,132 Water Penalties $0 $0 $0 $0 $0
New Water Hook-ups $0 $0 $0 $0 $0
General Fund Contract Operator Payment $300,000 $0 $0 $0 $0 General Fund Loan $0 $100,000 $75,000 $50,000 $25,000
Total Revenue $680,590 $520,061 $538,621 $561,691 $589,740
3.3 Expenses
The financial projections developed during the 2024 rate study were based upon the best information available at the time and incorporated several planning assumptions intended to improve the utility's financial position over the study period. Major rate study assumptions included:
Contract Operations
The utility would transition from a contracted operations model to employing an in-house certified operator. This assumption was expected to reduce annual operating expenses while providing greater operational flexibility and local control over system operations.
The projected timing of this transition was anticipated to occur gradually over the 5 years of the financial plan. It was expected to transition from $140,000 to $35,000 in those 5 years.
Personnel Costs
An increase to salary, payroll taxes, employee benefits, workers' compensation, insurance, and other personnel-related costs associated with employing an in-house, Grade 3 Water Treatment Operator.
These projections were based on the City's adopted FYE 2024 Water Fund budget and assumed an annual 4% increase in personnel costs to account for inflation and the anticipated compensation needed to recruit and retain a Grade 3 operator. The analysis also assumed that the increase in operations staffing costs would be partially offset by reductions in personnel costs elsewhere within the Water Fund budget. Because the City's staffing plan had not yet been finalized, these assumptions were intended to serve as planning-level estimates rather than reflect finalized personnel decisions.
Operating Expenses
Operating costs such as electricity, treatment chemicals, laboratory testing, repairs and maintenance, insurance, administration, and regulatory compliance were escalated annually using a 4% inflation factor.
Reserve Funding
Annual contributions toward recommended operating, emergency, and capital reserves to improve the utility's long-term financial stability.
• Operating Reserve – Build 3 times the expenses that occur during a billing cycle over 10 years.
Which equates to $13,894 annually.
• Emergency Reserve – Build $10,000 over 10 years. Which equates to $1,000 annually. • Capital Reserves - Collect the annualized funding necessary to replace all assets at the end of their expected useful lives, if 6% of replacement costs will be funded with cash reserves, 84% with grant funding, and 10% with loan financing. Annual reserve contributions can range from $128,000 - $154,000 per year.
3.4 Financial Outlook under Rate Study Assumptions
The projected financial outlook was developed assuming:
• The above revenue and expense assumptions.
• Continued collection of existing service charges.
• Annual rate adjustments as recommended in the adopted rate schedule. • Collection efficiencies consistent with historical performance. • The following consumption adjustments:
Growth of Consumption over Base Year from 2024 Rate Study Consumption Factors 2025 2026 2027 2028 2029
Conservation Factor -5.0% -4.0% -3.0% -2.0% -1.0%
Community Growth Factor 0.2% 0.2% 0.2% 0.2% 0.2%
Total Consumption Adjustment -4.9% -3.9% -2.9% -1.9% -0.9% Financial Outlook from 2024 Rate Study
Category 2025 2026 2027 2028 2029
Expenses
Operating Expenses
Salaries & Benefits $254,564 $264,747 $275,337 $286,350 $297,804 O&M $101,244 $105,294 $109,506 $113,886 $118,441
Contracted Services $140,000 $100,000 $60,000 $47,500 $35,000 Special Services $28,600 $29,744 $30,934 $32,171 $33,458 –Insurance $14,801 $15,393 $16,009 $16,649 $17,315
Other Departments $9,360 $9,734 $10,124 $10,529 $10,950 Miscellaneous $7,176 $7,463 $7,762 $8,072 $8,395
Sub-Total Operating Expenses $555,746 $532,376 $509,671 $515,157 $521,364 Reserve Funding
Capital Reserves $152,264 $137,185 $131,326 $128,420 $127,359 O&M Reserve $13,894 $13,894 $13,894 $13,894 $13,894
Emergency Reserve $1,000 $1,000 $1,000 $1,000 $1,000
Debt Reserve $0 $0 $0 $0 $0
Debt Service Charge $0 $0 $0 $0 $0
Sub-Total Reserve Funding $167,158 $152,079 $146,220 $143,314 $142,252 Total Expenses $722,903 $684,454 $655,890 $658,471 $663,616 Revenue
Sales Revenue $381,353 $420,903 $464,550 $512,717 $565,871 Uncollectable Receivables $0 $0 $0 $0 $0
Water Penalties $0 $0 $0 $0 $0
New Water Hook-ups $(763) $(842) $(929) $(1,026) $(1,131) General Fund Contract
Operator Payment $300,000 $0 $0 $0 $0
General Fund Loan $0 $100,000 $75,000 $50,000 $25,000
Total Revenue $680,590 $520,061 $538,621 $561,691 $589,740 Net Transfer
to/(from) Reserves $124,845 $(12,314)1 $28,9501 $46,5341 $68,3761 Reserve Funding Shortfall $(42,313) $(164,393)1 $(117,270)1 $(96,780)1 $(73,876)1 5-Yr Net Transfer to/(from) Reserves (FYE 2025 – 2029) $256,390 1 5-Yr Reserve Funding Shortfall (FYE 2025 – 2029) $(494,632) 1 1 Includes general fund loan assumption
4. Current Financial Plan
4.1 General Overview
RCAC reviewed the City of Trinidad Water Fund’s actuals for FYE 2025 and FYE 2026 through January 31, 2026. After discussions with staff, staff further refined the expected expenses through June 30, 2026, using updated data through April 30, 2026.
This seceon reviews changes in revenues and expenses and assesses the Water Fund’s ability to maintain financial sustainability without relying on a General Fund loan.
4.2 Revenues
Water sales in FYE 2025 were consistent with the projections included in the rate study. As anticipated, a $300,000 General Fund contribution was needed to balance the budget.
In FYE 2026, the City elected to use non-water sales revenue to help offset Water Fund expenses and balance the budget. This included $40,000 in Measure Z revenue, which increased reported revenues for the year; however, the funding was used immediately for treatment plant equipment replacement and should not be viewed as an ongoing revenue source.
Although the City’s adopted FYE 2027 Water Fund budget also relies on non-water sales revenue to help balance the budget, this analysis excludes non-water sales revenue for FYE 2027 through FYE 2031.
In FYE 2027, the Water Fund is also projected to receive $60,000 in connection fee revenue. Because connection fees are one-time, non-recurring revenues and are not typically available on an annual basis, this revenue helps balance the FYE 2027 budget but should not be relied upon as an ongoing funding source.
City of Trinidad’s Current Projected Water Fund Revenue Category 2025 2026 2027 2028 2029 2030 2031
Revenue
Sales Revenue
(Base + Usage) $383,419 $420,903 $464,550 $512,717 $565,871 $565,871 $565,871 Uncollectable
Receivables -$9,879 -$842 -$929 -$1,025 -$1,132 -$1,132 -$1,132 Connection Fees $0 $0 $60,000 $0 $0 $0 $0
Interest $0 $12,000 $0 $0 $0 $0 $0
Late Fees $0 $13,000 $0 $0 $0 $0 $0
Misc. $360 $500 $0 $0 $0 $0 $0
Measure Z $0 $40,000 $0 $0 $0 $0 $0
General Fund Contract
Operator Payment $300,000 $0 $0 $0 $0 $0 $0
General Fund Loan $0 $0 $0 $0 $0 $0 $0
Total Revenue $673,900 $485,561 $546,621 $511,691 $564,740 $564,740 $564,740
4.3 Expenses
The financial projections in this section were based upon the best information available at the time and incorporated several planning assumptions to best determine the financial projections and the need to use non-water sales revenue or general funds to balance the budget. Major assumptions included:
Contract Operations
The City was able to move away from using contracted operator services earlier than assumed in the rate study. As of June 2026, the City now has an in-house T3 operator. Contracted services were expected to be $100,000 in FYE 2026, but the City was able to reduce this amount to $96,000.
Contracted services were expected to be $60,000 in FYE 2027, but the City is now expected to spend only $37,500. Similar costs are expected in FYE 2028 and FYE 2029.
Personnel Costs
Salaries and benefits are lower than expected due to unfilled positions and the way certain benefits are based on prior-year salaries. Salaries are expected to increase by 16% in FYE 2027, with some benefits reflecting that increase in FYE 2028. In other years, workers’ compensation and medical insurance are assumed to increase by 4% annually for inflation.
Operations and Maintenance Expenses
O&M costs such as electricity, treatment chemicals, laboratory testing, repairs and maintenance, insurance, administration, and regulatory compliance were escalated annually using a 4% inflation factor.
Contracted Services - 2024 Rate Study Comparison to Current Financial Plan Expenses 2025 2026 2027 2028 2029 2030 2031
2024
Rate
Study
Contracted
Services $140,000 $100,000 $60,000 $47,500 $35,000 Not projected Not
projected
Current
Financial
Plan
Contracted
Services $146,509 $96,000 $37,500 $39,000 $40,560 $42,182 $43,870 Salaries and Benefits - 2024 Rate Study Comparison to Current Financial Plan Expenses 2025 2026 2027 2028 2029 2030 2031
2024
Rate
Study
Salaries &
Benefits $254,564 $264,747 $275,337 $286,350 $297,804
Not
projected
Not
projected
Current
Financia
l Plan
Salaries &
Benefits $205,809 $212,723 $277,769 $292,916 $304,633 $316,818 $329,491 Total Operating Expenses
Expenses in FYE 2025 and 2026 were higher than what was expected in the rate study. This was due to increased expenses related to material, supplies, and equipment. This included a large leak repair and treatment plant equipment replacement that was funded through Measure Z. Expenses in FYE 2027 are expected to decrease due to reasons such as discontinuing contracted operator services, successfully hiring an in-house T3 Operator, and successful project completion through Measure Z funding.
Reserve Funding
While the same reserve funding from the rate study is recommended, it is not expected that the Water Fund will fully fund reserves with the current rates.
4.4 Financial Outlook under Current Financial Conditions The projected financial outlook was developed assuming:
• The above revenue and expense assumptions
• Continued collection of existing service charges that existed during the 2024 rate study. • The 10 new connections projected base rates and usage are not included, if these are average ¾ inch meters this could add approximately $8,400 in revenue annually. • Annual rate adjustments as recommended in the adopted rate schedule. • Collection efficiencies consistent with historical performance. • The following consumption adjustments:
Current Assumed Growth of Consumption
Consumption Factors 2025 2026 2027 2028 2029 2030 2031
Conservation Factor -5.0% -4.0% -3.0% -2.0% -1.0% -1.0% -1.0% Community Growth Factor 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% O&M - 2024 Rate Study Comparison to Current Financial Plan Expenses 2025 2026 2027 2028 2029 2030 2031
2024
Rate
Study
O&M $101,244 $105,294 $109,506 $113,886 $118,441 Not
projected
Not
projected
Current
Financial
Plan
O&M $132,652 $161,942 $99,970 $103,969 $108,128 $112,453 $116,951 Annual O&M Expenses 2024 Rate Study Comparison to Current Financial Plan Expenses 2025 2026 2027 2028 2029 2030 2031
2024
Rate
Study
Operating
Expenses $555,746 $532,376 $509,671 $515,157 $521,364 Not projected Not
projected
Current
Financial
Plan
Operating
Expenses $587,929 $541,842 $488,297 $511,865 $532,340 $553,634 $575,779 Current Assumed Growth of Consumption
Consumption Factors 2025 2026 2027 2028 2029 2030 2031
Total Consumption Adjustment -4.9% -3.9% -2.9% -1.9% -0.9% -0.9% -0.9% Current Financial Outlook
Categories 2025 2026 2027 2028 2029 2030 2031
Expenses
Operating Expenses
Salaries &
Benefits $205,809 $212,723 $277,769 $292,916 $304,633 $316,818 $329,491 O&M $132,652 $161,942 $99,970 $103,969 $108,128 $112,453 $116,951 Contracted
Services $146,509 $96,000 $37,500 $39,000 $40,560 $42,182 $43,870 Special
Services $12,595 $13,950 $14,500 $15,080 $15,683 $16,311 $16,963 Insurance $22,950 $26,882 $27,608 $28,712 $29,861 $31,055 $32,297 Other Depts. $12,538 $25,000 $25,000 $26,000 $27,040 $28,122 $29,246 Misc. $8,377 $5,345 $5,950 $6,188 $6,436 $6,693 $6,961
Depreciation $46,498 $0 $0 $0 $0 $0 $0
Sub-Total
Operating
Expenses
$587,929 $541,842 $488,297 $511,865 $532,340 $553,634 $575,779 Reserve Funding
Capital
Reserves $152,264 $137,185 $131,326 $128,420 $127,359 $127,359 $127,359 O&M Reserve $13,894 $13,894 $13,894 $13,894 $13,894 $13,894 $13,894 Emergency
Reserve $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 Debt Reserve $0 $0 $0 $0 $0 $0 $0
Debt Service
Charge $0 $0 $0 $0 $0 $0 $0
Sub-Total
Reserve
Funding
$167,158 $152,079 $146,220 $143,314 $142,252 $142,252 $142,252 Total Expenses $755,087 $693,921 $634,517 $655,179 $674,592 $695,886 $718,031 Revenue 2025 2026 2027 2028 2029 2030 2031
Sales Revenue
(Base + Usage) $383,419 $420,903 $464,550 $512,717 $565,871 $565,871 $565,871 Uncollectable
Receivables -$9,879 -$842 -$929 -$1,025 -$1,132 -$1,132 -$1,132 Connection
Fees $0 $0 $60,000 $0 $0 $0 $0
Interest $0 $12,000 $0 $0 $0 $0 $0
Late Fees $0 $13,000 $0 $0 $0 $0 $0
Current Financial Outlook
Categories 2025 2026 2027 2028 2029 2030 2031
Misc. $360 $500 $0 $0 $0 $0 $0
Measure Z $0 $40,000 $0 $0 $0 $0 $0
General Fund
Payment $300,000 $0 $0 $0 $0 $0 $0
General Fund
Loan $0 $0 $0 $0 $0 $0 $0
Total Revenue $673,900 $485,561 $546,621 $511,691 $564,740 $564,740 $564,740
Net Transfer
to/(from)
Reserves
$85,611 ($56,281)2 $35,3242 ($174)2 $32,3992 $11,106 ($11,039) Reserve
Funding
Shortfall
($81,546) ($209,173)2 ($110,896)2 ($143,488)2 ($109,853)2 ($131,146) ($153,292) 5-Yr Net Transfer to/(from) Reserves (FYE 2025-2029) $126,9292 5-Yr Reserve Funding Shortfall (FYE 2025-2029) ($760,122)2 7-Yr Net Transfer to/(from) Reserves (FYE 2025-2031) $96,9462 7-Yr Reserve Funding Shortfall (FYE 2025-2031) ($938,580)2
5. Financial Impact
Based on the financial analysis, the water system is projected to experience a budget shortfall of approximately $56,281 for the fiscal year ending 2026 before accounting for recommended reserve funding. This shortfall is shown after applying available non-water sales revenue to offset operating expenses. However, due to the net transfer to reserves in FYE 2025, the Water Fund should remain in the black. The rate study budget assumed a $100,000 General Fund loan in 2026; however, this analysis indicates that the loan is not necessary to balance annual operations.
From 2026 through 2030, projected revenues are generally sufficient to cover annual operation and maintenance (O&M) expenses while also allowing the utility to contribute approximately $22,374 total toward reserves. However, in FYE 2031, it is expected that the water sales will no longer be covering the annual O&M expenses. This may be alleviated by non-water sales revenue such as late fees and interest that were not included in this analysis from FYE 2027 – 2031.
Although the system is able to make reserve contributions of $96,946 over the 7-year period, it is projected the utility is $938,580 below the recommended reserve funding target, indicating that reserve levels will continue to be underfunded.
2 Does not include any general fund loan
To maintain the long-term financial sustainability of the water system and provide adequate time for implementation, the utility should plan to conduct a rate study in 2029 to establish a new 5-year rate schedule for FYE 2030 – FYE 2034 and consider increasing reserve contributions at that time. If the City does not implement an updated rate schedule beginning in FYE 2030, it is expected that rates will no longer cover basic annual O&M costs.
6. Recommendations
In summary, the Water Fund appears able to avoid the General Fund loan assumed in the 2024 rate study under current conditions; however, the Fund remains unable to fully fund recommended reserves under the current rate schedule.
