Agenda — Yreka City Council, April 18, 2023 (part 1 of 2)

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Corey Middleton, Mayor
Paul McCoy, Mayor Pro tempore
Colleen Baker, Councilmember
Drake Davis, Councilmember
Duane Kegg, Councilmember
Jason Ledbetter, City Manager
Rhetta Hogan, Asst. City Manager and Clerk
Emily Aldrich, Finance Director
Matthew Bray, Public Works Director
John Elsnab, Human Resources Director
Mark Gilman, Police Chief
Dohn Henion, City Attorney
Jerry Lemos, Fire Chief
Juliana Lucchesi, Planning Director

YREKA CITY COUNCIL MEETING AGENDA
April 18, 2023
Regular Session: 6:30 PM
Yreka City Council Chamber, 701 Fourth Street, Yreka, CA Phone 530-841-2386, Facsimile 530-842-4836, email: [email protected] Regular Meetings of the Yreka City Council are held the 1st and 3rd Tuesday of every month.

The full agenda packet can be found on the City’s website: www.ci.yreka.ca.us/AgendaCenter Announcement of any action taken by the City Council in Closed Session required by the Ralph M. Brown Act. (Government Code § 54950 et. seq.)

1. 6:30PM CALL TO ORDER REGULAR SESSION AND PLEDGE OF ALLEGIANCE:

2. SPECIAL PRESENTATIONS AND/OR ANNOUNCEMENTS:

This time slot is for informational presentations, appointments, or awards to be presented by the City Council or to the City Council.

3. PUBLIC COMMENTS:

Public participation is welcomed and invited at all City Council meetings. This time is set aside for residents to address the City Council on matters listed on the Consent Agenda as well as other items not included on the Regular Agenda. If your comments concern an item noted on the Regular Agenda, please address the Council when that item is open for public comment.

The City requests that persons addressing the City Council refrain from making personal, slanderous, profane, or disruptive remarks.

Councilmembers, when recognized by the Mayor, may ask questions of presenter but no action may be taken by the City Council during the public comment section of the meeting. Under the Brown Act, the City Council is prohibited from discussing or taking action on any item not listed on the posted agenda.

Join this meeting via Zoom:

Link: https://us02web.zoom.us/j/6194957056
Meeting ID# 619-495-7056
Members of the public may also remotely listen to and participate in the meeting via teleconference. If you wish to listen or participate in this meeting through teleconference, simply dial into the conference number below, and enter the meeting ID#.

Conference call in Number: 669-900-6833 (Toll-Free 888 788 0099) “RAISE YOUR HAND” to provide public comment for your desired item. Speakers will be asked to identify themselves.
• Online: If you are online, click on “raise hand” on the bottom of your screen. • Mobile App: In the mobile app, you can raise your hand by tapping the "Raise Hand" option in the "More" tab. • Telephone: If you are calling in via telephone, to raise your hand, dial *9 (star-nine). Speakers will be called on by the last four digits of their phone number. To unmute yourself dial *6 (star-six).

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This time is set aside for residents to address the City Council on matters listed on the Consent Agenda as well as other items not included on the Regular Agenda. If your comments concern an item noted on the Regular Agenda, please address the Council when that item is open for public comment. • Please speak into the microphone from the podium. The podium electronically adjusts up and down to accommodate speaker.
• Please state your name for the record prior to providing your comments. • Please address the Council as a whole.
• If you have documents to present, please provide a minimum of seven (7) copies. • Please limit your remarks to five (5) minutes.

Public comments period is not intended to be a “Question and Answer” period or conversations with the Council or City staff.

4. PUBLIC COMMENT FOLLOW-UP:

This is the time for City Council or the City Manager to respond to public comments and may direct staff to prepare a report or place an item on a future agenda.

5. CONSENT AGENDA:

All matters listed under the consent agenda are considered routine and non-controversial and will be enacted by one motion unless any member of the Council wishes to remove an item for discussion, a. Approval/ratification of payments issued from March 27, 2023, through April 09, 2023. b. Approval of Minutes of the Regular Meeting held April 4, 2023. c. Acceptance of the City of Yreka’s Audited Financial Statements for Fiscal Year 2021-22. d. Cash Balances, Budget to Actual and Fiscal Performance Reports for March 2023. e. Adopt Resolution 2023-19 to include Uniform Allowance for Public Safety Classifications of Unrepresented Employees.
f. Continuation of Urgency Ordinance #864: Fireworks.
g. Waive Full Text Reading of All Ordinances on the Agenda. Ordinances shall be introduced and adopted by title only.

Recommended City Council Action: Motion to Adopt the Consent Agenda of the City Council of the City of Yreka as presented.

6. OLD BUSINESS
City Manager
a. Agenda Title: Legal Services Agreement for Special Counsel Retainer Services for City Attorney Dohn Henion.

City Attorney Dohn Henion is retiring as the City’s Legal Counsel at the end of April 2023 after eleven years of distinguished service. The proposed contract facilitates the transition to new legal counsel after April 30, 2023.

Recommended City Council Action: Motion to Authorize the City Manager and staff to execute a Legal Services Agreement with Dohn Henion for Special Counsel Retainer Services.

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7. PUBLIC HEARINGS:

Public Hearing Protocol:
i. Mayor will describe the purpose of the Public Hearing. ii. City Staff will provide the Staff Report.
iii. City Staff will respond to questions from the City Council. iv. Mayor will open the Public Hearing.
v. Public wanting to comment will come to the podium, provide the City Clerk with their name and address, and provide their comments.
vi. Mayor will close the Public Hearing.
vii. City Council will deliberate and act on the item.

City Manager/Fire Chief
a. Agenda Title: Second Reading of Ordinance 874 “Personal Fireworks Prohibited”.

At the February 21, 2023 City Council meeting, direction was given to the City Attorney to draft an ordinance banning the sale and use of fireworks within city limits. The City Attorney prepared Ordinance #874, An Ordinance of the City Council of the City of Yreka, California, Adding Chapter

9.70 to the Yreka Municipal Code Entitled “Personal Fireworks Prohibited”. The ordinance was introduced on March 21, 2023, passed, and moved to a second reading and public hearing. The ordinance allows for use of fireworks at supervised public display permitted events (e.g. pyrotechnic shows and displays at the fairgrounds or casino).

Recommended City Council Action: Conduct a public hearing, consider and move to Adopt Ordinance 874 – An Ordinance of the City Council of the City of Yreka, California, Adding Chapter

9.70 to the Yreka Municipal Code Entitled “Personal Fireworks Prohibited” and finding the Ordinance exempt from CEQA.
b. Agenda Title: Resolution 2023-20 Liability for Response Costs - Fireworks Within Ordinance 874, pursuant to Chapter 9.70.050 Liability for Response Cost, the City would recover the fully burdened cost of police, fire, code enforcement or other City personnel required to deal with the violation, the cost of seizure and disposal of the illegal fireworks, and attorney fees for any and all notices, meetings, or administrative or court proceedings to enforce this ordinance.

Recommended City Council Action: Motion to adopt Resolution 2023-20 Establishing Fees Relating to the Violation of Use of Personal Fireworks Pursuant to Ordinance 874, Liability for Response Costs Fireworks.

8. NEW BUSINESS
City Manager
a. Agenda Title: Issuance of Public Safety Ballot Measure Civic Engagement, Polling and Initiative Language Request for Proposal.

The City of Yreka is seeking qualified consultants, political strategists, community organizing, or civic engagement firms for the polling and engagement strategy needed to support a ballot measure or property assessment that will generate revenue to maintain and improve public safety initiatives within the City of Yreka.

Recommended City Council Action: Motion to Adopt Resolution 2023-21 Authorizing the City Manager to issue a Request for Proposal/Qualifications for Public Safety Ballot Measure Civic

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Engagement, Polling and Initiative Language and Designating Proceeds from Small Cities Organized Risk Entities’ one-time dividend of $80,650 (from real property and general liability policies) to the project.

9. CITY MANAGER/STAFF REPORTS:

City Manager and Staff may make brief announcements or reports at this time.

10. MAYOR/COUNCILMEMBERS REPORTS, STATEMENTS AND REQUESTS:

AB 1234* Conference and Meeting Report (verbal, if any) *(In accordance with AB 1234, Councilmembers shall make a brief report or file a written report on any meeting/event/conference attended at City expense.) Members of the Council may make brief announcements, reports, or request staff to report to Council on any matter at a subsequent meeting.

11. ADJOURNMENT:

In compliance with the requirements of the Brown Act, notice of this meeting has been posted in a publicly accessible place, 72 hours in advance of the meeting.

All documents produced by the City which are related to an open session agenda item and distributed to the City Council are made available for public inspection in the City Clerk’s Office during normal business hours.

Public Hearings: If, in the future, you wish to challenge in court any of the matters on an agenda for which a public hearing is to be conducted, you may be limited to raising only those issues which you (or someone else) raised orally at the public hearing or in written correspondence received by the City at or before the hearing. Any person seeking to challenge a City Council decision made as a result of a proceeding in which by law a hearing is required to be given, evidence is required to be taken, and the discretion in the determination of facts is vested in the City Council, shall be required to commence that action 90 days following the date on which the decision becomes final as provided in Code of Civil Procedure Section 1094.6. Please refer to Code of Civil Procedure 1094.6 to determine how to calculate when a decision becomes “final.”
"CHALLENGING DECISIONS OF CITY ENTITIES The time limit within which to commence any lawsuit or legal challenge to any quasi-adjudicative decision made by the City of Yreka is governed by Section 1094.6 of the Code of Civil Procedure, unless a shorter limitation period is specified by any other provision, including without limitation Government Code section 65009 applicable to many land use and zoning decisions, Government Code section 66499.37 applicable to the Subdivision Map Act, and Public Resources Code section 21167 applicable to the California Environmental Quality Act (CEQA). Under Section 1094.6, any lawsuit or legal challenge to any quasi-adjudicative decision made by the City must be filed no later than the 90th day following the date on which such decision becomes final. Any lawsuit or legal challenge, which is not filed within that 90-day period, will be barred. Government Code section 65009 and 66499.37, and Public Resources Code section 21167, impose shorter limitations periods and requirements, including timely service in addition to filing. If a person wishes to challenge the above actions in court, they may be limited to raising only those issues they or someone else raised at the meeting described in this notice, or in written correspondence delivered to the City of Yreka, at or prior to the meeting. In addition, judicial challenge may be limited or barred where the interested party has not sought and exhausted all available administrative remedies." The City of Yreka does not discriminate on the basis of race, color, national origin, religion, age, gender, sexual orientation, disability, or any other legally protected classes in employment or provision of services. In compliance with the Americans with Disabilities Act, those requiring accommodations for this meeting should notify the City Clerk 48 hours prior to the meeting at (530) 841-2386 or by notifying the Clerk at [email protected].

AFFIDAVIT OF NOTIFICATION AND POSTING

STATE OF CALIFORNIA)

COUNTY OF SISKIYOU) SS

CITY OF YREKA )

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I, Rhetta Hogan, City Clerk for the City of Yreka, hereby declare under penalty of perjury that a copy of the above Agenda of the Regular Meeting of the City Council of the City of Yreka, California, was delivered and/or notice by email not less than 72 hours, before the hour of 6:30 p.m. on April 18, 2023 to the members of the governing agency, and caused the agenda to be posted on the City’s website at www.ci.yreka.ca.us and posted at Yreka City Hall, 701 Fourth St., Yreka, California. /s/: Rhetta Hogan

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YREKA CITY COUNCIL MEETING MINUTES
April 4, 2023
Closed Session 5:30 PM
Regular Session: 6:30 PM
Yreka City Council Chamber, 701 Fourth Street, Yreka, CA Phone 530-841-2386, Facsimile 530-842-4836, email: [email protected] Regular Meetings of the Yreka City Council are held the 1st and 3rd Tuesday of every month.

The full agenda packet can be found on the City’s website: www.ci.yreka.ca.us/AgendaCenter

1. 5:30PM CALL TO ORDER:

Mayor Middleton called the meeting to order at 5:32PM. Councilmembers Baker, Davis, McCoy and Middleton were present. Councilmember Kegg was absent.

2. PUBLIC COMMENT ON CLOSED SESSION:

There were none.

3. CLOSED SESSION:

The City Council will recess to Closed Session to discuss the following item(s). At the conclusion of the Closed Session, Open Session will reconvene and reportable action, if any, will be announced:
a. Conference with Real Property Negotiations (§ 54956.8) Property: Fall Creek (Superior Water Rights, including Power Generation Facility)
Third Party Negotiation: PacifiCorp
City Negotiation: City Manager and City Attorney
Negotiating Parties: City of Yreka and PacifiCorp
Under Negotiation: Possible purchase including price, terms of payment, or both.

4. OPTIONAL RECESS IF DESIRED:

5. RETURN TO OPEN SESSION AT 6:32 PM:

Announcement of any action taken by the City Council in Closed Session required by the Ralph M. Brown Act. (Government Code § 54950 et. seq.)
There was no reportable action from closed session.

6. 6:30PM CALL TO ORDER REGULAR SESSION AND PLEDGE OF ALLEGIANCE:

The regular meeting was called to order at 6:30PM, Councilmembers Baker, Davis, McCoy and Middleton were present. Councilmember Kegg was absent.

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7. SPECIAL PRESENTATIONS AND/OR ANNOUNCEMENTS:

This time slot is for informational presentations, appointments, or awards to be presented by the City Council or to the City Council.
a. “Fund Your Small Business” Special Event
Quintin Gaddy, Program Director: Business Development with Siskiyou Economic Development, will share information about a special event, (Wednesday April 19, 2023, 10am at the Holiday Inn, Yreka), “Fund Your Small Business” hosted by Siskiyou Economic Development and cohosted by the Women’s Business Center at JEDI. The event will feature a panel of several lenders, the US Small Business Administration, and the CA Office of the Small Business Advocate, with a focus towards first time business owners or those looking to scale their business for the first time.

Quintin Gaddy presented on the event and activities of the Small Business Development Center. b. Caltrans Update on Yreka Rehab
Catherine Low, Caltrans Project Manager, will give an update on the Yreka Rehab Project.

Mayor Middleton directed City Manager to put Caltrans Quick Maps and Facebook page for updates on the Highway 3 construction project.

8. PUBLIC COMMENTS:

The City requests that persons addressing the City Council refrain from making personal, slanderous, profane, or disruptive remarks.

Public comment period is not intended to be a “Question and Answer” period or conversations with the Council or City staff.

Public comment was heard from Glenn White, Steve Radford, and Bob Dunham.

9. PUBLIC COMMENT FOLLOW-UP:

This is the time for City Council or the City Manager to respond to public comments and may direct staff to prepare a report or place an item on a future agenda.

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10. CONSENT AGENDA:

All matters listed under the consent agenda are considered routine and non-controversial and will be enacted by one motion unless any member of the Council wishes to remove an item for discussion, a. Approval/ratification of payments issued from March 13, 2023, through March 26, 2023. b. Approval of Minutes of the Regular Meeting held March 21, 2023. c. Approval of Minutes of the Special Meeting held March 25, 2023. d. Continuation of Urgency Ordinance #864: Fireworks.
e. Waive Full Text Reading of All Ordinances on the Agenda. Ordinances shall be introduced and adopted by title only.

Recommended City Council Action: Motion to Adopt the Consent Agenda of the City Council of the City of Yreka as presented.

There was no public comment.

Motion to Adopt the Consent Agenda of the City Council of the City of Yreka as presented.

MOTIONED: Councilmember McCoy
SECONDED: Councilmember Baker
AYES: Councilmembers Baker, Davis, McCoy, and Middleton NOES: -0-
ABSENT: Kegg

11. NEW BUSINESS
City Manager
a. Agenda Title: Special Event Known as the “Kiwanis Club Easter Egg Hunt” Steve Mains & Charles Schmidt, on behalf of the Kiwanis Club, have requested permission to have an Easter Egg Hunt with a Craft Show following at Miner Street Park for the special event known as “Kiwanis Club Easter Egg Hunt”. The event would take place on Saturday, April 8, 2023, from 9:00 AM to 12:00 PM.

Recommended City Council Action: Motion to Adopt Resolution 2023-17 Approving Vendors and Other Requests Associated with the Special Event Being Held by the Kiwanis Club to Be Known as “Kiwanis Club Easter Egg Hunt”.

There was no public comment.

Motion to Adopt Resolution 2023-17 Approving Vendors and Other Requests Associated with the Special Event Being Held by the Kiwanis Club to Be Known as “Kiwanis Club Easter Egg Hunt”.

MOTIONED: Councilmember Baker
SECONDED: Councilmember Davis
AYES: Councilmembers Baker, Davis, McCoy, and Middleton NOES: -0-
ABSENT: Councilmember Kegg
Police Chief
b. Agenda Title: Department of Justice, Community Hiring Program Grant Application The City of Yreka Police Department is applying for competitive Department of Justice, Community Hiring Program grant funding for officers to hire and or rehire additional career law enforcement

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officers in an effort to increase their community policing capacity and crime prevention efforts. The City is requesting funding for two officers, a total grant award of $750,000 for three years expendable over a five year period taking into account the recruitment lead time. The City would be responsible for a grant match of at least $250,000 over that same period for the two officers.

Recommended City Council Action: Motion to Adopt Resolution 2023-18 of the City Council of the City of Yreka, State of California, Approving the Filing of Application for “FY23 Community Oriented Policing Services (COPS) Hiring Program”.

There was no public comment.

Motion to Adopt Resolution 2023-18 of the City Council of the City of Yreka, State of California, Approving the Filing of Application for “FY23 Community Oriented Policing Services (COPS) Hiring Program”.

MOTIONED: Councilmember McCoy
SECONDED: Councilmember Davis
AYES: Councilmembers Baker, Davis, McCoy, and Middleton NOES: -0-
ABSENT: Kegg

12. CITY MANAGER/STAFF REPORTS:

City Manager and Staff may make brief announcements or reports at this time.

City Manager Ledbetter stated that the City is moving forward with the search for a new City Attorney and specialized legal services. It is hoped that the new General Legal Counsel will work with the City Council to move through the Code of Conduct meeting. City Manager Ledbetter spoke on how the Finance Director is working with the Siskiyou Family YMCA, STAGE and Montague Pool for a youth summer swim program.

13. MAYOR/COUNCILMEMBERS REPORTS, STATEMENTS AND REQUESTS:

Councilmember Davis attended the Fire Safe Committee at the end of last month, Siskiyou County Fire Safe has received grant funds to assist with home hardening activities.

Councilmember Baker has been appointed to CTC.

Councilmember Baker attended the recent LAFCO meeting.
*Councilmember Baker requested that the City put a process in place for taking political action positions for the City Council.
*Councilmember Baker requested that the Ad Hoc Communications committee to meet. *Councilmember Baker attended a volunteer recognition event for Siskiyou Food Bank, requested a presentation be arranged for the Siskiyou Food Bank to share information to the City Council on their organization.

Councilmember McCoy reminded everyone of the April 12 is LOLA meeting in Weed, and that the Continuum of Care meeting has been moved from April 5th has been moved to April 17th.

Councilmember Middleton urged pet owners to spade, neuter and microchip their pets so they can be returned.

14. ADJOURNMENT:

The meeting was adjourned at 8:02PM.

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____________________
Corey Middleton, Mayor
Minutes approved by City Council,
Motion on April 18, 2023
______________________
Rhetta Hogan, City Clerk

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CITY OF YREKA

CITY COUNCIL AGENDA MEMORANDUM
To: Yreka City Council
Prepared by: Emily Aldrich Finance Director
Agenda title: Acceptance of the City of Yreka’s Audited Financial Statements for Fiscal Year 2021-22
Meeting date: April 18, 2023
Discussion:

The City’s audited financial statements were reviewed at the Finance Committee meeting held April 7, 2023. The final reports were issued on March 27, 2023, and the report is available on the City’s website https://ci.yreka.ca.us .

The independent auditor’s report (letter to the City Council) covers internal controls over financial reporting and on compliance and other matters based on an audit of financial statements performed in accordance with government auditing standards. The letter states that there were no significant audit findings in areas of internal control over financial reporting.

In 2021-2022, the City of Yreka was subject to the Federal Single Audit Act. The single audit act is required when the City has expended over $750,000 of federal funds (grants and loans), during the audit period, and the City’s is subject to a focused review of expenditures pursuant to those grant and loan awards. Within the Single Audit Act Reports and Schedules, there were two significant findings in areas of compliance and other matters (pages 13 -15 of that report) where staff has made corrective plan.

Fiscal Impact:

Required compliance reporting for grants, debt, and State of California, State Controller’s Office per Government Code 12410.

Recommendation and Requested Action:

Acceptance of the City of Yreka’s Audited Financial Statement Fiscal Year 2021-2022

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CITY OF YREKA,

CALIFORNIA

FINANCIAL STATEMENTS

TOGETHER WITH
INDEPENDENT AUDITOR’S REPORT

FOR THE YEAR ENDED
JUNE 30, 2022

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CITY OF YREKA
Annual Financial Report
For the Year Ended June 30, 2022
Table of Contents
Page

INTRODUCTORY SECTION
List of Officials.............................................................................................................................................. i

FINANCIAL SECTION
Independent Auditor’s Report....................................................................................................................1-3 Management’s Discussion and Analysis (Unaudited) .............................................................................4-25 Basic Financial Statements:

Government-Wide Financial Statements:

Statement of Net Position .........................................................................................................26-27 Statement of Activities................................................................................................................... 28 Fund Financial Statements:

Governmental Funds:

Balance Sheet .......................................................................................................................... 29 Reconciliation of the Governmental Funds Balance Sheet to the GovernmentWide Statement of Net Position – Governmental Activities................................................ 30 Statement of Revenues, Expenditures and Changes in Fund Balances................................... 31 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Government-Wide Statement of Activities – Governmental Activities .............................................................................. 32 Proprietary Funds:

Statement of Net Position...................................................................................................33-34 Statement of Revenues, Expenses and Changes in Net Position............................................. 35 Statement of Cash Flows....................................................................................................36-37 Fiduciary Fund:

Statement of Fiduciary Net Position........................................................................................ 38 Statement of Changes in Fiduciary Net Position..................................................................... 39 Notes to Basic Financial Statements ...............................................................................................40-69 Required Supplementary Information (Unaudited):

City Pension Plan – Schedule of Proportionate Share of the Net Pension Liability ............................ 70 City Pension Plan – Schedule of Contributions ................................................................................... 71 City Pension Plan – Notes to City Pension Plan .................................................................................. 72 City OPEB Plan – Schedule of Changes in the Net OPEB Liability and Related Ratios .................... 73 City OPEB Plan – Schedule of Contributions...................................................................................... 74 City OPEB Plan – Notes to City OPEB Plan ....................................................................................... 75 Budgetary Comparison Schedule – General Fund ............................................................................... 76 Budgetary Comparison Schedule – Streets and Roads......................................................................... 77 Budgetary Comparison Schedule – Special Revenue........................................................................... 78 Note to Budgetary Comparison Schedules........................................................................................... 79

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INTRODUCTORY SECTION
• List of Officials

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CITY OF YREKA
List of Officials
For the Year Ended June 30, 2022
-iCity Council
Duane Kegg Mayor
Deborah Baird Mayor Pro-Tempore
Joan Smith Freeman Member
Paul McCoy Member
Corey Middleton Member
City Staff
Jason Ledbetter City Manager
Shella Rhetta Hogan Assistant City Manager, City Clerk, and Elected City Treasurer Mark Gilman Chief of Police
Dohn Henion City Attorney
Matthew K. Bray Director of Public Works
Emily Aldrich Finance Director
John Elsnab HR Director
Juliana Lucchesi Planning Director
Jerry Lemos Fire Chief

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FINANCIAL SECTION
• Independent Auditor’s Report
• Management’s Discussion and Analysis
• Basic Financial Statements
• Required Supplementary Information

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CERTIFIED PUBLIC ACCOUNTANTS
-1-
950 THARP ROAD, SUITE 502 YUBA CITY, CA 95993 TEL: (530) 673-9790 FAX: (530) 673-1305 [email protected]

SMITH & NEWELL
INDEPENDENT AUDITOR’S REPORT
To the Honorable Mayor and Members of the City Council
City of Yreka
Yreka, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information of the City of Yreka, California (City), as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

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

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

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

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

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-2-
To the Honorable Mayor and Members of the City Council
City of Yreka
Yreka, California
Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgement made by a reasonable user based on the financial statements.

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

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

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-3-
To the Honorable Mayor and Members of the City Council
City of Yreka
Yreka, California
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, City Pension Plan, City OPEB Plan, and budgetary comparison information as listed in the table of contents to be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquires, the basic financial statements, and other knowledge we obtain 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.

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

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

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 27, 2023, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

Smith & Newell CPAs
Yuba City, California
March 27, 2023

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Management’s Discussion and Analysis
(Unaudited)

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-4-
City of Yreka
Management’s Discussion and Analysis
As management of the City of Yreka (City), we offer readers of the City’s financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2022. We provide this discussion and analysis to 1) assist the reader in focusing on significant financial issues, 2) provide an overview of the City’s financial activity, and 3) identify changes in the City’s financial position. 2021-2022 Financial Highlights:
• The financial highlights briefly describe changes in the City’s net position. Readers of the City of Yreka’s financial report will learn more about the events that affected the changes in the net position while reading the full management discussion and analysis and accompanying financial statement. • In the primary government statement of net position for both governmental and business-type activities, the total net position for the City was $59,577,927. Of this amount, $11,567,815 of the unrestricted net position may be used to meet the government’s ongoing obligations to citizens and creditors.

Governmental Activities
• Governmental activities total net position balance increased by $2,366,416 from $27,908,057 in 2020-21 to $30,274,473 in 2021-22. The governmental activities unrestricted net position was $1,529,555 in 2020-21 and $3,008,189 in 2021-22.
• The increase in the governmental activities total net position balance of $2,366,416 is primarily due to a $722,228 decrease in invested in capital assets net of related debt, a $1,610,010 increase in restricted net position, and increase to the unrestricted net position of $1,478,634. • Total assets for governmental activities balance increased $2,693,540 from $39,757,506 in 2020- 21 to $42,451,046 in 2021-22.
o Current assets balance increased $3,553,020, where $3,261,733 was an increase in cash and investments balances, and $91,287 was an increase to the receivables account balances. o Restricted assets decreased by $5,279 from $643,408 in 2020-21 to $638,129 in 2021-22.

Restricted net assets include donor restricted cash and debt servicing cash reserve requirements. o Net OPEB assets increased by $187,092 from $25,852 in 2020-21 to $212,944 in 2021-22. o Capital assets decreased $841,293 from $24,218,135 in 2020-21 to $23,376,842 in 2021-22.

The decrease was due to depreciation expense of $1,190,188 and retirement of assets $2,276.

The decrease was offset by expenditures for new assets of $351,171.

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City of Yreka
Management’s Discussion & Analysis
-5-
o Deferred Outflows for governmental activities balance increased $992,247 from $1,849,419 in 2020-21 to $2,841,666 in 2021-22.
o Pension related outflows increased by $1,077,879 from $1,701,850 in 2020-21 to $2,779,729 in 2021-22.
o OPEB related outflows decreased by $85,632 from $147,569 in 2020-21 to $61,937 in 2021-22.
• Total liabilities for governmental activities balance decreased $2,051,189 from $12,902,345 in 2020-21 to $10,851,156 in 2021-22.
o Current liabilities balance increased $1,232,864, primarily due to a $477,925 increase in accounts payable, $58,126 increase in payroll payable, $146,751 increase in deposits payable, and $549,617 increase in unearned revenue. This was offset by a $445 decrease to interest payable.
o Net pension liability decreased $3,047,718.
o Long-term debt from borrowings decreased $217,260 for scheduled debt repayments. o Compensated absences decreased by a net of $19,075.
• Governmental activities deferred inflows were $796,523 in 2020-21 and $4,167,083 in 2021-22 for an increase of $3,370,560.
o Pension deferred inflows increased $3,370,351.
o OPEB deferred inflows increased $209.

Business-Type Activities
• The business-type activities total net position balance increased by $426,954 from $28,867,500 in 2020-2021 to $29,303,454 in 2021-2022 due to:
o Invested in capital assets net of related debt increased $4,669,463. o The restricted net position represents the City’s debt servicing reserve requirements remained the same at $550,000 to satisfy full funding of the City’s debt servicing requirements. o Unrestricted net position balance decreased by $4,242,509 from $12,802,135 in 2020-21 to $8,559,626 in 2021-22. The decrease is primarily due to the City’s investment in capital assets.

