A liability is recorded for unused sick leave balances only to the extent that it is probable that the unused balances will result in termination payments. This is estimated by including in the liability the unused balances of employees currently entitled to receive termination payment, as well as those who are expected to become eligible to receive termination benefits as a result of continuing their employment with the District. Other amounts of unused sick leave are excluded from the liability since their payment is contingent solely upon the occurrence of a future event (illness), which is outside the control of the District and the employee.
The balance of unpaid vacation and vested sick leave at year-end is recorded as a long- term liability in the financial statements.
L. Deferred Outflows and Deferred Inflows of Resources
The statement of net position reports a separate section for deferred outflows of resources. Deferred outflows of resources represent outflows of resources (consumption of net position) that apply to future periods and that, therefore, are not recognized as an expense until that time. The District has the following items that qualify for reporting in this category:
Deferred outflows related to pensions and OPEB equal to employer contributions made after the measurement date of the net pension liability and the total OPEB liability.
Deferred outflows related to pensions for differences between expected and actual experiences. These amounts are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with pensions through the plans.
Deferred outflows related to pensions resulting from the net difference in projected and actual earnings on investments of the pension plan fiduciary net position. These amounts are amortized over five years.
Deferred outflows related to OPEB for changes in assumptions. These amounts are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with retiree healthcare benefits through the plans.
VICTORVILLE WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(13)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) L. Deferred Outflows and Deferred Inflows of Resources (Continued) The statement of net position reports a separate section for deferred inflows of resources. Deferred inflows of resources represent inflows of resources (acquisition of net position) that apply to future periods and that, therefore, are not recognized as an inflow of resources (revenue) until that time. The District has the following items that qualify for reporting in this category:
Deferred inflows related to pensions for changes in assumptions. These amounts are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with pensions through the plan.
Deferred inflows related to OPEB for differences between expected and actual experiences and changes in assumptions. These amounts are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with retiree healthcare benefits through the plan.
M. Prepaid Water Connection Fees
Prepaid connection fees were received before year-end but will not be earned until the properties are developed and connected to the District’s system.
N. Capital Contributions
Capital contributions represent cash and capital asset additions contributed to the District through the collection of AB-1600 connection fees, by property owners, granting agencies or real estate developers desiring services that require capital expenditures or capacity commitment.
O. Net Position
Net Position is classified in the following categories:
Net Investment in Capital Assets – This amount consists or capital assets net of accumulated depreciation and reduced by outstanding debt (including premiums and discounts) that attributed to the acquisition, construction, or improvement of the assets.
Restricted Net Position – This amount is restricted by enabling legislation (such as external creditors, grantors, contributors, laws or regulations of other governments).
Unrestricted Net Position – This amount is all of the net position that does not meet the definition of “net investment in capital assets” or “restricted net position.”
VICTORVILLE WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(14)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) O. Net Position (Continued)
Sometimes the District will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted net position and unrestricted net position, a flow assumption must be made about the order in which the resources are considered to be applied. It is the District’s practice to consider restricted net position to have been depleted before unrestricted net position is applied, unless otherwise directed by Council.
P. Pensions
For purposes of measuring the net pension liability, deferred outflows and inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the District’s California Public Employees’ Retirement System (CalPERS) plans (Plans) and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis as they are reported by the CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value. CalPERS audited financial statements are publicly available reports that can be obtained at CalPERS’ website under Forms and Publications.
Q. Prior Year Data
Selected information regarding the prior year had been included in the accompanying financial statements. This information has been included for comparison purposes only and does not represent a complete presentation in accordance with accounting principles generally accepted in the United States of America. Accordingly, such information should be read in conjunction with the District’s prior year financial statements, from which this selected financial data was derived.
R. Estimates
The presentation of basic financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, deferred outflows of resources, liabilities, and deferred inflows of resources and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenditures during the reporting period. Actual results could differ from those estimates.
VICTORVILLE WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(15)
NOTE 2 CASH AND INVESTMENTS
Cash and investments as of June 30, 2021, are classified in the accompanying financial statements as follows:
Statement of Net Position:
Cash and Investments 61,344,992 $
Cash and Investments With Fiscal Agent 836,313
Total Cash and Investments 62,181,305 $
Cash and investments as of June 30, 2021, consist of the following:
Deposits with Financial institutions 99,104$
Deposits Held in City Pool 30,172,952
Investments 31,909,249
Total Cash and Investments 62,181,305$
Investments Pool of the City of Victorville
The District’s equity in the cash and investment City pool is managed by the City of Victorville. The District is a voluntary participant in that pool. This pool is governed by and under the regulatory oversight of the Investment Policy adopted by the City Council of the City of Victorville. The District has not adopted an investment policy separate from that of the City of Victorville. The fair value of the District’s investment in this pool is reported in the accompanying financial statements at amounts based upon the District’s pro-rata share of the fair value calculated by the City for the entire City portfolio. The balance available for withdrawal is based on the accounting records maintained by the City, which are recorded on an original cost basis.
Investments Authorized by the California Government Code and the City’s Investment Policy
The City adopts the investment policy for the District. The table on the following page identifies the investment types that are authorized for the District by the California Government Code and the City’s investment policy. The table also identifies certain provisions of the California Government Code (or the City’s investment policy, if more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustees that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City’s investment policy.
VICTORVILLE WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(16)
NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Investments Authorized by the California Government Code and the City’s Investment Policy (Continued)
Authorized by Maximum Maximum
Investment Types Investment Maximum Percentage Investment Authorized by State Law Policy Matur ity* of Portfolio* in One Issuer* Local Agency Bonds Yes 5 Years 70% None
U.S. Treasury Obligations Yes 5 Years 70% None
U.S. Agency Securities Yes 5 Years 75%** None
Banker’s Acceptances No 180 Days 40% 30%
Commercial Paper - Nonpooled Funds No 270 Days 25% 10%
Commercial Paper - Pooled Funds No 270 Days 40% 10%
Negotiable Certificates of Deposit Yes 2 Years 30% None Repurchase Agreements No 1 year None None
Reverse Repurchase Agreements No 92 Days 20% of Base Value None Medium-Term Notes No 5 Years 30% None
Mutual Funds*** Yes 5 Years 20%* 10%
Money Market Mutual Funds*** Yes 5 Years 20%* None
Mortgage Pass-Through Securities No 5 Years 20% None
County Pooled Investment Funds No N/A None None
Local Agency Investment Fund (LAIF) Yes N/A None None
JPA Pools (Other Investment Pools) No N/A None None
* Based on state law requirements or investment policy requirements, whichever is more restrictive. ** Ginnie Mae is not to exceed 20% of the total portfolio. *** Fund must be an AAA rated Government or US Treasury money fund.
Investments Authorized by Debt Agreements
Investments of debt proceeds held by bond trustee are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the District’s investment policy. The table on the following page identifies the investment types that are authorized for investments held by bond trustee. The table also identifies certain provisions of these debt agreements that address interest rate risk and concentration of credit risk.
Maximum
Authorized Maximum Percentage Investment
Investment Type Maturity Allowed in One Issuer
U.S. Treasury Obligations None None None
U.S. Agency Securities None None None
Banker's Acceptances 360 Days None None
Commercial Paper 270 Days None None
Money Market Mutual Funds None None None
Repurchase Agreements None None None
Investment Contracts None None None
Certificate of Deposit None None None
Local Agency Investment Fund (LAIF) None None None
California Common Law Trust Shares None None None
VICTORVILLE WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(17)
NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the District manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer-term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.
Information about the sensitivity of the fair values of the District’s investments (including investments held by bond trustee) to market interest rate fluctuations is provided by the following table that shows the distribution of these investments by maturity:
Remaining
Maturities
(in Months)
Investment Type Total Within 12 60+
LAIF 31,072,936$ 31,072,936$ -
Held by Bond Trustee:
Guaranteed Investment - -
Contract (GIC)* 816,500 - 816,500 Money Market Mutual Funds 19,813 19,813 - Total 31,909,249$ 31,092,749$ 816,500
*The District's GIC is with Financial Security Assurance (FSA). The contract required FSA to deposit cash, governmental securities, or governmental bonds as collateral with Bank of New York, at a value of at least 100%, 104%, or 105%, respectfully, of the investment balance. The termination of the investment contract and release of collateral would occur in the event of default by FSA. As of June 30, 2021, FSA was not in default and the value of the collateral met the requirements.
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the California Government C ode, the City’s investment policy, or debt agreements, and the actual Standard & Poor’s rating as of year-end for each investment type.
Minimum
Investment Type Total Legal Rating AAA Not Rated
LAIF 31,072,936 $ N/A - $ 31,072,936$ Held by Bond Trustee:
Guaranteed Investment - - - - Contract (GIC) 816,500 N/A - 816,500 Money Market Mutual Funds 19,813 AAA 19,813 - Total 31,909,249$ 19,813$ 31,889,436$
Ratings as of Year End
VICTORVILLE WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(18)
NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Concentration of Credit Risk
The investment policy of the District contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. The District has no investments in any one issuer (other than LAIF and money market mutual funds) that represent 5% or more of the City’s investments.
Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit).
The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure District deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. At June 30, 2021, the District’s deposits (bank balances) were insured by the federal depository insurance limits or collateralized as required under California Law.
For investments identified herein as held by bond trustee, the bond trustee selects the investment under the terms of the applicable trust agreement, acquires the investment, and holds the investment on behalf of the reporting government.
Investment in State Investment Pool
The District is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the oversight of the Treasurer of the state of California. The fair value of the District’s investment in this pool is reported in the accompanying financial statements at amounts based upon the District’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.
VICTORVILLE WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(19)
NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Fair Value Measurements
The District categorizes its fair value measurement within the fair value hierarchy established by accounting principles generally accepted in the United States of America.
The fair value framework provides a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of fair value hierarchy are described as follows:
Level 1 – Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets.
Level 2 – Inputs other than quoted prices included within the Level 1 that are observable for the asset or liability, either directly or indirectly and fair value is determined through the use of models or other valuation methodologies including:
- Quoted prices for similar assets or liabilities in active markets; - Quoted prices for identical or similar assets or liabilities in markets that are inactive;
- Inputs other than quoted prices that are observable for the asset or liability; - Inputs that are derived principally from or corroborated by observable market data by correlation of other items.
Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurements. These unobservable inputs reflect the District’s own assumptions about the inputs market participants would use in pricing the asset or liability (including assumptions about risk). These unobservable inputs are developed based on the best information available in the circumstances and may include the District’s own data.
The District’s investments in LAIF and money market mutual funds (held by bond trustee) are not subject to the fair value measurement hierarchy. The District’s investment in the GIC are included in Level 3 since they are not actively traded. To value the GIC, the District verified the collateral required was held at a minimum of 100% of the value reported above and recorded the investment at that amount.
VICTORVILLE WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(20)
NOTE 3 CAPITAL ASSETS
Capital asset activity for the year ended June 30, 2021 is as follows:
Balance Balance
July 1, 2020 Additions Deletions June 30, 2021
Nondepreciable Assets:
Land 8,884,222$ -$ -$ 8,884,222$ Intangibles 12,853,367 - - 12,853,367 Idle Assets 3,017,958 - - 3,017,958 Land Improvements 536,342 - - 536,342 Construction in Progress 6,649,518 1,594,782 (4,138,617) 4,105,683 Total Nondepreciable Assets 31,941,407 1,594,782 (4,138,617) 29,397,572 Depreciable Assets:
Buildings and Improvements 28,105,888 46,398 - 28,152,286 Computer and Communication 672,671 - - 672,671 Furniture and Equipment 37,136,465 763,548 - 37,900,013 Infrastructure 195,982,625 5,785,660 - 201,768,285 Intangibles 1,542,724 - - 1,542,724 Vehicles 3,554,588 359,066 (88,772) 3,824,882 Total Depreciable Assets 266,994,961 6,954,672 (88,772) 273,860,861 Less Accumulated Depreciation:
Buildings and Improvements (10,069,757) (690,148) - (10,759,905) Computer and Communication (571,706) (49,244) - (620,950) Furniture and Equipment (28,332,530) (1,502,582) - (29,835,112) Infrastructure (95,334,080) (4,905,471) - (100,239,551) Intangibles (1,520,091) (19,401) - (1,539,492) Vehicles (2,460,264) (171,753) 64,725 (2,567,292) Total Accumulated Depreciation (138,288,428) (7,338,599) 64,725 (145,562,302) Total Depreciable Assets, Net 128,706,533 (383,927) (24,047) 128,298,559 Capital Assets, Net 160,647,940$ 1,210,855$ (4,162,664)$ 157,696,131$
Depreciation expense for the District was $7,338,599 for the year ended June 30, 2021.
NOTE 4 LONG-TERM LIABILITIES
A summary of changes in long-term liabilities for the year ended June 30, 2021, is noted below:
Balance Balance Due Within
July 1, 2020 Additions Retirements June 30, 2021 One Year Other Long-Term Liabilities:
Compensated Absences 487,121$ 462,547$ (456,271)$ 493,397$ 386,743$ Other Debt:
2006 Certificate of Participation 9,310,000 - (380,000) 8,930,000 395,000 Unamortized Discounts/Premiums 99,083 - (6,193) 92,890 - Total 9,896,204$ 462,547$ (842,464)$ 9,516,287$ 781,743$
VICTORVILLE WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(21)
NOTE 4 LONG-TERM LIABILITIES (CONTINUED)
2006 Certificates of Participation
On March 1, 2006, the City of Victorville’s Baldy Mesa Water District issued 2006 Certificates of Participation. The proceeds were used to finance public improvements within the Baldy Mesa Water District service area.
The Certificates of Participation had a stated interest rates ranging from 3.20% to 5.00%.
The annual debt service is a special limited obligation of the District payable from and secured by a pledge of and lien on the net revenues of the District - see end of note.
Principal and interest payments are due each August 1 and interest only payments are due each February 1. The amount of Certificates of Participation outstanding at June 30, 2020 is $8,930,000.
The annual requirements to amortize outstanding debt of the District as of June 30, 2021 are as follows for each fiscal year ending June 30:
Year Ending June 30, Principal Interest
2022 395,000$ 412,403$
2023 410,000 395,388
2024 425,000 377,226
2025 445,000 358,304
2026 465,000 338,511
2030-31 2,655,000 1,355,924
2032-36 3,360,000 630,500
2037 775,000 19,375
Subtotal 8,930,000 3,887,631$
Premium 92,890
Total 9,022,890$
Certificates of Participation
Rate Covenant
The 2006 Certificate of Participation require that the Baldy Mesa Water District to generate sufficient net revenues which are at least equal to 110% of the amount of the installment payments and Parity Obligation coming due and payable in each fiscal year. The 2006 Certificate of Participations were issued before Baldy Mesa and Victor Valley Water District were consolidated into Victorville Water Dist rict. The City performed the calculation that demonstrated compliance with rate covenant for the fiscal year ended June 30, 2021. The calculation was prepared using revenues and the proportionate expenses applicable to the Baldy Mesa Water District.
Pledged Revenues
The District has a debt issuance outstanding that is collateralized by the pledging of certain revenues. The amount and term of the remainder of this commitment is indicated in the debt service to maturity table presented previously. The purpose for which the proceeds of the related debt issuance was utilized are disclosed in the debt description noted previously.
VICTORVILLE WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(22)
NOTE 4 LONG-TERM LIABILITIES (CONTINUED)
Pledged Revenues (Continued)
For the current year, pledged gross revenue (or net of certain expenses were so required by the debt agreement) as a percentage of the debt service payments are indicated in the table below:
Annual Amount of Annual Debt
Pledged Revenue Service Payment Pledged Revenue
(Net of Expenses, (of All Debt Secured as a Percentage
Description of Pledged Revenue Where Required) by This Revenue) of Debt Service Net Revenues Pledged by the
District for the 2006
Certificates of Participation 1,294,351$ 808,195$ 160%
NOTE 5 OTHER POSTEMPLOYMENT BENEFITS PLAN
Plan Description
The District Plan provides medical benefits to eligible retired Water District employees and beneficiaries in accordance with various labor agreements. The plan covers employees who retire directly from the District with five years of service. The District Plan also provides Dental and Vision benefits to eligible former Water District employees with 15 years of service. The District also pays life insurance premium for eight Water District retirees and no benefit is available for future retirees. The District provides a contribution up to a certain amount (a portion of the Health Net HMO single premium). The percentage varies based on years of service.
Funding Policy
The contribution requirements of plan members and the District are established and may be amended by City Council. The contribution required to be made under City Council and labor agreement requirements is based on a pay-as-you-go basis (i.e., as medical insurance premiums become due). The District has not established a trust for the purpose of holding assets accumulated for plan benefits.
Employees Covered
As of the June 30, 2020 measurement date, the following current and former employees were covered by the benefit terms under the Plan:
Active Employees 81
Inactive Employees Or Beneficiaries Currently
Receiving Benefits 28
Inactive Employees Entitled To, But Not Yet
Receiving Benefits 4
Total 113
VICTORVILLE WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(23)
NOTE 5 OTHER POSTEMPLOYMENT BENEFITS PLAN (CONTINUED)
Contributions
The District Plan and its contribution requirements are established by Memoranda of Understanding with the applicable employee bargaining units and may be amended by agreements between the District and the bargaining units.
The annual contribution is based on the year’s retiree medical premiums (pay-as-you-go basis). For the fiscal year ended June 30, 2021, the District’s cash contributions were $205,227 for current premiums and $561 for administrative costs and the estimated implied subsidy was $48,000 resulting in total payments of $253,788.
OPEB Liability
The District’s total OPEB liability was measured as of June 30, 2020 and was determined by an actuarial valuation dated June 30, 2020.
Actuarial Cost Method Entry Age Normal
Actuarial Assumptions:
Discount Rate 2.21%
Inflation 2.75%
Salary Increases 3.0% per annum, in aggregate
Investment Rate of Return N/A
Mortality, Retirement, Disability,
Termination 1997-2015 Experience Study
Mortality Improvement Postretirement mortality projected fully generational with Scale MP-2020
Healthcare Trend Rate Non-Medicare: 7.0% for 2022, decreasing to an ultimate rate of 4.0% in 2076
Medicare (Non-Kaiser) - 6.1% for 2022, decreasing to an ultimate rate of 4.0% in 2076
Medicare (Kaiser) - 5.0% for 2022, decreasing to an
ultimate rate of 4.0% in 2076
Discount Rate
The discount rate used to measure the total OPEB liability was 2.21%. The discount rate is determined based on the Bond Buyer 20-bond index since the District has not established a trust.
Change in Actuarial Assumptions
The discount rate changed from 3.50% at the beginning of the measurement period to
2.21% based on changes in the index. In addition, the medical trend rate for Kaiser Senior Advantage plans decreased from 6.5% to 5.0%.
VICTORVILLE WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(24)
NOTE 5 OTHER POSTEMPLOYMENT BENEFITS PLAN (CONTINUED)
Changes in the Total OPEB Liability
The changes in the total OPEB liability for the District Plan are as follows:
Total OPEB
Liability
Total OPEB Liability 6/30/2019 (MD) 10,288,735 $
Service Cost 474,890
Interest 372,802
Differences Between Expected and Actual Experience (904,000) Changes of Assumptions 1,795,864
Benefit Payments (224,298)
Net Changes During 2019-2020 (MP) 1,515,258
Total OPEB Liability 6/30/2020 (MD) 11,803,993 $
Sensitivity of the Total OPEB Liability to Changes in the Discount Rate The following presents the total OPEB liability of the District if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate:
1% Decrease Current Rate 1% Increase
(1.21%) (2.21%) (3.21%)
Total OPEB Liability 14,080,594 $ 11,803,993$ 10,010,162$ Discount Rate
Sensitivity of the Total OPEB Liability to Changes in Health Care Cost Trend Rates The following presents the total OPEB liability of the District if it were calculated using health care cost trend rates that are one percentage point lower (Non-Medicare: 6.0% for 2022 decreasing to 3.0% in 2076; Medicare (Non-Kaiser): 5.1% for 2022, decreasing to an ultimate rate of 3.0% in 2076; Medicare (Kaiser): 4.0% for 2022, decreasing to an ultimate rate of 3.0% in 2076) or one percentage point higher (Non-Medicare: 8.0% for 2022 decreasing to 5.0% in 2076; Medicare (Non-Kaiser): 7.1% for 2022, decreasing to an ultimate rate of 5.0% in 2076; Medicare (Kaiser): 6.0% for 2022, decreasing to an ultimate rate of 5.0% in 2076) than the current rate:
1% Decrease Current Rate 1% Increase
Total OPEB Liability 9,802,311 $ 11,803,993$ 14,437,580$ Healthcare Trend Rate
Recognition of Deferred Outflows and Deferred Inflows of Resources Gains and losses related to changes in the total OPEB liability are recognized in OPEB expense systematically over time. Amounts ar e first recognized in OPEB expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to OPEB and are recognized in future OPEB expense.
VICTORVILLE WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(25)
NOTE 5 OTHER POSTEMPLOYMENT BENEFITS PLAN (CONTINUED)
Recognition of Deferred Outflows and Deferred Inflows of Resources (Continued) The recognition period differs depending on the source of the gain or loss:
Net Difference Between Projected and Actual
Earnings on OPEB Plan Investments
Plan Investments 5 Years
All Other Amounts Expected average remaining service
lifetime (EARSL) (8.2 Years at
June 30, 2020 measurement date)
OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB For the fiscal year ended June 30, 2021, the District recognized OPEB expense of $524,372. As of the fiscal year ended June 30, 2021, the District reported deferred outflows/inflows of resources related to OPEB from the following sources:
Deferred Deferred
Outflows of Inflows of
Resources Resources
Employer Contributions Subsequent to the
Measurement Date 253,788$ -$
Differences Between Expected and Actual Experience - (2,015,486) Changes of Assumptions 2,032,010 (1,020,974)
Total 2,285,798$ (3,036,460)$
The $253,788 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the total OPEB liability during the fiscal year ending June 30, 2022. Other amounts reported as deferred outflows/inflows of resources related to OPEB will be recognized as expense as follows:
Deferred
Measurement Period Inflows of
Ended June 30, Resources
2022 (323,853) $
2023 (323,853)
2024 (323,853)
2025 (286,603)
2026 (73,662)
Thereafter 327,374
Payable to the Pension Plan
At June 30, 2021, the District had no outstanding amount of contributions to the OPEB plan required for the year ended June 30, 2021.
VICTORVILLE WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(26)
NOTE 6 PENSION PLAN
General Information about the Pension Plans
Plan Description
All qualified permanent and probationary employees are eligible to participate in the City’s Miscellaneous Plan, agent multiple-employer defined benefit pension plans administered by the California Public Employees’ Retirement System (CalPERS), which acts as a common investment and administrative agent for its partic ipating member employers. The District’s share of the net pension liability is reported as a cost-sharing plan in these financial statements. Benefit provisions under the Plan are established by State statute and Local Government resolution. CalPERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.
Benefits Provided
CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years of total service are eligible to retire at age 50 to 62 with statutorily reduced benefits. For employees hired into a plan with the 1.5% at 65 formula, eligibility for service retirement is age 55 with at least 5 years of services. PEPRA miscellaneous members become eligible for service retirement upon attainment of age 52 with at least 5 years of service. All members are eligible for nonduty disability benefits after 5 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.
The Plan’s provisions and benefits in effect as of the measurement period ended June 30, 2020, are summarized as follows:
Prior to on or after
Hire Date January 1, 2013 January 1, 2013
Benefit Formula 2.5%@55 2.0%@62
Benefit Vesting Schedule 5 Years of Service 5 Years of service Benefit Payments Monthly for Life Monthly for Life
Retirement Age 50 to 55 52 to 67
Required Employee Contribution Rates 8.00% 6.75%
Required Employer Contribution Rates:
Normal Cost Rate 10.59% 9.69%
Payment of Unfunded Liability $859,002 N/A
Miscellaneous
VICTORVILLE WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(27)
NOTE 6 PENSION PLAN (CONTINUED)
General Information about the Pension Plans (Continued) Contributions
Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers are determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS’ annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The Authority is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Authority contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contributions requirements are classified as plan member contributions. For the fiscal year ended June 30, 2021, the District made contributions of $1,520,299 to the plan.
Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions
Actuarial Assumptions
The total pension liability for the Miscellaneous Plan for the June 30, 2020 measurement period was determined by an actuarial valuation as of June 30, 2019, with standard update procedures used to roll forward the total pension liability to June 30, 2020.
VICTORVILLE WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(28)
NOTE 6 PENSION PLAN (CONTINUED)
Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
Actuarial Assumptions (Continued)
The total pension liability for the Miscellaneous Plan was based on the following assumptions:
Valuation Date June 30, 2019
Measurement Date June 30, 2020
Actuarial Cost Method Entry-Age Normal
Cost Method
Asset Valuation Method Market Value of Assets
Actuarial Assumptions:
Discount Rate 7.15%
Inflation 2.50%
Salary Increases (1)
Mortality Rate Table (2)
Post Retirement Benefit Income (3)
(1) Varies by entry age and service.
(2) The mortality table used was developed based on CalPERS-specific data. The probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015. Pre-retirement and Post-retirement mortality rates includes 15 years of projected mortality improvement using 90% of Scale MP-2016 published by the Society of Actuaries. for more details on this table, please refer to the CalPERS Experience Study and Review of Actuarial Assumptions report from December 2017 that can be found on the CalPERS website.
(3) Contract COLA up to 2.50% until Purchasing Power Protection Allowance Floor on Purchasing Power applies, 2.50% thereafter.
Long-Term Expected Rate of Return
The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.
In determining the long term expected rate of return, CalPERS took into account both short term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all the funds’ asset classes, expected compound (geometric) returns were calculated over the short term (first 10 years) and the long-term (11+ years) using a building block approach. Using the expected nominal returns for both short term and long term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the rounded single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short term and long-term returns. The expected rate of return was then set equal to the single equivalent rate calculated above and adjus ted to account for assumed administrative expenses.
VICTORVILLE WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(29)
NOTE 6 PENSION PLAN (CONTINUED)
Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
Long-Term Expected Rate of Return (Continued)
The expected real rates of return by asset class are as follows:
Assumed
Asset Real Return Real Return
Asset Class (a) Allocation Years 1 - 10 (b) Years 11+ (c) Global Equity 50.00 % 4.80 % 5.98 %
Fixed Income 28.00 1.00 2.62
Inflation Assets - 0.77 1.81
Private Equity 8.00 6.30 7.23
Real Assets 13.00 3.75 4.93
Liquidity 1.00 - (0.92)
100.00 %
(a) in the CalPERS CAFR, Fixed Income is included in Global Debt Securities; Liquidity is included in Short-term Investments; Inflation Assets are included in both Global Equity Securities and Global Debt Securities
(b) An expected inflation of 2.0% used for this period
(c) An expected inflation of 2.92% used for this period
Discount Rate
The discount rate used to measure the total pension liability was 7.15%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.
Proportionate Share of Net Pension Liability – City’s Miscellaneous Agent Multiple-Employer Plan Allocation to the District
The District’s net pension liability for the Plan is measured as the proportionate share of the net pension liability. The District’s proportionate share of the net pension liability was based on a projection of the District’s long-term share of contributions to the Miscellaneous Plan relative to the projected contributions of the City, actuarially determined.
VICTORVILLE WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(30)
NOTE 6 PENSION PLAN (CONTINUED)
Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
Proportionate Share of Net Pension Liability – City’s Miscellaneous Agent Multiple-Employer Plan Allocation to the District (Continued)
The District’s proportionate share of the net pension liability for the Miscellaneous Plan as of the measurement date ended June 30, 2019 and 2020 was as follows:
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability Proportionate
(a) (b) (c) = (a) - (b) Share
Balance at: 6/30/2019 (MD) 50,970,002$ 37,973,905$ 12,996,097$ 25.15% Balance at: 6/30/2020 (MD) 53,469,704 39,392,859 14,076,845 25.07% Net Changes During 2019-20 2,499,702$ 1,418,954$ 1,080,748$ -0.08% Increase (Decrease)
Pension Expense and Deferred Outflows and Inflows of Resources For the year ended June 30, 2021, the District recognized pension expense of $2,156,528 for the Miscellaneous Plan. At June 30, 2021, the District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources for the Miscellaneous Plan:
Deferred Deferred
Outflows of Inflows of
Resources Resources
Pension Contributions Subsequent to the
Measurement Date 1,520,299$ -$
Changes of Assumptions - (260,383) Differences Between Expected and Actual Experience 767,296 - Net Difference Between Projected and Actual
Earnings on Pension Plan Investments 435,727 - Total 2,723,322$ (260,383)$
$1,520,299 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ending June 30, 2022. Differences between projected and actual investment earnings are amortized on a five-year straight-line basis and all other amounts are amortized over the expected average remaining service lives of all members that are provided with benefits.
VICTORVILLE WATER DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(31)
NOTE 6 PENSION PLAN (CONTINUED)
Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
Pension Expense and Deferred Outflows and Inflows of Resources (Continued) Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
Deferred
Measurement Period Inflows of
Ended June 30, Resources
2022 187,088 $
2023 344,893
2024 240,668
2025 169,991
2026 -
Thereafter -
Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the District’s proportionate share of the net pension liability for the Miscellaneous Plan, calculated using the discount rate for the Plan, as well as what the District’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is one percentage-point lower or one percentage-point higher than the current rate:
1% Decrease Current Rate 1% Increase
(6.15%) (7.15%) (8.15%)
Net Pension Liability 21,628,259 $ 14,076,845 $ 7,881,436 $ Discount Rate
Pension Plan Fiduciary Net Position
Detailed information about each pension plan’s fiduciary net position is available in the separate issued CalPERS financial reports.
Payable to the Pension Plan
At June 30, 2021, the District had no outstanding amount of contributions to the Miscellaneous Plan required for the year ended June 30, 2021.
(32)
REQUIRED SUPPLEMENTARY INFORMATION
VICTORVILLE WATER DISTRICT
SCHEDULE OF PLAN’S PROPORTIONATE SHARE OF NET PENSION LIABILITY (COST SHARING PLAN)
LAST TEN FISCAL YEARS*
(33)
2021 2020 2019 2018 2017 2016 2015
(2020) (2019) (2018) (2017) (2016) (2015) (2014)
Plan’s Proportion of the
Net Pension Liability 25.07% 25.15% 24.95% 24.87% 24.63% 24.40% 24.28% Plan’s Proportionate Share of the
Net Pension Liability 14,076,845$ 12,996,097$ 11,526,434$ 11,480,941$ 9,777,304$ 7,425,085$ 6,754,806$ Plan’s Covered Payroll 6,177,914$ 5,546,115$ 5,598,545$ 5,506,946$ 4,860,190$ 4,824,221$ 4,707,026$ Plan’s Proportionate Share of the
Net Pension Liability as a
Percentage of Covered Payroll 227.86% 234.33% 205.88% 208.48% 201.17% 153.91% 143.50% Plan’s Proportionate Share of the
Fiduciary Net Position as a
Percentage of the Plan’s Total
Pension Liability 18.47% 18.74% 18.88% 18.52% 18.59% 19.55% 19.73% Notes to Schedule:
Benefit Changes:
There were no changes in benefits.
Changes in Assumptions:
from fiscal year June 30, 2015 to June 30, 2016:
GASB 68, paragraph 68 states that the long-term expected rate of return should be determined net of pension plan investment expense but without reduction for pension plan administrative expense. The discount rate of 7.50% used for the June 30, 2014 measurement date was net of administrative expenses. The discount rate of 7.65% used for the June 30, 2015 measurement date is without reduction of pension plan administrative expense. from fiscal year June 30, 2016 to June 30, 2017:
There were no changes in assumptions.
from fiscal year June 30, 2017 to June 30, 2018:
The discount rate was reduced from 7.65% to 7.15%.
from fiscal year June 30, 2018 to June 30, 2021:
There were no significant changes in assumptions.
*Fiscal year 2015 was the first year of implementation, therefore only seven years are shown.
Reporting Fiscal Year
(Measurement Date)
VICTORVILLE WATER DISTRICT
SCHEDULE OF PLAN CONTRIBUTIONS
(COST SHARING PLAN)
LAST TEN FISCAL YEARS*
(34)
2020-2021 2019-2020 2018-2019 2017-2018 2016-2017 2015-2016 2014-2015 Actuarially Determined Contribution 1,520,299$ 1,459,333$ 1,221,074$ 1,026,643$ 916,742$ 827,951$ 709,786$ Contributions in relation to the Actuarially
Determined Contribution (1,520,299) (1,459,333) (1,221,074) (1,026,643) (916,742) (827,951) (709,786) Contribution Deficiency (Excess) -$ -$ -$ -$ -$ -$ -$ Covered Payroll 6,148,247$ 6,177,914$ 5,546,115$ 5,598,545$ 5,506,946$ 4,860,190$ 4,824,221$ Contributions as a Percentage of Covered
Payroll 24.73% 23.62% 22.02% 18.34% 16.65% 17.04% 14.71% Notes to Schedule:
Valuation Date 6/30/2018 6/30/2017 6/30/2016 6/30/2015 6/30/2014 6/30/2013 6/30/2012 Methods and Assumptions Used to Determine Contribution Rates:
Actuarial Cost Method Entry Age Entry Age Entry Age Entry Age Entry Age Entry Age Entry Age Amortization Method (1) (1) (1) (1) (1) (1) (1)
Asset Valuation Method Fair Value Fair Value Fai r Value Fair Value Fair Value Fair Value 15-Year Smoothed
Market Method
Inflation 2.50% 2.63% 2.75% 2.75% 2.75% 2.75% 2.75%
Salary Increases (2) (2) (2) (2) (2) (2) (2)
Investment Rate of Return 7.00% (3) 7.25% (3) 7.375% (3) 7.50% (3) 7.50% (3) 7.50% (3) 7.50% (3) Retirement Age (4) (4) (4) (4) (4) (4) (4)
Mortality (5) (5) (5) (5) (5) (5) (5)
(1) Level percentage of payroll, closed
(2) Depending on age, service, and type of employment
(3) Net of pension plan investment expense, including inflation (4) 50 - 55 for 2.5%@55; 52 - 67 for 2.0%@62
(5) Mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study adopted by the CalPERS Board.
