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CL_AGN_240708_CC_AgendaPacket_F_A1. CALL TO ORDER 2. ROLL CALL 3. PLEDGE OF ALLEGIANCE 4. PRESENTATIONS/PROCLAMATIONS/ANNOUNCEMENTS 4.A.LOS ANGELES COUNTY FIRE DEPARTMENT UPDATE REGARDING JUNE 2024 BRUSH CLEARANCE INSPECTIONS (VERBAL REPORT) RECOMMENDATION: Receive and file. 5. APPROVE ORDER OF THE AGENDA This is the appropriate time for the Mayor or Councilmembers to approve the agenda as is or reorder. 6. BLUE FOLDER ITEMS (SUPPLEMENTAL) Blue folder (supplemental) items are additional back up materials to administrative reports, changes to the posted agenda packet, and/or public comments received after the printing and distribution of the agenda packet for receive and file. 6.A.FOR BLUE FOLDER DOCUMENTS APPROVED AT THE CITY COUNCIL MEETING RECOMMENDATION: Approved 7. PUBLIC COMMENT ON NON-AGENDA ITEMS This is the appropriate time for members of the public to make comments regarding items not listed on this agenda. Pursuant to the Brown Act, no action will take place on any items not on the agenda. 2 PORTUGUESE BEND ROAD ROLLING HILLS, CA 90274 (310) 377-1521 AGENDA Regular City Council Meeting CITY COUNCIL Monday, July 08, 2024 CITY OF ROLLING HILLS 7:00 PM The meeting agenda is available on the City’s website. The City Council meeting will be live-streamed on the City’s website. Both the agenda and the live-streamed video can be found here: https://www.rolling-hills.org/government/agenda/index.php Members of the public may submit written comments in real-time by emailing the City Clerk’s office at cityclerk@cityofrh.net. Your comments will become part of the official meeting record. You must provide your full name, but please do not provide any other personal information that you do not want to be published. Recordings to City Council meetings can be found here: https://www.rolling-hills.org/government/agenda/index.php Next Resolution No. 1374 Next Ordinance No. 385 CL_AGN_240708_CC_LACFD_BrushIsspection.pdf CL_AGN_240708_CC_Item4A.pdf 1 8. CONSENT CALENDAR Business items, except those formally noticed for public hearing, or those pulled for discussion are assigned to the Consent Calendar. The Mayor or any Councilmember may request that any Consent Calendar item(s) be removed, discussed, and acted upon separately. Items removed from the Consent Calendar will be taken up under the "Excluded Consent Calendar" section below. Those items remaining on the Consent Calendar will be approved in one motion. The Mayor will call on anyone wishing to address the City Council on any Consent Calendar item on the agenda, which has not been pulled by Councilmembers for discussion. 8.A.APPROVE AFFIDAVIT OF POSTING FOR THE CITY COUNCIL REGULAR MEETING OF JULY 8, 2024 RECOMMENDATION: Approve. 8.B.APPROVE MOTION TO READ BY TITLE ONLY AND WAIVE FURTHER READING OF ALL ORDINANCES AND RESOLUTIONS LISTED ON THE AGENDA RECOMMENDATION: Approve. 8.C.APPROVE THE FOLLOWING CITY COUNCIL MINUTES: JUNE 24, 2024 REGULAR MEETING RECOMMENDATION: Approve as presented. 8.D.PAYMENT OF BILLS RECOMMENDATION: Approve as presented. 8.E.ADOPT RESOLUTION NO. 1373 AUTHORIZING ADOPTION OF A GIFT POLICY FOR THE CITY OF ROLLING HILLS RECOMMENDATION: Approve as presented. 8.F.RECEIVE AND FILE A REPORT ON THE NEXT CITY SPONSORED COMMUNAL BINS EVENT FROM AUGUST 2, 2024 THROUGH AUGUST 9, 2024 TO ASSIST RESIDENTS WITH FIRE FUEL REDUCTION IN THE COMMUNITY RECOMMENDATION: Receive and file. 9. EXCLUDED CONSENT CALENDAR ITEMS 10. COMMISSION ITEMS 11. PUBLIC HEARINGS 11.A.A PUBLIC HEARING TO CONSIDER AND ADOPT RESOLUTION NO. 1371 AUTHORIZING PLACEMENT OF SOLID WASTE SERVICE CHARGES OWED TO REPUBLIC SERVICES PURSUANT TO ITS SOLID WASTE FRANCHISE WITH THE CITY OF ROLLING HILLS ON THE FY 2024-2025 LOS ANGELES COUNTY AUDITOR-CONTROLLER'S OFFICE ANNUAL TAX ROLL RECOMMENDATION: Staff recommends that the City Council hold a public CL_AGN_240708_CC_AffidavitofPosting.pdf CL_MIN_240624_CC_F.pdf CL_AGN_240708_CC_PaymentOfBills_E.pdf ResolutionNo1373_ GiftPolicies_Adoption_F.pdf CC_POL_240708_GiftPolicy_F.pdf PW_REF_240708_SW_CommunalBinLocations.pdf 2 hearing and subsequently adopt Resolution No. 1371 placing the sanitation service charge on the annual County of Los Angeles Tax Roll. 12. OLD BUSINESS 13. NEW BUSINESS 13.A.ACCEPT AND APPROVE THE CITY OF ROLLING HILLS AUDITED ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2023 RECOMMENDATION: Approve as presented. 13.B.ADOPT RESOLUTION NO. 1372 APPROVING THE UPDATED FISCAL YEAR 2024/25 PAY SCHEDULE TO COMPLY WITH CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM (CALPERS) STATUTORY AND REGULATORY REQUIREMENTS FOR COMPENSATION EARNABLE AND PUBLICLY AVAILABLE PAY SCHEDULES RECOMMENDATION: Approve as presented. 14. MATTERS FROM THE CITY COUNCIL 15. MATTERS FROM STAFF 16. RECESS TO CLOSED SESSION 16.A.CONFERENCE WITH LEGAL COUNSEL: THREATENED LITIGATION GOVERNMENT CODE SECTION 54956.9(D)(2) AND (E)(3)THE CITY COUNCIL FINDS, BASED ON ADVICE FROM LEGAL COUNSEL, THAT DISCUSSION IN OPEN SESSION WILL PREJUDICE THE POSITION OF THE CITY IN THE LITIGATION.NUMBER OF POTENTIAL CASES: (7)(GOVERNMENT CLAIMS ACT FORM SUBMITTED BY VARIOUS PROPERTY OWNERS IN RANCHO PALOS VERDES AGAINST THE CITY OF ROLLING HILLS ALLEGING DAMAGE TO PROPERTY) RECOMMENDATION: None. 16.B.CONFERENCE WITH LEGAL COUNSEL - INITIATION OF LITIGATION A CLOSED SESSION WILL BE HELD, PURSUANT TO GOVERNMENT CODE SECTION 54956.9(C) AND (D)(4) REGARDING THE DECISION OF WHETHER TO INITIATE LITIGATION (1 CASE) RECOMMENDATION: None. CL_AGN_240708_CC_FY24-25_SanitationReport.pdf CL_AGN_220711_CC_RH_ParcelMap_20200724_withRoads.pdf CL_AGN_240708_CC_FY24-25_TaxRoll.pdf ResolutionNo1371_FY 24-25_AnnualRefuseAssessment_F.pdf CL_PBN_240708_PH_CC_FY24-25_RefuseDirAss_Billing_Affidavit.pdf CL_AGN_240708_CC_Audit_CommunicationLetter.pdf CL_AGN_240708_CC_AnnualFinancialReport.pdf CL_AGN_240708_CC_InternalControlsReport.pdf CL_AGN_240708_CC_FY22-23_AuditedFInancials_Presentation.pdf Attachment A - ResolutionNo1372_FY24-25_SalarySchedule_F.pdf Attachment B - CL_AGN_240708_CC_CalPERS_PaySchedules.pdf 3 17. RECONVENE TO OPEN SESSION 18. ADJOURNMENT Next regular meeting: Monday, July 22, 2024 at 7:00 p.m. in the City Council Chamber, Rolling Hills City Hall, 2 Portuguese Bend Road, Rolling Hills, California, 90274. Notice: Public Comment is welcome on any item prior to City Council action on the item. Documents pertaining to an agenda item received after the posting of the agenda are available for review in the City Clerk's office or at the meeting at which the item will be considered. In compliance with the Americans with Disabilities Act (ADA), if you need special assistance to participate in this meeting due to your disability, please contact the City Clerk at (310) 377-1521 at least 48 hours prior to the meeting to enable the City to make reasonable arrangements to ensure accessibility and accommodation for your review of this agenda and attendance at this meeting. 4 Agenda Item No.: 4.A Mtg. Date: 07/08/2024 TO:HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM:CHRISTIAN HORVATH, CITY CLERK / EXECUTIVE ASSISTANT TO CITY MANAGER THRU:KARINA BAÑALES, CITY MANAGER SUBJECT: LOS ANGELES COUNTY FIRE DEPARTMENT UPDATE REGARDING JUNE 2024 BRUSH CLEARANCE INSPECTIONS (VERBAL REPORT) DATE:July 08, 2024 BACKGROUND: None. DISCUSSION: None. FISCAL IMPACT: None. RECOMMENDATION: Receive and file. ATTACHMENTS: CL_AGN_240708_CC_LACFD_BrushIsspection.pdf 5 Rolling Hills 2024 6 7 8 9 10 11 12 13 Agenda Item No.: 6.A Mtg. Date: 07/08/2024 TO:HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM:CHRISTIAN HORVATH, CITY CLERK / EXECUTIVE ASSISTANT TO CITY MANAGER THRU:KARINA BAÑALES, CITY MANAGER SUBJECT: FOR BLUE FOLDER DOCUMENTS APPROVED AT THE CITY COUNCIL MEETING DATE:July 08, 2024 BACKGROUND: None. DISCUSSION: None. FISCAL IMPACT: None. RECOMMENDATION: Approved. ATTACHMENTS: CL_AGN_240708_CC_Item4A.pdf 14 BLUE FOLDER ITEM (SUPPLEMENTAL) Blue folder (supplemental) items are additional back up materials to administrative reports, changes to the posted agenda packet, and/or public comments received after the printing and distribution of the agenda packet for receive and file. CITY COUNCIL MEETING July 8 , 2024 4A. LOS ANGELES COUNTY FIRE DEPARTMENT UPDATE REGARDING JUNE 2024 BRUSH CLEARANCE INSPECTIONS (VERBAL REPORT) FROM: CHRISTIAN HORVATH, CITY CLERK/EXECUTIVE ASSISTANT TO THE CITY MANAGER CL_AGN_240708_CC_LACFD_BrushIsspection.pdf 15 Agenda Item No.: 8.A Mtg. Date: 07/08/2024 TO:HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM:CHRISTIAN HORVATH, CITY CLERK / EXECUTIVE ASSISTANT TO CITY MANAGER THRU:KARINA BAÑALES, CITY MANAGER SUBJECT: APPROVE AFFIDAVIT OF POSTING FOR THE CITY COUNCIL REGULAR MEETING OF JULY 8, 2024 DATE:July 08, 2024 BACKGROUND: None. DISCUSSION: None. FISCAL IMPACT: None. RECOMMENDATION: Approve. ATTACHMENTS: CL_AGN_240708_CC_AffidavitofPosting.pdf 16 Administrative Report 8.A., File # 2364 Meeting Date: 7/8/202 4 To: MAYOR & CITY COUNCIL From: Christian Horvath, City Clerk TITLE APPROVE AFFIDAVIT OF POSTING FOR THE CITY COUNCIL ADJOURNED REGULAR MEETING OF JULY 8 , 202 4 EXECUTIVE SUMMARY STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) SS CITY OF ROLLING HILLS ) AFFIDAVIT OF POSTING In compliance with the Brown Act, the following materials have been posted at the locations below. Legislative Body City Council Posting Type Adjourned Regular Meeting Agenda Posting Location 2 Portuguese Bend Road, Rolling Hills, CA 90274 City Hall Window City Website: https://www.rolling-hills.org/government/agenda/index.php https://www.rolling-hills.org/government/city_council/city_council_archive_agendas/index.php Meeting Date & Time JULY 8 , 2024 7:00pm Open Session As City Clerk of the City of Rolling Hills, I declare under penalty of perjury, the document noted above was posted at the date displayed below. Christian Horvath, City Clerk Date: July 3 , 2024 17 Agenda Item No.: 8.B Mtg. Date: 07/08/2024 TO:HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM:CHRISTIAN HORVATH, CITY CLERK / EXECUTIVE ASSISTANT TO CITY MANAGER THRU:KARINA BAÑALES, CITY MANAGER SUBJECT: APPROVE MOTION TO READ BY TITLE ONLY AND WAIVE FURTHER READING OF ALL ORDINANCES AND RESOLUTIONS LISTED ON THE AGENDA DATE:July 08, 2024 BACKGROUND: None. DISCUSSION: None. FISCAL IMPACT: None. RECOMMENDATION: Approve. ATTACHMENTS: 18 Agenda Item No.: 8.C Mtg. Date: 07/08/2024 TO:HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM:CHRISTIAN HORVATH, CITY CLERK / EXECUTIVE ASSISTANT TO CITY MANAGER THRU:KARINA BAÑALES, CITY MANAGER SUBJECT: APPROVE THE FOLLOWING CITY COUNCIL MINUTES: JUNE 24, 2024 REGULAR MEETING DATE:July 08, 2024 BACKGROUND: None. DISCUSSION: None. FISCAL IMPACT: None. RECOMMENDATION: Approve as presented. ATTACHMENTS: CL_MIN_240624_CC_F.pdf 19 MINUTES – CITY COUNCIL MEETING Monday, June 24, 2024 Page 1 Minutes Rolling Hills City Council Monday, June 24, 202 4 Regular Meeting 7:00 p.m. 1. CALL TO ORDER The City Council of the City of Rolling Hills met in person on the above date at 7:03 p.m. Mayor Mirsch presiding. 2. ROLL CALL Councilmembers Present: Wilson, Black, Mayor Pro Tem Pieper, Mayor Mirsch Councilmembers Absent: Dieringer Staff Present: Karina Bañales, City Manager Christian Horvath, City Clerk / Executive Assistant to the City Manager John Signo, Planning & Community Services Director Samantha Crew, Management Analyst Pat Donegan, City Attorney 3. PLEDGE OF ALLEGIANCE – Councilmember Pieper 4. PRESENTATIONS / PROCLAMATIONS / ANNOUNCEMENTS – NONE 5. APPROVE ORDER OF THE AGENDA Motion by Councilmember Wilson, seconded by Councilmember Black to approve order of agenda. Without objection, so moved. 6. BLUE FOLDER ITEMS (SUPPLEMENTAL) Motion by Mayor Pro Tem Pieper, seconded by Councilmember Black to receive and file Blue Folder Items 7A and 8C. Without objection, so moved. 7. PUBLIC COMMENT ON NON-AGENDA ITEMS Public Comment: Alfred Visco Councilmember Dieringer arrived at 7:05 p.m. 8. CONSENT CALENDAR 8.A. APPROVE AFFIDAVIT OF POSTING FOR THE CITY COUNCIL REGULAR MEETING OF JUNE 24, 2024 8.B. APPROVE MOTION TO READ BY TITLE ONLY AND WAIVE FURTHER READING OF ALL ORDINANCES AND RESOLUTIONS LISTED ON THE AGENDA 8.C. APPROVE THE FOLLOWING CITY COUNCIL MINUTES: JUNE 10, 2024 REGULAR MEETING 8.D. PAYMENT OF BILLS 20 MINUTES – CITY COUNCIL MEETING Monday, June 24, 2024 Page 2 8.E. REPUBLIC SERVICES RECYCLING TONNAGE AND COMPLAINT REPORTS FOR MAY 2024 8.F. APPROVE SEVENTH AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT WITH MCGOWAN CONSULTING LLC. FOR SERVICES RELATING TO STORMWATER MANDATE COMPLIANCE Motion by Councilmember Black , seconded by Councilmember Wilson to approve Consent Calendar with amended minutes as presented. Motion carried unanimously with the following vote: AYES: Wilson, Black, Dieringer, Pieper, Mayor Mirsch NOES: None ABSENT: None 9. EXCLUDED CONSENT CALENDAR ITEMS – NONE 10. COMMISSION ITEMS – NONE 11. PUBLIC HEARINGS – NONE 12. OLD BUSINESS 12.A. RECONSIDERATION OF PREVIOUSLY APPROVED ROLLING HILLS COMMUNITY ASSOCIATION LEAD RESPONSIBILITY FOR THE COMBINED TENNIS COURT ADA AND CABANA PROJECTS AND CITY LEAD FOR CONSTRUCTION OF THE SUBSEQUENT TENNIS COURT #1 EXPANSION PROJECT Presentation by City Manager Karina Bañales Motion by Councilmember Black, seconded by Councilmember Wilson to go back to the original plan and move the assigned funding back to the Tennis Courts ADA capital project account. Motion carried unanimously with the following vote: AYES: Wilson, Black, Dieringer, Pieper, Mayor Mirsch NOES: None ABSENT: None 12.B. CONSIDERATION FOR POTENTIAL ADOPTION OF PROPOSED GIFT POLICY PRIOR TO ACCEPTANCE OF CHARITABLE CONTRIBUTIONS USED FOR PUBLIC PURPOSES IN ACCORDANCE WITH IRS CODE SECTION 170(C)(1) Presentation by City Clerk / Executive Assistant to the City Manager Christian Horvath Motion by Councilmember Black, seconded by Councilmember Wilson to approve as presented with the following direction: Under types of gifts, set acceptance of restricted gifts at $2000 and unrestricted gifts at $1000; Under Procedure, the City Council will consider accepting gifts exceeding $1000 at an agendized meeting, the City Manager can accept gifts under $1000 at their discretion, and in the event a monetary restricted gift is provided to the City and the purpose is unable to be accomplished within 5 years, that monetary gift shall convert to an unrestricted gift that can be used for general public purposes. Motion carried unanimously with the following vote: AYES: Wilson, Black, Dieringer, Pieper, Mayor Mirsch NOES: None ABSENT: None 21 MINUTES – CITY COUNCIL MEETING Monday, June 24, 2024 Page 3 13. NEW BUSINESS 13.A. ADOPT RESOLUTION NO. 1370 APPROVING THE "DESIGNATION OF APPLICANT'S RESOLUTION FOR NON-STATE AGENCIES" (CALOES FORM-130) AND TO DESIGNATE AUTHORIZED SIGNATORIES AMONG CITY STAFF TO SIGN APPLICATIONS FOR FEDERAL FINANCIAL ASSISTANCE IN THE CASE OF EXISTING OR FUTURE GRANTS UNDER APPLICABLE STATE AND FEDERAL LAW Presentation by Management Analyst Samantha Crew Motion by Councilmember Black, seconded by Mayor Pro Tem Pieper to approve as presented. Motion carried unanimously with the following vote: AYES: Wilson, Black , Dieringer, Pieper, Mayor Mirsch NOES: None ABSENT: None 14. MATTERS FROM THE CITY COUNCIL Councilmember Black commented about the beautiful lawn area in between City Hall and the Community Association buildings. 15. MATTERS FROM STAFF – NONE 16. RECESS TO CLOSED SESSION – 7:39 P.M. 16.A. CONFERENCE WITH LEGAL COUNSEL: THREATENED LITIGATION GOVERNMENT CODE SECTION 54956.9(D)(2) AND (E)(3) THE CITY COUNCIL FINDS, BASED ON ADVICE FROM LEGAL COUNSEL, THAT DISCUSSION IN OPEN SESSION WILL PREJUDICE THE POSITION OF THE CITY IN THE LITIGATION. NUMBER OF POTENTIAL CASES: (7) (GOVERNMENT CLAIMS ACT FORM SUBMITTED BY VARIOUS PROPERTY OWNERS IN RANCHO PALOS VERDES AGAINST THE CITY OF ROLLING HILLS ALLEGING DAMAGE TO PROPERTY) 17. RECONVENE TO OPEN SESSION – 8:33 P.M. 18. ADJOURNMENT: 8:34 P.M. The meeting was adjourned in memory of longtime resident Janice Adams and fallen Los Angeles County Firefighter Andrew Pontious at 8:34 p.m. on June 24, 2024. The next regular adjourned meeting of the City Council is scheduled to be held on Monday, July 8, 2024 beginning at 7:00 p.m. in the City Council Chamber at City Hall, 2 Portuguese Bend Road, Rolling Hills, California. It will also be available via City’s website link at: https://www.rolling-hills.org/government/agenda/index.php All written comments submitted are included in the record and available for public review on the City website. Respectfully submitted, ____________________________________ Christian Horvath, City Clerk 22 MINUTES – CITY COUNCIL MEETING Monday, June 24, 2024 Page 4 Approved, ____________________________________ Leah Mirsch, Mayor 23 Agenda Item No.: 8.D Mtg. Date: 07/08/2024 TO:HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM:CHRISTIAN HORVATH, CITY CLERK / EXECUTIVE ASSISTANT TO CITY MANAGER THRU:KARINA BAÑALES, CITY MANAGER SUBJECT: PAYMENT OF BILLS DATE:July 08, 2024 BACKGROUND: None. DISCUSSION: None. FISCAL IMPACT: None. RECOMMENDATION: Approve as presented. ATTACHMENTS: CL_AGN_240708_CC_PaymentOfBills_E.pdf 24 25 26 Agenda Item No.: 8.E Mtg. Date: 07/08/2024 TO:HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM:CHRISTIAN HORVATH, CITY CLERK / EXECUTIVE ASSISTANT TO CITY MANAGER THRU:KARINA BAÑALES, CITY MANAGER SUBJECT: ADOPT RESOLUTION NO. 1373 AUTHORIZING ADOPTION OF A GIFT POLICY FOR THE CITY OF ROLLING HILLS DATE:July 08, 2024 BACKGROUND: On June 26, 2023, the Charitable Foundation Ad Hoc Committee (Mayor Leah Mirsch and Councilmember Patrick Wilson) presented the City Council with a status update on exploring the establishment of a charitable 501 (c) foundation for the City of Rolling Hills (Attachment A). During the meeting, the committee presented findings on how other Peninsula Cities have successfully established similar 501(c) foundations, detailing their achievements and organizational structures. This information provided valuable insights into potential models and strategies that could be adapted to suit Rolling Hills' unique needs and objectives. While the committee initially considered the possibility of establishing a 501(c) organization, it subsequently identified an additional mechanism, Section 170(c)(1) of the Internal Revenue Code (IRC), which specifies the types of organizations and donations that can be made by donors and qualify for a tax deduction. These organizations include religious organizations, educational institutions, hospitals, medical research organizations, and governmental units (if the contribution is made exclusively for public purposes). The City of Rolling Hills is a governmental unit and, thus, comes under the purview of IRC 170(c)(1). Similar to a 501(c)(3) entity, IRC 170(c)(1) entities are eligible to receive tax-deductible charitable contributions under this provision with the added benefit of not having to create a separate legal entity. On February 12, 2024, the Ad Hoc Committee and staff presented a report that the 170(c)(1) was worth pursuing and directed staff to return with a more refined 170(C)(1) action plan. On May 13, 2024, the City Council received a presentation on the use of IRC 170(c)(1) and directed staff to return with a formal policy for accepting gifts and donations for public purposes based on Council comments and direction. On June 24, 2024, the City Council finalized the Gift Policy (Exhibit A to the Resolution) with 27 the following direction: Baseline amount for restricted gifts - set to $2000 Ceiling amount for unrestricted gifts - set to $1000 Baseline amount requiring City Council's formal acceptance of a proposed gift - set to $1000 Ceiling amount for gifts that can be accepted at the City Manager's discretion - set to $1000 Time period for restricted monetary gifts potentially converting to an unrestricted gift for general public purposes - set to $5 years DISCUSSION: Attached is the resolution for formal adoption of the Gift Policy as discussed at the June 24, 2024 City Council meeting. FISCAL IMPACT: None. RECOMMENDATION: Approve as presented. ATTACHMENTS: ResolutionNo1373_ GiftPolicies_Adoption_F.pdf CC_POL_240708_GiftPolicy_F.pdf 28 Resolution No. 1373 -1- RESOLUTION NO. 1373 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROLLING HILLS, CALIFORNIA AUTHORIZING ADOPTION OF A GIFT POLICY FOR THE CITY OF ROLLING HILLS THE CITY COUNCIL OF THE CITY OF ROLLING HILLS, CALIFORNIA, DOES HEREBY RESOLVE, DECLARE, DETERMINE, AND ORDER AS FOLLOWS: Section 1. Recitals. A. Over the last few months the City Council has discussed establishing policies and procedures for accepting charitable gifts given to the City. B. The City Council desires to adopt a gift policy so that potential donors as well as City staff and the public are clear on the criteria and process for gifts to the City. C. Further, adoption of a gift policy will aid in overall transparency and ethical local governance to ensure that gifts are properly vetted and handled and that there is no expectation or opportunity for special treatment or benefits due to a gift to the City. D. The policies and procedures contemplated by this Resolution apply only to those gifts of money, personal property and/or services. Gifts of Real Property are not subject to this policy. Section 2. The attached Policy For Gifts To The City Of Rolling Hills (attached hereto as Exhibit “A”) is hereby adopted. Section 3. This Resolution shall take effect immediately upon its adoption by the City Council, and the City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book or original resolutions. PASSED, APPROVED, AND ADOPTED this 8th day of July, 2024 ______________________________ LEAH MIRSCH MAYOR ATTEST: ___________________________ CHRISTIAN HORVATH CITY CLERK 29 Resolution No. 1373 -2- STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) SS CITY OF ROLLING HILLS ) The foregoing Resolution No. 1373 entitled: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROLLING HILLS, CALIFORNIA AUTHORIZING ADOPTION OF A GIFT POLICY FOR THE CITY OF ROLLING HILLS was approved and adopted at a regular meeting of the City Council on the 8th day of July, 2024, by the following roll call vote: AYES: NOES: ABSENT: ABSTAIN: ___________________________ CHRISTIAN HORVATH CITY CLERK 30 Resolution No. 1373 -3- Exhibit “A” 31 GIFT POLICY 1 7/8/2024 POLICY FOR GIFTS TO THE CITY OF ROLLING HILLS Purpose: To provide guidelines for the City's acceptance of gifts in a responsible, ethical, transparent and accountable manner. This gift policy is prospective and does not apply retroactively to any gifts given to the City prior to the adoption of this policy. Further, this policy is subject to modification or termination by the City at any time. Types of gifts: Gifts may be offered only in the form of cash, services or personal property. Donations of real property are not subject to this policy. Any such proposed donation of real property will be evaluated individually. A “restricted gift” is a gift designated by the donor for a particular City department, location or purpose. The City shall not consider the acceptance of any restricted gift with an estimated value under $2000. An “unrestricted gift” is a gift without any limitations placed on its use by the City. For the purpose of this policy, the term "gift" includes, without limitation goods or services provided by a City contractor or vendor beyond that specified in its contract with the City. The City, except for good cause, shall not consider the acceptance of any non-restricted gift with an estimated value under $1000. Procedure: The City Manager shall perform an initial evaluation of a proposed gift. Factors to be considered include, but are not limited to, the following: • Whether acceptance of the gift is in the City’s best interest and is consistent with applicable policies, ordinances, and resolutions; • Whether the acceptance of the gift would give rise to an appearance of impropriety; • In the case of a restricted gift, whether the gift obligates the City to make an immediate or initial City expenditure that has not been included in the approved City budget, and whether it may result in ongoing costs. • The City shall consider whether to accept a proposed gift at a City Council meeting as an item on its agenda for gifts exceeding an estimated value of $1000 or more. The staff report for the agenda item should discuss the staff's initial evaluation of the proposed gift. There is no need for staff to provide a recommendation to the City Council for each donation. • Gifts below an estimated value of $1000 may be accepted by the City Manager at the City Manger’s discretion and in accordance with this policy. The City Manager shall endeavor to notify the City Council either verbally at a City Council meeting or via written report of gifts received by the City. • Gifts to the City in no way entitle a resident or other donor to any greater benefit or different treatment than already provided to any other resident or donor. To avoid the appearance of impropriety, among other things, the City shall not accept gifts from or on behalf of any individual or entity who is in the process of obtaining discretionary approval from the City, or 32 GIFT POLICY 2 7/8/2024 who applied for discretionary approval within 12 months prior to the proposed gift. In the event a donor seeks discretionary approval from the City within 12 months following City's acceptance of a gift, the City shall return the gift to the donor when possible. • All gifts shall become City property. • In the event a monetary restricted gift is provided to the City and the purpose is unable to be accomplished within 5 years, that monetary gift shall convert to an unrestricted gift that can be used for general public purposes. • Upon acceptance by the City Council, a letter or email of the acknowledgement of the gift shall be sent to the donor, signed by the mayor. • The City does not provide legal, accounting, tax or other such advice to donors. The City shall only provide to the donor a description of the gift, service or personal property given to the City. The donor shall be responsible for estimating any fair market value for services or personal property donated. The City makes no representation or warranty on the tax deductibility of any gift and directs any donor to consult their CPA, tax professional or other advisor on these matters. • The City will not accept anonymous gifts. All records of donations shall be subject to disclosure under the Public Records Act. Policy for Gifts to City Employees Gifts to individual employees: Compensation for employees performing their public duty is limited to salaries, fringe benefits and any personal satisfaction that employees may derive from doing a good job. Therefore, individual employees shall not accept any personal gifts or tips from anyone other than the City for the performance of acts within the regular course of duties. Gifts for the benefit of City employees: Edible gifts (e.g., gift baskets) or similar items are allowed but shall be made available to all employees. Alcohol is not allowed. Policy Administrative History: Adopted 7/8/2024 33 Agenda Item No.: 8.F Mtg. Date: 07/08/2024 TO:HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM:CHRISTIAN HORVATH, CITY CLERK / EXECUTIVE ASSISTANT TO CITY MANAGER THRU:KARINA BAÑALES, CITY MANAGER SUBJECT: RECEIVE AND FILE A REPORT ON THE NEXT CITY SPONSORED COMMUNAL BINS EVENT FROM AUGUST 2, 2024 THROUGH AUGUST 9, 2024 TO ASSIST RESIDENTS WITH FIRE FUEL REDUCTION IN THE COMMUNITY DATE:July 08, 2024 BACKGROUND: The City's solid waste collection provider, Republic Services, has a franchise agreement with the City approved in April 2020 for a term of nine years. The annual service fee includes one 40 cubic yard bin for green waste disposal per property per year. To date, the City has held six events rotating between three sections of the City and disposed of 72.98 tons of green waste as shown in Table 1. Republic Services estimates around 97% of the green waste is turned into compost. Table 1 - Amount of Green Waste from Communal Bin Program DATE TONS Aug. 2021 11.99 Jan. 2022 12.46 Aug. 2022 17.41 Jan. 2023 19.52 Aug. 2023 4.98 Jan. 2024 6.62 TOTAL 72.98 DISCUSSION: The seventh communal bin event is from August 2-9, 2024. The designated locations will 34 rotate to the southern section of the City. Staff has reviewed the designated locations for accessibility, ease of use for residents in the community, size of the bins in relation to the street, and size of the truck carrying the bins with Republic Services and the RHCA. The four approved locations are as follows: 1. Quail Ridge North just north of Crest Road West. 2. On the Corner of Crest Road West and Quail Ridge north adjacent to 1 Crest Road West. 3. On Spur Lane just West of Cinchring Road on Cal Water’s Water Tank Property. 