RCAC recommends the City of Trinidad’s Council and Water Department:
• Continue to be transparent - Successful utilities are those that are transparent to their customers regarding their day-to-day operations, including successes and struggles. Promote your services to your customers and continuously educate them on why it is necessary to raise and adjust rates. • Continue Monitoring Financials Annual Annually - Review revenues versus expenditures every year to ensure that the rates cover all costs to the system. • Continue to Evaluate Cost-Saving Opportunities – Successful utilities regularly review operating expenses to identify opportunities to improve efficiency and reduce costs without compromising service levels. Small savings achieved through budgeting, purchasing, operations, and maintenance can accumulate over time and help support long-term financial sustainability. • Pursue Additional Revenue Opportunities – Continue seeking grants, low-interest financing, and other non-water-sales revenue opportunities, and ensure reserve funds are maintained in interest-bearing accounts whenever feasible. Diversifying revenue sources and maximizing earnings on existing funds can help improve long-term financial stability. • Maintain Healthy Reserves - The utility should establish a minimum reserve target for operating, emergency, and capital improvement reserves, currently this amount would be $276,940. If unrestricted reserve balances exceed approximately 150% of this target ($415,410) for two consecutive fiscal years, the Board should evaluate whether reserve contributions or water rates should be adjusted based on updated capital needs and financial projections. • Plan for the Next Rate Study – Water rate studies are typically updated every five years. However, the utility should consider updating its rate study sooner if significant changes occur to its financial condition or operations, including:
o Actual revenues or operating expenses differ from projections by 10–15% for two consecutive fiscal years.
o Major capital improvements, debt financing, or grant funding significantly change the utility's financial needs.
o Significant changes occur in customer demand, operating conditions, or regulatory requirements.
o The governing body wishes to modify its reserve funding or affordability objectives. o General best practice also recommends updating a rate study if planned reserve contributions cannot be fully funded for two consecutive fiscal years. However, for the City of Trinidad, this condition alone is not recommended as a trigger at this time because the Council has intentionally prioritized customer affordability over fully funding the recommended reserve contributions.
7. Conclusion
Based on the updated budget review, the City of Trinidad Water Fund the is in a stronger near-term position than originally projected due to reduced contract operator costs, the inclusion of non-water sales revenue in FYE 2026, and unexpected connection fee revenue projected in FYE 2027. However, this improved operating position does not fully resolve the Water Fund’s long-term reserve funding needs.
The updated projections continue to show that, under the current rate schedule, the Water Fund is not expected to fully fund recommended operating, emergency, and capital reserves.
Importantly, the updated outlook indicates that the Water Fund has stabilized its near-term operating position. With annual revenues now generally sufficient to cover operating costs, the next rate study can shift from addressing immediate budget gaps to focusing more directly on long-term reserve funding, capital replacement needs, and overall financial resiliency.
Appendix A: Detailed Financial Outlook under Current Financial Conditions Acct Description FYE 2025
Actuals
FYE 2026
(Projected
Actuals)
FYE 2027
(Projected)
FYE 2028
(Projected)
FYE 2029
(Projected)
FYE 2030
(Projected)
FYE 2031
(Projected)
Expenses
Operating Expenses
Employee Gross Wage $191,793 $175,665 $204,516 $212,697 $221,205 $230,053 $239,255 Fringe benefits $3,008 $1,377 $2,376 $2,471 $2,570 $2,673 $2,780 Deferred retirement $14,662 $12,308 $18,804 $19,556 $20,338 $21,152 $21,998 Medical insurance and expense $19,806 $27,000 $26,889 $31,191 $32,439 $33,736 $35,086 Health savings program $837 $1,200 $1,351 $1,405 $1,461 $1,520 $1,580 Workmen's comp insurance $6,030 $7,200 $6,749 $7,829 $8,142 $8,468 $8,806 Payroll tax $15,997 $14,474 $17,084 $17,767 $18,478 $19,217 $19,986 Grant payroll allocation -$46,323 -$26,500 $0 $0 $0 $0 $0 Crime bond $665 $745 $782 $813 $846 $880 $915
Insurance - liability $17,831 $20,311 $21,000 $21,840 $22,714 $23,622 $24,567 Property & casualty $4,454 $5,826 $5,826 $6,059 $6,301 $6,553 $6,816 Attorney-administrative tasks $0 $0 $500 $520 $541 $562 $585 City engineer-admin. Tasks $2,640 $1,500 $3,500 $3,640 $3,786 $3,937 $4,095 Engineer-special projects $0 $0 $5,000 $5,200 $5,408 $5,624 $5,849 City planner-admin. Tasks $52 $12,500 $5,000 $5,200 $5,408 $5,624 $5,849 Accountant-admin tasks $9,847 $11,000 $11,000 $11,440 $11,898 $12,374 $12,868 Auditor-financial reports $12,113 $13,000 $13,000 $13,520 $14,061 $14,623 $15,208 Bad debts $885 $550 $100 $104 $108 $112 $117
Financial advisor/tech support $483 $950 $1,500 $1,560 $1,622 $1,687 $1,755 Utilities $24,468 $24,000 $24,000 $24,960 $25,958 $26,997 $28,077 Acct Description FYE 2025
Actuals
FYE 2026
(Projected
Actuals)
FYE 2027
(Projected)
FYE 2028
(Projected)
FYE 2029
(Projected)
FYE 2030
(Projected)
FYE 2031
(Projected)
Dues & membership $855 $980 $1,000 $1,040 $1,082 $1,125 $1,170 Municipal/update expense $1,930 $165 $250 $260 $270 $281 $292 Office supplies & expense $3,146 $2,750 $3,500 $3,640 $3,786 $3,937 $4,095 Bank charges $0 $0 $100 $104 $108 $112 $117
Training / education $1,561 $900 $1,000 $1,040 $1,082 $1,125 $1,170 Contracted services $146,509 $96,000 $37,500 $39,000 $40,560 $42,182 $43,870 Telephone $4,392 $4,211 $4,000 $4,160 $4,326 $4,499 $4,679 Cable & internet service $743 $743 $780 $811 $844 $877 $912 Travel $595 $0 $0 $0 $0 $0 $0
Licenses & fees $4,762 $5,500 $6,000 $6,240 $6,490 $6,749 $7,019 Vehicle fuel & oil $5,456 $6,000 $6,500 $6,760 $7,030 $7,312 $7,604 Vehicle repairs $0 $1,500 $2,500 $2,600 $2,704 $2,812 $2,925 Building repairs & maintenance $1,125 $440 $3,500 $3,640 $3,786 $3,937 $4,095 Security system $2,255 $548 $550 $572 $595 $619 $643
Materials, supplies & equipment $8,927 $49,000 $3,640 $3,786 $3,937 $4,095 $4,258 Equipment repairs & maintenance $28,568 $19,500 $10,000 $10,400 $10,816 $11,249 $11,699 Community safety programs $293 $0 $0 $0 $0 $0 $0
Water lab fees $14,551 $12,000 $8,500 $8,840 $9,194 $9,561 $9,944 Water plant chemicals $9,818 $11,500 $10,500 $10,920 $11,357 $11,811 $12,284 Water line repair $20,655 $23,000 $15,000 $15,600 $16,224 $16,873 $17,548 Water plant repair $6,043 $4,000 $4,500 $4,680 $4,867 $5,062 $5,264 Depreciation $46,498 $0 $0 $0 $0 $0 $0
Sub-Total Operating Expenses $587,929 $541,842 $488,297 $511,865 $532,340 $553,634 $575,779 Reserve Funding
Acct Description FYE 2025
Actuals
FYE 2026
(Projected
Actuals)
FYE 2027
(Projected)
FYE 2028
(Projected)
FYE 2029
(Projected)
FYE 2030
(Projected)
FYE 2031
(Projected)
Capital Reserves $152,264 $137,185 $131,326 $128,420 $127,359 $127,359 $127,359 O&M Reserve $13,894 $13,894 $13,894 $13,894 $13,894 $13,894 $13,894 Emergency Reserve $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 Debt Reserve $0 $0 $0 $0 $0 $0 $0
Debt Service Charge $0 $0 $0 $0 $0 $0 $0
Sub-Total Reserve Funding $167,158 $152,079 $146,220 $143,314 $142,252 $142,252 $142,252 Total Expenses $755,087 $693,921 $634,517 $655,179 $674,592 $695,886 $718,031 Revenue FYE 2025
Actuals
FYE 2026
(Projected
Actuals)
FYE 2027
(Projected)
FYE 2028
(Projected)
FYE 2029
(Projected)
FYE 2030
(Projected)
FYE 2031
(Projected)
Sales Revenue (Base + Usage) $383,419 $420,903 $464,550 $512,717 $565,871 $565,871 $565,871 Uncollectable Receivables -$9,879 -$842 -$929 -$1,025 -$1,132 -$1,132 -$1,132 Connection Fees $0 $0 $60,000 $0 $0 $0 $0
Interest $0 $12,000 $0 $0 $0 $0 $0
Late Fees $0 $13,000 $0 $0 $0 $0 $0
Misc. $360 $500 $0 $0 $0 $0 $0
General Fund Contract Operator
Payment $300,000 $0 $0 $0 $0 $0 $0
General Fund Loan $0 $0 $0 $0 $0 $0 $0
Total Revenue $373,900 $485,561 $523,621 $511,691 $564,740 $564,740 $564,740 Net Transfer to/(from) Reserves $85,611 ($56,281)2 $35,3232 ($174)2 $32,3992 $11,106 ($11,039) Reserve Funding Shortfall ($81,546) ($208,359)2 ($110,896)2 ($143,488)2 ($109,853)2 ($131,146) ($153,292)
Acct Description FYE 2025
Actuals
FYE 2026
(Projected
Actuals)
FYE 2027
(Projected)
FYE 2028
(Projected)
FYE 2029
(Projected)
FYE 2030
(Projected)
FYE 2031
(Projected)
5-Yr Net Transfer to/(from) Reserves (FYE 2025-2029) $126,9292 5-Yr Reserve Funding Shortfall (FYE 2025-2029) ($760,122)2 7-yr Net Transfer to/(from) Reserves (FYE 2025-2031) $96,9462 7-yr Reserve Funding Shortfall (FYE 2025-2031) ($938,580) 2 DISCUSSION AGENDA ITEM 2
SUPPORTING DOCUMENTATION SUBMITTED
2. Discussion/Presentation regarding FY2025 Audit Report Audit Prepared by JJACPA
CITY OF TRINIDAD
COMMUNICATION WITH THOSE CHARGED WITH GOVERNANCE AND
COMMUNICATION OF INTERNAL CONTROL RELATED MATTERS
JUNE 30, 2025
7080 Donlon Way, Suite 204, Dublin, CA 94568 ● phone (925) 556-6200 ● fax: (707) 232-6226 1102 South Main Street, #1, Fort Bragg, CA 95437 ● phone (707) 964-6325 www.jjacpa.com
June 29, 2026
City Council
City of Trinidad
Trinidad, California
We have audited the basic financial statements of the City of Trinidad (City) as of and for the year ended June 30, 2025 and have issued our report thereon dated June 29, 2026. Professional standards require that we advise you of the following matters relating to our audit.
Our Responsibility in Relation to the Financial Statement Audit As communicated in our engagement letter dated October 10, 2025, our responsibility, as described by professional standards, is to form and express opinions about whether the financial statements that have been prepared by management with your oversight are presented fairly, in all material respects, in conformity with accounting principles generally accepted in the United States of America. Our audit of the financial statements does not relieve you or management of your respective responsibilities.
Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain reasonable, rather than absolute, assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, as part of our audit, we considered the internal control of the City solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control.
We are also responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process.
However, we are not required to design procedures for the purpose of identifying other matters to communicate to you.
Planned Scope and Timing of the Audit
We conducted our audit consistent with the planned scope and timing we previously communicated to you.
Compliance with All Ethics Requirements Regarding Independence The engagement team, others in our firm, as appropriate, and our firm has complied with all relevant ethical requirements regarding independence.
Qualitative Aspects of the Entity’s Significant Accounting Practices Significant Accounting Policies
Management has the responsibility to select and use appropriate accounting policies. A summary of the significant accounting policies adopted by the City is included in Note 1 to the financial statements.
There have been no initial selection of accounting policies and no changes in significant accounting policies or their application during 2024-25. No matters have come to our attention that would require us, under professional standards, to inform you about (1) the methods used to account for significant unusual transactions and (2) the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus.
Significant Accounting Estimates
Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s current judgments. Those judgments are normally based on knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ markedly from management’s current judgments
The most sensitive accounting estimates affecting the financial statements are useful lives of capital assets (“useful lives”).
Management’s estimate of the useful lives is based on experience with and observation of capital assets, by category (e.g. infrastructure) as well as industry standards, when applicable (i.e. buildings).
We evaluated the key factors and assumptions used to develop the useful lives and determined that it is reasonable in relation to the basic financial statements taken as a whole and in relation to the applicable opinion units.
Financial Statement Disclosures
Certain financial statement disclosures involve significant judgment and are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the City’s financial statements relate to commitments and contingencies.
Significant Difficulties Encountered during the Audit
We encountered no significant difficulties in dealing with management relating to the performance of the audit.
Uncorrected and Corrected Misstatements
For purposes of this communication, professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that we believe are trivial, and communicate them to the appropriate level of management. Further, professional standards require us to also communicate the effect of uncorrected misstatements related to prior periods on the relevant classes of transactions, account balances or disclosures, and the financial statements as a whole and each applicable opinion unit. Management has corrected all identified misstatements
In addition, professional standards require us to communicate to you all material, corrected misstatements that were brought to the attention of management as a result of our audit procedures.
None of the misstatements identified by us as a result of our audit procedures and corrected by management were material, either individually or in the aggregate, to the financial statements taken as a whole or applicable opinion units.
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter, which could be significant to the City’s financial statements or the auditor’s report. No such disagreements arose during the course of the audit.
Representations Requested from Management
We have requested certain written representations from management, which are included in an attached letter dated June 29, 2026.
Management’s Consultations with Other Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting matters. Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing and accounting matters.
Other Significant Findings or Issues
In the normal course of our professional association with the City, we generally discuss a variety of matters, including the application of accounting principles and auditing standards, operating and regulatory conditions affecting the City, and operational plans and strategies that may affect the risks of material misstatement. None of the matters discussed resulted in a condition to our retention as the City’s auditors.
Communication of Internal Control Related Matters
In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified.
This report is intended solely for the information and use of the City Council and management of the City and is not intended to be and should not be used by anyone other than these specified parties.
Very truly yours,
]ÉáxÑ{ ] TÜv{?VcT
JOSEPH J ARCH, CPA
President/CEO
JJACPA, INC.
June 29, 2026
JJACPA, Inc.
7080 Donlon Way, Suite 204
Dublin, CA 94568
This representation letter is provided in connection with your audit of financial statements of the governmental activities, business-type activities, each major fund, the aggregate remaining fund information, and the budgetary comparison information of the City of Trinidad(City) as of June 30, 2025 and for the year then ended, and the related notes to the financial statements, for the purpose of expressing opinions on whether the basic financial statements present fairly, in all material respects, the financial position, results of operations, and cash flows, where applicable, of the various opinion units of the City in conformity with accounting principles generally accepted for governments in the United States of America (U.S. GAAP).
Certain representations in this letter are described as being limited to matters that are material.
Items are considered material, regardless of size, if they involve an omission or misstatement of accounting information that, in the light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information would be changed or influenced by the omission or misstatement.
We confirm that, to the best of our knowledge and belief, having made such inquiries as we considered necessary for the purpose of appropriately informing ourselves as of June 29, 2026:
Financial Statements
• We have fulfilled our responsibilities, as set out in the terms of the audit engagement dated October 10, 2025, for the preparation and fair presentation of the financial statements of the various opinion units referred to above in accordance with U.S. GAAP. • We acknowledge our responsibility 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. • We acknowledge our responsibility for the design, implementation, and maintenance of internal control to prevent and detect fraud.
• We acknowledge our responsibility for compliance with the laws, regulations, and provisions of contracts and grant agreements.
• We have reviewed, approved, and taken responsibility for the financial statements and related notes.
• We have a process to track the status of audit findings and recommendations. • We have identified and communicated to you all previous audits, attestation engagements, and other studies related to the audit objectives and whether related recommendations have been implemented.