*Fiscal year 2015 was the first year of implementation, therefore only seven years are shown.
Fiscal Year
VICTORVILLE WATER DISTRICT
SCHEDULE OF CHANGES IN TOTAL OPEB LIABILITY AND RELATED RATIOS LAST TEN FISCAL YEARS*
(35)
2021 2020 2019 2018
(2020) (2019) (2018) (2017)
Total OPEB Liability:
Service Cost 474,890$ 417,399$ 494,095$ 583,831$ Interest on the Total OPEB Liability 372,802 364,950 404,923 345,325 Changes of Assumptions 1,795,864 601,978 (509,085) (1,452,630) Differences Between Expected and Actual
Experience (904,000) - (1,985,311) - Benefit Payments, Including Refunds and the
Implied Subsidy Benefit Payments (224,298) (216,889) (199,802) (185,817) Net Change in Total OPEB Liability 1,515,258 1,167,438 (1,795,180) (709,291) Total OPEB Liability - Beginning 10,288,735 9,121,297 10,916,477 11,625,768 Total OPEB Liability - Ending (A) 11,803,993$ 10,288,735$ 9,121,297$ 10,916,477$ Covered-Employee Payroll 7,618,996$ 7,078,295$ 6,818,328$ 4,577,527$ Total OPEB Liability As A Percentage of
Covered-Employee Payroll 154.93% 145.36% 133.78% 238.48% Notes to Schedule:
Changes in Assumptions:
Discount rate 2.21% 3.50% 3.87% 3.58%
Mortality improvement rates Scale MP-2020 Scale MP-2018 Scale MP-2018 Scale MP-2016 The mortality, retirement, disability, and termination rates for the measurement periods ended June 30, 2017 and 2018 were based on the CalPERS 1997-2011 Experience Study and CalPERS 1997-2015 Experience Study, respectively.
In the June 30, 2018 measurement period, the pre-65 waived retiree re-election was updated to be 10% after age 65.
In the June 30, 2020 measurement period, the medical trend rate for Kaiser Senior Advantage plans decreased from 6.5% to 5.0%.
*Fiscal year 2018 was the first year of implementation, therefore only four years are shown.
Fiscal Year Ended
(Measurement Date)
(36)
SUPPLEMENTARY INFORMATION
VICTORVILLE WATER DISTRICT
COMBINING SCHEDULE OF NET POSITION
JUNE 30, 2021
(WITH COMPARATIVE DATA FOR JUNE 30, 2020)
(37)
Victorville
Wastewater
Reclamation Reclaimed
Water Facility Water Eliminations 2021 2020
ASSETS
Current Assets
Cash and Investments 50,441,260 $ 5,479,546 $ 5,424,186 $ - $ 61,344,992$ 51,805,262 $ Cash and Investments with Fiscal Agent 836,313 - - - 836,313 836,634 Accounts Receivable, Net 4,001,721 780,619 32,379 - 4,814,719 4,667,426 Interest Receivable 25,368 - - - 25,368 112,417 Due from Other Governments 14,711 - - - 14,711 15,761 Inventory 1,247,678 - - - 1,247,678 755,791 Total Current Assets 56,567,051 6,260,165 5,456,565 - 68,283,781 58,193,291 Noncurrent Assets
Prepaid Deposits 17,319 186,569 - - 203,888 282,402 Advances to Other Funds 29,010,274 - - (29,010,274) - - Nondepreciable Capital Assets 27,393,985 1,956,017 47,570 - 29,397,572 31,941,407 Depreciable Capital Assets, Net 111,524,166 12,236,286 4,538,107 - 128,298,559 128,706,533 Total Noncurrent Assets 167,945,744 14,378,872 4,585,677 (29,010,274) 157,900,019 160,930,342 Total Assets 224,512,795 20,639,037 10,042,242 (29,010,274) 226,183,800 219,123,633 Deferred Outflows of Resources 2,220,373 65,425 - - 2,285,798 753,397 Deferred Outflows - OPEB Related 2,644,536 78,786 - - 2,723,322 2,548,508 Deferred Charge on Refunding 4,864,909 144,211 - - 5,009,120 3,301,905
LIABILITIES
Current Liabilities
Accounts Payable 2,064,050 213,226 2,404 - 2,279,680 1,531,948 Interest Payable 175,208 - - - 175,208 181,621 Prepaid Water Connection Fees 217,489 - - - 217,489 715,533 Deposits Payable 1,438,378 - - - 1,438,378 2,557,971 Total OPEB Liability - Due Within One Year 219,599 4,699 - - 224,298 - Long-Term Liabilities, Due Within One Year 781,743 - - - 781,743 761,824 Total Current Liabilities 4,896,467 217,925 2,404 - 5,116,796 5,748,897 Noncurrent Liabilities:
Advances from Other Funds - 29,010,274 - (29,010,274) - - Total OPEB Liability 11,337,124 242,571 - - 11,579,695 10,288,735 Net Pension Liability 13,882,814 194,031 - - 14,076,845 12,996,097 Long-Term Liabilities, Due in More
Than One Year 8,734,544 - - - 8,734,544 9,134,380 Total Noncurrent Liabilities 33,954,482 29,446,876 - (29,010,274) 34,391,084 32,419,212 Total Liabilities 38,850,949 29,664,801 2,404 (29,010,274) 39,507,880 38,168,109 Deferred Inflows of Resources
Deferred Inflows - OPEB Related 2,978,187 58,273 - - 3,036,460 2,748,733 Deferred Inflows - Pension Related 255,592 4,791 - - 260,383 555,753 Total Deferred Outflows of Resources 3,233,779 63,064 - - 3,296,843 3,304,486 Net Position
Net Investment in Capital Assets 130,077,107 14,192,303 4,585,677 - 148,855,087 151,694,293 Unrestricted 57,215,869 (23,136,920) 5,454,161 - 39,533,110 29,258,650 Total Net Position 187,292,976$ (8,944,617)$ 10,039,838$ -$ 188,388,197$ 180,952,943$ Totals
VICTORVILLE WATER DISTRICT
COMBINING SCHEDULE OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION YEAR ENDED JUNE 30, 2021
(WITH COMPARATIVE DATA FOR THE YEAR ENDED JUNE 30, 2020)
(38)
Victorville
Wastewater
Reclamation Reclaimed
Water Facility Water Eliminations 2021 2020
Operating Revenues
Utility Sales 24,153,594$ 8,294,456$ 548,875$ -$ 32,996,925$ 27,405,638$ Meter and Service Fees 7,481,406 - - - 7,481,406 7,217,219 Pass-Thru Charges 1,084,485 - - - 1,084,485 289,000 Fines and Forfeitures - - - - - 231,994 Arsenic Surcharge 263,614 - - - 263,614 264,302 Other 335,654 4,918 - - 340,572 198,467 Total Operating Revenues 33,318,753 8,299,374 548,875 - 42,167,002 35,606,620 Operating Expenses
Personnel Services 10,619,704 191,935 89,818 - 10,901,457 11,689,745 Maintenance and Operations 12,582,989 4,231,086 102,475 - 16,916,550 15,718,657 Production Costs 4,625,808 - 5,479 - 4,631,287 4,034,055 Pass-Thru Production Costs 1,084,485 1,446,328 - - 2,530,813 289,000 Depreciation 5,957,947 1,215,150 165,502 - 7,338,599 7,276,463 Total Operating Expenses 34,870,933 7,084,499 363,274 - 42,318,706 39,007,920 Operating Income (Loss) (1,552,180) 1,214,875 185,601 - (151,704) (3,401,300) Nonoperating Revenues (Expenses)
Taxes 1,096,573 - - - 1,096,573 912,768 Investment Income 270,724 8,813 8,561 (175,928) 112,170 998,042 Interest Expense (415,588) (175,928) - 175,928 (415,588) (430,914) Gain on Disposal of Assets 12,976 - - - 12,976 - Other Nonoperating Revenues 62,540 55,466 - - 118,006 292,774 Total Nonoperating Revenues
(Expenses) 1,027,225 (111,649) 8,561 - 924,137 1,772,670 Income (Loss) Before Capital
Contributions (524,955) 1,103,226 194,162 - 772,433 (1,628,630) Capital Contributions
Connection Fees 3,078,389 2,091,000 - - 5,169,389 3,619,685 Alternate Water Source Fees - - 903,332 - 903,332 574,233 Capital Restricted Use Fees - 590,100 - - 590,100 1,048,742 Capital Grants - - - - - 60,020 Total Capital Contributions 3,078,389 2,681,100 903,332 - 6,662,821 5,302,680 Change in Net Position 2,553,434 3,784,326 1,097,494 - 7,435,254 3,674,050 Net Position - Beginning of Year 184,739,542 (12,728,943) 8,942,344 - 180,952,943 177,278,893
Net Position - End of Year 187,292,976$ (8,944,617)$ 10,039,838$ -$ 188,388,197$ 180,952,943$ Totals
Attachment D
Southern California Logistics
Airport Authority Basic Financial
Statements for Fiscal Year Ended
June 30, 2021
SOUTHERN CALIFORNIA
LOGISTICS AIRPORT AUTHORITY
FINANCIAL STATEMENTS AND
SUPPLEMENTARY INFORMATION
YEAR ENDED JUNE 30, 2021
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
TABLE OF CONTENTS
YEAR ENDED JUNE 30, 2021
INDEPENDENT AUDITORS’ REPORT 1
BASIC FINANCIAL STATEMENTS
STATEMENT OF NET POSITION 4
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION 6 STATEMENT OF CASH FLOWS 7
NOTES TO FINANCIAL STATEMENTS 9
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF PLAN’S PROPORTIONATE SHARE OF NET PENSION
LIABILITY 42
SCHEDULE OF PLAN CONTRIBUTIONS 43
SCHEDULE OF PLAN’S PROPORTIONATE SHARE OF TOTAL OPEB
LIABILITY 44
SUPPLEMENTARY INFORMATION
COMBINING SCHEDULE OF NET POSITION 46
COMBINING SCHEDULE OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION 47
(1)
INDEPENDENT AUDITORS’ REPORT
Board of Directors
Southern California Logistics Airport Authority
Willows, California
Report on the Financial Statements
We have audited the accompanying financial statements of the Southern California Logistics Airport Authority (SCLAA), a component unity of the City of Victorville, California, as of and for the year ended June 30 2021, and the related notes to the financial statements which collectively comprise SCLAA’s basic financial statements as listed in the table of contents.
Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Board of Directors
Southern California Logistics Airport Authority
(2)
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of SCLAA as of June 30 2021, and the changes financial position and cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Other Matters
Prior-Year Comparative Information
We have previously audited the SCLAA’s June 30, 2020 financial statements, and we expressed an unmodified opinion on the financial statements of the SCLAA in our report dated February 23, 2021. In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 2020, is consistent, in all material respects, with the audited financial statements from which it has been derived.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the schedule of the plan’s proportionate share of the net pension liability, schedule of plan contributions, and schedule of the plan’s proportionate share of the total OPEB liability, identified as Required Supplementary Information (RSI) in the accompanying table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of the financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain lim ited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Management has omitted management’s discussion and an alysis 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 the 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.
Board of Directors
Southern California Logistics Airport Authority
(3)
Other Information
Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise SCLAA’s basic financial statements. The combining schedule of net position and the combining schedule of revenues, expenses and changes in net position (supplementary information), as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The supplementary information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in a ccordance with auditing standards generally accepted in the United States of America. In our opinion, suppl ementary information is fairly stated, in all material respects, in relation to the basic financial statements as a whole.
We also previously audited, in accordance with auditing standards generally accepted in the United States of America, the basic financial statements of the SCLAA as of and for the year ended June 30, 2020 (not presented herein), and have issued our report thereon dated February 23, 2021, which contained an unmodified opinion on the financial statements of the SCLAA. The combining schedule of net position and the combining schedule of revenues, expenses and changes in net position (supplementary information) for the year ended June 30, 2020, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the June 30, 2020 financial statements. The supplementary information has been subjected to the auditing procedures applied in the audit of the June 30, 2020 basic financial statements and certain additional proc edures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare those financial statements or to those financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly stated in all material respects in relation to the basic financial statements as a whole for the year ended June 30, 2020.
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards , we have also issued a report dated REPORT DATE on our consideration of SCLAA’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 on SCLAA’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering SCLAA’s internal control over financial reporting and compliance.
CliftonLarsonAllen LLP
Irvine, California
REPORT DATE
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
STATEMENT OF NET POSITION
JUNE 30, 2021
(WITH COMPARATIVE DATA FOR JUNE 30, 2020)
See accompanying Notes to Financial Statements.
(4)
2021 2020
ASSETS
CURRENT ASSETS
Cash and Investments 17,453,500$ 18,656,468$
Cash and Investments with Fiscal Agent 23,952,767 23,950,333 Accounts Receivable, Net 452,419 486,993
Due from Other Governments 2,241,469 849,543
Inventory 16,320 11,600
Total Current Assets 44,116,475 43,954,937
NONCURRENT ASSETS
Prepaid Items 2,759 53,817
Advances to City of Victorville 1,940,095 1,929,269 Nondepreciable Capital Assets 15,806,452 13,871,003 Depreciable Capital Assets, Net 116,571,538 125,242,176 Total Noncurrent Assets 134,320,844 141,096,265
Total Assets 178,437,319 185,051,202
DEFERRED OUTFLOWS OF RESOURCES
Deferred Outflow - OPEB Related 322,970 106,556 Deferred Outflow - Pension Related 789,736 745,881 Deferred Charge on Refunding 1,666,928 1,801,443 Total Deferred Outflows of Resources 2,779,634 2,653,880
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
STATEMENT OF NET POSITION (CONTINUED)
JUNE 30, 2021
(WITH COMPARATIVE DATA FOR JUNE 30, 2020)
See accompanying Notes to Financial Statements.
(5)
2021 2020
LIABILITIES
CURRENT LIABILITIES
Accounts Payable 1,265,784$ 246,438$
Interest Payable 1,283,294 1,308,493
Unearned Revenue 44,066 46,410
Total OPEB Liability - Due Within One Year 28,165 - Long-Term Liabilities, Due Within One Year 6,349,790 6,074,079 Total Current Liabilities 8,971,099 7,675,420
NONCURRENT LIABILITIES
Accrued Rent Credit Payable 601,572 585,416
Advances from City of Victorville 1,864,932 1,855,412 Advances from Other Governments 10,995,517 10,939,517 Total OPEB Liability 2,186,816 2,093,649
Net Pension Liability 3,838,581 3,546,936
Long-Term Liabilities, Due in More Than One Year 283,655,913 288,491,963 Total Noncurrent Liabilities 303,143,331 307,512,893 Total Liabilities 312,114,430 315,188,313
DEFERRED INFLOWS OF RESOURCES
Deferred Inflows - OPEB Related 589,499 413,856 Deferred Inflows - Pension Related 76,839 150,938 Total Deferred Inflows of Resources 666,338 564,794
NET POSITION (DEFICIT)
Net Investment in Capital Assets (132,728,001) (129,417,584) Unrestricted 1,164,186 1,369,559
Total Net Position (Deficit) (131,563,815)$ (128,048,025) $
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION YEAR ENDED JUNE 30, 2021
(WITH COMPARATIVE DATA FOR THE YEAR ENDED JUNE 30, 2020)
See accompanying Notes to Financial Statements.
(6)
2021 2020
OPERATING REVENUES
Charges for Services:
Landing Fees 1,576,966$ 893,765$
Fuel Flowage Fees 278,938 251,575
Rent and Lease Revenue 8,640,912 9,207,397
Total Charges for Services 10,496,816 10,352,737
Fines and Forfeitures 34,986 121,180
Other 524,539 724,410
Total Operating Revenues 11,056,341 11,198,327
OPERATING EXPENSES
Personnel Services 2,794,061 2,812,135
Maintenance and Operations 11,570,873 4,827,337
Depreciation 9,073,542 9,097,915
Total Operating Expenses 23,438,476 16,737,387
OPERATING LOSS (12,382,135) (5,539,060)
NONOPERATING REVENUES (EXPENSES)
Taxes 21,308,725 19,858,962
Investment Income 49,414 519,981
Interest Expense (17,139,120) (17,518,436)
Gain (Loss) on Sale of Capital Assets 6,775 (604,144) Other Nonoperating Expenses (19,487) (19,537) Total Nonoperating Revenues (Expenses) 4,206,307 2,236,826 LOSS BEFORE CAPITAL CONTRIBUTIONS (8,175,828) (3,302,234)
CAPITAL CONTRIBUTIONS
Capital Grants 6,344,691 843,148
Capital Contributions to the City of Victorville (1,684,653) - Total Capital Contributions 4,660,038 843,148
CHANGE IN NET POSITION (3,515,790) (2,459,086)
Net Position (Deficit) - Beginning of Year (128,048,025) (125,588,939) NET POSITION (DEFICIT) - END OF YEAR (131,563,815)$ (128,048,025) $
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
STATEMENT OF CASH FLOWS
YEAR ENDED JUNE 30, 2021
(WITH COMPARATIVE DATA FOR THE YEAR ENDED JUNE 30, 2020)
See accompanying Notes to Financial Statements.
(7)
2021 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Cash Received from Customers 11,085,240$ 10,894,428$ Cash Payments to Employees for Services (2,593,711) (2,318,965) Cash Payments to Suppliers for Goods and Services (10,505,189) (5,638,483) Net Cash Provided (Used) by Operating Activities (2,013,660) 2,936,980
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Cash Received from Other Governments 19,972,799 20,108,992 Cash Received from City of Victorville - 15,369 Cash Paid to City of Victorville (1,751,479) -
Net Cash Provided by Noncapital Financing Activities 18,221,320 20,124,361
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Cash Received from the Sale of Capital Assets 6,775 14,874 Capital Grants 6,344,691 843,148
Cash Payments to Acquire Capital Assets (2,338,353) (36,297) Principal Paid on Capital-Related Debt (5,920,000) (5,635,000) Interest Paid on Capital-Related Debt (15,550,721) (15,845,328) Net Cash Used by Capital and Related Financing Activities (17,457,608) (20,658,603)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest Received on Investments 49,414 313,981 Net Cash Provided by Investing Activities 49,414 313,981 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (1,200,534) 2,716,719 Cash and Cash Equivalents - Beginning of Year 42,606,801 39,890,082 CASH AND CASH EQUIVALENTS - END OF YEAR 41,406,267$ 42,606,801 $
RECONCILIATION OF CASH AND CASH EQUIVALENTS TO
STATEMENT OF NET POSITION:
Cash and Investments 17,453,500 $ 18,656,468 $
Cash and Investments with Fiscal Agent 23,952,767 23,950,333 Cash and Cash Equivalents 41,406,267 $ 42,606,801 $
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
STATEMENT OF CASH FLOWS (CONTINUED)
YEAR ENDED JUNE 30, 2021
(WITH COMPARATIVE DATA FOR THE YEAR ENDED JUNE 30, 2020)
See accompanying Notes to Financial Statements.
(8)
2021 2020
RECONCILIATION OF OPERATING LOSS TO NET CASH
PROVIDED (USED) BY OPERATING ACTIVITIES
Operating Loss (12,382,135)$ (5,539,060)$
Adjustments to Reconcile Operating Loss to Net Cash
Provided (Used) By Operating Activities:
Depreciation 9,073,542 9,097,915
Nonoperating Miscellaneous Expense (19,487) (19,537) (Increase) Decrease in Assets:
Accounts Receivable, Net 34,574 (294,741)
Inventory (4,720) 5,019
Prepaid Items 51,058 (51,410)
Deferred Outflows - OPEB (216,414) (85,499)
Deferred Outflows - Pension (43,855) 54,589
Increase (Decrease) in Liabilities:
Accounts Payable 1,019,346 (764,755)
Unearned Revenue (2,344) 14,709
Accrued Rent Credits Payable 16,156 (4,330) Accrued Compensated Absences (53,902) 21,477 Total OPEB Liability 121,332 205,277
Net Pension Liability 291,645 357,481
Deferred Inflows - OPEB 175,643 (48,438)
Deferred Inflows - Pension (74,099) (11,717) Net Cash Provided (Used) by Operating Activities (2,013,660)$ 2,936,980$
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING
AND FINANCING ACTIVITY
Interest Accretion Expenses 1,321,695$ 1,229,608$
Amortization of Bond Discounts and Premiums 91,868 91,868 Loss on Disposal of Capital Assets - (619,018) Total 1,413,563$ 702,458$
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(9)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Description of the Reporting Entity
The Southern California Logistics Airport Authority (SCLAA), a component unit of the City of Victorville, was formed in June of 1997 by the City of Victorville and the former Victorville Redevelopment Agency. Prior to the dissolution of the Victorville Redevelopment Agency in 2012, the Victorville Water District was added as a member of the JPA. The purpose of SCLAA is to provide for the coordination of long-range planning of the territory of George Air Force Base (now Southern California Logistics Airport, or the Airport). The Victor Valley Economic Development Authority (VVEDA), a Joint Powers Authority of the City of Victorville and other entities, was authorized to exclusively exercise the powers of a redevelopment agency in the area including and surrounding the Airport. VVEDA subsequently delegated to the SCLAA all of its redevelopment authority over the portion of the VVEDA project area comprised of the Airport.
B. Relationship to the City of Victorville
The SCLAA is an integral part of the reporting entity of the City of Victorville (City) and is reflected as a blended component unit within the City of Victorville. The SCLAA fund has been included within the scope of the basic financial statements of the City because the City Council is the governing board and has financial accountability over the operations of the SCLAA. Only the SCLAA fund is included herein and these financial statements, therefore, do not purport to represent the financial position or results of operations of the City of Victorville, California.
C. Basic Financial Statements
The basic financial statements are comprised of the statement of net position, the statement of revenues, expenses and changes in net position, the statement of cash flows and the notes to the basic financial statements.
D. Basis of Accounting, Measurement Focus and Financial Statement Presentation The SCLAA is accounted for as an enterprise fund (proprietary fund type). A fund is an accounting entity with a self-balancing set of accounts established to record the financial position and results of operations of a specific governmental activity. The activities of enterprise funds closely resemble those ongoing businesses in which the purpose is to conserve and add to basic resources while meeting operating expenses from current revenues. Enterprise funds account for operations that provide services on a continuous basis and are substantially financed by revenues derived from user charges.
The accounting and financial reporting treatment is determined by the applicable measurement focus and basis of accounting. Measurement focus indicates the type of resources being measured such as econom ic resources. The basis of accounting indicates the timing of transactions or events for recognition in the financial statements.
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(10)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) D. Basis of Accounting, Measurement Focus and Financial Statement Presentation (Continued)
Proprietary funds are presented using the economic resources measurement focus. This means that all assets, deferred outflows of resources, liabilities, and deferred inflows of resources (whether current or noncurrent) associated with their activity are included on their statement of net position.
Proprietary funds are presented using the accrual basis of accounting. Revenues are recognized when they are earned and expenses are recognized when the related goods or services are delivered, regardless of when the related cash flows take place. Amounts paid to acquire capital assets are capitalized as assets. Proceeds of long-term debt and acquisitions under capital leases are recorded as a liability. Amounts paid to reduce long-term indebtedness are reported as a reduction of the related liability. Bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable bond premium or discount. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenses.
The SCLAA distinguishes operating revenues and expenses from nonoperating items.
Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with airport and rental operations. The principal operating revenues of the SCLAA are charges to customers for services, which includes landing fees, fuel flowage fees, and rent and lease revenue, fines and forfeitures and other reimbursements. Operating expenses include personnel services, maintenance and operational costs and depreciation of capital assets. All revenues and expenses not meeting this definition, such as taxes, investment income, and interest expense, are reported as nonoperating revenues and expenses.
E. Cash and Investments
Investments are reported in the accompanying statement of net position at fair value.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
Changes in fair value that occur during a fiscal year are recognized as investment income reported for that fiscal year. Investment income includes interest earnings, changes in fair value, and any gains or losses realized upon the liquidation or sale of investments.
F. Cash Equivalents
For purposes of the statement of cash flows, cash equivalents are defined as short-term, highly liquid investments that are both readily convertible to known amounts of cash or so near their maturity that they present in significant risk of changes in value because of changes in interest rates. Cash equivalents include the cash and investments held by a fiscal agent.
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(11)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) G. Inventory and Prepaid Items
The SCLAA uses the consumption method of accounting for inventories. Inventory consists primarily of supplies for construction and repair that are valued at cost using the weighted average method.
Certain payments to vendors that reflect costs applicable to future accounting periods are recorded as prepaid items utilizing the consumption method.
H. Capital Assets
Capital assets are valued at cost where historical records are available and at an estimated historical cost where no historical records exist. Donated capital assets are valued at acquisition value on the date of donat ion. SCLAA capitalizes all assets with an initial individual cost of more than $5,000 and a useful life in excess of one year. The cost of normal maintenance and repairs that do not add to the value of the assets or materially extend the life are not capitalized.
Depreciation is computed utilizing the straight-line method over the following useful lives:
Buildings and Improvements 10 to 50 Years
Computer and Communications 5 Years
Furniture and Equipment 3 to 7 Years
Infrastructure 20 to 40 Years
Land Improvements 10 to 50 Years
Vehicles 8 to 15 Years
I. Compensated Absences
A liability is recorded for unused vacation and similar compensatory leave balances since the employees’ entitlement to these balances are attributable to services already rendered and it is probable that virtually all of these balances will be liquidated by either paid time off or payments upon termination or retirement.
A liability is recorded for unused sick leave balances only to the extent that it is probable that the unused balances will result in termination payments. This is estimated by including in the liability the unused balances of employees currently entitled to receive termination payment, as well as those who are expected to become eligible to receive termination benefits as a result of continuing their employment with the City. Other amounts of unused sick leave are excluded from the liability since their payment is contingent solely upon the occurrence of a future event (illness), which is outside the control of the City and the employee.
The balance of unpaid vacation and vested sick leave at year-end is recorded as a long- term liability in the financial statements.
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(12)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) J. Deferred Outflows and Deferred Inflows of Resources
The statement of net position reports a separate section for deferred outflows of resources. Deferred outflows of resources represent outflows of resources (consumption of net position) that apply to future periods and that, therefore, are not recognized as an expense until that time. The SCLAA has the following items that qualify for reporting in this category:
An unamortized loss on bond defeasance that results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the life of the refunding debt. Deferred outflow related to pensions and OPEB equal to employer contributions made after the measurement date of the net pension liability and the total OPEB liability.
Deferred outflows related to pensions for differences between expected and actual experiences. These amounts are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with pensions through the plans.
Deferred outflows related to pensions resulting from the net difference in projected and actual earnings on investments of the pension plan fiduciary net position. These amounts are amortized over five years.
Deferred outflows related to OPEB for changes in assumptions. These amounts are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with retiree healthcare benefits through the plans.
The statement of net position reports a separate section for deferred inflows of resources. Deferred inflows of resources represent inflows of resources (acquisition of net position) that apply to future periods and that, therefore, are not recognized as an inflow of resources (revenue) until that ti me. The SCLAA has the following items that qualify for reporting in this category:
Deferred inflows related to pensions changes in assumptions. These amounts are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with pensions through the plan.
Deferred inflows related to OPEB for differences between expected and actual experiences and changes in assumptions. These amounts are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with retiree healthcare benefits through the plan.
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(13)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) K. Net Position
Net position is classified in the following categories:
Net Investment in Capital Assets – This amount consists of capital assets net of accumulated depreciation and reduced by outstanding debt (including premiums and discounts) and capital related payables that are attributed to the acquisition, construction, or improvement of the assets.
Restricted Net Position – This amount is restricted by enabling legislation (such as external creditors, grantors, contributors, laws or regulations of other governments).
Unrestricted Net Position – This amount is the remaining net position that does not meet the definition of “invested in capital assets” or “restricted net position.”
Sometimes the SCLAA will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted net position and unrestricted net position, a flow assumption must be made about the order in which the resources are considered to be applied. It is the SCLAA’s practice to consider restricted net position to have been depleted before unrestricted net position is applied, unless otherwise directed by Council.
L. Pensions
For purposes of measuring the net pension liability, deferred outflows and inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the SCLAA’s California Public Employees’ Retirement System (CalPERS) plans (Plans) and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis as they are reported by the CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value. CalPERS audited financial statements are publicly available reports that can be obtained at CalPERS’ website under Forms and Publications.
M. Prior Year Data
Selected information regarding the prior year has been included in the accompanying financial statements. This information has been included for comparison purposes only and does not represent a complete presentation in accordance with accounting principles generally accepted in the United States of America. Accordingly, such information should be read in conjunction with the SCLAA’s prior year financial statements, from which this selected financial data was derived.
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(14)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) N. Estimates
The presentation of basic financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, deferred outflows of resources, liabilities, and deferred inflows of resources and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenditures during the reporting period. Actual results could differ from those estimates.
NOTE 2 CASH AND INVESTMENTS
Cash and investments as of June 30, 2021 are classified in the accompanying financial statements as follows:
Statement of Net Position:
Cash and Investments 17,453,500$
Cash and Investments With Fiscal Agent 23,952,767
Total Cash and Investments 41,406,267$
Cash and investments as of June 30, 2021, consist of the following:
Equity in City of Victorville Pool 119,703$
Investments 41,286,564
Total Cash and Investments 41,406,267$
Investments Pool of the City of Victorville
The SCLAA has no separate bank accounts or investments other than investments held by bond trustee, and their investment in LAIF. The SCLAA’s equity in the cash and investment pool is managed by the City of Victorville. The SCLAA is a voluntary participant in that pool.
This pool is governed by and under the regulatory oversight of the Investment Policy adopted by the City Council of the City of Victorville. The SCLAA has not adopted an investment policy separate from that of the City of Victorville. The fair value of the Authority’s investment in this pool is reported in the accompanying financial statements at amounts based upon the SCLAA’s pro-rata share of the fair value calculated by the City for the entire City portfolio. The balance available for withdrawal is based on the accounting records maintained by the City, which are recorded on an original cost basis.
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(15)
NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Investments Authorized by the California Government Code and the City’s Investment Policy
The City adopts the investment policy for the SCLAA. The table below identifies the investment types that are authorized for the SCLAA by the California Government Code and the City’s investment policy. The table also identifies certain provisions of the California Government Code (or the City’s investment policy, if more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustees that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City’s investment policy.
Authorized by Maximum Maximum
Investment Types Investment Maximum Percentage Investment Authorized by State Law Policy Matur ity* of Portfolio* in One Issuer* Local Agency Bonds Yes 5 Years 70% None
U.S. Treasury Obligations Yes 5 Years 70% None
U.S. Agency Securities Yes 5 Years 75%** None
Banker’s Acceptances No 180 Days 40% 30%
Commercial Paper - Nonpooled Funds No 270 Days 25% 10%
Commercial Paper - Pooled Funds No 270 Days 40% 10%
Negotiable Certificates of Deposit Yes 2 Years 30% None Repurchase Agreements No 1 Year None None
Reverse Repurchase Agreements No 92 Days 20% of Base Value None Medium-Term Notes No 5 Years 30% None
Mutual Funds*** No 5 Years 20%* 10%*
Money Market Mutual Funds*** Yes 5 Years 20%* None
Mortgage Pass-Through Securities No 5 Years 20% None
County Pooled Investment Funds No N/A None None
Local Agency Investment Fund (LAIF) Yes N/A None None
JPA Pools (Other Investment Pools) No N/A None None
* Based on state law requirements or investment policy requirements, whichever is more restrictive. ** Ginnie Mae is not to exceed 20% of the total portfolio. *** Fund must be an AAA rated Government or US Treasury money fund.
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(16)
NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Investments Authorized by Debt Agreements
Investment of debt proceeds held by bond trustee are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the SCLAA’s investment policy. The table below identifies the investment types that are authorized for investments held by bond trustee. The table also identifies certain provisions of these debt agreements that address interest rate risk and concentration of credit risk.
Maximum
Authorized Maximum Percentage Investment
Investment Type Maturity Allowed in One Issuer
U.S. Treasury Obligations None None None
U.S. Agency Securities None None None
Banker’s Acceptances 360 Days None None
Commercial Paper 270 Days None None
Money Market Mutual Funds None None None
Repurchase Agreements None None None
Investment Contracts None None None
Certificate of Deposit None None None
Local Agency Investment Fund (LAIF) None None None
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the Authority manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer-term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.