4. On Portuguese Bend Road across from 52 Portuguese Bend on the West side of the street. (2 bins) Note: These locations have been used for previous communal bin events without issue or complaint. Residents should follow these directions to participate in this free program: Place all green waste inside the bins. Do not leave any debris outside the bins. Piles need to be kept free of rocks and dirt. Do not dump non-green waste materials. Do not dump construction materials. FISCAL IMPACT: None. RECOMMENDATION: Receive and file. ATTACHMENTS: PW_REF_240708_SW_CommunalBinLocations.pdf 35 COMMUNAL BIN ROTATION ROTATION 1 – Southwest Quadrant Communal bins locations: 1. Quail Ridge North just north of Crest Road West 2. Corner of Crest Road West and Quail Ridge North adjacent to 1 Crest Road West 3. Spur Lane just west of Cinchring Road on Cal Water’s water tank property 4. Portuguese Bend Road across from 52 Portuguese Bend on the west side of the street (2 bins) 36 Agenda Item No.: 11.A Mtg. Date: 07/08/2024 TO:HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM:ROBERT SAMARIO, FINANCE DIRECTOR THRU:KARINA BAÑALES, CITY MANAGER SUBJECT: A PUBLIC HEARING TO CONSIDER AND ADOPT RESOLUTION NO. 1371 AUTHORIZING PLACEMENT OF SOLID WASTE SERVICE CHARGES OWED TO REPUBLIC SERVICES PURSUANT TO ITS SOLID WASTE FRANCHISE WITH THE CITY OF ROLLING HILLS ON THE FY 2024-2025 LOS ANGELES COUNTY AUDITOR- CONTROLLER'S OFFICE ANNUAL TAX ROLL DATE:July 08, 2024 BACKGROUND: Pursuant to the provisions of Chapter 8.08 of Title 8 of the City of Rolling Hills Municipal Code and Article 4 of Chapter 6 of Part 3 of Division 5 of the California Health and Safety Code, commencing with Section 5470, the City Council is authorized to levy the annual sanitation service charge and to have such charge collected on the tax roll in the same manner, by the same persons, and at the same time as, together with and not separately from, the general taxes of the City. DISCUSSION: The following is a summary of the services and activities associated with the sanitation charge: To protect public health and safety, Contractor shall provide and maintain all labor, equipment, material, supplies, supervision and all other items necessary for the Collection of all Solid Waste, Recyclable Materials, Green Waste, Bulky Items, and Brush generated or accumulated within the City from Residential Premises and City Facilities. The services provided by the Contractor under this Agreement shall be performed in a thorough and professional manner so that all Customers are provided at all times with reliable, courteous and high-quality Solid Waste Management Services. Contractor shall collect all properly placed Solid Waste, Recyclable Materials and Organic Waste from the designated collection location of every residential premises in the City twice each week. Each year in spring, and again in the fall, Contractor shall collect an unlimited amount of Bulky Items, and Green Waste from the designated collection location. In addition to the semi-annual Bulky Item and Green Waste Collection events, Contractor 37 shall provide Customers with on-call Collection for Bulky Items upon request. Contractor shall collect one (1) Bulky Item per calendar year from each Residential Premises at no charge on an on-call basis. Contractor will provide additional services as outlined in the Amended and Restated Agreement for Residential Solid Waste Management Services. For Fiscal Year 2024-25, the sanitation charge will be $1,432 per parcel. The sanitation charge is unchanged from Fiscal Year 2023-2024. The $1,432 per parcel was established based on the actual costs to provide refuse services. The enclosed Report contains detailed information about the annual charge and the charge to be applied to the parcels. The City Council may order implementation of City sanitation service charge on the FY 2024- 25 property tax rolls by adopting the enclosed Resolution with the attached Report. Council action on the staff recommendation is required in order to place the annual charge on the tax roll. A notice of the July 8, 2024 public hearing was published in the Daily Breeze on June 24, 2024 (see attached Affidavit.) FISCAL IMPACT: The anticipated total revenue is approximately $1,003,909 which is included in the 2024-25 Budget. RECOMMENDATION: Staff recommends that the City Council open the public hearing and adopt Resolution No. 1371 placing the sanitation service charge on the annual County of Los Angeles Tax Roll. ATTACHMENTS: CL_AGN_240708_CC_FY24-25_SanitationReport.pdf CL_AGN_220711_CC_RH_ParcelMap_20200724_withRoads.pdf CL_AGN_240708_CC_FY24-25_TaxRoll.pdf ResolutionNo1371_FY 24-25_AnnualRefuseAssessment_F.pdf CL_PBN_240708_PH_CC_FY24-25_RefuseDirAss_Billing_Affidavit.pdf 38 ANNUAL SANITATION (GARBAGE AND REFUSE COLLECTION) REPORT Sanitation Service The City of Rolling Hills proposes to collect funds to cover the expenses for the sanitation services provided to each property owner within the City. The following is a summary of the services and activities associated with the charges: • To protect public health and safety, Contactor shall provide and maintain all labor, equipment, material, supplies, supervision and all other items necessary for the Collection of all Solid Waste, Recyclable Materials, Green Waste, Bulky Items, and Brush generated or accumulated within the City from Residential Premises and City Facilities. The services provided by the Contractor under this Agreement shall be performed in a thorough and professional manner so that all Customers are provided at all times with reliable, courteous and high-quality Solid Waste Management Services. • Contractor shall collect all properly placed Solid Waste, Recyclable Materials and Organic Waste from the designated collection location of every residential premises in the City twice each week. • Each year on two consecutive Saturdays in April or May, and again on a Saturday in September or October, both as determined by the City, Contractor shall collect an unlimited amount of Bulky Items from the designated collection location. • In addition to the semi-annual Bulky Item Collection events, Contractor shall provide Customers with on-call Collection for Bulky Items upon request. Contractor shall collect one (1) Bulky Item per calendar year from each Residential Premises at no charge on an on-call basis. • Contractor will provide additional services as outlined in the Amended and Restated Agreement for Residential Solid Waste Management Services. The frequency, extent, and/or level of the services identified herein may be modified based on available funding and priorities as determined by the City. Sanitation Service Charge Calculation For Fiscal Year 2015-2016, the sanitation charge in the amount of $1,100 per parcel was established. The sanitation charge remained unchanged through fiscal year 2023. 39 In Fiscal Year 2023-2024, the cost of providing sanitation services increased to $1,432.11 per parcel. The increase from the $1,100 per parcel over the last five fiscal years to $1,432.11 per parcel is based on the direct costs incurred by the City based on the amounts paid to Republic Services for refuse services, which include adjustments for the Consumer Price Index (CPI) and landfill costs. The Franchise Agreement requires that Republic Services annually provide evidence of the CPI adjustment to the City Manager for review and approval. For fiscal year 2024-25, the annual sanitation charge will remain at $1,432.11 per parcel based on the direct cost of providing the service. Proposition 218 Considerations: Proposition 218, which the voters of the State of California passed on November 5, 1996, contains requirements for the imposition of a fee or charge for property related services. Requirements for fees and charges are contained in Section 6 of Article XIII D. Paragraph (b) describes the requirements for new, existing, or increased fees and charges as follows: (1) Revenues shall not exceed the funds required to provide the services. (2) Revenues shall not be used for any other purpose. (3) The amount of the fee or charge imposed upon any parcel or person as an incident of property ownership shall not exceed the proportional cost of the service attributable to the parcel. (4) No fee or charge may be imposed unless the service is actually used by or immediately available to the owner of the property in question. (5) No fee or charge shall be imposed for general governmental services, i.e. police, ambulance, library, where the service is available to the public at large in substantially the same manner as it is to the property owners. This report and recommended charges comply with all five of these requirements: 1. Revenues generated by this charge will not exceed funds required to provide sanitation services and shall not be used for any other purpose, besides what has been described herein. 2. The sanitation charge does not exceed the proportional cost of providing service to the parcels in the City and the charge is for actual use by or immediately available to the owner of the property in question. Boundary Diagram The enclosed diagram shows the exterior boundaries of the territory within the City of Rolling Hills subject to the annual sanitation charges, which has the same boundaries of the City of Rolling Hills itself. Parcel identification, the lines and dimensions of each lot, and parcel and subdivision of land within proposed sanitation services boundary described 40 herein are identified and correspond to the Los Angeles County Assessor’s Parcel Maps for said parcels as they existed at the time this Report was prepared a nd shall include all subsequent subdivisions, lot-line adjustments, or parcel changes therein. Reference is hereby made to the Los Angeles County Assessor’s map for a detailed description of the lines and dimensions of each lot and parcel of land within the City of Rolling Hills subject to the proposed annual sanitation service charge to be levied on behalf of the City. List of Assessor’s Parcel Numbers to be levied with the proposed charge amounts: Parcel Number Land Use Description Charge See Attached Residential See Attached 41 7567-011-020 7569-012-008 7569-012-019 7567-001-010 7567-002-019 7567-002-021 7567-003-050 7567-002-023 7569-015-007 7567-017-035 7567-003-033 7567-004-033 7567-017-018 7567-007-007 7567-009-018 7567-009-027 7569-018-002 7569-021-005 7569-011-012 7569-024-015 7569-026-012 7569-013-012 7567-002-008 7567-006-037 7567-008-018 7567-002-029 7567-006-034 7567-007-004 7567-007-013 7567-007-021 7567-008-008 7567-008-011 7567-008-014 7567-009-007 7567-009-022 7567-018-016 7567-018-021 7567-018-025 7567-018-032 7567-002-027 7567-006-033 7567-007-008 7567-007-010 7567-007-012 7567-007-014 7567-007-017 7567-007-018 7567-007-019 7567-008-009 7567-008-015 7567-008-019 7567-009-006 7567-009-014 7567-009-015 7567-009-023 7567-018-017 7567-018-018 7567-018-020 7567-018-023 7567-018-028 7567-018-034 7569-007-008 7567-002-017 7567-002-028 7567-006-031 7567-006-035 7567-007-011 7567-007-016 7567-007-025 7567-008-016 7567-009-009 7567-009-010 7567-009-012 7567-009-017 7567-009-021 7567-018-014 7567-018-019 7567-018-024 7567-018-029 7567-018-030 7567-018-033 7567-018-037 7569-005-015 7569-006-001 7567-006-030 7567-006-032 7567-006-036 7567-006-038 7567-007-006 7567-007-015 7567-007-020 7567-007-022 7567-007-024 7567-008-007 7567-009-005 7567-009-019 7567-018-022 7567-018-036 7569-005-014 7569-005-016 7569-006-007 7569-007-002 7569-007-003 7569-007-010 7569-006-006 7569-007-009 7567-009-039 7567-009-032 7567-009-033 7567-009-031 7567-009-035 7567-009-038 7569-004-016 7569-004-026 7569-001-023 7569-001-036 7569-002-006 7569-002-014 7569-002-016 7569-003-001 7569-004-005 7569-004-015 7569-004-025 7569-005-008 7569-001-025 7569-001-026 7569-001-033 7569-002-005 7569-002-007 7569-002-010 7569-002-012 7569-002-017 7569-002-018 7569-003-006 7569-003-013 7569-004-002 7569-004-012 7569-004-013 7569-004-020 7569-004-021 7569-005-004 7567-017-033 7567-017-038 7567-017-039 7567-017-040 7567-017-042 7567-017-048 7567-018-001 7567-018-006 7567-018-011 7569-004-010 7569-001-030 7569-001-032 7569-002-015 7569-003-003 7569-003-011 7569-004-006 7569-004-017 7569-004-018 7569-005-001 7569-005-003 7569-005-006 7569-005-010 7567-010-009 7567-017-036 7567-017-041 7567-017-046 7567-017-047 7567-018-004 7567-018-005 7567-018-009 7569-001-028 7569-001-029 7569-001-034 7569-001-035 7569-002-002 7569-002-008 7569-002-011 7569-002-013 7569-003-002 7569-004-004 7569-004-024 7569-005-002 7569-005-007 7569-005-013 7567-010-012 7567-017-034 7567-017-044 7567-018-002 7567-018-003 7567-018-008 7567-018-013 7567-010-013 7567-017-045 7567-017-051 7567-018-012 7567-002-005 7567-002-014 7567-001-004 7567-001-007 7567-001-016 7567-002-006 7567-002-011 7567-002-015 7567-001-006 7567-001-014 7567-002-004 7567-002-009 7567-002-013 7567-001-013 7567-001-017 7567-002-007 7567-002-016 7567-002-024 7567-002-018 7567-002-020 7567-002-022 7567-002-025 7567-009-025 7567-009-029 7567-009-030 7567-002-026 7567-009-024 7567-009-026 7567-009-028 7567-017-020 7567-001-904 7567-017-900 7569-003-904 7567-001-902 7567-003-011 7567-005-036 7567-003-052 7567-004-009 7569-003-010 7567-012-016 7567-004-016 7567-004-041 7567-004-037 7567-015-037 7567-017-052 7567-003-0307567-018-015 7567-018-031 7567-006-002 7567-009-013 7567-017-037 7567-009-016 7567-002-033 7567-003-008 7567-003-012 7567-003-016 7567-003-020 7567-003-022 7567-003-026 7567-003-028 7567-002-037 7567-002-030 7567-006-025 7567-002-034 7567-003-013 7567-003-017 7567-003-019 7567-003-023 7567-003-027 7567-003-036 7567-005-023 7567-006-003 7567-006-011 7567-006-015 7567-006-018 7567-006-024 7567-006-029 7567-012-021 7567-012-026 7567-012-038 7567-012-039 7567-016-013 7567-016-014 7567-017-010 7567-017-013 7567-017-019 7567-017-021 7567-017-027 7567-003-031 7567-003-035 7567-005-016 7567-005-019 7567-005-020 7567-005-022 7567-005-024 7567-005-027 7567-005-029 7567-005-033 7567-006-014 7567-006-023 7567-002-036 7567-003-009 7567-003-018 7567-003-021 7567-003-025 7567-003-034 7567-003-039 7567-005-017 7567-005-018 7567-005-021 7567-005-025 7567-005-028 7567-005-030 7567-005-032 7567-005-034 7567-005-039 7567-005-040 7567-006-001 7567-006-008 7567-006-013 7567-006-020 7567-006-026 7567-012-023 7567-012-029 7567-012-031 7567-012-036 7567-015-039 7567-016-011 7567-016-016 7567-016-017 7567-017-023 7567-017-030 7567-017-032 7567-012-020 7567-012-025 7567-012-027 7567-012-034 7567-016-015 7567-017-022 7567-017-029 7567-002-031 7567-002-035 7567-003-014 7567-003-015 7567-003-029 7567-003-037 7567-003-040 7567-003-041 7567-003-042 7567-005-031 7567-005-037 7567-005-038 7567-005-041 7567-006-012 7567-006-016 7567-006-021 7567-006-028 7567-012-024 7567-012-028 7567-012-0307567-012-032 7567-012-035 7567-012-037 7567-016-010 7567-017-011 7567-017-017 7569-010-006 7569-010-007 7569-010-011 7569-010-015 7569-012-020 7569-012-027 7569-013-001 7569-013-016 7569-013-017 7569-013-018 7569-014-004 7569-014-005 7569-014-006 7569-015-004 7569-015-006 7567-003-044 7567-003-045 7567-004-014 7567-004-019 7567-004-024 7567-004-029 7567-004-030 7567-010-019 7567-010-020 7567-010-025 7567-014-005 7567-014-011 7567-010-015 7569-013-010 7569-010-012 7569-010-016 7569-010-017 7569-012-007 7569-012-016 7569-012-017 7569-012-018 7569-013-006 7569-013-007 7569-013-013 7569-013-020 7569-014-002 7569-015-002 7569-015-008 7569-008-007 7569-012-004 7569-012-026 7569-013-011 7569-013-014 7569-013-015 7569-014-001 7569-014-013 7569-016-001 7567-003-043 7567-003-049 7567-003-051 7567-004-007 7567-004-013 7567-004-017 7567-004-023 7567-004-027 7567-010-014 7567-010-018 7569-001-020 7567-003-048 7567-004-008 7567-004-0117567-004-015 7567-010-017 7567-010-036 7567-011-024 7567-010-029 7567-010-033 7567-010-043 7567-011-014 7567-011-027 7567-012-019 7567-004-034 7567-004-035 7567-005-012 7567-005-014 7567-012-040 7567-012-041 7567-013-005 7567-014-006 7567-014-007 7567-014-010 7567-014-012 7567-014-026 7567-015-001 7567-015-005 7567-015-013 7567-015-019 7569-010-004 7569-011-003 7569-011-015 7569-011-016 7569-011-023 7569-012-025 7569-013-003 7569-014-007 7569-015-003 7567-004-012 7567-004-018 7567-004-026 7567-004-028 7567-010-024 7567-010-028 7567-010-034 7567-011-015 7567-011-016 7567-011-017 7567-011-023 7567-004-039 7567-005-010 7567-005-011 7567-013-006 7567-013-007 7567-014-002 7567-014-003 7567-014-008 7567-014-009 7569-009-009 7567-010-026 7567-010-027 7567-010-030 7567-010-032 7567-010-035 7567-010-037 7567-010-042 7567-011-019 7567-004-031 7567-004-032 7567-005-013 7567-013-010 7567-013-012 7567-013-013 7567-014-017 7567-014-021 7567-014-027 7567-015-004 7567-015-012 7567-015-017 7567-015-020 7567-015-036 7567-004-036 7567-004-040 7567-005-015 7567-013-008 7567-013-009 7567-013-011 7567-014-024 7567-015-008 7567-015-011 7567-015-016 7567-015-026 7567-015-027 7569-017-003 7569-017-008 7569-018-003 7569-021-007 7569-021-011 7569-021-018 7569-001-008 7569-001-015 7569-008-002 7569-008-004 7569-009-001 7569-009-007 7569-009-008 7569-017-002 7569-017-007 7569-018-001 7569-018-007 7569-020-004 7569-020-005 7569-021-004 7569-022-004 7569-001-016 7569-001-017 7569-008-006 7569-009-002 7567-014-018 7567-014-023 7567-015-002 7567-015-007 7567-015-014 7567-015-024 7569-017-001 7569-020-001 7569-021-010 7569-001-006 7569-001-007 7569-001-009 7569-007-015 7569-007-016 7569-008-003 7569-008-009 7569-009-011 7569-016-004 7569-023-012 7569-023-016 7569-023-026 7569-017-004 7569-017-005 7569-017-006 7569-018-004 7569-018-005 7569-018-006 7569-019-001 7569-019-002 7569-019-006 7569-020-003 7569-020-009 7569-021-008 7569-001-005 7569-001-018 7569-007-013 7569-008-008 7569-009-004 7569-009-006 7569-009-010 7569-022-005 7569-023-006 7569-023-013 7569-023-015 7569-023-023 7569-023-024 7569-023-025 7569-023-011 7569-023-017 7569-023-027 7570-025-022 7570-024-011 7570-025-018 7570-025-020 7570-025-029 7570-025-030 7570-025-032 7569-023-033 7569-023-034 7570-024-015 7570-024-016 7570-024-017 7570-025-025 7570-025-027 7570-025-028 7569-023-031 7569-015-900 7570-025-023 7569-024-013 7569-024-016 7570-024-014 7570-025-019 7570-025-021 7570-025-024 7570-025-026 7569-024-009 7569-024-0127569-024-017 7569-024-0197569-024-021 7569-025-002 7569-025-015 7569-026-004 7569-026-006 7569-026-010 7569-026-017 7569-026-002 7569-026-009 7569-026-013 7569-026-015 7569-025-010 7569-026-003 7569-026-005 7569-024-020 7569-025-003 7569-026-001 7569-026-007 7569-026-014 7570-024-900 7574-020-012 7574-020-008 7567-018-010 7569-026-900 7569-019-011 7567-010-046 7569-022-006 7567-011-022 7569-010-005 7567-010-045 7569-004-011 7567-002-010 7569-026-016 7569-023-014 7569-023-028 7569-025-014 7567-007-003 7567-006-027 7567-010-031 7569-011-006 7567-001-008 7569-001-024 7567-009-034 7567-003-046 7569-008-005 7567-015-003 7569-016-003 7567-007-026 7567-014-019 7567-015-018 7569-016-002 7567-014-025 7569-015-005 7567-007-005 7567-004-010 7567-003-038 7567-005-035 7569-024-014 7569-001-014 7569-011-022 7567-006-022 7569-012-012 7567-017-043 7567-011-018 7567-014-013 7569-007-011 7569-007-014 7567-015-015 7569-011-011 7567-014-028 7569-001-027 7567-011-021 7567-015-035 7567-017-028 7567-002-012 7567-006-017 7569-020-011 7567-009-020 7567-001-011 7567-010-022 7567-017-012 7567-003-032 7569-019-010 7567-004-025 7567-007-023 7567-010-016 7567-001-018 7569-010-010 7567-015-006 7567-010-023 7567-018-007 7569-014-003 7569-018-008 7569-021-019 7567-003-047 7567-012-022 7569-026-008 7570-025-031 7569-024-003 7569-001-021 7569-016-008 7567-017-031 7569-024-029 7569-020-010 7569-021-009 7567-008-020 7569-012-022 7569-026-011 7567-008-010 7569-012-024 7569-025-001 7569-024-028 7567-014-004 7567-015-034 7567-014-031 7569-004-027 7569-009-005 7567-014-022 7569-001-031 7569-012-015 7569-014-014 7569-014-015 7567-012-033 7567-006-019 7569-005-005 7567-017-016 7567-003-024 7567-009-036 7567-016-012 7567-007-009 7567-003-010 7567-004-020 7569-013-019 7567-004-038 7569-001-004 7569-007-012 7569-022-900 7567-015-040 Rolling Hills Estates Rolling Hills Estates Rolling Hills Rancho Palos Verdes Rancho Palos Verdes Delacroix Rd Rolling Hills RdPeppertree RdFor r e s t a l D r Middleridge RdLariat L n Cr e s t R d E M i d d l e c r e s t R d Greve D r A v e n u e D e M a g n o l i aDiamondhead LnSouthfield DrBl a c k h o r s e R d Sil v e r S p u r R d Main Sail DrCrest RdCrownview Dr Bro n c o D r Saddleback Rd Via El Miro Knoll View D rVia El Miro PlRobinview LnUpper Blackwater Canyon RdRousseau Ln Cr e s t R d W Palos Verdes Dr EBolan Ln Ro a n R d Pony Ln Storm Hill LnBeechgate DrOreLower Blackwater Canyon RdPa s e o D e P i n o Ca r t e s i a n C i r Roseapple R d Wr a n g l e r R d Wideloop Rd Aca c i a L n S p u r L n Falco n R o c k P l Crestridge RdMustang RdAbrazo DrPal o m i n o L n Pa l o s V e r d e s D r N Highpoint RdW Academy DrRi n g b i t R d W Cherry Hill LnRa n c h e r o R dTravis LnMeadowlark Ln Roundup RdShady Vista RdLo n e V a l l e y D r Hackamore RdT a n g e r i n e R d Flying Mane RdAvenida De AzaleaEl Concho LnE a s t f i e l d D r Dapplegray LnOcean a i r e D r Reata L n Wagon Ln Hummingbird LnPa s c a l P l Euc a l y p t u s L n Chesterfield RdAcacia RdCayuse LnStarline DrPinto Ln Crestwind Dr Grandpoint L n Marion DrPortuguese Bend RdNewridge DrSwe e t b a y R d Parkhurst D r Longhill D r Club View LnTallyhand Rd Maverick LnDeerhill DrDobbin LnAvenida De CameliaL a r c h b l u f f D r Ea s t v a l e R d Elkr i d g e D r Sag e b r u s h L n Narciss a D r Ganado D r Rocking h o r s e R d Pinto R d Hitching Post DrPheasant LnValley View Rd Sunnyfie ld LnPacksaddle Rd E Private Dr wy Deep Valley DrBuckboard LnFlying Mane LnCove v i e w D r Canyon View Ln Cr e s t R d Lariat Ln Li m e t r e e L n Hillside Ln Quail Ridge Rd SPacksa d dl e R d W Running B r a n d R d Ringb i t Rd EDelos DrA m b e r S k y D r Op e n B r a n d R d Chest n u t L n Chaparr al L n He a d l a n d D r Sunnyridge Rd Bowie Rd Avenid a D e R os a S u r r e y L n Golden Arrow D r El m b r i d g e D r Portuguese Bend RdB r o w n d e e r L n Paseo De CastanaS t a l l i o n R dWilliamsburg LnMartingale DrGeorgeff RdMorgan LnCrenshaw BlvdMiddleridge Ln NCaballeros RdPossum Ridge RdWestvale RdRoadrunner Rd Chuckwagon RdQu a i l R i d g e R d N Johns Canyon Rd Rainbow Ridge RdStrawberry LnAppaloosa LnPa l o V e r d e s D r N Poppy TrlCinchring Rd Outrider RdBuckskin LnPinetree LnMiddlerid g e L n S Buggy Whip DrBu r m a R d Crenshaw BlvdCity of Rolling Hills Parcel Map Roads Parcel Boundaries City Boundaries Ü 0 0.2 0.4 Miles Map created by Christine Lam (CLam2@isd.lacounty.gov) County of Los Angeles eGIS Group 7/24/2020 42 1 7567001004 1432.11 238.92 7567001006 1432.11 7567001007 1432.11 7567001008 1432.11 7567001010 1432.11 7567001011 1432.11 7567001013 1432.11 7567001014 1432.11 7567001016 1432.11 7567001017 1432.11 7567001018 1432.11 7567002004 1432.11 7567002005 1432.11 7567002006 1432.11 7567002007 1432.11 7567002008 1432.11 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1432.11 7569021019 1432.11 7569022004 1432.11 7569022005 1432.11 7569023006 1432.11 7569023011 1432.11 7569023012 1432.11 DA_2025_23892.xlsx 54 13 7569023013 1432.11 7569023014 1432.11 7569023015 1432.11 7569023016 1432.11 7569023017 1432.11 7569023023 1432.11 7569023024 1432.11 7569023025 1432.11 7569023026 1432.11 7569023027 1432.11 7569023028 1432.11 7569023031 1432.11 7569023033 1432.11 7569024003 1432.11 7569024009 1432.11 7569024012 1432.11 7569024013 1432.11 7569024014 1432.11 7569024015 1432.11 7569024016 1432.11 7569024017 1432.11 7569024019 1432.11 7569024020 1432.11 7569024021 1432.11 7569024028 1432.11 7569024029 1432.11 7569025001 1432.11 7569025002 1432.11 7569025003 1432.11 7569025010 1432.11 7569025014 1432.11 7569025015 1432.11 7569026001 1432.11 7569026002 1432.11 7569026003 1432.11 7569026004 1432.11 7569026005 1432.11 7569026006 1432.11 7569026007 1432.11 7569026008 1432.11 7569026009 1432.11 7569026010 1432.11 7569026011 1432.11 7569026012 1432.11 7569026013 1432.11 7569026014 1432.11 7569026015 1432.11 7569026016 1432.11 7569026017 1432.11 7570024011 1432.11 7570024024 1432.11 7570025018 1432.11 7570025019 1432.11 DA_2025_23892.xlsx 55 14 7570025020 1432.11 7570025021 1432.11 7570025023 1432.11 7570025024 1432.11 7570025025 1432.11 7570025026 1432.11 7570025027 1432.11 7570025028 1432.11 7570025029 1432.11 7570025030 1432.11 7570025031 1432.11 7570025032 1432.11 DA_2025_23892.xlsx 56 -1- Resolution No. 1371 RESOLUTION NO. 1371 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROLLING HILLS CONFIRMING THE LEVYING OF AN ANNUAL SANITATION (GARBAGE AND REFUSE COLLECTION) SERVICE CHARGE FOR FISCAL YEAR 2024-25 PURSUANT TO CHAPTER 8.08 OF TITLE 8 OF THE CITY OF ROLLING HILLS MUNICIPAL CODE THE CITY COUNCIL OF THE CITY OF ROLLING HILLS, CALIFORNIA, DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. Pursuant to the provisions of Chapter 8.08 of Title 8 of the City of Rolling Hills Municipal Code and Article 4 of Chapter 6 of Part 3 of Division 5 of the California Health and Safety Code, commencing with Section 5470, the City Council is authorized to levy the annual sanitation service charge (the "Charge") and to have such Charge collected on the tax roll in the same manner, by the same persons, and at the same time as, together with and not separately from, the general taxes of the City. SECTION 2. The City Manager prepared and filed a written report containing a description of each parcel of real property within the City to which the Charge is applicable (the “Identified Parcels”) and the amount of the Charge for each such Identified Parcel for fiscal year 2024-2025 in conformity with Section 8.08.230 of the City of Rolling Hills Municipal Code and approved such Report as filed. SECTION 3. Following notice duly given in accordance with law, the City Council previously held a full and fair public hearing regarding the levy and collection of the proposed charge for fiscal year 2024-2025 at an earlier meeting. All interested persons were afforded the opportunity to hear and be heard. The City Council considered all oral statements and all written protests made or filed by any interested person. A majority protest did not exist against the annual levy of the sanitation service charge and all oral and written protests to the levy and collection of the proposed charge for fiscal year 2024- 2025 were overruled by the City Council. SECTION 4 Based upon its review of the Report, a copy of which has been presented to the City Council and which has been filed with the City Clerk, the City Council hereby finds and determines that (i) each parcel in the City benefits from receiving sanitation service (ii) the net amount to be assessed upon each parcel of real property for fiscal year 2024-2025 in accordance with the Report is apportioned by a formula and method that fairly distributes the net amount among all assessable parcels in proportion to the estimated benefits received by each parcel, and (iii) no charge is imposed on any parcel that exceeds the reasonable cost of the benefits conferred on that parcel. 