City Council

Mayor Chris Canning Vice Mayor Irais Lopez- AMENDED AGENDA 1/15/2021 Ortega Councilmember Lisa M. Gift Councilmember Gary Kraus Councilmember Donald Williams *AMENDED* AGENDA City Council - Regular Meeting Tuesday, January 19, 2021 - 6:00 PM Virtual * COVID-19 NOTICE * The City of Calistoga is committed to public participation in City government in a manner that is consistent with guidance and Health Orders issued by the Napa County Public Health Officer and the Governor’s Executive Orders N-29-20 and N-25-20, which suspend certain requirements of the Brown Act. This Meeting is necessary so that the City can conduct necessary business and is permitted under the Napa County Health Order No. 20-06 as an Essential Governmental Function. Consistent with the above-referenced Orders, this meeting will not be physically open to the public. City Councilmembers and staff will be video/teleconferencing into the meeting. To maximize public safety while still maintaining transparency and public access, members of the public can observe and participate in the meeting from home. Below is information on how the public may observe and participate in the meeting. The City recognizes that not all residents have the same ways to stay engaged, so several alternatives are offered. Please participate in the meeting by observing or listening to the meeting in one of the following ways: 1. Watch on your TV – Napa Valley TV Channel 28 (call your cable provider to ensure you have a City of Calistoga coded cable box) 2. Listen on your phone – dial 1-669-900-6833, enter webinar ID: 829-0729-5419, password: 123201 3. Watch online via Zoom at https://us02web.zoom.us/j/82907295419?pwd=Qkh2d05YV25wVXdhbkU5dVY1QmlFQT09 enter password: 123201 4. Watch online via YouTube Live at youtube.com/cityofcalistogaC:\Users\mrittburg\Downloads\youtube.com\cityofcalistoga Please participate in the meeting by providing public comment on any item on the agenda or any item of municipal concern via email. Please submit your comment, limited to 350 words or less, via email to publiccomment@ci.calistoga.ca.us. Written public comments submitted by email should clearly indicate the Agenda Item No. or specify “Oral Communications” in the Subject Line for items not on the agenda and are requested to include the submitter’s full name. Comments received by 4:00 p.m. on the day of the meeting will be posted online with the agenda packet and included in the record but will not be read aloud. Comments received after the commencement of the meeting and before the agenda item is heard will be read aloud for a maximum of three minutes, or as determined by the Chair. If a comment is received after the agenda item is heard but before the close of the meeting, the comment will still be included as a part of the record of the meeting but will not be read aloud. The City of Calistoga thanks you in advance for taking all precautions to prevent spreading the COVID-19 virus. Note: The methods of observing or listening to the meeting or providing public comments may be altered or the meeting may be cancelled, if needed. You may check on the status of the meeting by visiting the City website at www.ci.calistoga.ca.us for any updates. Page 1 of 176 A. CALL TO ORDER – ROLL CALL - SALUTE TO THE FLAG B. ORAL COMMUNICATION ON CONSENT ITEMS OR NON-AGENDA ITEMS This time is set aside to receive comments from the public regarding matters on the Consent Calendar or matters of municipal concern not on the agenda. Pursuant to Government Code section 54954.3 (the Brown Act), however, the Council cannot consider any issues or take action on any requests during this comment period. Speakers are encouraged to limit their comments to 3 minutes maximum so that all speakers have an opportunity to address the City Council. C. ADOPTION OF MEETING AGENDA D. CITY MANAGER’S REPORT E. PROCLAMATIONS/PRESENTATIONS/ AWARDS None F. CONSENT CALENDAR 1. Approve the Minutes of the January 5, 2021, City Council Regular 5 - 10 Meeting as submitted. Recommended Action: Approve Minutes Staff Report and Minutes 2. Consideration of a Resolution accepting the FY 19-20 Development 11 - 19 Impact Fees Annual Report in Compliance with Assembly Bill 1600. Recommended Action: Adopt Resolution Staff Report and Attachments G. GENERAL GOVERNMENT 3. Presentation of the Audited Comprehensive Annual Financial Report for 21 - 174 the Fiscal Year Ended June 30, 2020 and Receive and File Report. Recommended Action: Receive and File Report. Staff Report and Attachments 4. Consideration of proposal for essay contest on government. 