Agenda, first session — Fairfield City Council, March 19, 2024 (part 1 of 3)

For individuals with hearing or speaking limitations, dial 711 or (800) 7352922 (English). For Spanish, Tagalog or other language, please dial (800) 8553000 and provide the communication assistant with the following City telephone number: (707) 3994010.

DISCLOSURE OF CAMPAIGN CONTRIBUTIONS:

Pursuant to Government Code 84308, City Council Members are disqualified and not able to participate in any agenda item involving contracts (other than competitively bid, labor, or personal employment contracts), franchises, discretionary land use permits and other entitlements if the City Council Member received more than $250 in campaign contributions from the applicant or contractor, an agent of the applicant or contractor, or any financially interested participant who actively supports or opposes the City's decision on the agenda item since January 1, 2023. Members of the City Council who have received, and applicants, contractors or their agents who have made, campaign contributions totaling more than $250 to a City Council Member since January 1, 2023, are required to disclose that fact for the official record of the subject proceedings. Disclosures must include the amount of the campaign contribution and identify the recipient City Council Member and may be made either in writing to the City Clerk before the agenda item or by verbal disclosure during consideration.

Members of the public can observe the meeting on Comcast Cable Channel 26, ATT UVerse 99, and webstreamed live at www.youtube.com/user/FFCATV/live . The public may join the meeting via Zoom at https://fairfieldca.zoom.us/j/89060213840?pwd=UUd0WlpEMStLemcxbld4dzVMK3Z5dz09 or via phone (408) 6380968, Webinar ID: 890 6021 3840, Passcode: 7074287400 CALL TO ORDER 6:00 PM
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CONSENT CALENDAR
All matters listed on the Consent Calendar are to be approved with one motion unless a member of the City Council or the public requests that separate action be taken on a specific item.

1.Approval of Meeting Minutes from February 2024
Recommended Action
Approve the meeting minutes.

Funding Source
N/A
Contact:Delaney Dombrowski, (707) 4287402
a

2.Resolution 202456 of the City Council of the City of Fairfield Approving a Technology Software asaService (SaaS) Agreement for Workforce Scheduling Software with InTime Services, Inc.

Recommended Action
Adopt resolution.

Funding Source
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CITY OF FAIRFIELDFAIRFIELD CITY COUNCILTUESDAY, MARCH 19, 2024; 6:00 PMHARRY T. PRICE MEMORIAL COUNCIL CHAMBER, 1000WEBSTER STREET, FAIRFIELD, CA 94533 OR VIA ZOOMAGENDANotice to PublicThe City of Fairfield is committed to providing meeting facilities that areaccessible to persons with disabilities and/or have language barriers. To requestmeeting materials in alternative formats, or to request a sign languageinterpreter, realtime captioning, or other accommodation, please contact theCity Clerk's Office, at least 72 hours in advance of the meeting at (707) 4287400.For individuals with hearing or speaking limitations, dial 711 or (800) 7352922(English). For Spanish, Tagalog or other language, please dial (800) 8553000and provide the communication assistant with the following City telephonenumber: (707) 3994010.DISCLOSURE OF CAMPAIGN CONTRIBUTIONS:Pursuant to Government Code 84308, City Council Members are disqualified and notable to participate in any agenda item involving contracts (other than competitivelybid, labor, or personal employment contracts), franchises, discretionary land usepermits and other entitlements if the City Council Member received more than $250 incampaign contributions from the applicant or contractor, an agent of the applicant orcontractor, or any financially interested participant who actively supports or opposesthe City's decision on the agenda item since January 1, 2023. Members of the CityCouncil who have received, and applicants, contractors or their agents who havemade, campaign contributions totaling more than $250 to a City Council Membersince January 1, 2023, are required to disclose that fact for the official record of thesubject proceedings. Disclosures must include the amount of the campaigncontribution and identify the recipient City Council Member and may be made either inwriting to the City Clerk before the agenda item or by verbal disclosure duringconsideration.Members of the public can observe the meeting on Comcast Cable Channel 26, ATT UVerse 99, andwebstreamed live at www.youtube.com/user/FFCATV/live . The public may join the meeting via Zoomat https://fairfieldca.zoom.us/j/89060213840?pwd=UUd0WlpEMStLemcxbld4dzVMK3Z5dz09 or viaphone (408) 6380968, Webinar ID: 890 6021 3840, Passcode: 7074287400CALL TO ORDER 6:00 PMROLL CALLCouncilmember Doug CarrCouncilmember Doriss PanduroCouncilmemberScott TonnesenCouncilmember Rick VaccaroCouncilmember K. Patrice Williams Vice Mayor Pam BertaniMayor Catherine "Cat" MoyINVOCATION Pastor John Reed, Fairfield Church of ChristPLEDGE OF ALLEGIANCECOUNCIL REPORTSCITY MANAGER REPORTCITY ATTORNEY REPORTCITY CLERK REPORTPUBLIC COMMENTS PUBLIC COMMENTSPersons wishing to address the City Council on subjects not on the agenda but within the jurisdictionof the council may do so at this time. The council cannot discuss or take action on matters not on theagenda for this meeting, but councilmembers may briefly respond to statements made or questionsraised by the public, ask for clarification from staff, refer the matter to staff, request staff to report backto the council at a subsequent meeting, or place the matter on a future agenda. To speak on anagenda item please use the “raise your hand” feature or press *9 on your phone. Speakers arelimited to three minutes per item.CONSENT CALENDARAll matters listed on the Consent Calendar are to be approved with one motion unless a member ofthe City Council or the public requests that separate action be taken on a specific item.1.Approval of Meeting Minutes from February 2024Recommended ActionApprove the meeting minutes.Funding SourceN/AContact:Delaney Dombrowski, (707) 4287402a2.Resolution 202456 of the City Council of the City of Fairfield Approving a Technology SoftwareasaService (SaaS) Agreement for Workforce Scheduling Software with InTime Services, Inc.Recommended Action Adopt resolution.

Funding Source
$241,681; Fund 10150100
Contact:Savita Chaudhary, (707) 4287582
a

3.Resolution 202457 of the City Council of the City of Fairfield Approving the City’s Fiscal Year 20222023 Annual Comprehensive Financial Report and the Schedule of Expenditures for Federal Awards Report and Other Reports
Recommended Action
Adopt resolution.

Funding Source
N/A
Contact:John Furtado, (707) 4287629
a

4.Resolution 202458 of the City Council of the City of Fairfield Adopting an Updated Title VI Compliance Program for the City of Fairfield
Recommended Action
Adopt resolution.

Funding Source
N/A
Contact:Tiffany Plater, (707) 4343809
a

5.2023 Annual Report on the General Plan
Recommended Action
Other – Receive Report and authorize submission to the State.

Funding Source
N/A
Contact:Jessie Hernandez, (707) 4287450
a

6.Second Reading and Adoption of Ordinance 202402 of the City Council of the City of Fairfield Amending Section 25.28.5 of Chapter 25, Article I of the Municipal Code, Also Known as the Zoning Ordinance, to Permit Selected Industrial Business Park Uses for Office Commercial – North Cordelia Zoned Properties South of Business Center Drive and Establish Certain Design and Operating Standards
Recommended Action
Provide second reading and adopt Ordinance 202402.

Funding Source
N/A
Contact:David Feinstein, (707) 4287448
a

7.Resolution 202459 of the City Council of the City of Fairfield Approving an Agreement with the International City/County Management Association to Host a Veterans Local Government Management Fellow
Recommended Action
Adopt resolution.

Funding Source
N/A
Contact:David Gassaway, (707) 4287400
a
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8.Resolution 202460 of the City Council of the City of Fairfield Adopting a Council Resolution Policy
Recommended Action
Adopt resolution.

Funding Source
N/A
Contact:David Gassaway, (707) 4287400
a
PUBLIC HEARINGS

9.Public Hearing; and
Resolution 202461 of the City Council of the City of Fairfield Levying an Assessment for Calendar Year 2024 for the North Texas Street Business Improvement District; and Resolution 202462 of the City Council of the City of Fairfield Approving an Agreement with the North Texas Street Business Association for the Calendar Year 2024 Operation and Administration of the North Texas Street Business Improvement District Recommended Action
Hold public hearing and adopt resolutions.

Funding Source
N/A
Contact:Dwayne Dalman, (707) 4287649
a
ADJOURN TO TUESDAY, APRIL 2, 2024, 6:00 P.M., HARRY T. PRICE MEMORIAL COUNCIL CHAMBER.

Any disclosable public records related to an open session item on a regular meeting agenda and distributed by the City of Fairfield to all or a majority of the Fairfield City Council less than 72 hours prior to that meeting are available for public inspection at City Hall, in the 4th floor lobby, 1000 Webster Street, Fairfield, California during normal business hours.

PUBLIC NOTIFICATION
I, Delaney Dombrowski, Deputy City Clerk, do hereby certify that I have caused a true copy of the above notice and agenda to be delivered to each of the members of the Fairfield City Council, at the time and in the manner prescribed by law and that this agenda was posted at City Hall, 1000 Webster Street, Fairfield, California on Thursday, March 14, 2024.

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Agenda Item No: 1.

AGENDA REPORT
DATE:March 19, 2024
TO:Mayor and City Council
FROM:David Gassaway, City Manager
SUBJECT:Approval of Meeting Minutes from February 2024
RECOMMENDED ACTION
Approve the meeting minutes.

STATEMENT OF ISSUE
Minutes need approval by the City Council.

DISCUSSION
The City Council Minutes for February 2024 have been approved by the city attorney and need council approval.

FINANCIAL IMPACT
N/A
PUBLIC CONTACT/ADVISORY BODY RECOMMENDATION
N/A
ALTERNATIVE ACTION
The council may choose to modify the minutes which will result in bringing this item back at a future date.

STAFF CONTACT
Delaney Dombrowski, Acting Deputy City Clerk
(707) 4287402
[email protected]
COORDINATED WITH
City Attorney's Office
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Agenda Item No: 1.AGENDA REPORTDATE:March 19, 2024 TO:Mayor and City CouncilFROM:David Gassaway, City ManagerSUBJECT:Approval of Meeting Minutes from February 2024RECOMMENDED ACTIONApprove the meeting minutes.STATEMENT OF ISSUEMinutes need approval by the City Council.DISCUSSIONThe City Council Minutes for February 2024 have been approved by the city attorney and need councilapproval.FINANCIAL IMPACTN/APUBLIC CONTACT/ADVISORY BODY RECOMMENDATIONN/AALTERNATIVE ACTIONThe council may choose to modify the minutes which will result in bringing this item back at a futuredate.STAFF CONTACTDelaney Dombrowski, Acting Deputy City Clerk(707) 428[email protected] WITH City Attorney's Office
ATTACHMENTS:

Description
Attachment 1: City Council Minutes 262024
Attachment 2: City Council Closed Session Minutes 262024 Attachment 3: City Council Minutes 2202024
REVIEWERS:

Reviewer Action Date
Dombrowski, Delaney Approved 2/23/2024 4:02 PM
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CITY OF FAIRFIELD

FAIRFIELD CITY COUNCIL
TUESDAY, FEBRUARY 6, 2024; 6:00 PM
HARRY T. PRICE MEMORIAL COUNCIL CHAMBER, 1000
WEBSTER STREET, FAIRFIELD, CA 94533 OR VIA ZOOM
AGENDA

MINUTES

CALL TO ORDER

Mayor Catherine “Cat” Moy called the meeting to order at 6:00 p.m.

ROLL CALL

On roll call were Councilmembers Doug Carr, Doriss Panduro, Scott Tonnesen, Rick Vaccaro, and K.

Patrice Williams; Vice Mayor Pam Bertani, and Mayor Moy.

INVOCATION

Scout Troop 100 member Landon Pace gave an invocation.

PLEDGE OF ALLEGIANCE

Scout Troop 482 Color Guard led the Pledge of Allegiance.

COUNCIL REPORTS

Councilmember Carr reported he attended the 106th Annual Solano County Farm Bureau Dinner and the Chocolate and Vine event hosted by Fairfield Community Services Foundation.

Vice Mayor Bertani welcomed everyone and said she would pass on a report due to an expected lengthy meeting.

Councilmember Panduro reported that she participated in the Point In Time Count of homeless residents on January 31. She thanked the volunteers, the Police Department’s Homeless Intervention Team, and Homeless Services Manager Samantha Burrows.

Councilmember Vaccaro, Councilmember Tonnesen, and Mayor Moy did not have reports.

Councilmember Williams reported that she attended the Tri-City NAACP Fundraising Gala for Literacy and that the highlight of the evening was witnessing Solano County Librarian M ychal Threets (a major Tik Tok star!) and Children’s Librarian Joan Parker, both from the Fairfield Civic Center Branch, who received Unsung Hero/Shero awards. Mychal was recently on Good Morning America! He will be hosting “Afro Day” on March 30 at the Vallejo Library.

CITY MANAGER REPORT

City Manager David Gassaway shared that the restrooms in the back of the Council Chamber are not working, and that people can use the Police Department lobby restrooms. He reported that there was one change to the agenda: Item 4 on the Consent Calendar would be pulled and brought back to Packet Page 7 of 516Attachment 1 Page 1 of 4

Council for action on February 20, 2024.

CITY ATTORNEY REPORT

City Attorney David Lim had nothing to report.

CITY CLERK REPORT

City Clerk Karen Rees had nothing to report.

PRESENTATIONS

1. Proclamation Declaring Scouting Day Presented by Councilmember Doug Carr to Kornelius Neal

2. Proclamation and Poem Declaring Black History Month Presented by Councilmember K.

Patrice Williams to Debra Williams of the Fairfield Suisun National Council of Negro Women and Poet Laureate Suzanne Bruce

3. Proclamation Declaring Lunar New Year Presented by Mayor Catherine Moy to C.C. Yin and members of APAPA-Asian Pacific Islander American Public Affairs and the Chinese Association of Solano County

PUBLIC COMMENTS

Francisco Guzman and Wardine Taylor spoke about traffic safety issues due to drivers speeding on Acacia Street (between Union Avenue and N. Texas Street). Mayor Moy asked Director of Public Works Paul Kaushal to speak to them in the lobby.

Rochelle Conner spoke about her safety concerns of a walk path adjacent to Oliver Road starting at Woodcreek Drive that she reported a year ago. Mayor Moy asked her to also speak to Mr. Kaushal.

Leo (online) thanked Chief of Police Dan Marshall and Fire Department staff for attending a meeting at Holy Spirit Church of parents who were concerned about school safety.

CONSENT CALENDAR

4. Second Reading of Ordinance No. 2024-01 of the City Council of the City of Fairfield Amending Section 25.28.5 of the City of Fairfield Zoning Ordinance to Permit Selected Industrial Business Park Uses for Office Commercial – North Cordelia Zoned Properties South of Business Center Drive and Establish Certain Design and Operating Standards

5. Resolution 2024-13 of the City Council of the City of Fairfield Adopting City-Sponsored Special Events for the 2024 Calendar Year

6. Resolution 2024-14 of the City Council of the City of Fairf ield Approving Amendment No. 8 to the Federal Legislative Consultant Services Agreement Between the City of Fairfield, Solano Transportation Authority, the Cities of Vacaville and Vallejo, and Akin Gump Strauss Hauer & Feld, LLP

7. Resolution 2024-15 of the City Council of the City of Fairfield Approving Credit Card Processing Fees to be Passed on to the End Users

8. Resolution 2024-16 of the City Council of the City of Fairfield Authorizing th e City Manager to Approve the Police Department’s Purchase of Three DJI Mavic 3 Thermals, One DJI Mavic 3 Enterprise, Packet Page 8 of 516Attachment 1 Page 2 of 4

and One DJI Avata Unmanned Aerial Vehicles, and Update to the Police Department’s Lexipol Policy 711 to Reflect the Change in Inventory, in Accordance with City Ordinance 2022-06

9. Resolution 2024-17 of the City Council of the City of Fairfield Authorizing the City Manager to Execute and File an Amended Claim with the Metropolitan Transportation Commission (MTC) for Allocation of Transportation Development Act (TDA) and State Transit Assistance Funds (STAF), Funds for Fiscal Year 2023-2024

10. Resolution 2024-18 of the City Council of the City of Fairfield Authorizing the City M anager to Execute Amendment No. 1 with MV Transportation for Fixed-Route, Paratransit, and Microtransit Operations

11. Resolution 2024-19 of the City Council of the City of Fairfield Accepting the Waterman Boulevard Sidewalk and Rancho Solano Median Extensions Project as Complete

12. Resolution 2024-20 of the City Council of the City of Fairfield Approving a Memorandum of Understanding (MOU) between the City of Fairfield and City of Benicia for Cost-Sharing of the Lopes Road and Water Pipeline Reconstruction Project, Authorizing the City Manager to Execute the MOU on Behalf of the City and Authorizing an Update to the Fiscal Year 20232024 Budget; and

Resolution 2024-21 of the City Council of the City of Fairfield Authorizing the City Manager to Execute a Professional Services Agreement Between the City of Fairfield and Dewberry Engineers, Inc. for Engineering Services Related to the Lopes Road and Wate r Pipeline Reconstruction Project

13. Resolution 2024-22 of the City Council of the City of Fairfield Authorizing the City Manager to Execute the Improvement Agreement for the Wiseman Waterline Relocation Project

14. Resolution 2024-23 of the City Council of the City of Fairfield Authorizing the City Manager to Execute a Professional Services Agreement Between the City of Fairfield and Kjeldsen, Sinnock, Neudeck, Inc. for Professional Engineering Services for the Cement Hill Water Treatment Plant New Entryway (Project) and Authorizing an Update to the Fiscal Year 2023- 2024 Budget and Updating the 5-Year Capital Improvement Plan to Include the Project

City Manager Gassaway pulled Item 4 and stated it will be returned to Council on February 20, 2024.

Councilmember Panduro pulled Item 5. Councilmember Panduro asked to two additional events:

Dia de la Nina (Day of the Child) in October 2024, and Dia de Los Muertos (Day of the Dead) in November 2024. No members of the public wished to speak on this item . Councilmember Panduro made a motion to approve Item 5. Vice Mayor Bertani seconded the motion. The motion carried unanimously (7-0).

Citizen Nora Dizon asked for Item 12 to be pulled for clarification. Item pulled by Citizen Nora Dizon who made comments. Director of Public Works Paul Kaushal answered Ms. Dizon’s questions. No other members of the public wished to comment on this item. Councilmember Tonnesen made a motion to approve Resolutions 2024-20 and 2024-21. Councilmember Carr seconded the motion. The motion carried unanimously (7-0).Vice Mayor Bertani made a motion to approve the consent calendar excluding Items 5 and 12. Councilmember Vaccaro seconded the motion. The motion carried unanimously (7-0).

NEW BUSINESS

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15. City Manager Gassaway opened the City Council Discussion and Direction Regarding Ceasefire Resolution.

The following individuals spoke on Item 15 in person: Joseph Levi, Karen Yuen, Matthew Finkelstein, F.

Meltzer, Jeff Powers, Asma S., Rachel Lessem, Andrea Morell, Tamar Davis, Shalamit Linda Rosner, Jack Flynn, Sabine Goerke-Shrode, John Takeuchi, Hector Alfaro, Susan George, Seth Sanders, Shanthi, Alex Lunine, Keila Kaa, Cheryl Gelving, Anjam Khan, Shaheen Shaikh, Erica Ballinger, Alex Berke, Saad, Richard Diamond, Dr. Ruby Ali, Ahmad Basir, Brigitte Hunley, Fatimah Abughannam, Jeff Patterson, Yara Ibrahim, Geri Kahn, Dr. Janet Leventhal, Jacob Merkin, Mari Bowie, Elise, Omar El-Mahmoud, Dr.

Shahid Rehman, Musa Tariq, Naveed Desai, Dr. Larry Wanetick, Rabbi Chaim Zaklos, Monadel Herzallah, Steven Pierce, Rochelle Conner, Samad Patel, Noah R., Deborah Gilliam, Cornelius Wood, Prosper Bosley, Brook, Mercedes.

The following individuals called in on Zoom and spoke on Item 15: Andrew Lee, Deborah Agar, Shereen Khan Amrikani, Andrew Li, Sadaf, Liftawiya, Mary Tad, Mary, Vish, “No Name,” Hna, Gillian Ashworth, Deziana Torres, “No Name,” Nurse Nuzhat, Camille Santana, Nadya, Kholoud Nasser, Ellen Brotsky, Ed R., Lawrence Grossman, Naomi Smoller, Sukhdip Purewal Bopatai, Susan Cohen Grossman, Janet Nathan, Jeanette, “No Name,” Omair, “N,” Haneen Ali, Hina, A.J. Frere, Lan, Nicely Ioeza, and Ri.

After a lengthy discussion, Mayor Moy asked that Item 15 be brought back to Council at the March 19, 2024, meeting for discussion of a Council Policy to address issues like this that arise. The City of San Jose sent a sample of what they created, and Council will consider the language used to prepare a similar resolution.

ADJOURNED AT 9:16 P.M. TO TUESDAY, FEBRUARY 20, 2024, 6:00 P.M., HARRY T. PRICE MEMORIAL CITY COUNCIL CHAMBER.

_______________________________
City Clerk

__________________________
Mayor

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CITY OF FAIRFIELD

FAIRFIELD CITY COUNCIL

CLOSED SESSION
TUESDAY, FEBRUARY 6, 2024; 5:00 PM
CITY HALL, CITY MANAGER'S OFFICE, 1000 WEBSTER STREET, 4TH FLOOR, FAIRFIELD, CA 94533 OR VIA ZOOM

AGENDA

MINUTES

CALL TO ORDER

Mayor Cat Moy called the meeting to order at 5:01 p.m. City Attorney David Lim called roll.

Present in person were Councilmembers Doug Carr, Doriss Panduro, Scott Tonnesen, Rick Vaccaro, K.

Patrice Williams, Mayor Pam Bertani, and Mayor Cat Moy.

No members of the public were present. No one asked to speak at public comment either in person or via Zoom.

The City Council went into closed session on Item #1 - Conference with Legal Counsel on Existing Litigation - Douglas Campbell (FFL2200164 and FFL2200180) with City Manager David Gassaway, City Attorney David Lim, Angela Broaddus, Farbod Pirouzmand, Shannon Ripple, and Police Chief Dan Marshall.

The City Council went into closed session on Item #2 - Conference with Legal Counsel on Existing Litigation - Dustin Joseph (FFL2100032) with City Manager David Gassaway, City Attorney David Lim, Angela Broaddus, Farbod Pirouzmand, Shannon Ripple, and Poli ce Chief Dan Marshall.

The City came out of closed session and went back into open session.

Mayor Moy adjourned the meeting at 5:55 p.m.

______________________________
City Attorney
________________________________
Mayor Cat Moy

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CITY OF FAIRFIELD

FAIRFIELD CITY COUNCIL
TUESDAY, FEBRUARY 20, 2024; 6:00 PM
HARRY T. PRICE MEMORIAL COUNCIL CHAMBER, 1000
WEBSTER STREET, FAIRFIELD, CA 94533 OR VIA ZOOM

MINUTES

CALL TO ORDER

Mayor Catherine “Cat” Moy called the meeting to order at 6:00 p.m.

ROLL CALL

On roll call were Councilmembers, Doug Carr, Doriss Panduro, Scott Tonnesen, Rick Vaccaro, and K.

Patrice Williams; Vice Mayor Pam Bertani, and Mayor Moy.

INVOCATION

Vice Mayor Bertani gave an invocation.

PLEDGE OF ALLEGIANCE

Councilmember Vaccaro led the Pledge of Allegiance.

COUNCIL REPORTS

Councilmember Williams reported she attended the State of the City (SOTC) address at the Hilton Garden Inn and said it was exceptional. She shared that it will be available on video soon and she encouraged everyone to watch it. She also reported she attended the Solano Economic Development Corporation (EDC) breakfast held at Bally Keal Estate on February 8, where California Forever CEO Jan Sramek and Duane Kromm of the Solano County Orderly Growth Committee spoke.

Councilmember Tonnesen reported he hosted the Downtown Business Walk a week ago. He thanked Crime Prevention Specialist Nicole Russo, Downtown Business Coordinator Debi Tavey, Recycling Coordinator Sandra Gonzalez and Sustainability Advisor Raquel Fenelia Asi of Republic Services. They visited 12 businesses in the 700 block of Texas Street to assist them with any challenges they may have. These face-to-face meetings will happen every quarter.

Councilmember Vaccaro thanked the first responders and Public Works who have been busy dealing with rainstorms. He said the SOTC was excellent and he enjoyed the positive economic forecast. He asked Mayor Moy if tonight’s meeting could be adjourned in memory of Leo Giovannetti, who died on February 8, 2024. Leo taught and coached at Armijo High School for 36 years and was well-loved by everyone. He wished his grandson Mason a happy 7th birthday!

Councilmember Panduro reported she attended the Annual State of the Base at Travis Air Force Base on February 8, a presentation by Brig. Gen. Derek Salmi for local and civic community leaders. She

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shared that Wings Over Solano (U.S. Navy Blue Angels) would hold an air show at TAFB March 17 - 18, 2024. It’s free and open to the public. Lastly, she thanked everyone who participated in the Adopt A Street cleanup along N. Texas Street on February 17 on her adopted street. The Police Department also adopted two streets in the area. They collected 15 large bags of trash.

Vice Mayor Bertani also attended the SOTC and the Solano EDC breakfast and said they were outstanding events. She reported that the next Fairfield Clergy Action Network (CAN) meeting would be held on February 27 at 3 p.m. in Council Chamber.

Councilmember Carr reported he and Councilmember Tonnesen met with the new owners of the Solano Town Center (mall), Spinosa Real Estate Group, and that they liked the plans the new owners have.

Mayor Moy thanked the staff who helped coordinate the SOTC, especially Communications Manager Bill Way and the Marketing and Outreach Division who taped the event and created the marketing materials, and Executive Office Manager Kelly Ballard who coordinated the event. Next, she reported that the water level in Lake Berryessa (Fairfield’s main water source) is higher this year than at the same time last year. If we get 12+ more inches of rain, the Glory Hole could spill over as it did in 2017, when the lake became famous! Mayor Moy is a member of the Solano Transportation Authority Board and shared that they are working with other Bay Area cities to create a universal transportation card that could be used interchangeably on any mode of transit.

CITY MANAGER REPORT

City Manager David Gassaway thanked the Fairfield-Suisun Chamber of Commerce for hosting the SOTC and Keynote Speaker Jerry Nickelsburg of UCLA, who gave an economic forecast for the city. He said he’s received positive feedback on the event. He reported that the “Cease Fire” issue regarding the Israel-Hamas war would return to Council on March 19, 2024. Lastly, he stated there were no changes to the agenda.

CITY ATTORNEY REPORT

City Attorney David Lim had nothing to report.

CITY CLERK REPORT

City Clerk Karen Rees reported she was coordinating a Trash Mob on Saturday, February 24, 2024, from 9-11 am at Allan Witt Park and needs more volunteers.

PRESENTATIONS

1. Proclamation Declaring National Cancer Prevention Month Presented by Mayor Cat Moy to Senior Health Services Manager Jayleen Richards of Solano County Public Health.

PUBLIC COMMENTS

David Colomb spoke about the Solano County Grand Jury and said they are recruiting new members.

CONSENT CALENDAR

2. Approval of Meeting Minutes from January 2024

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3. Resolution 2024-24 of the City Council of the City of Fairfield Approving Additional Transfer of Funds from Community Facilities District (CFD) No. 2 to the Solano Land Trust and Authorizing an Update to the Fiscal Year 2023-2024 Budget

4. Resolution 2024-25 of the City Council of the City of Fairfield Approving the Plans and Specifications and Awarding a Contract to Globe Engineering Development (GED) for the Community Development Block Grant (CDBG) Lee Bell Park and Sidewalk Gap Closure Project and Authorizing an Update to the Fiscal Year 2023-2024 Budget

5. Resolutions 2024-26 Through 2024-33 of the City Council of the City of Fairfield Authorizing the City Manager to Execute Professional Service Agreements for Engineering Design Services for Fiscal Years 2024 and 2025 Capital Improvement Projects Between the City of Fairfield and Bennett Engineering Services (BEN|EN); Callander Associates Landscape Architecture, Inc. (CALA); Carollo Engineers, Inc.; Consor North America, Inc.; DKS Associates; KimleyHorn & Associates, Inc.; Nichols Consulting Engineers, Chtd. (NCE); and Rick Engineering Company

6. Resolution 2024-34 of the City Council of The City of Fairfield Appro ving a Funding Agreement Between the City of Fairfield and Solano Transportation Authority (STA) for the East Tabor/Tolenas Safe Routes to School Gap Closure Project

7. Resolution 2024-35 of the City Council of the City of Fairfield Approving the Plans and Specifications and Awarding a Contract to Mountain Cascade Inc., for the Cadenasso Drive Pavement Reconstruction Project, Federal Aid Project No. STPL 5132-055

8. Resolution 2024-36 of the City Council of the City of Fairfield Suspending Competitive Bidding and Authorizing the City Manager to Purchase Two Portable Bus Scaffolding Systems for FAST Battery Electric Buses

9. Resolution 2024-37 of the City Council of the City of Fairfield Approving a Grant Agreement between the Bay Area Air Quality Management District (BAAQMD) and the City of Fairfield to Rece ive Carl Moyer Grant Funds for the Municipal Fleet Electrification Project

10. Resolution 2024-38 of the City Council of the City of Fairfield Authorizing the City Manager to Execute a Professional Services Agreement Between the City of Fairfield and Willdan Energy Solutions for Project Management and Owner's Representative Services for the Transit and Municipal Fleet Electrification Corporation Yard Improvements

Councilmember Vaccaro made a motion to approve the consent calendar. Councilmember Carr seconded the motion. The motion carried unanimously (7-0).

NEW BUSINESS

11. Assistant to the City Manager Anna Guiles recommended to Council that it approve Resolution 2024-39 of the City Council of the City of Fairfield Adopting the City of Fairfield’s 2024 State and Federal Legislative Platform.

Legislative Advocate Jason Gonsalves of Joe A. Gonsalves & Son’s lobbying firm gave a state legislative update.

Councilmember Vaccaro made a motion to approve Resolution 2024-39. Vice Mayor Bertani seconded the motion. The motion carried unanimously (7-0).

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12. Chief of Police Dan Marshall recommended to Council that it approve Resolution 2024-40 of the City Council of the City of Fairfield Amending the Departmental Position Control List.

Councilmember Tonnesen made a motion to approve Resolution 2024-40. Vice Mayor Bertani seconded the motion. The motion carried unanimously (7-0).

13. City Manager Gassaway recommended to Council that it approve Resolution 2024-41 of the City Council of the City of Fairfield Adopting the Updated Peafowl Management Plan (2024), Authorizing the City Manager to Enter Into an Agreement with Raptor Events, LLC to Humanely Reduce Peafowl Pride Size, and Authorizing an Update to the Fiscal Year 2023-2024 Budget.

The following individuals spoke on Item 13: Heidi Daugherty, Jared Widrich, Fred Gates, Bret Barner, and Thea Hansen.

City Manager Gassaway stated that Raptor Events, LLC, would not trap any peafowl at Dunnell Nature Park but would trap at the various addresses of residents who gave permission for them to trap at their homes.

Councilmember Tonnesen made a motion to approve Resolution 2024-42. Vice Mayor Bertani seconded the motion. The motion carried unanimously (7-0).

PUBLIC HEARINGS

14. Fire Chief John Sturdee recommended to Council that it approve Resolution 2024-42 of the City Council of the City of Fairfield Authorizing the City Manager and the Fire Department to Apply through the Solano Local Agency Formation Commission (LAFCO) for a Long-Term Service Agreement with the Cordelia Fire Protection District.

Mayor Moy opened the public hearing. There were no requests to speak. Mayor Moy closed the public hearing.

Councilmember Vaccaro made a motion to approve Resolution 2024-42. Councilmember Tonnesen seconded the motion. The motion carried unanimously (7-0).

15. Public Works Sr. Management Analyst Chris Lewis recommended to Council that it open the Public Hearing; and approve Resolution 2024-43 of the City Council of the City of Fairfield Annexing Territory (Midway Meadows) to Community Facilities District No. 2012-2 (Public Safety Services, Open Space Operation, and Park Maintenance) as Annexation No. 66, Authorizing the Levy of a Special Tax Within the Annexed Territory, and Submitting the Levy of a Special Tax to the Qualified Electors Thereof; and

Resolution 2024-44 of the City Council of the City of Fairfield Declaring the Results of a Special Annexation Election in Territory Annexed to Community Facilities District No. 2012-2 (Public Safety Services, Open Space Operation, and Park Maintenance), Determining the Validity of Prior Proceedings, and Directing Recording of Amended Notice of Special Tax Lien for City of Fairfield Community Facilities District No. 2012-2 (Public Safety Services, Open Space Operation, and Park Maintenance) Annexation No. 66 (Midway Meadows).

Mayor Moy opened the public hearing. There were no requests to speak. Mayo Moy closed the public hearing.

Packet Page 15 of 516Attachment 3 Page 4 of 5

Vice Mayor Bertani made a motion to approve 2024-43. Councilmember Vaccaro seconded the motion. The motion carried unanimously (7-0).

City Clerk Rees opened the ballot and read that there were two Yes votes in favor of annexation.

Councilmember Panduro made a motion to approve Resolution 2024-44. Councilmember Carr seconded the motion. The motion carried unanimously (7-0).

THE MEETING WAS ADJOURNED AT 7:19 P.M. IN MEMORY OF FORMER ARMIJO HIGH SCHOOL TEACHER AND COACH LEO GIOVANNETTI WHO DIED ON FEBRUARY 8, 2024, TO TUESDAY, MARCH 5, 2024, 6:00 P.M., AT THE HARRY T. PRICE MEMORIAL COUNCIL CHAMBER.

_______________________________
City Clerk

__________________________
Mayor

Packet Page 16 of 516Attachment 3 Page 5 of 5

Agenda Item No: 2.

AGENDA REPORT
DATE:March 19, 2024
TO:Mayor and City Council
FROM:David Gassaway, City Manager
SUBJECT:Resolution 202456 of the City Council of the City of Fairfield Approving a Technology SoftwareasaService (SaaS) Agreement for Workforce Scheduling Software with InTime Services, Inc.

RECOMMENDED ACTION
Adopt resolution.

STATEMENT OF ISSUE
The Police Department (PD) seeks approval to contract with InTime Services Inc. (InTime) for new workforce scheduling software.

DISCUSSION
The PD has been utilizing the legacy application, Schedule Express, since 2015. This program no longer meets all of PD’s current and future requirements for scheduling officers’ work shifts. Shift bidding is a significant need and is currently completed manually through Schedule Express. InTime provides a shift bidding function that will streamline and automate this manual process, resulting in reduced staff time and fewer errors.

The City recently modernized its ERP system with Tyler Munis. InTime features a timekeeping module that fully integrates with the Tyler Munis payroll system. Officers' work hours, shifts, and other paid time will be entered electronically through InTime and sent to the Tyler Munis payroll system with an automated workflow to increase effectiveness and efficiency. Additionally, InTime features will also assist in managing officers' leaves, overtime, and special events.

FINANCIAL IMPACT
The proposed costs include the initial implementation and five years of hosting and licensing. The first year costs are $65,820, which includes a onetime $26,000 implementation cost and $39,820 for hosting and licensing costs. Years two through five will cost $41,413, $43,070, $44,793, and $46,585 respectively. The projected cost for the fiveyear agreement is $265,681, including a $24,000 contingency.

Packet Page 17 of 516

Agenda Item No: 2.AGENDA REPORTDATE:March 19, 2024 TO:Mayor and City CouncilFROM:David Gassaway, City ManagerSUBJECT:Resolution 202456 of the City Council of the City of Fairfield Approving a TechnologySoftwareasaService (SaaS) Agreement for Workforce Scheduling Softwarewith InTime Services, Inc.RECOMMENDED ACTIONAdopt resolution. STATEMENT OF ISSUEThe Police Department (PD) seeks approval to contract with InTime Services Inc. (InTime) for newworkforce scheduling software.DISCUSSIONThe PD has been utilizing the legacy application, Schedule Express, since 2015. This program nolonger meets all of PD’s current and future requirements for scheduling officers’ work shifts. Shiftbidding is a significant need and is currently completed manually through Schedule Express. InTimeprovides a shift bidding function that will streamline and automate this manual process, resulting inreduced staff time and fewer errors.The City recently modernized its ERP system with Tyler Munis. InTime features a timekeeping modulethat fully integrates with the Tyler Munis payroll system. Officers' work hours, shifts, and other paid timewill be entered electronically through InTime and sent to the Tyler Munis payroll system with anautomated workflow to increase effectiveness and efficiency. Additionally, InTime features will alsoassist in managing officers' leaves, overtime, and special events.FINANCIAL IMPACTThe proposed costs include the initial implementation and five years of hosting and licensing. The firstyear costs are $65,820, which includes a onetime $26,000 implementation cost and $39,820 forhosting and licensing costs. Years two through five will cost $41,413, $43,070, $44,793, and $46,585 respectively. The projected cost for the fiveyear agreement is $265,681, including a $24,000 contingency.

Year 1: $65,820
Year 2: $41,413
Year 3: $43,070
Year 4: $44,793
Year 5: $46,585
Contingency: $24,000
Total: $265,681
The procurement of InTime will be cost neutral, as PD will terminate the existing software, Schedule Express, and reallocate those funds for InTime. The PD has a sufficient budget for this application in Fund 101501008441.

PUBLIC CONTACT/ADVISORY BODY RECOMMENDATION
N/A
ALTERNATIVE ACTION
City Council may choose not to adopt the resolution. If the resolution is not adopted, PD will continue to use the current Schedule Express system. However, this is not recommended as PD will ultimately benefit from the efficiencies of a modern workforce scheduling system, reducing the burden and optimizing processing times.

STAFF CONTACT
Jeff Bertany, IT Manager
(707) 4287531
[email protected]
COORDINATED WITH
City Attorney's Office, Finance Department, Human Resources Department, Police Department ATTACHMENTS:

Description
Attachment 1: Proposed Resolution
Attachment 2: Proposed Agreement
REVIEWERS:

Reviewer Action Date
Chaudhary, Savita Approved 2/29/2024 8:44 PM
Dombrowski, Delaney Approved 3/4/2024 2:02 PM
Dombrowski, Delaney Approved 3/4/2024 2:02 PM
Packet Page 18 of 516

CITY OF FAIRFIELD

RESOLUTION NO. 2024-56

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FAIRFIELD APPROVING A TECHNOLOGY

SOFTWARE-AS-A-SERVICE (SAAS) AGREEMENT FOR WORKFORCE SCHEDULING SOFTWARE WITH INTIME SERVICES, INC.

WHEREAS, the Fairfield Police Department (PD) has utilized Schedule Express for workforce scheduling since 2015; and

WHEREAS, this legacy application requires manual processing, lacks automation features, and no longer meets current and future requirements for the PD’s scheduling; and

WHEREAS, InTime Services, Inc. (InTime) has been selected to meet all scheduling requirements and fully automate processes for improved operational efficiencies; and

WHEREAS, services with the current vendor will be terminated to redirect funds to procure the new scheduling software.

NOW, THEREFORE, THE COUNCIL OF THE CITY OF FAIRFIELD HEREBY RESOLVES:

Section 1. The City Council approves the agreement with InTime Services, Inc. for workforce scheduling software, which includes implementation, training, and support from the PD Fund 10150100 in the amount of $265,681.

Section 2. The city manager is hereby authorized to execute the agreement with InTime Services, Inc.

Section 3. The council hereby authorizes the city manager or his designee to take all steps necessary or useful to implement this resolution.

Packet Page 19 of 516Attachment 1 Page 1 of 2

RES. NO. 2024-56

Page 2 ends

PASSED AND ADOPTED this 19th day of March 2024, by the following vote:

AYES: MEMBERS: MOY/BERTANI/CARR/PANDURO/TONNESEN/VACCARO/WILLIAMS NOES: MEMBERS: _________________________________________________ ABSENT: MEMBERS: _________________________________________________ ABSTAIN: MEMBERS: _________________________________________________

_________________________________________________
MAYOR
ATTEST:
___________________________

CITY CLERK

Packet Page 20 of 516Attachment 1 Page 2 of 2

Agenda Item No: 3.

AGENDA REPORT
DATE:March 19, 2024
TO:Mayor and City Council
FROM:David Gassaway, City Manager
SUBJECT:Resolution 202457 of the City Council of the City of Fairfield Approving the City’s Fiscal Year 20222023 Annual Comprehensive Financial Report and the Schedule of Expenditures for Federal Awards Report and Other Reports RECOMMENDED ACTION
Adopt resolution.

STATEMENT OF ISSUE
The City Council is being asked to approve the Annual Comprehensive Financial Report (ACFR) for Fiscal Year (FY) 20222023, as well as the Schedule of Expenditures for Federal Awards Report (Single Audit). The FY 20222023 ACFR indicates the City’s financial condition as of June 30, 2023, and has been audited by Eide Bailly LLP, an independent firm of Certified Public Accountants (CPA).

DISCUSSION
Each year, an audit of the City’s ACFR and the City’s Single Audit is performed by a firm of independent CPAs in conformity with the Generally Accepted Audit Standards (GAAS).

The ACFR is a report that covers all funds of the City and is prepared following the Generally Accepted Accounting Principles (GAAP). It is considered a generalpurpose report, as it is intended to meet the needs of a broad range of user groups. The auditors have issued an unmodified opinion on these financial statements. Such an opinion reflects the auditors’ belief that the basic financial statements contained in these reports adequately represent the financial position of the City of Fairfield (see Auditors’ opinion on page 1 of the ACFR).

A good summary of the financial condition of the City is contained within the transmittal letter and the Management’s Discussion and Analysis (MD&A) of the ACFR, as well as in the City’s Popular Annual Financial Report (PAFR) for FY 20222023, which is also included in this submission. The PAFR is a more condensed version of the ACFR that extracts summary information from the ACFR. The PAFR is not audited but is provided as a supplement to the ACFR. Additional supporting information related to the financial statements can be found within the notes of the ACFR financial statements. The following represents key financial positions and highlights of the City’s major funds:

GovernmentWide:The assets plus deferred outflows of the City exceeded its liabilities plus deferred inflows at the close of FY 20222023 with a net position of $648 million. Of this amount, the unrestricted net position is negative ($18) million after accounting for the City’s net pension liability of $233 million, and increases in Compensated Absences and Claim liabilities. Total longterm liabilities reflected on the statement of net position increased by $112 million, primarily resulting from the net pension plan increases. This increase was due to a lower thanexpected rate of return on investments based on the June 30, 2022, measurement of the pension liability. At the close of the current fiscal year, the City’s governmental funds reported a combined ending fund balance of $234 million, consisting of the following components:

The City’s governmental funds reported a combined ending fund balance of $234 million, an increase of $6.96 million or 3% over the prior year.

Total fund balances include cash and noncash assets (such as receivables and land assets). The General Fund is the chief operating fund of the City and reflects an increase of $0.5 million in fund balance.

The fund balance for the Low Mod Income Housing Fund decreased by $2.1 million due to providing financial assistance to Mission Samoa to build the pallet shelter project for homeless sheltering, as well as the cost of relocating the Housing Department to a larger building.

The Capital Projects fund balances increased by $4.2 million. This was due to an increase in developer fees collected for increased building permit activity and an intergovernmental revenue increase for sewer projects. Concurrently, actual expenditures increased due to various projects during the year including the North Texas Roadway project, Grange Middle School Safe Routes to Schools project, upgrades to Fire Stations, and various paving maintenance projects.

General Fund:The fund balance increased from the prior year to the current year by $0.5 million to a balance of $57.3 million. The main increase is a result of higher total revenues of $8 million [Property taxes (+$1.9 million, 5%), Sales taxes (+$0.63 million, 1%), Utility User and Franchise taxes (+$1.5 million, 15%), Investment income (+$4.3 million, 238%), Other taxes, Miscellaneous and departmental revenues ($0.8 million, 4%)].

Packet Page 21 of 516

However, expenses were higher by $11.1 million. Staffrelated costs were the largest portion of expense increase ($7.2 million) primarily from wage increases, higher than projected overtime on the safety side, and higher pension costs. The remaining is due to the department’s discretionary spending ($0.9 million) and internal service charges (+$3.9 million, 18%) from higher contributions to the vehicle replacement and maintenance costs, and Information Technology cyber security costs. Net transfers increased by $0.44 million, with the City contributing towards Landscape and Lighting Districts.

Internal Service Fund Liabilities:As shown in the transmittal letter, the table below shows some of the key liabilities of the internal service funds and their associated levels of funding:

IntraGovernmental Loan Fund:The net position of the IntraGovernmental Loan Fund decreased by $3.2 million, from $42.7 million to $39.5 million. This was primarily due to the purchase and preparation of the Bank of America site ($2 million), the West Net project for a fire alerting system ($1.3 million), offset by revenue received from the redevelopment agency loan repayments ($0.7 million).

Water Funds:The net position of the Water Funds increased by $3.4 million during FY 20222023 from $78.0 to $81.4 million. This was mainly due to lower operating and capitalrelated expenses. The Fund also recognized its share of the City’s Net Pension Liability of $17.9 million, as required by the Governmental Accounting Standards Board (GASB 68).

Golf Funds:The Golf Funds ended with an accumulated net position of $14.8 million, generally consisting of the net capital assets of the golf courses of $13.6 million, and cash balance of $1.2 million. In 2023, the Golf Bonds were fully paid off and the courses are currently debtfree, thus enabling the city to start addressing some of the muchneeded deferred maintenance.

Transit:The net position of the Transportation Funds decreased by $2.0 million during FY 20222023. This was mainly due to the lingering effects of the pandemic and reduced ridership after losing the intercity routes and their related revenue. Farebox revenue dropped to 5.74% from 7.1% last year. As required by GASB 68, the Fund has recognized its share of the City’s Net Pension Liability of $3.5 million (including deferred inflows and outflows), which resulted in the Fund ending with a negative unrestricted net position of $2.4 million.

CalPERS and Net Pension Liability:As of June 30, 2023, the net pension liability with CalPERS for FY 20222023 almost doubled from $120 million last year to $233 million, based on a measurement date of June 30, 2022. This represents a 30% funding shortfall of the total pension liability of $785 million. In addition, the City has pension obligation bonds totaling $32.8 million of principal and interest, with an annual debt service of approximately $3 million. The Statement of Activities also recognizes pension cost expenses which increased by $22 million in FY 20222023 compared to FY 20212022. An increase in personnel costs due to the costofliving adjustment also contributed to the decrease in the net position.

Other Reports
Measure P Compliance Report:The City’s independent auditors have completed a Transactions and Use Tax Ordinance Compliance and Internal Control Audit Report. The City is found to comply with the Ordinance (Attachment 9).

Utility Users Tax Compliance Report:The City’s municipal code requires that independent auditors perform a Compliance and Internal Control Audit Report. The City is found to comply with the Ordinance (Attachment 10).

Transportation Development Act (TDA) Audit:The California Code of Regulations requires each transportation planning agency to transmit a report of an audit of its accounts and records to the State Controller; a report of an audit of its accounts and records by the appropriate county auditor; a certified public accountant; or a public accountant under Sections 6505 and 26909 of the Government Code annually and within 12 months of the end of the fiscal year. The audit report is attached (Attachment 11).

Audit Findings:For the ACFR, the auditors had some findings that are addressed in the management letter (Attachment 6), and the Auditor's letter on governance (Attachment 5).

Summary:This year, the City began utilizing the new Tyler Munis ERP system. There were several challenges and a large learning curve for the organization. However, the City, once again, received an unmodified opinion from the auditors for the work performed and reports prepared by the City’s Accounting Division. This is also demonstrated by the fact that the City was awarded the Certificate of Achievement for Excellence in Financial Reporting by the Government Finance Officers Association (GFOA) for the 35th year in FY 20212022. The expectation is to receive the award in the future for this set of financial statements. The City also received the GFOA Triple Crown award, which is given to agencies that receive the Certificate of Achievement for the following three financial reports: the ACFR, the PAFR, and the City’s Budget and Financial Plan.