57 -2- Resolution No. 1371 SECTION 5. Parcels that are owned or used by any county, city, city and county, special district or any other local governmental entity, the State of California or the United States shall be charged unless the City demonstrates by clear and convincing evidence that such parcels receive no benefit from the proposed service. SECTION 6. As set forth in the Report, the annual sanitation service charge is in compliance with the provisions of the City of Rolling Hills Municipal code and Article XIIID of the California Constitution and the City Council has complied with all laws pertaining to the levy of an annual charge pursuant to the City of Rolling Hills Municipal Code and Article XIIID of the California Constitution. SECTION 7. The annual sanitation service charge is levied without regard to property valuation. SECTION 8. The City Council hereby finds and determines that the cost of the service that is financed by the annual sanitation service charge for fiscal year 2024-2025 is approximately $1,003,909.11 SECTION 9. The City Council hereby determines and imposes the annual sanitation service charge for fiscal year 2024-2025, at the rates set forth in the Report of $1,432.11 per parcel, which is in compliance with the provisions of the City of Rolling Hills Municipal code and Article XIIID of the California Constitution. SECTION 10. The adoption of this resolution constitutes the levy of an annual sanitation service charge against parcels of property in the City of Rolling Hills for the fiscal year commencing July 1, 2024 and ending June 30, 2025. SECTION 11. The County Auditor of Los Angeles County shall enter on the County Assessment Roll opposite each parcel of land the amount of the annual sanitation service charge, and such charge, and each installment of the charge, shall be collected in the same manner, and shall be subject to the same penalties and priority of lien as, other charges and taxes fixed and collected by, or on behalf of the City. After collection by the County, the net amount of the charge, after deduction of any compensation due the County, shall be paid to the Finance Director. SECTION 12. The Finance Director shall deposit all money representing charges collected by the County to the credit of the Rolling Hills Refuse Fund. SECTION 13. The City Clerk is hereby authorized and directed to file the Boundary Diagram and the list of actual Parcel Charges (a listing of the Assessor's Parcel Numbers and the amount to be levied on each parcel) with the County Auditor, together with a certified copy of this Resolution upon its adoption, in addition to any additional information the County Auditor required to collect the charge with the County taxes. 58 -3- Resolution No. 1371 SECTION 14. A certified copy of this resolution and a copy of the Report and the actual Parcel Charges (a listing of the Assessor's Parcel Numbers and the amount to be levied on each parcel) shall be filed in the office of the City Clerk and open to public inspection. PASSED, APPROVED and ADOPTED this 8th day of July 2024. ________________________________ Leah Mirsch Mayor ATTEST: ____________________________________ Christian Horvath City Clerk 59 -4- Resolution No. 1371 STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) SS CITY OF ROLLING HILLS ) The foregoing Resolution No. 1371 entitled: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROLLING HILLS CONFIRMING THE LEVYING OF AN ANNUAL SANITATION (GARBAGE AND REFUSE COLLECTION) SERVICE CHARGE FOR FISCAL YEAR 2024-25 PURSUANT TO CHAPTER 8.08 OF TITLE 8 OF THE CITY OF ROLLING HILLS MUNICIPAL CODE was approved and adopted at a regular meeting of the City Council on the 8th day of July, 2024, by the following roll call vote: AYES: NOES: ABSENT: ABSTAIN: ___________________________ CHRISTIAN HORVATH CITY CLERK 60 CL_PBN_240708_PH_CC_FY24-25_RefuseDirAssBill - Page 1 of 1 2615 Pacific Coast Highway #329 Torrance, California 90254 (310) 543-6635 pfernandez@scng.com City of Rolling Hills 2 Portuguese Bend Road Rolling Hills, California 90274 Account Number:5007827 Ad Order Number:0011675164 Customer's Reference/PO Number: Publication:Daily Breeze Publication Dates:06/24/2024 Total Amount:$481.28 Payment Amount:$0.00 Amount Due:$481.28 Notice ID:USQuPZAypQvn6JFfF9MK Invoice Text:City of Rolling Hills NOTICE OF PUBLIC HEARING ON THE ANNUAL SANITATION (GARBAGE AND REFUSE COLLECTION) SERVICE CHARGE AND THE REPORT PREPARED IN CONNECTION WITH THE ANNUAL SANITATION (GARBAGE AND REFUSE COLLECTION) SERVICE CHARGE IN THE CITY OF ROLLING HILLS The City of Rolling Hills annually collects sanitation (garbage and refuse collection) service charges (“sanitation charges”) on the tax roll in the same manner, by the same persons, and at the same time as, together with and not separately from, the general taxes of the City. NOTICE IS HEREBY GIVEN the City Council of the City of Rolling Hills has caused a written report to be prepared and filed with the City Clerk regarding the City's sanitation charges for fiscal year 2024-2025. Such report contains a description of each parcel of real property receiving sanitation services furnished by the City and the amount of the charge for each parcel for fiscal year 2024-2025 computed in conformity with Chapter 8.08 of Title 8 of the City’s Municipal Code. NOTICE IS HEREBY FURTHER GIVEN that on the 8th day of July, 2024 at 7:00 P.M. the City Council of the City of Rolling Hills will hold a public hearing on the above- described report and levy of the annual sanitation charges. The report is on file in the office of the City Clerk, 2 Portuguese Bend Road, California 90274, and available for public inspection. All City Councilmembers will participate in an in-person meeting and members of the community are welcome to attend the meeting at City Hall; however, a live audio of the City Council meeting will be available on the City’s website http://www.rolling-hills.org/. The meeting agenda will be on the City’s website https://www.rolling- 61 CL_PBN_240708_PH_CC_FY24-25_RefuseDirAssBill - Page 1 of 1 Daily Breeze 2615 Pacific Coast Highway #329 Torrance, California 90254 (310) 543-6635 0011675164 City of Rolling Hills 2 Portuguese Bend Road Rolling Hills, California 90274 PROOF OF PUBLICATION (2015.5 C.C.P.) STATE OF CALIFORNIA County of Los Angeles I am a citizen of the United States and a resident of the County aforesaid; I am over the age of eighteen years, and not party to or interested in the above- entitled matter. I am the principal clerk of the printer of Daily Breeze, a newspaper of general circulation, printed and published in the City of Torrance*, County of Los Angeles, and which newspaper has been adjudged a newspaper of general circulation by the Superior Court of County of Los Angeles, State of California, under the date of June 15, 1945, Decree No. Pomo C-606. The notice, of which the annexed is a printed copy (set in type not smaller than nonpareil), has been published in each regular and entire issue of said newspaper and not in any supplement thereof on the following dates, to wit: 06/24/2024 I certify (or declare) under the penalty of perjury that the foregoing is true and correct. Dated at Torrance, California On this 24th day of June, 2024. ______________________________ Signature *Daily Breeze circulation includes the following cities: Carson, Compton, Culver City, El Segundo, Gardena, Harbor City, Hawthorne, Hermosa Beach, Inglewood, Lawndale, Lomita, Los Angeles, Long Beach, Manhattan Beach, Palos Verdes Peninsula, Palos Verdes, Rancho Palos Verdes, Rancho Palos Verdes Estates, Redondo Beach, San Pedro, Santa Monica, Torrance and Wilmington 62 Agenda Item No.: 13.A Mtg. Date: 07/08/2024 TO:HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM:ROBERT SAMARIO, FINANCE DIRECTOR THRU:KARINA BAÑALES, CITY MANAGER SUBJECT: ACCEPT AND APPROVE THE CITY OF ROLLING HILLS AUDITED ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2023 DATE:July 08, 2024 BACKGROUND: Each year, the City prepares a financial report covering all funds and operations. The financial report provides the City Council and public a measure of the financial condition of the City and the results of operations for the fiscal year. The financial statements are audited each year by an independent CPA firm to ensure that the financial statements are fairly presented. The accompanying financial statements are referred to as the "Annual Comprehensive Financial Report" (ACFR). As the name implies, the ACFR provides a "comprehensive" presentation of the City's finances. The ACFR is prepared in accordance with standards promulgated by the Governmental Accounting Standards Board (GASB) and have been audited by an independent certified public accounting firm. Based on their audit, the firm expresses an opinion as to whether the financial statements are free of any material misstatement and can, thus, be relied upon by the readers of the financial statement. DISCUSSION: The attached financial statements for the fiscal year ended June 30, 2023, are not only required to be prepared each year, but they provide important information regarding the financial health of the City, and whether the financial health improved or deteriorated during the fiscal year. The City's financial operations are organized into various funds. By far, the largest and most important fund is the General Fund, which accounts for a variety of unrestricted revenues, primarily taxes, that pay for core local governmental services, such as law enforcement, planning, building safety, emergency preparedness, and administration. Since the revenues are unrestricted, the City has considerable discretion on how these funds are spent. The other funds largely account for revenues that are restricted to specified purposes, typically 63 the enabling legislation that imposed the taxes. These funds include Proposition A, Proposition C, Measure R and Measure M. All of these revenues are derived from special sales tax measure approved by Los Angeles County voters over the last few decades and are restricted to transit and transportation purposes. The City also uses a separate fund to account of solid waste services provided under contract by a private waste hauling company. These services are paid for by City residents through their property taxes billed by Los Angeles County on behalf of the City. This operation is reported as an Enterprise Fund in the annual financial statements, which means the charges for the services must be determined based on the full cost to provide the services. A summary of the City's financial position and results of operations is provided below. CITY-WIDE ANALYSIS The City-wide statements present all City operations in two categories. The governmental activities category includes all City funds except for the Refuse Collection Fund. In addition, this category almost entirely is made up of the General Fund, which is where most City services, along with tax revenues that primarily pay for those services, are reported. The net position of the City’s governmental activities increased by $302,996, excluding transfers of $214,759. Including transfers the net position increased by $88,237. The business-type activities include refuse collection operations. Refuse collection services are considered a utility and, as such, are typically fully funded from direct charges to customers utilizing these services. For this reason, they tend to operate much like the private sector and thus are classified as a “business-type activity.” Refuse charges are added to the tax roll each year and are billed by the County of Los Angeles in conjunction with the billing for property taxes. For fiscal year 2022-23, the direct charges totaled $744,696. In addition, the General Fund transferred $214,759 to partly subsidize rates charged to customers and keep the annual charge fixed at $1,100. Note that for fiscal year 2023-24, the rates were increased to fully recover the costs of operations, eliminating the General Fund subsidy going forward. GENERAL FUND By far the largest of the governmental funds is the General Fund, in which where most of the City’s operations are accounted for. The General Fund’s financial position decreased by $645,906, which includes capital transfers of $760,528. Excluding capital transfers, the General Fund realized an operating surplus of $344,675. Capital transfers are an intentional use of General Fund reserves to fund capital improvement projects. Property Tax revenues is the largest General Fund revenue at $1,378,564, making up 48% of total General Fund revenues of $2,781,180. Property Tax revenues increased from the prior year total of $1,323,001 by 55,563 (4.2%), which is a moderate growth for a revenue that historically grows by 3-6% per year. This growth is reflective of the strong real estate market over the last few years driven by low interest rates, strong demand, and a high volume of sales activity. 64 In March of 2021, the President signed the American Rescue Plan Act (ARPA), providing $1.9 trillion in federal relief to mitigate the impacts of the COVID-19 pandemic. Of that amount, approximately $64 billion was provided to provide direct and flexible financial resources for every city and town nationwide. The City received a total of $441,364 in two installments of $220,682 each, the first in June 2021 and the second a year later in June of 2022. The second installment was used in fiscal year 2022/23 to cover a portion of law enforcement services. As such, these revenues will not be available in subsequent years. The City issues permits for building and construction projects undertaken by City residents. These revenues are highly tied to the economy and housing market. As real estate prices increase, there tends to be an increase in residential building activity. However, starting in 2021, as a result of COVID, building activity, and the associated revenues declined. Several years ago, revenues from building and related permits were almost $800,000. In fiscal year 2020/21, they dropped precipitously to $183,378. With the end of the pandemic, building activity picked up and revenues jumped to $518,309 last fiscal year and to $578,496 in the current fiscal year. Due to the recent rise in interest rates and other factors, building revenues have not performed as well during the first six months of fiscal year 2023-24. The City receives an allocation from the State of California called the Motor Vehicle License Fee (MVLF). The MVLF is a tax imposed in lieu of a local personal property tax on automobiles. The MVLF is imposed at a rate of 2% on a vehicle's market value, adjusted by a depreciation schedule specified in state law. Pursuant to the State Constitution, VLF revenue is allocated to local governments. Approximately 75% of MVLF is split between cities and counties. The remaining 25% of local government VLF funds are restricted to funding various health, mental health, and social services programs shifted to the counties as part of the 1991 realignment. In fiscal year 2022/23, the City’s allocation totaled $263,988. This revenue is largely affected by the number in, and dollar increase of, car sales. With the recent rise in interest rates, car sales, as with real estate, will likely decrease to some degree. UTILITY FUND The Underground Utility Fund on the City’s governmental funds balance sheet is a major fund. The Capital Projects – Utility Fund provides funds for consultant and construction services for underground utilities projects and other infrastructure improvements. The Capital Projects – Utility Fund has a total fund balance of $665,574. RESULTS OF AUDIT The City's financial records and annual financial report is subject to an audit by an independent CPA firm. At the conclusion of the audit, the auditors issue an opinion letter which indicates whether or not the financial statements are free of material misstatement and 65 whether they can be relied upon. Based on their audit, the City received an "unmodified" opinion, which means the financial statements can indeed be relied upon. This opinion letter is included within the financial statements. The auditors also provide City Council with two other letters separate from the opinion letter and that are not included within the financial report document. The first is a report on internal controls. Although the auditors do not express an opinion on internal controls, they do a fair amount of testing in this area to determine if the City's internal control procedures can be relied upon for purposes on conducting their audit. For example, if internal controls were weak, the auditors would have to perform more substantive test work to reach a comfort level sufficient to issue an unmodified opinion. As a result of the auditor's testing and evaluation of internal controls, the first letter indicates that there were no material weaknesses noted. The second letter contains certain areas the auditors are required to communicate to an audit committee or City Council about. Based on their audit, there were no items that required special communication other than the normal information required under government auditing standards. Both letters are attached. FISCAL IMPACT: None. RECOMMENDATION: Approve as presented. ATTACHMENTS: CL_AGN_240708_CC_Audit_CommunicationLetter.pdf CL_AGN_240708_CC_AnnualFinancialReport.pdf CL_AGN_240708_CC_InternalControlsReport.pdf CL_AGN_240708_CC_FY22-23_AuditedFInancials_Presentation.pdf 66 1611 E. Fourth Street, Suite 200 Santa Ana, CA 92701 (714) 569-1000 203 N. Brea Blvd, Suite 203 Brea, CA 92821 (714) 672-0022 21 Waterway Avenue, Suite 30089 The Woodlands, TX 77380 (936) 828-4587 2151 River Plaza Dr., Suite 150 Sacramento, CA 95833  (916) 503-9691 24422 Avenida de la Carlota, Suite 275 Laguna Hills, CA 92653 (949) 829-8299 www.lslcpas.com June 24, 2024 To the Honorable Mayor and Members of the City Council City of Rolling Hills, California We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Rolling Hills, California (the “City”) for the year ended June 30, 2023. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards and Government Auditing Standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated January 15, 2024. Professional standards also require that we communicate to you the following information related to our audit. Significant Audit Matters Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during the fiscal year ended June 30, 2023. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the City’s financial statements were: Management’s estimates of the net pension liability and net other postemployment benefits liability are based on actuarial valuation estimates. We evaluated the methods, assumptions, and data used to develop the actuarial valuation estimates in determining that they are reasonable in relation to the financial statements taken as a whole. The financial statement disclosures are neutral, consistent, and clear. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. We are pleased to report that no such misstatements were identified during the course of our audit. 67 To the Honorable Mayor and Members of the City Council City of Rolling Hills, California Disagreements with Management For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested certain representations from management that are included in the management representation letter dated June 24, 2024. Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the City’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. Other Matters We applied certain limited procedures to management’s discussion and analysis, the budgetary comparison schedules for the General Fund and the major special revenue funds, and the required pension and other postemployment benefits schedules, which are required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI. We were engaged to report on the combining and individual fund financial statements and schedules which accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves. Future GASB Pronouncements The following Government Accounting Standards Board (GASB) pronouncements will be effective for the following fiscal years’ audits and should be reviewed for proper implementation by management: Fiscal Year 2023-2024 GASB Statement No. 99, Omnibus 2022. 68 To the Honorable Mayor and Members of the City Council City of Rolling Hills, California Fiscal Year 2024-2025 GASB Statement No. 101, Compensated Absences. Future Projects Comprehensive Project, Financial Reporting Model. Comprehensive Project, Revenue and Expense Recognition. Major Project, Going Concern Uncertainties and Severe Financial Stress. Major Project, Infrastructure Assets. Practice Issue, Classification of Nonfinancial Assets. Practice Issue, Risks and Uncertainties Disclosures. Pre-Agenda Research Activities, Subsequent Events. Restriction on Use This information is intended solely for the information and use of City Council and management of the City and is not intended to be, and should not be, used by anyone other than these specified parties. Very truly yours, Brea, California 69 CITY OF ROLLING HILLS, CALIFORNIA FOR THE FISCAL YEAR ENDED JUNE 30, 2023 FINANCIAL STATEMENTS 70 CITY OF ROLLING HILLS, CALIFORNIA Financial Statements For the Fiscal Year Ended June 30, 2023 PREPARED BY: THE CITY OF ROLLING HILLS, CALIFORNIA FINANCIAL SERVICES DEPARTMENT 71 THIS PAGE INTENTIONALLY LEFT BLANK 72 CITY OF ROLLING HILLS, CALIFORNIA Financial Statements For the Fiscal Year Ended June 30, 2023 Table of Contents Page Number FINANCIAL SECTION INDEPENDENT AUDITORS’ REPORT ................................................................................................................. 1 MANAGEMENT’S DISCUSSION AND ANALYSIS ................................................................................................ 5 BASIC FINANCIAL STATEMENTS Government-Wide Financial Statements: Statement of Net Position .............................................................................................................................. 15 Statement of Activities .................................................................................................................................... 16 Fund Financial Statements: Balance Sheet - Governmental Funds ........................................................................................................... 18 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position .................................................................................................................... 21 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds ................................................................................................................... 22 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities ...................................... 24 Statement of Net Position - Proprietary Funds .............................................................................................. 25 Statement of Revenues, Expenses and Changes in Fund Net Position - Proprietary Funds ........................................................................................................................... 26 Statement of Cash Flows - Proprietary Funds ............................................................................................... 27 Notes to Financial Statements ....................................................................................................................... 29 73 CITY OF ROLLING HILLS, CALIFORNIA Financial Statements For the Fiscal Year Ended June 30, 2023 Table of Contents Page Number REQUIRED SUPPLEMENTARY INFORMATION Notes to Required Supplementary Information .............................................................................................. 53 Budgetary Comparison Schedule – General Fund ........................................................................................ 54 Budgetary Comparison Schedule – Cal/OES Fund ....................................................................................... 55 Schedule of Proportionate Share of the Net Pension Liability – Miscellaneous ............................................ 56 Schedule of Plan Contributions – Miscellaneous ........................................................................................... 58 Schedule of Changes in the Net OPEB Asset and Related Ratios ............................................................... 60 Schedule of Plan Contributions – OPEB ........................................................................................................ 61 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES Combining Balance Sheet – Nonmajor Governmental Funds ....................................................................... 62 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Governmental Funds ..................................................................................... 