• Significant assumptions used by us in making accounting estimates, including those measured at fair value, are reasonable.
• Related party relationships and transactions have been appropriately accounted for and disclosed in accordance with the requirements of U.S. GAAP. • All events subsequent to the date of the financial statements and for which U.S. GAAP requires adjustment or disclosure have been adjusted or disclosed. • The effects of all known actual or possible litigation and claims have been accounted for and disclosed in accordance with U.S. GAAP.
• All component units, as well as joint ventures with an equity interest, are included and other joint ventures and related organizations are properly disclosed. • All funds and activities are properly classified.
• All funds that meet the quantitative criteria in GASB Statement No. 34, Basic Financial Statements—and Management's Discussion and Analysis—for State and Local Governments, and GASB Statement No. 37, Basic Financial Statements—and Management's Discussion and Analysis—for State and Local Governments: Omnibus as amended, for presentation as major are identified and presented as such and all other funds that are presented as major are considered important to financial statement users. • All components of net position, nonspendable fund balance, and restricted, committed, assigned, and unassigned fund balance are properly classified and, if applicable, approved. • Our policy regarding whether to first apply restricted or unrestricted resources when an expense is incurred for purposes for which both restricted and unrestricted net position/fund balance are available is appropriately disclosed and net position/fund balance is properly recognized under the policy.
• All revenues within the statement of activities have been properly classified as program revenues, general revenues, contributions to term or permanent endowments, or contributions to permanent fund principal.
• All expenses have been properly classified in or allocated to functions and programs in the statement of activities, and allocations, if any, have been made on a reasonable basis. • All interfund and intra-entity transactions and balances have been properly classified and reported.
• Special items and extraordinary items have been properly classified and reported. • Deposit and investment risks have been properly and fully disclosed. • Capital assets, including infrastructure assets, are properly capitalized, reported, and if applicable, depreciated.
• All required supplementary information is measured and presented within the prescribed guidelines.
• With regard to investments and other instruments reported at fair value:
- The underlying assumptions are reasonable and they appropriately reflect management’s intent and ability to carry out its stated courses of action. - The measurement methods and related assumptions used in determining fair value are appropriate in the circumstances and have been consistently applied. - The disclosures related to fair values are complete, adequate, and in conformity with U.S. GAAP.
- There are no subsequent events that require adjustments to the fair value measurements and disclosures included in the financial statements.
Information Provided
• We have provided you with:
- Access to all information, of which we are aware that is relevant to the preparation and fair presentation of the financial statements of the various opinion units referred to above, such as records, documentation, meeting minutes, and other matters; - Additional information that you have requested from us for the purpose of the audit; and
- Unrestricted access to persons within the entity from whom you determined it necessary to obtain audit evidence.
• All transactions have been recorded in the accounting records and are reflected in the financial statements.
• We have disclosed to you the results of our assessment of the risk that the financial statements may be materially misstated as a result of fraud. • We have no knowledge of any fraud or suspected fraud that affects the entity and involves:
- Management;
- Employees who have significant roles in internal control; or - Others where the fraud could have a material effect on the financial statements. • We have no knowledge of any allegations of fraud, or suspected fraud, affecting the entity’s financial statements communicated by employees, former employees, vendors, regulators, or others.
• We are not aware of any pending or threatened litigation and claims whose effects should be considered when preparing the financial statements.
• We have disclosed to you the identity of the entity’s related parties and all the related party relationships and transactions of which we are aware.
• There have been no communications from regulatory agencies concerning noncompliance with or deficiencies in accounting, internal control, or financial reporting practices. • The City has no plans or intentions that may materially affect the carrying value or classification of assets and liabilities.
• We have disclosed to you all guarantees, whether written or oral, under which the City is contingently liable.
• We have disclosed to you all significant estimates and material concentrations known to management that are required to be disclosed in accordance with GASB Statement No. 62 (GASB-62), Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements. Significant estimates are estimates at the balance sheet date that could change materially within the next year.
Concentrations refer to volumes of business, revenues, available sources of supply, or markets or geographic areas for which events could occur that would significantly disrupt normal finances within the next year.
• We have identified and disclosed to you the laws, regulations, and provisions of contracts and grant agreements that could have a direct and material effect on financial statement amounts, including legal and contractual provisions for reporting specific activities in separate funds.
• There are no:
- Violations or possible violations of laws or regulations, or provisions of contracts or grant agreements whose effects should be considered for disclosure in the financial statements or as a basis for recording a loss contingency, including applicable budget laws and regulations.
- Unasserted claims or assessments that our lawyer has advised are probable of assertion and must be disclosed in accordance with GASB-62.
- Other liabilities or gain or loss contingencies that are required to be accrued or disclosed by GASB-62
• The City has satisfactory title to all owned assets, and there are no liens or encumbrances on such assets nor has any asset or future revenue been pledged as collateral, except as disclosed to you.
• We have complied with all aspects of grant agreements and other contractual agreements that would have a material effect on the financial statements in the event of noncompliance.
To the best of our knowledge and belief, no events have occurred subsequent to the balance sheet date and through the date of this letter that would require adjustment to or disclosure in the aforementioned financial statements.
Gabriel Adams
City Clerk/Interim City Manager
Monday, July 13, 2026
CITY OF TRINIDAD, CALIFORNIA
ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED
JUNE 30, 2025
This page intentionally left blank.
City of Trinidad, California
Basic Financial Statements
For the year ended June 30, 2025
Table of Contents
i
Page
Table of Contents .................................................................................................................................. i List of Officials ................................................................................................................................... iii Independent Auditors’ Report ........................................................................................................... 1 Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net Position .......................................................................................................... 7 Statement of Activities .............................................................................................................. 8 Fund Financial Statements:
Governmental Funds
Balance Sheet ................................................................................................................................ 12 Reconciliation of Governmental Funds Balance Sheet to the Statement of Net Position ........................................................................................................ 13 Reconciliation of Fund Basis Balance Sheet to Government-wide Statement of Net Position – Governmental Activities ............................................................. 14 Statement of Revenues, Expenditures, and Changes
in Fund Balances – Governmental Funds ................................................................................ 15 Reconciliation of Fund Basis Statements to Government-wide Statement of Activities ............................................................................................................ 16 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities ............................... 17 Statement of Revenues, Expenditures, and Changes in
Fund Balances - Budget to Actual – General Fund and
Major Special Revenue Funds ................................................................................................. 18
INTRODUCTORY SECTION
FINANCIAL SECTION
City of Trinidad, California
Basic Financial Statements
For the year ended June 30, 2025
Table of Contents, Continued
ii
Page
Basic Financial Statements, Continued:
Fund Financial Statements, Continued:
Proprietary Funds:
Statement of Net Position – Proprietary Funds ............................................................................ 20 Statement of Revenues, Expenses, and Changes in Fund Net Position – Proprietary Funds ............................................................................................................... 21 Statement of Cash Flows – Proprietary Funds ............................................................................. 22 Notes to Basic Financial Statements .......................................................................................... 27 Other Supplemental Information:
Combining and Individual Fund Financial Statements and Schedules:
Nonmajor Governmental Funds:
Combining Balance Sheet ............................................................................................................. 50 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ............................................................................................................... 54 Nonmajor Special Revenue Funds:
Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget to Actual – Integrated Waste Management ........................................................... 58 Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget to Actual – COPS Program ................................................................................... 59 Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget to Actual – State Gas Tax Fund ............................................................................ 60 Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget to Actual – Transportation Development Agency ................................................ 61 Schedule of Revenues, Expenditures, and Changes in Fund Balances –
Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ....................................................................... 63 City of Trinidad, California
Basic Financial Statements
For the year ended June 30, 2025
List of Officials
iii
Cheryl Kelly, Mayor
Bryce Kenny, Mayor Pro Tem
John Waskiewicz, Member
Kati Breckenridge, Member
Jack Tuttle, Member
Gabriel Adams, City Clerk/Interim City Manager
CITY COUNCIL
CITY OFFICIALS
iv
This page intentionally left blank.
7080 Donlon Way, Suite 204, Dublin, CA 94568 ● phone (925) 556-6200 ● fax: (707) 232-6226 1102 South Main Street, #1, Fort Bragg, CA 95437 ● phone (707) 964-6325 www.jjacpa.com
INDEPENDENT AUDITOR’S REPORT
To the Honorable Mayor and City Council
of the City of Trinidad
Trinidad, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Trinidad (City), as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise City’s basic financial statements as listed in the table of contents.
In our opinion, the accompanying financial statements present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2025, and the respective changes in financial position and, where applicable, cash flows thereof and the respective budgetary comparison for the General Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Responsibilities of Management for the Financial Statements The City’s management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
To the Honorable Mayor and City Council
of the City of Trinidad
Trinidad, California
Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions.
Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control–related matters that we identified during the audit.
Required Supplementary Information
Management has omitted management’s discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information..
Supplementary Information
Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise the City of Trinidad’s basic financial statements. The combining nonmajor fund financial statements are presented for purposes of additional analysis and are not a required part of the financial statements.
To the Honorable Mayor and City Council
of the City of Trinidad
Trinidad, California
The combining funds financial statements on pages 50-61 are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements.
The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole.
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated June 29, 2026 on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of 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’s internal control over financial reporting and compliance.
]]TVcT? \ÇvA
June 29, 2026 JJACPA, Inc.
Dublin, CA
4 This page intentionally left blank
BASIC FINANCIAL STATEMENTS
5 This page intentionally left blank.
6 City of Trinidad, California
Statement of Net Position
June 30, 2025
Governmental Business-type
Activities Activities Total
ASSETS
Current assets:
Cash and investments $ 142,276 883,551 $ 1,025,827 $
Receivables 290,245 1,989,018 2,279,263
Internal balances 953,230 (953,230) -
Total current assets 2,127,026 1,178,064 3,305,090
Noncurrent assets:
Capital assets:
Nondepreciable 43,778 25,090 68,868
Depreciable 2,368,091 1,069,495 3,437,586
Total noncurrent assets 2,411,869 1,094,585 3,506,454
Total assets 4,538,895 2,272,649 6,811,544
LIABILITIES
Accounts payable 123,143 1,135,868 1,259,011
Accrued expenses 5,010 5,636 10,646
Customer deposits - 2,980 2,980
Compensated absences 40,051 26,283 66,334
Total liabilities 168,204 1,170,767 1,338,971
NET POSITION
Net investment in capital assets 2,411,869 1,094,585 3,506,454 Restricted 418,711 270,000 688,711
Unrestricted (deficit) 1,540,111 (262,703) 1,277,408
Total net position 4,370,691 1,101,882 5,472,573
Total liabilities and net position $ 4,538,895 $ 2,272,649 $ 6,811,544 The accompanying notes are an integral part of these basic financial statements. 7 City of Trinidad, California
Statement of Activities
For the year ended June 30, 2025
Operating Capital
Charges for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions Primary government:
Governmental activities:
General government $ 75,288 797,151 $ 29,539 $ - $
Public safety 795 184,392 - 175,332
Public works/streets 1,153,459 11,323 82,149 76,848
Total governmental activities 2,125,942 87,406 296,080 76,848 Business-type activities:
Water utility 383,781 3,935,838 - 2,896,432
Cemetery 13,390 21,795 - -
Total business-type activities 3,957,633 397,171 - 2,896,432 Total primary government $ 484,577 6,083,575 $ 296,080 $ 2,973,280 $ General revenues:
Taxes:
Property taxes
Sales tax
Transient occupancy tax
Motor vehicle in-lieu fees
Use of property
Investment earnings
Other general revenues
Transfers
Total general revenues and transfers
Change in net position
Net position:
Beginning of year
End of year
Program Revenues
The accompanying notes are an integral part of these basic financial statements. 8 Governmental Business-Type
Activities Activities Totals
$ (692,324) $ - $ (692,324)
9,855 - 9,855
(983,139) - (983,139)
(1,665,608) (1,665,608) -
- (655,625) (655,625)
- (8,405) (8,405)
- (664,030) (664,030)
$ (1,665,608) $ (664,030) $ (2,329,638)
140,362 $ - $ 140,362
413,441 - 413,441
286,480 - 286,480
42,809 - 42,809
50,676 - 50,676
56,865 2,771 59,636
6,084 - 6,084
(300,000) 300,000 -
696,717 302,771 999,488
(968,891) (361,259) (1,330,150)
5,339,582 1,463,141 6,802,723
$ 4,370,691 $ 1,101,882 $ 5,472,573
Net (Expense) Revenue and
Changes in Net Position
9 This page intentionally left blank.
10 Fund
Governmental Funds:
General Fund
HSIP Street Improvements To account for funds received from the Highway Safety Improvement Program (HSIP) to be used on improving the City's streets.
FUND FINANCIAL STATEMENTS
Description
MAJOR FUNDS
The Fund Financial Statements present only individual major funds, while non-major funds are combined in a single column. Major funds are defined as having significant activities or balances in the current year.
This fund is the general operating fund of the City which accounts for all financial resources except those legally or administratively required to be accounted for in other funds. 11 City of Trinidad, California
Balance Sheet
Governmental Funds
June 30, 2025
HSIP Other
General Street Governmental
Fund Improvement Funds Totals
ASSETS
Cash and investments $ - 372,097 $ 511,454 $ 883,551 $
Receivables 182,246 107,999 - 290,245
Due from other funds 1,672,385 - 1,672,385 -
Total assets $ 2,226,728 $ 619,453 - $ $ 2,846,181
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable $ 45,571 $ 9,918 $ 67,654 $ 123,143
Accrued expenses 4,963 - 47 5,010
Due to other funds 597,314 - 121,841 719,155
Compensated absences 40,051 - 40,051 -
Total liabilities 90,585 607,232 189,542 887,359
Fund balances:
Nonspendable $ - - $ - $ - $
Restricted - 418,711 - 418,711
Committed 1,154,475 - 1,154,475 -
Assigned - - 58,912 58,912
Unassigned (deficit) 981,668 (607,232) (47,712) 326,724 Total fund balances 2,136,143 (607,232) 429,911 1,958,822 Total liabilities and fund balances $ 2,226,728 $ 619,453 - $ $ 2,846,181 The accompanying notes are an integral part of these basic financial statements. 12 City of Trinidad, California
Reconciliation of the Governmental Funds Balance Sheet
to the Statement of Net Position
June 30, 2025
Total fund balances - governmental funds $ 1,958,822
2,411,869
Net position of governmental activities $ 4,370,691
The accompanying notes are an integral part of these basic financial statements.
Amounts reported for governmental activities in the Statement of Net Position are different because:
Long-term receivables are not available to pay current period expenditures and, therefore, are unearned in the governmental funds.
Capital assets used in governmental activities are not current financial resources and, therefore, are not reported in the governmental funds balance sheet.