FINANCIAL IMPACT
There is no financial impact resulting from the acceptance of the report. The cost of the audit of the City’s ACFR is included as part of the Packet Page 22 of 516

Agenda Item No: 3.AGENDA REPORTDATE:March 19, 2024 TO:Mayor and City CouncilFROM:David Gassaway, City ManagerSUBJECT:Resolution 202457 of the City Council of the City of Fairfield Approving the City’s Fiscal Year 20222023 AnnualComprehensive Financial Report and the Schedule of Expenditures for Federal Awards Report and Other ReportsRECOMMENDED ACTIONAdopt resolution.STATEMENT OF ISSUEThe City Council is being asked to approve the Annual Comprehensive Financial Report (ACFR) for Fiscal Year (FY) 20222023, as well as theSchedule of Expenditures for Federal Awards Report (Single Audit). The FY 20222023 ACFR indicates the City’s financial condition as ofJune 30, 2023, and has been audited by Eide Bailly LLP, an independent firm of Certified Public Accountants (CPA).DISCUSSIONEach year, an audit of the City’s ACFR and the City’s Single Audit is performed by a firm of independent CPAs in conformity with the GenerallyAccepted Audit Standards (GAAS).The ACFR is a report that covers all funds of the City and is prepared following the Generally Accepted Accounting Principles (GAAP). It isconsidered a generalpurpose report, as it is intended to meet the needs of a broad range of user groups. The auditors have issued anunmodified opinion on these financial statements. Such an opinion reflects the auditors’ belief that the basic financial statements contained inthese reports adequately represent the financial position of the City of Fairfield (see Auditors’ opinion on page 1 of the ACFR). A good summary of the financial condition of the City is contained within the transmittal letter and the Management’s Discussion and Analysis(MD&A) of the ACFR, as well as in the City’s Popular Annual Financial Report (PAFR) for FY 20222023, which is also included in thissubmission. The PAFR is a more condensed version of the ACFR that extracts summary information from the ACFR. The PAFR is not auditedbut is provided as a supplement to the ACFR. Additional supporting information related to the financial statements can be found within thenotes of the ACFR financial statements. The following represents key financial positions and highlights of the City’s major funds:GovernmentWide:The assets plus deferred outflows of the City exceeded its liabilities plus deferred inflows at the close of FY 20222023with a net position of $648 million. Of this amount, the unrestricted net position is negative ($18) million after accounting for the City’s netpension liability of $233 million, and increases in Compensated Absences and Claim liabilities. Total longterm liabilities reflected on thestatement of net position increased by $112 million, primarily resulting from the net pension plan increases. This increase was due to a lowerthanexpected rate of return on investments based on the June 30, 2022, measurement of the pension liability. At the close of the current fiscalyear, the City’s governmental funds reported a combined ending fund balance of $234 million, consisting of the following components: The City’s governmental funds reported a combined ending fund balance of $234 million, an increase of $6.96 million or 3% over theprior year.Total fund balances include cash and noncash assets (such as receivables and land assets). The General Fund is the chief operatingfund of the City and reflects an increase of $0.5 million in fund balance.The fund balance for the Low Mod Income Housing Fund decreased by $2.1 million due to providing financial assistance to MissionSamoa to build the pallet shelter project for homeless sheltering, as well as the cost of relocating the Housing Department to a largerbuilding.The Capital Projects fund balances increased by $4.2 million. This was due to an increase in developer fees collected for increasedbuilding permit activity and an intergovernmental revenue increase for sewer projects. Concurrently, actual expenditures increased due tovarious projects during the year including the North Texas Roadway project, Grange Middle School Safe Routes to Schools project,upgrades to Fire Stations, and various paving maintenance projects.General Fund:The fund balance increased from the prior year to the current year by $0.5 million to a balance of $57.3 million. The mainincrease is a result of higher total revenues of $8 million [Property taxes (+$1.9 million, 5%), Sales taxes (+$0.63 million, 1%), Utility User andFranchise taxes (+$1.5 million, 15%), Investment income (+$4.3 million, 238%), Other taxes, Miscellaneous and departmental revenues ($0.8million, 4%)].However, expenses were higher by $11.1 million. Staffrelated costs were the largest portion of expense increase ($7.2 million) primarily fromwage increases, higher than projected overtime on the safety side, and higher pension costs. The remaining is due to the department’sdiscretionary spending ($0.9 million) and internal service charges (+$3.9 million, 18%) from higher contributions to the vehicle replacement andmaintenance costs, and Information Technology cyber security costs. Net transfers increased by $0.44 million, with the City contributing towardsLandscape and Lighting Districts. Internal Service Fund Liabilities:As shown in the transmittal letter, the table below shows some of the key liabilities of the internal servicefunds and their associated levels of funding:IntraGovernmental Loan Fund:The net position of the IntraGovernmental Loan Fund decreased by $3.2 million, from $42.7 million to $39.5million. This was primarily due to the purchase and preparation of the Bank of America site ($2 million), the West Net project for a fire alertingsystem ($1.3 million), offset by revenue received from the redevelopment agency loan repayments ($0.7 million). Water Funds:The net position of the Water Funds increased by $3.4 million during FY 20222023 from $78.0 to $81.4 million. This wasmainly due to lower operating and capitalrelated expenses. The Fund also recognized its share of the City’s Net Pension Liability of $17.9million, as required by the Governmental Accounting Standards Board (GASB 68).Golf Funds:The Golf Funds ended with an accumulated net position of $14.8 million, generally consisting of the net capital assets of the golfcourses of $13.6 million, and cash balance of $1.2 million. In 2023, the Golf Bonds were fully paid off and the courses are currently debtfree,thus enabling the city to start addressing some of the muchneeded deferred maintenance. Transit:The net position of the Transportation Funds decreased by $2.0 million during FY 20222023. This was mainly due to the lingeringeffects of the pandemic and reduced ridership after losing the intercity routes and their related revenue. Farebox revenue dropped to 5.74%from 7.1% last year. As required by GASB 68, the Fund has recognized its share of the City’s Net Pension Liability of $3.5 million (includingdeferred inflows and outflows), which resulted in the Fund ending with a negative unrestricted net position of $2.4 million.CalPERS and Net Pension Liability:As of June 30, 2023, the net pension liability with CalPERS for FY 20222023 almost doubled from$120 million last year to $233 million, based on a measurement date of June 30, 2022. This represents a 30% funding shortfall of the totalpension liability of $785 million. In addition, the City has pension obligation bonds totaling $32.8 million of principal and interest, with an annualdebt service of approximately $3 million. The Statement of Activities also recognizes pension cost expenses which increased by $22 million inFY 20222023 compared to FY 20212022. An increase in personnel costs due to the costofliving adjustment also contributed to thedecrease in the net position. Other ReportsMeasure P Compliance Report:The City’s independent auditors have completed a Transactions and Use Tax Ordinance Compliance andInternal Control Audit Report. The City is found to comply with the Ordinance (Attachment 9).Utility Users Tax Compliance Report:The City’s municipal code requires that independent auditors perform a Compliance and InternalControl Audit Report. The City is found to comply with the Ordinance (Attachment 10).Transportation Development Act (TDA) Audit:The California Code of Regulations requires each transportation planning agency to transmita report of an audit of its accounts and records to the State Controller; a report of an audit of its accounts and records by the appropriate countyauditor; a certified public accountant; or a public accountant under Sections 6505 and 26909 of the Government Code annually and within 12months of the end of the fiscal year. The audit report is attached (Attachment 11).Audit Findings:For the ACFR, the auditors had some findings that are addressed in the management letter (Attachment 6), and the Auditor'sletter on governance (Attachment 5).Summary:This year, the City began utilizing the new Tyler Munis ERP system. There were several challenges and a large learning curve forthe organization. However, the City, once again, received an unmodified opinion from the auditors for the work performed and reports preparedby the City’s Accounting Division. This is also demonstrated by the fact that the City was awarded the Certificate of Achievement for Excellencein Financial Reporting by the Government Finance Officers Association (GFOA) for the 35th year in FY 20212022. The expectation is toreceive the award in the future for this set of financial statements. The City also received the GFOA Triple Crown award, which is given toagencies that receive the Certificate of Achievement for the following three financial reports: the ACFR, the PAFR, and the City’s Budget andFinancial Plan.

FINANCIAL IMPACT
There is no financial impact resulting from the acceptance of the report. The cost of the audit of the City’s ACFR is included as part of the General Fund budget (Fund 101, Division and Responsibility Code 20300).

PUBLIC CONTACT/ADVISORY BODY RECOMMENDATION
On March 5, 2024, the City Council’s Audit Committee met with the independent auditors and received and reviewed the attachments to this report.

ALTERNATIVE ACTION
The council may choose to reject the acceptance of the City’s Annual Comprehensive Financial Report for the Fiscal Year ending on June 30, 2023. It should be noted, however, that any changes to the report at this point would result in additional costs incurred by the City.

STAFF CONTACT
John Furtado, Director of Finance
(707) 4287629
[email protected]
COORDINATED WITH
N/A
ATTACHMENTS:

Description
Attachment 1: Proposed Resolution
Attachment 2: Auditors Report (Unmodified Opinion on ACFR) Attachment 3: Single Audit Report
Attachment 4: Corrective Action Plan (CAP), for Single Audit Attachment 5: Letter from Auditors to City Council on Governance Attachment 6: Letter from Auditors to Management
Attachment 7: Auditors Report on Internal Control (GAGAS) Attachment 8: FY2223 PAFR
Attachment 9: Measure P Compliance Report
Attachment 10: UUT Compliance Report
Attachment 11: Transportation Development Act (TDA)
Attachment 12: GANN Report
Attachment 13: Golf Course AUP Report
Attachment 14: Legends AUP Report
REVIEWERS:

Reviewer Action Date
Garibay, Ana Approved 3/6/2024 11:36 AM
Garibay, Ana Approved 3/6/2024 11:37 AM
Garibay, Ana Approved 3/6/2024 11:39 AM
Dombrowski, Delaney Approved 3/6/2024 12:33 PM
Dombrowski, Delaney Approved 3/6/2024 12:33 PM
Packet Page 23 of 516

CITY OF FAIRFIELD

RESOLUTION NO. 2024-57

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FAIRFIELD APPROVING THE CITY’S FISCAL YEAR 2022-2023 ANNUAL COMPREHENSIVE FINANCIAL REPORT AND THE SCHEDULE OF

EXPENDITURES FOR FEDERAL AWARDS REPORT AND OTHER REPORTS

NOW, THEREFORE, THE COUNCIL OF THE CITY OF FAIRFIELD HEREBY RESOLVES:

Section 1. Pursuant to Section 37208 (c) of the Government Code, the Fiscal Year 2022- 2023 Annual Comprehensive Financial Report, and the Schedule of Expenditures for Federal Awards Report (Single Audit), and other reports are hereby approved and ratified.

Section 2. The city manager and finance director are hereby authorized to take all actions necessary to implement this resolution.

PASSED AND ADOPTED this 19th day of March 2024, by the following vote:

_________________________________________________
MAYOR
ATTEST:
___________________________

CITY CLERK

Packet Page 24 of 516Attachment 1 Page 1 of 1

City of Fairﬁeld, California
Annual Comprehensive Financial Report
Fiscal Year Ended June 30, 2023
Packet Page 25 of 516Attachment 2 Page 1 of 188

City of Fairfield, California

Annual Comprehensive
Financial Report

For the Fiscal Year Ended
June 30, 2023

Prepared by:

Finance Department
Packet Page 26 of 516Attachment 2 Page 2 of 188

City of Fairfield, California
Annual Comprehensive Financial Report
For the Year Ended June 30, 2023
Table of Contents
Introductory Section (unaudited)Page
Table of Contents i
City Council, Elected Officials, and Management Leadership Team iv Letter of Transmittal v
Organization Chart xv
Certificate of Achievement for Excellence in Financial Reporting xvi Financial Section
Independent Auditor's Report 1
Management's Discussion and Analysis 5
Basic Financial Statements:

Government‐Wide Financial Statements:

Statement of Net Position 18
Statement of Activities 19
Fund Financial Statements:

Governmental Funds:

Balance Sheet 23
Reconciliation of the Governmental Funds Balance Sheet
to the Government‐Wide Statement of Net Position 25
Statement of Revenues, Expenditures and Changes in Fund Balances 27 Reconciliation of the Governmental Funds Statement
of Revenues, Expenditures and Changes in Fund Balances
to the Government‐Wide Statement of Activities 29
General Fund: Statement of Revenues, Expenditures and Changes in Fund Balance ‐ Budget and Actual 30
Low Mod Income Housing Major Special Revenue Fund: Statement of Revenues, Expenditures and Changes in Fund Balance ‐ Budget and Actual 31 Proprietary Funds:

Statement of Net Position 33
Statement of Revenues, Expenses and Changes in Net Position 35 Statement of Cash Flows 37
Fiduciary Funds:

Statement of Fiduciary Net Position 42
Statement of Changes in Fiduciary Net Position 43
Notes to Basic Financial Statements 45
Packet Page 27 of 516Attachment 2 Page 3 of 188

City of Fairfield, California
Annual Comprehensive Financial Report
For the Year Ended June 30, 2023
Table of Contents (continued)
Financial Section, (continued)Page
Required Supplementary Information: (unaudited)
Schedule of Changes in Net Pension Liability and Related Ratios ‐ Miscellaneous Plan 97 Schedule of Changes in Net Pension Liability and Related Ratios ‐ Safety Plan 98 Schedule of Contributions ‐ Miscellaneous Plan 99
Schedule of Contributions ‐ Safety Plan 100
Schedule of Changes in Net OPEB Liability and Related Ratios 101 Schedule of Contributions ‐ Net OPEB Liability 102
Supplementary Information:

City Capital Projects ‐ Major Capital Projects Fund: Schedule of Revenues, Expenditures and Changes in Fund Balance ‐ Budget and Actual 104 Non‐Major Governmental Funds:

Combining Balance Sheet 107
Combining Statement of Revenues, Expenditures and Changes in Fund Balances 111 Combining Schedule of Revenues, Expenditures and Changes in Fund Balances ‐ Budget and Actual 115
Internal Service Funds:

Combining Statement of Net Position 123
Combining Statement of Revenues, Expenses and Changes in Net Position 125 Combining Statement of Cash Flows 127
Custodial Funds:

Combining Statement of Fiduciary Net Position 133
Combining Statement of Changes in Fiduciary Net Position 135 Statistical Section (unaudited)Table
Net Position by Component 1 139
Changes in Net Position 2 141
Governmental Activities Tax Revenues by Source 3 145
Fund Balances of Governmental Funds 4 147
Changes in Fund Balances of Governmental Funds 5 149
Changes in Fund Balances of General Fund 6 151
Assessed Value and Estimated Actual Value of Taxable Property 7 153 Property Tax Rates ‐ Direct and Overlapping Governments 8 154 Principal Property Taxpayers 9 155
Property Tax Levies and Collections 10 156
Ratios of Outstanding City Debt by Type 11 157
Ratios of General Bonded Debt Outstanding 12 158
Direct and Overlapping Governmental Activities Debt 13 159 Legal Debt Margin Information 14 161
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City of Fairfield, California
Annual Comprehensive Financial Report
For the Year Ended June 30, 2023
Table of Contents (continued)
Statistical Section (unaudited), (continued)Table Page
Utility and Golf Debt Pledged Revenue Coverage 15 163
Demographic and Economic Statistics 16 165
Principal Employers 17 166
Full‐time Authorized City Government Employees by Function 18 167 Operating Indicators by Function 19 168
Capital Asset Statistics by Function 20 169

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City of Fairfield, California
City Council and Elected Officials

Management Leadership Team

David Gassaway John Sturdee John Furtado
City Manager Fire Chief Director of Finance

David Lim Farbod Pirouzmand Paul Kaushal
City Attorney Director of Human Resources Director of Public Works

David Zellers LaTanna Jones Savita Chaudhary
Director of Community Director of Housing Services Assistant City Manager/ Development Director of Information Technology

Kristina Kaunzinger Dan Marshall
Director of Parks and Recreation Police Chief

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January 30, 2024
Honorable Mayor and City Council
City of Fairfield, California
The City is pleased to submit its Annual Comprehensive Financial Report (ACFR) of the City of Fairfield (the City) for the fiscal year ended June 30, 2023. The information contained in this ACFR is prepared in accordance with generally accepted accounting principles (GAAP) and includes an unmodified opinion on the report by the City’s independent certified public accountants, Eide Bailly LLP.

Management assumes responsibility for the accuracy and fairness of the information provided in this report.

The ACFR is presented in three sections: introductory, financial, and statistical. The introductory section includes this transmittal letter, the City’s organizational chart and a list of municipal officers and officials. The financial section includes management’s discussion and analysis (MD&A), government-wide financial statements, fund financial statements, notes to the financial statements, and required supplementary information, as well as the auditor’s report on the financial statements and schedules. The MD&A provides additional information regarding management of the City’s finances and should be read in conjunction with the transmittal letter. The statistical section includes selected financial and demographic information of the City, generally presented on a multi-year basis.

The Reporting Entity and Services Provided
Fairfield is a general law city and operates under a Council-Manager form of government. The City provides a full range of municipal services, including police, fire, water, public transportation, streets and sidewalks, housing assistance, cultural and recreation facilities, golf courses, public works and parks, planning, and economic development. Sewer service is provided by agreement with the Fairfield-Suisun Sewer District, which operates and maintains interceptors and the treatment plant, while the City maintains local collector sewers.

This report includes all activities considered to be a part of, controlled by, and dependent on the City.

Accordingly, this report includes the financial activities of the following:

Water Facilities Improvement District
Municipal Park Improvement District
Housing Authority
Public Financing Authority
Storm Drain Facilities Improvement District
Community Facilities Districts
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vi
City and Government Profile
Fairfield sits at the northeastern portion of the San
Francisco Bay Area. The County seat of Solano County
since 1858, Fairfield has the vision of a progressive city.

Founded in 1856 by Captain Robert Waterman, the City
was named after Fairfield, Connecticut, Waterman’s
hometown. Community amenities include an enclosed
regional shopping mall with over one million square
feet and 150 stores, an adult recreation center, the
650‐acre Rockville Hills Park, and a weekly farmer's
market in season. Situated between the two largest
metropolitan areas of Northern California, Fairfield
bridges the gap between the San Francisco Bay Area
and the Sacramento metropolitan region. The Napa
and Sonoma wineries lie within an hour to the west,
and Lake Tahoe two hours to the east.

The City is a general law city and was incorporated in
1903. It has a Council‐Manager form of government
with the Mayor elected at large and six Council
members elected by district. They all serve four‐year, staggered terms. The City has two citizen commissions Planning and Youth, and five oversight and advisory committees, all whose members are appointed by Council to a fixed term. They are the Landscape Oversight Committee (seven members), the CDBG Advisory Committee (five members), the Golf Advisory Board (six members), the Measure P Oversight Committee (five members) and the Rockville Hills Regional Park Citizen Advisory Committee (seven members). The City Clerk and Treasurer are directly elected. The City Council appoints the City Manager and City Attorney. The City Manager appoints department heads.

The City is organized into ten departments: Public Works, Police, Fire, Finance, Human Resources, Information Technology, Community Development, Parks and Recreation, Housing Services, and City Manager’s Office (CMO); with the CMO including Clerk and Legal offices. For reporting purposes, the financial statements present CMO and Human resources under Administration while Information Technology is reported in an Internal Service Fund.

The chart below shows the City’s full‐time staff levels during the past ten years.  The City’s employees are 0.5% of the total population of the City. The City
provides a broad range of services including
police and fire protection; construction and
maintenance of streets, parks, storm drains,
and other infrastructure; recreational and
cultural activities, including two 18‐hole
championship golf courses; and
administrative support services.  Some
major public services delivered within the
City’s boundaries, including library,
wastewater, and education, are provided by
other governmental agencies.  The City is
not financially accountable for the
operations of these franchises or
government agencies.

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Accounting System and Budgetary Control

Note 1 in the Basic Financial Statements provides a detailed explanation of the City’s significant accounting policies. The City has established internal controls to ensure the government’s assets are protected from loss, theft, or misuse and to demonstrate stewardship of public resources. Because the cost of internal controls should not outweigh their benefits, the City’s framework on internal controls has been designed to provide reasonable, rather than absolute, assurance that the financial statements will be free from material misstatements.

FY 22‐23 was the City’s first year using a new Tyler Munis ERP system. The Financial Modules went live on July 1, 2022, and the Human Capital Management Modules went live on January 1, 2023. The new system has more capabilities than the legacy system, and many features that have improved efficiency and accuracy across departments.

The City prepares a two‐year budget, and departments work with the City Manager and the Finance Department to submit operating budget requests. The City Manager and Director of Finance then make recommendations to the City Council regarding the two‐year budget. After public discussion and evaluation of their recommendations, the City Council adopts a two‐year budget and multi‐year forecast and adopts a mid‐cycle budget update at the end of the first year.

Expenditures are controlled at the fund level for all budgeted departments within the City and may not legally exceed appropriations. The budgets are adopted on a basis substantially consistent with GAAP.

Any amendments to the total appropriations of a fund must be approved by the City Council.

Economic Overview of the City and Region
201

Below is a summary analysis of some key indicators of the region’s economic environment.

Stock and Financial Markets

Stock markets recovered their 2022 losses with the Dow Jones and S&P gaining 11.8% and 17.6% respectively. Interest rates again rose significantly during the year. The rising rates were triggered by the Fed continuing to increase interest rates in their effort to tackle inflation which, while lower than in 2022, was still stubbornly high and over the 2% Fed target. The Conference Board’s Leading Economic Index (LEI) fell 0.7% in September, continuing the persistent decline for the last year and a half. The index declined 7.8% year‐over‐year. The consistent decline month‐over‐month continues to signal future contraction in the economy.

This outlook is associated with persistent inflation compounded by high short‐term interest rates, a manufacturing index below 50, as well as an inverted yield curve. The board forecasts that 2023 Real GDP growth will come in at 2.2 percent year‐over‐year.

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Economic Overview of the City and Region (Continued)

Below are the changes in the financial market as of June 30, 2023:

Financial Market Rate Fiscal Year Change
Dow Jones 34,408 3,632
S&P 500 4,450 665
2 Year Treasury 4.895% 1.932%
30‐Year Home Mortgage 7.02% 1.32%

Employment

The impact of a cooling job market is starting to take place. There has been an increase in unemployment in the region of 0.7% and job openings have fallen to the lowest level in more than two years in June 2023.

Unemployment Rate Fiscal Year Change
United States 3.6% 0.0%
California 4.6% 0.4%
Solano County 4.7% 0.7%
Fairfield 4.7% 0.7%

Inflation

Inflation began to stabilize but prices continue to be high and impacts to discretionary spending of average consumers are anticipated to be seen in FY 23‐24. The personal savings rate has also started to come down as consumers use savings to cover higher costs. The personal savings rate was 4.9% for June 2023 and has dropped to 3.4% by September 2023.

Inflation Rate Fiscal Year Change
Bay Area CPI 2.9% ‐3.9%
Turner Building CPI 1.2% ‐1.0%
Personal Savings Rate 4.9% ‐0.2%
Oil Prices (as of 6/30/23) $71 ‐$36

Rental Vacancy Rates

The overall industrial vacancy rate in Fairfield increased by

1.2% due to 85,000 square feet of newly available warehouse space. The office market also had an increase in vacancy rate due to lease turnover of Class A space. The increases in vacancy rates are believed to be temporary as it is expected the newly completed spaces will be leased.

Vacancy Rates Rate Fiscal Year Change
Office – Fairfield 18.2% 1.2%
Industrial – Fairfield 3.0% 1.2%
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Economic Overview of the City and Region (Continued)

Sales and Use Tax

In California, sales tax
performance for FY 22‐23 grew by

2.1% which is significantly less than
the growth seen during the
pandemic recovery. For the year,
sales tax revenue for the City grew
by 2.7%, over the prior year driven
by a strong performance in the
business and industry sector. The
strong performance offset the
declines seen in the auto, building,
and fuel‐related industries. Measure P did not benefit as much in the business and industry sector and saw an overall decrease of 0.6% over the prior year driven by the decline in the auto, building, and fuel sectors. The chart above shows the change in sales tax for the past 10 years, which includes a comparison of FY 22‐23 to FY 21‐22 where the City’s sales tax collections were up 2.7% (3% rounded).

Property Taxes

In FY 22‐23, Fairfield property values
increased by approximately 5.2%,
compared to the County’s overall
increase of 4.7%. The chart to the right
shows the total change in valuation for
the various types of properties within
the City. Residential represents 70.4%
of the City’s valuation. There is still
$127 million of assessed value
representing Proposition 8 reductions
on 989 single‐family homes that could
be recovered in the future should
housing prices continue to increase, this is down to 3.2% of parcels in the City.

Housing

Housing sales totaled 1,159 units sold
during the calendar year 2022,
median sales price was $610,000 for
the year. This represented a 6%
increase over the prior year. The
impact of rising interest rates has
begun to cool the housing market and
for the first 9 months of the calendar
year 2023, prices and demand have
begun to fall.

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Economic Condition and Outlook – General Fund

The City was able to maintain General Fund reserves
significantly higher than the City Council’s established level of 20% of expenditures during FY 22‐23.

The General Fund’s major revenue sources include
property and sales taxes / Measure P local taxes, utility users and franchise taxes, transfer and vehicle taxes, and hotel taxes. Together these groups comprised 86.1% of
total revenues for FY 22‐23. The remaining 13.9% includes revenues such as licenses and permits, charges for services, miscellaneous income, and interest/rental income. The City currently projects a few years of deficits. This is primarily due to increasing costs related to staffing, such as cost of living adjustments, added positions, and higher pension costs driven by CalPERS investment volatility that has increased pension premiums, adequately funding internal service charges, and slowing revenue growth due to the cooling economy. Under direction from the Council, City staff is reevaluating current expenditures, looking for efficiencies, opportunities to cut costs or realign resources, and looking at opportunities to increase revenues either through new revenue streams or increases to existing revenues.

FY22‐23 FY23‐24 FY24‐25 FY25‐26 FY26‐27 FY27‐28
Actuals Budgeted Budgeted Forecasted Forecasted Forecasted Revenues/Transfers In 132.2 137.3 144.3 136 141 145.7
Expenditures/Transfers Out 131.7 137.3 148.6 156.5 162 167.6 (Deficit)/Surplus 0.5 0.0 ‐4.3 ‐20.5 ‐21.0 ‐21.9
Ending Reserves 57.3 57.3 53.0 32.5 11.5 ‐10.4
% of Expenditures 44% 42% 36% 21% 7%‐6%
General Fund Forecasted Trend
(In Millions)

The five‐year forecast includes the following assumptions:

 Property tax growth of approximately 2% to 5%, resulting from new development and increased assessed values for properties within the City.
 Sales tax and Measure P taxes are projected to decrease in FY 23‐24 by 0.2% and increase by

2.7% in FY 24‐25, largely due to the opening of auto dealerships, fuel sales, and increased activity in building and construction. In the outer years, sales taxes are anticipated to grow at 3%.  Investment income is expected to increase significantly for FY 23‐24 and FY 24‐25 as current investments mature and previous market value adjustments are reversed. It is then expected to decrease in the outer years as the fund balance is depleted.  Development‐related revenues are expected to increase in FY 23‐24 and then remain flat for FY 24‐25.
 Cannabis retail or manufacturing operations revenues are adjusted downward by 27% to reflect current expectations and are projected to grow at a modest rate of 3% thereafter.

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Economic Condition and Outlook – General Fund (Continued)

 Wage increases for FY 23‐24 and FY 24‐25 are baked in based on the respective negotiated contracts with the labor groups. Total staffing cost increases are assumed to be capped at 2% for all years beyond FY 24‐25.
 Increases of 2‐5% annually on non‐personnel expenses, depending on the nature of each of those components, and reflect the estimated inflation rate.
 Includes the City’s estimated pension contribution rates provided by CalPERS. It also assumes that CalPERS achieves a 6.8% return on investment over the long run.

Economic Conditions and Outlook – Other Funds

Golf Funds

Although the total number of taxable rounds decreased at the City’s golf courses by 9% during the past fiscal year, overall course revenues increased slightly as the increase in rental income has offset some of the loss on revenue related to rounds. For the third consecutive year, the
courses did not require additional support from the City.

Golf course bonds were paid off in July 2023. The golf
courses are going to be utilizing the excess working capital to address deferred maintenance needs and ensure the courses continue to operate without the assistance of the General Fund. The City has entered a new management contract for a single operator of the courses and restaurants effective January 1, 2024.

Transit

Fairfield added a new transportation
mode called microtransit early in FY 23‐
24 to better meet Fairfield’s current
transportation needs and hedge against
unsustainable service cost inflation. The
transition of Solano Express to Solano
County Transit (SolTrans) was
completed in FY 22‐23. California’s
farebox recovery requirements have
been deferred due to the COVID‐19
pandemic with no set date for
reinstatement. Forecast risks include
decreased funding and continued
increases in operating costs.

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xiii

Economic Conditions and Outlook – Other Funds (Continued)

Water Funds

The last water rate increase went into effect in 2021. A water master plan is currently underway which will address future capital projects, align operation costs, and provide information about potential rate changes in the future. Continued capital needs are being addressed utilizing reserve funds.

Capital Project Funds

To assist in building new parks and facilities, including police and fire infrastructure, the City relies on the collection of its AB 1600 Impact fees from new development in the City. Without
continued new development, future parks and facilities may be delayed or eliminated from the City’s master plan. In addition to new parks and facilities, the City also transfers in Gas Tax revenue to fund street capital projects. The current Capital Improvement Plan includes 142 projects valued at $189.4 million over FY 23‐24 and FY 24‐25. An update to AB 1600 Impact fees for parks, facilities, and urban design are anticipated in FY 24‐25.

Internal Service Funds

These funds account for many services provided to all departments within the City, including the funding for insurance and compensated absences. Since the City is self‐insured, it is prudent to fund a portion, or all the liability owed over time so other funds are not heavily affected in any one year.

The City’s Compensated Absences liability continues to grow with the addition of more staffing, and labor contract cost of living adjustment increases, and is currently 25% funded. See Notes 11 and 15 in the City’s FY 22‐23 Annual Comprehensive Financial Report for the actuarial assumptions used.

The major self‐insurance liabilities, other post‐employment benefits (OPEB), and compensated absences with their corresponding funding reserves as of June 30, 2023, are listed below:

(1, 2) The cash reserve represents the cash in the City’s OPEB fund at June 30, 2023. The liability represents the actuarial accrued liability (as presented in the Required Supplementary Information).

(3) Represents available cash in these specific funds at June 30, 2023. Does not include other insurance fund balances that do not relate to Workers’ Compensation, General Liability, or OPEB.

Workers'
Compensation
General
Liability
Other Post-
Employment
Benefits
(OPEB) (1,2)
Compensated
Absences Combined
Cash Reserve (3)12,169,440$ 1,758,326$ 311,198$ 5,441,533$ 19,680,497$ Actuarial Liability 9,845,000$ 4,771,000$ 82,581$ 21,735,274$ 36,433,855$ % of Liability Funded 124% 37% 377% 25% 54%
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xiv

Trend Information / Comparison of Cities

See the City’s original budget for fiscal years 23‐24 and 24‐25 for more information regarding these trends among comparable cities

 The City’s population growth rate is slightly below average.

 The City’s per capita revenues from tax revenues are below average.

 The City has had significant swings in its property and sales tax revenues, building and foreclosure activity, unemployment rates, transit ridership and golf rounds played.

 The City’s pension obligation contribution rate has increased significantly over the past ten years.

 The City’s Other Post‐Employment Benefits (OPEB) liability is below the average.

Awards and Acknowledgements

The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Fairfield for its Annual Comprehensive Financial Report (ACFR) for the fiscal year ended June 30, 2022, marking the 35th time the City has received this award. In order to be awarded a Certificate of Achievement, the City was required to produce a report that met GFOA’s high standards for reporting. It is anticipated that the current ACFR will continue to meet the Certificate of Achievement Program’s requirements.

This ACFR was prepared by the City’s Finance Director, Budget Officer, and the Accounting Division staff, who worked hard to prepare this document, including:

 Accounting Manager: Myles Dixon
 Principal Accountant: Tenzin Gangnay
 Senior Management Analyst: Kristan Weihe
 Accountants: Julie de Guzman and Ruth Rendon
Thanks are also extended to the City’s independent auditors for their review of this report, and to the City Council, City Treasurer, and City Department Directors for their stewardship and commitment in planning for the long‐term fiscal health of the City. For more information about the City, or to view the ACFR online, visit http://www.fairfield.ca.gov/

Respectfully submitted,

David Gassaway John Furtado
City Manager Director of Finance
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City of Fairfield, California Organization Chart xv Citizens of FairfieldCity ClerkMayor & City CouncilCommissionsCity ManagerAssistant City ManagerInformation TechnologyCommunity DevelopmentHousingFinanceHuman ResourcesParks and RecreationFirePolicePublic WorksCity AttorneyCity Treasurer Packet Page 41 of 516Attachment 2 Page 17 of 188

Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Fairfield
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2022
Executive Director/CEO
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City of Fairfield, California
People and Places in the City

xvii

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Independent Auditor’s Report
To the Honorable Mayor and Members of the City Council
City of Fairfield, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, the business- type activities, each major fund, and the aggregate remaining fund information of the City of Fairfield, California (City) as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2023, and the respective changes in financial position, and, where applicable, cash flows thereof and the respective budgetary comparison for the general fund and the major special revenue fund for the year then ended in accordance with accounting principles generally accepted in the United States of America.

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

Adoption of New Accounting Standard
As discussed in Note 1 and Note 22 to the financial statements, the City has adopted the provisions of Government Accounting Standards Board (GASB) Statement No. 96, Subscription-Based Information Technology Arrangements, for the year ended June 30, 2023. As a result of implementing the standard, there was no effect on the beginning net position as of July 1, 2022. Our opinions are not modified with respect to this matter.

2 Correction of an Error
As discussed in Note 22 to the financial statements, certain errors resulting in an overstatement of amounts previously reported for accounts receivable and revenues as of June 30, 2022, were discovered by management during the current year. Accordingly, a restatement has been made to the North Bay Treatment Plant Enterprise Fund and the business-type activities net position as of July 1, 2022, to correct the error. Our opinions are not modified with respect to that matter.

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

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

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

In performing an audit in accordance with GAAS and Government Auditing Standards, we:
•Exercise professional judgment and maintain professional skepticism throughout the audit. •Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
•Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed.
•Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.

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3 •Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time.

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

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, schedules of changes in net pension liability and related ratios, schedule of changes in the net (other postemployment benefits) OPEB liability and related ratios, and schedules of contributions for the pension and OPEB liabilities, 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 GAAS, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The schedule of revenues, expenditures and changes in fund balance – budget and actual of the city capital project fund and the combining and individual nonmajor fund financial statements and schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. 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 GAAS. In our opinion, the schedule of revenues, expenditures and changes in fund balances – budget and actual of the city capital project fund and the combining and individual nonmajor fund financial statements are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

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

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

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated January 30, 2024, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering City’s internal control over financial reporting and compliance.

Sacramento, California
January 30, 2024
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City of Fairfield, California
Management Discussion and Analysis
5 This discussion and analysis of the City of Fairfield’s (City’s) financial activities and performance provides an overview and analysis of the City’s financial activities for the fiscal year ended June 30, 2023. This report has been prepared in accordance with standards established by the Governmental Accounting Standards Board (GASB). Please read it in conjunction with the transmittal letter, the basic financial statements, and the accompanying notes to those financial statements.

Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements, which consists of three parts: (1) Government-Wide Financial Statements, (2) Fund Financial Statements, and (3) Notes to the Basic Financial Statements. The financial statements presented herein include all of the activities of the City and its component units.

Government-Wide Financial Statements
These provide readers with a broad view of the City’s finances, using the economic resources measurement focus and accrual basis of accounting. These accounting methods are similar to those used by private-sector companies. All of the current year’s revenues and expenses are taken into account regardless of when cash is received or paid. Additionally, certain interfund receivables, payables, and interfund activity have been eliminated.

Fund Financial Statements
These provide readers with additional information about the City’s major funds, how services were financed in the short term, and fund balances available for financing future projects. Most of the City’s funds excluding the City’s General Fund and Internal Service Funds have significant restrictions, commitments, or other limitations which significantly affect the availability of their fund resources for future use.

Notes to the Financial Statements
These provide additional information to give the reader a better understanding of the data provided in the Government-Wide Financial Statements and Fund Financial Statements.

In addition to the basic financial statements and accompanying notes, this report also presents certain Required Supplementary Information concerning the City’s progress in funding its obligation to provide pension and retiree health benefits to its employees. The combining statements for non-major and internal service funds are presented immediately following the required supplementary information.

Financial Highlights
The assets plus deferred outflows of the City exceeded its liabilities plus deferred inflows at the close of FY 22-23 with a net position of $648 million. Of this amount, the unrestricted net position is -$18 million after accounting for the City’s net pension liability of $233 million and increases in Compensated Absences and Claim liabilities. Total long-term liabilities reflected on the statement of net position increased by $112 million, primarily resulting from the net pension plan increases, due to a lower-than-expected rate of return on investments, based on the June 30, 2022, measurement of the pension liability. As of the close of the current fiscal year, the City’s governmental funds reported a combined ending fund balance of $234 million, consisting of the following components (see Note 13 for more detail):

Fund Balance Component Amount (in millions)
Non-spendable $1.2
Restricted by Outside Parties/Obligations, land held for redevelopment and loans 158
Committed for Future Development Projects and
Pension Stabilization Plan 22
Assigned for Debt Service on Pension Bonds and future capital project costs 7 Unassigned (includes 20% operating Reserve) 46
Total Fund Balance at June 30, 2023 $234
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City of Fairfield, California
Management Discussion and Analysis

6 Government-Wide Financial Analysis
The City’s Statements of Net Position are shown below for fiscal years 2023 and 2022, including descriptions of items included in the Statements (in millions):

2023 2022 2023 2022 2023 2022
Current and other assets 371$ 364$ 124$ 121$ 495$ 485$ Capital assets 367 369 162 167 529 536 Total assets 738 733 286 288 1,024 1,021 Total deferred outflows of resources 73 28 8 4 81 32 Current and other liabilities 43 38 9 12 52 50 Long term liabilities 263 159 124 116 387 275 Total liabilities 306 197 133 128 439 325 Total deferred inflows of resources 16 64 2 7 18 71 Net position:

Net investment in capital assets 356 360 104 104 460 464 Restricted 175 170 31 29 206 199 Unrestricted (42) (30) 24 24 (18) (6) Total net position 489$ 500$ 159$ 157$ 648$ 657$ Summary Statements of Net Position (in millions)
TotalsGovernmental Activities Business-Type Activities

 Current and Other Assets
This includes unrestricted cash and investments and items such as receivables, inventory, land held for development, and prepaid items expected to be converted into cash within one year.

 Capital Assets
Consisting of land, buildings, improvements, infrastructure, vehicles, equipment, and the right-to-use assets. These items provide services to the community and are not available for future spending.

 Current and Other Liabilities
Represents liabilities expected to be paid with cash within one year.

 Long Term Liabilities
Includes the outstanding obligations for the City, including the City’s long-term obligations for pensions, OPEB, compensated absences, leases, subscriptions, claims outstanding, and bonded debt.

 Net Position
Net investment in capital assets represents the City’s capital assets net of accumulated depreciation and related debt.

The restricted portion is subject to externally imposed restrictions for activities such as capital projects, debt service, and community development and is not available for general operations. The unrestricted portion is available for general operations. The deficit amount shown in Governmental Activities is due to the City’s outstanding pension obligations.

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City of Fairfield, California
Management Discussion and Analysis

7 Government-Wide Financial Analysis (Continued)

The Statement of Activities reflects that the City’s total net position decreased by $9 million, which includes the current year’s decrease of $8 million and $1 million of prior period adjustment. The decrease in net position is attributable to the increase in net pension liabilities. The net pension liability with CalPERS for FY 22-23 almost doubled from $120 million last year to $233 million, based on a measurement date of June 30, 2022. This represents a 30% funding shortfall of the total pension liability of $785 million. In addition, the City has pension obligation bonds totaling $32.8 million of principal and interest with an annual debt service of approximately $3.0 million. The Statement of Activities also recognizes pension cost expenses which increased in FY 22-23 as compared to FY 21-22 by $22 million. An increase in personnel costs due to the cost-of-living adjustment also contributed to the decrease in the net position. See Note 14 of the City’s ACFR for more information regarding the City’s pension obligation. The City’s Statements of Activities are shown below (in millions) for FY 2023 and 2022:

2023 2022 2023 2022 2023 2022
Revenues:

Program Revenues:

Charges for services 13$ 6$ 56$ 54$ 69$ 60$ Operating grants and contributions 24 29 10 11 34 40 Capital grants and contributions 27 27 5 5 32 32 General Revenues:

Property taxes 38 36 38 36 Sales and transaction taxes 58 56 58 56 Other taxes 18 16 18 16 Other Revenues 12 20 2 (1) 14 19 Total revenues 190 190 73 69 263 259 Expenses:

Administration 14 13 14 13 Finance 2 1 2 1 Police 61 48 61 48 Fire 34 27 34 27 Public works 54 43 54 43 Community development 10 6 10 6 Housing 17 15 17 15 Parks and recreation 9 7 9 7 Interest on long term debt 1 1 1 1 Water utility 40 34 40 34 North bay treatment plant 10 9 10 9 Transportation 13 15 13 15 Golf courses 6 6 6 6 Total expenses 202 161 69 64 271 225 Increase (decrease) in net position (12) 29 4 5 (8) 34 Net position July 1, as restated* 501 471 155 152 656 623 Net position June 30 489$ 500$ 159$ 157$ 648$ 657$ Summary Statements of Activities (in millions)
Business-Type ActivitiesGovernmental Activities Totals
*Restated due to GASB 96 and correction of error. See note 22.

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City of Fairfield, California
Management Discussion and Analysis

8 Government-Wide Financial Analysis (Continued)

Revenues include charges for services, collected for services to the public such as water utility charges, grants, and contributions, representing funding received from other governments and organizations for the purpose of financing the operating and capital costs of special programs, and taxes, including property, sales and transaction, franchise,
transient occupancy, and business license taxes.

Expenses include Administration (including the City
Council, City Manager, Human Resources, Information
Technology, and contract City Attorney services), Finance (including Risk Management), Police, Fire, Public Works, Community Development (including Planning, Building,
and Economic Development), Housing, Parks and
Recreation (including Adult and Youth Activities, Aquatics), the City’s two golf courses, North Bay Water Treatment
Plant, Water Utility and Transportation.

Governmental Activities

The total cost of services for all governmental activities in FY 22- 23 was $202 million, with program revenues covering $64 million (32%), resulting in a net cost of $138 million. The remaining portion of governmental activities was covered by taxes (some of which can only be used for certain programs) and other revenues, such as interest, general entitlements, sale of property, and transfers. The cost of services went up by $41 million, driven by cost escalations, the impact of negotiated labor agreements, and increased staffing. Capital expenses increased by $4.6 million due to non-capitalized expenditures. The city also right-sized its internal service funds which increased expenses by $5.2 million, and Special Revenue fund expenses increased by $ 2.4 million.

Finally, Pension-related expenses increased by $17.4 million. The following table shows the total and net cost of Governmental Activities.
26%
13%
12%15%
22%
7%5%
Government-Wide Revenues by Source - $263 Million
Charges for services
Operating grants /
contributionsCapital grants / contributions
Property taxes
Sales / transaction taxes
Other taxes
Other
5%
1%2%
4%
22%
13%
4%
15%5%
20%
3%
6%
Government-Wide Expenses by Source - $271
Million
Administration
Finance
Golf courses
Other
Police
Fire
North bay plant
Water utility
Transportation
Public works
Parks and recreation
Housing
2023 2022 2023 2022
Administration and Finance 16$ 14$ 13$ 12$ Police 61 48 60 44 Fire 34 27 28 22 Public works 54 43 23 10 Community development 10 6 7 4 Housing 17 15 3 3 Parks and recreation 9 7 3 3 Interest on long term debt 1 1 1 1 Total 202$ 161$ 138$ 99$
Net Program Cost/(Revenue) of Governmental Activities (in millions) Total Cost Net Cost/(Revenue)
of Services of Services
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City of Fairfield, California
Management Discussion and Analysis

9 Government-Wide Financial Analysis (Continued)

Business-Type Activities
The total cost of all Business-Type activities this year was $69 million. As shown in the Statement of Activities, the amounts paid by users of the systems was $55 million, receipts from operating and capital grants and contributions were $15 million, primarily related to transportation and water utility, for a total of $70 million of program revenues offsetting the cost of these activities. Net position increased by $3 million for business-type activities (including investment earnings and transfers) to $158 million. The net program revenues summarized below do not include the investment income or transfers, which are reflected as general revenue to the business-type activities.

2023 2022 2023 2022
Water utility 40$ 34$ (2)$ (8)$ North bay treatment plant 10 9 (1) (1) Transportation 13 15 2 3 Golf courses 6 6 - - Total 69$ 64$ (1)$ (6)$ Net Program Cost/(Revenue) of Business-Type Activities (in millions) Total Cost Net Cost/(Revenue)
of Services of Services
$0
$10
$20
$30
$40
$50
Water Utility North Bay Plant Transportation Golf Courses 2023 Revenue $41.8 $11.8 $11.0 $6.2
2023 Expense $39.4 $10.6 $12.9 $5.8
$41.8
$11.8 $11.0
$6.2
$39.4
$10.6 $12.9
$5.8
Revenues vs Expenses Business-Type Activities
(in millions)Packet Page 52 of 516Attachment 2 Page 28 of 188

City of Fairfield, California
Management Discussion and Analysis

10 Financial Analysis of the City’s Funds

The Fund Financial Statements focus on individual parts of the City’s government, reporting operations in more detail than the Government-Wide Statements.

Governmental Funds

The City’s governmental funds provide information on near-term inflows, outflows and balances of spendable resources. The City’s governmental funds reported a combined fund balance at June 30, 2023 of $234 million, an increase of $7 million over the end of the previous fiscal year. Major changes are explained below.

The General Fund is the chief operating fund of the City and reflects an increase of $0.5 million in fund balance. Additional analysis on this fund is contained in a General Fund Budgetary Highlights section of the MD&A, the main increase is due to higher than anticipated Sales Tax and User Utility taxes.

The fund balance for the Low Mod Income Housing Fund decreased by $2.1 million due to providing financial assistance to Mission Samoa to build the pallet shelter project for homeless sheltering along with the cost of relocating the Housing department to a larger building.

Capital Projects fund balances increased by $4.2 million due to an increase in developer fees related to the increase in building permits while the intergovernmental revenue increased for sewer projects while actual expenditures increased due to various projects during the year which include the North Texas Roadway project, Grange Middle School Safe Route to Schools project, upgrades to the Fire Stations, and various paving maintenance projects.

Other Governmental Funds reflect an increase in fund balance of $4.4 million, which was mainly due to the collection of development taxes and special assessments levied for the use of future City projects yet to begin.

Proprietary Funds

The City’s proprietary funds provide the same type of information found in the Government-Wide Financial Statements but in more detail. Factors concerning these funds have previously been addressed in the discussion of business-type activities under the Government-Wide Statements.

General Fund Budgetary Highlights

Over the course of the year, the City Council revised the City’s budget with adjustments for various revenue and expenditure changes. After taking into account these adjustments, General Fund revenues were lower than the final budget by $0.25 million (0.19%), which is primarily attributable to higher sales and transaction taxes, utility and franchise taxes, and increases in charges for services and other miscellaneous revenues that were offset by slightly lower property taxes, other taxes, and a decrease in the fair value of investments due to the rising interest rate environment. Key changes to revenue accounts are shown below:

A significant portion of the City’s General Fund revenue base is dependent on revenues received from local Measure P, a 1% transaction and use tax, which went into effect on April 1, 2013, and will expire in 2033. The revenue from this measure is to protect the safety, services, and quality of life in Fairfield along with improving the City’s infrastructure.

Sales Taxes were higher by $74 thousand or 0.2% due to renewed economic activity driven by manufacturing within the city and higher fuel costs.

Charges for services were lower by $0.14 million with higher than expected planning and building related fees from increased building activity offset by lower than expected revenue from Parks and Recreation activities that had difficulty in hiring staff for programs. Miscellaneous revenues increased by $0.2 million driven by higher contributions from other agencies and other reimbursements.

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City of Fairfield, California
Management Discussion and Analysis

11 General Fund Budgetary Highlights (Continued)

$38
$32
$26
$12
$7 $7
$4
$6
$
$5
$10
$15
$20
$25
$30
$35
$40
Property Taxes
29%
Sales Tax 24%Measure P
Taxes 20%
Utility /
Franchise
Taxes 9%
Other Taxes
5%
Charges for
Services 5%
Licenses,
Permits &
Fines 3%
Other 5%
General Fund Revenues by Category
Fiscal Year 22 -23

General Fund expenses including transfers out were under budget by $0.49 million or 0.38%, mainly due to higher staff vacancy savings primarily in the Public Works ($0.23 million) & Administration departments ($0.5 million), lower spending in Parks and Recreation ($0.22 million) as planned activities were hampered by staffing shortages. These were offset by increased expenses in Community Development, due to the need for consultants to help carry out work driven by larger planning and building revenues ($0.3 million). Non-departmental expenses increased by $0.26 million over the final budget due to higher sales tax rebates, as sales tax receipts came in much higher than anticipated .

$55
$29
$14
$17
$4 $7 $5
General Fund Expenditures by Department
Fiscal Year 22-23
Police 42%
Fire 22%
Admin / Non Dept 11%
Public Works 13%
Transfers Out 3%
Recreation 5%
Community Development 4%

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City of Fairfield, California
Management Discussion and Analysis

12 Capital Assets
Capital Assets

The City’s investment in capital assets for its governmental and business-type activities as of June 30, 2023, amounts to $529 million (net of accumulated depreciation/amortization). This investment in capital assets includes land, buildings and improvements, equipment, vehicles, machinery, infrastructure, right to use assets, and work in progress. The total decrease in capital assets for the current fiscal year was 1%. The City adopted a capital improvement program (CIP) for FY 23-24 and FY 24-25 of $95.7 million and $93.7 million respectively. Additional information on the various future projects please refer below to the Economic Factors and Next Years Budget section. For a detailed listing of all capital assets for governmental and business-type activities please refer to Note 6.

Accumulated
Cost
Depreciation/
Amortization
Carrying
Amount
Governmental Activities:

Land 47$ 47$
Buildings and Improvements 294 (112)$ 182 Equipment, Vehicles, Machinery 61 (38) 23 Infrastructure 319 (234) 85 Right to Use Assets 9 (2) 7 Work in Progress 23 23
Total Governmental Activities 753$ (386)$ 367$ Business-Type Activities:

Land / Intangibles 20$ 20$
Buildings and Improvements 86 (54)$ 32 Equipment, Vehicles, Machinery 34 (33) 1 Infrastructure 217 (120) 97 Work in Progress 12 12
Total Business-Type Activities 369$ (207)$ 162$ Summary of Capital Assets (in millions)

Major capital projects in FY 22-23 include:
 Grange Middle School Safe Route to Schools - $1.8 million  Construction for new Fire Station 39 - $1.0 million
 WestNet Alarming system for Fire Department - $1.4 million  Street resurfacing and pavement maintenance - $2.3 million

13%
50%6%
23%
2%
6%
Total Capital Assets by Type - At Net
Land
Buildings and Improvements
Equipment, Vehicles, Machinery
Infrastructure
Right to Use Assets
Work in Progress
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City of Fairfield, California
Management Discussion and Analysis

13 Bonded Debt and Other Long-Term Obligations
The City continues to maintain good credit ratings on all of its debt issues, as evidenced by the AA rating assigned by Standard and Poor’s to its Pension Obligation Bonds (with AAA being the highest rating). The graph below summarizes the City’s long- term obligations (in millions). The City’s net OPEB liability, covering retiree health and dental payments, is $82,581. The City set aside $3.0 million in an internal service fund and in March 2018, the City established an irrevocable trust to help offset this liability. The City’s net OPEB liability relates to a closed plan with a total of 23 members. The actuarial study prepared in the analysis of this obligation assumes a long-term rate of return of 5.25%. The health costs will increase annually from 5.9% until the rate reaches 3.9%. The dental rate of 3% will increase annually. See Note 15 for more information regarding the City’s net OPEB Liability.