65 Budgetary Comparison Schedules – Special Revenue Funds: Transit Fund ............................................................................................................................................. 68 Measure R Fund ...................................................................................................................................... 69 COPS Fund ............................................................................................................................................. 70 CLEEP Fund ............................................................................................................................................ 71 Measure M Local Return Fund ................................................................................................................ 72 LA County Measure W Fund ................................................................................................................... 73 Budgetary Comparison Schedules – Capital Projects Funds: Underground Utility Fund ......................................................................................................................... 74 Capital Projects Fund .............................................................................................................................. 75 74 1611 E. Fourth Street, Suite 200 Santa Ana, CA 92701 (714) 569-1000 203 N. Brea Blvd, Suite 203 Brea, CA 92821 (714) 672-0022 21 Waterway Avenue, Suite 30089 The Woodlands, TX 77380 (936) 828-4587 2151 River Plaza Dr., Suite 150 Sacramento, CA 95833  (916) 503-9691 24422 Avenida de la Carlota, Suite 275 Laguna Hills, CA 92653 (949) 829-8299 www.lslcpas.com INDEPENDENT AUDITORS’ REPORT To the Honorable Mayor and Members of the City Council City of Rolling Hills, 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 Rolling Hills, California (the “City”), as of and for the year ended June 30, 2023, 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, 2023, and the respective changes in financial position, and, where applicable, cash flows thereof, for the year then ended in accordance with accounting principles generally accepted in the United States of America. 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. 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, 75 To the Honorable Mayor and Members of the City Council City of Rolling Hills, California intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we: •Exercise professional judgment and maintain professional skepticism throughout the audit. •Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. •Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed. •Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. •Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit. Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, budgetary comparison schedules for the General Fund and major special revenue funds, and the required pension and other postemployment benefits schedules, as listed on the table of contents, 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 inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The accompanying combining and individual fund financial statements and schedules (supplementary information) are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. 2 76 To the Honorable Mayor and Members of the City Council City of Rolling Hills, California The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated June 24, 2024, 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 City’s internal control over financial reporting and compliance. Brea, California June 24, 2024 3 77 THIS PAGE INTENTIONALLY LEFT BLANK 4 78 Management Discussion and Analysis The following narrative provides an overview and analysis of the financial activities of the City of Rolling Hills for the fiscal year ended June 30, 2023. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in the City’s financial statements. Financial Highlights •The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of resources at the close of the most recent fiscal year by $7,328,105 (net position). Of this amount, $3,374,868 (unrestricted net position) may be used to meet the government’s ongoing obligations to citizens and creditors. •As of the close of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $5,912,635. Of this amount $1,285,998 is unassigned and available for spending at the City’s discretion. An additional $2,648,498 is assigned for emergencies and other contingencies pursuant to City policy. •General Fund revenues exceeded budget by $142,796 before interfund transfers, and expenditures were $885,525 below budget. After operating transfers and a restatement of the beginning fund balance, the General Fund’s fund balance decreased by $645,906. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements contain the following three components: 1) Government-wide Financial Statements, 2) Fund Financial Statements and 3) Notes to the Financial Statements. Government-Wide Financial Statements The government-wide financial statements are designed to provide readers with a broad overview of the City’s finances, in a manner similar to a private sector business. These statements include all assets and liabilities of the City using the accrual basis of accounting, which is similar to the accounting used by most private -sector companies. All of the current year’s revenues and expenses are considered regardless of when cash is received or paid. The statement of net position presents information on all of the City’s assets, deferred inflows/outflows of resources and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The statement of activities presents information showing how the government’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change regardless of the timing of related cash flows. Thus, some of the revenues and expenses reported in this statement will have no effect on cash until some future fiscal period. Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from functions that are intended to recover some or all of their costs through user fees and charges (business -type activities). Governmental activities. With the exception of refuse services, all of the City’s basic services are reported in this category, including the general administration, public safety, planning and development, recreation and public works. Property taxes, sales tax, real estate transfer tax, licenses and permits, franchise fees, charges for services, interest income, grants, contributions from other agencies, and other revenues finance these activities. 5 79 Business-type activities. The City charges a fee to customers to cover all or most of the costs of certain services it provides. The City’s Refuse Collection operation is reported in this category. The government-wide financial statements can be found on pages 15 to 17 of this report. Fund Financial Statements The fund financial statements provide detailed information about the City’s most significant funds. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental funds. Most of the City’s basic services are reported in governmental funds, which focus on how money flows in and out of those funds and balances left at year -end that are available for spending. These funds are reported using an accounting method called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the City’s general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance the City’s programs. The difference between the results in the Governmental Fund financial statements to those in the Government wide financial statements are explained in a reconciliation following each Governmental Fund financial statement. In addition to the major funds reported separately on the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balance, the City also maintains 7 special revenue funds and one capital project fund. Data from these funds are combined into a single, aggregated presentation referred to as other governmental funds. Individual fund data for each of these non-major governmental funds are provided in the form of combining statements elsewhere in this report. The City adopts an annual appropriated budget for all of its governmental and proprietary funds. A budget comparison statement has been provided for the General Fund to demonstrate compliance with this budget. This comparison can be found on page 54 of this report. The basic governmental fund financial statements can be found on pages 18 to 24 of this report. Proprietary funds. When the City charges customers for the services it provides, these services are generally reported in proprietary funds. Within the category of proprietary funds are Enterprise Funds and Internal Service Funds. Enterprise funds are used to report the same functions presented as business -type activities in the government-wide financial statements. The City uses an enterprise fund to account for its Refuse activity. Internal service funds are an accounting devise used to accumulate and allocate costs internally among the City’s various functions. The City uses an internal service fund to account for its Municipal Self Insurance costs and accumulated reserves. Because these services predominantly benefit governmental rather than business -type functions, this fund has been included within the governmental activities in the government -wide financial statement. The basic proprietary fund financial statements can be found on pages 25 to 27 of this report. Notes to the Financial Statements The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 29 to 51 of this report. 6 80 Other Information The combining statements referred to earlier in connection with nonmajor governmental funds are presented immediately following the notes to the financial statements. Combining and individual fund statements and schedules can be found on pages 62 to 67 of this report. Governmental-wide Financial Analysis Net Position As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. The City’s net position for fiscal years 2021/22 and 2022/23 are shown in Table 1 below. As of June 30, 2023, total assets and deferred outflows exceeded total liabilities and deferred inflows by $7,328,105. This is a slight increase from prior year. Overall, the City’s financial position has been very stable over the last few years . 2022 2023 Restated 2023 2022 2023 2022 Assets: Current and other assets 7,415,842$ 7,867,825$ 496,140$ 9,069$ 7,911,982$ 7,876,894$ Capital assets 1,448,092 741,184 - - 1,448,092 741,184 Total Assets 8,863,934 8,609,009 496,140 9,069 9,360,074 8,618,078 Deferred outflows of resources: Pension/OPEB related items 662,387 344,619 - - 662,387 344,619 Liabilities: Current and other liabilities 1,738,064 787,124 472,085 - 2,210,149 787,124 Total Liabilities 1,738,064 787,124 472,085 - 2,210,149 787,124 Deferred inflows of resources: Lease related items 384,989 452,504 - - 384,989 452,504 Pension/OPEB related items 75,163 474,132 - - 75,163 474,132 460,152 926,636 - - 460,152 926,636 Net position: Invested in capital assets 1,448,092 741,184 1,448,092 741,184 Restricted 2,505,145 2,226,109 2,505,145 2,226,109 Unrestricted 3,374,868 4,272,575 24,055 9,069 3,398,923 4,281,644 Total Net Position 7,328,105$ 7,239,868$ 24,055$ 9,069$ 7,352,160$ 7,248,937$ Government Activities Business Activities Primary Government Total Table 1 City of Rolling Hills Net Position 7 81 Of the total net position shown in the bottom section of Table 1, $1,448,092 (19.8%) reflects its investment in capital assets. An additional $2,505,145 (34.2%) of the net position represents resources that are subject to external restrictions on how they may be used. The remaining balance of $3,374,868 (46.0%) is unrestricted and may be used to meet the government’s ongoing obligations. Of this amount, approximately $2.8 million has been designated by City Council for emergencies, such natural disasters, economic downturns such as the Great Recession in 2008, and other unexpected events that may call upon City financial resources. Changes in Net Position A summary of the changes to the net position is provided in Table 2 below. 2023 2022 2023 2022 2023 2022 Revenues: Program revenues: Charges for Services 715,829$ 549,661$ 744,696$ 784,200$ 1,460,525$ 1,333,861$ Operating Grants and contributions 636,687 639,864 - - 636,687 639,864 Capital Contributions and grants 42,938 87,749 42,938 87,749 General revenues: Property taxes 1,378,565 1,323,001 - - 1,378,565 1,323,001 Franchise taxes 14,846 15,106 - - 14,846 15,106 Other taxes 78,287 104,578 - - 78,287 104,578 Motor vehicle in-lieu - unrestricted 263,988 247,231 - - 263,988 247,231 Use of money and property 148,992 (76,181) 195 - 149,187 (76,181) Other 89,437 44,850 - 3,917 89,437 48,767 Total Revenues 3,369,569 2,935,859 744,891 788,117 4,114,460 3,723,976 Expenses: General government 1,557,286 1,468,917 - - 1,557,286 1,468,917 Public safety 416,983 497,831 - - 416,983 497,831 Planning and development 652,808 796,712 - - 652,808 796,712 Public works 439,496 189,272 - - 439,496 189,272 Refuse collection - - 944,664 886,143 944,664 886,143 Total Expenses 3,066,573 2,952,732 944,664 886,143 4,011,237 3,838,875 Excess (Deficiency) Before Transfers 302,996 (16,873) (199,773) (98,026) 103,223 (114,899) Transfers (214,759) (225,229) 214,759 44,706 - (180,523) Increase (Decrease) in Net Position 88,237 (242,102) 14,986 (53,320) 103,223 (295,422) Net Position - Beginning -Restated 7,239,868 7,481,970 9,069 107,366 7,248,937 7,589,336 Net Position - Ending 7,328,105$ 7,239,868$ 24,055$ 54,046$ 7,352,160$ 7,293,914$ Total Government Activities Business Activities Primary Government Table 2 City of Rolling Hills Changes in Net Position Governmental Activities. As previously noted, the governmental activities category includes all City funds except for the Refuse Collection Fund. In addition, this category almost entirely is made up of the General Fund, which is where most city services, along with tax revenues that primarily pay for those services, are reported. 8 82 As shown in Table 2 above, the net position of the City’s governmental activities, which includes all funds except the Refuse Fund, increased by $88,237. Excluding transfers of $214,729, which consists of a transfer to the Refuse Fund, the increase was $302,996. Given the expectations going into the year, as further described later, these are very good results. Business-Type Activities. The program for the business-type activities includes refuse collection operations. Refuse collection services are considered a utility and, as such, are typically fully funded from direct charges to customers utilizing these services. For this reason, they tend to operate much like the private sector and thus are classified as a “business-type activity.” In the case of the City’s refuse operation, refuse rates have been partially subsidized by unrestricted General Fund revenues since 2016 in order to keep rates flat at $1,100 per year per parcel in spite of increases each year to the contracted services provided by a private hauling company. In fiscal year 2023, the General Fund transferred $238,729 to the Refuse Collection Fund. This was partially offset by a transfer from the Refuse Collection Fund of $24,000 back to the General Fund to cover administrative overhead costs. This explains the net transfer in of $214,729 shown in Table 2 above. The net result of operations was a increase in net position of $14,986, increasing the net position to $24,055. Financial Analysis of the Government’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’s governmental funds is to provide information on near -term inflows, outflows and balances of spendable resources. Such information is useful in assessing the City’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. As of the end of fiscal year 2022/23, the City’s governmental funds in total reported combined ending fund balances of $5,912,635, which indicates a strong financial position, largely due to the General Fund. This is a decrease of $695,673 from last fiscal year. The decrease is largely attributable to the City’s investment in capital improvements. These costs are reflected both in the General Fund as Transfers Out to the Capital Improvement Fund of $760,528 and to the CalOES Capital Grants Fund of $15,294. These transfers cover the capital outlay costs incurred in these two funds, in addition to grants funds received in the CalOES Capital Grants Fund. This use of General Fund reserves (fund balance) is both appropriate and needed and, as such, represents a planned drawdown of reserves. By far the largest of the governmental funds is the General Fund, in which where most of the City’s operations are accounted for. The General Fund’s financial position decreased by $645,906 for a net position at June 30, 2023 of $4,633,046 for the reason explained in the preceding paragraph. Excluding transfers, the General Fund realized an operating surplus of $344,675. 9 83 General Fund Revenue Highlights The breakdown of General Fund revenues is shown in the pie chart below. As shown in the chart above, Property Tax revenues is the largest revenue at $1,3 78,564, making up 48% of total General Fund revenues of $2,781,180 . Property Tax revenues increased from the prior year total of $1 ,323,001 by 55,563 (4.2%), which is a moderate growth for a revenue that historically grows by 3-6% per year. This growth is reflective of the strong real estate market over the last few years driven by low interest rates, strong demand, and a high volume of sales activity. In March of 2021, the President signed the American Rescue Plan Act (ARPA), providing $1.9 trillion in federal relief to mitigate the impacts of the COVID-19 pandemic. Of that amount, approximately $64 billion was provided to provide direct and flexible financial resources for every city and town nationwide. T he City received a total of $441,364 in two installments of $220,682 each, the first in June 2021 and the second a year later in June of 2022. The second installment was used in fiscal year 2022/23 to cover a portion of law enforcement services. A s such, these revenues will not be available in subsequent years. The City issues permits for building and construction projects undertaken by City residents. These revenues are highly tied to the economy and housing market. As real estate prices increase, there tends to be an increase in residential building activity. However, starting in 2021, as a result of COVID, building activity, and the associated revenues declined. Several years ago, revenues from building and related permits were almost $800,000. In fiscal year 2020/21, they dropped precipitously to $183,378. With the end of the pandemic, building activity picked up and revenues jumped to $518,309 last fiscal year and to $578,496 in the current fiscal year. Due to the recent rise in interest rates and other factors, building revenues have not performed as well during the first six months of fiscal year 2023/24. The City receives an allocation from the State of California called the Motor Vehicle License Fee (MVLF). The MVLF is a tax imposed in lieu of a local personal property tax on automobiles. The MVLF is imposed at a rate of 2% on a vehicle's market value, adjusted by a depreciation schedule specified in state law. 10 84 Pursuant to the State Constitution, VLF revenue is allocated to local governments. Approximately 75% of MVLF is split between cities and counties. The remaining 25% of local government VLF funds are restricted to funding various health, mental health, and social services programs shifted to the counties as part of the 1991 realignment. In fiscal year 2022/23, the City’s allocation totaled $263,988. This revenue is largely affected by the number in, and dollar increase of, car sales. With the recent rise in interest rates, car sales, as with real estate, will likely decrease to some degree. The Underground Utility Fund on the City’s governmental funds balance sheet is a major fund. The Capital Projects – Utility Fund provides funds for consultant and construction services for underground utilities projects and other infrastructure improvements. The Capital Projects – Utility Fund has a total fund balance of $665,574. Proprietary Funds The City’s proprietary funds provide the same type of information found in the government -wide financial statements but in greater detail. Ending unrestricted net position for the Refuse Collection - Enterprise Fund is $24,055. The total change in net position for the Refuse Collection - Enterprise Fund was a net position increase of $14,986. Ending unrestricted net position for the Municipal Self Insurance Fund - Internal Service Fund was unchanged at $268,115. General Fund Budgetary Highlights The fiscal year 2022/23 adopted budget totaled $3.4 million as shown in the Table 3 below. The amended budget, which reflects budget amendments, mostly to capital transfers, totaled $4.4 mi llion. Table 3 General Fund Expenditures - Budget Vs Actual Fiscal Year Ended June 30, 2023 Adopted Amended Budget Budget Actuals Variance City Administration 1,101,635$ 1,101,635$ 978,595$ 123,040$ Finance 140,500 140,500 190,344 (49,844) Planning 924,069 948,539 667,166 281,373 Public Safety 245,000 245,000 237,665 7,335 City Properties 199,000 290,438 284,793 5,645 Non-Departmental 252,857 286,357 143,942 142,415 Transers Out 564,500 1,390,142 1,014,581 375,561 Totals 3,427,561$ 4,402,611$ 3,517,086$ 885,525$ 11 85 In contrast, expenditures totaled $3.5 million, resulting in savings of $885,524. With the exception of the Finance Department, all departments are well under budget. The largest savings is in Transfers Out. The budget reflects the total expected amount of capital improvement costs that will be funded by the General Fund. However, because the work generally takes more than one year to complete, the transfers are typically under spent, and the unspent budget dollars will be carried forward into next fiscal year. The other department with a large savings is the Planning Department at $281,373. This total is made up of a number of accounts in which expenditures were below expectations. In many cases, the nature of the planning services ebb and flow from year to year and it is challenging to anticipate the level of expenditures, and thus the budget dollars needed, each year. Capital Asset and Debt Administration Capital Assets The City’s investment in capital assets for its governmental and business -type activities as of June 30, 2023 amounts to $1,448,092. This investment includes land for the City Hall campus, tennis courts, Poppy Trail land, Hesse’s Gap, Hix Ring and Storm Hill Park. Additional information on the City of Rolling Hills capital assets can be found in Note 5 on page 40 of this report. Long-Term Debt The City has no bonded indebtedness. At the end of the current fiscal year, the City’s compensated absences increased from $59,449 to $64,353. Other Post-Employment Health Care Benefits The City offers its retired employees medical benefits through CalPERS, which provides medical insurance benefits to eligible retirees. Through CalPERS, the City pre-funds these benefits while the employees are actively working. Pursuant to GASB Statement 78, adopted during fiscal year 2017-18, the City is required to recognize a liability for any unfunded accrued liabilities as determined by an actuary. As of June 30, 2023, the City’s total accrued liability was $564,108. However, this liability was offset by the prefunded investments held by CalPERS on the City’s behalf which totaled $658,510. As a result, the City’s net position was a net surplus/asset of $94,402, which is included on the Statement of Net Position. See Note 10 on pages 48 to 50. Pension Plan Obligations The City provides a defined benefit pension plan to its employees which is administered by CalPERS. Details of this pension plan can be found in Note 9 found on page 43 to 47. Pursuant to GASB Statement 68, the City reports any unfunded accrued liabilities in its financial statements. As of June 30, 2023, the net pension liability was $918,010. However, the City has a established a Pension Stabilization Trust Fund to supplement the funding of its pension obligations. The balance in the trust as of June 30, 2023, was $444,568. As such, the plan is approximately 85% funded. Economic Factors and Next Year’s Budgets The City almost exclusively provides services to the residents of the Rolling Hills Community Association. In addition, it has not retail or commercial businesses within its City limits . As such, the City only typically receives less than $25,000 annually from sales taxes, which are derived entirely from online sales transactions; and its regular and ongoing operations are primarily funded from property taxes assessed on residential properties. Since assessed values grow at 2% or less per state law and are only re-assessed to market value when properties are sold, growth in property taxes tends to range between 3-6% in normal conditions. In fiscal year 2022/23, property taxes grew 4.2%. 12 86 One of the key services provided to the community are related to residential building activity, which generate revenues from building and construction-related permits and fees. These revenues make up approximately 20% of total revenues. Unlike property taxes, building revenues are tied to economic conditions and can be significantly impacted by major economic downturns or other event, such as the recent increase in interest rates. In fact, we have seen a reduction in large building projects in fiscal year 2023/24, which may have been affected by higher borrowing costs. The City also receives funding from the state for vehicle licensing fees of approximately $263,000 and $93,000 in other taxes. The City Council adopted the Fiscal Year 2023/24 budget in June 2023, and the following factors were considered in preparing the budget: •Property taxes are expected to grow by 5%. •ARPA grant revenues are no longer available. •A continued favorable trend in building activity and a commensurate increase in building related revenues is assumed. However, the recent increase in interest rates have resulted in some waning of revenues. •Much needed capital improvements are included in the budget, which are being funded from reserves. •At June 30, 2023. the General Fund’s reserves totaled $4,633,046. This represents 170% of the fiscal year 2023/24 General Fund expenditure budget of $2,725,424. Of the $4,633,046, $2,871,180 is set aside as a contingency reserve. The balance is earmarked for capital improvements. Contacting the City’s Financial Department This financial report is designed to provide a general overview of the City’s finances and to demonstrate the City’s accountability for the money it receives. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the City’s Finance Department at the City of Rolling Hills, 2 Portuguese Bend Road, Rolling Hills, California 90274. 