13 City of Trinidad, California
Reconciliation of Fund Basis Balance Sheet to Government-wide Statement of Net Position Governmental Activities
June 30, 2025
Governmental
Funds Changes Statement of
Balance Sheet Reclassifications in GAAP Net Position
ASSETS
Current assets:
Cash and investments $ 883,551 $ - $ - $ 883,551
Receivables 290,245 - - 290,245
Due from other funds 1,672,385 (1,672,385) - -
Internal balances - 953,230 - 953,230
Total current assets 2,846,181 (719,155) - 2,127,026
Noncurrent assets:
Capital assets, net - - 2,411,869 2,411,869
Total noncurrent assets - - 2,411,869 2,411,869
Total assets 2,846,181 (719,155) 2,411,869 4,538,895
LIABILITIES
Accounts payable $ 123,143 $ - $ - $ 123,143
Accrued expense 5,010 - - 5,010
Due to other funds 719,155 (719,155) - -
Compensated absences 40,051 - - 40,051
Total liabilities 887,359 (719,155) - 168,204
FUND BALANCES/NET POSITION
Fund balances:
Restricted 418,711 (418,711) - -
Committed 1,154,475 (1,154,475) - -
Assigned (58,912) 58,912 - -
Unassigned 326,724 (326,724) - -
Net position:
Net investment in capital assets - - 2,411,869 2,411,869 Restricted - - 418,711 418,711
Unrestricted 1,958,822 - (418,711) 1,540,111
Total fund balances/ net position 1,958,822 - 2,411,869 4,370,691 Total liabilities and net position $ 2,846,181 $ (719,155) $ 2,411,869 $ 4,538,895 The accompanying notes are an integral part of these basic financial statements. 14 City of Trinidad, California
Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds
For the year ended June 30, 2025
HSIP Other
General Street Governmental
Fund Improvement Funds Totals
REVENUES:
Property taxes $ - 140,362 $ - $ 140,362 $
Sales tax 413,441 - - 413,441
Transient occupancy tax 286,480 - - 286,480
Vehicle license fees 42,809 - - 42,809
Building and planning fees 66,377 - 5,450 71,827
Intergovernmental/grants 29,539 - 343,381 372,920
Rent and franchise fees 34,408 - 22,141 56,549
Business licenses and fees 7,606 - - 7,606
Investment earnings 53,189 - 3,676 56,865
Other revenues 8,192 - - 8,192
Total revenues - 1,082,403 374,648 1,457,051
EXPENDITURES:
Current:
General government $ - 654,000 $ 70,874 $ 724,874 $
Public safety 49,781 125,551 - 175,332
Public works/streets 324,295 607,232 221,932 1,153,459
Total expenditures 1,028,076 607,232 418,357 2,053,665
REVENUES OVER (UNDER)
EXPENDITURES 54,327 (607,232) (43,709) (596,614)
OTHER FINANCING SOURCES (USES):
Transfers in - - - -
Transfers out (300,000) - (300,000) -
Total other financings sources (uses) (300,000) - (300,000) - Net change in fund balances (245,673) (607,232) (43,709) (896,614) FUND BALANCES:
Beginning of year - 2,381,816 473,620 2,855,436
End of year $ (607,232) 2,136,143 $ 429,911 $ 1,958,822 $ The accompanying notes are an integral part of these basic financial statements. 15 City of Trinidad, California
Reconciliation of Fund Basis Statements to Government-wide Statement of Activities For the year ended June 30, 2025
Capital
Asset
(Additions),
Fund Based Retirements & Government-wide
Functions/Programs Totals Depreciation Adjustments Totals Governmental activities:
General government $ 72,277 724,874 $ - $ 797,151 $
Public safety - 175,332 - 175,332
Public works/streets 1,153,459 - 1,153,459 -
Total governmental activities $ 2,053,665 $ 72,277 $ 2,125,942 - $ The accompanying notes are an integral part of these basic financial statements. 16 City of Trinidad, California
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities For the year ended June 30, 2025
Net change in fund balances - governmental funds $ (896,614) Depreciation expense (72,277)
Change in net position of governmental activities $ (968,891) Amounts reported for governmental activities in the Statement of Activities are different because:
Governmental funds report capital outlays as expenditures while governmental activities report depreciation expense to allocate those expenditures over the life of the assets:
The accompanying notes are an integral part of these basic financial statements. 17 City of Trinidad, California
Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual General Fund
For the year ended June 30, 2025
Variance w/Final
Positive
Original Final Actual (Negative)
REVENUES:
Property taxes $ 135,425 $ 135,425 $ 140,362 $ 4,937
Sales tax 351,200 351,200 413,441 62,241
Transient occupancy tax 215,000 215,000 286,480 71,480
Vehicle license fees 21,800 21,800 42,809 21,009
Building and planning fees 40,400 40,400 66,377 25,977
Intergovernmental/grants 8,800 8,800 29,539 20,739
Rent and franchise fees 41,225 41,225 34,408 (6,817)
Business licenses and fees 8,350 8,350 7,606 (744)
Investment earnings 35,500 35,500 53,189 17,689
Other revenues 9,000 9,000 8,192 (808)
Total revenues 866,700 866,700 1,082,403 215,703
EXPENDITURES:
Current:
General government 577,843 577,843 654,000 (76,157)
Public safety 64,141 64,141 49,781 14,360
Public works/streets 282,323 282,323 324,295 (41,972)
Total expenditures 924,307 924,307 1,028,076 (103,769)
REVENUES OVER (UNDER)
EXPENDITURES (57,607) (57,607) 54,327 111,934
OTHER FINANCING SOURCES (USES):
Transfer In - - - -
Transfer out - (300,000) - 300,000
Total other financing sources (uses) - (300,000) - 300,000 Net change in fund balances (57,607) (57,607) (245,673) 411,934 FUND BALANCES:
Beginning of year 2,381,816 2,381,816 2,381,816 -
End of year $ 2,324,209 2,324,209 $ 2,136,143 $ 411,934 $ General Fund
Budgeted Amounts
The accompanying notes are an integral part of these basic financial statements. 18 Fund
MAJOR FUNDS:
Water Utility Fund
Cemetery Fund
PROPRIETARY FUNDS
Description
Proprietary funds account for City's operations financed and operated in a manner similar to a private business enterprise. The intent of the City is that the cost of providing goods and services be financed primarily through user charges.
This fund accounts for the operations of the City’s water utility, a self-supporting activity which renders services on a user-charge basis to its customers.
This fund accounts for the operations and maintained of the City’s Cemetery through burial plot sales.
All of the City's Enterprise Funds have been identified as major proprietary funds. 19 City of Trinidad, California
Statement of Net Position
Proprietary Funds
June 30, 2025
Water Utilities Cemetery
Fund Fund Totals
ASSETS
Current assets:
Cash and investments - $ 142,276 $ 142,276 $
Receivables 1,989,018 - 1,989,018
Total current assets 142,276 1,989,018 2,131,294
Noncurrent assets:
Capital assets, not being depreciated 25,089 1 25,090
Capital assets, net of depreciation 1,067,585 1,910 1,069,495 Total non current assets 1,911 1,092,674 1,094,585
Total assets $ 144,187 3,081,692 $ 3,225,879 $
LIABILITIES
Current liabilities:
Accounts payable 1,135,443 $ 425 $ 1,135,868 $
Accrued expenses 5,247 389 5,636
Customer deposits 2,980 - 2,980
Due to other funds 953,230 - 953,230
Compensated absences 20,860 5,423 26,283
Total liabilities $ 6,237 2,117,760 $ 2,123,997 $
NET POSITION
Net investment in capital assets 1,092,674 $ 1,911 $ 1,094,585 $ Restricted for capital projects 270,000 - 270,000
Unrestricted (398,742) 136,039 (262,703)
Total net position 137,950 963,932 1,101,882
Total liabilities and net position $ 144,187 3,081,692 $ 3,225,879 $ The accompanying notes are an integral part of these basic financial statements. 20 City of Trinidad, California
Statement of Revenues, Expenses, and Changes in Fund Net Position Proprietary Funds
For the year ended June 30, 2025
Water Utilities Cemetery
Fund Fund Totals
OPERATING REVENUES:
Water sales 383,781 $ - $ 383,781 $
Burial plot sales - 13,390 13,390
Total operating revenues 13,390 383,781 397,171
OPERATING EXPENSES:
Personnel costs 252,135 20,207 272,342
Operations & maintenance 3,637,205 1,360 3,638,565
Depreciation 46,498 228 46,726
Total operating expenses 21,795 3,935,838 3,957,633
OPERATING INCOME(LOSS) (8,405) (3,552,057) (3,560,462)
NONOPERATING REVENUES
(EXPENSES)
Investment earnings - 2,771 2,771
Intergovernmental 2,896,432 - 2,896,432
Total non-operating revenues, net 2,771 2,896,432 2,899,203 Income (Loss) before transfers (655,625) (5,634) (661,259) Transfers in - - -
Transfers out 300,000 - 300,000
CHANGE IN NET POSITION (5,634) (355,625) (361,259)
NET POSITION:
Beginning of year 1,319,557 143,584 1,463,141
End of year 963,932 $ 137,950 $ 1,101,882 $
The accompanying notes are an integral part of these basic financial statements. 21 City of Trinidad, California
Statement of Cash Flows
Proprietary Funds
For the year ended June 30, 2025
Water Utilities
Fund Cemetery Fund Totals
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers $ 13,390 383,781 $ 397,171 $ Cash payments to employees for salaries and benefits (248,521) (14,784) (263,305) Cash payments for operations and maintenance (4,740) (2,595,604) (2,600,344) Net cash provided (used) by operating activities (6,134) (2,460,344) (2,466,478)
CASH FLOWS FROM NONCAPITAL FINANCING
ACTIVITIES:
Transfers received (paid) - 506,098 506,098
Net cash provided (used) by noncapital financing activities - 506,098 506,098
CASH FLOWS FROM CAPITAL AND FINANCING
ACTIVITIES:
Grants received - 1,503,794 1,503,794
Net cash provided (used) by capital and related financing activities 1,503,794 - 1,503,794 CASH FLOWS FROM INVESTING ACTIVITIES:
Investment earnings 2,771 - 2,771
Net cash provided (used) by investing activities 2,771 - 2,771 Net increase (decrease) in cash and cash equivalents (450,452) (3,363) (453,815) CASH AND CASH EQUIVALENTS:
Beginning of year 128,824 300,040 428,864
End of year $ (150,412) $ 125,461 $ (24,951)
Reconciliation of income (loss) from operations to net
cash provided (used) by operating activities:
Operating income (loss) $ (8,405) (3,552,057) $ (3,560,462) $ Adjustments to reconcile operating income (loss)
to net cash provided (used) by operating activities:
Add depreciation, a noncash expense 228 46,498 46,726
(Increase) decrease in current assets:
Prepaid expenses 219 4,323 4,542
Increase (decrease) in liabilities:
Increase (decrease) in payables/accruals (3,599) 1,037,278 1,033,679 Compensated absences 5,423 3,614 9,037
Net cash provided by operating activities $ (6,134) (2,460,344) $ (2,466,478) $ The accompanying notes are an integral part of these basic financial statements.
There were no noncash investing, capital, or financing activities affecting recognized assets and liabilities for the year ended June 30, 2025. 22 23
NOTES TO BASIC FINANCIAL STATEMENTS
24 This page intentionally left blank.
City of Trinidad, California
Basic Financial Statements
For the year ended June 30, 2025
Index to Notes to Basic Financial Statements
25 Page
Note 1 – Summary of Significant Accounting Policies ................................................................... 27 Note 2 – Stewardship, Compliance and Accountability ................................................................. 34 Note 3 – Cash and Investments ......................................................................................................... 36 Note 4 – Receivables .......................................................................................................................... 39 Note 5 – Payables ............................................................................................................................... 39 Note 6 – Capital Assets ...................................................................................................................... 40 Note 7 – Net Position/Fund Balances ............................................................................................... 41 Note 8 – Interfund Transactions ...................................................................................................... 43 Note 9 – Defined Contribution Retirement Plan ............................................................................ 44 Note 10 – Risk Management ............................................................................................................. 44 Note 11 – Commitments and Contingencies .................................................................................... 44 Note 12 – New Accounting Pronouncements ................................................................................... 45 Note 13 – Subsequent Events ............................................................................................................ 46 26 This page intentionally left blank.
City of Trinidad, California
Notes to Basic Financial Statements
For the year ended June 30, 2025
27 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Financial Reporting Entity
The City of Trinidad was incorporated on November 7, 1870 under the laws of the State of California. The City operates under a Council-Manager form of government that provides the following services: public safety (police, fire and animal control), recreation and culture, public improvements, planning and zoning, general and administrative services, cemetery and water utilities.
The City participates in a joint powers agency through a formally organized and separate entity agreement.
The financial activities of the Public Agency Risk Sharing Authority of California (PARSAC), a public entity risk pool, are not included in the accompanying financial statements because they are administered by a governing board which is separate from and independent of the City.
The accounting policies of the City conform to accounting principles generally accepted in the United States of America as prescribed by the Governmental Accounting Standards Board (GASB) and the American Institute of Certified Public Accountants (AICPA) as applicable to governments. The following is a summary of the more significant policies.
Government-wide Financial Statements
The government-wide financial statements (i.e., the statement of net position, and the statement of activities) report information on all of the nonfiduciary activities of the primary government. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenue, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support.
The statement of activities demonstrates the degree to which the direct and indirect expenses of a given function or segment are offset by program revenue. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenue includes (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 included among program revenue are reported instead as general revenue. Expenses reported for functional activities include allocated indirect expenses.
Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds, even though the later are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements.
City of Trinidad, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2025
28 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued Fund Financial Statements
The 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. Each fund is accounted for by providing a separate set of self- balancing accounts that constitute its assets, liabilities, fund equity, revenue, and expenditures/expenses. Funds are organized into three major categories: governmental, proprietary, and fiduciary. An emphasis is placed on Major funds within the governmental and proprietary categories. A fund is considered Major if it is the primary operation fund of the City, or the government has determined that a fund is important to the financial statement user, or it meets the following criteria:
Total assets, liabilities, revenue, or expenditures/expenses of that individual governmental fund or enterprise fund are at least 10% of the corresponding total for all funds of that category or type.
Total assets, liabilities, revenue, or expenditures/expenses of the individual governmental fund or enterprise fund are at least 5% of the corresponding total for all governmental and enterprise funds combined.
The funds of the financial reporting entity are described below:
Governmental Fund Types
Governmental funds are those through which most general government functions typically are financed.
The City maintains the following fund types:
• General Fund - this fund accounts for all unrestricted resources except those required to be accounted for in another fund.
• Special Revenue Funds - these funds are used to account for the proceeds of specific revenue resources (other than major capital projects) that are legally restricted to expenditures for specified purposes.
• Capital Projects Funds - these funds are used to account for financial resources to be used for the acquisition, improvements or construction of streets, infrastructure and major capital projects. • Enterprise Funds - these funds are established to account for operations that are financed and operated in a manner similar to private business enterprises - where the intent of the City is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges. The Water Utilities Fund and the Cemetery Fund are reported as enterprise funds.
Major Funds
The following are the City’s major funds this year:
• General Fund - this fund is the City’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund.
City of Trinidad, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2025
29 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued Major Funds, continued
• HSIP Street Improvement - this fund is used to account for funds received from the Highway Safety Improvement Program (HSIP) to be used on improving the City's streets.
Measurement Focus
Measurement focus is a term used to describe “which” transactions are recorded within the various financial statements. Basis of accounting refers to “when” transactions are recorded regardless of the measurement focus applied. The government-wide statement of net position and the statement of activities, and both governmental and business-type activities are presented using the economic resources measurement focus. The accounting objectives of the economic measurement focus are the determination of operating income, changes in net position (or cost recovery), financial position, and cash flows. All assets and liabilities (whether current or noncurrent) associated with their activities are reported.
In the fund financial statements, the “current financial resources” measurement focus or the “economic resources” measurement focus is used, as appropriate. All governmental funds utilize a “current financial resources” measurement focus. Only current financial assets and liabilities are generally included on their balance sheets. Their operating statements present sources and uses of available spendable financial resources during a given period. These funds use “fund balance” as their measure of available spendable financial resources at the end of the period.
The proprietary fund utilizes an “economic resources” measurement focus. Proprietary fund equity is classified as net position.
Agency funds are not involved in the measurement of results of operations; therefore, measurement focus is not applicable to them.
Basis of Accounting
In the government-wide statement of net position, and in the statement of activities, both governmental and business-like activities are presented using the “accrual basis of accounting.” Under the accrual basis of accounting, revenue is recognized when earned, and expenses are recorded when the liability is incurred and the amount of obligation is ascertainable. Revenue, expenses, gains, losses, assets, and liabilities resulting from exchange and exchange-like transactions are recognized when the exchange takes place.
City of Trinidad, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2025
30 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued Basis of Accounting, continued
In the fund financial statements, governmental funds are presented on the “modified accrual basis of accounting.” Under this modified accrual basis of accounting, revenue is recognized when “measurable and available.” Measurable means knowing or being able to reasonably estimate the amount. Available means collectible within the current period or soon enough thereafter to pay current liabilities. Revenue which is susceptible to accrual includes property taxes and special assessments that are levied for and due for the fiscal year, and collected within 60 days after year-end. Licenses, permits, fines, penalties, charges for services, and miscellaneous revenue are recorded as governmental fund type revenue when received in cash because they are not generally measurable until actually received. Revenue from taxpayer assessed taxes, such as sales taxes, are recognized in the accounting period in which they became both measurable and available to finance expenditures of the fiscal period. Grant revenue, which is normally reimbursements of expenses under contractual agreements, is recorded as a receivable when earned rather than when susceptible to accrual. Generally, this occurs when authorized expenditures are made under the grant program or contractual agreement. Expenditures are recognized when the fund liability is incurred, if measurable, except for unmatured interest on long-term debt in the governmental funds, which is recognized when due.