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City of Yreka
Management’s Discussion & Analysis
-6-
• Total assets for business-type activities balance increased by $6,896,475 from $41,858,788 in 2020-21 to $48,755,263 in 2021-22.
o Current asset balances decreased $2,213,653 from $15,240,333 in 2020-21 to $13,026,680 in 2020-21, of which cash and investment balances decreased $2,678,983 and receivable balances increased $465,331, of which $459,353 was an increase in intergovernmental receivables and $67,754 was an increase in due from other funds.
o Net OPEB assets increased $109,927 from $9,855 in 2020-21 to $119,782 in 2021-22. o Restricted cash balance remained the same at $550,000 for debt servicing reserves. o Capital assets increased $9,000,201 from $26,058,600 in 2020-21 to $35,058,801 in 2021-22. o Deferred outflows decreased $618,900 from $523,107 in 2020-21 and $1,142,007 in 2021-22. • Total liabilities for business-type activities balance increased $5,608,765 from $13,221,133 in 2020-21 to $18,829,898 in 2021-22.
o Current liabilities balance increased $2,015,232.
o Net pension liability decreased $723,680.
o Long-term liabilities balance increased $4,317,213.
• Deferred inflows increased $1,479,656 from $284,262 in 2020-21 to $1,763,918 in 2021-22.

Overview of the Financial Statements:

The discussion and analysis are intended to serve as an introduction to the City of Yreka’s basic financial statements. The City of Yreka’s basic financial statements comprise of three components: 1) governmentwide financial statements, 2) fund financial statements and 3) notes to the financial statements. This report contains other supplementary information in addition to the basic financial statements.

Government-wide Financial Statements:

The government-wide financial statements are designed to provide readers with a broad overview of the City of Yreka’s finances in a manner like a private-sector business. The statement of net position presents information on all of the City of Yreka’s assets and liabilities, with the difference between the two reported as the net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City of Yreka is improving or deteriorating. The statement of activities presents information showing how the City’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying events giving rise to the changes occur, regardless of the timing of related cash flows. Revenues and expenses are reported in this statement. For some items, this will only result in cash flows in future fiscal periods; an example would be the reporting for capital leases.

The government-wide financial statements distinguish functions of the City of Yreka that are principally supported by taxes, intergovernmental revenues and grants (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (businesstype activities).

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City of Yreka
Management’s Discussion & Analysis
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The governmental activities of the City of Yreka include general government, public safety, recreation and culture, public works, and planning and community development.

The business-type activities of the City of Yreka include water and sewer operations.

The government-wide financial statements can be found on pages 26 and 28 of this report.

Fund Financial Statements:

A fund is a grouping of related accounts used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All City funds are divided into three categories: governmental funds, proprietary funds, and fiduciary funds.

Governmental funds:

Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term cash flows and ending fund balances available at the end of the fiscal year.

Balance Sheet and the Reconciliation of Total Governmental Fund Balance to the Statement of Net Position - Governmental Activities/Governmental Funds:

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fiscal year 2021-2022, the differences are attributable to:
(1) the recognition of capital assets,
(2) the recognition of long-term assets that are not available to pay for current period expenditures, (3) the deferred outflows of resources related to pension and other post-employment benefits, (4) the deferred inflows of resources related to pension and other post-employment benefits, (5) and that certain liabilities are not due and payable in the current period and therefore are not reported in the government funds.

The analysis of these two statements helps the reader understand the long-term impact of the City’s capital expenditures and financing decisions.

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Reconciliation of the Statement of Revenues, Expenditures and Changes in Funds Balance to the Statement of Activities - Governmental Funds:

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net position of governmental activities. In 2021-2022, the differences are attributable to:
(1) change in capital outlay net of depreciation,
(2) change in long-term debt net of repayments,
(3) change in unavailable revenues,
(4) change in deferred inflows and outflows,
(5) change in other post-employment benefits, compensated absences, and pension obligations, and (6) net cost arising from the disposal of capital assets.

The major funds within governmental funds include the General Operating Fund, Special Revenue Fund, Special Grants Fund, and Streets and Roads Fund. The major governmental funds are presented in (1) the governmental fund balance sheet, (2) the governmental fund statement of revenues, expenditures, and changes in fund balances for the governmental funds, and (3) the reconciliation of the Statement of Revenues, Expenditures and Changes in Funds Balance to the Statement of Activities Governmental Funds, found on Pages 29 through 32 of this report.

The City of Yreka normally adopts a biannual appropriated budget for each of its governmental funds. A budgetary comparison statement for the governmental funds demonstrates compliance with the budget and is located on pages 76 through 78 of this report.

Proprietary funds:

The City of Yreka maintains two different types of proprietary funds for its business-type activities. These are also referred to as Enterprise Funds and are used to report the same functions presented as businesstype activities in the government-wide financial statements. The City of Yreka uses these funds to account for its water and sewer operations. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the water and sewer funds, each of which is considered a major fund. The basic proprietary fund financial statements can be found on Pages 33 through 37 of this report.

Fiduciary funds:

Fiduciary funds are used to account for resources held for the benefit of parties outside the government. A fiduciary fund represents an agency fund, which is custodial in nature (assets equal liabilities) and does not involve measurement of results of operation. The City’s only agency fund accounts are for the nonadjudicated cash seizures arising from activities of the Siskiyou Unified Major Investigations Team, (SUMIT), Page 38 through 39 of this report.

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City of Yreka
Management’s Discussion & Analysis
-9-
Notes to the financial statements:

The notes provide additional information that is essential in understanding the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 40 through 69 of this report.

Other supplemental information:

In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information that found on pages 70 through 79 of this report.

Financial Analysis of the City as a Whole:

Government-Wide Financial Analysis:

As noted earlier, the net position may serve over time as a useful indicator of a government’s financial position. The City of Yreka’s net position was $30,274,473 for governmental activities and $29,303,454 for business type activities, a total of $59,577,927, at the close of fiscal year 2020-2021.

City of Yreka – Changes in Net Position
The largest portion of the City’s net position reflects its investment in capital assets (e.g., land, buildings, machinery, and equipment as well as infrastructure assets such as roads, bridges, water and sewer systems), less any related debt used to acquire those assets that is still outstanding. The City of Yreka uses these capital assets to provide services to its citizens. Consequently, these assets are generally not available for future spending. Although the City of Yreka’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.

Total Net Position for:

Governmental
Activities
Business-Type
Activities Total
Fiscal Year 2020-2021 $ 27,908,057 $ 28,876,500 $ 56,784,557 Fiscal Year 2021-2022 30,274,473 29,303,454 59,577,927
Increase or (Decrease) in Net Position $ 2,366,416 $ 426,954 $ 2,793,370

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City of Yreka
Management’s Discussion & Analysis
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City of Yreka – Governmental Activities Net Position
The schedule below displays a year over year comparative summary of the City’s governmental activities net position, previously discussed in the financial highlights:

City of Yreka - Net Position
Governmental Activities
Increase/
(Decrease)
Percentage
Change
2020-2021 2021-2022
2020-2021 as
the base year
Current assets and other assets $ 14,870,111 $ 18,223,131 $ 3,353,020 22.5% Restricted assets 643,408 638,129 (5,279) -0.8%
Net OPEB assets 25,852 212,944 187,092 723.7%
Non current assets 24,218,135 23,376,842 (841,293) -3.5% Total Assets 39,757,506 42,451,046 2,693,540 6.8%
Deferred Outflows 1,849,419 2,841,666 992,247 53.7%
Total Deferred Outflows 1,849,419 2,841,666 992,247 53.7% Current liabilities 499,859 1,732,723 1,232,864 246.6%
Net pension liability 7,646,889 4,599,171 (3,047,718) -39.9% Long-term liabilities 4,755,597 4,519,262 (236,335) -5.0% Total Liabilities 12,902,345 10,851,156 (2,051,189) -15.9% Deferred Inflows 796,523 4,167,083 3,370,560 423.2%
Total Deferred Inflows 796,523 4,167,083 3,370,560 423.2% Net position:

Net investment in capital assets 21,149,483 20,427,255 (722,228) -3.4% Restricted 5,229,019 6,839,029 1,610,010 30.8%
Unrestricted 1,529,555 3,008,189 1,478,634 96.7%
Total Net Position $ 27,908,057 $ 30,274,473 $ 2,366,416 8.5% Governmental Activities

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City of Yreka
Management’s Discussion & Analysis
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City of Yreka – Business-Type Activities Net Position
The schedule below displays a year over year comparative summary of the City’s business-type activities net position, previously discussed in the financial highlights:

City of Yreka - Net Position BusinessType Activities
Increase/
(Decrease)
Percentage
Change
2020-2021 2021-2022
2020-2021 as
the base year
Current assets and other assets $ 15,240,333 $ 13,026,680 $ (2,213,653) -14.5% Restricted assets 550,000 550,000 - 0.0%
Net OPEB assets 9,855 119,782 109,927 1115.4%
Non current assets 26,058,600 35,058,801 9,000,201 34.5% Total Assets 41,858,788 48,755,263 6,896,475 16.5%
Deferred Outflows 523,107 1,142,007 618,900 118.3%
Total Deferred Outflows 523,107 1,142,007 618,900 118.3% Current liabilities 276,648 2,291,880 2,015,232 728.4%
Net pension liability 2,338,561 1,614,881 (723,680) -30.9% Long-term liabilities 10,605,924 14,923,137 4,317,213 40.7% Total Liabilities 13,221,133 18,829,898 5,608,765 42.4% Deferred Inflows 284,262 1,763,918 1,479,656 520.5%
Total Deferred Inflows 284,262 1,763,918 1,479,656 520.5% Net position:

Net investment in capital assets 15,524,365 20,193,828 4,669,463 30.1% Restricted 550,000 550,000 - 0.0%
Unrestricted 12,802,135 8,559,626 (4,242,509) -33.1%
Total Net Position $ 28,876,500 $ 29,303,454 $ 426,954 1.5% Business-Type Activities

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City of Yreka
Management’s Discussion & Analysis
-12-
Comparison of Government Wide Revenues:

Total primary government revenue increased $1,698,288 from $16,222,884 in 2020-21 to $17,921,172 in 2021-22.
2020-2021 2021-2022
Year over
Year Change
Governmental Activities:

Program Revenue
Charges for services $ 1,037,880 $ 1,352,805 $ 314,925
Operating grants and contributions 1,395,185 2,172,826 777,641 Capital grants and contributions 41,008 157,089 116,081 Total Program Revenue 2,474,073 3,682,720 1,208,647
General Revenue
Taxes:

Property 1,840,308 1,969,332 129,024
Sales and use 4,422,756 4,294,849 (127,907)
Transient occupancy taxes 1,150,819 1,264,820 114,001
Franchise taxes 279,828 268,153 (11,675)
Interest and investment earnings 34,120 (66,005) (100,125) Miscellaneous 140,929 2,248 (138,681)
Gain (loss) on disposal of
capital assets 89,698 232,024 142,326
Transfers (100,621) (207,304) (106,683)
Total General Revenues and Transfers 7,857,837 7,758,117 (99,720) Total Governmental Activities 10,331,910 11,440,837 1,108,927 Business-Type Activities:

Program Revenue
Charges for services 5,735,521 5,943,306 207,785
Operating grants and contributions (2,382) 501,570 503,952 Total Program Revenue 5,733,139 6,444,876 711,737
General Revenue
Interest and investment earnings 30,253 (171,845) (202,098) Miscellaneous revenue 26,961 (26,961) -
Transfers 100,621 207,304 106,683
Total General Revenues and Transfers 157,835 35,459 (122,376) Total Business-Type Activities 5,890,974 6,480,335 589,361 Total Primary Government $ 16,222,884 $ 17,921,172 $ 1,698,288

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City of Yreka
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Governmental Activities
Governmental activities program revenue increased $1,208,647. The increase of $314,925 charges for fees and services (development impact fee revenue) and $777,641 operating grants and contributions (reimbursement mutual aid response for public safety). Capital grants increased by $116,081 reflective of one-time revenue.

Governmental activities general revenues decreased $99,720. • Sales tax decreased $127,907 from the previous earnings in 2020-21, when economy was stimulated with COVID subsidies.
• Investment earnings decreased $100,125 primarily due to change in portfolio valuation for unrealized losses due to higher rates on CD’s.
• Due to the down turn in the economy and slow-down of COVID funds Sales Tax and investment earnings were impacted.
• Net transfers out increased by $106,683 in 2021-2022 due to one-time development impact fees transfers to the enterprise funds. These fees were on a five-year payment deferral program from the Rainrock Casino for water and wastewater development impacts and were recognized in 2019-2020.

Business Type Activities
Business type activities program revenue increased $711,737. Charges for services increased $207,785, due to schedule rate increases. Revenue from capital grants increased $503,952.

Business type activities general revenue from grants and contributions decreased $122,376. In 2021-22 market rates increased causing $202,098 mark to market valuation loss.

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City of Yreka
Management’s Discussion & Analysis
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Comparison of Government Wide Program Expenses:

Primary government expenses decreased $1,352,050 from $16,479,852 in 2020-21 to $15,127,802 in 2021-

22. Functional expenses for governmental activities increased $240,530 from $8,833,891 in 2020-21 to $9,074,421 in 2021-22.

Government wide adjustments include changes in pension valuation, other post-employment benefits, compensated absences, debt-servicing interest and capitalization and amortization of fixed assets. Detail changes in maintenance and operating expenses are detailed in the governmental fund section of this report. • General governmental expense increased $480,704. The City paid annual software services in advance an additional $20,297, additionally liability insurance was higher by $59,310. In 2021-22, the City added additional personnel, including an Assistant City Manager and Human Resources Director.
• Public safety decreased $321,599, primarily due to significant decreases in pension liability of nearly $347,214 partially offset by an increase in operating expenses. • Public ways and facilities expenses decreased $3,021. • Culture and recreation expense decreased $29,131, primarily due to a significant decrease in pension liability.
• Community development expense increased $112,915, including Planning Director. • Interest on long term debt increased $662.
2020-2021 2021-2022
Year over
Year Change
Governmental Activities:

Program Expense
General government $ 936,851 $ 1,417,555 $ 480,704
Public safety 4,802,337 4,480,738 (321,599)
Public ways and facilities 1,650,506 1,647,485 (3,021)
Culture and recreation 682,005 652,874 (29,131)
Community development 587,857 700,772 112,915
Interest on long-term debt 174,335 174,997 662
Total Governmental Activities 8,833,891 9,074,421 240,530 Business-Type Activities:

Program Expense
Sewer 3,601,181 2,856,529 (744,652)
Water 4,044,780 3,196,852 (847,928)
Total Business-Type Activities 7,645,961 6,053,381 (1,592,580) Total Primary Government $ 16,479,852 $ 15,127,802 $ (1,352,050)

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City of Yreka
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Functional expenses for business-type activities decreased $1,592,580 from $7,645,961 in 2020-21 to $6,053,381 in 2021-22.
• Sewer program expense decreased $744,652.
• Water program expense decreased $847,928.

Yreka Police Station, 2020

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City of Yreka
Management’s Discussion & Analysis
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Financial Analysis of the City’s Funds:

As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.

Governmental funds:

The focus of the City of Yreka’s governmental funds is to provide information on near-term cash and available ending balances and reserves for operations. Such information is useful in assessing the City of Yreka’s financing requirements. Fund balances serve as a useful measure of a government’s net capital available for spending at the end of the fiscal year. More detailed information on the City’s governmental fund balances can be found on pages 58 to 59 of this report.

The General Fund is the chief operating fund of the City of Yreka, and at the end of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $16,551,362. The following describes the fund balances designations:

Nonspendable: The nonspendable governmental fund balances for the City total $214,776 and represent medium and long-term loans to residents and businesses. These loans arise from housing and economic development grant lending programs and from City-issued promissory notes due to the sale of real City property.

Restricted: The restricted governmental fund balances for the City total $4,605,062. Of the $966,697 General Fund balance, $638,950 is reserved for capital outlays and represents the Crandall and Stewart specified donated funds. The City has expenditure control restricted to special capital outlays pursuant to donor wills. Restricted balances in special grant funds includes program income, generated from the City’s residential and business lending, that is restricted by the grantor in re-use. Special revenue funds have a restricted fund balance from voter-approved parcel tax assessment for fire protective services. Special revenue funds capital improvement reserves are from developer fees and are restricted to planned improvements. Street and road restricted balances are from statewide fuel (highway users tax accounts, or HUTA), restricted sales taxes (local transportation funds), and transfers in from the General Fund (restricted to transit, road and street construction, maintenance, and improvements).

Committed: The committed governmental fund balances for the City are zero.

Assigned: The restricted fund balances for the City are $4,545,490. The City has assigned these balances to cover capital improvements, planning and development, budget stabilization, other post employments benefits, grant contingencies and general liability reserves.

Unassigned: The City has $7,186,034 of unassigned governmental fund balances.

Proprietary funds:

The City of Yreka’s proprietary funds, also referred to as business-type activities or Enterprise Funds, provide the same type of information found in the government-wide financial statements but in more detail.

Total net position of the water and sewer funds at the end of the year amounted to $29,303,454, and the unrestricted net position was $8,559,626. In the statement on Cash Flows, page 36-37, the net increase in cash shows a net decrease of $2,678,983. The sewer cash balance decreased $159,650. The water utility proprietary funds cash balance decreased $2,519,333. Overall, increases to cash balances build reserves for future scheduled capital outlay projects, whereas decreases to cash reflect planned capital outlay or debt repayment.

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Agency funds:

Agency funds consist of fiduciary funds that are used to account for assets held in a trustee or agent capacity for others. The City holds non-adjudicated seizure money on behalf of the SUMIT, a state recognized locally operated major crimes investigation team task force. In 2019, the SUMIT task force dissolved.

However, the funds on deposit represent seizure funds that have not been adjudicated.

General Fund Budgetary Highlights:

Below is a table comparing the differences between the original budget and the final amended budget for revenue and expenses in the General Fund, Special Grant Fund, Special Revenue and Streets and Roads Fund. More information is available on pages 76 through 78 of this report. (Unfavorable) Variance With
General Fund Original Final Actual Final to Org. Actual to Final Revenue $ 7,078,959 $ 7,666,063 $ 9,294,928 $ 587,104 $ 1,628,865 Expense 7,075,270 7,583,777 6,983,824 (508,507) 599,953 Excess (deficiency) of revenue over (under) expenses 3,689 82,286 2,311,104 78,597 2,228,818 Other Financing Sources and (Uses) (550,006) (2,196,006) (2,101,163) (1,646,000) 94,843 Net Change in Fund Balance $ (546,317) $ (2,113,720) $ 209,941 $ (1,567,403) $ 2,323,661 (Unfavorable) Variance With
Special Grants Original Final Actual Final to Org. Actual to Final Revenue $ 1,964,600 $ 1,964,600 $ 398,621 $ - $ (1,565,979) Expense 2,469,750 2,770,100 387,844 (300,350) 2,382,256 Excess (deficiency) of revenue over (under) expenses (505,150) (805,500) 10,777 (300,350) 816,277 Other Financing Sources and (Uses) - - 1,834,300 - 1,834,300 Net Change in Fund Balance $ (505,150) $ (805,500) $ 1,845,077 $ (300,350) $ 2,650,577 (Unfavorable) Variance With
Special Revenue Original Final Actual Final to Org. Actual to Final Revenue $ 548,500 $ 548,500 $ 994,340 $ - $ 445,840
Expense 345,726 776,551 765,471 (430,825) 11,080
Excess (deficiency) of revenue over (under) expenses 202,774 (228,051) 228,869 (430,825) 456,920 Other Financing Sources and (Uses) (9,500) (302,147) (302,147) (292,647) - Net Change in Fund Balance $ 193,274 $ (530,198) $ (73,278) $ (723,472) $ 456,920 (Unfavorable) Variance With
Streets and Roads Original Final Actual Final to Org. Actual to Final Revenue $ 627,274 $ 627,274 $ 581,937 $ - $ (45,337)
Expense 1,177,281 1,272,548 1,191,097 (95,267) 81,451
Excess (deficiency) of revenue over (under) expenses (550,007) (645,274) (609,160) (95,267) 36,114 Other Financing Sources and (Uses) 550,006 550,006 596,006 - 46,000 Net Change in Fund Balance $ (1) $ (95,268) $ (13,154) $ (95,267) $ 82,114 Schedule of Revenues and Expenditures – Budget to Actual 2021-2022

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City of Yreka
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-18-
General Fund:
• Total revenues were $7,078,959 in the original budget, $7,666,063 in the final budget and $9,294,928 for actuals.
• The revenue increase of $587,104 in the final budget to adopted budget is primarily due to increases in intergovernmental revenue increased $587,104 in the final budget to adopted budget due to $131,202 reimbursement to the Yreka Volunteer Fire Department for CalOES fire mutual aid response. Additionally, ARPA funds were received in the amount of $449,616. • The revenue increase of $1,628,865 in the actual to final budget is primarily due to increases in transit occupancy taxes, “lodging tax” of $439,820. Property tax revenue and sales tax increased $151,711 and $794,849 respectively. Intergovernmental revenue increased in the actual to final budget $101,055, where $131,202 is federal reimbursement for the Antelope Fire. • Total expenses were $7,075,270 in the original budget, $7,583,777 in the final budget and $6,983,824 for actuals.
• The expense increased by $508,507 in the final budget to adopted budget in police ($4,500) and fire ($142,824) expenditures, in part due to mutual aid response. General government expenditures increased $151,724 primarily due to large liability insurance increases. City administration increased $12,500 in part due to increase in professional services in connection to hiring a new City Manager. Final budget was increased for capital outlay of $135,920 due to anticipation of purchasing new vehicles that are delayed. • Other Financing Sources and (Uses) were ($550,006) in the original budget, ($2,196,006) in the final budget and ($2,101,162) for actuals.
• The increase in the financing sources $1,880,300 in the final budget to adopted budget was due to a revenue transfer from general fund to special revenue to cover short falls in known projects including remodel of City Hall, Community Theater HAVC/Roofing project, and South Oregon street project.
• The change in the general fund balance was ($546,317) in the original budget, ($2,113,720) in the final budget and $209,942 for actuals.

Special Grant Fund:
• Special grant funds were not a major special revenue fund in fiscal year 2021-2022.

Special Revenue Fund:
• Revenues were $548,500 in the original budget, $548,500 in the final budget and $994,341 for actuals.

The increases were due development fee receipts.
• Expenses were $345,726 in the original budget and $776,551 in the final budget, and $765,471 for actuals.
• The increase of $430,825 in the final budget to adopted budget was attributable to the contribution to the pension trust reserves for former landfill employees.

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City of Yreka
Management’s Discussion & Analysis
-19-
• Other Financing Sources and (Uses) were $(9,500) in the original budget, ($302,147) in the final budget and ($302,147) for actuals.
• The transfer out increased $292,647 in the final budget to adopted budget for development fee revenues as it relates to development mitigation projects. The transfers out are to offset debt servicing, attributable to growth and development impacts to the water, sewer, and general debt servicing fund for police station building where improvements have been financed as insufficient impact fees had been collected for the growth impacts prior to construction.

Streets and Roads Fund:
• Revenues were $627,274 in the original budget, $627,274 in the final budget and $581,936 for actuals. • Expenses were $1,177,281 in the original budget, $1,272,548 in the final budget and $1,191,097 for actuals.
• Other financing sources were $550,006 in the original budget and $550,006 in the final budget and actuals that reflects a transfer in of $596,006 from the general operating fund.

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City of Yreka
Management’s Discussion & Analysis
-20-
Capital Assets and Debt Administration
Changes in Capital Assets
The City of Yreka’s investment in capital assets for its governmental and business type activities as of June 30, 2022, amounts to $58,435,643 (net of accumulated depreciation). Non-depreciable capital assets are land and land right of ways, used primarily for streets and construction that is in progress. Depreciable assets include buildings and structures, equipment, and vehicles. Capital assets for infrastructure include streets and sidewalks, curbs and gutters, drainage systems, bridges, and lighting systems.

The City has numerous master plan studies where engineers have identified the capital improvement projects needed within the next five to ten years for the City’s infrastructure assets of streets, storm water drainage, water and sewer utilities. To that end, the City remains focused in its efforts to deal with ways to fund infrastructure improvements.

Capital grants remain a primary source of funding for capital outlay to the City’s aging infrastructure. The City’s streets and roads need routine maintenance and rehabilitation. Fuel or gas taxes for streets and roads do not provide an adequate revenue stream for repairs, and the City has relied on competitive grants, sales tax revenues and street reserves for road improvements.

Balance
June 30, 2021 Additions Retirements
Transfers/
Adjustments
Balance
June 30, 2022
Governmental Activities:

Capital assets not being depreciated;
Land $ 2,207,241 $ - $ (2,276) $ - $ 2,204,965
Construction in Progress 1,298,590 105,792 - - 1,404,382 Total Capital Assets, Not Being Depreciated 3,505,831 105,792 (2,276) - 3,609,347 Capital assets being depreciated;
Building and Structures 11,764,744 - - - 11,764,744
Machinery and Equipment 5,123,989 245,379 - 527,368 5,896,736 Infrastructure 34,658,635 - - (527,368) 34,131,267
Governmental Activities Capital Assets 55,053,199 351,171 (2,276) 55,402,094 - Less Accumulated Depreciation (30,835,064) (1,190,188) - (32,025,252) - Governmental Activities Capital Assets, Net 24,218,135 (839,017) (2,276) 23,376,842 - Business-Type Activities:

Capital assets not being depreciated;
Land 374,428 - - 374,428 -
Construction in Progress 1,087,741 10,276,704 - 11,364,445 - Total Capital Assets, Not Being Depreciated 1,462,169 10,276,704 - 11,738,873 - Capital assets being depreciated;
Building and Structures 12,425,795 - 67,878 - 12,493,673 Machinery and Equipment 8,626,674 (67,878) - 8,558,796
Infrastructure 29,429,842 - - 29,429,842 -
Total Business Activities Capital Assets 51,944,480 10,276,704 - 62,221,184 - Less Accumulated Depreciation (25,885,880) (1,276,503) - (27,162,383) - Business-Type Capital Assets, Net 26,058,600 9,000,201 - 35,058,801 - Total Capital Assets, Net $ 50,276,735 $ 8,161,184 (2,276)$ -$ 58,435,643 $

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City of Yreka
Management’s Discussion & Analysis
-21-
The City improve the safety and reliability of its water and sewer systems, the City has entered into grant and lending agreements upgrade these systems. Planned utility rate increases from 2018 to 2023, seek to (a) adequately fund these utilities, (b) demonstrate the City’s ability to debt service its loan obligations, and (c) maintain an adequate level of reserves.

Major capital asset events during the year are listed as follows:

Governmental Activities
• Land - The City sold a small parcel of land near Greenhorn Park. • Transfers – There were no transfers in the current year as projects not completed. • Construction in Progress - At the end of 2021-2022 CIP totals $1,404,382. o Of the outstanding construction in progress, $1,295,263 relates to the Flood Hazard Reduction Grant for flood corridor development project along Yreka Creek. • Machinery and Equipment - The City’s acquired a Jaws of Life for $40,396, crack sealer for $77,275, traffic sign for $26,363 and two additional vehicles.

Business-Type Activities
• Construction in Progress - Additions to construction in process projects were $10,276,704 for water distributions and sewer collection systems capital projects, primarily relating to water $2,706,946 and sewer $5,402,495 utility replacement projects underneath California State Highway 3. An additional construction in process of $1,428,230 for E. Lennox Water design, $34,953 for filter plan improvements and $141,288 for sewer collection improvements system design, both pursuant to Prop. 1 State of California grant projects. Additionally, improvements to the wastewater treatment plant pursuant to Clean Water State Revolving Fund totaling $120,487.
• Transfers – There were no transfers from construction in progress. • Machinery and Equipment - The City acquired equipment.

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City of Yreka
Management’s Discussion & Analysis
-22-
Changes in Long-term Liabilities, Long-term Debt and Compensated Absences:

Changes in Long-term Liabilities
North Street Water Main replacement, August 29,
2011
At the end of the 2021-2022, total longterm liabilities were $14,809,826. That includes $792,106 for the current
portion of long-term debt and
compensated absences. The City’s net
position for compensated absences
increased by $19,075 for governmental
activities and decreased by $13,525 for
business-type activities.

Detailed information on lenders, rates and maturities for long-term debt are found on pages 54 through 57 of this report.