13 87 THIS PAGE INTENTIONALLY LEFT BLANK 14 88 CITY OF ROLLING HILLS, CALIFORNIA Statement of Net Position Governmental Business-Type Activities Activities Total Assets: Cash and investments 5,996,745$ 480,865$ 6,477,610$ Receivables: Accounts 34 15,275 15,309 Taxes 80,218 - 80,218 Accrued interest 26,895 - 26,895 Due from other governments 392,991 - 392,991 Lease receivable 379,989 - 379,989 Restricted assets: Restricted cash and investments 444,568 - 444,568 Capital assets not being depreciated 1,077,049 - 1,077,049 Capital assets, net of depreciation 371,043 - 371,043 Net other post-employment benefits asset 94,402 - 94,402 Total Assets 8,863,934 496,140 9,360,074 Deferred Outflows of Resources: Pension deferrals 448,170 - 448,170 Other post-employment benefit deferrals 214,217 - 214,217 Total Deferred Outflows of Resources 662,387 - 662,387 Liabilities: Accounts payable 317,543 472,085 789,628 Accrued liabilities 21,572 - 21,572 Unavailable revenue 222,601 - 222,601 Deposits payable 193,585 - 193,585 Due to other governments 400 - 400 Compensated absences, due within one year 30,000 - 30,000 Noncurrent liabilities: Compensated absences 34,353 - 34,353 Net pension liability 918,010 - 918,010 Total Liabilities 1,738,064 472,085 2,210,149 Deferred Inflows of Resources: Deferred inflows lease related 384,989 - 384,989 Pension deferrals 58,666 - 58,666 Other post-employment benefit deferrals 16,497 - 16,497 Total Deferred Inflows of Resources 460,152 - 460,152 Net Position: Investment in capital assets 1,448,092 - 1,448,092 Restricted: Community development projects 5,000 - 5,000 Public safety 54,679 - 54,679 Public works 557,192 - 557,192 Capital projects 1,339,822 - 1,339,822 Quimby Act 9,482 - 9,482 Pension stabilization trust 444,568 - 444,568 Unrestricted 3,469,270 24,055 3,493,325 Total Net Position 7,328,105$ 24,055$ 7,352,160$ June 30, 2023 Primary Government The notes to financial statements are an integral part of this statement. 15 89 CITY OF ROLLING HILLS, CALIFORNIA Statement of Activities For the Year Ended June 30, 2023 Operating Capital Charges for Contributions Contributions Expenses Services and Grants and Grants Functions/Programs Governmental Activities: General government 1,557,286$ 9,706$ 43,800$ -$ Public safety 416,983 4,985 387,093 42,938 Planning and development 652,808 710,491 - - Public works 497,896 - 264,194 - Total Governmental Activities 3,124,973 725,182 695,087 42,938 Business-Type Activities: Refuse collection 944,664 744,696 - - Total Business-Type Activities 944,664 744,696 - - Total 4,069,637$ 1,469,878$ 695,087$ 42,938$ General Revenues: Taxes: Property taxes Sales taxes Franchise taxes Other taxes Motor vehicle in lieu - unrestricted Use of money and property Other Transfers Total General Revenues and Transfers Change in Net Position Net Position at the Beginning of the Year, as Restated Net Position, End of the Year Program Revenues The notes to financial statements are an integral part of this statement. 16 90 Primary Government Governmental Business-Type Activities Activities Total (1,503,780)$ -$ (1,503,780)$ 18,033 - 18,033 57,683 - 57,683 (233,702) - (233,702) (1,661,766) - (1,661,766) - (199,968) (199,968) - (199,968) (199,968) (1,661,766) (199,968) (1,861,734) 1,378,565 - 1,378,565 20,556 - 20,556 14,846 - 14,846 57,731 - 57,731 263,988 - 263,988 148,992 195 149,187 80,084 - 80,084 (214,759) 214,759 - 1,750,003 214,954 1,964,957 88,237 14,986 103,223 7,239,868 9,069 7,248,937 7,328,105$ 24,055$ 7,352,160$ Net (Expenses) Revenues and Changes in Net Position The notes to financial statements are an integral part of this statement. 17 91 CITY OF ROLLING HILLS, CALIFORNIA Balance Sheet Governmental Funds June 30, 2023 General Assets: Cash and investments 4,031,948$ -$ 665,574$ 378,304$ Receivables: Accounts 34 - - - Taxes 80,218 - - - Accrued interest 26,895 - - - Due from other governments 91,343 231,648 - - Due from other funds 308,824 - - - Lease receivable 379,989 - - - Restricted assets: Restricted cash and investments 444,568 - - - Total Assets 5,363,819$ 231,648$ 665,574$ 378,304$ Liabilities, Deferred Inflows of Resources, and Fund Balances (Deficit): Liabilities: Accounts payable 130,627$ 14,205$ -$ 141,660$ Accrued liabilities 21,572 - - - Deposits payable 193,585 - - - Due to other governments - - - - Due to other funds - 236,235 - - Total Liabilities 345,784 250,440 - 141,660 Deferred Inflows of Resources: Unavailable revenues - 222,601 - - Lease related 384,989 - - - Total Deferred Inflows of Resources 384,989 222,601 - - Fund Balances (Deficit): Restricted: Public safety - police - - - - Grants - public works - - - - Capital projects - - 665,574 236,644 Quimby Act - - - - Pension stabilization trust 444,568 - - - Assigned to: Contingencies 2,648,498 - - - Unassigned (Deficit)1,539,980 (241,393) - - Total Fund Balances (Deficit)4,633,046 (241,393) 665,574 236,644 Total Liabilities, Deferred Inflows of Resources, and Fund Balances (Deficit)5,363,819$ 231,648$ 665,574$ 378,304$ Underground Utility Fund Capital Projects FundCAL/OES Capital Projects Funds Special Revenue Fund The notes to financial statements are an integral part of this statement. 18 92 CITY OF ROLLING HILLS, CALIFORNIA Balance Sheet Governmental Funds June 30, 2023 Assets: Cash and investments Receivables: Accounts Taxes Accrued interest Due from other governments Due from other funds Lease receivable Restricted assets: Restricted cash and investments Total Assets Liabilities, Deferred Inflows of Resources, and Fund Balances (Deficit): Liabilities: Accounts payable Accrued liabilities Deposits payable Due to other governments Due to other funds Total Liabilities Deferred Inflows of Resources: Unavailable revenues Lease related Total Deferred Inflows of Resources Fund Balances (Deficit): Restricted: Public safety - police Grants - public works Capital projects Quimby Act Pension stabilization trust Assigned to: Contingencies Unassigned (Deficit) Total Fund Balances (Deficit) Total Liabilities, Deferred Inflows of Resources, and Fund Balances (Deficit) Nonmajor Total Governmental Governmental Funds Funds 652,804$ 5,728,630$ - 34 - 80,218 - 26,895 70,000 392,991 - 308,824 - 379,989 - 444,568 722,804$ 7,362,149$ 31,051$ 317,543$ - 21,572 - 193,585 400 400 72,589 308,824 104,040 841,924 - 222,601 - 384,989 - 607,590 34,355 34,355 587,516 587,516 - 902,218 9,482 9,482 - 444,568 - 2,648,498 (12,589) 1,285,998 618,764 5,912,635 722,804$ 7,362,149$ The notes to financial statements are an integral part of this statement. 19 93 THIS PAGE INTENTIONALLY LEFT BLANK 20 94 CITY OF ROLLING HILLS, CALIFORNIA Reconciliation of the Balance Sheet of Governmental Funds To the Statement of Net Position June 30, 2023 Amounts reported for governmental activities in the statement of net position are different because: Total fund balances - governmental funds 5,912,635$ Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds.1,448,092 Compensated absences are not due and payable in the current period, and therefore, are not reported in the funds.(64,353) Governmental funds report all pension contributions as expenditures; however, in the statement of activities, the excess/deficiency of the total pension liability over/under the plan fiduciary net position is reported as a net pension liability/asset.(918,010) Pension-related deferred outflows of resources that have not been included as financial uses in the governmental fund activity are as follows: Contributions made after the actuarial measurement date 119,805$ Changes in assumptions 94,069 Difference between expected and actual experiences 18,435 Net difference between projected and actual earnings on plan investments 168,155 Adjustments due to differences in proportions 47,706 448,170 Pension-related deferred inflows of resources that have not been included as financial resources in the governmental fund activity are as follows: Net difference between projected and actual earnings on plan investments (12,347) Difference in proportionate share (46,319) (58,666) Governmental funds report all other post-employment benefits contributions as expenditures; however, in the statement of net position, the excess of the plan fiduciary net position over the total other post-employment benefits liability is reported as a net other post-employment benefits asset.94,402 Other post-employment benefits-related deferred outflows of resources that have not been included as financial uses in the governmental fund activity are as follows: Contributions made after the actuarial measurement date 42,708 Differences between expected and actual experience 36,480 Assumption changes 72,283 Differences between projected and actual return on assets 62,746 214,217 Other post-employment benefits-related deferred inflows of resources that have not been included as financial resources in the governmental fund activity are as follows: Differences between expected and actual experience (16,497) Internal service funds are used by management to charge the costs of certain activities, such as equipment and technology replacement, to individual funds. The assets and liabilities of the internal service funds must be added to the statement of net position.268,115 Net Position of Governmental Activities 7,328,105$ The notes to financial statements are an integral part of this statement. 21 95 CITY OF ROLLING HILLS, CALIFORNIA Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Year Ended June 30, 2023 General Revenues: Taxes 1,471,698$ -$ -$ -$ Licenses and permits 584,246 - - - Intergovernmental 529,510 42,938 - - Charges for services 70,951 - - - Use of money and property 105,706 - 14,692 8,350 Fines and forfeitures 4,985 - - - Miscellaneous 80,084 - - - Total Revenues 2,847,180 42,938 14,692 8,350 Expenditures: Current: General government 1,586,501 - - - Public safety 237,665 13,945 - - Planning and development 667,166 - - - Public works - - 13,645 - Capital outlay 11,173 257,978 - 816,473 Total Expenditures 2,502,505 271,923 13,645 816,473 Excess (Deficiency) of Revenues Over (Under) Expenditures 344,675 (228,985) 1,047 (808,123) Other Financing Sources (Uses): Transfers in 24,000 15,294 - 760,528 Transfers out (1,014,581) - - - Total Other Financing Sources (Uses)(990,581) 15,294 - 760,528 Net Change in Fund Balance (645,906) (213,691) 1,047 (47,595) Fund Balances (Deficit), Beginning of the Year, as Restated 5,278,952 (27,702) 664,527 284,239 Fund Balances (Deficit), End of the Year 4,633,046$ (241,393)$ 665,574$ 236,644$ Underground Utility Fund Capital Projects FundCAL/OES Capital Projects Funds Special Revenue Fund The notes to financial statements are an integral part of this statement. 22 96 CITY OF ROLLING HILLS, CALIFORNIA Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Year Ended June 30, 2023 Revenues: Taxes Licenses and permits Intergovernmental Charges for services Use of money and property Fines and forfeitures Miscellaneous Total Revenues Expenditures: Current: General government Public safety Planning and development Public works Capital outlay Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balance Fund Balances (Deficit), Beginning of the Year, as Restated Fund Balances (Deficit), End of the Year Nonmajor Total Governmental Governmental Funds Funds -$ 1,471,698$ - 584,246 494,565 1,067,013 - 70,951 14,326 143,074 - 4,985 - 80,084 508,891 3,422,051 - 1,586,501 165,373 416,983 13,919 681,085 114,127 127,772 5,000 1,090,624 298,419 3,902,965 210,472 (480,914) - 799,822 - (1,014,581) - (214,759) 210,472 (695,673) 408,292 6,608,308 618,764$ 5,912,635$ The notes to financial statements are an integral part of this statement. 23 97 CITY OF ROLLING HILLS, CALIFORNIA Reconciliation of the Statement of Revenues, Expenditures, And Changes in Fund Balances of Governmental Funds To the Statement of Activities For the Year End June 30, 2023 Amounts reported for governmental activities in the statement of activities are different because: Net change in fund balances - total governmental funds (695,673)$ Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of these assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays was less than depreciation expense in the current period. Capital outlay 720,500$ Depreciation (13,592) 706,908 Compensated absences expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds.(4,904) Pension obligation expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds.63,426 Other post-employment benefits obligation expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds.12,562 Internal service funds are used by management to charge the costs of certain activities, such as equipment and technology replacement, to individual funds. The net revenues of the internal service funds are reported with governmental activities.5,918 Change in Net Position of Governmental Activities 88,237$ The notes to financial statements are an integral part of this statement. 24 98 CITY OF ROLLING HILLS, CALIFORNIA Statement of Net Position Proprietary Funds June 30, 2023 Governmental Activities- Internal Service Fund Assets: Cash and investments 480,865$ 268,115$ Accounts receivable 15,275 - Total Assets 496,140 268,115 Liabilities: Current: Operating Income (Loss) Before Transfers 472,085 - Accrued liabilities - - Accrued interest - - Total Liabilities 472,085 - Net Position: Unrestricted 24,055 268,115 Total Net Position 24,055$ 268,115$ Business-Type Activities - Enterprise Fund Refuse Collection Fund The notes to financial statements are an integral part of this statement. 25 99 CITY OF ROLLING HILLS, CALIFORNIA Statement of Revenues, Expenses And Changes in Fund Net Position Proprietary Funds For the Year Ended June 30, 2023 Governmental Activities- Internal Service Fund Operating Revenues: Sales and service charges 744,696$ -$ Total Operating Revenues 744,696 - Operating Expenses: Administration and general 492 - Refuse collection 944,172 - Total Operating Expenses 944,664 - Operating Income (Loss)(199,968) - Nonoperating Revenues (Expenses): Interest revenue 195 5,918 Total Nonoperating Revenues (Expenses)195 5,918 Operating Income (Loss) Before Transfers (199,773) 5,918 Transfers in 238,759 - Transfers out (24,000) - Change in Net Position 14,986 5,918 Net Position: Net Position, Beginning of the Year 9,069 262,197 Net Position, End of the Year 24,055$ 268,115$ Business-Type Activities - Enterprise Fund Refuse Collection Fund The notes to financial statements are an integral part of this statement. 26 100 CITY OF ROLLING HILLS, CALIFORNIA Statement of Cash Flows Proprietary Funds For the Year Ended June 30, 2023 Governmental Activities- Internal Service Fund Cash Flows from Operating Activities: Cash received from customers and users 753,764$ -$ Net Cash Provided by Operating Activities 281,185 - Cash Flows from Non-Capital Financing Activities: Cash transfers out (24,000) - Cash transfers in 238,759 - Repayment made to other funds (15,274) - Net Cash Provided by Non-Capital Financing Activities 199,485 - Cash Flows from Investing Activities: Interest received 195 5,918 Net Cash Provided by Investing Activities 195 5,918 Net Increase in Cash and Cash Equivalents 480,865 5,918 Cash and Cash Equivalents, July 1 - 262,197 Cash and Cash Equivalents, June 30 480,865$ 268,115$ Reconciliation of Operating Loss to Net Cash Provided by Operating Activities: Operating loss (199,968)$ -$ Adjustments to reconcile operating lossOperating Income (Loss) Before Transfers to net cash provided by operating activities: Depreciation - - Decrease in accounts receivable 9,068 - Increase in accounts payable 472,085 - Total adjustments 481,153 - Net Cash Provided by Operating Activities 281,185$ -$ Business-Type Activities - Enterprise Fund Refuse Collection Fund The notes to financial statements are an integral part of this statement. 27 101 THIS PAGE INTENTIONALLY LEFT BLANK 28 102 CITY OF ROLLING HILLS, CALIFORNIA Notes to the Financial Statements For the Year Ended June 30, 2023 I. SIGNIFICANT ACCOUNTING POLICIES NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The basic financial statements of the City of Rolling Hills, California (the City) have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). The Governmental Accounting Standards Board (GASB) is the accepted standard -setting body for establishing governmental accounting and financial reporting principles. The more significant of the City's accounting policies are described below. A.Description of Entity The accompanying basic financial statements present the financial activity of the City. The City is the level of government primarily accountable for activities relevant to the operations of the City of Rolling Hills, California. The City was incorporated on January 25, 1957, under the provisions of the State of California. The City operates under a Council-Manager form of government and provides the following services as authorized by its charter: public safety, sanitation, animal control, culture and recreation, public improvement planning and zoning, and general administrative services. The Rolling Hills Community Association is not a part of the City's reporting entity because the City has no accountability for fiscal matters of the Rolling Hills Community Association. B.Government-Wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the non-fiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenue s, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include: 1) charges to customers or applicants who purchase, use or directly benefit from goods, services or privileges provided by a given function or segment, and 2) grants and contribut ions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds and proprietary funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. C.Measurement Focus, Basis of Accounting and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. 29 103 CITY OF ROLLING HILLS, CALIFORNIA Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) As a general rule, the effect of interfund activity has been eliminated from the government -wide financial statements. Exceptions to this general rule are charges between the City’s proprietary funds function and various other functions of the City. Elimination of these charges would distort the direct costs and program revenues reported for various functions concerned. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current peri od or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, franchise taxes, licenses and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when the government receives cash. When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, and then use unrestricted resources as needed. The City reports the following major governmental funds: The General Fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. The Cal/OES special revenue fund is used to track funding for the California Governor’s Office of Emergency Services grant activity and operations. The Capital Projects Fund is used to facilitate the expenditures necessary to fund and account for various capital projects and capital asset acquisitions throughout the City’s general operations. The Underground Utility capital projects fund is used to facilitate the expenditures necessary to construct the City's underground utility projects. The City reports the following major proprietary fund: The Refuse Collection Fund is used to account for operations (a) that are financed and operated in a manner similar to private business enterprises - where the intent of the governing body is that the costs of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges or (b) where the governing body has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. 30 104 CITY OF ROLLING HILLS, CALIFORNIA Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Additionally, the City reports the following fund types: •The internal service fund accounts for the financing of goods and services provided by one department to other departments on a cost reimbursement basis. The City’s internal service fund is for self-insurance. 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 opera ting revenues of the government’s proprietary funds are charges to customers for sales and services. Operating expenses for proprietary funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting these definitions are reported as non-operating revenues and expenses. D.Assets, Deferred Outflows, Liabilities, Deferred Inflows and Net Position or Equity Cash and Investments All cash and investments, except those that are held by fiscal agents, are held in a City pool. These pooled funds are available upon demand and, therefore, are considered cash and cash equivalents for purposes of the statement of cash flows. Investments held by fiscal agents with an original maturity of three months or less are also considered cash equivalents and are shown as restricted assets for financial statement presentation purposes. Investments for the City are reported at fair value. The City's policy is generally to hold investments until maturity. Receivables and Payables Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year 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 non-current portion of interfund loans). All other outstanding balances between funds are reported as "due to/from other funds." Any residual balances outstanding between the governmental activi ties and business-type activities are reported in the government-wide financial statements as "internal balances”. All trade and property tax receivables are shown net of allowance for uncollectibles. Prepaid Costs Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements using the purchases method. Capital Assets Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads, bridges, sidewalks and similar items), are reported in the governmental activities columns in the government-wide financial statements. The City defines capital assets as assets with an initial, individual cost of more than $5,000 (amount not rounded) and an estimated useful life in excess of one year. 31 105 CITY OF ROLLING HILLS, CALIFORNIA Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Capital Assets Such assets are recorded at historical cost when purchased or constructed. Donated capital assets are recorded at acquisition value at the date of acquisition. The costs of normal maintenance and repairs that do not add to the value of the assets or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Property, plant, equipment, and infrastructure of the primary government are depreciated using the straight-line method over the following estimated useful lives: Assets Years Building improvements 7-50 Improvements other than buildings 20 Computer equipment 5-20 Equipment and vehicles 5-20 Furniture and fixtures 20 Compensated Absences It is the City's policy to permit employees to accumulate a limited amount of earned but unused vacation, which will be paid to employees in the period taken or upon separation from City's service. All vacation pay is accrued when incurred in the government-wide financial statements. In governmental funds, the cost of vacations is recognized when payments are made to employees. Accumulated sick leave benefits are not recognized as liabilities of the City. The City's policy is to record sick leave as an operational expense in the period taken, since such benefits do not vest, nor is payment probable; however, unused sick leave is added to the creditable service period for calculation of retirement benefits when the employee retires. Deferred Outflows/Inflows of Resources In addition to assets, the statement of financial position and governmental fund balance sheet 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 assets or fund balance that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/ expenditure) until then. The government has two items that qualify for reporting in this category. They are deferred outflows relating to the net pension obligation and deferred outflows related to other post-employment benefits reported in the government-wide statement of net position. These outflows are the results of contributions made after the measurement period, the net difference between projected and actual earnings on plan investments, changes in actuarial assumptions, differences between expected and actual experiences, and adjustments due to differences in proportions. The amounts for contributions made after the measurement period will be recognized in the subsequent fiscal year; the net diffe rence between projected and actual earnings on plan investments will be amortized over five years; and all remaining deferrals will be amortized over the remaining expected average remaining service life. 32 106 CITY OF ROLLING HILLS, CALIFORNIA Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) In addition to liabilities, the statement of financial position or governmental fund balance sheet 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 assets that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The government has three items that qualify for reporting in this category. The government may report one item which arises only under a modified accrual basis of accounting that qualifies for reporting in this category, accordingly, unavailable revenue, is reported only in the governmental funds balance sheet and is related to grant revenue. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. The other items that qualifies for reporting in this category are deferred inflows relating to the net pension obligation and other post-employment benefits reported in the government-wide statement of net position. These inflows are the result changes in actuarial assumptions, differences between expected and actual experience s, adjustments to proportions, and differences in the proportionate share of contributions. These amounts are deferred and amortized over the remaining service life. Lastly, leases related items for the amount of the lease receivable plus any lease payments related to future periods, less any lease incentives paid to, or on behalf of, the lessee at or before the commencement of the lease term . Fund Equity In the fund financial statements, government funds report the following fund balance classification: Non-spendable includes amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact. Restricted include amounts that are constrained on the use of resources by either (a) external creditors, grantors, contributors, or laws of regulations of other governments or (b) by law through constitutional provisions or enabling legislation. Committed include amounts that can only be used for specific purposes pursuant to constraints imposed by the City Council through resolution. The City has no committed fund balance as of June 30, 2023. Assigned include amounts that are constrained by the government’s intent to be used for specific purposes but are neither restricted nor committed. The assigned balance is set aside with the intent to be used for a specific purpose by the City Council through resolution. Unassigned include the residual amounts that have not been restricted, committed, or assigned to specific purposes. An individual governmental fund could include non-spendable resources and amounts that are restricted or unrestricted (committed, assigned, or unassigned) or any combination of those classifications. 