175 - 176 Recommended Action: Consider proposal and provide direction to staff. Staff Report 5. Consideration of a Resolution approving an agreement with Silver Rose Ventures LLC for pedestrian safety improvements on Silverado Trail. Recommended Action: Adopt Resolution *This item will be continued to the February 2, 2021, Regular City Council Meeting H. COUNCIL REQUESTS AND IDEAS FOR DISCUSSION I. ADJOURNMENT Page 2 of 176 NOTICE: If you challenge a city’s zoning, planning, or other decision in court, you may be limited to raising only those issues you or someone else raised at the public hearing described in this notice, or in written correspondence delivered to the City Council at, or prior to, the public hearing. Judicial review of any City administrative decision may be had only if a petition is filed with the court not later than the 90th day following the date upon which the decision becomes final. Judicial review of environmental determinations may be subject to a shorter time period for Litigation, in certain cases 30 days following the date of final decision. Pursuant to GC §54957.5 any writings/documents provided to a majority of the City Council regarding any item on this agenda will be made available for public inspection on the City website at www.ci.calistoga.ca.us. AMERICANS WITH DISABILITIES ACT: The City can provide special assistance for persons with disabilities to participate in public meetings. To make a request for disability-related modification or accommodation please contact the Deputy City Clerk at hgaede@ci.calistoga.ca.us or (707)942-2805. If you need assistance or accommodation, please provide notice at least 48 hours prior to the meeting. For TTY/ Speech-to-Speech users, dial 7-1-1 for the California Relay Service, offering free text-to-speech, speech-to-speech, and Spanish language services 24 hours a day, 7 days a week. POSTING: I declare a copy of this Amended Agenda was posted at City Hall, 1232 Washington Street, Calistoga, on January 15, 2021. _____________________________ Marni Rittburg, CMC, City Clerk Page 3 of 176 Page 4 of 176  CITY OF CALISTOGA STAFF REPORT TO: Honorable Mayor and City Council FROM: Marni Rittburg DATE: January 19, 2021 SUBJECT: Approving Minutes of the January 5, 2021, Regular City Council Meeting Approved by Michael Kirn, City Manager DESCRIPTION: Consider approving the Minutes of the January 5, 2021, Regular City Council Meeting. RECOMMENDATION: Approve the minutes. ATTACHMENTS: 1. January 5, 2021, Regular City Council Meeting Minutes Page 5 of 176  DRAFT MINUTES CALISTOGA CITY COUNCIL REGULAR MEETING Tuesday, January 5, 2021 - 6:00 P.M. Virtual Meeting A) CALL TO ORDER – ROLL CALL – SALUTE TO THE FLAG Mayor Canning, called the regular session to order at 6:00 p.m. Present: Councilmembers Lisa Gift, Gary Kraus, and Donald Williams; Vice Mayor Irais Lopez-Ortega, and Mayor Chris Canning Absent: None B) ADOPTION OF MEETING AGENDA It was MOVED by Councilmember Kraus and SECONDED by Vice Mayor Lopez- Ortega to adopt the meeting agenda as presented. The motion carried by the following vote: AYES: Councilmembers Gift, Kraus, and Williams, Vice Mayor Lopez- Ortega and Mayor Canning NOES: None ABSTAIN: None ABSENT: None C) CITY MANAGER’S REPORT City Manager Mike Kirn thanked citizens who shopped local and supported our small businesses over the holidays. City Manager Kirn offered accolades to the Police and Fire Departments on an excellent job on the Toys for Tots, Senior Start Tree and Holiday Meal Gift Cards programs. Over 100 families were provided assistance. Pioneer Bridge work was suspended due to COVID-19, work has now resumed and is expected to be completed at end of the January. City Manager Kirn acknowledged three Fire Fighters who have volunteered to be part of a COVID-19 Medical Strike Team and are headed to Southern California. D) ORAL COMMUNICATION ON CONSENT ITEMS OR NON-AGENDA ITEMS No oral communication was received. For oral communication and public comment content, for any item on the agenda, view the video of the meeting available on the City’s YouTube channel https://www.youtube.com/user/CityofCalistoga. E) PROCLAMATIONS/PRESENTATIONS/AWARDS 1. Mayor Canning administered the Oath of Office to newly hired City Clerk, Marni Rittburg. Page 2 of 6 Page 6 of 176 Calistoga City Council Minutes January 5, 2021 Page 2 of 5 2. Mayor Canning presented a proclamation recognizing the 100th Birthday of Gena Quast and proclaimed Friday, January 8, 2021 as Gena Quast day. F) CONSENT CALENDAR 3. Approved the minutes of the December 15, 2020 City Council Regular Meeting as submitted. 4. Adopted Resolution 2021-001 finding that the Developer of the Calistoga Hills Project is in good faith compliance with the terms and conditions of the project's development agreement. It was MOVED by Councilmember Williams and SECONDED by Vice Mayor Lopez-Ortega to approve the Consent Calendar. The motion carried by the following vote: AYES: Councilmembers Gift, Kraus, and Williams, Vice Mayor Lopez- Ortega and Mayor Canning NOES: None ABSTAIN: None ABSENT: None G.) GENERAL GOVERNMENT 5. Receive COVID-19 update and provide direction to staff. Recommended Action: Provide direction to staff. City Manager Mike Kirn presented the staff report. On December 17, 2020, Calistoga was placed under the State mandated Shelter at Home Order. The order is currently effective through