Long-Term Liabilities
June 30, 2021 Additions Reductions June 30, 2022
Current
Portion
Governmental Activities:

Compensated Absences $ 262,892 $ 275,346 $ 294,421 $ 243,817 $ 200,000 Capital Lease 437,652 - 85,065 352,587 86,280
Loans Payable - Governmental
Agencies 1,424,053 - 98,195 1,325,858 103,491
Certificates of participation -
USDA Rural Development 2,631,000 - 34,000 2,597,000 35,000 Governmental Activities 4,755,597 275,346 511,681 4,519,262 424,771 Business-Type Activities:

Compensated Absences 71,689 107,280 120,805 58,164 58,164 Capital Lease 367,235 - 80,835 286,400 82,171
Loans Payable - 4,632,573 - 4,632,573 -
Certificates of participation -
USDA Rural Development 10,167,000 - 221,000 9,946,000 227,000 Business-Type Activities 10,605,924 4,739,853 422,640 14,923,137 367,335 Total Long-Term Liabilities $ 15,361,521 $ 5,015,199 $ 934,321 $ 19,442,399 $ 792,106

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City of Yreka
Management’s Discussion & Analysis
-23-
Next Year’s Budgets and Rates:

Budget Highlights for 2022-2023:

Below are highlights for fiscal year 2022-23 from the City’s biannual budget, adopted by the City Council on September 7, 2021. The budget can be found on the City’s website, http://ci.yreka.ca.us.

City of Yreka
2022-23 Adopted Budget
For Governmental Activities, the City projects a $225,073 decrease in fund balances. At budget adoption the City was awaiting for the Department of Treasury final rulings for the coronavirus American Rescue Plan Act (ARPA) funding guidelines. The City anticipates using the APRA revenue loss calculation to offset most of the current year excess spending within the General Fund. Reserves have been accumulated in prior years for planned system capital improvements within the Special Grant fund for City Hall accessibility building improvements.

For Business-Type Activities, the City anticipates a $1,671,204 decrease to fund balance reserves. The decrease in the business type funds reflects planned major capital outlay for the replacement of water and sewer mains located beneath CA Highway 3, in anticipation of CalTrans repaving of the highway that runs the north-south length of the town in 2023-2024. Reserves have been accumulated in prior years for planned system capital improvements.

Adopted
Budgeted
Revenue
Adopted
Budgeted
Expense
Excess of
Revenue over
Expense
Total General Fund $ 7,696,140 $ 8,079,337 $ (383,197)
Total Special Rev. Fund 563,500 355,226 $208,274
Total Streets and Roads 1,222,867 1,222,867 $0
Special Grant Fund 2,999,600 3,049,750 ($50,150)
12,482,107 12,707,180 (225,073)
Sewer Fund 4,879,052 5,788,240 (909,188)
Water Fund 11,241,969 12,003,985 (762,016)
Total Business-Type Funds 16,121,021 17,792,225 (1,671,204) All Funds Combined $ 28,603,128 $ 30,499,405 $ (1,896,277) Total Governmental Activity Funds

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City of Yreka
Management’s Discussion & Analysis
-24-
General Fund Revenue Projections:

General Fund - Fiscal Year Mainstream Revenue Comparison Horizon Issues for 2022-2023:

1. Supply chain constraints arising from global trade impacts relating to construction projects pending and or under contract, for example availability of water and sewer mainline pipe.

2. Rental market and inventory of available housing is restricted both from impacts relating to wildfires displacing residents in Siskiyou County and Southern Oregon and the relocation of urban dwellers to the area due to affordability, remote work opportunities and lifestyle decisions.

3. Growth in the City’s homeless population.

4. Impacts to storefronts, unemployment, and economic impacts to businesses within the areas arising from the highway 3 construction.

5. Retention and recruitment of human talent and increased demand for public safety services.

6. Revenue development and pension funding.

7. Development of the City’s 20-year general plan update.

Actual
19-20
Actual
20-21
Actual
21-22
Adopted
Budget
22-23
Property Tax (secured & unsec. roll) $1,143,815 $ 1,186,188 $ 1,268,795 $ 1,208,650 Property Tax arising from MVLF shift (1) 630,797 654,120 691,566 650,000 Transient Lodging 720,811 1,201,139 1,264,820 830,000
Sales Tax (2) 3,443,956 4,422,757 4,294,850 3,600,000
Franchises 280,751 274,117 268,153 285,000
Licenses and Permits 199,952 230,172 275,499 189,900
Fines and Forfeitures (117) 2,292 6,450 250
Use of Money and Property 227,556 3,223 90,383 70,800
Intergovernmental 393,416 605,484 971,434 348,418
User Fees and Charges 57,834 50,505 76,534 50,825
Administrative Cost Recovery (3) 389,001 456,184 526,691 445,797 Other Revenues 142,494 306,529 364,680 16,500
Subtotal General Fund Revenue $7,630,266 $ 9,392,710 $10,099,855 $ 7,696,140 Financial Statements, but represented as a revenue for budgeting purposes. (2) Administrative Cost Recovery is netted against the departmental administrative and general governmental expense on in the (1) Prop tax arising from the MVLF shift.

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City of Yreka
Management’s Discussion & Analysis
-25-
Requests for Information:

This financial report is designed to provide to all interested readers a general overview of the City of Yreka’s finances. Questions concerning any of the information provided in this report, or requests for additional financial information, can directed to the City’s Finance Director, 701 Fourth Street, Yreka, CA 96097, website www.ci.yreka.ca.us.

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Basic Financial Statements
• Government-Wide Financial Statements

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CITY OF YREKA
Statement of Net Position
June 30, 2022
Governmental Business-Type
Activities Activities Totals
ASSETS
Cash and investments $ 15,919,540 $ 11,929,891 $ 27,849,431 Receivables:

Accounts 212,103 611,034 823,137
Intergovernmental 527,769 459,353 987,122
Interest 30,987 26,402 57,389
Taxes 1,317,956 - 1,317,956
Restricted cash and investments 638,129 550,000 1,188,129 Loans receivable, net 173,762 - 173,762
Inventory 41,014 - 41,014
Net OPEB asset 212,944 119,782 332,726
Capital assets:

Non-depreciable 3,609,347 11,738,873 15,348,220
Depreciable, net 19,767,495 23,319,928 43,087,423
Total capital assets 23,376,842 35,058,801 58,435,643
Total Assets 42,451,046 48,755,263 91,206,309

DEFERRED OUTFLOWS OF RESOURCES
Deferred pension adjustments 2,779,729 1,107,167 3,886,896 Deferred OPEB adjustments 61,937 34,840 96,777
Total Deferred Outflows of Resources 2,841,666 1,142,007 3,983,673

LIABILITIES
Accounts payable 612,005 1,732,555 2,344,560
Retention payable - 438,527 438,527
Salaries and benefits payable 401,329 - 401,329
Interest payable 23,021 120,798 143,819
Deposits payable 146,751 - 146,751
Unearned revenue 549,617 - 549,617
Long-term liabilities:

Due within one year 424,771 367,335 792,106
Due in more than one year 4,094,491 14,555,802 18,650,293 Net pension liability 4,599,171 1,614,881 6,214,052
Total Liabilities 10,851,156 18,829,898 29,681,054

DEFERRED INFLOWS OF RESOURCES
Deferred pension adjustments 3,856,277 1,589,091 5,445,368 Deferred OPEB adjustments 310,806 174,827 485,633
Total Deferred Inflows of Resources 4,167,083 1,763,918 5,931,001 The notes to the basic financial statements are an integral part of this statement. -26-
Continued (Page 1 of 2)

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CITY OF YREKA
Statement of Net Position
June 30, 2022
Governmental Business-Type
Activities Activities Totals

NET POSITION
Net investment in capital assets 20,427,255 20,193,828 40,621,083 Restricted for:

Public safety 1,760,879 - 1,760,879
Public ways and facilities 892,475 - 892,475
Culture and recreation 27,695 - 27,695
Community development 1,085,284 - 1,085,284
Capital projects 2,572,644 - 2,572,644
Debt service 500,052 550,000 1,050,052
Unrestricted 3,008,189 8,559,626 11,567,815
Total Net Position $ 30,274,473 $ 29,303,454 $ 59,577,927 The notes to the basic financial statements are an integral part of this statement. -27-
Continued (Page 2 of 2)

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CITY OF YREKA
Statement of Activities
For the Year Ended June 30, 2022
Program Revenues
Operating Capital
Charges for Grants and Grants and
Functions/Programs: Expenses Services Contributions Contributions Governmental activities:

General government $ 1,417,555 $ 771,956 $ 462,230 $ -
Public safety 4,480,738 355,972 658,109 -
Public ways and facilities 1,647,485 16,676 818,852 157,089 Culture and recreation 652,874 4,750 100 -
Community development 700,772 203,451 233,535 -
Interest on long-term debt 174,997 - - -
Total Governmental Activities 9,074,421 1,352,805 2,172,826 157,089 Business-type activities:

Sewer 2,856,529 2,816,859 - 16,771
Water 3,196,852 3,126,447 - 484,799
Total Business-Type Activities 6,053,381 5,943,306 - 501,570 Total $ 15,127,802 $ 7,296,111 $ 2,172,826 $ 658,659
General Revenues:

Taxes:

Property taxes
Sales and use taxes
Transient occupancy taxes
Franchise taxes
Interest and investment earnings
Miscellaneous
Gain on sale of capital assets
Transfers
Total General Revenues and Transfers
Change in Net Position
Net Position - Beginning
Net Position - Ending
The notes to the basic financial statements are an integral part of this statement. -28-

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Net (Expense) Revenue and
Changes in Net Position
Governmental Business-Type
Activities Activities Totals
$ (183,369) $ - $ (183,369)
(3,466,657) - (3,466,657)
(654,868) - (654,868)
(648,024) - (648,024)
(263,786) - (263,786)
(174,997) - (174,997)
(5,391,701) - (5,391,701)
- (22,899) (22,899)
- 414,394 414,394
- 391,495 391,495
(5,391,701) 391,495 (5,000,206)
1,969,332 - 1,969,332
4,294,849 - 4,294,849
1,264,820 - 1,264,820
268,153 - 268,153
(66,005) (171,845) (237,850)
2,248 - 2,248
232,024 - 232,024
(207,304) 207,304 -
7,758,117 35,459 7,793,576
2,366,416 426,954 2,793,370
27,908,057 28,876,500 56,784,557
$ 30,274,473 $ 29,303,454 $ 59,577,927
The notes to the basic financial statements are an integral part of this statement. -28-

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Basic Financial Statements
• Fund Financial Statements

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CITY OF YREKA
Balance Sheet
Governmental Funds
June 30, 2022
Streets Special Special
General and Roads Revenue Grants Totals
ASSETS
Cash and investments $ 10,107,882 $ 1,189,063 $ 1,281,190 $ 3,341,405 $ 15,919,540 Receivables:

Accounts 165,782 - 46,271 50 212,103
Intergovernmental 14,520 28,440 - 484,809 527,769
Interest 24,160 2,434 2,681 1,712 30,987
Taxes 1,068,362 249,594 - - 1,317,956
Restricted cash and investments 638,129 - - - 638,129
Loans receivable, net - - - 173,762 173,762
Inventory 41,014 - - - 41,014
Total Assets $ 12,059,849 $ 1,469,531 $ 1,330,142 $ 4,001,738 $ 18,861,260

LIABILITIES
Accounts payable $ 213,810 $ 223,977 $ 52,516 $ 121,702 $ 612,005 Salaries and benefits payable 401,329 - - - 401,329
Interest payable 23,021 - - - 23,021
Deposits payable 146,751 - - - 146,751
Unearned revenue 449,617 - - 100,000 549,617
Total Liabilities 1,234,528 223,977 52,516 221,702 1,732,723

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue 21,098 234,079 - 321,998 577,175
Total Deferred Inflows of Resources 21,098 234,079 - 321,998 577,175

FUND BALANCES
Nonspendable 41,014 - - 173,762 214,776
Restricted 966,697 1,011,475 1,277,626 1,349,264 4,605,062 Assigned 2,610,478 - - 1,935,012 4,545,490
Unassigned 7,186,034 - - - 7,186,034
Total Fund Balances 10,804,223 1,011,475 1,277,626 3,458,038 16,551,362 Total Liabilities, Deferred Inflows
of Resources and Fund Balances $ 12,059,849 $ 1,469,531 $ 1,330,142 $ 4,001,738 $ 18,861,260 The notes to the basic financial statements are an integral part of this statement. -29-

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CITY OF YREKA
Reconciliation of the Governmental Funds Balance
Sheet to the Government-Wide Statement of
Net Position - Governmental Activities
June 30, 2022
Total Fund Balances - Total Governmental Funds $ 16,551,362 Amounts reported for governmental activities in the Statement of Net Position are different because:

Capital assets used in governmental activities are not financial resources and therefore are not reported in the governmental funds balance sheet. 23,376,842
Other long-term assets are not available to pay for current period expenditures and therefore are reported as unavailable revenue in the governmental funds. 577,175 Deferred outflows of resources related to pension and OPEB are not reported in the governmental funds. 2,841,666 Deferred inflows of resources related to pension and OPEB are not reported in the governmental funds. (4,167,083) Certain liabilities are not due and payable in the current period and therefore are not reported in the governmental funds.

Compensated absences (243,817)
Loans payable (1,325,858)
Certificates of participation (2,597,000)
Capital leases (352,587)
Net pension liability (4,599,171)
Net OPEB liability (asset) 212,944
Net Position of Governmental Activities $ 30,274,473
The notes to the basic financial statements are an integral part of this statement. -30-

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CITY OF YREKA
Statement of Revenues, Expenditures and
Changes in Fund Balances
Governmental Funds
For the Year Ended June 30, 2022
Streets Special Special
General and Roads Revenue Grants Totals

REVENUES
Taxes and assessments $ 7,788,183 $ - $ 304,998 $ - $ 8,093,181 Licenses and permits 275,499 - 440,927 - 716,426
Fines and forfeitures (6,450) 13,806 - - 7,356
Use of money (87,556) 6,629 6,367 8,555 (66,005)
Intergovernmental 1,032,193 550,568 - 390,066 1,972,827 Charges for services 76,534 - 240,309 - 316,843
Other revenues 216,525 10,934 1,739 - 229,198
Total Revenues 9,294,928 581,937 994,340 398,621 11,269,826

EXPENDITURES
Current:

General government 1,055,868 - 456,237 - 1,512,105
Public safety 4,536,464 - 3,111 - 4,539,575
Public ways and facilities 82,634 1,087,459 - 80,717 1,250,810 Culture and recreation 505,258 - - - 505,258
Community development 575,612 - - 201,448 777,060
Debt service:

Principal 34,000 - 183,260 - 217,260
Interest and other charges 92,530 - 82,467 - 174,997
Capital outlay 101,458 103,638 40,396 105,679 351,171
Total Expenditures 6,983,824 1,191,097 765,471 387,844 9,328,236 Excess of Revenues Over (Under)
Expenditures 2,311,104 (609,160) 228,869 10,777 1,941,590

OTHER FINANCING SOURCES (USES)
Proceeds from sale of capital assets 234,300 - - - 234,300 Transfers in 94,843 596,006 - 1,834,300 2,525,149
Transfers out (2,430,306) - (302,147) - (2,732,453)
Total Other Financing Sources (Uses) (2,101,163) 596,006 (302,147) 1,834,300 26,996 Net Change in Fund Balances 209,941 (13,154) (73,278) 1,845,077 1,968,586 Fund Balances - Beginning 10,594,282 1,024,629 1,350,904 1,612,961 14,582,776 Fund Balances - Ending $ 10,804,223 $ 1,011,475 $ 1,277,626 $ 3,458,038 $ 16,551,362 The notes to the basic financial statements are an integral part of this statement. -31-

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CITY OF YREKA
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the
Government-Wide Statement of Activities - Governmental Activities For the Year Ended June 30, 2022
Net Change in Fund Balances - Total Governmental Funds $ 1,968,586 Amounts reported for governmental activities in the Statement of Activities are different because:

Governmental funds report capital outlay as expenditures. However, in the Statement of Activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense.

Expenditures for capital outlay 351,171
Less current year depreciation (1,190,188)
Governmental funds only report the disposal of assets to the extent proceeds are received from the sale.

In the Statement of Activities, a gain or loss is reported for each disposal. This is the net cost of the capital assets disposed. Proceeds from the sale of capital assets were $234,300. (2,276) Debt proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the Statement of Net Position. Repayment of principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Position.

Principal retirements 217,260
Some revenues reported in the Statement of Activities will not be collected for several months after the City's year-end and do not provide current financial resources and therefore are not reported as revenues in the governmental funds.

Change in unavailable revenue 146,291
Certain changes in deferred outflows and deferred inflows of resources reported in the Statement of Activities relate to long-term liabilities and are not reported in the governmental funds.

Changes in deferred outflows of resources related to pension 1,077,879 Changes in deferred outflows of resources related to OPEB (85,632) Changes in deferred inflows of resources related to pension (3,370,351) Changes in deferred inflows of resources related to OPEB (209) Some expenses reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in the governmental funds.

Change in compensated absences 19,075
Change in net pension liability 3,047,718
Change in net OPEB liability/asset 187,092
Change in Net Position of Governmental Activities $ 2,366,416 The notes to the basic financial statements are an integral part of this statement. -32-

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CITY OF YREKA
Statement of Net Position
Proprietary Funds
June 30, 2022
Business-Type Activities - Enterprise Funds
Sewer Water Totals
ASSETS
Current Assets:

Cash and investments $ 5,640,396 $ 6,289,495 $ 11,929,891 Receivables:

Accounts 254,265 356,769 611,034
Interest 11,643 14,759 26,402
Intergovernmental - 459,353 459,353
Due from other funds 67,754 - 67,754
Total Current Assets 5,974,058 7,120,376 13,094,434
Noncurrent Assets:

Restricted cash and investments 250,000 300,000 550,000 Net OPEB asset 56,564 63,218 119,782
Capital assets:

Non-depreciable 6,635,735 5,103,138 11,738,873
Depreciable, net 10,551,307 12,768,621 23,319,928
Total Noncurrent Assets 17,493,606 18,234,977 35,728,583 Total Assets 23,467,664 25,355,353 48,823,017

DEFERRED OUTFLOWS OF RESOURCES
Deferred pension adjustments 498,442 608,725 1,107,167
Deferred OPEB adjustments 16,452 18,388 34,840
Total Deferred Outflows of Resources 514,894 627,113 1,142,007

LIABILITIES
Current Liabilities:

Accounts payable 516,642 1,215,913 1,732,555
Retention payable 241,993 196,534 438,527
Interest payable 89,410 31,388 120,798
Due to other funds - 67,754 67,754
Compensated absences 14,823 43,341 58,164
Certificates of participation 88,000 139,000 227,000
Capital leases - 82,171 82,171
Total Current Liabilities 950,868 1,776,101 2,726,969
The notes to the basic financial statements are an integral part of this statement. -33-
Continued (Page 1 of 2)

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CITY OF YREKA
Statement of Net Position
Proprietary Funds
June 30, 2022
Business-Type Activities - Enterprise Funds
Sewer Water Totals
Noncurrent Liabilities:

Loans payable 4,632,573 - 4,632,573
Certificates of participation 4,278,000 5,441,000 9,719,000 Capital leases - 204,229 204,229
Net pension liability 727,013 887,868 1,614,881
Total Noncurrent Liabilities 9,637,586 6,533,097 16,170,683 Total Liabilities 10,588,454 8,309,198 18,897,652

DEFERRED INFLOWS OF RESOURCES
Deferred pension adjustments 715,402 873,689 1,589,091
Deferred OPEB adjustments 82,557 92,270 174,827
Total Deferred Inflows of Resources 797,959 965,959 1,763,918

NET POSITION
Net investment in capital assets 8,188,469 12,005,359 20,193,828 Restricted for debt service 250,000 300,000 550,000
Unrestricted 4,157,676 4,401,950 8,559,626
Total Net Position $ 12,596,145 $ 16,707,309 $ 29,303,454 The notes to the basic financial statements are an integral part of this statement. -34-
Continued (Page 2 of 2)

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CITY OF YREKA
Statement of Revenues, Expenses and
Changes in Net Position
Proprietary Funds
For the Year Ended June 30, 2022
Business-Type Activities - Enterprise Funds
Sewer Water Totals

OPERATING REVENUES
Charges for services $ 2,816,859 $ 3,126,816 $ 5,943,675 Other revenues - (369) (369)
Total Operating Revenues 2,816,859 3,126,447 5,943,306

OPERATING EXPENSES
Power and water 187,243 236,495 423,738
Treatment 862,473 835,585 1,698,058
Sewer collection 368,680 - 368,680
Water distribution - 568,159 568,159
Administration and billing 692,152 742,009 1,434,161
Depreciation 594,140 682,363 1,276,503
Total Operating Expenses 2,704,688 3,064,611 5,769,299
Operating Income (Loss) 112,171 61,836 174,007

NON-OPERATING REVENUES (EXPENSES)
Intergovernmental 16,771 484,799 501,570
Interest income (69,073) (102,772) (171,845)
Interest expense (151,841) (132,241) (284,082)
Total Non-Operating Revenues (Expenses) (204,143) 249,786 45,643 Income (Loss) Before Transfers (91,972) 311,622 219,650 Transfers in 46,548 160,756 207,304
Change in Net Position (45,424) 472,378 426,954
Total Net Position - Beginning 12,641,569 16,234,931 28,876,500 Total Net Position - Ending $ 12,596,145 $ 16,707,309 $ 29,303,454 The notes to the basic financial statements are an integral part of this statement. -35-

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CITY OF YREKA
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2022
Business-Type Activities - Enterprise Funds
Sewer Water Totals

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers $ 2,813,320 $ 3,128,280 $ 5,941,600 Payments to suppliers (787,077) (47,712) (834,789)
Payments to employees (937,833) (1,158,535) (2,096,368) Net Cash Provided (Used) by Operating Activities 1,088,410 1,922,033 3,010,443

CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES
Intergovernmental revenues received 16,771 25,446 42,217 Interfund loans received - 67,754 67,754
Interfund loans made (67,754) - (67,754)
Transfers from other funds 46,548 160,756 207,304
Net Cash Provided (Used) by Non-Capital
Financing Activities (4,435) 253,956 249,521

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Acquisition of capital assets (5,596,517) (4,241,660) (9,838,177) Proceeds from debt 4,632,573 - 4,632,573
Principal paid on debt (85,000) (216,835) (301,835)
Interest paid on debt (122,895) (132,497) (255,392)
Net Cash Provided (Used) by Capital and
Related Financing Activities (1,171,839) (4,590,992) (5,762,831)

CASH FLOWS FROM INVESTING ACTIVITIES
Interest on investments (71,786) (104,330) (176,116)
Net Cash Provided (Used) by Investing Activities (71,786) (104,330) (176,116) Net Increase (Decrease) in Cash and Cash Equivalents (159,650) (2,519,333) (2,678,983) Balances - Beginning 6,050,046 9,108,828 15,158,874
.

Balances - Ending $ 5,890,396 $ 6,589,495 $ 12,479,891
The notes to the basic financial statements are an integral part of this statement. -36-
Continued (Page 1 of 2)

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CITY OF YREKA
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2022
Business-Type Activities - Enterprise Funds
Sewer Water Totals

RECONCILIATION OF OPERATING INCOME (LOSS)

TO NET CASH PROVIDED (USED) BY OPERATING

ACTIVITIES
Operating income (loss) $ 112,171 $ 61,836 $ 174,007
Adjustments to reconcile operating income to net cash
provided (used) by operating activities:

Depreciation 594,140 682,363 1,276,503
Decrease (increase) in:

Accounts receivable (3,539) 1,833 (1,706)
Deferred outflows - pension adjustments (284,734) (355,582) (640,316) Deferred outflows - OPEB adjustments 9,230 12,186 21,416 Increase (decrease) in:

Accounts payable 405,830 1,142,185 1,548,015
Compensated absences (17,106) 3,581 (13,525)
Net pension liability (343,498) (380,182) (723,680)
Net OPEB liability/asset (52,065) (57,862) (109,927)
Deferred inflows - pension adjustments 639,478 783,756 1,423,234 Deferred inflows - OPEB adjustments 28,503 27,919 56,422 Net Cash Provided (Used) by Operating Activities $ 1,088,410 $ 1,922,033 $ 3,010,443 The notes to the basic financial statements are an integral part of this statement. -37-
Continued (Page 2 of 2)

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CITY OF YREKA
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2022
Custodial
Fund
Court
Nonadjudicated
Seizure Fund
ASSETS
Cash and investments $ 19,219
Total Assets 19,219

LIABILITIES
Accounts payable -
Total Liabilities -

NET POSITION
Restricted for individuals, organizations, or other governments 19,219 Total Net Position $ 19,219
The notes to the basic financial statements are an integral part of this statement. -38-

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CITY OF YREKA
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the Year Ended June 30, 2022
Custodial
Fund
Court
Nonadjudicated
Seizure Fund

ADDITIONS
Interest and investment income $ 2
Total Addisions 2

DEDUCTIONS
Distribution of funds held for others -
Total Deductions -
Total Increase (Decrease) in Fiduciary Net Position 2
Total Net Position - Beginning 19,217
Total Net Position - Ending $ 19,219
The notes to the basic financial statements are an integral part of this statement. -39-

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Basic Financial Statements
• Notes to Basic Financial Statements

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CITY OF YREKA
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-40-
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
The City of Yreka operates under a Council-Manager form of government and provides the following services: public safety, streets and roads, culture and recreation, public improvements, planning and zoning, general administrative services and water and sewer.

Component Units
Generally accepted accounting principles require government financial statements to include the primary government and its component units. Component units of a governmental entity are legally separate entities for which the primary government is considered to be financially accountable and for which the nature and significance of their relationship with the primary government are such that exclusion would cause the combined financial statements to be misleading. The primary government is considered to be financially accountable if it appoints a majority of an organization’s governing body and is able to impose its will on that organization or there is a potential for the organization to provide specific financial benefits to or impose specific financial burdens on the primary government.

Based on the application of the criteria set forth by the Governmental Accounting Standards Board, management has determined that there are no component units of the City.

Joint Agencies
The City is a participant in Small Cities Organized Risk Effort (SCORE), the purpose of which is for member cities to share in the administrative costs of providing liability and workers’ compensation insurance. SCORE is composed of 18 member cities and is governed by a board of directors appointed by the member cities. Complete financial information can be obtained from the SCORE offices at 2180 Harvard Street, Suite 460, Sacramento, CA 95815. The City is not financially accountable for this organization and therefore, it is not a component unit under Statement Nos. 14, 39 and 61 of the Governmental Accounting Standards Board.

B. Basis of Presentation
Government-Wide Financial Statements
The Statement of Net Position and Statement of Activities display information on all of the nonfiduciary activities of the City. These statements include the financial activities of the overall government, except fiduciary activities. Eliminations have been made to minimize the double counting of internal activities.

Interfund services provided and used are not eliminated in the process of consolidation. These statements distinguish between the governmental and business-type activities of the City. Governmental activities, which are normally supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees charged to external parties.

The Statement of Activities presents a comparison between direct expenses and program revenues for each different identifiable activity of the City's business-type activities and each function of the City's governmental activities. Direct expenses are those that are specifically associated with a program or function and; therefore, are clearly identifiable to a particular function. Program revenues include 1) charges paid by the recipients of goods and services offered by the program, 2) operating grants and contributions, and 3) capital grants and contributions. Taxes and other items not properly included among program revenues are presented instead as general revenues.

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CITY OF YREKA
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-41-
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) B. Basis of Presentation (Continued)
Fund Financial Statements
The fund financial statements provide information about the City’s funds, including fiduciary funds. Funds are organized into three major categories: governmental, proprietary, and fiduciary. The emphasis is placed on major funds within the governmental and proprietary categories; each is displayed in a separate column.

The City reports the following major governmental funds:
• The General fund is used to account for all revenues and expenditures necessary to carry out basic governmental activities of the City that are not accounted for through other funds. For the City, the General fund includes such activities as public safety, planning and zoning, general administrative services, culture and recreation, and public works.
• The Streets and Roads fund is a special revenue fund used to account for revenues received from the State of California which must be spent for street maintenance or repairs. Funding comes primarily from state grants.
• The Special Revenue fund is a special revenue fund used to account for revenues and expenditures related to fire assessments, landfill assessments and development fees. Funding comes primarily from assessment income.
• The Special Grants fund is a capital projects fund used to account for various federal and state grants which must be spent for infrastructure capital outlays, such as streets and parks, and economic and community development. Funding comes primarily from federal and state grants.

The City reports the following major proprietary funds:
• The Sewer fund is an enterprise fund used to account for activity related to providing customers with sewer services and billing for sewer services provided by the City. • The Water fund is an enterprise fund used to account for activity related to providing customers with water service and billing for water services provided by the City.