33 107 CITY OF ROLLING HILLS, CALIFORNIA Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) The City established certain a minimum fund balance policy as follows: The General Fund, Community Facilities Fund, and Underground Utility Fund shall maintain unrestricted fund balance (amount remaining after non-spendable and restricted fund balance) equivalent to a minimum of 100% of originally adopted annual expenditures (excluding one -time expenditures greater than $25,000) before transfers plus any City Council approved committed or assigned fund balance. Fund Equity Flow Assumptions Sometimes the government will fund outlays for a particular purpose from both restricted and unrestricted resources (the total of committed, assigned, and unassigned fund balance). In order to calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in the governmental fund financial statements a flow assumption must be made about the order in which the resources are considered to be applied. It is the government’s policy to consider restricted fund balance to have been 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. Net Position Flow Assumption Sometimes the government will fund outlays for a particular purpose from both restricted (e.g., restricted grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted –net position and unrestricted – net position in the government-wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the government’s policy to consider restricted – net position to have been depleted before unrestricted – net position is applied. Property Tax Property tax revenue is recognized on the basis of GASB Code Section P70, that is, in the fiscal year for which the taxes have been levied providing they become available. Available means due or past due and receivable within the current period and collected within the current period or expected to be collected soon enough thereafter (not to exceed 60 days) to be used to pay liabilities of the current period. The County of Los Angeles collects property taxes for the City. Tax liens attach annually as of 12:01 AM on the first day in January prior to the fiscal year for which the taxes are levied. Taxes are levied on both real and personal property, as it exists on that date. The tax levy covers the fiscal period July 1 to June 30. All secured personal property taxes and one-half of the taxes on real property are due November 1; the second installment is due February 1. All taxes are delinquent, if unpaid, by Dece mber 10 and April 10, respectively. Unsecured personal property taxes become due on March 1 each year and are delinquent, if unpaid, on August 31. 34 108 CITY OF ROLLING HILLS, CALIFORNIA Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Pension Plans For purposes of measuring the net pension liability, deferred outflows and inflows of resources related to pensions, and pension expense, information about the fiduciary net position and additions to/deductions from the fiduciary net position have been determined on the same basis as they are reported by the CalPERS Financial Office. For this purpose, benefit payments (including refunds of employee contributions) are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value. CalPERS audited financial statements are publicly available reports that can be obtained at CalPERS’ website under Forms and Publications. GASB 68 requires 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 (VD): June 30, 2021 Measurement Date (MD): June 30, 2022 Measurement Period (MP): July 1, 2021 to June 30, 2022 Other Post-Employment Benefits Plan 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), the assets of which are held by the California Public Employees’ Retirement System (CalPERS), and additions to/deductions from the OPEB Plan’s fiduciary net position hav e been determined by an independent actuary. For this purpose, benefit payments are recognized when currently 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 (VD): June 30, 2021 Measurement Date (MD): June 30, 2022 Measurement Period (MP): July 1, 2021 to June 30, 2022 35 109 CITY OF ROLLING HILLS, CALIFORNIA Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 2: CASH AND INVESTMENTS As of June 30, 2023, cash and investments were reported in the accompanying financial statements as follows: Cash and investments as of June 30, 2023, consisted of the following: The City follows the practice of pooling cash and investments of all funds, except for funds required to be held by fiscal agents under provisions of bond indentures. Interest income earned on pooled cash and investments is allocated annually to the various funds based on average daily cash balances. Interest Income from cash and investments with fiscal agents is credited directly to the related fund. A.Deposits As of June 30, 2023, the carrying amount of the City’s deposits was $131,137 and the bank balance was $198,489. The $67,352 difference represents outstanding checks and deposits in transit. The California Government Code requires California banks and savings and loan associations to secure a City’s deposits by pledging government securities with a value of 110% of a City’s deposits. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of a City’s total deposits. The City Treasurer may waive the collateral requirement for deposits which are fully insured up to $250,000 by the FDIC. The collateral for deposits in federal and state chartered banks is held in safekeeping by an authorized Agent of Depository recognized by the State of California Department of Banking. The collateral for deposits with savings and loan associations is generally held in safekeeping by the Federal Home Loan Bank in San Francisco, California as an Agent of Depository. These securities are physically held in an undivided pool for all California public agency depositors. Under Government Code Section 53655, the placement of securities by a bank or savings and loan association with an “Agent of Depository” has the effect of perfecting the security interest in the name of the local governmental agency. Accordingly, all collateral held by California Agents of Depository are considered to be held for, and in the name of, the local governmental agency. Cash and Investments: Governmental activities 5,996,745$ Business-type activities 480,865 Total cash and investments 6,477,610 Governmental activities 444,568 Total restricted cash and investments 444,568 Total 6,922,178$ Cash on hand 1,500$ Demand deposits 131,137 Restricted investments (Section 115 Trust) 444,568 Investments 6,344,973 Total Cash and Investments 6,922,178$ 36 110 CITY OF ROLLING HILLS, CALIFORNIA Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 2: CASH AND INVESTMENTS (CONTINUED) B.Investments Under provision of the City’s investment policy, and in accordance with the California Government Code, the following investments are authorized: •U.S. Treasury Bonds, Notes and Bills •Money Market Savings Accounts •Local Agency Investment Fund (State Pool) •Deposit of Funds C.Investments Authorized by Debt Agreements The above investments do not address investment of debt proceeds held by a bond trustee. Investments of debt proceeds held by a bond trustee are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City’s investment policy. D.Investments in State Investment Pool The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California . LAIF is overseen by the Local Agency Investment Advisory Board, which consists of five members, in accordance with State statute. The State Treasurer’s Office audits the fund annually. The fair value of the position in the investment pool is the same as the value of the pool shares. E.Pension Rate Stabilization Program Section 115 Trust In July 2018, the City Council authorized participation in the PARS Pension Rate Stabilization Program Section 115 Trust in order to mitigate rising pension costs through CalPERS. The initial funding amount was $185,000. The program has been established as a multiple employer trust so that public agencies regardless of size can join the program and receive the necessary economies of scale to keep administrative feels low and avoid any setup costs. The trust permits the City, under Federal and State law, to invest in a more diversified array of investments to maximize investment returns long term. The balance of the Trust at June 30, 2023 is $444,568 and is reported as restricted cash and investments. F.Credit Risk Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. The City mitigates its credit risk generally by following its three primary investment objectives, in order, of safety, liquidity and yield. The California Government Code generally limits allowable investments t o those classes of investments with lower risk (and therefore lower yields). The City's investment policy further restricts these investments to the highest quality within a category and excludes certain otherwise allowable investments as not meeting the C ity's liquidity requirement. 37 111 CITY OF ROLLING HILLS, CALIFORNIA Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 2: CASH AND INVESTMENTS (CONTINUED) Credit risk is measured by the assignment of a rating by a nationally recognized statistical rating organization. As of June 30, 2023, all securities were investment grade and were legal under State and City law. Investments in U.S. government securities are not considered to have a credit risk and, therefore, their credit quality is not disclosed As of June 30, 2023, the City's investments in external investment pools and money market mutual funds are unrated. G.Custodial Credit Risk The custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover deposits or will not be able to recover collateral securities that are in the possession of an outside party. As of June 30, 2023, $327,280 of the City’s deposits or investments were exposed to custodial credit risk, although deposits are classified as local agency collateralized deposit account. H.Concentration of Credit Risk The City is in compliance with restrictions imposed by its investment policy, which limits certain types of investments. As of June 30, 2023, in accordance with GASB Statement No. 40, if the City has invested more than 5% of its total investments in any one issuer then it is exposed to credit risk. The Investments guaranteed by the U.S. government and investments in mutual funds and external investment pools are excluded from this. As of June 30, 2023, none of the City’s deposits or investment were exposed to concentration of credit risk. I.Interest Rate Risk The City's investment policy limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. The City's investment policy establishes a maximum maturity of three years for all individual investments. As of June 30, 2023, the City had the following investments and original maturities: 1 year 1 - 3 3 - 5 Fair or less years years Value Investments: Local Agency Investment Fund 1,599,640$ -$ -$ 1,599,640$ Money Market Saving Accounts 873,820 - - 873,820 Certificates of Deposits 590,196 1,636,874 1,148,528 3,375,598 U.S. Treasury Securities 495,915 - - 495,915 Restricted investments: Money Market Funds 444,568 - - 444,568 4,004,139$ 1,636,874$ 1,148,528$ 6,789,541$ Investment Maturities (in Years) 38 112 CITY OF ROLLING HILLS, CALIFORNIA Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 2: CASH AND INVESTMENTS (CONTINUED) J.Fair Value Hierarchy The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. At June 30, 2023, all of the City’s investments are valued using Level 1 inputs, with the exception of the Local Agency Investment Fund and money market funds, which are considered to be uncategorized. NOTE 3: RECEIVABLES Receivables at June 30, 2023, for the City's individual major funds, and non-major and internal service funds in the aggregate, including applicable allowances for uncollectible accounts, are detailed below. All receivables are expected to be collected within one year, except for delinquent property taxes. NOTE 4: INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS A.Interfund Transfers Individual fund operating transfers for the fiscal year ended June 30, 2023, are as follows: Of the $1,014,581 transferred out of the General Fund, $760,528 was transferred to the non-major Capital Improvement Fund for capital projects, $15,294 to the Cal/OES fund and $238,759 was transferred to the Refuse Collection Fund to support operating costs and to cover traffic safety efforts. The Refuse Collection Fund transferred out $24,000 to the General Fund to cover administrative expenditures in the current fiscal year. Refuse General Collection Fund Fund Total Property, sales, and franchise taxes 80,252$ -$ 80,252$ Taxes assessed for rubbish collection - 15,275 15,275 Total Receivables 80,252$ 15,275$ 95,527$ Accounts Receivable Refuse General Collection Funds Fund Fund Total Transfers In: General Fund -$ 24,000$ 24,000$ Refuse collection fund 238,759 - 238,759 Cal/OES 15,294 - 15,294 Non-Major Funds 760,528 - 760,528 Total 1,014,581$ 24,000$ 1,038,581$ Transfers Out 39 113 CITY OF ROLLING HILLS, CALIFORNIA Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 4: INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS (CONTINUED) B.Due To/From Other Funds The amounts loaned from the General Fund to the Cal/OES Fund, non-major governmental funds and Refuse Collection fund were to eliminate negative cash balances as of June 30, 2023. NOTE 5: CAPITAL ASSETS Capital asset activity for the year ended June 30, 2023, was as follows: During the fiscal year ended June 30, 2023, depreciation expense was $13,592 and allocated to general government functional expense. Receivable Fund Payable Fund Totals General Fund Cal/OES Fund 236,235$ General Fund Non-Major Governmental Funds 72,589 308,824$ Balance Balance July 1, 2022 Additions Deletions June 30, 2023 Governmental activities: Capital assets, not being depreciated Land 564,040$ -$ -$ 564,040$ Construction-in-progress 155,859 357,150 - 513,009 Total capital assets, not being depreciated 719,899 357,150 - 1,077,049 Capital assets, being depreciated Land Improvements 176,139 - - 176,139 Machinery, equipment, and vehicles 11,987 - - 11,987 Storm Drain - 363,350 - 363,350 Fixtures 26,591 - - 26,591 Total capital assets, being depreciated 214,717 363,350 - 578,067 Less accumulated depreciation Land Improvements 176,139 - - 176,139 Machinery, equipment, and vehicles 8,390 2,111 -10,501 Storm Drain - 9,084 - 9,084 Fixtures 8,903 2,397 -11,300 Total accumulated depreciation 193,432 13,592 - 207,024 Total capital assets, being depreciated, net 21,285 376,942 - 371,043 Total governmental activities capital assets 741,184$ 734,092$ -$ 1,448,092$ 40 114 CITY OF ROLLING HILLS, CALIFORNIA Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 6: LEASES A.Leases Receivable and Deferred Inflows of Resources The City entered into a 72 month-lease as Lessor for the use of a building at No. 1 Portugueses Bend Road and other near related common areas. An initial lease receivable was recorded in the amount of $497,765. As of June 30, 2023, the value of the lease receivable is $379,989. The lessee is required to make annual fixed payments of $5,749 until increased to $6,998 starting July 2023. The value of the deferred inflow of resources as of June 30, 2023 was $384,989, and the City recognized lease revenue of $52,904 during the fiscal year. The principal and interest payments that are expected to maturity are as follows: NOTE 7: COMPENSATED ABSENCES The following is a summary of changes in compensated absences of the City for the fiscal year ended June 30, 2023: Liabilities for compensated absences are typically liquidated by the General Fund. NOTE 8: LIABILITY, INSURED PROGRAMS AND WORKERS’ COMPENSATION PROTECTION A.Description of Self-Insured Pool Pursuant to Joint Powers Agreement The City is a member of the California Joint Powers Insurance Authority (the Authority). The Authority is composed of 124 California public entities and is organized under a joint powers agreement pursuant to California Government Code §6500 et seq. The purpose of the Authority is to arrange and administer programs for the pooling of self-insured losses, to purchase excess insurance or reinsurance, and to arrange for group purchased insurance for property and other lines of coverage. The California JPIA began covering claims of its members in 1978. Each member government has an elected official as its representative on the Board of Directors. The Board operates through a nine-member Executive Committee. June 30 Principal Interest Total Payments 2024 70,051$ 13,925$ 83,976$ 2025 72,905 11,071 83,976 2026 75,876 8,100 83,976 2027 78,967 5,009 83,976 2028 82,190 1,792 83,982 Totals 379,989$ 39,897$ 419,886$ Governmental Activities Balance Balance Due Within July 1, 2022 Additions Deletions June 30, 2023 One Year Compensated Absences 59,449$ 35,089$ 30,185$ 64,353$ 30,000$ 41 115 CITY OF ROLLING HILLS, CALIFORNIA Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 8: LIABILITY, INSURED PROGRAMS AND WORKERS’ COMPENSATION PROTECTION (CONTINUED) B.Primary Self-Insurance Programs of the Authority Each member pays an annual contribution at the beginning of the coverage period. A retrospective adjustment is then conducted annually thereafter, for coverage years 2012-13 and prior. Coverage years 2013-14 and forward are not subject to routine annual retrospective adjustment. The total funding requirement for primary self-insurance programs is based on an actuarial analysis. Costs are allocated to individual agencies based on payroll and claims history, relative to other members of the risk-sharing pool. Primary Liability Program Claims are pooled separately between police and general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $100,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $100,000 to $500,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the second layer. (4) Incurred costs from $500,000 to $50 million, are distributed based on the outcome of cost allocation within the first and second loss layers. The overall coverage limit for each member, including all layers of coverage, is $50 million per occurrence. Subsidence losses also have a $50 million per occurrence limit. The coverage structure is composed of a combination of pooled self-insurance, reinsurance, and excess insurance. Additional information concerning the coverage structure is available on the Authority’s website: https://cjpia.org/coverage/risk-sharing-pools/. Primary Workers’ Compensation Program Claims are pooled separately between public safety (police and fire) and general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $75,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $75,000 to $200,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the second layer. (4) Incurred costs from $200,000 to statutor y limits are distributed based on the outcome of cost allocation within the first and second loss layers. For 2022-23 the Authority’s pooled retention is $1 million per occurrence, with reinsurance to statutory limits under California Workers’ Compensation Law. Employer’s Liability losses are pooled among members to $1 million. Coverage from $1 million to $5 million is purchased through reinsurance policies, and Employer’s Liability losse s from $5 million to $10 million are pooled among members. C.Purchased Insurance Pollution Legal Liability Insurance The City participates in the pollution legal liability insurance program which is available through the Authority. The policy covers sudden and gradual pollution of scheduled property, streets, and storm drains owned by the City. Coverage is on a claims-made basis. There is a $250,000 deductible. The Authority has an aggregate limit of $20 million. 42 116 CITY OF ROLLING HILLS, CALIFORNIA Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 8: LIABILITY, INSURED PROGRAMS AND WORKERS’ COMPENSATION PROTECTION (CONTINUED) Property Insurance The City participates in the all-risk property protection program of the Authority. This insurance protection is underwritten by several insurance companies. City property is currently insured according to a schedule of covered property submitted by the City to the Authority. City property currently has all-risk property insurance protection in the amount of $1,633,455. There is a $10,000 deductible per occurrence except for non -emergency vehicle insurance which has a $2,500 deductible. Crime Insurance The City purchases crime insurance coverage in the amount of $1,000,000 with a $2,500 deductible. The fidelity coverage is provided through the Authority. D.Adequacy of Protection During the past three fiscal years, none of the above programs of protection experienced settlements or judgments that exceeded pooled or insured coverage. There were also no significant reductions in pooled or insured liability coverage in 2022-23. NOTE 9: PENSION PLAN OBLIGATIONS A.General Information about the Pension Plans Plan Description All qualified permanent and probationary employees are eligible to participate in the City ’s cost-sharing multiple-employer defined benefit pension plans administered by the California Public Employees’ Retirement System (CalPERS), which acts as a common investment and administrative agent for its participating member employers. Benefit provisions under the Plans are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website. The City has a Miscellaneous cost-sharing plan including the Classic Tier and PEPRA Tier. Benefits Provided CalPERS provides service retirement and disability benefits, annual cost-of-living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non -duty disability benefits after 10 years of service. The death benefit is one of the following: The Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law. 43 117 CITY OF ROLLING HILLS, CALIFORNIA Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 9: PENSION PLAN OBLIGATIONS (CONTINUED) Below is a summary of the plans’ provisions and benefits in effect at June 30, 2023, for which the City has contracted: Major Benefit Options Miscellaneous Misc. PEPRA Hire date Prior to January 1, 2013 January 1, 2013 and thereafter Benefit Provision Benefit formula 2% @60 2% @62 Social Security Yes No Full/Modified Modified Modified Benefit vesting schedule 5 years of service 5 years of service Benefit payments monthly for life monthly for life Retirement age Minumum 50 yrs Monthly benefits, as a % of eligible compensation 1.092% to 2.418% 1.0% to 2.5% Required employer contribution rates 26.740%8.670% Required employee contribution rates 6.920%7.250% New entrants are not allowed in the Miscellaneous Classic Tier. Contribution Description Section 20814(c) of the California Public Employees’ Retirement Law (PERL) 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. The total plan contributions are determined through the CalPERS’ annual actuarial valuation process. For public agency cost -sharing plans covered by either the Miscellaneous or Safety risk pools, the Plan’s actuarially determined rate is b ased on the estimated amount necessary to pay the Plan’s allocated share of the risk pool’s costs of benefits earned by employees during the year, and any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. For the year ended June 30, 2023, the contributions recognized as a reduction to the net pension liability for all Plans was $105,332. B.Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions As of June 30, 2023, the City reported net pension liability for its proportionate shares of the net pension liability of the Plan was $918,010. 44 118 CITY OF ROLLING HILLS, CALIFORNIA Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 9: PENSION PLAN OBLIGATIONS (CONTINUED) 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, 2022, and the total pension liability for the Plan used to calculate the net pension liability was determined by an actuari al valuation as of June 30, 2021 rolled forward to June 30, 2022 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 plans relative to the projected contributions of all participating employers, actuarially determined. The City’s proportionate share of th e net pension liability for the Plan as of June 30, 2021 and 2022, was as follows: For the year ended June 30, 2023, the City recognized pension income of $63,426. At June 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: The $119,805 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 202 4. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows: Proportion - June 30, 2021 0.00723% Proportion - June 30, 2022 0.00795% Change 0.0007% Deferred Outflows Deferred Inflows of Resources of Resources Contributions subsequent to the measurement date 119,805$ -$ Changes of assumptions 94,069 - Differences between expected and 18,435 - actual experience Net difference between projected 168,155 (12,347) and actual earnings on pension plan investments Adjustment due to differences in proportions 47,706 - Difference in proportionate share of contributions - (46,319) Total 448,170$ (58,666)$ Deferred Outflows/(Inflows) Fiscal year ended June 30, of Resources 2024 69,637$ 2025 61,413 2026 35,799 2027 102,850 Total 269,699$ 45 119 CITY OF ROLLING HILLS, CALIFORNIA Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 9: PENSION PLAN OBLIGATIONS (CONTINUED) Actuarial Assumptions For the measurement period ended June 30, 2022 (the measurement date), the total pension liability was determined by rolling forward the June 30, 2021, total pension liability. The June 30, 2022 total pension liability was based on the following actuarial methods and assumptions: Actuarial Cost Method Entry Age Normal Cost Method Actuarial Assumptions Discount rate 6.90% Inflation 2.30% Salary increases Varies by entry age and services Mortality rate table Derived using CalPERS’ membership data for all funds Post-retirement benefit increase The lesser of contract COLA or 2.30% until purchasing power protection allowance floor on purchasing power applies, 2.30% thereafter The mortality table used was developed based on CalPERS -specific data. The probabilities of mortality are based on the 2021 CalPERS Experience Study for the period from 2001 to 2019. Pre -retirement and Post-retirement mortality rates include generational mortality improvement using 80% of Scale MP -2020 published by the Society of Actuaries. For more details on this table, please refer to the CalPERS Experience Study and Review of Actuarial Assumptions report from November 2021 that can be found on the CalPERS website. Discount Rate The discount rate used to measure the total pension liability was 6.90%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long -term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability. 