Proprietary funds use the “accrual basis of accounting” which records the financial effect on an enterprise of transactions and other events and circumstances that have cash consequences for an enterprise in the periods in which those transactions, events and circumstances occur rather than only when cash is received or paid by the enterprise.
Budgetary Data
General Budget Policies: the City maintains budgetary controls of which the objective is to ensure compliance with legal provisions embodied in the annual budget approval by the City Council.
Budgetary control for operations is maintained at the department level by individual funds. Budgetary control for capital improvement projects (i.e., project-length financial plans) is maintained at the individual project level by fund. The City’s budgeted expenditure authority lapses at the end of each fiscal year. However, outstanding purchase order commitments or capital improvement projects may be re-appropriated for the subsequent fiscal year upon City Council approval.
Budget Basis of Accounting: budgets for governmental funds are adopted on a basis consistent with accounting principles generally accepted in the United States of America as prescribed by the GASB and the AICPA. The Budgetary Comparison Schedule of the general fund presents comparisons of legally adopted budget amounts (both the original budget and final budget), and actual amounts, on the budgetary basis. The budgeting basis is substantially equivalent to the City's accounting basis; thus no reconciliation between the two is considered necessary.
City of Trinidad, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2025
31 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued Other Accounting Policies
Cash and Investments
The City follows the requirements of GASB in reporting cash and investments at fair value and disclosing risks related to credit risk, concentration of credit risk, interest rate risk and foreign currency risk, as applicable.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the City considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.
Capital Assets
Capital assets used in governmental fund type operations are accounted for on the statement of net position. Public domain general capital assets (infrastructure) consisting of certain improvements other than buildings, such as roads, sidewalks and bridges are capitalized prospectively starting July 1, 2003.
City policy has set the capitalization threshold for reporting capital assets at $5,000. Capital outlay is recorded as expenditures of the general and special revenue funds, and, as capital assets in the government-wide financial statements to the extent the City’s capitalization threshold is met. Donated assets are recorded at estimated fair value at the date of donation.
Property, plant and equipment acquired for proprietary funds are capitalized in the respective fund to which it applies and are stated at their cost. Where cost could not be determined from the available records, estimated historical cost was used to record the estimated value of the assets.
Depreciation is recorded on a straight-line basis over the estimated useful lives of the capital assets which range from 3 to 20 years for equipment and vehicles, and 20 to 50 years for infrastructure, buildings and improvements. Land, art and treasurers are not considered exhaustible, therefore are not being depreciated.
Use of Estimates
The preparation of financial statements requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
City of Trinidad, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2025
32 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued Compensated Absences
The City has established a liability for accrued vacation, except that additional accruals for salary-related expenses associated with the costs of compensated absences, for example, the employer’s share of social security and Medicare taxes, have not been accrued as that amount is not considered significant or material to the financial statements taken as a whole. All vacation pay is accrued when incurred in the government- wide and proprietary funds financial statements. This liability is established for current employees at their current rates of pay. If accrued vacation is not used by the employee during their term of employment, compensation is payable to the employee at the time of separation, and at the employee’s prevailing rate of pay. Each fiscal year, an adjustment to the liability is made based on pay rate changes and adjustments for the estimated current portion due within one year. Due to the immaterial amount of year end accrued compensated absences, the City has elected to report compensated absences as accrued expenses in all applicable funds.
Interfund Activity
Interfund activity is reported as loans, reimbursements or transfers. Loans are reported as interfund receivables and payables as appropriate and are subject to elimination upon consolidation.
Reimbursements are when one fund incurs a cost and then charges the appropriate benefiting fund and reduces its related cost as a reimbursement. All other interfund transactions are treated as transfers.
Transfers between governmental and proprietary funds are netted as part of the reconciliation to the government-wide financial statements.
Property Tax Revenue
Property taxes in the State of California are administered for all local agencies at the County level and consist of secured, unsecured and utility tax rolls. The following is a summary of major policies and practices relating to property taxes:
Property Valuations - are established by the Assessor of Humboldt County for the secured and unsecured property tax rolls; the utility property tax roll is valued by the California State Board of Equalization. Under the provisions of Article XIIIA of the State Constitution (Proposition 13, adopted by the voters on June 6, 1978), properties are assessed at 100% of full value. From this base of assessment, subsequent annual increases in valuation are limited to a maximum of 2%.
However, increase to full value is allowed for property improvements or upon change in ownership. Personal property is excluded from these limitations and is subject to annual reappraisal.
Tax Levies - are limited to 1% of full assessed value which results in a tax rate of $1.00 per $100 assessed valuation under the provisions of Proposition 13. Tax rates for voter-approved indebtedness are excluded from this limitation.
City of Trinidad, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2025
33 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued Tax Levy Dates - are attached annually on January 1, preceding the fiscal year for which the taxes are levied. The fiscal year begins July 1 and ends June 30 of the following year. Taxes are levied on both real and unsecured personal property. Liens against real estate, as well as the tax on personal property, are not relieved by subsequent renewal or change in ownership. Tax Collections - are the responsibility of the County's tax collector. Taxes and assessments on secured and utility rolls, which constitute a lien against the property, may be paid in two installments: The first is due on November 1 of the fiscal year and is delinquent if not paid by December 10; and the second is due on March 1 of the fiscal year and is delinquent if not paid by April 10. Unsecured personal property taxes do not constitute a lien against property unless the taxes become delinquent. Payment must be made in one installment, which is delinquent if not paid by August 31 of the fiscal year. Significant penalties are imposed by the County for late payments. The City has elected to receive the City's portion of the property tax revenue from the County under the State enacted “Teeter Bill” program. Under this program, the City receives 100% of the City's share of the levied property taxes in periodic payments, with the County assuming responsibility for collecting the delinquencies as well as keeping the related late penalties and interest.
Tax Levy Apportionments - due to the nature of the City-wide maximum levy, it is not possible to identify general-purpose tax rates for specific entities. Under State legislation adopted subsequent to the passage of Proposition 13, apportionments to local agencies are made by each County auditor-controller based primarily on the ratio that each agency represented of the total City-wide levy for the three fiscal years prior to fiscal year 1979. Property Tax Administration Fees - the State of California fiscal year 1990-91 Budget Act authorized Counties to collect an administrative fee for its collection and distribution of property tax revenue.
Revenue and Expenditures
Substantially all governmental fund revenue is accrued. Property taxes are billed and collected within the same period in which the taxes are levied. Subsidies and grants to proprietary funds, which finance either capital or current operations, are reported as non-operating revenue. In recording grant revenue, the provider recognizes liabilities and expenses and the recipient recognizes receivables and revenue when the applicable eligibility requirements, including time requirements, are met. Grant resources transmitted before eligibility requirements are met, are reported as advances by the provider and deferred revenue by the recipient.
Operating income in proprietary fund financial statements includes revenue and expenses related to the primary continuing operations of the fund. Principal operating revenue for proprietary funds are charges to customers for sales or services. Principal operating expenses are the costs of providing goods or services and include administrative expenses and depreciation of capital assets. Other revenue and expenses are classified as non-operating in the financial statements. When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, and then unrestricted resources as needed. Expenditures are recognized when the related fund liability is incurred.
City of Trinidad, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2025
34 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued Net Position and Fund Balances
The City’s Net Position is classified as follows on the government-wide statement of net position:
Net Investment in Capital Assets - represents the City’s total investment in capital assets reduced by any outstanding debt used to acquire these assets.
Restricted Net Position - includes resources that the City is legally or contractually obligated to spend in accordance with restrictions imposed by external third parties. Unrestricted Net Position - represents resources derived from sources without spending restrictions, are used for transactions relating the general operations of the City, and may be used at the discretion of those charged with governance to meet current expenses or obligations for any purpose.
Fund Balance designations are classified on the governmental funds balance sheet as follows:
• Nonspendable - amounts that cannot be spent because they are either (a) legally or contractually required to be maintained intact or (b) not in spendable form such as long-term notes receivable. • Restricted - amounts that can be spent only for the specific purposes stipulated by constitution, external resource providers, or through enabling legislation. • Committed - amounts that can be used only for the specific purposes determined by a formal action of the City Council, to establish, modify or rescind a fund balance commitment. • Assigned - amounts that are constrained by the government’s intent to be used for specific purposes but do not meet the criteria to be classified as restricted or committed, as determined by a formal action or policy of the City Council or its appointed official. • Unassigned - the residual classification for the government’s general fund and includes all spendable amounts not contained in the other classifications.
2. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
Revenue Limitations Imposed by California Proposition 218 Proposition 218, which was approved by the voters in November 1996, regulates the City’s ability to impose, increase, and extend taxes, assessments, and fees. Any new, increased, or extended taxes, assessments, and fees subject to the provisions of Proposition 218, require voter approval before they can be implemented. Additionally, Proposition 218 provides that these taxes, assessments, and fees are subject to the voter initiative process and may be rescinded in the future years by the voters.
City of Trinidad, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2025
35 2. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY, Continued Dependence Upon Tourism Industry
The City is economically dependent on tourism generated tax dollars for providing revenue to its general fund, the primary operating fund of the City. The tourism industry accounts for all the transient occupancy taxes collected and a significant portion of all sales taxes collected. Property taxes, Rents and Franchise fees are also main contributors to the general fund. Consequently, a downturn in the tourism industry for the City could result in a substantial reduction in general fund revenue. In the event of such a downturn, the City may have insufficient resources in its general fund to pay all of its obligations or provide services to its citizens at the current level.
The following table shows what percentage these revenue sources provide to the City’s general fund:
2021 2022 2023 2024 2025
Property tax 16% 14% 14% 17% 13%
Sales & use tax 46% 48% 44% 35% 38%
Transient occupancy tax 13% 16% 19% 22% 26%
Rents & franchise fees 12% 7% 6% 4% 3%
87% 85% 83% 78% 80%
Cash Deficit Balances by Fund
The following governmental activity funds reported year-end cash deficit balances:
HSIP Street Improvement $ 597,314
LCP Update Grant #3 24,915
Onsite Wastewater Treatment System 24,354
STIP Trinity St. Road Rehab 58,879
CalReycle SB 1383 Assistance Grant 55
OPC Coastal Resilience 20
OGALS Per Capita 13,618
Water Utilities Fund 953,230
$ 1,672,385
City of Trinidad, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2025
36 2. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY, Continued Deficit Fund Balances
Due to the City incurring costs in advance of receiving grant awards and other reimbursements, and revenue which it expects to recover in the future from grants and other sources, the following funds incurred deficits in their year-end fund balances:
HSIP Street Improvement $ 607,232
LCP Update Grant #3 8
SB 2 Planning Grant 9
Onsite Wastewater Treatment System 24,675
STIP Trinity St. Road Rehab 9,327
CalRecycle SB 1383 Assistance Grant 2 55
OPC Coast Resilience 20
OGALS Per Capita 13,618
$ 654,944
3. CASH AND INVESTMENTS
The City follows the practice of pooling cash and investments of all funds except for restricted funds required to be held by outside custodians, fiscal agents or trustees, under the provisions of bond covenants. Cash and investments at fiscal year-end are classified in the accompanying financial statements as follows:
Statement of Net Position June 30, 2025
Governmental Activities $ 883,551
Business-type Activities 142,276
1,025,827
Cash and Investments consist of the following:
Local Agency Investment Fund 625,809
Deposits with financial instiutions 399,918
Petty cash 100
$ 1,025,827
Collateral and Categorization Requirements
At fiscal year end, the City’s carrying amount of demand deposits was $399,918 and the local bank account balances were $448,006. The difference represented outstanding checks and deposits in transit.
Of the total bank deposit balance, $250,000 was insured by Federal Depository Insurance Corporation (FDIC) and $198,006 was collateralized in accordance with California Government Code Section 53600.
California law requires that the fair value of the pledged securities must equal at least 110% of the City’s deposits. California law also allows financial institutions to secure the City’s deposits by pledging first trust deed mortgage notes having a value of 150% of the City’s total deposits.
City of Trinidad, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2025
37 3. CASH AND INVESTMENTS, Continued
Investments in money market funds and the Local Agency Investment Fund (LAIF) are not insured by the FDIC or any government agencies. Investments in government or government sponsored entity (GSE) bonds are not insured but are collateralized by loans on real estate.
Investment Policy
The table below identifies the investment types that are authorized under provisions of the City’s investment policy which is in accordance with Section 53601 of the California Government Code. The table also identifies certain provisions of the investment policy that address interest rate risk, credit risk, and concentration of credit risk.
Maximum Maximum
Maximum Percentage Investment Minimum
Authorized Investment Type Maturity of Portfolio in One Issuer Rating Certificates of Deposit 3 years 20% None None
U.S. Treasury Securities None None None None
Local Agency Investment Fund None None None N/A
State and Local Agency Obligations None 20% None AAA
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.
Concentration of Credit Risk
The investment policy of the City contains limitations on the amount that can be invested in any single issuer as described above, and beyond that stipulated by the California government code. Investments at fiscal year-end were as follows:
Investment Type Fair Value Maturity Yield Concentration Local Agency Investment Fund 625,809 $ on demand 4.23% 61% Demand Dposits (checking) on demand 0.05% 39% 399,918
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. The City’s investment policy limits credit risk by requiring compliance with the California Government Code for investment of public funds.
City of Trinidad, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2025
38 3. CASH AND INVESTMENTS, Continued
The credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The California government code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits, other than the following provision for deposits: “The California government code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits.”
The credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., brokerdealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California government code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for investments. With respect to investments, custodial credit risk generally applies only to direct investments in marketable securities. Custodial credit risk does not apply to a local government’s indirect investment in securities through the use of mutual funds or government investment pools (such as LAIF).
Fair Value Measurements
The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. These principles recognize a three-tiered fair value hierarchy, as follows:
• Level 1: Investments reflect prices quoted in active markets; • Level 2: Investments reflect prices that are based on a similar observable asset either directly or indirectly, which may include inputs in markets that are not considered to be active; and, • Level 3: Investments reflect prices based upon unobservable sources.
Investments in LAIF are uncategorized as deposits and withdrawals are made on the basis of $1 and not fair value. Amounts are recorded on an amortized cost basis which approximates fair value.
Participation in an External Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF). LAIF, established in 1977, is regulated by California Government Code Section 16429 and under the day to day administration of the California State Treasurer. There is a five member Local Investment Advisory Board that is chaired by the State Treasurer. LAIF determines fair value of its investment portfolio based on market quotations for those securities where market quotations are readily available, and on amortized cost or best estimate for those securities where market value is not readily available. LAIF is part of the Pooled Money Investment Account (PMIA) and under the control of the State Treasurer’s Office, which is audited by the Bureau of State Audits. As of June 30, 2025, LAIF had approximately $21.974 billion in investments. Audited financial statements of PMIA may be obtained from the California State Treasurer’s web site at www.treasurer.ca.gov.
City of Trinidad, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2025
39 3. CASH AND INVESTMENTS, Continued
The fair value of the City’s investment in this pool is reported in the accompanying financial statements at amounts based upon the City’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis.
4. RECEIVABLES
Receivables consisted of the following at June 30, 2025:
Governmental Activities
Sales tax $ 70,327
Property tax 30,470
Intergovernmental 98,636
Interest 10,177
Other receivables 80,626
Total 290,236 $
Business-type Activities
Water fund customers $ 80,217
Water fund grants 1,908,801
Total $ 1,989,018
Management has elected to record bad debts using the direct write-off method. Accounting principles generally accepted in the United States of America require that the allowance method be used to reflect bad debts. However, the effect of the use of the direct write-off method is not materially different from the results that would have been obtained had the allowance method been followed.
5. PAYABLES
Accounts payable as reported in the Statement of Net Position are comprised of the following:
Governmental Business-type
Activities Activities
Accounts payable 123,143 $ 1,135,868 $
Accrued expenses 5,010 5,636
$ 128,153 $ 1,141,504
Accrued expenses as reported in the Statement of Net Position comprise accrued compensation, related payroll taxes and benefits.