The City reports the following additional fund type:
• The Custodial fund accounts for resources held by the City as an agent for the Court Nonadjudicated Seizure fund. The fund is used for safekeeping of cash deposits arising from seizures performed by the Siskiyou Unified Major Crime Investigation Unit (SUMIT), a recognized state task force.

As cases are adjudicated, funds are transferred to the court ordered recipients and/or participating agencies involved with the case.

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CITY OF YREKA
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-42-
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. Basis of Accounting and Measurement Focus
The government-wide and proprietary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place.

Nonexchange transactions, in which the City gives (or receives) value without directly receiving (or giving) equal value in exchange, include property and sales tax, grants, entitlements, and donations. Under the accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied.

Revenues from sales tax are recognized when the underlying transactions take place. Revenues from grants, entitlements, and donations are recognized in the fiscal year in which all eligibility requirements have been satisfied.

Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available.

Property and sales taxes, interest, certain state and federal grants and charges for services are considered susceptible to accrual and are accrued when their receipt occurs within 60 days after the end of the fiscal year. Expenditures are generally recorded when a liability is incurred, as under accrual accounting.

However, debt service expenditures as well as expenditures related to claims and judgments are recorded only when payment is paid. General capital asset acquisitions are reported as expenditures in the various functions of the governmental funds. Proceeds of governmental long-term debt and acquisitions under capital leases are reported as other financing sources.

Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the enterprise funds are charges to customers for sales and services. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation of capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses.

Fiduciary funds include custodial funds. All fiduciary funds are reported using the economic resources measurement focus and the accrual basis of accounting.

D. Non-Current Governmental Assets/Liabilities
Non-current governmental assets and liabilities, such as capital assets and long-term liabilities, are reported in the governmental activities column in the government-wide Statement of Net Position.

E. Cash and Cash Equivalents
For purposes of the accompanying Statement of Cash Flows, the City considers all highly liquid investments with a maturity of three months or less when purchased including amounts held in the City’s investment pool, to be cash and cash equivalents.

F. Investments
The City pools cash and investments of all funds. Each fund’s share in this pool is displayed in the accompanying financial statements as cash and investments.

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CITY OF YREKA
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-43-
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) F. Investments (Continued)
Investment transactions are recorded on the trade date. The fair value of investments is determined annually.

Investments in nonparticipating interest-earning investment contracts are reported at cost; short-term investments are reported at amortized cost, investments in the State of California Local Agency Investment Fund, an external pool, are reported at amortized cost which approximates fair value, and the fair value of all other investments are obtained by using quotations obtained from independent published sources or by the safekeeping institution. The fair value represents the amount the City could reasonably expect to receive for an investment in a current sale between a willing buyer and seller.

Income from pooled investments is allocated to the individual funds based on the fund or participant’s average daily cash balance at quarter end in relation to the total pool investments. Income from non-pooled investments is recorded based on the specific investments held by the fund.

G. Restricted Cash and Investments
Restricted assets in the governmental funds represent cash and investments held in the General fund for capital outlay per the trust documents that govern the bequests of these funds to the City of $438,129.

Restricted assets in the proprietary funds represent cash and investments held in the Sewer fund for debt service of $250,000 and in the Water fund for debt service of $300,000.

H. Receivables
Receivables for governmental activities consist mainly of accounts, intergovernmental, interest and taxes receivable. Management believes its receivables are fully collectible and, accordingly, no allowance for doubtful accounts is required.

Receivables for business-type activities consist mainly of user fees, intergovernmental revenue and interest.

Management believes its receivables are fully collectible and, accordingly, no allowance for doubtful accounts is required.

I. Loans Receivable
A total of $173,762 was recorded as loans receivable at June 30, 2022. Of this amount, $173,762 represents low interest notes and related accrued interest to finance multi-family and single-family construction and rehabilitation projects and homebuyer assistance for low-income families. Loan terms are 15 to 55 years with an interest rate at 0 to 5 percent. The primary source of funding for these loans comes from grants from the federal Community Development Block Grant (CDBG) program. The CDBG grants contain monitoring requirements to ensure grant compliance. These requirements are reflected in the loan agreements. The loans receivable balance is reported net of an allowance for uncollectible accounts of $144,250.

J. Capital Assets
Capital assets, including public domain (infrastructure such as roads, bridges, sidewalks, water, sewer, and similar items) are defined by the City as assets with a cost greater than $15,000 for property, plant and equipment and $50,000 for infrastructure assets. Capital assets are recorded at historical or estimated historical cost if actual historical cost is unavailable. Contributed capital assets are recorded at their acquisition value at the date of donation.

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CITY OF YREKA
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-44-
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) J. Capital Assets (Continued)
Capital assets used in operations are depreciated or amortized using the straight-line method over the assets’ estimated useful lives in the government-wide financial statements. The range of estimated useful lives by type of asset is as follows:

Depreciable Asset Estimated Lives
Vehicles 5 to 10 years
Equipment 3 to 20 years
Water and sewer mains 50 years
Land improvements 20 to 30 years
Structures and improvements 50 years
Infrastructure 15 to 50 years
Maintenance and repairs are charged to operations when incurred. Betterments and major improvements which significantly increase values, change capacities, or extend useful lives are capitalized. Upon sale or retirement of capital assets, the cost and related accumulated depreciation are removed from the respective accounts and any resulting gain or loss is included in the results of operations.

K. Property Tax
Siskiyou County assesses properties, bills, collects, and distributes property taxes to the City. The County remits the entire amount levied and handles all delinquencies, retaining interest and penalties.

Property taxes are levied on a fiscal year (July 1 - June 30). The secured property tax assessments are due on November 1 and February 1 and become delinquent after December 10 and April 10, respectively. The unsecured property tax assessments are due on August 1 and become delinquent after August 31. Property taxes become a lien on the property effective January 1 of the preceding year.

The City recognizes property taxes when the individual installments are due, provided they are collected within 60 days after year-end.

L. Interfund Transactions
Interfund transactions are reflected as either loans, services provided or used, reimbursements or transfers.

Loans reported as receivables and payables are referred to as either “due to/from other funds” (i.e., the current portion of interfund loans) or “advances to/from other funds” (i.e., the noncurrent portion of interfund loans) as appropriate and are subject to elimination upon consolidation. Any residual balances outstanding between the governmental activities and the business-type activities are reported in the government-wide financial statements as “internal balances.” Advances between funds, as reported in the fund financial statements, are offset by a nonspendable fund balance account in applicable governmental funds to indicate that they are not in spendable form.

Services provided or used, deemed to be at market or near market rates, are treated as revenues and expenditures or expenses. These services provide information on the net cost of each government function and therefore are not eliminated in the process of preparing the government-wide Statement of Activities.

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CITY OF YREKA
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-45-
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) L. Interfund Transactions (Continued)
Reimbursements occur when the funds responsible for particular expenditures or expenses repay the funds that initially paid for them. Such reimbursements are reflected as expenditures or expenses in the reimbursing fund and reductions to expenditures or expenses in the reimbursed fund.

All other interfund transactions are treated as transfers. Transfers between funds are netted as part of the reconciliation to the government-wide presentation.

M. Compensated Absences
In the government-wide financial statements, vested or accumulated vacation leave and compensated time off that is expected to be liquidated with expendable available financial resources is recorded as an expense and related liability with the current portion estimated based on historical trends. In the governmental fund financial statements, the expenditures and liabilities related to those obligations are recognized only when they mature. Vested or accumulated vacation leave and compensated time off of proprietary funds and in the government-wide financial statements is recorded as an expense and liability of those funds as the benefits accrue to employees.

Sick leave, however, does not vest with the employees and is payable only when sick leave is taken. In accordance with GASB Statement No. 16, no liability is recorded for non-vesting accumulating rights to receive sick pay benefits.

N. Pension
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pension, and pension expense, information about the fiduciary net position of the City’s California Public Employees’ Retirement System (CalPERS) plan (Plan) and additions to/deductions from the Plan’s fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.

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

Valuation Date June 30, 2020
Measurement Date June 30, 2021
Measurement Period July 1, 2020 to June 30, 2021
O. Other Postemployment Benefits (OPEB)
For purposes of measuring the net OPEB liability/asset, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the City’s plan (OPEB Plan) and additions to/deductions from the OPEB Plan’s fiduciary net position have been determined on the same basis. For this purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms.

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CITY OF YREKA
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-46-
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) O. Other Postemployment Benefits (OPEB) (Continued)
Generally accepted accounting principles require that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used:

Valuation Date June 30, 2020
Measurement Date June 30, 2021
Measurement Period June 30, 2020 to June 30, 2021
P. Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period and so will not be recognized as an outflow of resources (expense) until then. The City has two items that qualify for reporting in this category. These items relate to the outflows from changes in the net pension liability and net OPEB liability/asset and are reportable on the Statement of Net Position.

In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period and so will not be recognized as an inflow of resources (revenue) until that time. The City has three items which qualify for reporting in this category. The first item, unavailable revenue is reported only in the governmental funds balance sheet.

The governmental funds report unavailable revenue for receivables that have not been received within the modified accrual period. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. The second and third items relate to the inflows from changes in the net pension liability and net OPEB liability/asset and are reportable on the Statement of Net Position.

Q. Estimates
The preparation 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 certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

R. Implementation of Governmental Accounting Standards Board (GASB) Statements The following Governmental Accounting Standards Board (GASB) Statements have been implemented, if applicable, in the current financial statements.

Statement No. 87, Leases. This Statement increases the usefulness of governments’ financial statements by requiring recognition of certain lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract.

Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period. This statement enhances the relevance and comparability of information about capital assets and the cost of borrowing for a reporting period and simplifies accounting for interest cost incurred before the end of a construction period.

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CITY OF YREKA
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-47-
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) R. Implementation of Governmental Accounting Standards Board (GASB) Statements (Continued) Statement No. 92, Omnibus 2020. This Statement will enhance comparability in the application of accounting and financial reporting requirements and will improve the consistency of authoritative literature.

Statement No. 93, Replacement of Interbank Offered Rates. The objective of this Statement is to address implications of GASB Statement No. 53 and GASB Statement No. 87 and other accounting and financial reporting implications that result from the replacement of an IBOR.

Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans. The requirements of this Statement will result in more consistent financial reporting of defined contribution pension plans, defined contribution OPEB plans, and other employee benefit plans, while mitigating the costs associated with reporting those plans.

The requirements also will enhance the relevance, consistency, and comparability of (1) the information related to Section 457 plans that meet the definition of a pension plan and the benefits provided through those plans and (2) investment information for all Section 457 plans.

S. Future Accounting Pronouncements
The following GASB Statements will be implemented, if applicable, in future financial statements:

Statement No. 91 “Conduit Debt Obligations” The requirements of this statement are effective for periods beginning after December 15, 2021. (FY 22/23)
Statement No. 94 “Public-Private and Public-Public Partnerships and Availability Payment Arrangements” The requirements of this statement are effective for periods beginning after June 15, 2022. (FY 22/23)
Statement No. 96 “Subscription-Based Information Technology Arrangements” The requirements of this statement are effective for periods beginning after June 15, 2022. (FY 22/23) NOTE 2: CASH AND INVESTMENTS
A. Financial Statement Presentation
As of June 30, 2022, the City’s cash and investments are reported in the financial statements as follows:

Governmental activities $ 16,557,669
Business-type activities 12,479,891
Fiduciary funds 19,219
Total Cash and Investments $ 29,056,779

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CITY OF YREKA
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-48-
NOTE 2: CASH AND INVESTMENTS (CONTINUED)
A. Financial Statement Presentation (Continued)
As of June 30, 2022, the City’s cash and investments consisted of the following:

Cash:

Cash on hand $ 1,200
Deposits (less outstanding checks) 2,733,942
Total Cash 2,735,142
Investments:

In City’s pool 26,321,637
Total Investments 26,321,637
Total Cash and Investments $ 29,056,779
B. Cash
At year end, the carrying amount of the City’s cash deposits (including amounts in checking accounts) was $2,733,942 and the bank balance was $2,702,735. The difference between the bank balance and the carrying amount represents outstanding checks and deposits in transit. In addition, the City had cash on hand of $1,200.

Custodial Credit Risk for Deposits - Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, the City will not be able to recover its deposits or collateral securities that are in the possession of an outside party. The City’s investment policy requires that deposits in banks must meet the requirements of the California Government Code. Under this code, deposits of more than $250,000 must be collateralized at 105 percent to 150 percent of the value of the deposit to guarantee the safety of the public funds. The first $250,000 of the City’s deposits are insured by the Federal Deposit Insurance Corporation (FDIC). Deposits of more than the $250,000 insured amount are collateralized.

C. Investments
The City has an investment policy, the purpose of which is to establish guidelines for prudent investment of the City’s funds, and outline the policies for maximizing the efficiency of the City’s cash management program. The ultimate goal is to enhance the economic status of the City while protecting its pooled investments.

The investment policy provides the basis for the management of a prudent, conservative investment program. Funds are invested to provide the maximum security of principal with secondary emphasis on achieving the highest return, while meeting daily cash flow needs. All investments are made in accordance with the Government Code and, in general, the investment policy is more restrictive than state law.

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CITY OF YREKA
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-49-
NOTE 2: CASH AND INVESTMENTS (CONTINUED)
C. Investments (Continued)
Under the provisions of the City’s investment policy the City may invest or deposit in the following:

U.S. Treasury Obligations
U.S. Government Agency Securities and Instrumentalities of Government Sponsored Corporations Bankers’ Acceptances
Commercial Paper
Repurchase Agreements
Time Deposits and Certificates of Deposit
Negotiable Certificates of Deposit
State of California Local Agency Investment Fund (LAIF) Fair Value of Investments - The City measures and records its investments using fair value measurement guidelines established by generally accepted accounting principles. These guidelines recognize a threetiered fair value hierarchy as follows:

Level 1: Quoted prices for identical investments in active markets; Level 2: Observable inputs other than quoted market prices; and, Level 3: Unobservable inputs
The City’s position in external investment pools is in itself regarded as a type of investment and looking through to the underlying investments of the pool is not appropriate. Therefore, the City’s investments in external investment pools are not recognized in the three-tiered fair value hierarchy described above.

At June 30, 2022, the City had the following recurring fair value measurements:

Fair Value Measurements Using
Investment Type Fair Value Level 1 Level 2 Level 3
Investments by Fair Value Level
Certificates of Deposit $ 2,664,624 $ 2,664,624 $ - $ - Total Investments Measured at Fair Value 2,664,624 $ 2,664,624 $ - $ - Investments in External Investment Pool
LAIF 23,657,013
Total Investments $ 26,321,637
Interest Rate Risk - Interest rate risk is the risk of loss due to the fair value of an investment falling due to interest rates rising. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. To limit the exposure to fair value losses resulting from increases in interest rates, the City’s investment policy limits investment maturities to a term appropriate to the need for funds so as to permit the City to meet all projected obligations.

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CITY OF YREKA
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-50-
NOTE 2: CASH AND INVESTMENTS (CONTINUED)
C. Investments (Continued)
As of June 30, 2022, the City had the following investments, all of which had a maturity of 5 years or less:

Maturities Weighted
Average
Interest Fair Maturity
Investment Type Rates 0-1 year 1-5 years Value (Years)
Certificates of Deposit 0.900-2.700% $ 1,714,314 $ 950,310 $ 2,664,624 1.00 LAIF Variable 23,657,013 - 23,657,013 -
Total Investments $ 25,371,327 $ 950,310 $ 26,321,637 0.10 Credit Risk - Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. The City’s investment policy sets specific parameters by type of investment to be met at the time of purchase. Presented below is the minimum rating required (where applicable) by the California Government Code or the City’s investment policy and the actual rating as of year-end for each investment type.

Standard &
Minimum Legal Poor’s Moody’s % of
Investment Type Rating Rating Rating Portfolio
Certificates of Deposit N/A NR NR 10.12%
LAIF N/A NR NR 89.88%
Total 100.00%
Custodial Credit Risk - Custodial credit risk for investments is the risk that, in the event of the failure of a depository financial institution, the City will not be able to recover its deposits or collateral securities that are in the possession of an outside party. To mitigate the custodial credit risk the City’s investment policy requires that all securities owned by the City shall be held in safekeeping by a third-party bank trust department.

Concentration of Credit Risk - Concentration of credit risk is the risk of loss attributed to the magnitude of the City’s investment in a single issuer of securities. When investments are concentrated in one issuer, this concentration presents a heightened risk of potential loss. The City’s investment policy states that no more than 50 percent of the City’s total investment portfolio shall be invested in a single security type or with a single financial institution. Unless matched to a specific cash flow, the City shall not directly invest in securities maturing more than five years from the date of purchase. Investments in any one issuer (other than U.S. Treasury securities, mutual funds, and external investment pools) at June 30, 2022 did not exceed 5 percent.

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CITY OF YREKA
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-51-
NOTE 2: CASH AND INVESTMENTS (CONTINUED)
D. Investment in External Investment Pool
The City of Yreka maintains an investment in the State of California Local Agency Investment Fund (LAIF), managed by the State Treasurer. This fund is not registered with the Securities and Exchange Commission as an investment company, but is required to invest according to California State Code. The Local Investment Advisory Board (Board) has oversight responsibility for LAIF. The Board consists of five members as designated by State Statute. At June 30, 2022, the City’s investment in LAIF valued at amortized cost was $23,657,013 and is the same as the value of the pool shares. There are no restrictions on withdrawal of funds. The total amount invested by all public agencies in LAIF on that day was $231.6 billion. Of that amount, 98.12 percent is invested in non-derivative financial products and 1.88 percent in structured notes and asset-backed securities.

NOTE 3: CAPITAL ASSETS
Capital assets activity for the year ended June 30, 2022, was as follows:

Balance Transfers/ Balance
July 1, 2021 Additions Retirements Adjustments June 30, 2022 Governmental Activities
Capital Assets, Not Being Depreciated
Land $ 2,207,241 $ - ($ 2,276) $ - $ 2,204,965
Construction in progress 1,298,590 105,792 - - 1,404,382 Total Capital Assets, Not Being
Depreciated

3,505,831 105,792

( 2,276) - 3,609,347
Capital Assets, Being Depreciated
Building and structures 11,764,744 - - - 11,764,744
Machinery and equipment 5,123,989 245,379 - 527,368 5,896,736 Infrastructure 34,658,635 - - ( 527,368) 34,131,267
Total Capital Assets, Being Depreciated 51,547,368 245,379 - - 51,792,747 Less Accumulated Depreciation For:

Building and structures ( 4,158,241) ( 275,485) - - ( 4,433,726) Machinery and equipment ( 2,963,841) ( 329,081) - - ( 3,292,922) Infrastructure ( 23,712,982) ( 585,622) - - ( 24,298,604) Total Accumulated Depreciation ( 30,835,064) ( 1,190,188) - - ( 32,025,252) Total Capital Assets, Being Depreciated,
Net 20,712,304 ( 944,809) - - 19,767,495
Governmental Activities Capital Assets,
Net $ 24,218,135 ($ 839,017) ($ 2,276) $ - $ 23,376,842

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CITY OF YREKA
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-52-
NOTE 3: CAPITAL ASSETS (CONTINUED)
Balance Transfers/ Balance
July 1, 2021 Additions Retirements Adjustments June 30, 2022 Business-Type Activities
Capital Assets, Not Being Depreciated
Land $ 374,428 $ - $ - $ - $ 374,428
Construction in progress 1,087,741 10,276,704 - - 11,364,445 Total Capital Assets, Not Being
Depreciated

1,462,169 10,276,704

- - 11,738,873
Capital Assets, Being Depreciated
Building and structures 12,425,795 - - 67,878 12,493,673 Machinery and equipment 8,626,674 - - ( 67,878) 8,558,796 Infrastructure 29,429,842 - - - 29,429,842
Total Capital Assets, Being Depreciated 50,482,311 - - - 50,482,311 Less Accumulated Depreciation For:

Building and structures ( 5,450,572) ( 294,191) - - ( 5,744,763) Machinery and equipment ( 5,377,909) ( 209,969) - - ( 5,587,878) Infrastructure ( 15,057,399) ( 772,343) - - ( 15,829,742) Total Accumulated Depreciation ( 25,885,880) ( 1,276,503) - - ( 27,162,383) Total Capital Assets, Being Depreciated,
Net 24,596,431 ( 1,276,503) - - 23,319,928
Business-Type Activities Capital Assets,
Net $ 26,058,600 $ 9,000,201 $ - $ - $ 35,058,801
Depreciation
Depreciation expense was charged to governmental activities as follows:

General government $ 59,878
Public safety 336,053
Public ways and facilities 615,898
Culture and recreation 178,359
Total Depreciation Expense – Governmental Activities $ 1,190,188 Depreciation expense was charged to the business-type activities as follows:

Sewer $ 594,140
Water 682,363
Total Depreciation Expense – Business-Type Activities $ 1,276,503 Construction in Progress
Construction in progress for governmental activities relates primarily to work performed on street improvements, storm drains and information system improvements. Construction in progress for businesstype activities relates primarily to sewer and water upgrades.

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CITY OF YREKA
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-53-
NOTE 4: INTERFUND TRANSACTIONS
Due From/To Other Funds
During the course of operations, transactions occur between funds to account for goods received or services rendered. These receivables and payables are classified as due from or due to other funds. In addition, when funds overdraw their share of pooled cash, the receivables and payables are also classified as due from or due to other funds.

The following are due to and due from balances as of June 30, 2022:

Due From Due To
Other Funds Other Funds
Sewer $ 67,754 $ -
Water - 67,754
Total $ 67,754 $ 67,754
Transfers
Transfers are indicative of funding for capital projects, lease payments or debt service and re-allocations of special revenues. The following are the interfund transfers for fiscal year ended June 30, 2022:

Transfers In Transfers Out
General fund $ 94,843 $ 2,430,306
Streets and Roads fund 596,006 -
Special Revenue fund - 302,147
Special Grants fund 1,834,300 -
Sewer fund 46,548 -
Water fund 160,756 -
Total $ 2,732,453 $ 2,732,453
NOTE 5: UNEARNED REVENUES
At June 30, 2022, the components of unearned revenue were as follows:

Unearned
General Fund
Coronavirus State and Local Fiscal Relief Funds received in advance $ 449,617 Special Grants
Funds received in advance 100,000
Total $ 549,617

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CITY OF YREKA
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-54-
NOTE 6: LONG-TERM LIABILITIES
The following is a summary of changes in long-term liabilities for the year ended June 30, 2022:

Amounts
Balance Additions/ Balance Due Within
Type of Indebtedness July 1, 2021 Adjustments Retirements June 30, 2022 One Year Governmental Activities
Compensated absences $ 262,892 $ 275,346 ($ 294,421) $ 243,817 $ 200,000 Loans from direct borrowings 1,424,053 - ( 98,195) 1,325,858 103,491 Certificates of participation 2,631,000 - ( 34,000) 2,597,000 35,000 Capital leases 437,652 - ( 85,065) 352,587 86,280
Total Governmental Activities $ 4,755,597 $ 275,346 ($ 511,681) $ 4,519,262 $ 424,771 Business-Type Activities
Compensated absences $ 71,689 $ 107,280 ($ 120,805) $ 58,164 $ 58,164 Loans from direct borrowings - 4,632,573 - 4,632,573 -
Certificates of participation 10,167,000 - ( 221,000) 9,946,000 227,000 Capital leases 367,235 - ( 80,835) 286,400 82,171
Total Business-Type Activities $ 10,605,924 $ 4,739,853 ($ 422,640) $ 14,923,137 $ 367,335 Compensated absences are generally liquidated by the fund where the accrued liability occurred. Individual issues of debt payable outstanding at June 30, 2022, are as follows:

For the business-type activities, all debt is accounted for in the proprietary fund where the liability occurred.

On September 2, 2021, the City obtained a bond anticipation note from the Banner Bank in the amount of $6,098,000 to finance the Main Street Sewer Interceptor Improvement Project. As of June 30, 2022, the City had not drawn down the full amount of the bond anticipation note funds and the balance outstanding is $4,632,573. The entire principal balance is due July 1, 2024.

Governmental Activities
Loans from Direct Borrowings:

County of Siskiyou loan, dated May 8, 2007, payable in annual installments of $175,000, with an interest rate of 5.93% and maturity of May 8, 2032. This loan was used to finance the sale of the landfill site. The loan is secured by an assessment to the taxpayers’ property.

Total Loans from Direct Borrowings
Certificates of Participation:
2019 Certificates of Participation, dated September 7, 2018, payable in annual installments of $36,000 to $122,000, with an interest rate of 3.50% and maturity of April 1, 2059. These Certificates of Participation were used to finance the construction of the City’s police department facilities and are secured by the facilities.

Total Certificates of Participation
Total Governmental Activities
$ 1,325,858
1,325,858
2,597,000
2,597,000
$ 3,922,858

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CITY OF YREKA
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-55-
NOTE 6: LONG-TERM LIABILITIES (CONTINUED)
Business-Type Activities
Loans from Direct Borrowings:

Banner Bank Series 2021 Wastewater Revenue Bond Anticipation Note, dated September 2, 2021, in the amount of $6,098,000 with an interest rate of 2.43%, payable at maturity on July 1, 2024. Interest on the unpaid balance is payable semiannually on each January 1 and July 1 until the principal amount is paid in full. The note proceeds were used to finance the Main Street Sewer Interceptor Improvement Project.

Total Loans from Direct Borrowings
Certificates of Participation:
2012 Wastewater Certificates of Participation, dated February 6, 2014, payable in semiannual principal installments of $84,000 to $164,000, with an interest rate of

2.75%, and maturity of January 1, 2054. These Certificates of Participation were used to finance improvements to the City’s wastewater collection, treatment and disposal system and are secured by the wastewater system. 2010 Water Certificates of Participation, dated October 1, 2010, payable in annual principal installments of $111,000 to $257,000, with an interest rate of 2.25%, and maturity of October 1, 2050. These Certificates of Participation were used to finance improvements to the City’s water facilities and are secured by the water system.

Total Certificates of Participation
Total Business-Type Activities
$ 4,632,573
4,632,573
4,366,000
5,580,000
9,946,000
$ 14,578,573
Following is a schedule of debt payment requirements to maturity for long-term debt, excluding compensated absences that have indefinite maturities.

Governmental Activities
Loans from Direct Borrowings
Year Ended
June 30 Principal Interest Total
2023 $ 103,492 $ 71,508 $ 175,000
2024 109,073 65,927 175,000
2025 114,956 60,044 175,000
2026 121,156 53,844 175,000
2027 127,690 47,310 175,000
2028-2032 749,491 125,509 875,000
Total $ 1,325,858 $ 424,142 $ 1,750,000

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CITY OF YREKA
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-56-
NOTE 6: LONG-TERM LIABILITIES (CONTINUED)
Governmental Activities (Continued)
Certificates of Participation
Year Ended
June 30 Principal Interest Total
2023 $ 35,000 $ 90,895 $ 125,895
2024 37,000 89,670 126,670
2025 38,000 88,375 126,375
2026 39,000 87,045 126,045
2027 41,000 85,680 126,680
2028-2032 226,000 405,930 631,930
2033-2037 267,000 363,580 630,580
2038-2042 317,000 313,565 630,565
2043-2047 377,000 254,030 631,030
2048-2052 448,000 183,225 631,225
2053-2057 532,000 99,155 631,155
2058-2059 240,000 12,670 252,670
Total $ 2,597,000 $ 2,073,820 $ 4,670,820
Business-Type Activities
Certificates of Participation
Year Ended
June 30 Principal Interest Totals
2023 $ 227,000 $ 242,841 $ 469,841
2024 232,000 237,233 469,233
2025 237,000 231,501 468,501
2026 243,000 225,634 468,634
2027 249,000 219,616 468,616
2028-2032 1,340,000 1,002,486 2,342,486
2033-2037 1,512,000 828,020 2,340,020
2038-2042 1,707,000 630,914 2,337,914
2043-2047 1,927,000 408,089 2,335,089
2048-2052 1,910,000 159,255 2,069,255
2053-2054 362,000 9,487 371,487
Total $ 9,946,000 $ 4,195,076 $ 14,141,076
NOTE 7: LEASES
Capital Leases
The City has entered into certain capital lease agreements under which the related equipment will become the property of the City when all terms of the lease agreements are met.

