Town of
Fairfax
Fairfax, California
Basic Financial Statements and
Independent Auditor’s Report
For the Year Ended June 30, 2023
Prepared by: Finance Department
This page intentionally left blank.
Town of Fairfax
Basic Financial Statements
For the Year Ended June 30, 2023
Table of Contents
Page
Independent Auditor’s Report ................................................................................................................................ 1 Management’s Discussion and Analysis ................................................................................................................. 5 Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net Position ............................................................................................................................ 16 Statement of Activities ................................................................................................................................ 17 Fund Financial Statements:
Governmental Fund Financial Statements:
Balance Sheet ........................................................................................................................................ 18 Reconciliation of the Governmental Funds – Balance Sheets with the Statement of Net Position ................................................................................................. 20 Statements of Revenues, Expenditures and Changes in Fund Balance ................................................ 22 Reconciliation of the Net Change in Fund Balances – Total Governmental Funds with the Statement of Activities ..................................................................................................... 24 Notes to Basic Financial Statements .................................................................................................................. 25 Required Supplementary Information:
Schedule of the Town’s Proportionate Share of the Net Pension Liability (Asset) – A Cost-Sharing Employer Defined Pension Plan ................................................................................. 58 Schedule of Contributions – A Cost-Sharing Employer Defined Pension Plan ................................................ 60 Schedule of Changes in the Net OPEB Liability and Related RatiosOther Post-Employment Benefits (OPEB) – Agent Multiple Employer Plan ...................................... 62 Schedule of Contributions – Agent Multiple Employer OPEB Plan ................................................................. 64 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual – Major Funds:
General Fund ......................................................................................................................................... 66 Federal Stimulus Special Revenue Fund .............................................................................................. 67 Budgetary Principles .......................................................................................................................................... 68 Town of Fairfax
Basic Financial Statements
For the Year Ended June 30, 2023
Table of Contents
Supplementary Information:
Non-Major Governmental Funds:
Combining Balance Sheets ........................................................................................................................ 70 Combining Statements of Revenues, Expenditures and Changes in Fund Balances................................. 72 Combining Schedules of Revenues, Expenditures and Changes In Fund Balances – Budget and Actual .................................................................................................. 74 INDEPENDENT AUDITOR’S REPORT
To the Honorable Mayor and Members of the Town Council
of the Town of Fairfax
Fairfax, California
Opinions
We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Town of Fairfax (Town), California, as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the Town’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, each major fund, and the aggregate remaining fund information of the Town as of June 30, 2023, and the respective changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America.
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 Town and to meet our other ethical responsibilities, in accordance with the relevant ethical requirement relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the 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 Town’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.
1 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 opinion.
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 will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with generally accepted 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 Town’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 Town’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 and other Required Supplementary Information as listed in the Table of Contents be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our 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.
2 Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Town’s basic financial statements. The accompanying Supplementary Information, as listed in the Table of Contents, is presented for purposes of additional analysis and is not a required part of the basic financial statements.
Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the 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.
Pleasant Hill, California
April 18, 2024
3 This page intentionally left blank.
Town of Fairfax
Management’s Discussion and Analysis
June 30, 2023
This discussion and analysis of the Town’s financial activities and performance provides an overview for the fiscal year ended June 30, 2023. Please read this in conjunction with the Town’s financial statements, which follow this discussion and analysis.
GOVERNMENT-WIDE HIGHLIGHTS
• The Government-Wide Statement of Net Assets appears as the first statement of the Basic Financial Statements and is summarized in this Management’s Discussion and Analysis section. The statement shows the Town’s assets to be $18,036,089, liabilities of $15,920,959 and net assets of $57,574 at June 30, 2023. This compares with assets of $23,505,908, liabilities of $14,313,940 and net assets of $5,769,823 at June 30, 2022.
• The Government-Wide Statement of Activities and Changes in Net Assets appears as the second statement of the Basic Financial Statements and is summarized in this Management’s Discussion and Analysis section. This statement shows a decrease in net assets of $5,712,249 for the fiscal year ended June 30, 2023 as compared to an increase in net assets of $4,221,138 for the fiscal year ended June 30, 2022. Revenues for fiscal 2023 increased by $263,549 from the prior year primarily due to increased revenues from charges for services, property and sales taxes, and investment earnings, offset by decreased revenues from operating grants. Expenses for the same period decreased by $10,196,936 due to increased expenditures in general government (primarily from increased retirement expenses passed through from PERS investment activity, and public works, offset by decreases in public safety, planning & building, parks and recreation, and debt service interest. All Town debt is at fixed rates and is unaffected by increasing interest rates. • The Town’s long-term debt (including current portion & unamortized premium) totaled $12,330,390 as of June 30, 2023, which includes the outstanding balance on the Measure K bonds and the lease financing debt from refinancing the Town’s Unaccrued Actuarial Liability (UAL) on pensions for Miscellaneous and Safety employees.
FUND HIGHLIGHTS
At the close of fiscal year 2023, the Town’s governmental funds reported a combined ending fund balance of $6,479,301, an decrease of $1,049,983 from the June 30, 2022 ending fund balance of $7,529,284. The detailed components of Revenues and Expenditures can be found in the accompanying Statement of Revenues, Expenditures and Changes in Fund Balances.
5 TOWN’S HIGHLIGHTS
During 2022-2023, the Town accomplished the following key projects and tasks:
• Controlled costs, spending less than budgeted, and received more than expected revenues. (Please note that an extraordinary -6.1%investment loss by CalPERS in FY 2021-22 resulted in a net position decrease to the Town in FY 2022-23, which does not represent cash paid out, and is expected to rebound based on a positive rate of return for CalPERS seen in FY 2022-23). • Hired Deputy Clerk, Planning and Building Services Director, Housing Specialist Planner, Public Works Maintenance Worker, and increased hours of a Current Planner, filled Police positions of Lieutenant and Detective.
• Completed a 5-year pavement plan, and worked with Marin County to seek funds for upper Bolinas Rd • Utilized above target reserve funds to complete major road repairs on Scenic Rd and Porteous Rd, and slurry seal on Center Rd from Pastori Rd to town limits • Proactively replaced a failing retaining wall on Canyon Rd • Assessed condition and shaved most sidewalks in town for enhanced walkability and increasing grant program for residents needing larger repair to their sidewalks • Implemented Climate Action Plan, including Fleet Electrification Policy, Building Reach Codes, and AB 1383 implementation.
• Adopted 15 ordinances and 85 resolutions compared to 12 ordinances and 77 resolutions the prior year.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the Town’s basic financial statements. The Town’s basic financial statements consist of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the basic financial statements. This report also contains required and other supplementary information in addition to the basic financial statements themselves.
Government-wide Financial Statements
The government-wide financial statements consist of a Statement of Net Assets and a Statement of Activities and Changes in Net Assets. These statements are designed to provide readers with a broad overview of the Town’s finances, in a manner similar to a private-sector business. They provide information about the activities of the Town as a whole and present a longer-term view of the Town’s finances.
The Statement of Net Assets presents information on all of the Town’s assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the Town is improving or declining.
The Statement of Activities and Changes in Net Assets presents information showing how the Town’s net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, some of the revenues and expenses reported in this statement may result in cash flows only in future fiscal periods, such as revenues related to uncollected taxes and interest expense incurred but not paid. 6 Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The Town, like other governmental entities, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Funds of governmental entities are divided into two categories: governmental funds and business-type funds.
Governmental funds
Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on (1) short-term inflows and outflows of spendable resources and (2) the remaining year-end balances available for spending. This information may be useful in evaluating a government’s near-term financing requirements.
Because the focus of governmental fund financial statements is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions.
Both the governmental funds balance sheet and statement of revenues, expenditures, and changes in fund balances provide a reconciliation to assist the reader with this comparison between governmental funds and governmental activities.
The Town maintains 22 individual governmental funds. In the governmental funds balance sheet and statement of revenues, expenditures, and changes in fund balances, information is presented as Major Fund and Non-major Governmental Funds. The Major Fund includes the following funds of the General Fund:
• General Fund
• Dry Period Financing Fund
• Equipment Replacement Fund.
• Building and Planning Fund
• Building Improvement Fund
• Retirement Fund
• Office Equipment Replacement Fund
The balance of the funds is represented in the Non-major Governmental Funds, and is further broken down into three categories here: Special Revenue, Capital Projects, and Debt Service. 7 Special Revenue funds generally account for revenues derived from specific sources. These funds are required by statute or ordinance to finance particular functions or activities of government. They include the following funds:
• Gas Tax Fund
• Special Police Fund
• Open Space Fund
• Fairfax Festival Fund
• Measure F Municipal Services Fund
• Measure A/AA Transportation Fund
• Measure A – Parks Fund
• Federal Stimulus Funds (ARPA)
Capital Projects funds are used to account for financial resources used for the acquisition or construction of major capital facilities, infrastructure, and equipment other than those financed by proprietary funds. They include the following funds:
• Grants Fund
• Town Fund
• Storm Projects Fund
Non-major Governmental Funds: Debt Service. The Measure K Debt Service funds are used to account for principal and interest payments on the Town’s Measure K bond debts:
• Measure K Debt Service Series 2008 Fund
• Measure K Debt Service Series 2012 Fund
• Measure K Debt Service Series 2016 Fund
• Lease Agreement (CalPERS Refinance)
Agency Funds
Agency funds are used to account for assets held by the Town in a fiduciary capacity or as an agent for individuals, governmental entities, and others. There are no current Agency Funds.
Business-type Funds
The Town maintains no business-type funds, or Enterprise funds, which are often used for utility services such as water & sewer, and transportation services, such as ports & airports.
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 follow the basic financial statements.
Required Supplementary Information
In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information other than this discussion and analysis concerning the Town’s budgetary comparison schedules and PERS schedule of funding progress. 8 GOVERNMENT-WIDE FINANCIAL ANALYSIS
The Town has presented its financial statements in accordance with GASB Statement No. 34, Basic Financial Statements – Management’s Discussion and Analysis – for State and Local Governments. Please note that the Town does not conduct any business-type activities and therefore, all financial analysis schedules only show governmental activities.
Net Assets
Net assets for the Town are summarized below and an analysis follows:
Net assets invested in capital assets (e.g. land, buildings, equipment, and infrastructure) of $6,806,314 at the end of fiscal year 2023 represents the cost of these assets less any outstanding debt used to acquire those assets. The Town uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Resources needed to repay the outstanding debt must be provided from other sources other than the related assets, because the capital assets themselves cannot be used to repay these debts.
Restricted net assets of $1,132,128 at the end of fiscal 2023 represent resources that are subject to external restrictions on how they may be used. The remaining unrestricted net assets is available to finance day-today operations without constraints.
Governmental Activities Percentage
2023 2022 Change
Cash and investments $ 8,059,149 $ 8,254,488 -2.4%
Capital assets, net 9,281,814 9,063,977 2.4%
Other assets 695,126 6,187,443 -88.8%
Total assets 18,036,089 23,505,908 -23.3%
Deferred outflow of resources 3,868,133 5,856,726 -34.0% Current liabilities 3,590,569 2,635,159 36.3%
Non-current liabilities 12,330,390 11,678,781 5.6%
Total liabilities 15,920,959 14,313,940 11.2%
Deferred inflow of resources 5,925,689 9,278,871 -36.1% Invested in capital assets, net 6,806,314 5,970,877 14.0% Restricted 1,132,128 1,047,267 8.1%
Unrestricted (7,880,868) (1,248,321) 531.3%
- -
Net assets $ 57,574 $ 5,769,823 -99.0%
9 Changes in Net Assets
Changes in net assets for the Town are summarized below and an analysis follows:
Governmental Activities Percentage
2023 2022 Change
Revenues:
Program revenues:
Charges for services $ 1,508,313 1,588,355 $ 5.3%
Operating grants & contributions 1,403,777 1,033,648 -26.4% General revenues:
Taxes 11,005,566 11,348,996 3.1%
Intergovernmental 0.0%
Use of Money & Property 34,410 161,521 369.4%
Miscellaneous 664,973 748,068 12.5%
Transfers - -
Total revenues 14,617,039 14,880,588 1.8%
Expenses:
General government 794,935 9,456,460 1089.6%
Public safety 6,075,546 6,827,502 12.4%
Public works 1,276,895 1,483,886 16.2%
Planning & Building 1,027,895 1,494,588 45.4%
Parks and recreation 760,040 712,694 -6.2%
Debt Service 460,590 617,707 34.1%
Total expenses 10,395,901 20,592,837 98.1%
Change in net assets 4,221,138 (5,712,249) -235.3%
Net assets - beginning of year 1,548,685 5,769,823 272.6% Net assets - end of year $ 5,769,823 57,574 $ -99.0%
Net assets decreased $5,712,249 during the fiscal year ended June 30, 2023. Total revenues for fiscal year 2023 were $14,880,588 as compared to $14,617,039 for fiscal year 2022.
The $263,549 (1.8%) increase in revenues the fiscal year ended June 30, 2023 is attributed to a 3.1% increase in tax receipts, and a 369.4% increase in investment earnings; increased miscellaneous revenues and charges for services. Operating grants & contributions decreased slightly.
Total expenses for the year ended June 30, 2023 were $20,592,837 compared with $10,395,901 for the same period in 2022. The increase of $10,196,936 in expenses primarily from the $5,838,970 increase in pension expense (see note 6B in Notes to the Financial Statements) from disappointing returns in PERS investments which are passed through to employers. All department expenses increased (except for Parks & Recreation) due to inflation, the addition of personnel and salary increases. The interest on long term debt increased by
34.1%.
10 ANALYSIS OF MAJOR GOVERNMENTAL FUNDS
General Fund
The general fund is the chief operating fund of the Town of Fairfax. At June 30, 2023, the unassigned fund balance of the general fund was $6,447,967.
General Fund revenue during the FY 2022-23 year totaled $11,777,409 which was more than the final budgeted amount by $683,823 or 6.2%. This revenue increase primarily relates to the Town’s projection of sales & property taxes, assessments, franchise fees and revenue from other agencies which were lower than actual receipts.