City of Trinidad, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2025
40 6. CAPITAL ASSETS
Governmental capital asset activity the year ended June 30, 2025, was as follows:
Balance Balance
June 30, 2024 June 30, 2025
Governmental activities:
Nondepreciable assets:
Land $ 43,778 $ - $ - $ 43,778
Total nondepreciable assets - 43,778 - 43,778
Depreciable assets:
Buildings, improvements and Streets 3,259,858 - - 3,259,858 Machinery and equipment 83,738 - - 83,738
Vehicles 75,275 - - 75,275
Total depreciable assets - 3,418,871 - 3,418,871
Accumulated Depreciation (72,277) (978,503) - (1,050,780) Net depreciable assets (72,277) 2,440,368 - 2,368,091
Total net capital assets $ (72,277) 2,484,146 $ - $ 2,411,869 $ Additions Deletions
Business-type Capital asset activity for the year ended June 30, 2025, was as follows:
Balance Balance
June 30, 2024 Additions Deletions June 30, 2025
Business-type activities:
Nondepreciable assets:
Water utility - Land 25,089 $ - $ - $ 25,089 $
Cemetery - Land 1 - 1
Total nondepreciable assets - 25,090 - 25,090
Depreciable assets:
Water utility 2,436,668 - - 2,436,668
Cemetery building 7,964 - - 7,964
Total depreciable assets - 2,444,632 - 2,444,632
Accumulated depreciation (46,726) (1,328,411) - (1,375,137) Net depreciable assets (46,726) 1,116,221 - 1,069,495
Total net capital assets $ (46,726) 1,141,311 $ - $ 1,094,585 $ City of Trinidad, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2025
41 7. NET POSITION/ FUND BALANCES
Net Position
Governmental Business-type
Activities Activities
Net investment in capital assets $ 2,411,869 $ 1,094,585 Restricted 418,711 270,000
Unrestricted 1,540,111 (262,703)
Total $ 4,370,691 $ 1,101,882
Restricted balances are for the same purposes as fund balance restrictions because external restriction requirements are the same. See descriptions of the restrictions below.
Fund Balance
Fund balance consisted of the following at June 30, 2025:
Restricted:
Budget Act COVID 59,682 $
COPS Program Grant 133,038
State Gas Tax Fund 71,006
Transportation Development Agency 100,114
CalRecycle SB 1383 Assistance Grant 2 48,455
Prop 84 Stormwater Grant 5
Harbor Fund 6,411
Total Restricted $ 418,711
Committed
General Fund 1,154,475
Total Committed $ 1,154,475
The following describes the purpose of each restriction and commitment account used by the City:
Restricted
• Budget Act COVID – represents restricted amounts to provide economic relief and support to individuals, families, businesses, and communities affected by the COVID-19 pandemic. • COPS Program Grant – represents amounts restricted for law enforcement services under the Citizens Option for Public Safety (COPS) Program.
City of Trinidad, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2025
42 7. NET POSITION/ FUND BALANCES, Continued
• State Gas Tax Fund – accounts for the City’s receipt and use of State gas tax funds for which use is restricted to street maintenance activities. • Transportation Development Agency – accounts for the City’s receipt and use of State Transportation Development Act funds for which the use is restricted to street maintenance activities. These funds are distributed by the Humboldt County Association of Governments (HCAOG).
• CalRecycle SB1383 Assistance Grant – represents amounts restricted by the CalRecycle for costs associated with collection, education and outreach, edible food recovery, capacity planning, procurement administration, and record keeping. • Prop 84 Stormwater Grant – represents amounts restricted for the operations of the City’s Proposition 84 Stormwater Grant.
• Harbor Fund – represents amounts restricted for the operations of the City’s harbor.
Committed
• Reserves – represents amounts designated by the City Council for future contingencies, which include the following:
Emergency reserve $ 459,000
Budget stabilization reserve 459,000
Capital/special project reserve 221,475
Self insurance reserve 15,000
Total committed fund balances $ 1,154,475
Excess of Expenditures and Transfers Over Appropriations: Expenditures and transfers exceeded appropriations for the year ended June 30, 2025, for the following funds:
Total Excess
Expenditures Expenditures
Final Budget and Transfers Over Appropriations
Governmental Activities
Major Funds
General Fund 924,307 $ 1,328,076 $ (403,769) $
City of Trinidad, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2025
43 8. INTERFUND TRANSACTIONS
Transfers are used to (1) move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to expend them, and (2) use unrestricted revenues collected in the general fund to finance various programs accounted for in other funds in accordance with budgetary authorizations.
Transfers consisted of the following at June 30, 2025:
Transfers In Transfers Out
Governmental Activities
Major Funds:
General Fund -$ 300,000$
Total Governmental Activities 300,000 -
Business-type Activities
Water Utilities Fund 300,000 -
Total Business-type Activities 300,000 -
Total Transfers $ 300,000 300,000$
Due to and from balances result from the time lag between the dates that (1) interfund goods and services are provided or reimbursable expenditures occur, (2) transactions are recorded in the accounting system, and (3) payments between funds are made. Due to and due from other funds consisted of the following as of June 30, 2025:
Due from Due to
Other Funds Other Funds
Governmental Funds
Major Funds:
General Fund 1,672,385 $ - $
HSIP Street Improvement - 597,314
Total Major Funds 1,672,385 597,314
Nonmajor Funds:
LCP Update Grant #3 - 24,915
Onsite Wastewater Treatment Systm - 24,354
STIP Trinity St. Road Rehab - 58,879
CalRecycle SB 1383 Assistance Grant - 55
OPC Coastal Resilience - 20
OGALS Per Capita - 13,618
Total Nonmajor Funds - 121,841
Total Governmental Funds 1,672,385 719,155
Proprietary Funds
Water Utilities Fund 953,230 -
Total Proprietary Funds 953,230 -
Total Transfers $ 1,672,385 $ 1,672,385
City of Trinidad, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2025
44 9. DEFINED CONTRIBUTION RETIREMENT PLAN
The City contributes to an employee owned defined contribution plan administered through Smith Barney/Hartford ITT under established plan provisions, and which may be amended by City council resolution. The City contributes 6% of an employee’s annual salary to the plan which provides retirement benefits. The City also provides matching contributions up to 6% of an employee’s contributions for all eligible employees. Plan participants age 50 and older can make catch-up annual contributions up to $5,000; and in the three years prior to retirement, can make catch-up contributions of up to twice the annual limit. All employee and employer contributions are tax deferred to the employee. The City contributed $47,837 to the plan for the year.
10. RISK MANAGEMENT
The City is exposed to various risks of loss related to torts, thefts, damage and destruction of assets, errors and omissions, injuries to employees, and natural disasters. The City is a member of the California Intergovernmental Risk Authority (CIRA), a public entity risk pool currently operating as a common risk management and insurance program for member cities. The relationship between the City and CIRA is such that CIRA is not a component unit of the City for financial reporting purposes. CIRA is governed by a Board consisting of representatives from member municipalities. The Board controls the operations of the Authority, including selection of management and approval of operating budgets, independent of any influence by member municipalities beyond their representation on the Board. Financial statements may be obtained from CIRA, 5330 East Bidwell, Suite 150, Folsom, CA 95630. For workers compensation insurance, the City is insured by the Local Agency Workers Compensation Excess Company. For property coverage, the City is protected by a commercial general liability insurance policy.
11. COMMITMENTS AND CONTINGENCIES
In the normal course of City operations there are occasional and various legal claims and actions against the City for which no provision has been made in the financial statements because the amount of liability, if any, is unknown.
The City has received state and federal funds for specific purposes that are subject to review and audit by the grantor agencies. Although such audits could generate expenditure disallowances under terms of the grants, it is believed that any required reimbursements will not be material.
At June 30, 2025 the City was committed to several grant funded planning and construction contracts related to potable water quality, water treatment plant upgrades, onsite wastewater treatment services, street water runoff and environmental related improvements. The ability of the City to meet these contractual commitments is dependent upon continued intergovernmental grant funding.
City of Trinidad, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2025
45 11. COMMITMENTS AND CONTINGENCIES, Continued
The City entered into an agreement with the County of Humboldt to provide law enforcement services within the City limits. The agreement period commences November 1, 2021 through June 30, 2025.
Appropriations are partially funded through annual COPS grant of approximately $150,000 with the City paying any difference out of its general fund. The City and the County are currently continuing the law enforcement services arrangement after June 30, 2025 while negotiations are in progress for the next contract agreement.
12. NEW ACCOUNTING PRONOUNCEMENTS
The GASB has issued Statement No. 100, "Accounting Changes and Error Corrections—an amendment of GASB Statement No. 62." The primary objective of this Statement is to enhance accounting and financial reporting requirements for accounting changes and error corrections to provide more understandable, reliable, relevant, consistent, and comparable information for making decisions or assessing accountability. The implementation of this statement did not have an effect on the financial statements.
The GASB has issued Statement No. 101, "Compensated Absences." The objective of this Statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated absences. That objective is achieved by aligning the recognition and measurement guidance under a unified model and by amending certain previously required disclosures. The implementation of this statement did not have an effect on the financial statements.
The GASB has issued Statement No. 102, “Certain Risk Disclosures.” The requirements of this Statement will improve financial reporting by providing users of financial statements with essential information that currently is not often provided. The disclosures will provide users with timely information regarding certain concentrations or constraints and related events that have occurred or have begun to occur that make a government vulnerable to a substantial impact. As a result, users will have better information with which to understand and anticipate certain risks to a government’s financial condition. The implementation of this statement did not have an effect on the financial statements.
The GASB has issued Statement No. 103, “Financial Reporting Model Improvements.” The objective of this Statement is to improve key components of the financial reporting model to enhance its effectiveness in providing information that is essential for decision making and assessing a government’s accountability. This Statement also addresses certain application issues. The requirements of this Statement will take effect for financial statements starting with the fiscal year that ends June 30, 2026.
The GASB has issued Statement No. 104, “Disclosure of Certain Capital Assets.” The objective of this Statement is to improve the clarity and consistency of note disclosures related to capital assets by requiring governments to separately disclose certain types of capital assets, including lease assets, intangible right-to-use assets, subscription assets, and capital assets held for sale. These enhanced disclosures are intended to provide financial statement users with more decision-useful information about the nature and composition of a government’s capital assets. The requirements of this Statement will take effect for financial statements starting with the fiscal year that ends June 30, 2026.
City of Trinidad, California
Notes to Basic Financial Statements, Continued
For the year ended June 30, 2025
46 13. SUBSEQUENT EVENTS
Events occurring after June 30, 2025 but before the financial statements were available to be issued must be evaluated for possible adjustment to the financial statements or disclosure. The effects of subsequent events that provide evidence about conditions that existed at June 30, 2025 are recognized in the accompanying financial statements. Subsequent events which provide evidence about conditions that existed after June 30, 2025 require disclosure in the accompanying notes. Management has evaluated the activity of the City through June 29, 2026, and concluded that no subsequent event(s) have occurred that would require recognition in the financial statements or disclosure in the notes to the financial statements.
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
47 This page intentionally left blank.
48 Fund Type
Special Revenue Funds
Integrated Waste Management
LCP Update Grant #3
Budget Act COVID
SB 2 Planning Grant
HCD LEAP Grant
COPS Grant Program
State Gas Tax Fund
Transportation Development Act
Onsite Wastewater Treatment System
STIP Trinity St. Road Rehab
Road Maintenance and Rehab
LCP Local Coast Program
Calycle SB 1383 Assistance Grant
REAP Housing Grant HCAOG
OPC Coastal Resilience
Prop 84 Stormwater Grant
OGALS Per Capita
Harbor Fund
Special revenue funds are used to account for specific revenue sources that are restricted, committed, or assigned to expenditures for particular purposes.
NON-MAJOR GOVERNMENTAL FUNDS
Description
To account for waste hauling franchise fees received and waste diversion programs implemented to help achieve compliance with CalReycle mandated diversion targets Grant program funded by the Coastal Commission to dedicate resources to the City's ongoing Local Coastal Program update, the City in updating the LCP, including several tasks (5).
The Budget Act COVID fund, primarily established through the CARES Act, provides financial assistance to the City to address the public health and economic impacts of the COVID-19 pandemic.
Grant funds through CA Department of Housing and Community Development used to bring the City's Housing Element into Compliance with State requirements, including development of the Accessory Dwelling Unit (ADU) Ordinance.
To account for funds received from the HCD LEAP Grant to update planning documents and implement process improvements that accelerate housing production.
To account for funds received from the State or law enforcement services under the Citizens Option for Public Safety (COPS) Program.
To account for the City’s share of State of California’s Highway User Tax collected by the State that are legally restricted to the maintenance and improvement of City roads and streets.
To account for funds received from the Transportation Development Act to improve public transportation services and encourage regional transportation coordination.
To account for permit revenue received intended to offset costs associated with implementing the City's wastewater treatment system.
State Department of Transportation funded removal and replacement of asphalt, striping and markings, and utility, monument, and manhole cover adjustments on To account for the ongoing maintenance and rehabilitation needs of city roads Grant funds awarded by the Coastal Commission to dedicate resources to update the City's Local Coastal Program.
This fund accounts for the operations of the City's harbor.
To account for funds received from CalRecycle SB 1383 Local Assistance Grant Program which aims to reduce organic waste and edible food waste to lower methane emissions and promote recycling and composting.
To account for funds received from the Humboldt County Association of Governments to help the City reach its housing production goals
Grant funds through the Ocean Protection Council, Prop 68, used to develop the Trinidad Community Coastal Resilience Action Plan.
This fund accounts for the operations of the City’s Proposition 84 Stormwater Grant.
Per Capita grant allocation of $177,952 awarded through the California State Parks and Recreation Department for enhancement and development of recreation opportunities in Trinidad.
