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Measure VV – In an effort to address the City’s projected budget deficit and to ensure a secure <br />financial future, the City launched various community engagement efforts designed to explore <br />the viability of a potential revenue measure. As part of this work, several community surveys <br />and a public opinion poll were executed in fiscal year 2019-20 to gain a better understanding of <br />public service priorities. Several potential tax measures were also tested, including a <br />modification to the real property transfer tax, a public safety parcel tax, and a vacant property <br />tax. The results of this work were ultimately presented to the City Council in fiscal year 2019-20 <br />and used to inform their decision in fiscal year 2020-21 to place Measure VV on the November <br />2020 ballot, increasing the real property transfer tax rate from $6 per thousand dollars in assessed <br />valuation to $11 per thousand dollars in valuation. <br />FINANCIAL INFORMATION <br /> City Budget & Budgetary Controls <br /> The City Council is required to adopt a final budget by passing a budget resolution no later than June <br />30, following a public hearing process. This annual budget serves as the foundation for the City’s <br />financial planning and control. The budget is prepared by fund, function (Public Safety) and <br />department (Police). The legal level of budgetary control is at the fund level. The City Manager is <br />authorized to transfer budgeted amounts between departments and line items within any fund. Any <br />revisions that alter the total expenditures of any fund must be approved by the City Council. <br />Transfers between funds must be approved by the City Council. At the end of the fiscal year, <br />encumbered appropriations are carried forward and become part of the following year’s budget while <br />appropriations that have not been encumbered lapse, unless otherwise authorized by the City Council <br />and the City Manager. <br /> Accounting System <br /> The City’s accounting records for general government operations are maintained on a modified <br />accrual basis, with revenues recorded when measurable and available. Expenditures are recorded <br />when the services or goods are received and the liabilities incurred. Accounting records for the <br />City’s proprietary activities are maintained on the full accrual basis, with revenues recorded <br />when earned and expenses when incurred. <br /> In maintaining the City’s accounting system, consideration is given to the adequacy of internal <br />controls. Internal controls are designed to provide reasonable assurance regarding the <br />safeguarding of assets and to ensure the reliability of financial records and maintaining <br />accountability for assets. The concept of reasonable assurance recognizes that the cost of control <br />should not exceed the benefits likely to be derived. The evaluation of costs and benefits requires <br />continuing estimates and judgments by City management. We believe that the City’s system of <br />internal accounting controls continues to adequately safeguard assets and provide reasonable <br />assurance that financial transactions are properly recorded. <br /> Risk Management <br /> The City maintains commercial insurance combined with self-insurance for all of its governmental <br />operations. The City is a member of the Local Agency Workers’ Compensation Excess Joint Powers <br />Authority (LAWCX). The City is also a member of California Joint Powers Risk Management <br />Authority (CJPRMA), providing general liability coverage in an aggregate up to $40 million. <br />x99