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 maj or asset class. 46 120 CITY OF ROLLING HILLS, CALIFORNIA Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 9: PENSION PLAN OBLIGATIONS (CONTINUED) In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations. Using historical returns of all of the funds’ asset classes, expected compound (geometric) returns were calculated over the next 20 years using a building -block approach. The expected rate of return was then adjusted to account for assumed administrative expenses of 10 Basis points. The expected real rates of return by asset class are as follows: Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the City’s proportionate share of the net pension liability of the Plan, calculated using the discount rate for the 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% point lower (5.90 percent) or 1% point higher (7.90 percent) than the current rate: Pension Plan Fiduciary Net Position Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports. See CalPERS website for additional information. C.Pension Rate Stabilization Program Section 115 Trust The City holds investments in a Section 115 Trust for pension stabilization. The current market value of the trust is $444,568. This trust fund is not included in the calculation of the net pension liability, as the assets are not in the custody of the plan administrator, CalPERS. Refer to Note 2 for additional information. Assumed Asset Asset Class Allocation Real Return 1, 2 Global equity-cap-weighted 30.00%4.54% Global equity-non-cap-weighted 12.00%3.84% Private equity 13.00%7.28% Treasury 5.00%0.27% Mortgage-backed securities 5.00%0.50% Investment grade corporates 10.00%1.56% High yield 5.00%2.27% Emerging market debt 5.00%2.48% Private debt 5.00%3.57% Real assets 15.00%3.21% Leverage -5.00%-0.59% 1 An expected inflation of 2.30% used for this period. 2 Figures are based on the 2021-22 Asset Liability Management study Discount Rate - 1% Current Discount Rte Discount Rate +1% (5.90%)(6.90%)(7.90%) Proportionate share of net pension liability 1,418,308$ 918,010$ 506,390$ 47 121 CITY OF ROLLING HILLS, CALIFORNIA Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 10: OTHER POST-EMPLOYMENT HEALTH CARE BENEFITS A.Plan Description The City provides retiree medical benefits through an agent multiple-employer defined benefit healthcare plan, administered by the California Public Employees’ Retirement System (CalPERS) which provides medical insurance benefits to eligible retirees. A separate financial report is not available for the plan. Employees are eligible for retiree health benefits if they retire from the City on or after age 60 with at least 5 years of service with the City and are eligible for a PERS pension. B.Employees Covered Membership of the plan consisted of 6 eligible active employees and 6 enrolled eligible retirees at June 30, 2023. These amounts do not reflect current retirees not enrolled in the CalPERS health plan who are eligible to enroll in the plan at a later date. C.Contributions The contribution requirements of plan members and the City are established and may be amended by the City Council. The City must agree to make a defined monthly payment towards the cost of each retiree's coverage. The actual contribution is based on projected pay -as-you-go financing requirements. For the measurement dated ended June 30, 2022, the City’s contributions were $42,708 in total payments, which were recognized as a reduction to the OPEB liability. D.Net OPEB Asset The City’s net OPEB asset was measured as of June 30, 2022 and the total OPEB liability used to calculate the net OPEB asset was determined by an actuarial valuation dated June 30, 2022 to determine the June 30, 2022 total OPEB liability, based on the following actuarial methods and assumptions: Inflation: 2.50% per year Investment Return / Discount Rate: 6.25% per year Healthcare Trend: 4.00% per year Payroll Increase: 2.75% per year Mortality:2017 CalPERS Mortality for Active Miscellaneous Employees Retirement Rates: 2017 CalPERS 2.0% @ 62 Rates for Miscellaneous Employees (adjusted to reflect a minimum retirement age of 52 for those hired after 2012) The long-term expected rate of return on OPEB plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of OPEB plan investment expense and inflation) are developed for each major asset class. These ranges are combined to p roduce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for e ach major asset class are summarized in the following table: Asset Class Target Allocation Assumed Gross Return All Equities 40.00%7.545% All Fixed Income 43.00%4.250% Real Estate Investment Trusts 8.00%7.250% All Commodities 4.00%7.545% Treasury Inflation Protected Securities (TIPS)5.00%3.000% Total 100.00% 48 122 CITY OF ROLLING HILLS, CALIFORNIA Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 10: OTHER POST-EMPLOYMENT HEALTH CARE BENEFITS (CONTINUED) E.Discount Rate The discount rate used to measure the total OPEB liability was 6.25 percent. The projection of cash flows used to determine the discount rate assumed that City contributions will be made at rates equal to the actuarially determined contribution rates. Based on those assumptions, the OPEB plan’s fiduciary net position was projected to be available to make all projected OPEB payments for current active and inactive employees and beneficiaries. Therefore, the long-term expected rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability. F.Changes in the OPEB Liability (Asset) G.Sensitivity of the Net OPEB Asset to Changes in the Discount Rate The following presents the net OPEB asset of the City if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2022: Total OPEB Plan Fiduciary Net OPEB Liability Net Position Liability/(Asset) (a)(b) (c) = (a) - (b) Balance at June 30, 2022 544,859$ 753,149$ (208,290)$ Changes recognized for the measurement period: Service cost 28,818 -28,818 Interest on total OPEB liability 33,605 (94,448) 128,053 Differences between expected and (466) - (466) actual experience Contributions-employer -42,708 (42,708) Benefit payments, including refunds of (42,708) (42,708) - employee contributions Administrative expense - (191) 191 Net changes during 2022-23 19,249 (94,639) 113,888 Balance at June 30, 2023 564,108$ 658,510$ (94,402)$ Discount Rate Current Discount Rate 1 Percent Discount Rate +1 Percent (5.25%) (6.25%) (7.25%) Plan's net OPEB (asset)(42,489)$ (94,402)$ (138,309)$ 49 123 CITY OF ROLLING HILLS, CALIFORNIA Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 10: OTHER POST-EMPLOYMENT HEALTH CARE BENEFITS (CONTINUED) H.Sensitivity of the Net OPEB Asset to Changes in the Healthcare Cost Trend Rate The following presents the net OPEB asset of the City if it were calculated using health care cost trend rates that are one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2022: I.OPEB Plan Fiduciary Net Position CalPERS issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained from CalPERS’ website at www.calpers.ca.gov. J.OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB For the fiscal year ended June 30, 2023, the City recognized OPEB expense of $197,630. As of fiscal year ended June 30, 2023, the City reported deferred outflows of resources related to OPEB from the following sources: The $42,708 reported as deferred outflows of resources related to contributions subsequent to the June 30, 202 2 measurement date will be recognized as a reduction of the net OPEB liability/(asset) during the fiscal year ending June 30, 2024. All other deferred items will be amortized and recognized in pension expense as follows: Current Heathcare Cost 1% Decrease Trend Rate 1% Increase Plan's net OPEB (asset)(149,444)$ (94,402)$ (28,505)$ Deferred Outflows Deferred Inflows of Resources of Resources Contributions subsequent to the measurement date 42,708$ -$ Changes of assumptions 72,283 - Differences between expected and 36,480 (16,497) actual experience Net difference between projected and actual earnings on OPEB plan investments 62,746 - Total 214,217$ (16,497)$ Deferred Outflows/(Inflows) Fiscal year ended June 30, of Resources 2024 23,330$ 2025 23,939 2026 22,581 2027 40,126 2028 13,159 Thereafter 31,877 Total 155,012$ 50 124 CITY OF ROLLING HILLS, CALIFORNIA Notes to the Financial Statements For the Year Ended June 30, 2023 NOTE 11: DEFERRED COMPENSATION PLAN The City offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. Pursuant to the IRC 457 subsection (g); all amounts of compensation deferred under the deferred compensation plan, all property, or rights are solely the property and rights of the employee and beneficiaries of the plan. Deferred compensation funds are not subject to the claims of the City’s general creditors; consequently, the assets and related liabilities of the plan are not included within the City’s financial statements. The ending investment balance of the plan as of June 30, 2023, was $238,709. NOTE 12: COMMITMENTS AND CONTINGENCIES A. Litigation In the opinion of the California Joint Powers Insurance Authority, there are no known claims which would exceed the City's applicable coverage. The City's management is not aware of any lawsuits or claims that would have a material adverse effects on the financial position of the City. B. Grants Amounts received or receivable from granting agencies are subject to audit and adjustment by grantor agencies. While no matters of non-compliance were disclosed by prior year's audits of the financial statements or by a prior year single audit of a Federal grant program; grantor agencies may subject grant programs to additional compliance tests, which may result in disallowed costs. In the opinion of management, future disallowances of current or prior grant expenditures, if any, would not have a material adverse effect on the financial position of the City. NOTE 13: RESTATEMENTS Grant expenditures totaling $14,050 were incorrectly charged to the LEAP Grant Fund in fiscal year 2022. Upon further consideration, these costs should have been charged to the General Fund and the fund balance as of June 30, 2022 has been restated by ($14,050) and $14,050 in the General Fund and LEAP Grant Fund, respectively. During fiscal year 2019, the City purchased Rule 20A Credits from the City of Palos Verdes Estates, valued at $1,125,491, which was approved by Southern California Edison Company. Based on negotiated prices, the cost to the City was $675,295 and was recorded as a deposit asset. Upon further analysis by the City regarding the accounting of this payment, it was determined that the $675,295 should have been recorded as a current expenditure within the Underground Utility Fund. The fund balance as of June 30, 2022 of the Underground Utility Fund has since been restated by $675,295. NOTE 14: SUBSEQUENT EVENTS The City evaluated subsequent events for recognition and disclosure through June 24, 2024, the date on which these financial statements were available to be issued. Management concluded that no material subsequent events have occurred since June 30, 2023, that required recognition or disclosure in these financial statements. 51 125 THIS PAGE INTENTIONALLY LEFT BLANK 52 126 CITY OF ROLLING HILLS, CALIFORNIA Notes to the Required Supplementary Information Year Ended June 30, 2023 STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY A.General Budget Policies The City Council is required to adopt an annual budget resolution by July 1 of each fiscal year. Annual budgets are adopted and presented for reporting purposes on a basis consistent with generally accepted accounting principles. The City Council reviews a tentative budget and adopts a final budget after a public hearing is conducted to receive comments prior to adoption. The City's governing board satisfied these requirements. Expenditures may not exceed the total annual budgeted amount in any category without the approval of the City Council. Throughout the fiscal year, monthly financial reports comparing actual figures with budgeted figures are prepared and distributed to the City Manager and members of the City Council. As these reports are reviewed, attention is drawn to variations between budgeted amounts and actual amounts and if necessary the City Council considers the need for increases in expenditure categories. The ori ginal adopted budgets are revised by the City Council during the year to give consideration to these modified expenditure categories and to unanticipated income. It is this final revised budget including all revisions and amendments approved by the City Council subsequent to the initial budget adoption that is presented in the financial statements. The level of appropriated budgetary control is the total adopted budget which is defined as the total budget for all funds and divisions. The City Manager may authorize transfers of appropriations within the sub-categories of the major expenditure categories of the adopted budget. Supplemental appropriations during the year must be approved by the City Council. The Community Facilities, Transportation Development Act, TDA Article 3, SB 12383 Grant, and LEAP Grant special revenue funds did not adopt a budget for the fiscal year ended June 30, 2023. Unexpended or unencumbered appropriations lapse at the end of the fiscal year. Encumbered appropriations are reappropriated in the subsequent year's budget by action of the City Council. Excess of Expenditures over Appropriations For the year ended June 30, 2023, expenditures exceeded appropriations in the finance department (the legal level of budgetary control) of the general government function of the General Fund by $49,848. In addition, expenditures exceeded appropriations in the capital outlay function of the General Fund by $11,173. Total expenditures did not exceed appropriations in the General Fund. Additionally, expenditures exceeded appropriations in the public safety function of the Cal/OES and COPS Fund by $13,945 and $373, respectively. Total expenditures did not exceed appropriations in the Cal/OES and COPS Fund. B.Deficit Fund Equity At June 30, 2023, The City reported deficit fund equities in the following funds: Fund Name Fund Type Deficit Cause Transportation Development Act Nonmajor Special Revenue Fund (5,000)$ (a) LEAP Grant Fund Nonmajor Special Revenue Fund (7,589) (a) (a) Deficit due to timing differences between grant receipts and disbursements,and is expected to be eliminated through future grant revenues. 53 127 CITY OF ROLLING HILLS, CALIFORNIA Budgetary Comparison Schedule General Fund For the Year Ended June 30, 2023 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1, as restated 5,278,952$ 5,278,952$ 5,278,952$ -$ Resources (Inflows): Taxes 1,581,213 1,581,213 1,471,698 (109,515) Licenses and permits 475,000 475,000 584,246 109,246 Intergovernmental 473,682 473,682 529,510 55,828 Charges for services 35,250 35,250 70,951 35,701 Use of money and property 129,239 129,239 105,706 (23,533) Fines and forfeitures 5,000 5,000 4,985 (15) Miscellaneous 5,000 5,000 80,084 75,084 Transfers in 24,000 24,000 24,000 - Amounts Available for Appropriations 8,007,336 8,007,336 8,150,132 142,796 Charges to Appropriations (Outflows): General government 1,694,704 1,818,930 1,586,501 232,429 Public safety 245,000 245,000 237,665 7,335 Planning and Development 924,069 948,539 667,166 281,373 Capital outlay - - 11,173 (11,173) Transfers out 564,500 1,390,142 1,014,581 375,561 Total Charges to Appropriations 3,428,273 4,402,611 3,517,086 885,525 Budgetary Fund Balance, June 30 4,579,063$ 3,604,725$ 4,633,046$ 1,028,321$ 54 128 CITY OF ROLLING HILLS, CALIFORNIA Budgetary Comparison Schedule CAL/OES For the Year Ended June 30, 2023 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 (27,702)$ (27,702)$ (27,702)$ -$ Resources (Inflows): Intergovernmental - 3,292,638 42,938 (3,249,700) Transfers in - 54,797 15,294 (39,503) Amounts Available for Appropriation (27,702) 3,319,733 30,530 (3,289,203) Charges to Appropriation (Outflow): Public safety - - 13,945 (13,945) Capital outlay to - 4,360,219 257,978 4,102,241 Total Charges to Appropriations - 4,360,219 271,923 4,088,296 Budgetary Fund Balance, June 30 (27,702)$ (1,040,486)$ (241,393)$ 799,093$ 55 129 CITY OF ROLLING HILLS, CALIFORNIA Cost-Sharing Multiple Employer Miscellaneous Plan Schedule of Proportionate Share of the Net Pension Liability As of June 30, for the Last Ten Fiscal Years (1) 2023 2022 2021 2020 2019 Measurement Date 6/30/2022 6/30/2021 6/30/2020 6/30/2019 6/30/2018 Proportion of the Net Pension Liability 0.00795%0.00723%0.00699%0.00672%0.00679% Proportionate Share of the Net Pension Liability 918,010$ 391,149$ 759,963$ 688,971$ 622,418$ Covered Payroll 432,749$ 470,458$ 522,620$ 458,829$ 408,643$ Proportionate Share of the Net Pension Liability as a Percentage of Covered Payroll 212.13%83.14%145.41%150.16%152.31% Proportionate Share of the Fiduciary Net Position as a Percentage of the Plan's Total Pension Liability 76.68%88.29%75.10%75.30%75.30% Notes to Schedule of Proportionate Share of the Net Pension Liability: Changes of Benefit Terms: There were no changes to benefit terms that applied to all members of the Public Agency Pool. However, individual employers in the Plan may have provided a benefit improvement to their employees such as Golden Handshakes, service purchases,and other prior service costs. Employers that have done so may need to report this information as a separate liability in their financial statement as CalPERS considers such amounts to be separately financed employer-specific liabilities.These employers should consult with their auditors. Additionally, the figures above do not include any liability impact that occurred after the June 30, 2021 valuation date, unless the liability impact is deemed to be material to the Public Agency Pool. (1)Historical information is required only for measurement for which GASB 68 is applicable. Fiscal Year 2014-15 was the first year of implementation, therefore only nine years are shown. Changes of Assumptions: Effective with the June 30, 2021 valuation date (2022 measurement date), the accounting discount rate was reduced from 7.15%to 6.90%.In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. Projected returns for all asset classes are estimated, combined with risk estimates,and are used to project compound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long-term projected portfolio return.In addition, demographic assumptions and the inflation rate assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. 56 130 2018 2017 2016 2015 6/30/2017 6/30/2016 6/30/2015 6/30/2014 0.00633%0.00611%0.00539%0.00678% 627,859$ 528,827$ 369,954$ 421,924$ 492,817$ 465,123$ 453,661$ 410,896$ 127.40%113.70%81.55%102.68% 73.30%74.10%78.30%81.00% 57 131 CITY OF ROLLING HILLS, CALIFORNIA Cost-Sharing Multiple Employer Miscellaneous Plan Schedule of Plan Contributions As of June 30, for the Last Ten Fiscal Years (1) 2023 2022 2021 2020 2019 Actuarially Determined Contribution 119,805$ 105,332$ 92,977$ 84,285$ 68,379$ Contribution in Relation to the Actuarially Determined Contribution 0.01%(105,332) (92,977) (84,285) (68,379) Contribution Deficiency (Excess)-$ -$ -$ -$ -$ Covered Payroll 596,903$ 432,749$ 470,458$ 522,620$ 458,829$ Contributions as a Percentage of Covered Payroll 0.00%24.34%19.76%16.13%14.90% Notes to Schedule of Plan Contributions: Actuarial Cost Method:Entry Age Normal Amortization Method/Period: Asset Valuation Method: Inflation:2.30% Salary Increases: Retirement Age: Mortality:The probabilities of mortality are based on the 2021 CalPERS Experience Study for the period from 2001 to 2019. Pre-retirement and Post-retirement mortality rates include generational mortality improvement using 80% of Scale MP-2020. (1)Historical information is required only for measurement for which GASB 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore only nine years are shown. The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2022-23 were derived from the June 30, 2021 funding valuation report. For details, see June 30, 2021 Funding Valuation Report. Market Value of Assets. For details, see June 30, 2021 Funding Valuation Report. Varies by Entry Age and Service The probabilities of Retirement are based on the 2021 CalPERS Experience Study for the period of 2001 to 2019. 58 132 2018 2017 2016 2015 54,671$ 53,328$ 45,578$ 34,611$ (54,671) (53,328) (45,578) (34,611) -$ -$ -$ -$ 408,643$ 492,817$ 465,123$ 453,661$ 13.38%10.82%9.80%7.63% 59 133 CITY OF ROLLING HILLS, CALIFORNIA Schedule of Changes in the Net OPEB Asset and Related Ratios As of June 30, for the Last Ten Fiscal Years (1) 2023 2022 2021 2020 2019 2018 Measurement Date 6/30/2022 6/30/2022 6/30/2021 6/30/2019 6/30/2018 6/30/2017 Total OPEB Liability: Service cost 28,818$ 15,651$ 15,232$ 19,302$ 18,785$ 18,282$ Interest on the total OPEB liability 33,605 26,260 25,506 24,323 22,828 20,310 Benefit payments (42,708) (33,632) (18,424) (18,424) (18,424) (17,715) Expected Minus Actual Benefit Payments (466) - (10,483) (879) - - Experience (Gains)/Losses - 46,340 - (22,094) - - Changes in assumptions - 79,174 - 22,803 - - Net change in total OPEB liability 19,249 133,793 11,831 25,031 23,189 20,877 Total OPEB liability - beginning 544,859 411,066 399,235 374,204 351,015 330,138 Total OPEB liability - ending (a)564,108 544,859 411,066 399,235 374,204 351,015 Plan Fiduciary Net Position: Contribution - employer - - 18,424 18,424 18,424 17,715 Net investment income 47,066 129,273 40,568 37,919 35,713 37,288 Benefit payments - (33,632) (18,424) (18,424) (18,424) (17,715) Administrative expense (191) (239) (308) (125) (1,017) (449) Investment Gains/Losses (141,514) - (6,790) 3,053 (1,742) - Other - - - - 542 - Net change in plan fiduciary net position (94,639) 95,402 33,470 40,847 33,496 36,839 Plan fiduciary net position - beginning 753,149 657,747 624,277 583,430 549,934 513,095 Plan fiduciary net position - ending (b)658,510 753,149 657,747 624,277 583,430 549,934 Net OPEB Liability/(Asset) - ending (a) - (b)(94,402)$ (208,290)$ (246,681)$ (225,042)$ (209,226)$ (198,919)$ Plan fiduciary net position as a percentage of the total OPEB liability 116.73%138.23%160.01%156.37%155.91%156.67% Covered-employee payroll 432,749$ 470,458$ 522,620$ 458,829$ 408,643$ 492,817$ Net OPEB asset as a percentage of covered-employee payroll 21.81%44.27%47.20%49.05%51.20%40.36% Notes to Schedule of Changes in Net OPEB Asset and Related Ratios: (1)Historical information is required only for the measurement periods for which GASB 75 is applicable. Fiscal Year 2018 was the first year of implementation. Future years' information will be displayed up to 10 years as information becomes available. Changes in assumptions: Expected rate of return was changed from 6.50% to 6.25%. 60 134 CITY OF ROLLING HILLS, CALIFORNIA Schedule of Plan Contributions As of June 30, for the Last Ten Fiscal Years (1) 2023 2022 2021 2020 2019 2018 42,708$ 33,632$ 18,424$ 18,424$ 18,424$ 17,422$ (42,708) (33,632) (18,424) (18,424) (18,424) (17,422) -$ -$ -$ -$ -$ -$ 596,903$ 432,749$ 470,458$ 522,620$ 458,829$ 408,643$ 7.15%7.77%3.92%3.53%4.02%4.26% Notes to Schedule: Methods and assumptions used to determine contributions: Valuation Date June 30, 2021 Actuarial Cost Method Amortization Valuation Method/Period Asset Valuation Method Market value Inflation 2.75% Payroll Growth 2.75% Investment Rate of Return 6.25% per annum Healthcare cost-trend rates Retirement Age Mortality Actuarially Determined Contribution Contribution in Relation to the Actuarially Determined Contributions Contribution Deficiency (Excess) Covered-employee payroll Contributions as a percentage of covered-employee payroll (1)Historical information is required only for the measurement periods for which GASB 75 is applicable. Fiscal Year 2018 was the first year of implementation. Future years' information will be displayed up to 10 years as information becomes available. 