49 City of Trinidad, California
Combining Balance Sheet
Nonmajor Governmental Funds - Special Revenue Funds
June 30, 2025
Integrated LCP Budget SB 2
Waste Update Act Planning
Mgmt Grant #3 COVID Grant
ASSETS
Cash and investments 26,517$ -$ 85,963$ -$
Receivables 874 43,770 - -
Prepaid expenses - - - -
Total assets 27,391$ 43,770$ 85,963$ -$
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts Payables - $ 18,863$ 26,281$ -$
Accrued expenses 38 - - 9
Due to other funds - 24,915 - -
Total liabilities 38 43,778 26,281 9
Fund balances:
Nonspendable - - - -
Restricted - 59,682 -
Committed - - - -
Assigned 27,353 - -
Unrestricted (deficit) - (8) - (9)
Total fund balances 27,353 59,682 (8) (9)
Total liabilities and fund balances 27,391$ 43,770$ 85,963$ -$ 50 Onsite
COPS State Transportation Wastewater STIP
Program Gas Tax Development Treatment Trinity St
Grant Fund Agency System Road Rehab
149,913$ 69,866$ $ 100,114 -$ -$
- 1,140 - - 54,866
- - - - -
149,913$ 71,006$ $ 100,114 -$ 54,866$
16,875$ -$ $ - 321$ 5,314$
- - - - -
- - - 24,354 58,879
16,875 - 24,675 - 64,193
- - - - -
133,038 71,006 100,114 - -
- - - - -
- - - - -
- - (24,675) - (9,327)
133,038 71,006 100,114 (24,675) (9,327)
149,913$ 71,006$ $ 100,114 -$ 54,866$
(continued)
51 City of Trinidad, California
Combining Balance Sheet
Nonmajor Governmental Funds - Special Revenue Funds, Continued June 30, 2025
CalRecycle CalRecycle
Road LCP Local SB 1383 SB 1383
Maint & Coast Assistance 1383 Assistance
Rehab Program Grant Grant 2
ASSETS
Cash and investments 30,083$ -$ -$ $ 48,455
Receivables 1,476 - - -
Prepaid expenses - - - -
Total assets 31,559$ -$ -$ $ 48,455
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts Payables - $ -$ -$ $ -
Accrued expenses - - - -
Due to other funds - - 55 -
Total liabilities - - 55 -
Fund balances:
Nonspendable - - -
Restricted - - - 48,455
Committed - - -
Assigned 31,559 - - -
Unrestricted (deficit) - - (55) - 0 Total fund balances 31,559 - (55) 48,455 Total liabilities and fund balances 31,559$ -$ -$ $ 48,455 52 OPC Prop 84 OGALS Total
Coastal Stormwater Per Harbor Nonmajor
Resilience Grant Capita Fund Funds
-$ 5$ -$ 538$ 511,454$
- - - 5,873 107,999
- - - -
-$ 5$ -$ 6,411$ 619,453$
-$ -$ -$ -$ 67,654$
- - - - 47
20 - 13,618 - 121,841
20 - 13,618 - 189,542
- - - - -
- 5 - 6,411 418,711
- - - - -
- - - - 58,912
(20) - (13,618) - (47,712)
(20) 5 (13,618) 6,411 429,911
-$ 5$ -$ 6,411$ 619,453$
(concluded)
53 City of Trinidad, California
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds - Special Revenue Funds
For the year ended June 30, 2025
Integrated LCP Budget SB 2
Waste Update Act Planning
Mgmt Grant #3 COVID Grant
REVENUES:
Building and planning fees $ - - $ - $ - $
Intergovernmental 82,149 - - -
Rent and franchise fees 16,268 - - -
Investment earnings - - - -
Total revenues 16,268 82,149 - -
EXPENDITURES:
Current:
General government 1,356 - 59,890 -
Public safety - - - -
Public works/streets 89,494 - - -
Total expenditures 1,356 89,494 59,890 -
REVENUES OVER (UNDER)
EXPENDITURES 14,912 (7,345) (59,890) -
OTHER FINANCING SOURCES (USES):
Transfers in - - - -
Transfers out - - - -
Total other financing
sources (uses) - - - -
NET CHANGE IN FUND BALANCES 14,912 (7,345) (59,890) -
FUND BALANCES:
Beginning of year 7,337 12,441 119,572 (9)
End of year $ (8) 27,353 $ 59,682 $ (9) $
54 Onsite
COPS State Transportation Wastewater STIP
Program Gas Tax Development Treatment Trinity St
Grant Fund Agency System Road Rehab
$ - - $ - $ 5,450 $ - $
185,271 17,450 11,298 - 39,714
- - - - -
1,361 1,730 - - -
18,811 185,271 13,028 5,450 39,714
- - - - -
125,551 - - - -
- - 6,082 16,326 48,785
- 125,551 6,082 16,326 48,785
18,811 59,720 6,946 (10,876) (9,071)
- - - - -
- - - - -
- - - - -
18,811 59,720 6,946 (10,876) (9,071)
52,195 93,168 (13,799) 73,318 (256)
$ 71,006 133,038 $ 100,114 $ (24,675) $ (9,327) $
(continued)
55 City of Trinidad, California
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds - Special Revenue Funds, Continued For the year ended June 30, 2025
CalRecycle CalRecycle
Road LCP Local SB 1383 SB 1383
Maint & Coast Assistance Assistance
Rehab Program Grant Grant 2
REVENUES:
Building and planning fees $ - - $ - $ - $
Intergovernmental 8,378 - (879) -
Rent and franchise fees - - - -
Investment earnings 585 - - -
Total revenues 8,963 - (879) -
EXPENDITURES:
Current:
General government - - - 9,628
Public safety - - - -
Public works/streets - 8,879 - 14,609
Total expenditures - 8,879 - 24,237
REVENUES OVER (UNDER)
EXPENDITURES 8,963 (9,758) - (24,237)
OTHER FINANCING SOURCES (USES):
Transfers in - - - -
Transfers out - - - -
Total other financing
sources (uses) - - - -
NET CHANGE IN FUND BALANCES 8,963 (9,758) - (24,237)
FUND BALANCES:
Beginning of year - 22,596 9,703 72,692
End of year $ - 31,559 $ (55) $ 48,455 $
56 OPC Prop 84 OGALS Total
Coastal Stormwater Per Harbor Nonmajor
Resilience Grant Capita Fund Funds
$ - - $ - $ - $ 5,450 $
- - - 343,381
- - - 5,873 22,141
- - - - 3,676
- - - 5,873 374,648
- - - - 70,874
- - - - 125,551
5,325 28,818 3,614 221,932
- 28,818 5,325 3,614 418,357
- (28,818) (5,325) 2,259 (43,709)
- - - - -
- - - - -
- - - - -
- (28,818) (5,325) 2,259 (43,709)
5 28,798 (8,293) 4,152 473,620
$ 5 (20) $ (13,618) $ 6,411 $ 429,911 $
(concluded)
57 City of Trinidad, California
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Integrated Waste Management
For the year ended June 30, 2025
Variance w/Final
Positive
Original Final Actual (Negative)
REVENUES:
Rent and franchise fees $ 12,500 $ 12,500 $ 16,268 $ 3,768 Total revenues 12,500 12,500 16,268 3,768
EXPENDITURES:
Current:
General government 1,800 1,800 1,356 444
Total expenditures 1,800 1,800 1,356 444
REVENUES OVER (UNDER)
EXPENDITURES 10,700 10,700 14,912 4,212
OTHER FINANCING SOURCES (USES):
Transfers in - - - -
Transfers out - -
Total other financing sources (uses) - - - -
Net change in fund balances 10,700 10,700 14,912 4,212
FUND BALANCES:
Beginning of year 12,441 12,441 12,441 -
End of year $ 23,141 $ 23,141 $ 27,353 $ 4,212
Budgeted Amounts
58 City of Trinidad, California
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual COPS Program Grant
For the year ended June 30, 2025
Variance w/Final
Positive
Original Final Actual (Negative)
REVENUES:
Intergovernmental revenues $ 150,000 $ 150,000 $ 185,271 $ 35,271 Investment earnings - - - -
Total revenues 150,000 150,000 185,271 35,271
EXPENDITURES:
Current:
Public safety 129,926 129,926 125,551 4,375
Total expenditures 129,926 129,926 125,551 4,375
REVENUES OVER (UNDER)
EXPENDITURES 20,074 20,074 59,720 39,646
OTHER FINANCING SOURCES (USES):
Transfers in - - - -
Transfers out - - - -
Total other financing sources (uses) - - - -
Net change in fund balances 20,074 20,074 59,720 39,646 FUND BALANCES:
Beginning of year 73,318 73,318 73,318 -
End of year $ 93,392 $ 93,392 $ 133,038 $ 39,646
Budgeted Amounts
59 City of Trinidad, California
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual State Gas Tax Fund
For the year ended June 30, 2025
Variance w/Final
Positive
Original Final Actual (Negative)
REVENUES:
Intergovernmental revenues $ 27,000 $ 27,000 $ 17,450 $ (9,550) Investment earnings - - 1,361 1,361
Total revenues 27,000 27,000 18,811 (8,189)
EXPENDITURES:
Current:
Public works/streets - - - -
Total expenditures - - - -
REVENUES OVER (UNDER)
EXPENDITURES 27,000 27,000 18,811 (8,189)
OTHER FINANCING SOURCES (USES):
Transfers in - - - -
Transfers out - - - -
Total other financing sources (uses) - - - -
Net change in fund balances 27,000 27,000 18,811 (8,189) FUND BALANCES:
Beginning of year 52,195 52,195 52,195 -
End of year $ 79,195 $ 79,195 $ 71,006 $ (8,189)
Budgeted Amounts
60 City of Trinidad, California
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Transportation Development Agency
For the year ended June 30, 2025
Variance w/Final
Positive
Original Final Actual (Negative)
REVENUES:
Intergovernmental revenues $ 14,575 $ 14,575 $ 11,298 $ (3,277) Investment earnings - - 1,730 1,730
Total revenues 14,575 14,575 13,028 (1,547)
EXPENDITURES:
Current:
Public ways and facilities 6,035 6,035 6,082 (47)
Total expenditures 6,035 6,035 6,082 (47)
REVENUES OVER (UNDER)
EXPENDITURES 8,540 8,540 6,946 (1,594)
OTHER FINANCING SOURCES (USES):
Transfers in - - - -
Transfers out (8,500) (8,500) - 8,500
Total other financing sources (uses) (8,500) (8,500) - 8,500 Net change in fund balances 40 40 6,946 6,906
FUND BALANCES:
Beginning of year 93,168 93,168 93,168 -
End of year $ 93,208 $ 93,208 $ 100,114 $ 6,906
Budgeted Amounts
61 This page intentionally left blank.
62 7080 Donlon Way, Suite 204, Dublin, CA 94568 ● phone (925) 556-6200 ● fax: (707) 232-6226 1102 South Main Street, #1, Fort Bragg, CA 95437 ● phone (707) 964-6325 www.jjacpa.com
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE
AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Independent Auditor’s Report
To the Honorable Mayor and City Council
of the City of Trinidad
Trinidad, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the businesstype activities, each major fund, the aggregate remaining fund information, and the budgetary comparison information of the City of Trinidad, California (City), as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated June 29, 2026.
Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) as a basis for designing procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified.
To the Honorable Mayor and City Council
of the City of Trinidad
Trinidad, California
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements.
However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
]]TVcT? \ÇvA
June 29, 2026 JJACPA, Inc.
Dublin, CA
DISCUSSION AGENDA ITEM 3
SUPPORTING DOCUMENTS WERE PROVIDED
3. November 2026 City Council Election Calendar Update.
CITY OF TRINIDAD STAFF REPORT
DATE: Tuesday, July 14, 2026
TO: Mayor & City Council
FROM: Gabriel Adams, City Clerk/Interim City Manager
DISCUSSION AGENDA TITLE
3. November 2026 City Council Election Calendar Update.
STAFF RECOMMENDATION:
Briefly present and review upcoming timeline. No decision required.
NOVEMBER 2026 CITY ELECTION CALENDAR
May
• Adopt Resolution requesting Election Consolidation with the County.
June
• Announce the upcoming election season calendar and prepare candidate nomination packets.
July
• Publish Election Notice for Upcoming November Council Seats on July 08. o (3) 4-Year Terms; Kelly, Breckenridge, Tuttle
o (1) 2-Year Term (Waskiewicz)
• Candidate Nomination Period opens July 13.
August
• Filing period for City Council Candidate nominees closes on August 07 if an incumbent files. • Filing period for City Council Candidate nominees is extended to August 12 if no incumbents file by August 07.
September
• Staff works with County Elections to prepare the ballot.
October
• Publish notification of (2) upcoming Planning Commission vacancies November
• General Election, Tuesday, November 03, 2026.
December
• When County Elections results are certified, swear in new Council members, appoint Mayor, and re-distribute or confirm Committee/Commissionership assignments.
DISCUSSION AGENDA ITEM 4
SUPPORTING DOCUMENTS WERE PROVIDED
4. Staff Activity Report – June 2026.
CITY OF TRINIDAD STAFF REPORT
DATE: Tuesday, July 14, 2026
TO: Mayor and City Council
FROM: Gabriel Adams, Interim City Manager
DISCUSSION AGENDA ITEM: Staff Activity Report – June 2026 STAFF RECOMMENDATION: Review content, discuss, and receive public input.
DRAFT MOTION TO CONSIDER: Accept Staff Activity Report for June 2026.
June 2026 SUMMARY
- STAFF PRODUCTIVITY
o ADMINISTRATION: June and July are typically filled with a frenzy of fiscal year-end, and fiscal year-beginning housekeeping tasks.
It’s also the beginning of construction season, tourist season, and vacation season. This month was action packed with deadlines, public notices, information gathering, and meeting the needs of city transitioning from a bedroom community to a tourist destination. o City administrative staff spent the first half of June in a deep dive developing the budget for FY2027, and providing fiscal year-end June 30, 2025 support to the Auditor. The second half of June was spent conducting an extensive employee evaluation process, transitioning the Water Department back to in-house Chief Plant Operator control, preparing for the upcoming general election candidate nomination period opening, and managing cash flow to balance construction costs and investment earnings.
The rest of the month dedicated to problem-solving, meetings, responding to inquiries, routine operations, maintaining community partnerships and outreach, and managing complex projects, as summarized below:
• Provided FY2025 Audit support to JJACPA, Inc.: Provided responses to supplemental questions that helped conclude the audit process, and prepare the document for presentation at the July 14 Council meeting.
• Cash Flow & Investments: Managed the city’s cash flow and investment earnings potential.
• Payroll: Coordinating bi-weekly payrolls.
• Water Department Support: Supported the water department preparation and distribution of the 2025 Consumer Confidence Report.
• Long-Range Water Planning: Received notice that the TA application that the City submitted was rejected. Met with Division of Funding Assistance Staff and strategized next steps. Prepared comments and attended the State Water Board meeting on July 07 for the FY2027 Intended Use Plan, and urged the board to consider the City of Trinidad’s application. Will be following up with written public comments by the July 23 deadline, and during their August 07 public meeting to adopt the IUP. • Community Engagement & Safety Coordination: PCS and HCSO participated in public safety appreciation day at Trinidad School on June 09.
• Website Accessibility
Mandate: Trinidad is under
an April 2027 mandated
deadline to make its
website accessible by
people with disabilities. Met
with Civic Plus, discussed
tools to complete that
transition in the upcoming
fiscal year, and have a
game plan to implement the new tools necessary to be compliant. • CERT Trailer: The CERT Trailer has found a new home in Trinidad, and will be moved there for at least a year, starting in late July. A lease agreement is being drafted between the City and the resident, for secure storage.
• Water Customer Financial Hardship Assistance: Conducted water system past due account audits and developed alternative payment plans for customers having difficulty keeping up with rising costs. • Resident Real-Estate transaction support/troubleshooting: Continued city coordination and support to a resident in escrow that discovered an issue with a 1999 lot line adjustment with the City of Trinidad that was not completed properly and created a serious issue with the title company. High priority issue.
• CIRA Claims and Year End transitions: Facilitated damage claims filed by Scenic Drive residents for January 03 water leak damages.
• Library budget/staffing challenges: Implemented budget funding to relieve Friends of Trinidad Library of financial burden they are no longer able to give for extra hours at the Library. • Community Group Contributions: Issued payment of TOT support to the Library, Museum, Land Trust, and Chamber of Commerce.
• BOCCE Court Overhaul: At the request of the Trinidad Coastal Land Trust, the Public Works Department gave the Bocce Court a much needed facelift. • Food Truck Inquiries: Staff continues to receive inquiries from mobile food facilities looking for space to park and grow their businesses. Due to a lack of public space available, or parcels zoned accordingly, staff has to facilitate creative solutions and collaborative discussions with the Land Trust, Chamber, and commercial establishments to help fulfill, in the short-term, this high-demand activity.
o STAFFING: The Grant Coordinator outreach period closed on June 19. 24 applications were received. Staff has assembled a resume packet and will begin reviewing them in mid-July. o FINANCE: Routine bi-weekly payroll, weekly invoice payables, and monthly cash flow analysis is performed to ensure the City’s revenues are invested appropriately while preserving adequate resources for ongoing construction invoices for the Intertie project.
Financial statements included in the June meeting packet indicate business as predicted this time of year.
The July meeting will address the Water Fund budget in detail, along with the FY2025 audit that will help justify many of the assumptions that FY2026 and FY2027 were based on. o PUBLIC WORKS: In addition to their daily routine, Public Works staff has dedicated a significant amount of time to overseeing and providing support to GRS, Inc. and the STIP paving project. They also conducted routine storm water maintenance, public facility maintenance, and keeping the streets and trails looking beautiful.
o STREETLIGHTS: The City issued an encroachment permit to PGE for replacement of all the nonfunctioning lights, scheduled for completion between now and the end of July. o WATER: In addition to performing daily routine water sampling, staff focused on delivering high quality water to all customers in June and monitoring/repairing customer leaks.
On June 24 Kyle and Gabe responded to a water leak reported by a Trinidad Eatery employee at approximately 11:00pm with water running from a meter on West Street onto Trinity. After several hours of digging and troubleshooting, the leak was repaired. Kyle’s commitment to ensuring the meter was repaired that night saved the residents of West Street and the Trinidad Eatery from experiencing an extended outage the following day. The leak was caused by a corroded meter that blew out. See pic.
As of July 01, the City concluded its transition from contract Chief Plant Operator control, to in-house control with Carl Anderson now at the helm.
This concludes a nearly 5-year process of losing our long-term operator, handing control over to a contractor, depletion of the water fund reserves to cover high operating costs, building our water operator bench from scratch, and developing our new T3 Operator pipeline.
Met with State Water Regulators to discuss the T3 transition, and will be hosting Scott Gilbreath on July 15 for the bi-annual inspection. The full public works and water department team will be joining the city manager on July 17 for a tour of the Humboldt Bay Municipal Water District facility to help expand our knowledge base and continue learn about how other systems operate. § Kyle Shipman (T2) is now a certified T2/D2 Operator.