General Fund expenditures for FY 2022-23 totaled $12,765,599 and were lower than the final budgeted amount by $1,016,682 or 7.4%. This is in part due to delaying certain expenditures, such as hiring several director positions and savings in budgeted contract services, and capital outlay.
Federal Stimulus Fund
The Federal Stimulus Fund is the largest special revenue fund for the Town of Fairfax. There were no fund receipts during the FY 2022-23 and no expenditures.
Prior year receipts were classified as a “deferred, or unearned revenue” (a liability account) for the amounts in excess of current expenditures. The current balance of unearned revenues is $1,766,049. At the end of the current fiscal year, the fund balance was $ 0 due to the deferral of the greater portion of the receipts until such time as they are committed.
The Town is planning to use these ARPA funds for storm water improvements, in keeping with the Federal designation that the funds may be used for improvement to Water. Design of the projects have begun, and implementation and expenditure is planned for FY 2024-25.
Grants Capital Projects Fund
The Grants Capital Projects fund is the main capital project fund for the Town of Fairfax. At the end of the current fiscal year, the committed fund balance was $78,201.
Grant Capital Projects Fund revenue during the FY 2022-23 year totaled $500,710 which was under the final budgeted amount of $3,470,978 by $2,970,268. This revenue decrease primarily relates to the Town’s projection of the timing of projects which were delayed to future fiscal periods. Revenues are received primarily on a reimbursement basis.
Grant Capital Projects Fund expenditures for FY 2021-22 totaled $1,586,676, and were lower than the final budgeted amount of $4,74,743by $3,157,067. This is in part due to extending the timing of road & bridge projects.
11 Storm Capital Projects Fund
The Storm Capital Projects Fund is for the storm recovery capital projects partially or fully funded by federal and state grants. At the end of the current fiscal year, the fund deficit was ($902,310), down $2,731 from the prior year.
Storm Capital Projects Fund had no revenue during the FY 2022-23 year which was equal to the final budgeted amount of $-0- Anticipated revenues are primarily from federal and state agencies which are subject to a long collection process.
Expenditures for FY 2022-23 totaled $175,621 and were higher than the final budgeted amount of $170,000 by $5,621. Expenses not reimbursed are covered by transfers from the General Fund. In FY 2022-23 the General Funds transferred in $178,352
Town Capital Projects Fund
The Town Capital Projects fund is for capital projects funded by the Town of Fairfax, Measure F and Measure A. At the end of the current fiscal year, the fund deficit was ($247,453) compared with the prior year deficit of ($227,461).
The Town Capital Projects Fund had no revenue during the FY 2022-23 year. This revenue decrease from budget primarily is from the Town’s projection of the timing of projects which were delayed to future fiscal periods. Measure A Transportation funds designated for reimbursement of related expenses have not been transferred. Grant Capital Projects Fund expenditures for FY 2022-23 totaled $112,777 due to extending the timing of projects. Expenses not reimbursed will be covered by transfers from the General Fund.
ECONOMIC OUTLOOK AND NEXT YEAR’S BUDGET
Several factors influence our current economic outlook. General Fund Revenues exceeded the budget by $683,800 (6.2%). The Town's Sales Tax rebounded to pre-pandemic levels, with a notable 11.4% increase compared to FY 2022. Rising goods and labor expenses have pushed up business prices, potentially leading to stagnant sales compared to previous years. The Federal Reserve has kept interest rates steady for a fifth consecutive meeting in March 2024 as they monitor the market. They anticipate that economic growth will be much higher this year than previously estimated, but it is far too early to determine whether inflation has stalled moving forward. Fairfax, along with neighboring cities, has witnessed consistent increases in real estate property values over the past decade. Property Tax revenue remained resilient during the pandemic. However, a sharp rise in mortgage rates has dampened median home values and property sales, slowing the ascent of assessed property valuations. Consequently, while Property Tax revenue is forecasted to rise in the next fiscal year, the growth rate is expected to taper compared to previous years. Overall, next year revenues are expected to be strong for the Town.
The Town will face challenges with increasing pension costs due in part to anticipated actions at the state level to decrease the discount rate on projected CalPERS earnings and unaccrued liability charges to member agencies. The Town has buffered itself from this impact by financing a large portion of its unaccrued liability (UAL) previously. However, the CalPERS return on investment in FY 2021-22 of -6.1% has significantly decreased the Town’s net position in FY 2022-23. Positive CalPERS returns in FY 2022-23 are expected to help rebound the Town’s net position. The Town has eliminated or reduced many of the other post-employment benefits (OPEB) for new employees (hired after July 1, 2013) which will lower future costs for retiree health care.
12 The General Fund budget for 2023-2024 projects a 4.0% increase in revenues due to higher sales tax projections and an increase in interest earnings. General Fund expenditures are projected to increase 6.6% primarily in Planning and Building (+16.1%) due to hiring a new Planning and Building Services director and continuing expenses for the Housing Element Update. Police Services will increase approximately 9.8% primarily in personnel costs which include increased pension costs.
The Town has budgeted $4.12 million in its 2023-24 capital improvement program, Capital expenditures include significant increases in road repairs and bridge replacements. Though the majority of the projects will be grant funded, the General Fund will use $1.42 million of its reserves for the expenditures which will bring its reserve level from an estimated 45% to around 26% which is above the desired level set by the Town Council
The impacts of inflation and lingering COVID-19 impacts on the local economy make it difficult to estimate the true long term fiscal impact on our financial resources. Such factors as the diminishing availability and increasing cost of labor and services provide a challenge to the Town for the upcoming year.
REQUESTS FOR INFORMATION
This financial report is designed to provide our residents, taxpayers, creditors and government regulators with a general overview of the Town’s finances and to demonstrate the Town’s accountability for the money it receives. Below is the contact address for questions about this report or requests for additional financial information.
Finance Director
Town of Fairfax
142 Bolinas Road
Fairfax, CA 94930
(415) 458-2350
13 This page intentionally left blank.
BASIC FINANCIAL STATEMENTS
Governmental-Type
Activities
ASSETS
Cash and investments (Note 2) $7,342,442
Restricted cash and investments (Note 2) 716,707
Accounts receivable 557,135
Taxes receivable 77,855
Interest receivable 60,136
Capital assets:
Land and construction in progress (Note 4) 4,298,402
Depreciable capital assets, net of accumulated depreciation (Note 4) 4,983,412 Total Assets 18,036,089
DEFERRED OUTFLOWS OF RESOURCES
Related to pension (Note 6) 3,346,122
Related to OPEB (Note 8) 522,011
Total Deferred Outflows of Resources 3,868,133
LIABILITIES
Accounts payable 360,162
Accrued payroll 92,344
Deposits payable 56,419
Interest payable 148,534
Unearned revenue 1,766,049
Compensated absences payable (Note 1G):
Due within one year 116,951
Due in more than one year 357,133
Claims payable (Note 9):
Due within one year 144,110
Long-term debt (Note 5):
Due within one year 906,000
Due in more than one year 10,229,500
Net pension liability (Note 6) 1,337,745
Net OPEB liability (Note 8):
Due in more than one year 406,012
Total Liabilities 15,920,959
DEFERRED INFLOWS OF RESOURCES
Related to pension (Note 6) 4,933,004
Related to OPEB (Note 8) 992,685
Total Deferred Inflows of Resources 5,925,689
NET POSITION (Note 1L):
Net investment in capital assets 6,806,314
Restricted for:
Special projects 579,675
Debt service 552,453
Total Restricted Net Position 1,132,128
Unrestricted (7,880,868)
Total Net Position $57,574
TOWN OF FAIRFAX
STATEMENT OF NET POSITION
See accompanying notes to financial statements
JUNE 30, 2023
16 Program Revenues Net (Expense)
Operating Capital Revenue and
Charges for Grants and Grants and Changes in
Functions/Programs Expenses Services Contributions Contributions Net Position Governmental Activities:
General government $9,677,404 $604,914 $33 ($9,072,457) Public safety 6,827,502 161,396 365,456 (6,300,650)
Public works 1,483,886 1,011 135,208 $529,545 (818,122) Planning and building 1,494,588 689,466 (805,122)
Parks and recreation 712,694 131,568 3,405 (577,721)
Interest and fiscal charges 396,763 (396,763)
Total Governmental Activities $20,592,837 $1,588,355 $500,697 $532,950 (17,970,835) General revenues:
Property taxes 7,758,012
Utility user tax 453,165
Sales taxes 2,018,621
Other taxes 1,119,198
Investment earnings 161,521
Miscellaneous 748,069
Total General Revenues 12,258,586
Change in Net Position (5,712,249)
Net Position-Beginning 5,769,823
Net Position-Ending $57,574
TOWN OF FAIRFAX
FOR THE YEAR ENDED JUNE 30, 2023
STATEMENT OF ACTIVITIES
See accompanying notes to financial statements
17 Federal
Stimulus Grants Storm
General Special Revenue Capital Projects Capital Projects Fund Fund Fund Fund
ASSETS
Cash and investments (Note 2) $5,032,365 $1,766,049
Restricted cash and investments (Note 2) 167,500
Receivables (net of allowances):
Accounts 497,879
Taxes 77,855
Interest 60,136
Due from other funds (Note 3) 982,394 $963,410
Total Assets $6,818,129 $1,766,049 $963,410
LIABILITIES AND
FUND BALANCES
Liabilities:
Accounts payable $221,399 $118,285 $6,151
Accrued payroll 92,344
Deposits payable 56,419
Unearned revenue $1,766,049
Due to other funds (Note 3) 766,924 896,159
Total Liabilities 370,162 1,766,049 885,209 902,310
Fund Balances (Note 1L):
Restricted 167,500
Committed 78,201
Unassigned 6,280,467 (902,310)
Total Fund Balances (Deficits) 6,447,967 78,201 (902,310) Total Liabilities and Fund Balances $6,818,129 $1,766,049 $963,410
TOWN OF FAIRFAX
GOVERNMENTAL FUNDS
BALANCE SHEET
JUNE 30, 2023
See accompanying notes to financial statements
18 Town Non-Major
Capital Projects Governmental
Fund Funds Total
$544,028 $7,342,442
549,207 716,707
59,256 557,135
77,855
60,136
1,945,804
$1,152,491 $10,700,079
$12,310 $2,017 $360,162
92,344
56,419
1,766,049
235,143 47,578 1,945,804
247,453 49,595 4,220,778
1,136,285 1,303,785
78,201
(247,453) (33,389) 5,097,315
(247,453) 1,102,896 6,479,301
$1,152,491 $10,700,079
19 JUNE 30, 2023
Total fund balances reported on the governmental funds balance sheet $6,479,301 Amounts reported for Governmental Activities in the Statement of Net Position are different from those reported in the Governmental Funds above because of the following:
CAPITAL ASSETS
Capital assets used in Governmental Activities are not current assets or financial resources and therefore are not reported in the Governmental Funds. 9,281,814
LONG-TERM ASSETS AND LIABILITIES
The assets and liabilities below are not due and payable in the current period and therefore are not reported in the Funds:
Interest payable (148,534)
Compensated absences (474,084)
Claims payable (144,110)
Long-term debt (11,135,500)
Net pension asset and pension-related deferred outflows and inflows of resources (2,924,627) Net OPEB liability and OPEB-related deferred outflows and inflows of resources (876,686) NET POSITION OF GOVERNMENTAL ACTIVITIES $57,574
See accompanying notes to financial statements
TOWN OF FAIRFAX
Reconciliation of the
GOVERNMENTAL FUNDS - BALANCE SHEETS
with the
STATEMENT OF NET POSITION
20 This page intentionally left blank.
Federal
Stimulus Grants Storm
General Special Revenue Capital Projects Capital Projects Fund Fund Fund Fund
REVENUES
Property taxes $6,231,110
Special assessments 506,709
Sales taxes 2,018,621
Permits, licenses and fees 781,952
Fines, forfeitures and penalties 40,817
From other agencies 1,259,332 $500,710
Franchise fees 472,843
Services charges 161,175
Use of money and property 185,365
Other revenue 119,485
Total Revenues 11,777,409 500,710
EXPENDITURES
Current:
General government 2,266,191
Public safety 6,729,225
Public works 1,219,415
Planning and building 1,481,113
Parks and recreation 624,329
Capital outlay 310,596 1,586,676 $175,621
Debt service:
Principal 116,600
Interest and fiscal charges 18,130
Total Expenditures 12,765,599 1,586,676 175,621
REVENUES OVER (UNDER) EXPENDITURES (988,190) (1,085,966) (175,621)
OTHER FINANCING SOURCES (USES)
Transfers in (Note 3) 995,000 247,502 178,352
Transfers (out) (Note 3) (260,112)
Total Other Financing Sources (Uses) 734,888 247,502 178,352 Net change in fund balance (253,302) (838,464) 2,731
FUND BALANCE (DEFICIT)
Beginning of the year 6,701,269 916,665 (905,041)
End of the year $6,447,967 $78,201 ($902,310)
TOWN OF FAIRFAX
GOVERNMENTAL FUNDS
STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE FOR THE YEAR ENDED JUNE 30, 2023
See accompanying notes to financial statements
22 Town Non-Major
Capital Projects Governmental
Fund Funds Total
$533,382 $6,764,492
506,709
2,018,621
781,952
40,817
3,126,586 1,366,544
472,843
238,796 77,621
185,365
744,407 624,922
2,602,469 14,880,588
2,266,191
6,729,225
1,219,415
1,481,113
80,541 704,870
$112,777 2,185,670
821,000 937,600
388,357 406,487
112,777 1,289,898 15,930,571
(112,777) 1,312,571 (1,049,983)
101,137 3,571 1,525,562
(8,352) (1,257,098) (1,525,562)
92,785 (1,253,527)
(19,992) 59,044 (1,049,983)
(227,461) 1,043,852 7,529,284
($247,453) $1,102,896 $6,479,301
23 with the
The schedule below reconciles the Net Changes in Fund Balances reported on the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balance, which measures only changes in current assets and current liabilities on the modified accrual basis, with the Change in Net Position of Governmental Activities reported in the Statement of Activities, which is prepared on the full accrual basis.
NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS ($1,049,983)
CAPITAL ASSETS TRANSACTIONS
Governmental Funds report capital outlays as expenditures. However, in the Statement of Activities the cost of those assets is capitalized and allocated over their estimated useful lives and reported as depreciation expense.
The capitalized expenditures are therefore added back to fund balance 698,683 (Capitalized expenditures is the net of total capital outlay of $1,964,726 and non-capitalized capital outlay expenditures of $1,266,043)
Depreciation expense is deducted from the fund balance (480,846)
LONG-TERM DEBT PROCEEDS AND PAYMENTS
Bond proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the Statement of Net Position Repayment of bond principal is an expenditure in the governmental funds, but in the Statement of Net Position the repayment reduces long-term liabilities.
Repayment of debt principal is added back to fund balance 937,600
ACCRUAL OF NON-CURRENT ITEMS
The amounts below included in the Statement of Activities do not provide or (require) the use of current financial resources and therefore are not reported as revenue or expenditures in governmental funds (net change):
Compensated absences (115,206)
Net OPEB liability and OPEB-related deferred outflows and inflows of resources 191,236 Claims payable (64,487)
Interest payable 9,724
Collective net pension liability and pension-related deferred outflows and inflows of resources (5,838,970) CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES ($5,712,249) See accompanying notes to financial statements
Reconciliation of the
NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS
TOWN OF FAIRFAX
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2023
24 Town of Fairfax
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
1. SIGNIFICANT ACCOUNTING POLICIES
The basic financial statements of the Town of Fairfax (Town), California, have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to governmental agencies. The Governmental Accounting Standards Boards (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The more significant of the Town’s accounting policies are described below.
A. Financial Reporting Entity
The Town was incorporated in 1931 and is situated near the cities of San Anselmo and San Rafael in the North Bay of the San Francisco Bay Area. The Town operates under the Council-Manager form of government, incorporated under general law in 1931 and provides the following services: public safety (police), planning and building, public works and streets, park services, and general administration services.
The Town is governed by a five-member council elected by Town residents. The Town is legally separate and fiscally independent, which means it can issue debt, set and modify budgets and fees and sue or be sued. The accompanying basic financial statements include the financial activities of the Town, as the primary government.
Blended Component Unit – The Fairfax Financing Authority The Fairfax Financing Authority (Authority) is a separate government entity whose purpose is to assist with the financing or refinancing of certain public capital facilities within the Town. The Authority has the power to purchase bonds issued by any local agency at public or negotiated sale and may sell such bonds to public or private purchasers at public or negotiated sale. The Authority is controlled by the Town and has the same governing body as the Town, which also performs all accounting and administrative functions for the Authority. The financial activities of the Authority are included in the 2008, 2012, 2016, and 2020 Lease Financing Series Debt Service Funds.
B. Basis of Accounting and Measurement Focus
The accounts of the Town are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures or expenses, as appropriate.
Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled.
Government – Wide Financial Statements
The Town’s government–wide financial statements include a Statement of Net Position and a Statement of Activities. These statements present summaries of the governmental activities for the Town, the primary government, accompanied by a total column.
These financial statements are presented on an “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all of the Town’s assets and deferred outflows of resources, and liabilities and deferred inflows of resources, including capital assets and related current year infrastructure asset additions and long-term liabilities, are included in the accompanying Statement of Net Position. The Statement of Activities presents changes in net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred.
25 Town of Fairfax
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
1. SIGNIFICANT ACCOUNTING POLICIES (Continued)
B. Basis Accounting and Measurement Focus (Continued)
Certain types of transactions are reported as program revenues for the Town and are presented in the following categories:
• Charges for services
• Operating grants and contributions
• Capital grants and contributions
Certain eliminations have been made as prescribed by GASB Statement No. 34 in regards to interfund activities, payables and receivables. The following interfund activities have been eliminated:
• Due to/from other funds
• Transfers in/out
Governmental Fund Financial Statements
Governmental fund financial statements include a Balance Sheet and a Statement of Revenues, Expenditures and Changes in Fund Balances for all major governmental funds and non-major funds aggregated. The Town has presented all major funds that met the applicable criteria.
All governmental funds are accounted for on a spending or “current financial resources” measurement focus.
Accordingly, only current assets and deferred outflows of resources, and current liabilities and deferred inflows of resources, generally are included on the balance sheets. The Statement of Revenues, Expenditures and Changes in Fund Balances present increases (revenues and other financial sources) and decreases (expenditures and other financial uses) in net current assets. Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expenditures of the current period.
Revenues are recorded when received in cash, except those revenues subject to accrual (generally 60 days after year-end) are recognized when due. The primary revenue sources, which have been treated as susceptible to accrual by the Town, are property taxes, charges for services, federal and state grants, sales tax, and interest. Expenditures are recognized in the accounting period in which the related fund liability is incurred.
Deferred revenues arise when potential revenues do not meet both the “measurable” and “available” criteria for recognition in the current period. Deferred revenues also arise when the government receives resources before it has a legal claim to them, as when grant monies are received prior to incurring qualifying expenditures. In subsequent periods when both revenue recognition criteria are met or when the government has a legal claim to the resources, the deferred revenue is removed from the balance sheet and revenue is recognized.
C. Recognition of Interest Liability
In the government-wide financial statements, interest payable on long-term debt is recognized as the liability is incurred for governmental activities.
In the fund financial statements, interest payable on long-term debt is recognized as the liability is incurred. 26 Town of Fairfax
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
1. SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. Use of Restricted and Unrestricted Net Position
When an expense is incurred for purposes for which both restricted and unrestricted net position is available, the Town’s policy is to apply restricted net position first.
E. Cash, Cash Equivalents and Investments
The Town pools cash and investments from all sources, for the purpose of increasing income through investment activities. Interest income on investments is allocated on the basis of average month-end cash and investment balances in each fund. Cash and cash equivalents represent cash and investments and restricted cash and investments with an original maturity term of three months or less.
F. Capital Assets
Capital assets are valued at historical cost or estimated historical cost if actual historical cost was not available. Donated fixed assets are valued at their estimated fair value on the date donated. Town policy has set the capitalization threshold for reporting capital assets at $5,000. Depreciation is recorded on a straightline basis over estimated useful lives of the assets as follows:
Buildings 25-50 years
Improvements other than buildings 20 years
Vehicles 6-15 years
Machinery and equipment 5-20 years
Infrastructure 20-65 years
Assets are grouped by asset type into one of the following accounts – land, other improvements, infrastructure (e.g. roads, bridges, sidewalks, and similar items), buildings (and improvements), machinery and equipment, vehicles, and construction in progress.
The Town defines infrastructure as the basic physical assets that allow the Town to function. The assets include streets and park lands. Each major infrastructure system can be divided into subsystems. For example, the street system can be subdivided into pavement, curb and gutters, sidewalks, medians, streetlights, landscaping and land. These subsystems are not delineated in the basic financial statements. The appropriate operating department maintains information regarding the subsystems.
G. Compensated Absences
Government-Wide Financial Statements
For governmental activities, compensated absences are recorded as incurred and the related expenses and liabilities are recorded in the Government-Wide Financial Statements.
Fund Financial Statements
In governmental funds, compensated absences are recorded as expenditures in the years paid, as it is the Town’s policy to liquidate any unpaid compensated absences at June 30 from future resources, rather than currently available financial resources.
27 Town of Fairfax
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
1. SIGNIFICANT ACCOUNTING POLICIES (Continued)
G. Compensated Absences (Continued)
Compensated absences include vacation and sick leave. It is the policy of the Town to pay 100% of the accumulated vacation leave when an employee retires or terminates employment. The Town recognizes the liability for its compensated absences in the governmental activities, which is liquidated by the General Fund.
The following is a summary of compensated absences transactions during the fiscal year ended June 30, 2023:
Governmental
Activities
Beginning Balance $358,878
Additions 119,830
Payments (4,624)
Ending Balance $474,084
Current Portion $116,951
H. Property Tax Levy Collection and Maximum Rates
The State of California (State) Constitution Article XIIIA provides that the combined maximum property tax rate on any given property may not exceed one percent (1%) of its assessed value unless an additional amount for general obligation debt has been approved by voters. Assessed value is calculated at 100% of market value as defined by Article XIIIA and may be adjusted by no more than two percent (2%) per year unless the property is sold, transferred, or improved. The State Legislature has determined the method of distribution of receipts from a one percent (1%) tax levy among the counties, cities, school districts, and other districts.
Marin County assesses, bills for, and collects property taxes as follows:
Secured Unsecured
Lien dates January 1 January 1
Levy dates July 1 July 1
Due dates 50% on November 1 and July 1
50% on February 1
Delinquent as of December 10 (for November) August 31
April 10 (for February)
The term “unsecured” refers to taxes on personal property other than real estate, land, and buildings. These taxes are secured by liens on the property being taxed.
28 Town of Fairfax
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
1. SIGNIFICANT ACCOUNTING POLICIES (Continued)
H. Property Tax Levy Collection and Maximum Rates (Continued) Property taxes levied are recorded as revenue when received in the fiscal year of levy because of the adoption of the “alternate method of property tax distribution,” known as the Teeter Plan, by the Town and the County of Marin. The Teeter Plan authorizes the auditor-controller of the County of Marin to allocate 100% of the secured property taxes billed, but not yet paid. The County of Marin remits tax monies to the Town in four installments, as follows:
55% remitted on December 15
40% remitted on April 15
4.5% remitted on June 30
0.5% remitted on July 30
I. Post Employment Benefits Other than Pensions
The Town provides post-retirement health care benefits to management and miscellaneous employees starting at 10 years of service and increasing the contribution with years of service as required by current association and management agreements for employees hired after June 30, 2013. The post-retirement health benefits are either eliminated or reduced by 50%. The Town makes premium payments on a “pay-as-you-go” basis.
J. Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires Town management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as disclosure of contingent assets and liabilities, at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Accordingly, actual results could differ from those estimates.
K. Net Position
Government-Wide Financial Statements
In the government-wide financial statements, net position is classified in the following categories:
Net Investment in Capital Assets – This amount consists of capital assets net of accumulated depreciation and reduced by outstanding debt that attributed to the acquisition, construction, or improvement of the assets.
Restricted Net Position – This amount is restricted by external creditors, grantors, contributors, or laws or regulations of other governments.
Unrestricted Net Position – This amount is all net position that do not meet the definition of “net investment in capital assets” or “restricted net position.”
29 Town of Fairfax
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
1. SIGNIFICANT ACCOUNTING POLICIES (Continued)
L. Fund Balances
Governmental fund balances represent the net current assets of each fund. Net current assets generally represent a fund’s cash and receivables, less its liabilities.
The Town’s fund balances are classified in accordance with Governmental Accounting Standards Board Statement Number 54 (GASB 54), Fund Balance Reporting and Governmental Fund Type Definitions, which requires the Town to classify its fund balances based on spending constraints imposed on the use of resources.
For programs with multiple funding sources, the Town prioritizes and expends funds in the following order:
Restricted, Committed, Assigned, and Unassigned. Each category in the following hierarchy is ranked according to the degree of spending constraint:
Nonspendables represents balances set aside to indicate items do not represent available, spendable resources even though they are a component of assets. Fund balances required to be maintained intact, such as Permanent Funds, and assets not expected to be converted to cash, such as prepaids, notes receivable, and land held for redevelopment are included. However, if proceeds realized from the sale or collection of nonspendable assets are Restricted, Committed or Assigned, then Nonspendable amounts are required to be presented as a component of the applicable category.
Restricted fund balances have external restrictions imposed by creditors, grantors, contributors, laws, regulations, or enabling legislation which requires the resources to be used only for a specific purpose.
Nonspendable amounts subject to restrictions are included along with spendable resources.
Committed fund balances have constraints imposed by formal action of the Town Council which may be altered only by formal action of the Town Council. The Town Council can, by adoption of a resolution prior to the end of the fiscal year, commit fund balance. Nonspendable amounts subject to Council commitments are included along with spendable resources.
Assigned fund balances are amounts constrained by the Town’s intent to be used for a specific purpose, but are neither Restricted nor Committed. Intent is expressed by the Town Council or its designee and may be changed at the discretion of the Town Council or its designee. This category includes nonspendables, when it is the Town’s intent to use proceeds or collections for a specific purpose, and residual fund balances, if any, of Special Revenue, Capital Projects and Debt Service Funds which have not been Restricted or Committed.
Unassigned fund balance represents residual amounts that have not been Restricted, Committed, or Assigned.
This includes the residual General Fund balance and residual fund deficits, if any, of other governmental funds.
30 Town of Fairfax
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
1. SIGNIFICANT ACCOUNTING POLICIES (Continued)
L. Fund Balances (Continued)
Detailed classifications of the Town’s Fund Balances, as of June 30, 2023, are below:
Grants Storm Town Non-Major
General Capital Projects Capital Projects Capital Projects Governmental Fund Balance Classifications Fund Fund Fund Fund Funds Total Restricted for:
Special projects $583,832 $583,832
Debt service 552,453 552,453
PARS trust - retirement benefits $167,500 167,500
Total Restricted Fund Balances 167,500 1,136,285 1,303,785 Committed for:
Special projects $78,201 78,201
Total Committed Fund Balances 78,201 78,201
Unassigned:
General Fund 6,280,467 6,280,467
Other major funds ($902,310) ($247,453) (1,149,763)
Non-major funds (33,389) (33,389)
Total Unassigned Fund Balances 6,280,467 (902,310) (247,453) (33,389) 5,097,315 Total Fund Balances (Deficits) $6,447,967 $78,201 ($902,310) ($247,453) $1,102,896 $6,479,301 General Fund Reserve Policy
The Town’s General Fund Reserve Policy requires the Town to strive to maintain a goal of 20% of projected General Fund expenditures for each fiscal year and an additional 5% for emergency situations (excluding debt service, fund transfers, and encumbered funds).