The City’s long-term debt and
obligations of governmental
activities show an increase
during FY 22-23 with an
outstanding balance of $276
million as of June 30, 2023.

The increase of $104 million
to the net pension liability
was due to CalPERS negative
return on investments during
FY 21-22. Long-term
obligations for business-type
activities increased in FY 22-
23 by $8 million, to $128
million, a result of CalPERS
negative return on
investments. Refer to Notes
8, 9, 10, 11, and 14 in the
footnote section for a more
detailed listing of the City’s
outstanding obligations.

2023 2022 2023 2022 2023 2022
General Obligation Bonds 6$ 6$ 6$ 6$ Pension Obligation Bonds 25 27 25 27 Utility-Water Revenue Bonds 95$ 99$ 95 99 Recreational Revenue Bonds 1 1 1 1 Total City Bonded Debt 31$ 33$ 96$ 100$ 127$ 133$ Compensated Absences 22 18 3 2 25 20 Claims and Judgments 15 14 15 14 Leases and Subscriptions 5 5 5 Net Pension Liability 203 102 29 18 232 120 Total City Obligations 245$ 139$ 32$ 20$ 277$ 154$ Total City Debt and Obligations 276$ 172$ 128$ 120$ 404$ 287$ Governmental Activities Business-Type Activities Total
Summary of Long-Term City Bonded Debt and Obligations (in millions)

2%
6%
24%
0%
6%
4%
1%
57%
Long Term City Debt and Obligations by Type
General Obligation Bonds
Pension Obligation Bonds
Utility-Water Revenue Bonds
Recreational Revenue Bonds
Compensated Absences
Claims and Judgments
Leases and Subscriptions
Net Pension Liability
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City of Fairfield, California
Management Discussion and Analysis

14 Economic Factors and Biannual Budget
The City prepares a two-year budget based on council-set goals and priorities, which contains a multi-year financial plan that focuses on long-term financial viability and allows decision-makers to understand the impact of their policy decisions. Budget development is guided by a series of policies adopted by the City Council, which guides long-term planning, minimum reserve levels, employee compensation, cash and debt management, information technology, and utility rates. The budget was based on these key assumptions:

Tax Revenues – HdL Companies provides estimates for property, sales and use tax, and Measure P (transaction and use tax) as part of their tax auditing contracts with the City. Their estimates are based on the current consensus among national economists. The level of projected development is estimated by Community Development staff and reflects projects that have been approved or are in some form of the entitlement process.

Property Tax – Residential property represents 71% of the total assessed valuation and the City received 16.5% of the 1% base property tax. There is still $109 million of potential recovery from Proposition 8 reductions (14% of the original amount, 2% of total assessed value) should housing prices continue to increase. As of March 2023, the latest data available, General Fund appeals totaled $81 million and $1.5 billion for the Successor Agency, representing 1% and 23% of their total assessed values. Any successful appeals will reduce our property tax revenues by a similar percentage (with a 15.5% success rate over the past five years based on value). The property values from property transfers decreased slightly from calendar year 2021 to 2022, from $344 million to $302 million.

Utility and Franchise Taxes – The City imposes a Utility Users Tax of 2% on all residential and commercial utility bills for properties within the City. In addition, the City has franchise agreements with several utility companies, where they pay the City a franchise fee based on a percentage of their revenue earned within the City limits. These fees serve as compensation for, among other things, wear and tear on City streets. Franchise fees can change when the customer base expands when additional services are used, when weather impacts the use of the utility, and when rates change. Staff is projecting a 5% increase in FY 23-24 based on historical information and a 2% annual increase in these revenues for FY 24-25.

Motor Vehicle in Lieu Tax/Other Taxes – The Vehicle License Fee (VLF) is a statewide tax on the ownership of a registered vehicle in place of taxing vehicles as personal property. By law, all revenues from the VLF fund city and county services, but the State Legislature controls the tax rate and the allocation among local governments. In 2004, the Legislature permanently reduced the VLF tax rate and eliminated State general fund backfill to cities and counties. Instead, cities and counties now receive additional transfers of property tax revenues in lieu of VLF. These funds are classified as property taxes. The growth of VLF going forward is tied to the change in the City’s assessed value growth in the prior fiscal year, and therefore for FY 23- 24 is projected to change at a rate similar to that for secured property taxes in FY 22-23. In addition, the City imposes a Transient Occupancy Tax of 10% on room rates for stays of 30 days or less. The County imposes a transfer tax of $1.10 per $1,000 of property valuation on all property sales that occur within the City limits, of which the City receives 50%.

Sales Taxes and Local Measure P Sales and Use Taxes – The total sales tax rate in Fairfield is 8.375%. Of that, 1% comes to Fairfield as our “local Bradley burns” portion from the state and 1% represents the Measure P local use tax. Also included in the 8.375% sales tax is the one-half cent tax approved by California voters in November 1993 (Proposition 172), which is designated for public safety. This sales tax is shared between the cities and the County.

The forecast assumes some continued slowdown within these industries along with a slowdown in fuel as gas prices are anticipated to tax revenues. These are expected to be offset by continued increases in building and industry, construction, and food industries.

Personnel costs – These are based on current staffing levels, a vacancy savings rate of 5% (excluding Fire who have historically been fully staffed). Impacts of labor agreements effective July 1, 2022, through June 30, 2025, have been included and up to 2% COLA adjustments are accounted for in outer years.

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City of Fairfield, California
Management Discussion and Analysis

15 Economic Factors and Biannual Budget (Continued)

Health Costs – Based upon information provided by our health care providers, the City’s health costs are projected to increase over 10% in FY 23-24. In FY 24-25 and beyond, healthcare costs are also estimated to grow at 5% per year. The budget also assumes equal sharing between the City and employees for any increases in health premiums for the next two fiscal years for all but one bargaining unit (which has a 95%/5% sharing between the City and the employee for any increases). For FY 23-24 and beyond, the forecast assumes that the City shares the increase in premiums equally with employees.

Pension Costs – Pension rates for FY 23-24 are based on information provided by CalPERS. Staff has also incorporated the FY 21-22 loss which will begin to be reflected in FY 24-25. The total impact of the increase to FY 24-25 is $1.75 million ($1.3 million General Fund) more than FY 23-24. Staff is also projecting that, based on current market conditions, CalPERS might not be able to achieve the discount rate of 6.8% in FY 23-24.

Internal Service Funds (ISF’s) Funding – Funding to the City’s ISF’s has been increased in FY 23-24 to ensure adequate operational and reserve levels for insurance claims, leave payouts, and internal services such as IT and Vehicle Replacement costs. In past years, the City was underfunding various ISF reserves to reduce operating costs. To correct that trend, this budget funds ISF’s at higher levels but does not fund the existing underfunded balances.

Next Year’s Capital Improvement Program

The City’s adopted capital improvement program (CIP) for FY 23-24 and FY 24-25 of $95.7 million and $93.7 million respectively. The CIP is designed to meet community needs, with special emphasis on those projects that contribute to the City’s economic vitality and quality of life, including Fire Station 39, Fire Station 36, Police Department Expansion, Annual Street Pavement Maintenance, Water Ozone Improvements, West Texas Water Main Replacement, High Lift Pumps and Power Upgrades, Corporation Yard Electrification, as well as improvements at Allan Witt, Linear Trail, and other community and neighborhood parks.

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City of Fairfield, California
Management Discussion and Analysis

16 Economic Factors and Biannual Budget (Continued)

The table below summarizes major projects planned for the next two fiscal years (in millions):

Category Name of Project Estimates FY 23-24 Estimates FY 24-25 Information Technology Client Computers Replacement Program 0.50$ 0.50$ Enterprise Resource Planning - Tyler Munis 0.71$ 0.74$ NBR Laboratory Reconstruction 0.99$ -$ Parks Allan Witt Park Phase 3 All Inclusive Play Area 2.78$ 2.78$ Linear Park Node 4A - Recreation Center 8.53$ 8.32$ Public Buildings Central Utility Plant Modernization 2.00$ 1.00$ Fire Station 36 (New)5.88$ 5.17$
Fire Station 39 (New)6.38$ 5.81$
Police Department Headquarters Addition 5.93$ 9.48$ Sewer Midtown Sewer Replacement Project 0.30$ 3.19$ West Texas Relief Sewer 4.73$ -$
Streets 2024 Rancho Solano Pavement Maintenance 2.50$ -$ Cadenasso Drive Pavement Reconstruction 2.94$ -$ Pavement Maintenance Operations 2.20$ 2.20$ Travis Safe Route to Schools & Transit Trail 1.34$ 6.86$ Transit Local Bus Replacement 5.77$ 5.36$ Paratransit Vehicles 1.12$ -$
Phase 1A - Corporation Yard Fleet Electrification 0.65$ 3.42$ Water Water Main Replacements 1.00$ 1.00$ West Texas Water Main Replacement 4.21$ -$

Contacting the City’s Financial Management

This Annual Comprehensive Financial Report (ACFR) is designed to provide a general overview of the City’s finances. This report can be obtained at no cost from the City’s website at https://www.fairfield.ca.gov/government/city- departments/finance/financial-reports. If you have questions about this report or need any additional financial information, contact the City’s Finance Department at 1000 Webster Street, Fairfield, CA 94533, phone 707-428-7567.

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City of Fairfield, California
Government-Wide Financial Statements

17 Packet Page 60 of 516Attachment 2 Page 36 of 188

City of Fairfield, California

Statement of Net Position
June 30, 2023

The notes to the basic financial statements are an integral part of this statement.

18 Governmental Business-Type
Activities Activities Total
Assets:

Cash and investments (Notes 1D and 4) 256,979,146$ 81,756,591$ 338,735,737$ Receivables, net (Note 5) 97,054,607 12,628,053 109,682,660 Inventory (Note 1G) 740,700 275,179 1,015,879 Prepaid items (Note 1G) 1,038,609 1,038,609 Restricted cash and investments (Notes 1E and 4) 6,537,001 28,642,586 35,179,587 Land held for development (Note 1Q)8,589,809 8,589,809 Internal balances (Note 3)74,404 (74,404) - Investment in joint agencies (Note 1H) 522,363 522,363 Capital assets (Notes 1I and 6):

Nondepreciable 69,604,185 31,817,788 101,421,973 Depreciable/amortizable, net 297,259,245 130,544,298 427,803,543 Total capital assets 366,863,430 162,362,086 529,225,516 Total assets 737,877,706 286,112,454 1,023,990,160 Deferred Outflows of Resources (Note 1J):

Deferred charge on refunding 1,455,376 29,649 1,485,025 Deferred outflows related to OPEB (Note 1L and 15) 171,437 171,437 Deferred outflows related to pensions (Notes 1K and 14) 71,225,162 8,415,033 79,640,195 Total deferred outflows of resources 72,851,975 8,444,682 81,296,657 Liabilities:

Accounts payable and other current liabilities (Note 7) 24,480,200 4,587,900 29,068,100 Interest payable 89,654 307,283 396,937 Unearned revenue (Note 1R) 5,379,517 919,239 6,298,756 Long-term obligations (Note 8): -
Due within one year 12,888,463 4,000,965 16,889,428 Due in more than one year 263,300,604 123,912,462 387,213,066 Total liabilities 306,138,438 133,727,849 439,866,287 Deferred Inflows of Resources (Note 1J):

Deferred inflows related to pensions (Notes 1K and 14) 30,814 2,103,048 2,133,862 Deferred inflows related to leases (Notes 1N and 9) 15,371,903 15,371,903 Total deferred inflows of resources 15,402,717 2,103,048 17,505,765 Net Position (Note 12):

Net investment in capital assets 356,404,912 103,223,493 459,628,405 Restricted for:

Capital projects 71,991,750 71,991,750
Debt service 1,087,433 490,398 1,577,831 Community development and housing 60,783,876 60,783,876 Special projects 40,701,297 40,701,297
Major maintenance 31,204,137 31,204,137
Minority Interest (385,495) (385,495)
Outreach Independence:

Expendable 41,524 41,524
Nonexpendable 335,375 335,375
Total restricted 174,941,255 31,309,040 206,250,295 Unrestricted (42,157,641) 24,193,706 (17,963,935) Total net position 489,188,526$ 158,726,239$ 647,914,765$ Primary Government

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City of Fairfield, California

Statement of Activities
For the Year Ended June 30, 2023

The notes to the basic financial statements are an integral part of this statement.

19 Program Revenues
Operating Capital
Charges for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions Total Primary government:

Governmental activities
Administration 13,535,269$ 395,238$ 658,242$ 1,886,729$ 2,940,209$ Finance 2,494,093 6,532 7,149 13,681 Police 61,762,522 492,256 1,287,494 1,779,750 Fire 34,042,320 1,481,153 3,856,472 5,337,625 Public works 53,894,207 7,317,026 4,134,569 19,688,155 31,139,750 Community development 9,590,647 1,726,585 1,048,668 2,775,253 Housing 16,523,078 12,742,006 614,290 13,356,296 Parks and recreation 9,220,998 1,458,748 532,596 4,627,040 6,618,384 Interest on long-term debt 1,172,795 -
Total governmental activities 202,235,929 12,877,538 24,267,196 26,816,214 63,960,948 Business-type activities:

Water utility 39,393,361 36,817,083 4,945,046 41,762,129 North bay treatment plant 10,553,487 11,803,191 11,803,191 Transportation 12,935,916 591,615 10,031,849 346,731 10,970,195 Golf courses 5,820,901 6,224,425 6,224,425 Total business-type activities 68,703,665 55,436,314 10,031,849 5,291,777 70,759,940 Total primary government 270,939,594$ 68,313,852$ 34,299,045$ 32,107,991$ 134,720,888$ General Revenues and Transfers:

Taxes:

Property taxes
Sales taxes
Transaction and use taxes
Franchise taxes
Utility user taxes
Transient occupancy taxes
Business license taxes
Other taxes
Total taxes
Unrestricted intergovernmental revenues
Investment earnings
Net decrease in fair value of investments
Miscellaneous
Transfers (Note 3)
Total general revenues and transfers
Change in net position
Net position - beginning of year, as restated (Note 22) Net position - end of year
Packet Page 62 of 516Attachment 2 Page 38 of 188

The notes to the basic financial statements are an integral part of this statement.

20 Governmental Business-Type
Activities Activities Total
(10,595,060)$ (10,595,060)$
(2,480,412) (2,480,412)
(59,982,772) (59,982,772)
(28,704,695) (28,704,695)
(22,754,457) (22,754,457)
(6,815,394) (6,815,394)
(3,166,782) (3,166,782)
(2,602,614) (2,602,614)
(1,172,795) (1,172,795)
(138,274,981) (138,274,981)
2,368,768$ 2,368,768
1,249,704 1,249,704
(1,965,721) (1,965,721)
403,524 403,524
2,056,275 2,056,275
(138,274,981) 2,056,275 (136,218,706) 38,320,898 38,320,898
31,765,373 31,765,373
25,750,284 25,750,284
6,680,437 6,680,437
5,097,331 5,097,331
2,894,996 2,894,996
1,761,206 1,761,206
2,022,852 2,022,852
114,293,377 114,293,377
1,135,193 1,135,193
4,905,710 1,685,909 6,591,619
(240,265) (147,867) (388,132) 6,283,381 76,075 6,359,456 370,140 (370,140) -
126,747,536 1,243,977 127,991,513
(11,527,445) 3,300,252 (8,227,193) 500,715,971 155,425,987 656,141,958
489,188,526$ 158,726,239$ 647,914,765$
and Changes in Net Position
Net (Expense) Revenue

Packet Page 63 of 516Attachment 2 Page 39 of 188

City of Fairfield, California
People and Places in the City

21 Packet Page 64 of 516Attachment 2 Page 40 of 188

City of Fairfield, California
Governmental Funds Financial Statements

22 Packet Page 65 of 516Attachment 2 Page 41 of 188

City of Fairfield, California

Balance Sheet
Governmental Funds
June 30, 2023

The notes to the basic financial statements are an integral part of this statement.

23 General Low Mod
Fund Income Housing
Assets:

Cash and investments  (Notes 1D and 4) 49,245,679$     3,100,608$ Receivables, net  (Note 5) 29,596,136        31,015,107 Prepaid items (Note 1G) 895,654             2,905
Restricted cash and investments  (Notes 1E and 4) 6,252,481 Land held for development (Note 1Q) 6,485,680
Total assets 85,989,950$     40,604,300$
Liabilities:

Accounts payable and other current liabilities (Note 7) 11,978,383$ 96,330$ Advances from other funds (Note 3)
Due to other funds (Note 3)
Unearned revenues (Note 1R) 735,856
Total liabilities 12,714,239 96,330
Deferred Inflows Of Resources (Note 1J):

Lease related ‐ (lessor) (Notes 1N and 9) 15,949,257
Unavailable revenue‐receivables 2,530,000
Total deferred inflows of resources 15,949,257 2,530,000 Fund Balances (Notes 1P and 13):

Nonspendable 895,654             2,905
Restricted 6,370,309          37,975,065
Committed 3,744,466
Assigned 282,000
Unassigned 46,034,025
Total fund balances 57,326,454        37,977,970
Total liabilities, deferred inflows of
resources, and fund balances 85,989,950$     40,604,300$ Major Funds

Packet Page 66 of 516Attachment 2 Page 42 of 188

The notes to the basic financial statements are an integral part of this statement.

24 Total
Non‐Major Total
City Governmental Governmental
Capital Projects         Funds                 Funds
62,004,529$           75,013,826$           189,364,642$ 2,017,228                21,705,595             84,334,066 3,333                        901,892
284,520                   6,537,001
6,485,680
64,021,757$           97,007,274$           287,623,281$ 9,384,555$             1,919,229$             23,378,497$ 997,000                   997,000
1,838,154                1,838,154
286,725                   4,356,936                5,379,517 9,671,280                9,111,319                31,593,168 15,949,257
3,311,921                5,841,921
‐                            3,311,921                21,791,178 338,708                   1,237,267
50,014,251             63,922,173             158,281,798 18,273,633             22,018,099
4,336,226                2,049,520                6,667,746 46,034,025
54,350,477             84,584,034             234,238,935 64,021,757$           97,007,274$           287,623,281$ Major Funds

Packet Page 67 of 516Attachment 2 Page 43 of 188

City of Fairfield, California

Reconciliation of the Governmental Funds Balance Sheet to the Government‐Wide Statement of Net Position

June 30, 2023

The notes to the basic financial statements are an integral part of this statement.

25 Reconciliation Statement of N
Total Fund Balances ‐ Total Governmental Funds 234,238,935$ Amounts reported for Governmental Activities in the Statement of Net Position are different because:

Capital assets used in governmental activities are not current financial resources and therefore are not reported in the Governmental Funds Balance Sheet. Except for the Internal Service Funds amount of $27,333,932, the capital assets were as follows:

Nondepreciable Assets 68,697,733
Depreciable/amortizable buildings, property, equipment, and infrastructure, net 270,831,765 Total Capital Assets, net of accumulated depreciation/amortization 339,529,498 Interestpayable onlong‐term debt does not require current financial resources. Therefore, interest payable is not reported as a liability in the Governmental Funds Balance Sheet. (89,654) Internal Service Funds are used by management to charge the costs of certain activities, such as insurance and fleet management, to individual funds. The assets, deferred outflows/inflow of resources, and liabilities of the Internal Service Funds are included in governmental activities in the Government‐Wide Statement of Net Position. 72,976,979 Deferred inflows recorded in governmental fund financial statements resulting from activities in which revenues were earned but funds were not available, were recognized as revenues in the Government‐Wide Financial Statements. 5,841,921 Deferred inflows related to lease revenue are not reported in the Governmental Funds but are recognized as revenue in the Government‐Wide Statements. 577,354 Deferred outflows and deferred inflows related to pensions are only reported in the Government‐Wide Statement of Net Position. 71,194,348
Deferred charges on refunding of debt arenot reported in theGovernmental Funds Balance Sheet but are reported in the Government‐Wide Statement of Net Position, and amortized over time.1,455,376
Long ‐termliabilities arenot dueand payablein the current period and therefore they are not reported in the Governmental Funds Balance Sheet. Except for the Internal Service Funds amount of $39,652,836, the long‐term liabilities were as follows:

Long‐term liabilities ‐ due within one year (2,750,702) Long‐term liabilities ‐ due in more than one year (233,785,529) Total long‐term liabilities (236,536,231)
Net Position of Governmental Activities 489,188,526$
Packet Page 68 of 516Attachment 2 Page 44 of 188

City of Fairfield, California
People and Places in the City

26 Packet Page 69 of 516Attachment 2 Page 45 of 188

City of Fairfield, California

Statement of Revenues, Expenditures and
Changes in Fund Balances
Governmental Funds
For the Year Ended June 30, 2023

The notes to the basic financial statements are an integral part of this statement.

27 General Low Mod
Fund Income Housing
Revenues:

Property taxes 37,917,393$
Sales taxes 31,765,373
Transaction and use taxes (Measure P) 25,750,284
Utility and franchise taxes 11,777,768
Other taxes 6,679,054
Development fees
Special assessments levied
Licenses, permits and fines 3,620,409
Developers' contributions
Intergovernmental 544,711                 614,290$
Charges for services 6,645,281
Investment income 1,507,985             222,698
Net increase (decrease) in fair value of investments (111,765)               56,847 Miscellaneous 4,045,243             132,719
Total revenues 130,141,736         1,026,554
Expenditures:

Current:

Administration 6,409,959
Finance 1,659,569
Police 54,672,405
Fire 29,299,880
Public works 17,250,475
Parks and recreation 7,224,619
Community development 5,441,017
Housing services 3,144,649 Non‐departmental 5,249,441
Capital outlay 211,309
Debt service:

Principal retirement 433,397                 18,202
Interest 19,194                   7,945
Fiscal agent fees
Total expenditures 127,871,265         3,170,796
Excess (deficiency) of revenues
over (under) expenditures 2,270,471             (2,144,242) Other Financing Sources (Uses):

Subscriptions (Notes 1O and 10)200,309
Transfers in (Note 3) 1,887,753             45,000
Transfers out (Note 3) (3,838,556)            (31,852)
Total other financing sources (uses)(1,750,494)            13,148 Net change in fund balances 519,977                 (2,131,094) Fund Balances:

Beginning of year 56,806,477 40,109,064
End of year 57,326,454$ 37,977,970$
Major Funds
Packet Page 70 of 516Attachment 2 Page 46 of 188

The notes to the basic financial statements are an integral part of this statement.

28 Total
Non‐Major Total
City Governmental Governmental
Capital Projects Funds Funds
403,505$              38,320,898$
31,765,373
25,750,284
11,777,768
4,322,641             11,001,695
9,578,498$                9,578,498
9,508,692             9,508,692
3,620,409
115,857                 115,857
5,592,045                   22,322,257           29,073,303 6,645,281
807,870                      875,177                 3,413,730 (130,106)                     171,242                 (13,782) 54,727                        2,468,014             6,700,703 15,903,034                40,187,385           187,258,709 928,013                 7,337,972
1,659,569
674,188                 55,346,593
1,093,824             30,393,704
6,904,046             24,154,521
538,082                 7,762,701
1,031,045             6,472,062
13,171,299           16,315,948
5,249,441
22,109,987                1,065,140             23,386,436 2,350,646             2,802,245
1,150,949             1,178,088
50,281                   50,281
22,109,987                28,957,513           182,109,561 (6,206,953)                 11,229,872           5,149,148 200,309
10,442,819                3,544,641             15,920,213 (79,163)                       (10,353,070)          (14,302,641) 10,363,656                (6,808,429)            1,817,881 4,156,703                   4,421,443             6,967,029 50,193,774                80,162,591           227,271,906 54,350,477$              84,584,034$         234,238,935$ Major Funds
Packet Page 71 of 516Attachment 2 Page 47 of 188

City of Fairfield, California

Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balance to the Government‐Wide Statement of Activities
For the Year Ended June 30, 2023

The notes to the basic financial statements are an integral part of this statement.

29 Net Change in Fund Balances ‐ Total Governmental Funds 6,967,029$ Amounts reported for governmental activities in the Statement of Activities are different because:

Governmental Funds report capital outlay as expenditures in the amount of $23,386,436. In the Government‐Wide Statementof Activities,a portion of theseexpenditures, $7,352,759 are reported as capital assets. Additional departmental assets were recorded at $2,273,682 with $28,775 in retirement of capital assets.9,597,666
Depreciation expense on capital assets is reported in the Government‐WideStatement of Activities, but it does not require the use of current financial resources. Therefore, depreciation expense is not reported as an expenditure in Governmental Funds. (14,432,224) Amortization expense on right‐to ‐useassetsisreportedintheGovernment‐Wide Statement of Activities, but it does not require the use of current financial resources. Therefore, amortization expense is not reported as an expenditure in Governmental Funds. (526,057) Repayment of lease principal is an expenditure in Governmental Funds, but the repayment reduces long‐term liabilities in the Government‐Wide Statement of Net Position. 277,489 Repayment of subscription principal is an expenditure in Governmental Funds, but the repayment reduces long‐term liabilities in the Government‐Wide Statement of Net Position. 262,866 Repayment of bond principal is an expenditure in Governmental Funds, but the repayment reduces long‐term liabilities in the Government‐Wide Statement of Net Position. 2,261,890 Issuance of long‐tem debt is a revenue in Governmental Funds, but the issuance of long‐term debt increases the long‐term obligations in the Government‐Wide Statement of Net Position. (200,309) Accrued interest expense on long‐term debt is reported in the Government‐Wide Statement of Activities, but it does not require the use of current financial resources. Therefore, accrued interest expenseis notreported as an expenditurein Governmental Funds. This amountrepresents thechange in accrued interest from prior year.5,293
In the Governmental Funds, lessor lease revenue not meeting the availability criteria for revenue recognition arerecorded as deferred inflows of resources. In theGovernment‐Wide Statements,these amounts are recognized as income in a systematic and rational manner over the term of the lease. 577,354 Amortization expense (of Deferred Charges and Bond Issue Discount) is reported in the Government‐ Wide Statement of Activities, but it does not require the use of current financial resources. Therefore, amortization expense is not reported as expenditures in Governmental Funds. (156,938) In the Governmental Funds, receivables not meeting the availability criteria for revenuerecognition are recorded as unavailable revenue. In the Government‐Wide Statements, these amounts are recognized as income on the full accrual basis of accounting. (764,735) Internal Service Funds are used by management to charge the costs of certain activities, such as insurance and fleet management, to individual funds. The decrease in net position is reported with governmental activities.(7,318,430)
The change in pension amounts (actuarially determined) are not a use of current financial resources and are not included in the net change in fund balances but are included in the net position of governmental activities.(8,078,339)
Change in Net Position of Governmental Activities (11,527,445)$ Packet Page 72 of 516Attachment 2 Page 48 of 188

City of Fairfield, California

Statement of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual
General Fund
For the Year Ended June 30, 2023

The notes to the basic financial statements are an integral part of this statement.

30 Variance with
Budgeted Amounts Final Budget‐
Positive
Original Final Actual (Negative)
Revenues:

Property taxes 38,412,352$ 38,412,352$ 37,917,393$ (494,959)$ Sales taxes 30,091,586 31,691,586 31,765,373 73,787 Transaction and use taxes (Measure P) 25,779,044 25,779,044 25,750,284 (28,760) Utility and franchise taxes 9,973,572 11,773,572 11,777,768 4,196 Other taxes 6,173,120 6,973,120 6,679,054 (294,066) Licenses, permits and fines 3,567,812 3,567,812 3,620,409 52,597 Intergovernmental 606,717 606,717 544,711 (62,006) Charges for services 5,898,379 6,783,379 6,645,281 (138,098) Investment income 988,232 988,232 1,507,985 519,753 Net increase (decrease) in fair value of investments (111,765) (111,765) Miscellaneous 3,819,888 3,819,888 4,045,243 225,355 Total Revenues 125,310,702 130,395,702 130,141,736 (253,966) Expenditures:

Current:

Administration 7,624,877 6,903,185 6,409,959 493,226 Finance 1,668,150 1,688,001 1,659,569 28,432 Police 54,071,374 54,698,201 54,672,405 25,796 Fire 26,805,876 29,305,876 29,299,880 5,996 Public works 17,679,785 17,679,785 17,250,475 429,310 Parks and recreation 8,447,606 7,447,606 7,224,619 222,987 Community development 5,121,901 5,134,014 5,441,017 (307,003) Non‐departmental 4,808,440 5,506,583 5,249,441 257,142 Capital Outlay 211,309 (211,309)
Debt service:

Principal retirement 433,397              (433,397)
Interest 19,194                (19,194)
Total Expenditures 126,228,009         128,363,251          127,871,265      491,986 Excess revenues over expenditures (917,307)               2,032,451              2,270,471           238,020 Other Financing Sources (Uses):

Subscriptions 200,309 200,309
Transfers in 2,687,753 1,887,753 1,887,753 ‐ Transfers out (3,408,796) (3,838,556) (3,838,556) ‐ Total other financing sources (uses) (721,043) (1,950,803) (1,750,494) 200,309 Net change in fund balance (1,638,350) 81,648 519,977 438,329 Fund Balance ‐ Beginning of Year 56,806,477 56,806,477 56,806,477 Fund Balance ‐ End of Year 55,168,127$ 56,888,125$ 57,326,454$ 438,329$ Packet Page 73 of 516Attachment 2 Page 49 of 188

City of Fairfield, California

Statement of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual
Low Mod Income Housing Major Special Revenue Fund
For the Year Ended June 30, 2023

The notes to the basic financial statements are an integral part of this statement.

31 Budget Actual Housing Fund
Variance with
Budgeted Amounts Final Budget‐
Positive
Original Final Actual (Negative)
Revenues:

Intergovernmental 614,290$ 614,290$
Investment income 105,657$ 105,657$ 222,698 117,041 Net increase (decrease) in fair value of investments 56,847 56,847 Miscellaneous 1,764,697 1,764,697 132,719 (1,631,978) Total Revenues 1,870,354 1,870,354 1,026,554 (843,800) Expenditures:

Current:

Housing services 3,542,874 3,542,874 3,144,649 398,225 Debt Service:

Principal 18,202                (18,202)
Interest 7,945                  (7,945)
Total Expenditures 3,542,874          3,542,874          3,170,796          372,078 Excess (deficiency) of revenues
over (under) expenditures (1,672,520)         (1,672,520)         (2,144,242)         (471,722) Other Financing (Uses):

Transfers in 45,000 45,000 45,000 ‐ Transfers out (225,018) (225,018) (31,852) 193,166 Total other financing (uses) (180,018) (180,018) 13,148 193,166 Net change in fund balances (1,852,538) (1,852,538) (2,131,094) (278,556) Fund Balance ‐ Beginning of Year 40,109,064 40,109,064 40,109,064 Fund Balance ‐ End of Year 38,256,526$ 38,256,526$ 37,977,970$ (278,556)$ Packet Page 74 of 516Attachment 2 Page 50 of 188

City of Fairfield, California
Proprietary Funds Financial Statements

32 Packet Page 75 of 516Attachment 2 Page 51 of 188

City of Fairfield, California

Statement of Net Position
Proprietary Funds
June 30, 2023

The notes to the basic financial statements are an integral part of this statement.

33 North Bay
Water Treatment
Utility Plant Transportation
Assets:

Current Assets
Cash and investments (Notes 1D and 4) 75,389,531$           4,520,978$          3,165$ Receivables, net (Note 5) 7,423,591                1,407,563            1,954,683 Inventory (Note 1G)
Prepaid items (Note 1G)
Due from other funds (Note 3)
Total current assets 82,813,122             5,928,541            1,957,848 Noncurrent Assets
Restricted cash and investments (Notes 1E and 4) 27,595,815 Advances to other funds (Note 3) 1,865,706
Investment in joint agencies (Note 1H) 522,363
Loans receivable (Note 5) 1,742,616
Land held for development (Note 1Q)
Capital assets: (Notes 1I and 6)
Nondepreciable 18,612,317             1,487,081
Depreciable/amortizable 224,912,297           66,192,916          25,976,968 Less: accumulated depreciation/amortization (129,932,679)         (33,980,449)        (23,934,795) Total capital assets 113,591,935           33,699,548          2,042,173 Total noncurrent assets 114,114,298           64,903,685          2,042,173 Total assets 196,927,420           70,832,226          4,000,021 Deferred Outflows of Resources (Note 1J):

Deferred charge on refunding
Deferred outflows related to OPEB (Note 15)
Deferred outflows related to pension (Note 14) 5,216,632 2,144,255 1,054,146 Total deferred outflows of resources 5,216,632 2,144,255 1,054,146 Liabilities:

Current Liabilities
Accounts payable and other current liabilities (Note 7) 2,064,206                713,017                1,312,785 Due to other funds (Note 3)74,404
Accrued interest payable 298,564
Accreted interest payable (Note 8) 183,416
Unearned revenue (Note 1R)400,478
Compensated absences (Note 8) 73,558                      61,185                  8,509 Claims and judgments payable (Notes 8 and 11)
Long‐term obligations ‐ due within one year (Note 8) 3,163,944                28,674 Total current liabilities 5,783,688                774,202                1,824,850 Noncurrent Liabilities
Advances from other funds (Note 3) 1,865,706
Accreted interest payable (Note 8) 35,928,229
Compensated absences (Note 8) 1,397,588                1,162,516            161,672 Claims and judgments payable (Notes 8 and 11)
Net pension liability (Note 14) 17,889,332             7,353,282            3,479,127 Net OPEB liability (Note 15)
Long‐term obligations ‐ due in more than one year (Note 8) 56,511,462             29,254 Total noncurrent liabilities 113,592,317           8,515,798            3,670,053 Total liabilities 119,376,005           9,290,000            5,494,903 Deferred Inflows of Resources (Note 1J):

Deferred inflows related to pensions (Note 14) 1,398,047 705,001 Total deferred inflows of resources 1,398,047 705,001 ‐ Net Position (Note 12):

Net investment in capital assets 53,916,529 33,699,548 1,984,245 Restricted for major maintenance 31,204,137
Restricted for minority interest (385,495)
Restricted for debt service
Unrestricted 27,453,471 (1,536,710) (2,424,981) Total net position (deficit)81,370,000$ 62,981,480$ (440,736)$ Business‐type Activities ‐ Enterprise Funds
Packet Page 76 of 516Attachment 2 Page 52 of 188

The notes to the basic financial statements are an integral part of this statement.

34 Governmental
Total Activities
Enterprise Internal
Golf Courses Funds Service Funds
1,842,917$         81,756,591$            67,614,504$
99,600                 10,885,437              1,375,767 275,179               275,179                    740,700 ‐                                  136,717
‐                                  1,912,558
2,217,696           92,917,207              71,780,246
1,046,771           28,642,586
1,865,706                 997,000
522,363
1,742,616                 11,344,774
2,104,129
11,718,390         31,817,788              906,452
20,204,796         337,286,977            50,310,030
(18,894,756)       (206,742,679)          (23,882,550)
13,028,430         162,362,086            27,333,932
14,075,201         195,135,357            41,779,835
16,292,897         288,052,564            113,560,081
29,649                 29,649
171,437
8,415,033
29,649                 8,444,682                 171,437 497,892               4,587,900                 1,101,703 74,404
8,719                    307,283
183,416
518,761               919,239
143,252                    5,807,867
3,076,852
481,679               3,674,297                 1,253,042 1,507,051           9,889,791                 11,239,464 1,865,706
35,928,229
2,721,776                 15,927,407
11,539,148
28,721,741
82,581
56,540,716              1,965,939
‐                             125,778,168            29,515,075 1,507,051           135,667,959            40,754,539
2,103,048
‐                        2,103,048                  ‐
13,623,171         103,223,493            24,114,951
31,204,137
(385,495)
490,398               490,398
701,926               24,193,706              48,862,028 14,815,495$       158,726,239$          72,976,979$
Packet Page 77 of 516Attachment 2 Page 53 of 188

City of Fairfield, California

Statement of Revenues, Expenses and Changes in Net Position Proprietary Funds
For the Year Ended June 30, 2023

The notes to the basic financial statements are an integral part of this statement.

35 North Bay
Water Treatment
Utility Plant Transportation
Operating Revenues:

Charges for services 35,838,123$      11,803,191$      529,127$ Insurance Recovery
Miscellaneous 978,960              62,488
Total operating revenues 36,817,083        11,803,191        591,615 Operating Expenses:

Material and supplies
Operating and maintenance 24,201,663 7,449,734 8,141,132 General and administrative 3,837,216 1,337,122 2,167,341 Insurance claims and premiums
Depreciation and amortization 6,905,455 1,766,631 788,868 Total operating expenses 34,944,334 10,553,487 11,097,341 Operating income (loss) 1,872,749 1,249,704 (10,505,726) Nonoperating Revenues (Expenses):

Investment income 1,213,945          450,463
Net increase (decrease) in fair value of investments (35,184)               (136,271) Interest expense (4,449,027)         (875)
Intergovernmental revenue 10,031,849
Gain (loss) on disposition of capital asset (1,210,402) Other revenue (expense) 40,191                (627,298) Total nonoperating revenues (expenses)(3,230,075)         314,192              8,193,274 Income (loss) before capital contributions
and transfers (1,357,326)         1,563,896          (2,312,452) Capital contributions:

Connection fees 4,621,317
Intergovernmental revenue 346,731
Developers contributions 323,729
Total capital contributions 4,945,046 ‐ 346,731 Transfers (Note 3):

Transfers in
Transfers out (242,438) (88,954) (38,748) Total transfers (242,438) (88,954) (38,748) Change in net position 3,345,282 1,474,942 (2,004,469) Net Position (Deficit):

Beginning of year, as restated (Note 22) 78,024,718 61,506,538 1,563,733 End of year 81,370,000$ 62,981,480$ (440,736)$ Business‐type Activities ‐ Enterprise Funds
Packet Page 78 of 516Attachment 2 Page 54 of 188

The notes to the basic financial statements are an integral part of this statement.

36 Governmental
Total Activities
Enterprise Internal
Golf Courses Funds Service Funds
5,820,541$          53,990,982$         34,145,515$
662,564
403,884                1,445,332
6,224,425             55,436,314            34,808,079
5,653,865
5,391,218             45,183,747            19,492,486
7,341,679              6,252,389
5,975,165
380,173                9,841,127              4,894,951 5,771,391             62,366,553            42,268,856
453,034                (6,930,239)             (7,460,777) 21,501                  1,685,909              1,019,851 23,588                  (147,867)                (213,582) (49,510)                 (4,499,412)             (23,554) 10,031,849            75,145
19,419                  (1,190,983)             531,919 16,465                  (570,642)
31,463                  5,308,854              1,389,779 484,497                (1,621,385)             (6,070,998)

4,621,317
346,731
323,729
‐                             5,291,777               ‐ 1,701,000
(370,140)                (2,948,432)
‐                             (370,140)                (1,247,432) 484,497                3,300,252              (7,318,430) 14,330,998          155,425,987         80,295,409
14,815,495$        158,726,239$       72,976,979$
Packet Page 79 of 516Attachment 2 Page 55 of 188

City of Fairfield, California

Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2023

The notes to the basic financial statements are an integral part of this statement.

37 North Bay
Water Treatment
Utility Plant Transportation
Cash Flows from Operating Activities:

Receipts from customers and users 36,338,373$ 12,398,808$ 620,457$ Payments to suppliers (14,931,288) (4,646,155) (5,635,686) Payments to employees (7,794,437) (2,927,022) (1,191,732) Payments for interfund services used (5,475,439) (421,527) (3,471,881) Net cash provided by (used for) operating activities 8,137,209 4,404,104 (9,678,842) Cash Flows from Noncapital Financing Activities:

Grants 16,893,054
Proceeds from interfund loan 74,404
Repayment of interfund loan (7,346,708)
Transfers in
Transfers out (242,438) (88,954) (38,748) Net cash provided by (used for) noncapital
financing activities (242,438) (88,954) 9,582,002 Cash Flows from Capital and Related Financing Activities:

Principal payments ‐ bonds (6,515,000)
Principal payments ‐ notes payable
Principal payments ‐ lease liabilities
Interest payments ‐ lease liabilities
Principal payments ‐ subscription‐based liabilities (28,971) Interest payments ‐ subscription‐based liabilities (875) Interest paid on bonds (1,240,375)
Fiscal agent fees paid (14,440)
Connection fees 4,621,317
Capital contribution 437,724
Proceeds from sales of capital assets 40,191 46,300 Acquisition and construction of capital assets (4,855,493) (809,243) (349,481) (7,963,800) (809,243) 104,697

Cash Flows from Investing Activities:

Investment income received 1,057,570 548,047 (4,692) Net cash provided by investing activities 1,057,570 548,047 (4,692) Net increase (decrease) in cash and cash equivalents 988,541 4,053,954 3,165 Cash and Cash Equivalents:

Beginning of year 74,400,990 28,062,839
End of year 75,389,531$ 32,116,793$ 3,165$
Business‐type Activities ‐ Enterprise Funds
Net cash provided by (used by) capital
and related financing activities
Packet Page 80 of 516Attachment 2 Page 56 of 188

The notes to the basic financial statements are an integral part of this statement.

38 Governmental
Total Activities
Enterprise Internal
Golf Courses Funds Service Funds
6,224,033$      55,581,671$      42,195,141$
(5,694,854)       (30,907,983)       (22,417,504)
(11,913,191)       (11,836,595)
(134,743)          (9,503,590)         (1,433,586)
394,436           3,256,907           6,507,456
16,893,054
74,404
(7,346,708)
1,701,000
(370,140)             (2,948,432)
9,250,610           (1,247,432)
(455,000)          (6,970,000)
(119,155)
(73,374)
(6,670)
(28,971)               (1,310,568)
(875)                     (16,057)
(25,400)            (1,265,775)         (853)
(4,003)               (18,443)
4,621,317
437,724
19,419              105,910              531,919
(235,218)          (6,249,435)         (5,415,509)
(700,202)          (9,368,548)         (6,410,267)
45,988              1,646,913           628,056
45,988              1,646,913           628,056
(259,778)          4,785,882           (522,187)
3,149,466        105,613,295      68,136,691
2,889,688$      110,399,177$    67,614,504$
Packet Page 81 of 516Attachment 2 Page 57 of 188

City of Fairfield, California

Statement of Cash Flows (continued)
Proprietary Funds
For the Year Ended June 30, 2023

The notes to the basic financial statements are an integral part of this statement.

39 Statement of Cash Flows Part 2
North Bay
Water Treatment
Utility Plant Transportation
Reconciliation of Operating Income to Net Cash
Provided by (Used for) Operating Activities:

Operating income (loss) 1,872,749$ 1,249,704$ (10,505,726)$ Adjustments to reconcile operating income (loss)
to net cash provided by (used for) operating activities:

Depreciation and amortization expense 6,905,455            1,766,631          788,868 Pension expense 2,004,671            823,938              509,637 (Increase) decrease in receivable (478,710)              (11,178)               28,842 Decrease in loans receivable 151,997
(Increase) decrease in inventory
(Increase) decrease in prepaid items
(Increase) decrease in advances to other funds 454,798 Increase (decrease) in advances from other funds (454,798) (Increase) decrease in due from other funds
(Increase) decrease in deferred outflows (1,777,468)          (730,615)            (345,686) Increase (decrease) in accounts payable (671,907)              363,141              (141,076) Increase (decrease) in compensated absences 335,688              (13,701) Increase in claims and judgments payable 729,072
Increase (decrease) in unearned revenue
Non‐cash expense 8,145
Total adjustment 6,264,460            3,154,400          826,884 Net cash provided by (used for) operating activities 8,137,209$         4,404,104$        (9,678,842)$ Non‐cash investing, capital and financing activities:
323,729$
211,205
Business‐type Activities ‐ Enterprise Funds
Contributions of capital assets from developers
Amortization of bond premium
Subscription liability for the acquisition of right to use asset Packet Page 82 of 516Attachment 2 Page 58 of 188

The notes to the basic financial statements are an integral part of this statement.

40 Governmental
Total Activities
Enterprise Internal
Golf Courses Funds Service Funds
453,034$         (6,930,239)$       (7,460,777)$
380,173           9,841,127           4,894,951
3,338,246
(392)                  (461,438)             40,355
151,997
(39,593)            (39,593)               104,226
‐                            550,166
454,798              (261,000)
(454,798)
5,434,150
(2,853,769)         217,666
(440,873)          (890,715)             (245,302)
321,987              3,396,110
729,072              417,000
42,087              42,087
8,145                   (580,089)
(58,598)            10,187,146         13,968,233
394,436$         3,256,907$        6,507,456$
(4,247,149)$
323,729$
16,317$           227,522
Packet Page 83 of 516Attachment 2 Page 59 of 188

City of Fairfield, California
Fiduciary Funds Financial Statements

41 Packet Page 84 of 516Attachment 2 Page 60 of 188

City of Fairfield, California

Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2023

The notes to the basic financial statements are an integral part of this statement.

42 Successor Agency
to the Fairfield
Redevelopment Agency
Custodial Private‐Purpose
Funds Trust Fund
Assets:

Cash and investments (Note 4) 13,803,054$ 7,303,997$ Receivables, net 4,590,552 1,384,679 Restricted cash and investments (Note 4)9,080,969 714,430 Land held for resale (Note 20)3,920,066
Total assets 27,474,575 13,323,172 Liabilities:

Accounts payable and other current liabilities 6,903,073 Interest payable 272,877
Loans payable to City of Fairfield (Note 20)11,454,463 Long‐term debt ‐ due within one year (Note 20)3,135,000 Long‐term debt ‐ due in more than one year (Note 20)9,515,647 Total liabilities 6,903,073 24,377,987 Net Position (Deficit):

Restricted for:

Individuals, organizations and other governments 20,571,502$ (11,054,815)$ Net Position Fiduciary Funds
Packet Page 85 of 516Attachment 2 Page 61 of 188

City of Fairfield, California

Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the Year Ended June 30, 2023

The notes to the basic financial statements are an integral part of this statement.

43 Successor Agency
to the Fairfield
Redevelopment Agency
Custodial Private‐purpose
Funds Trust Fund
Additions:

Collection of other fees 4,875,102$
Collection for other governments 27,020,317
Contributions from members 168,000
Special assessments 5,890,710
Property taxes 8,073,264$
Investment income 789,875 58,469 Net decrease in fair value of investments (72,710) (95,016) Miscellaneous 138,894
Total Additions 38,671,294 8,175,611 Deductions:

Distribution of other fees 5,020,789
Distributions to other governments 24,871,333
Program and administrative expenses 1,699,383
Interest expense 4,723,099
Principal payment on bonds 850,000
Developer reimbursements 779,582
Enforceable obligations 457,265
Total deductions 37,944,186 457,265

Change in Net Position 727,108 7,718,346 Net Position ‐ Beginning of Year 19,844,394 (18,773,161) Net Position ‐ End of the Year 20,571,502$ (11,054,815)$

Packet Page 86 of 516Attachment 2 Page 62 of 188

City of Fairfield, California
People and Places in the City

44 Packet Page 87 of 516Attachment 2 Page 63 of 188

City of Fairfield, California

Notes to Basic Financial Statements
For the Year Ended June 30, 2023

45 1) Summary of Significant Accounting Policies .............................................................................................. 46 2) Property Taxes ......................................................................................................................................... 57 3) Interfund Transactions ............................................................................................................................. 57 4) Cash and Investments .............................................................................................................................. 59 5) Receivables .............................................................................................................................................. 65 6) Capital Assets ........................................................................................................................................... 66 7) Accounts Payable and Other Current Liabilities ......................................................................................... 70 8) Long‐Term Obligations ............................................................................................................................. 71 9) Leases ...................................................................................................................................................... 75 10) Subscription‐Based Information Technology Arrangements (SBITAs) ........................................................ 76 11) Risk Management and Insurance .............................................................................................................. 77 12) Classification of Net Position .................................................................................................................... 78 13) Fund Balances .......................................................................................................................................... 79 14) Retirement Plans ...................................................................................................................................... 79 15) Other Post‐Employment Benefits (OPEB) .................................................................................................. 85 16) Tax Abatements‐Economic Development Incentives ................................................................................. 88 17) Commitment and Contingent Liabilities .................................................................................................... 89 18) Excess of Expenditures over Appropriations and Negative Fund Balances/Net Position ............................. 89 19) North Bay Treatment Plan ........................................................................................................................ 90 20) Successor Agency Trust for Assets of Former Redevelopment Agency ....................................................... 90 21) Debt with No City Commitment ................................................................................................................ 94 22) Prior Period Adjustment ........................................................................................................................... 95 23) Subsequent Event .................................................................................................................................... 95

Packet Page 88 of 516Attachment 2 Page 64 of 188

City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

46 1) Summary of Significant Accounting Policies

A. Organization and Reporting Entity

The City of Fairfield (the City) was incorporated on December 12, 1903, under the laws of the State of California.

The City is a general law city administered by a Council‐Manager form of government. As required by generally accepted accounting principles, these financial statements present the City and its component units, entities for which the City is considered to be financially accountable.