Information about the sensitivity of the fair valu es of the Authority’s investments (including investments held by bond trustee) to market interest rate fluctuations is provided by the following table that shows the distribution of these investments by maturity.
Remaining
Maturities
(in Months)
Investment Type Total Within 12
LAIF 17,333,797 $ 17,333,797 $
Held by Bond Trustee:
Money Market Mutual Funds 23,952,767 23,952,767
Total 41,286,564 $ 41,286,564 $
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(17)
NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the California Government C ode, the City’s investment policy, or debt agreements, and the actual Standard & Poor’s rating as of year-end for each investment type.
Minimum
Investment Type Total Legal Rating AAA Not Rated
LAIF 17,333,797 $ N/A - $ 17,333,797$ Held by Bond Trustee:
Money Market Mutual Funds 23,952,767 AAA 23,952,767 - Total 41,286,564 $ 23,952,767 $ 17,333,797 $
Ratings as of Year End
Concentration of Credit Risk
The investment policy of the SCLAA contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. The SCLAA has no investments in any one issuer (other than LAIF and money market mutual funds) that represent 5% or more of the City’s investments.
Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit).
The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure SCLAA deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. At June 30, 2021, the SCLAA’s deposits (bank balances) were equity in the City of Victorville’s pool, which was insured by the federal depository insurance limits or collateralized as required under California Law.
For investments identified herein as held by bond trustee, the bond trustee selects the investment under the terms of the applicable trust agreement, acquires the investment, and holds the investment on behalf of the reporting government.
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(18)
NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Investment in State Investment Pool
The SCLAA is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the oversight of the Treasurer of the state of California. The fair value of the SCLAA’s investment in this pool is reported in the accompanying financial statements at amounts based upon the SCLAA’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.
Fair Value Measurements
The SCLAA categorizes its fair value measurement within the fair value hierarchy established by accounting principles generally accepted in the United States of America.
The fair value framework provides a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of fair value hierarchy are described as follows:
Level 1 – Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets.
Level 2 – Inputs other than quoted prices included within the Level 1 that are observable for the asset or liability, either directly or indirectly and fair value is determined through the use of models or other valuation methodologies including:
- Quoted prices for similar assets or liabilities in active markets; - Quoted prices for identical or similar assets or liabilities in markets that are inactive;
- Inputs other than quoted prices that are observable for the asset or liability; - Inputs that are derived principally from or corroborated by observable market data by correlation of other items.
Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurements. These unobservable inputs reflect the SCLAA’s own assumptions about the inputs market participants would use in pricing the asset or liability (including assumptions about risk). These unobservable inputs are developed based on the best information available in the circumstances and may include the SCLAA’s own data.
The SCLAA’s investments in LAIF and money market mutual funds (held by bond trustee) are not subject to the fair value measurement hierarchy.
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(19)
NOTE 3 CAPITAL ASSETS
The following is a summary of changes in capital assets for SCLAA at June 30, 2021:
Balance Transfers Balance
July 1, 2020 Additions from City Deletions June 30, 2021 Nondepreciable Assets:
Land 13,848,689$ -$ -$ -$ 13,848,689$ Construction in Progress 22,314 1,935,449 - - 1,957,763 Total Nondepreciable Assets 13,871,003 1,935,449 - - 15,806,452 Depreciable Assets:
Buildings and Improvements 180,173,417 77,553 - - 180,250,970 Computer and Communication 254,165 - - - 254,165 Furniture and Equipment 7,747,618 - - (306,648) 7,440,970 Infrastructure 96,466,741 325,351 - - 96,792,092 Land Improvements 128,489 - - - 128,489 Vehicles 775,561 - 22,719 (18,083) 780,197 Total Depreciable Assets 285,545,991 402,904 22,719 (324,731) 285,646,883 Less Accumulated Depreciation:
Buildings and Improvements (104,689,923) (4,077,097) - - (108,767,020) Computer and Communication (233,548) (5,122) - - (238,670) Furniture and Equipment (5,339,904) (354,349) - 306,648 (5,387,605) Infrastructure (49,187,755) (4,616,943) - - (53,804,698) Land Improvements (112,428) (12,849) - - (125,277) Vehicles (740,257) (7,182) (22,719) 18,083 (752,075) Total Accumulated Depreciation (160,303,815) (9,073,542) (22,719) 324,731 (169,075,345) T
otal Depreciable Assets, Net 125,242,176 (8,670,638) - - 116,571,538 Capital Assets, Net 139,113,179$ (6,735,189)$ -$ -$ 132,377,990$
Depreciation expense for the SCLAA was $9,073,542 for the year ended June 30, 2021.
NOTE 4 LONG-TERM LIABILITIES
A summary of changes in long-term liabilities for the year ended June 30, 2021 is noted below:
Balance Balance Due Within
July 1, 2020 Additions Retirements June 30, 2021 One Year Other Long-Term Liabilities:
Compensated Absences 283,554$ 164,669$ (218,571)$ 229,652$ 124,790$ Other Debt:
Tax Allocation Bonds:
2005 Tax Allocation Parity Bonds 15,320,000 - (1,115,000) 14,205,000 1,165,000 2006 Tax Allocation Bonds (Non-Housing) 48,995,000 - (1,155,000) 47,840,000 1,205,000 2006 Tax Allocation Bonds (Housing) 13,160,000 - (310,000) 12,850,000 325,000 2006 Allocation Parity Bonds 41,675,000 - (145,000) 41,530,000 155,000 2006 Tax Allocation Revenue Parity Bonds 30,230,000 - (575,000) 29,655,000 610,000 2006 Tax Allocation Revenue Bonds 54,810,000 - (1,070,000) 53,740,000 1,135,000 2007 Tax Allocation Bonds 34,055,000 - (720,000) 33,335,000 760,000 2007 Tax Allocation Bonds (Non-Housing)* 35,550,000 - (725,000) 34,825,000 765,000 2008 Tax Allocation Bonds* 22,763,420 1,321,695 (105,000) 23,980,115 105,000 Tax Allocation Bonds Subtotal 296,558,420 1,321,695 (5,920,000) 291,960,115 6,225,000 Unamortized Discounts/Premiums (2,275,932) - 91,868 (2,184,064) - Total 294,566,042$ 1,486,364$ (6,046,703)$ 290,005,703$ 6,349,790$ See pledged revenue information at the end of this note.
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(20)
NOTE 4 LONG-TERM LIABILITIES (CONTINUED)
Tax Allocation Parity Bonds, Series 2005A
In June 2005, the SCLAA issued $42,185,000 principal amount of Tax Allocation Parity Bonds, Series 2005A. This debt was issued to finance certain public capital improvements benefiting the SCLAA.
On February 8, 2006, $1.8 million of bond proceeds was invested in land for the construction of a new City library. Prior to this purchase (on November 3, 2005), the Board of Directors of the SCLAA adopted a resolution with the intent of entering into a loan agreement between the SCLAA and the City with respect to this land purchase. On September 21, 2010 City Council approved this loan agreement. Legal counsel for the City has indicated that approval by the bond insurer is not required for the investment of proceeds not held by the bond trustee.
Bonds maturing on December 1, 2010, December 1, 2016, December 1, 2020, December 1, 2025, December 1, 2030, and December 1, 2035 in the amounts of $2,765,000, $3,365,000, $5,140,000, $6,335,000, $7,870,000 and $15,335,000 are term bonds. The outstanding bonds bear interest at 3.50% to 5.00% due June 1 and December 1 of each year.
The bonds are subject to redemption prior to maturity as described in the bond covenants.
The bonds maturing on or after June 1, 2016 are subject to optional redemption in whole or in part by lot, without premium.
The bonds maturing on December 1, 2010, December 1, 2016, December 1, 2020, December 1, 2025, December 1, 2030, and December 1, 2035 are subject to mandatory redemption in part by lot, without premium, commencing December 1, 2007, December 1, 2012, December 1, 2016, December 1, 2021, December 1, 2026, and December 1, 2031, respectively, from sinking fund payments made by SCLAA.
In the fiscal year ended June 30, 2006 these bonds were partially defeased by the issuance of the Tax Allocation Revenue Parity Bonds, Refunding Series 2005 (Non-Housing). As of June 30, 2021, the required reserve for the Bonds was met with fiscal agent cash. The Bonds are a special obligation of the SCLAA payable from tax increment revenues. The amount of bonds outstanding at June 30, 2021 is $14,205,000.
Tax Allocation Revenue Parity Bonds, Refunding Series 2006 (Non-Housing) In June 2006, the SCLAA issued $62,780,000 principal amount of Tax Allocation Revenue Parity Bonds, Refunding Series 2006. The proceeds were used to refund the 2001 Tax Allocation Bonds, the 2003 Tax Allocation Bonds, and a portion of 2005 Tax Allocation Bonds. As a result, the 2001 and 2003 Tax Allocation Bonds are considered to be defeased, and the 2005 Tax Allocation Bonds are considered to be partially defeased. The respective liabilities have been removed from the statement of net position.
Bonds maturing on December 1, 2026, December 1, 2031, December 1, 2036 and December 1, 2043 in the amounts of $6,895,000, $8,595,000, $10,810,000 and $20,335,000 are term bonds. The outstanding bonds bear interest at 4.50% to 5.00% due June 1 and December 1 of each year.
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(21)
NOTE 4 LONG-TERM LIABILITIES (CONTINUED)
Tax Allocation Revenue Parity Bonds, Refunding Series 2006 (Non-Housing) (Continued)
The bonds are subject to redemption prior to maturity as described in the bond covenants.
The bonds maturing on or after June 1, 2016 are subject to optional redemption in whole or in part by lot without premium.
The bonds maturing on December 1, 2026, December 1, 2031, December 1, 2036 and December 1, 2043 are subject to mandatory redemption in part by lot, without premium, commencing December 1, 2022, December 1, 2027, December 1, 2032 and December 1, 2037, respectively, from sinking fund payments made by SCLAA.
As of June 30, 2021, the required reserve for the Bonds was met with fiscal agent cash. The bonds are a special obligation of the SCLAA payable from tax increment revenues. The amount of bonds outstanding at June 30, 2021 is $47,840,000.
Tax Allocation Revenue Parity Bonds, Refunding Series 2006 (Housing Set-Aside) In June 2006, the SCLAA issued $16,855,000 principal amount of Housing Set-Aside Revenue Bonds, Refunding Series 2006. The proceeds were used to refund all of the 2003 Tax Allocation Bonds and a portion of the 2005 Tax Allocation Parity Bonds. As a result, the 2003 Tax Allocation Bond is considered to be defeased and the liability has been removed from the statement of net position.
Bonds maturing on December 1, 2026, December 1, 2031, December 1, 2036 and December 1, 2043 in the amounts of $1,855,000, $2,305,000, $2,905,000 and $5,460,000 are term bonds. The outstanding bonds bear interest at 4.50% to 5.00% due June 1 and December 1 of each year.
The bonds are subject to redemption prior to maturity as described in the bond covenants.
The bonds maturing on or after June 1, 2016 are subject to optional redemption in whole or in part by lot without premium.
The bonds maturing on December 1, 2026, December 1, 2031, December 1, 2036 and December 1, 2043 are subject to mandatory redemption in part by lot, without premium, commencing December 1, 2022, December 1, 2027, December 1, 2032 and December 1, 2037, respectively, from sinking fund payments made by SCLAA.
As of June 30, 2021, the required reserve for the Bonds was met with fiscal agent cash. The bonds are a special obligation of the SCLAA payable from tax increment revenues. The amount of bonds outstanding at June 30, 2021 is $12,850,000.
Tax Allocation Revenue Parity Bonds, Taxable Series 2006 In June 2006, the SCLAA issued $45,020,000 principal amount of Tax Allocation Revenue Parity Bonds, Taxable Series 2006. The proceeds were used to finance certain redevelopment activities benefiting the SCLAA.
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(22)
NOTE 4 LONG-TERM LIABILITIES (CONTINUED)
Tax Allocation Revenue Parity Bonds, Taxable Series 2006 (Continued) Bonds maturing on December 1, 2036, and December 1, 2043 in the amounts of $20,080,000, and $24,940,000 are term bonds. The outstanding bonds bear interest at
6.10% due June 1 and December 1 of each year.
The bonds are subject to redemption prior to maturity as described in the bond covenants.
The bonds are subject to optional redemption in whole or in part by lot, subject to a premium.
The bonds maturing on December 1, 2036, December 1, 2043 are subject to mandatory redemption in part by pro rata, without premium, commencing December 1, 2006, December 1, 2037, respectively, from sinking fund payments made by SCLAA.
As of June 30, 2021, the required reserve for the Bonds was met with fiscal agent cash. The bonds are a special obligation of the SCLAA payable from tax increment revenues. The amount of bonds outstanding at June 30, 2021 is $41,530,000.
Taxable Tax Allocation Revenue Parity Bonds, Forward Series 2006 In November 2006, SCLAA issued $34,980,000 principal amount of Taxable Tax Allocation Revenue Parity Bonds, Forward Series 2006. The proceeds were used to finance and refinance certain redevelopment activities benefiting the SCLAA.
The bonds mature from December 1, 2007 to December 1, 2043 in varying amounts.
Principal is payable in annual installments ranging from $50,000 to $2,320,000, commencing December 1, 2007. The bonds accrue interest at rates between 6.25% and
6.30%. Interest on the bonds is payable semiannually on each June 1 and December 1, commencing June 1, 2007.
The bonds are subject to optional and mandatory redemption prior to maturity.
As of June 30, 2021, the required reserve for the Bonds was met with fiscal agent cash. The bonds are a special obligation of the SCLAA payable from tax increment revenues. The amount of bonds outstanding at June 30, 2021 is $29,655,000.
Taxable Subordinate Tax Allocation Revenue Bonds, Series 2006 In November 2006, the SCLAA issued $64,165,000 principal amount of Taxable Subordinate Tax Allocation Revenue Bonds, Series 2006. The proceeds were used to finance certain redevelopment activities benefiting the SCLAA.
The bonds mature from December 1, 2007 to December 1, 2043 in varying amounts.
Principal is payable in annual installments ranging from $395,000 to $4,135,000, commencing December 1, 2007. The bonds accrue interest at 6.05%. Interest on the bonds is payable semiannually on each June 1 and December 1, commencing June 1, 2007.
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(23)
NOTE 4 LONG-TERM LIABILITIES (CONTINUED)
Taxable Subordinate Tax Allocation Revenue Bonds, Series 2006 (Continued) The bonds are subject to optional and mandatory redemption prior to maturity.
As of June 30, 2021, the required reserve for the Bonds was met with fiscal agent cash. The bonds are a special obligation of the SCLAA payable from tax increment revenues. The amount of bonds outstanding at June 30, 2021 is $53,740,000.
Taxable Housing Set-Aside Revenue Parity Bonds, Series 2007 In March 2007, the SCLAA issued $41,460,000 principal amount of Taxable Housing Set- Aside Revenue Parity Bonds, Series 2007. The proceeds were used to finance certain low- and moderate-income housing programs of the Authority. On July 7, 2009, $20,000,000 of bond proceeds were invested in a loan to the Victorville Water District. Legal counsel for the City has indicated that approval by the bond insurer is not required for the investment of proceeds not held by the bond trustee. In February 2013 this loan was repaid in full with interest.
Bonds maturing on December 1, 2012, December 1, 2017, December 1, 2022, December 1, 2027, and December 1, 2043 in the amounts of $3,265,000, $2,800,000, $3,620,000, $4,685,000 and $27,090,000 are term bonds. The outstanding bonds bear interest at 5.00%,
5.20%, 5.25%, 5.40% and 5.55% due June 1 and December 1 of each year.
The bonds are subject to optional redemption in whole or in part by lot, without premium.
As of June 30, 2021, the required reserve for the Bonds was met with fiscal agent cash and an insurance policy. The bonds are a special obligation of the SCLAA payable from tax increment revenues. The amount of bonds outstanding at June 30, 2021 is $33,335,000.
Subordinate Tax Allocation Revenue Bonds, Series 2007
In December 2007, the SCLAA issued $42,000,000 principal amount Subordinate Tax Allocation Revenue Bonds, Series 2007. The proceeds were used to finance certain redevelopment activities benefiting the SCLAA.
Bonds maturing on December 1, 2008, December 1, 2009, December 1, 2012, December 1, 2017, December 1, 2022, December 1, 2027, December 1, 2032, December 1, 2032, December 1, 2037, December 1, 2037, December 1, 2037, December 1, 2043 and December 1, 2043 in the amounts of $480,000, $425,000, $1,395,000, $2,805,000, $3,640,000, $4,745,000, $3,000,000, $3,275,000, $3,325,000, $3,800,000, $1,250,000, $9,210,000 and $4,650,000 are term bonds. The outstanding bonds bear interest at 4.000%,
4.200%, 4.375%, 5.250%, 5.375%, 5.600%, 5.900%, 6.000%, 5.900%, 6.000%, 6.100%,
5.900% and 6.150% due June 1 and December 1 of each year.
The bonds are subject to redemption prior to maturity at the option of the Authority, on or after December 1, 2017, in whole or in part by lot, without premium.
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(24)
NOTE 4 LONG-TERM LIABILITIES (CONTINUED)
Subordinate Tax Allocation Revenue Bonds, Series 2007 (Continued) The bonds maturing on the dates described above are subject to mandatory redemption in part by lot, without premium, commencing December 1, 2010, December 1, 2013, December 1, 2018, December 1, 2023, December 1, 2028, December 1, 2028, December 1, 2033, December 1, 2033, December 1, 2033, December 1, 2038, and December 1, 2038, respectively, from sinking fund payments made by SCLAA.
As of June 30, 2021, the required reserve for the Bonds was met with fiscal agent cash. The bonds are a special obligation of the SCLAA payable from tax increment revenues. The amount of bonds outstanding at June 30, 2021 is $34,825,000.
Subordinate Tax Allocation Revenue Bonds, Series 2008
In May 2008, the SCLAA issued $13,334,925 principal amount of Subordinate Tax Allocation Revenue Bonds, Series 2008A. The proceeds were used to finance certain redevelopment activities benefiting the SCLAA and to partially refund the $35,000,000 principal amount of Subordinate Tax Allocation Revenue Notes, Series 2008.
Bonds maturing on December 1, 2010, December 1, 2013, December 1, 2018, December 1, 2023, December 1, 2033, December 1, 2038, and December 1, 2043 in the amounts of $130,000, $215,000, $340,000, $530,000, $1,675,000, $1,285,000, and $1,720,000 are Current Interest Bonds. The outstanding bonds bear interest at 4.25%, 4.50%, 5.00%,
5.25%, 6.00%, 6.00% and 6.00% due June 1 and December 1 of each year.
Bonds maturing on December 1 of each year beginning 2044 through 2050 in the initial principal amounts of $1,316,266, $1,216,397, $1,123,621, $1,037,536, $957,600, $883,633, and $814,910 are Capital Appreciation Bonds. The outstanding bonds bear yields to maturity of 7.300%, 7.320%, 7.340%, 7.360%, 7.380%, 7.400% and 7.420%. All of the bonds have a future maturity value of $131,805,000 at June 30, 2021.
The current interest bonds are subject to redemption prior to maturity at the option of the Authority, on or after December 1, 2018, in whole or in part by lot, without premium. The Capital Appreciation Bonds are subject to optional redemption in whole or in part by lot, without premium.
As of June 30, 2021, the required reserve for the Bonds was met with fiscal agent cash. The bonds are a special obligation of the SCLAA payable from tax increment revenues. The amount of bonds outstanding at June 30, 2021 is $23,980,115, which includes an accretion balance of $11,620,190.
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(25)
NOTE 4 LONG-TERM LIABILITIES (CONTINUED)
Debt Service Requirements to Maturity
The annual requirements to amortize outstanding SCLAA debt as of June 30, 2021, are as follows for each fiscal year ending June 30:
Year Ending June 30, Principal* Interest
2022 6,225,000$ 15,238,104$
2023 6,550,000 14,906,577
2024 6,885,000 14,555,859
2025 7,245,000 14,184,559
2026 7,630,000 13,792,810
2027-31 44,665,000 62,262,070
2032-36 58,425,000 48,026,395
2037-41 77,350,000 28,526,413
2042-46 94,184,999 47,291,605
2047-2051 90,425,001 77,127,009
Subtotal 399,585,000 335,911,401$
Discounts/Premiums (2,184,064)
Total 397,400,936$
* This total includes capital appreciation of $107,624,885 for tax allocation bonds that will be accrued in the future years.
Tax Allocation Bonds
Pledged Revenue
All of the above Tax Allocation Bonds are collateralized by the pledging of certain revenues.
The amount and term of the remainder of these commitments are indicated in the debt service to maturity tables presented in the accompanying notes. The purposes for which the proceeds of the related debt issuances were utilized are disclosed in the debt descriptions in the accompanying notes.
The SCLAA contains a portion of the Victor Valley Economic Development Authority (VVEDA) Successor Agency (see Note 8 for additional information). The RPTTF (tax increment distributions) from VVEDA represent the primary revenue of the SCLAA.
As a result of the state’s action to dissolve all redevelopment agencies in the state of California, the VVEDA Successor Agency no longer receives the full amount of tax increment previously pledged by the dissolv ed redevelopment agency to its bondholders. In its place is a new revenue stream (RPTTF distributions) provided to the VVEDA Successor Agency that represents only that portion of tax increment that is necessary to pay the approved enforceable obligations that come due for that fiscal year.
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(26)
NOTE 4 LONG-TERM LIABILITIES (CONTINUED)
Pledged Revenue (Continued)
For the current year, pledged gross revenue (net of certain expenses were so required by the debt agreement) as a percentage of debt service payments are indicated in the table below:
Annual Amount of Annual Debt
Pledged Revenue Service Payment Pledged Revenue
(Net of Expenses, (of All Debt Secured as a Percentage
Description of Pledged Revenue Where Required) by This Revenue) of Debt Service Property Tax Increment Pledged by
the Southern California Logistics
Airport Authority 23,020,692$ 21,470,720$ 107%
NOTE 5 ADVANCES TO/FROM
Advances to/from the City
Fund Reporting
Fund Reporting Receivable Payable Amount
City of Victorville SCLAA 1,864,932$ a)
Successor Agency* SCLAA 10,995,517 b)
SCLAA City of Victorville 1,940,095 c)
*Advances from the Successor Agency have been classified as Advances from Other Governments in the statement of net position.
a) Per a loan agreement approved on October 20, 2009 by the Board of the Victorville Redevelopment Agency (RDA), a $1,700,000 advance was made from the Low and Moderate Housing Fund to the SCLAA. The advance is to be used for SCLAA redevelopment activities. The advance has an interest rate equal to the annualized Local Agency Investment Fund (LAIF) rate of return. The loan had a repayment term of five years, which was due June 30, 2014, but has not yet been repaid due to funding issues with the SCLAA. There is no current payment schedule available for this advance. The outstanding balance of the advance as of June 30, 2021 is $1,864,932.
b) Per a loan agreement approved on September 15, 2009 by the Board of Victorville RDA, a $10,000,000 advance was made from the Bear Valley Road Redevelopment Project Area (RDA Capital Project Fund) to the SCLAA. The advance is to be used to continue redevelopment at SCLAA and to fund prior years’ capital improvements and redevelopment project expenses. The advance bears interest at 3% using the simple interest method in accordance with SB-107. The outstanding balance of the advance as of June 30, 2021 is $10,995,517. The California Department of Finance has denied repayment on this loan.
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(27)
NOTE 5 ADVANCES TO/FROM (CONTINUED)
Advances to/from the City (Continued)
c) Per a loan agreement signed on September 21, 2010, by the Board of the SCLAA, a $1,895,000 advance was made from the SCLAA to the Capital Impact Facilities Fund. The advance is to be used for the purchase of land. The advance has a term of repayment to automatically renew the loan until there are sufficient funds to repay.
The City is working on a plan to repay this loan in fiscal year 2021-2022. The advance has an interest rate equal to the annualized Local Agency Investment Fund (LAIF) rate of return. The outstanding balance of the advance as of June 30, 2021 is $1,940,095.
NOTE 6 PENSION PLAN
General Information about the Pension Plan
Plan Description
All qualified permanent and probationary employees are eligible to participate in the City’s Miscellaneous Plan, agent multiple employer defined benefit pension plans administered by the California Public Employees’ Retirement System (CalPERS), which acts as a common investment and administrative agent for its participating member employers. The SCLAA’s share of the net pension liability is reported as a cost-sharing plan in these financial statements. Benefit provisions under the Plan are established by State statute and Local Government resolution. CalPERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.
Benefits Provided
CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years of total service are eligible to retire at age 50 to 62 with statutorily reduced benefits. For employees hired into a plan with the 1.5% at 65 formula, eligibility for service retirement is age 55 with at least five years of services. PEPRA miscellaneous members become eligible for service retirement upon attainment of age 52 with at least five years of service. All members are eligible for nonduty disability benefits after five years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(28)
NOTE 6 PENSION PLAN (CONTINUED)
General Information about the Pension Plan (Continued)
Benefits Provided (Continued)
The Plan’s provisions and benefits in effect as of the measurement period ended June 30, 2020, are summarized as follows:
Prior to on or after
Hire Date January 1, 2013 January 1, 2013
Benefit Formula 2.5%@55 2.0%@62
Benefit Vesting Schedule 5 Years of Service 5 Years of Service Benefit Payments Monthly for Life Monthly for Life
Retirement Age 50 to 55 52 to 67
Required Employee Contribution Rates 8.00% 6.75%
Required Employer Contribution Rates:
Normal Cost Rate 10.59% 9.69%
Payment of Unfunded Liability $215,495 N/A
Miscellaneous
Contributions
Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers are determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS’ annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The SCLAA is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. SCLAA contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contributions requirements are classified as plan member contributions. For the fiscal year ended June 30, 2021, SCLAA made contributions totaling $381,393.
Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions
Actuarial Assumptions
The total pension liability for the Miscellaneous Plan for the June 30, 2020 measurement period was determined by an actuarial valuation as of June 30, 2019, with update procedures used to roll forward the total pension liability to June 30, 2020. The total pension liability for the Miscellaneous Plan was based on the following assumptions:
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(29)
NOTE 6 PENSION PLAN (CONTINUED)
Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
Actuarial Assumptions (Continued)
Valuation Date June 30, 2019
Measurement Date June 30, 2020
Actuarial Cost Method Entry-Age Normal
Cost Method
Asset Valuation Method Market Value of Assets
Actuarial Assumptions:
Discount Rate 7.15%
Inflation 2.50%
Salary Increases (1)
Mortality Rate Table (2)
Post Retirement Benefit Income (3)
(1) Varies by entry age and service.
(2) The mortality table used was developed based on CalPERS-specific data. The probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015. Pre-retirement and Post-retirement mortality rates includes 15 years of projected mortality improvement using 90% of Scale MP-2016 published by the Society of Actuaries.
For more details on this table, please refer to the CalPERS Experience Study and Review of Actuarial Assumptions report from December 2017 that can be found on the CalPERS website.
(3) Contract COLA up to 2.00% until Purchasing Power Protection Allowance Floor on Purchasing Power applies, 2.50% thereafter.
Long-term Expected Rate of Return
The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.
In determining the long term expected rate of return, CalPERS took into account both short term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all the funds’ asset classes, expected compound (geometric) returns were calculated over the short term (first 10 years) and the long-term (11+ years) using a building block approach. Using the expected nominal returns for both short term and long term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the rounded single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short term and long-term returns. The expected rate of return was then set equal to the single equivalent rate calculated above and adjus ted to account for assumed administrative expenses.
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(30)
NOTE 6 PENSION PLAN (CONTINUED)
Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
Long-term Expected Rate of Return (Continued)
The expected real rates of return by asset class are as follows:
Assumed
Asset Real Return Real Return
Asset Class (a) Allocation Years 1 - 10 (b) Years 11+ (c) Global Equity 50.00 % 4.80 % 5.98 %
Fixed Income 28.00 1.00 2.62
Inflation Assets - 0.77 1.81
Private Equity 8.00 6.30 7.23
Real Assets 13.00 3.75 4.93
Liquidity 1.00 - (0.92)
100.00 %
(a) In the CalPERS CAFR, Fixed Income is included in Global Debt Securities; Liquidity is included in Short-term Investments; Inflation Assets are included in both Global Equity Securities and Global Debt Securities
(b) An expected inflation of 2.0% used for this period
(c) An expected inflation of 2.92% used for this period
Discount Rate
The discount rate used to measure the total pension liability was 7.15%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.
Proportionate Share of Net Pension Liability – City’s Miscellaneous Agent Multiple-Employer Plan Allocation to the SCLAA
The SCLAA’s net pension liability for the Plan is measured as the proportionate share of the net pension liability. The SCLAA’s proportionate share of the net pension liability was based on a projection of the SCLAA’s long-term share of contributions to the Miscellaneous Plan relative to the projected contributions of the City, actuarially determined.
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(31)
NOTE 6 PENSION PLAN (CONTINUED)
Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
Proportionate Share of Net Pension Liability – City’s Miscellaneous Agent Multiple-Employer Plan Allocation to the SCLAA (Continued)
The SCLAA’s proportionate share of the net pension liability for the Miscellaneous Plan as of the measurement date ended June 30, 2019 and 2020 was as follows:
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability Proportionate
(a) (b) (c) = (a) - (b) Share
Balance at: 6/30/2019 (MD) 13,910,894$ 10,363,958 $ 3,546,936 $ 6.86% Balance at: 6/30/2020 (MD) 14,580,525 10,741,944 3,838,581 6.84% Net Changes During 2019-20 669,631$ 377,986$ 291,645$ -0.02% Increase (Decrease)
Pension Expense and Deferred Outflows and Inflows of Resources For the year ended June 30, 2021, the SCLAA recognized pension expense of $588,058 for the Miscellaneous Plan. At June 30, 2021, the SCLAA reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources for the Miscellaneous Plan:
Deferred Deferred
Outflows of Inflows of
Resources Resources
Pension Contributions Subsequent to the
Measurement Date 381,393$ -$
Changes of Assumptions - (76,839) Differences Between Expected and Actual Experience 260,444 - Net Difference Between Projected and Actual
Earnings on Pension Plan Investments 147,899 - Total 789,736$ (76,839)$
$381,393 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ending June 30, 2022. Differences between projected and actual investment earnings are amortized on a five-year straight-line basis and all other amounts are amortized over the expected average remaining service lives of all members that are provided with benefits.
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(32)
NOTE 6 PENSION PLAN (CONTINUED)
Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
Pension Expense and Deferred Outflows and Inflows of Resources (Continued) Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
Deferred
Measurement Period Inflows of
Ended June 30, Resources
2022 65,794 $
2023 121,291
2024 84,637
2025 59,782
2026 -
Thereafter -
Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the SCLAA’s proportionate share of the net pension liability for the Miscellaneous Plan, calculated using the disc ount rate of 7.15%, as well as what the SCLAA’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate:
1% Decrease Current Rate 1% Increase
(6.15%) (7.15%) (8.15%)
Net Pension Liability 5,897,758 $ 3,838,581$ 2,149,170$ Discount Rate
Pension Plan Fiduciary Net Position
Detailed information about each pension plan’s fiduciary net position is available in the separate issued CalPERS financial reports.
Payable to the Pension Plan
At June 30, 2021, the SCLAA had no outstanding amount of contributions to the Miscellaneous Plan required for the year ended June 30, 2021.
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(33)
NOTE 7 OTHER POSTEMPLOYMENT BENEFITS PLAN
Plan Descriptions
The SCLAA participates in the City’s Other Postemployment Benefits Defined Benefit Pension Plan and the SCLAA’s share of the total OPEB liability is reported as a cost sharing plan in these financial statements.
The City Plan provides medical benefits to eligible retired City employees and beneficiaries in accordance with various labor agreements. The plan covers employees who retire directly from the City with 8 years of service. The City provides a contribution up to a certain amount (a portion of the HMO single premium). The percentage varies based on years of service.
Funding Policy
The contribution requirements of plan members and the City are established and may be amended by City Council. The contribution required to be made under City Council and labor agreement requirements is based on a pay-as-you-go basis (i.e., as medical insurance premiums become due). The City has not established a trust that is administered by the City for the purpose of holding assets accumulated for plan benefits.
Contributions
The City Plan and its contribution requirements are established by Memoranda of Understanding with the applicable employee bargaining units and may be amended by agreements between the City and the bargaining units. The annual contribution is based on the year’s retiree medical premiums (pay-as-you-go basis). For the fiscal year ended June 30, 2021, the SCLAA’s cash contributions were $15,564 in cash benefit payments, $72 in administrative costs, and the estimated implied subsidy was $6,184, resulting in total payments of $21,820.
Total OPEB Liability
The City’s total OPEB liability was measured as of June 30, 2020 and determined by an actuarial valuation as of June 30, 2020.