The following funds had fund balance deficits at June 30, 2023: Storm Capital Projects Fund, Town Capital Projects Fund, and Fairfax Festival Special Revenue Fund in the amounts of $(902,310), $(247,453) and $(33,389), respectively.
M. Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Town categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The fair value hierarchy categorizes the inputs to valuation techniques used to measure fair value into three levels based on the extent to which inputs used in measuring fair value are observable in the market.
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 inputs are inputs – other than quoted prices included within level 1 – that are observable for an asset or liability, either directly or indirectly.
Level 3 inputs are unobservable inputs for an asset or liability.
If the fair value of an asset or liability is measured using inputs from more than one level of the fair value hierarchy, the measurement is considered to be based on the lowest priority level input that is significant to the entire measurement.
31 Town of Fairfax
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
1. SIGNIFICANT ACCOUNTING POLICIES (Continued)
N. New GASB Pronouncements
The following Governmental Accounting Standards Board (GASB) pronouncements were effective in fiscal year 2022-23:
GASB Statement No. 91 – In May 2019, GASB issued Statement No. 91, Conduit Debt Obligations. The primary objectives of this Statement are to provide a single method of reporting conduit debt obligations by issuers and eliminate diversity in practice associated with such arrangements. This Statement achieves those objectives by clarifying the existing definition of a conduit debt obligation; establishing that a conduit debt obligation is not a liability of the issuer; establishing standards for accounting and financial reporting of additional commitments and voluntary commitments extended by issuers and arrangements associated with conduit debt obligations; and improving required note disclosures. The provisions of this Statement were implemented during fiscal year 2023. The implementation had no material effect on the Town’s financial statements.
GASB Statement No. 92 – In January 2020, GASB issued Statement No. 92, Omnibus 2020. The primary objective of this Statement is to address practice issues that have been identified during implementation and application of certain GASB Statements for a variety of topics. The provisions of this Statement were implemented during fiscal year 2023. The implementation of this Statement had no material effect on the Town’s financial statements.
GASB Statement No. 94 – In March 2020, GASB issued Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements. The primary objective of this Statement is to improve financial reporting by addressing issues related to public-private and public-public partnership arrangements (PPPs). The provisions of this Statement were implemented during fiscal year 2023. The implementation of this Statement had no material effect on the Town’s financial statements.
GASB Statement No. 96 – In May 2020, GASB issued Statement No. 96, Subscription-Based Information Technology Arrangements. The primary objective of this Statement is to improve financial reporting by establishing a definition for subscription-based information technology arrangements (SBITAs) and providing uniform guidance for accounting and financial reporting for transactions that meet that definition. The provisions of this Statement were implemented during fiscal year 2023. The implementation of this Statement had no material effect on the Town’s financial statements.
GASB Statement No. 99 – In April 2022, GASB issued Statement No. 99, Omnibus 2022. The objectives of this Statement are to enhance comparability in accounting and financial reporting and to improve the consistency of authoritative literature by addressing (1) practice issues that have been identified during implementation and application of certain GASB Statements and (2) accounting and financial reporting for financial guarantees. The provisions of this Statement were implemented during fiscal year 2023. The implementation of this Statement had no material effect on the Town’s financial statements.
32 Town of Fairfax
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
1. SIGNIFICANT ACCOUNTING POLICIES (Continued)
O. Deferred Outflows/Inflows of Resources
In addition to assets, the statement of net position or balance sheet reports a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net assets that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then.
In addition to liabilities, the statement of net position or balance sheet reports 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.
P. Leases and Subscriptions Accounting
A lease is defined as a contract that conveys control of the right to use another entity’s nonfinancial asset (the underlying asset) as specified in the contract for a period of time in an exchange or exchange-like transaction.
Examples of nonfinancial assets include buildings, land, vehicles, and equipment.
A Subscription-Based Information Technology Arrangement (SBITA) is a contract that conveys control of the right to use another party’s (a SBITA vendor’s) IT software, alone or in combination with tangible capital assets (the underlying IT assets), as specified in the contract for a period of time in an exchange or exchangelike transaction.
The Town will record material leases under GASB 87 and material subscriptions under GASB 96, as required.
2. CASH AND INVESTMENTS
The Town maintains a cash and investment pool, which includes cash balances and authorized investments of all funds, which the Town invests to enhance interest earnings. The pooled interest earned is allocated to the funds monthly, based on average daily cash and investment balances in these funds.
A. Summary of Cash and Investments
The following is a summary of cash and investments at June 30, 2023:
Governmental
Activities
Cash and investments $7,342,442
Restricted cash and investments 716,707
Grand Total $8,059,149
33 Town of Fairfax
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
2. CASH AND INVESTMENTS (Continued)
A. Summary of Cash and Investments (Continued)
Cash and investments were categorized as follows at June 30, 2023:
Credit Days to
Quality Ratings Fair Value Maturity
Town Treasury Deposits:
Deposits Not Rated $320,793 N/A
Petty cash Not Rated 300 N/A
Total Town Treasury Deposits 321,093
Town Treasury Investments:
Local Agency Investment Fund Not Rated 7,570,556 N/A
PARS Trust - Mutual Funds Not Rated 167,500 N/A
Total Treasury Investments 7,738,056
Total Cash and Investments $8,059,149
B. Cash Deposits
The California Government Code requires California banks and savings and loan associations to secure the Town’s cash deposits by pledging securities as collateral. This Code states that collateral pledged in this manner shall have the effect of perfecting a security interest in such collateral superior to those of a general creditor. Thus, collateral for cash deposits is considered to be held in the Town’s name.
According to California law, the market value of pledged securities with banking institutions must equal at least 110% of the Town’s cash deposits. California law also allows institutions to secure Town deposits by pledging first trust deed mortgage notes having a value of 150% of the Town’s total cash deposits. The Town may waive collateral requirements for cash deposits, which are fully insured up to $250,000 by the Federal Deposit Insurance Corporation. The Town, however, has not waived the collateralization requirements.
The Town follows the practice of pooling cash and investments of all funds, except for funds required to be held by fiscal agents under the provisions of bond indentures. Interest income earned on pooled cash and investments is allocated on a monthly basis to the various funds based on average daily cash and investment balances.
C. Investments
The Town is authorized by State statutes and in accordance with the Town’s Investment Policy (Policy) to invest in the following:
• State Local Agency Investment Fund (LAIF)
• Insured and/or collateralized certificates of deposit • U.S. Treasury obligations which carry the full faith and credit guarantee of the United States government and are considered to be the most secure instruments available • U.S. government agency and instrumentality obligations that have a liquid market with a readily determinable market value
• Bankers' acceptances
34 Town of Fairfax
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
2. CASH AND INVESTMENTS (Continued)
C. Investments (Continued)
• Commercial paper, rated in the highest tier by a nationally recognized rating agency • Investment-grade obligations of state, local governments and public authorities • Money market mutual funds regulated by the Securities and Exchange Commission and whose portfolios consist only of dollar-denominated securities In addition, investments of debt proceeds held by bond trustees are governed by the provisions of the debt agreements of the Town rather than the general provisions of the Town’s Investment Policy.
D. Investments in Local Agency Investment Funds
The Town is a voluntary participant in LAIF that is regulated by the California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of the Town’s investment in this pool as reported in the accompanying financial statements is based upon the Entity’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio).
The balance is available for withdrawal on demand, and is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. Included in LAIF’s investment portfolio are U.S.
Treasuries, Federal Agency obligations, time deposits, negotiable certificates of deposits, commercial paper, corporate bonds, and security loans. At June 30, 2023, the average life on investment funds invested by LAIF was 260 days.
E. Fair Value Hierarchy
The Town 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 fair value of the assets. Level 1 inputs are quoted prices in an active market for identical assets; Level 2 inputs are significant other observable inputs; and Level 3 inputs are significant unobservable inputs.
The following is a summary of the fair value hierarchy of the fair value of investments of the Town as of June 30, 2023:
Investment Type Exempt Total
California Local Agency Investment Fund $7,570,556 $7,570,556 PARS Trust - Mutual Funds 167,500 167,500
Total Investments $7,738,056 7,738,056
Cash in banks and on hand 321,093
Total Cash and investments $8,059,149
Section 115 Pension Trust with Public Agency Retirement Services (PARS) and the California Local Agency Investment Fund (LAIF) investments are measured at amortized cost and, therefore, are exempt from being classified under GASB 72.
35 Town of Fairfax
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
3. INTERFUND TRANSACTIONS
A. Interfund Transfers
Transfers during the fiscal year ended June 30, 2023, were comprised of the following:
Fund Receiving Transfers Fund Making Transfers Amount
General Fund Non-Major Governmental Funds $995,000
Grants Capital Projects Fund Non-Major Governmental Funds 247,502 Storm Capital Projects Fund General Fund 170,000
Town Capital Projects Fund 8,352
Town Capital Projects Fund General Fund 86,541
Non-Major Governmental Funds 14,596
Non-Major Governmental Funds General Fund 3,571
Total Interfund Transfers $1,525,562
Transfers to the General Fund were for administrative costs and claims liabilities. Transfers to all other funds were for administrative costs, capital projects and special projects.
B. Current Interfund Balances
Current interfund balances arise in the normal course of business and are expected to be repaid shortly after end of the fiscal year. At June 30, 2023, interfund balances were as follows:
Due from Other Funds Due to Other Funds Amount
General Fund Town Capital Projects Fund $200,042
Grants Capital Projects Fund 766,924
Non-Major Governmental Funds 15,428
Grants Capital Projects Fund Storm Capital Projects Fund 896,159 Town Capital Projects Fund 35,101
Non-Major Governmental Funds 32,150
Total Due From Other Funds $1,945,804
36 Town of Fairfax
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
4. CAPITAL ASSETS
The Town has reported all capital assets including infrastructure in the Government-Wide Statement of Net Position. The Town has elected to use the basic approach as defined by GASB Statement No. 34 for all infrastructure reporting, whereby depreciation expense and accumulated depreciation have been recorded.
Infrastructure includes roads, bridges, curbs, sidewalks, drainage systems, street and traffic lights, park improvements and other improvements.
The following is a summary of capital assets for governmental activities:
Balance Balance
June 30, 2022 Additions Retirements June 30, 2023
Capital assets not being depreciated:
Land $255,988 $255,988
Construction in progress 3,533,791 $508,623 4,042,414
Total capital assets not being depreciated 3,789,779 508,623 4,298,402 Capital assets being depreciated:
Buildings 423,974 423,974
Other improvements 2,309,098 2,309,098
Vehicles 736,963 129,146 ($41,812) 824,297
Machinery and equipment 439,057 60,914 (12,763) 487,208 Infrastructure 13,372,397 13,372,397
Total capital assets being depreciated 17,281,489 190,060 (54,575) 17,416,974 Less accumulated depreciation for:
Buildings (310,911) (3,070) (313,981)
Other improvements (1,469,483) (107,590) (1,577,073)
Vehicles (594,762) (47,003) 41,812 (599,953)
Machinery and equipment (381,863) (10,413) 12,763 (379,513) Infrastructure (9,250,272) (312,770) (9,563,042)
Total accumulated depreciation (12,007,291) (480,846) 54,575 (12,433,562) Net capital assets being depreciated 5,274,198 (290,786) 4,983,412 Governmental activity capital assets, net $9,063,977 $217,837 $9,281,814 37 Town of Fairfax
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
4. CAPITAL ASSETS (Continued)
Depreciation expense for governmental activities depreciation expenses on capital assets for the year ended June 30, 2023, were as follows:
Depreciation
Expense
General Government $185,654
Public Safety 51,349
Public Works 243,843
Total Governmental Activities $480,846
5. LONG-TERM DEBT
The following is a summary of long-term debt transactions during the fiscal year ended June 30, 2023:
Original Amount Due in More
Issue Balance Balance Due within than One
Governmental Activity Debt: Amount June 30, 2022 Retirements June 30, 2023 One Year Year Authority Debt:
2008 General Obligation Revenue Bonds
1.50-4.70%, due 8/1/2025 $2,231,000 $820,000 ($180,000) $640,000 $198,000 $442,000 Revenue Bonds, Series 2012
2.00-3.00%, due 8/1/2027 2,880,000 1,446,500 (210,000) 1,236,500 220,000 1,016,500 Direct Borrowings:
2020 PERS Refinancing Lease Agreement
3.45%, due 8/1/2036 9,402,000 8,980,000 (320,000) 8,660,000 375,000 8,285,000 Town Debt:
General Obligation Refunding Bonds
Series 2016 2.10%, due 8/1/2027 1,239,000 710,000 (111,000) 599,000 113,000 486,000 Direct Borrowings:
Capital Leases:
Solar Panel Lease 249,000 16,600 (16,600)
Notes:
Capital Improvement Notes 500,000 100,000 (100,000)
Total Government Activity Debt - Net $12,073,100 ($937,600) $11,135,500 $906,000 $10,229,500 2008 General Obligation Revenue Bonds
2008 General Obligation Revenue Bonds in the principal amount of $2,231,000 were issued on August 21, 2008, by the Fairfax Financing Authority to provide funds to acquire the 2008 General Obligation Refunding Bonds (2008 Town Bonds) concurrently issued by the Town. Proceeds from these 2008 Town Bonds were used to refund the 2000 General Obligations Bonds as well as to fund certain capital projects within the Town. The 2008 Town Bonds are general obligations of the Town repayable from ad valorem property taxes levied by the County. Annual principal and interest payments on the 2008 Town Bonds are expected to require less than 10 percent of property tax revenues. 2008 Town Bonds debt service remittances by the Town are pledged for and used by the Authority to make debt service payments on the 2008 General Obligation Revenue Bonds to third party bond holders.