January 8, 2021. Napa County remains in the deep purple tier. The City of Calistoga received $56,000 through the CARES Act to cover some costs associated with COVID-19 activities. Councilmember Williams inquired about the CARES Act funds and how the City used those funds. City Manager Kirn stated the City purchased personal protective equipment for City employees such as hand sanitizers, disinfectants, and masks to allow the City to remain operational. Administrative Services Director Gloria Leon stated that during the months of March and June the City submitted payroll costs for First Responders (Police and Fire) to the State. Mayor Canning asked for an accounting report or a summary to be provided at a later date. Director Leon will prepare a summary. Vice Mayor Lopez-Ortega stated that the deadline to apply for the Small Business COVID-19 Relief Grant Program was extended to January 13, 2021. Vice Mayor Lopez-Ortega inquired if City employees are receiving proper care and how the City is managing the risk. City Manager Kirn stated the Public Works Department has Page 3 of 6 Page 7 of 176 Calistoga City Council Minutes January 5, 2021 Page 3 of 5 split their field personnel and water and wastewater operators into two different shifts to minimize cross contamination. Additionally, the City has invested in fogging devices. All Police vehicles are fogged and sanitized at the end of every shift. Additionally, the common areas of the Police Department are fogged daily. Employees are encouraged to stay home if they are not feeling well. Employees are provided with hand sanitizers and are encouraged to wash their hands often and wear a mask. City Manager Kirn noted that the State changed vendors for COVID-19 testing shortly before Christmas. The testing schedule is: Tuesdays and Wednesdays in Calistoga through the month of January and Thursday, Friday and Saturday in Napa at the Expo. Their goal is to test 330 people a day in Calistoga and 600 people a day in Napa. Appointments are required. Children can be tested with their parents’ consent. Mayor Canning stated he knows this is a challenging time for everyone and indications are the stay-at-home order will most likely not be lifted on January 8th. 6. Receive Update on Logvy Park Play Area Improvements. Recommended Action: Provide direction to staff. Parks and Recreation Director Rachel Melick thanked the donors and volunteers that participated in the Holiday Food Distribution. Also, a huge thank you to the restaurants who prepared the meals. A total of 290 meals were distributed. Parks and Recreation Director Rachel Melick presented the staff report and provided an update on the Logvy Park Play Area improvements. Director Melick thanked the Adelante Group for all their hard work to get this project off the ground. Councilmember Gift expressed she is aware that this is a conceptual plan and suggested adding a pavilion or covered area to be able to host events in a shaded or covered area during rainy or hot weather. Vice Mayor Lopez-Ortega stated that these improvements will be a great asset for the community. City Manager Kirn stated that he has been in contact with the Corporation for Better Housing who manages the apartment complex on Washington. They have indicated a willingness to participate in creating an opening in their fence in the lower portion of the property so there can be direct access to Logvy Park. Additionally, Mr. Kirn received word from the State of California Recreation Department for a call for projects, however the City is not eligible to apply for this funding opportunity. This funding opportunity is for Counties, Joint Powers Authorities, and Non-profits. The City has reached out to UpValley Family Centers and they are willing to help us sponsor an application. We will be coordinating closely with UpValley Family Centers and the Adelante Group on preparing an application. Applications are due in November. Page 4 of 6 Page 8 of 176 Calistoga City Council Minutes January 5, 2021 Page 4 of 5 No public comment was received. 7. Consideration of a Resolution determining that the Maintenance of Effort (MOE) was met for Fiscal Year 2019/20 under the Measure T Program. Recommended Action: Adopt Resolution Senior Engineer Hamid Heidary presented the staff report. Council and staff discussion ensued. No public comment was received. It was MOVED by Councilmember Williams and SECONDED by Councilmember Kraus to adopt Resolution 2021-002 determining the Maintenance of Effort (MOE) was met for Fiscal Year 2019/20 under the Measure T Program. The motion carried by the following vote: AYES: Councilmembers Gift, Kraus, and Williams, Vice Mayor Lopez- Ortega and Mayor Canning NOES: None ABSTAIN: None ABSENT: None 8. Consideration of a Resolution confirming Councilmember Appointments to various Committees. Recommended Action: Discuss, confirm appointments, and adopt Resolution. Mayor Canning presented the item. No public comment was received. It was MOVED by