Actuarial Cost Method Entry Age Normal
Actuarial Assumptions:
Discount Rate 2.21%
Inflation 2.75%
Salary Increases 3.0% per annum, in aggregate
Investment Rate of Return N/A
Mortality, Retirement, Disability
Termination 1997-2015 Experience Study
Mortality Improvement Post-retirement mortality projected fully generational with Scale MP-2020
Healthcare Trend Rate Non-Medicare: 7.0% for 2022, decreasing to an ultimate rate of 4.0% in 2076
Medicare (Non-Kaiser) - 6.1% for 2022, decreasing to an ultimate rate of 4.0% in 2076
Medicare (Kaiser) - 5.0% for 2022, decreasing to an
ultimate rate of 4.0% in 2076
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(34)
NOTE 7 OTHER POSTEMPLOYMENT BENEFITS PLAN (CONTINUED)
Discount Rate
The discount rate used to measure the total OPEB liability was 2.21%. The discount rate is determined based on the Bond Buyer 20-bond index since the City has not established a trust.
Change in Actuarial Assumptions
The discount rate changed from 3.50% at the beginning of the measurement period to
2.21% based on changes in the index. In addition, the medical trend rate for Kaiser Senior Advantage plans decreased from 6.5% to 5.0%.
Allocation of Total OPEB Liability
The SCLAA’s proportionate share of the total OPEB liability as of the measurement dates ended June 30, 2019 and 2020 was as follows:
Total OPEB Proportionate
Liability Share
Balance - June 30, 2019 (MD) 2,093,649$ 8.19%
Balance - June 30, 2020 (MD) 2,214,981 7.99%
Net Changes During 2019-20 (121,332)$ -0.20%
Sensitivity of the Total OPEB Liability to Changes in the Discount Rate The following presents the SCLAA’s proportionate share of the total OPEB liability if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate:
1% Decrease Current Rate 1% Increase
(1.21%) (2.21%) (3.21%)
Total OPEB Liability 2,678,876 $ 2,214,981$ 1,853,306$ Discount Rate
Sensitivity of the Total OPEB Liability to Changes in the Health Care Cost Trend Rates The following presents the SCLAA’s proportionate share of the total OPEB liability if it were calculated using health care cost trend rates that are one percentage point lower (Non- Medicare: 6.0% for 2022 decreasing to 3.0% in 2076; Medicare (Non-Kaiser): 5.1% for 2022, decreasing to an ultimate rate of 3.0% in 2076; Medicare (Kaiser): 4.0% for 2022, decreasing to an ultimate rate of 3.0% in 2076) or one percentage point higher (Non- Medicare: 8.0% for 2022 decreasing to 5.0% in 2076; Medicare (Non-Kaiser): 7.1% for 2022, decreasing to an ultimate rate of 5.0% in 2076; Medicare (Kaiser): 6.0% for 2022, decreasing to an ultimate rate of 5.0% in 2076) than the current rate:
1% Decrease Current Rate 1% Increase
Total OPEB Liability 1,782,492$ 2,214,981$ 2,796,861$ Healthcare Trend Rate
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(35)
NOTE 7 OTHER POSTEMPLOYMENT BENEFITS PLAN (CONTINUED)
Recognition of Deferred Outflows and Deferred Inflows of Resources Gains and losses related to changes in total OPEB liability are recognized in OPEB expense systematically over time. Amounts are first recognized in OPEB expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to OPEB and are to be recognized in future OPEB expense.
The recognition period differs depending on the source of the gain or loss:
Net Difference Between Projected and Actual
Earnings on OPEB Plan Investments
Plan Investments 5 Years
All Other Amounts Expected average remaining service
lifetime (EARSL) (9.1 Years at
June 30, 2020 measurement date)
OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB For the fiscal year ended June 30, 2021, the SCLAA recognized OPEB expense of $102,380. As of fiscal year ended June 30, 2021, the SCLAA reported deferred outflows/inflows of resources related to OPEB from the following sources:
Deferred Deferred
Outflows of Inflows of
Resources Resources
Employer Contributions Subsequent to the
Measurement Date 21,820$ -$
Differences Between Expected and Actual Experience - (395,973) Changes of Assumptions 301,150 (193,526)
Total 322,970$ (589,499)$
The $21,820 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the Total OPEB liability during the fiscal year ending June 30, 2022. Other amounts reported as deferred outflows of resources related to OPEB will be recognized as expense as follows:
Deferred
Measurement Period Inflows of
Ended June 30, Resources
2022 (55,856) $
2023 (55,856)
2024 (55,856)
2025 (55,856)
2026 (55,855)
Thereafter (9,070)
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(36)
NOTE 7 OTHER POSTEMPLOYMENT BENEFITS PLAN (CONTINUED)
Payable to the Pension Plan
At June 30, 2021, the SCLAA had no outstanding amount of contributions to the OPEB plan required for the year ended June 30, 2021.
NOTE 8 COMMITMENTS AND CONTINGENCIES
Litigation
The SCLAA is a defendant in certain legal actions arising in the normal course of operations. The accompanying basic financial statements reflect a liability for the probable amounts of loss associated with these claims.
Southern California Logistics Airport Authority and Stirling Enterprise LLC In the early 1990’s the US Air Force closed George Air Force Base (former Base). In response the local communities formed the Victor Valley Economic Development Authority (VVEDA). VVEDA and the Air Force entered into agreements to lease and ultimately transfer title to the former Base to VVEDA. The subject land is designated as either Public Benefit Transfer (PBT) Parcels or Economic Development Conveyance (EDC) Parcels. The PBT Parcels are made up of approximately 2,200 acres previously used by the U.S. Air Force and are restricted to use as an airport. These parcels were transferred to SCLAA at no cost.
The EDC Parcels are made up of approximately 1,800 acres of adjacent property which may be developed for use as commercial property. SCLAA paid $1,636,489 and is required to pay additional $37,176 for these EDC Parcels. In 1993 a Redevelopment Plan was adopted by VVEDA establishing a redevelopment proj ect area encompassing the former Base as well as approximately 55,000 additional acre s. VVEDA delegated its decision making authority relative to the former Base, now known as SCLAA.
SCLAA adopted a Specific Plan in conformity with the Redevelopment Plan and adopted a Master Development Plan establishing its goal to develop the area as a cargo and aircraft maintenance facility and a business/industrial center thereby creating jobs and improving economic conditions in the Victor Valley.
In July 1998 SCLAA and Stirling Enterprises, LLC and its related entities (Stirling) entered into the first of several agreements for the marketing, acquisition, operation and development of SCLAA. The Fourth Amended and Restated Master Agreement (Stirling Agreement) is the current agreement superseding all previous versions.
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(37)
NOTE 8 COMMITMENTS AND CONTINGENCIES (CONTINUED)
Revenues from Sales of Land
In August 2016, three agreements with Stirling were approved by the SCLAA Board of Directors that were intended to serve as a framework that encourages development before the expiration of the Master Agreement (MA). The three agreements are a Satisfaction and Termination Agreement, a Disposition, Exchange and Development Agreement (#2) and an Option and Development Agreement.
The Disposition, Exchange and Development Agreement allows for the removal of approximately 280-acres of Airport-owned property from the definition of EDC Parcels and the title transfer in fee to Stirling, of approximately 280-acres. The Airport-owned property will become available for the Airport for revenue-producing purposes and the Airport will have the flexibility to develop the subject property on a ground-lease basis with aviation and nonaviation (Section 2.01 of the Development and Exchange Agreement). Revenue sharing will only exist relating to these parcels if the respective transaction is procured by Stirling and be split 80/20 with the larger share to benefit SCLAA.
The Agreement also provides for the disposition of additional off-airport property. In addition to the Stirling Exchange Parcels, SCLAA will then transfer, in fee, 200-acres of property for the $.0203/psf purchase price ($176,448) and participate in revenue sharing for net proceeds in an amount equal to 30% (Section 2.03 of the Development and Exchange Agreement). Net proceeds are generally defined to be revenues generated from the eventual sale by Stirling that are residual to infrastructure costs, EIR costs and developer credits. The Agreement also transfers the public infrastructure obligations of the Authority pursuant to the MA and DDA to Stirling.
Finally, the Option Agreement, in connection with performance obligations related to the Development and Exchange Agreement, will provide Stirling the ability to acquire additional acreage currently provided for in the Master Agreement. Such an exercise of option will occur in 50-acre increments based on Stirling having developed 500,000 square feet of property owned by it. The Option Agreement is set up to run through December 2050 and can terminate sooner due to nonperformance described in Section 1.5 of the Option and Development Agreement.
Management
Stirling is allowed to lease or cause to be leased the EDC Parcels and shall participate in 20% of the Net Lease Revenue from any such leases. The Authority has retained the right to lease the PBT Parcels and retain revenues from those leases, but shall allow Stirling to participate in 20% of any net lease revenues from tenants who may be procured by Stirling and approval by the Authority. Any revenues from other interim uses on the former Base such as filming will be shared on a 50%/50% basis between Stirling and Authority.
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(38)
NOTE 9 SCLAA’S FINANCIAL CONDITION SIGNIFICANT FINANCIAL OBLIGATIONS AND MANAGEMENT’S PLANS
In Fiscal Year 08/09, the assessed value for the Victor Valley Redevelopment Project Area was approximately $9.49 billion. Beginning in FY 09/10, there were significant decreases in assessed value for the Victor Valley Redevelopment Project Area. Assessed values for the Project Area reached a low point of $6.6 Billion in FY 12/13. The decrease was largely the result of the Great Recession. Since FY 12/13, assessed values have increased steadily.
For Fiscal Year 2020-2021, the assessed value for the Project Area was approximately $9.99 billion. The steady increase in assessed values have resulted in the SCLAA paying all past due debt service in the previous fiscal year. As of the December 1, 2018 tax distribution, the SCLAA was no longer in default. In 2018, Moody’s issued an upgraded rating on the Successor Agency to the Victor Valley Economic Development Authority (VVEDA) housing set-aside Tax Allocation Bonds and the Non-Housing Tax Allocation Bonds to “stable” outlook as a result of resolving the outstanding defaults, and the prospective analysis on increasing assessed values in the project area.
During the current fiscal year and prior year, SCLAA had results that were not as favorable as fiscal year 2018-2019 with a net loss of $3.5 million and $2.5 million, respectively. A summary of the financial condition of the SCLAA enterprise fund is as follows:
Beginning Net Position (128,048,025)$
Net Income (3,515,790)
Ending Net Position (131,563,815)$
Management’s Plans with Respect to its Financial Condition Management plans to ensure that annual expenditures do not exceed annual revenues and to build the reserves that are necessary to provide for economic uncertainties.
The SCLAA has continued to maintain a balance budget since 2007-2008 and all revenues are projected to cover current liabilities.
Regarding the SCLAA’s financial condition, an Interfund loan agreement was signed July 1, 2016 by the Board of SCLAA and a $10,000,000 advance was made available from the 2007 SCLA Housing bond fund to the Airport Operations Fund and has been used to subsidize operations. The advance has a term repayment of five years, with an annualized Wall Street Journal Prime Rate as the interest rate. The outstanding balance of the advance as of June 30, 2021 is $8,824,244, which has been eliminated for financial statement purposes within the SCLAA since the advance is within the fund itself. SCLAA is currently preparing for payment of this loan in FY 2021-2022 using funding from property sales.
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(39)
NOTE 10 JOINTLY GOVERNED ORGANIZATIONS
Victor Valley Economic Development Authority
The Victor Valley Economic Development Authority (VVEDA) was formed in 1992 by the Cities of Victorville and Hesperia, the Town of Apple Valley and the County of San Bernardino to provide the mechanism and funding to manage development of the property formerly known as the George Air Force Base, facilitate the successful reuse of the property and promote economic development within the area surrounding the Air Base. In 2000, the City of Adelanto was added as a member of the Authority. In December 2011 Assembly Bill 1X 26 (the bill) dissolved VVEDA, and as such all assets of the former VVEDA have been transferred to the VVEDA Successor Agency and are subject to the distribution’s provisions of the bill. The SCLAA contains a portion of the VVEDA Successor Agency with the Town of Apple Valley and City of Adelanto comprising the rest of the VVEDA Successor Agency. The RPTTF (tax increment distributions) from VVEDA represent the primary revenue of the SCLAA. Financial statements may be obtained by sending a written request to Victor Valley Economic Development Authority, 18374 Phantom Street, Victorville, CA 92394.
NOTE 11 SUCCESSOR AGENCY TRUST FOR ASSETS OF THE FORMER REDEVELOPMENT AGENCY
On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X 26 (the Bill) that provides for the dissolution of all redevelopment agencies in the state of California. This action impacted the SCLAA because the SCLAA has historically funded its operations and debt service using significant tax increment revenue from the Victor Valley Economic Development Agency (VVEDA). VVEDA has acted as a pass-through agency for the various recipients of tax increment revenue in the Victor Valley and is subject to the dissolution requirements of the Bill.
The Bill provides that upon dissolution of a redevelopment agency, either the city or another unit of local government will agree to serve as the “successor agency” to hold the assets until they are distributed to other units of state and local government. On January 17, 2012, the Victorville City Council elected to become the Successor Agency for the former redevelopment agency in accordance with the Bill as part of City resolution number 12-005.
After enactment of the law, which occurred on June 28, 2011, redevelopment agencies in the state of California cannot enter into new projects, obligations or commitments. Subject to the control of a newly established oversight board, remaining assets can only be used to pay enforceable obligations in existence at the date of dissolution (including the completion of any unfinished projects that were subject to legally enforceable contractual commitments).
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
(40)
NOTE 12 LEASES
The SCLAA has various leases for rental of portions certain real property and improvements for which the cost and accumulated depreciation cannot readily be determined. Lease terms vary. Future minimum rental payments to be re ceived on the leases that are contractually due as of June 30, 2021 are estimated as follows:
Lease
Year Ending June 30, Payments
2022 8,022,722 $
2023 8,185,944
2024 8,433,322
2025 8,700,875
2026 8,909,364
2027-2031 48,720,055
2032-2036 55,915,099
2037-2041 63,504,771
Total 210,392,152 $
(41)
REQUIRED SUPPLEMENTARY INFORMATION
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
SCHEDULE OF PLAN’S PROPORTIONATE SHARE OF NET PENSION LIABILITY (COST SHARING PLAN)
LAST TEN FISCAL YEARS*
(42)
2021 2020 2019 2018 2017 2016 2015
(2020) (2019) (2018) (2017) (2016) (2015) (2014)
Plan’s Proportion of the
Net Pension Liability 6.84% 6.86% 6.90% 6.95% 7.07% 6.87% 6.76% Plan’s Proportionate Share of the
Net Pension Liability 3,838,581$ 3,546,936$ 3,189,455$ 3,210,086$ 2,805,052$ 2,090,587$ 1,880,791$ Plan’s Covered Payroll 1,686,096$ 1,534,654$ 1,565,360$ 1,579,911$ 1,368,422$ 1,343,244$ 1,310,612$ Plan’s Proportionate Share of the
Net Pension Liability as a
Percentage of Covered Payroll 227.66% 231.12% 203.75% 203.18% 204.98% 155.64% 143.50% Plan’s Proportionate Share of the
Fiduciary Net Position as a
Percentage of the Plan’s Total
Pension Liability 5.04% 5.11% 5.22% 5.18% 5.33% 5.50% 6.76% Notes to Schedule:
Benefit Changes:
There were no changes in benefits.
Changes in Assumptions:
From fiscal year June 30, 2015 to June 30, 2016:
GASB 68, paragraph 68 states that the long-term expected rate of return should be determined net of pension plan investment expense but without reduction for pension plan administrative expense. The discount rate of 7.50% used for the June 30, 2014 measurement date was net of administrative expenses. The discount rate of 7.65% used for the June 30, 2015 measurement date is without reduction of pension plan administrative expense.
From fiscal year June 30, 2016 to June 30, 2017:
There were no changes in assumptions.
From fiscal year June 30, 2017 to June 30, 2018:
The discount rate was reduced from 7.65% to 7.15%.
From fiscal year June 30, 2018 to June 30, 2021:
There were no significant changes in assumptions.
*Fiscal year 2015 was the first year of implementation, therefore only seven years are shown.
Reporting Fiscal Year
(Measurement Date)
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
SCHEDULE OF PLAN CONTRIBUTIONS
(COST SHARING PLAN)
LAST TEN FISCAL YEARS*
(43)
2020-2021 2019-2020 2018-2019 2017-2018 2016-2017 2015-2016 2014-2015 Actuarially Determined Contribution 381,393 $ 345,578 $ 279,699 $ 275,299 $ 273,075 $ 233,116 $ 197,631 $ Contributions in relation to the Actuarially
Determined Contribution (381,393) (345,578) (279,699) (275,299) (273,075) (233,116) (197,631) Contribution Deficiency (Excess) - $ - $ - $ - $ - $ - $ - $ Covered Payroll 1,676,551$ 1,686,096$ 1,534,654$ 1,565,360$ 1,579,911$ 1,368,422$ 1,343,244$ Contributions as a Percentage
of Covered Payroll 22.75% 20.50% 18.23% 17.59% 17.28% 17.04% 14.71% Notes to Schedule:
Valuation Date 6/30/2018 6/30/2017 6/30/2016 6/30/2015 6/30/2014 6/30/2013 6/30/2012 Methods and Assumptions Used to Determine Contribution Rates:
Actuarial Cost Method Entry Age Entry Age Entry Age Entry Age Entry Age Entry Age Entry Age Amortization Method (1) (1) (1) (1) (1) (1) (1)
Asset Valuation Method Fair Value Fair Value Fai r Value Fair Value Fair Value Fair Value 15-Year Smoothed
Market
Method
Inflation 2.50% 2.63% 2.75% 2.75% 2.75% 2.75% 2.75%
Salary increases (2) (2) (2) (2) (2) (2) (2)
Investment Rate of Return 7.00% (3) 7.25% (3) 7.375% (3) 7.50% (3) 7.50% (3) 7.50% (3) 7.50% (3) Retirement Age (4) (4) (4) (4) (4) (4) (4)
Mortality (5) (5) (5) (5) (5) (5) (5)
(1) Level percentage of payroll, closed
(2) Depending on age, service, and type of employment
(3) Net of pension plan investment expense, including inflation (4) 50 - 55 for 2.5%@55; 52 - 67 for 2.0%@62
(5) Mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study adopted by the CalPERS Board.
*Fiscal year 2015 was the first year of implementation, therefore only seven years are shown.
Fiscal Year
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
SCHEDULE OF PLAN’S PROPORTIONATE SHARE OF TOTAL OPEB LIABILITY (COST SHARING PLAN)
LAST TEN FISCAL YEARS*
(44)
2021 2020 2019 2018
(2020) (2019) (2018) (2017)
Plan’s Proportion of the Total OPEB Liability 0.00% 8.19% 8.57% 8.43% Plan’s Proportionate Share of the Total
OPEB Liability 2,214,981$ 2,093,649$ 1,888,372$ 2,014,829$ Plan’s Covered Payroll 2,348,399$ 1,993,268$ 1,735,340$ 1,494,600$ Plan’s Proportionate Share of the Total OPEB
Liability as a Percentage of Covered Employee
Payroll 94.32% 105.04% 108.82% 134.81%
Notes to Schedule:
Changes in Assumptions:
Discount rate 2.21% 3.50% 3.87% 3.58%
Mortality improvement rates Scale MP-2020 Scale MP-2018 Scale MP-2018 Scale MP-2016 The mortality, retirement, disability, and termination rates for the measurement periods ended June 30, 2017 and 2018 were based on the CalPERS 1997-2011 Experience Study and CalPERS 1997-2015 Experience Study, respectively.
In the June 30, 2018 measurement period, the pre-65 waived retiree re-election was updated to be 10% after age 65.
In the June 30, 2020 measurement period, the medical trend rate for Kaiser Senior Advantage plans decreased from 6.5% to 5.0%.
*Fiscal year 2018 was the first year of implementation, therefore only four years are shown.
Fiscal Year Ended
(Measurement Date)
(45)
SUPPLEMENTARY INFORMATION
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
COMBINING SCHEDULE OF NET POSITION
JUNE 30, 2021
(WITH COMPARATIVE DATA FOR JUNE 30, 2020)
(46)
Non Other
Aeronautical Aeronautical Services Elimination 2021 2020 ASSETS
Current Assets
Cash and Investments 1,591,498$ 111,244$ 15,750,758$ -$ 17,453,500$ 18,656,468$ Cash and Investments with Fiscal Agent - - 23,952,767 - 23,952,767 23,950,333 Accounts Receivable, Net 452,419 - - - 452,419 486,993 Due from Other Funds - - - - - - Due from Other Governments 2,241,469 - - - 2,241,469 849,543 Inventory 16,320 - - - 16,320 11,600 Total Current Assets 4,301,706 111,244 39,703,525 - 44,116,475 43,954,937 Noncurrent Assets
Prepaid Items 2,759 - - - 2,759 53,817 Advances to Other Funds - - 9,078,004 (9,078,004) - - Advances to City of Victorville - - 1,940,095 - 1,940,095 1,929,269 Advances to Other Governments - - - - - - Nondepreciable Capital Assets 2,052,694 - 13,753,758 - 15,806,452 13,871,003 Depreciable Capital Assets, Net 20,218,289 - 96,353,249 - 116,571,538 125,242,176 Total Noncurrent Assets 22,273,742 - 121,125,106 (9,078,004) 134,320,844 141,096,265 T
otal Assets 26,575,448 111,244 160,828,631 (9,078,004) 178,437,319 185,051,202 Deferred Outflow of Resources
Deferred Outflows - OPEB Related 322,970 - - - 322,970 106,556 Deferred Outflow - Pension Related 781,130 8,606 - - 789,736 745,881 Deferred Charge on Refunding - - 1,666,928 - 1,666,928 1,801,443 Total Deferred Outflow of Resources 1,104,100 8,606 1,666,928 - 2,779,634 2,653,880
LIABILITIES
Current Liabilities
Accounts Payable 1,251,784 14,000 - - 1,265,784 246,438 Interest Payable - - 1,283,294 - 1,283,294 1,308,493 Unearned Revenue 44,066 - - - 44,066 46,410 Due to Other Funds - - - - - - Bonds Subject to Call - - - - - - Total OPEB Liability - Due Within One Year 28,165 - - - 28,165 - Long-Term Liabilities, Due Within One Year 124,790 - 6,225,000 - 6,349,790 6,074,079 Total Current Liabilities 1,448,805 14,000 7,508,294 - 8,971,099 7,675,420
Noncurrent Liabilities
Accrued Rent Credit Payable 600,572 1,000 - - 601,572 585,416 Advances from Other Funds 9,078,004 - - (9,078,004) - - Advances from City of Victorville - - 1,864,932 - 1,864,932 1,855,412 Advances from Other Governments - - 10,995,517 - 10,995,517 10,939,517 Total OPEB Liability 2,186,816 - - - 2,186,816 2,093,649 Net Pension Liability 3,825,101 13,480 - - 3,838,581 3,546,936 Long-Term Liabilities, Due Beyond One Year 104,862 - 283,551,051 - 283,655,913 288,491,963 Total Noncurrent Liabilities 15,795,355 14,480 296,411,500 (9,078,004) 303,143,331 307,512,893 Total Liabilities 17,244,160 28,480 303,919,794 (9,078,004) 312,114,430 315,188,313 Deferred Inflows of Resources
Deferred Inflows - OPEB Related 589,499 - - - 589,499 413,856 Deferred Inflows - Pension Related 74,754 2,085 - - 76,839 150,938 Total Deferred Inflows of Resources 664,253 2,085 - - 666,338 564,794 Net Position (Deficit)
Net Investment in Capital Assets 21,321,348 - (154,049,349) - (132,728,001) (129,417,584) Unrestricted (11,550,213) 89,285 12,625,114 - 1,164,186 1,369,559 Total Net Position (Deficit) 9,771,135$ 89,285$ (141,424,235)$ -$ (131,563,815)$ (128,048,025)$ Totals
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY
COMBINING SCHEDULE OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION YEAR ENDED JUNE 30, 2021
(WITH COMPARATIVE DATA FOR THE YEAR ENDED JUNE 30, 2020)
(47)
Non Other
Aeronautical Aeronautical Services Elimination 2021 2020 Operating Revenues
Charges for Services:
Landing Fees 1,576,966$ -$ -$ -$ 1,576,966$ 893,765$ Fuel Flowage Fees 278,938 - - - 278,938 251,575 Rent and Lease Revenue 7,535,912 105,000 1,000,000 - 8,640,912 9,207,397 Total Charges for Services 9,391,816 105,000 1,000,000 - 10,496,816 10,352,737 Fines and Forfeitures 34,986 - - - 34,986 121,180 Other 524,539 - - - 524,539 724,410 Total Operating Revenues 9,951,341 105,000 1,000,000 - 11,056,341 11,198,327 Operating Expenses
Personnel Services 2,792,194 1,867 - - 2,794,061 2,812,135 Maintenance and Operations 11,486,449 64,477 19,947 - 11,570,873 4,827,337 Depreciation 2,834,129 - 6,239,413 - 9,073,542 9,097,915 Total Operating Expenses 17,112,772 66,344 6,259,360 - 23,438,476 16,737,387 Operating Loss (7,161,431) 38,656 (5,259,360) - (12,382,135) (5,539,060) Nonoperating Revenues (Expenses)
Taxes 180,308 - 21,128,417 - 21,308,725 19,858,962 Investment Income 7,224 132 295,818 (253,760) 49,414 519,981 Interest Expense (253,760) - (17,139,120) 253,760 (17,139,120) (17,518,436) Gain on Sale of Capital Assets 6,775 - - - 6,775 (604,144) Other Nonoperating Expenses - - (19,487) - (19,487) (19,537) Total Nonoperating Revenues
(Expenses) (59,453) 132 4,265,628 - 4,206,307 2,236,826 Income (Loss) Before Capital
Contributions (7,220,884) 38,788 (993,732) - (8,175,828) (3,302,234) Capital Contributions
Capital Grants 6,344,691 - - - 6,344,691 843,148 Capital Contribution to the City of Victorville (1,684,653) - - - (1,684,653) - Total Capital Contributions 4,660,038 - - - 4,660,038 843,148 Change in Net Position (2,560,846) 38,788 (993,732) - (3,515,790) (2,459,086) Net Position (Deficit) - Beginning of Year 12,331,981 50,497 (140,430,503) - (128,048,025) (125,588,939) Net Position (Deficit) - End of Year 9,771,135$ 89,285$ (141,424,235)$ -$ (131,563,815)$ (128,048,025)$ Totals
Item Number: 8
City Council / Board of Directors
Written Communications
Meeting of: March 1, 2022
Submitted By:
Josefina Trevino, Human Resources Officer
Subject:
Benefits Resolution No. 22-020 and Table Of Organization Recommendation:
That the City Council adopt Benefits Resolution 22-020, revising the Table of Organization and Compensation Schedule, effective January 1, 2022.
Fiscal Impact:
The fiscal impact associated with the employee salary schedule and benefits is included with the Mid-year 2021-2022 Budget.
Discussion:
Below is a summary of the proposed changes to the Benefits Resolution and the Table of Organization.
Changes to Personnel
A total of 7 full-time positions have been added, 4 full-time positions were deleted, and there are 2 title changes. The total authorized full-time positions increased from 459 to 462 positions, reflecting a net increase of 3 positions (Please see Attachment A, Summary of Changes to the Table of Organization).
Changes to Part-time Hourly Rates
On December 17, 2019, the City of Victorville Council approved Resolution 19-097, the Part-time Employee Table of Compensation with a three-year phased implementation plan, with 2022 being the last year, resulting from SB3 amending the minimum wage.
Unfortunately, the part-time hourly rates for several classifications, effective January 1, 2022, were missed in the 2021-2022 fiscal year benefits resolution adoption (Please see Attachment C, Part-Time Table of Compensation). The budget reflected the increases, so there is no additional impact to the budget.
2 4
5 6
Changes to Benefits
On Thursday, June 17, 2021, President Joe Biden signed the Juneteenth National Independence Day Act, (the “Juneteenth Act”) into law to recognize the end of slavery in the United States. This new law adds Juneteenth, which takes place on June 19th of every year, to the list of federally recognized holidays. Because Juneteenth falls on a Sunday this year, Monday June 20th will be observed.
Additionally, the allowable amount that can be transferred to a deferred compensation plan has been increased to $20,500 as of January 1, 2022 (Please see Attachment B, Benefits Resolution No. 22-020 and Table of Organization).
Staff is requesting your favorable consideration on this item and is available for any questions that you may have.
Attachments: A. Summary of Changes to the Table of Organization B. Benefits Resolution No. 22-020 and Table of Organization C. Part-Time Table of Compensation
CITY OF VICTORVILLE
SUMMARY OF CHANGES TO THE TABLE OF ORGANIZATION
MID YEAR 2021-2022
BUILDING DEPARTMENT
ADDED: 1
(1) SENIOR BUILDING INSPECTOR, RANGE 42
DELETE: 1
BUILDING MANAGER, RANGE 50
CITY MANAGER DEPARTMENT
DELETE: 1
(1) MANAGEMENT TECHNICIAN, RANGE 29
ENGINEERING DEPARTMENT
ADDED: 1
(1) MANAGEMENT SPECIALIST, RANGE 35
DELETED: 1
(1) ENGINEERING SPECIALIST, RANGE 38
TITLE CHANGE: 1
(1) TRAFFIC ENGINEERING SPECIALIST, RANGE 41 TO ASSISTANT ENGINEER I, RANGE 41
FIRE DEPARTMENT
ADDED: 1
(1) FIRE ADMINISTRATIVE MANAGER, RANGE 50
DELETED: 1
(1) ADMINISTRATIVE ANALYST, RANGE 41
INFORMATION TECHNOLOGY DEPARTMENT
ADDED: 2
(1) SECRETARY, RANGE 21
(1) TECHNOLOGY TECHNICIAN, RANGE 27
PLANNING DEPARTMENT
ADDED: 1
(1) HOMELESSNESS SERVICES MANAGER, RANGE 50
TITLE CHANGE: 1
(1) ADMINISTRATIVE SECRETARY, RANGE 29 TO MANAGEMENT TECHNICIAN RANGE 29
PUBLIC WORKS AND WATER DEPARTMENT
ADDED: 1
(1) MAINTENANCE WORKER, RANGE 18
Resolution 22-020 Mid-Year 2021-2022 Table of Organization Page 1
RESOLUTION NO. 22-020
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VICTORVILLE AMENDING THE TABLE OF
ORGANIZATION, FIXING THE RATES OF COMPENSATION, AND ESTABLISHING FRINGE BENEFITS FOR EMPLOYEES OF THE CITY OF VICTORVILLE INCLUDED IN RESOLUTION NUMBER 2 1-052 AND SUBSEQUENT AMENDMENTS.
WHEREAS, copies of said Table of Organization, Fixing Rates of Compensation, and Establishing Fringe Benefits relating to an appropriation of funds at the City of Victorville were prepared and distributed to the City Council, and have been available for the inspection by the public in the office of the City Clerk of the City of Victorville.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF VICTORVILLE DOES HEREBY RESOLVE AS FOLLOWS:
SECTION 1. That the Table of Organization for the fiscal year 2021-2022 is hereby revised. A total of 462 full-time Positions on such Table of Organization are authorized to be filled in accordance with the Personnel Ordinance of the City of Victorville. The salaries and compensation of officers and employees of the City of Victorville shall be established as provided in said Personnel Ordinance for the salary ranges to which position is assigned by this Benefit Resolution for Fiscal Year 2021-2022.