Present Value
of Remaining
Stated Payments at
Interest Rate June 30, 2022
Governmental activities 1.40% $ 352,587
Business-type activities 1.64% 286,400
Total $ 638,987

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CITY OF YREKA
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-57-
NOTE 7: LEASES (CONTINUED)
Capital Leases (Continued)
Equipment and related accumulated depreciation under capital lease are as follows:

Governmental Business-Type
Activities Activities
Equipment $ 437,652 $ 413,780
Less: accumulated depreciation
(depreciation on these assets will start in 2022/2023) - - Net Value $ 437,652 $ 413,780
As of June 30, 2022, capital lease annual amortization is as follows:

Year Ended Governmental Business-Type
June 30 Activities Activities
2023 $ 90,727 $ 86,252
2024 90,727 86,252
2025 90,727 86,252
2026 90,727 35,938
Total Requirements 362,908 294,694
Less: interest ( 10,321) ( 8,294)
Present Value of Remaining Payments $ 352,587 $ 286,400 NOTE 8: NET POSITION
The government-wide and proprietary fund financial statements utilize a net position presentation. Net position is categorized as net investment in capital assets, restricted and unrestricted. • Net investment in capital assets - consists of capital assets including restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes or other borrowings that are attributable to the acquisition, construction or improvement of those assets.
• Restricted net position - consists of net position with constraints placed on the use either by (1) external groups such as creditors, grantors, contributors or laws or regulations of other governments; or (2) law through constitutional provisions or enabling legislation. These principally include restrictions for capital projects, debt service requirements and other special revenue fund purposes.
• Unrestricted net position - all other net position that does not meet the definition of “restricted” or “net investment in capital assets”.

Net Position Flow Assumption
When a government funds outlays for a particular purpose from both restricted and unrestricted resources, a flow assumption must be made about the order in which the resources are considered to be applied. When both restricted and unrestricted net position are available, it is considered that restricted resources are used first, followed by the unrestricted resources.

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CITY OF YREKA
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-58-
NOTE 8: NET POSITION (CONTINUED)
Net Position Restricted by Enabling Legislation
The government-wide Statement of Net Position reports $7,389,029 of restricted net position, of which $2,289,101 is restricted by enabling legislation.

NOTE 9: FUND BALANCES
As prescribed by GASB Statement No. 54, governmental funds report fund balance in classifications based primarily on the extent to which the City is bound to honor constraints on the specific purposes for which amounts in the funds can be spent. Fund balances for governmental funds can be made up of the following:
• Nonspendable fund balance - amounts that cannot be spent because they are either (a) not in spendable form, or (b) legally or contractually required to be maintained intact. The “not in spendable form” criterion includes items that are not expected to be converted to cash, for example:
inventories and prepaid amounts.
• Restricted fund balance - amounts with constraints placed on their use that are either (a) externally imposed by creditors, grantors, contributors, or laws or regulations of other governments; or (b) imposed by law through constitutional provisions or enabling legislation. Restrictions may effectively be changed or lifted only with the consent of resource providers. • Committed fund balance - amounts that can only be used for the specific purposes determined by formal action of the City’s highest level of decision-making authority. The City Council is the highest level of decision-making authority for the City that can, by adoption of an ordinance, commit fund balance. Once adopted, the limitation imposed remains in place until a similar action is taken to remove or revise the limitation. The underlying action that imposed the limitation needs to occur no later than the close of the reporting period. • Assigned fund balance - amounts that are constrained by the City’s intent to be used for specific purposes. The intent can be established at either the highest level of decision-making authority, or by a body or an official designated for that purpose.
• Unassigned fund balance - the residual classification for the City’s General fund that includes all amounts not contained in the other classifications. In other funds, the unassigned classification is used only if expenditures incurred for specific purposes exceed the amounts restricted, committed, or assigned to those purposes.

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CITY OF YREKA
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-59-
NOTE 9: FUND BALANCES (CONTINUED)
The fund balances for all major and nonmajor governmental funds as of June 30, 2022, were distributed as follows:

Streets and Special Special
General Roads Revenue Grants Totals
Nonspendable:

Loans Receivable $ - $ - $ - $ 173,762 $ 173,762
Inventory 41,014 - - - 41,014
Subtotal 41,014 - - 173,762 214,776
Restricted for:

Community Services 27,695 - - - 27,695
Capital Improvements 438,950 - - - 438,950
Streets and Sidewalks - 1,011,475 - - 1,011,475
Fire Protection - - 1,057,949 - 1,057,949
Debt Servicing 500,052 - 219,677 - 719,729
Revolving Loans - - - 646,334 646,334
Public Safety - - - 702,930 702,930
Subtotal 966,697 1,011,475 1,277,626 1,349,264 4,605,062 Assigned for:

Capital Improvements 1,087,436 - - 1,664,813 2,752,249
Planning and Development 134,020 - - 270,199 404,219
Budget Stabilization 100,000 - - - 100,000
Grant Contingencies 1,289,022 - - - 1,289,022
Subtotal 2,610,478 - - 1,935,012 4,545,490
Unassigned 7,186,034 - - - 7,186,034
Total $ 10,804,223 $ 1,011,475 $ 1,277,626 $ 3,458,038 $ 16,551,362 Fund Balance Flow Assumption
When a government funds outlays for a particular purpose from both restricted and unrestricted resources (the total of committed, assigned, and unassigned fund balance), a flow assumption must be made about the order in which the resources are considered to be applied. When both restricted and unrestricted fund balance are available, it is considered that restricted fund balance is depleted before using any of the components of unrestricted fund balance. Further, when the components of unrestricted fund balance can be used for the same purpose, committed fund balance is depleted first, followed by assigned fund balance.

Unassigned fund balance is applied last.

Fund Balance Policy
The City Council has adopted a fund balance policy for financial statement reporting. The policy establishes procedures for reporting fund balance classifications, establishes prudent reserve requirements and establishes a hierarchy of fund balance expenditures.

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CITY OF YREKA
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-60-
NOTE 10: PENSION PLAN
A. General Information about the Pension Plan
Plan Description
All qualified permanent and probationary employees are eligible to participate in the City’s separate Safety (police and fire) and Miscellaneous (all other) Employee Pension Plan, a cost-sharing multiple-employer defined benefit pension plan administered by the California Public Employees’ Retirement System (CalPERS). Benefit provisions under the Plan are established by State statute and City resolution.

CalPERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.

Effective January 1, 2013, the City added retirement tiers for the Miscellaneous and Safety Rate Tiers for new employees as required under the Public Employee Pension Reform Act (PEPRA). New employees hired on or after January 1, 2013 will be subject to new, lower pension formulas, caps on pensionable income levels and new definitions of pensionable income. In addition, new employees will be required to contribute half of the total normal cost of the pension benefit unless impaired by an existing Memorandum of Understanding. The cumulative effect of these PEPRA changes will ultimately reduce the City’s retirement costs.

Summary of Rate Tiers and Eligible Participants
Open for New Enrollment
Miscellaneous PEPRA Miscellaneous members hired on or after January 1, 2013 Safety PEPRA Safety members hired on or after January 1, 2013 Closed to New Enrollment
Miscellaneous Miscellaneous members hired before January 1, 2013 Safety Safety members hired before January 1, 2013
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 (age 52 for Miscellaneous Plan members if the membership date is on or after January 1, 2013) with statutorily reduced benefits. Retirement benefits are paid monthly for life. All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost-of-living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.

Each Rate Tier’s specific provisions and benefits in effect at June 30, 2022, are summarized as follows:

Monthly Benefits
Benefit Retirement as a % of
Formula Age Eligible Compensation
Miscellaneous 2.0% @ 55 50-55 1.426% to 2.418%
Miscellaneous PEPRA 2.0% @ 62 52-62 1.000% to 2.500%
Safety 2.0% @ 50 50 2.000% to 2.700%
Safety PEPRA 2.7% @ 57 50-57 2.000% to 2.700%

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CITY OF YREKA
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-61-
NOTE 10: PENSION PLAN (CONTINUED)
A. General Information about the Pension Plan (Continued) Contributions
Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for all Plans are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees.

Employer Employee Employer Paid
Contribution Contribution Member
Rates Rates Contribution Rates
Miscellaneous 10.340% 7.000% 0.000%
Miscellaneous PEPRA 7.590% 6.750% 0.000%
Safety 18.190% 9.000% 0.000%
Safety PEPRA 13.130% 13.000% 0.000%
For the year ended June 30, 2022, the contributions recognized as part of pension expense were as follows:

Contributions-Employee
Contributions-Employer (Paid by Employer)
Miscellaneous $ 593,700 $ -
Safety 426,493 -
B. Pension Liability, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pension
The City’s net pension liability for the Plan is measured as the proportionate share of the net pension liability. The net pension liability of the Plan is measured as of June 30, 2021, and the total pension liability for the Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2020 rolled forward to June 30, 2021 using standard update procedures. The City’s proportion of the net pension liability was based on a projection of the City’s long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined.

The City’s proportionate share of the net pension liability for the Plan as of June 30, 2021 and 2022 was as follows:

Proportion Proportion Change-
June 30, 2021 June 30, 2022 Increase (Decrease)
Miscellaneous .13990% .19315% .05325%
Safety .06130% .07256% .01126%

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CITY OF YREKA
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-62-
NOTE 10: PENSION PLAN (CONTINUED)
B. Pension Liability, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pension (Continued)
As of June 30, 2022, the City reported a net pension liability for its proportionate share of the net pension liability of the Plan as follows:

Proportionate
Share of Net
Pension Liability
Miscellaneous $ 3,667,569
Safety 2,546,483
Total Net Pension Liability $ 6,214,052
For the year ended June 30, 2022, the City recognized pension expense of $438,574. At June 30, 2022, the City reported deferred outflows of resources and deferred inflows of resources related to pension from the following sources:

Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to the measurement date $ 1,134,581 $ - Difference between expected and actual experience 850,182 ( 3,839) Difference between projected and actual earnings on
pension plan investments 27,140 ( 4,744,376)
Difference between City contributions and proportionate share of contributions 98,428 ( 634,793)
Adjustment due to differences in proportions 1,776,565 ( 62,360) Total $ 3,886,896 ($ 5,445,368)
$1,134,581 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 ended June 30, 2023. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pension will be recognized as pension expense as follows:

Fiscal
Year Ended
June 30
2023 ($ 347,354)
2024 ( 384,933)
2025 ( 658,923)
2026 ( 1,301,843)
Thereafter -
Total ($ 2,693,053)

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CITY OF YREKA
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-63-
NOTE 10: PENSION PLAN (CONTINUED)
B. Pension Liability, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pension (Continued)
Actuarial Assumptions
The total pension liabilities in the June 30, 2020 actuarial valuations were determined using the following actuarial assumptions:

Valuation Date June 30, 2020
Measurement Date June 30, 2021
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions:

Discount Rate 7.15%
Investment Rate of Return 7.15%
Inflation 2.50%
Salary Increases Varies by entry-age and service
Mortality Rate Table Derived using CalPERS’ membership data for all funds Post-Retirement Benefit Increase Contract COLA up to 2.50% until Purchasing Power Protection Allowance Floor on Purchasing Power applies
The mortality table used was developed based on CalPERS-specific data. The table includes 15 years of mortality improvements using Society of Actuaries Scale 90 percent of scale MP 2016. For more details on this table, please refer to the December 2017 Experience Study report (based on CalPERS demographic data from 1997 to 2015) that can be found on the CalPERS website.

Discount Rate
The discount rate used to measure the total pension liability was 7.15 percent. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

Long-Term Expected Rate of Return
The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.

In determining the long-term expected rate of return, CalPERS took into account both short-term and longterm market return expectations as well as the expected pension fund cash flows. Using historical and forecasted information for all of 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 adjusted to account for assumed administrative expenses.

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CITY OF YREKA
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-64-
NOTE 10: PENSION PLAN (CONTINUED)
B. Pension Liability, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pension (Continued)
Long-Term Expected Rate of Return (Continued)
The table below reflects the long-term expected real rate of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation.

These rates of return are net of administrative expenses.

Assumed
Asset Real Return Real Return
Asset Class Allocation Years 1-10(a) Years 11+(b)
Global Equity 50.0% 4.80% 5.98%
Fixed Income 28.0% 1.00% 2.62%
Inflation Assets 0.0% 0.77% 1.81%
Private Equity 8.0% 6.30% 7.23%
Real Assets 13.0% 3.75% 4.93%
Liquidity 1.0% 0.00% -0.92%
Total 100.0%
(a) An expected inflation of 2.00% used for this period (b) An expected inflation of 2.92% used for this period Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate The following presents the City’s proportionate share of the net pension liability for each Rate Tier as of the measurement date, calculated using the discount rate for each Plan, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1- percentage point lower or 1-percentage point higher than the current rate:
1% Discount 1%
Decrease Rate Increase

6.15% 7.15% 8.15%
Miscellaneous $ 6,669,570 $ 3,667,569 $ 1,185,858
Safety 4,586,346 2,546,483 870,987
Pension Plan Fiduciary Net Position
Detailed information about the pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.

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CITY OF YREKA
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-65-
NOTE 11: OTHER POSTEMPLOYMENT BENEFITS (OPEB)
A. General Information about the OPEB Plan
Plan Description
The City’s defined benefit OPEB plan (the Plan) provides OPEB to retirees of the City. The Plan is an agent multiple-employer defined benefit plan administered by the California Public Employees’ Retirement System (CalPERS). The City Council reserves the authority to review and amend the funding policy from time to time, in order to ensure that the funding policy continues to best suit the circumstances of the City.

Benefits Provided
The City provides retiree medical, dental and vision insurance coverage. Only medical coverage is subsidized by the City.

If dental and/or vision coverage is selected, the retiree must pay 100 percent of the premiums. Since no OPEB liability is expected with respect to dental or vision coverage for retirees, neither is considered in the valuation of the net OPEB liability.

Medical coverage is currently provided through CalPERS as permitted under the Public Employees’ Medical and Hospital Care Act (PEMHCA). This coverage requires the employee to satisfy the requirements for retirement under CalPERS: either (a) attainment of age 50 (age 52, if a miscellaneous PEPRA employee) with 5 years of State or public agency service or (b) an approved disability retirement.

The employee must begin his or her retirement (“pension”) benefit within 120 days of terminating employment with the City to be eligible to continue medical coverage through the City and be entitled to the employer subsidy described below.

If an eligible employee is not already enrolled in the medical plan, he or she may enroll within 60 days of retirement or during any future open enrollment period. Coverage may be continued at the retiree’s option for his or her lifetime. A surviving spouse and other eligible dependents may also continue coverage.

As a PEMHCA employer, the City is obligated to contribute toward the cost of retiree medical coverage for the retiree’s lifetime or until coverage is discontinued. The City’s current PEMHCA resolution on file with CalPERS, executed in 2001, defines the City’s contribution toward the cost of medical plan premiums for active and retired employees to be the PEMHCA Minimum Employer Contribution (MEC). The MEC was $143 per month in 2021 and increased to $149 per month in 2022.

Contributions
The City plans to prefund its OPEB liability by contributing 100 percent or more of the Actuarially Determined Contributions each year. The annual contribution is based on the actuarially determined contribution. For the fiscal year ended June 30, 2022, the City’s cash contributions were $96,438 in payments to the trust. The City has created a trust with California Employers’ Retiree Benefit Trust (CERBT) for the purpose of prefunding obligations for past services.

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CITY OF YREKA
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-66-
NOTE 11: OTHER POSTEMPLOYMENT BENEFITS (OPEB) (CONTINUED) A. General Information about the OPEB Plan (Continued)
Employees Covered by Benefit Terms
At June 30, 2022 the following employees were covered by the benefit terms:

Active employees waiving coverage 17
Inactive employees or beneficiaries currently receiving benefit payments 11 Active employees 39
Total 67
B. Net OPEB Liability (Asset)
The City’s net OPEB liability (asset) of ($332,726), was measured as of June 30, 2021, and was determined by the actuarial valuation as of June 30, 2020.

Actuarial Assumptions and Other Inputs
The net OPEB liability (asset) in the June 30, 2020 actuarial valuation was determined using the following actuarial assumptions and other inputs, applied to all periods included in the measurement, unless otherwise specified:

Valuation Date June 30, 2020
Funding Method Entry Age Normal Cost, level of percent of pay Asset Valuation Method Market value of assets
Discount Rate 6.45%
Participants Valued Only current active and retired participants. No future entrants are considered in the valuation.

Salary Increase 3.00% per year; allocates the cost of benefits between service years General Inflation Rate 2.5% per year
Healthcare cost trend rates 5.8% for 2021, decreasing 0.1% per year to an ultimate rate of 4.0% for 2076 and later years
Demographic actuarial assumptions used in the June 30, 2020 valuation are based on the 2017 experience study of the California Public Employees Retirement System using data from 1997 to 2015, except for a different basis used to project future mortality improvements. The representative mortality rates were those published by CalPERS’ adjusted to back out 15 years of Scale MD 2016 to central year 2015.

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CITY OF YREKA
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-67-
NOTE 11: OTHER POSTEMPLOYMENT BENEFITS (OPEB) (CONTINUED) C. Changes in the Net OPEB Liability (Asset)
The table below shows the changes in the total OPEB liability (asset), the Plan Fiduciary Net Position (i.e.

Fair value of the Plan assets), and the net OPEB liability (asset) during the measurement period ending on June 30, 2021 for the City’s proportionate share.

Increases (Decreases)
Total OPEB Plan Net OPEB
Liability Fiduciary Liability
(Asset) Net Position (Asset)
(a) (b) (a) – (b)
Balances at Fiscal Year Ending June 30, 2021 $ 1,057,158 $ 1,092,868 ($ 35,710) Changes during the period:

Service cost 52,289 - 52,289
Interest cost 69,392 - 69,392
Contributions - employer - 193,368 ( 193,368)
Net investment income - 225,750 ( 225,750)
Benefit payments ( 67,217) ( 62,217) -
Administrative expense - ( 421) 421
Net Changes 54,464 351,480 ( 297,016)
Balances at Fiscal Year Ending June 30, 2022 $ 1,111,622 $ 1,444,348 ($ 332,726) Sensitivity of the Net OPEB Liability (Asset) to Changes in the Discount Rate The following presents the net OPEB liability (asset) of the City, as well as what the City’s net OPEB liability (asset) would be if it were calculated using a discount rate that is 1-percentage-point lower or 1- percentage-point higher than the current discount rate:
1% Decrease Discount Rate 1% Increase

5.45% 6.45% 7.45%
Net OPEB Liability (Asset) ($ 174,897) ($ 332,726) ($ 463,423) Sensitivity of the Net OPEB Liability (Asset) to Changes in the Healthcare Cost Trend Rates The following presents the net OPEB liability (asset) of the City, as well as what the City’s net OPEB liability (asset) would be if it were calculated using healthcare cost trend rates that are 1-percentage point lower or 1-percentage point higher than the current healthcare cost trend rates:

Current Trend Current Trend
-1% Current Trend +1%
Net OPEB Liability (Asset) ($ 482,260) ($ 332,726) ($ 145,822)

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CITY OF YREKA
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-68-
NOTE 11: OTHER POSTEMPLOYMENT BENEFITS (OPEB) (CONTINUED) D. OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB
For the year ended June 30, 2022, the City recognized OPEB credit of $36,898. At June 30, 2022, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

Deferred Outflows Deferred Inflows
of Resources of Resources
Contributions made subsequent to the measurement date $ 96,438 $ - Change of assumptions 339 ( 23,485)
Differences between expected and actual experience - ( 347,144) Net difference between projected and actual earnings on investments - ( 115,004) Total $ 96,777 ($ 485,633)
$96,438 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net OPEB liability (asset) in the year ended June 30, 2023.

Other amountsreported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows:

Fiscal
Year Ended
June 30
2023 ($ 84,455)
2024 ( 88,536)
2025 ( 86,759)
2026 ( 88,570)
2027 ( 58,329)
Thereafter ( 78,645)
($ 485,294)
NOTE 12: RISK MANAGEMENT
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters.

There is no claims liability to be reported based on the requirements of Governmental Accounting Standards Board Statement No. 10, which requires that a liability for claims be reported if information prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated.

There are no significant reductions in insurance coverage from prior years and there have been no settlements exceeding the insurance coverages for each of the past three fiscal years.

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CITY OF YREKA
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-69-
NOTE 12: RISK MANAGEMENT (CONTINUED)
The City is a member of the Small Cities Organized Risk Effort joint powers authority (SCORE), which provides the City with liability coverage with limits of $40,000,000 for each occurrence, workers’ compensation coverage with limits to $4,850,000 for each occurrence and property coverage for replacement. SCORE provides these limits and coverage by participating in the California Joint Powers Risk Management Authority (CJPRMA) for excess liability and Local City Workers’ Compensation Excess Liability joint powers authority (LAWCX) for excess workers’ compensation. Property coverage is obtained by a group purchase from insurance companies with the City’s deductible being $10,000 each claim for vehicles and property.

NOTE 13: OTHER INFORMATION
A. Commitments and Contingencies
Amounts received or receivable from grant agencies are subject to audit and adjustment by grantor agencies.

Any disallowed claims, including amounts already collected, may constitute a liability of the appreciable funds. The amount, if any, of expenditures which may be disallowed by the grantor cannot be determined at this time although the government expects such amounts, if any, to be immaterial.

B. Subsequent Events
Management has evaluated events subsequent to June 30, 2022 through March 27, 2023, the date on which the financial statements were available for issuance. Management has determined no subsequent events requiring disclosure have occurred.

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Required Supplementary Information
(Unaudited)

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CITY OF YREKA
Required Supplementary Information
City Pension Plan
Schedule of Proportionate Share of the Net Pension Liability For the Year Ended June 30, 2022
Last 10 Years*
Measurement Date 2013/2014 2014/2015 2015/2016 2016/2017 Miscellaneous
Proportion of the net pension liability 0.04824% 0.11561% 0.12410% 0.12737% Proportionate share of the net pension liability $ 3,001,876 $ 3,171,703 $ 4,311,099 $ 5,021,119 Covered payroll 1,702,490 1,603,577 1,532,020 1,524,699 Proportionate share of the net pension liability
as a percentage of covered payroll 176.32% 197.79% 281.40% 329.32% Plan fiduciary net position as a percentage of the
total pension liability 83.03% 83.86% 77.23% 75.07%
Miscellaneous PEPRA
Proportion of the net pension liability 0.00001% -0.00003% 0.00001% 0.00010% Proportionate share of the net pension liability $ 416 $ (842) $ 196 $ 3,842 Covered payroll 32,329 106,953 295,758 307,014
Proportionate share of the net pension liability
as a percentage of covered payroll 1.29% -0.79% 0.07% 1.25% Plan fiduciary net position as a percentage of the
total pension liability 83.01% 149.81% 98.64% 89.10%
Safety
Proportion of the net pension liability 0.03180% 0.04683% 0.05637% 0.05612% Proportionate share of the net pension liability $ 1,978,889 $ 1,929,584 $ 2,919,427 $ 3,353,532 Covered payroll 860,036 909,068 890,370 910,448
Proportionate share of the net pension liability
as a percentage of covered payroll 230.09% 212.26% 327.89% 368.34% Plan fiduciary net position as a percentage of the
total pension liability 81.42% 82.46% 75.69% 73.76%
Safety PEPRA
Proportion of the net pension liability 0.00000% 0.00001% 0.00003% 0.00008% Proportionate share of the net pension liability $ 12 $ (312) $ 1,562 $ 4,688 Covered payroll 43,053 48,981 104,559 105,369
Proportionate share of the net pension liability
as a percentage of covered payroll 0.03% -0.64% 1.49% 4.45% Plan fiduciary net position as a percentage of the
total pension liability 80.95% 103.20% 92.51% 87.68%
* The City implemented GASB 68 for the fiscal year June 30, 2015, therefore only eight years are shown. -70-

Page 130 of 217 ends

2017/2018 2018/2019 2019/2020 2020/2021

0.13147% 0.13557% 0.13950% 0.19465%
$ 4,954,547 $ 5,428,694 $ 5,884,112 $ 3,696,100
1,624,634 1,605,006 1,618,342 1,576,614
304.96% 338.24% 363.59% 234.43%

76.11% 74.43% 73.18% 83.48%

0.00007% 0.00021% 0.00044% -0.00150%
$ 2,578 $ 8,467 $ 18,706 $ (28,531)
483,923 620,488 746,534 861,936

0.53% 1.36% 2.51% -3.31%

96.12% 93.89% 92.28% 107.72%

0.05808% 0.05929% 0.06109% 0.07267%
$ 3,407,746 $ 3,701,061 $ 4,069,838 $ 2,550,230
973,986 889,848 938,030 913,940
349.88% 415.92% 433.87% 279.04%

73.77% 73.31% 72.49% 83.01%

0.00007% 0.00012% 0.00019% -0.00011%
$ 4,172 $ 7,299 $ 12,794 $ (3,747)
121,049 177,102 186,154 219,378

3.45% 4.12% 6.87% -1.71%

93.45% 92.59% 91.40% 102.62%
-70-

Page 131 of 217 ends

CITY OF YREKA
Required Supplementary Information
City Pension Plan
Schedule of Contributions
For the Year Ended June 30, 2022
Last 10 Years*
Fiscal Year 2014/2015 2015/2016 2016/2017 2017/2018
Miscellaneous
Contractually required contributions (actuarially determined) $ 172,274 $ 171,267 $ 222,568 $ 331,273 Contributions in relation to the actuarially determined contributions (172,274) (171,267) (222,568) (331,273)
Contribution deficiency (excess) $ - $ - $ - $ -
Covered payroll $ 1,603,577 $ 1,532,020 $ 1,524,699 $ 1,624,634 Contributions as a percentage of covered payroll 10.74% 11.18% 14.60% 20.39% Miscellaneous PEPRA
Contractually required contributions (actuarially determined) $ 2,064 $ 6,596 $ 6,505 $ 32,068 Contributions in relation to the actuarially determined contributions (2,064) (6,596) (6,505) (32,068)
Contribution deficiency (excess) $ - $ - $ - $ -
Covered payroll $ 106,953 $ 295,758 $ 307,014 $ 483,923 Contributions as a percentage of covered payroll 1.93% 2.23% 2.12% 6.63% Safety
Contractually required contributions (actuarially determined) $ 182,105 $ 182,568 $ 253,942 $ 283,769 Contributions in relation to the actuarially determined contributions (182,105) (182,568) (253,942) (283,769)
Contribution deficiency (excess) $ - $ - $ - $ -
Covered payroll $ 909,068 $ 890,370 $ 910,448 $ 973,986 Contributions as a percentage of covered payroll 20.03% 20.50% 27.89% 29.13% Safety PEPRA
Contractually required contributions (actuarially determined) $ 5,154 $ 5,633 $ 9,567 $ 14,657 Contributions in relation to the actuarially determined contributions (5,154) (5,633) (9,567) (14,657)
Contribution deficiency (excess) $ - $ - $ - $ -
Covered payroll $ 48,981 $ 104,559 $ 105,369 $ 121,049
Contributions as a percentage of covered payroll 10.52% 5.39% 9.08% 12.11% * The City implemented GASB 68 for the fiscal year June 30, 2015, therefore only eight years are shown. -71-

Page 132 of 217 ends

2018/2019 2019/2020 2020/2021 2021/2022
$ 394,947 $ 470,384 $ 525,137 $ 558,963
(394,947) (470,384) (525,137) (558,963)
$ - $ - $ - $ -
$ 1,605,006 $ 1,618,342 $ 1,576,614 $ 1,278,644

24.61% 29.07% 33.31% 43.72%
$ 43,599 $ 55,191 $ 68,563 $ 105,965
(43,599) (55,191) (68,563) (105,965)
$ - $ - $ - $ -
$ 620,488 $ 746,534 $ 861,936 $ 1,337,805

7.03% 7.39% 7.95% 7.92%
$ 316,062 $ 375,035 $ 394,723 $ 419,336
(316,062) (375,035) (394,723) (419,336)
$ - $ - $ - $ -
$ 889,848 $ 938,030 $ 913,940 $ 661,355

35.52% 39.98% 43.19% 63.41%
$ 22,867 $ 25,888 $ 31,770 $ 50,317
(22,867) (25,888) (31,770) (50,317)
$ - $ - $ - $ -
$ 177,102 $ 186,154 $ 219,378 $ 364,320

12.91% 13.91% 14.48% 13.81%
-71-

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CITY OF YREKA
Required Supplementary Information
City Pension Plan
Notes to City Pension Plan
For the Year Ended June 30, 2022
-72-
NOTE 1: SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY Change of Assumptions and Methods
Benefit Changes: None
Change of Assumptions: None
NOTE 2: SCHEDULE OF CONTRIBUTIONS
Methods and assumptions used to determine the contribution rates were as follows:

Valuation Date June 30, 2019
Actuarial cost method Individual Entry Age Normal
Amortization method Level Percentage of Payroll and Direct Rate Smoothing Remaining amortization period Differs by employer rate plan but no more than 30 years Asset valuation method Fair Value
Discount Rate 7.00%
Payroll Growth 2.75%
Inflation 2.50%
Salary increases Varies based on entry age and service
Investment rate of return 7.00%

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CITY OF YREKA
Required Supplementary Information
City OPEB Plan
Schedule of Changes in the Net OPEB Liability and Related Ratios For the Year Ended June 30, 2022
Last 10 Years*
Measurement Date 2016/2017 2017/2018 2018/2019 2019/2020 Total OPEB Liability
Service Cost $ 61,524 $ 63,524 $ 50,734 $ 52,256
Interest 84,282 90,967 71,533 76,548
Difference between expected and actual experience - (354,506) - (174,296) Change of assumptions - (39,997) - 425
Benefit payments (44,431) (45,488) (46,880) (46,374)
Net Change in Total OPEB Liability 101,375 (285,500) 75,387 (91,441) Total OPEB Liability - Beginning 1,257,337 1,358,712 1,073,212 1,148,599 Total OPEB Liability - Ending (a) $ 1,358,712 $ 1,073,212 $ 1,148,599 $ 1,057,158 Plan Fiduciary Net Position
Contributions - employer $ 44,431 $ 640,362 $ 234,801 $ 252,743 Net investment income - (1,070) 53,584 51,907
Benefit payments (44,431) (45,488) (46,880) (46,374)
Administrative expenses - (109) (147) (461)
Net Change in Plan Fiduciary Net Position - 593,695 241,358 257,815 Plan Fiduciary Net Position - Beginning - - 593,695 835,053 Plan Fiduciary Net Position - Ending (b) $ - $ 593,695 $ 835,053 $ 1,092,868 Net OPEB Liability (Asset) - Ending (a) - (b) $ 1,358,712 $ 479,517 $ 313,546 $ (35,710) Plan fiduciary net position as a percentage of the total OPEB liability 0.00% 55.32% 72.70% 103.38%
Covered-employee payroll $ 3,537,524 $ 3,537,524 $ 3,261,752 $ 3,442,309 Net OPEB liability as a percentage of covered-employee payroll 38.41% 13.56% 9.61% -1.04% * The City implemented GASB 75 for the fiscal year June 30, 2018, therefore only five years are shown. -73-

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2020/2021
$ 52,289
69,392
-
-
(67,217)
54,464
1,057,158
$ 1,111,622
$ 193,368
225,750
(67,217)
(421)
351,480
1,092,868
$ 1,444,348
$ (332,726)
129.93%
$ 3,571,115
-9.32%
-73-

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CITY OF YREKA
Required Supplementary Information
City OPEB Plan
Schedule of Contributions
For the Year Ended June 30, 2022
Last 10 Years*
Fiscal Year 2017/2018 2018/2019 2019/2020 2020/2021
Actuarially determined contributions $ 212,915 $ 86,272 $ 88,800 $ 91,397 Contributions in relation to the actuarially determined contribution (640,362) (242,423) (252,743) (193,368) Contribution deficiency (excess) $ (427,447) $ (156,151) $ (163,943) $ (101,971) Covered-employee payroll $ 3,537,524 $ 3,261,752 $ 3,442,309 $ 3,571,115 Contributions as a percentage of covered-employee payroll 18.10% 7.43% 7.34% 5.41% * The City implemented GASB 75 for the fiscal year June 30, 2018, therefore only five years are shown. -74-

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2021/2022
$ 56,535
(96,438)
$ (39,903)
$ 3,725,290

2.59%
-74-

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CITY OF YREKA
Required Supplementary Information
City OPEB Plan
Notes to City OPEB Plan
For the Year Ended June 30, 2022
-75-
NOTE 1: SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY AND RELATED RATIOS
General Inflation Rate 2.5% per year
Salary Increase 3.0% per year
Spouse Coverage The percentage of retirees assumed to cover a spouse in retirement was assumed to be 70%.