38 Town of Fairfax
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
5. LONG-TERM DEBT (Continued)
The substance of these two bond issues is that the Town and Authority are obligated to repay debt service from property tax collections. Under generally accepted accounting principles, the activities of the Town and Authority have been consolidated together (termed “blended”) and transactions and balances of the 2008 Town Bonds have been eliminated for financial reporting purposes. 2008 Revenue Bond principal payments are payable on August 1 of each year and interest payments are payable semi-annually on February 1 and August 1. 2008 Revenue Bonds maturing on or after August 1, 2017, are subject to call on any interest payment date at par, plus a premium of 1% to 2% of the principal amount. 2008 Revenue Bonds maturing on August 1, 2026, are subject to early redemption without premium on or after August 1, 2025, from the mandatory sinking fund redemptions. Term 2008 Revenue Bonds maturing August 1, 2031, are also subject to mandatory early redemptions from the sinking fund payments commencing August 1, 2028.
The 2008 General Obligation Revenue Bonds are general obligations of the Town and Authority, payable solely from ad valorem property taxes levied by the Town and collected by Marin County. The bond covenants contain events of default that require the revenue of the Town to be applied by the Trustee as specified in the terms of the agreement if any of the following conditions occur: default on debt service payments; the failure of the Town to observe or perform the conditions, covenants, or agreement terms of the debt; bankruptcy filing by the Town; or if any court or competent jurisdiction shall assume custody or control of the Town. No such events occurred during the fiscal year ending June 30, 2023.
Revenue Bonds, Series 2012
Revenue Bonds, Series 2012 in the principal amount of $2,880,000 were issued on March 1, 2012, by the Fairfax Financing Authority to provide funds to acquire the 2012 General Obligation Refunding Bonds (2012 Town Bonds) concurrently issued by the Town. Proceeds from these 2012 Town Bonds were used to repay the 2002 General Obligations Bonds as well as to fund certain capital projects within the Town. The 2012 Town Bonds are general obligations of the Town repayable from ad valorem property taxes levied by the County and debt service remittances by the Town are pledged for and used by the Authority to make debt service payments on the Revenue Bonds, Series 2012 to third party bond holders.
The substance of these two bond issues is that the Town and Authority are obligated to repay debt service from property tax collections. Under generally accepted accounting principles, the activities of the Town and Authority have been consolidated together (termed “blended”) and transactions and balances of the 2012 Town Bonds have been eliminated for financial reporting purposes.
Revenue Bond principal payments are payable on August 1 of each year and interest payments are payable biannually on February 1 and August 1. Revenue Bonds maturing on or after August 1, 2021, are subject to call on any interest payment date at par, plus a premium of 1% to 2% of the principal amount. Revenue Bonds maturing on August 1, 2022, are subject to early redemption without premium on or after August 1, 2021, from the mandatory sinking fund redemptions.
39 Town of Fairfax
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
5. LONG-TERM DEBT (Continued)
The Revenue Bonds, Series 2012 are general obligations of the Town and Authority, payable solely from ad valorem property taxes levied by the Town and collected by Marin County. The bond covenants contain events of default that require the revenue of the Town to be applied by the Trustee as specified in the terms of the agreement if any of the following conditions occur: default on debt service payments; the failure of the Town to observe or perform the conditions, covenants, or agreement terms of the debt; bankruptcy filing by the Town; or if any court or competent jurisdiction shall assume custody or control of the Town. No such events occurred during the fiscal year ending June 30, 2023. 2020 PERS Refinancing Lease Agreement – Direct Borrowing On September 29, 2020, the Town entered into a lease agreement with the Fairfax Financing Authority, in the amount of $9,402,000, to finance all or a portion of the existing Unfunded Actuarially Accrued Liability of the Town to CalPERS and refinance the Town’s obligations under a 2017 Lease Agreement. The agreement was assigned to Capital One Public Funding LLC on September 29, 2020. The agreement carries an interest rate of 3.45%. Principal and interest rates are payable semi-annually on February 1 and June 30, commencing February 1, 2021. The refinancing resulted in a net present value savings over the life of the lease in the amount of $2,257,124. As a result, the 2017 PERS Refinancing Lease Agreement is considered defeased and the liability for that lease has been removed from the Town’s Statement of Net Position. 2016 General Obligation Refunding Bonds
In 2016, the Town issued $1,239,000 in General Obligation Refunding Bonds with an interest rate
2.10%. The proceeds were used to advance refund $1,330,000 of the Town’s outstanding 2006 General Obligation Bonds. The net proceeds, together with an additional $110,263, were deposited in an irrevocable trust with an escrow agent to provide funds for the future debt service payment on the refunded bonds. As a result, the 2006 General Obligation Bonds are considered defeased and the liability for those bonds has been removed from the Town’s Statement of Net Position.
The Refunding Bonds, Series 2016, are general obligations of the Town, payable solely from ad valorem property taxes levied by the Town and collected by Marin County. The bond covenants contain events of default that require the revenue of the Town to be applied by the Trustee as specified in the terms of the agreement if any of the following conditions occur: default on debt service payments; the failure of the Town to observe or perform the conditions, covenants, or agreement terms of the debt; bankruptcy filing by the Town; or if any court or competent jurisdiction shall assume custody or control of the Town. No such events occurred during the fiscal year ending June 30, 2023.
Capital Lease
The Town has entered into a capital lease as of June 30, 2023. Under the lease agreement, ownership of the assets are passed to the Town at the end of the lease. Since the lease is in essence a financing arrangement, the cost of acquiring the asset and the amount of the lease has been included in the Town’s financial statements.
Capital Improvement Notes
On February 13, 2018, the Town entered into five promissory notes with the County of Marin, in the total amount of $500,000, to finance infrastructure projects associated with the Town’s Capital Improvement Program. The promissory notes carry various interest rates from 3.50% to 4.00%. Principal and interest payments are payable annually on February 1 over five years, commencing February 1, 2019. 40 Town of Fairfax
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
5. LONG-TERM DEBT (Continued)
Debt Service Requirements
The Town’s annual debt service requirements through maturity are as follows:
For The Year
Ending June 30 Principal Interest Principal Interest Total 2024 $531,000 $62,301 $375,000 $293,198 $1,261,499
2025 564,000 45,616 435,000 279,311 1,323,927
2026 597,000 27,521 472,000 263,770 1,360,291
2027 381,000 13,755 515,000 246,848 1,156,603
2028 402,500 4,698 557,000 228,459 1,192,657
2029 - 2033 3,466,000 811,959 4,277,959
2034 - 2038 2,840,000 189,076 3,029,076
$2,475,500 $153,891 $8,660,000 $2,312,621 $13,602,012
Other Long-Term Debt Direct Borrowings
6. EMPLOYEE RETIREMENT PLAN
A. General Information about the Pension Plan
Plan Description – All qualified permanent, probationary and part-time employees are eligible to participate in the Town’s Safety (police and fire) and Miscellaneous (all other) Employee Pension Rate Plans. The Town’s Miscellaneous and Safety Rate Plans are part of the public agency cost-sharing multiple-employer defined benefit pension plan (PERF C), which is administered by the California Public Employees’ Retirement System (CalPERS). PERF C consists of a miscellaneous pool and a safety pool (also referred to as “risk pools”), which are comprised of individual employer miscellaneous and safety rate plans, respectively. Individual employers may sponsor more than one miscellaneous and safety rate plan. The employer participates in one cost-sharing multiple-employer defined benefit pension plan regardless of the number of rate plans the employer sponsors. The Town sponsors six rate plans (three miscellaneous and three safety). Benefit provisions under the Plan are established by State statute and Town resolution. CalPERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.
Benefits Provided – CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for nonduty 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.
41 Town of Fairfax
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
6. EMPLOYEE RETIREMENT PLAN (Continued)
A. General Information about the Pension Plan (Continued) The Plan’s provisions and benefits in effect at June 30, 2023, are summarized as follows:
Classic Tier I Classic Tier II PEPRA
Hire date
Prior to
October 30, 2012
On or after
October 30, 2012
On or after
January 1, 2013
Benefit formula 2.5% @ 55 2.0% @ 55 2.0% @ 62
Benefit vesting schedule 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life Retirement age 50 - 55 50 - 63 52 - 67
Monthly benefits, as a % of eligible compensation 2.0% - 2.5% 1.426% - 2.418% 1.0% - 2.5% Required employee contribution rates 8% 7% 7.250%
Required employer contribution rates 12.400% 11.060% 7.760% Classic Tier I Classic Tier II PEPRA
Hire date
Prior to
October 30, 2012
On or after
October 30, 2012
On or after
January 1, 2013
Benefit formula 3% @ 50 3% @ 55 2.7% @ 57
Benefit vesting schedule 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life Retirement age 50 50 - 55 50 - 57
Monthly benefits, as a % of eligible compensation 3% 2.4% - 3% 2.0% - 2.7% Required employee contribution rates 9% 9% 13.750%
Required employer contribution rates 24.360% 22.480% 13.660% Miscellaneous
Safety
CalPERS collects employer contributions for the Plan as a percentage of payroll for the normal cost portion as noted in the rates above and as a dollar amount for contributions toward the unfunded liability and side fund. The dollar amounts are billed on a monthly basis. The Town’s required contribution for the unfunded liability and side fund was $42,766 in fiscal year 2023.
Contributions – Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for the Plan are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The Town 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 to the Plan were as follows:
Miscellaneous Safety Total
Contributions - employer $227,840 $248,567 $476,407
42 Town of Fairfax
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
6. EMPLOYEE RETIREMENT PLAN (Continued)
B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Plan and additions to/deductions from the Plan’s 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.
As of June 30, 2023, the Town reported a net pension liability for its proportionate share of the net pension liability of the Plan as follows:
Proportionate Share
of Net Pension Liability
Miscellaneous $531,839
Safety 805,906
Total Net Pension Liability $1,337,745
The Town’s net pension asset for the Plan is measured as the proportionate share of the net pension asset. The net pension asset of the Plan is measured as of June 30, 2022, and the total pension liability for the Plan used to calculate the net pension asset was determined by an actuarial valuation as of June 30, 2021 rolled forward to June 30, 2022 using standard update procedures. The Town’s proportion of the net pension asset was based on a projection of the Town’s long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined. The Town’s proportionate share of the net pension liability (asset) for the Plan as of June 30, 2021 and 2022 was as follows:
Miscellaneous
Proportion - June 30, 2021 -0.11510%
Proportion - June 30, 2022 0.01137%
Change - Increase (Decrease) 0.12647%
Safety
Proportion - June 30, 2021 -0.09553%
Proportion - June 30, 2022 0.01173%
Change - Increase (Decrease) 0.10726%
Total
Proportion - June 30, 2021 -0.21063%
Proportion - June 30, 2022 0.02309%
Change - Increase (Decrease) 0.23372%
43 Town of Fairfax
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
6. EMPLOYEE RETIREMENT PLAN (Continued)
B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
For the year ended June 30, 2023, the Town recognized pension expense of $5,838,970. At June 30, 2023, the Town reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
Miscellaneous:
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date $227,840 Differences between actual and expected experience 10,680 ($7,153) Change in assumptions 54,498
Differences between actual contributions and
proportionate share of contributions 977,107 (509,680)
Change in employer's proportion and differences between the employer’s contributions and the employer’s
proportionate share of contributions 38,167 (1,607,922) Net differences between projected and actual earnings
on plan investments 97,419
Total $1,405,711 ($2,124,755)
Safety:
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date $248,567 Differences between actual and expected experience 33,354 ($8,752) Change in assumptions 81,260
Differences between actual contributions and
proportionate share of contributions 1,387,510 (1,100,097) Change in employer's proportion and differences between the employer’s contributions and the employer’s
proportionate share of contributions 62,456 (1,699,400) Net differences between projected and actual earnings
on plan investments 127,264
Total $1,940,411 ($2,808,249)
Combined Total $3,346,122 ($4,933,004)
44 Town of Fairfax
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
6. EMPLOYEE RETIREMENT PLAN (Continued)
B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
$476,407 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, 2024. Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
Miscellaneous: Safety: Total:
Annual
Amortization
Annual
Amortization
2024 ($336,230) ($462,760) ($798,990)
2025 (359,847) (428,884) (788,731)
2026 (310,392) (302,394) (612,786)
2027 59,585 77,633 137,218
Total ($946,884) ($1,116,405) ($2,063,289)
Annual
Amortization
Year Ended
June 30
Actuarial Assumptions – For the measurement period ended June 30, 2022, the total pension liability was determined by rolling forward the June 30, 2021 total pension liability. The June 30, 2021 total pension liability was based on the following actuarial methods and assumptions for all rate plans:
Valuation Date June 30, 2021
Measurement Date June 30, 2022
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions:
Discount Rate 6.90%
Inflation 2.30%
Payroll Growth 3.00%
Projected Salary Increase Varies by Entry Age and Service (1) Investment Rate of Return 6.9% (2)
Mortality Derived using CalPers Membership Data for all Funds (3) 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
(1) Depending on age, service and type of employment
(2) Net of pension plan investment expenses, includes inflation (3) The mortality table used was developed based on CalPERS' specific data. The table includes generational mortality improvements using Society of Actuaries Scale 80% of Scale MP 2020. For more details on this table, please refer to the CalPERS November 2021 experience study report (based on CalPERS demographic data from 2001 to 2019) that can be found on the CalPERS website.
All underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2021 valuation were based on the results of a November 2021 actuarial experience study for the period of 2001 to 2019.
Further details of the Experience Study can be found on the CalPERS website. 45 Town of Fairfax
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
6. EMPLOYEE RETIREMENT PLAN (Continued)
B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
Discount Rate – The discount rate used to measure the total pension liability for the Plan was 6.90%. The projection of cash flows used to determine the discount rate for the Plan assumed that contributions from all plan members in the Public Employees Retirement Fund (PERF) 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.
The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.
In determining the long-term expected rate of return, CalPERS took into account both short-term and longterm market return expectations as well as the expected pension fund cash flows. Such cash flows were developed assuming that both members and employers will make their required contributions on time and as scheduled in all future years. Using historical returns of all the funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the rounded single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses.
The table below reflects the expected real rates of return by asset class.