NO. POSITION RANGE NO. POSITION RANGE
5 ACCOUNT CLERK 20 4081 4961 27 FIREFIGHTER PARAMEDIC FFPM 5542 6805 2 ACCOUNTANT 40 6688 8129 1 FLEET ADMIN TECHNICIAN 27 4851 5897 6 ADMINISTRATIVE ANALYST 41 6855 8332 1 FLEET MANAGER 50 8561 10406 2 ADMINISTRATIVE SECRETARY 29 5097 6195 1 GAS DISTRIBUTION COORDINATOR 39 6525 7931 1 AIRPORT DIRECTOR 64 10887 13234 1 GIS COORDINATOR 39 6525 7931 1 AIRPORT MAINTENANCE SUPERVISOR 37 6210 7549 1 GIS MANAGER 50 8561 10406 8 AIRPORT MAINTENANCE WORKER 18 3885 4722 2 GIS TECHNICIAN 27 4851 5897 1 AIRPORT OPERATIONS & FACILITIES MANAGER 50 8561 10406 1 HOMELESSNESS SOLUTIONS COORDINATOR 42 7026 8541 4 AIRPORT OPERATIONS OFFICER 23 4395 5342 1 HOMELESSN ESS SOLUTIONS MANAGER 50 8561 10406 1 AIRPORT SPECIALIST 35 5911 7185 1 HUMAN RESOURCES ANALYST 41 6855 8332 1 ANIMAL CARE & CONTROL MANAGER 50 8561 10406 1 HUMAN RESOURCES OFFICER 64 10887 13234 1 ANIMAL CONTROL COMMUNITY OU TREACH OFFICER 35 5911 7185 1 HUMAN R ESOURCES SPECIALIST 35 5911 7185 1 ANIMAL CONTROL LEAD OFFICER 28 4973 6044 1 LEAD MECHANIC 32 5489 6672 3 ANIMAL CONTROL OFFICER 24 4505 5476 2 LIBRARY COORDINATOR 27 4851 5897 2 ANIMAL CONTROL TECH 27 4851 5897 2 LINE LOCATOR 25 4618 5613 1 ASSISTANT CITY ENGINEER 61 10110 12289 9 MAINTENANCE LEAD WORKER 28 4973 6044 6 ASSISTANT ENGINEER I 41 6855 8332 1 MAINTENANCE SUPERVISOR 40 6688 8129 2 ASSISTANT ENGINEER II 45 7567 9197 41 MAINTENANCE WORKER 18 3885 4722 1 ASSISTANT PLANNER 37 6210 7549 3 MANAGEMENT SPECIALIST 35 5911 7185 1 ASSOCIATE CIVIL ENGINEER 51 8775 10666 5 MANAGEMENT TECHNICIAN 29 5097 6195 2 ASSOCIATE PLANNER 44 7382 8973 2 MARKETING TECHNICIAN 29 5097 6195 3 BATTALION CHIEF BC 9124 11201 2 MECHANIC 23 4395 5342 1 BATTALION CHIEF (DEPUTY FIRE MARSHALL) BC 9124 11201 10 OFFICE ASSI STANT 17 3790 4607 1 BILLING TECHNICIAN 28 4973 6044 1 PARKS SUPERVISOR 40 6688 8129 1 BUILDING & FIRE OFFICIAL 64 10887 13234 3 PERMIT TECHNICIAN 27 4851 5897 3 BUILDING INSPECTOR 35 5911 7185 1 PUBLIC INFORMATION OFFI CER 64 10887 13234 1 BUYER 33 5626 6839 1 PUBLIC WORKS & WATER DIRECTOR 64 10887 13234 1 CHILDREN'S LIBRARIAN 27 4851 5897 4 PUBLIC WORKS INSPECTOR 35 5911 7185 1 CITY CLERK 64 10887 13234 2 PUBLIC WORKS MANAGER 50 8561 10406 5 CITY COUNCIL MEMBER 943 2 PUBLIC WORKS SUPERVISOR 40 6688 8129 1 CITY ENGINEER 68 12018 14608 1 PUBLIC WORKS TECHNICIAN 29 5097 6195 1 CITY LIBRARIAN 40 6688 8129 1 RECREATION & LIBRARY MANAGER 50 8561 10406 1 CITY MANAGER 21507 2 RECREATION SUPERVISOR 37 6210 7549 1 CITY PLANNER 64 10887 13234 1 RECYCLING TECHNICIAN 27 4851 5897 1 CITY SURVEYOR 50 8561 10406 1 RISK MANAGER 50 8561 10406 2 CODE COMPLIANCE TECHNICIAN 27 4851 5897 1 SCADA COORDINATOR 42 7026 8541 2 CODE ENFORCEMENT OFFICER I 30 5224 6350 12 SECRETARY 21 4183 5085 8 CODE ENFORCEMENT OFFICER II 35 5911 7185 4 SENIOR ACCOUNT CLERK 24 4505 5476 1 CODE ENFORCEMENT OFFICIAL 64 10887 13234 1 SENIOR ADMINISTRATIVE ANALYST 47 7950 9663 1 COMMUNITY RELATIONS SPECIALIST 35 5911 7185 1 SENIOR AIRPORT MAINTENANCE LEADWORKER 32 5489 6672 1 COMMUNITY SERVICES COORDINATOR 27 4851 5897 1 SENIOR BUILDING INSPECTOR 42 7026 8541 1 CROSS CONNECTION COORDINATOR 32 5489 6672 2 SENIOR CIVIL ENGINEER 55 9686 11773 1 CROSS CONNECTION TECHNICIAN 29 5097 6195 2 SENIOR CODE ENFORCEMENT OFFICER 42 7026 8541 1 CUSTOMER SERVICE LEAD R EPRESENTATIVE 28 4973 604 4 1 SENIOR ENGINEERING & GIS TECHNICI AN 33 5626 6839 14 CUSTOMER SERVICE REPRESENTATIVE 20 4081 4961 2 SENIOR EQUIPMENT OPERATOR 27 4851 5897 2 DEPUTY CITY CLERK 29 5097 6195 1 SENIOR HUMAN RESOURCES TECHNICIAN 31 5355 6509 2 DEPUTY CITY MANAGER 75 14285 17364 2 SENIOR MAINTENANCE LEADWORKER 32 5489 6672 1 DEVELOPMENT SPECIALIST 35 5911 7185 19 SENIOR MAINTENANCE WORKER 22 4288 5212 1 DEVELOPMENT TECHNICIAN 29 5097 6195 8 SENIOR MECHANIC 29 5097 6195 1 DIRECTOR OF ELECTRIC UTILITY SERVICES 64 10887 13234 2 SENIOR PLAN CHECKER 42 7026 8541 1 DIRECTOR OF FINANCE 64 10887 13234 2 SENIOR PLANNER 50 8561 10406 1 DIVISION CHIEF DC 10234 12439 2 SENIOR TRAFFIC SIGNAL MAINT TECHNICIAN 33 5626 6839 1 ECONOMIC DEVELOPMENT MANAGER 50 8561 10406 2 SENIOR WATER DISTRIBUTION LEAD WORKER 36 6059 7365 1 ECONOMIC DEVELOPMENT TECHNICIAN 27 4851 5897 10 SEN IOR WATER DISTRIBUTION WORKER 23 4395 5342 2 ELECTRIC DISTRIBUTION SPECIALIST 33 5626 683 9 1 SENIOR WATER SUPPLY LEAD OPERATOR 38 6366 7737 1 ELECTRICAL TECHNICIAN 33 5626 6839 8 SENIOR WATER SUPPLY OPERATOR 29 5097 6195 1 ELECTRICAL TECHNICIAN ASSISTANT 31 5355 6509 1 SIG N TECHNICIAN 24 4505 5476 1 ELECTRICIAN 33 5626 6839 1 SURVEY TECHNICIAN 28 4973 6044 1 EMERGENCY MANAGEMENT COORDI NATOR 45 7567 9197 4 SW EEPER OPERATOR 24 4505 5476 1 EMERGENCY MEDICAL SERVICES COORDINATOR EMSC 7799 9480 5 TECHNOLOGY COORDINATOR 39 6525 7931 1 ENERGY MARKET MANAGER 50 8561 10406 1 TECHNOLOGY MANAGER 50 8561 10406 2 ENGINEERING LEAD WORKER 28 4973 6044 1 TECHNOLOGY OFFICER 64 10887 13234 1 ENVIRONMENTAL PROGRAMS COORDINATOR 43 7202 8754 4 TECHNOLOGY TECHNICIAN 27 4851 5897 1 ENVIRONMENTAL PROGRAMS MANAGER 50 8561 10406 1 TRAFFIC MAINTENANCE SUPERVISOR 40 6688 8129 6 EQUIPMENT OPERATOR 24 4505 5476 2 TRAFFIC SIGNAL MAINTENANCE TECHNICIAN 28 4973 6044 1 EXECUTIVE ASSISTANT TO THE CITY MANA GER 40 6688 8129 1 UTILITY DISTRI BUTION SUPERVISOR 40 6688 8129 2 EXECUTIVE ASSISTANT TO THE DEPUTY CITY MANAGER 37 6210 7549 3 VEHICLE SERVICE WORKER 18 3885 4722 1 FACILITIES MANAGER 50 8561 10406 1 WAREHOUSE CLERK 20 4081 4961 2 FINANCE ANALYST 47 7950 9663 2 WAREHOUSE TECHNICIAN 23 4395 5342 2 FINANCE MANAGER 50 8561 10406 2 WATER CONSERVATION SPECIALIST 30 5224 6350 3 FINANCE SPECIALIST 35 5911 7185 4 WATER DISTRIBUTION LEAD WORKER 28 4973 6044 3 FINANCE SUPERVISOR 40 6688 8129 2 WATER DISTRIBUTION SUPERVISOR 40 6688 8129 5 FINANCE TECHNICIAN 29 5097 6195 11 WATER DISTRIBUTION WORKER 19 3982 4840 1 FIRE ADMINISTRATIVE MANAGER 50 8561 10406 2 WATER MANAGER 50 8561 10406 15 FIRE CAPTAIN FC 7339 9010 1 WATER QUALITY SPECIALIST 30 5224 6350 1 FIRE CHIEF 70 12626 15347 1 WATER RESOURCES SUPERVISOR 40 6688 8129 15 FIRE ENGINEER FE 6197 7608 2 WATER SUPPLY LEAD OPERATOR 32 5489 6672 2 FIRE INSPECTOR 30 5224 6350 1 WATER SUPPLY SUPERVISOR 42 7026 8541 462 NUMBER OF AUTHORIZED FT POSITIONS
Resolution 22-020 MID-YEAR 2021-2022 Table of Organization
CITY OF VICTORVILLE
MID-YEAR 2021-2022 TABLE OF ORGANIZATION
Revised and adopted by the City of Victorville Council as of January 1, 2022
SALARY SALARY
STEP STEP STEP STEP STEP
R a n g e 12345
17 3790 3979 4178 4387 4607
18 3885 4079 4283 4497 4722
19 3982 4181 4390 4609 4840
20 4081 4285 4500 4725 4961
21 4183 4393 4612 4843 5085
22 4288 4502 4727 4964 5212
23 4395 4615 4846 5088 5342
24 4505 4730 4967 5215 5476
25 4618 4849 5091 5346 5613
27 4851 5094 5349 5616 5897
28 4973 5221 5482 5757 6044
29 5097 5352 5619 5900 6195
30 5224 5486 5760 6048 6350
31 5355 5623 5904 6199 6509
32 5489 5763 6052 6354 6672
33 5626 5908 6203 6513 6839
35 5911 6207 6517 6843 7185
36 6059 6362 6680 7014 7365
37 6210 6521 6847 7189 7549
38 6366 6684 7018 7369 7737
39 6525 6851 7193 7553 7931
40 6688 7022 7373 7742 8129
41 6855 7198 7558 7935 8332
42 7026 7378 7747 8134 8541
43 7202 7562 7940 8337 8754
44 7382 7751 8139 8546 8973
45 7567 7945 8342 8759 9197
47 7950 8347 8765 9203 9663
50 8561 8989 9438 9910 10406
51 8775 9214 9674 10158 10666
55 9686 10170 10679 11213 11773
61 10110 10616 11146 11704 12289
64 10887 11432 12003 12604 13234
68 12018 12619 13249 13912 14608
75 14285 14999 15749 16537 17364
FF 5542 5858 6174 6489 6805
FE 6197 6550 6903 7255 7608
FC 7339 7757 8175 8592 9010
BC 9124 9643 10162 10681 11201
EMS 7799 8189 8598 9028 9480
DC 10234 10746 11283 11847 12439
Only Active Ranges shown based on the Table of Organization Resolution 22-020 Mid- Year 2021-2022 Table of Organization Page 3 of 12
CITY OF VICTORVILLE
MID-YEAR 2021-2022 TABLE OF COMPENSATION - MONTHLY RATE OF PAY Revised and adopted by the City of Victorville Council as of January 1, 2022
Resolution 22-020 Mid-Year 2021-2022 Table of Organization Page 4
SECTION 2. FRINGE BENEFITS - The following is provided as an overview and should not be considered as a complete description of benefits. The fringe benefits are for the City of Victorville full-time employees effective July 1, 2021, unless otherwise specified, through June 30, 2022, shall be:
1. Annual Vacation Leave - All full-time employees shall earn annual vacation credits accrued bi-weekly in the beginning of the years listed below and are authorized to accumulate vacation leave credits as follows:
Years of Full-
Time
Employment
Annual
Vacation
Hours
Earned
Safety Shift
Annual
Vacation Hours
Earned
Hours Earned Per
Pay Period (26 pay
periods per year)
Safety Shift Hours
Earned Per Pay
Period (26 pay
periods per year)
Maximum
Vacation
Accrual Hours
Safety Shift
Maximum Vacation
Accrual Hours
0-5 80 112 3.08 4.31 160 224
6-10 120 168 4.62 6.47 240 336
11-15 160 224 6.15 8.61 320 448
16+ 200 280 7.69 10.77 400 560
Full-time employees are eligible to use annual leave time as it accrues. Effective January 1, 2012, accruals will be earned every pay period. (See City of Victorville Personnel Rules, Rule X, Sections 1 and 2.)
2. Sick Leave – Accrued at the rate of 3. 7 hours per pay period for all probationary and full-time employees, for a total of 96 hours per year.
Safety Shift Personnel (56-hour per week) accrue at the rate of 4.69 hours per pay period for all probationary and full-time employees, for a total of 122 hours per year.
Healthy Workplaces/Healthy Families Act of 2014 Paid Sick Leave – A part-time employee who, on or after July 1, 2015, works in California for 30 or more days within a year from the beginning of employment is entitled to paid sick leave. Paid sick leave accrues at the rate of one hour per every 30 hour s worked, paid at the employees’ regular wage rate. Accrual shall begin on the first day of employment. Accruals may be capped at 48 hours or 6 days.
Families First Coronavirus Response Act (FFCRA) Sick Leave Conversion:
Any COVID-19 sick leave hours provided under The Families First Coronavirus Response Act (FFCRA) not used by employees by December 31, 2020, have been converted to paid time off hours. The converted paid time off hours will be available from January 1, 2021 to June 30, 202 2. These hours are not subject for a payout and shall be scheduled with the employee’s supervisor or Department Head, taking into consideration the request of the employee and the work demands of the department. Approval by the Department Head prior to taking this time off is required.
Sick Leave Yearly Payoff - Non-represented full-time employees who maintain a minimum of 144 hours and have completed 5 years of full -time of continuous service with the City of Victorville will be able to receive a payoff of their accrued sick leave hours. The maximum payoff cannot exceed 1 44 hours, every December, beginning December 2021. The payoff will be based on the following scale:
Resolution 22-020 Mid-Year 2021-2022 Table of Organization Page 5
Sick Leave Accrued as of Date of
Termination
Cash Payment of hours of
Accrued Sick Leave
240 hours or less 35%
241 to 320 hours 40%
321 to 400 hours 45%
401 to 480 hours 50%
481 to 560 hours 55%
561 to 640 hours 60%
641 to 720 hours 65%
721 to 800 hours 70%
801 to 880 hours 75%
881 to 960 hours 80%
961 to 1,040 hours 85%
1,041 to 1,120 hours 90%
1,121 to 1,200 hours 95%
1,201 hours and above 100%
Upon completion of five (5) years of continuous service, sick leave payout upon separation of service or termination is calculated according to the above formula, pursuant to Resolution 09-103:
3. Holidays
Day Date Holiday
Monday 5-Jul-21 Independence Day
Monday 6-Sep-21 Labor Day
Thursday 11-Nov-21 Veterans Day
Thursday 25-Nov-21 Thanksgiving Day
Friday 26-Nov-21 Day after Thanksgiving Day
Thursday 23-Dec-21 Christmas Eve Holiday
Friday 24-Dec-21 Christmas Holiday (Observed)
Thursday 30-Dec-21 New Year's Eve Holiday
Friday 31-Dec-21 New Year's Day Holiday
Monday 17-Jan-22 Martin Luther King, Jr. Day
Monday 21-Feb-22 President's Day
Monday 30-May-22 Memorial Day
Monday 20-Jun-22 Juneteenth National Independence Day
1 Floating Holidays
Total of 14 Holidays
Resolution 22-020 Mid-Year 2021-2022 Table of Organization Page 6
Note: Actual holidays vary each year. T hree days in December are designated as permanent Cost of Living Adjustment (COLA) reduction days and applied to the December holiday schedule. Actual COLA reduction days taken are based on individual department needs and must be taken within 30 days. Days off during the December holidays shall not be prorated for any employee hired after January 1, 2022.
Floating Holiday may be taken in conjunction with another holiday, vacation, or sick leave day. No partial holiday may be taken. Floating Holiday may be taken after six months of service.
Premium Holiday Pay- Based on the approved holidays in this section and excluding the floating holiday, nonexempt, full-time, non-represented employees who are eligible for paid holidays but who are required to work on a company holiday will be paid at one and one- half times their regular rate of pay for the hours worked in addition to holiday pay. Part-time employees who are required to work on an approved company holiday will be eligible to receive one and one-half times their regular rate of pay for the hours worked.
Safety Shift Personnel (56-hour per week) will be paid ten (10) hours of regular pay for each of the above holidays on the pay period in which the holiday occurs. The floating holiday will be paid during the pay period of the employee’s choice.
4. Stability Pay – Non-represented employees will receive stability pay , starting after 10 years o f continuous part-time or full-time service or the combination of the two with the City of Victorville, every December, beginning December 2021, based on the following scale:
Years of Service Amount
10 - 14 $500
15 - 19 $1,000
20 + $1,500
5. Executive Leave – Provided to Department Heads, Assistant Department Heads, and other designated staff, based on the City Manager’s evaluation of the amount of time worked. Advance written approval by the City Manager is required. (See Administrative Policy D-1.)
6. Compensatory Time – Employees eligible for compensatory time may accrue such time, up to the limit of 40 hours for full-time employees. Compensatory time may not be earned until 40 hours have been worked in a workweek. Compensatory time earned after 40 hours in a workweek are earned at one and one-half rates.
Compensatory time must be used within six months from the date of accrual. It is the employee’s choice whether to receive compensatory time or overtime pay. Part-time employees and Safety Shift Personnel are not eligible for compensatory time.
7. Retirement – Effective July 1, 2015, the City ceased to pay the 8.0% employee share of contributions to the California Public Employees’ Retirement System (CalPERS). The City ceased to report the Employer Paid Member Contributions (EPMC) to PERS as special compensation. The City shall participate in the CalPERS replacement benefit plan or equivalent. The City provides all full- time employees 4th l evel 1959 Survivor’s Benefits. For full -time employees and Council Members hired on or after January 1, 2013, CalPERS
Resolution 22-020 Mid-Year 2021-2022 Table of Organization Page 7
contributions will be implemented according to the Public Employees’ Pension Reform Act of 2013 (PEPRA) AB 340 and AB 197. Council Members have the option to elect membership into CalPERS. • Miscellaneous Classic Formula: Member formula: 2.5% @ 55 Employees pay CalPERS 8% employee contribution.
• Miscellaneous PEPRA Formula: Member formula 2.0% @ 62 Employee will pay the statutorily mandated employee contribution rate of one half of the total normal cost. • Safety Classic Formula: Member formula: 2% @ 50 Employee pay CalPERS 9% employee contribution. • Safety PEPRA F ormula: Member formula 2.7% @ 57. Employee will pay the statutorily mandated employee contribution rate of one half of the total normal cost.
8. Deferred Compensation –As of January 1, 20 22, full-time employees shall be eligible to transfer up to $20,500 of annual salary per year into a City -approved Deferred Compensation Plan; full-time employees 50 years of age and above are allowed a catch up provision of $6,500. An additional standard provision is available to full-time employees who are planning on retiring within thre e years. Under this provision funds not utilized may be contributed the year prior to retirement. Deferred Compensation funds may be accessed through a loan program.
A 401(a) Def ined Contribution Plan is available for new full -time employees who may elect an employee contribution, under Section 401(a) of the Internal Revenue Code. The plan document allows a 60-day period for the individuals to make an election from the initial date of hire. Pursuant to Federal Regulations, effective December 31, 2009, existing full-time employees may not enroll or modify an existing 401(a) plan.
The following Victorville Fire De partment positions will receive employer contributions per month: Fire Chief $800, Division Chief $750, Battalion Chief $750, Fire Marshal $750, Fire Training Captain Officer $600, Fire Captain $600, Fire Engineer $250.
9. Retirement Medical Coverage – City employees and Council Members who meet CalPERS’s requirements and retire simultaneously with the City of Victorville are considered City retirees.
The City shall be responsible for retirees’ (beginning with eight years of service) medical insurance premium as follows:
Years of Service 25 + 20-24 15-19 8-14
City Paid 100% 75% 50% 25%
Retirees must have been previously enrolled in medical coverage, for twelve consecutive months, in the City’s medical insurance plan at time of retirement to be eligible to receive the medical reimbursement based on the above table.
For early retirees under age 65 - Payment is based on the single- party rate of the medical options available through the City’s insurance plan, not to exceed $900 per month.
For retirees age 65 and over – Payment is based on available Medicare Supplemental options single-party rate, available through the City’s insurance plan, not to exceed $900 per month.
Retirees age 65 and over must be enrolled with Medicare Part A (Hospital) and Part B (Medical) in order to be eligible for a retiree medical plan offered through the City.
Resolution 22-020 Mid-Year 2021-2022 Table of Organization Page 8
Retirees may continue dental and vision insurance coverage at their own expense.
Retirees must have been previously enrolled in medical coverage, for twelve consecutive months, in the City’s medical insurance plan at time of retirement to be eligible to receive the one time pay-off option.
Effective February 11, 2000, an employee may opt for a one time pay -off, at the time of retirement, in lieu of monthly medical retirement benefits. This shall be paid on a pro- rated basis, contingent upon years of service described in the chart below.
Years of Service 25 + 20-24 15-19 8-14
City Paid 100% 75% 50% 25%
Pay-off Amount $17,091 $13,672 $10,253 $6,838
These amounts may change annually, based on the CPI applied to the City employees’ wages.
10. Medicare - Employees hired after April 1, 1986, shall contribute 1.45% of their base salary as a matching share of contribution to provide Medicare coverage, available upon retirement, based on Social Security Administration guidelines.
11. Fringe – The amount of $900 per month is provided by the City for health, dental, and vision coverage for all non-represented full-time employees and Council Members . Married couples who are both full -time employees with the City may utilize the full fringe each for family medical, dental and vision. If eligible family members are enrolled, they must be enrolled in the same coverage as elected by the employee. The maximum cash back benefit for employees and Council Members waiving medical benefits is $400 per month. Employees and Council Members may purchase dental and vision coverage with this amount. Any remaining balance may be deposited into a flexible spending account or included as taxable income on their paychecks. Flexible spending accounts are provided for pre- tax deposits to cover expens es for health care and/or dependent day care. The City is responsible for the monthly administrative fee associated with the health care and dependent day care plans.
Additionally, non-represented full-time employees who enroll in medical, dental and vision plans and are paying out-of-pocket, the City will subsidize 50% of the total out-of-pocket cost up to $500 per month. This subsidy does not apply to Council Members or retirees.
Fringe for Represented Employees - The amount of $850 per month is provided by the City for health, dental, and vision coverage for represented full-time employees. Married couples who are both full -time employees with the City may utilize the full fringe each for family medical, dental and vision. If eligible family members are enrolled, they must be enrolled in the same coverage as elected by the employee. The maximum cash back benefit for employees waiving medical benefits is $350 per month. Employees may purchase dental and vision coverage with this amount. Any remaining balance may be deposited into a flexible spending account or included as taxable income on their paychecks. Flexible spending accounts are provided for pre- tax deposits to cover expenses for health care and/or dependent day care. The City is responsible for the monthly administrative fee associated with the health care and dependent day care plans.
Resolution 22-020 Mid-Year 2021-2022 Table of Organization Page 9
12. Workers' Compensation Program – Insurance provided by the City for work-related injuries occurring to the employee during the course of employment. (See City of Victorville Personnel Rules, Rule X, Section 4.) (See Family and Medical Leave Act Policy No. B-25)
13. Employee Assistance Program – The City provides for a confidential counseling program for employees and eligible dependents.
14. Unemployment Insurance – May provide income for the employee if laid off or involuntarily terminated for reasons other than misconduct.
15. Life insurance - Group term life insurance and accidental death and dismemberment insurance is paid by the City at the rate of . 162 per thousand dollars of base salary and is rounded to the nearest $1,000. For Full- time employees, the benefit is one times annual salary, to a maximum of $250,000. A maximum of $10,000 life insurance policy is paid by the City for Council Members.
16. Short-Term Disability (STD) Insurance – Full-time employees shall contribute .61% per $100 of monthly salary. Employee premiums are post -tax; therefore, benefits will not be taxed upon receipt of payment.
Employees may be eligible to receive disability payments after 7 days of missed work, and benefits shall continue for 13 weeks for a qualifying illness or injury. STD pays 60% of employees’ weekly base pay, with a minimum of $50 per week, up to a maximum of $1,600 per week. Part -time employees are not eligible. (See City of Victorville Personnel Rules, Rule X, Section 12.) (See Family and Medical Leave Act Policy No. B-25).
17. Long- Term Disability – The City provides coverage for full -time employees after 90 days of disability.
The City’s premium is $.70 per $100 of monthly salary and covers 66.67% of employees’ monthly salary.
Minimum of $50 per month to a maximum of $5,000 per month.
18. Safety shoes - All employees, with the exception of Safety Personnel, who are required to wear safety shoes, shall receive $ 175 reimbursement per fiscal year for purchase of one pair of shoes. Exceptions are governed by Administrative Policy No. G-7.
19. Uniforms - Payment for non-safety uniform service shall not exceed $174 per year per employee for those employees required to wear uniforms. Reimbursement to Victorville Municipal Utilities Service employees who maintain their own uniforms, due to specialized uniforms and handling, shall not exceed $300 per year.
The following Victorville Fire Department Positions will receive uniform allowance as follows: Division Chief, Battalion Chief, Training Officer, Fire Captain, Fire Engineer and Firefighter/P aramedic $58.33 per month. Fire Marshal, Fire Prevention Inspector $37.50 per month, EMS Coordinator $45.83 per month.
Per CalPERS PEPRA legislation passed January 1, 2013, Uniform allowance is not pensionable for PEPRA CalPERS members.
20. Stand -by Pay – Available to qualified full -time non-safety and non- exempt regular employees who are required to be immediately available for duty. Employees called to work while on Stand-by will be paid at a rate of $300 per week plus their regular rate of pay for the hours actually worked, subject to FLSA overtime provisions.
Resolution 22-020 Mid-Year 2021-2022 Table of Organization Page 10
21. Bilingual Pay – Upon the recommendation of the Department Head and based on the need of the Department, employees who are proficient in speaking a qualified foreign language shall receive $50.00 per month of additional pay as a bilingual pay incentive. To be eligible, personnel must pass the City’s written and oral exam. Currently the qualified foreign language is Spanish.
22. Tuition Reimbursement – Available to full-time regular employees, after one year of full-time service. All courses taken for reimbursement must be approved by the Department Head and the Personnel Officer prior to the beginning of the course. Courses eligible for reimbursement must be job related and toward a related degree.
Tuition reimbursement will include any associated fees including books, permits and other required fees (excluding shipping costs) up to a maximum of $3,000 per fiscal year based on prior approval by the Department Head and Personnel Officer. The Tuition Reimbursement program may be suspended if allocated funds are exhausted and/or if the Council chooses not to allocate the funds necessary to continue the program in any particular fiscal year due to budget constraints. (See Tuition Reimbursement Administrative Policy No: B-31)
23. Work Week – Full-time non-safety employees will work a 40-hour week schedule. All Safety non- shift employees will work a 40-hour week schedule. Safety Shift Personnel will work on a 48/96 schedule with FLSA overtime based on actual hours worked over 212 hours in a 28-day work cycle.
Work schedules:
The work schedule effective July 13th, 2019 will be a 9/80 schedule, whereby all full -time employees will work 40 hours per week. The work week begins each Friday at 12:01pm and ends each Friday at 12:00pm, with the exception of certain Library Staff, Airport Field Operati ons Workers, VMUS Field Operations Workers, Community Services Park Maintenance Workers, Development Code Enforcement Officers, Engineering Traffic Field Workers and Development Animal Control Officers, who will have a work week beginning each Saturday at 12:00am and ending each Friday at 11:59pm.
Overtime will be calculated for all non- exempt employees, who exceed 40 total actual hours worked over a consecutive 168 hours or 7 days (per FLSA) between these times, excluding Safety Shift Personnel.
All Safety, non-shift employees, will work a 40-hour week schedule. Safety Shift Personnel will work on a 48/96 schedule with FLSA overtime based on actual hours worked over 212 hours in a 28-day work cycle. Safety Shift Personnel’s 28-day FLSA period begins on the first Saturday of each FLSA period at 12:00am and ends on the last Friday of FLSA period at 11:59pm.
For all non-exempt, employees, including Safety Shift Personnel, only hours actually worked will be counted when calculating overtime pay. Approved paid leave shall not be considered as time worked for the purpose of computing the total number of hours worked in the work period. Overtime is calculated pursuant to federal law.
Battalion Chiefs who work a shift or part of a shift that requires work hours beyond standard hours in a given pay period, and excluding hours worked as a result of a shift trade, will be compensated for extra hours worked at a straight time hourly rate.
24. City of Victorville Fire Department Additional Compensation – Dependent on qualifications and need of the department:
• Hazardous Materials (Hazmat) Specialist Qualification $100 per month:
o Personnel with California State Fire Training Hazmat 1A -1G certification and task book
Resolution 22-020 Mid-Year 2021-2022 Table of Organization Page 11
completion will be entitled to $100 per month additional pay for maintaining that specialty.
• Haz-Mat Specialist Qualifications and Designated Haz-Mat Team Member $375 per month:
o Personnel who are routinely and consistently exposed to toxic, radioactive, explosive or other hazardous substances or perform hazardous activities to implement health or safety procedures and possess a California State Fire Training Haz -Mat 1A -1G certification and task book completion, and assigned to the Department’s Haz -Mat Response Team will be entitled to an additional $375 per month while maintaining placement on the Team and specialty.
• Urban Search and Rescue (USAR) Specialist Qualifications $100 per month:
o Personnel with California State Fire Training Low -Angle Rescue, Rescue 1 and 2, Confined Space Rescue, and Water Rescue will be entitled to $100 per month additional pay for maintaining that specialty.
• USAR Specialist Qualifications and Designated USAR Team Member $375 per month:
o Personnel who are routinely and consistently involved in search and rescue involving extrication and initial medical stabilization of individuals trapped in confined spaces, including transportation accidents mines and collapsed trenches. It also includes a multi -hazard discipline such as earthquakes, hurricanes, storms, floods, terrorist activities and hazardous materials. Personnel with California State Fire Training Low -Angle Rescue, Rescue 1 and 2, Confined Space Rescue, and Water Rescue, and assigned to the Department’s USAR Response Team will be entitled to an additional $375 per month while maintaining placement on the Team and specialty.
• Paramedic Pay available to Fire Captains and Fire Engineers $200 per month:
o Captains and Engineers who maintain the Paramedic License, and are available to function as Paramedics in case of need, will be entitled to an additional $200 per month while license and ability are maintained.
• Fire Instructor I certification pay available to Fire Captains $100 per month:
o Fire Captains with California State Fire Training Fire Instructor 1 and task book completion will be entitled to $100 per month additional pay for maintaining that specialty and being available as a lead instructor.
• Company Officer certification pay available to Fire Engineers and Fire Captains $100 per month:
o Engineers and Captains with California State Fire Training Company Officer 2A -E certification and task book completion will be entitled to $100 per month additional pay for maintaining that specialty.
• Fire Apparatus Driver/Operator (with License) certification pay available to Firefighter/Paramedics $100 per month:
o Firefighter/Paramedics with California State Fire Training Fire Apparatus Driver/Operator 1A-B, and the appropriate California Driver’s License endorsement will be entitled to $100 per month additional pay for maintaining that specialty, and being available to operate apparatus based on Department need.
Resolution 22-020 Mid-Year 2021-2022 Table of Organization Page 12
• Paramedic Preceptor pay (when supervising) available to all Fire Personnel California State Licensed Paramedics when assigned a student $100 per month:
o All personnel with current California Paramedic license who routinely and consistently are assigned to supervise paramedic students will be entitled to $100 per month during the time they are assigned a student.
• Bilingual Pay (Must pass a Spanish written and oral exam) available to Fire Captains, Fire Engineers, Firefighter/Paramedics $50 per month:
o All personnel passing the Department’s written and oral Spanish language exam will be entitled to an additional $50 per month.
• Fair Labor Standards Act (FLSA) – Compensation paid for normal full -time work schedule including premium pay required by FLSA.
• Fire Captains Working Out of Classification - Fire Captains Working out of Class up as Battalion Chief shall earn one half hour pay for every four hours worked. To be eligible to work, as a Battalion Chief the employee must meet the minimum standards required for the role as determined by the Fire Chief.
Title Salary Range Current Hourly Rate Hourly Rate Effective 1-1-22 Aquatic Aide M $14.00 $15.00
Recreation Leader I M $14.00 $15.00
Lifeguard 1 $15.25 $16.25
Senior Recreation Leader 1 $15.25 $16.25
Senior Lifeguard 2 $16.50 $17.50
Administrative Intern 2 $16.50 $17.50
Library Aide 2 $16.50 $17.50
Recreation Specialist 3 $18.00 $19.00
Pool Manager 3 $18.00 $19.00
Library Clerk 4 $20.25 $21.00
Office Aide 4 $20.25 $21.00
Maintenance Aide 5 $21.50 $22.00
Vehicle Service Worker 5 $21.50 $22.00
Library Technician 6 $23.25 $23.25
Engineering Intern 6 $23.25 $23.25
Recreation Supervisor - PT 10 $40.05 $40.05
Assistant Engineer - PT 20 $70.00 $70.00
CITY OF VICTORVILLE
FISCAL YEAR 2021-2022 PART-TIME TABLE OF COMPENSATION
Revised and adopted by the City of Victorville Council as of 1/1/2022
Item Number: 9
City Council / Board of Directors
Written Communications
Meeting of: March 1, 2022
Submitted By:
Sophie L. Smith, Deputy City Manager
Subject:
Declaration of Surplus Land – Civic Properties
Recommendation:
That the Board of Directors for the Successor Agency adopt Resolution No. R-SA-22-003 declaring the Civic Properties as “Surplus Land” pursuant to the Surplus Land Act Fiscal Impact:
None at this time.