Medical Trend Updated to use the Getzen healthcare trend model sponsored by the Society of Actuaries.

Excise Tax on High-Cost Coverage The excise tax was excluded from the results given the December 2019 repeal of this provision of the Affordable Care Act.

NOTE 2: SCHEDULE OF CONTRIBUTIONS
The actuarially determined contribution (ADC) developed for the City’s fiscal year ending June 30, 2022 was determined and presented in the June 30, 2020 Actuarial Valuation report.

Methods and Assumptions Used to Determine Contributions:

Actuarial cost method Entry Age Normal
Amortization method Level percent of pay
Amortization period 19 years
Asset valuation method Market
Discount rate 6.45%
Salary increases 3.00%
Inflation 2.50%
Healthcare cost trend rates 5.8% to 4% step 0.1%; PEMHCA min 4% Mortality improvement MW Scale 2020 generationally

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CITY OF YREKA
Required Supplementary Information
Budgetary Comparison Schedule
General Fund
For the Year Ended June 30, 2022
Actual Variance with
Amounts Final Budget
Original Final (Budgetary Positive
Budget Budget Basis) (Negative)

REVENUES
Taxes and assessments $ 6,413,650 $ 6,413,650 $ 7,788,183 $ 1,374,533 Licenses and permits 187,900 187,900 275,499 87,599
Fines and forfeitures 250 250 (6,450) (6,700)
Use of money 70,800 70,800 (87,556) (158,356)
Intergovernmental 344,034 931,138 1,032,193 101,055
Charges for services 45,825 45,825 76,534 30,709
Other revenues 16,500 16,500 216,525 200,025
Total Revenues 7,078,959 7,666,063 9,294,928 1,628,865

EXPENDITURES
Current:

General government 1,006,456 1,170,680 1,055,868 114,812 Public safety 4,635,468 4,790,292 4,536,464 253,828
Public ways and facilities 122,680 122,680 82,634 40,046 Culture and recreation 586,651 598,951 505,258 93,693
Community development 550,430 591,224 575,612 15,612
Debt service:

Principal 34,000 34,000 34,000 -
Interest and other charges 92,085 92,530 92,530 -
Capital outlay 47,500 183,420 101,458 81,962
Total Expenditures 7,075,270 7,583,777 6,983,824 599,953 Excess of Revenues Over (Under) Expenditures 3,689 82,286 2,311,104 2,228,818

OTHER FINANCING SOURCES (USES)
Proceeds from sale of capital assets - 234,300 234,300 - Transfers in - - 94,843 94,843
Transfers out (550,006) (2,430,306) (2,430,306) -
Total Other Financing Sources (Uses) (550,006) (2,196,006) (2,101,163) 94,843 Net Change in Fund Balances (546,317) (2,113,720) 209,941 2,323,661 Fund Balances - Beginning 10,594,282 10,594,282 10,594,282 - Fund Balances - Ending $10,047,965 $ 8,480,562 $10,804,223 $ 2,323,661 -76-

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CITY OF YREKA
Required Supplementary Information
Budgetary Comparison Schedule
Streets and Roads - Major Special Revenue Fund
For the Year Ended June 30, 2022
Variance with
Final Budget
Original Final Actual Positive
Budget Budget Amounts (Negative)

REVENUES
Fines and forfeitures $ 15,000 $ 15,000 $ 13,806 $ (1,194) Use of money 3,500 3,500 6,629 3,129
Intergovernmental 608,774 608,774 550,568 (58,206)
Other revenues - - 10,934 10,934
Total Revenues 627,274 627,274 581,937 (45,337)

EXPENDITURES
Current:

Public ways and facilities 889,781 952,773 889,221 63,552 Transportation 200,000 200,000 198,238 1,762
Debt service:

Principal 45,000 - - -
Interest and other charges 2,500 2,500 - 2,500
Capital outlay 40,000 117,275 103,638 13,637
Total Expenditures 1,177,281 1,272,548 1,191,097 81,451 Excess of Revenues Over (Under) Expenditures (550,007) (645,274) (609,160) 36,114

OTHER FINANCING SOURCES (USES)
Transfers in 550,006 550,006 596,006 46,000
Total Other Financing Sources (Uses) 550,006 550,006 596,006 46,000 Net Change in Fund Balances (1) (95,268) (13,154) 82,114 Fund Balances - Beginning 1,024,629 1,024,629 1,024,629 - Fund Balances - Ending $ 1,024,628 $ 929,361 $ 1,011,475 $ 82,114 -77-

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CITY OF YREKA
Required Supplementary Information
Budgetary Comparison Schedule
Special Revenue - Major Special Revenue Fund
For the Year Ended June 30, 2022
Variance with
Final Budget
Original Final Actual Positive
Budget Budget Amounts (Negative)

REVENUES
Taxes and assessments $ 290,000 $ 290,000 $ 304,998 $ 14,998 Licenses and permits 16,000 16,000 440,927 424,927
Use of money 2,500 2,500 6,367 3,867
Charges for services 240,000 240,000 240,309 309
Other revenues - - 1,739 1,739
Total Revenues 548,500 548,500 994,340 445,840

EXPENDITURES
Current:

General government 65,000 456,324 456,237 87
Public safety 15,000 14,100 3,111 10,989
Debt service:

Principal 184,475 183,260 183,260 -
Interest and other charges 81,251 82,467 82,467 -
Capital outlay - 40,400 40,396 4
Total Expenditures 345,726 776,551 765,471 11,080
Excess of Revenues Over (Under) Expenditures 202,774 (228,051) 228,869 456,920

OTHER FINANCING SOURCES (USES)
Transfers out (9,500) (302,147) (302,147) -
Total Other Financing Sources (Uses) (9,500) (302,147) (302,147) - Net Change in Fund Balances 193,274 (530,198) (73,278) 456,920 Fund Balances - Beginning 1,350,904 1,350,904 1,350,904 - Fund Balances - Ending $ 1,544,178 $ 820,706 $ 1,277,626 $ 456,920 -78-

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CITY OF YREKA
Required Supplementary Information
Note to Budgetary Comparison Schedules
For the Year Ended June 30, 2022
-79-
NOTE 1: BUDGETARY BASIS OF ACCOUNTING
Formal budgetary integration is employed as a management control device during the year. The City presents a comparison of annual budget to actual results for the General fund and major special revenue funds. The amounts reported on the budgetary basis are generally on a basis consistent with accounting principles generally accepted in the United States of America (GAAP).

The City follows these procedures annually in establishing the budgetary data reflected in the financial statements:
(1) The City Manager submits to the City Council a recommended draft budget for the fiscal year commencing the following July 1. The budget includes recommended expenditures and the means of financing them.
(2) The City Council reviews the recommended budget at regularly scheduled meetings, which are open to the public. The Council also conducts a public hearing on the recommended budget to obtain comments from interested persons.
(3) Prior to July 1, the budget is adopted through the passage of a resolution. (4) From the effective date of the budget, which is adopted and controlled at the department level, the amounts stated therein, as recommended expenditures become appropriations to the various City departments. The City Council may amend the budget by motion during the fiscal year. The City Manager may authorize transfers from one object or purpose to another within the same department.

The City does not use an encumbrance system as an extension of normal budgetary accounting for the General and other governmental funds. Under this system, purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of applicable appropriations.

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CITY OF YREKA,

CALIFORNIA

SINGLE AUDIT ACT

REPORTS AND SCHEDULES

FOR THE YEAR ENDED
JUNE 30, 2022

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CITY OF YREKA
Single Audit Act
For the Year Ended June 30, 2022
Table of Contents
Page
Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards............................................................................1-2 Independent Auditor’s Report on Compliance for Each Major Program and on Internal Control over Compliance Required by the Uniform Guidance.................................................3-5 Schedule of Expenditures of Federal Awards for the Year Ended June 30, 2022 ........................................ 6 Notes to Schedule of Expenditures of Federal Awards .............................................................................7-8 Schedule of Findings and Questioned Costs............................................................................................9-13 Schedule of Prior Year Findings and Questioned Costs............................................................................. 14 Management’s Corrective Action Plan ....................................................................................................... 15

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CERTIFIED PUBLIC ACCOUNTANTS
-1-
950 THARP ROAD, SUITE 502 YUBA CITY, CA 95993 TEL: (530) 673-9790 FAX: (530) 673-1305 [email protected]

SMITH & NEWELL
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL

REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF

FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH

GOVERNMENT AUDITING STANDARDS
To the Honorable Mayor and Members of the City Council
City of Yreka
Yreka, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Yreka, California, (City) as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the City's basic financial statements and have issued our report thereon dated March 27, 2023.

Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City's internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do not express an opinion on the effectiveness of the City's internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency or a combination of deficiencies in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified.

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-2-
To the Honorable Mayor and Members of the City Council
City of Yreka
Yreka, California
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Smith & Newell CPAs
Yuba City, California
March 27, 2023

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CERTIFIED PUBLIC ACCOUNTANTS
-3-
950 THARP ROAD, SUITE 502 YUBA CITY, CA 95993 TEL: (530) 673-9790 FAX: (530) 673-1305 [email protected]

SMITH & NEWELL
INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM

AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY

THE UNIFORM GUIDANCE
To the Honorable Mayor and Members of the City Council
City of Yreka
Yreka, California
Report on Compliance for Each Major Federal Program
Opinion on Each Major Federal Program
We have audited the City of Yreka, California's (City) compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on each of the City's major federal programs for the year ended June 30, 2022. The City's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs.

In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2022.

Basis for Opinion on Each Major Federal Program
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report.

We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal program. Our audit does not provide a legal determination of the City’s compliance with the compliance requirements referred to above.

Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to the City’s federal programs.

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-4-
To the Honorable Mayor and Members of the City Council
City of Yreka
Yreka, California
Auditor’s Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the City’s compliance with the requirements of each major federal program as a whole.

In performing an audit in accordance with generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance, we:
• Exercise professional judgement and maintain professional skepticism throughout the audit. • Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures, including examining, on a test basis, evidence regarding the City’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances. • Obtain an understanding of the City’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control over compliance.

Accordingly, no such opinion is expressed.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit.

Other Matters
The results of our auditing procedures disclosed instances of noncompliance which are required to be reported in accordance with the Uniform Guidance and which are described in the accompanying schedule of findings and questioned costs as items 2022-001 and 2022-002. Our opinion on each major federal program is not modified with respect to these matters.

Government Auditing Standards requires the auditor to perform limited procedures on the City’s response to the noncompliance findings identified in our audit described in the accompanying schedule of findings and questioned costs. The City’s response was not subjected to the other auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response.

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-5-
To the Honorable Mayor and Members of the City Council
City of Yreka
Yreka, California
Report on Internal Control Over Compliance
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

Our consideration of internal control over compliance was for the limited purpose described in the Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified.

Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed.

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.

Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance We have audited the financial statements of the governmental activities, business-type activities, each major fund, and the aggregate remaining fund information of the City of Yreka, California, (City) as of and for the year ended June 30, 2022 and the related notes to the financial statements, which collectively comprise the City's basic financial statements. We issued our report thereon dated March 27, 2023, which contained unmodified opinions on those financial statements. Our audit was performed for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole.

Smith & Newell CPAs
Yuba City, California
March 27, 2023

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CITY OF YREKA
Schedule of Expenditures of Federal Awards
For the Year Ended June 30, 2022
Pass-Through
Assistance Entity Passed Total
Federal Grantor/Pass-Through Listing Identifying Through to Federal Grantor/Program Title Number Number Subrecipients Expenditures U.S. Department of Agriculture
Direct Program:

Water and Waste Disposal Systems for Rural Communities 10.760 - $ - $ 5,071,901 Total U.S. Department of Agriculture - 5,071,901
U.S. Department of Commerce
Siskiyou Economic Development Council:

Economic Adjustment Assistance 11.307 11-Unknown - 10,620 Subtotal 11.307 - Economic Development Cluster 10,620
Total U.S. Department of Commerce - 10,620
U.S. Department of Housing and Urban Development
State Department of Housing and Community Development:

Community Development Block Grants/State's Program
and Non-Entitlement Grants in Hawaii 14.228 20-CDBG-12037 - 66,222 Community Development Block Grants/State's Program
and Non-Entitlement Grants in Hawaii 14.228 20-CDBG-12091 - 2,309,149 Community Development Block Grants/State's Program
and Non-Entitlement Grants in Hawaii 14.228 21-CSBG-PL-30004 - 113 Community Development Block Grants/State's Program
and Non-Entitlement Grants in Hawaii 14.228 - - 388,002 Subtotal 14.228 - 2,763,486
Total U.S. Department of Housing and Urban Development - 2,763,486 U.S. Department of the Treasury
State Controller's Office:

Coronavirus State and Local Fiscal Recovery Funds 21.027 21-Unknown - 489,431 Total U.S. Department of the Treasury - 489,431
Environmental Protection Agency
State Water Resource Control Board:

Brownfields Assessment and Cleanup Cooperative
Agreements 66.818 BF-99T61601-0 - 102,134
Total Environmental Protection Agency - 102,134
Total $ - $ 8,437,572
See the accompanying Notes to Schedule of Expenditures of Federal Awards -6-

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CITY OF YREKA
Notes to Schedule of Expenditures of Federal Awards
For the Year Ended June 30, 2022
-7-

1. REPORTING ENTITY
The accompanying Schedule of Expenditures of Federal Awards presents the activity of all federal financial assistance programs of the City of Yreka, California (City). The City’s reporting entity is defined in Note 1 to the City’s basic financial statements. All federal awards received directly from federal agencies as well as federal awards passed through other government agencies are included on the Schedule of Expenditures of Federal Awards. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes in net position or cash flows of the City.

2. BASIS OF ACCOUNTING
Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements, regardless of the measurement focus applied. The accompanying Schedule of Expenditures of Federal Awards, is presented using the modified accrual basis of accounting for grants accounted for in the governmental fund types and the accrual basis of accounting for grants accounted for in the proprietary fund types, as described in the notes to the City financial statements. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowed or are limited as to reimbursements. In addition, the outstanding balance of prior years’ loans that have significant continuing compliance requirements have been included in total federal expenditures.

3. INDIRECT COST RATE
The City has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance.

4. RELATIONSHIP TO FEDERAL FINANCIAL REPORTS
The amounts reported in the accompanying Schedule of Expenditures of Federal Awards agree or can be reconciled with amounts reported in the related federal financial assistance reports.

5. RELATIONSHIP TO BASIC FINANCIAL STATEMENTS
The amounts reported in the accompanying Schedule of Expenditures of Federal Awards agree or can be reconciled with amounts reported in the City’s basic financial statements.

6. PASS-THROUGH ENTITIES’ IDENTIFYING NUMBER
When federal awards were received from a pass-through entity, the Schedule of Expenditures of Federal Awards shows, if available, the identifying number assigned by the pass-through entity. When no identifying number is shown, the City determined that no identifying number is assigned for the program or the City was unable to obtain an identifying number from the pass-through entity.

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CITY OF YREKA
Notes to Schedule of Expenditures of Federal Awards
For the Year Ended June 30, 2022
-8-

7. LOANS WITH CONTINUING COMPLIANCE REQUIREMENTS
The City participates in certain federal award programs that sponsor revolving loan programs, which are administered by the City. These programs require servicing arrangements with the City. The funds are returned to the programs upon repayment of the principal and interest. In accordance with Section 200.510 of the Uniform Guidance, the City has reported the outstanding balance of loans from previous years that have significant continuing compliance requirements as of June 30, 2022, along with the value of total outstanding and new loans made during the current year.

The programs listed below had the following aggregate, federally funded loans outstanding at June 30, 2022:

Assistance Amount Outstanding
Listing
Number Program Title July 1, 2021 June 30, 2022

14.228 Community Development Block Grants/State’s Program and Non-Entitlement Grants in Hawaii $ 388,002 $ 318,012 Total Loans Outstanding $ 388,002 $ 318,012

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CITY OF YREKA
Schedule of Findings and Questioned Costs
For the Year Ended June 30, 2022
-9-
SECTION I - SUMMARY OF AUDITOR’S RESULTS
Financial Statements Status

1. Type of auditor’s report issued Unmodified

2. Internal controls over financial reporting:
a. Material weaknesses identified? No
b. Significant deficiencies identified and not considered to be material weaknesses? No

3. Noncompliance material to financial statements noted? No Federal Awards

1. Internal control over major programs:
a. Material weaknesses identified? No
b. Significant deficiencies identified and not considered to be material weaknesses? No

2. Type of auditor’s report issued on compliance for major programs: Unmodified

3. Any audit findings disclosed that are required to be reported in accordance with 2 CFR Section 200.516(a)? Yes

4. Identification of major programs:

10.760 Water and Waste Disposal Systems for Rural Communities

14.228 Community Development Block Grants/State’s Program and Non-Entitlement Grants in Hawaii

5. Dollar threshold used to distinguish between Type A and Type B programs? $750,000

6. Auditee qualified as a low-risk auditee under 2 CFR Section 200.520? No

SECTION II - FINANCIAL STATEMENT FINDINGS
None

SECTION III - FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS

10.760 Water and Waste Disposal Systems for Rural Communities 2022-001

14.228 Community Development Block Grants/State’s Program and Non-Entitlement Grants in Hawaii 2022-001

14.228 Community Development Block Grants/State’s Program and Non-Entitlement Grants in Hawaii 2022-002

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CITY OF YREKA
Schedule of Findings and Questioned Costs
For the Year Ended June 30, 2022
-10-
2022-001
Name: Water and Waste Disposal Systems for Rural Communities/ Community Development Block Grants/State’s Program and
Non-Entitlement Grants in Hawaii
CFDA #: 10.760

14.228
Federal Grantor: U.S. Department of Agriculture
U.S. Department of Housing and Urban Development
Pass Through Entity: State Department of Housing and Community Development Award No.: Various
Year: 2021/2022
Compliance Requirement: Other
Criteria
Internal control over the Schedule of Expenditures of Federal Awards (SEFA) requires that the City provide accurate Federal expenditure information to the City Auditor in a timely manner.

Condition
During our test of major programs we noted that the SEFA provided by the City at the beginning of audit fieldwork contained errors in the federal expenditures. Expenditures included on the SEFA provided at the beginning of the audit were more than actual expenditures by $529,729 in the major programs listed above.

Cause
The City did not reconcile the federal expenditure claims to the SEFA that was provided to us at the start of the audit.

Effect
Federal expenditures reported on the original SEFA provided at the beginning of fieldwork was not materially correct and adjustments were overstated by approximately $529,729.

Questioned Cost
No questioned costs were identified as a result of our procedures.

Context
The condition noted above was identified during our procedures related to reconciling federal expenditures to the SEFA.

Repeat Finding
This is not a repeat finding.

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CITY OF YREKA
Schedule of Findings and Questioned Costs
For the Year Ended June 30, 2022
-11-
2022-001 (Continued)
Recommendation
We recommend that the City reconcile federal expenditures claimed to the City’s general ledger and SEFA.

Views of Responsible Officials and Planned Corrective Action Refer to separate Management’s Corrective Action Plan for views of responsible officials and management’s responses.

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CITY OF YREKA
Schedule of Findings and Questioned Costs
For the Year Ended June 30, 2022
-12-
2022-002
Name: Community Development Block Grant/State’s Program and NonEntitlement Grants in Hawaii CFDA #: 14.228
Federal Grantor: U.S. Department of Housing and Urban Development Pass Through Entity: State Department of Housing and Community Development Award No.: Various
Year: 2021/2022
Compliance Requirement: Program Income
Criteria
The loan documents require that recipients of CDBG loans continue to own and reside in their homes that were acquired using CDBG funding.

Condition
During our test of loan monitoring procedures, we noted that all of the loans tested did not include verification documentation regarding loan recipients were the homeowners during the 2021-2022 fiscal year. We also noted verification that the loan recipients occupied the homes obtained with CDBG funding was missing. We noted one of the loan recipients did not have proof of fire and flood insurance on file.

Cause
The City did not have formalized loan monitoring policies and procedures in place to ensure that loans were monitored on an annual basis in accordance with the loan agreements.

Effect
Information was not available to determine if the loan recipients were in compliance with the requirements of their loan agreements.

Questioned Cost
No questioned costs were identified as a result of our procedures.

Context
Not applicable.

Repeat Finding
This is not a repeat finding.

Recommendation
We recommend that the City develop and maintain policies and procedures regarding loan monitoring and ensure that all documentation of loan monitoring be maintained on an annual basis.

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CITY OF YREKA
Schedule of Findings and Questioned Costs
For the Year Ended June 30, 2022
-13-
2022-002 (Continued)
Views of Responsible Officials and Planned Corrective Action Refer to separate Management’s Corrective Action Plan for views of responsible officials and management’s responses.

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CITY OF YREKA, CALIFORNIA
Status of Prior Year Findings and Questioned Costs
And
Corrective Action Plan
For the Year Ended June 30, 2022
Compiled by: Emily Aldrich, Finance Director
City of Yreka
701 Fourth Street • Yreka, CA 96097
(530) 841-2386 • FAX (530) 842-4836

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CITY OF YREKA
Schedule of Prior Year Findings and Questioned Costs
For the Year Ended June 30, 2022
-14-
Audit Reference
2021-001
Status of Prior Year Audit Recommendation
Prior Period Adjustment
Recommendation
We recommend that the City review the financial records and ensure all items are recorded correctly.

Status
Implemented

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CITY OF YREKA
Management’s Corrective Action Plan
For the Year Ended June 30, 2022
-15-
2022-001 Water and Waste Disposal Systems for Rural Communities/Community Development Block Grants/State’s Program and Non-Entitlement Grants in Hawaii We recommend that the City reconcile federal expenditures claimed to the City’s general ledger and SEFA.

Management’s Response: The Municipal Projects Manager retains and holds all grant related documents. They create and submit the requests for reimbursements.

Finance did not timely reconcile the variance of the general ledger with the Grant Manager’s Life-to-Date Spreadsheet of Expenditures.

Responsible Individual: It is the Finance Director’s, Emily Aldrich, responsibility to ensure that all schedules provided to the auditor reconcile with the general ledger.

Corrective Action Plan: The Finance Department has added two new positions of Staff Accountants. They have been charged with the responsibility of working with Public Works project managers to ensure complete and accurate reconciliation of the SEFA and general ledger on a routine basis.

Anticipated Completion Date: Employees have been hired and are in the process of being trained on how to reconcile the schedule to the general ledger.
2022-002 Community Development Block Grants/State’s Program and Non-Entitlement Grants in Hawaii
We recommend that the City develop and maintain policies and procedures regarding loan monitoring and ensure that all documentation of loan monitoring be maintained on an annual basis.

Management’s Response: Finance was unaware of the need to have current utility bills included with the files.

Responsible Individual: It is the Finance Director’s, Emily Aldrich, responsibility to ensure that all loan files are complete and accurate.

Corrective Action Plan: An annual checklist has been added to each loan file to ensure that all proper documentation is included.

Anticipated Completion Date: March 31, 2023 – all files will be updated with the necessary checklist and appropriate documentation.