Asset Class(a)
Assumed Asset
Allocation Real Return 1,2
Global Equity - Cap-weighted 30.0% 4.54%
Global Equity - Non-Cap-weighted 12.0% 3.84%
Private Equity 13.0% 7.28%
Treasury 5.0% 0.27%
Mortgage-backed Securities 5.0% 0.50%
Investment Grade Corporates 10.0% 1.56%
High Yield 5.0% 2.27%
Emerging Market Debt 5.0% 2.48%
Private Debt 5.0% 3.57%
Real Assets 15.0% 3.21%
Leverage -5.0% -0.59%
100.0%
(1) An expected inflation of 2.30% used for this period. (2) Figures are based on the 2021 Asset Liability Management study. 46 Town of Fairfax
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
6. EMPLOYEE RETIREMENT PLAN (Continued)
B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
In July 2022, CalPERS reported a preliminary (6.1%) net loss return on investments for fiscal year 2021-22.
This compares to a preliminary 21.3% net return on investment for the prior year.
On November 17, 2021, the board adopted a new strategic asset allocation. The new asset allocation along with the new capital market assumptions, economic assumptions and administrative expense assumption support a discount rate of 6.90% (net of investment expense, but without a reduction for administrative expense) for financial reporting purposes. This includes a reduction in the price inflation assumption from
2.50% to 2.30% as recommended in the November 2021 CalPERS Experience Study and Review of Actuarial Assumptions. This study also recommended modifications to retirement rates, termination rates, mortality rates and rates of salary increases that were adopted by the CalPERS Board. These new assumptions are reflected in the CalPERS GASB 68 accounting valuation reports for the June 30, 2022 measurement date.
In July 2018, the Town established a Section 115 Pension Trust with Public Agency Retirement Services (PARS). PARS, the trust administrator, partners with U.S. Bank and HighMark Capital Management to provide trustee and investment advisory services, respectively. This trust was established to set aside moneys to meet the Town’s future pension contributions or unfunded liabilities. Financial statements of PARS may be obtained from PARS, 4350 Von Karman Avenue, Suite 100, Newport Beach, CA 92660.
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate – The following presents the Town’s proportionate share of the net pension liability for the Plan, calculated using the discount rate for the Plan, as well as what the Town’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate:
Miscellaneous Safety Total
1% Decrease 5.90% 5.90% 5.90%
Net Pension Liability $2,745,313 $4,190,756 $6,936,069
Current Discount Rate 6.90% 6.90% 6.90%
Net Pension Liability $531,839 $805,906 $1,337,745
1% Increase 7.90% 7.90% 7.90%
Net Pension Liability ($1,289,301) ($1,960,444) ($3,249,745) Pension Plan Fiduciary Net Position – Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports. 47 Town of Fairfax
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
7. DEFINED CONTRIBUTION RETIREMENT PLAN
The Town contributes to VantageTrust, which administers a defined contribution retirement plan. A deferred compensation retirement plan provides retirement benefits in return for services rendered, provides an individual account for each participant, and specifies how contributions to the individual’s accounts are determined instead of specifying the amount of benefits the individual is to receive. The benefits a participant will receive depend on the amount contributed to the participant’s account, and the returns earned on investments on those contributions. The Plan’s trust administrator is The International City Management Association Retirement Corporation (ICMA-RC), 777 North Capitol Street, N.E., Suite 600, Washington, D.C., 20002-4240.
As established by the plan, all eligible part-time, seasonal, and temporary employees of the Town become participants in the plan effective July 1, 2014 or upon starting date as an employee.
As determined by the plan, 3.75% of gross earnings to the plan. The Town contributes an additional 3.75% of the employee’s gross earnings. Contributions made by an employee and the employer vest immediately. No forfeitures were noted during the current period.
During the year, the Town and employees each contributed $0 and $326,412 respectively. The total covered payroll of employees participating in the plan for the year ended June 30, 2023 was $3,139,931. The total payroll for the year was $3,322,514.
8. OTHER POST-EMPLOYMENT BENEFITS
A. Plan Description and Funding Policy
The Town provides full health insurance benefits to Miscellaneous employees who retire with at least 25 years of service (20 years in Management). The Town will pay up to the one-party Kaiser basic rate for retirees. For those with 10 or more years of service, there are partial benefits. For Public Safety Employees hired on or after July 1, 2013 the Town will contribute 1% of the employee’s regular rate of pay into a Retirement Health Savings plan (RHS). Contributions to the RHS began on July 1, 2018 and continue with each pay period based on the employee’s regular rate of pay at that time. Miscellaneous employees hired after July 1, 2013 are no longer eligible for retiree benefits. For retirees not eligible for the premium-based benefit, the Town will pay the CalPERS minimum employer contribution towards premiums, which is $149 per month from July to December 2022 and $151 from January to June 2023. The cost of the benefits provided by the Plan is currently being paid along with the annual required contribution. The long-term strategy for funding the benefits provided under the Plan is currently being evaluated.
The Town participates in the California Employers Retirees Benefit Trust (CERBT), an irrevocable trust established to fund OPEB. CERBT is administrated by CALPERS, and is managed by an appointed board not under the control of Town Council. This Trust is not considered a component unit by the Town and has been excluded from these financial statements. The CERBT issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained from the California Public Employees’ Retirement System, CERBT, P.O. Box 942703, Sacramento, CA 94229-2703.
The Town’s Policy is to fund these benefits by accumulating assets with CERBT discussed above pursuant to Council Resolution 09-48. For the year ended June 30, 2023, the Town’s contributions to the Plan were $200,000.
48 Town of Fairfax
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
8. OTHER POST-EMPLOYMENT BENEFITS (Continued)
A. Plan Description and Funding Policy (Continued)
Employees Covered by Benefit Terms – Membership in the plan consisted of the following at the measurement date of June 30, 2022:
Active employees 36
Inactive employees or beneficiaries currently
receiving benefit payments 11
Inactive employees entitled to but not yet
receiving benefit payments 14
Total 61
B. Net OPEB Liability
Actuarial Methods and Assumptions – The Town’s net OPEB liability was measured as of June 30, 2022 and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation dated June 30, 2021 based on the following actuarial methods and assumptions: (a) 6.00% investment return; (b)
2.80% projected annual salary increase; and (c) health care cost trend rate increases between 1.80% - 9.50% in future years.
Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the Town and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the Town and plan members to that point. The actuarial methods and assumptions used include techniques that smooth the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets. Actuarial calculations reflect a long-term perspective and actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future. Actuarially determined amounts are subject to revision at least once every three years as results are compared to past expectations and new estimates are made about the future. The Town’s OPEB unfunded actuarial accrued liability is being amortized as a level percentage of projected payroll using a closed nineteen-year amortization period.
The underlying mortality assumptions were based on the CalPERS Experience Study and Review of Actuarial Assumptions published in November 2021 for Public Agency Miscellaneous and Police members.
49 Town of Fairfax
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
8. OTHER POST-EMPLOYMENT BENEFITS (Continued)
B. Net OPEB Liability (Continued)
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 produce 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 each major asset class are summarized in the following table:
Long-Term
Target Expected Real
Asset Class Allocation Rate of Return
Global Equity 49% 4.50%
Fixed Income 23% 1.40%
Global Real Estate (REITs) 20% 3.70%
Treasury Inflation-Protected Securities (TIPS) 5% 0.50% Commodities 3% 1.10%
Total 100%
Discount Rate – The discount rate used to measure the total OPEB liability was 6.00%. The projection of cash flows used to determine the discount rate assumed that Town 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.
50 Town of Fairfax
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
8. OTHER POST-EMPLOYMENT BENEFITS (Continued)
C. Changes in Net OPEB Liability
The changes in the net OPEB liability is shown in the following table:
Total OPEB Plan Fiduciary Net OPEB
Liability Net Position Liability/(Asset)
(a) (b) (a) - (b)
Balance at June 30, 2021 (Measurement Date) $1,891,834 $1,622,241 $269,593 Changes Recognized for the Measurement Period:
Service Cost 75,700 75,700
Interest on the total OPEB liability 124,471 124,471
Differences between expected and actual experience (94,468) (94,468) Changes of assumptions 100,150 100,150
Contributions:
Employer - Town's Contribution 306,885 (306,885)
Net investment income (237,014) 237,014
Benefit payments, including refunds of employee
contributions (106,885) (106,885)
Administrative expenses (437) 437
Net changes 98,968 (37,451) 136,419
Balance at June 30, 2022 (Measurement Date) $1,990,802 $1,584,790 $406,012 Increase (Decrease)
Detailed information about the OPEB plan's fiduciary net position is available in the separately issued plan financial report that may be obtained from CalPERS.
D. Sensitivity of the Net OPEB Liability to Changes in the Discount Rate and Healthcare Cost Trend Rates The following presents the net OPEB liability of the Town, as well as what the Town’s net OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower (5.00%) or 1-percentagepoint higher (7.00%) than the current discount rate:
Net OPEB Liability
Discount Rate -1% Discount Rate Discount Rate +1%
5.00% 6.00% 7.00%
$634,949 $406,012 $213,926
The following presents the net OPEB liability of the Town, as well as what the Town’s net OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-percentage-point lower (4.30% to
4.50%, decreasing to an ultimate rate of 3.04%) or 1-percentage-point higher (6.30% to 6.50%, decreasing to an ultimate rate of 5.04%) than the current healthcare cost trend rates (5.30% to 5.50%,decreasing to an ultimate rate of 4.04%):
Net OPEB Liability
Healthcare Cost
1% Decrease Trend Rates 1% Increase
$171,903 $406,012 $692,453
51 Town of Fairfax
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
8. OTHER POST-EMPLOYMENT BENEFITS (Continued)
E. OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB For the year ended June 30, 2023, the Town recognized $(191,236) of OPEB expense. At June 30, 2023, the Town reported deferred outflows and inflows of resources related to OPEB from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between actual and expected experience $6,587 ($529,201) Changes of assumptions 274,150 (463,484)
Net differences between projected and actual earnings on OPEB plan investments 127,840
Contributions Subsequent to the Measurement Date 113,434 Total $522,011 ($992,685)
$113,434 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as reduction in the net OPEB liability in the year ended June 30, 2024. Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized as part of OPEB expense as follows:
Year Annual
Ended June 30 Amortization
2024 ($158,044)
2025 (160,485)
2026 (135,287)
2027 (131,239)
2028 947
Total ($584,108)
9. RISK MANAGEMENT
A. Risk Pool
The Town is a participant in the Bay Cities Joint Powers Insurance Authority (BCJPIA), which covers general liability claims in an amount up to $1,000,000. The Town has a deductible or uninsured liability of up to $50,000 per claim. Once the Town’s deductible is met, BCJPIA becomes responsible for payment of all claims up to the limit. Other coverage includes excess insurance for claims over $1,000,000.
The Town also participates in the BCJPIA for worker’s compensation insurance. BCJPIA participates in the Local Agency Worker’s Compensation Excess Insurance Joint Powers Authority’s (LAWCX) risk pool which in turn purchases coverage above $1,000,000. The Town has a deductible or uninsured liability of up to $150,000 per claim. BCJPIA pool covers claims from $150,000 to $1,000,000. Claims from $1,000,000 up to statutory are covered by LAWCX. Once the Town’s deductible is met, then BCJPIA Plan becomes responsible for payment of all claims up to the limit. Settled claims have not exceeded insurance coverage in any of the past three fiscal years by any significant amount.
52 Town of Fairfax
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
9. RISK MANAGEMENT (Continued)
A. Risk Pool (Continued)
Each risk pool is governed by a board consisting of representatives from member municipalities. The board controls the operations of each risk pool, including selection of management and approval of operating budgets, independent of any influence by member municipalities beyond their representation on the board.
The Town’s contributions to each risk pool equal the ratio of the Town’s payroll to the total payrolls of all entities participating in the same layer of each program, in each program year. Actual surpluses or losses are shared according to a formula developed from overall loss costs and spread to member entities on a percentage basis after a retrospective rating.
B. Liability for Uninsured Claims
Municipalities are required to record their liability for uninsured claims and to reflect the current portion of this liability as an expenditure in their financial statements. As discussed above, the Town has coverage for such claims, but it has retained the risk for the deductible or uninsured portion of these claims. The Town’s liability for uninsured claims based on claims experience was computed as follows:
June 30
2023 2022
Balance at beginning of year $79,623 $83,637
Change in liability for prior fiscal year
claims and clams incurred but not reported 119,510 14,569 Claims paid (55,023) (18,583)
Balance at end of year $144,110 $79,623
Due in one year $144,110 $79,623
During the past three years there have been no significant reductions in any of the Town’s Insurance coverage and no settlement amounts have exceeded insurance coverage.
10. JOINTLY GOVERNED ORGANIZATIONS
The Town participates in several active jointly governed organizations through formally organized and separate entities established under the Joint Exercise of Powers Act of the State of California. As separate legal entities, these entities exercise full powers and authorities within the scope of the related Joint Powers Agreements (JPA), including selection of management and approval of operating budgets, independent of any influence by each member beyond representation on each Board. Obligations and liabilities of these jointly governed organizations are not the Town’s responsibility, and the Town does not have an equity interest in the assets of each jointly governed organization except upon dissolution.
A. Ross Valley Fire Service
The Ross Valley Fire Service (Fire Service) was established under a 1982 Joint Exercise of Powers Agreement between the Town of Fairfax, the Town of San Anselmo, the Town of Ross and the County of Marin (for Sleepy Hollow) for the purpose of providing fire protection, emergency medical, and related services within the covered area. Members of the Fire Service pay their pro rata share of the total annual contributions. Financial statements for the Fire Service may be found at www.rossvalleyfire.org. 53 Town of Fairfax
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
10. JOINTLY GOVERNED ORGANIZATIONS (Continued)
B. Ross Valley Paramedic Authority (Authority)
The Authority is a joint powers agreement formed on December 14, 1982, by the Town of Fairfax, Town of Corte Madera, Kentfield Fire Protection District, Town of Larkspur, County of Marin, Town of Ross, Town of San Anselmo, and Sleepy Hollow Fire Protection District for the purpose of providing paramedic services.