Component units, although legally separate entities, are, in substance, part of the City’s operations and data from these units are combined with data of the City. Based on the above criteria, the accompanying financial statements include the financial activities of these component units:

Fairfield Public Financing Authority
Fairfield Water Facilities Improvement District No. 1
Fairfield Municipal Park Improvement District No. 1
Fairfield Storm Drain Facilities Improvement District No. 1 Fairfield Community Facilities Districts
Housing Authority of the City of Fairfield

These entities are legally separate from each other; however, the City Council serves in separate session as the governing body of these related agencies. The financial activities of these entities are integrally related to those of the City and blended with those of the City. Blending involves aggregating/merging component unit data and data from the City at both the Government‐Wide and Fund Financial Statement level.

Each of the component units or activities included in the Government‐Wide and Fund Financial Statements are blended components because the governing body of the City is the same or substantially as that of the Authority (or District) and management of the City has operational responsibility for the entity. These component units are described below:

i. Fairfield Public Financing Authority

The Fairfield Public Financing Authority (the Financing Authority) is a public agency created under a joint exercise of powers agreement between the City and the former Redevelopment Agency (now Successor Agency). The Financing Authority was created for the purpose of providing financing of public capital improvements for the City and the former Agency. The Financing Authority is a blended component because the City Council is the governing board of the Financing Authority.

ii. Fairfield Water Facilities Improvement District No. 1

The Fairfield Water Facilities Improvement District No. 1 (the Water Improvement District) is a voter‐approved improvement district formed in 1972 to finance and build water treatment and storage facilities. The City Council is the governing board of the Water Improvement District. The entity is a blended component because the governing body of the City is the same as that of the District and management of the City has operational responsibility for the District.

iii. Fairfield Municipal Park Improvement District No. 1

The Fairfield Municipal Park Improvement District No. 1 (the Park Improvement District) is a voter‐approved improvement district formed in 1972 to finance acquisition and construction of parks and recreational facilities.

The City Council is the governing board of the Park Improvement District. The entity is a blended component Packet Page 89 of 516Attachment 2 Page 65 of 188

City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

47 because the governing body of the City is the same as that of the District and management of the City has operational responsibility for the District.

iv. Fairfield Storm Drain Facilities Improvement District No. 1

The Fairfield Storm Drain Facilities Improvement District No. 1 (the Storm Drain Facilities Improvement District) is a voter‐approved improvement district formed in 1972 to finance construction of storm drainage facilities. The City Council is the governing board of the Storm Drain Facilities Improvement District. The entity is a blended component because the governing body of the City is the same as that of the District and management of the City has operational responsibility for the District.

v. Fairfield Community Facilities Districts

The City of Fairfield Community Facilities Districts were created in accordance with the State of California Mello‐ Roos Community Facilities Act of 1972. The Districts were formed to levy special taxes, issue bonds, and obtain loans supported by special taxes for open space and general traffic and street improvements. The City Council is the governing board of the Fairfield Community Facilities Districts. The entity is a blended component because the governing body of the City is the same as that of the Districts and management of the City has operational responsibility for the Districts.

vi. Housing Authority of the City of Fairfield

The Housing Authority of the City of Fairfield (the Housing Authority) is organized under the California Health and Safety Code. The objectives of the Housing Authority are to preserve and increase the supply of affordable housing; to aid low‐income families in obtaining decent, safe and sanitary housing through Federal assistance programs and low/moderate income housing programs; and to oversee the housing assets of the former redevelopment agency.

The Housing Authority is governed by a Board of Commissioners composed of five City Council members and two members of the public. This entity is a blended component because the governing body of it and the City are substantively the same and management of the City has operational responsibility for the Authority.

B. Measurement Focus, Basis of Accounting, and Financial Statement Presentation

The financial statements of the City have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for governmental accounting and financial reporting principles. These statements implement all the applicable GASB statements.

The accounts of the City and its component units are organized and operated on the basis of fund accounting. A fund is an independent fiscal and accounting entity with a self‐balancing set of accounts. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance‐related legal and contractual provisions. The minimum number of funds is maintained consistent with legal and managerial requirements.

i. Government ‐ Wide Financial Statements
The City Government‐Wide Financial Statements include a Statement of Net Position and a Statement of Activities.

These statements present summaries of Governmental and Business‐Type Activities for the City accompanied by a total column. Fiduciary activities of the City are not included in these statements.

These statements are presented on an “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all of the City’s assets, deferred outflows of resources, liabilities and deferred inflows of resources, including capital assets, as well as infrastructure assets, and long‐term liabilities, are included in the Packet Page 90 of 516Attachment 2 Page 66 of 188

City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

48 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. The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. The types of transactions reported as program revenues for the City are reported in three categories: 1) charges for services, 2) operating grants and contributions, and 3) capital grants and contributions. Taxes and other items not included among program revenues are reported instead as general revenues.

Certain eliminations have been made in regards to interfund activities, payables and receivables. All internal balances in the Statement of Net Position have been eliminated, except those representing balances between the governmental activities and the business‐type activities, which are presented as internal balances and eliminated in the total primary government column. In the Statement of Activities, internal service fund transactions have been eliminated; however, those transactions between governmental and business‐type activities have not been eliminated.
ii. 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 as aggregated. An accompanying reconciliation schedule is presented to explain the differences in governmental fund balances as presented in these statements to the net position presented in the Government‐Wide financial statements.

All governmental funds are accounted for on a spending or “current financial resources” measurement focus and the modified accrual basis of accounting. Accordingly, only current assets, current liabilities, and deferred inflows of resources are included on the Balance Sheet. The Statement of Revenues, Expenditures and Changes in Fund Balances present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they are “measurable and available”). “Measurable” means the amount of the transaction can be determined and “available” means collectible within the current period or soon enough thereafter to pay liabilities of the current period. The City considers property taxes revenues to be available if they are collected within 60 days after year‐end. All other revenues reported in the governmental funds are considered to be available if they are received within 90 days after year‐end, except for grants, which is one year. Property taxes, sales tax, franchise taxes, licenses, interest, grants, and special assessments are susceptible to accrual.

Revenue from grants, entitlements, and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. Expenditures are recorded when the related fund liability is incurred, except for unmatured interest, which is recognized when due, and certain compensated absences and claims and judgments, which are recognized when the obligations are expected to be liquidated with expendable available financial resources.

The City has presented all major funds that met the applicable criteria. The City reports the following as major governmental funds:

General Fund ‐ is the general operating fund of the City. It is used to account for all financial resources except those which are restricted as to use.

Low Mod Income Housing Special Revenue Fund ‐ is used to account for housing assets, housing functions, and all housing responsibilities previously performed by the now defunct Redevelopment Agency, including financial development and rehabilitation of low and moderate income housing units, including all revolving loan fund programs. The fund is restricted to account for the use of the resources that will increase, improve and preserve the supply of housing available for the low and moderate‐income households. The primary source of funding is interest income, the repayment of loans receivables, and the sale of land.

Packet Page 91 of 516Attachment 2 Page 67 of 188

City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

49 City Capital Projects Fund ‐ is used to account for construction projects. The primary sources of funding have been City‐levied development taxes, State Gas Tax, Local Transportation Tax, Traffic Safety Funds and temporary loans to projects.

iii. Proprietary Fund Financial Statements

Proprietary Fund Financial Statements include a Statement of Net Position, a Statement of Revenues, Expenses and Changes in Net Position, and a Statement of Cash Flows for each major proprietary fund.

A column representing internal service funds is also presented in these statements. However, internal service balances and activities have been combined with the governmental activities in the Government‐Wide financial statements. Internal Service Funds provide a variety of services to all City departments such as printing and mailing, automotive, communication, cogeneration and Civic Center maintenance, insurance requirements, as well as loans and advances.

Proprietary Funds are accounted for using the “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all assets, deferred outflows/inflows of resources, and liabilities (whether current or non‐ current) are included on the Statement of Net Position. The Statement of Revenues, Expenses and Changes in Net Position presents increases (revenues) and decreases (expenses) in total 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. Operating revenues in the proprietary funds are those revenues that are generated from the primary operations of the fund. All other revenues are reported as non‐operating revenues.

Operating expenses are those expenses that are essential to the primary operations of the fund. All other expenses are reported as non‐operating expenses.

The City has presented all proprietary funds as major funds because the City believes the financial position and activities of these funds are significant to the City as a whole. The City of Fairfield reports the following major proprietary fund types:

Water Utility Fund ‐ accounts for the operations of the water system. This is a self‐supporting activity which provides water services on a user charge basis to residences and businesses located in the City.

North Bay Treatment Plant ‐ used to account for the operations of a joint water treatment plant built by the cities of Fairfield and Vacaville. This plant supplies treated water to both the cities. The City of Fairfield is the designated administrator and operator of the plant.

Transportation Fund ‐ accounts for the operations of the City’s transportation system for a fixed route and demand response service which, along with fare box revenues, receives grants from the Transportation Development Act (TDA) and the Federal Transit Administration (FTA) and state and regional funding.

Golf Courses Fund ‐ accounts for the operations of the two City‐owned public golf courses (Rancho Solano and Paradise Valley). The revenue generated from the courses is used to pay the debt service payments on the bond issues with which the courses were constructed.

The City reports the following internal service funds:

Central Services Fund ‐ accounts for the printing, copying, and mail services provided to the various City departments; as well as accounting for public work maintenance supplies for the various City departments.

Vehicle Services/Replacement Fund ‐ accounts for automotive services performed for the various City departments as well as accounting for the City’s Vehicle Replacement Fund.

Packet Page 92 of 516Attachment 2 Page 68 of 188

City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

50 Information Technology Fund ‐ accounts for the charges to the various departments for the use and maintenance of the main power supplies for various communication devices such as hand radios, phones, computers, and closed circuit video cameras throughout the City.

Intragovernmental Loan Fund ‐ accounts for loans made to City funds or affiliated agencies.

Insurance Fund ‐ accounts for all insurance activities of the City excluding OPEB.

Retiree Insurance (OPEB) Fund ‐ accounts for payment of Other‐Post‐Employment Benefits including medical and dental premiums for retired executive management employees.

Public Facilities Fund ‐ accounts for the operation of the cogeneration facilities, the major maintenance of the civic center complex, parks, fire department facilities and equipment.

Compensated Absences Fund ‐ accounts for the funding and tracking of the liabilities for vacation, personal leave, and sick leave for the Governmental Activities of the City.

iv. Fiduciary Fund Financial Statements

Fiduciary Fund Financial Statements include a Statement of Fiduciary Net Position and Statement of Changes in Fiduciary Net Position. The City’s Fiduciary funds represent Custodial Funds and Private Purpose Trust Funds.

Custodial funds are used to account for assets temporarily held by the City in a fiduciary capacity, and use the economic resources measurement focus. The City’s custodial funds activities include Other Deposits, Fairfield‐ Suisun Sewer District, Solano Animal Control Authority, Green Valley Open Space Maintenance District, Tri‐City and County Regional Parks and Open Space Group, Community Facilities Districts Debt Service, and Fairfield Housing and Community Development Corporation, the latter for servicing the debt of the non‐commitment debt—see Note 21.

The Private Purpose Trust Fund is a Fiduciary Fund type used by the City to report trust arrangements under which principal and income benefit other governmental entities. This trust fund uses the economic resources measurement focus and the accrual basis of accounting. This fund reports the assets, liabilities and activities of the Successor Agency to the former Fairfield Redevelopment Agency (Successor Agency).

C. Use of Restricted/Unrestricted Net Position and Use of Estimates

When an expense is incurred for purposes for which both restricted and unrestricted net position are available, the City’s policy is to use the restricted net position first.

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures.

Accordingly, actual results could differ from those estimates.

D. Cash and Cash Equivalents and Investments

For purposes of the Statement of Cash Flows, cash equivalents are defined as cash and investments which are considered to be liquid assets for purposes of measuring cash flows. Cash and investments of all funds are pooled with the City’s pooled cash and investments, and are considered cash and cash equivalents because the pool is used essentially as a demand deposit account from the standpoint of the funds. Investments are recorded at fair value; changes in fair value are included with investment income in the operating statements.

Packet Page 93 of 516Attachment 2 Page 69 of 188

City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

51 E. Restricted Cash and Investments

Certain proceeds of debt issues, along with certain resources, are set aside for their repayment and classified as restricted cash and investments on the balance sheet, because their use is limited by applicable bond covenants and/or other agreements.

During fiscal year 2018‐2019, the City Council approved the creation of a Section 115 Trust (“Trust”) with Public Agency Retirement Services (PARS) specifically for the accumulation of assets to be used towards the funding of pensions. All assets in the Trust are irrevocably dedicated to funding obligations of the City’s pension beneficiaries or costs of administering the Trust. The funds are not considered plan assets of the City’s pension plan with CalPERS, and are therefore considered restricted assets of the City. These restricted cash and investments, as well as the offsetting restricted fund balance, are reported in the City’s General Fund.

F. Unbilled Services Receivable

Utility revenue is recorded when earned. Customers are billed monthly. The estimated value of services provided yet unbilled at year‐end has been included in the accompanying financial statements.

G. Inventory and Prepaid Items

Inventory is valued at cost using the first in, first out method. Inventory in the Proprietary Funds consists of expendable supplies held for future consumption or capitalization. The cost is recorded as an expense as inventory and prepaid items are consumed (consumption method). Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items.

H. Investment in Joint Agencies

In addition to the component units listed above, the City also has an ownership interest in the Solano Water Authority and the California Joint Powers Risk Management Authority. These entities do not meet the criteria for being a component unit of the City, and their financial information is not combined with that of the City. The City’s equity investment in the Solano Water Authority is reported in the Water Utility Enterprise Fund as an investment in joint venture.

I. Capital Assets

The City’s assets are capitalized at historical cost or estimated historical cost (except for right‐to‐use lease assets, the measurement of which is discussed in Note 1N, and right‐to‐use subscription assets, the measurement of which is discussed in Note 1O). City policy has set the capitalization threshold for reporting general capital assets at $5,000 and infrastructure at $100,000. City Policy has set the capitalization threshold for reporting right‐to use subscription IT assets at $50,000. Donations or contributions of capital assets are recorded at acquisition cost when received.

Packet Page 94 of 516Attachment 2 Page 70 of 188

City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

52 Depreciation/amortization is recorded on a straight‐line basis over the estimated useful lives of the capital assets as follows:

Asset Category Useful Life
Buildings 30‐60 years
Improvements 30‐60 years
Equipment 5‐60 years
Infrastructure 25‐60 years
Right‐to‐use lease buildings 3‐10 years
Right‐to‐use lease equipment 5 years
Right‐to‐use subscription software 2‐6 years

The City defines infrastructure as the basic physical assets that allow the City to function. The assets include the street system, water purification and distribution system, sewer and water pipes system, park and recreation lands and improvement, storm water conveyance system, and buildings combined with the site amenities such as parking and landscaped areas used by the City in the conduct of its business. 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, traffic control devices (signs, signals and pavement markings), landscaping and land. These subsystems were not delineated in the Basic Financial Statements. The appropriate operating department maintains information regarding the subsystems.

J. Deferred Outflows/Inflows of Resources

Deferred outflows of resources represent a consumption of net assets that applies to a future period and will not be recognized as an outflow of resources (expense/expenditure) until then. The City has four items that qualifies for reporting in this category: 1) deferred charges on refunding reported in the government‐wide statement of net position (deferred charge on refunding results from the difference in the carrying value of refunded debt and its reacquisition price.) This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt; 2) deferred outflows/inflows related to pensions. See Note 14. A. 3. for further discussion; 3) deferred outflows/inflows related to Other Post‐Employment Benefits (OPEB). See Note 15. B. 6. for further discussion; and 4) deferred inflows related to leases where the City is the lessor, are reported in the governmental funds balance sheet and statement of net position. The deferred inflows of resources related to leases are recognized as an inflow of resources (revenue) on a straight‐line basis over the term of the lease (See Note 9).

Deferred inflows of resources represent an acquisition of net assets that applies to a future period and will not be recognized as an inflow of resources (revenue) until that time. For the governmental funds, the City has two of these items which qualify for reporting in this category (under the modified accrual basis of accounting).

Accordingly, the item, unavailable revenue, is reported only in the governmental funds balance sheet and represents unavailable revenues from interest receivable on notes as well as loan receivables which are due in greater than 90 days. These amounts are deferred and recognized as inflows of resources in the period that the amounts becomes available. The fund statements also carry an amount related to lease receivables. These amounts are amortized as amounts become available. At the government‐wide statements, these two items are eliminated and recognized as revenue since “availability” of resources is not a criteria used in the government‐ wide statements. In addition, the City reports deferred inflows related to pension/OPEB for certain pension/OPEB related items and leases. See Notes 9, 14. A. 3 and Note 15 for further discussion.

K. 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 City of Fairfield’s California Public Employees Retirement System (CalPERS) Miscellaneous and Safety Plans and additions to/deductions from the Plan’s fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this Packet Page 95 of 516Attachment 2 Page 71 of 188

City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

53 purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.

L. Other Postemployment Benefits (OPEB)

For purposes of measuring the net OPEB liability, deferred outflows of resources related to OPEB, and OPEB expense, information about the City’s plan (OPEB Plan) have been determined on the accrual basis. As of the measurement date of June 30, 2022, there was $2,010,678 accumulated in the CalPERS OPEB trust for the plan.

See Note 15 for further discussion regarding OPEB.

M. Long Term Obligations Compensated Absences

The liability for compensated absences includes the unused vacation leave, sick leave, and compensatory time off and personal leave, which are accrued as earned.

i. Government‐Wide Financial Statements
For governmental and business‐type activities, compensated absences are recorded as incurred and related expenses and liabilities are reported.

ii. Fund Financial Statements
Compensated absences for governmental funds are recorded in an internal service fund. Thus, the liability in the internal service fund is reported as compensated absences expenses are incurred. In proprietary funds, compensated absences are expensed and funded by the various funds in the period in which they are earned.

N. Leases

The City determines if an arrangement is a lease at inception.

When the City is a lessor, lease receivables are recorded by the City as the present value of future lease payments expected to be received from the lessee during the lease term, reduced by any provision for estimated uncollectible amounts. Lease receivables are subsequently reduced over the life of the lease as cash is received in the applicable reporting period. The present value of future lease payments to be received are discounted based on the interest rate the City charges the lessee.

When the City is a lessee, leases are included in capital assets and lease liabilities in the statements of net position.

Lease assets represent the City’s control of the right to use an underlying asset for the lease term, as specified in the contract, in an exchange or exchange‐like transaction. Lease assets are recognized at the commencement date based on the initial measurement of the lease liability, plus any payments made to the lessor at or before the commencement of the lease term and certain direct costs. Lease assets are amortized in a systematic and rational manner over the shorter of the lease term or the useful life of the underlying asset.

Lease liabilities represent the City’s obligation to make lease payments arising from the lease. Lease liabilities are recognized at the commencement date based on the present value of expected lease payments over the lease term, less any lease incentives. Interest expense is recognized ratably over the contract term. The lease term may include options to extend or terminate the lease when it is reasonably certain that the City will exercise that option.

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City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

54 The City recognizes payments for short‐term leases with a lease term of 12 months or less as expenses as incurred, and these leases are not included as lease liabilities or right‐to‐use lease assets on the statement of net position.

For individual contracts where information about the discount rate implicit in the lease are not included, the City has elected to use the incremental borrowing rate to calculate the present value of expected lease payments.

O. Subscription‐Based Information Technology Arrangements (SBITAs)

The City determines if an arrangement is a Subscription‐Based Information Technology Arrangement (SBITA) at inception.

Right‐to‐use subscription assets are recognized at the commencement date and represent the City’s right to use the underlying subscription IT asset for the subscription term. Right‐to‐use subscription IT assets are measured at the initial value of the subscription liability plus any payments made to the vendor at or before the commencement date of the subscription term, plus any capitalizable initial implementation costs necessary to place the subscription IT asset into service. Right‐to‐use subscription IT assets are amortized in a systematic and rational manner over the shorter of the subscription term or useful life of the underlying asset. City policy has set the capitalization threshold for reporting right‐to use subscription IT assets at $50,000.

Subscription Liabilities represent the City’s obligation to make subscription payments arising from the subscription contract. Subscription liabilities are recognized at the subscription commencement date based on the present value of future subscription payments expected to be made during the subscription term. The present value of subscription payments are discounted based on an incremental borrowing rate determined by the City.

The City recognizes payments for short‐term Subscription‐Based Information Technology Arrangements with a subscription term of 12 months or less as expenses as incurred, and these arrangements are not included as subscription liabilities or right‐to‐use subscription assets on the statements of net position.

P. Fund Balances

The Governmental Fund Balances consist of Nonspendable, Restricted, Committed, Assigned and Unassigned amounts as described below: (See Note 13 for tabular presentation)

Nonspendable: Items that cannot be spent because they are not in spendable form, long term portions of receivables (net of the amount accounted for in restricted funds), inventories, prepaid items, and also items that are legally or contractually required to be maintained intact, such as principal of an endowment from a third party.

Restricted: Restricted fund balances encompass the portion of net fund resources subject to externally enforceable legal restrictions. This includes externally imposed restrictions by creditors (such as through debt covenants), grantors, contributors, laws or regulations of other governments, as well as restrictions imposed by law through constitutional provisions or enabling legislation.

Committed: Committed fund balances encompass the portion of net fund resources which use is constrained by limitations that the government imposes upon itself by formal action through City Council Resolution. The City Council is also the highest level of decision making for all of its component units. Commitments may be changed or removed only by the same formal action (City Resolution) taken by the City Council to impose the constraint.

Assigned: Assigned fund balances encompass the portion of net fund resources reflecting the government’s intended use of resources. Assignment of resources can be done by the highest level of decision making or by a committee or official designated for that purpose. The Finance Director has been given authority by the City Council to assign funds for the City of Fairfield.

Unassigned: Unassigned fund balances encompass 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 Packet Page 97 of 516Attachment 2 Page 73 of 188

City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

55 funds. The City has adopted a policy to achieve and maintain unassigned fund balance in the General Fund of at least 20% of expenditures.

Q. Land Held for Development

Land held for development includes land parcels used to develop or redevelop blighted properties and are reported at the lower of cost or net realizable value or agreed‐upon price if a disposition agreement has been made with a developer. Individual parcels that have experienced a market decline are written down to estimated current fair value.

R. Unearned Revenue

Unearned revenues are a liability because it refers to revenue that has not yet been earned but represents products or services that are owed to the customer. As the product or service is delivered over time, it is recognized as revenue on the income statement. Examples of unearned revenue include prepaid rental revenues, as well as permits, business license taxes, grants, and prepaid revenues received in advance of the required services being performed.

S. Spending Policy

The City believes that sound financial management principles require that sufficient funds be retained by the City to provide a stable financial base at all times. To retain this stable financial base, the City needs to maintain unassigned fund balance in its General Fund sufficient to fund the cash flows of the City and to provide financial reserves for unanticipated expenditures and/or revenue shortfalls of an emergency nature. The City has adopted a policy to achieve and maintain an unassigned fund balance in the General Fund of at least 20% of expenditures.

At the governmental fund financial statement level, the City’s policy is that restricted, committed, and assigned fund balances are considered to have been spent first before unassigned fund balances have been spent, when expenditures are incurred for purposes for which amounts in any of those fund balance classifications could be used.

T. Implementation of New GASB Pronouncements

In fiscal year 2022‐2023, the City implemented the following new accounting standards to conform to the following Governmental Accounting Standards Board (GASB) Statements:

GASB Statement No. 94 – In March 2020, the GASB issued Statement No. 94, Public‐Private and Public‐Public Partnerships and Availability Payment Arrangements. The objective of this Statement is to improve financial reporting by addressing issues related to public‐private and public‐public partnership arrangements (PPPs). The Statement did not have a material effect on the financial statements.

GASB Statement No. 96 – As of July 1, 2022, the City adopted GASB Statement No. 96, Subscription‐based Information Technology Arrangements (SBITAs). The implementation of this standard establishes that a SBITA results in a right to use subscription IT asset ‐ an intangible asset ‐ and a corresponding liability. The standard provides the capitalization criteria for outlays other than subscription payments, including implementation costs of a SBITA. The Statement requires recognition of certain SBITA assets and liabilities for SBITAs that previously were recognized as outflows of resources based on the payment provisions of the contract. The effect of the implementation of this standard on beginning net position is disclosed in Note 22 and the additional disclosures required by this standard are in Note 1O and Note 10.

GASB Statement No. 99 – In April 2022, the GASB issued Statement No. 99, Omnibus 2022, to improve the consistency of authoritative literature by addressing (1) practice issues that have been identified during the Packet Page 98 of 516Attachment 2 Page 74 of 188

City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

56 implementation and application of certain GASB Statements and (2) accounting and financial reporting for financial guarantees. The practice issues addressed by this Statement are as follows:
 The requirements related to the extension of the use of LIBOR, accounting for SNAP distributions, disclosures of nonmonetary transactions, pledges of future revenues by pledging governments, clarification of certain provisions in Statement 34, as amended, and terminology updates related to Statement 53 and Statement 63 are effective upon issuance.  The requirements related to leases, PPPs, and SBITAs are effective for fiscal years beginning after June 15, 2022.
 The requirements related to financial guarantees and the classification and reporting of derivative instruments within the scope of Statement 53 are effective for fiscal years beginning after June 15, 2023.

The Statement did not have a material effect on the financial statements.

U. Budgetary Information

The City adopts annual budgets for all its funds except for the Custodial Funds, the Permanent Fund, and the Private‐Purpose Trust Fund. The City operates on a fiscal year basis that begins on July 1 of each year, and ends the following year on June 30. The City Manager’s Office and Finance Department manage the budget process, with support from each of the operating departments. The preparation of the budget takes place between January and June, culminating with the adoption of a two‐year budget by the City Council, with the Council adopting any adjustments before the beginning of the second fiscal year as part of a mid‐cycle review performed by staff.

Public hearings are conducted on the proposed budgets to review all appropriations and sources of financing.

Budgeted expenditures are then adopted through the passage of a resolution. The budget represents the maximum authorized expenditures for the year and cannot legally be exceeded except by subsequent amendments of the budget by the City Council. Any amendments to the total level of net appropriations for a fund or transfers between funds must be approved by the City Council. Capital project appropriations shall remain in effect until the project is completed or until modified in a subsequently adopted budget. See the detailed budget preparation calendar for the City in the Appendix of the adopted budget document for details on this process.

Expenditures are controlled at the fund level for all budgeted funds within the City, the level at which expenditures may not legally exceed appropriations. The budgets are adopted on a basis consistent with generally accepted accounting principles (GAAP).

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City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

57 2) Property Taxes

Property taxes are levied and become a lien on real property at January 1, based on the assessed values determined by the Solano County Assessor (the County). Taxes are due November 1 and February 1 and are delinquent if not paid by December 10 and April 10, respectively. Property tax revenues are recognized when levied.

Article XIII of the California Constitution (known as “Proposition 13”) limits ad valorem taxes on real property to 1 percent of value plus taxes necessary to pay indebtedness approved by voters before July 1, 1978. The Article also established the 1975/76 assessed valuation as the basis and limits annual increases to the cost of living, not to exceed 2 percent, for each year thereafter. Property may also be reassessed to full market value after a sale, transfer of ownership, or completion of new construction. The State is prohibited under the Article from imposing new ad valorem, sales, or transaction taxes on real property. Local government may impose special taxes (except on real property) with the approval of 2/3 of the qualified electors. In addition to the City’s property tax levies for voter‐approved debt, Solano County levies property taxes limited to $1 per $100 of assessed valuation for county, cities, schools, and special districts’ operating expenditures. This additional property tax levy is distributed to the different governmental agencies under the State mandated alternate method of apportioning taxes (commonly referred to as the “Teeter Plan”) whereby all local agencies with historical tax delinquency rates less than three percent, including cities, receive from the county 100% of their respective shares of the amount of ad valorem taxes levied, without regard to the actual collection of taxes levied. This method was placed in effect by Solano County in the 1965/66 tax year and remains in effect unless the County Board of Supervisors orders its discontinuance.

3) Interfund Transactions

The City had numerous transactions between funds to finance operations, construct assets, and service debt all within the course of normal business operations. As discussed below, these transactions are classified as transfers in/out, due to/from other funds or advances to/from other funds.

The following tables summarize interfund transfers (as presented in the City’s Fund Financial Statements) for the fiscal year ended June 30, 2023, including a description of major transfer activity:

Low Mod City Non‐Major
General Income Capital Governmental Internal
Fund Housing Projects Funds Service Totals
Transfers Out:
(fund making transfer)
Governmental Funds:

General Fund ‐ 45,000$ 765,000$ 2,767,556$ 261,000$ 3,838,556$ Low Mod Income Housing Fund ‐ ‐ 31,852 31,852 City Capital Projects Fund ‐ 79,163 79,163 Non‐Major Governmental Funds 1,887,753$ ‐ 8,164,099 61,218 240,000 10,353,070 Total Governmental Funds 1,887,753 45,000 8,929,099 2,939,789 501,000 14,302,641 Enterprise Funds:

Water Utility ‐ 242,438 242,438 North Bay Treatment Plant 88,954 88,954 Transportation ‐ 38,748 38,748 Total Enterprise Funds ‐ ‐ 370,140 ‐ 370,140 Internal Service Funds ‐ 1,513,720 234,712 1,200,000 2,948,432 Totals 1,887,753$ 45,000$ 10,442,819$ 3,544,641$ 1,701,000$ 17,621,213$ Transfers In (fund receiving transfer):

Governmental Funds

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City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

58 A. General Fund

The transfer in from Non‐Major Governmental Funds (Capital Projects Assessment and Improvement District Fund) for $1,887,753 was related to Community Facilities Districts funding to the general fund for various police, fire, and parks activities.

B. Low\Mod Housing

The transfer in from the General Fund of $45,000 was the City’s contribution to the Housing Trust Fund which was established in FY 2021‐2022.

C. City Capital Projects

The transfer in from the General Fund of $765,000, along with the transfer in from the Special Programs Special Revenue Fund of $408,349, consisted of funding a portion of the FY 22/23 street pavement maintenance projects.

The transfer in from Non‐Major Governmental Funds (State Gas Tax Special Revenue Fund, Development Tax Special Revenue Fund, and Assessment and Improvement Districts Capital Projects Fund) with a combined amount of $7,755,750 was used to fund street maintenance, traffic improvements, pavement rehabilitation and various capital projects. The construction and rehabilitation of these capital projects are needed to meet standards contained in the City’s General Plan. The transfer in of $1,513,720 from the Internal Service Funds was mainly from the Intergovernmental Loan fund that was used to fund the WestNet Alarm System for the Fire Department.

A portion of this amount, $159,264, is a transfer in from the Internal Service Public Facilities Fund used for various capital projects in the downtown area.

D. Non‐Major Governmental Funds

The transfer in of $3,544,641 is mainly comprised of the funding to the Non‐Major Governmental Fund (Pension Obligation Debt Service Fund) for the servicing of the Pension Obligation Bonds. A portion of this amount, $168,760, is a transfer in from the General Fund to the City’s portion of the Maintenance Districts throughout the City.

E. Internal Service Funds

The transfer in from the General Fund of $261,000 to the Intergovernmental Loan Fund was to provide funding for the loans to the Non‐Major Governmental Fund ‐ Maintenance Districts Fund. The transfer in from the Non‐Major Governmental Funds for $240,000 was from the Non‐Major Fund (Development Tax Special Revenue Fund) to the Internal Service Fund (Public Facilities Funds) to fund various City Hall Civic Center improvements.

Due From/To Other Funds consist of the following at June 30, 2023:

Due From Other Funds:
(fund making loan)
Internal Service Funds 1,838,154$ 74,404$ Non ‐Major
Governmental Fund
Special Programs
Due to Other Funds
(fund receiving loan)
Enterprise
Transit

Due to other funds consist of a short‐term advance for year‐end cash flow purposes until the Transportation Fund and Special Programs receives its various grant receipts.

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City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

59 Advances From/To Other Funds consist of the following at June 30, 2023:

Internal Service Fund
Intergovermental Loan 997,000$
Enterprise
North Bay Treatment Plant 1,865,706$
Non ‐Major
Governmental Fund
Maintenance Districts
Enterprise
Water Utility
Advances to Other Funds
(fund making loan)
Advances From Other Funds
(fund receiving loan)

The Internal Service Fund – Intergovernmental Loan Fund loaned $997,000 to the Non‐Major Maintenance Districts Fund to assist and supplement the districts' budget in seven of the respective districts that were encountering cash shortfalls. These loans are interest free and will be repaid over five years beginning in FY 2023‐ 2024.

The Enterprise Fund—North Bay Treatment Water Plant advanced funds to the Enterprise Fund—Water Utility Fund to finance water plant improvements. This advance will and is being repaid over a ten year period which began in FY 2021‐2022.

4) Cash and Investments

The City manages the cash of the City and component units on a pooled basis. Funds are invested in accordance with Section 53601 of the State government code and the City’s established investment policy. All monies not required for immediate expenditure are invested or deposited to earn the maximum yield consistent with safety and liquidity. All investments have the City as registered owner or are kept in the custody of the City or a qualified safekeeping institution. A monthly investment report is submitted to the City Manager and City Council showing a description of the investments, purchase price, purchase date, current fair value for all securities with a maturity of more than 12 months, maturity date, par value, discount or premium if any, cost, yield, safekeeping institution for each deposit or investment, average weighted maturity and effective yield of the portfolio. A portion of the portfolio is managed by third party investment managers. The City has contracted with PARS to manage a Section 115 Trust for the City’s Pension Trust fund.

A. Deposits

The carrying amount of the City’s cash deposits at June 30, 2023 was $5,717,924 and the bank balance was $9,146,710. The carrying amount of the City’s cash deposits with Fiscal Agent at June 30, 2023 was $1,507,377 and the bank balance was $1,335,444. The entire bank balances were covered by federal depository insurance up to $250,000 or by collateral held by the City’s agent in the City’s name as discussed below.

The California Government Code has provisions for financial institutions that limit custodial credit risk for deposits.

Financial institutions are required to secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law. The fair value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. The City’s financial institutions also have insurance through the Federal Depository Insurance Corporation (FDIC).

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City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

60 B. Investments

The City’s investment policy restricts investments to the following:

Certificates of Deposit must be FDIC insured or fully collateralized. They must also be purchased from banks or financial institutions located in California.

Negotiable Certificates of Deposit may not exceed 30% of the City’s invested funds.

Bankers’ Acceptances may be invested if issued by domestic or foreign banks provided, they are institutions with short‐term debt obligations rated “A‐1” or higher, or the equivalent, by a nationally recognized statistical‐rating organization (NRSRO); and have long‐term debt obligations which are rated “AA” or higher by at least two nationally recognized statistical rating organizations. No more than 30% of the City’s portfolio may be invested in this category.

Treasury Bills and Notes with a maximum maturity of five years.

Federally‐Sponsored Credit Agency Securities with a maximum maturity of five years (75% maximum).

Local Agency Investment Fund (LAIF) deposits may be made in this fund up to the State of California limit of $75,000,000 for each government entity. The City and its component units have three accounts with LAIF, therefore the maximum deposit that may be made is $225,000,000.

California Asset Management Program (CAMP) is a California Joint Powers Authority ("JPA") established in 1989 to provide California public agencies with professional investment services. The CAMP Pool is a permitted investment for all local agencies under California Government Code Section 53601(p). This program consists of a short‐term money market fund rated AAA and separately managed portfolios of specific authorized securities (as specified in this policy). This pool carries a stable Net Asset Value, whereby the fair value position in the pool is the same as the value of the pool shares.

Savings Accounts, Money Market Accounts and General Checking Accounts may be used to deposit idle cash. No account may be opened without written authorization from the Finance Director.

Commercial Paper must be rated prime quality (P1 by Moody’s or A1 by Standard and Poor’s). Eligible paper is further limited to notes issued by corporations organized and operating within the U.S. and having total assets in excess of $500,000,000 and having an “A” or higher rating in other long term debt (25% maximum).

Corporate Medium‐Term Notes must be rated A by one NRSO (Nationally Recognized Statistical Rating Organization). The maximum maturity of medium‐term notes may not exceed five years. No more than 30% of the City’s portfolio may be invested in this category.

Money Market Mutual Funds must attain the highest ranking, or the highest letter and numerical rating provided by not less than two nationally recognized statistical rating organizations. The purchase of securities authorized by this subdivision may not exceed 20% of the portfolio. No more than 10% per money market fund.

Municipal Obligations must be rated at least A by at least two NSRO’s. The maximum maturity is five years and no more than 5% can be invested with one agency.

Supranationals must be rated AAA by at least two NSRO’s; the maximum maturity is five years and no more than 10% of the City’s portfolio can be invested in this category.

Repurchase Agreements, Reverse Repurchase Agreements, Financial Futures and Options, U.S. Zero Coupons and Bonds, and Small Business Administration Guaranteed Notes may not be invested in without specific Packet Page 103 of 516Attachment 2 Page 79 of 188

City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

61 instruction from the Finance Director. The Cash with Fiscal Agents represents primarily restricted bond proceeds (for bond required reserves) and is governed by the provisions of the relevant bond documents and indentures.

Section 115 Pension Trust is governed by the provisions of the City of Fairfield Section 115 Trust Agreement with PARS rather than the general provisions of the California Government Code or the City’s investment policy.

Investments authorized to be held in the trust include Equity, Fixed Income, and Money Market Mutual Funds, with target percentages of 60%, 35%, and 5% respectively. These funds have been restricted for future pension contributions.

C. Risk Disclosures

Interest Rate Risk is defined as the risk that changes in interest rates demanded by the market will adversely affect the fair value of an investment. As a means of limiting its exposure to fair value losses arising from rising interest rates, State law, and the City’s investment policy limits the City’s investment portfolio to maturities not to exceed five years from the time of purchase. Information about the sensitivity of the fair values of the City’s investments to market interest rate fluctuations (including $10,845,826 of debt proceeds held by bond trustees and $6,252,481 in the Section 115 Pension Trust) is provided by the following table that shows the fair values of investments held by the City grouped by maturity at June 30, 2023:

One year One to Two to Three to Four to % of
Investment Category or less Two Years Three Years Four Years Five Years Total portfolio LAIF 13,295,185$ 13,295,185$ 3%
U.S. Government Agencies 18,512,697 17,588,483$ 13,011,540$ 2,486,361$ 807,708$ 52,406,789 13% U.S. Treasuries 25,669,126 63,301,296 60,931,012 13,446,055 10,883,193 174,230,682 44% Negotiable CDs 1,074,788 2,851,698 3,926,486 0% Medium Term Notes 7,910,893 24,067,235 13,992,534 8,438,680 3,236,603 57,645,945 14% Supranationals 416,495 416,495 0% Money Market Mutual Funds 2,684,328 2,684,328 1% CAMP 86,734,082 86,734,082 22%
Section 115 Trust:

Equity Mutual Funds 3,604,357 3,604,357 1% Fixed Income Mutual Funds 2,340,819 2,340,819 1% Money Market Mutual Funds 307,305 307,305 0% Totals 161,475,287$ 106,031,802$ 90,786,784$ 24,371,096$ 14,927,504$ 397,592,473$ 100% Remaining Maturity (in years)

Credit Risk is a risk that a security or a portfolio will lose some or all of its value due to a real or perceived change in the ability of the issuer to repay its debt. Generally, this is measured by the assignment of a rating by a Nationally Recognized Statistical Rating Organization (NRSRO) (see credit quality ratings in section F). The City’s credit quality risk policy is discussed in section B above, within the individual security types.

Custodial Credit Risk is a risk that in the event of the failure of the counterparty (e.g. broker‐dealer), the City will not be able to recover the value of its investment or collateral securities that are held by the counterparty. All of the City’s investments in securities are held in the name of the City and are held via book entry at the location of the City’s third‐party custodian. Therefore, the City has no custodial credit risk.

Concentration Risk can also arise in the wake of a failure to adequately diversify investments. Except for treasuries and agency securities, the City’s investment policy attempts to limit the City’s investments in any one bank or corporation to no more than 5% of the total portfolio (at the time of purchase). There are no Investments in any one issuer (other than U.S. Treasury securities, mutual funds, and external investment pools) that represent 5% or more of the total City’s investment.

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City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

62 D. Investments in Local Agency Investment Funds

As of June 30, 2023, the City has $13,295,185 invested in LAIF. The City valued its investments in LAIF as of June 30, 2023, by multiplying its account balance with LAIF of $13,500,000 by a fair value factor determined by LAIF. The fair value factor was determined by dividing all LAIF participants’ total aggregate fair value by total aggregate amortized cost resulting in a factor of .984828.

The LAIF is part of the Pooled Money Investment Account (PMIA) with the State and is a voluntary program that provides an investment alternative for California’s local governments and special districts. The LAIF pool is not registered (nor required to be registered) with the SEC. The PMIA began in 1955 and oversight is provided by the Pooled Money Investment Board (PMIB) and an in‐house investment committee. The Local Investment Advisory Board (LIAB) provides oversight for LAIF. The Board consists of five members, as designated by statute.

Additionally, the State Treasurer’s Office is audited by the Bureau of State Audits on an annual basis, as well as a continuing audit process throughout the year.

E. Summary of Cash and Investments

The following is a summary of cash and investments at June 30, 2023:

Fiduciary Funds
Governmental Business‐Type Statement of
Category Activities Activities Subtotals Net Position Totals Cash and Investments 256,979,146$ 81,756,591$ 338,735,737$ 21,107,051$ 359,842,788$ Restricted Cash and Investments 6,537,001 28,642,586 35,179,587 9,795,399 44,974,986 Total Cash and Investments 263,516,147$ 110,399,177$ 373,915,324$ 30,902,450$ 404,817,774$ Government‐Wide Statement of Net Position

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City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

63 Standard & Poor's
Credit Quality Fair
Investment Category Ratings Value
City Treasury:

Deposits 5,717,924$
Investments
Securities of US Gov't Agencies
FHLB AA 11,749,502
FNMA AA 16,062,812
FHLMC AA 18,634,599
FFCB AA 5,830,004
Total Securities of US Gov't Agencies 52,276,917
US Treasury Notes Not Rated 171,160,512
Medium Term Notes AAA 3,553,373
Medium Term Notes AA 21,577,039
Medium Term Notes A 32,515,533
Negotiable CD A‐1 3,926,486
Supranationals AAA 416,495
Money Market Mutual Funds AAA 2,206,634
CAMP AAA 79,565,992
Local Agency Investment Funds Not rated 13,295,185
Total Investments 380,494,166
Total City Treasury 386,212,090
Fiscal Agents:

Deposits 1,507,377
Investments
Securities of US Gov't Agencies
FNMA AA 129,872
US Treasury Notes Not Rated 3,070,170
Money Market Mutual Funds AAA 477,694
CAMP AAA 7,168,090
Section 115 Trust:

Equity Mutual Funds Not Rated 3,604,357
Fixed Income Mutual Funds BB 2,340,819
Money Market Mutual Fund AAA 307,305
Total Investments 17,098,307
Total Cash and Investments with Fiscal Agents 18,605,684 Total Cash and Investments 404,817,774$
F. Summary

At June 30, 2023, the City had the following deposits and investments, with corresponding credit quality ratings:

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City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

64 G. Fair Value Measurements

The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset.

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described as follows:

Level 1 – Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the City could access.

Level 2 – Inputs to the valuation methodology include:
 Quoted prices for similar assets or liabilities in active markets;  Quoted prices for identical or similar assets or liabilities in inactive markets;  Inputs other than quoted prices that are observable for the asset or liability;  Inputs that are derived principally from observable market data by correlation or other means.

Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

Unobservable inputs reflect the City’s own assumptions about the inputs market participants would use in pricing the asset or liability (including assumptions about risk). Unobservable inputs are developed based on the best information available in the circumstances and may include the City’s own data.

The asset’s level within the hierarchy is based on the lowest level of input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. The determination of what constitutes observable requires judgment by the City’s management. City management considers observable data to be market data, which is readily available, regularly distributed or updated, reliable, and verifiable, not proprietary, and provided by multiple independent sources that are actively involved in the relevant market. The categorization of an investment within the hierarchy is based upon the relative observability of the inputs to its fair value measurement and does not necessarily correspond to City management’s perceived risk of that investment.

In instances where inputs used to measure fair value fall into different levels in the above fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest level input that is significant to the valuation. The City’s assessment of the significance of inputs to these fair value measurements requires judgment and considers factors specific to each asset or liability.

The City’s investments in governmental investment pools, such as LAIF and CAMP (JPA investment Pools) are recorded at fair value and the City’s proportionate share in these types of investments is measured based on uncategorized input not defined as a Level 1, Level 2, or Level 3 input; but rather labeled as items measured at fair value not leveled.

The following is a description of the valuation methods and assumptions used by the City to estimate the fair value of its investments. There have been no changes in the methods and assumptions used at June 30, 2023. The methods described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. City management believes its valuation methods are appropriate and consistent with other market participants. The use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

The City’s treasury pool asset market prices are derived from closing bid prices as of the last business day of the month as supplied by Interactive Data, Bloomberg, or Telerate. Where prices are not available from generally recognized sources, the securities are priced using a yield‐based matrix system to arrive at an estimated fair value.

Prices that fall between data points are interpolated. When available, quoted prices are used to determine fair Packet Page 107 of 516Attachment 2 Page 83 of 188

City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

65 Governmental Activities
Other
Low Mod City Non‐Major Total
General Income Capital Governmental Governmental
Category Fund Housing Projects Funds Activities
Taxes 10,977,946$    10,977,946$
Interest and other 362,059 14,156$            247,393$              261,585$        885,193 Intergovernmental 1,369,608 1,768,771 2,433,038 5,571,417 Notes 30,766,945      17,968,983 48,735,928
Accounts 2,551,426 234,006 1,064 1,041,989 3,828,485
Leases 15,949,257 15,949,257
Less Allowance for Doubtful Accounts (1,614,160) (1,614,160) Total Receivables, Net 29,596,136$    31,015,107$    2,017,228$          21,705,595$  84,334,066 Add Internal Service Fund Receivables 12,720,541
Total Receivables, Net 97,054,607$
Major Funds
value. When quoted prices in active markets are available, investments are classified within Level 1 of the fair value hierarchy.

For investments classified within Level 2 of the fair value hierarchy, the City’s custodians generally use a multi‐ dimensional relational model. Inputs to their pricing models are based on observable market inputs in active markets. The inputs to the pricing models are typically benchmark yields, reported trades, broker‐dealer quotes, issuer spreads, and benchmark securities, among others. The City does not have any investments that are measured using Level 3 inputs. The City has the following recurring fair value measurements as of June 30, 2023:

Quoted Prices in Significant
Active Markets Other Significant
for Identical Observable Unobservable
Assets Inputs Inputs
Investments by fair value level Total (Level 1) (Level 2) (Level 3) US Treasuries 174,230,682$        174,230,682$
Government Agency Securities 52,406,789             52,406,789$ Negotiable Certificates of Deposit 3,926,486               3,926,486 Medium Term Notes 57,645,945             57,645,945
Supranationals 416,495                   416,495
Money Market Mutual Funds 2,684,328               2,684,328 Section 115 Trust:

Equity Mutual Funds 3,604,357 3,604,357
Fixed Income Mutual Funds 2,340,819 2,340,819 Money Market Mutual Funds 307,305 370,305 Totals 297,563,206$ 183,230,491$ 114,395,715$ ‐$ Items measured at fair value not leveled
CAMP 86,734,082
LAIF 13,295,185
Total Fair Value of Investments 397,592,473$
Fair Value Measurements on a Recurring Basis Using

5) Receivables

Receivables as of June 30, 2023, net of applicable allowances for uncollectible accounts (where applicable), are as follows:

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City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

66 In the governmental activities, approximately $30,777,000 of the outstanding balance of notes receivable in the Low Mod Income Housing Special Revenue Fund and $17,390,000 in Non‐Major Governmental Special Revenue Funds (Home, CDBG, and NSP) are not anticipated to be collected within the next year.

Amounts due to the City from the Successor Agency at June 30, 2023, are $11,454,463, of which $109,689 is reported in the Non‐Major Governmental Special Revenue Home Fund and $11,344,774 is reported in Intragovernmental Internal Service Fund (see Note 20).

Business‐Type Activities
North Bay Total
Water Treatment Business‐Type
Category Utility Plant Transportation Golf Courses Activities Interest and other 350,431$ 148,285$ 8,054$ 506,770$ Intergovernmental 1,250,827 1,751,633$ 3,002,460 Accounts 7,459,257 8,451 203,050 91,546 7,762,304 Less Allowance for Doubtful Accounts (386,097) (386,097) Subtotal Receivables, Net 7,423,591 1,407,563 1,954,683 99,600 10,885,437 Loans 1,742,616 1,742,616
Total Receivables, Net 7,423,591$ 3,150,179$ 1,954,683$ 99,600$ 12,628,053$ Major Funds
l A

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City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

67 Capital Assets for the governmental activities of the City for the year ended June 30, 2023, consisted of the following:

Balance
July 1, 2022 Balance
Asset Description As Restated Additions Retirements Transfers June 30, 2023 Governmental activities:

Non‐depreciable assets:

Land 46,515,634$ 46,515,634$
Work in progress* 18,695,543 7,706,937$ (39,686)$ (3,274,243)$ 23,088,551 Total non‐depreciable assets 65,211,177 7,706,937 (39,686) (3,274,243) 69,604,185 Assets being depreciated:

Land improvements 188,933,591 399,083 189,332,674 Buildings and improvements 104,451,198 516,143 104,967,341 Machinery and equipment 57,213,766 2,952,291 (1,389,331) 2,359,017 61,135,743 Infrastructure 316,616,951 1,877,237 318,494,188 Total assets being depreciated 667,215,506 4,829,528 (1,389,331) 3,274,243 673,929,946 Accumulated depreciation:

Land improvements (34,241,700) (4,472,603) (38,714,303) Buildings and improvements (69,696,765) (3,168,984) (72,865,749) Machinery and equipment (35,956,124) (3,689,869) 1,389,331 (38,256,662) Infrastructure (227,467,428) (6,289,640) (233,757,068) Total accumulated depreciation (367,362,017) (17,621,096) 1,389,331 ‐ (383,593,782) Total assets being depreciated, net 299,853,489 (12,791,568) ‐ 3,274,243 290,336,164 Right‐to‐use assets being amortized:

Right‐to‐use lease buildings 1,707,210 1,707,210 Right‐to‐use lease machinery and equipment 380,552 380,552 Right‐to‐use subscription software* 5,059,407 2,146,177 7,205,584 Total right‐to‐use assets 7,147,169 2,146,177 ‐ ‐ 9,293,346 Accumulated amortization:

Right‐to‐use lease buildings (118,890) (329,830) (448,720) Right‐to‐use lease machinery and equipment (19,239) (78,859) (98,098) Right‐to‐use subscription software (1,823,447) (1,823,447) Total accumulated amortization (138,129) (2,232,136) ‐ ‐ (2,370,265) Total right‐to‐use assets being amortized, net 7,009,040 (85,959) ‐ ‐ 6,923,081 Total depreciable/amortizable assets, net 306,862,529 (12,877,527) ‐ 3,274,243 297,259,245 Total governmental activities net capital assets 372,073,706$ (5,170,590)$ (39,686)$ ‐$ 366,863,430$

*$1,758,507 of the July 1, 2022, beginning balance of Work in progress was restated to the beginning balance of Right‐to‐use subscription software due to the implementation of GASB 96.