Councilmember Kraus and SECONDED by Councilmember Williams to adopt Resolution 2021-003 confirming Mayor and elected officials’ appointments to various boards and commissions. The motion carried by the following vote: AYES: Councilmembers Gift, Kraus, and Williams, Vice Mayor Lopez- Ortega and Mayor Canning NOES: None ABSTAIN: None ABSENT: None H.) COUNCIL REQUESTS AND IDEAS FOR DISCUSSION Vice Mayor Lopez-Ortega stated she was appointed to serve on the League of California Cities Community Services Policy Committee in 2021. Page 5 of 6 Page 9 of 176 Calistoga City Council Minutes January 5, 2021 Page 5 of 5 Mayor Canning thanked Chief Celaya for the noticeable improvement in the activity and behavior in Pioneer Park. I.) ADJOURNMENT Mayor Canning adjourned the meeting in memory of John Martin, at 7:12 p.m. Respectfully Submitted Prepared by: Approved by: Marni Rittburg, CMC, City Clerk Chris Canning, Mayor Approved: Page 6 of 6 Page 10 of 176  CITY OF CALISTOGA STAFF REPORT TO: Honorable Mayor and City Council FROM: Gloria Leon, Administrative Services Director DATE: January 19, 2021 SUBJECT: FY 19-20 Development Impact Fees Annual Report in Compliance with Assembly Bill 1600 Approved by Michael Kirn, City Manager DESCRIPTION: FY 19-20 Development Impact Fees Annual Report in Compliance with Assembly Bill 1600. RECOMMENDATION: Adopt a Resolution Accepting the FY 19-20 annual development fee report. BACKGROUND: State law (California Government Code Section 66006) requires each local agency that imposes AB 1600 development impact fees to prepare an annual report providing specific information about those fees. The AB 1600 legal requirements stipulate that fees imposed on new development have the proper nexus to any project on which they are imposed. In addition, AB 1600 imposes certain accounting and reporting requirements with respect to the fees collected. The fees for accounting purposes must be segregated from the General Fund of the City and from other funds or accounts containing fees collected for other improvements. Interest on each development fee fund or account must be credited to the fund or account and used only for the purpose for which fees were collected. The recommended Resolution (Attachment 1) accepts the annual report which is included as Exhibit A (the FY 19-20 AB 1600 Report) to the Resolution. FINANCIAL IMPACT: None Page 11 of 176 CEQA REVIEW: The recommended action is not a project and therefore not subject to CEQA review. CONSISTENCY WITH CITY COUNCIL GOALS AND OBJECTIVES: Goal 1: Maintain and enhance the economic vitality of the community and the financial stability of the City. ATTACHMENT 1. Resolution with Exhibit A - FY 19-20 AB 1600 Report Page 2 of 9 Page 12 of 176  ATTACHMENT 1 RESOLUTION NO. 2021-XXX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CALISTOGA, COUNTY OF NAPA, STATE OF CALIFORNIA, ACCEPTING THE FISCAL YEAR 2019-20 ANNUAL REPORT OF DEVELOPER IMPACT FEES (AB 1600 REPORT) WHEREAS, the City of Calistoga imposes fees to mitigate the impact of development pursuant to Government Code Section 66000 et seq.; and WHEREAS, said fees collected are deposited into a special and separate capital account for each type of improvement funded by development fees; and WHEREAS, the City maintains separate funds for, administrative facilities, fire, police, transportation, affordable housing, cultural/recreational, traffic signal, northwest drainage, water, and wastewater; and WHEREAS, the City is required within 180 days after the last day of each fiscal year to make available to the public information for the fiscal year regarding these fees under Government Code Section 66006; and WHEREAS, City staff has prepared a report (“AB 1600 Report”) that contains the information required by Government Code Section 66006; and WHEREAS, no loans were made from any of the accounts identified in the AB 1600 Report; and WHEREAS, there were no refunds of development impact fees collected pursuant to Government Code Section 66001 (e), nor were there any allocations of unexpended revenues collected pursuant to Government Code Section 66001 (f); and WHEREAS, the AB 1600 Report was made available for review on December 28, 2020, more than fifteen (15) days prior to the date the Council considered the AB 1600 Report; and WHEREAS, no interested persons have requested notice of the AB 1600 Report; consequently, no notices of availability of the AB 1600 Report were mailed. NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF CALISTOGA DOES RESOLVE, DECLARE, DETERMINE, AND ORDER AS FOLLOWS: Section 1: A. In accordance with Government Code Section 66006, the City has conducted an annual review of its development impact fees and capital infrastructure programs and the City Council has reviewed the AB 1600 Report attached hereto as Exhibit A and incorporated therein by this reference. B. The City Council hereby approves, accepts, and adopts the FY 19-20 AB 1600 Report. Page 3 of 9 Page 13 of 176 Resolution No. 