Background:
In 2006, the Victorville Redevelopment Agency acquired APN’s 3106-261-12 and 3106- 261-13 (“Civic Properties”) for future auto park development and expansion of the Auto Park at Valley Center. With the downturn in the economy, the auto industry suffered greatly and the demand for such property was non-existent.
In June 2012, Governor Brown signed into law Assembly Bill 1484 (AB1484) making substantial changes to the redevelopment agency dissolution process implemented in 2012. One key component of AB184 was requiring that all successor agencies develop a Long Range Property Management Plan (LRPMP) which would be subject to the review and approval of the Department of Finance. The LRPMP included a property inventory list, use, and proposed disposal of real estate assets in accordance with the LRPMP.
Among the properties listed in the LRPMP are the two Civic Properties (Attachment B, Civic Properties Map).
Discussion:
In October 2019, Governor Newsom signed into law AB 1486, and AB 1255 in September of 2021 substantially amending the Surplus Land Act (“SLA”) found in Government Code, Title 5, Division 2, Part 1 of Article 8, “Surplus Land”. The purpose of these amendments was to promote affordable housing development on unused or underutilized public land 2 4
5 4
throughout the State of California and to respond to the existing affordable housing crisis.
Among this, the amendments also added new procedures with which a public agency must comply before it can dispose of surplus land.
Under the SLA, “surplus land” means land owned in fee simple for which a local agency’s governing body takes a formal action at a regular public meeting declaring land to be surplus and not necessary for a local agency’s use. In addition, the SLA requires that all land must now be declared either “surplus” or “exempt surplus” by a local agency, as supported by written finding in resolution before a local agency may take action to dispose of it. Declarations of “surplus or exempt surplus” must be made by an adopted resolution that is provided to the Department of Housing and Community Development (“HCD”), to which HCD can raise an objection within thirty (30) days of receipt. Properties that are deemed “surplus” must be offered to interested housing sponsors for the purposes of creating affordable housing (Section 54222 of Article 8. Surplus Land Act).
Although city staff has received several inquiries on the Civic Properties, all the leads have been from private parties interested in developing the sites for non-housing related activities, and therefore do not meet any of the exemptions provided in the SLA or in Section 103 of HCD’s Surplus Land Act Final Guidelines. Because the Successor Agency to the former Victorville Redevelopment Agency is required to dispose of the Civic Properties according to the LRPMP, staff has prepared the attached Resolution No. R- SA-22-003 declaring the Civic Properties as “surplus land”. Upon declaring the properties “surplus”, the City is then required to prepare a written Notice of Availability (“NOA”) and send out to certain parties designated in the SLA, which includes HCD, any local public entities within the City’s jurisdiction, and housing sponsors listed on HCD’s website. The purpose of this notice is to provide interested parties an opportunity to develop low- moderate-income housing projects. Entities who are interested in developing an affordable housing project on surplus land have 60-days to respond to the City’s NOA.
Should the City receive a Notice of Interest within the 60-day period, then a 90-day good faith negotiation period begins on the first day after the end of the 60-day period. If by the end of the 90-day period terms for an affordable housing project cannot be agreed upon, then the City may dispose of the surplus land without further regard to the SLA.
Staff is seeking your honorable board’s approval in adopting Resolution No. R-SA-22- 003 declaring the Civic Properties as “Surplus Land” pursuant to the Surplus Land Act.
Staff remains available for any questions or comments.
Attachments: A. Resolution No. R-SA-22-003
B. Civic Properties Map
ATTACHMENT A
RESOLUTION NO. R-SA-22-003
1 RESOLUTION NO. R-SA-22-003
A RESOLUTION OF THE CITY OF VICTORVILLE SITTING AS THE
GOVERNING BOARD OF THE SUCCESSOR AGENCY TO THE
VICTORVILLE REDEVELOPMENT AGENCY DECLARING THE CIVIC
PROPERTIES AS “SURPLUS LAND” PURSUANT TO THE SURPLUS
LAND ACT
WHEREAS, the Victorville Redevelopment Agency (the “Redevelopment Agency”) was duly created and activated pursuant to the provision of the California Community Redevelopment Law, Health and Safety Code Section 33000 et seq. (the “CRL”) by a duly adopted Ordinance of the City of Victorville, California (the “City”); and
WHEREAS, pursuant to redevelopment dissolution legislation (ABX1 26 and AB 1484) (“Redevelopment Dissolution Legislation”) and California Health and Safety Code Section 34172, the Redevelopment Agency is now deemed dissolved and in accordance with California Health and Safety Code Section 34173(d)(3) and Resolution No. 12 -005, the city council of the City (“City Council”) confirmed that the City shall serve as the Successor Agency to the Redevelopment Agency; and
WHEREAS, upon dissolution of the Redevelopment Agency and confirmation of the City as Successor Agency, all assets, properties and contracts of the Redevelopment Agency, were transferred, by operation of law, to the Successor Agency pursuant to the provisions of California Health and Safety Code Section 34175(b) and p ursuant to California Health and Safety Code Section 34179, the oversight board (“Oversight Board”) of the Successor Agency was also established; and
WHEREAS, among the properties transferred from the Redevelopment Agency to the Successor Agency is that c ertain property located on Civic Drive and Valley Park Lane having APN’s No. 3106 -261-12 and 3106 -261-13 in the City of Victorville, California, as more particularly described on Exhibit “A” attached hereto, together with all right, title and interest in and to all appurtenances and improvements thereon (collectively, “Civic Drive Properties”); WHEREAS, the Successor Agency is expeditiously winding down the affairs of the Redevelopment Agency in accordance with AB x1 26 and subsequent legislation (collectively hereinafter the “Dissolution Laws”) and as directed by the Oversight Board in accordance with CRL Section 34177(h); and
WHEREAS, pursuant to the Dissolution Laws, within six months of receiving a finding of Completion (“FOC”) from the California State Department of Finance (“DOF”), which FOC was received on June 12, 2013, the Successor Agency was required to adopt a Long -Range Property Management Plan (“LRPMP”) addressing the proposed u se, retention or disposition of all such Properties pursuant to CRL Section 34191.5; and 2 WHEREAS, under the Surplus Property Land Act, Government Code Sections 54220 - 54233 (“Act”), surplus land is land owned in fee simple for which a local agency’s governing body takes formal action at a regular public meeting declaring land to be surplus and not necessary for a local agency’s use; and
WHEREAS, l and must be declared either “surplus land” or “exempt surplus land”, as supported by written findings, before it may be disposed of; and WHEREAS, the Civic Properties is included in the LRPMP, is “surplus land” as it is not necessary for the Successor Agency’s use; and
WHEREAS, the Civic Properties is declared “surplus land” and prior to disposing of or participating in negotiations to dispose of the Civic Properties, the Successor Agency shall send a written notice of availability (“NOA”), in a form prescribed by the Housing and Community Development (“HCD”) Department, according to the HCD Surplus Land Act Guidelines Section 201. Notice of Availability to certain parties designated in the SLA for the purposes of disposing surplus land for affordable housing.
NOW, THEREFORE, THE GOVERNING BOARD OF THE SUCCESSOR AGENCY TO
THE VICTORVILLE REDEVELOPMENT AGENCY DOES HEREBY FIND, RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
Section 1. Recitals.
That the recitals set forth above, including any definitions set forth therein, are true and correct and are incorporated into and made a material part of this Resolution by this reference.
Section 2. Finding of Property as Surplus Land.
That based on the facts and information set fort h in the above Recitals, the Civic Properties are deemed Surplus Land.
Section 4. Transmission of Certified Resolution to HCD.
That the Economic Development Department is directed to transmit a certified copy of this Resolution to the HCD, as specified in Section 400(e) of the Guidelines immediately following the adoption hereof.
Section 5. Notice of Availability pursuant to HCD Surplus Land Act Guidelines.
That no disposal of the Civic Properties shall occur until Section 201 and Section 202 of the HCD Surplus Land Act Guidelines has been completed; and any approvals required by the RDA dissolution process have been obtained.
Section 6. Effective Date.
That this Resolution shall take effect immediately upon its adoption. 3 Section 7. Certification.
That the Secretary shall certify to the passage and adoption of this Resolution; shall enter the same in the book of original Resolutions; and shall make a minute passage and adoption thereof in the records of the proce edings, in the minutes of the meeting at which this Resolution is passed and adopted.
EXHIBIT “A” TO
RESOLUTION NO. R-SA-22-003
LEGAL DESCRIPTION:
APN: 3106-261-12
PARCEL MAP 16741 PARCEL 1 BOOK 209 PAGE 22
APN: 3106-261-13
PARCEL MAP 16741 PARCEL 2 BOOK 209 PAGE 22
ATTACHMENT B
CIVIC PROPERTIES MAP
Item Number: 10
City Council / Board of Directors
Written Communications
Meeting of: March 1, 2022
Submitted By:
Sophie L. Smith, Deputy City Manager
Subject:
Declaration of Exempt Surplus Land – Duncan Property
Recommendation:
That the Board of Directors for the Victorville Water District: 1) adopt Resolution No. VWD 22-002 declaring the Duncan Property as “Exempt Surplus Land” pursuant to the Surplus Land Act, and authorize the transmittal of a certified copy of the Resolution to the Housing and Community Development (“HCD”) Department, as specified in Section 400(e) of the Surplus Land Act Guidelines; and 2) authorize staff to initiate negotiations for the disposition and sale of the Duncan Property with the San Bernardino County Real Estate Services Division
Fiscal Impact:
None at this time.
Background:
On August 15, 2007, the Victor Valley Water District and Baldy Mesa Water District were consolidated into a subsidiary district of the City of Victorville, known as the Victorville Water District (“District”). All the liabilities, revenues, and assets were assumed by the District upon consolidation. Among the assets assumed was the Baldy Mesa Water District building located at 10313 Duncan Road, Phelan, CA, 92371 with Assessor’s Parcel No. 3071-041-01 (the “Duncan Property”). The Duncan Building was built around 1996 and served as the administration office and public meeting venue for the Baldy Mesa Water District until 2007. Since then, the Duncan Building has been used by the City as a records/storage facility as it is outside of City limits and is not conducive for efficient District operations.
Discussion:
In 2020, city staff started to receive inquiries on the potential purchase or leasing of the Duncan Property and listed the property on LoopNet to make it available for sale publicly. 2 4
5 2
Among the interest received was the San Bernardino County Sheriff’s Department. In August 2020, city staff provided staff members of the Sheriff’s Department with a tour of the Duncan Property so that they could determine if the site could accommodate a new Sheriff’s Station. Separately, private parties continued to contact city staff of their desire to lease or purchase the Duncan Property, and therefore staff provided these individuals with a walk-thru of the site on June 9, 2021.
As a result of the potential disposal of the Duncan Property, staff worked with legal counsel to determine the process required by the Surplus Land Act (“SLA”) as it has been substantially amended and continues to undergo changes. The purpose of these amendments was to promote affordable housing development on unused or underutilized public land throughout the State of California and to respond to the existing affordable housing crisis. Among this, the recent amendments to the SLA add new procedures with which a public agency must comply before it can dispose of surplus land.
Under the SLA, “surplus land” means land or real property owned in fee simple for which a local agency’s governing body takes a formal action at a regular public meeting declaring land to be surplus and not necessary for a local agency’s use. In addition, the SLA requires that all land must now be declared either “surplus” or “exempt surplus” by a local agency, as supported by written finding in resolution before a local agency may take action to dispose of it. Declarations of “surplus or exempt surplus” must be made by an adopted resolution that is provided to the Department of Housing and Community Development (“HCD”), to which HCD can raise an objection within thirty (30) days of receipt. Under the SLA Section 54221(f)(1)(D) surplus properties can be exempt if the property is transferred to another local, state, or federal agency for the agency’s use.
Properties that are deemed “surplus” must be offered to interested housing sponsors for the purposes of creating affordable housing (Section 54222 of Article 8. Surplus Land Act).
The County Sheriff’s Department has continued to express interest in negotiating the purchase of the Duncan Property as it meets their requirement for the relocation of the Victor Valley Station, currently located in the City of Adelanto. Among enforcement operations, assets and personnel, the new station will house the Victor Valley Search and Rescue operations for the entire High Desert Region, which will allow for more efficient deployment of existing services and will accommodate future expansion needs. The County Sheriff’s Department is also considering acquiring the three adjacent two-acre vacant properties surrounding the Duncan Property that would provide them with total of eight acres for all their services and operations (Please see Attachment B, Map of Duncan Property).
Staff has prepared the attached Resolution No. VWD 22-002 declaring the Duncan Property as “exempt surplus” land as the potential sale to the San Bernardino County Sheriff’s Department falls within Section 54221(f)(1)(D) of the SLA. The Duncan Property will not be disposed of until purchase and sale terms, including the sales price for the property has been negotiated, and a final Purchase and Sale Agreement has been approved by the District’s Board of Directors and executed by the parties. 2 4
5 2
Staff remains available for any questions or comments.
Attachments: A. Resolution No. VWD 22-002
B. Map of Duncan Property
ATTACHMENT A RESOLUTION
NO. VWD 22-002
1 RESOLUTION NO. VWD 22-002
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE
VICTORVILLE WATER DISTRICT (DISTRICT) DECLARING THE
DUNCAN PROPERTY AS “EXEMPT SURPLUS LAND” PURSUANT TO
THE SURPLUS LAND ACT)
WHEREAS, the District is the owner of certain real property located in the City of Phelan, an unincorporated area within San Bernardino County, located at 10313 Duncan Road, Phelan, California 92371 with Assessor’s Parcel No. 3071-041-01, as more specifically described in Exhibit A, attached hereto and made a part of hereof (“Duncan Property”); and WHEREAS, under the Surplus Property Land Act, Government Code Sections 54220 - 54233 (“Act”), surplus land is land owned in fee simple for which a local agency’s governing body takes formal action at a regular public meeting declaring land to be surplus and not necessary for a local agency’s use; and
WHEREAS land must be declared either “surplus land ” or “exempt surplus land ”, as supported by written findings, before it may be disposed of; and WHEREAS, under the Act, land is necessary for the District’s use if the land is being used, or is planned to be used pursuant to a written plan adopted by the Districts Board, for District work or operations, and
WHEREAS, the Duncan Property is approximately 2.0 acres in size containing approximately a 6,073 SF building , is currently vacant , and is not currently being used by the District; and
WHEREAS, City staff has determined that the Duncan Property is not suitable for the City’s use; and
WHEREAS, SLA Section 54221(f)(1)( D) defines “exempt surplus land” to include surplus land that is transferred to another local, state, or federal agency for this agency’s use; and WHEREAS, the San Bernardino County Sheriff’s Department, Victor Valley Station (“Station”), located in the City of Adelanto, provides contract law enforcement services to the City of Adelanto and surrounding communities, and houses the Victor Valley Search and Rescue for the High Desert Region;
WHEREAS, the Station enforcement operations, assets and personnel hav e reached capacity and the San Bernardino County Sheriff’s has determined that there is an immediate need for expansion which will allow for more efficient deployment of services and response time; and WHEREAS, the San Bernardino County Sheriff’s have identified the Duncan Property as a good location that would meet the needs of the Station with minimal building improvement or modification expenses and have expressed its desire to acquire the Duncan Property from the District; and
2 WHEREAS, although the Duncan Property will not be disposed of until a purchase price has been negotiated and a final Purchase and Sale Agreement is approved by the District’s Board and executed by the parties, the Duncan Property must be declared “exempt surplus land” as it qualifies under the requirements in the SLA Section 54221(f)(1)(D).
NOW, THEREFORE, THE BOARD OF DIRECTORS OF THE VICTORVILLE WATER
DISTRICT DOES HEREBY FIND, RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
Section 1. Recitals.
That the recitals set forth above, including any definitions set forth therein, are true and correct and are incorporated into and made a material part of this Resolution by this reference.
Section 2. Finding of Property as Exempt Surplus Land.
That based on the facts and information set for in the above Recitals, the Duncan Property is Exempt Surplus Land.
Section 4. Transmission of Certified Resolution to HCD.
That the Economic Development Department is directed to transmit a certified copy of this Resolution to the HCD, as specified in Section 400(e) of the Guidelines i mmediately following the adoption hereof.
Section 5. Property Disposal Timing; Approval of a Purchases and Sale Agreement with Specific Terms Required.
That no disposal of the Duncan Property shall occur until a Purchase and Sale Agreement containing the agreed upon purchase price for the Duncan Property has been approved by the Board of Directors, and executed by the parties, but in no event sooner than thirty (30) days after this Resolution has been transmitted to the HCD,
Section 6. Effective Date.
That this Resolution shall take effect immediately upon its adoption.
Section 7. Certification.
That the District Secretary shall certify to the passage and adoption of this Resolution; shall enter the same in the book of original Resolutions of the District; and shall make a minute passage and adoption thereof in the records of the proceedings of the District, in the minutes of the meeting at which this Resolution is passed and adopted.
EXHIBIT “A” TO RESOLUTION NO. VWD 22-002
DUNCAN PROPERTY DESCRIPTION
LEGAL DESCRIPTION:
PARCEL MAP 3427 W ½ N ½ PARCEL 1 EX ST (CC-3-19-86 #86-071936 AND OD 2-19-86 #86-044412)
APN: 3071-041-01-0000
10313 DUNCAN ROAD
PHELAN, CA 92371
ATTACHMENT B
MAP OF DUNCAN PROPERTY
Item Number: 11
City Council / Board of Directors
Written Communications
Meeting of: March 1, 2022
Submitted By:
Sophie L. Smith, Deputy City Manager
Subject:
Approval of an Amended and Restated Loan Agreement for the Victor Valley Economic Development Authority Bear Valley Loan
Recommendation:
1) That the Honorable Victorville Successor Agency Board of Directors adopt Resolution No. R-SA-22-002 approving an amended restated loan agreement for the Victor Valley Economic Development Authority Bear Valley loan; and 2) That the Honorable SCLAA Board of Directors adopt Resolution No. SCLAA-22- 006 approving an amended and restated loan agreement for the Victor Valley Economic Development Authority Bear Valley loan
Fiscal Impact:
There is no fiscal impact associated with this item.
Background:
In 1997, the Victor Valley Economic Development Authority (VVEDA) authorized the formation by the City and the Victorville Redevelopment Agency of the authority now known as the Southern California Logistics Airport Authority (SCLAA). SCLAA operates the airport (formerly George Air Force Base) that is the focus of the VVEDA redevelopment project area. VVEDA delegated all its redevelopment authority with respect to the airport to SCLAA. The Fourth Amendment to the VVEDA JPA provided for funding to SCLAA from the VVEDA project area from all of the JPA members. Such funding for SCLAA capital projects was deemed necessary for the redevelopment of the former GAFB.
In 2009, SCLAA and the Victorville Redevelopment Agency entered into a loan transaction known as the Bear Valley Loan. As part of the “Bear Valley Loan”, dated June 30, 2009, SCLAA borrowed $10,000,000 from the Victorville Redevelopment Agency to fund a fueling station and an underground pipeline to connect the station to 2 4
4 7
the fuel farm. The construction of the fuel farm, fueling station, and connecting pipeline were necessary for future usage by aircraft. Certain airlines would not fuel their aircraft at the airport prior to the improvements due to the conditions of the fuel farm. Given SCLAA’s reliance upon tax increment generated from the VVEDA RDA project area, the Bear Valley Loan was intended to be repaid from SCLAA’s share of VVEDA tax increment revenue.
Dissolution of California Redevelopment Agencies pursuant to Assembly Bill ABx1 26 prevented repayment of the Bear Valley Loan under the terms of the original loan agreement. However, the Dissolution Bill allowed for reinstatement and repayment of loans borrowed by former redevelopment agencies.
Discussion:
On January 10, 2022 VVEDA presented three existing loans that were used for legitimate redevelopment purposes to the San Bernardino Countywide Oversight Board (CWOB). Included in these loans was the Bear Valley Loan that was approved as an enforceable obligation per Health and Safety Code (HSC) Section 34191.4 (b).
HSC Section 34171 (d)(1)(B) provides that “loans of moneys borrowed by the redevelopment agency for a lawful purpose, to the extent they are legally required to be repaid pursuant to a required repayment schedule or other mandatory loan terms” can be enforceable obligations. This applies to the Bear Valley loan as the monies borrowed were for a lawful purpose and the repayment loan agreement provides for SCLAA to repay the loan from its share of VVEDA tax increment revenue.
HSC Section 34191.4 (b) further details that loan agreements “shall be deemed to be enforceable obligations provided that the oversight board makes a finding that the loan was for legitimate redevelopment purposes” and provides guidelines regarding loan repayment, including how interest is to be calculated, when payments can be made, a limit on payments in any given year, and a requirement to restrict 20% of non- housing loan payments for affordable housing.
The CWOB approved this item and found the loans to have been used for legitimate redevelopment purposes and that they be included in the repayment schedule. It is currently being reviewed by the Department of Finance as required by HSC Section 34179 (h).
It is now appropriate that the parties agree to amend and restate the Bear Valley Loan which has an outstanding principal balance of $13,750,000 (as of December 31, 2021 with required 3% simple interest) upon the terms and conditions as set forth in the Second Amended and Reinstated Loan Agreement for the Victor Valley Economic Development Authority Bear Valley Loan which is also attached to Resolution No. R- SA-22-002 and SCLAA-22-006. The restated loan agreement has been drafted to include VVEDA as a party to the agreement, as the funds for repayment of the loan will be generated from the VVEDA project area and flow from VVEDA to SCLAA then to the Victorville Successor Agency for repayment. The item will also be presented to the VVEDA Board at its upcoming meeting.
2 4
4 7
Staff remains available for any questions or comments you might have.
Attachments: A. Resolution No. R-SA-22-002
B. Resolution No. SCLAA-22-006
RESOLUTION NO. R-SA-22-002
RESOLUTION OF THE VICTORVILLE SUCCESSOR AGENCY
APPROVING AN AMENDED AND RESTATED LOAN AGREEMENT
FOR THE VICTOR VALLEY ECONOMIC DEVELOPMENT
AUTHORITY BEAR VALLEY LOAN
WHEREAS, the Victorville Redevelopment Agency (the “Redevelopment Agency”) was duly created and activated pursuant to the provisions of the California Community Redevelopment Law, Health and Safety Code section 33000 et seq. (the “CRL”) by a duly adopted Ordinance of the City of Victorville, California (the “City”); and
WHEREAS, on or about June 28, 2011, as part of the 2011- 12 State budget bill, the California Legislature enacted the Governor signed companion bills, ABx1 26 and ABx1 27, requiring that each redevelopment agency be dissolved unless the community that created it enacts an ordinance committing to making certain payments (collectively, the “Redevelopment Restructuring Bills”); and
WHEREAS, specifically, ABx1 26 prohibited agencies from taking numerous actions and provided that agencies are deemed to be dissolved (the “Dissolution Bill”); and
WHEREAS, the validity of Redevelopment Restructuring Bills was challenged in Court and ABx1 26 was upheld; and
WHEREAS, pursuant to Dissolution Bill, the Redevelopment Agency was dissolved as of February 1, 2012; and
WHEREAS, pursuant to CRL section 34173 and in accordance with Resolution no. R-12- 002, the Board of Commissioners of the Redevelopment Agency confirmed that the City of Victorville would serve as the successor agency to the Redevelopment Agency (the “Successor Agency”) and the City Council of the City (“City Council”) confirmed such designation by adopting Resolution No. 12-005; and
WHEREAS, the Victor Valley Economic Development Authority (“VVEDA ”) was established under California Government Code Section 6500 et seq. and was formed pursuant to the provisions of that certain Fourth Amended and Restated Joint Exercise of Powers Agreement, dated June 21, 2000; and
WHEREAS, pursuant to the Third Amended and Restated Joint Exercise of Powers Agreement, dated November 18, 2008, VVEDA has delegated its decision making authority with respect to former George Air Force Base (“GAFB”) to SCLAA, formerly known as the Southern California International Airport Authority, including the pursuit of redevelopment projects on and adjacent to GAFB under the California Community Redevelopment Law (Health and Safety Code Section 33000, et seq.), for the purposes of causing the redevelopment of areas in the interests of health, safety and general welfare; and
WHEREAS, the Redevelopment Agency previously entered into a Loan Agreement in a principal amount of $10,000,000 with the Southern California Logistics Airport Authority (“SCLAA”) whereby the former Redevelopment Agency loaned monies to SCLAA from the Bear Valley Project Area to fund the costs of capital improvements and redevelopment projects for Southern California Logistics Airport (the “Bear Valley Loan”); and
WHEREAS, Health and Safety Code (HSC) Sects. 34171 (d)(l)(B) provides that “loan of money borrowed by the redevelopment agency for a lawful purpose, to the extent they are legally required to be repaid pursuant to a required repayment schedule or other mandatory loan term” can be enforceable obligations; and
WHEREAS, it is now necessary to amend and restate the Bear Valley Loan pursuant to the Amended and Restated Loan Agreement for the Victor Valley Economic Development Authority Bear Valley Loan, a copy of which is attached hereto as Exhibit ‘A’ and incorporated herein by this reference (the “Amended Bear Valley Loan”); and
WHEREAS, restating and amending the Bear Valley Loan will enable it to be recognized as an enforceable obligation thereby allowing for the repayment of such loan from tax increment revenues.
NOW, THEREFORE, THE VICTORVILLE SUCCESSOR AGENCY DOES
HEREBY FIND, RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
Section 1. Recitals
The Recitals set forth above are true and correct and incorporated herein by reference.
Section 2. Loan Agreement Approval
The Board of the Victorville Successor Agency hereby approves the Amended Bear Valley Loan as attached hereto as Exhibit A and authorizes the execution thereof by the Board’s Executive Director.
Section 3. Effective Date
This Resolution shall take effect upon its adoption.
Section 4. Certification
The Board Secretary shall certify to the passage and adoption of this Resolution; shall enter the same in the book of original Resolutions of the Board; and shall make a minute of passage and adoption thereof in the records of the proceedings of the Board, in the minutes of the meeting at which this Resolution is passed and adopted.
EXHIBIT A
AMENDED BEAR VALLEY LOAN
AMENDED AND RESTATED LOAN AGREEMENT FOR THE VICTOR VALLEY ECONOMIC
DEVELOPMENT AUTHORITY BEAR VALLEY LOAN
This Amended and Restated Loan Agreement (“Agreement”) is made this __ day of _______, 2022, by and between the Victor Valley Economic Development Authority Successor Agency, a successor agency established pursuant to Part 1.85 of Division 24 of the California Health and Safety Code (“Dissolution Law”) and representing the Southern California Logistics Airport Authority (“Borrower”), and the Victorville Successor Agency, a successor agency established pursuant to Dissolution Law and representing the former Victorville Redevelopment Agency (“Lender”).
WITNESSETH:
WHEREAS, on June 30, 2009, Borrower executed a loan agreement (“Original Agreement”) to borrow $10,000,00 from Lender and Lender’s Bear Valley Project Area to enable Borrower to fund the costs of c apital improvements and redevelopment projects (“Bear Valley Loan”); and
WHEREAS, the dissolution of California redevelopment agencies by Assembly Bill X1 26 prevented repayment of the Bear Valley Loan according to the terms of the Original Agreement; and
WHEREAS, Dissolution Law details the process for reinstatement and repayment of loans borrowed by former redevelopment agencies.
NOW, THEREFORE, in consideration of the mutual promises and obligations of the parties contained herein, Borrower and Lender hereby covenant and agree as follows:
1. Lender agrees to amend, restate, and reinstate the Bear Valley Loan, which has an outstanding principal amount of Ten Million Dollars ($ 10,000,000), upon the terms and conditions set forth below, in accordance with Dissolution Law.
2. Interest on the remaining principal amount of the loan that was previously unpaid after the original effective date of the loan shall be recalculated from the date of origination of the loan as approved by Borrower on a quarterly basis, at a simple interest rate of 3 percent.
3. The recalculated loan shall be repaid to the Lender in accordance with a defined schedule over a reasonable term of years. Moneys repaid shall be applied first to the principal, and second to the interest.
4. The annual loan repayments, together with other annual loan repayments made by Borrower, shall be no more than one- half of the increase between the amount distributed to affected taxing entities in the Borrower’s former Redevelopment Project Area pursuant to Health and Safety Code (“HSC”) Section 34191.4(b)(3)(A) in the prior fiscal year and the amount distributed to taxing entities pursuant to that paragraph in the 2012–13 base year.
5. Loan repayments shall be subject to annual approval by the San Bernardino Countywide Oversight Board and the California Department of Finance, as part of their review of Borrower’s Recognized Obligation Payment Schedule.
6. This Agreement amends and restates the Bear Valley Loan in its entirety. No part of this Agreement shall be interpreted other than in accordance with Dissolution Law.
IN WITNESS WHEREOF, the undersigned parties hereto have caused this Agreement to be duly executed and delivered by their duly authorized officers or representatives as of the date first above written.
BORROWER:
VICTOR VALLEY ECONOMIC DEVELOPMENT AUTHORITY SUCCESSOR AGENCY
By: ____________________
Keith Metzler,
Its Executive Director
LENDER:
VICTORVILLE HOUSING SUCCESSOR AGENCY
By: ____________________
Keith Metzler
Its Executive Director
RESOLUTION NO. SCLAA-22-006
RESOLUTION OF THE SOUTHERN CALIFORNIA LOGISTICS
AIRPORT AUTHORITY APPROVING AN AMENDED AND RESTATED
LOAN AGREEMENT FOR THE VICTOR VALLEY ECONOMIC
DEVELOPMENT AUTHORITY BEAR VALLEY LOAN
WHEREAS, the Victorville Redevelopment Agency (the “Redevelopment Agency”) was duly created and activated pursuant to the provisions of the California Community Redevelopment Law, Health and Safety Code section 33000 et seq. (the “CRL”) by a duly adopted Ordinance of the City of Victorville, California (the “City”); and
WHEREAS, on or about June 28, 2011, as part of the 2011- 12 State budget bill, the California Legislature enacted the Governor signed companion bills, ABx1 26 and ABx1 27, requiring that each redevelopment agency be dissolved unless the community that created it enacts an ordinance committing to making certain payments (collectively, the “Redevelopment Restructuring Bills”); and
WHEREAS, specifically, ABx1 26 prohibited agencies from taking numerous actions and provided that agencies are deemed to be dissolved (the “Dissolution Bill”); and
WHEREAS, the validity of Redevelopment Restructuring Bills was challenged in Court and ABx1 26 was upheld; and
WHEREAS, pursuant to Dissolution Bill, the Redevelopment Agency was dissolved as of February 1, 2012; and
WHEREAS, pursuant to CRL section 34173 and in accordance with Resolution no. R-12- 002, the Board of Commissioners of the Redevelopment Agency confirmed that the City of Victorville would serve as the successor agency to the Redevelopment Agency (the “Successor Agency”) and the City Council of the City (“City Council”) confirmed such designation by adopting Resolution No. 12-005; and
WHEREAS, the Vic tor Valley Eco nomic Development Authority ( “VVEDA”) was established under California Government Code Section 6500 et seq. and was formed pursuant to the provisions of that certain Fourth Amended and Restated Joint Exercise of Powers Agreement, dated June 21, 2000; and
WHEREAS, pursuant to the Third A mended and Restated Joint Exercis e of Powers Agreement, dated November 18, 2008, VVEDA has delegated its decision making authority with respect to former George Air Force Base (“GAFB”) to SCLAA, formerly known as the Southern California International Airport Authority, including the pursuit of redevelopment projects on and adjacent to GAFB under the California Community Redevelopment Law (Health and Safety Code Section 33000, et seq.), for the purposes of causing the redevelopment of areas in the interests of health, safety and general welfare; and
WHEREAS, the Redevelopment Agency previously entered into a Loan Agreement in a principal amount of $10,000,000 with the Southern California Logistics Airport Authority (“SCLAA”) whereby the former Redevelopment Agency loaned monies to SCLAA from the Bear Valley Project Area to fund the costs of capital improvements and redevelopment projects for SCLAA (the “Bear Valley Loan”); and
WHEREAS, Health and Safety Code (HSC) Sects. 34171 (d)(l)(B) provides that “loan of money borrowed by the redevelopment agency for a lawful purpose, to the extent they are legally required to be repaid pursuant to a required repayment schedule or other mandatory loan term” can be enforceable obligations; and
WHEREAS, it is now necessary to amend and restate the Bear Valley Loan pursuant to the Amended and Restated Loan Agreement for the Victor Valley Economic Development Authority Bear Valley Loan, a copy of which is attached hereto as Exhibit ‘A’ and incorporated herein by this reference (the “Amended Bear Valley Loan”); and
WHEREAS, restating and amending the Bear Valley Loan will enable it to be recognized as an enforceable obligation thereby allowing for the repayment of such loans from tax increment revenues.