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City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

68 Capital Assets for the business‐type activities of the City for the year ended June 30, 2023, consisted of the following:

Balance
July 1, 2022 Balance
Asset Description As Restated Additions Retirements Transfers June 30, 2023 Business ‐ type activities:

Non‐depreciable assets:

Land 14,937,056$ 22,426$ 14,959,482$ Intangibles 5,126,663 5,126,663
Work in progress 7,093,948 4,985,709 (348,014)$ 11,731,643 Total non‐depreciable assets 27,157,667 5,008,135 ‐$ (348,014) 31,817,788 Depreciable assets:

Land improvements 10,674,951 10,674,951
Buildings and improvements 75,297,393 48,660 (28,299) 75,317,754 Machinery and equipment 41,126,063 1,111,160 (8,317,436) 65,174 33,984,961 Infrastructure 216,534,363 402,459 282,840 217,219,662 Total depreciable assets 343,632,770 1,562,279 (8,345,735) 348,014 337,197,328 Accumulated depreciation:

Land improvements (10,473,843) (18,425) (10,492,268) Buildings and improvements (41,802,920) (1,572,714) 28,299 (43,347,335) Machinery and equipment (37,890,033) (1,627,678) 6,887,334 (32,630,377) Infrastructure (113,650,389) (6,593,208) (120,243,597) Total accumulated depreciation (203,817,185) (9,812,025) 6,915,633 ‐ (206,713,577) Total assets being depreciated, net 139,815,585 (8,249,746) (1,430,102) 348,014 130,483,751 Right‐to‐use assets being amortized:

Right‐to‐use subscription software 86,899 2,750 89,649 Total right‐to‐use assets 86,899 2,750 ‐ ‐ 89,649 Accumulated amortization:

Right‐to‐use subscription software (29,102) (29,102) Total accumulated amortization ‐ (29,102) ‐ ‐ (29,102) Total right‐to‐use assets being amortized, net 86,899 (26,352) ‐ ‐ 60,547 Total depreciable/amortizable assets, net 139,902,484 (8,276,098) (1,430,102) 348,014 130,544,298 Total business ‐ type activities net capital assets 166,973,252$ (3,270,713)$ (1,430,102)$ ‐$ 162,362,086$

Net Capital Assets for both governmental activities and business‐type activities of the City for the year ended June 30, 2023 are $529,225,516.

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City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

69 The following table presents summary information on infrastructure assets as of June 30, 2023:

Cost to Build Accumulated Balance
Asset Description June 30, 2023 Depreciation June 30, 2023 Governmental activities:

Bridges and box culverts 22,255,417$ (15,436,128)$ 6,819,289$ Retention and catch basins 8,462,341 (4,564,526) 3,897,815 Manholes 27,029,926 (12,960,134) 14,069,792
Pavement 127,781,687 (106,812,012) 20,969,675
Pump stations ‐ sewer 1,016,805 (605,432) 411,373
Sewer pipes 15,846,993 (8,675,365) 7,171,628
Sidewalks, curbs and gutters 36,959,151 (31,117,417) 5,841,734 Storm drains and open channels 50,238,455 (35,856,781) 14,381,674 Street lights 17,224,030 (11,610,626) 5,613,404
Traffic signals 11,679,383 (6,118,647) 5,560,736
Total governmental activities 318,494,188 (233,757,068) 84,737,120 Business ‐ type activities:

Water utility 217,219,662 (120,243,597) 96,976,065 Total business ‐ type activities 217,219,662 (120,243,597) 96,976,065 Total infrastructure assets 535,713,850$ (354,000,665)$ 181,713,185$

For the year ended June 30, 2023, depreciation and amortization expense on capital assets was charged to the governmental functions of the City as follows:

Department Depreciation/Amortization
Administration 524,106$
Finance 193
Police 1,187,123
Fire 633,516
Public works 11,555,304
Community development 38,568
Housing 132,013
Parks and recreation 887,458
Capital assets held by the government's internal service funds are charged to the various functions based on their usage of the assets 4,894,951 Total Governmental Activities Depreciation/Amortization Expense 19,853,232$

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City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

70 For the year ended June 30, 2023, depreciation and amortization expense on capital assets was charged to the business‐type activities of the City as follows:

Fund Depreciation/Amortization
Water utility 6,905,455$
North bay treatment plant 1,766,631
Transportation 788,868
Golf courses 380,173
Total Business ‐type Activities Depreciation/Amortization Expense 9,841,127$

7) Accounts Payable and Other Current Liabilities

Accounts payable and other current liabilities as of June 30, 2023 are as follows:

Governmental Activities
Other
Low Mod City Non‐Major Total
General Income Capital Governmental Governmental
Current Liabilities Fund Housing Projects Funds Activities Accounts payable 11,586,730$    95,330$        3,470,082$          1,919,229$      17,071,371$ Deposits payable 391,653            1,000            5,914,473             6,307,126 Total Accounts Payable & Other
Current Liabilities 11,978,383$    96,330$        9,384,555$          1,919,229$      23,378,497 Add: Internal service current liabilities 1,101,703
Total Accounts Payable & Other
Current Liabilities 24,480,200$
Business‐Type Activities
North Bay Total
Water Treatment Business‐Type
Current Liabilities Utility Plant Transportation Golf Courses Activities Accounts payable 2,064,206$      713,017$     1,308,341$          497,892$         4,583,456$ Deposits payable 4,444                     4,444
Total Accounts Payable & Other
Current Liabilities 2,064,206$      713,017$     1,312,785$          497,892$         4,587,900$ Major Funds
Major Funds

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City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

71 8) Long‐Term Obligations

The following is a summary of long‐term obligation transactions of the City for the year ended June 30, 2023:

Balance
July 1, 2022 Incurred or Satisfied or Balance Due within More than Long Term Obligations As Restated Issued Matured June 30, 2023 One Year One Year Governmental Activities:

General obligation bonds 6,065,458$ 421,890$ 5,643,568$ 421,890$ 5,221,678$ Pension obligation bonds 27,440,000 1,840,000 25,600,000 1,905,000 23,695,000 Long‐term notes payable 119,155 119,155
Compensated absences 18,339,164 7,765,572$ 4,369,462 21,735,274 5,807,867 15,927,407 Claims and judgments payable 14,199,000 3,338,327 2,921,327 14,616,000 3,076,852 11,539,148 Net OPEB liability 20,774 279,473 217,666 82,581 82,581 Net pension liability 101,744,477 122,457,661 20,234,507 203,967,631 203,967,631 Leases 1,933,883 350,863 1,583,020 369,564 1,213,456 Subscriptions 2,871,142 1,934,223 1,573,435 3,231,930 1,307,290 1,924,640 Subtotal 172,733,053 135,775,256 32,048,305 276,460,004 12,888,463 263,571,541 Less: Unamortized bond discount (295,568) 24,631 (270,937) (270,937) Total Governmental Activities 172,437,485$ 135,775,256$ 32,072,936$ 276,189,067$ 12,888,463$ 263,300,604$ Business‐Type Activities:

Utility‐Water revenue bonds ‐ principal 60,329,148$ 3,548,915$ 56,780,233$ 3,163,944$ 53,616,289$ Utility‐Water revenue bonds ‐ accreted interest 35,663,575 3,414,155$ 2,966,085 36,111,645 183,416 35,928,229 Recreational revenue bonds 920,000 455,000 465,000 465,000 Compensated absences 1,813,969 1,064,760 13,701 2,865,028 143,252 2,721,776 Net pension liability 18,237,049 13,014,377 2,529,685 28,721,741 28,721,741 Subscriptions 86,899 28,971 57,928 28,674 29,254 Subtotal 117,050,640 17,493,292 9,542,357 125,001,575 3,984,286 121,017,289 Plus: Unamortized bond premium 3,139,374 227,522 2,911,852 16,679 2,895,173 Total Business‐Type Activities 120,190,014$ 17,493,292$ 9,769,879$ 127,913,427$ 4,000,965$ 123,912,462$

The Government Code of the State of California provides for a legal debt limit of 15% of gross assessed valuation.

By law, the general obligation debt subject to the limitation may be offset by amounts set aside for repaying general obligation bonds. This includes the City's General and Pension Obligation bonds. The City is in compliance with this code.

A. General Obligation Bonds

The general obligation bonds are repaid from property tax revenues, and the City is obligated under the law to levy a property tax sufficient to service the debt.

The City has pledged future zone of benefit property tax revenues to pay the Solano County Water Agency for the North Bay Aqueduct project costs. The City is obligated under the agreement to levy a zone of benefit property tax sufficient to service the contractual payments. The debt does not bear interest. The debt is serviced through the Non‐major General Obligation Bonds Debt Service Fund. Debt service in fiscal year 2023 amounted to $421,890 and the property tax revenue received to service this debt was $403,505 with the remainder coming from accumulated resources on hand.

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City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

72 The annual debt service requirements for the General Obligation Bonds are as follows:

Fiscal Year
Ending Principal Interest Total
2024 421,890$                              421,890$
2025 421,890                                 421,890
2026 421,890                                 421,890
2027 421,890                                 421,890
2028 421,890                                 421,890
2029‐2033 2,109,450                             2,109,450 2034‐2036 1,424,668                             1,424,668 Totals 5,643,568$                           ‐$                                       5,643,568$ General Obligation Bonds ‐Governmental Activities

B. Pension Obligation Bonds

The City is a member of the California Public Employees’ Retirement System (PERS), a public employees defined benefit retirement program. In fiscal year 2005, the City issued $41,745,000 in order to refinance the City’s unamortized, unfunded actuarial accrued liability with PERS (see Note 14 for more information on PERS pension plan). Series 2004 A was a variable rate debt in the face amount of $8,920,000; series 2004 B was a fixed rate debt and was issued in the face amount of $20,995,000; and series 2005 A2 was variable rate debt and was issued in the face amount of $11,830,000. In FY 2011, the City issued the 2011 series of pension obligation bonds in the amount of $15,870,000 to fully refund and retire both variable rate series bonds: Series 2004 A in the amount of $8,920,000 and series 2005 A2 in the amount of $6,430,000. In FY 2015, the City issued $21,835,000 in refunding bonds to refinance $20,810,000 that was outstanding in the Pension Obligation Series 2004 B series of bonds. The 2015 bonds were issued at a range of interest rates ranging from 1% to 4.75%. These bonds mature in 2034. Under the Indenture of Trust related to the bonds, the remedies for an event of default include compulsion of the City to comply with its obligations, including the payment of debt service, and any other remedies available under law or equity.

On December 4, 2018, to take advantage of lower interest rates, the City issued the 2018 series of pension obligation bonds in the amount of $15,325,000 to fully refund the $13,315,000 that was outstanding in the 2011 Series bonds. The 2011 bonds had interest rates ranging from 7.08% to 8.5%, while the 2018 series bonds bear interest at rates ranging from 2.85% to 4.36%. The maturity date of the bonds remained the same at 2034.

The 2015 series bonds have an outstanding balance of $14,155,000 while the 2018 series bonds currently have an amount outstanding of $11,445,000. These Pension Obligation Bonds (POB’s) are backed by the full faith and credit of the City. All pension obligation bonds are federally taxable. Under the Indenture of Trust related to the bonds, the remedies for an event of default include compulsion of the City to comply with its obligations, including the payment of debt service, and any other remedies available under law or equity.

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City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

73 As of June 30, 2023, the amount of accrued interest payable in the Government Wide Statement of Net Position is $89,654. At June 30, 2023, the outstanding balance is $25,600,000. The debt is serviced through the debt service fund and the annual debt service requirements for the POB’s are as follows:

Fiscal Year
Ending Principal Interest Total
2024 1,905,000$ 1,075,843$ 2,980,843$ 2025 1,970,000 1,009,186 2,979,186 2026 2,045,000 936,213 2,981,213 2027 2,120,000 859,820 2,979,820 2028 2,205,000 776,749 2,981,749 2029‐2033 12,510,000 2,394,727 14,904,727 2034 2,845,000 130,198 2,975,198 Totals 25,600,000$ 7,182,736$ 32,782,736$ Pension Obligation Bonds‐Governmental Activities

C. Utility‐Water Revenue Bonds

In November 2007, the City issued $84,466,697 in revenue bonds with interest rates ranging from 4.66% to 5.01% to finance the modernization of the current treatment plant and the construction of water distribution systems.

The City has pledged future water customer revenues, net of specified operating expenses to repay the $84.5 million in water revenue bonds. In FY 2017, $43,610,000 of these bonds were refunded (see 2017 Water Refunding Revenue Bonds). This includes total principal and interest remaining to be paid on the bonds is $40,856,697 and $73,703,302, respectively. The remaining outstanding amount of the 2007 bonds are capital appreciation bonds in the originally issued principal amount of $40,856,697. The $73,703,302 in interest represents an amount of accreted interest (to be accreted over the period between 2007 and 2038) and began paying down in 2021. Annual principal and interest payments on the bonds are expected to require less than 47% of net revenues in 2024 and in future years. As of June 30, 2023, the total principal remaining to be paid on the bonds is $31,945,233 and $36,111,645 of interest has been accreted to date. In the current fiscal year, the amount added to the accreted interest payable was $3,414,155. The outstanding certificates of participation were executed and delivered by The Bank of New York Mellon Trust Company, N.A, as trustee, and evidence of interests in installment payments made by the City under an Installment Sale Agreement. The City’s obligation to pay installment payments is secured by a pledge of the net revenues of the City’s water enterprise. In the event of a default by the City under the Installment Sale Agreement, the Trustee has the right to exercise any remedy available under law or equity, including declaring all principal components of the unpaid installment payments, together with accrued interest at a default rate, to be immediately due and payable.

In February, 2013, the City issued $4,810,000 in revenue bonds with interest rates ranging from 2.0% to 5.0% to defease and refund on a current basis the Water Enterprise 2003 Refunding Bonds. The issuance premium is reported in long‐term debt‐due on the balance sheet and the remaining balance of $58,828 was amortized during the current year. Principal and interest paid in the current year were $589,375. These bonds have been paid off as of June 30, 2023.

In April 2017, the City issued $40,320,000 in revenue bonds with interest rates ranging from 3.0% to 5.0% to defease and refund on a current basis the term and serial components of the Water Enterprise 2007 Revenue Bonds. The issuance premium is reported in long‐term debt due on the balance sheet and will be amortized over the next 20 years (the remaining life of the bonds). As of June 30, 2023, the balance of the premium is $2,895,173.

The City has pledged future water customer revenues, net of specified operating expenses to repay the $40.3 million in water revenue bonds. Annual principal and interest payments on the bonds are expected to require less than 10% of net revenues in 2024 and in future years. Net customer revenues in the current year were $13,885,224. Under the Indenture of Trust for the bonds, the remedies for an event of default include any remedy available under law or equity, including declaring the principal amount of any outstanding 2017 Bonds, together Packet Page 116 of 516Attachment 2 Page 92 of 188

City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

74 with accrued interest, to be immediately due and payable. The total principal and interest remaining to be paid on the bonds is $24,835,000 and $19,992,906, respectively. As of June 30, 2023, the amount of accrued interest payable is $298,564. At June 30, 2023, the water revenue bonds consist of the following:

Bond Issue Bonds Outstanding
2007 Water Revenue Bonds ‐ principal 31,945,233$
2007 Water Revenue Bonds ‐ accreted interest 36,111,645 2017 Water Refunding Revenue Bonds 24,835,000
Total Water Revenue Bonds 92,891,878$

The debt service requirements on the utility water revenue bonds are as follows:

Fiscal Year
Ending Principal (1)Interest Total
2024 3,347,360$ 4,675,312$ 8,022,672$ 2025 3,501,335 4,822,707 8,324,042 2026 3,664,156 4,963,796 8,627,952 2027 3,836,567 5,098,708 8,935,275 2028 4,018,892 5,224,039 9,242,931 2029‐2033 23,244,529 27,749,265 50,993,794 2034‐2038 29,589,039 29,936,096 59,525,135 2039‐2042 21,690,000 2,777,750 24,467,750 Total 92,891,878$ 85,247,673$ 178,139,551$ (1) Includes accreted interest.

Utility‐Water Revenue Bonds‐Business‐type Activities

D. Recreational Revenue Bonds

In December 2011, the City, on behalf of the Municipal Park Improvement District No. 1 of the City of Fairfield, issued $8,775,000 to refund the outstanding Municipal Park Improvement District No. 1 of the City of Fairfield 1998 Revenue Bonds, Series A.

The Bonds were issued to obtain debt service savings and to restructure the debt service requirements of the City’s golf courses in Rancho Solano and Paradise Valley. The debt bears interest at rates ranging from 2% to 4%.

These bonds will mature in fiscal year 2024. The issuance premium is reported in long‐term debt‐due on the balance sheet and will be amortized over the next one year (the remaining life of the bonds). As of June 30, 2023, the balance of the premium is $16,679.

The pledged revenue to pay debt service includes all charges received and all other income and revenues derived by the City from the ownership and operation of the golf courses. In the current year, the debt service amounted to $455,000 and the golf course fund had net revenues (after depreciation) of $891,300. To the extent funds are insufficient to pay the operating and maintenance costs and pay the debt service on the bonds, the Council is authorized to levy a tax on taxable property within the Municipal Park Improvement District No. 1 to pay such debt service. To date, no levy has been necessary nor made. The 2011 Bonds are not subject to acceleration upon a default with respect to the 2011 Bonds. As of June 30, 2023, the amount of accrued interest payable is $8,719. At June 30, 2023, the outstanding balance is $465,000.

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City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

75 The debt service requirements on the bonds are as follows:

Fiscal Year
Ending Principal Interest Total
2024 465,000$ 8,719$ 473,719$ Total 465,000$ 8,719$ 473,719$ Recreational Revenue Bonds ‐Business‐type Activities

E. Long‐term Notes Payable—Governmental Activities – Direct Borrowings

In January 2012, the City obtained a long term loan from the California Energy Resources Conservation and Development Commission in the amount of $2,376,232. This loan was to retrofit the City’s street and pedestrian crossing lights. This loan has a fixed rate of 1% with payments due semi‐annually through December 2022. The loan has been paid off as of June 30, 2023.

F. Compensated Absences

The City’s vested and unpaid compensated absences for the governmental activities are accounted for in the Compensated Absences Internal Service fund. As of June 30, 2023, the outstanding liability for the governmental activities is $21,735,274. As for the City’s business‐type activities, the liabilities for the vested and unpaid compensated absences are accounted by activity and the total as of June 30, 2023 is $2,865,028. The current portion of this liability is $5,807,867 for the governmental activities, and $143,252 for the business‐type activities funds, and has been determined based on recent payout history.

G. Arbitrage

The Tax Reform Act of 1986 instituted certain arbitrage restrictions concerning the issuance of tax‐exempt bonds after August 31, 1986. Arbitrage regulations deal with the investment of all tax‐exempt bond proceeds at an interest yield greater than the interest yield paid to bondholders. Generally, all interest paid to bondholders can be retroactively rendered taxable if applicable rebates are not reported and paid to the U.S. Treasury at least every five years. The City has evaluated each bond issued subject to the arbitrage requirements and has determined that no arbitrage liability exists as of June 30, 2023. The City has complied with all significant bond covenants relating to reserve and sinking fund requirements.

9) Leases

A. Lease receivable

As of year‐end June 30, 2023, the City had entered into various lease agreements as the lessor where it had leased its land, ranging from three years to thirty‐one years. As of June 30, 2023, the outstanding lease receivables total to $15,949,257. These leases require the various lessees to make periodic payments to the City, and range in interest rates from 0.7268% to 4.3260%. The offsetting entry to the lease receivable is a deferred inflow and the value of the deferred inflows at June 30, 2023, is $15,371,903. The City will be systematically recognizing revenue over the terms of the leases, and in the current fiscal year, the City recognized $485,919 in lease principal and $181,679 in interest.

B. Lease payable

As of year‐end June 30, 2023, the City has entered into various lease agreements as the lessee for the use of various buildings and pieces of equipment, for terms ranging from three to ten years. As of June 30, 2023, the value of the lease liability outstanding is $1,583,020. The City is required to make monthly fixed payments, and these leases have interest rates ranging from 0.7268% to 2.7571%. These right‐to‐use lease assets are recognized Packet Page 118 of 516Attachment 2 Page 94 of 188

City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

76 as Capital Assets (see Note 6), and the value of the right‐to‐use lease assets as of June 30, 2023, is $2,087,762, with accumulated amortization of $546,818.

The future principal and interest lease payments as of June 30, 2023, were as follows:

Fiscal Year
Ending Principal Interest Total
2024 369,564$ 33,786$ 403,350$ 2025 350,155 26,435 376,590 2026 282,693 19,233 301,926 2027 236,762 12,463 249,225 2028 66,214 8,648 74,862 2029‐2032 277,632 15,578 293,210 Totals 1,583,020$ 116,143$ 1,699,163$

10) Subscription‐Based Information Technology Arrangements (SBITAs)

A. Governmental Activities

As of year‐end June 30, 2023, the City had entered into various subscriptions for the use of various software, for terms ranging from two to six years. As of June 30, 2023, the value of the total subscription liability outstanding is $3,231,930. The City is required to make annual fixed payments, and these subscriptions have interest rates ranging from 1.1703% to 3.3050%. The right‐to‐use subscription IT assets are recognized as Capital Assets (see Note 6), and the value of the right‐to‐use subscription assets as of June 30, 2023, is $7,205,584 with accumulated amortization of $1,823,447.

The future principal and interest subscription payments as of June 30, 2023, were as follows:

Fiscal Year
Ending Principal Interest Total
2024 1,307,290$ 82,861$ 1,390,151$ 2025 1,320,144 48,588 1,368,732 2026 572,057 13,421 585,478 2027 16,018 817 16,835 2028 16,421 413 16,834 Totals 3,231,930$ 146,100$ 3,378,030$

B. Business‐Type Activities

As of year‐end June 30, 2023, the City had entered into a subscription for the use of Swiftly software, with a term of three years. As of June 30, 2023, the value of the subscription liability outstanding is $57,928. The City is required to make annual fixed payments, and this subscription has an interest rate of 2.0237%. The right‐to‐use subscription asset is recognized as a Capital Asset (see Note 6), and the value of the right‐to‐use subscription asset as of June 30, 2023, is $89,649, with accumulated amortization of $29,102.

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City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

77 The future principal and interest subscription payments as of June 30, 2023, were as follows:

Fiscal Year
Ending Principal Interest Total
2024 28,674$ 1,172$ 29,846$ 2025 29,254 592 29,846 Totals 57,928$ 1,764$ 59,692$

11) Risk Management and Insurance

The City is partially self‐insured for workers’ compensation insurance with a $750,000 retention per occurrence and general liability coverage with a $750,000 retention per occurrence and is a member of joint power authorities for the coverage above and beyond the retention levels (see below). The City is completely self‐insured for unemployment insurance, short‐term disability insurance, other post‐employment benefits (OPEB), vision and dental insurance coverage programs. The expenses of the self‐insurance programs are recorded in the Insurance Internal Service Fund. In 2022, an independent actuary performed an analysis of the City’s self‐insured workers’ compensation reserves and general liability reserve (i.e. payable claims); this actuarial analysis is performed every two years for these two liability accounts. For fiscal years 2023 and 2022, estimates for incurred but not reported claims (IBNR) are included in the liability estimates recommended by the actuary. Based on the analysis, which used a rate of 1.5% to discount future investment earnings at a 75% confidence level, the City’s worker’s compensation actuarial liability at June 30, 2023 is $9,845,000 and the general liability actuarial liability is $4,771,000.

The changes in balances of claims liabilities during the past years for the General Liability and Workers’ Compensation fund combined are as follows:

Claims Liability FY 22/23 FY 21/22
Beginning of Fiscal Year 14,199,000$ 14,996,249$ Incurred Claims including IBNR's 3,338,327 3,869,617 Claims Payments (2,921,327) (4,666,866) End of Fiscal Year 14,616,000$ 14,199,000$

For worker’s compensation, the City purchases excess insurance coverage (above and beyond the retention limit of $750,000) from a governmental joint powers authority up to statutory limits per occurrence. This joint power authority is Prism formally known as the California State Association of Counties Excess Insurance Authority, a risk sharing pool of California public agencies, dedicated to controlling losses and providing effective risk management.

In 1979, 29 California counties came together to form this joint powers authority in order to pool their risk and provide a viable and cost effective solution for the counties’ insurance and risk management needs. Since then, the Prism’s membership has expanded to include 95% of the counties in California and nearly 70% of the cities, as well as numerous school districts, special districts, housing authorities, fire districts, and other Joint Powers Authorities. The Prism is a separate legal entity and is governed by a 62‐member Board of Directors. Members are assessed a contribution for each program in which they participate (for the City of Fairfield, this is the Excess Workers’ compensation program). Members may be subject to additional supplemental assessments if it is determined that contributions are insufficient. If it is determined that excess contributions are available, a dividend may be declared. Separate financial statements may be obtained from the Prism website at https://www.prismrisk.gov/resources/prism-documents/ .

For general liability, the City is a member of the California Joint Powers Risk Management Authority (CJPRMA), a joint powers authority which provides the City with $40,000,000 liability coverage over and above the self‐insured Packet Page 120 of 516Attachment 2 Page 96 of 188

City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

78 retention of $750,000. A property insurance policy is purchased by the member entities of CJPRMA with a deductible of $250,000 per loss. The CJPRMA is a legal entity separate and distinct from its member entities, as permitted by the California Government Code. CJPRMA is governed by a 21‐member Board of Directors appointed by the member agencies. Member agencies include approximately 72 Cities, 1 County, 1 Unified School District and 16 special districts. The purpose of the CJPRMA is to spread the adverse effects of losses among the member agencies and to provide excess coverage as a pool, spreading the overall risk among the member entities. Should actual losses among participants are greater than the anticipated losses, the City will be assessed its pro rata share of that deficiency. Conversely, if actual losses are less than anticipated, the City will be refunded its pro rata share of the excess. Separate financial statements may be obtained from the CJPRMA website at https://main.cjprma.org/resources/documents/financials . For both programs, there have been no insurance settlements that have exceeded insurance coverage in each of the last three years.

12) Classification of Net Position

In the Government‐Wide Financial Statements, net position is classified into the following categories:

A. Net Investment in Capital Assets ‐ This category groups all capital assets, net of accumulated depreciation and related debt, into one component of net position, as noted below.

Governmental Business‐Type
Activities Activities Totals
Capital Assets 366,863,430$ 162,362,086$ 529,225,516$ Less Long Term Debt and Liabilities:

Long term debt due within one year (12,888,463) (4,000,965) (16,889,428) Long term debt due in more than one year (263,300,604) (123,912,462) (387,213,066) Total Long Term Debt (276,189,067) (127,913,427) (404,102,494) Plus Long Term Debt not applicable to Capital Assets:

Compensated absences 21,735,274 2,865,028 24,600,302 Claims and judgments payable 14,616,000 14,616,000 Pension obligation bonds (including unamortized discount) 25,329,063 25,329,063 Net OPEB liabilty 82,581 82,581
Net pension liability 203,967,631 28,721,741 232,689,372 Total long term debt not applicable to capital assets 265,730,549 31,586,769 297,317,318 Total long term debt applicable to capital assets (10,458,518) (96,326,658) (106,785,176) Add accreted interest* 36,111,645 36,111,645 Add unspent bond proceeds related to capital debt 1,046,771 1,046,771 Add capital‐related deferred outflows of resources 29,649 29,649 Net Investment in Capital Assets 356,404,912$ 103,223,493$ 459,628,405$ *Since interest on long‐term debt is excluded in the calculation of the net investment in capital assets, the accreted interest portion of the debt is added back.

In the Governmental Activities, out of the $6,537,001 restricted cash and investments, there are no unspent bond proceeds. In the Business‐Type Activities, out of the $28,642,586 restricted cash and investments, $573,052 represents remaining (unspent) bond proceeds for debt service reserves, $473,719 represents cash restricted for debt service, and $27,595,815 represents restricted cash for major maintenance reserves.

B. Restricted Net Position – This category presents external restrictions imposed by creditors, grantors, contributors (Outreach Independence), or laws or regulations of other governments (3rd parties) and restrictions imposed by law through constitutional provisions or enabling legislation. The restrictions are categorized in the governmental activities by General Fund, Capital Projects, Debt Service, Community Development Programs, and specific projects, and in the business‐type activities by Debt Service, Major Maintenance, and Minority Interest.

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City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

79 C. Unrestricted Net Position – This category represents the net position of the City, which is not restricted for any project or other purpose.

13) Fund Balances

The City’s Fund Balances for Governmental funds are presented as follows:

Non‐Major Total
General Low Mod City Governmental Governmental
Fund Balances Fund Income Housing Capital Projects Funds Funds Nonspendable
Prepaids 895,654$              2,905$                   3,333$                   901,892$ Outreach independence 335,375                335,375
Total 895,654                2,905                      ‐                         338,708                1,237,267 Restricted
Pension trust (PARS) 6,252,481             6,252,481
Successor agency admin costs 117,828                117,828 Special revenue:

Housing assistance 461,282                461,282
Streets and parks 5,643,172             5,643,172
Housing and special projects 37,975,065           34,621,609           72,596,674 Debt service 1,177,087             1,177,087
Capital projects 50,014,251           21,977,499           71,991,750 Outreach Independence 41,524                   41,524
Total 6,370,309             37,975,065           50,014,251           63,922,173           158,281,798 Committed
Pension stabilization 3,744,466             3,744,466
Capital projects 18,273,633           18,273,633
Total 3,744,466              ‐                          ‐                         18,273,633           22,018,099 Assigned
Infrastructure/Facilities 201,000                201,000 Vehicle Replacement 81,000                   81,000
Capital projects 4,336,226             4,336,226
Pension obligation bonds 2,049,520             2,049,520 Total 282,000                 ‐                         4,336,226             2,049,520             6,667,746 Unassigned
General fund reserve @20% 26,440,361           26,440,361 Carryovers/Encumbrances 195,715                195,715
Unassigned fund balance 19,397,949           19,397,949 Total Unassigned 46,034,025            ‐                          ‐                          ‐                         46,034,025 Total Fund Balances 57,326,454$        37,977,970$        54,350,477$        84,584,034$        234,238,935$ Major Funds

Included in the restricted fund balance for the Low Mod Income Housing Special Revenue Fund, there are approximately $30,777,000 of loans receivable that are not anticipated to be collected within the next year. In the non‐major governmental funds (HOME, CDBG, and NSP) fund balance, there is approximately $17,390,000 of loans receivable that are not anticipated to be collected within the next year.

14) Retirement Plans

A. Pension Plan

1. General Information about the Pension Plans

i. Plan Description – The City contributes to the California Public Employees Retirement System (CalPERS), an agent multiple‐employer system that acts as a common investment and administrative agent for participating public entities within the state of California. All qualified permanent and probationary Packet Page 122 of 516Attachment 2 Page 98 of 188

City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

80 employees are eligible to participate in the City’s separate Safety (police and fire) and Miscellaneous (all other) Plans. Benefit provisions under the Plans are established by State statute and City resolution.

CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website at www.calpers.ca.gov .

ii. Benefits Provided ‐ CalPERS provides 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. Classic miscellaneous, classic safety and PEPRA safety members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. PEPRA miscellaneous members with five years of total service are eligible to retire at age 52 with statutorily reduced benefits. All members are eligible for non‐duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.

The Plans’ provisions and benefits in effect at June 30, 2023, are summarized as follows:

Plan Classic Plan Tier II PEPRA
Hire Date Prior to 8/26/2012 On or After 8/26/2012 On or After 1/1/2013 Formula 2.7% @ 55 2.5% @ 55 2% @ 62
Benefit vesting schedule 5 years of service 5 years of service 5 years of service Benefit payments monthly for life monthly for life monthly for life Retirement age 50‐55 50‐55 52‐67
Monthly benefits, as a % of annual salary 2.0% to 2.7% 2.0% to 2.5% 1.0% to 2.5% Required employee contribution rates 10.50% 10.50% 6.50% Required employer contribution rates 39.230% 39.230% 41.730% Plan Classic Plan Tier II PEPRA
Hire Date Prior to 8/26/2012 On or After 8/26/2012 On or After 1/1/2013 Formula 3% @ 50 3% @ 55 2.7% @ 57
Benefit vesting schedule 5 years of service 5 years of service 5 years of service Benefit payments monthly for life monthly for life monthly for life Retirement age 50 50‐55 50‐57
Monthly benefits, as a % of annual salary 3.0% 2.4% to 3.0% 2.0% to 2.7% Required employee contribution rates 11.25% 11.25% 10.50% Required employer contribution rates 45.010% 45.010% 47.260% Miscellaneous
Safety

Employees Covered ‐ At June 30, 2023, the following employees were covered by the benefit terms for each Plan:

Employees Covered Miscellaneous Safety Total
Inactive employees or beneficiaries
currently receiving benefits 570 245 815 Inactive employees entitled to but not yet
receiving benefits 371 86 457 Active employees 359 172 531 Totals 1,300 503 1,803

iii. Contributions ‐ Section 20814(c) of the California Public Employees’ Retirement law requires that the employer contribution rates for all public employers are determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in rate. Funding contributions for both Plans are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined Packet Page 123 of 516Attachment 2 Page 99 of 188

City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

81 rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rates of employees. As of June 31, 2023, the average employee contribution rate for miscellaneous and safety plan are 7.228% and 9.061% of annual pay, respectively, and employer’s contribution rate for miscellaneous and safety plan are 41.73% and 47.26% of annual pay, respectively. For the fiscal year ended June 30, 2023, the employer contributions were $12,593,590 for miscellaneous and $12,542,766 for safety, respectively.

2. Net Pension Liability

The City’s net pension liability for each Plan is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of each of the Plans is measured as of June 30, 2022, using an annual actuarial valuation as of June 30, 2021 rolled forward to June 30, 2022. The General Fund, in the governmental activities, and the Water, Transportation, and North Bay Regional Water enterprise funds are the primary funds used to liquidate the pension liabilities. A summary of principal assumptions and methods used to determine the net pension liability is shown below.

i. Actuarial Assumptions ‐ The total pension liabilities in the June 30, 2021, actuarial valuations were determined using the following actuarial assumptions.

Provision Miscellaneous Safety
Valuation Date June 30, 2021 June 30, 2021
Measurement Date June 30, 2022 June 30, 2022
Actuarial Cost Method Entry ‐Age Entry ‐Age
Normal Cost Method Normal Cost Method
Actuarial Assumptions:

Discount Rate 6.90% 6.90%
Inflation 2.30% 2.30%
Payroll Growth 2.80% 2.80%
Projected Salary Increase (1)3.00% ‐ 10.44% 4.12% ‐ 17.97% Investment Rate of Return (2)6.80% 6.80%
Mortality (3)
(1) Depending on age, service and type of employment
(2) Net of pension plan investment and administrative expenses, including inflation Derived using CalPERS' Membership Data for all Funds
(3) The mortality table used was developed based on CalPERS ‐specific data. The probabilities of mortality are based on the 2021 CalPERS Experience Study for the period from 2001 to 2019. Pre ‐retirement and Post‐retirement mortality rates include generational mortality improvement using 80% of Scale MP‐2020 published by the Society of Actuaries. For more details on this table, please refer to the CalPERS Experience Study and Review of Actuarial Assumptions report from November 2021 that can be found on the CalPERS website.

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City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

82 Other actuarial assumptions used in the June 30, 2021, valuation were based from the CalPERS Experience Study and Review of Actuarial Assumptions report from November 2021 that can be found on the CalPERS website.

ii. Discount Rate ‐ The discount rate used to measure the total pension liability was 6.90%, down from

7.15% last year. The reduction of 0.1% is based on the thresholds specified in the CalPERS Funding Risk mitigation policy. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long‐term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

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

In determining the long‐term expected rate of return, CalPERS considered both short‐term and long‐term market return expectations. Using historical returns of all the funds’ asset classes, expected compound (geometric) returns were calculated over the next 20 years using a building‐block approach. The expected rate of return was then adjusted to account for assumed administrative expenses of 10 Basis points.

The expected real rates of return by asset class are as follows:

Asset Class Target Allocation Real Return (1) (2)
Global Equity ‐ Cap‐weighted 30.0% 4.5%
Global Equity ‐ Non ‐Cap‐weighted 12.0% 3.8%
Private Equity 13.0% 7.3%
Treasury 5.0% 0.3%
Mortgage‐backed Securities 5.0% 0.5%
Investment Grade Corporates 10.0% 1.6%
High Yield 5.0% 2.3%
Emerging Market Debt 5.0% 2.5%
Private Debt 5.0% 3.6%
Real Assets 15.0% 3.2%
Leverage ‐5.0%‐0.6%
Total 100%
(1) An expected inflation of 2.30% used for this period. (2) Figures are based on the 2021 Asset Liability Management study.

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City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

83 iii. Changes in the Net Pension Liability ‐ The changes in the net pension liability for each Plan for the measurement date June 30, 2022, are as follows:

Miscellaneous Plan:

Total Pension
Liability
Plan Fiduciary Net
Position
Net Pension
Liability/(Asset)
Balance at June 30, 2021 371,403,276$ 300,118,245$ 71,285,031$ Changes in the year:

Service cost 6,037,681             6,037,681
Interest on the total pension liability 26,161,115           26,161,115 Changes in assumptions 11,596,275           11,596,275 Differences between expected and actual experience 3,102,260             3,102,260 Contribution ‐ employer 11,177,620           (11,177,620) Contribution ‐ employee 3,002,172             (3,002,172) Projected investment income 20,489,671           (20,489,671) Differences between projected and actual earnings on plan investments (43,034,018)          43,034,018
Benefit payments, including refunds of employee contributions (19,948,106)          (19,948,106)           ‐ Administrative expenses (186,956)               186,956 Net changes 26,949,225           (28,499,617)          55,448,842 Balance at June 30, 2022 398,352,501$      271,618,628$      126,733,873$ Safety Plan:

Total Pension
Liability
Plan Fiduciary Net
Position
Net Pension
Liability/(Asset)
Balance at June 30, 2021 354,962,880$ 306,266,385$ 48,696,495$ Changes in the year:

Service cost 7,938,938             7,938,938
Interest on the total pension liability 25,238,718           25,238,718 Changes in assumptions 15,399,167           15,399,167 Differences between expected and actual experience 265,602                 265,602 Contribution ‐ employer 11,586,572           (11,586,572) Contribution ‐ employee 3,388,779             (3,388,779) Projected investment income 21,017,274           (21,017,274) Differences between projected and actual earnings on plan investments (44,218,418)          44,218,418
Benefit payments, including refunds of employee contributions (17,637,205)          (17,637,205)           ‐ Administrative expenses (190,786)               190,786 Net changes 31,205,220           (26,053,784)          57,259,004 Balance at June 30, 2022 386,168,100$      280,212,601$      105,955,499$ Totals of both Miscellaneous and Safety Plans 784,520,601$      551,831,229$      232,689,372$ Increase (Decrease)
Increase (Decrease)

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City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

84 iv. Sensitivity of the Net Pension Liability to Changes in the Discount Rate ‐ The following presents the net pension liability of the City for each Plan, calculated using the discount rate for each Plan, as well as what the City’s 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:

Scenario/Effect on Liability
Miscellaneous
Plan
Safety
Plan Total
1% Decrease 5.90% 5.90% 5.90%
Net Pension Liability 178,406,225$            160,568,690$     338,974,915$ Current Discount Rate 6.90% 6.90% 6.90%
Net Pension Liability 126,733,873$            105,955,499$     232,689,372$ 1% Increase 7.90% 7.90% 7.90%
Net Pension Liability 84,016,394$              61,293,670$        145,310,064$

v. Pension Plan Fiduciary Net Position ‐ Detailed information about each pension plans’ fiduciary net position is available in the separately issued CalPERS financial reports.

3. Pension Expense and Deferred Outflows/Inflows of Resources Related to Pensions

For the year ended June 30, 2023, the City recognized pension expense of $17,275,263 and $16,439,114 for the Miscellaneous and Safety Plan, respectively, for a total of $33,714,377. At June 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Pension contributions subsequent
to measurement date 12,593,590$   12,542,766$   25,136,356$ Differences between actual and
expected experience 3,169,787        1,826,136        (30,814)$          4,995,923        (30,814)$ Changes in assumption 7,730,850        11,817,965      19,548,815 Change in proportion 2,103,048        (2,103,048)$    2,103,048        (2,103,048) Net differences between
projected/actual earnings on plan
investments 13,466,277      14,389,776      27,856,053
Totals 39,063,552$   (2,103,048)$    40,576,643$   (30,814)$          79,640,195$   (2,133,862)$ Miscellaneous Plan Safety Plan Total

The amount of $12,593,590 and $12,542,766 for the Miscellaneous and Safety Plans, respectively, is reported as deferred outflows of resources related to contributions subsequent to the measurement date and will be recognized as a reduction of the net pension liability in the year ended June 30, 2024.

Packet Page 127 of 516Attachment 2 Page 103 of 188

City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

85 The amount reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

Fiscal Miscellaneous Safety
Year Ended Plan Plan Total
2024 8,118,529$      7,377,020$      15,495,549$
2025 6,780,020        5,998,078        12,778,098
2026 861,563           4,691,395        5,552,958
2027 8,606,802        9,936,570        18,543,372
Total 24,366,914$   28,003,063$   52,369,977$

B. Defined Contribution Plans

The City also provides defined contribution retirement benefits through the City of Fairfield 401(a) plan as well as a 457 plan. Benefit terms, including contribution requirements, are established, and may be amended by the City Council. The City and its employees contribute to this plan in accordance with the terms of the employees’ Memorandums of Understanding (MOU’s). In addition, for the 457 plans, employees are permitted to make voluntary contributions to the plan, up to applicable Internal Revenue Code limits. Employees are immediately vested in these contributions and the earnings on those contributions. Employer liabilities are limited to the amount of current contributions. For the year ended June 30, 2023, the City recognized an expense of $2,703,038 for the employer contribution to the 401 and 457 plans.

C. Other Retirement Systems

The Omnibus Budget Reconciliation Act of 1990 (OBRA) mandates that public sector employees who are not members of their employer’s existing retirement system as of January 1, 1992, be covered by either Social Security or an alternative plan. The City contracts with the Public Agency Retirement System (PARS), to maintain a defined contribution plan that covers part‐time, seasonal, and temporary employees. Employer liabilities are limited to the amount of current contributions.

Under PARS, employees contribute 6.2% and the City contributes 1.3% of the employee’s salary each pay period.

For the fiscal year ended June 30, 2023, total contributions of $12,126 were made based on a total amount of covered compensation of $932,770.

Certain part‐time employees have elected to be covered under Social Security, which requires these employees and the City to each contribute 6.2% of the employee’s salary. For the fiscal year ended June 30, 2023, total contributions of $25,408 were made based on a total amount of covered compensation of $409,800.

15) Other Post‐Employment Benefits (OPEB)

A. General Information about the OPEB Plans

1. Plan Description

The City's Retiree Health Plan is a single employer defined benefit healthcare plan. The City provides post‐ retirement health care benefits to certain retired executive management employees and retired City officials as approved by City resolution. Eligibility requirements include: (1) age 53 with 10 or more years of service with the City and; (2) provide a minimum of 4 years of service as an executive management employee; and receipt of Public Employees Retirement System (PERS) benefits. The eligible official/employee must elect to be included in this program immediately upon retirement. The City does not issue a separate, stand‐alone financial report for its OPEB plan. The City’s Retiree Insurance (OPEB) Internal Service Fund is used to liquidate the net OPEB liability. The City has established a trust with CalPERS Packet Page 128 of 516Attachment 2 Page 104 of 188

City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

86 California Employers’ Retiree Benefit Trust (CERBT) for the purpose of accumulating funding for OPEB obligations. The CERBT is a Section 115 OPEB Trust and is an agent multiple employer plan for those electing to prefund their OPEB obligations. As of the measurement date of June 30, 2022, this trust had accumulated assets of $2,010,678.

2. Employees covered

There are twenty‐three retired individuals covered under this program. The plan is closed, and all twenty‐ three retirees are receiving benefits.

3. Contributions

For the executive management group discussed above, the City pays a subsidy towards the medical and dental premiums for retirees and their dependents. The subsidy is limited to the premium amount that is for the lowest cost medical and dental plans available. During the year ended June 30, 2023, the City made no contributions to the CERBT trust.

B. Net OPEB Liability

1. Actuarial Assumptions

The net OPEB liabilities in the June 30, 2022 actuarial valuation were determined using the following actuarial assumptions:

Valuation Date
Measurement Date
Measurement Period July 1, 2021 to June 30, 2022
Actuarial Assumptions:

Discount Rate
Inflation
Salary Increases N/A
Mortality Rate 2021 CalPERS's Experience Study
Healthcare Trend Rate
Provisions
June 30, 2022
June 30, 2022

5.25%

2.50%

5.9% in 2024, step down to 3.9% by 2076

2. Discount Rate

The discount rate of 5.25% was used to calculate the net OPEB liability for the measurement date June 30, 2022. The projection of cash flows used to determine the discount rate assumed that City contributions will be made at rates equal to the actuarially determined contribution rates.

Packet Page 129 of 516Attachment 2 Page 105 of 188

City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

87 The table below reflects long‐term expected real rate of return by asset class.

Asset Class
Target
Allocation
Real Return
Years 1‐5
Real Return
Years 6+
Global Equity 34.0% 4.40% 4.50%
Fixed Income 41.0%‐1.00% 2.20%
Global Real Estate 17.0% 3.00% 3.90%
Treasury Inflation Protected Securities 5.0%‐1.80% 1.30% Commodities 3.0% 80.00% 1.20%
Total 100%

3. Changes in the Net OPEB Liability
The changes in the net OPEB liability for the Plan as of the measurement date June 30, 2022 are as follows:

Total OPEB Liability
Plan Fiduciary Net
Position
Net OPEB
Liability/(Asset)
Balance at June 30, 2021 2,570,282$ 2,549,508$ 20,774$ Changes in the year:

Interest on the Total OPEB Liability 143,995                     143,995 Expected Investment Income 142,761                  (142,761) Administrative Expenses (644)                       644 Benefit Payments (217,666)                    (217,666)                 ‐ Changes in Assumption 98,017                       98,017 Difference between expected and actual plan experience (501,369)           (501,369) Difference between projected and actual earnings on
Investments (463,281)                463,281
Net Changes (477,023)                    (538,830)                61,807 Balance at June 30, 2022 2,093,259$                2,010,678$             82,581$

4. Sensitivity of the Net OPEB Liability to Changes in the Discount Rate

The following presents the net OPEB liability of the City if it were calculated using a discount rate this is one percent lower or one percent higher than the current rate:

Plan
1% Decrease
(4.25%)
Current
Discount Rate
(5.25%)
1% Increase
(6.25%)
Net OPEB Liability/(Asset) 260,800$ 82,581$ (71,299)$

5. Sensitivity of the Net OPEB Liability to Changes in Health Care Cost Trend Rates

The following presents the net OPEB liability of the City if it were calculated using healthcare cost trend rates that are one percent lower or one percent higher than the current rate:

Plan
1% Decrease
(4.9%)
Cost
Trend Rate
(5.9%)
1% Increase
(6.9%)
Net OPEB Liability/(Asset) (63,715)$ 82,581$ 248,713$ Packet Page 130 of 516Attachment 2 Page 106 of 188

City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

88 6. OPEB Expense and Deferred Outflows and Inflows of Resources Related to OPEB

Gains and losses related to changes in net OPEB liability are recognized in OPEB expense systematically over time.

Amounts are first recognized in OPEB expense for the year the gain and loss occur. The remaining amounts are categorized as deferred outflows of resources related to OPEB and are to be recognized in the future OPEB expense.

The recognition period differs depending on the source of the gain or loss. Net difference between projected and actual earnings on OPEB plan investments are amortized over 5 years and all others are amortized over the expected average remaining service lifetime, which is 0 years at June 30, 2023, since there are no active members. For the year ended June 30, 2023, the City recognized OPEB expense of ($376,504).