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Fund Type Fund Fund Description Previous Balance
Receipts /
Debits
Disbursements /
Credits
Cash Balance by
Fund
General-Unrestricted 01 General Operating $ 9,309,534.22 $ 488,591.51 $ 656,409.97 $ 9,141,715.76 General-Designated 01 General Oper. - Other - - - 0.00
General-Designated 01 Comm Art - - - 0.00
General-Designated 01 Fire Museum 3,322.35 - - 3,322.35 General-Designated 01 Planning Deposits - - - 0.00
General-Designated 01 Sidewalk in Lieu 39,278.46 - - 39,278.46 General-Designated 01 Parkland Trust 300.00 - - 300.00
General-Designated 01 Police Asset Forfeit 12,239.86 - - 12,239.86 General-Designated 01 Parking Fees - - - 0.00
General-Designated 01 Campbell Tract Redemption - - - 0.00 General-Designated 02 Gifts Donations 25,956.31 25.00 - 25,981.31 General-Designated 02 K-9 Unit - - - 0.00
General-Designated 02 YPD Donated - Hitson 4,987.54 - - 4,987.54 General-Designated 02 YPD Donated - Travellers 741.68 - - 741.68 General-Designated 02 YPD Donated - Teen Fund 3,956.43 - - 3,956.43 General-Restricted 04 Crandell Cash 416,042.45 - - 416,042.45 General-Restricted 05 Property Abatement Recovery 41,503.63 - - 41,503.63 General-Designated 08 Grant Projects Reserve 1,334,085.73 - 50,000.00 1,284,085.73 General-Designated 08 PERS Pension Liability Reserve - - - 0.00 General-Designated 09 Reserves for Cap. Outlay 838,097.89 - - 838,097.89 General-Designated 10 Capital Outlay 241,821.35 - 500.00 241,321.35 General-Designated 11 Capital Building Project - YPD (2,574.88) - 12,917.41 (15,492.29) General - All General-Designated 12 Debt Servicing - GF (YPD Bldg) 277,625.64 - - 277,625.64 General-Designated 12 Debt Servicing Reserves - GF (YPD Bldg) 200,000.00 - - 200,000.00 General-Designated 90 Payroll Clearing (397,678.78) 685,302.53 563,532.09 (275,908.34) 12,239,799.45 $ Spec. Rev. -Streets 20 Road and Street Funds including HUTA 86,203.86 41,053.63 42,159.36 85,098.13 Spec. Rev. -Streets 21 Local Transportation 604,848.48 - - 604,848.48 Streets Spec. Rev. -Streets 24 Fines - Traffic Safety 167,017.16 665.89 3,629.76 164,053.29 853,999.90 $ Special Revenue 30 Fire Assessment Spec. Rev 1,203,470.15 29,659.75 7,569.05 1,225,560.85 Special Revenue 31 Landfill Access Fee - Debt Service 7,446.76 20,863.46 2,104.72 26,205.50 Special Revenues Special Revenue 32 Developer Impact Fees 236,155.69 - 14,044.83 222,110.86 $ 1,473,877.21 Special Grants 60 Spec Grants Capital Outlay 1,460,965.77 24,512.75 9,324.65 1,476,153.87 Special Grants Special Grants 65 Community Development Grants 839,729.34 50.00 512.46 839,266.88 SpecialOperating 67 SUMIT Operating 496,634.14 - - 496,634.14 $ 2,812,054.89 Water Enterprise 70 Water Operating 36,809.66 234,253.33 261,612.00 9,450.99 Water Enterprise 71 Water Capital Projects (639,449.31) - 15,944.72 (655,394.03) Water Enterprise 72 Water Debt Servicing 468,673.76 - 7,187.66 461,486.10 Water Enterprise 72 USDA COPS 2010 300,000.00 - - 300,000.00 Water Enterprise Water Enterprise 74 Water Reserves 5,662,535.13 45,559.33 5,708,094.46 - $ 5,823,637.52 Sewer Enterprise 80 Sewer Operating 599,013.37 257,348.46 252,718.54 603,643.29 Sewer Enterprise 81 Sewer Capital Outlay (463,147.58) 1,400.00 67,892.00 (529,639.58) Sewer Enterprise 82 Sewer Debt Servicing 251,259.76 - - 251,259.76 Sewer Enterprise 82 USDA COPS 2003 250,000.00 - - 250,000.00 Enterprise-Sewer Sewer Enterprise 84 Sewer Reserves 5,222,569.73 60,864.09 5,283,433.82 - $ 5,858,697.29 Agency
Agency 92 Agency SUMIT - Cash 19,219.97 0.48 - 19,220.45 $ 19,220.45 COLUMN TOTALS $ 29,159,195.72 $ 1,890,150.21 $ 1,968,059.22 $ 29,081,286.71 $ 29,081,286.71 -
BANK RECAPITULATION PER BANK Market Value Unrealized Gain PER LEDGER L.A.I.F. 0.861% 24,600,019.86 24,283,304.79 (316,715.07) Pershing Bank - CD & Treas Investments 2,697,000.00 2,635,773.66 (61,226.34) Pershing Bank - Cash 23,762.53
Petty Cash Drawers 1,200.00
YVFD Petty Cash -
Banner Bank (DDA for Bank Anticipation Not -
MB SUMIT Operating x2233 495,370.24
MB SUMIT Asset Forfeiture X4281 19,220.45
Mechanics Bank - ZBA x6830 -
Mechanics Bank - MM x6505 501,191.78
Mechanics Bank - 01015102 858,804.59
TOTAL PER BANK 29,196,569.45

ADJUSTMENTS
Less Outstanding Checks MB (108,634.67)
Less Outstanding Checks SVB SUMIT (2,304.04)
Interest CR (GL ) January 2023 (9.12)
Transfer 2/28 - Posted 3/1 at Bank 10,648.20
Transfer 2/28 - Posted 3/1 at Bank 13,179.22
CalPERS (1,782.79)
LWAPP (1,420.22)
Calpers Rounding Journal (0.01)
LAIF (5.00)
Mechanics Money Market (1,191.78)
MBSC Interest - Jan (9,526.36)
MBSC Interest - Feb (6,230.60)
MBSC Interest - Mar (8,005.57)
TOTAL PER LEDGER 29,081,286.71 29,081,286.71
(0.00)
Corey Middleton, City Mayor
Emily Aldrich, Finance Director

CITY OF YREKA

REPORT ON CASH TO THE CITY COUNCIL
Mar-2023

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2022-2023 Operating Budget of Revenue and Expenditures
with Year to Date Actual Results March 31, 2023
Fund AnalysisMajor Grp Fund Adopted Operating Budget Year to Date 3 Adopted Operating Budget Year to Date 4 Operating Budget Net Actual
Year to Date
Current Cash
Balance
Investment in LAIF 00 - - - - - - -
General Operating 01 7,474,244.57 7,923,861.07 6,169,263.25 7,854,692.39 7,990,628.39 5,657,580.28 511,682.97 (66,767.32) 9,196,856.43 General Operating Fund 7,474,244.57 7,923,861.07 6,169,263.25 7,854,692.39 7,990,628.39 5,657,580.28 (66,767.32) 511,682.97 9,196,856.43 Gifts Donations 02 - - 11,007.95 700.00 700.00 3,036.48 (700.00) 7,971.47 35,666.96 YVFD Volunter Fund 03 13,500.00 13,500.00 - 13,500.00 13,500.00 - - - - Trusts -Crandell-Stewart 04 - - 4,355.46 2,050.00 2,050.00 27,262.25 (2,050.00) (22,906.79) 416,042.45 Property Abatement 05 - - - - - 17,042.86 - (17,042.86) 41,503.63General Fund Reserves 08 - - 3,610.17 - - 50,000.00 - (46,389.83) 1,284,085.73 Reserves for Cap. Outlay 09 - - 6,972.27 - - - - 6,972.27 838,097.89 Capital Outlay 10 82,500.00 82,500.00 (500.00) 82,500.00 82,500.00 14,488.79 - (14,988.79) 241,321.35 Construction Fund 11 - - - - - 15,379.55 - (15,379.55) (15,492.29)General Fund Debt Servicing 12 125,895.00 125,895.00 - 125,895.00 125,895.00 22,426.25 - (22,426.25) 477,625.64 Payroll Clearing 90 - - - - - 48,463.54 - (48,463.54) (275,908.34) General Fund - Restricted or Designated 221,895.00 221,895.00 25,445.85 224,645.00 224,645.00 198,099.72 (2,750.00) (172,653.87) 3,042,943.02 Total General Fund 7,696,139.57 8,145,756.07 6,194,709.10 8,079,337.39 8,215,273.39 5,855,680.00 (69,517.32) 339,029.10 12,239,799.45 Gas Tax & Traffic Cong. 20 954,702.40 954,702.40 293,366.24 954,702.44 954,702.44 637,669.28 (0.04) (344,303.04) 85,098.13 Local Transportation 21 200,000.00 200,000.00 229,885.84 200,000.00 200,000.00 - - 229,885.84 604,848.48 Fines - Traffic Safety 24 68,164.14 68,164.14 8,988.65 68,164.14 68,164.14 52,045.29 - (43,056.64) 164,053.29 Road, Street & Transit - Restricted 1,222,866.54 1,222,866.54 532,240.73 1,222,866.58 1,222,866.58 689,714.57 (0.04) (157,473.84) 853,999.90 Total Road, Streets and Transit 1,222,866.54 1,222,866.54 532,240.73 1,222,866.58 1,222,866.58 689,714.57 (0.04) (157,473.84) 853,999.90 Fire Assessment Spec. Rev 30 307,500.00 307,500.00 256,837.40 105,726.24 105,726.24 68,044.68 201,773.76 188,792.72 1,225,560.85Landfill Access Fee - Debt Service 31 240,000.00 240,000.00 180,861.94 240,000.01 240,000.01 133,390.76 (0.01) 47,471.18 26,205.50 Developer Impact Fees 32 16,000.00 16,000.00 2,433.24 9,500.00 9,500.00 - 6,500.00 2,433.24 222,110.86 Special Revenue - Restricted 563,500.00 563,500.00 440,132.58 355,226.25 355,226.25 201,435.44 208,273.75 238,697.14 1,473,877.21 Total Special Revenue 563,500.00 563,500.00 440,132.58 355,226.25 355,226.25 201,435.44 208,273.75 238,697.14 1,473,877.21 Spec Grants Capital Outlay 60 2,249,000.00 2,249,000.00 222,935.55 2,249,000.00 2,249,000.00 411,594.88 (188,659.33) - 1,476,153.87 Community Development Grants 65 750,600.00 750,600.00 9,581.04 800,750.00 800,750.00 92,330.93 (50,150.00) (82,749.89) 839,266.88 SUMIT Operating Fund 67 - - 3,567.94 - 209,863.75 - (206,295.81) - 496,634.14 Special Grants - Capital Projects 2,999,600.00 2,999,600.00 236,084.53 3,049,750.00 3,049,750.00 713,789.56 (50,150.00) (477,705.03) 2,812,054.89 Special Grants - Operating & Capital Projects 2,999,600.00 2,999,600.00 236,084.53 3,049,750.00 3,049,750.00 713,789.56 (50,150.00) (477,705.03) 2,812,054.89 Water Operating 70 2,585,884.55 2,585,884.55 1,839,745.11 2,585,884.53 2,585,884.53 1,920,045.08 (80,299.97) 0.02 9,450.99 Water Capital Projects 71 2,853,117.00 7,873,117.00 4,019,372.08 2,853,117.00 7,873,117.00 3,628,287.36 391,084.72 - (655,394.03) Water Debt Servicing 72 356,738.17 356,738.17 - 349,238.17 349,238.17 34,574.74 (34,574.74) 7,500.00 761,486.10 Water Reserves 74 (916,687.72) (1,197,687.72) 848,699.28 - - - 848,699.28 (1,197,687.72) 5,708,094.46 Water Enterprise 4,879,052.00 9,618,052.00 6,707,816.47 5,788,239.70 10,808,239.70 5,582,907.18 (1,190,187.70) 1,124,909.29 5,823,637.52 Sewer Operating 80 2,360,449.98 2,360,449.98 1,629,052.61 2,360,449.97 2,360,449.97 1,430,029.42 0.01 199,023.19 603,643.29 Sewer Capital Outlay 81 9,326,680.00 9,326,680.00 1,069,595.59 9,326,680.00 9,518,080.00 1,154,192.92 (191,400.00) (84,597.33) (529,639.58) Sewer Debt Servicing 82 318,855.00 318,855.00 (556,798.91) 316,855.00 316,855.00 118,293.15 2,000.00 (675,092.06) 501,259.76 Sewer Reserves 84 (764,015.98) (764,015.98) 683,546.80 - - - (764,015.98) 683,546.80 5,283,433.82 Sewer Enterprise Fund 11,241,969.00 11,241,969.00 2,825,396.09 12,003,984.97 12,195,384.97 2,702,515.49 (953,415.97) 122,880.60 5,858,697.29 Total Enterprise Funds 16,121,021.00 20,860,021.00 9,533,212.56 17,792,224.67 23,003,624.67 8,285,422.67 (2,143,603.67) 1,247,789.89 11,682,334.81 SUMIT Agency Trust - Cash 92 - - - - - - - - 19,220.45
Agency Funds - - - - - - - - 19,220.45 \
Total Agency Funds - - - - - - - - 19,220.45
All Funds Combined 33,791,743.61 28,603,127.11 16,936,379.50 30,499,404.89 35,846,740.89 15,746,042.24 (2,054,997.28) 1,190,337.26 29,081,286.71 Excess of Rev over Exp.-Surplus/
R E V E N U E E X P E N S E (Deficit)
Approval:______________________________________________________Corey Middleton, Mayor 4/11/2023 4:44 PM

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City of Yreka Financial Statement Groupings
Summary FY 22-23 YTD Fiscal Performance
as of March 31, 2023
ACCOUNT DESCRIPTION Adopted Bdgt Current Period Favorable or (Unfavorable)
Revised Operating
Bdgt

1. GENERAL FUNDSRevenue
801 REVENUE: PROP TAXES 1,208,650.00 1,208,650.00 814,143.94 -394,506.06807 MVLF IN LIEU 650,000.00 368,967.23 -281,032.77 650,000.00810 SALES TAX 3,600,000.00 2,651,919.72 -948,080.28 3,600,000.00813 REVENUE: TOT TAXES 830,000.00 771,896.86 -58,103.14 830,000.00814 REVENUE: FRANCHISE FEES 285,000.00 269,421.88 -15,578.12 285,000.00815 REVENUE - LICENSES AND PERMITS 189,900.00 236,443.13 46,543.13 189,900.00825 REVENUE - FINES & FORFEITURES 250.00 -1,422.16 -1,672.16 250.00830 REVENUE - USE OF MONEY & PROPERTY 70,800.00 223,710.91 152,910.91 70,800.00850 REVENUE - INTERGOVERNMENTAL 348,417.57 407,870.19 -390,163.88 798,034.07870 REVENUE - USER FEES AND CHARGES 50,825.00 33,376.73 -17,448.27 50,825.00880 ICA ALLOCATION 445,797.00 333,000.00 -112,797.00 445,797.00882 REVENUE - OTHER 16,500.00 85,880.67 69,380.67 16,500.00883 GAIN (LOSS) ON SALE OF ASSETS 0.00 -500.00 -500.00 0.00898 INTERFUND TRANSFERS 0.00 0.00 0.00 0.00

1. GENERAL FUNDS Revenue Totals 7,696,139.57 8,145,756.07 6,194,709.10 -1,951,046.97Expense 100 MAYOR, COUNCIL, CITY MANAGER, CLERK 432,382.41 499,882.41 398,805.35 101,077.06110 EXP. GENERAL GOVERNMENT 1,000,856.81 1,000,081.58 775.23 1,000,856.81130 PUBLIC SAFETY CODE ENFORCEMENT 124,003.29 106,732.79 17,270.50 124,003.29 Tuesday, April 11, 2023 Page 1 of 8

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ACCOUNT DESCRIPTION Adopted Bdgt Current Period Favorable or (Unfavorable)
Revised Operating
Bdgt
200 PUBLIC SAFETY - POLICE 3,764,055.55 3,805,991.55 2,655,539.71 1,150,451.84210 PUBLIC SAFETY - FIRE 688,288.33 350,757.61 337,530.72 688,288.33220 PLANNING AND DEVELOPMENT 556,999.77 561,347.88 -9,848.11 551,499.77300 PUBLIC WORKS - ENGINEERING AND ADMIN 150,103.38 64,067.62 100,035.76 164,103.38350 PUBLIC WORKS - MECHANICAL MAINT (ELIM) 0.01 367,914.79 -349,914.78 18,000.01370 PUBLIC WORKS - SERVICE CENTER (ELIM) 0.00 27,310.96 -27,310.96 0.00400 CULTURAL & REC - PARKS AND REC 574,386.30 285,315.91 289,070.39 574,386.30645 CAPITAL OUTLAY 72,500.00 15,379.55 57,120.45 72,500.00740 PRINCIPAL ON LT DEBT 35,000.00 0.00 35,000.00 35,000.00745 INTEREST ON LT DEBT 90,895.00 22,426.25 68,468.75 90,895.00760 INTERFUND TRANSFERS 589,866.54 0.00 589,866.54 589,866.54

1. GENERAL FUNDS Expense Totals 8,079,337.39 8,215,273.39 5,855,680.00 2,359,593.391. GENERAL FUNDS Net Position Change -383,197.82 -69,517.32 339,029.10 408,546.42 Tuesday, April 11, 2023 Page 2 of 8

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ACCOUNT DESCRIPTION Adopted Bdgt Current Period Favorable or (Unfavorable)
Revised Operating
Bdgt
Summary for 'Auditor Fund' = 1. GENERAL FUNDS (1036 detail records)2. STREETS FUNDSRevenue 825 REVENUE - FINES & FORFEITURES 15,000.00 15,000.00 7,029.45 -7,970.55830 REVENUE - USE OF MONEY & PROPERTY 3,500.00 9,956.52 6,456.52 3,500.00850 REVENUE - INTERGOVERNMENTAL 614,500.00 504,320.87 -110,179.13 614,500.00887 REVENUE: INKIND 0.00 10,933.89 10,933.89 0.00898 INTERFUND TRANSFERS 589,866.54 0.00 -589,866.54 589,866.54

2. STREETS FUNDS Revenue Totals 1,222,866.54 1,222,866.54 532,240.73 -690,625.81Expense 300 PUBLIC WORKS - ENGINEERING AND ADMIN 62,542.43 62,542.43 36,225.11 26,317.32310 PUBLIC WORKS - STREET MAINTENANCE 430,564.36 379,663.51 64,630.85 444,294.36311 PUBLIC WORKS - STREET SWEEPING 85,522.92 61,470.34 24,052.58 85,522.92312 PUBLIC WORKS - STREET LIGHTING 56,144.97 24,918.29 31,226.68 56,144.97313 PUBLIC WORKS - WEED CONTROL STREETS 10,995.72 2,492.49 8,503.23 10,995.72314 PUBLIC WORKS - PUBLIC PARKING LOTS 2,373.41 405.85 1,967.56 2,373.41320 PUBLIC WORKS - TRAFFIC SAFETY 68,164.14 68,164.14 52,045.29 16,118.85340 TRANSPORTATION 200,000.00 0.00 200,000.00 200,000.00390 PUBLIC WORKS - STORM DRAINS 171,558.63 86,866.07 84,692.56 171,558.63645 CAPITAL OUTLAY 40,000.00 45,627.62 44,372.38 90,000.00740 PRINCIPAL ON LT DEBT 90,000.00 0.00 26,270.00 26,270.00745 INTEREST ON LT DEBT 5,000.00 0.00 5,000.00 5,000.00

2. STREETS FUNDS Expense Totals 1,222,866.58 1,222,866.58 689,714.57 533,152.012. STREETS FUNDS Net Position Change -0.04 -0.04 -157,473.84 -157,473.80 Tuesday, April 11, 2023 Page 3 of 8

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ACCOUNT DESCRIPTION Adopted Bdgt Current Period Favorable or (Unfavorable)
Revised Operating
Bdgt
Summary for 'Auditor Fund' = 2. STREETS FUNDS (299 detail records)3. SPECIAL REVENUE FUNDSRevenue 811 OTHER TAXES 305,000.00 305,000.00 245,723.30 -59,276.70815 REVENUE - LICENSES AND PERMITS 16,000.00 0.00 -16,000.00 16,000.00830 REVENUE - USE OF MONEY & PROPERTY 2,500.00 13,547.34 11,047.34 2,500.00870 REVENUE - USER FEES AND CHARGES 240,000.00 180,861.94 -59,138.06 240,000.00

3. SPECIAL REVENUE FUNDS Revenue Totals 563,500.00 563,500.00 440,132.58 -123,367.42Expense 100.3 COLLECTION EXPENSE 65,000.01 65,000.01 -41,609.24 106,609.25 210 PUBLIC SAFETY - FIRE 15,000.00 0.00 15,000.00 15,000.00645 CAPITAL OUTLAY 0.00 0.00 0.00 0.00740 PRINCIPAL ON LT DEBT 185,708.43 168,086.76 17,621.67 185,708.43745 INTEREST ON LT DEBT 80,017.81 74,957.92 5,059.89 80,017.81760 INTERFUND TRANSFERS 9,500.00 0.00 9,500.00 9,500.00

3. SPECIAL REVENUE FUNDS Expense Totals 355,226.25 355,226.25 201,435.44 153,790.813. SPECIAL REVENUE FUNDS Net Position Change 208,273.75 208,273.75 238,697.14 30,423.39 Tuesday, April 11, 2023 Page 4 of 8

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ACCOUNT DESCRIPTION Adopted Bdgt Current Period Favorable or (Unfavorable)
Revised Operating
Bdgt
Summary for 'Auditor Fund' = 3. SPECIAL REVENUE FUNDS (40 detail records)4. CAPITAL & CDBG GRANTSRevenue 830 REVENUE - USE OF MONEY & PROPERTY 600.00 600.00 9,581.04 8,981.04850 REVENUE - INTERGOVERNMENTAL 2,249,000.00 126,503.49 -2,122,496.51 2,249,000.00882 REVENUE - OTHER 0.00 100,000.00 100,000.00 0.00898 INTERFUND TRANSFERS 750,000.00 0.00 -750,000.00 750,000.00

4. CAPITAL & CDBG GRANTS Revenue Totals 2,999,600.00 2,999,600.00 236,084.53 -2,763,515.47Expense 220 PLANNING AND DEVELOPMENT 0.00 0.00 55,530.30 -55,530.30600 COMMUNITY DEVELOPMENT 375,750.00 195,579.66 180,170.34 375,750.00645 CAPITAL OUTLAY 2,674,000.00 2,674,000.00 462,679.60 2,211,320.40

4. CAPITAL & CDBG GRANTS Expense Totals 3,049,750.00 3,049,750.00 713,789.56 2,335,960.444. CAPITAL & CDBG GRANTS Net Position Change -50,150.00 -50,150.00 -477,705.03 -427,555.03 Tuesday, April 11, 2023 Page 5 of 8

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ACCOUNT DESCRIPTION Adopted Bdgt Current Period Favorable or (Unfavorable)
Revised Operating
Bdgt
Summary for 'Auditor Fund' = 4. CAPITAL & CDBG GRANTS (185 detail records)5. WATER FUNDSRevenue 510 WATER TREATMENT AND CONSERVATION 0.00 0.00 175.00 175.00830 REVENUE - USE OF MONEY & PROPERTY 83,000.00 169,526.41 86,526.41 83,000.00850 REVENUE - INTERGOVERNMENTAL 1,734,000.00 4,111,872.08 -2,361,127.92 6,473,000.00870 REVENUE - USER FEES AND CHARGES 3,054,552.00 2,426,242.98 -628,309.02 3,054,552.00882 REVENUE - OTHER 0.00 0.00 0.00 0.00898 INTERFUND TRANSFERS 7,500.00 7,500.00 0.00 -7,500.00

5. WATER FUNDS Revenue Totals 4,879,052.00 9,618,052.00 6,707,816.47 -2,910,235.53Expense 100.3 COLLECTION EXPENSE 258,545.64 258,545.64 171,686.14 86,859.50300.1 ENGINEERING 268,491.91 181,048.32 87,443.59 268,491.91 500 WATER DISTRIBUTION EXPENSE 872,028.16 434,816.84 437,211.32 872,028.16510 WATER TREATMENT AND CONSERVATION 860,333.82 771,619.15 88,714.67 860,333.82 510.1 COST OF POWER AND WATER 289,000.00 189,874.63 99,125.37 289,000.00 645 CAPITAL OUTLAY 2,286,335.00 7,306,335.00 3,431,753.80 3,874,581.20690 CAPITALIZATION OF ASSETS 0.00 196,533.56 -196,533.56 0.00740 PRINCIPAL ON LT DEBT 221,170.83 0.00 221,170.83 221,170.83745 INTEREST ON LT DEBT 128,067.34 34,574.74 93,492.60 128,067.34760 INTERFUND TRANSFERS 375,000.00 0.00 375,000.00 375,000.00799 ICA EXPENSE 229,267.00 171,000.00 58,267.00 229,267.00

5. WATER FUNDS Expense Totals 5,788,239.70 10,808,239.70 5,582,907.18 5,225,332.525. WATER FUNDS Net Position Change -909,187.70 -1,190,187.70 1,124,909.29 2,315,096.99 Tuesday, April 11, 2023 Page 6 of 8

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ACCOUNT DESCRIPTION Adopted Bdgt Current Period Favorable or (Unfavorable)
Revised Operating
Bdgt
Summary for 'Auditor Fund' = 5. WATER FUNDS (342 detail records)6. SEWER FUNDSRevenue 830 REVENUE - USE OF MONEY & PROPERTY 35,395.00 35,395.00 145,021.23 109,626.23850 REVENUE - INTERGOVERNMENTAL 5,000,000.00 512,796.00 -4,487,204.00 5,000,000.00870 REVENUE - USER FEES AND CHARGES 2,904,574.00 2,167,578.86 -736,995.14 2,904,574.00882 REVENUE - OTHER 3,300,000.00 0.00 -3,300,000.00 3,300,000.00898 INTERFUND TRANSFERS 2,000.00 0.00 -2,000.00 2,000.00

6. SEWER FUNDS Revenue Totals 11,241,969.00 11,241,969.00 2,825,396.09 -8,416,572.91Expense 100.3 COLLECTION EXPENSE 247,545.64 247,545.64 163,885.92 83,659.72300.1 ENGINEERING 231,491.91 139,783.24 91,708.67 231,491.91510.1 COST OF POWER AND WATER 221,000.00 137,679.78 83,320.22 221,000.00 550 WASTEWATER COLLECTION EXPENSE 589,801.84 210,377.55 379,424.29 589,801.84560 WASTEWATER TREATMENT EXPENSE 868,957.58 616,302.93 444,054.65 1,060,357.58645 CAPITAL OUTLAY 8,936,803.00 912,200.12 8,024,602.88 8,936,803.00690 CAPITALIZATION OF ASSETS 0.00 0.00 241,992.80 -241,992.80740 PRINCIPAL ON LT DEBT 88,000.00 0.00 88,000.00 88,000.00745 INTEREST ON LT DEBT 228,855.00 118,293.15 110,561.85 228,855.00760 INTERFUND TRANSFERS 375,000.00 0.00 375,000.00 375,000.00799 ICA EXPENSE 216,530.00 162,000.00 54,530.00 216,530.00

6. SEWER FUNDS Expense Totals 12,003,984.97 12,195,384.97 2,702,515.49 9,492,869.486. SEWER FUNDS Net Position Change -762,015.97 -953,415.97 122,880.60 1,076,296.57 Tuesday, April 11, 2023 Page 7 of 8

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ACCOUNT DESCRIPTION Adopted Bdgt Current Period Favorable or (Unfavorable)
Revised Operating
Bdgt
Summary for 'Auditor Fund' = 6. SEWER FUNDS (254 detail records) Grand Total 1,896,277.78 2,054,997.28 -1,190,337.26 -3,245,334.54 Tuesday, April 11, 2023 Page 8 of 8

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S:\Human Resources\Resolutions\Resolution Amendments

CITY COUNCIL AGENDA MEMORANDUM
TO: Yreka City Council
PREPARED BY: John Elsnab, Human Resources Director
AGENDA TITLE: Discussion and Possible Action: Motion to Adopt Resolution 2023-19 of the City Council of the City of Yreka to include Uniform Allowance Compensation for Public Safety
Classifications of Unrepresented Employees.

MEETING DATE: April 18, 2023
Discussion:

Following the adoption of Resolution 2022-57 in December 2022 “Approving the Compensation for Unrepresented Employees”, it was discovered that the uniform allowance was found to be omitted from that resolution for the Chief of Police, Fire Chief, and the Police Lieutenant classifications. Uniform allowance for these classifications had previously been provided in the Yreka Police Administration Association (YPAA) Memorandum of Understanding at the equivalent rate of thirty-five dollars ($35.00) per pay period and was intended to be included in Resolution 2022-57 for the public safety classifications.

By adopting Resolution 2023-19, the public safety classifications will continue to receive thirty-five ($35.00) per pay period as intended. Uniform allowance compensation will be retroactive to January 8, 2023.

Fiscal Impact:

No changes to the approved wages and compensation for the Unrepresented Employees Unit.

Recommendation and Requested Action:

Motion to Adopt Resolution 2023-19 of the City Council of the City of Yreka to include Uniform Allowance Compensation for Public Safety Classifications of Unrepresented Employees.

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RESOLUTION NO. 2023-19

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF YREKA

TO INCLUDE UNIFORM ALLOWANCE COMPENSATION FOR

PUBLIC SAFETY CLASSIFICATIONS OF UNREPRESENTED EMPLOYEES WHEREAS, upon adoption, this Resolution allows for a uniform allowance of thirtyfive dollars ($35.00) per pay period to Public Safety Classifications within the Unrepresented Employees Unit, retroactive to January 8, 2023;
WHEREAS, it was discovered that the uniform allowance was found to be unintentionally omitted from Resolution 2022-57 in December 2022 “Approving the Compensation for Unrepresented Employees” for the Chief of Police, Fire Chief, and the Police Lieutenant classifications;
WHEREAS, this Council finds that the uniform allowance for Public Safety Classifications in the Unrepresented Employees Unit is fair and proper and in the best interests of the City;
NOW, THEREFORE, BE IT RESOLVED, by the City Council of Yreka, the Uniform Allowance is approved and adopted.