The Authority is controlled by an eight member board consisting of a member from each entity. Services are provided by the County of Marin Fire Department to the Authority. The Authority’s operations are financed by its members, through property taxes on each residential unit and commercial property. The books and records are maintained by the Town of Larkspur. Financial statements for the Ross Valley Paramedic Authority may be found at www.rossvalleypa.org.
C. Marin General Services Authority (MGSA)
The MGSA was established on April 26, 2005, to replace the Marin Street Light Acquisition Authority. All the original members of the Marin Street Light Acquisition Authority are eligible for membership. The Authority is established to finance, implement, and manage various municipal services with the member agencies including taxicab regulation and information management services. All assets and funds of the Marin Street Light Acquisition Authority were transferred to the MGSA. The financial responsibility of each member is based on a relative population and assessed value formula. Audited financial statements may be obtained by a request to the Marin General Services Authority at Marin County Auditor-Controller, County of Marin, 3501 Civic Center Drive, Room 225, San Rafael, CA 94903.
D. Marin Emergency Radio Authority (MERA)
The Town is a member of MERA, along with the County of Marin and twenty-four local government agencies. The purpose of MERA is to plan, finance, implement, own, and operate a multi-jurisdictional and countywide public safety and emergency radio system. To finance this system, in 1999 MERA issued approximately $27 million in revenue bonds. Audited financial statements may be obtained by a request to the Marin Emergency Radio Authority at Marin County Auditor-Controller, County of Marin, 3501 Civic Drive, Room 225, San Rafael, CA 94903.
E. Marin County Major Crimes Task Force
The Marin County Major Crimes Task Force, established in 1977, is a specialized undercover law enforcement unit focused on drug related and major criminal activity throughout the County of Marin. The Task Force Oversight Committee is comprised of member cities and the Marin County Sheriff.
F. Marin Clean Energy (MCE)
The Town is a member of Marin Clean Energy (MCE), a California Joint Powers Authority established on December 19, 2008, along with the Counties of Marin, Contra Costa, Napa and Solano and twenty-nine local government agencies. MCE is separate from and derives no financial support from the Town. MCE’s mission is to confront the climate crisis by eliminating fossil fuel greenhouse gas emissions, producing renewable energy, and creating equitable community. Audited financial statements can be obtained at 1125 Tamalpais Avenue, San Rafael, CA 94901.
54 Town of Fairfax
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
10. JOINTLY GOVERNED ORGANIZATIONS (Continued)
G. Transportation Authority of Marin (TAM)
The Town is a member of the Transportation Authority of Marin (TAM), established on March 2, 2004, along with the County of Marin and sixteen local government agencies pursuant to Section 180050 of the California Public Utilities Code (“PUC”). TAM’s responsibilities include the development and administration of the Measure A ½‐Cent Transportation Sales Tax Expenditure Plan, approved by Marin voters in November 2004, the Measure AA ½‐Cent Transportation Sales Tax Expenditure Plan, approved by Marin voters in November 2018 and extended the revenue under Measure A for 30 years, and the Measure B $10 VRF (Vehicle Registration Fee) Expenditure Plan, approved by Marin voters in November 2010. TAM also serves as the Congestion Management Authority (CMA) for Marin County, providing countywide planning and programming for transportation related needs. As both the sales tax authority and the CMA for Marin County, TAM plays a leading role in planning, financing, and implementation of transportation projects and programs in Marin County. Audited financial statements can be obtained at 900 Fifth Avenue, Suite 100, San Rafael, CA 94901.
H. Marin Wildfire Prevention Authority (MWPA)
The Town is a member of Marin Wildfire Prevention Authority (MWPA), a California Joint Powers Authority established on March 2020, along with the County of Marin and seventeen local government agencies. In March 2020, most of Marin County residents voted to pass a special tax – Measure C ballot that is applied to all parcels of real property located in Marin County Within the defined boundary of the member entities, to fund proactive, state-of-the-art wildfire prevention and preparedness efforts. Revenues raised from the Measure C tax are used solely to plan, finance, implement, manage, own, and operate a multijurisdictional agency to prevent and mitigate wildfires in Marin County. Audited financial statements can be obtained at 28 Liberty Ship Way, Suite 2800, Sausalito, CA 94965.
11. COMMITMENTS AND CONTINGENCIES
The Town is subject to litigation arising in the normal course of business. In the opinion of the Town Attorney, there is no pending litigation which is likely to have a material adverse effect on the financial position of the Town.
55 This page intentionally left blank.
REQUIRED SUPPLEMENTARY INFORMATION
Town of Fairfax
Required Supplementary Information
For the Year Ended June 30, 2023
SCHEDULE OF THE TOWN'S PROPORTIONATE SHARE
OF THE NET PENSION LIABILITY (ASSET)
A Cost Sharing-Employer Defined Pension Plan
Last 10 Years*
Miscellaneous
Measurement Date 6/30/2014 6/30/2015 6/30/2016
Plan's Proportion of the Net Pension Liability (Asset) 0.07748% 0.09126% 0.09001% Plan's Proportionate Share of the Net Pension Liability (Asset) $1,914,846 $2,503,788 $3,126,781 Plan's Covered Payroll $1,247,851 $1,241,911 $1,287,995 Plan's Proportionate Share of the Net Pension Liability (Asset) as a Percentage of its Covered Payroll 153.45% 201.61% 242.76% Plan's Proportionate Share of the Fiduciary Net Position as a Percentage of the Plan’s Total Pension Liability 81.08% 76.61% 72.56% Safety
Measurement Date 6/30/2014 6/30/2015 6/30/2016
Plan's Proportion of the Net Pension Liability (Asset) 0.11099% 0.10852% 0.01031% Plan's Proportionate Share of the Net Pension Liability (Asset) $4,163,196 $4,471,432 $5,341,602 Plan's Covered Payroll $809,319 $1,014,302 $1,112,774
Plan's Proportionate Share of the Net Pension Liability (Asset) as a Percentage of its Covered Payroll 514.41% 440.84% 480.03% Plan's Proportionate Share of the Fiduciary Net Position as a Percentage of the Plan’s Total Pension Liability 72.14% 73.40% 72.69% Combined Total
Measurement Date 6/30/2014 6/30/2015 6/30/2016
Plan's Proportion of the Net Pension Liability (Asset) 0.18847% 0.19978% 0.10032% Plan's Proportionate Share of the Net Pension Liability (Asset) $6,078,042 $6,975,220 $8,468,383 Plan's Covered Payroll $2,057,170 $2,256,213 $2,400,769 Plan's Proportionate Share of the Net Pension Liability (Asset) as a Percentage of its Covered Payroll 295.46% 309.16% 352.74% Plan's Proportionate Share of the Fiduciary Net Position as a Percentage of the Plan’s Total Pension Liability 75.75% 74.65% 74.06% Notes to Schedule:
* Fiscal year 2015 was the 1st year of implementation.
58 Town of Fairfax
Required Supplementary Information
For the Year Ended June 30, 2023
6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022
0.05890% 0.05022% 0.05510% 0.06003% -0.11510% 0.01137%
$2,045,987 $1,892,771 $2,206,385 $2,532,177 ($2,185,481) $531,839 $1,307,451 $1,422,171 $1,731,683 $1,795,191 $1,713,955 $2,014,672 156.49% 133.09% 127.41% 141.05% -127.51% 26.40%
84.04% 85.78% 84.16% 77.71% 110.51% 127.90%
6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022
0.00632% 0.05147% 0.05555% 0.06113% -0.00096% 0.01173%
$3,272,224 $3,020,302 $3,467,642 $4,072,550 ($3,352,678) $805,906 $1,102,979 $1,153,546 $1,169,226 $1,319,468 $1,071,305 $1,130,078 296.67% 261.83% 296.58% 308.65% -312.95% 71.31%
83.16% 85.20% 83.64% 73.12% 115.46% 132.41%
6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022
0.06521% 0.10170% 0.11065% 0.12116% -0.11605% 0.02309%
$5,318,211 $4,913,073 $5,674,027 $6,604,727 ($5,538,159) $1,337,745 $2,410,430 $2,575,717 $2,900,909 $3,114,659 $2,785,260 $3,144,750 220.63% 190.75% 195.59% 212.05% -198.84% 42.54%
83.51% 85.43% 83.85% 75.10% 113.27% 130.42%
Miscellaneous
Safety
Combined Total
59 Town of Fairfax
Required Supplementary Information
For the Year Ended June 30, 2023
Miscellaneous
For the Fiscal Year Ended June 30, 2015 2016 2017
Actuarially determined contribution $206,873 $286,615 $127,013 Contributions in relation to the actuarially determined contributions (206,873) (286,615) (1,692,298) Contribution deficiency (excess) $0 $0 ($1,565,285)
Covered payroll $1,241,911 $1,287,995 $1,307,451
Contributions as a percentage of covered payroll 16.66% 22.25% 129.43% Safety
For the Fiscal Year Ended June 30, 2015 2016 2017
Actuarially determined contribution $379,846 $544,416 $174,929 Contributions in relation to the actuarially determined contributions (379,846) (544,416) (2,966,287) Contribution deficiency (excess) $0 $0 ($2,791,358)
Covered payroll $1,014,302 $1,112,774 $1,102,979
Contributions as a percentage of covered payroll 37.45% 48.92% 268.93% For the Fiscal Year Ended June 30, 2015 2016 2017
Actuarially determined contribution $586,719 $831,031 $301,942 Contributions in relation to the actuarially determined contributions (586,719) (831,031) (4,658,585) Contribution deficiency (excess) $0 $0 ($4,356,643)
Covered payroll $2,256,213 $2,400,769 $2,410,430
Contributions as a percentage of covered payroll 26.00% 34.62% 193.27% *Fiscal year 2015 was the 1st year of implementation.
SCHEDULE OF CONTRIBUTIONS
A Cost Sharing-Employer Defined Pension Plan
Last 10 Years*
Combined Total
60 Town of Fairfax
Required Supplementary Information
For the Year Ended June 30, 2023
2018 2019 2020 2021 2022 2023
$183,010 $287,457 $281,856 $2,811,976 $187,860 $227,840 (183,010) (287,457) (281,856) (2,811,976) (187,860) (227,840) $0 $0 $0 $0 $0 $0
$1,422,171 $1,731,683 $1,795,191 $1,713,955 $2,014,672 $2,165,697
12.87% 16.60% 15.70% 164.06% 9.32% 10.52%
2018 2019 2020 2021 2022 2023
$266,312 $283,781 $414,027 $4,423,693 $220,732 $248,567 (266,312) (283,781) (414,027) (4,423,693) (220,732) (248,567) $0 $0 $0 $0 $0 $0
$1,153,546 $1,169,226 $1,319,468 $1,071,305 $1,130,078 $1,156,817
23.09% 24.27% 31.38% 412.93% 19.53% 21.49%
2018 2019 2020 2021 2022 2023
$449,322 $571,238 $695,883 $7,235,669 $408,592 $476,407 (449,322) (571,238) (695,883) (7,235,669) (408,592) (476,407) $0 $0 $0 $0 $0 $0
$2,575,717 $2,900,909 $3,114,659 $2,785,260 $3,144,750 $3,322,514
17.44% 19.69% 22.34% 259.78% 12.99% 14.34%
Miscellaneous
Combined Total
Safety
61 Town of Fairfax
Required Supplementary Information
For the Year Ended June 30, 2023
SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY AND RELATED RATIOS Schedule of Changes in Net OPEB Liability
Last 10 fiscal years*
Other Post-Employment Benefits (OPEB) - Agent Multiple Employer Plan Measurement Date 2017 2018
Total OPEB Liability
Service Cost $70,686 $66,761
Interest 136,346 165,840
Changes of assumptions (58,106) (45,050)
Differences between expected and actual experience 293,112 Benefit payments (40,109) (64,900)
Implicit Rate Subsidy Fulfilled (5,453) (25,787)
Net change in total OPEB liability 396,476 96,864
Total OPEB liability - beginning 1,905,187 2,301,663
Total OPEB liability - ending (a) $2,301,663 $2,398,527 OPEB fiduciary net position
Net investment income $62,741 $59,886
Contributions - Employer - Town's Contribution 160,109 184,900 Contributions - Employer - Implicit Subsidy 5,453 25,787 Administrative expense (310) (418)
Benefit payments (40,109) (64,900)
Implicit Rate Subsidy Fulfilled (5,453) (25,787)
Net change in plan fiduciary net position 182,431 179,468 Plan fiduciary net position - beginning 594,476 776,907 Plan fiduciary net position - ending (b) $776,907 $956,375 Net OPEB liability - ending (a)-(b) $1,524,756 $1,442,152 Plan fiduciary net position as a percentage of the total OPEB liability 33.75% 39.87% Covered-employee payroll $1,983,474 $2,038,020
Net OPEB liability as a percentage of covered-employee payroll 76.87% 70.76% * Fiscal year 2018 was the first year of implementation.
62 Town of Fairfax
Required Supplementary Information
For the Year Ended June 30, 2023
2019 2020 2021 2022
$69,283 $209,347 $217,386 $75,700
176,301 99,805 122,717 124,471
32,801 12,962 (552,481) (94,468)
(238,657) 353,019 (695,226) 100,150
(55,133) (85,929) (101,216) (106,885)
(37,062) (34,610)
(52,467) 554,594 (1,008,820) 98,968
2,398,527 2,346,060 2,900,654 1,891,834
$2,346,060 $2,900,654 $1,891,834 $1,990,802
$62,528 $39,531 $345,040 ($237,014)
155,133 85,929 221,216 306,885
37,062 34,610
(208) (547) (478) (437)
(55,133) (34,610) (101,216) (106,885)
(37,062) (85,929)
162,320 38,984 464,562 (37,451)
956,375 1,118,695 1,157,679 1,622,241
$1,118,695 $1,157,679 $1,622,241 $1,584,790
$1,227,365 $1,742,975 $269,593 $406,012
47.68% 39.91% 85.75% 79.61%
$2,518,122 $2,924,356 $2,595,720 $3,418,905
48.74% 59.60% 10.39% 11.88%
63 Town of Fairfax
Required Supplementary Information
For the Year Ended June 30, 2023
Fiscal Year Ended June 30, 2018 2019 2020
Actuarially determined contribution $65,854 $195,302 $126,146 Contributions in relation to the
actuarially determined contribution 165,562 194,535 94,752 Contribution deficiency (excess) ($99,708) $767 $31,394 Covered-employee payroll $1,983,474 $2,038,020 $2,518,122 Contributions as a percentage of
covered-employee payroll 8.35% 9.55% 3.76%
Measurement Date
Actuarial Cost Method Entry age normal, level percent of pay Amortization Period 19 years
Actuarial Assumptions: Closed period, level percent of pay Discount Rate 6.00%
Inflation 2.30%
Assumed Payroll Growth 2.800%
Healthcare Trend Rates
Rate of Return on Assets 6.00%
Mortality Rate CalPERS rates
Retirement rates CalPERS rates
* Fiscal year 2018 was the first year of implementation.