2021-XXX Annual AB 1600 Report FY 2019-20 Page 2 of 2 Section 2: Effective Date: The resolution shall take effect immediately upon adoption. Section 3: Severability. If any section, subsection, sentence, clause, phase, or portion of this Resolution is for any reason held invalid or unconstitutional, such decision shall not affect the validity of the remaining portions of this Resolution. The City Council hereby declares that it would have passed this Resolution and each section, subsection, sentence, clause or phase thereof irrespective of the fact that any one of or more sections, subsections, clauses, or phases be declared unconstitutional on their face or as applied. PASSED, APPROVED AND ADOPTED by the City Council of the City of Calistoga at a regular meeting held this 19th day of January 2021, by the following vote: AYES: NOES: ABSENT: ABSTAIN: I, Marni Rittburg, City Clerk of the City of Calistoga, hereby certify that the foregoing Resolution was duly adopted by the City Council of the City of Calistoga at a regular meeting held on the 19th day of January 2021, by the following vote: ATTEST: APPROVED: ________________________ ________________________ Marni Rittburg, City Clerk Chris Canning, Mayor Page 4 of 9 Page 14 of 176  Exhibit A CITY OF CALISTOGA FY 19-20 Development Impact Fees Annual Report For Compliance with Assembly Bill 1600 December 28, 2020 Prepared by the City of Calistoga Administrative Services Department Page 5 of 9 Page 15 of 176 Page 6 of 9 Page 16 of 176 Page 7 of 9 Page 17 of 176 Fire AB 1600 development fees cover new development’s share of the costs associated with the replacement of capital equipment and vehicles. Capital items will depreciate more -._- quickly as new development occurs and the City’s service population grows. Police AB 1600 development fees cover new development’s share of the costs associated with the replacement of capital equipment and vehicles. Capital items willdepreciate more quickly as new development occurs and the City’s service population grows. "l'I-'- -11-‘ AB E Affordable Housing I-r114.-:1--E 1600 development I'I'j'l"hI'b fees cover new development’s share of the costs associated with construction '-1'-T'-"'?1-—-I-H-"-'-"F'I.'jI-Z- and preservation of affordable to very low-, T low- — and I-ji-j. moderate-income households. I.I.|.L.|.?u?-ia_I..|-u-1.-. Cultural/Recreational AB 1600 development fees are designed to cover the costs |.I.|.I.—Z Z--H-I-'IrI-I-II-I associated Calistoga. with new parks and recreation -I-I———.---Ifacilities '— required to I‘-HI.‘ serve future growth '-in Transportation AB 1600 development fees cover new development’s share of the costs associated with providing infrastructure improvements necessary to accommodate the increase in traffic and bicycle-associated improvements associated with new development. Traffic Signal AB 1600 development fees will cover future signal and intersection improvements. This fee is no longer collected separately, and the identified signal improvements have been incorporated into the Transportation Fee. Funds collected under this impact fee will be used to facilitate the construction of the traffic signal at the intersection of Foothill Boulevard and Petrified Forest Road. Once the fees collected have been expended this impact fee account will be closed. Northwest Drainage AB 1600 development fees are used to fund the design and construction of drainage infrastructure improvements to mitigate the impact of new development. Water Capacity fees are used to fund the design and construction of water supply, water treatment and distribution system infrastructure improvements to cover costs associated with new development. Wastewater Capacity fees are used to fund the design and construction of wastewater treatment, collection and disposal infrastructure improvements to cover costs associated with new development Attachment 1.A reflects the Annual Report and Analysis of Changes in Fund Balance for '13"-H:i".'..1‘:-'«'-‘.-"'."-':'.L'i=""' Developer's Impact and Capacity Fees for the Fiscal Year Ending June 30, 2020. Page 8 of 9 Page 18 of 176 ?mn_=:2: A.> » 9 . 9 .. Page 9 of 9 Page 19 of 176 Page 20 of 176  CITY OF CALISTOGA STAFF REPORT TO: Honorable Mayor and City Council FROM: Gloria Leon, Administrative Services Director DATE: January 19, 2021 SUBJECT: Presentation of the Audited Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2020 and to receive and file report Approved by Michael Kirn, City Manager DESCRIPTION: Presentation on the Audited Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2020 and to receive and file report. RECOMMENDATION: By motion receive and file report. SUMMARY: Receive presentation by Michael O’Connor, CPA, from R.J. Ricciardi, Inc., on the Fiscal Year 2019/20 audited Comprehensive Annual Financial Report. BACKGROUND: The Comprehensive Annual Financial Report (CAFR) is an audited summary report of financial transactions of the City for the Fiscal Year 2019/20, ending June 