At June 30, 2023, the City reported deferred outflows of resources and deferred inflow of resources related to OPEB from the following sources:

Deferred Outflows of
Resources
Deferred Inflow of
Resources
Net difference between projected and
actual earnings on investments 171,437$
Total 171,437$ ‐$

The deferred outflows of resources related to OPEB will be recognized as OPEB expense as follows:

2024 (21,857)$
2025 (28,742)
2026 (28,182)
2027 (92,656)
Total (171,437)$
Fiscal Year Ended

16) Tax Abatements ‐ Economic Development Incentives

GASB Statement No. 77 defines tax abatements as resulting from an agreement between a government and an individual or entity in which the government promises to forgo tax revenues and the individual or entity promises to subsequently take a specific action that contributes to economic development or otherwise benefits the government or its citizens. According to the GASB 77, the substance of these agreements meet the definition of “tax abatements” as the revenues received were not available for general municipal services purposes, but rather used to effectively reduce the net tax liability of certain taxpayers per the conditions of an agreement. The taxes paid to the City are included in the revenue reported in these financial statements and the payments made to the businesses based upon the taxes paid are also included as expenditures in these financial statements.

The City offers an economic development incentive program to the entities that propose to locate or expand already established businesses within the City. This incentive program is expected to provide a stimulus to the City's economy, increase the tax base and create jobs. Each of the agreements entered into by the City, provides for a rebate of taxes paid to the City according to formulas contained in the agreements. These limited terms agreements provide for a sharing of the taxes (percentage rebates) above certain amounts with a maximum rebate not to exceed the cost of a business’ improvements and/or development impact fees. The City generally expects to receive increased revenue as a result of these agreements. These incentive agreements require approval by City Council. The term of eligibility under these agreements, approved by City Council, will expire on March 31, 2028.

Packet Page 131 of 516Attachment 2 Page 107 of 188

City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

89 For the fiscal year ended June 30, 2023, under this program the City had abatements of sales tax totaling $1,756,083. Pursuant to the Sales and Use Tax law (chapter 8 – Article 1 – section 7056), in order to protect the confidential information of sales taxes collected and abatements provided to each of the specific agencies, the City has presented the aggregate amount abated during the current fiscal year.

17) Commitments and Contingent Liabilities

Various claims and lawsuits are pending against the City. Although the outcome of these claims and lawsuits is not presently determinable, in the opinion of the City’s management, on the advice of legal counsel, it is unlikely that they will have a material adverse effect on the accompanying financial statements.

The City and the Housing Authority have received federal and state grants for specific purposes that are subject to review and audit by the grantor agencies. Such audits could lead to a request for reimbursement for expenditures disallowed under the terms of the grant. The amount, if any, of expenditure that may be disallowed by the granting agencies cannot be determined at this time, although the City expects such amounts, if any, to be immaterial.

A. Other Development Agreements

The City has entered into several agreements with various developers who are developing numerous residential and commercial projects throughout the City. The City agreed to grant the developers’ development fee credits since the developers constructed (or have agreed to construct) certain public improvements beyond what was needed to serve their specific projects. The value of the credits as of June 30, 2023, was $44,240,280. This amount does increase for inflation but does not accrue interest. The accounting for the amounts due are not recorded as liabilities since the payments (the uses of credits) are contingent upon the pulling of future building permits (from building growth that has not yet occurred).

B. Golf Courses Contingent Advances from Other Funds

In the 2014 Financial Statements, the Business‐Type activities golf courses funds showed advances from other funds in the amount of $25,141,275 representing the loans received from the City’s Intra‐governmental loan fund and development tax funds to facilitate the construction and the ongoing operations of the golf course fund. In the 2015 Financial Statements, for financial statement purposes, these loans were reclassified to “Transfers In” recognizing that the repayment of these loans is not scheduled to happen in the near and foreseeable future. At the same time, the City has not formally forgiven the loans and the advances are now being disclosed as a contingent liability of the golf course funds. The balance of these loans has not accrued any interest in the current fiscal year and is $27.6 million at June 30, 2023 (of which $15.6 million is principal and $12 million is previously accrued and unpaid interest). Should sufficient resources in the golf courses become available to make repayments in the future, those repayments of this contingent liability will take place; and be recorded as transfers out from the golf courses at that time.

18) Excess of Expenditures over Appropriations and Negative Fund Balances/Net Position

In the Neighborhood Stabilization Program, Gas Tax, Special Programs, Community Development Block Grant, Pension Obligation Bonds, and Assessment & Community Facilities Districts funds for non‐major funds, there was a negative variance in expenditures and the variance was covered by the accumulated fund balance.

Packet Page 132 of 516Attachment 2 Page 108 of 188

City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

90 Net position in the Proprietary Transportation fund reflects a negative net position due to the loss on disposition of capital assets reported in both FY 22‐23 and FY 21‐22. Beginning in FY 21‐22, the City’s transit program began transitioning two commuter bus routes to an alternate operator. Due to this transition, the City’s transit system ceased operating two express bus lines and transferred nine busses that were originally purchased in FY 18‐19 to the new operator at no cost, resulting in a loss on disposition of capital assets in both fiscal years.

Net position in the Internal Service Compensated Absence fund reflects a negative net position due to the City recognizing the compensated absences outstanding liability of all the governmental activities in this fund. It’s anticipated that increased funding levels will take place in the future, which will gradually reduce this deficit over time.

Expenditures over Appropriations and Negative Fund Balances/Net Position 19) North Bay Treatment Plant

The North Bay Treatment Plant was constructed through a joint exercise of powers agreement between the City and the City of Vacaville to operate and maintain facilities for supplying potable water to their respective service areas. The agreement did not create a separate agency or separate legal entity separate from the parties. A Joint Powers Policy Committee (JPPC) handles the organization and administration of the North Bay Treatment Plant.

The JPPC is composed of the Director of Public Works from the City and the Director of Public Works from Vacaville or their designated alternates. The City is reporting this cost‐sharing arrangement as a joint venture with a majority interest, due to the fact the City has operational control of this facility and functions as a majority member. As a result, the City reports the entire operations of the North Bay Treatment Plant as a major enterprise fund in the accompanying financial statements, with a corresponding reserve for minority interests.

At June 30, 2023, the net position between Fairfield and Vacaville is classified as follows:

Net Position Fairfield Vacaville Totals
Net Investment in capital assets 21,658,597$ 12,040,951$ 33,699,548$ Restricted for major maintenance 19,866,283 11,337,854 31,204,137 Restricted for minority interest (385,495) (385,495) Unrestricted (1,536,710) (1,536,710) Totals 39,988,170$ 22,993,310$ 62,981,480$

20) Successor Agency Trust for Assets of Former Redevelopment Agency

The purpose of this footnote is to explain the impact of the dissolution of the Fairfield Redevelopment Agency on the City’s financial statements. Under AB 1X 26, passed on June 28, 2011, all redevelopment agencies in the State of California were dissolved and ceased operations as a legal entity as of February 1, 2012.

Amongst numerous requirements, AB 1X 26 requires the following:

i. subject to the control of a newly established oversight board, assets of the former redevelopment agency must be disposed expeditiously, and property tax revenue generated by a former redevelopment agency can only be used to pay enforceable obligations (i.e., debt obligations and other third‐party contractual obligations);

ii. either the city or another unit of local government may agree to serve as the “Successor Agency” to hold the net position until they are distributed to units of state and local government.

Packet Page 133 of 516Attachment 2 Page 109 of 188

City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

91 iii. successor agencies may transfer housing functions of the former redevelopment agency to the appropriate entity; and
iv. any property tax revenue in excess of enforceable obligations is to be distributed by county auditor controllers to taxing entities, which includes the City, as surplus property tax. In addition, any land sales of property by the Successor agency must be distributed to Solano County, which in turn, is distributed to the various taxing entities. In all years going forward, successor agencies will only be allocated revenue in the amount that is necessary to pay the estimated annual installment payments on enforceable obligations of the former redevelopment agency until all enforceable obligations of the prior redevelopment agency have been paid in full and all assets of the agency have been liquidated.

As a result of the restrictions placed on the assets and liabilities of the former redevelopment agency, all of these assets and liabilities were transferred (and are accounted for on an ongoing basis) into a fiduciary fund (private‐ purpose trust fund) on February 1, 2012. On February 7th, 2012, the City Council elected to become the Successor Agency to the former Fairfield Redevelopment Agency in accordance with AB 1X 26 as part of City resolution number SA2012‐01. On May 14, 2012, the Oversight Board to the Successor Agency of the Fairfield Redevelopment Agency agreed to transfer the housing responsibilities and all rights, powers, duties, and obligations associated with the housing activities of the agency to the Fairfield Housing Authority. The transfer of the majority of these housing assets occurred during fiscal year 2012‐2013 year after the approval by the State of California Department of Finance.

A. Receivables

At June 30, 2023 receivables consisted of the following:

Total
Receivables Receivables
Interest and other 59,679$
Loans 1,325,000
Total Receivables, Net 1,384,679$

Several of the loan receivables are those that had been made to small businesses to assist with business development. As payments are received from these loans, these funds are reflected on the Recognized Obligation Payment Schedules (ROPS) as “Other Income” and are subsequently utilized to decrease the resources requested from Solano County and the State of California. The loans receivable is for $1,325,000 and represents a Loan Receivable from Casa Nova Mobile Home Park. Bond proceeds were issued by the former redevelopment agency and originally used to assist Casa Nova Mobile Home Park to purchase the mobile home park (in 1996 and now have been subsequently refinanced), and now the Successor Agency recognizes a loan receivable from Casa Nova equal to the amount of bonds payable that relate to the purchase of the mobile home park. The receivable is reduced as the debt (bonds payable) is paid down by the mobile home park.

B. Land Held for Resale

The total value of Land Held for Resale at June 30, 2023, is $3,920,066 and consists of properties that were acquired by the former Redevelopment Agency for future development. The properties are carried at the lower of cost or fair value. As a result of the Successor Agency having its Property Management Plan approved by the State on February 27, 2014, the Successor Agency will continue to look to sell land for development. When the Successor Agency sells a piece of land, under state law, the proceeds are immediately remitted to Solano County, which in turn distributes the proceeds of sale to the various taxing entities.

Packet Page 134 of 516Attachment 2 Page 110 of 188

City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

92 C. Long Term Obligations

The following is a summary of long‐term bonds outstanding of the Successor Agency for the year ended June 30, 2023:

Amount Amount Due
Balance Incurred or Satisfied or Balance Due Within More Than 7/1/2022 Issued Matured 6/30/2023 One Year One Year
Tax Allocation Bonds
2011 TABS, North Texas Project Area 6,015,000$            105,000$               5,910,000$             110,000$               5,800,000$ 6,015,000                ‐$                          105,000                  5,910,000                110,000                  5,800,000 Tax Allocation Refunding Bonds
Successor Agency 2014 Highway 12 3,125,654               1,525,740              1,599,914                1,599,914               ‐ Successor Agency 2014 City Center 1,033,879               503,254                  530,625                    530,625                   ‐ Successor Agency 2014 Cordelia 1,370,467               671,006                  699,461                    699,461                   ‐ Successor Agency 2014 Casa Nova 1,510,000               185,000                  1,325,000                195,000                  1,130,000 7,040,000                ‐                             2,885,000              4,155,000                3,025,000              1,130,000 Bond Premiums 777,919                    333,771                  444,148                    444,148 Total Bonds Payable 13,832,919$          ‐$                          3,323,771$           10,509,148$          3,135,000$           7,374,148$ Long Term Notes Payable
Solano business park H12‐3A 1,963,121$            1,963,121$             1,963,121$ Kaufman & Broad H12‐3A 178,378                    178,378                    178,378 Total Long Term Notes Payable 2,141,499$             ‐$                           ‐$                           2,141,499$              ‐$                           2,141,499$ Total Long Term Debt 15,974,418$          ‐$                          3,323,771$           12,650,647$          3,135,000$           9,515,647$

i. Tax Allocation Bonds

The North Texas Redevelopment Project Area Tax Allocation Bonds, Series 2011, were issued in February 2011 by the former Redevelopment Agency in the amount of $6,725,000 to purchase additional land for development. The bonds bear interest at rates ranging from 3.52% to 8.25%. The debt service requirements on the tax allocation bonds are as follows:

Fiscal Year
Ending Principal Interest Totals
2024 110,000$ 553,975$ 663,975$ 2025 120,000 543,625 663,625 2026 130,000 532,375 662,375 2027 145,000 520,000 665,000 2028 160,000 505,875 665,875 2029‐2033 1,035,000 2,263,137 3,298,137 2034‐2038 1,635,000 1,639,937 3,274,937 2039‐2043 2,575,000 656,688 3,231,688 Totals 5,910,000$ 7,215,612$ 13,125,612$ Tax Allocation Bonds

ii. Tax Allocation Refunding Bonds

On April 3, 2014, the Successor Agency issued $29,075,000 in bonds to refinance prior obligations and bonds of the Successor Agency and related obligations of the Fairfield Public Financing Authority (which were for Redevelopment purposes). As of June 30, 2023, the outstanding balance of the refunding issue is $4,155,000. This debt issue has interest rates ranging from 3.00% ‐ 5.00% and has a final maturity date in 2028. This bond issue neither raised new money nor increased the final maturity date. The revenue bonds are secured by a pledge of, and lien on, monies deposited from time to time in the Redevelopment Property Tax Trust Fund. This bond Packet Page 135 of 516Attachment 2 Page 111 of 188

City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

93 refinancing was approved by both the California Department of Finance as well as the Successor Agency’s Oversight Board.

This bond issue of $29,075,000 included the refinancing of the previously outstanding 2003, Series B bonds which were previously issued (originally in 1996 and subsequently refinanced in 2003) specifically to assist Casa Nova Mobile Home Park in the purchase of their mobile home park. The amount outstanding that pertains to Casa Nova Mobile Home Park at June 30, 2023 is $1,325,000. This portion of the bonds is being serviced and paid by Casa Nova Mobile Home Park and the Successor Agency has recorded both a receivable and a liability for this same amount. As Casa Nova makes a principal payment, the bonds payable and loans receivable are reduced for an equal amount. As Casa Nova Mobile Home Park makes an interest payment, miscellaneous revenue is recorded along with an interest expense.

The remaining debt service requirements on these refunding tax allocation bonds are as follows:

Fiscal Year
Ending Principal Interest Totals
2024 3,025,000$ 132,125$ 3,157,125$ 2025 205,000 51,375 256,375 2026 215,000 40,875 255,875 2027 225,000 29,875 254,875 2028 235,000 18,375 253,375 2029 250,000 6,250 256,250 Totals 4,155,000$ 278,875$ 4,433,875$ Tax Allocation Refunding Bonds

iii. Long Term Notes Payable

The former Redevelopment Agency has two long‐term notes in the Highway 12 Project Area totaling $2,141,499 (which includes accrued interest). These notes are subordinate to other debts of the Successor Agency. In September 1981, the Agency issued a long‐term note for $931,081 to reimburse a developer for the cost of oversizing storm drainage facilities in the Highway 12 Project Area. Interest accrued at 10% compounded annually through September 1, 1989, after which the note became non‐interest bearing. Total unpaid interest is $1,032,040, which has been added to the note. In February 1982, the Agency issued a non‐interest‐bearing long‐ term note to reimburse a developer for the cost of oversizing storm drainage facilities in the Highway 12 Project Area for $178,378. No payments have been made on the loans. The loans will mature once the City of Fairfield loans have been satisfied and matured.

iv. Loans Payable to the City of Fairfield and the Fairfield Housing Authority

The City has made prior loans to the former Redevelopment Agency for redevelopment project costs. The loans payable due to the City of Fairfield for monies advanced to the Redevelopment Agency for various Redevelopment purposes. In fiscal year 2013‐2014, the City received approval from the Department of Finance (as well as the Oversight Board) to partially reinstate these loans owed to the City (to the Internal Service‐Intragovernmental Service Fund) in the principal amount of $12,047,692 ($11,337,538 for Cordelia and $710,154 for City Center). The first repayment on these loans was received this year and will be fully paid off in FY 2024‐25, as the Successor Agency must first pay off its loans from the Housing Authority which took place in the current fiscal year.

Packet Page 136 of 516Attachment 2 Page 112 of 188

City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

94 Amount Amount Due
Balance Incurred or Satisfied or Balance Due Within More Than 7/1/2022 Issued Matured 6/30/2023 One Year One Year
Loans Payable to the City of Fairfield
Regional Center ‐ Loan from HOME Fund 109,689$ 109,689$ 109,689$ Cordelia ‐ Loan from IGL Fund 11,337,538 351,459$ 10,986,079 7,641,305$ 3,344,774 City Center ‐ Loan from IGL Fund 710,154 351,459 358,695 358,695 ‐ Total Loans payable to the City 12,157,381 ‐$ 702,918 11,454,463 8,000,000 3,454,463 Loans Payable to Housing Authority
City Center Loan 297,083 297,083 ‐ ‐ Total Loans payable to Housing Authority 297,083 ‐ 297,083 ‐ ‐ ‐ Totals 12,454,464$ ‐$ 1,000,001$ 11,454,463$ 8,000,000$ 3,454,463$

The loans payable to the Fairfield Housing Authority are obligations that were previously owed to the Redevelopment low and moderate income housing fund. In prior years, the City received approval to transfer these housing assets (loans receivables) to the successor housing entity, which is the Fairfield Housing Authority. In the current year, per the schedule above, the Successor Agency requested monies for gradual repayments of these loans, via the Recognized Obligation Payment Schedule (ROPS) process. The loan was paid off in this fiscal year. 21) Debt with No City Commitment

Special assessment districts in various parts of the City have issued debt under the 1915 Act and Mello‐Roos Special Tax Act of 1982 to finance infrastructure improvements and facilities within their boundaries. Neither the faith and credit nor the taxing power of the City, the State of California, or any political subdivision thereof is pledged to the payment of any debt service for these districts. Payment of the debt is secured by valid assessment liens placed upon certain lands within each district. The City is the collecting and paying agent for the debt issued by these Districts but has no direct or contingent liability or moral obligation for the payment of this debt.

Therefore, this debt is not included in the general long‐term debt of the City. This type of debt is accounted for in the custodial funds. In addition, the Fairfield Housing Authority issued debt in 2012 to serve as a conduit to assist a mobile home park in the refinancing of their previously existing bonds. This debt is not a liability of the City, as the mobile home park’s revenue collections are the sole source of payment and security on the bonds; and these revenues have been assigned by the Housing Authority to the trustee for direct payment on the bonds. As neither the City nor the Housing Authority have any financial liability for this debt, this debt is not included in the general long‐term debt of the City.

The outstanding balance of each of these issues as of June 30, 2023, is as follows:

Issue Maturity Balances
Description Date Date June 30, 2023
Communities Facilities District No. 3 ‐ Series 2018 12/5/18 9/1/37 10,535,000$ Communities Facilities District No. 2007‐1, Fairfield Commons, Series 2008 4/3/08 9/1/38 14,180,000 Communities Facilities District No. 2016‐1, Villages at Fairfield‐ Area A, Series 2 1/25/18 9/1/48 3,650,000 Communities Facilities District No. 2016‐1, Villages at Fairfield‐ Area B, Series 2 8/8/19 9/1/49 19,710,000 Communities Facilities District No. 2016‐1, Villages at Fairfield‐ Area C, Series 2 11/23/21 9/1/52 22,880,000 Communities Facilities District No. 2019‐1, One Lake, Series 2020A 6/25/20 9/1/50 15,240,000 Communities Facilities District No. 2019‐1, One Lake, Series 2021A 9/30/21 9/1/51 11,825,000 Fairfield Housing Authority 2012 Revenue Bonds (Creekside Estates) 1/31/12 9/1/29 3,735,000 Total Non‐Commitment Debt 101,755,000$

Packet Page 137 of 516Attachment 2 Page 113 of 188

City of Fairfield, California

Notes to Basic Financial Statements (continued)
For the Year Ended June 30, 2023

95 22) Prior Period Adjustments

As of July 1, 2022, the City adopted GASB Statement No. 96, Subscription‐Based Information Technology Arrangements (SBITAs). The implementation of this standard establishes that a SBITA results in a right to use subscription IT asset – an intangible asset – and a corresponding liability. The standard provides the capitalization criteria for outlays other than subscription payments, including implementation costs of a SBITA. The Statement requires recognition of certain SBITA assets and liabilities for SBITAs that previously were recognized as outflows of resources based on the payment provisions of the contract. Beginning net position was restated to retroactively adopt the provisions of GASB Statement No. 96.

In FY 21‐22, North Bay Treatment Plant financial report contained an error which resulted in overstatement of revenue and receivable. Beginning net position was restated to correct the error.

Transportation
North Bay Treatment
plant
Internal Service
Funds
Net Position at July 1, 2022, as previously stated 1,563,733$ 62,768,541$ 79,867,651$ Prior period adjustment:

Correction of error (1,262,003)
Recognition of right‐to ‐use subscription asset 86,899 4,699,501 Reclassification of work in progress (1,758,507)
Recognition of subscription liability (86,899) (2,513,236) Net Position at July 1, 2022, as restated 1,563,733$ 61,506,538$ 80,295,409$ Net Position
Proprietary Funds
Business‐type fund

Governmental
Activities
Business‐type
Activities
Net Position at July 1, 2022, as previously stated 500,286,213$ 156,687,990$ Prior period adjustment:

Correction of error (1,262,003)
Recognition of right‐to‐use subscription asset 5,059,407 86,899 Reclassification of work in progress (1,758,507)
Recognition of subscription liability (2,871,142) (86,899) Net Position at July 1, 2022, as restated 500,715,971$ 155,425,987$ Net Position
Government ‐wide Level

23) Subsequent Event

The City refunded the Successor Agency's North Texas Bonds on December 5, 2023. This will provide an overall savings of $4,095,267 over the life of the Bonds with a present value savings of $1,915,513.

Packet Page 138 of 516Attachment 2 Page 114 of 188

City of Fairfield
People and Places in the City

96 Packet Page 139 of 516Attachment 2 Page 115 of 188

City of Fairfield, California Required Supplementary Information 97 Miscellaneous Plan Schedule of Changes in Net Pension Liability and Related Ratios Last Ten Years* 2015 2016 2017 2018 2019 2020 2021 2022 2023Total pension liabilityService cost 4,456,976$ 4,265,773$ 4,261,714$ 4,792,562$ 4,953,864$ 4,959,754$ 5,042,853$ 5,221,877$ 6,037,681$ Interest on the total pension liability 19,288,633 19,987,138 20,564,347 21,229,322 22,113,909 23,145,866 24,133,212 25,231,079 26,161,115 Differences between expected and actual experience (2,954,005) (3,999,107) (901,217) 2,752,187 3,004,523 2,153,819 3,855,652 3,102,260 Changes in assumptions(4,868,664) 17,376,981 (2,020,155) 11,596,275 Benefit payments, including refunds of employee contributions (11,268,897) (12,209,765) (13,203,370) (13,733,897) (15,191,547) (16,093,011) (16,890,914) (18,641,949) (19,948,106) Net change in total pension liability 12,476,712 4,220,477 7,623,584 28,763,751 12,608,258 15,017,132 14,438,970 15,666,659 26,949,225 Total pension liability ‐‐ beginning 260,587,733 273,064,445 277,284,922 284,908,506 313,672,257 326,280,515 341,297,647 355,736,617 371,403,276 Total pension liability ‐‐ ending (a)273,064,445 277,284,922 284,908,506 313,672,257 326,280,515 341,297,647 355,736,617 371,403,276 398,352,501 Plan fiduciary net positionContributions ‐ employer 3,415,841 4,147,940 4,923,250 5,608,699 6,305,148 7,460,599 9,054,680 9,903,995 11,177,620 Contributions ‐ employee 2,471,961 2,436,113 2,528,364 2,598,318 2,555,190 2,575,759 2,656,053 2,760,535 3,002,172 Net investment income 31,874,238 4,549,087 958,715 22,563,672 18,437,644 15,156,188 11,749,293 56,111,862 (22,731,303) Benefit payments, including refunds of employee contributions (11,268,897) (12,209,765) (13,203,370) (13,733,897) (15,191,547) (16,093,011) (16,890,914) (18,641,949) (19,948,106) Net Plan to Resource Movement(546) Other Miscellaneous Income/Expense(659,510) 546 Net change in fiduciary net position 26,493,143 (1,076,625) (4,793,041) 17,036,792 11,446,379 9,100,081 6,569,112 50,134,443 (28,499,617) Plan fiduciary net position ‐‐ beginning 185,207,961 211,701,104 210,624,479 205,831,438 222,868,230 234,314,609 243,414,690 249,983,802 300,118,245 Plan fiduciary net position ‐‐ ending (b)211,701,104 210,624,479 205,831,438 222,868,230 234,314,609 243,414,690 249,983,802 300,118,245 271,618,628 Net pension liability ‐‐ ending (a) ‐ (b)61,363,341$ 66,660,443$ 79,077,068$ 90,804,027$ 91,965,906$ 97,882,957$ 105,752,815$ 71,285,031$ 126,733,873$ Plan fiduciary net position as a percentage of the total pension liability 77.53% 75.96% 72.24% 71.05%71.81% 71.32% 70.27% 80.81% 68.19%Measurement Date 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022Covered payroll (from prior year) 24,365,716$ 24,507,487$ 24,641,309$ 25,345,225$ 25,943,558$ 27,532,843$ 29,246,526$ 30,678,521$ 32,082,394$ 251.84% 272.00% 320.91% 358.27% 354.48% 355.51% 361.59% 232.36% 395.03% * Fiscal year 2015 was the first year of implementation (GASB 68), therefore, only nine years are shown.Change of Assumptions Effective with the June 30, 2021 valuation date (2022 measurement date), the accounting discount rate was reduced from 7.15% to 6.90%. In determining the long‐term expected rate of return, CalPERS took into account long‐term market return expectations as well as the expected pension fund cash flows. Projected returns for all asset classes are estimated, combined with risk estimates, and are used to project compound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long‐term projected portfolio return. In addition, demographic assumptions and the inflation rate assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. The accounting discount rate was 7.15% for measurement dates 2017 through 2021, 7.65% for measurement dates 2015 through 2016, and 7.50% for measurement date 2014.Net pension liability as a percentage of covered payrollPacket Page 140 of 516Attachment 2 Page 116 of 188

City of Fairfield, California Required Supplementary Information (continued) 98 Safety Plan Schedule of Changes in Net Pension Liability and Related Ratios Last Ten Years* 2015 2016 2017 2018 2019 2020 2021 2022 2023Total pension liabilityService cost 5,672,753$ 5,385,012$ 5,258,222$ 6,300,021$ 6,296,742$ 6,522,394$ 7,032,195$ 7,034,201$ 7,938,938$ Interest on the total pension liability 17,334,621 18,224,032 18,921,981 19,573,221 20,572,192 21,922,457 23,007,358 24,001,451 25,238,718 Differences between expected and actual experience (86,780) (2,588,170) (2,663,481) 2,678,526 6,491,163 1,812,363 (55,466) 265,602 Changes in assumptions(4,628,655) 16,931,340 (1,005,769) 15,399,167 Benefit payments, including refunds of employee contributions (10,603,117) (11,504,270) (12,163,671) (12,963,887) (14,181,595) (14,994,561) (15,682,792) (16,480,599) (17,637,205) Net change in total pension liability 12,404,257 7,389,339 9,428,362 27,177,214 14,360,096 19,941,453 16,169,124 14,499,587 31,205,220 Total pension liability ‐‐ beginning 233,593,448 245,997,705 253,387,044 262,815,406 289,992,620 304,352,716 324,294,169 340,463,293 354,962,880 Total pension liability ‐‐ ending (a)245,997,705 253,387,044 262,815,406 289,992,620 304,352,716 324,294,169 340,463,293 354,962,880 386,168,100 Plan fiduciary net positionContributions ‐ employer 4,742,507 5,065,553 5,640,187 6,815,028 7,234,241 18,568,978 12,849,535 14,601,731 11,586,572 Contributions ‐ employee 2,456,907 2,261,518 2,356,563 2,653,300 2,485,341 2,741,655 2,840,794 2,892,822 3,388,779 Net investment income 28,800,259 4,001,161 803,971 20,605,386 16,944,567 14,077,299 11,390,873 56,491,428 (23,391,930) Benefit payments, including refunds of employee contributions (10,603,117) (11,504,270) (12,163,671) (12,963,887) (14,181,595) (14,994,561) (15,682,792) (16,480,599) (17,637,205) Net Plan to Resource Movement(505) Other Miscellaneous Income/Expense(606,911) 505 Net change in fiduciary net position 25,396,556 (176,038) (3,362,950) 17,109,827 11,875,138 20,393,876 11,398,410 57,505,382 (26,053,784) Plan fiduciary net position ‐‐ beginning 166,126,184 191,522,740 191,346,702 187,983,752 205,093,579 216,968,717 237,362,593 248,761,003 306,266,385 Plan fiduciary net position ‐‐ ending (b)191,522,740 191,346,702 187,983,752 205,093,579 216,968,717 237,362,593 248,761,003 306,266,385 280,212,601 Net pension liability ‐‐ ending (a) ‐ (b)54,474,965$ 62,040,342$ 74,831,654$ 84,899,041$ 87,383,999$ 86,931,576$ 91,702,290$ 48,696,495$ 105,955,499$ Plan fiduciary net position as a percentage of the total pension liability 77.86% 75.52% 71.53% 70.72% 71.29% 73.19% 73.07% 86.28% 72.56%Measurement Date 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022Covered payroll (from prior year) 20,672,545$ 20,287,881$ 20,082,583$ 22,074,441$ 22,170,095$ 24,119,130$ 25,122,688$ 25,427,060$ 26,930,315$ 263.51% 305.80% 372.62% 384.60% 394.15% 360.43% 365.02% 191.51% 393.44% * Fiscal year 2015 was the first year of implementation (GASB 68), therefore, only nine years are shown.Change of Assumptions Effective with the June 30, 2021 valuation date (2022 measurement date), the accounting discount rate was reduced from 7.15% to 6.90%. In determining the long‐term expected rate of return, CalPERS took into account long‐term market return expectations as well as the expected pension fund cash flows. Projected returns for all asset classes are estimated, combined with risk estimates, and are used to project compound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long‐term projected portfolio return. In addition, demographic assumptions and the inflation rate assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. The accounting discount rate was 7.15% for measurement dates 2017 through 2021, 7.65% for measurement dates 2015 through 2016, and 7.50% for measurement date 2014.Net pension liability as a percentage of covered payrollPacket Page 141 of 516Attachment 2 Page 117 of 188

City of Fairfield, California Required Supplementary Information (continued) 99 Schedule of Contributions – Miscellaneous Plan Last Ten Years* 2015 2016 2017 2018 2019 2020 2021 2022 2023Actuarially determined contributions 4,147,940$ 4,923,250$ 5,608,699$ 6,278,436$ 7,455,288$ 9,054,751$ 9,892,323$ 11,163,419$ 12,593,590$ Contributions in relation to the actuarially determined contribution (4,147,940) (4,923,250) (5,608,699) (6,278,436) (7,455,288) (9,054,751) (9,892,323) (11,163,419) (12,593,590) Contribution deficiency (excess)‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ Covered payroll (from current year) 24,507,487$ 24,641,309$ 25,345,225$ 25,943,558$ 27,532,843$ 29,246,526$ 30,678,521$ 32,082,394$ 35,007,610$ Contributions as a percentage of covered payroll 16.93% 19.98% 22.13% 24.20% 27.08% 30.96% 32.25% 34.80% 35.97%Notes to ScheduleValuation date: 6/30/2012 6/30/2013 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2020Methods and assumptions used to determine contribution rates:Actuarial cost method Entry Age Normal Cost MethodAmortization method Level Percentage of PayrollRemaining amortization period 16 Years as of the Valuation DateAsset valuation method Market Value of AssetsInflationSalary Increase 3.00% ‐ 10.44% depending on age, service and type of employmentInvestment Rate of Return 6.80% (net of administration expenses)Retirement age The probabilities of retirement are based on the 2021 CalPERS Experience Study for the period from 2000 to 2019.Mortality * Fiscal year 2015 was the first year of implementation (GASB 68), therefore, only nine years are shown.2.80%The probabilities of mortality are based on the 2021 CalPERS Experience Study for the period from 2000 to 2019. Pre‐retirement and post‐retirement mortality rates incorporate mortality improvement trends with actual recent mortality rates using Scale MP‐2020 published by the Society of Actuaries. Packet Page 142 of 516Attachment 2 Page 118 of 188

City of Fairfield, California Required Supplementary Information (continued) 100 Schedule of Contributions – Safety Plan Last Ten Years* 2015 2016 2017 2018 2019 ** 2020 ** 2021 ** 2022 2023Actuarially determined contributions 5,065,553$ 5,640,187$ 6,815,028$ 7,234,241$ 8,568,977$ 9,844,064$ 10,601,731$ 11,585,568$ 12,542,766$ Contributions in relation to the actuarially determined contribution (5,065,553) (5,640,187) (6,815,028) (7,234,241) (18,568,977) (12,844,064) (14,601,731) (11,585,568) (12,542,766) Contribution deficiency (excess)‐$ ‐$ ‐$ ‐$ (10,000,000)$ (3,000,000)$ (4,000,000)$ ‐$ ‐$ Covered payroll (from current year) 20,287,881$ 20,082,583$ 22,074,441$ 22,170,095$ 24,119,130$ 25,122,688$ 25,427,060$ 26,930,315$ 30,043,092$ Contributions as a percentage of covered payroll 24.97% 28.08% 30.87% 32.63% 76.99% 51.13% 57.43% 43.02% 41.75%Notes to ScheduleValuation date: 6/30/2012 6/30/2013 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2020Methods and assumptions used to determine contribution rates:Actuarial cost method Entry Age Normal Cost MethodAmortization method Level Percentage of PayrollRemaining amortization period 16 Years as of the Valuation DateAsset valuation method Market Value of AssetsInflationSalary Increase 4.12% ‐ 17.97% depending on age, service and type of employmentInvestment Rate of Return 6.80% (net of administration expenses)Retirement age The probabilities of retirement are based on the 2021 CalPERS Experience Study for the period from 2000 to 2019.Mortality * Fiscal year 2015 was the first year of implementation (GASB 68), therefore, only nine years are shown.** In FY 18/19, FY 19/20 and FY 20/21, the Safety Plan's contribution includes a one‐time $10,000,000, $3,000,000 and $4,000,000 payment, respectively, towards the Safety Plan's unfunded liability.2.80%The probabilities of mortality are based on the 2021 CalPERS Experience Study for the period from 2000 to 2019. Pre‐retirement and post‐retirement mortality rates incorporate mortality improvement trends with actual recent mortality rates using Scale MP‐2020 published by the Society of Actuaries. Packet Page 143 of 516Attachment 2 Page 119 of 188

City of Fairfield, California Required Supplementary Information (continued) 101 Schedule of Changes in Net OPEB Liability and Related Ratios Last Ten Years* 2018 2019 2020 2021 2022 2023Total OPEB liability ‐ Beginning3,192,938$ 3,153,300$ 2,606,431$ 2,648,042$ 2,662,388$ 2,570,282$ Service cost 18,300 18,895 Interest on the OPEB liability 208,731 198,022 161,227 149,013 148,706 143,995 Differences between expected and actual experience (606,345) 88,699 (501,369) Changes in assumptions 93,961 132,429 21,424 98,017 Benefit payments (266,669) (251,402) (252,045) (244,790) (240,812) (217,666) Net change in OPEB liability (39,638) (546,869) 41,611 14,346 (92,106) (477,023) Total OPEB liability ‐‐ ending (a)3,153,300$ 2,606,431$ 2,648,042$ 2,662,388$ 2,570,282$ 2,093,259$ Plan fiduciary net positionEmployer Contribution to the Trust 500,000$ 1,000,000$ 500,000$ Employer Contribution ‐ Direct Benefit Payments 266,669$ 251,402 252,045 244,790 137,500$ Net investment income 687 99,467 106,318 448,334 (320,520)$ Benefit payments (266,669) (251,402) (252,045) (244,790) (240,812) (217,666) Administrative expenses (27) (215) (909) (835) (644) Net change in fiduciary net position‐ 500,660 1,099,252 605,409 344,187 (538,830) Plan fiduciary net position ‐‐ beginning‐ ‐ 500,660 1,599,912 2,205,321 2,549,508 Plan fiduciary net position ‐‐ ending (b)‐ 500,660 1,599,912 2,205,321 2,549,508 2,010,678 Net OPEB liability ‐‐ ending (a) ‐ (b)3,153,300$ 2,105,771$ 1,048,130$ 457,067$ 20,774$ 82,581$ Plan fiduciary net position as a percentage of the total OPEB liability 0.00% 19.21% 60.42% 82.83% 99.19% 96.05%Measurement Date 6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022Covered‐employee payroll (from prior year) 396,752$ 214,999$ N/A** N/A** N/A** N/A**794.78% 979.43% N/A** N/A** N/A** N/A*** Fiscal year 2018 was the first year of implementation (GASB 75), therefore, only six years are shown.** This is a closed plan with no active members. The plan only covers members who are already retired while the plan was active.Net OPEB liability as a percentage of covered‐employee payroll Packet Page 144 of 516Attachment 2 Page 120 of 188

City of Fairfield, California Required Supplementary Information (continued) 102 Schedule of Contributions ‐ Net OPEB Liability Last Ten Years* 2018 2019 2020 2021 2022 2023Actuarially determined contributions 246,546$ 506,722$ 281,374$ 101,350$ 82,663$ 67,365$ Contributions in relation to the actuarially determined contribution (751,402) (1,252,045) (744,790) (137,500) (217,666) Contribution deficiency (excess) (504,856)$ (745,323)$ (463,416)$ (36,150)$ (135,003)$ 67,365$ Covered‐employee payroll (from current year) 214,999$ N/A ** N/A ** N/A ** N/A ** N/A **Contributions as a percentage of covered‐employee payroll 349.49% N/A ** N/A ** N/A ** N/A ** N/A **Notes to ScheduleValuation date: 6/30/2016 6/30/2018 6/30/2018 6/30/2020 6/30/2020 6/30/2022Methods and assumptions used to determine contribution rates:Actuarial cost method Entry Age Normal Cost MethodAmortization method/period Level dollar payments; closed 5 year periodAsset valuation methodInflationPayroll Growth N/AHealthcare cost‐trend ratesInvestment Rate of Return 5.25%Retirement age N/A; all members are retiredMortality2021 CalPERS's Experience Study* Fiscal year 2018 was the first year of implementation (GASB 75), therefore, only six years are shown.** This is a closed plan with no active members. The plan only covers members who are already retired while the plan was active.Market Value2.50%6.8% in 2024, step down to 3.9% by 2076 Packet Page 145 of 516Attachment 2 Page 121 of 188

City of Fairfield, California

Supplementary Information

103

Packet Page 146 of 516Attachment 2 Page 122 of 188

City of Fairfield, California

Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual
City Capital Projects – Major Fund
For the Year Ended June 30, 2023

104

Capital
Variance with
Final Budget‐
Final Positive
Budget Actual (Negative)
Revenues:

Development fees 5,155,935$ 9,578,498$ 4,422,563$ Intergovernmental 9,604,762 5,592,045 (4,012,717) Investment income 425,574 807,870 382,296 Net increase (decrease) in fair value of investments (130,107) (130,106) 1 Miscellaneous 500,000 54,727 (445,273) Total Revenues 15,556,164 15,903,034 346,870 Expenditures:

Capital outlay 50,160,871 22,109,987 28,050,884 Excess (deficiency) revenues
over (under) expenditures (34,604,707) (6,206,953) 28,397,754 Other Financing Sources (Uses):

Transfers in 27,231,737 10,442,819 (16,788,918) Transfers out (79,163) (79,163)
Total other financing sources (uses) 27,152,574 10,363,656 (16,788,918) Net change in fund balance (7,452,133) 4,156,703 11,608,836 Fund Balance ‐ Beginning of Year 50,193,774 50,193,774 Fund Balance ‐ End of Year 42,741,641$ 54,350,477$ 11,608,836$

Projects Budget Actual
Packet Page 147 of 516Attachment 2 Page 123 of 188

City of Fairfield, California
Non Major Governmental Funds
Special Revenue Funds

105

State Gas Tax
To account for monies received and expended from State Gas Tax allocation to cities.

Home Program
To account for monies received and expended under the Home Investment Partnerships Program (HOME). Funds are provided by the Federal Government and passed through the State of California.

Neighborhood Stabilization Program
To account for monies received and expended under the Neighborhood Stabilization Program (NSP) issued under the American Reinvestment and Recovery Act (ARRA) of 2008. Funds are provided by the Federal Government and passed through the State of California.

Development Tax
To account for monies received from taxes levied by the City on new residential construction based on the number of bedrooms in each unit, square footage of all new commercial construction and units of residential construction.

City ordinance commits these monies to funding construction, major maintenance and debt service for park, street, drainage, and public safety facilities.

Special Programs
To account for monies received from Federal, State, and Regional grants as well as asset seizures.

Maintenance Districts
To account for maintenance districts monies received from taxes levied on property owners located within the districts.

Community Development Block Grant
To account for monies received and expended by the City as a participant in the Federal Community Development Block Grant program, including accounting for activity related to the revolving loan fund program.

Section 8 Housing Assistance
To account for monies received and expended in housing assistance to low and moderate income families. Funds are provided by receipts from Housing and Urban Development (HUD) for the Federal Section 8 Housing Choice Voucher program.

Improvement Districts
To account for monies received from the special taxes collected related to the Downtown Improvement District, the North Texas Business Improvement District, and the Tourism Business Improvement District. There was no adopted budget for the fund. Therefore, there is no budget.

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City of Fairfield, California
Non Major Governmental Funds
Other Funds

106

Debt Service Funds

General Obligation Bonds
To account for property tax monies and zone of benefit taxes levied for the payment of voter‐approved debt principal and interest and payment of contractual obligations.

Pension Obligation Bonds
To account for the proceeds of the bonds issued to refund the City’s unfunded liability to the CalPERS retirement system; and to account for the ongoing accumulation of resources used in making payments on this debt.

Capital Project Fund

Assessment and Community Facilities Districts
To account for the construction of public improvements deemed to benefit the properties against which special assessments are levied. Activities financed through assessments include street lighting and paving, utility and other general infrastructure improvements. In addition, to account for the activities in the Community Facilities Districts and the Rancho Solano and North Texas Benefit Districts.

Permanent Fund

Outreach Independence
To account for monies donated to the City and the Friends of the Senior Center for disbursements relating to senior citizen outreach programs.

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City of Fairfield, California

Combining Balance Sheet
Non‐Major Governmental Funds
June 30, 2023

107

Neighborhood
State Gas Home Stabilization Development
Tax Program Program Tax
Assets:

Cash and investments 4,878,086$ 1,989,561$ 548,018$ 18,275,628$ Receivables, net 765,086 13,970,704 847,860 Prepaid items
Restricted cash and investments
Total assets 5,643,172$ 15,960,265$ 1,395,878$ 18,275,628$ Liabilities:

Accounts payable and other current liabilities 8,210$ 1,190$ 1,995$ Due to other funds
Advances from other funds
Unearned revenue
Total liabilities ‐ 8,210 1,190 1,995 Deferred Inflows Of Resources:

Unavailable revenue‐loans interest receivable 2,899,670 Fund balances:

Nonspendable
Restricted 5,643,172     13,052,385      1,394,688
Committed 18,273,633
Assigned
Total fund balances 5,643,172     13,052,385      1,394,688       18,273,633 Total liabilities, deferred inflows of
resources, and fund balances 5,643,172$   15,960,265$    1,395,878$     18,275,628$ Special Revenue
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108

Community Section 8
Special Maintenance Development Housing Improvement
Programs Districts Block Grant Assistance Districts
5,786,943$   17,080,005$   226,608$           472,553$           89,596$ 2,210,181      137,730           3,394,600           19,442                244,804 3,333
284,520
7,997,124$   17,217,735$   3,905,728$        495,328$           334,400$ 816,286$       508,660$         103,433$           30,713$              247,731$ 1,838,154
997,000
4,356,936
7,011,376     1,505,660       103,433              30,713                247,731 412,251
3,333
985,748         15,712,075     3,390,044          461,282              86,669 985,748         15,712,075     3,390,044          464,615              86,669 7,997,124$   17,217,735$   3,905,728$        495,328$           334,400$ Special Revenue

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City of Fairfield, California

Combining Balance Sheet (continued)
Non‐Major Governmental Funds
June 30, 2023

109

Capital
Debt Service Project
General Pension Assessment &
Obligation Obligation Community Facilities
Bonds Bonds Districts
Assets:

Cash and investments 1,177,087$ 2,040,014$ 22,074,576$ Receivables, net 9,506 103,934
Prepaid items
Restricted cash and investments
Total assets 1,177,087$ 2,049,520$ 22,178,510$ Liabilities:

Accounts payable and other current liabilities 201,011$ Due to other funds
Advances from other funds
Unearned revenue
Total liabilities ‐ ‐ 201,011 Deferred Inflows Of Resources:

Unavailable revenue‐loans interest receivable
Fund balances:

Nonspendable
Restricted 1,177,087         21,977,499
Committed
Assigned 2,049,520
Total fund balances 1,177,087         2,049,520          21,977,499 Total liabilities, deferred inflows of
resources, and fund balances 1,177,087$      2,049,520$        22,178,510$ Packet Page 152 of 516Attachment 2 Page 128 of 188

110

Permanent
Fund
Total
Non‐Major
Outreach Governmental
Independence Funds
375,151$            75,013,826$
1,748                   21,705,595
3,333
284,520
376,899$            97,007,274$
1,919,229$
1,838,154
997,000
4,356,936
‐                            9,111,319
3,311,921
335,375              338,708
41,524                 63,922,173
18,273,633
2,049,520
376,899              84,584,034
376,899$            97,007,274$

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City of Fairfield, California

Combining Statement of Revenues, Expenditures and
Changes in Fund Balances
Non‐Major Governmental Funds
For the Year Ended June 30, 2023

111

Neighborhood
State Gas Home Stabilization Development
Tax Program Program Tax
Revenues:

Taxes 3,354,261$
Property taxes
Special assessments levied
Developers' contribution
Intergovernmental 5,745,156$
Investment income 82,658 53,505$ 8,421$ Net increase (decrease) in fair value of investments 16,909 (2,321) (3,215) Miscellaneous 1,099,324
Total revenues 5,844,723 51,184 5,206 4,453,585 Expenditures:

Current:

Administration
Police
Fire
Public works 57,068 29,867
Parks and recreation 2,337
Community development
Housing services 155,864 12,583
Capital outlay
Debt service:

Principal retirement
Interest
Fiscal agent fees
Total expenditures 57,068 155,864 12,583 32,204 Excess (deficiency) of revenues
over (under) expenditures 5,787,655 (104,680) (7,377) 4,421,381 Other Financing Sources (Uses):

Transfers in
Transfers out (5,278,635) (2,227,614) Total other financing sources (uses)(5,278,635) ‐ ‐ (2,227,614) Net change in fund balances 509,020 (104,680) (7,377) 2,193,767 Fund Balances:

Beginning of year 5,134,152 13,157,065 1,402,065 16,079,866 End of year 5,643,172$ 13,052,385$ 1,394,688$ 18,273,633$ Special Revenue
Packet Page 154 of 516Attachment 2 Page 130 of 188

112

Community Section 8
Special Maintenance Development Housing Improvement
Programs Districts Block Grant Assistance Districts
22,792$         945,588$
4,074,245$
4,629,467      834,120            893,568$        10,219,946$ 68,533            271,846            14,318            7,907                 2,791 179,740         40,894               13,000                                        512 913,976         345,760                                      92,117               3,779 5,814,508      5,566,865         920,886          10,319,970       952,670 928,013
665,588         8,600
1,093,824
104,867         6,542,997         169,247
524,745         11,000
105,529                                                               925,516 1,628,492                                  1,127,634       10,246,726 88,756
11,580
5,051,058      6,542,997         1,316,481       10,347,062       925,516 763,450         (976,132)           (395,595)         (27,092)             27,154 168,760
(416,200)        (27,228)                                       (24,261) (416,200)        141,532             ‐                       (24,261)              ‐ 347,250         (834,600)           (395,595)         (51,353)             27,154 638,498         16,546,675       3,785,639       515,968            59,515 985,748$       15,712,075$    3,390,044$    464,615$          86,669$ Special Revenue

Packet Page 155 of 516Attachment 2 Page 131 of 188

City of Fairfield, California

Combining Statement of Revenues, Expenditures and
Changes in Fund Balances (continued)
Non‐Major Governmental Funds
For the Year Ended June 30, 2023

113

Capital
Project
General Pension Assessment &
Obligation Obligation Community Facilities
Bonds Bonds Districts
Revenues:

Taxes
Property taxes 403,505$
Special assessments levied 5,434,447$
Developers' contribution 115,857
Intergovernmental
Investment income 43,651$          315,855
Net increase (decrease) in fair value of investments (17,254)           (56,778) Miscellaneous 13,058
Total revenues 403,505          26,397            5,822,439 Expenditures:

Current:

Administration
Police
Fire
Public works
Parks and recreation
Community development
Housing services
Capital outlay 1,065,140
Debt service:

Principal retirement 421,890          1,840,000
Interest 1,139,369
Fiscal agent fees 37,756            12,525
Total expenditures 459,646          2,991,894       1,065,140 Excess (deficiency) of revenues
over (under) expenditures (56,141)           (2,965,497)     4,757,299 Other Financing Sources (Uses):

Transfers in 3,375,881
Transfers out (2,379,132)
Total other financing sources (uses)‐ 3,375,881 (2,379,132) Net change in fund balances (56,141) 410,384 2,378,167 Fund Balances:

Beginning of year 1,233,228 1,639,136 19,599,332 End of year 1,177,087$ 2,049,520$ 21,977,499$
Debt Service

Packet Page 156 of 516Attachment 2 Page 132 of 188

114

Permanent
Total
Non‐Major
Outreach Governmental
Independence Funds
4,322,641$
403,505
9,508,692
115,857
22,322,257
5,692$           875,177
(245)               171,242
2,468,014
5,447             40,187,385
928,013
674,188
1,093,824
6,904,046
538,082
1,031,045
13,171,299
1,065,140