2017 CalPERS Mortality for Active Miscellaneous Employees Entry Age Normal Level percent of payroll over a closed rolling 15-year period 4.00% 2017 CalPERS 2.0%@62 Rates for Miscellaneous Employees 61 135 CITY OF ROLLING HILLS, CALIFORNIA Combining Balance Sheet Nonmajor Governmental Funds June 30, 2023 Assets: Cash and investments 9,482$ 140,174$ 171,244$ 30,772$ Due from other governments - - - - Total Assets 9,482$ 140,174$ 171,244$ 30,772$ Liabilities and Fund Balances (Deficit): Liabilities: Accounts payable -$ -$ -$ 9,328$ Unearned revenues - - - - Due to other governments - 400 - - Due to other funds - - - - Total Liabilities - 400 - 9,328 Fund Balances (Deficit): Restricted: Public safety -police - - - 21,444 Grants - public works - 139,774 171,244 - Quimby Act 9,482 - - - Unassigned (Deficit)- - - - Total Fund Balances (Deficit)9,482 139,774 171,244 21,444 Total Liabilities and Fund Balances (Deficit)9,482$ 140,174$ 171,244$ 30,772$ Community Facilities Fund Transit Fund Measure R COPS Special Revenue Funds 62 136 CITY OF ROLLING HILLS, CALIFORNIA Combining Balance Sheet Nonmajor Governmental Funds June 30, 2023 Assets: Cash and investments Due from other governments Total Assets Liabilities and Fund Balances (Deficit): Liabilities: Accounts payable Unearned revenues Due to other governments Due to other funds Total Liabilities Fund Balances (Deficit): Restricted: Public safety -police Grants - public works Quimby Act Unassigned (Deficit) Total Fund Balances (Deficit) Total Liabilities and Fund Balances (Deficit) 12,911$ -$ 175,905$ 91,533$ - - - - 12,911$ -$ 175,905$ 91,533$ -$ 5,000$ -$ 16,723$ - - - - - - - - - - - - - 5,000 - 16,723 12,911 - - - - - 175,905 74,810 - - - - - (5,000) - - 12,911 (5,000) 175,905 74,810 12,911$ -$ 175,905$ 91,533$ Transportation Development Act Measure M Local Return LA County Measure W CLEEP Special Revenue Funds 63 137 CITY OF ROLLING HILLS, CALIFORNIA Combining Balance Sheet Nonmajor Governmental Funds June 30, 2023 Assets: Cash and investments Due from other governments Total Assets Liabilities and Fund Balances (Deficit): Liabilities: Accounts payable Unearned revenues Due to other governments Due to other funds Total Liabilities Fund Balances (Deficit): Restricted: Public safety -police Grants - public works Quimby Act Unassigned (Deficit) Total Fund Balances (Deficit) Total Liabilities and Fund Balances (Deficit) Total Nonmajor Governmental Funds -$ 20,783$ -$ 652,804$ 5,000 - 65,000 70,000 5,000$ 20,783$ 65,000$ 722,804$ -$ -$ -$ 31,051$ - - - - - - - 400 - - 72,589 72,589 - - 72,589 104,040 - - - 34,355 5,000 20,783 - 587,516 - - - 9,482 - - (7,589) (12,589) 5,000 20,783 (7,589) 618,764 5,000$ 20,783$ 65,000$ 722,804$ LEAP Grant Fund TDA Article 3 SB 1383 Grant Special Revenue Funds Special Revenue Funds 64 138 CITY OF ROLLING HILLS, CALIFORNIA Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds For the Year Ended June 30, 2023 Revenues: Intergovernmental -$ 89,730$ 30,500$ 165,371$ Use of money and property 209 3,094 3,780 676 Total Revenues 209 92,824 34,280 166,047 Expenditures: Current: Public safety - - - 165,373 Planning and development - - - - Public works - 58,400 - - Capital outlay - - - - Total Expenditures - 58,400 - 165,373 Net Change in Fund Balances 209 34,424 34,280 674 Fund Balances (Deficit), Beginning of the Year, as Restated 9,273 105,350 136,964 20,770 Fund Balances (Deficit), End of the Year 9,482$ 139,774$ 171,244$ 21,444$ Special Revenue Funds Community Facilities Fund Transit Fund Measure R COPS 65 139 CITY OF ROLLING HILLS, CALIFORNIA Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds For the Year Ended June 30, 2023 Revenues: Intergovernmental Use of money and property Total Revenues Expenditures: Current: Public safety Planning and development Public works Capital outlay Total Expenditures Net Change in Fund Balances Fund Balances (Deficit), Beginning of the Year, as Restated Fund Balances (Deficit), End of the Year -$ -$ 34,507$ 104,457$ 284 - 3,883 1,941 284 - 38,390 106,398 - - - - - - - - - - - 55,727 - 5,000 - - - 5,000 - 55,727 284 (5,000) 38,390 50,671 12,627 - 137,515 24,139 12,911$ (5,000)$ 175,905$ 74,810$ Transportation Development Act Measure M Local Return LA County Measure W Special Revenue Funds CLEEP 66 140 CITY OF ROLLING HILLS, CALIFORNIA Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds For the Year Ended June 30, 2023 Revenues: Intergovernmental Use of money and property Total Revenues Expenditures: Current: Public safety Planning and development Public works Capital outlay Total Expenditures Net Change in Fund Balances Fund Balances (Deficit), Beginning of the Year, as Restated Fund Balances (Deficit), End of the Year Total Nonmajor Governmental Funds 5,000$ -$ 65,000$ 494,565$ - 459 - 14,326 5,000 459 65,000 508,891 - - - 165,373 - - 13,919 13,919 - - - 114,127 - - - 5,000 - - 13,919 298,419 5,000 459 51,081 210,472 - 20,324 (58,670) 408,292 5,000$ 20,783$ (7,589)$ 618,764$ LEAP Grant FundTDA Article 3 SB 1383 Grant Special Revenue Funds 67 141 CITY OF ROLLING HILLS, CALIFORNIA Budgetary Comparison Schedule Transit Fund For the Year Ended June 30, 2023 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 105,350$ 105,350$ 105,350$ -$ Resources (Inflows): Intergovernmental 82,000 82,000 89,730 7,730 Use of money and property 400 400 3,094 2,694 Amounts Available for Appropriations 187,750 187,750 198,174 10,424 Charges to Appropriation (Outflow): Public works 58,400 58,400 58,400 - Total Charges to Appropriations 58,400 58,400 58,400 - Budgetary Fund Balance, June 30 129,350$ 129,350$ 139,774$ 10,424$ 68 142 CITY OF ROLLING HILLS, CALIFORNIA Budgetary Comparison Schedule Measure R Fund For the Year Ended June 30, 2023 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 136,964$ 136,964$ 136,964$ -$ Resources (Inflows): Intergovernmental 28,000 28,000 30,500 2,500 Use of money and property 200 200 3,780 3,580 Amounts Available for Appropriations 165,164 165,164 171,244 6,080 Budgetary Fund Balance, June 30 165,164$ 165,164$ 171,244$ 6,080$ 69 143 CITY OF ROLLING HILLS, CALIFORNIA Budgetary Comparison Schedule COPS Fund For the Year Ended June 30, 2023 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 20,770$ 20,770$ 20,770$ -$ Resources (Inflows): Intergovernmental 165,000 165,000 165,371 371 Use of money and property - - 676 676 Amounts Available for Appropriations 185,770 185,770 186,817 1,047 Charges to Appropriations (Outflows): Public safety 165,000 165,000 165,373 (373) Transfers out - - - - Total Charges to Appropriations 165,000 165,000 165,373 (373) Budgetary Fund Balance, June 30 20,770$ 20,770$ 21,444$ 674$ 70 144 CITY OF ROLLING HILLS, CALIFORNIA Budgetary Comparison Schedule CLEEP Fund For the Year Ended June 30, 2023 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 12,627$ 12,627$ 12,627$ -$ Resources (Inflows): Use of money and property 25 25 284 259 Amounts Available for Appropriations 12,652 12,652 12,911 259 Charges to Appropriations (Outflows): Public safety 1,200 1,200 - 1,200 Total Charges to Appropriations 1,200 1,200 - 1,200 Budgetary Fund Balance, June 30 11,452$ 11,452$ 12,911$ 1,459$ 71 145 CITY OF ROLLING HILLS, CALIFORNIA Budgetary Comparison Schedule Measure M Local Return Fund For the Year Ended June 30, 2023 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 137,515$ 137,515$ 137,515$ -$ Resources (Inflows): Intergovernmental 31,000 31,000 34,507 3,507 Use of money and property 200 200 3,883 3,683 Amounts Available for Appropriations 168,715 168,715 175,905 7,190 Budgetary Fund Balance, June 30 168,715$ 168,715$ 175,905$ 7,190$ 72 146 CITY OF ROLLING HILLS, CALIFORNIA Budgetary Comparison Schedule LA County Measure W Fund For the Year Ended June 30, 2023 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 24,139$ 24,139$ 24,139$ -$ Resources (Inflows): Intergovernmental 105,000 105,000 104,457 (543) Use of money and property - - 1,941 1,941 Amounts Available for Appropriations 129,139 129,139 130,537 1,398 Charges to Appropriations (Outflows): Public works 80,000 80,000 55,727 24,273 Total Charges to Appropriations 80,000 80,000 55,727 24,273 Budgetary Fund Balance, June 30 49,139$ 49,139$ 74,810$ 25,671$ 73 147 CITY OF ROLLING HILLS, CALIFORNIA Budgetary Comparison Schedule Underground Utility Fund For the Year Ended June 30, 2023 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1, as Restated 664,527$ 664,527$ 664,527$ -$ Resources (Inflows): Use of money and property - - 14,692 14,692 Amounts Available for Appropriations 664,527 664,527 679,219 14,692 Charges to Appropriations (Outflows): Public works - 13,645 13,645 - Total Charges to Appropriations - 13,645 13,645 - Budgetary Fund Balance, June 30 664,527$ 650,882$ 665,574$ 14,692$ 74 148 CITY OF ROLLING HILLS, CALIFORNIA Budgetary Comparison Schedule Capital Projects Fund For the Year Ended June 30, 2023 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 284,239$ 284,239$ 284,239$ -$ Resources (Inflows): Use of money and property - - 8,350 8,350 Transfers in 396,000 1,166,845 760,528 (406,317) Amounts Available for Appropriations 680,239 1,451,084 1,053,117 (397,967) Charges to Appropriations (Outflows): Capital outlay to 396,000 1,166,845 816,473 350,372 Total Charges to Appropriations 396,000 1,166,845 816,473 350,372 Budgetary Fund Balance, June 30 284,239$ 284,239$ 236,644$ (47,595)$ 75 149 1611 E. Fourth Street, Suite 200 Santa Ana, CA 92701 (714) 569-1000 203 N. Brea Blvd, Suite 203 Brea, CA 92821 (714) 672-0022 21 Waterway Avenue, Suite 30089 The Woodlands, TX 77380 (936) 828-4587 2151 River Plaza Dr., Suite 150 Sacramento, CA 95833  (916) 503-9691 24422 Avenida de la Carlota, Suite 275 Laguna Hills, CA 92653 (949) 829-8299 www.lslcpas.com INDEPENDENT AUDITORS’ 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 Rolling Hills, 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 Rolling Hills, California (the “City”), as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated June 24, 2024. 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 that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified. 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. 150 To the Honorable Mayor and Members of the City Council City of Rolling Hills, California 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 City’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 City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Brea, California June 24, 2024 151 CITY OF ROLLING HILLS ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 152 Purpose of Agenda Item To hear a report on the City’s audited Annual Comprehensive Financial Report (ACFR) for the fiscal year ended June 30, 2023 Receive and file 153 Background Why are audited financial statements prepared? Required by State Controller and possibly by City’s Muni Code How do they differ from other financial reports prepared by staff during the year and at year end? Interim reports focus on a comparison of revenues and expenditures to budget ACFR focuses on the financial condition (health) of the entity and whether the financial condition improved or deteriorated during the fiscal year 154 Key Contents of ACFR Management’s Discussion & Analysis (MD&A) Entity-wide financial statements Fund financial statements (major funds) Footnotes Individual fund financial statements 155 FINANCIAL HIGHLIGHTS ENTITY-WIDE 156 ENTITY-WIDE FINANCIAL CONDITION Govt'l Business Activities Activities Total Assets Current and Other Assets 8,543,120$ 9,069$ 8,552,189$ Capital Assets 741,184 - 741,184 Deferred Outflows 344,619 - 344,619 Total Assets 9,628,923 9,069 9,637,992 Liabilities Current and Other Liabilities 344,619 - 344,619 Deferred Outflows 787,124 - 787,124 Total Liabilities 1,131,743 - 1,131,743 Net Position Invested in Capital Assets 741,184 - 741,184 Restricted 2,226,109 - 2,226,109 Unrestricted 4,947,870 9,069 4,956,939 Total Net Position 7,915,163$ 9,069$ 7,924,232$ 157 ENTITY-WIDE RESULTS OF OPERATIONS Govt'l Business Activities Activities Total Revenues Taxes 1,471,698$ -$ 1,471,698$ Operating Grants 636,687 - 636,687 Charges for Services 715,829 744,696 1,460,525 Other 545,355 195 545,550 Total Revenues 3,369,569 744,891 4,114,460 Expenses Greneral Government 1,557,286 - 1,557,286 Public Safety 416,983 - 416,983 Planning & Development 652,808 - 652,808 Public Works 439,496 - 439,496 Refuse Collection - 944,664 944,664 Total Expenses 3,066,573 944,664 4,011,237 Excess (Deficiency)302,996 (199,773) 103,223 Transfers (214,759) 214,759 - Increase (Decrease) in Net Position 88,237 14,986 103,223 Net Position - Beginning (Restated)7,239,868 9,069 7,248,937 Net Position - Ending 7,328,105$ 24,055$ 7,352,160$ 158 GENERAL FUND HIGHLIGHTS 159 GENERAL FUND REVENUES Adopted Actual Budget Revenues Variance Property Taxes 1,425,207$ 1,378,564$ (46,642)$ Sales Taxes 19,300 20,555 1,255 Property Transfer Tax 122,706 57,185 (65,521) Other Taxes - 546 546 Motor Vehicle In Lieu 252,000 263,988 11,988 Construction & Demo Permits - 5,750 5,750 Building & Other Permits 475,000 578,496 103,496 Variance, Planning & Zoning 20,000 61,244 41,244 Animal Control Fees 250 353 103 Franchise Fees 14,000 14,847 847 Fines & Traffic Violations 4,500 4,422 (78) Fines & Forfeitures - 563 563 Cost Reimbursements 15,000 9,353 (5,647) RHCA Lease Revenue 69,000 63,404 (5,596) Prop A Exchange - 43,800 43,800 Interest on Investments 40,000 17,054 (22,946) PARS Earnings 20,239 25,244 5,005 Public Safety Aug Fund 1,000 1,040 40 Burglar Alarm Response 500 - (500) Miscellaneous Revenue 5,000 82,904 77,904 Transfers In - ARPA 220,682 220,682 - Transfers In - Refuse 24,000 24,000 - TOTALS 2,728,383$ 2,873,993$ 145,610$ 160 GENERAL FUND EXPENDITURES Adopted Amended Budget Budget Actuals Variance City Administration 1,101,635$ 1,101,635$ 978,595$ 123,040$ Finance 140,500 140,500 190,344 (49,844) Planning 924,069 948,539 667,166 281,373 Public Safety 245,000 245,000 237,665 7,335 City Properties 199,000 290,438 284,793 5,645 Non-Departmental 252,857 286,357 143,943 142,414 Transers Out 564,500 1,390,142 1,014,581 375,561 Totals 3,427,561$ 4,402,611$ 3,517,087$ 885,524$ 161 General Fund Summary Amended Budget Actuals Variance Operating Revenues 2,728,383$ 2,871,181$ 142,798$ Operating Expenditures (3,012,469) (2,502,506) 509,963 Operating Surplus (Deficit)(284,086) 368,675 652,761 Capital Transfers (1,390,142) (1,014,581) 375,561 Net Increase (Decrease) (1,674,228)$ (645,906)$ 1,028,322$ 162 AUDIT RESULTS 163 AUDIT RESULTS Unmodified (“Clean”) opinion No material weaknesses or significant deficiencies in the system of internal controls 164 QUESTIONS/DISCUSSION 165 Agenda Item No.: 13.B Mtg. Date: 07/08/2024 TO:HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM:KARINA BAÑALES, CITY MANAGER THRU:KARINA BAÑALES, CITY MANAGER SUBJECT: ADOPT RESOLUTION NO. 1372 APPROVING THE UPDATED FISCAL YEAR 2024/25 PAY SCHEDULE TO COMPLY WITH CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM (CALPERS) STATUTORY AND REGULATORY REQUIREMENTS FOR COMPENSATION EARNABLE AND PUBLICLY AVAILABLE PAY SCHEDULES DATE:July 08, 2024 BACKGROUND: The California Public Employees’ Retirement System (CalPERS) requires that the City Council regularly adopt a master salary schedule listing pay rates/ranges for all city-established positions, including the City Manager position. CalPERS Circular Letter 200-00320 (Attachment B) mandates that public agencies maintain and publish comprehensive salary schedules for all positions. This requirement is essential for maintaining the integrity of the pension system, ensuring fair and equitable compensation, and fostering public trust in the management of public funds. This evening, staff recommends that the City Council adopt the attached resolution (Attachment A), which establishes the City's Fiscal Year 2024-2025 (FY24-25) Salary and Hourly Compensation Schedule for the city's classifications. DISCUSSION: The City of Rolling Hills has not adopted a master salary schedule by Resolution to reflect the current pay ranges. Accordingly, the attached resolution will establish the City’s Salary and Hourly Compensation Schedule for Employees in City Service. Exhibit A of Resolution No. 1372 is a Salary Schedule table describing full-time and part-time classifications, authorized positions, and the minimum and monthly salary range. The Salary Schedule includes a Cost-of-Living Adjustment (COLA) that took effect on July 1, 2024, and was accounted for in the FY24-25 budget. Additionally, adjustments to employee salaries have been factored in. For reference, staff have included language from Section 1 of 166 the Rolling Hills Employee Handbook: Cost of Living Adjustment. “annually, employees will receive a COLA in their salary or hourly rate based on the month of March, Los Angeles/Orange County/Riverside Consumer Price Index (CPI) for all items. The COLA will be applied to employee salaries or hourly rates automatically, not to exceed 3.5% on July 1 of every year based on the March CPI. On July 1 of every year, position salary ranges will also adjust automatically. The salary range will adjust based on the month of March, Los Angeles/Orange County/Riverside CPI for all items not to exceed 3.5%.” Conclusion: It is recommended that the City Council adopt the attached resolution to formalize the employee salary schedule and ensure compliance with CalPERS Circular Letter 200-00320. This resolution will mandate the salary schedule's regular updating and public availability. FISCAL IMPACT: The fiscal impact was included in the FY24-25 Adopted Budget. RECOMMENDATION: Approve as presented. ATTACHMENTS: Attachment A - ResolutionNo1372_FY24-25_SalarySchedule_F.pdf Attachment B - CL_AGN_240708_CC_CalPERS_PaySchedules.pdf 167 -1- Resolution No. 1372 RESOLUTION NO. 1372 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROLLING HILLS, CALIFORNIA APPROVING THE UPDATED FISCAL YEAR 2024/25 PAY SCHEDULE TO COMPLY WITH CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM (CALPERS) STATUTORY AND REGULATORY REQUIREMENTS FOR COMPENSATION EARNABLE AND PUBLICLY AVAILABLE PAY SCHEDULES THE CITY COUNCIL OF THE CITY OF ROLLING HILLS, CALIFORNIA DOES HEREBY RESOLVE, DECLARE, DETERMINE, AND ORDER AS FOLLOWS: WHEREAS, all employers must comply with the compensation earnable and publicly available pay schedules provisions contained within California Government Code (GC) section 20636(d) and California Code of Regulations (CCR), Title 2, Section 570.5; and WHEREAS, it is necessary for the City Council to review and duly approve and adopt in accordance with requirements of applicable public meetings laws a publicly available pay schedule; and WHEREAS, attached to this resolution and incorporated by reference is the City’s comprehensive pay schedule which will be made publicly available on the City’s external website and provided upon request; and WHEREAS, the City reviews and may revise employee compensation and salary schedule ranges; and WHEREAS, the City benefits from a highly qualified, municipal workforce; and WHEREAS, to assist in retaining such a workforce, it is critical that the City’s compensation levels are competitive in the marketplace; and WHEREAS, the City should adjust salaries to reflect changes in the region’s cost of living; and WHEREAS, represented classifications are covered by current contracts which specify the amount of the salary adjustments in the new fiscal year; and WHEREAS, the salaries are scheduled to take effect the beginning of the pay period that includes July 1, 2024 168 -2- Resolution No. 1372 NOW THEREFORE, BE IT RESOLVED, that the City Council of the City of Rolling Hills hereby: 1. Adopts the fiscal year 2024/25 pay schedule in Exhibit A, reflecting these pay adjustments effective the first pay period following the adoption of this resolution PASSED, APPROVED and ADOPTED this 8th day of July 2024. ________________________________ Leah Mirsch Mayor ATTEST: ____________________________________ Christian Horvath City Clerk 169 -3- Resolution No. 1372 STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) SS CITY OF ROLLING HILLS ) The foregoing Resolution No. 1372 entitled: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROLLING HILLS, CALIFORNIA APPROVING THE UPDATED FISCAL YEAR 2024/25 PAY SCHEDULE TO COMPLY WITH CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM (CALPERS) STATUTORY AND REGULATORY REQUIREMENTS FOR COMPENSATION EARNABLE AND PUBLICLY AVAILABLE PAY SCHEDULES was approved and adopted at a regular meeting of the City Council on the 8th day of July, 2024, by the following roll call vote: AYES: NOES: ABSENT: ABSTAIN: ___________________________ CHRISTIAN HORVATH CITY CLERK 170 -4- Resolution No. 1372 Exhibit “A” 171 City of Rolling Hills Salary Schedule Effective 7/1/2024 through 6/30/ 2025 Adopted by ResolutionNo. 1372 Full-Time Classification Authorized Positions Monthly Minimum Monthly Maximum City Manager 1 Planning & Community Services Director 1 12,351$ 12,785$ Management Analyst 1 6,449$ 8,341$ City Clerk/Executive Assistant 1 6,488$ 8,519$ Senior Planner 0 6,442$ 8,333$ Assistant Planner 1 4,551$ 6,085$ Code Enforcement Officer 0 4,551$ 6,085$ Administrative Assistant 1 4,373$ 5,795$ Part-Time Classification Authorized Positions Hourly Minimum Hourly Maximum Bookkeeper/Administrative Clerk 1 25.63$ 32.70$ $16,172 172 California Public Employees’ Retirement System P.O. Box 942715 | Sacramento, CA 94229-2715 888 CalPERS (or 888-225-7377) | TTY: (877) 249-7442 www.calpers.ca.gov Payroll Circular Letter January 8, 2020 Circular Letter: 200-003-20 Distribution: IV, VI, X, XII, XVI To: All CalPERS Contracted Agencies (Public Agency, Schools, and State) Subject: Statutory and Regulatory Requirements for Publicly Available Pay Schedules Purpose The purpose of this Circular Letter is to inform all CalPERS Contracted Agencies of the requirements for providing CalPERS with a Publicly Available Pay Schedule in compliance with the Public Employees’ Retirement Law (PERL), Public Employees’ Pension Reform Act of 2013 (PEPRA), and Title 2 of the California Code of Regulations (CCR). Purpose of Publicly Available Pay Schedules Under the PERL and PEPRA, compensation earnable and pensionable compensation are determined in accordance with amounts identified on publicly available pay schedules. Compensation Earnable Under Government (Gov.) Code sections 20636 and 20636.1, compensation earnable means the pay rate and special compensation of the member, as further defined by those statutes. Pay rate for contracting agency and school members is deemed the normal monthly rate of pay or base pay of the member paid in cash to similarly situated members of the same group or class of employment for services rendered on a full-time basis during normal working hours, pursuant to publicly available pay schedules. Pay rate for contracting agency and school members who are not in a group or class is deemed the monthly rate of pay or base pay of the member, paid in cash and pursuant to publicly available pay schedules, for services rendered on a full-time basis during normal working hours, subject to specified limitations. 173 Circular Letter: 200-003-20 January 8, 2020 Page 2 of 4 Pay rate for state members is deemed the average monthly remuneration paid in cash out of funds paid by the employer to similarly situated members of the same group or class of employment, in payment for the member’s services or for time during which the member is excused from work, as further specified by subdivision (g) of Gov. Code 20636, pursuant to publicly available pay schedules. Pensionable Compensation Pursuant to Gov. Code section 7522.34, pensionable compensation of a new member of any public retirement system means the normal monthly rate of pay or base pay of the member paid in cash to similarly situated members of the same group or class of employment for services rendered on a full-time basis during normal working hours, pursuant to publicly available pay schedules, subject to specified limitations. Requirements of Publicly Available Pay Schedules Subdivision (a) of CCR section 570.5 defines the requirements for a publicly available pay schedule used to determine pay rates. Pay rates shall be limited to the amount listed on a pay schedule that must meet all the following eight (8) requirements: 1.Be duly approved and adopted by the employer's governing body in accordance with requirements of applicable public meetings laws 2.Identify the position title for every employee position 3.Show the pay rate as a single amount or multiple amounts within a range for each identified position 4.Indicate the time base, including, but not limited to, whether the time base is hourly, daily, bi-weekly, monthly, bi-monthly, or annually 5.Be posted at the office of the employer or immediately accessible and available for public review from the employer during normal business hours or posted on the employer's website 6.Indicate an effective date and date of any revisions 7.Is retained by the employer and available for public inspection for not less than five years 8.Does not reference another document in lieu of disclosing the pay rate Here is an example of a compliant pay schedule, to the extent it has been duly approved and adopted by the employer’s governing body in accordance with requirements of applicable public meeting laws, it is posted on the employer’s website, and it is retained by the employer and available for public inspection for not less than five years: 174 Circular Letter: 200-003-20 January 8, 2020 Page 3 of 4 Classification Rate Type Step 1 Step 2 Step 3 Step 4 Step 5 City Manager Monthly $10,500 $11,000 $11,500 $12,000 $12,500 City Counsel Monthly $10,000 $10,500 $11,000 $11,500 $12,000 City Clerk Monthly $5,500 $6,000 $6,500 $7,000 $7,500 Call Center Representative Monthly $5,000 $5,500 $6,000 $6,500 $7,000 Analyst Monthly $5,000 $5,500 $6,000 $6,500 $7,000 Assistant Monthly $4,500 $5,000 $5,500 $6,000 $6,500 Revised as of 09/01/2017 and adopted by the Board as of 09/15/2017 City of CalPERS Salary Schedule for Fiscal Year 17-18 Effective as of 07/01/2017 Special Compensation Pursuant to CCR section 571 for classic members, and CCR section 571.1 for new members under PEPRA, special compensation items are defined under an exclusive list. Each special compensation item shall be reported separately from pay rate, in accordance with the criteria described in those regulations. Therefore, a publicly available pay schedule in which the special compensation items are reflected in the pay rates does not comply with CCR section 570.5. Absence of Publicly Available Pay Schedule If an employer fails to meet the requirements of subdivision (a) of CCR section 570.5, under subdivision (b), the board may determine in its sole discretion an amount that will be considered as pay rate, taking into consideration all information it deems relevant including, but not limited to, the following: •Documents approved by the employer’s governing body in accordance with requirements of public meeting laws and maintained by the employer •Last pay rate listed on a pay schedule that conforms to the requirements of subdivision (a) with the same employer for the position at issue •Last pay rate for the member that is listed on a pay schedule that conforms with the requirements of subdivision (a) with the same employer for a different position •Last pay rate for the member in a position that was held by the member and that is listed on a pay schedule that conforms to the requirements of subdivision (a) of a former CalPERS employer. Importance of Publicly Available Pay Schedule Publicly available pay schedules are required by CalPERS and are a critical component to verify all members’ pay rates when calculating members’ retirement benefits. Maintaining a compliant publicly available pay schedule will support transparency and expedite CalPERS’ review process. 175 Circular Letter: 200-003-20 January 8, 2020 Page 4 of 4 Failure to provide CalPERS with a compliant publicly available pay schedule may result in a retirement benefit being delayed. Questions It is the employer’s responsibility to comply with all terms and conditions set forth in the employer’s contract with CalPERS and to ensure all reportable information is compliant with the PERL, PEPRA, and the CCR. If you have any questions or concerns, contact the CalPERS Customer Contact Center at 888 CalPERS (or 888-225-7377), or email MOU_Review@calpers.ca.gov. Renee Ostrander, Chief Employer Account Management Division 176 Agenda Item No.: 16.A Mtg. Date: 07/08/2024 TO:HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM:CHRISTIAN HORVATH, CITY CLERK / EXECUTIVE ASSISTANT TO CITY MANAGER THRU:KARINA BAÑALES, CITY MANAGER SUBJECT: CONFERENCE WITH LEGAL COUNSEL: THREATENED LITIGATION GOVERNMENT CODE SECTION 54956.9(D)(2) AND (E)(3) THE CITY COUNCIL FINDS, BASED ON ADVICE FROM LEGAL COUNSEL, THAT DISCUSSION IN OPEN SESSION WILL PREJUDICE THE POSITION OF THE CITY IN THE LITIGATION. NUMBER OF POTENTIAL CASES: (7) (GOVERNMENT CLAIMS ACT FORM SUBMITTED BY VARIOUS PROPERTY OWNERS IN RANCHO PALOS VERDES AGAINST THE CITY OF ROLLING HILLS ALLEGING DAMAGE TO PROPERTY) DATE:July 08, 2024 BACKGROUND: None. DISCUSSION: None. FISCAL IMPACT: None. RECOMMENDATION: None. ATTACHMENTS: 177 Agenda Item No.: 16.B Mtg. Date: 07/08/2024 TO:HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM:CHRISTIAN HORVATH, CITY CLERK / EXECUTIVE ASSISTANT TO CITY MANAGER THRU:KARINA BAÑALES, CITY MANAGER SUBJECT: CONFERENCE WITH LEGAL COUNSEL - INITIATION OF LITIGATION A CLOSED SESSION WILL BE HELD, PURSUANT TO GOVERNMENT CODE SECTION 54956.9(C) AND (D)(4) REGARDING THE DECISION OF WHETHER TO INITIATE LITIGATION (1 CASE) DATE:July 08, 2024 BACKGROUND: None. DISCUSSION: None. FISCAL IMPACT: None. RECOMMENDATION: None. ATTACHMENTS: 178