30, 2020. The report is presented to the City Council and provides summary financial information for citizens, other government agencies, lenders, and interested parties. The format of this report complies with the generally accepted accounting principles (GAAP) and reporting requirements of the national Governmental Accounting Standards Board (GASB). Michael O’Connor, CPA from R.J. Ricciardi, Inc., a licensed certified public accounting firm, has audited the City of Calistoga's financial statements. The goal of the independent audit was to provide reasonable assurance that the City of Calistoga’s financial statements for fiscal year ending June 30, 2020, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting amounts and Page 21 of 176 disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. Mr. O’Connor has issued the accompanying financial statements (Attachments 1-4) with no significant or unusual transactions in the City’s statement of net assets and fund statements. General Fund The City’s General Fund ended Fiscal Year 2019/20 with $7,130,755 in fund balance compared to $7,862,053 in Fiscal Year 2018/19 and $8,275,721 in Fiscal Year 2017/18. Total revenues decreased by $2.5 million when compared to Fiscal Year 2018/19 and the costs of the City’s General Fund operations were $1.1 million more than General Fund Revenues. This was due to COVID-19 and the loss in transient occupancy tax before transfers in from Fiscal Year 2018/19. Net change in fund balance of Fiscal year 2018/19 was ($731,298) as compared to ($413,668) in Fiscal Year 2018/19. During the fiscal year, City Council made various revisions to the City budget. The budget amendments fall into two categories: changes made during the year for unanticipated appropriations and at the year-end review for adjustments in revenues and expenditures and increases in appropriations to better reflect actual operations during the year. Excluding budgeted transfers, General Fund revenues came in at about $0.7 million more than the final amended budget as a result of a one-time ERAF property tax payment, in the amount of $0.03 million; sales tax, $0.04 million; interest earnings $0.07 million; transient occupancy taxes, $0.2 million and intergovernmental, $0.3 million. Actual expenditures were $1.8 million less than the final amended budget. This was mainly due to COVID-19 and capital projects of $1.4 million not being expensed. The detailed budgetary comparison schedule for the general fund can be found on page 57 of the CAFR (Attachment # 5). Of the $7,130,755 fund balance $737,586 is non-spendable as it is represented by prepayments to vendors ($78,202) and advances to the Wastewater Fund ($659,384). The remaining $7,130,755 unassigned fund balance is available for spending at the City Council’s discretion, subject to Council-established policies for reserve funds. The City’s General Fund on June 30, 2019 had $5.9 million in cash and investments as compared to $6.0 million in Fiscal Year 2018/19 and $5.6 million cash available in Fiscal Year 2017/18. Enterprise Funds The Water and Wastewater funds had $449,814 and $2,080,367 respectively at June 30, 2020 as compared to $0 and $2,298,930 respectively in cash and cash equivalent balances at June 30, 2019. The reason for the change in cash was increase in water rates and additional use of funds for maintenance, operations, and employee services. The Water Fund had an operating income loss of $65,490 and the Wastewater Fund had an operating income loss of $220,189 before contributions and transfers for Fiscal Page 2 of 154 Page 22 of 176 Year 2019/20. Total expenses for the enterprise funds for Fiscal Year 2019/20 were $7.2 million when compared to Fiscal Year 2018/19 of $6.6 million, an increase of nearly $0.6 million. This is due to increases in coasts for purchasing of water, contracted services, vacancies being filled and the reporting of GASB 68 which changed the methodology by which current period pension expenses are reported. Total revenue for the enterprise funds in Fiscal Year 2019/20 was $7.6 million comprised of $0.7 million in capital grants and contributions, $.1 million in other revenues, and $6.8 million in charges for services. In Fiscal Year 2018/19 total revenue was $8.6 million, comprised of $6.1 million in charges for services and $2.5 million in capital grants and contributions. At the end of Fiscal year 2019/20, the City had $14.7 million in long-term debt and capital lease obligations outstanding. Of this amount approximately 82% relates to the City's business-type activities, mainly the water and wastewater systems, with the remaining 18% for general governmental type financing activities. In the business-type activities the City made all required payments of principal and interest on its obligations despite the City’s strained financial conditions. Additional information about the City's long-term obligations can be found under Section E – Long Term Debt, Pages 39 – 44 under the notes to