2,350,646
1,150,949
50,281
‐                      28,957,513
5,447             11,229,872
3,544,641
(10,353,070)
‐                      (6,808,429)
5,447             4,421,443
371,452         80,162,591
376,899$      84,584,034$
Packet Page 157 of 516Attachment 2 Page 133 of 188

City of Fairfield, California

Combining Schedule of Revenues, Expenditures and
Changes in Fund Balances ‐ Budget and Actual
Non‐Major Governmental Funds
For the Year Ended June 30, 2023

115

Revenues: Final Budget    Actual Variance   Final  Budget   Actual Variance Taxes
Property taxes
Special assessments levied
Developers' contributions
Intergovernmental 5,030,000$         5,745,156$    715,156$       732,148$           (732,148)$ Investment income 20,000                 82,658            62,658           53,505$             53,505 Net increase (decrease) in fair value of investments 16,909            16,909           (2,321)                (2,321) Miscellaneous
Total Revenues 5,050,000            5,844,723      794,723         732,148              51,184               (680,964) Expenditures:

Current:

Administration
Finance
Police
Fire
Public works 57,068 57,068
Parks and recreation
Community development
Housing services 748,245 155,864 592,381 Capital Outlay
Debt Service:

Principal retirement
Interest
Fiscal fees
Total Expenditures 57,068 57,068 ‐ 748,245 155,864 592,381 Excess (deficiency) of revenues
over (under) expenditures 4,992,932 5,787,655 794,723 (16,097) (104,680) (88,583) Other Financing Sources (Uses):

Transfers in
Transfers out (5,195,684) (5,278,635) (82,951) Total other financing sources (uses) (5,195,684) (5,278,635) (82,951) ‐ ‐ ‐ Net change in fund balances (202,752) 509,020 711,772 (16,097) (104,680) (88,583) Beginning Fund Balances 5,134,152 5,134,152 ‐ 13,157,065 13,157,065 ‐ Ending Fund Balances 4,931,400$ 5,643,172$ 711,772$ 13,140,968$ 13,052,385$ (88,583)$ Special Revenue Funds
State Gas Tax Home Program
Packet Page 158 of 516Attachment 2 Page 134 of 188

116

Final Budget    Actual Variance Final Budget    Actual Variance 1,080,980$       3,354,261$        2,273,281$
8,421$             8,421$
(3,215)              (3,215)
1,900,000         1,099,324          (800,676)
‐$                             5,206                5,206           2,980,980         4,453,585          1,472,605 29,867               29,867
2,336                 2,337                  (1)
12,583             (12,583)
‐                                12,583             (12,583)       32,203               32,204                (1) ‐                                (7,377)              (7,377)         2,948,777         4,421,381          1,472,604 (2,227,614)        (2,227,614)
‐                                 ‐                         ‐                   (2,227,614)        (2,227,614)          ‐ ‐                                (7,377)              (7,377)         721,163            2,193,767          1,472,604 1,402,065               1,402,065         ‐                   16,079,866       16,079,866         ‐ 1,402,065$             1,394,688$      (7,377)$       16,801,029$     18,273,633$      1,472,604$ Neighborhood Stabilization Program Development Tax
Packet Page 159 of 516Attachment 2 Page 135 of 188

City of Fairfield, California

Combining Schedule of Revenues, Expenditures and
Changes in Fund Balances ‐ Budget and Actual (continued) Non‐Major Governmental Funds
For the Year Ended June 30, 2023

117

Revenues: Final Budget Actual Variance Final Budget   Actual Variance Taxes 22,792$           22,792$
Property taxes
Special assessments levied 4,638,336$             4,074,245$      (564,091)$ Developers' contributions
Intergovernmental 3,835,200$             4,629,467        794,267            776,500                  834,120            57,620 Investment income 68,533             68,533              159,843                  271,846            112,003 Net increase (decrease) in fair value of investments 179,740           179,740            (72,060)                   40,894              112,954 Miscellaneous 727,423                  913,976           186,553            9,000                       345,760            336,760 Total Revenues 4,562,623               5,814,508        1,251,885        5,511,619               5,566,865        55,246 Expenditures:

Current:

Administration 319,965                  928,013           (608,048) Finance
Police 575,739                  665,588           (89,849) Fire 1,093,824        (1,093,824)
Public works 145,239                  104,867           40,372              7,311,874               6,542,997        768,877 Parks and recreation 715,536                  524,745           190,791 Community development 105,529           (105,529)
Housing services 1,200,509               1,628,492        (427,983) Capital Outlay
Debt Service:

Principal retirement
Interest
Fiscal fees
Total Expenditures 2,956,988 5,051,058 (2,094,070) 7,311,874 6,542,997 768,877 Excess (deficiency) of revenues
over (under) expenditures 1,605,635 763,450 (842,185) (1,800,255) (976,132) 824,123 Other Financing Sources (Uses):

Transfers in 168,760 168,760
Transfers out (5,117,255) (416,200) 4,701,055 (41,429) (27,228) 14,201 Total other financing sources (uses) (5,117,255) (416,200) 4,701,055 127,331 141,532 14,201 Net change in fund balances (3,511,620) 347,250 3,858,870 (1,672,924) (834,600) 838,324 Beginning Fund Balances 638,498 638,498 ‐ 16,546,675 16,546,675 ‐ Ending Fund Balances (2,873,122)$ 985,748$ 3,858,870$ 14,873,751$ 15,712,075$ 838,324$ Special Programs Maintenance Districts
Special Revenue Funds

Packet Page 160 of 516Attachment 2 Page 136 of 188

118

Section 8 Housing Assistance
Final Budget Actual Variance Final Budget Actual Variance Final Budget Actual Variance 945,588$ 945,588$
893,551$ 893,568$ 17$ 12,093,162$ 10,219,946$ (1,873,216)$ 14,318 14,318 7,907 7,907 2,791 2,791 13,000 13,000 512 512 14,000 92,117 78,117 3,779 3,779 893,551 920,886 27,335 12,107,162 10,319,970 (1,787,192) ‐ 952,670 952,670

8,600 (8,600)

169,247           (169,247)
11,000              (11,000)
925,516             (925,516)
93,908                  1,127,634        (1,033,726)      12,211,500             10,246,726        1,964,774 88,756                (88,756)
11,580                (11,580)
93,908                  1,316,481        (1,222,573)      12,211,500             10,347,062        1,864,438         ‐                                925,516             (925,516) 799,643                (395,595)          (1,195,238)      (104,338)                 (27,092)              77,246               ‐                                27,154                27,154 193,166                  (193,166)
(23,331)                   (24,261)              (930)
‐                               ‐                          ‐                         169,835                  (24,261)              (194,096)           ‐                                 ‐                            ‐ 799,643                (395,595)          (1,195,238)       ‐                                (51,353)              (51,353)              ‐                                27,154                27,154 3,785,639             3,785,639         ‐                         515,968                  515,968              ‐                         59,515                59,515 4,585,282$          3,390,044$      (1,195,238)$    515,968$                464,615$           (51,353)$           ‐$                              86,669$             86,669$ Special Revenue Funds
Community Development
Improvement DistrictsBlock Grant

Packet Page 161 of 516Attachment 2 Page 137 of 188

City of Fairfield, California

Combining Schedule of Revenues, Expenditures and
Changes in Fund Balances ‐ Budget and Actual (continued) Non‐Major Governmental Funds
For the Year Ended June 30, 2023

119

Revenues: Final Budget    Actual Variance Final Budget    Actual Variance Taxes
Property taxes 366,224$          403,505$        37,281$ Special assessments levied
Developers' contributions
Intergovernmental
Investment income                           43,651$           43,651$ Net increase (decrease) in fair value of investments (17,254)            (17,254) Miscellaneous
Total Revenues 366,224            403,505          37,281           ‐$                      26,397             26,397 Expenditures:

Current:

Administration
Finance
Police
Fire
Public works
Parks and recreation
Community development
Housing services
Capital Outlay
Debt Service:

Principal retirement 421,890            421,890                                  1,725,000        1,840,000        (115,000) Interest 1,250,362        1,139,369        110,993
Fiscal fees 43,275               37,756            5,519             14,401             12,525             1,876 Total Expenditures 465,165            459,646          5,519             2,989,763        2,991,894        (2,131) Excess (deficiency) of revenues
over (under) expenditures (98,941)             (56,141)           42,800          (2,989,763)      (2,965,497)      24,266 Other Financing Sources (Uses):

Transfers in 3,000,000 3,375,881 375,881
Transfers out
Total other financing sources (uses)‐ ‐ ‐ 3,000,000 3,375,881 375,881 Net change in fund balances (98,941) (56,141) 42,800 10,237 410,384 400,147 Beginning Fund Balances 1,233,228 1,233,228 ‐ 1,639,136 1,639,136 ‐ Ending Fund Balances 1,134,287$ 1,177,087$ 42,800$ 1,649,373$ 2,049,520$ 400,147$ Pension Obligation BondsGeneral Obligation Bonds
Debt Service Funds
Packet Page 162 of 516Attachment 2 Page 138 of 188

120

Final Budget Actual Variance

4,858,261$             5,434,447$       576,186$
115,857             115,857
139,409                  315,855             176,446
(56,778)              (56,778)
13,058               13,058
4,997,670               5,822,439         824,769
674,653                  1,065,140         (390,487)
674,653                  1,065,140         (390,487)
4,323,017               4,757,299         434,282

(2,689,265)              (2,379,132)        310,133
(2,689,265)              (2,379,132)        310,133
1,633,752               2,378,167         744,415
19,599,332             19,599,332        ‐
21,233,084$           21,977,499$     744,415$
Districts
Capital Project Fund
Assessment & Community Facilities
Packet Page 163 of 516Attachment 2 Page 139 of 188

City of Fairfield, California
Internal Service Funds

121

Packet Page 164 of 516Attachment 2 Page 140 of 188

City of Fairfield, California
Internal Service Funds

122

Service Fund Descriptions
Central Services
To account for the printing, copying, and mail services provided to the various City departments; as well as accounting for public work maintenance supplies for the various City departments.

Vehicle Services/ Replacement
To account for automotive services performed for the various City departments as well as accounting for the City’s Vehicle Replacement Fund.

Information Technology
To account for the charges to the various departments for the use and maintenance of the main power supplies for various communication devices such as hand radios, phones, computers, and closed circuit video cameras throughout the City.

Intragovernmental Loan
To account for loans made to City funds or affiliated agencies.

Insurance
To account for all insurance activities of the City excluding OPEB.

Retiree Insurance (OPEB)
To account for the payment of Other Post‐Employment Benefits including medical and dental premiums for retired executive management employees.

Public Facilities
To account for the operations of the cogeneration facilities, the major maintenance of the Civic Center complex, Parks, Fire Department Facilities and equipment.

Compensated Absences
To account for the funding and tracking of the liabilities for vacation, personal leave, and sick leave for the Governmental Activities of the City.

Packet Page 165 of 516Attachment 2 Page 141 of 188

City of Fairfield, California

Combining Statement of Net Position
Internal Service Funds
June 30, 2023

123

Vehicle
Central  Services/ Information
Services Replacement Technology
Current Assets
Cash and investments 442,244$       8,518,252$        7,882,892$ Receivables, net 2,037              88,062                104,144 Due from other funds
Inventory 71,596            669,104
Prepaid items 136,717
Total current assets 515,877         9,275,418          8,123,753 Noncurrent Assets
Advances to other funds
Loans receivable
Land held for development
Capital Assets:

Non depreciable 702,331 204,121
Depreciable/amortizable 33,702 29,176,498 16,781,041 Less: accumulated depreciation/amoritzation (23,631) (14,243,458) (6,294,131) Total Capital Assets 10,071 15,635,371 10,691,031 Total noncurrent assets 10,071 15,635,371 10,691,031 Total assets 525,948 24,910,789 18,814,784 Deferred Outflows of Resources:

Deferred outflow related to OPEB
Liabilities:

Current Liabilities
Accounts payable and other current liabilities 13,049            179,198              377,837 Claims and judgments payable ‐ due within one year
Compensated absences ‐ due within one year
Long‐term debt ‐ due within one year 1,253,042
Total current liabilities 13,049            179,198              1,630,879 Noncurrent Liabilities
Net OPEB liability
Claims and judgments payable ‐ due in more than one year Compensated absences ‐ due in more than one year
Long‐term debt ‐ due in more than one year 1,965,939
Total noncurrent liabilities ‐                        ‐                           1,965,939 Total liabilities 13,049            179,198              3,596,818 Net Position:

Net investment in capital assets 10,071 15,635,371 7,472,050 Unrestricted 502,828 9,096,220 7,745,916 Total net position (deficit)512,899$ 24,731,591$ 15,217,966$ Assets:

Packet Page 166 of 516Attachment 2 Page 142 of 188

124

Intra‐Retiree Total
governmental Insurance Public Compensated Internal Service Loan Insurance (OPEB) Facilities Absences Funds
23,193,550$            17,797,538$      311,198$          4,027,297$      5,441,533$           67,614,504$ 188,211                    741,036              210,615            18,788              22,874                   1,375,767 1,912,558                1,912,558
740,700
136,717
25,294,319              18,538,574         521,813            4,046,085        5,464,407             71,780,246 997,000                    997,000
11,344,774              11,344,774
2,104,129                2,104,129

906,452
4,318,789        50,310,030
(3,321,330)       (23,882,550)
‐                                  ‐                            ‐                         997,459            ‐                             27,333,932 14,445,903               ‐                            ‐                         997,459            ‐                             41,779,835 39,740,222              18,538,574         521,813            5,043,544        5,464,407             113,560,081 171,437            171,437
269,280                    31,983                230,356           1,101,703 3,076,852           3,076,852
5,807,867             5,807,867
1,253,042
269,280                    3,108,835                                       230,356           5,807,867             11,239,464 82,581              82,581
11,539,148         11,539,148
15,927,407           15,927,407
1,965,939
‐                                 11,539,148         82,581                                         15,927,407           29,515,075 269,280                    14,647,983         82,581              230,356           21,735,274           40,754,539 997,459           24,114,951
39,470,942              3,890,591           610,669            3,815,729        (16,270,867)         48,862,028 39,470,942$            3,890,591$         610,669$          4,813,188$      (16,270,867)$       72,976,979$ Packet Page 167 of 516Attachment 2 Page 143 of 188

City of Fairfield, California

Combining Statement of Revenues, Expenses and
Changes in Net Position
Internal Service Funds
For the Year Ended June 30, 2023

125

Vehicle
Central Services/ Information
Services Replacement Technology
Operating Revenues:

Charges for services 320,934$ 12,162,082$ 11,615,291$ Insurance Recovery
Total operating revenues 320,934 12,162,082 11,615,291 Operating Expenses:

Material and supplies 140,824 2,515,652 2,089,227 Operating and maintenance 5,273 5,231,500 2,694,095 General and administrative 203,566 744,049 4,037,667 Insurance claims and premiums
Depreciation and amortization 2,565 2,126,683 2,489,978 Total operating expenses 352,228 10,617,884 11,310,967 Operating Income (loss) (31,294) 1,544,198 304,324 Nonoperating Revenues (Expenses):

Investment income 6,760 128,954 115,924 Net increase (decrease) in fair value of investments 76 (42,559) 2,964 Interest expense (22,728)
Intergovernmental revenue
Gain on sale of capital assets 335,255
Total nonoperating revenues (expenses)6,836 421,650 96,160 Income (loss) before transfers (24,458) 1,965,848 400,484 Transfers:

Transfers in
Transfers out (3,784) (89,972) (112,849) Total transfers (3,784) (89,972) (112,849) Change in net position (28,242) 1,875,876 287,635 Net Position (Deficit):

Beginning of year, as restated 541,141 22,855,715 14,930,331 End of year 512,899$ 24,731,591$ 15,217,966$

Packet Page 168 of 516Attachment 2 Page 144 of 188

126

Intra‐Retiree Total
governmental Insurance Public Compensated Internal Service Loan Insurance (OPEB) Facilities Absences Funds
3,726,195$      123,641$         1,672,316$     4,525,056$         34,145,515$ 662,564            662,564
‐$                          4,388,759        123,641           1,672,316       4,525,056           34,808,079 908,162           5,653,865
2,333,806           1,376,568       7,851,244           19,492,486 60,621                 1,152,595        5,266               48,625                 6,252,389 6,328,108        (352,943)          5,975,165
275,725           4,894,951
2,394,427           7,480,703        (347,677)          2,560,455       7,899,869           42,268,856 (2,394,427)          (3,091,944)       471,318           (888,139)         (3,374,813)          (7,460,777) 349,068               255,510            23,971             65,197             74,467                 1,019,851 (317,160)             96,250              (3,922)              22,641             28,128                 (213,582) (826)                 (23,554)
75,145                 75,145
176,664               20,000             531,919
283,717               351,760            20,049             107,012           102,595               1,389,779 (2,110,710)          (2,740,184)       491,367           (781,127)         (3,272,218)          (6,070,998) 261,000               700,000            240,000           500,000               1,701,000 (1,354,456)          (23,597)             (1,200,000)      (163,774)         (2,948,432) (1,093,456)          676,403            (1,200,000)      76,226             500,000               (1,247,432) (3,204,166)          (2,063,781)       (708,633)          (704,901)         (2,772,218)          (7,318,430) 42,675,108         5,954,372        1,319,302        5,518,089       (13,498,649)        80,295,409 39,470,942$       3,890,591$      610,669$         4,813,188$     (16,270,867)$      72,976,979$ Packet Page 169 of 516Attachment 2 Page 145 of 188

City of Fairfield, California

Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended June 30, 2023

127

Vehicle
Central Services/ Information
Services Replacement Technology
Cash Flows from Operating Activities:

Receipts from customers and users 320,934$ 12,162,082$ 11,615,291$ Payments to suppliers (138,009) (5,461,174) (4,334,404) Payments to employees (114,778) (2,883,809) (3,414,812) Payments for interfund services used (88,788) (643,583) (420,139) Net cash provided by (used for) operating activities (20,641) 3,173,516 3,445,936 Cash Flows from Noncapital Financing Activities:

Transfers in
Transfers out (3,784) (89,972) (112,849) Net cash provided by (used for) noncapital
financing activities (3,784) (89,972) (112,849) Cash Flows from Capital and Related Financing Activities:

Principal payments‐notes payable
Interest paid‐notes payable
Proceeds from sales of capital assets 335,255
Principal paid‐ lease liabilities (73,374)
Interest paid‐ lease liabilities (6,670)
Principal paid‐ subscription liabilities (1,310,568)
Interest paid‐ subscription liabilities (16,057)
Acquisition and construction of capital assets (5,471) (2,256,545) (913,172) Net cash provided by (used for) capital and
related financing activities (5,471) (1,921,290) (2,319,841) Cash Flows from Investing Activities:

Investment income received 6,164 20,210 107,704 Net cash provided by investing activities 6,164 20,210 107,704 Net increase (decrease) in
cash and cash equivalents (23,732) 1,182,464 1,120,950 Cash and Cash Equivalents:

Beginning of year 465,976 7,335,788 6,761,942 End of year 442,244$ 8,518,252$ 7,882,892$

Packet Page 170 of 516Attachment 2 Page 146 of 188

128

Intra‐Retiree Total
governmental Insurance Public Compensated Internal Service Loan Insurance (OPEB) Facilities Absences Funds
8,049,626$          3,726,195$         123,641$          1,672,316$      4,525,056$        42,195,141$ (4,238,184)           (6,093,668)          (14,746)             (2,137,319)       (22,417,504) (824,295)             (143,767)          (4,455,134)         (11,836,595) (60,621)                 (128,163)             (43,667)             (48,625)              (1,433,586) 3,750,821             (3,319,931)          108,895            (652,437)          21,297                6,507,456 261,000                700,000               240,000            500,000              1,701,000 (1,354,456)           (23,597)                (1,200,000)        (163,774)          (2,948,432) (1,093,456)           676,403               (1,200,000)        76,226              500,000              (1,247,432) (119,155)          (119,155)
(853)                  (853)
176,664                20,000              531,919
(73,374)
(6,670)
(1,310,568)
(16,057)
(2,104,129)           (136,192)          (5,415,509)
(1,927,465)            ‐                             ‐                         (236,200)           ‐                           (6,410,267) (38,512)                 336,657               17,256              83,894              94,683                628,056 (38,512)                 336,657               17,256              83,894              94,683                628,056 691,388                (2,306,871)          (1,073,849)        (728,517)          615,980              (522,187) 22,502,162          20,104,409         1,385,047         4,755,814        4,825,553          68,136,691 23,193,550$        17,797,538$       311,198$          4,027,297$      5,441,533$        67,614,504$ Packet Page 171 of 516Attachment 2 Page 147 of 188

City of Fairfield, California

Combining Statement of Cash Flows (continued)
Internal Service Funds
For the Year Ended June 30, 2023

129

Reconciliation of Operating Income (Loss) to Net Cash
Provided by (Used for) Operating Activities:

Operating income (loss) (31,294)$ 1,544,198$ 304,324$ Adjustments to reconcile operating income (loss)
to net cash provided by (used for) operating activities:

Depreciation and amortization expense 2,565             2,126,683         2,489,978 (Increase) decrease in receivables
(Increase) decrease in inventory (122)               104,348 (Increase) decrease in prepaid items 550,166
(Increase) decrease in advances to other funds
(Increase) decrease in due from other funds
(Increase) decreaes in deferred outflows
Increase (decrease) in accounts payable 8,210             (601,713)           101,468 Increase (decrease) in compensated absences
Increase in claims and judgments payable
Non‐cash expense
Total adjustment 10,653           1,629,318         3,141,612 Net cash provided by (used for) operating activities (20,641)$       3,173,516$       3,445,936$ Non‐cash capital activities:
(4,247,149)$        Subscription liability for the acquisition of right to use asset

Packet Page 172 of 516Attachment 2 Page 148 of 188

130

(2,394,427)$         (3,091,944)$        471,318$          (888,139)$        (3,374,813)$       (7,460,777)$ 275,725             4,894,951
702,918                (662,563)             40,355
104,226
550,166
(261,000)               (261,000)
5,434,150             5,434,150
217,666            217,666
269,180                17,576                 (40,023)             (245,302) 3,396,110          3,396,110
417,000               417,000
(580,089)           (580,089)
6,145,248             (227,987)             (362,423)           235,702            3,396,110          13,968,233 3,750,821$          (3,319,931)$        108,895$          (652,437)$        21,297$              6,507,456$ (4,247,149)$

Packet Page 173 of 516Attachment 2 Page 149 of 188

City of Fairfield, California
Custodial Funds

131

Packet Page 174 of 516Attachment 2 Page 150 of 188

City of Fairfield, California
Custodial Funds

132

Fund Descriptions
Other Deposits
To account for deposits received from outside parties that are held in a custodial capacity. Some of the large items include deposits for: encroachment permit bonds and deposits, restitution for crimes committed, and asset seizures.

Fairfield‐Suisun Sewer District
To account for the activities of the Fairfield‐Suisun Sewer District.

Solano Animal Control Authority
To account for monies for the operation of the Solano Animal Control Authority.

Green Valley Open Space Maintenance District
To account for maintenance district monies received from taxes levied on properties located in Solano County for acquisition of open space and maintenance in Green Valley which is overseen by Solano County.

Tri‐City and County Regional Parks and Open Space Group To account for JPA monies contributed from Solano County and the cities of Benicia, Fairfield and Vallejo for the study and development of a coordinated system of recreation and open space between the three cities.

CFD Debt Service
To account for the financing and debt service of Community Facilities Districts, that have been determined to be debt with no City commitment (non‐commitment debt). This fund accounts for the collection of assessments and servicing of this non‐commitment debt.

Fairfield Housing and Community Development Corporation To account for the resources of a separate 501(c)(3) corporation that has been formed for the purposes of carrying out support for affordable housing and promoting community development initiatives.

Packet Page 175 of 516Attachment 2 Page 151 of 188

City of Fairfield, California

Combining Statement of Fiduciary Net Position
Custodial Funds
June 30, 2023

133

Solano
Fairfield‐Animal
Other Suisun Control
Deposits Sewer District Authority
Assets:

Cash and investments 3,588,083$ 4,269,636$ 134,693$ Receivables, net 38,050 4,500,345 12,589 Restricted cash and investments
Total Assets 3,626,133 8,769,981 147,282 Liabilities:

Accounts payable 1,970,701 4,073,885 73,540 Total Liabilities 1,970,701 4,073,885 73,540 Net Position:

Restricted for individuals,
organizations, and other
governments 1,655,432$ 4,696,096$ 73,742$

Packet Page 176 of 516Attachment 2 Page 152 of 188

134

Green
Valley Tri‐City/County Fairfield Housing
Open Space Regional Parks CFD and Community
Maintenance & Open Space Debt Development
District Group Service Corporation Total
958,710$      80,411$            4,721,521$     50,000$              13,803,054$ 4,478             375                    34,715            4,590,552 9,080,969       9,080,969
963,188        80,786              13,837,205     50,000                 27,474,575 784,947          6,903,073
‐                       ‐                         784,947           ‐                            6,903,073 963,188$      80,786$            13,052,258$  50,000$              20,571,502$

Packet Page 177 of 516Attachment 2 Page 153 of 188

City of Fairfield, California

Combining Statement of Changes in Fiduciary Net Position Custodial Funds
For the Year Ended June 30, 2023

135

Solano
Fairfield‐Animal
Other Suisun Control
Deposits Sewer District Authority
Additions:

Collection of other fees 4,875,102$
Collection for other governments 26,026,404$          880,651$ Contributions from members
Special assessments
Investment income 57,201                    635
Net increase (decrease) in fair value of investments (32,386)                   (2,825) Total Additions 4,899,917               26,026,404            878,461 Deductions:

Distribution of other fees 5,020,789
Distributions to other governments 24,871,333
Program and administrative expenses 66,833 590,378 896,960 Interest expense
Principal payment on bonds
Developer reimbursements
Total deductions 5,087,622 25,461,711 896,960

Change in Net Position (187,705) 564,693 (18,499) Net Position ‐ Beginning of Year 1,843,137 4,131,403 92,241 Net Position ‐ End of the Year 1,655,432$ 4,696,096$ 73,742$ Packet Page 178 of 516Attachment 2 Page 154 of 188

136

Green
Valley Tri‐City/County Fairfield Housing
Open Space Regional Parks CFD and Community
Maintenance & Open Space Debt Development
District Group Service Corporation Total
4,875,102$
113,262$                27,020,317
168,000$                168,000
5,890,710               5,890,710
14,131                    1,220$                    716,688                  789,875 (3,332)                     (50)                           (34,117)                   (72,710) 124,061                  1,170                      6,741,281                ‐$                        38,671,294 5,020,789
24,871,333
17,772                    127,440                  1,699,383 4,723,099               4,723,099
850,000                  850,000
779,582                  779,582
17,772                     ‐                               6,480,121                ‐                               37,944,186 106,289                  1,170                      261,160                   ‐                               727,108 856,899                  79,616                    12,791,098            50,000                    19,844,394 963,188$                80,786$                  13,052,258$          50,000$                  20,571,502$

Packet Page 179 of 516Attachment 2 Page 155 of 188

City of Fairfield, California
People and Places in the City

137

Packet Page 180 of 516Attachment 2 Page 156 of 188

City of Fairfield, California
Statistical Section

138

Contents Pages
Financial Trends
139 ‐ 152
Table 1 ‐ Net Position by Component Table 5 ‐ Changes in Fund Balances of Table 2 ‐ Changes in Net Position         Governmental Funds Table 3 ‐ Governmental Activities Tax Revenues Table 6 ‐ Changes in Fund Balances of by Source         General Fund
Table 4 ‐ Fund Balances of Governmental Funds
Revenue Capacity
153 ‐ 156
Table 7 ‐ Assessed Value and Estimated Table 9 ‐ Principal Property Taxpayers Actual Values of Taxable Property Table 10 ‐ Property Tax Levies and Collections Table 8 ‐ Property Tax Rates ‐ Direct and
Overlapping Governments
Debt Capacity
157 ‐ 164
Table 11 ‐ Ratio of Outstanding City Debt by Type Table 14 ‐ Legal Debt Margin Information Table 12 ‐ Ratio of General Bonded Debt Table 15 ‐ Utility and Golf Debt Pledged Outstanding                 Revenue Coverage
Table 13 ‐ Direct and Overlapping
Governmental Activities Debt
Demographic and Economic Information
165 ‐ 166
Table 16 ‐ Demographic and Economic Statistics Table 17 ‐ Principal Employers Operating Information / Debt Continuing Disclosures
167 ‐ 169
Table 18 ‐ Full‐time Authorized City Government Table 20 ‐ Capital Asset Statistics by Function Employees by Function
Table 19 ‐ Operating Indicators by Function
Sources:  Unless otherwise noted, the information in these schedules is derived from the annual comprehensive financial reports for the relevant year.

These schedules present information to help the reader assess the affordability of the government's current levels of outstanding debt and the government's ability to issue additional debt in the future. They include:

These schedules offer demographic and economic indicators to help the reader understand the environment within which the government's financial activities. They include:

These schedules contain service and infrastructure data to help the reader understand how the information in the government's financial report relates to the services the government provides and the activities it performs, as well as scheduled required by various debt covenants. They include:

This part of the City of Fairfield's Annual Comprehensive Financial Report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government's overall financial health. In contrast to the Financial Section, the Statistical Section is not subject to independent audit.

These schedules contain trend information to help the reader understand how the government's financial performance and well ‐being have changed over time. They include:

These schedules contain information to help the reader assess the government's most significant local revenue sources, property and sales taxes. They include:

Packet Page 181 of 516Attachment 2 Page 157 of 188

City of Fairfield, California

Net Position by Component
(accrual basis of accounting)
By Fiscal Year ‐ Last Ten Fiscal Years

Table 1

139

Table 1
2014 2015 2016 2017
Governmental activities
Net investment in capital assets 280,220,525$        298,401,721$        323,606,096$        336,038,449$ Restricted 146,869,909           154,254,022          160,077,675           156,192,967 Unrestricted 61,781,934             (93,132,227)           (72,416,045)            (53,391,259) Total governmental activities net position 488,872,368$        359,523,516$        411,267,726$        438,840,157$ Business‐type activities
Net investment in capital assets 103,591,615$        91,482,110$          87,956,953$           88,831,165$ Restricted 17,665,866             17,873,301            20,183,680             21,830,966 Unrestricted 7,985,138               18,186,209            22,603,302             20,817,996 Total business ‐type activities net position 129,242,619$        127,541,620$        130,743,935$        131,480,127$ Primary Government
Net investment in capital assets 383,812,140$        389,883,831$        411,563,049$        424,869,614$ Restricted 164,535,775           172,127,323          180,261,355           178,023,933 Unrestricted 69,767,072             (74,946,018)           (49,812,743)            (32,573,263) Total primary government net position 618,114,987$        487,065,136$        542,011,661$        570,320,284$ Source:  City of Fairfield ACFR

71%
32%
‐3%
Allocation of Net Position for Fiscal Year 2023
Capital Assets Restricted Other
Packet Page 182 of 516Attachment 2 Page 158 of 188

140

2018 2019 2020 2021 2022 2023
360,630,992$ 359,360,263$ 358,165,387$ 366,592,521$ 30,654,310$ 356,404,912$ 148,645,577 154,910,949 158,195,251 169,140,810 170,045,974 174,941,255 (54,093,719) (50,809,831) (58,888,468) (64,667,857) (30,414,071) (42,157,641) 455,182,850$ 463,461,381$ 457,472,170$ 471,065,474$ 170,286,213$ 489,188,526$ 86,660,214$ 93,642,762$ 96,888,502$ 102,238,253$ 103,717,574$ 103,223,493$ 22,923,098 24,014,320 25,682,136 27,055,244 28,583,286 31,309,040 20,468,352 20,721,546 20,356,963 22,656,747 24,387,130 24,193,706 130,051,664$ 138,378,628$ 142,927,601$ 151,950,244$ 156,687,990$ 158,726,239$ 447,291,206$ 453,003,025$ 455,053,889$ 468,830,774$ 464,371,884$ 459,628,405$ 171,568,675 178,925,269 183,877,387 196,196,054 198,629,260 206,250,295 (33,625,367) (30,088,285) (38,531,505) (42,011,110) (6,026,941) (17,963,935) 585,234,514$ 601,840,009$ 600,399,771$ 623,015,718$ 656,974,203$ 647,914,765$

‐
100
200
300
400
500
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
384 390 412 425 447 453 455 469 464 460 MillionsNet Investment in Capital Assets Packet Page 183 of 516Attachment 2 Page 159 of 188

City of Fairfield, California

Changes in Net Position
(accrual basis of accounting)
By Fiscal Year ‐ Last Ten Fiscal Years

Table 2

141

2014 2015 2016 2017
Expenses
Governmental activities
Administration / Finance 4,547,124$ 8,679,900$ 8,705,876$ 8,874,847$ Police 33,325,087 34,286,700 36,088,243 38,768,415 Fire 14,682,630 15,698,833 16,180,164 17,813,313 Public works 30,816,138 31,541,207 32,278,130 29,144,358 Community development 2,170,508 11,905,248 12,520,002 13,244,813 Housing ‐ ‐ ‐ ‐ Parks and recreation 15,941,172 6,667,509 6,268,850 6,681,502 Interest on long‐term debt 1,489,123 2,345,601 2,326,068 1,687,043 102,971,782 111,124,998 114,367,333 116,214,291 Business‐type activities
Water 38,597,177 32,968,445 31,351,507 31,508,356 North bay treatment plant 7,254,180 7,387,888 6,912,177 7,243,588 Transportation 12,417,380 12,260,948 12,177,417 11,851,331 Golf courses 6,200,252 6,651,196 5,100,140 4,762,749 Police training center 708,255 777,911 809,537 ‐ 65,177,244 60,046,388 56,350,778 55,366,024 168,149,026$ 171,171,386$ 170,718,111$ 171,580,315$ Program Revenues
Governmental activities:

Charges for services:

Public works 791,108$ 178,110$ 324,159$ 339,664$ Parks and recreation 1,997,949 2,095,614 2,179,879 2,145,843 Other activities 627,218 1,161,044 2,124,259 2,572,188 Operating grants and contributions 21,229,135 18,750,444 18,767,680 19,264,298 Capital grants and contributions 19,057,926 36,977,917 49,602,173 29,224,595 43,703,336 59,163,129 72,998,150 53,546,588 Business‐type activities:

Charges for services:

Water 32,183,364 32,184,164 29,515,139 29,357,594 North bay treatment plant 7,613,251 7,341,059 8,556,271 10,216,274 Transportation 2,540,617 2,359,351 2,471,629 2,542,027 Golf courses 4,527,945 4,302,712 4,128,491 4,068,853 Police training center 122,357 143,236 ‐ ‐ Operating grants and contributions 7,829,261 7,947,485 7,563,921 8,324,379 Capital grants and contributions 273,674 1,738,732 4,423,996 3,267,958 55,090,469 56,016,739 56,659,447 57,777,085 98,793,805$ 115,179,868$ 129,657,597$ 111,323,673$ Source: City of Fairfield
Total governmental activities expenses
Total primary government expenses
Total governmental activities program revenues
Total business ‐type activities program revenues
Total primary government program revenues
Total business ‐type activities expenses

Packet Page 184 of 516Attachment 2 Page 160 of 188

142

2018 2019 2020 2021 2022 2023
11,123,403$ 11,900,667$ 14,703,518$ 12,927,151$ 14,392,640$ 16,029,362$ 43,433,870 45,359,400 50,289,152 53,147,611 48,046,571 61,762,522 20,977,657 23,299,548 24,774,955 27,799,367 26,677,805 34,042,320 41,671,584 42,510,868 44,225,785 48,656,594 42,785,178 53,894,207 13,611,124 14,714,798 16,295,692 6,774,428 5,738,204 9,590,647 ‐ ‐ ‐ 15,375,486 15,575,305 16,523,078 7,379,270 8,356,798 8,109,541 6,026,185 6,956,929 9,220,998 1,938,861 1,902,206 1,523,848 1,292,831 1,195,638 1,172,795 140,135,769 148,044,285 159,922,491 171,999,653 161,368,270 202,235,929 33,716,744 34,267,635 35,441,283 36,838,063 33,665,670 39,393,361 8,363,268 9,072,882 9,480,780 9,537,620 9,321,685 10,553,487 12,421,497 13,185,265 13,687,532 12,635,411 15,362,231 12,935,916 4,807,394 5,112,961 4,786,710 4,411,497 5,947,716 5,820,901 ‐ ‐ ‐ ‐ ‐ ‐ 59,308,903 61,638,743 63,396,305 63,422,591 64,297,302 68,703,665 199,444,672$ 209,683,028$ 223,318,796$ 235,422,244$ 225,665,572$ 270,939,594$ 200,110$ 204,547$ 195,505$ 242,963$ 490,823$ 7,317,026$ 1,988,401 2,331,329 1,175,693 307,141 1,129,383 1,458,748 2,626,035 4,159,175 1,203,256 4,188,114 4,758,746 4,101,764 17,960,671 16,794,639 18,289,154 26,288,851 28,908,570 24,267,196 42,448,472 25,903,360 24,418,466 41,959,476 26,947,824 26,816,214 65,223,689 49,393,050 45,282,074 72,986,545 62,235,346 63,960,948 31,535,899 32,345,646 35,230,082 37,246,220 37,313,663 36,817,083 8,262,242 11,112,017 10,427,655 12,097,768 9,968,690 11,803,191 2,454,050 2,250,751 1,648,109 494,090 866,972 591,615 4,388,981 4,314,330 4,184,787 6,377,792 6,290,695 6,224,425 ‐ ‐ ‐ ‐ ‐ ‐ 8,901,898 9,441,298 9,024,408 10,996,083 11,434,255 10,031,849 2,982,474 8,560,072 3,382,582 7,724,142 4,506,789 5,291,777 58,525,544 68,024,114 63,897,623 74,936,095 70,381,064 70,759,940 123,749,233$ 117,417,164$ 109,179,697$ 147,922,640$ 132,616,410$ 134,720,888$

Packet Page 185 of 516Attachment 2 Page 161 of 188

City of Fairfield, California

Changes in Net Position (Continued)
(accrual basis of accounting)
By Fiscal Year ‐ Last Ten Fiscal Years

Table 2

143

Table 2
2014 2015 2016 2017
Net (expense)/revenue
Governmental activities (59,268,446)$        (51,961,869)$         (41,369,183)$         (62,667,703)$ Business‐type activities (10,086,775)          (4,029,649)             308,669                  2,411,061 (69,355,221)$        (55,991,518)$         (41,060,514)$         (60,256,642)$ General Revenues / Other
Governmental activities
Taxes
Property taxes 23,062,490$         26,567,981$          28,358,047$          29,209,321$ Sales and transaction taxes 35,407,196           36,972,165            41,837,970            39,688,255 Other taxes 12,409,833           12,772,647            13,625,678            14,119,010 Intergovernmental 231,977                 228,683                  45,144                    234,269 Investment earnings 2,295,425              1,847,878               2,793,300               1,057,577 Net decrease in fair value of investments ‐                           ‐                            ‐                            ‐ Miscellaneous 4,707,347              5,247,355               6,565,223               6,678,679 Gain on sale of property 1,749,844               ‐                            ‐                            ‐ Extraordinary loss‐dissolution RDA 16,336,659            ‐                            ‐                            ‐ Transfers 650,499                 (16,344,975)           (750,994)                 (495,159) Total governmental activities 96,851,270           67,291,734            92,474,368            90,491,952 Business‐type activities
Investment earnings 694,248                 629,860                  1,044,843               182,338 Net decrease in fair value of investments ‐                           ‐                            ‐                            ‐ Miscellaneous 103,169                 135,144                  113,055                  1,590,513 Transfers (650,499)                16,344,975            750,994                  495,159 Total business ‐type activities 146,918                 17,109,979            1,908,892               2,268,010 Total primary government 96,998,188$         84,401,713$          94,383,260$          92,759,962$ Change in Net Position
Governmental activities 37,582,824$         15,329,865$          51,105,185$          27,824,249$ Business‐type activities (9,939,857)            13,080,330            2,217,561               4,679,071 Total primary government 27,642,967$         28,410,195$          53,322,746$          32,503,320$ Source:  City of Fairfield
Total primary government net expense

35%
18%
25%
9%
13%
Use of Funds for FY 2023 Public safety
Utilities
Public works
Development/Recreation
Other
Packet Page 186 of 516Attachment 2 Page 162 of 188

144

2018 2019 2020 2021 2022 2023
(74,912,080)$ (98,651,235)$ (114,640,417)$ (99,013,108)$ (99,132,924)$ (138,274,981)$ (783,359) 6,385,371 501,318 11,513,504 6,083,762 2,056,275 (75,695,439)$ (92,265,864)$ (114,139,099)$ (87,499,604)$ (93,049,162)$ (136,218,706)$ 31,333,350$ 34,085,030$ 35,310,874$ 36,853,122$ 36,348,069$ 38,320,898$ 41,211,801 43,059,220 42,874,589 49,589,708 56,179,400 57,515,657 15,113,195 15,071,640 14,553,246 14,825,096 15,873,960 18,456,822 246,085 242,683 279,957 273,811 17,018,236 1,135,193 682,405 7,910,032 8,831,408 2,407,335 2,886,075 4,905,710 ‐ ‐ ‐ ‐ (9,998,218) (240,265) 7,394,017 6,605,782 6,646,359 8,118,282 9,681,503 6,283,381 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ (608,027) (422,979) (76,244) 356,265 364,638 370,140 95,372,826 106,551,408 108,420,189 112,423,619 128,353,663 126,747,536 551,922 2,837,620 3,627,905 263,105 915,002 1,685,909 ‐ ‐ ‐ ‐ (3,878,019) (147,867) 524,787 438,556 369,792 946,058 1,981,639 76,075 608,027 422,979 76,244 (356,265) (364,638) (370,140) 1,684,736 3,699,155 4,073,941 852,898 (1,346,016) 1,243,977 97,057,562$ 110,250,563$ 112,494,130$ 113,276,517$ 127,007,647$ 127,991,513$ 20,460,746$ 7,900,173$ (6,220,228)$ 13,410,511$ 29,220,739$ (11,527,445)$ 901,377 10,084,526 4,575,259 12,366,402 4,737,746 3,300,252 21,362,123$ 17,984,699$ (1,644,969)$ 25,776,913$ 33,958,485$ (8,227,193)$

44%
26%
25%
5%
Source of Funds for FY 2023 Taxes
Charges for Services
Grants/Contributions
Other
Packet Page 187 of 516Attachment 2 Page 163 of 188

City of Fairfield, California

Governmental Activities Tax Revenues by Source
(accrual basis of accounting)
By Fiscal Year ‐ Last Ten Fiscal Years

Table 3

145

Table 3
Fiscal Property Sales/Transaction Other
Year Taxes Taxes* Taxes** Total
2014 23,062,490$ 35,407,196$ 12,409,833$ 70,879,519$ 2015 26,567,981 36,972,165 12,772,647 76,312,793 2016 28,358,047 41,837,970 13,625,678 83,821,695 2017 29,209,321 39,688,255 14,119,010 83,016,586 2018 31,333,350 41,211,801 15,113,195 87,658,346 2019 34,085,030 43,059,220 15,071,640 92,215,890 2020 35,310,874 42,874,589 14,553,246 92,738,709 2021 36,853,122 49,589,708 14,825,096 101,267,926 2022 36,348,069 56,179,400 15,873,960 108,401,429 2023 38,320,898 57,515,657 18,456,822 114,293,377 Source: City of Fairfield
*In April, 2013, Measure P, a 1% transaction and use tax was enacted. In November 2016, the transaction and use tax was extended for an additonal 15 years to 2033. **Other taxes consist of franchise tax, utility user tax, transient occupancy tax, business license tax, and other taxes.

$0
$50
$100
$150
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
$23 $27 $28 $29 $31 $34 $35 $37 $36 $38
$35 $37 $42 $40 $41 $43 $43 $50 $56 $58$12 $13 $14 $14 $15 $15 $15 $15 $16 $18 MillionsProperty Taxes Sales/Transaction Taxes Other Taxes Packet Page 188 of 516Attachment 2 Page 164 of 188

City of Fairfield, California
People and Places in the City

146

Packet Page 189 of 516Attachment 2 Page 165 of 188

City of Fairfield, California

Fund Balances of Governmental Funds
(modified accrual basis of accounting)
By Fiscal Year ‐ Last Ten Fiscal Years

Table 4

147

able 4
2014 2015 2016 2017
General Fund
Nonspendable 6,110$
Restricted
Committed
Assigned 6,229,328              2,024,541$           4,418,223$            4,416,397$ Unassigned 24,255,237           19,874,728           20,876,012            21,228,639 Total general fund 30,490,675$         21,899,269$         25,294,235$          25,645,036$ All other governmental funds
Nonspendable 335,375$               335,375$               335,375$                335,375$ Restricted 125,960,121         136,082,371         139,523,737          140,413,466 Committed 10,764,506           9,860,803              10,222,340            11,174,449 Assigned 3,051,394              4,786,139              12,902,068            19,938,002 Unassigned
Total all other governmental funds 140,111,396$       151,064,688$       162,983,520$        171,861,292$ Source:  City of Fairfield

$0
$50
$100
$150
$200
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
$140 $151 $163 $172 $173
$158 $160 $168 $170 $177 MillionsOther Governmental Funds Restricted Fund Balances Packet Page 190 of 516Attachment 2 Page 166 of 188

148

$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
$50
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
$24
$20 $21 $21 $23
$29
$36
$42
$47 $46 MillionsGeneral Fund Unassigned Fund Balance

2018 2019 2020 2021 2022 2023
53,801$ 22,000$ 12,000$ 895,654$ 5,286,612 5,435,139 6,841,794 5,882,751$ 6,370,309 7,266,947 7,725,365 3,727,306 3,623,465 3,744,466 4,415,269$ 6,278,715 282,000
23,125,111 28,822,295 35,937,493 41,714,193 47,300,261 46,034,025 27,540,380$ 47,708,370$ 49,119,997$ 52,295,293$ 56,806,477$ 57,326,454$ 335,375$ 335,375$ 335,375$ 335,375$ 335,375$ 341,613$ 132,634,714 138,404,751 141,369,068 147,846,982 148,030,707 151,911,489 11,020,383 12,064,326 11,979,293 16,095,711 16,079,866 18,273,633 28,600,148 7,652,343 5,822,196 3,925,093 6,019,481 6,385,746 172,590,620$ 158,456,795$ 159,505,932$ 168,203,161$ 170,465,429$ 176,912,481$

Packet Page 191 of 516Attachment 2 Page 167 of 188

City of Fairfield, California

Changes in Fund Balances of Governmental Funds
(modified accrual basis of accounting)
By Fiscal Year ‐ Last Ten Fiscal Years

Table 5

149

2014 2015 2016 2017
Revenues
Taxes 73,342,642$      80,562,332$      86,914,959$      86,186,557$ Development fees 7,268,473           9,212,911           10,577,539        6,523,669 Special assessments levied 4,579,329           4,621,416           4,973,363           5,441,183 Licenses, permits and fines 3,409,222           2,793,778           3,098,394           2,946,531 Developers' contribution 991,869              408,322              297,899              257,432 Intergovernmental 23,406,950        28,599,137        44,044,033        31,940,671 Charges for services 3,396,573           4,015,173           5,534,166           6,144,376 Investment income 1,001,547           1,182,876           1,583,153           437,782 Net decrease in fair value of investments
Miscellaneous 2,906,263           2,656,733           2,783,022           2,617,799 Total revenues 120,302,868      134,052,678      159,806,528      142,496,000 Expenditures
Administration / Finance 2,890,734           3,610,521           4,006,001           5,246,013 Police 31,949,831        33,113,818        35,896,094        37,583,206 Fire 14,009,112        15,170,426        16,287,240        17,560,739 Public works 10,955,173        12,618,878        13,544,353        14,042,213 Parks and recreation 15,260,442        5,589,069           5,567,133           6,053,818 Community development 2,141,664           11,592,701        12,608,989        13,451,185 Housing services
Non‐departmental 1,496,102           4,634,486           4,801,029           3,817,702 Capital outlay 14,195,159        21,694,966        41,253,983        30,175,326 Debt service:

Principal 806,890              891,890              1,906,890           1,686,890 Interest 2,347,188           2,328,147           1,717,155           1,941,846 Fiscal agent fees 20,559                21,184                18,289                20,438 Issuance costs                                                          228,304 Total expenditures 96,072,854        111,266,086      137,835,460      131,579,376 Excess (deficiency) of revenues
over (under) expenditures 24,230,014        22,786,592        21,971,068        10,916,624 Other financing sources (uses)
Issuance of refunding                                                          21,835,000 Payment to refunded bond escrow                                                          (21,174,417) Bond discount                             21,835,000        (426,301) Gain on sale of property                             (21,174,417) Subscriptions
Leases (as lessee)
Transfers in 10,319,105        13,538,771        14,894,347        16,865,682 Transfers out (12,550,240)       (33,963,478)       (21,785,897)       (18,553,733) Total other financing sources (uses) (2,231,135)         (19,764,124)       (6,657,268)         (1,688,051) Extraordinary items:
36,245,366
Net change in fund balances 58,244,245$      3,022,468$        15,313,800$      9,228,573$ Debt service as a percentage of
noncapital expenditures 3.48% 3.27% 3.39% 3.27%
Source:  City of Fairfield
Extraordinary gain (loss)‐‐dissolution of
Fairfield Redevelopment Agency

Packet Page 192 of 516Attachment 2 Page 168 of 188

150

2018 2019 2020 2021 2022 2023
90,354,326$      95,841,255$      95,416,626$      109,700,418$    113,026,766$    118,616,018$ 4,942,419           7,481,437           4,647,913           14,321,328        7,251,588           9,578,498 5,995,658           6,813,858           7,481,060           7,949,569           9,009,670           9,508,692 2,734,897           3,479,535           2,920,083           4,078,924           3,934,657           3,620,409 946,949              1,095,092           51,094                441,725              2,365,429           115,857 33,231,114        21,692,133        21,225,584        25,610,759        41,689,580        29,073,303 7,174,139           6,911,323           6,171,143           6,310,413           7,859,790           6,645,281 1,067,308           5,200,842           6,189,959           1,938,770           2,057,367           3,413,730 (7,764,527)         (13,782)
3,824,530           3,492,633           2,159,173           3,231,021           5,155,918           6,700,703 150,271,340      152,008,108      146,262,635      173,582,927      184,586,238      187,258,709 4,780,076           5,418,985           6,990,490           5,565,649           6,511,212           8,997,541 38,940,548        41,873,962        44,612,479        48,131,554        50,204,273        55,346,593 18,911,666        21,580,359        21,787,988        24,990,675        27,190,361        30,393,704 15,626,230        17,290,319        17,726,511        19,469,714        20,521,893        24,154,521 6,092,792           7,868,406           6,734,063           5,126,947           6,575,058           7,762,701 12,996,451        13,892,385        14,968,531        5,467,073           5,601,354           6,472,062 15,376,628        16,104,074        16,315,948
5,049,006           15,298,522        8,737,622           9,882,129           9,111,044           5,249,441 40,612,587        18,610,215        18,997,645        23,819,066        18,590,497        23,386,436 1,721,890           2,051,890           2,106,890           2,146,890           2,335,991           2,802,245 1,906,025           1,570,807           1,296,692           1,250,362           1,200,469           1,178,088 21,125                21,429                18,863                18,406                17,874                50,281 268,614
146,658,396      145,745,893      143,977,774      161,245,093      163,964,100      182,109,561 3,612,944           6,262,215           2,284,861           12,337,834        20,622,138        5,149,148 15,325,000
(15,041,320)

200,309
1,248,741
22,025,622 35,540,495 11,180,012 14,219,021 31,438,580 15,920,213 (21,184,374) (36,052,225) (11,004,109) (14,820,235) (46,536,007) (14,302,641) 841,248 (228,050) 175,903 (601,214) (13,848,686) 1,817,881 4,454,192$ 6,034,165$ 2,460,764$ 11,736,620$ 6,773,452$ 6,967,029$

2.99% 2.85% 2.72% 2.47% 2.43% 2.51%

Packet Page 193 of 516Attachment 2 Page 169 of 188

City of Fairfield, California

Changes in Fund Balances of General Fund
(modified accrual basis of accounting)
By Fiscal Year ‐ Last Ten Fiscal Years

Table 6

151

2014 2015 2016 2017
Revenues
Taxes 70,404,120$      75,831,210$      83,549,929$      82,907,862$ Licenses, permits and fines 3,409,222           2,793,778           3,098,394           2,946,531 Intergovernmental 372,257              1,033,614           541,554              457,231 Charges for services 3,396,573           4,015,173           5,534,166           6,144,376 Investment income 275,112              322,062              352,476              97,577 Net decrease in fair value of investments
Miscellaneous 1,417,805           1,663,350           1,827,202           1,790,673 Total revenues 79,275,089        85,659,187        94,903,721        94,344,250 Expenditures
Administration / Finance 2,573,262           3,427,198           3,800,333           5,046,385 Police 30,127,434        31,783,496        34,828,205        36,606,605 Fire 13,851,664        15,165,818        16,091,862        17,190,449 Public works 6,855,746           8,579,280           9,380,745           9,758,856 Parks and recreation 4,117,466           4,318,303           4,908,617           5,366,916 Community development 2,076,496           2,538,008           2,619,544           2,937,136 Non‐departmental* 1,496,102           4,634,486           4,801,029           3,817,702 Capital outlay
Debt Service:

Principal Retirement
Interest
Total expenditures* 61,098,170        70,446,589        76,430,335        80,724,049 Excess (deficiency) of revenues
over (under) expenditures 18,176,919        15,212,598        18,473,386        13,620,201 Other financing sources (uses)
Leases (as lessee)
Subscriptions
Transfers in 339,694              835,982              170,632              323,857 Transfers out (7,344,069)         (24,639,986)       (15,249,052)       (13,593,257) Total other financing sources (uses) (7,004,375)         (23,804,004)       (15,078,420)       (13,269,400) Net change in fund balances 11,172,544$      (8,591,406)$       3,394,966$        350,801$ Source:  City of Fairfield
*Includes one‐time payment of $10,000,000, $3,000,000 & $4,000,000 towards the Safety Plan's unfunded liability in FY19, FY20 & FY21, respectively.