PASSED, APPROVED AND ADOPTED on this Eighteenth Day of April 2023 by the following vote:

AYES:

NOES:

ABSENT:

Corey Middleton, Mayor
_______________________________
Attest:
_______________________________
Rhetta Hogan, City Clerk

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CITY OF YREKA

CITY COUNCIL AGENDA MEMORANDUM
To:

Prepared By:

Agenda Title:

Meeting date:

Yreka City Council
City Clerk
Discussion/Possible Action: Continuation of Urgency Ordinance 864.

April 18, 2023
Discussion:

The drought, prevailing climatic temperatures, and the allocation of Yreka Fire Resources to mutual aid to suppress wildfires was found to constitute an immediate threat to the public safety.

Ordinance 864 delays the sale of fireworks and the use of fireworks and public displays of pyrotechnics until the threat to public safety is abated.

Recommendation:

That the Council continue Urgency Ordinance 864.

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SUMMARY OF ADOPTED URGENCY ORDINANCE No. 864
Please take notice that the Yreka City Council adopted, at an emergency meeting held on July 29, 2021, a temporary urgency ordinance, number 864, entitled: “AN UNCODIFIED URGENCY

ORDINANCE OF THE CITY OF YREKA DECLARING A LOCAL EMERGENCY, AND AUTHORIZING THE

DELAY OF THE SALE AND USE OF FIREWORKS WHICH MAY CREATE A THREAT TO PUBLIC SAFETY

DEEMED TO BE ARISING FROM THE INCIDENCE OF THE LAVA FIRE AND SETTING FORTH THE FACTS CONSTITUTING SUCH URGENCY AND FINDING THE ORDINANCE EXEMPT FROM CEQA REVIEW” This urgency ordinance generally provides:

1. The factual background of the Lava Fire, the drought, the prevailing climatic temperatures and the fact that Yreka’s Fire Resources are engaged in mutual aid to suppress the Lava Fire as well as the allocation of law enforcement resources in traffic control and the fact that without Yreka’s normally available police and fire resources, the use of fireworks and pyrotechnics fire may not be able to be suppressed which was found to constitute the basis for the urgency nature of the ordinance and the City Council determined that there existed an immediate threat to the public health, safety and/or welfare and a need for immediate preservation of the public peace, health, or safety that warrants the adopted urgency measures.

2. The ordinance delays the sale of fireworks and the use of fireworks and public displays of pyrotechnics until the threat to public safety is abated and the urgency ordinance is terminated.

3. The city council determined that a local emergency now exists and shall continue to exist until its termination is ordained by the City Council. The need for continuance of the urgency measures will be regularly reviewed by City Council until it is terminated. The ordinance will be terminated at the earliest possible time.

4. The ordinance vests in the City Manager, Chief of Police and the Fire Chief with the discretion to take such acts as may be necessary to effectuate the intent of the ordinance.

5. The Council determined that the ordinance complies with a categorical exemption from CEQA review.

By roll call vote the following councilmembers voted in favor of the ordinance: Duane Kegg, Deborah Baird, Paul McCoy and Corey Middleton.

This summary is not intended to be a comprehensive statement of all of the provisions of the Ordinance, but constitutes only a fair summary of the Ordinance. The complete text of the Ordinance and the minutes of the emergency session is available for review online in Yreka’s City Council Agenda section or through a public records request as an in-person review of it is not available because City Hall is not currently open to the public.

Yreka City Clerk

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CITY OF YREKA

CITY COUNCIL AGENDA MEMORANDUM
To: Yreka City Council
From: Jason Ledbetter, City Manager
Prepared By: Rhetta Hogan, Assistant City Manager
Agenda Title: Legal Services Agreement for Special Counsel Retainer Services for City Attorney Dohn Henion
Meeting Date: April 18, 2023
Recommended Action:

6.a. Motion to Authorize the City Manager and staff to execute a Legal Services Agreement with Dohn Henion for Special Counsel Retainer Services.

Discussion:

Fiscal Impact:

Fiscal impact is based on usage.

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DOHN R. HENION

ATTORNEY AT LAW
g
280 Fairway Village Ln.

Roseburg, OR 97471
(707) 464-9761
[email protected]
Legal Services Agreement
CLIENT: City of Yreka, California
ADDRESS: 701 Fourth St., Yreka, CA
MATTER: Special Counsel Services
We are pleased to have you as a client. In order to enhance our attorney-client relationship, you should become familiar with our standard terms of engagement for legal services. These terms will apply to both of us unless specifically modified in writing.

Identification of Parties. This Agreement is between the City of Yreka, California at the address set forth above, hereinafter referred to as the "Client" or “you” and dohn r. henion, Attorney and Counselor at Law, 280 Fairway Village Ln., Roseburg, OR, hereinafter referred to as the "Attorney" or “we.”
We have not been engaged to act as counsel for, or to assume any duties toward, any other affiliated or related parties, including parent, subsidiary or commonly owned corporations or entities; family members; officers; directors; agents; or employees. If, in connection with the discharge of Attorney’s responsibilities to you, we communicate with any such person or entity, that will not create any attorney-client relationship between us and that person or entity, though such communications will fall within the scope of the privilege between you and us to the extent applicable law permits. Apart from the client identified in this paragraph, no individuals or entities with any interest in the subject matter of our representation are entitled to rely on our advice without Attorney’s express written permission.

Scope of Services. Attorney has tendered his resignation as general counsel from the office of City Attorney effective April 26, 2023. At that time Attorney will no longer be the city’s general counsel. It is possible that in the transition to another general counsel that city staff or the new general counsel may have some questions relating to activities that Attorney undertook during his term of office. It anticipated that Attorney has already delivered all Client’s documents while

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discharging his duties since these documents (correspondence, pleadings, deposition transcripts, experts’/investigators’ reports, responses to public records act requests and other writings, exhibits, and physical evidence and other records reasonably necessary for Yreka’s representation) were copied by attachments via electronic mail. However, it is possible, for the convenience of the transitioning general counsel, that requests will be made to re-forward these documents and that Attorney will consume time in researching and responding to these requests. Attorney’s work will not include taking on new assignments and will be limited to revisiting prior work done. The scope of our legal services will be in accordance with our agreement with you that includes this writing, any additional agreements and any further discussions and correspondence with you. The time devoted to your matters may include consultations with others, correspondence, meetings, telephone calls, negotiations, factual investigations and analysis, legal research and analysis, document preparation and revision, travel away from the office on your behalf, and all other work related to these matters. Attorney is authorized to communicate through e-mail and Client recognizes that there is always a possibility that may be misdirected or lost. Client will ensure that the new general counsel or any interim general counsel will execute appropriate court forms to inform the court that Attorney is no longer attorney of record in client’s litigation as of April 26, 2023. Services in any matter not described above will require Attorney’s express consent.

We will be sending you status reports in the form of our billing on an hourly basis which recites what we are doing on your behalf. Client will reviewAttorney’s invoices carefully on receipt and advise us promptly if you have any questions or concerns about them. This is necessary to enable us to respond to your concerns while the relevant invoice is still fresh, and to ensure that we are made aware of potential problems and have an opportunity to address them before we incur significant additional fees and costs on your behalf.Whenever you have any questions or comments regarding our services or the status of your matter, or whenever any new facts or considerations come to your attention, you should contact me.

Client agrees to be truthful with Attorney, to cooperate, to keep Attorney informed of any information or developments which may come to Client's attention, to abide by this agreement, to pay Attorney's bills on time and to keep Attorney advised of Client's address, telephone number and whereabouts. Client will assist Attorney in providing necessary information and documents and will appear when necessary at legal proceedings.

Compensation and Method of Payment. We normally charge for services based upon the type of services rendered and the reasonable value of our services to you. The factors we consider include: the time and effort required; the time limitations imposed by you or by the circumstances (e.g., an emergency situation); the novelty and difficulty of the questions involved and the skill required to perform the services properly; the experience, reputation and ability of the professional performing the services; in specified cases, the amount involved or the results obtained; the likelihood, if made apparent to you, that our employment will preclude other employment by others; the nature and length of our relationship, whether the services are of the same general kind as previously rendered to and paid by you; and the customary charges for comparable legal services.

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Client agrees to pay a fee for all attorneys’ time expended on your behalf at sum of $500.00 per hour. Paralegal services shall be paid at the rate of $60.00 per hour. Attorney charges in minimum units of .25 hour. Since the time spent by attorneys and staff in performing services on your behalf is the most significant element in determining the amount of the fees, we cannot predict in advance what the total amount of the legal fees will be for this engagement.

If requested and where feasible, we will provide you with an estimate of the nature and cost of our services. When estimates are given, unless otherwise specified in writing, they are not maximum or minimum or fixed quotations and where contingent are dependent upon factors not entirely within our control. The ultimate services or relevant cost may be more or less than the estimate.

The accuracy of our estimates may depend greatly on our knowledge of the facts or circumstances beyond our control, such as the decisions of a court or the actions of third parties such as opposing counsel.

The time charged will include the time Attorney spends on telephone calls relating to Client's matter, including calls with Client, witnesses, opposing counsel or court personnel. The legal personnel assigned to client's matter may confer among themselves about the matter, as required and appropriate. When they do confer, each person will charge for the time expended, as long as the work done is reasonably necessary and not duplicative. Likewise, if more than one of the legal personnel attends a meeting, court hearing or other proceeding, each will charge for the time spent. Attorney will charge for waiting time in court and elsewhere and for travel time, both local and out of town.

Costs and Other Charges.
(a) In General. Often it is necessary for us to incur expenses on your behalf for items such as filing or transcript fees, travel, lodging, meals, long-distance telephone calls, messengers, and extraordinary clerical and other expenses. These items are generally billed at our actual cost, and separately itemized on our statements as “costs advanced.” We also charge for photocopying and printing, outgoing faxes, computerized research and word processing on longer documents at rates calculated to approximate our burdened cost of providing these services to you. We may retain the services of third parties on your behalf, such as expert witnesses or consultants, document processing, or database preparation and management. We may arrange to have those third parties bill you directly, and you will be solely responsible for their charges. (b) Out of Town Travel Client agrees to pay transportation, meals, lodging and all other costs of any necessary out-of-Roseburg travel by Attorney. Client will also be charged the hourly rate for the time legal personnel spend traveling.

Billing Statements. Attorney will send Client periodic statements for fees and costs incurred.

Each statement will be payable within five days of the date the client meets in open session following receipt of the invoice. Client may request a statement at intervals of not less than 30 days. If Client so requests, Attorney will provide one within 10 days. We expect payment within a few days after the statement is delivered, and a monthly service charge is added for late payments.

This service charge, assessed on the last day of each month against all fees and costs (including any unpaid service charges previously assessed) that were billed before the beginning of the month

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and remain unpaid at the end of the month, is calculated at an annual rate equal to 10% of the unpaid balance. Whenever the prime rate exceeds 10%, we will have the right to increase the service charge, provided always that it is reasonable in relation to our borrowing costs and not usurious.

Discharge and Withdrawal. California law allows a client the right to terminate the representation of an attorney or law firm at any time. Subject to our giving reasonable notice to arrange alternative counsel, we retain the same right to terminate our representation. If withdrawal is subject to the jurisdiction of any Court, then the discharge will be effective when approved by the Court. Unless specifically agreed by the Attorney and the Client, the Attorney will provide no further services and advance no further costs on Client’s behalf after receipt of the notice, other than to obtain any required Court orders to effectuate the discharge. Client agrees to execute a Substitution of Attorney’s form within 5 days of Attorney’s request so that the court may be notified of the change of relationship. If Client fails to timely execute the substitution, Client shall be responsible to reimburse Attorney at his hourly rate together with any charges related to any Motion to be Relieved as Counsel. When Attorney's services conclude, all unpaid charges will immediately become due and payable. After services conclude, Attorney will, upon Client's request and within a reasonable time, deliver Client's file, and property in Attorney's possession.

Client agrees that the file may be reproduced at a photocopy service or at Attorney’s office.

Attorney shall be entitled to be reimbursed for photocopy charges for copying of the file.

Whether or not Attorney is discharged by Client, in the event Client does not proceed with the matters for which Attorney is retained under this agreement, Termination of Attorney’s services will not affect Client’s responsibility to pay for legal services rendered and all out-of-pocket costs incurred up to the date when Attorney receives notice of termination, and for any further work required of us in order to facilitate an orderly turnover of matters in process at the time of termination.

Disclaimer of Guarantee and Estimates. Just as we cannot guarantee you any particular result, we cannot guarantee in advance the cost of the matter you have asked us to handle. Even the most carefully prepared estimates may turn out to be inaccurate. If at any time you have questions about the fees and costs that have been or will be accruing, the form or content of any billing statement, or any other aspect of our representation whatsoever, please do not hesitate to raise them with me.

Miscellaneous Provisions.
(a) Entire agreement. This Agreement contains the entire Agreement of the parties. No other agreement, statement, or promise made on or before the effective date of this Agreement will be binding on the parties.
(b) Severability in event of partial invalidity. If any provision of this Agreement is held in whole or in part to be unenforceable for any reason, the remainder of that provision and of the entire Agreement will be severable and remain in effect.
(c) Modification by subsequent agreement. This Agreement may be modified by subsequent Agreement of the parties only by an instrument in writing signed by both of them or an oral agreement only to the extent that the parties carry it out.

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(d) Power of attorney/lien. Attorney is hereby granted with a special power of attorney authorizing Attorney to sign the client's name on settlement drafts and other documents. This authorization shall last so long as this agreement remains effective and fees are payable. (e) Effective date. This Agreement will govern all legal services performed by Attorney on behalf of Client commencing with the date Attorney first performed services. Even if this agreement does not take effect, Client will be obligated to pay Attorney the reasonable value of any services Attorney may have performed for Client. This agreement shall not take effect until it has been signed and returned to Client after Attorney’s review and approval of the client identification information provided below. (f) Your File. The papers and property reasonably necessary to your representation that we accumulate in the course of our engagement (your “file”) belong to you. Subject to any protective order, nondisclosure agreement or other applicable legal obligation, you may see or have your file at any time on reasonable notice. If you request that all or any portion of your file be returned to you at any time, we may retain a copy made at your expense of any portion of the file returned to you that is reasonable under the circumstances, including for the purpose of documenting the nature and extent of the services we have provided. In the event that all or any portion of your file becomes the subject of a subpoena, discovery request or other disclosure obligation (“Process”) while in our possession, including after all services pertaining to that file have been completed, you will pay our then-prevailing hourly rates and our costs for our response to that Process.

If we continue to hold all or any portion of your file after our representation of you in that matter is completed, we may notify you at any time of our intent to dispose of the file. We will send this notice to you by mail and email at the last mail and email addresses you provided to us. You will have sixty days from the transmission of this notice to request that (subject to any court order, nondisclosure agreement or other legal obligation) we deliver the file as you direct, at your expense. If you fail to provide us such notice within that sixty-day period, you agree that we may destroy all or any part of the file without further notice to you.
(g) Consent to Receive Information. We occasionally send out announcements, newsletters, alerts and the like to some or all of our clients by fax or email. If there are items of this kind that you would prefer not to receive, please let us know. Please understand that we provide these materials as a courtesy, if there are specific areas of the law that you would like us to monitor and report on to you on an ongoing basis, we would be happy to arrange to do so in a separate engagement letter. (h) Insurance. If you have not already considered the applicability of your insurance policies to this matter (or any other matter we may handle for you), you may wish to discuss it with your insurance agent or broker. If you would like us to investigate or advise you regarding the availability or extent of insurance coverage, we may agree to do so (subject to checking for any conflict of interest that could prevent us from doing so) by specifically including it as part of this engagement above, or in a new engagement letter. If we do not hear from you, we will assume you are addressing any insurance-related questions yourself If you are insured for all or any part of the costs of our representation, we will cooperate with you in providing your carrier information regarding your claim, including sending to the carrier copies of our bills if you so request. However, regardless of the availability of any insurance coverage, we will bill our fees and costs directly to you, and payment will be due directly from you currently, whether or not your carrier eventually reimburses you, as you may know, insurance carriers sometimes take the position, rightly or wrongly, that their particular policy obligations do not require them to pay the entire amount of attorneys' fees or costs reasonably billed by counsel; insurance carriers also sometimes impose delays before paying their insureds' counsel.

Presently, this office is covered by a professional liability insurance policy.

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(i) Funds Held in Trust. California law provides that funds to be held in trust for your account that are nominal in amount or are to be held for a short period of time are to be placed in an unsegregated trust account, the interest on which is paid by the depository institution to a State Bar fund to provide legal services for indigent persons. If interest, on funds held for your account may be more substantial, we can arrange a segregated interest-bearing trust account if you so direct in writing and provide us with your federal tax identification number so that the depository institution can report the interest to taxing authorities as required by law.

G) Several responsibilities. The parties have read and understood the foregoing terms and agree to them as of the date attorney first provided services. If more than one client signs below, each agrees to be liable, jointly and severally, for all obligations under this agreement. If the Client is a business organization the individual executing this document on behalf of the business hereby personally guarantees the indebtedness. Client shall receive a fully executed duplicate of this agreement. ~k) Arbitration of Disputes. Any controversy or claim arising out of or related to this contract, or the breach thereof, shall be settled by binding arbitration administered by the American Arbitration at Attorney's offices in Crescent City, California, in accordance with its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.

The arbitrator shall be a practicing attorney. In the event of a dispute concerning attorneys' fees or costs, you may elect to have the dispute submitted to arbitration, pursuant to Business and Professions Code Sections 6200 et seq. (the "Mandatory Fee Arbitration Act"). In that event, the fee dispute shall be resolved by the Bar Association of the nearest county that conducts such non-binding arbitrations, unless all parties agree that the arbitration shall be binding after the dispute has arisen. In the event the bar association arbitration is non-binding and one or more parties reject the non-binding award, then final resolution of the dispute will take place pursuant to the binding arbitration procedure described for controversies above. In any dispute between us other than one for which California law forbids it, the prevailing party shall recover its reasonable attorneys' fees and costs (other than the charges of the Arbitrator in an arbitration.) IN WITNESS WHEREOF the parties hereto for themselves, their successors, and assigns do hereby agree to the full performance of the covenants herein contained and have caused this Legal Services Agreement to be executed by setting hereunto their signatures on the dates shown opposite the signatures below and completing the client identification information below the signature.

DATED:

DATED: 03/28/2023
By: ___________ _
Jason Ledbetter, City Manager
City of Yreka
Attest:

By: _____________ _
Rhetta Hogan, City Clerk
Byd};ln k
dohn r. henion

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CITY OF YREKA

CITY COUNCIL AGENDA MEMORANDUM
To:

From:

Prepared By:

Agenda Title:

Meeting Date:

Yreka City Council
Jason Ledbetter, City Manager
Rhetta Hogan, Assistant City Manager
Second Reading of Ordinance 874 “Personal Fireworks Prohibited” and Consideration of Resolution 2023-20 Liability for Response Costs – Fireworks
April 18, 2023
Discussion:

At the February 21, 2023 City Council meeting, direction was given to the City Attorney to draft an ordinance banning the sale and use of fireworks within the city limit of the City of Yreka.

Accordingly, the City Attorney prepared Ordinance #874 An Ordinance of the City Council of the City of Yreka, California, Adding Chapter 9.70 to the Yreka Municipal Code Entitled “Personal Fireworks Prohibited” and finding the Ordinance exempt from CEQAs that was introduced on March 21, 2023, for the first reading. The first reading passed and was moved to a second reading.

This evening a public hearing is being conducted and upon consideration, the ordinance is being considered for adoption along with the associated fee resolution for liability of response costs. The resolution allows the City to recover the fully burdened cost of police, fire, code enforcement or other City personnel required to deal with the violation, the cost of seizure and disposal of the illegal fireworks, and attorney fees for any and all notices, meetings, or administrative or court proceedings to enforce this ordinance.

It should be noted that the ordinance allows for use of fireworks at supervised public display permitted events (e.g. pyrotechnic shows and displays at the fairgrounds or casino).

Fiscal Impact:

None
Recommended Action:
(1) Conduct Public Hearing, once considered;
(2) Move to adopt by reading by title only, Ordinance #874; Introduce by reading title only, Ordinance 874; An Ordinance of the City Council of the City of Yreka, California, Adding Chapter 9.70 to the Yreka Municipal Code Entitled “Personal Fireworks Prohibited” and Finding the Ordinance exempt from CEQAs; and move to pass it to the next agenda for public hearing and adoption.
(3) Move to Adopt Resolution No. 2023-20 a Resolution of the City Council of the City of Yreka Establishing Fees Relating to Violation of Personal Fireworks Pursuant to Ordinance 874.

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1 2 ORDINANCE NO. 874
3 4 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
5 OF YREKA, CALIFORNIA ADDING CHAPTER 9.70 TO
6 THE YREKA MUNICIPAL CODE ENTITLED “PERSONAL
7 FIREWORKS PROHIBITED” AND FINDING THE
8 ORDINANCE EXEMPT FROM CEQA
9 Section 1. The City Council of the City of Yreka, California, finds as follows:
10 WHEREAS, Article Xl, Section 7 of the California Constitution 11 provides that the City may make and enforce within its limits all local, 12 police, sanitary, and other ordinances and regulations not in conflict with 13 general laws; and,
14 WHEREAS, Health and Safety Code Section 11541 authorizes the 15 City Council to establish local fireworks regulations; and, 16 WHEREAS, the city is situated in an area that, seasonally, is in 17 extremely high wildfire danger due to high temperatures and low 18 atmospheric moisture conditions; and,
19 WHEREAS, cities to Yreka’s north and south have been completely 20 decimated by wildfires within the last several years and parts of the city 21 itself were ordered evacuated due to those wildfires; and, 22 WHEREAS, individuals using fireworks, particularly children under 23 the age of 15, are at a high risk of injury from their use; and, 24 WHEREAS, fireworks have caused fires to structures resulting in 25 local residents losing all their personal possessions; and, 26 WHEREAS, traditional law enforcement methods are not effective in 27 deterring such use; and,

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2 28 WHEREAS, public education and the availability of safe and sane 29 fireworks has not been effective in deterring the use of dangerous and illegal 30 fireworks; and,
31 WHEREAS, The City Council has determined to prohibit the sale, 32 use, and/or possession of any fireworks and to make homeowners and 33 tenants responsible for fireworks violations that occur on property they own 34 or occupy; and,
35 WHEREAS, the continued use of dangerous, illegal as well as safe 36 and sane fireworks within the City is an immediate threat to public health, 37 safety and welfare because of the size of such fireworks, the lack of 38 safeguards in their manufacture and residents lack of compliance with 39 fireworks laws; and,
40 WHEREAS, individual use of fireworks should be distinguished from 41 permitted fireworks displays conducted by pyrotechnic professionals; and 42 WHEREAS, with the Fourth of July approaching, it’s a matter of 43 immediate public health and safety to adopt this ordinance to address the use 44 of fireworks and thereafter publicize its provisions before that holiday; and 45 Section 2. The City Council of the City of Yreka, California, does ordain 46 that the Yreka Municipal Code is hereby amended to add Chapter 9.70, to 47 Title 9, Public Health, Safety and Morals, as follows 48 9.70.010. Definitions. Whenever in this Chapter, or in any resolution or 49 standard adopted by the City Council pursuant to this Chapter, the following 50 terms are used, they shall have the meaning ascribed to them in this Section, 51 unless it is apparent from the context thereof that some other meaning is 52 intended:
53 “Fireworks” has the meaning set forth in California Health and Safety 54 Code Section 12511. The term “fireworks” includes a) “Dangerous 55 fireworks,” as defined in California Health and Safety Code Section 12505 56 and the relevant sections of Title 19, Code of Regulations, subchapter 6; and 57 b) “Safe and sane fireworks,” as defined in California Health and Safety 58 Code Section 12529. The term “fireworks” excludes c) “Exempt fireworks,” 59 as defined in California Health and Safety Code Section 12508; and d)

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3 60 “Party poppers” and “snap caps,” as each is defined in California Code of 61 Regulations, Title 19, Section 980; e) The proper use of flares by peace 62 officers, fire officials, or motorists.
63 “Organization” means a public agency, other corporation or 64 unincorporated association located within the City.
65 “Public right of way” means any City property, including that City 66 property over which the City has granted an easement to another public agency. 67 “Responsible party” means a) A person that owns, rents, leases, or 68 otherwise has possession of, or is in immediate control of, a residence or other 69 private property or a vessel; and b) A person that organizes, supervises, 70 sponsors, conducts, allows, controls, or controls access to, the possession, 71 manufacture, sale, offer for sale, use, or discharge of fireworks at a residence or 72 other private property or on a vessel.
73 “Street” means any City street or alley, including right of ways for ingress 74 or egress granted to the City by easement or dedication. 75 “Vessel” has the meaning set forth in California Harbors and Navigation 76 Code Section 651.
77 9.70.020. Prohibition.
78 (a) Except as otherwise provided in this Article, no person shall 79 possess, manufacture, sell, offer to sell, use, or discharge, any 80 fireworks.
81 (b) The Fire Chief, Police Chief, Code Enforcement Officer or their 82 delegee, may seize, take, remove or cause to be removed, at the 83 expense of the owner or any vendor, any and all such fireworks 84 offered or exposed for sale, stored or held in violation of this 85 Article, the state fireworks law or the California Fire Code. 86 9.70.030. Supervised Public Display; Permit Required 87 (a) Any Organization desiring to hold a public display of fireworks 88 within the City shall submit an application for a permit to do so to

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4 89 the Fire Chief at least two (2) calendar months prior to the date of 90 the proposed event.
91 (1) Any permit granted for such display shall be lawful only for 92 that event.
93 (2) No permit granted under this section shall be transferable. 94 (b) The Fire Chief may adopt reasonable rules and regulations for 95 granting such permits for supervised public displays of 96 fireworks to Organizations.
97 (c) Each such display must be handled and presented by a 98 competent operator approved by the Fire Chief and licensed 99 by the State of California.
100 (d) Such display must be located and discharged in a manner that, in 101 the sole opinion of the Fire Chief, is not hazardous to persons or 102 property.
103 (e) Such Organization or operator shall furnish an indemnification 104 in the form specified by the FireChief.
105 (f) In addition, the Organization or operator shall proof of current 106 commercial general liability coverage in an amount of $1,000,000 107 generally liability insurance (or such other amount as agreed upon 108 by the Fire Chief and risk manager) to address the potential for 109 damage to persons or property that may arise from the permitted 110 display and the acts of the Organization, its agents, employees or 111 contractors. The certificate of insurance shall be endorsed to name 112 the City, its officers, agents and employees as additional insureds. 113 (g) Any permit issues shall be only for the event, date and time 114 named and is nonrenewable and non-transferable.
115 9.70.040. Host Liability.
116 (a) Except as provided in (3) below, no Host shall allow any person 117 to violate a provision of this Article on the Host’s private

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5 118 property or on the public right of way or street adjacent or 119 proximate to the Host's private property.
120 (1) Where there is more than one Host, each Host is liable 121 jointly and severally.
122 (2) No Host shall aid or abet another person’s violation of a 123 provision of this Article. A Host aids and abets another 124 person' s violation of a provision of this Article if the Host 125 knows of the other person’s unlawful purpose and then 126 specifically intends to, and does in fact, supervise, control, 127 aid, facilitate, promote, encourage, or instigate the other 128 person' s commission of that violation.
129 (3) The provisions this section shall not apply to:
130 (i) The possession, manufacture, storage, display, sale, 131 purchase, use, or discharge of fireworks as permitted 132 under this Chapter, state or federal law; or
133 (ii) A Host who initiates contact with law enforcement or 134 fire officials to assist in removing any person from its 135 property or terminating an activity in order to comply 136 with this Article, if the request for assistance is made 137 before any other person contacts law enforcement or fire 138 officials to complain about the violation of this Article. 139 9.70.050. Liability for Response Costs
140 (a) In addition to any administrative penalty or any penalty under any 141 other section of this City Code or state law, any Host who violates 142 this Article is liable for the response costs relating to the violation. 143 (1) As used here, "response costs" include the following: the 144 fully burdened cost of police, fire, code enforcement or other 145 City personnel required to deal with the violation, the cost of 146 seizure and disposal of the illegal fireworks, and attorney 147 fees for any and all notices , meetings , or administrative or 148 court proceedings to enforce this ordinance.

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Yreka City CouncilApril 18, 2023

Yreka City Council
April 18, 2023