the financial statements. Several of the loans require a debt coverage ratio of 120%. The ratio for the Wastewater Fund for was 101.8% and did not meet the debt service coverage ratio for FY 2019/20 when on-time capacity fee revenues are excluded. The ratio for the Water Fund for was 249.3% meeting the debt service coverage ratio for FY 2019/20. Home Grant Fund This fund was established to account for a HOME loan between the City and Palisades Investors, L.P. in the amount of $3,197,184 bearing interest at 3% per annum. Payments of principal and interest are due annually from excess/distributable cash with the entire principal and interest due in 2064. The objectives and intent of the HOME program is to provide decent affordable housing to lower-income households, strengthen the ability of state and local governments to provide housing that is affordable; expand the capacity of non-profit housing providers; and leverage private sector participation. At the end of the fiscal year, the City had $3.9 million in notes receivables in the HOME Grant Fund. CDBG Open Grant Fund This fund was established to provide "silent" second mortgages for eligible first-time home buyers. The City currently holds 17 first-time homebuyer notes with a fund balance of $1.2 million on June 30, 2020. The maximum amount for a silent second mortgage were set at $250,000 by the California Department of Housing and Community Development. The silent second mortgages are basically a deferred payment loan due upon transfer of title or when no longer the principal residence. Page 3 of 154 Page 23 of 176 Special Revenue Funds Special Revenue Funds ended the fiscal year with $2,672,188 in cash and investments and a net change in fund balance of $678,004 for a combined total fund balance of $4,618,274 as compared to $4,201,385 in Fiscal Year 2018/19. The increase was due primarily receiving $504,315 from Measure T funding. Of that amount $372,563 was transferred to the General Fund for construction of Cedar, Grant and Harley and Spring Streets. In addition, $395,000 was received through Measure D for Housing Projects. Equipment Replacement Fund The net position for this fund on June 30, 2020 was $2,171,113 with $587,656 unrestricted. The net position for this fund in FY 18/19 was $1,675,811 of which $405,870 was unrestricted. $150,000 has been set aside for a financial software upgrade. Summary When all operations were concluded, the governmental activities function reported a change of $.7 million in net position. Revenues from all governmental activities decreased over the previous fiscal year by $3.2 million from $24.1 million to 20.9 million. There was an increase of 8.1% for charges for services, due to increased utility rates; 7% more in operating grants and contributions due partly to a CDBG Grant; and a 26.8% decrease in transient occupancy tax due to COVID-19. During Fiscal Year 2019-20 approximately 38% of the City's total revenue came from various taxes including property, sales, and transient occupancy as opposed to a total of 40% in Fiscal Year 2018-19. Property taxes increased by 14%, whereby the City received $0.3 million, a one-time educational revenue augmentation (ERAF) payment. The total cost of all programs and services in Fiscal Year 2019-20 was $20.2 million an increase of 7.3% from Fiscal Year 2018-19 and includes a wide range of services such as police and fire protection, streets, public works, general administration, community services, water, and wastewater operations. Largest contributors to the increase was public safety, community services, housing, and public works. Net position of business type-activities increased by $0.5 million due to increases in utility rates. City staff was successful in applying and being awarded capital grants and contributions which includes a Community Development Block Grant (CDBG) in the amount of $0.6 million for housing needs. In addition, the City received a grant from Office of Emergency Services in the amount of $0.2 million for the Riverside Pond Project. Mr. O’Connor has concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified audit opinion that t he City of Calistoga's financial statements for the fiscal year ended June 30, 2020, are fairly presented in conformity with U.S. generally accepted accounting principles. The independent auditor's report is presented as the first component of the financial section of the audit report. Page 4 of 154 Page 24 of 176 Governmental Auditing Standards Board Reporting Requirements The June 30, 2020 CAFR continues to comply with the GASB reporting standards. Below is a listing of the different sections in the report: • Transmittal letter by the City Manager and Administrative Services Director • Auditor’s Report • Management’s Discussion and Analysis • Government-wide financial statements, prepared using the economic resources measurement focus and the accrual basis of accounting • Fund financial statements, consisting of a series of statements