NOW, THEREFORE, THE SOUTHERN CALIFORNIA LOGISTICS AIRPORT
AUTHORITY DOES HEREBY FIND, RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
Section 1. Recitals
The Recitals set forth above are true and correct and incorporated herein by reference.
Section 2. Loan Agreement Approval
The Board of the Southern California Logistics Airport Authority hereby approves the Amended Bear Valley Loan as attached hereto as Exhibit A and authorizes the execution of any documents to facilitate the repayment of the loan by the Board’s Executive Director.
Section 3. Effective Date
This Resolution shall take effect upon its adoption.
Section 4. Certification
The Board Secretary shall certify to the passage and adoption of this Resolution; shall enter the same in the book of original Resolutions of the Board; and shall make a minute of passage and adoption thereof in the records of the proceedings of the Board, in the minutes of the meeting at which this Resolution is passed and adopted.
EXHIBIT A
AMENDED BEAR VALLEY LOAN
AMENDED AND RESTATED LOAN AGREEMENT FOR THE VICTOR VALLEY ECONOMIC
DEVELOPMENT AUTHORITY BEAR VALLEY LOAN
This Amended and Restated Loan Agreement (“Agreement”) is made this __ day of _______, 2022, by and between the Victor Valley Economic Development Authority Successor Agency, a successor agency established pursuant to Part 1.85 of Division 24 of the California Health and Safety Code (“Dissolution Law”) and representing the Southern California Logistics Airport Authority (“Borrower”), and the Victorville Successor Agency, a successor agency established pursuant to Dissolution Law and representing the former Victorville Redevelopment Agency (“Lender”).
WITNESSETH:
WHEREAS, on June 30, 2009, Borrower executed a loan agreement (“Original Agreement”) to borrow $10,000,00 from Lender and Lender’s Bear Valley Project Area to enable Borrower to fund the costs of c apital improvements and redevelopment projects (“Bear Valley Loan”); and
WHEREAS, the dissolution of California redevelopment agencies by Assembly Bill X1 26 prevented repayment of the Bear Valley Loan according to the terms of the Original Agreement; and
WHEREAS, Dissolution Law details the process for reinstatement and repayment of loans borrowed by former redevelopment agencies.
NOW, THEREFORE, in consideration of the mutual promises and obligations of the parties contained herein, Borrower and Lender hereby covenant and agree as follows:
1. Lender agrees to amend, restate, and reinstate the Bear Valley Loan, which has an outstanding principal amount of Ten Million Dollars ($ 10,000,000), upon the terms and conditions set forth below, in accordance with Dissolution Law.
2. Interest on the remaining principal amount of the loan that was previously unpaid after the original effective date of the loan shall be recalculated from the date of origination of the loan as approved by Borrower on a quarterly basis, at a simple interest rate of 3 percent.
3. The recalculated loan shall be repaid to the Lender in accordance with a defined schedule over a reasonable term of years. Moneys repaid shall be applied first to the principal, and second to the interest.
4. The annual loan repayments, together with other annual loan repayments made by Borrower, shall be no more than one- half of the increase between the amount distributed to affected taxing entities in the Borrower’s former Redevelopment Project Area pursuant to Health and Safety Code (“HSC”) Section 34191.4(b)(3)(A) in the prior fiscal year and the amount distributed to taxing entities pursuant to that paragraph in the 2012–13 base year.
5. Loan repayments shall be subject to annual approval by the San Bernardino Countywide Oversight Board and the California Department of Finance, as part of their review of Borrower’s Recognized Obligation Payment Schedule.
6. This Agreement amends and restates the Bear Valley Loan in its entirety. No part of this Agreement shall be interpreted other than in accordance with Dissolution Law.
IN WITNESS WHEREOF, the undersigned parties hereto have caused this Agreement to be duly executed and delivered by their duly authorized officers or representatives as of the date first above written.
BORROWER:
VICTOR VALLEY ECONOMIC DEVELOPMENT AUTHORITY SUCCESSOR AGENCY
By: ____________________
Keith Metzler,
Its Executive Director
LENDER:
VICTORVILLE HOUSING SUCCESSOR AGENCY
By: ____________________
Keith Metzler
Its Executive Director
Item Number: 12
City Council / Board of Directors
Written Communications
Meeting of: March 1, 2022
Submitted By:
John Mendiola, Finance Director / City Treasurer
Subject:
Amendment Number Four to a Consultant/Professional Services Provider Agreement with Hinderlinter, de Llamas and Associates for Sales and Use Tax Audit Services Recommendation:
Staff recommends that City Council approve Amendment Number Four to the Consultant/Professional Services Agreement with Hinderlinter, de Llamas and Associates for the current year not to exceed amount of $150,000.00.
Fiscal Impact:
The fiscal impact of this recommendation does not require any additional appropriations.
The increase is primarily a result of increased audit services because of larger sales tax revenue being allocated to the countywide or state pool. The costs for the audit services are offset against the sales tax revenue awarded to the City as a result and are coded as follows:
1000010-40200 (General Fund Sales Tax Revenue)
Background:
The City of Victorville has contracted with Hinderlinter, de Llamas and Associates (HdL) for quarterly analysis, reporting, and projections as well as ongoing sales tax audits to identify and correct distribution errors and thereby generate previously unrealized sales, use and transactions taxes income for the City. Please see Attachment B for full scope of services.
Discussion:
The audit services provided for in the contract have grown with the increase in distribution warehouses as well as the impacts from increased online purchases since the start of the COVID-19 pandemic. As defined in the original scope of services in Attachment B, HdL consultants perform ongoing sales tax audits in order to identify and correct point of sale 2 4
3 8
distribution errors, thereby generating previously unrealized sales, use, and transactions taxes income for the City. They are responsible for contacting the appropriate management and accounting officials in companies that have businesses where a probability of error exists to verify whether current tax receipts accurately reflect the local sales activity. Such contacts are conducted in a courteous manner to encourage local business retention and expansion. Reports of all contacts and results are included in billings. HdL also prepares and submits to the California Department of Tax and Fee Administration (CDTFA) all information necessary to correct any allocation errors that are identified and follows up with individual businesses and CDFTA to ensure that all back quarterly payments due to the City are recovered.
As a result of the performance of the consultant in the audit capacity locating and recovering sales that were incorrectly applied to another entity or to the state pool, there is a need to increase the agreement amount to cover the payments to the consultant. HdL is paid 15% of the recovered amount. Staff has seen an increase in amounts recovered from HdL in second quarter of FY 21-22 and is requesting a contract increase to cover the remainder of the fiscal year.
Staff therefore recommends that the City Council approve the attached amendment to the Consultant/Professional Services Provider Agreement with HdL and remains available for any questions or comments.
Attachments: A. Amendment No. 4 to Consultant/Professional Services Agreement B. HDL Original Agreement
ATTACHMENT A
Consultant/Professional Services Provider Agreement/Hinderliter, De Llamas and Associates/ Project ESC19-016/Amendment 4
AMENDMENT NUMBER: FOUR
TO
CONSULTANT/PROFESSIONAL SERVICES PROVIDER
AGREEMENT
BY AND BETWEEN
CITY OF VICTORVILLE
AND
HINDERLITER, DE LLAMAS AND ASSOCIATES
FOR
SALES AND USE TAX AUDIT SERVICES, PROJECT ESC19-016
THIS AMENDMENT (the “Amendment”) is made and entered in to this ____ day of _______, 2021, by and between by and between the City of Victorville, a municipal corporation, organized and existing in the County of San Bernardino under and by virtue of the laws of the State of California (hereinafter referred to as “City”), and Hindlerliter, De Llamas and Associates, a California corporation, hereinafter referred to as “Consultant”, City and Consultant are sometimes hereinafter referred to individually as a “Party” and collectively referred to as the “Parties”.
Recitals
1. WHEREAS, the City has a Consultant/Professional Services Provider Agreement (hereinafter referred to as the “Original Agreement”) with the Consultant to provide Sales and Use Tax Audit Services, Project ESC19-016; and
2. WHEREAS, on or about July 11, 2019, Amendment One (1) was issued to the Original Agreement to exercise Option 1 of 4, additional one-year periods, amending Section 6., Term of Agreement, to commence July 1, 2019 and expire June 30, 2020; and
3. WHEREAS, on or about August 18, 2020, Amendment Two (2) was issued to the Original Agreement to exercise Option 2 of 4, additional one-year periods, amending Section 6., Term of Agreement, to commence July 1, 2020 and expire June 30, 2021; and all references to George N.
Harris II, Deputy City Manager, or his designee, were replaced with Sophie L. Smith, Deputy City Manager, or her designee. Section 3 ., Compens ation, total annual not to exceed sum of $50,000.00, remained unchanged; and
4. WHEREAS, on or about July 3, 2021, Amendment Three (3) was issued to the Original Agreement to exercise Option 3 of 4, additional one-year periods, amending Section 6., Term of Agreement, to commence July 1, 2021 and expire June 30, 2022. Section 3., Compensation, total annual not to exceed sum of $50,000.00, remains unchanged; and
5. WHEREAS, it is the desire of the Parties to issue Amendment four (4) to the Original Agreement to amend Section 3., Compensation to revise the total annual not to exceed sum from $50,000.00 to $150,000.00; and
6. NOW THEREFORE , in consideration of the covenants, conditions, and promises contained herein and for such other good and valuable consideration, receipt of which is hereby acknowledged, the Parties are willing to amend the Original Agreement as stated below.
Consultant/Professional Services Provider Agreement/Hinderliter, De Llamas and Associates/ Project ESC19-016/Amendment 4
Contract Amendment
Section 3. – COMPENSATION – is amended as follows:
“The City shall pay to Consultant a sum not to exceed One Hundred Fifty Thousand and 00/100 dollars ($150,000.00) for faithful performance of the services to be rendered under this Agreement, subject to the Fee Schedule provisions of Section 4, below.”
Except as amended herein, t he terms and conditions of the O riginal Agreement and all previous amendments remain in full force and effect.
(SIGNATURES ON NEXT PAGE)
Consultant/Professional Services Provider Agreement/Hinderliter, De Llamas and Associates/ Project ESC19-016/Amendment 4
IN WITNESS WHEREOF, the parties hereto have caused the Amendment to the Original Agreement to be entered as of the dates written below.
PARTY OF THE FIRST PART PARTY OF THE SECOND PART
THE CITY OF VICTORVILLE HINDERLITER DE LLAMAS AND
ASSOCIATES
By:_______________________________ By:________________________________ Debra Jones, Andrew Nickerson,
Mayor President
Dated:______________________________ Dated:______________________________
ATTEST
By:_________________________________
Jennifer Thompson,
City Clerk
Dated:_______________________________
THE CITY OF VICTORVILLE APPROVED AS TO STANDARD FORM
By:________________________________ By:______________________________ Lee Brown, Andre de Bortnowsky,
Risk Manager City Attorney
Dated:______________________________ Dated:_____________________________
ATTACHMENT B
Item Number: 13
City Council / Board of Directors
Written Communications
Meeting of: March 1, 2022
Submitted By:
C. Eric Ray, Airport Director
Subject:
Airport Joint Use Agreement Between the United States of America (Air Force) and the Southern California Logistics Airport Authority
Recommendation:
That the Honorable Southern California Logistics Airport Authority Board of Directors:
1. Approve entering into an Airport Joint Use Agreement between the United States of America (acting by and through the Secretary of the Air Force) and the Southern California Logistics Airport Authority.
2. Authorize the Airport Director to sign said AJUA; and
3. Adopt Resolution No. SCLAA 22-007, amending the 2021/2022 budget, increasing revenue in Fund 450 by $14,554.
Fiscal Impact:
The agreement presented herein will generate approximately $291,113 in gross lease revenue over the initial term (date of execution plus 5 years). The table below outlines the fiscal impact of the agreement over the initial term.
FY 21/22
(Apr-Jun)
FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27
(Jul-Mar)
$14,554 $58,223 $58,223 $58,223 $58,223 $43,667
The revenue associated with this agreement increases the budgeted revenue established for Fiscal Year 2021/2022 and thereby requires an additional revenue appropriation in the amount of $14,554 in the Airport Operations Fund 450. Resolution No. SCLAA 22-006 is presented herein for the purpose of requesting approval of the required budget adjustment as outlined below.
5 7
0 Original FY21/22 Budget
Revenue Expense
450 Airport Operations Fund (Landing Fees) $56,000 $0
Revised FY21/22 Budget
Revenue Expense
450 Airport Operations Fund (Landing Fees) $70,554 $0
Future appropriations for the subject Agreement will be considered at the time the annual budget is approved.
Background:
Title 49, United States Code (“USC”), subtitle VII provides that an airport that receives financial assistance from the United States Government will make its facility available without charge for use by Government aircraft in common with other aircraft, except that if the use is substantial, the Government may be charged a reasonable share, proportionate to the use, of the cost of operating and maintaining the facility used.
Federal Aviation Administration “(FAA”) Airport Compliance Manual Order 5190.6B, §
7.14(a) and § 3.2(a); Grant Assurance 27 (Use by Federal Government Aircraft); and 49 USC § 47107(a)(11) define “substantial use” as the existence of one of the following conditions:
1. Five or more government aircraft are regularly based at the airport or on land adjacent thereto.
2. Federal government aircraft make 300 or more total calendar month operations (each landing and takeoff is a separate operation);
3. The gross cumulative weight of federal government aircraft using the airport in a calendar month exceeds 5,000,000 pounds (total operations of federal government aircraft multiplied by the gross certified weights of such aircraft).
On August 5, 2008, the 163rd Air Reconnaissance Wing (“ARW”), based out of March Air Reserve Base (“ARB”), entered into an Airport Joint Just Agreement (“AJUA”) with the Southern California Logistics Airport Authority (“SCLAA”) as a result of its substantial use of the facility to fly its MQ-1 Predator Unmanned Aerial System (“UAS”) for the purpose of performing flight training. The AJUA defined the SCLAA’s maintenance and operational responsibilities, regulated the activities of the 163 rd ARW, and provided a vehicle by which the SCLAA can be compensated for allowing the 163 rd ARW to use its aeronautical facilities.
Early in 2009, the 452 nd Air Mobility Wing (“AMW”) expressed interest in conducting nighttime flight training with its C-17 cargo aircraft at the Southern California Logistics Airport (“SCLA”) for the purpose of training pilots to land without airfield lighting, using only night vision goggles. On May 1, 2009, a new AJUA was executed that replaced the 5 7
0 previous edition that contemplated the activities of both the 163 rd ARW and the 452 nd AMW. This second AJUA expired on April 30, 2014.
Starting in the fall of 2013, SCLA staff approached both the 163 rd ARW and the 452 nd AMW to initiate discussions intended to ensure the timely execution of a new AJUA. Over the following eight months, many technical discussions ensued with the 452 nd AMW pertaining to their desire for the SCLAA to fund and construct a new runway specifically dedicated to meeting the C-17 crew training needs. Realizing such request was not tenable, staff sought and offered several compromise solutions that entailed reasonable modifications to one of the existing SCLA runways to better accommodate the 452 nd AMW. Ultimately, the 452 nd AMW chose to utilize other airfield accommodations within the purview of the Department of Defense, thus declining to enter another AJUA.
Concurrent discussions with the 163 rd ARW were central to determining the reasonable cost for their proportionate use of the airfield. The 163 rd ARW adamantly disputed the cost of operating and maintaining the SCLA airfield and purported lower aircraft operations counts. Ultimately, successful negotiation produced a new five-year AJUA that expired on June 30, 2019. Thereafter, the 163 rd ARW relocated all operations to March Air Reserve Base and declared the Air Force hangar facilities at the SCLA surplus.
Discussion:
Within the past year, the Air Force has placed a new mission in its SCLA hangar facilities to perform certain defense testing operations using six MQ-9 aircraft that are to be operated by the contracting firm i3. Prior to the commencement of MQ-9 operations, this mission requires the execution of a new AJUA based upon the number of aircraft regularly based at the SCLA. Staff has negotiated a new AJUA with a five-year term in the amount of $58,223 per year to be recognized as airport landing fee revenue.
Because the Airport Use Agreement will produce a steady revenue stream, staff recommends that Your Honorable Southern California Logistics Airport Authority Board of Directors approve the Airport Joint Use Agreement by and between the United States of America and the Southern California Logistics Airport Authority, authorize the Airport Director to execute said agreement, and adopt Resolution No. SCLAA 22-007 amending the 2021/2022 fiscal year budget, increasing budgeted revenue by $14,554.
Staff remains available for any questions or comments you may have.
CER/hdk
Attachments: A. Site Map
B. Airport Joint Use Agreement
C. Resolution No. SCLAA 22-007
ATTACHMENT A
SITE MAP
SITE MAP
Government Leased Facilities
Jointly Used Flying Facilities
ATTACHMENT B
AIRPORT JOINT USE AGREEMENT
AIRPORT JOINT USE AGREEMENT
BETWEEN
SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY,
AND
UNITED STATES OF AMERICA
TABLE OF CONTENTS
AIRPORT JOINT USE AGREEMENT 3
RECITALS 3
AGREEMENT 4
1. DEFINITIONS 4
2. JOINT USE 3
3. AUTHORITY’S RESPONSIBILITIES 3
4. AIR FORCE RESPONSIBILITIES 4
5. PAYMENTS 4
6. AIRFIELD MANAGEMENT 5
7. AIR FORCE RESERVED RIGHTS 5
8. FIRE PROTECTION AND CRASH RESCUE SERVICES 5
9. RECORDS AND BOOKS OF ACCOUNT 5
10. TERM 6
11. TERMINATION 6
12. GENERAL PROVISIONS 6
13. MAJOR REPAIRS AND NEW CONSTRUCTION 7
14. NOTICES 8
15. EXHIBITS 8
AIRPORT JOINT USE AGREEMENT
THIS AIRPORT JOINT USE AGREEMENT (“Agreement”) made and entered into as of this _____ day of _____, 2022, by and between the SOUTHERN CALIFORNIA LOGISTICS AIRPORT AUTHORITY (Authority) and the UNITED STATES OF AMERICA, acting by and through the Secretary of the Air Force (“Air Force” or “Government”) Air Force and t he AUTHORITY are sometimes hereinafter referred to as "P arty" or collectively as "Parties".
RECITALS
A. The Authority owns and operates the Southern Califor nia Logistics Airport (“Airport"), located in the City of Victorville, County of San Bernardino, State of California.
B. Title 49, United States Code, Chapter 471, "Airport Development," (49 U.S.C. §
47101-47129), including but not limited to 49 U.S.C. §47107(a) (11) provides that each of the Airport's facilities developed with financial assistance from the United States of America and each of the Airport's facilities usable for the landing and taking off of aircraft always will be available without charge for use by Government aircraft in common with other aircraft, except that if the use is substantial, the AUTHORITY may charge the Government a reasonable share, proportionate to its use, of the cost of operating and maintaining the facility used.
C. The Government requires substantial use of the flying facilities at the Airport for Air Force Material Command (AFMC) for use by MQ -9 aircraft, as well as for other occasional transient government aircraft. All other federal g overnment aircraft as defined bel ow will be responsible for any fees associated with their substantial use of the flying facilities. Contract operation and use by other governmental agencies are addressed through separate arrangements with the AUTHORITY and these governmental agencies are not parties to this Agreement.
D. The AUTHORITY agrees to the Air Force substantial use, in common with other users of the Airport, of the flying facilities at the Airport.
E. In accordance with Air Force Instruction (AFI) 10–1002, Joint Use Agreements for Military and Civilian Flying Facilities, it is the AUTHORITY’s responsibility to determine when the total Government use is substantial and notify the Air Force that its use has exceeded the “substantial use” criteria and all future use will result in charges.
F. The Air Force agrees to make a good faith effort based on its available records, if any, and/or information provided by the AUTHORITY and/or the Airport’s control tower to support the AUTHORITY’s efforts to identify other federal government users. The Parties agree that the AUTHORITY’s efforts to identify all federal government aircraft landing at the Airport is
intended to allow full reimbursement to the AUTHORITY for the proportionate share of the total military users (assigned and transient) for the Jointly Used Flying Facilities, as that term is defined below. The Parties agree that renewal of this Agreement will not be delayed if the AUTHORITY,
through its best efforts, is unable to identify other transient military and federal government aircraft landing at the Airport.
G. In accordance with Air Force policy, there shall only be one Air Force agreement supporting Air Force military operations for each civil airport used. When more than one Air Force unit regularly uses an airport, the Deputy Assistant Secretary of the Air Force (Installations) will designate a lead unit (normally the Air National Guard through the National Guard Bureau ) who will attempt to account for the use by all Air Force activities and be the lead in discussions with the AUTHORITY. Any Air Force user that refuses, fails to participate, or does not reply to requests from the 97AMW will be directed by the Deputy Assistant Secretary of the Air Force (Installations) to terminate operations at the Airport.
H. All non- AFMC units or non- Air Force users will be bi lled directly by the AUTHORITY and pay their proportionate share directly to the AUTHORITY. All other federal agencies and branches or bureaus of the United States military will need to work directly with the AUTHORITY to pay their fair share, proportiona te to their use, of the cost of operating and maintaining the Jointly Used Flying Facilities.
I. Air Force and AUTHORITY desire to provide for the delineation of responsibility for operation and maintenance of the flying facilities jointly used in common with others at the Airport, and to establish Air Force's reasonable share, proportional to such use, of the cost of operating and maintaining such jointly used flying facilities.
AGREEMENT
THERFORE, the Parties agree as follows:
1. DEFINITIONS
A. For purposes of this Agreement, the “Jointly Used Flying Facilities” (JUFF) of the Airport means the runways, taxiways, lighting systems, navigational aids, markings and appurtenances open to public use and use by the Air Force, including all improvements and facilities pertaining thereto and situated thereon (Depicted at Exhibit A-1) and all future additions, improvements, and facilities thereto as may be added or constructed from time to time. Jointly Used Flying Facilities do not include land areas used exclusively by the Air Force, or the terminal buildings, hangars, non-Government parking aprons and ramps, or other areas or stru ctures used exclusively by the AUTHORITY or its lessees, permittees, or licensees for civilian or commercial purposes. Air Force maintains exclusive use leased facilities, also depicted at Exhibit A -2.
3 B. Federal Aviation Administration (FAA) Airport Compliance Manual Order 5190.6B, § 7.14(a) and § 3.20(a); Grant Assurance 27 (Use by Federal Government Aircraft); and 49 U.S.C. § 47107(a)(11) define “substantial use” as the existence of one of the following conditions: (1) five or more federal government aircraft are regularly based at the airport or land adjacent to the airport, (2) federal government aircraft make 300 or more total calendar month operations (each landing and takeoff is a separate operation), (3) the gross cumulative weight of federal government aircraft using the airport in a calendar month exceeds 5,000,000 pounds (total operations of federal government aircraft multiplied by the gross certified weights of such aircraft). “Federal government aircraft” means the collective use by United States aircraft and not individual branches or bureaus of the United States military, for purposes for defining substantial use only, herein.
C. Federal Government Aircraft - federal government aircraft means aircraft owned or leased to the federal government. This includes all aircraft operated by National Guard Army units, Air Force Reserve units and Air National Guard units.
D. Air Force Aircraft – federal government aircraft operated and controlled by Air Force active duty units, Air Force Reserve units and Air National Guard units. Unmanned Aerial Systems and Remotely Piloted Aircraft are considered no different than manned aircraft in the Air Force.
2. JOINT USE
Subject to the terms and conditions of this Agreement, the Air Force shall have the use, in common with other users of the Airport, present and prospective, of the J UFF, together with all necessary and convenient rights of ingress and egress to and from Air Force facilities at the Airport, the JUFF located on the Airport as required. Air Force’s use of the JUFF shall not unduly restrict civil aviation and commercial space transportation launches. Routes for ingress and egress for Air Force's employees, agents, customers and contractors shall not unduly restrict the Air Force in its operations.
3. AUTHORITY RESPONSIBILITIES
Subject to the availability of appropriations therefore, the AUTHORITY is responsible for the following services and functions in accordance with Paragraph 6 below:
a. Operate and maintain the Airport Access Control System as a tool to safeguard the JUFF, and the larger Airport Operations Area, from unauthorized individuals and vehicles.
b. Furnishing all personnel, materials and equipment required in the rendering of the services to be provided under the Agreement.
4 c. Performing any and all maintenance of the Jointly Used Flying Facilities, including but not limited to:
(1) Joint sealing, repair, crack repair, surface repairs, airfield markings and repairing or replacing of damaged sections of airfield pavement;
(2) Runway, taxiway, and approach lighting and the regulators and controls therefore;
(3) Beacons, obstruction lights, wind indicators, and other navigational aids;
(4) Grass cutting and grounds care, drainage, and dust and erosion control of unpaved areas, adjacent to runways and taxiways;
(5) Sweeping runways and taxiways;
(6) Controlling wildlife hazards to aircraft operations
(7) Removing hazards from runways and taxiways within a reasonable time after such runways and taxiways have been so encumbered.
d. Furnishing utilities necessary to operate the Jointly Used Flying Facilities.
e. Removing disabled non-Air Force aircraft as expeditiously as possible, subject to the rules and regulations of the National Transportation Safety Board, in order to minimize the length of time the Jointly Used Flying Facilities, or any part thereof, would be closed because of such aircraft.
4. AIR FORCE RESPONSIBILITIES
Air Force will be responsible for the following:
a. Subject to availability of appropriations therefore, repairing within a reasonable time damage to the Jointly Used Flying Facilities to the ext ent that such damage is caused solely by Air Force aircraft operations and/or Air Force equipment installed and maintained by the Government on the Jointly Used Flying Facilities and is in excess of the fair wear and tear resulting from the military use contemplated under this Agreement.
b. Removing disabled Air Force aircraft as expeditiously as possible in order to minimize the length of time the Jointly Used Flying Facilities, or any part thereof, would be closed because of such aircraft.
5 5. PAYMENTS
a. In consideration of and for the faithful performance of this Agreement, and subject to the availability of federal appropriations, the Air Force shall pay to AUTHORITY as its proportionate share of operating and maintaining the JUFF an amount each year of fifty eight thousand, two hundred twenty two dollars and 55 cents ($ 58,222.55), payable in equal monthly installments of four thousand eight hundred fifty one dollars and 88 cents ($4,851.88).
b. Payments for the periods set out in Paragraph 5a above shall be made upon submission of appropriate bills to Air Force as designated in Paragraph 5c below and may be submitted as soon as the Agreement is executed. Air Force shall pay the bills within 30 days of receipt by delivery of payment to the AUTHORITY at the address set forth below. Provided, however, that if during the term of this Agreement, sufficient funds are not avai lable through the annual federal appropriations at the beginning of any fiscal year (October 1st) to carry out the provisions of this Agreement, the Air Force will so notify the AUTHORITY in writing.
c. Bills for the payments provided hereunder shall be directed to:
Tyler Neale
Executing Agent, HSST
AEDC/TDH
1478 Fifth Street
Arnold AFB, TN 37389
931-434-8229
Or to such other address as Air Force may from time to time provide in writing.
d. Payments shall be made to the AUTHORITY at:
Airport Director
18374 Phantom West
Victorville, CA 92394
(760) 243-1900
Or to such other address as the AUTHORITY may from time to time provide to Air Force in writing.
e. Either Party may request renegotiation if either Party, at the request or with the formal concurrence of the other, as the case may be, requires services not contemplated by this Agreement, or reduces or eliminates services it undertakes to provide under this Agreement.
6 6. AIRFIELD MANAGEMENT
a. The AUTHORITY agrees that maintenance of the Jointly Used Flying Facilities shall, at all times, be in accordance with Federal Aviation Adminis tration ("FAA") standards for the operation of a jet capable, general aviation and public use airport.
b. Air Force agrees that any markings and equipment installed by it pursuant to Paragraph 7 of the Agreement shall not be in conflict with FAA standards.
7. AIR FORCE RESERVED RIGHTS
Air Force reserves the right, at its sole cost and expense and subject to Paragraph 6b above, to:
a. Provide and maintain in the Jointly Used Flying Facilities airfield markings required solely for military aircraft operations.
b. Install, operate and maintain in the Jointly Used Flying Facilities any and all additional equipment necessary for the safe and efficient operation of military aircraft, required by the Air Force safety procedures and specifically negotiated with SCLA to insure adequate procedures are developed that reduce the chance of inadvertent runway incursions and all changes are coordinated with SCLA.
8. FIRE PROTECTION AND CRASH RESCUE SERVICES
The AUTHORITY
maintains a fire fighting and crash rescue organization in support of military and civilian operations at the Airport.
9. RECORDS AND BOOKS OF ACCOUNT
a. The AUTHORITY agrees to keep records and books of account showing the actual cost to it of all items of labor, materials, equipment, supplies, services, and other expenditures made in fulfilling the obligations of this Agreement. The Comptroller General of the United States or any of his or her duly authorized representatives shall, until the expiration of three (3) years after final payment, have access at all times to such records and books of account, or to any directly pertinent books, documents, papers, and records of any of the AUTHORITY's contractors or subcontractors engaged in the performance of and involving transactions related to this Agreement. The AUTHORITY further agrees that representatives of the Air Force Audit Agency or any other designated representative of the Government shall have the same right of access to such records, books of account, documents and papers as are available to the Comptroller General.
7 10. TERM
The term of this Agreement shall be five (5) years. The term begins and the agreement is effective the date when signed by the last party. E xtensions thereto will be made as appropriate at the written request of one Party and the written agreement of both parties.
11. TERMINATION
This Agreement may be terminated by the either party at any time by giving the other party at least thirty (30) days' notice thereof in writing.
b. The Air Force, by giving written notice to the AUTHORITY, may terminate the right of the AUTHORITY to proceed under this Agreement if it is found, after notice and hearing by the Secretary of Air Force or his or her duly authorized representative, that gratuities in the form of entertainment, gifts, or otherwise, were offered or given by the AUTHORITY, or any agent or representative of the AUTHORITY, to any officer or employee of Air Force with a view toward securing this Agreement or securing favorable treatment with respect to the awarding or amending, or the making of any determinations with respect to the pe rforming of such Agreement, provided that the existence of the facts upon which the Secretary of Air Force or his or her duly authorized representative makes such findings shall be an issue and may be reviewed in any competent court.
c. In the event this Agreement is terminated as provided in subparagraph 11b above, the Air Force shall be entitled to pursue the same remedies against the AUTHORITY as it could pursue in the event of a breach of the Agreement by the AUTHORITY and in addition to any other damage to which it may be entitled by law.
d. Any termination of this Agreement by the Air Force shall not create any liability on the part of the Government to the AUTHORITY for costs or anticipated profits or income, or costs of construction, maintenance, r epair or upgrade, of the Jointly Used Flying Facilities
.
e. The rights and remedies provided in subparagraphs 11b and 11c above shall not be exclusive and are in addition to any other rights and remedies provided by law or under this Agreement.
f.
If the AUTHORITY terminates the Agreement, the Air Force, in accordance with Federal Aviation Administration (FAA) Airport Compl iance Manual Order 5190.6B, § 7.14(a) and § 3.20(a), Grant Assurance 27 (Use by Federal Government Aircraft) and 49 U.S.C. § 47107(a)(11), will continue use of the Joint ly Used Flying Facilities. Per these federal statutes and policy, the AUTHORITY cannot obstruct, interfere with or restrain federal government aircraft including DoD/Air Force aircraft (manned and unmanned aircraft) from landing and taking off and otherwise utilizing the Jointly Used Flying Facilities.
8 12. GENERAL PROVISIONS
a. Compliance with Law. The P arties shall comply with all federal, state and local laws, rules and regulations applicable to the activities conducted under this Agreement.
b. Assignment. Neither P arty shall transfer or assign this Agreement without the prior written consent of the other, which shall not be unreasonably withheld or delayed.
c. Liability. Except as otherwise provided in this Agreement, neither Party shall be liable for damages to property or injuries to persons arising from acts of the other in the use of the Jointly Used Flying Facilities or occurring as a consequence of the performance of responsibilities under this agreement.
d. Third Party Benefit. No member or delegate to Congress shall be admitted to any share or part of this Agreement or to any benefit that may arise therefrom, but this provision shall not be construed to extend to this Agreement if made with a corporation for its general benefit.
e. Entire Agreement. It is expressly agreed that this written instrument embodies the entire financial arrangement and agreement of the P arties regarding the use of the Jointly Used Flying Facilities by the Air Force, and there are no understandings or agreements, verbal or otherwise, between the P arties in regard to it except as expressly set forth herein.