§ Operator in Training Dereck Shadle has applied to take the T2 exam and is waiting for his test date. § We now have two T2’s, and T3, and a third T2 in training. Go Trinidad Water!
o PLANNING: The Planning Commission did not meet in June. The City Planner has been busy focusing on a few resident based CDP/Design Review applications, the ADU ordinance, and other LCP updates. She has also provided support in facilitating OWTS permits, outside city water connection logistics (Cavanaugh and Pierce), and help sorting out the Wagner Street 1999 lot line adjustment issue that has come up due to a property in escrow.
o ENGINEERING: GHD staff provided ongoing support in June with two primary projects; Main Street STIP project, and Trinidad-Westhaven Emergency Intertie Project closeout. o BUILDING: City Building Inspector Dan Dimick provided professional, routine services to builders needing permit assistance during his regular weekly Thursday visits. He keeps the City Manager informed, is always willing to help, and the service he provides to the City is extremely professional, cooperative, and thorough.
§ STOP WORK ORDER: A Stop-Work Order has been issued to Charles Garth at his property located at 1 North Westhaven Drive (corner of Westhaven Drive and Frontage Road). Numerous complaints have been issued regarding unpermitted construction on the property, excessive vehicle storage, and unpermitted/over occupancy of a facility zoned public & religious. (See photo).
o CEMETERY: Received and processed several requests for information of deceased/burial records. Communicated with several families preparing for the inevitable, and coordinated plot locations and final details for several burials (cremation and standard) that were conducted in June. - FUTURE AGENDA TOPICS UNDER DEVELOPMENT
o Salmonberry Preschool: The community has come together to support Salmonberry in a big way. They have reached nearly 50% of their funding goal, and may be in need of additional support. The Council may be asked whether to hold a special meeting in July or August if needed to address possible backfill funding to keep the program alive in 2026.
- GRANT PROJECTS
o Trinidad-Westhaven Emergency Intertie Project: A mold and mildew outbreak in the newly constructed pumphouse caused a controversy that complicated the final stages of grant closeout, calling into question building design and construction integrity, which is currently under review.
The City of Trinidad received an A+ grade from the State Water Board on the grant administration.
The City Manager has taken the reigns on the Intertie Closeout with no funding left in the grant to complete it. Discussions have been held between the City, GHD, the building inspector, and the project contractor.
The City Manager will be meeting with WCSD representatives by phone on July 15 to discuss findings, share information, and determine the next steps.
The not so good news is that when the pump was tested on April 29, WCSD experienced an unanticipated pressure issue at higher elevations in the distribution system that call into question their ability to provide the City a useful amount of water in an emergency – or at least until their new treatment plant is operational in 2027 (or later). City staff will be meeting with WCSD soon to determine the best path forward to address mold remediation and pump test issues. The Council should expect to see a formal update in September, once the pumphouse issues have been addressed.
o Per Capita Parks & Recreation: The Racquet Court improvement project was rejected by Council in July.
Staff shifted attention to utilizing these funds to develop a shovel ready repair plan for the decaying boardwalk-sidewalk surface leading down Edwards Street from Van Wycke to the Harbor. The City failed to achieve a land tenure agreement with the Rancheria due to an issue discussed at the special meeting on August 06. The City filed a right-of-way use application to the BIA as directed by the Rancheria. The BIA responded in February, confirming receipt of the application and notifying the City that the project has been assigned to a staff member named in the letter. The City received a response from the BIA on April 22 to confirm they will be reaching out to the Trinidad Rancheria for input. Trinidad has invested approximately $90,000 of staff time over a 4-year period developing the repair plan for the boardwalk, and risks losing it if the Per Capita program expires before the City is able to get reimbursed for the eligible expenses. The City Manager will be meeting with the Rancheria CEO in July to discuss further handling of the situation, and hopefully develop a land tenure agreement that satisfies the state funding agency. o STIP: The bid has been awarded to GRS, Inc. Construction is underway. Two overnight construction days began July 13 to grind and repave, minimizing traffic and business impacts, and a prolonged construction process. A substantial amount of outreach was done in advance of this construction to residents and businesses that would be affected.
- TRIBAL GOVERNMENT CONSULTATIONS: No consultations pending, but may be needed to discuss various projects of mutual intertest, such as the boardwalk improvement project. The City has been sued by the Yurok Tribe for the partial settlement reached with the Trinidad Rancheria on May 06. - TRAILS:
• ALMT: There has been no progress or updated activity on the appeal. Old Home Beach shoreline erosion concerns overshadowed any possible movement towards consensus on this topic, followed by the March trial date for the existing litigation. All discussions with the Coastal Commission on this subject has been tabled as a result.
• GALINDO TRAIL: There has been revived chatter on social media to urge the city to close this trail, but the ongoing, unresolved ALMT issue will overshadow any attention that could be devoted to this discussion.
- PUBLIC SAFETY
o HSCO Reports/Statistics: A full list of calls/stats for May are included in the meeting packet.
o The call ratio based on all stats is approximately 3:1 County/City for the “Trinidad Coverage Area” included.
- CAPITAL IMPROVEMENT PROJECTS UNDERWAY
o Town Hall Painting: The Town Hall sign is getting a
refresh from Victory Signs. The color scheme has been
selected and the work is in progress. Hope to have the
sign on the new and improved Town Hall in July.
7/14/26, 12:38 PM
https://outlook.cloud.microsoft/mail/id/AAQkADkxOWYxMDM1LWYyYjYtNDA4Zi05MTBhLTY4Y2I3NTgyYTFjMwAQAAbECj6mpf5KiitTGcQFxK4%3D Page 1 of 2 Outlook
Bypass flow measurement July 8, 2026
From Todd Kraemer <[email protected]>
Date Wed 7/8/2026 5:06 PM
To Cityclerk Trinidad <[email protected]>; Water Trinidad <[email protected]> Cc [email protected] <[email protected]> Hello Gabe,
We are in the low-flow season. Today, PWA measured 1.5 CFS for the bypass flow discharge; the staff plate reading stage is 0.5 ft.
Photo is downstream of the water plant diversion array beneath gravels. 7/14/26, 12:38 PM
https://outlook.cloud.microsoft/mail/id/AAQkADkxOWYxMDM1LWYyYjYtNDA4Zi05MTBhLTY4Y2I3NTgyYTFjMwAQAAbECj6mpf5KiitTGcQFxK4%3D Page 2 of 2 Photo of telemeter and concrete, double-box culvert.
Have a great week, Todd
Todd Kraemer
Senior Hydrologist, CPESC
Pacific Watershed Associates
707-496-7091 (cell)
www.pacificwatershed.com
7/14/26, 12:51 PM
https://outlook.cloud.microsoft/mail/id/AAQkADkxOWYxMDM1LWYyY…NDA4Zi05MTBhLTY4Y2I3NTgyYTFjMwAQAIXRgWsVa3RPgd9q%2BaY2IIE%3D Page 1 of 3 Outlook
FW: Notice of Opportunity for Public Comments, Board Workshop, and Board Consideration of the State Fiscal Year 2026-27 Drinking Water State Revolving Fund Intended Use Plan From Pauli, Brenda@Waterboards <[email protected]> Date Fri 6/26/2026 5:26 PM
To Cityclerk Trinidad <[email protected]>; Acather Trinidad <[email protected]> Good Afternoon Gabe and Angela,
The Drinking Water SRF Intended Use Plan (IUP)draft for fiscal year 2026-2027 has been released.
I’ve not read it in detail but take a look starting on page 32 (38 of 129 in the pdf).
Brenda Pauli
Sanitary Engineer
DIVISION OF FINANCIAL ASSISTANCE
Office of Sustainable Water Solutions | Small Community DW Unit 1 State Water Resources Control Boards
Email: [email protected]
Phone: +1 (916) 341-5658
Website: www.waterboards.ca.gov
Follow: X | YouTube | Facebook | LinkedIn
From: California Water Boards <[email protected]> Sent: Tuesday, June 23, 2026 4:02 PM
To: Pauli, Brenda@Waterboards <[email protected]> Subject: Notice of Opportunity for Public Comments, Board Workshop, and Board Consideration of the State Fiscal Year 2026-27 Drinking Water State Revolving Fund Intended Use Plan Having trouble viewing this? View it as a webpage
7/14/26, 12:51 PM
https://outlook.cloud.microsoft/mail/id/AAQkADkxOWYxMDM1LWYy…NDA4Zi05MTBhLTY4Y2I3NTgyYTFjMwAQAIXRgWsVa3RPgd9q%2BaY2IIE%3D Page 2 of 3 California State Water Resources Control Board (SWRCB)
The State Water Resources Control Board (State Water Board) will accept public comments on the draft State Fiscal Year (SFY) 2026-27 Drinking Water State Revolving Fund (DWSRF) Intended Use Plan (IUP). Public Comments are due by noon on July 23, 2026.
The State Water Board will hold a workshop to provide an overview of the draft SFY 2026-27 DWSRF IUP with Supplemental IUPs and receive public input.
Tuesday, July 7, 2026
Coastal Hearing Room – Second Floor
Joe Serna Jr. - CalEPA Building
1001 I Street, Sacramento
And via Video and Teleconference (For public commenters) The State Water Board will consider the adoption of the proposed SFY 2026-27 DWSRF IUP at its regularly scheduled Board meeting no earlier than:
Tuesday, August 18, 2026
Coastal Hearing Room – Second Floor
Joe Serna Jr. - CalEPA Building
1001 I Street, Sacramento
And via Video and Teleconference (For public commenters) For Draft 2026-27 DWSRF IUP and more information, please review the State Water Board website:
https://www.waterboards.ca.gov/drinking_water/services/funding/SRF.html or review the Public Notice linked below.
View the Public Notice here (PDF)
Update your subscriptions, modify your password or email address, or stop subscriptions at any time on your Subscriber Preferences Page.
You will need to use your email address to log in. If you have questions or problems with the subscription service, please visit subscriberhelp.govdelivery.com.
Public Comment provided by the City of Trinidad during the State Water Board Public Hearing/Workshop for the FY2026-2027 Intended Use Plan; Tuesday, July 07, 2026 4:55 minutes into the meeting
https://www.youtube.com/watch?v=uX0wNjLjpVI
My name is Gabriel Adams. I am the City Manager & Clerk for the City of Trinidad. On behalf of Mayor Cheryl Kelly and the Trinidad City Council, I thank you for the discussion and providing the opportunity to comment.
I also want to thank the DFA staff and our regulators for always being insightful, supportive, and treating small cities like small cities. Their encouragement gives us the endurance needed to meet or exceed all the mandates, deadlines, and expectations of our State level partners.
I did a quick read of relevant sections of the IUP, with a particular interest in the opportunities prioritized for SAFER “at-risk” systems and projects. The draft appears to give Trinidad an opportunity to receive financial assistance from the State, and I’d like to share a summary of our experience that may be of use for the Board to consider when preparing the final draft.
The City of Trinidad is a small coastal city located in the Yurok aboriginal territory of northern Humboldt County with a population just over 300. The area is rich cultural and natural resources, and supports a large tourist base 6-8 months of the year with visitors seeking cool weather, big trees, open spaces, and uncrowded beaches. (but don’t tell anyone)
Our City operates a small, Treatment Grade 3 Certification Level, single-source, surface water system with 328 connections, consisting of mostly residential customers, with a K-8 school, a working Harbor, a market, a gas station, and the Trinidad Rancheria – a Native American reservation established in 1906. We are considered a severely disadvantaged community with an “At-Risk” SAFER status, and an annual water fund operating budget of just over $500k, with no reserves.
Water shortage concerns during the 2018-2021 drought forced the City to evaluate whether the source it developed in 1970 was resilient enough to meet the community’s needs into the future. The aging infrastructure was provided a boost from the 2021 Urban Multi-Benefit Drought Relief Fund to upgrade one of the City’s two, 50-year old redwood storage tanks.
In 2021 the City lost its Chief Plant Operator who took with him over 30-years of institutional knowledge. The City’s effort to recruit an in-house T3 operator failed, and had to hire a consulting engineering firm to run the plant. As a result, the City burned through a 1-million-dollar capital reserve fund in just under 4-years covering high operating costs.
In July 2024, the Council authorized a one-time transfer of $300k from the General Fund to stabilize the water fund.
In October 2024 the City conducted a rate study with the help of RCAC. The Council faced having adopting rates that were nearly unaffordable, so instead they settled on the rate option that would only stop the bleeding, with a promise to cut costs and revisit the rate discussion in 2-3 years.
In January 2026, less than a year after its new tank was put into service, a 6” mainline broke during the overnight hours and drained the entire storage capacity – approximately 400,000 gallons. Torrential rains prolonged the recovery effort, requiring an extended boil water and water shortage period that lasted over a week.
The City has held several discussions about whether to consider an opportunity to regionalize through an interconnection (not consolidation) with the Humboldt Bay Municipal Water System that serves the City of Eureka, Arcata, several other cities, communities, and CSD’s in our area.
Council directed staff in July 2025, and again in May 2026, to research options to conduct a comparative analysis that evaluates the options of investing in the existing system, or considering an interconnection with a larger system, with an emphasis on understanding customer rates, resiliency, and growth inducing impacts.
With no funding of its own to conduct the analysis, the City turned to the Division of Financial Assistance for help, and was encouraged to submit an application for Technical Assistance.
On June 10, 2026, the application was rejected due to ineligibility, with the priorities being “Failing Systems” or “Consolidation projects”. This was disappointing considering all the significant vulnerabilities experienced by the City of Trinidad since the prior needs assessment was conducted in 2021.
The City of Trinidad water system is out of the ICU, but still remains in recovery care, due to several unprecedented issues that turned catastrophic given their complexity and cost. We hope there’s room in the IUP for policy that supports willing and able water systems like Trinidad that lack the funding, but would benefit greatly by tapping into the expertise and resources of the State to help make informed, generational decisions on the future of its drinking water.
For these reasons, we urge the board to continue supporting the funding of At-Risk systems like Trinidad, and to also consider evaluating the regional interconnection option as a viable discretionary funding priority for systems proactively working to avoid future failures.
Thank you again for the opportunity to share our comments, and for sharing so many valuable insights during this workshop.
STAFF REPORT SUPPLEMENTAL
Date: Tuesday, July 14, 2026
Background Info: The City of Trinidad is responding to the Governor’s Order calling on all Californians to do their part by reducing consumption.
Luffenholtz Creek flow readings are presented to the Council on an as-needed basis - during drought events or when requested. As we enter into the summer low-flow months, the focus of these reports (during the dry season) will be to share and put into perspective how Trinidad’s water consumption metrics compare to those of recent years.
The amounts represent the total water sold, captured by 323 customer meters, measured in cubic feet (7.48 gallons = 1 cubic foot).
July 2021 251,168 cuft January 2022 189,201
July 2022 198,081 January 2023 154,543
July 2023 223,806 January 2024 148,407
July 2024 264,491 January 2025 131,229
July 2025 292,315 (17.37% Water Loss) January 2026 128,006 (16.59% Water Loss) August 2021 269,771 February 2022 154634
August 2022 227,681 February 2023 136,626
August 2023 265,808 February 2024 132,690
August 2024 233,215 February 2025 131,537
August 2025 218,593 (19.53% Water Loss) February 2026 122,728 (18.59% Water Loss) September 2021 227,831 March 2022 184,103
September 2022 216,470 March 2023 152,813
September 2023 200,348 March 2024 125,188
September 2024 200,050 March 2025 136,579
September 2025 208,873 (19.32% Water Loss) March 2026 165,706 (21.57% Water Loss) October 2021 203,176 April 2022 173,115
October 2022 180,065 April 2023 145,504
October 2023 188,335 April 2024 176,413
October 2024 206,875 April 2025 171,808
October 2025 206,839 (23.22% Water Loss) April 2026 156,370 (22.13% Water Loss) November 2021 204,438 May 2022 154,634
November 2022 169,144 May 2023 211,380
November 2023 151,914 May 2024 182,738
November 2024 159,316 May 2025 216,497
November 2025 151,829 (9.13% Water Loss) May 2026 186,799 (13.72% Water Loss) December 2021 201,160 June 2022 233,692
December 2022 170,419 June 2023 209,336
December 2023 122,937 June 2024 229,339
December 2024 159,299 June 2025 203,350
December 2025 157,803 (14.27% Water Loss) June 2026 247,937 (17.11% Water Loss) Water sold (consumed) in June was high due to several, significant customer leaks from malfunctioning irrigation systems. We will continue to monitor consumption each month and report this information (along with summary trends and analysis) to the Council for review, comparison, and questions at each meeting.