that focus on a government’s major governmental funds and water/wastewater enterprise funds • Notes to financial statements • Required supplementary information, which requires budgetary comparison schedules to be presented • Supplemental statements • Statistical schedules Fund balances for governmental funds on June 30, 2020 were as follows: Non- spendable Governmental funds $737,586; restricted for capital improvements $33,834; restricted for affordable housing $7,051,225 ($3,937,912 for Home Grant Fund); $1,218,250 for CDBG Open Grant Fund and $1,895,063 for Other Governmental Funds; restricted for streets, $1,835,922; restricted for facilities $168,084; restricted for public safety $424,168; restricted for parks $2,975 and Unassigned General Fund balance $6,393,169. Non-spendable funds are proceeds that will become available in the future. Under auditing professional standards, the auditor is required to provide a separate communication to the City Council on specific issues regarding the conduct of the audit and other information relating to the financial statements and financial policies and practices of the City. The communication indicates that there were no issues or difficulties in conducting the audit. The communication and additional reports for the June 30, 2020 Comprehensive Annual Financial Report are attached. FINANCIAL IMPACT: None CEQA REVIEW: The recommended action is not a project and therefore not subject to CEQA review. CONSISTENCY WITH CITY COUNCIL GOALS AND OBJECTIVES: Goal #1, Maintain and enhance the economic vitality of the community and the financial stability of the City. ATTACHMENTS: 1. Communication to those charged with governance letter from Auditor 2. Report on Internal Control over Financial Reporting 3. Report on Agreed-Upon Procedures Applied to Appropriations Limit Worksheets 4. City Council and Management Report 5. 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Donald Williams DATE: January 19, 2021 SUBJECT: Government Essay Contest Approved by Michael Kirn, City Manager DESCRIPTION: Proposal for essay contest on government. RECOMMENDATION: Consider the request to approve essay contest guidelines and provide direction to staff. BACKGROUND: To encourage civic engagement in local government the proposal is for the Calistoga City Council to sponsor an essay contest including prizes for persons 18 years old and younger who reside within the Calistoga Unified School District boundary. The purpose of the contest would be: (1) to encourage local participation in government; (2) to formally recognize skillful verbal communication; (3) to foster thoughtful consideration of the role of formal government. The theme of the essay will relate to government, inviting individuals to comment on a governmental issue of current interest. Sample topics might include: “How Can Government Foster Unity in a Diverse Community?” “What Would Encourage Calistogan’s to Participate in Local Government?” “What Is the Significance of the Motto ‘E Pluribus Unum’?” “What Does Good Citizenship Mean?” “Comment on This Idea: It Takes a Village to Raise a Child” or “How to Respond to Disappointment with Government”. The essay parameters would be developed by a committee of three Calistogans and one Councilmember, all appointed by the City Council. Committee members shall be skilled in written communication. The Committee would be charged with selecting a topic, establish award amounts and a due date, develop judging criteria, deciding whether essays should be typed or handwritten, and judging the submittals. Judging Page 175 of 176 criteria could include creativity or an abstract thought thread on the topic, conveyance of message, sentence structure, grammar and spelling. Essays would be limited to a specific number of words (say 500) focused on the topic selected by the Committee, and would include a cover sheet with the name, age, and address of the author. The essays would be received by the City Clerk and distributed to the Committee members without revealing the names of the authors. The Committee members will be responsible to independently rank the essays and then meet virtually to select the top three top-ranked essays. Once the top three essays are selected the City Clerk will reveal the name of the authors. The City Council would then award the prizes at a regularly scheduled Council meeting. Local newspapers would be encouraged to print the winning essays. Staff is seeking direction whether to proceed with the proposed essay contest, total prize amount, and composition of the Judging Committee. FINANCIAL IMPACT: Depending on the total prize amount there should be sufficient funds in the FY 2020-21 City Council Services and Supplies budget. CEQA REVIEW: The recommended action is not a project and therefore not subject to CEQA review. CONSISTENCY WITH CITY COUNCIL GOALS AND OBJECTIVES: Goal 5, Objective 3: Continue to promote and enhance communication and transparency. Page 2 of 2 Page 176 of 176