Specifically, no landing fees or other fees not provided in this Agreement will be assessed by the AUTHORITY against Air Force for the use of the Jointly Used Flying Facilities during the term of this Agreement.
f. Modification. This Agr eement may only be modified or amended by mutual agreement of the Parties in writing and signed by each of the Parties hereto.
g. Waiver. The failure of either P arty to insist, in any one or more instances, upon the strict performance of any of the terms , conditions, covenants, or provisions of this Agreement shall not be construed as a waiver or relinquishment of the right to the future performance of any such terms, conditions, covenants, or provisions. No provision of this Agreement shall be deemed to have been waived by either Party unless such waiver be in writing, signed by such Party.
h. Paragraph Headings. The brief headings or titles preceding each paragraph and subparagraph are merely for purposes of identification, convenience, and ease of re ference, and will be completely disregarded in the construction of this Agreement.
i. In accordance with 31 U.S.C. § 1341, the Air Force shall have no financial liability under this Agreement to any Party or to anyone else beyond federal funds appropriated and available for this Agreement.
9 13. MAJOR REPAIRS AND NEW CONSTRUCTION
Major repair projects and/or new construction projects required for the Jointly Used Flying Facilities (collectively, "Joint Use Projects") are not included under this Agreement. Any Government contribution to Joint Use Projects shall be the subject of separate negotiations and written agreement between the AUTHORITY and the Government at such time as the work is required. Any Government participation in the costs of J oint Use Projects is subject to the availability of Federal funds for such purpose at the time the work is required.
14. CHANGED CIRCUMSTANCES
The P arties acknowledge that compliance with any federal l egislative action or other federal Executive action (whether issued before or after the effective date of the this Agreement) affecting this Airport Joint Use Agreement, including but not limited to (i) Base Realignment and Closure Act or (ii) modification of AFMC mission, or Secretary of the Air Force basing decisions may require that amendment(s) be made to this Airport Joint Use Agreement.
15. NOTICES
No notice, order, direction, determination, requirement, consent or approval under this Agreement shall be of any effect unless it is in writing and addressed as provided herein.
a. Written communications to the AUTHORITY shall be addressed as follows:
Airport Director
SOUTHERN CALIFORNIA LOGISTICS AIRPORT
18374 Phantom Drive
Victorville, California 92394
(760) 243-1900
b. Written communications to Air Force shall be addressed as follows:
Executive Agent
High Speed Systems Test PMO
1478 Fifth Street Arnold AFB, TN 37389
931-434-8229
10 Notification of any change in the above addresses shall be made in writing to the other PARTY at least 30 days before the effective date of the change.
IN WITNESS WHEREOF, the respective duly authorized representatives of the PARTIES hereto have executed this Agreement on the date set forth near their respective signatures.
Dated: SOUTHERN CALIFORNIA LOGISTICS
AIRPORT AUTHORITY
By:
C. ERIC RAY
Airport Director
Dated: _____________________________
Dated: _____________________________
APPROVED AS TO FORM:
By:
ANDRE DE BORTNOWSKI
Authority Counsel
APPROVED AS TO RISK:
By:
LEE BROWN
Authority Risk Manager
11 [Air Force signature page follows]
UNITED STATES OF AMERICA
By: ________________________________
ROBERT E. MORIARTY, P.E., SES,
Deputy Assistant Secretary of the Air Force
(Installations,)
Dated: ______________________________
2 3
9 6
ATTACHMENT C
RESOLUTION NO. SCLAA 22-007
2 3
9 6
RESOLUTION NO. SCLAA 22-007
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE SOUTHERN
CALIFORNIA LOGISTICS AIRPORT AUTHORITY AMENDING THE ANNUAL BUDGET FOR FISCAL YEAR 2021-2022
WHEREAS, the Executive Director of the Southern California Logistics Airport Authority did heretofore submit to the SCLAA Board of Directors an estimate of the expenditures and revenues of the City departments and offices, together with a proposed budget for the fiscal year 2021-2022; and
WHEREAS, copies of said budget were prepared and distributed to the SCLAA Board of Directors, approved by the SCLAA Board of Directors prior to June 30, 2021, and have been available for the inspection by the public in the office of the Authority Secretary of the SCLAA; and
WHEREAS, after preparation of the budget, a need to amend the budget is being recommended to the Board of Directors for approval; and WHEREAS, the Executive Director or his designee will provide all necessary justification for the budget amendment as an attachment to this resolution or in the associated SCLAA Board of Directors agenda report.
NOW, THEREFORE, THE BOARD OF DIRECTORS OF THE SOUTHERN
CALIFORNIA LOGISTICS AIRPORT AUTHORITY HEREBY RESOLVE AS FOLLOWS:
SECTION 1. That the annual budget for the fiscal year 2021-2022 for the SCLAA be hereby amended to reflect a change in the amounts and associated accounts listed below and as described in the corresponding Agenda Item.
Account Amount Adjusted
4500125-44600 14,554
SECTION 2. That copies of such amended budget, certified by the Authority Secretary, shall be filed with the auditors of the SCLAA and in the office of the Authority Secretary for public inspection and certified copies thereof shall be made available for use by City departments, offices and subsidiary districts of the City.
Item Number: 14
City Council / Board of Directors
Written Communications
Meeting of: March 1, 2022
Submitted By:
Jeff Armstrong, Fire Chief
Subject:
Award of contract to All American Fence for the construction of a wrought iron fence, concrete repair/replacement, plus the installation of two (2) automatic gates.
Recommendation:
That Your Honorable City Council (1) Approve the award of contract to All American Fence Company for the construction of a wrought iron fence at Fire Station 311, concrete repairs (Additive #1) and the installation of two automatic gates in the amount not to exceed $198,000.00 for project CC22-073.
Fiscal Impact:
This contract, if approved by Council, will be funded from the Fire Department fiscal year 2021-2022 budget (1002010-55060-96044) in the amount of $110,000 and Measure P Fire Building Maintenance (1052010-52410) in the amount of $88,000 resulting in a total award of $198,000.00.
Background:
The Fire Department in conjunction with the Facilities Department has identified the urgent need for increased security at one of our fire stations. Fire Station 311, next to the fairgrounds, is currently unsecured, and intrusion or theft cannot be prevented. The Department has been experiencing increased foot traffic, unauthorized access to this facility, along with recent incidents of vandalism.
Increased fire station security is centered around securing the City’s assets and Fire Department equipment, as well as protecting the personal vehicles of employees. It will also address liability to the City by restricting unauthorized access to the fire station grounds where many hazards exist, and someone could be injured. Enhanced fire station security, as ‘essential services’, is not only encouraged by the Department of Homeland Security, but specifically, this project was also outlined in the Victorville Public Safety Plan (page 27).
2 4
4 3
Discussion:
The Fire Chief along with the Facilities Manager met to discuss the security needs at Station 311. Discussion included the project scope, design the process to move forward.
It was identified that due to the unauthorized access to the station required a wrought iron fence to ensure a safe work environment for staff.
On December 20, 2021, the Request for Bid (RFB) was posted on Ebid Construction Board and the City of Victorville website inviting qualified contractors to bid on the project.
This RFB included an Additive (Additive #1) for the addition of a second gate on the property, south of the training tower. The additive was included to the project to increase accessibility to the training tower and improve traffic flow at the fire station. A job walk was held on January 6, 2022, and bids were due February 2, 2022. The following three (3) bids were received:
Contractor Base Bid Additive #1 Total Bid Amount
All American Fence, Hesperia, CA $162,000.00 $36,000 $198,000 Red Hawk Fence, Perris, CA $191,147.00 $30,625 $221,772 Harris Fence, Los Angeles, CA $195,357.00 $48,334 $243,691 Each contractor and subs are CSLB-licensed, DIR-Registered, and not debarred federally or by the state. All two Addenda were acknowledged by each bidder, required documents and bidder’s bond were submitted by each contractor. After review and tabulation of the bid proposals, it was determined that All American Fence is the lowest responsive and responsible bidder.
Staff recommends that the City Council award a contract to All American Fence for Project CC22-073 in the amount of $198,000.00.
Staff remains available for any questions the Council may have.
Attachments: A. Proposed Contract
ATTACHMENT A
PROPOSED CONTRACT
1 Construction Agreement/ALL AMERICAN FENCE ERECTORS/PROJECT CC22-073
CONSTRUCTION AGREEMENT
BY AND BETWEEN
THE CITY OF VICTORVILLE
AND
DANTIN ENT. INC., DBA ALL AMERICAN FENCE ERECTORS
FOR
WROUGHT IRON FENCE FOR FIRE STATION 311, CC22-073
THIS CONSTRUCTION AGREEMENT (the “Agreement”) is made and entered into by and between the City of Victorville, a municipal corporation located in the County of San Bernardino, State of California, hereinafter referred to as the “City”, and ALL AMERICAN FENCE ERECTORS, a California corporation, hereinafter referred to as the “Contractor”. The City and the Contractor are sometimes hereinafter referred to as a “Party” and collectively referred to as the “Parties.”
RECITALS:
WHEREAS, the City requires Wrought Iron Fence for Fire Station 311 (the Project); and WHEREAS, in light of the facts set forth above, the City desires to retain Contractor in connection with Wrought Iron Fence for Fire Station 311; and
NOW, THEREFORE, IN CONSIDERATION OF THE COVENANTS, CONDITIONS, AND
PROMISES CONTAINED HEREIN AND FOR SUCH OTHER GOOD AND VALUABLE CONSIDERATION, THE PARTIES HERETO AGREE AS FOLLOWS:
Section 1. RECITALS
The Recitals set forth above are true and correct and are hereby incorporated into this Agreement by this reference, as though set forth herein.
Section 2. TERM OF AGREEMENT
This Agreement shall commence within fifteen (15) CALENDAR DAYS after issuance of Notice to Proceed (the “Commencement Date”) and shall terminate upon completion of the Project Sixty (60) CALENDAR DAYS after Commencement Date (the “Termination Date”), unless sooner terminated in accordance with the provisions of this Agreement (the “Term”). From and after the Termination Date, and upon subsequent agreement by the Parties, this Agreement may continue on a month-to-month basis until terminated pursuant to Section 3 below.
Section 3. TERMINATION OR SUSPENSION
a. This Agreement may be terminated or suspended without cause by either Party at any time, provided that the Party initiating the termination provides the other Party at least thirty (30) days advance written notice of such termination or suspension. In the event of such termination, the City shall only be liable for payment under the payment provisions of this Agreement for satisfactory work rendered or supplies actually furnished prior to the effective date of termination.
CIP#_________
2 Construction Agreement/ Construction Agreement/ALL AMERICAN FENCE ERECTORS/PROJECT CC22-073
b. This Agreement may be terminated or suspended with cause by either Party at any time, provided that the Party initiating termination provides the other Party at least ten (10) days advance written notice of such termination or suspension. In the event of such termination, the City shall only be liable for payment under the payment provisions of this Agreement for satisfactory work rendered or supplies actually furnished prior to the effective date of termination.
Section 4. CONTRACT DOCUMENTS; PRIORITY
a. Contract Documents. The Contract Documents consist of the following documents, all of which are either attached hereto as exhibits or are incorporated herein by this reference. Said Contact Documents are intended to be correlative and constitute Contractor’s perfo rmance obligations:
1. This Agreement.
2. Exhibits A & B.
3. Notice Inviting Bids for the Project.
4. Specifications for the Project.
5. Special Provisions.
6. Faithful Performance and Payment Bond.
7. Non-Collusion Declaration.
8. Guaranty.
b. Interpretation. In the event of any conflict between any of the Contract Documents, the document highest in the order of precedence (from highest to lowest), as set forth in Subsection
4.a above shall control.
Section 5. CONTRACTOR’S OBLIGATIONS
Contractor shall complete the Project as specifically set forth in the Contract Documents.
Contractor shall furnish, at its own cost and expense, all labor, services, material, tools, equipment, supplies, transportation, and any other items and facilities necessary therefore, as provided in the Contract Documents.
Section 6. COMPENSATION
The Contractor agrees to receive and accept the following amount, not to exceed One Hundred Ninety Eight Thousand and 00/100 Dollar ($198,000.00), as full compensation for furnishing; all materials, doing all the work contemplated and embraced in this contract, all loss or damage arising out of the nature of the work aforesaid, the action of the elements, any unforeseen difficulties or obstructions which may arise or be encountered in the execution of the work until its acceptance by the City, and for all risks of every description connected with the work, all expenses incurred by or in consequence of the suspension or discontinuance of work well and faithfully completing the whole work, thereof, according to the requirements of the agreement documents and to the satisfaction of Joseph Slegers, Building and Fire Official to wit: See Exhibit “A”, Scope of Work.
Section 7. BID PROPOSAL FORMS
The City shall pay Contractor as provided in the Bid Proposal Forms, attached hereto as Exhibit “B”, and incorporated herein by this reference as though set forth in full, subject to approval of the City, when applicable.
3 Construction Agreement/ Construction Agreement/ALL AMERICAN FENCE ERECTORS/PROJECT CC22-073
Section 8. PREVAILING WAGES
a. State Wages - In accordance with the provisions of California Labor Code Sections (1720,1770-1776, 1810, 1813 and 1815, as amended and applicable ), the State Director of Industrial Relations has determined the general prevailing rates of per diem wages in the locality where the Project is to be done. Copies of the updated Wage Determination rates are available from the CITY and the State of California via the internet at www.dir.ca.gov. Additionally, copies of the prevailing rate of per diem wages and federal wage decision rates are on file at the City of Victorville Finance Department and shall be made available for review to any interested party on request. Notwithstanding anything in the Contract Documents to the contrary, Contractor and all subcontractors shall pay not less than said specified State of California rates to all workers employed by them in the execution of the work contemplated by this Contract. Contractor shall be responsible for using the correct and current prevailing wage rates.
b. AB219 (as applicable) adds Section 1720.9 to the Labor Code, the hauling and delivery of ready-mixed concrete to carry out a public works contract, with respect to contracts involving state agency or any political subdivision of the state. Section 1720.9 defines the term “ready-mixed” concrete and specifies that the rate of pay shall be the current prevailing wage “for the geographical area in which the factory or batching plant is located” as determined by the DIR.
The statute also requires a written agreement between the party hauling or delivering the ready- mixed concrete and the party that engaged its services. Nothing in Section 1720.9 shall cause any company to be treated as a contract or or subcontractor for any purpose other than the application of this chapter of the Labor Code.
c. The delivery company shall provide certified payroll records under Labor Code section 1776(a) to the party that engaged its services and to the general contractor within five working days after the employee has been paid, accompanied by a written time record within five working days after the employee has been paid, accompanied by a written time record. The time record must be certified by each driver for the performance of job duties.
d. Contractor shall be solely responsible for using the correct wage decision or determination and performing accordingly. An error on the part of any awarding body does not relieve the Contractor from the responsibility for payment of the correct State prevailing wage and compliance with the maintenance and inspection of payroll records, posting of prevailing wage rates at work site, employment of apprentices, and other requirements of California Labor Code Section 1720, et seq.; California Code of Regulations, Title 8, Section 16000 et seq.; and all other applicable State labor laws. Contractor further acknowledges and agrees that it will be independently responsible for reviewing the applicable laws and regulations and effectuating compliance with those laws. Contractor will require the same of all its subcontractors.
NOTE: Confirmation of certified payroll submittal to the Department of Industrial Relations (DIR) is required with each invoice to the City. Payment of the invoice may be delayed when proof of certified payroll submittal is not included with the Contractor’s invoice.
Section 9. WORKERS’ COMPENSATION INSURANCE
Contractor shall procure and maintain, at its own expense, during the Term of this Agreement, workers’ compensation insurance, providing coverage as required by the California State Workers’ Compensation Law. If any class of employees employed by Contract or is not 4 Construction Agreement/ Construction Agreement/ALL AMERICAN FENCE ERECTORS/PROJECT CC22-073
protected by the California State Workers’ Compensation Law, Contractor shall provide adequate insurance for the protection of such employees to the satisfaction of the City.
In conformance with current statutory requirements of Section 1860 et seq., of the Labor Code of the State of California, the undersigned confirms the following as their certification:
I am aware of the provisions of Section 3700 of the Labor Code which requires every employer to be insured against liability for workers’ compensation or to undertake self-insurance in accordance with the provisions before commencing the performance of the work of this contract.
Section 10. NOTICE TO PROCEED
No work, service, material, or equipment shall be performed or furnished under this Contract unless and until a Notice to Proceed has been given to the Contractor by the City. Contractor shall commence work pursuant to the Contract Documents as directed by the City in the Notice to Proceed, and to diligently execute the same to completion within the time limits set forth in the Contract Documents.
Section 11. COMPLIANCE WITH LAWS
Contractor shall comply with all local, state, and federal laws and regulations applicable to the performance of the work required by the Contract Documents, including any rule, regulation, or bylaw governing the conduct or performance of Contractor, its employees, officers, board members, agents, independent contractors, and subcontractors. Unless otherwise specified in the Contract Do cuments, all required permits and licenses shall be held or obtained by the Contractor at its sole expense.
Section 12. COMMERCIAL GENERAL AND AUTOMOBILE LIABILITY
INSURANCE
Contractor shall procure and maintain at its own expense, during the term of this Agreement, com mercial general liability insurance, of not less than One Million Dollars ($1,000,000) per occurrence, and Two Million Dollars ($2,000,000) in the aggregate, for bodily injury, personal injury, death, loss, or damage resulting from the wrongful or negligent acts by the Contractor or its officers, employees, servants, volunteers, and agents and independent contractors.
Contractor shall further procure and maintain, at its own expense, during the Term of this Agreement, commercial vehicle liability insurance covering personal injury and property damage, of not less than One Million Dollars ($1,000,000) Combined Single Limit, covering any vehicle(s) utilized by Contractor or its officers, employees, servants, volunteers, or agents and independent contractors in performing the services required by this Agreement.
Section 13. COURSE OF CONSTRUCTION/INLAND MARINE INSURANCE
Contractor, and or any of its subcontractors, suppliers, vendors, employees, or person whom it performing any work under this agreement shall purchase, and maintain insurance to the full contract and insurable value thereof commonly referred to as a Course of Construction, Builders’ Risk, or an Inland Marine policy that offers “Installation” coverage for all materials, supplies, equipment, and property obtained by, or for Contractor, which is to become part of the work while such equipment and property is stored at the jobsite, at temporary locations, or while in transit to the 5 Construction Agreement/ Construction Agreement/ALL AMERICAN FENCE ERECTORS/PROJECT CC22-073
project from such temporary locations. Contractor, and or any of its subcontractors, suppliers, vendors, employees, or person whom is performing any work under this agreement shall also be responsible for insuring their owned, leased/rented or borrowed equipment. Insurance should also include a Loss Payee, and a Waiver of Subrogation Endorsement(s) in favor of the City of Victorville.
Section 14. ADDITIONAL INSURED
Notwithstanding any inconsistent statement in any required insurance policies or any subsequent endorsements attached thereto, the protection offered by all policies, except for Workers' Compensation coverage, shall bear an endorsement whereby it is provid ed that, the City and its officers, employees, servants, volunteers, and agents and independent contractors, including, without limitation, the City Attorney, are named as Additional Insureds.
Section 15. WAIVER OF SUBROGATION RIGHTS
Contractor shall require the carriers of all required insurance policies to waive all rights of subrogation against the City and its officers, volunteers, employees, contractors, and subcontractors. Each policy of insurance shall be endorsed to reflect such waiver.
Section 16. PROOF OF INSURANCE COVERAGE; REQUIRED PRIOR TO
COMMENCEMENT OF SERVICES
a. Contractor shall secure from a good and responsible company or companies authorized to do insurance business in the State of California the policies of insurance required by this Agreement and furnish to the City Clerk certificates of said insurance at least one (1) day prior to the commencement of any services to be performed under this Agreement.
b. The certificates of insurance shall bear an endorsement whereby it is provided that, in the event of cancellation or amendment of any required insurance policy for any reason whatsoever, the City shall be notified by mail, postage prepaid, not less than thirty (30) days before the cancellation or amendment is effective. In the case of non -payment, ten (10) days’ advance written notice shall be given.
c. The certificates of insurance shall bear an endorsement whereby it is provided that the respective insurance policy shall not be terminated or expire without first providing thirty (30) days written notice to the City of such termination or expiration.
d. The certificates of insurance shall indicate that the respective insurance policy will be maintained throughout the Term of this Agreement.
e. The Commercial General Liability and vehicle liability policies shall be endorsed to contain the following provision: “For any claims related to this Contract , Contractor’s service coverage shall be primary with respect to the City. Any insurance maintained by the City shall be in excess of Contractor’s insurance and shall not contribute to it.
Section 17. TIME OF THE ESSENCE
Time is of the essence in the performance of this Agreement.
6 Construction Agreement/ Construction Agreement/ALL AMERICAN FENCE ERECTORS/PROJECT CC22-073
Section 18. INDEMNIFICATION
Notwithstanding the limits of any insurance, Contractor shall indemnify the City, its officials, officers, agents, volunteers and employees against, and will hold and save them and each of them harmless from, any and all actions, suits, claims, damages to persons or property, losses, costs, penalties, obligations, errors, omissions or liabilities, (herein "claims or liabilities") that may be asserted or claimed by any person, firm or entity arising or alleged to arise out of or in connection with the negligent performance of the work, opera tions or activities of Contractor, its agents, employees, subcontractors, or invitees, provided for herein, or arising or alleged to arise from the negligent acts or omissions of Contractor hereunder, or arising or alleged to arise from Contractor's negligent performance of or failure to perform any term, provision, covenant or condition of this Agreement, but excluding such claims or liabilities or portion of such claims or liabilities arising or alleged to arise from the negligence or willful misconduct of the City its officials, officers, agents, volunteers or employees, and in connection therewith:
a. Contractor will defend any action or actions filed in connection with any of said claims or liabilities and will pay all costs and expenses, including legal costs and attorneys' fees incurred in connection therewith;
b. Contractor will promptly pay any ju dgment rendered against the City, its officials, officers, agents or employees for any such claims or liabilities arising or alleged to arise out of or in connection with Contractor's (or its agents', employees', subcontractors' or invitees') negligent performance of or failure to perform such work, operations or activities hereunder; and Contractor agrees to save and hold the City, its officials, volunteers, officers, agents, and employees harmless there from;
c. In the event the City, its officials, off icers, agents, volunteers or employees is made a Party to any action or proceeding filed or prosecuted against Contractor for such damages or other claims arising or alleged to arise out of or in connection with the negligent performance of or failure to perform the work, operation or activities of Contractor hereunder, Contractor shall pay to the City, its officials, volunteers officers, agents or employees, any and all costs and expenses incurred by the City, its officers, agents or employees in such acti on or proceeding, including but not limited to, legal costs and attorneys' fees for counsel acceptable to City; d. Contractor's duty to defend and indemnify as set out in this Section shall include any claims, liabilities, obligations, losses, demands, actions, penalties, suits, costs, expenses or damages or injury to persons or property arising or alleged to arise from, in connection with, as a consequence of or pursuant to any state or federal law or regulation regarding hazardous substances, including but not limited to the Federal Insecticide, Fungicide and Rodenticide Act ("FIFRA"), Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), Resource Conservation and Recovery Act of 1976 ("RCRA"), the Hazardous and Solid Was te Amendments of 1984, the Hazardous Material Transportation Act, the Toxic Substances control Act, the Clean Air Act, the Clean Water Act, the California Hazardous Substance Account Act, the California Hazardous Waste Control Law or the Porter -Cologne Water Quality Control Act, as any of those statutes may be amended from time to time;
The Contractor's indemnification obligations pursuant to this Section shall survive the termination of this Agreement. Contractor shall require the same indemnification fr om all subcontractors.
7 Construction Agreement/ Construction Agreement/ALL AMERICAN FENCE ERECTORS/PROJECT CC22-073
Section 19. REPORTS
Upon request by Joseph Slegers, Building Official , or his designee, Contractor shall prepare and submit reports concerning Contractor's performance of the work required by this Agreement.
Section 20. RECORDS
a. Contractor shall keep such books and records as shall be necessary to perform the services required by this Agreement and enable Joseph Slegers, Building Official or his designee, to evaluate the cost and the performance of such services.
b. Books and records pertaining to costs shall be kept and prepared in accordance with generally accepted accounting principles. Joseph Slegers, Building and Fire Official , or his designee, shall have full and free access to such books and records at all reasonable times, including the right to inspect, copy, audit, and make records and transcripts from such records.
d. Records and supporting documents pertaining to the use of funds paid to Contractor hereunder shall be retained by Cont ractor and made a vailable to Joseph Slegers, Building Official, or his designee , for purposes of performing an audit for a period of five (5) years from the date of termination of this Agreement.
Section 21. MODIFICATIONS AND AMENDMENTS
This Agreement may be modified or amended only by a written instrument signed by both Parties.
Section 22. ENTIRE AGREEMENT
a. This Agreement supersedes any and all prior or contemporaneous agreements, either oral or written, between the City and Contractor with respect to the subject matter of this Agreement.
b. The Contract Documents contain all of the covenants and agreements between the Parties with respect to the subject matter herein, and each Party acknowledges that no representations, inducements, promises, or agreements have been made by or on behalf of any Party, except those covenants and agreements in this Agreement and the Contract Documents.
c. No agreement, statement, or promise with respect to the subject matter of the Contract Documents, which is not contained in the Contract Documents, or in a valid modification or amendment to the Contract Documents, shall be valid or binding on either Party.
Section 23. AMBIGUITIES
This Agreement is in all respects intended by each Party hereto to be deemed and construed to have been jointly prepared by the Parties and the Parties hereby expressly agree that any uncertainty or ambiguity existing herein shall not be interpreted against either of them.
Except as expressly limited by this paragraph, all of the applicable rules of interpretation of contract shall govern the interpretation of any uncertainty or ambiguity of this Agreement. 8 Construction Agreement/ Construction Agreement/ALL AMERICAN FENCE ERECTORS/PROJECT CC22-073
Notwithstanding the foregoing, the Parties agree that Exhibit “A” is attached hereto for reference purposes and to the extent there are any ambiguities, inconsistencies or conflicts between the terms of this Construction Agreement and Exhibit “A” the terms of this Construction Agreement shall control and nothing set forth in Exhibit “A” shall be deemed to supersede any of the provisions of this Construction Agreement.
Section 24. NOTICES
a. Any notice to be provided pursuant to this Agreement shall be in writing, and all such notices shall be delivered by personal service or by deposit in the United States mail, certified or registered, return receipt requested, with postage prepaid, and addr essed to the Parties as follows:
To the City: Joseph Slegers, Building Official
Development Department
City of Victorville
14343 Civic Drive
Victorville, CA 92392
To Contractor: Dantin Ent. Inc., DBA All American Fence Erectors 16653 Walnut St., Hesperia, CA 92345
b. Notices, payments, and other documents shall be deemed delivered upon receipt by personal service or as of the second (2nd) day after deposit in the United States mail.
Section 25. NON-LIABILITY OF CITY OFFICERS AND EMPLOYEES
No officer or employee of the City shall be personally liable to Contractor, or any successor in interest, in the event of any default or breach by the City or for any amount, which may become due to Contractor or to its successor(s), or for any breach of any obligation of the terms of this Agreement.
Section 26. REVIEW BY ATTORNEYS
Each Party hereto has had its attorneys review this Agreement and all related documents.
Each Party hereto has consulted with its attorneys and has negotiated the terms of this Agreement based on such consultation.
Section 27. CARE OF WORK
Contractor must adopt reasonable methods during the life of the Agreement to furnish continuous protection to t he work, and the equipment, materials, papers, documents, plans, studies and other components to prevent losses or damages, and will be responsible for all damages, to persons or property, until acceptance of the work by the City, except those losses or damages as may be caused by the City’s own negligence. The performance of the work by Contractor or the payment of money by the City shall not relieve Contractor from any obligation to correct any incomplete, inaccurate, or defective work at no further cost to the City, when such inaccuracies are due to the negligence of Contractor.
9 Construction Agreement/ Construction Agreement/ALL AMERICAN FENCE ERECTORS/PROJECT CC22-073
Section 28. CAPTIONS AND HEADINGS
The captions and headings contained in this Agreement are provided for identification purposes only and shall not be interpreted to limit or define the content of the provisions described under the respective caption or heading.
Section 29. SUCCESSORS, HEIRS, AND ASSIGNS
Except as otherwise expressly provided herein, this Agreement shall be binding upon the successors, endorsees, assigns, heirs, and personal representatives of each of the Parties to this Agreement and, likewise, shall inure to the benefit of the successors, endorsees, assigns, heirs, and personal representatives of each of the Parties.
Section 30. GENDER; PLURAL
In this Agreement, unless the context clearly requires otherwise, the masculine, feminine and neuter genders and the singular and the plural shall include one another.
Section 31. SEVERABILITY
If any one or more of the sentences, clauses, paragraphs, or sections contained herein is declared invalid, void, or unenforceable by a court of competent jurisdiction, the same shall be deemed severable from the remainder of this Agreement and shall not affect, impair, or invalidate any of the remaining sentences, clauses, paragraphs, or sections contained herein.
Section 32. GOVERNING LAW
The validity of this Agreement and any of its terms or provisions, as well as the rights and duties of the Parties under this Agreement, shall be construed pursuant to and in accordance with California law.
Section 33. CUMULATIVE REMEDIES
Except with respect to rights and remedies expressly declared to be exclusive in this Agreement, the rights and remedies of the Parties are cumulative and the exercise by either Party of one or more of such rights or remedies shall not preclude the exercis e by it, at the same or different times, of any other rights or remedies for the same default of any other default by the other Party.
Section 34. VENUE
All proceedings involving disputes over the terms, provisions, covenants, or conditions contained in this Agreement and all proceedings involving any enforcement action related to this Agreement shall be initiated and conducted in the applicable court or forum in San Bernardino County, California.
Section 35. ATTORNEY'S FEES
Should any litigation, specifically including but not limited to, arbitration and other non-judicial resolution of disputes be commenced between the Parties to this agreement concerning this 10 Construction Agreement/ Construction Agreement/ALL AMERICAN FENCE ERECTORS/PROJECT CC22-073
agreement or the rights and duties of either in relation thereto, the Parties prevailing in such litigation or other proceeding shall be entitled, in addition to such other relief as may be granted, to a reasonable sum as and for attorney fees in such litigation where the proceeding which, if not agreed upon by the Parties, shall be determined by the court or other entity in which such litigation or other proceeding is brought.
Section 36. EFFECTIVENESS OF AGREEMENT
This Agreement shall not be binding upon the City, until signed by the authorized representative(s) of Contractor, approved by the City’s Risk Manager, and executed by the authorized City personnel or Mayor.
Section 37. REPRESENTATIONS OF PARTIES AND PERSONS
EXECUTING AGREEMENT
a. Each of the Parties to this Agreement hereby represents that all necessary and appropriate actions of their governing bodies have been taken to make this Agreement a binding obligation of each of the Parties hereto.
b. The persons executing this Agreement warrant that th ey are duly authorized to execute this Agreement on behalf of and bind the Parties each purports to represent.
Section 38. COUNTERPARTS
This Agreement may be executed by the Parties in counterparts, and when executed by each of the Parties, each counterpart shall be deemed to be a part of this Agreement.
(END OF THIS PAGE)
11 Construction Agreement/ Construction Agreement/ALL AMERICAN FENCE ERECTORS/PROJECT CC22-073
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the dates written below.
THE CITY OF VICTORVILLE Dantin Ent., Inc. dba All American Fence
By:_______________________________ By:_________________________________ Debra Jones, Mayor John Noss, President
Dated:______________________________ Dated:______________________________
ATTEST (AS APPLICABLE, over 50K)
By:________________________________
Jennifer Thompson,
City Clerk
Dated:_____________________________
THE CITY OF VICTORVILLE APPROVED AS TO STANDARD FORM
By:________________________________ By:________________________________ Lee Brown, Andre de Bortnowsky,
Risk Manager City Attorney
Dated:______________________________ Dated:_____________________________
12 Construction Agreement/ Construction Agreement/ALL AMERICAN FENCE ERECTORS/PROJECT CC22-073
EXHIBIT A
SCOPE OF WORK
CC22-073 WROUGHT IRON FENCE FIRE STATION 311
11 CITY OF VICTORVILLE
CC22-073 WROUGHT IRON FENCE FOR FIRE STATION 311
SCOPE OF WORK
• 8' wrought iron fence to curve out at the top with basic spear tips • Laterals shall be spaced 5"-6"
• Install 4'x8'x3/4" (#9) expanded metal mesh on both sides of the pedestrian gate • Replace "V" gutter per detail
• Provide a minimum 10 gate controller remotes
• Gate openers shall also be operated by Opticom
• Tap into electrical in the apparatus bay. If gate openers require a dedicated circuit, conduit and wire must be installed to the panel located inside the station • Quote Motorized Gate #2 separately on the Bid Form. This is designated as Additive #1. • Contractor shall be responsible to verify measurements prior to bid • Contractor is responsible for all required permits and fees • Contractor is responsible for underground utility location • Contractor is responsible for the storage of all tools and materials. • Contractor is responsible for the removal of all construction trash and debris. • Contractor is responsible for concrete truck cleanout arrangements. • Contractor is responsible for any damage to City buildings, equipment, and vehicles due to negligence.
• The City is not responsible for stolen or damaged tools and materials left on site.
13 Construction Agreement/ Construction Agreement/ALL AMERICAN FENCE ERECTORS/PROJECT CC22-073
EXHIBIT B
BID PROPOSAL FORMS
See Attachment