5.50% (non-Medicare), trending down to 5.30%
(Medicare)
Methods and assumptions used to determine contribution rates:
June 30, 2022
SCHEDULE OF CONTRIBUTIONS
AGENT MULTIPLE EMPLOYER OPEB PLAN
Last 10 fiscal years*
64 Town of Fairfax
Required Supplementary Information
For the Year Ended June 30, 2023
2021 2022 2023
$300,289 $100,296 $107,930
242,513 306,885 113,434
$57,776 ($206,589) ($5,504)
$2,924,356 $3,418,905 $2,899,863
8.29% 8.98% 3.91%
65 TOWN OF FAIRFAX
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2023
Variance with
Budgeted Amounts Final Budget
Positive
Original Final Actual (Negative)
REVENUES
Property taxes $5,282,338 $6,172,638 $6,231,110 $58,472 Special assessments 380,000 416,200 506,709 90,509
Sales tax 1,806,420 1,806,420 2,018,621 212,201
Permits licenses and fees 120,000 665,500 781,952 116,452 Fines, forfeitures and penalties 130,000 130,000 40,817 (89,183) From other agencies 77,000 1,091,700 1,259,332 167,632
Franchise fees 480,000 480,000 472,843 (7,157)
Services charges 200,528 202,320 161,175 (41,145)
Use of money and property 21,300 33,600 185,365 151,765 Other revenue 14,300 95,208 119,485 24,277
Total Revenues 8,511,886 11,093,586 11,777,409 683,823
EXPENDITURES
Current:
General government 3,029,093 2,910,965 2,266,191 644,774 Public safety 6,600,262 6,725,324 6,729,225 (3,901)
Public works and facilities 1,037,376 1,185,894 1,219,415 (33,521) Planning and building 1,126,927 1,766,927 1,481,113 285,814 Parks and recreation 612,442 612,441 624,329 (11,888)
Capital outlay 382,600 446,000 310,596 135,404
Debt service:
Principal 280,000 116,600 116,600
Interest and fiscal charges 18,130 18,130 18,130
Total Expenditures 13,086,830 13,782,281 12,765,599 1,016,682 REVENUES OVER (UNDER) EXPENDITURES (4,574,944) (2,688,695) (988,190) 1,700,505
OTHER FINANCING SOURCES (USES)
Transfers in 4,009,213 3,605,000 995,000 (2,610,000)
Transfers (out) (1,353,213) (2,944,000) (260,112) 2,683,888 Total Other Financing Sources (Uses) 2,656,000 661,000 734,888 73,888 Net change in fund balance ($1,918,944) ($2,027,695) (253,302) $1,774,393
FUND BALANCE
Beginning of year 6,701,269
End of year $6,447,967
66 TOWN OF FAIRFAX
FEDERAL STIMULUS SPECIAL REVENUE FUND
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2023
Variance with
Budgeted Amounts Final Budget
Positive
Original Final Actual (Negative)
REVENUES
From other agencies $899,711 $899,711 ($899,711)
Total Revenues 899,711 899,711 (899,711)
EXPENDITURES
Capital outlay 1,700,000 1,700,000 1,700,000
Total Expenditures 1,700,000 1,700,000 1,700,000
REVENUES OVER (UNDER) EXPENDITURES (800,289) (800,289) 800,289 Net change in fund balance ($800,289) ($800,289) $800,289
FUND BALANCE
Beginning of year
End of year
67 Town of Fairfax
Required Supplementary Information
For the Year Ended June 30, 2023
1. BUDGETARY PRINCIPLES
The Town follows these procedures in establishing the budgetary data reflected in the financial statements:
• By June 30, the Town Manager submits to the Town Council a proposed operating budget for the year commencing July 1. The operating budget includes proposed expenditures and the means of financing them.
Continuing appropriations are rebudgeted by the Town Council as part of the adoption of subsequent year’s budgets.
• Public hearings are conducted to obtain taxpayer comments. • The budget is legally enacted through passage of a resolution during a Town Council meeting July – September.
• Department Heads are responsible for ensuring department expenditures stay within the department's budgeted appropriation. Approval from the Town Manager is required to move funds between personnel and operating expense sections of each department budget. Any increase to the total departmental/fund appropriation will require prior approval by the Town Council. • Formal budgeting is employed as a management control device during the year for the general, certain special revenue and debt service funds.
• Budgets for the general, special revenue and debt service funds are adopted on a basis consistent with generally accepted accounting principles (GAAP), except Special Police Special Revenue Fund. • Budgets for capital projects funds are adopted on a project-life basis.
Budgeted amounts are as originally adopted or as amended by the Town Council. Budget amendments were not material in relation to the original appropriations.
Under encumbrance accounting, purchase orders, contracts and other commitments for expenditures are recorded to reserve that portion of the applicable appropriation. Encumbrance accounting is employed as an extension of formal budgetary accounting. Since encumbrances do not yet constitute expenditures or liabilities, encumbrances outstanding at year-end are reported as reservations of fund balances.
Expenditures over Appropriations
The following funds had an excess of expenditures over appropriations, but had adequate resources to cover the excess:
Expenditures in
Excess of Budget
General Fund:
Public safety $3,901
Public works and facilities 33,521
Parks and Recreation 11,888
2016 Series Debt Service Fund - debt service 21,679
68 SUPPLEMENTARY INFORMATION
TOWN OF FAIRFAX
NON-MAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEETS
JUNE 30, 2023
SPECIAL REVENUE FUNDS
Special Fairfax Gas Open
Police Festival Measure F Tax Space
ASSETS
Cash and investments $4,157 $49,907 $190,361 $58,178
Restricted cash and investments
Accounts receivable $16,206 3,755
Total Assets $4,157 $16,206 $53,662 $190,361 $58,178
LIABILITIES AND
FUND BALANCES
Liabilities:
Accounts payable $2,017
Due to other funds 47,578
Total Liabilities 49,595
Fund balances:
Restricted $4,157 $53,662 $190,361 $58,178
Unassigned (33,389)
Total Fund Balances (Deficits) 4,157 (33,389) 53,662 190,361 58,178 Total Liabilities and Fund Balances $4,157 $16,206 $53,662 $190,361 $58,178 70 2020 Lease
Measure A/AA Measure A 2008 Series 2012 Series 2016 Series Financing Transportation Parks Debt Service Debt Service Debt Service Debt Service Total $150,642 $90,783 $544,028
$255,072 $218,502 $71,224 $4,409 549,207
36,049 3,246 59,256
$150,642 $126,832 $255,072 $218,502 $74,470 $4,409 $1,152,491 $2,017
47,578
49,595
$150,642 $126,832 $255,072 $218,502 $74,470 $4,409 1,136,285 (33,389)
150,642 126,832 255,072 218,502 74,470 4,409 1,102,896
$150,642 $126,832 $255,072 $218,502 $74,470 $4,409 $1,152,491
DEBT SERVICE FUNDS
SPECIAL
REVENUE FUNDS
71 TOWN OF FAIRFAX
NON-MAJOR GOVERNMENTAL FUNDS
COMBINING STATEMENTS OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED JUNE 30, 2023
SPECIAL REVENUE FUNDS
Special Fairfax Open
Police Festival Measure F Gas Tax Space
REVENUES
Property taxes
From other agencies $173,532 $745,749 $361,483 $3,405
Service charges $77,621
Other revenue
Total Revenues 173,532 77,621 745,749 361,483 3,405
EXPENDITURES
Current:
Parks and recreation 76,970 3,571
Debt service:
Principal
Interest
Total Expenditures 76,970 3,571
REVENUES OVER
(UNDER) EXPENDITURES 173,532 651 745,749 361,483 (166)
OTHER FINANCING SOURCES (USES)
Transfers in 3,571
Transfers (out) (200,000) (699,353) (184,039)
Total Other Financing Sources (Uses) (200,000) (699,353) (184,039) 3,571 NET CHANGE IN FUND BALANCES (26,468) 651 46,396 177,444 3,405
FUND BALANCE (DEFICIT)
Beginning of the year 30,625 (34,040) 7,266 12,917 54,773 End of the year $4,157 ($33,389) $53,662 $190,361 $58,178 72 SPECIAL
Total
2020 Lease Nonmajor
Measure A/AA Measure A 2008 Series 2012 Series 2016 Series Financing Governmental Transportation Parks Debt Service Debt Service Debt Service Debt Service Funds $177,699 $215,717 $139,966 $533,382
$80,146 1,007 1,222 1,366,544
77,621
$624,922 624,922
80,146 178,706 216,939 139,966 624,922 2,602,469
80,541
180,000 210,000 111,000 320,000 821,000
14,996 26,714 41,724 304,923 388,357
194,996 236,714 152,724 624,923 1,289,898
80,146 (16,290) (19,775) (12,758) (1) 1,312,571
3,571
($153,706) (20,000) (1,257,098)
(153,706) (20,000) (1,253,527)
(153,706) 60,146 (16,290) (19,775) (12,758) (1) 59,044
304,348 66,686 271,362 238,277 87,228 4,410 1,043,852
$150,642 $126,832 $255,072 $218,502 $74,470 $4,409 $1,102,896
REVENUE FUNDS DEBT SERVICE FUNDS
73 Special Police Measure F
Variance Variance
Positive Positive
Budget Actual (Negative) Budget Actual (Negative)
REVENUES
Property taxes
From other agencies $170,000 $173,532 $3,532 $744,000 $745,749 $1,749 Service charges
Total Revenues 170,000 173,532 3,532 744,000 745,749 1,749
EXPENDITURES
Current:
Parks and recreation
Debt service:
Principal
Interest and fiscal charges
Total Expenditures
REVENUES OVER
(UNDER) EXPENDITURES 170,000 173,532 3,532 744,000 745,749 1,749
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers (out) (200,000) (200,000) (730,000) (699,353) 30,647 Total other financing sources (uses) (200,000) (200,000) (730,000) (699,353) 30,647 NET CHANGE IN FUND BALANCES ($30,000) (26,468) $3,532 $14,000 46,396 $32,396
FUND BALANCE (DEFICIT)
Beginning of the year 30,625 7,266
End of the year $4,157 $53,662
TOWN OF FAIRFAX
BUDGETED NON-MAJOR GOVERNMENTAL FUNDS
COMBINING SCHEDULES OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
74 Gas Tax Open Space
Variance Variance Variance
Positive Positive Positive
Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative) $396,191 $361,483 ($34,708) $2,000 $3,405 $1,405
396,191 361,483 (34,708) 2,000 3,405 1,405
4,000 3,571 429
4,000 3,571 429
396,191 361,483 (34,708) (2,000) (166) 1,834
4,000 3,571 (429)
(435,000) (184,039) 250,961 ($294,240) ($153,706) $140,534 (435,000) (184,039) 250,961 4,000 3,571 (429) (294,240) (153,706) 140,534 ($38,809) 177,444 $216,253 $2,000 3,405 $1,405 ($294,240) (153,706) $140,534 12,917 54,773 304,348
$190,361 $58,178 $150,642
(Continued)
Transportation
Measure A/AA
75 TOWN OF FAIRFAX
BUDGETED NON-MAJOR GOVERNMENTAL FUNDS
COMBINING SCHEDULES OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Variance Variance
Positive Positive
Budget Actual (Negative) Budget Actual (Negative)
REVENUES
Property taxes $153,593 $177,699 $24,106
From other agencies $26,655 $80,146 $53,491 970 1,007 37 Service charges
Total Revenues 26,655 80,146 53,491 154,563 178,706 24,143
EXPENDITURES
Current:
Parks and Recreation
Debt service:
Principal 171,800 180,000 (8,200)
Interest and fiscal charges 41,411 14,996 26,415
Total Expenditures 213,211 194,996 18,215
REVENUES OVER
(UNDER) EXPENDITURES 26,655 80,146 53,491 (58,648) (16,290) 42,358
OTHER FINANCING SOURCES (USES)
Transfers (in)
Transfers (out) (39,973) (20,000) 19,973
Total other financing sources (uses) (39,973) (20,000) 19,973 NET CHANGE IN FUND BALANCES ($13,318) 60,146 $73,464 ($58,648) (16,290) $42,358
FUND BALANCE (DEFICIT)
Beginning of the year 66,686 271,362
End of the year $126,832 $255,072
Measure A Parks 2008 Series Debt Service
76 Variance Variance Variance
Positive Positive Positive
Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative) $257,102 $215,717 ($41,385) $127,577 $139,966 $12,389
1,624 1,222 (402) 806 (806)
$625,101 $624,922 ($179)
258,726 216,939 (41,787) 128,383 139,966 11,583 625,101 624,922 (179) 198,100 210,000 (11,900) 111,000 111,000 625,101 320,000 305,101 38,614 26,714 11,900 20,045 41,724 (21,679) 304,923 (304,923) 236,714 236,714 131,045 152,724 (21,679) 625,101 624,923 178 22,012 (19,775) (41,787) (2,662) (12,758) (10,096) (1) (1) $22,012 (19,775) ($41,787) ($2,662) (12,758) ($10,096) (1) ($1) 238,277 87,228 4,410
$218,502 $74,470 $4,409
2012 Series Debt Service 2016 Series Debt Service 2020 Lease Financing Debt Service 77 This page intentionally left blank.