$0
$50
$100
$150
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
$79 $86 $95 $94 $101 $107 $106 $116 $122 $130
MillionsTotal General Fund Revenues
Packet Page 194 of 516Attachment 2 Page 170 of 188

152

2018 2019 2020 2021 2022 2023
87,533,691$      92,089,879$      92,835,821$      101,459,155$    108,714,444$    113,889,872$ 2,734,897           3,479,535           2,920,083           4,078,924           3,934,657           3,620,409 459,490              467,962              605,418              573,360              696,958              544,711 7,174,139           6,911,323           6,171,143           6,310,413           7,859,790           6,645,281 222,858              2,009,675           2,328,286           1,348,034           827,087              1,507,985 (3,658,668)         (111,765)
2,461,853           2,539,420           1,483,304           1,758,025           3,734,139           4,045,243 100,586,928      107,497,794      106,344,055      115,527,911      122,108,407      130,141,736 4,561,503           5,054,525           6,329,656           5,216,172           6,126,829           8,069,528 38,083,461        41,411,882        44,173,273        47,189,271        49,350,555        54,672,405 18,225,615        20,741,762        21,575,867        24,600,363        26,774,174        29,299,880 10,717,240        11,878,134        11,878,627        13,262,014        14,608,124        17,250,475 5,240,660           5,893,668           6,121,707           4,719,771           5,861,144           7,224,619 2,739,788           3,422,777           3,314,942           4,108,255           4,780,518           5,441,017 5,049,006           15,298,522        8,737,622           9,882,129           9,111,044           5,249,441 211,309
90,519                433,397
2,554                  19,194
84,617,273        103,701,270      102,131,694      108,977,975      116,705,461      127,871,265 15,969,655        3,796,524           4,212,361           6,549,936           5,402,946           2,270,471 618,455
200,309
255,780              22,257,998        811,291              1,248,863           18,634,072        1,887,753 (14,330,091)       (5,886,532)         (3,612,025)         (4,623,503)         (20,144,289)       (3,838,556) (14,074,311)       16,371,466        (2,800,734)         (3,374,640)         (1,510,217)         (1,750,494) 1,895,344$        20,167,990$      1,411,627$        3,175,296$        3,892,729$        519,977$ $0
$50
$100
$150
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
$61 $70 $76 $81 $85
$104*$102*$109*$117 $128
MillionsTotal General Fund Expenses
Packet Page 195 of 516Attachment 2 Page 171 of 188

City of Fairfield, California Assessed Value and Estimated Actual Value of Taxable Property (accrual basis of accounting) By Fiscal Year ‐ Last Ten Fiscal Years Table 7 153 Table 7 Less: Total Taxable DirectTax Exempt TaxReal Property Rate20147,901,820,577$ 3,044,828,732$ 528,590,473$ 609,860,999$ 10,865,378,783$ 0.0071000 20158,450,788,958 3,184,400,080 550,589,799 593,971,089 11,591,807,748 0.0065000 20169,051,091,056 3,337,346,549 539,773,774 604,822,232 12,323,389,147 0.0047000 20179,735,211,041 3,537,335,144 558,828,437 569,234,030 13,262,140,592 0.0045000 201810,423,395,576 3,708,864,371 565,508,865 550,237,826 14,147,530,986 0.0045000 201911,098,766,161 3,916,582,215 621,450,392 633,312,031 15,003,486,737 0.0045000 202011,678,069,722 4,152,769,066 603,016,099 455,411,064 15,978,443,823 0.0030000 202112,261,971,994 4,215,852,029 585,390,783 916,252,848 16,146,961,958 0.0023000 202213,061,441,890 4,383,202,165 676,451,826 347,579,642 17,773,516,239 0.0023000 202313,120,057,536 4,388,033,371 655,187,297 618,341,618 17,544,936,586 0.0022000 Source: Solano County Assessor Office (HDL Report) and the City of FairfieldResidential PropertyCommercial PropertyUnsecured PropertyFiscal YearAssessed Value $8 $10 $12 $14 $16 $182014 2015 2016 2017 2018 2019 2020 2021 2022 2023$11 $12 $12 $13 $14 $15 $16 $16 $18 $18 BillionsProperty Assessed ValuesPacket Page 196 of 516Attachment 2 Page 172 of 188

City of Fairfield, California Property Tax Rates ‐ Direct And Overlapping Governments By Fiscal Year ‐ Last Ten Fiscal Years Table 8 154 Total School Special Total Direct &Fiscal City Debt County Debt District Debt OverlappingYear Rate Rate Rate Rate Rates20140.00470 1.00000 0.07112 0.02000 1.0958220150.00450 1.00000 0.08848 0.02000 1.1129820160.00450 1.00000 0.07677 0.02000 1.1012720170.00450 1.00000 0.13800 0.02000 1.1625020180.00450 1.00000 0.12026 0.02000 1.1447620190.00450 1.00000 0.15266 0.02000 1.1771620200.00300 1.00000 0.09469 0.02000 1.1176920210.00230 1.00000 0.10138 0.02000 1.1236820220.00230 1.00000 0.11154 0.02000 1.1338420230.00220 1.00000 0.10566 0.02000 1.12786Source: Solano County Auditor‐Controller's OfficeOverlapping Rates 1.08%1.10%1.12%1.14%1.16%1.18%1.20%2014 2015 2016 2017 2018 2019 2020 2021 2022 20231.10%1.11%1.10%1.16%1.14%1.18%1.12%1.12%1.13%1.13%Property Tax RatesPacket Page 197 of 516Attachment 2 Page 173 of 188

City of Fairfield, California

Principal Property Taxpayers
June 30, 2023

Table 9

155

Table 11
%%
Total Total
Taxable Taxable Taxable Taxable
Assessed Assessed Assessed Assessed
Taxpayer Value Rank Value Value Rank Value
Anheuser‐Busch Inc 332,848,252$        1 1.90% 315,662,547$        1 2.91% Northbay Healthcare Group 261,180,946          21.49%
Star‐West Solano LLC 200,797,493          3 1.14% 172,790,546          2 1.59% Gateway 80 Owner LP 107,220,205          40.61%
Meyer Cookware Industries Inc 88,142,335             5 0.50% 79,922,040             3 0.74% North Bay Logistics Owner LLC 74,970,000             60.43% Ball Metal Beverage Corporation 74,256,739             7 0.42% 49,061,859             6 0.45% Jelly Belly Candy Company 67,934,631             80.39% PW Fund A LP 67,662,723             90.39%
Reep‐ Industries Standford Court Calif 67,488,901             10 0.38% N A Rolling Oaks‐88 LP 53,154,223             4 0.49%
Amcor Pet Packaging USA Inc 51,615,837             5 0.48% SBC Services 48,196,474             7 0.44%
US Real Estate Limited Partnership 44,344,380             8 0.41% Household Products Manufacturing 40,087,090             9 0.37% Usir III Distribution Fermi Dr 34,853,400             10 0.32% Total Taxpayers Assessed Value 1,342,502,225       7.65% 889,688,396          8.20% Total City Assessed Value 17,544,960,933$  100.00% 10,865,378,783$  100.00% Source:  Solano County Assessor Office (HDL Report)
2023 2014

$0
$100
$200
$300
$400
$333
$261
$201
$107 $88 $75 $74 $68 $68 $67MillionsTop Ten Property Taxpayers in 2023 Packet Page 198 of 516Attachment 2 Page 174 of 188

City of Fairfield, California

Property Tax Levies and Collections
By Fiscal Year ‐ Last Ten Fiscal Years

Table 10

156

Table
Collections
Ended Levy for Subsequent
December 31 Fiscal Year Amount % of Levy Years Amount % of Levy 2014 23,062,490$ 23,062,490$ 100%‐ 27,299,372$ 100% 2015 26,567,981 26,567,981 100%‐ 23,062,490 100% 2016 28,358,047 28,358,047 100%‐ 26,567,981 100% 2017 29,209,321 29,209,321 100%‐ 28,358,047 100% 2018 31,333,350 31,333,350 100%‐ 29,209,321 100% 2019 34,085,030 34,085,030 100%‐ 31,333,350 100% 2020 35,310,874 35,310,874 100%‐ 34,085,030 100% 2021 36,853,122 36,853,122 100%‐ 35,310,874 100% 2022 36,348,069 36,348,069 100%‐ 36,348,069 100% 2023 38,320,898 38,320,898 100%‐ 38,320,898 100% Source: Solano County Auditor Controller's Office
Total Collections to DateAmount Collected
In addition to the City's property tax levies for voter ‐approved debt,Solano County levies property taxes limited to $1 per $100 of assessed valuation for county,city, school and special district operating expenses. This additional property tax levy is distributed to the different governmental agencies under the State mandated alternate method of apportioning taxes (commonly referred to as the "Teeter Plan") whereby all local agencies, including cities, receive from the county 100% of their respective shares of the amount of ad valorem taxes levied, without regard to the actual collection of the taxes levied. This method was placed ineffect bySolano Countyin the1965‐66 tax year and remains in effect unless the County Board of Supervisors orders its discontinuance.

12 $‐
$5
$10
$15
$20
$25
$30
$35
$40
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
$27
$23
$27 $28 $29
$31
$34 $35 $36
$38 MillionsProperty Tax Levies and Collections
Packet Page 199 of 516Attachment 2 Page 175 of 188

City of Fairfield, California Ratios of Outstanding City Debt by Type By Fiscal Year ‐ Last Ten Fiscal Years Table 11 157 Table 13 General Pension Long Term Utility‐Recreational Long Term Total PercentageFiscal Obligation Obligation Notes Water Revenue Notes Primary of Personal PerYear Bonds Bonds* Payable Leases Subscriptions Bonds* Bonds* Payable Subscriptions Government Income Capita20149,440,578$ 35,750,000$ 2,234,010$ 118,249,028$ 6,950,000$ 172,623,616$ 3.40% 1,516 20159,018,688 35,280,000 1,978,747 106,973,401 6,287,677 5,370,000$ 164,908,513 3.11% 1,439 20168,596,798 34,393,699 1,720,288 109,373,969 5,345,045 2,695,000 162,124,799 2.98% 1,322 20178,174,908 33,157,119 1,458,454 112,421,409 4,366,157 159,578,047 2.67% 1,253 20187,753,018 31,871,329 1,193,251 110,036,098 3,345,834 154,199,530 2.37% 1,188 20197,331,128 32,265,539 924,623 107,712,533 2,284,074 150,517,897 2.09% 1,093 20206,909,238 30,605,170 652,539 105,333,179 1,854,193 145,354,319 1.84% 951 20216,487,348 28,904,801 376,889 102,279,004 1,408,774 139,456,816 1.65% 885 20226,065,458 27,144,432 119,155 1,933,883$ 99,099,101 952,996 135,315,025 1.39% 815 20235,643,568 25,329,063 1,583,020 3,231,930$ 95,787,051 481,679 57,928$ 132,114,239 1.69% 1,105 Source: City of Fairfield* Outstanding debt amounts include unamortized bond discounts and premiums. See the notes of the financial statements for more information on debt.Governmental Activities Business‐Type Activities 4%19%4%73%City Debt Outstanding for Fiscal Year 2023 General Obligation Pension Other UtilityPacket Page 200 of 516Attachment 2 Page 176 of 188

City of Fairfield, California Ratios of General Bonded Debt Outstanding By Fiscal Year ‐ Last Ten Fiscal Years Table 12 158 Table 14 Percentage ofEstimatedGeneral Pension Less: Amounts Total Actual TaxableFiscal Obligation Obligation Available in Debt Net Bonded Value of PerYear Bonds Bonds Total Service Fund Debt Property Capita20149,440,578$ 35,750,000$ 45,190,578$ 3,400,917$ 41,789,661$ 0.38% 38220159,018,688 35,280,000 44,298,688 5,215,588 39,083,100 0.34% 35220168,596,798 34,393,699 42,990,497 6,834,676 36,155,821 0.29% 32120178,174,908 33,157,119 41,332,027 719,195 40,612,832 0.31% 35620187,753,018 31,871,329 39,624,347 910,820 38,713,527 0.27% 33320197,331,128 32,265,539 39,596,667 901,478 38,695,189 0.26% 33020206,909,238 30,605,170 37,514,408 1,230,337 36,284,071 0.23% 31020216,487,348 28,904,801 35,392,149 1,176,132 34,216,017 0.21% 29020226,065,458 27,144,432 33,209,890 1,138,281 32,071,609 0.18% 26720235,643,568 25,329,063 30,972,631 1,087,433 29,885,198 0.17% 250Source: City of FairfieldGeneral Bonded Debt Outstanding $0$100$200$300$4002014 2015 2016 2017 2018 2019 2020 2021 2022 2023$382$352$321$356$333$330$310$290$267$250Per Capita General Bonded DebtPacket Page 201 of 516Attachment 2 Page 177 of 188

City of Fairfield, California

Direct and Overlapping Governmental Activities
June 30, 2023

Table 13

159

Share of
%Outstanding Overlapping
2022/23 Total Assessed Valuation: 17,544,936,586$ Applicable (1)Debt 6/30/23 Debt Direct and Overlapping Tax and Assessment Debt:

Solano County Community College District 26.525% 343,410,887$ 91,089,738$ Fairfield‐Suisun Unified School District 77.761% 250,990,000 195,172,334 Fairfield‐Suisun Unified School District Community Facilities District #5 85.401% 9,254,077 7,903,074 Fairfield‐Suisun Unified School District Community Facilities District #6 100% 633,033 633,033 Travis Unified School District Community Facilities District No. 2 100% 15,655,000 15,655,000 Fairfield Municipal Park Facilities District, I.D. No. 1 100% 465,000 465,000 City of Fairfield Zone of Benefit Obligations 100% 5,643,568 5,643,568 City of Fairfield Community Facilities District No. 3 100% 10,535,000 10,535,000 City of Fairfield Community Facilities District No. 2007‐1 100% 14,130,000 14,130,000 City of Fairfield Community Facilities District No. 2016‐1 I.A. A 100% 3,650,000 3,650,000 City of Fairfield Community Facilities District No. 2016‐1 I.A. B 100% 19,710,000 19,710,000 City of Fairfield Community Facilities District No. 2016‐1 I.A. C 100% 22,880,000 22,880,000 City of Fairfield Community Facilities District No. 2019‐1 I.A. 1 100% 27,065,000 27,065,000 California Municipal Finance Authority
Community Facilities Department No. 2021‐16 Fairfield Monte Verde 100% 5,685,000 5,685,000 California Statewide Communities Development Authority 1915 Act Bonds 100% 8,170,797 8,170,797 TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: 737,877,362$ 428,387,544$ Direct and Overlapping General Fund Debt:

Solano County General Fund Obligations 25.821% 75,815,000$ 19,576,191$ Solano County Pension Obligation Bonds 25.821% 9,310,000 2,403,935 Travis Unified School District General Fund Obligations 41.459% 14,729,529 6,106,715 Fairfield‐Suisun Unified School District Certificates of Participation 77.761% 6,093,160 4,738,102 City of Fairfield Pension Obligations 100% 25,329,063 25,329,063 TOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT: 131,276,752 58,154,006 Overlapping Tax Increment Debt (Successor Agencies)100%13,055,000 13,055,000 Total Direct Debt 30,972,631
Total Overlapping Debt:468,623,919
Combined Total Debt (2)882,209,114$ 499,596,550$ (1) The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value. Applicable percentages were estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the city divided by the district's total taxable assessed value.
(2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non‐bonded capital lease obligations.

50%
34%
1%15%
Total Debt
Solano County School Districts
Successor Agency City of Fairfield
24%
46%
3%
27%
Share of Overlapping Debt
Solano County School Districts
Successor Agency City of Fairfield
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City of Fairfield, California
People and Places in the City

160
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City of Fairfield, California

Legal Debt Margin Information
By Fiscal Year ‐ Last Ten Fiscal Years

Table 14

161

Table 16
2014 2015 2016 2017
Net Assessed Value 10,865,378,783$ 11,591,807,748$ 12,323,389,147$ 13,262,140,592$ Debt Limit Percentage 15% 15% 15% 15%
Debt Limit 1,629,806,817 1,738,771,162 1,848,508,372 1,989,321,089 Net Amount of Bonded Debt
Applicable to Debt Limit
General Bonded Debt* 45,190,578 44,298,688 42,990,497 41,332,027 Legal Debt Margin 1,584,616,239$ 1,694,472,474$ 1,805,517,875$ 1,947,989,062$ Source: Solano County Auditor Controller's Office and the City of Fairfield * The GovernmentCode of the Stateof California provides for a legal debt limitof 15%of gross assessed valuation. By law,the general obligation debtsubject to the limitation may beoffset by amounts setaside for repaying general obligation bonds. This includes the City's General and Pension Obligation bonds.

$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
$1.6 $1.7 $1.8 $2.0 $2.1 $2.3 $2.4 $2.4
$2.7 $2.6
BillionsDebt Limit
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162

Table 16
2018 2019 2020 2021 2022 2023
14,147,530,986$ 15,003,486,737$ 15,978,443,823$ 16,146,961,958$ 17,773,516,239$ 17,544,936,586$ 15% 15% 15% 15% 15% 15%
2,122,129,648 2,250,523,011 2,396,766,573 2,422,044,294 2,666,027,436 2,631,740,488 39,624,347 39,596,667 37,514,408 35,392,149 33,209,890 30,972,631 2,082,505,301$ 2,210,926,344$ 2,359,252,165$ 2,386,652,145$ 2,632,817,546$ 2,600,767,857$

$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
$50
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
$45 $44 $43 $41 $40 $40 $38 $35 $33 $31
MillionsGeneral Bonded Debt
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City of Fairfield, California

Utility and Golf Debt Pledged Revenue Coverage
By Fiscal Year ‐ Last Ten Fiscal Years

Table 15

163

Net Available Revenues Debt Service
Fiscal
Year
including water
connection fee
excluding water
connection fee Principal Interest
including water
connection fee
excluding water
connection fee
2014 12,082,285$ 9,273,348$ 4,655,000$ 3,264,085$ 153% 117% 2015 13,685,418 9,588,589 4,890,000 3,026,075 173% 121% 2016 13,010,658 10,239,483 3,110,000 2,355,417 238% 187% 2017 10,756,713 7,774,738 3,145,000 2,323,751 197% 142% 2018 10,902,160 8,798,176 5,360,000 1,827,947 152% 122% 2019 13,148,944 10,165,038 5,455,000 1,734,456 183% 141% 2020 13,608,970 11,840,567 5,675,000 1,516,256 189% 165% 2021 17,282,104 10,890,351 3,793,669 3,950,588 223% 141% 2022 17,481,795 14,249,506 3,663,880 4,083,576 226% 184% 2023 13,885,224 9,263,907 3,548,915 4,195,291 179% 120% Note: Net Available Revenues for Water Utility includes Operating Revenues, Nonoperating Revenues less expenses (excluding depreciation and interest expense).

Source: City of Fairfield
Coverage
Utility‐Water Revenue Bonds

0%
50%
100%
150%
200%
250%
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
153%
173%
238%
197%
152%
183%189%
223%226%
179%
Water Revenue Bonds Coverage Ratios ‐All Fees
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City of Fairfield, California

Utility and Golf Debt Pledged Revenue Coverage
By Fiscal Year ‐ Last Ten Fiscal Years

Table 15

164

Table 17 – Golf
Recreational Revenue (Golf) Bonds
Net Debt Service
Fiscal
Year
Available
Revenues Principal Interest Coverage
2014 1,183,637$ 845,000$ 280,175$ 105% 2015 1,284,065 880,000 249,900 114% 2016 1,479,799 910,000 214,100 132% 2017 1,065,552 945,000 177,000 95% 2018 1,196,996 985,000 138,400 107% 2019 1,355,931 1,025,000 98,200 121% 2020 707,798 415,000 69,400 146% 2021 1,334,899 430,000 54,381 276% 2022 772,899 440,000 40,513 161% 2023 891,300 455,000 25,400 186% Note: Net Available Revenues for Golf includes all Operating Revenues, Nonoperating Revenues, Transfers In, Advances less Operating Expenses and Nonoperating expense (excluding depreciation and interest expense).

Source: City of Fairfield

0%
50%
100%
150%
200%
250%
300%
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
105%114%
132%
95%107%121%
146%
276%
161%
186%
Golf Bonds Coverage Ratios
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City of Fairfield, California Demographic and Economic Statistics By Fiscal Year ‐ Last Ten Fiscal Years Table 16 165 Table 18 PerCapitaFiscal Personal Personal Median School UnemploymentYear Population Income Income Age Enrollment Rate2014109,320 4,630,139,280$ 42,354$ 33.7 27,040 6.8%2015111,125 4,723,812,625 42,509 33.0 26,871 5.9%2016112,637 4,738,976,501 42,073 34.0 26,913 5.3%2017114,157 5,080,443,128 44,504 34.0 26,941 5.0%2018116,156 5,360,715,556 46,151 34.0 26,526 4.2%2019117,149 5,753,890,284 49,116 34.8 26,866 3.9%2020116,981 6,043,706,384 51,664 34.8 26,784 13.6%2021118,005 6,313,857,525 53,505 34.8 26,138 7.8%2022119,897 7,036,515,136 58,688 35.0 25,918 4.0%2023119,526 7,822,737,648 65,448 35.3 25,781 4.7%Source:City of Fairfield `Fairfield‐Suisun and Travis Unified School DistrictsCalifornia Department of FinanceU.S. Dept. of Commerce Bureau of Economic Analysis 0%5%10%15%2014 2015 2016 2017 2018 2019 2020 2021 2022 20237%6%5%5%4%4%14%8%4%5%Unemployment RatePacket Page 208 of 516Attachment 2 Page 184 of 188

City of Fairfield, California Principal Employers Current Year and Nine Years Ago Table 17 166 Percentage of Percentage ofTotal City Total CityEmployerEmployeesRankEmploymentEmployeesRankEmploymentTravis Air Force Base 13,414 1 25% 14,353 129%County of Solano 2,633 2 5% 2,628 35%Fairfield‐Suisun Unified School District 2,213 3 4% 2,707 25%North Bay Medical Center 1,969 4 4% 1,982 44%Solano Community College 750 5 1% 867 52%Partnership Health 561 6 1% 403 10 1%City of Fairfield 553 7 1% 504 61%Jelly Belly Candy Company 489 8 1% 461 81%Sutter Regional Medical Foundation 475 9 1% 475 71%Westamerica Bancorporation 418 10 1% 418 91%Source: City of Fairfield2023 2014able 19 Packet Page 209 of 516Attachment 2 Page 185 of 188

City of Fairfield, California Full‐time Authorized City Government Employees by Function By Fiscal Year ‐ Last Ten Fiscal Years As of June 30 Table 18 167 Table 20 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023FunctionAdministration / Finance 49 50 52 52 54 58 64 64 73 75 Community development 12 12 21 21 21 23 24 27 27 27 Parks and recreation 30 32 21 22 22 22 23 24 26 26 Fire 63 63 65 71 71 69 69 73 79 79 Housing program 8 10 10 10 10 9 7 10 11 11 Police 184 192 192 192 194 191 198 198 202 202 Public works 89 90 95 95 102 112 113 116 117 118 Transportation 7 10 10 10 7 7 6 6 8 7 Water utility 68 68 68 68 67 67 67 67 67 68 Total 510 527 534 541 548 558 571 585 610 613 Source: City of Fairfield 400 450 500 550 600 650 7002014 2015 2016 2017 2018 2019 2020 2021 2022 2023510 527 534 541 548 558 571 585 610 613 Total Authorized Full‐Time Employees Packet Page 210 of 516Attachment 2 Page 186 of 188

City of Fairfield, California Operating Indicators by Function By Fiscal Year – Last Ten Fiscal Years As of June 30 Table 19 168 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023PolicePhysical arrests 4,419 4,721 5,022 4,621 4,775 4,620 3,604 3,578 3,701 3,525 Parking citations 1,733 1,557 1,736 1,831 2,098 1,620 2,918 2,340 1,419 790 FireNumber of emergency calls 10,975 11,704 12,493 12,582 12,735 13,459 14,020 14,133 15,773 16,126 Inspections 400 436 173 64 694 912 1,588 1,111 1,718 1,556 Public works:Street resurfacing (miles) 27 31 34 35 25 30 8 33 25 6 Parks and recreationNumber of recreation classes 70 95 87 123 135 144 177 35 90 113 Number of facility rentals 8 8 8 8 8 8 8 7 7 7 Community developmentNumber of businesses 3,688 3,712 3,234 3,054 3,865 4,439 5,009 4,803 5,930 6,700 New commercial square footage 679,896 851,401 560,540 1,019,667 15,466 19,982 11,678 750,705 779,752 411,405 WaterNew connections 231 357 362 484 277 323 130 391 377 405 Average daily consumption (millions gallons) 11 16 14 14 15 15 16 17 16 15 TransportationTotal miles covered by bus system 1,760,423 1,758,453 1,811,452 1,869,950 1,877,780 1,943,461 1,725,451 1,322,050 1,430,711 571,103 Total passengers 1,077,492 1,070,654 1,027,427 992,616 963,958 883,122 678,475 304,107 355,878 261,608 Golf courses108,000 103,813 100,506 97,473 101,504 102,002 94,983 141,848 132,768 121,996 Sources: Various City DepartmentsGolf rounds played Packet Page 211 of 516Attachment 2 Page 187 of 188

City of Fairfield, California Capital Asset Statistics by Function By Fiscal Year – Last Ten Fiscal Years As of June 30 Table 20 169 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023PoliceStations 1 1 1 1 1 1 1 1 1 1 Patrol cars 106 119 127 130 99 102 103 101 113 113 FireFire stations 5 5 5 5 5 5 5 5 5 5 Public worksStreets (miles) 287 294 298 298 300 301 303 306 309 311 Streetlights 9,100 9,248 9,412 9,412 9,493 9,508 9,620 9,841 9,967 9,995 Traffic signals 101 101 101 101 104 104 105 107 107 107 Parks and recreationParks acreage 274 281 281 281 281 281 281 281 281 281 Parks 23 24 24 24 24 24 24 27 27 27 Golf courses 2 2 2 2 2 2 2 2 2 2 Tennis courts 8 8 8 8 8 8 8 10 5 5 Community centers 4 5 5 5 5 5 5 5 5 5 WaterWater mains (miles) 362 377 368 377 413 426 429 435 439 438 Fire hydrants 3,114 3,134 3,176 3,134 3,266 3,331 3,362 3,399 3,450 3,455 Maximum daily capacity 57 57 57 57 57 57 57 57 57 57 (millions of gallons)Transportation 48 48 48 48 48 48 48 48 42 27 Sources: Various City Departments.Note: No capital asset indicators are available for the General Government function.Number of busesPacket Page 212 of 516Attachment 2 Page 188 of 188

Federal Awards Reports in Accordance
with the Uniform Guidance
June 30, 2023
City of Fairfield, California
eidebailly.com
Packet Page 213 of 516Attachment 3 Page 1 of 24

City of Fairfield, California
Table of Contents
June 30, 2023
Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ............................................................................................................................... 1 Independent Auditor’s Report on Compliance for each Major Federal Program; Report on Internal Control Over Compliance; and Report on the Schedule of Expenditures of Federal Awards Required by the Uniform Guidance ..................................................................................................................................................... 3 Schedule of Expenditures of Federal Awards ............................................................................................................ 7 Notes to Schedule of Expenditures of Federal Awards ............................................................................................. 9 Schedule of Findings and Questioned Costs
I – Summary of Auditor's Results ......................................................................................................................... 10 II – Financial Statement Findings ......................................................................................................................... 11 III – Federal Award Findings and Questioned Costs ............................................................................................ 15 Summary Schedule of Prior Audit Findings .............................................................................................................. 22 Packet Page 214 of 516Attachment 3 Page 2 of 24

1 Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards
To the Honorable Mayor and Members of the City Council
City of Fairfield, California
We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States (Government Auditing Standards), the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Fairfield, California (City), as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements and have issued our report thereon dated January 30, 2024. Our report included an emphasis of matter paragraph regarding the City's adoption of Governmental Accounting Standards Board Statement No. 96, Subscription-Based Information Technology Arrangements, effective July 1, 2022. Our report contained an additional emphasis of matter paragraph stating the City restated beginning net position for the correction of an error.

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

Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.

Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that have not been identified. However, as described in the accompanying Schedule of Findings and Questioned Costs, we identified certain deficiencies in internal control that we consider to be material weaknesses and significant deficiencies.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. We consider the deficiencies described in the accompanying schedule of findings and questioned costs as items 2023-001 and 2023-002 to be material weaknesses.

2 A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. We consider the deficiency described in the accompanying schedule of findings and questioned costs as item 2023-003 to be a significant deficiency.

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

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

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

Sacramento, California
January 30, 2024
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3 Independent Auditor’s Report on Compliance for Each Major Federal Program; Report on Internal Control Over Compliance; and Report on the Schedule of Expenditures of Federal Awards Required by the Uniform Guidance
To the Honorable Mayor and Members of the City Council
City of Fairfield, California
Report on Compliance for Each Major Federal Program
Opinion on Each Major Federal Program
We have audited the City of Fairfield, California (City)’s compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on each of the City’s major federal programs for the year ended June 30, 2023. The City’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs.

In our opinion, the City complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2023.

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

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

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

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

In performing an audit in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance, we:
•Exercise professional judgment and maintain professional skepticism throughout the audit. •Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the City’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances.
•Obtain an understanding of the City’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control over compliance. Accordingly, no such opinion is expressed.

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

Other Matters
The results of our auditing procedures disclosed instances of noncompliance, which are required to be reported in accordance with the Uniform Guidance and which are described in the accompanying schedule of findings and questioned costs as items 2023-007 and 2023-008. Our opinion on each major federal program is not modified with respect to these matters.

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

Packet Page 218 of 516Attachment 3 Page 6 of 24

5 Report on Internal Control over Compliance
Our consideration of internal control over compliance was for the limited purpose described in the Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance and therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as discussed below we did identify certain deficiencies in internal control over compliance that we consider to be material weaknesses and significant deficiencies.

A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis.

We consider the deficiencies in internal control over compliance described in the accompanying schedule of findings and questioned costs as items 2023-004, 2023-006, and 2023-008 to be material weaknesses.

A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. We consider the deficiencies in internal control over compliance described in the accompanying schedule of findings and questioned costs as items 2023-005 and 2023-007 to be significant deficiencies.

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

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

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

Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements. We issued our report thereon dated January 30, 2024, which contained unmodified opinions on those financial statements. Our report included an emphasis of matter Packet Page 219 of 516Attachment 3 Page 7 of 24

6 paragraph regarding the City's adoption of Governmental Accounting Standards Board Statement No. 96, Subscription-Based Information Technology Arrangements, effective July 1, 2022. Our report contained an additional emphasis of matter paragraph stating the City restated beginning net position for the correction of an error. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the 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 schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole.

Sacramento, California
February 22, 2024
Packet Page 220 of 516Attachment 3 Page 8 of 24

See Notes to Schedule of Expenditures of Federal Awards 7 City of Fairfield, California
Schedule of Expenditures of Federal Awards
Year Ended June 30, 2023

Federal Program/Project
Financial or Pass‐through Amounts
Assistance Identification Provided to
Listing Number Expenditures Subrecipients
U.S. Department of Defense
Direct Programs:

Community Economic Adjustment Assistance for Responding to Threats to the Resilience of a Military Installation 12.003 MIR1973‐22‐01 411,585$ ‐$
Total U.S. Department of Defense 411,585 ‐
U.S. Department of Housing and Urban Development
Direct Programs:

CDBG‐Entitlement Grants Cluster:

Community Development Block Grant/Entitlement Grants 14.218 B19MC060027 45,865               30,025 Community Development Block Grant/Entitlement Grants 14.218 B20MC060027 73,160                ‐ Community Development Block Grant/Entitlement Grants 14.218 B21MC060027 153,561            153,561 Community Development Block Grant/Entitlement Grants 14.218 B22MC060027 391,603            52,452 Community Development Block Grant/Entitlement Grants 14.218 Program Income 346,177             ‐
COVID‐19 Community Development Block Grant 14.218
B20MW060027 359,474            227,044
Subtotal CDBG‐Entitlement Grants Cluster 1,369,840         463,082 Passed through the Community AcƟon Partnership Solano
Joint Powers Authority:

COVID‐19 Emergency Solutions Grant Program 14.231 N/A 473,706 ‐ Passed through the California Department of Housing and Community Development:

Home Investment Partnerships Program ‐ Program Income 14.239 Program Income 155,369 ‐ Housing Voucher Cluster:

Section 8 Housing Choice Vouchers 14.871 N/A 10,219,946 ‐ Subtotal Housing Voucher Cluster 10,219,946 ‐
Total U.S. Department of Housing and Urban Development 12,218,861 463,082 U.S. Department of Justice
Direct Programs:

Edward Byrne Memorial Justice Assistance Grant Program 16.738 2018‐DJ‐BX‐0824 14,401                ‐
Edward Byrne Memorial Justice Assistance Grant Program 16.738 2019‐DJ‐BX‐0627 5,715                  ‐
Subtotal Edward Byrne Memorial Justice Assistance Grant Program 20,116                ‐ Total U.S. Department of Justice 20,116                ‐ U.S. Department of Transportation
Passed through the California Department of Transportation:

Highway Planning and Construction 20.205 STPCML‐5132 (049) 1,240,060 ‐ Highway Planning and Construction 20.205 HSIPL‐5132 (50) 977 ‐ Highway Planning and Construction 20.205 HSIPL‐5132 (51) 1,063 ‐ Highway Planning and Construction 20.205 HSIPL‐5132 (52) 657,978 ‐ Subtotal Highway Planning and Construction 1,900,078 ‐ Federal Grantor/Pass‐Through
Grantor/Program or Cluster Title
Packet Page 221 of 516Attachment 3 Page 9 of 24

See Notes to Schedule of Expenditures of Federal Awards 8 City of Fairfield, California
Schedule of Expenditures of Federal Awards
Year Ended June 30, 2023

Federal Program/Project
Financial or Pass‐through Amounts
Assistance Identification Provided to
Listing Number Expenditures Subrecipients
Federal Grantor/Pass‐Through
Grantor/Program or Cluster Title
Direct Programs:

Federal Transit Cluster:

Federal Transit Formula Grant 20.507 CA‐2021‐200‐00 1,523,388$ ‐$ COVID‐19 ARPA Federal Transit Formula Grant 20.507 CA‐2023‐026‐00 1,026,224 ‐ Subtotal Federal Transit Cluster 2,549,612 ‐
Passed through the California Office of Traffic Safety:

Highway Safety Cluster:

State and Community Highway Safety 20.600
PT21169 36,293                ‐
State and Community Highway Safety 20.600
PT23026 142,546             ‐
Subtotal Highway Safety Cluster 178,839             ‐
Total U.S. Department of Transportation 4,628,529          ‐ U.S. Department of the Treasury
Passed through from Solano County:

COVID‐19 Coronavirus State and Local Fiscal
Recovery Funds 21.027
SLFRP1180 215,000 ‐
Total U.S. Department of the Treasury 215,000 ‐ U.S. Department of Homeland Security
Direct Programs:

Assistance to Firefighters Grant 97.044
EMW‐2020‐FG‐
14083 71,483                ‐
Staffing for Adequate Fire & Emergency Response 97.083
EMW‐2020‐FF‐00816 1,013,320          ‐
Total U.S. Department of Homeland Security 1,084,803          ‐ Total Federal Expenditures 18,578,894$    463,082$

Packet Page 222 of 516Attachment 3 Page 10 of 24

9 City of Fairfield, California
Notes to Schedule of Expenditures of Federal Awards
Year Ended June 30, 2023
Note 1 - Basis of Presentation
The accompanying schedule of expenditures of federal awards (the “Schedule”) includes the federal award activity of the City under programs of the federal government for the year ended June 30, 2023. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes in net position, or cash flows of the City.

Note 2 - Summary of Significant Accounting Policies
Expenditures reported on the Schedule are reported on the modified accrual basis of accounting for governmental funds and the accrual basis of accounting for proprietary funds, except for subrecipient expenditures, which are reported on the cash basis. When applicable, such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.

Note 3 - Indirect Cost Rate
The City has not elected to use the 10% de minimis cost rate.

Packet Page 223 of 516Attachment 3 Page 11 of 24

10 City of Fairfield, California
Schedule of Findings and Questioned Costs
Year Ended June 30, 2023
Section I – Summary of Auditor’s Results

FINANCIAL STATEMENTS
Type of auditor's report issued Unmodified
Internal control over financial reporting:

Material weaknesses identified Yes
Significant deficiencies identified not considered
to be material weaknesses Yes
Noncompliance material to financial statements noted?No

FEDERAL AWARDS
Internal control over major program:

Material weaknesses identified Yes
Significant deficiencies identified not considered
to be material weaknesses Yes
Type of auditor's report issued on compliance
for major programs:Unmodified
Any audit findings disclosed that are required to be reported in accordance with Uniform Guidance 2 CFR 200.516(a)?Yes
Identification of major programs:

Federal Financial Assistance Listing
Section 8 Housing Choice Vouchers/Housing Voucher Cluster 14.871 Highway Planning and Construction 20.205
Staffing for Adequate Fire & Emergency Response 97.083
Dollar threshold used to distinguish between type A
and type B programs:$750,000
Auditee qualified as low-risk auditee?No
Name of Major Federal Program or Cluster
Packet Page 224 of 516Attachment 3 Page 12 of 24

11 City of Fairfield, California
Schedule of Findings and Questioned Costs
Year Ended June 30, 2023

Section II – Financial Statement Findings

2023-001 Systems Access, Security and Segregation of Duties Material Weakness in Internal Control over Financial Reporting

Criteria:

Management is responsible for establishing a system of internal controls to prevent individuals having inappropriate access to systems or records within their accounting system. This includes having controls in place to review the systems access granted to individuals to ensure that those individuals are only granted the access they require for their position and assigned responsibilities, removing access when those individuals no longer require it, and reviewing the assigned access for conflicts with segregation of duties.

System security should also be reviewed by management to ensure that all settings are applied and function as designed.

Condition:

In July 2022, the City transitioned to a new accounting system (from Cayenta to Tyler Technologies ERP (Tyler Munis)). During the course of our audit, we found that there was no formal review of the access granted to the City employees at the time of implementation, nor was there formal review of the changes to access (new access granted, modified or removed) during the entirety of fiscal year 2023 for appropriateness or conflicting segregation of duties.

There were also individuals in the accounting department that had administrative privileges (superusers) in the accounting system during fiscal year 2023.

We also found that the security settings established for user roles was not formally reviewed and tested to ensure that security settings and restrictions functioned as designed prior to implementation.

Cause:

The City did not have a formal and documented process for the review of user access or system security settings by management until after fiscal year 2023.

Effect:

By not reviewing the user access changes, allowing accounting personnel to have superuser access in the accounting system, and not adequately testing the system security settings, there is an increased risk of individuals having inappropriate access and conflicting segregation of duties which increases the risk of fraud or error occurring within the accounting system and not being identified by management.

Packet Page 225 of 516Attachment 3 Page 13 of 24

City of Fairfield, California
Schedule of Findings and Questioned Costs
Year Ended June 30, 2023

12 Recommendation:

We recommend that management establish a formal review and approval of all existing users and their assigned access to ensure that individuals only have access to systems required for their position and assigned responsibilities and identify any inappropriate access causing conflicting segregation of duties.

We also recommend that management implement a formal review and approval of changes made to user access assignments.

Furthermore, we recommend that management conduct periodic reviews of users and their assigned access on periodic basis to ensure that their current assigned access in appropriate for their position and responsibilities.

Views of Responsible Officials:

Management concurs with the finding. See separate corrective action plan.

2023-002 Prior Period Adjustment, Manual Adjustments and Chart of Accounts for Financial Reporting Material Weakness in Internal Control over Financial Reporting

Criteria:

Management is responsible for establishing policies and procedures for the preparation of the financial statements. This includes establishing guidelines for the consistent mapping of general ledger accounts in the financial statements.

Condition:

During the preparation of the annual financial statements, the City does not utilize a chart of accounts which identifies the proper mapping and classification of general ledger accounts in the annual financial statements. The preparation of the financial statements is currently performed manually on an individual fund basis by different accountants which increases the risk of improper and inconsistent mapping and classification of accounts from the general ledger in the annual financial statements. During our audit, we identified numerous instances in which accounts were improperly mapped from the general ledger into the financial statements.

We also identified that certain accounts and activity are manually adjusted in the preparation of the financial statements (offline adjustments). These offline adjustments did not include evidence of management’s review and approval.

These adjustments included an adjustment to the North Bay Treatment Plant Enterprise Fund.

During the course of our audit, we proposed a material audit adjustment to revenues, accounts receivable and beginning net position of the fund, which if not recorded, would have resulted in a material misstatement of the City’s financial statements.

Packet Page 226 of 516Attachment 3 Page 14 of 24

City of Fairfield, California
Schedule of Findings and Questioned Costs
Year Ended June 30, 2023

13 Cause:

Management prepares the financial statements using spreadsheets in a manual format with offline adjustments for the individual funds which are further consolidated into the reporting fund and manually compiled into the financial statement working papers. The City does not have a chart of accounts that identifies the proper mapping of general ledger accounts into financial statement. We also noted the City did not formally integrate the preparation of the annual financial statements with the new accounting system.

Effect:

Without formal guidelines for the mapping of general ledger accounts in the financial statements, there is an increased risk of improper mapping and classification of accounts. This also increases the risk that management fails to identify improper mapping of accounts during their review as the accounts comprising the individual line-items is not readily available.

As a consequence of allowing offline adjustments, there is an increasing risk of misstating or omitting certain accounts or transactions. Misstatement of the financial statements could result in serious misrepresentations of the City’s financial position and results of operations.

We noted the conditions noted above results in the lack of a proper and complete audit trail and resulted in an increase of audit effort and cost to reconcile the City's financial statements to the general ledger.

Recommendation:

We recommend that management establish a formal mapping and classification of general ledger accounts for financial reporting to ensure that the general ledger accounts are properly and consistently mapped in the annual financial statements. We also strongly suggest that management investigate the capabilities of its accounting system to identify the classification of accounts in the financial statements. We would also recommend to investigate implementing an integrated financial statement preparation solution that interfaces with the City's new accounting system to assist minimizing the manual input into the preparation of financial statements and ensure consistency.

We further recommend that management record all manual adjustments required for the preparation of the financial statements into the general ledger to ensure that all adjustments are retained in the accounting system and are subject to the internal controls of the accounting system. All adjustments required in the preparation of the annual financial statements should be formally documented, reviewed and approved prior to posting to the financial statements.

Views of Responsible Officials:

Management concurs with the finding. See separate corrective action plan.

Packet Page 227 of 516Attachment 3 Page 15 of 24

City of Fairfield, California
Schedule of Findings and Questioned Costs
Year Ended June 30, 2023

14 2023-003 Reconciliations
Significant Deficiency in Internal Control over Financial Reporting

Criteria:

Management is responsible for establishing policies and procedures for the preparation of the financial statements. This includes ensuring that sub-ledgers supporting the amounts presented in the financial statements are reconciled.

Condition:

We noted that the general fund accounts receivable account contained items that were previously written off but not reflected in the detailed sub-ledger activities. We recommend that the general fund accounts receivable sub-ledger be reconciled on a regular basis. The account reconciliations should include a reconciliation between the general ledger supporting sub-ledger. The reconciliations are a necessary component of strong internal control over the accounting procedures.

Cause:

The accounts receivable subledger was not updated to reflect activities, including write-offs made in the current year.

Effect:

By not reconciling the accounts receivable subledgers on a regular basis, this increases the risk of misstatements or misappropriations going undetected by management.

Recommendation:

We recommend that management perform regular reconciliations of accounts receivable sub- ledgers to the general ledger. A benefit of regular reconciliations is that errors do not accumulate and can be identified and attributed to a particular period, which makes it easier to perform future reconciliations.

Views of Responsible Officials:

Management concurs with the finding. See separate corrective action plan.

Packet Page 228 of 516Attachment 3 Page 16 of 24

15 City of Fairfield, California
Schedule of Findings and Questioned Costs
Year Ended June 30, 2023

Section III – Federal Award Findings and Questioned Costs

2023-004 Federal Agency: U.S. Department of Homeland Security Program/Cluster: Staffing for Adequate Fire & Emergency Response Federal Assistance Listing Number: 97.083
Pass-through: N/A
Award No. and Year: EMW-2020-FF-00816, 2020
Compliance Requirement: Reporting
Type of Finding: Material Weakness in Internal Control over Compliance

Criteria:

Per 2 CFR 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. This includes internal controls over maintaining records of the preparer and approver of required reports.

Condition:

We identified four (4) instances in which the City did not retain evidence to document the individual who reviewed the required reports prior to submission. This consisted of two (2) financial reports and two (2) performance reports.

Cause:

The City’s procedures did not include documenting the review of the reports prior to submission.

Effect:

Ineffective controls over this area of compliance could result in reports that are inaccurate or incomplete being submitted to the granting agency.

Questioned Costs:

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

Context/Sampling:

All semi-annual financial reports and semi-annual performance report were selected for testing.

The population consisted of two (2) financial reports and two (2) performance reports. All reports were selected for testwork.

Packet Page 229 of 516Attachment 3 Page 17 of 24

City of Fairfield, California
Schedule of Findings and Questioned Costs
Year Ended June 30, 2023

16 Repeat Finding from Prior Year(s):

No.

Recommendation:

We recommend that the City revise its procedures to include evidence to document the individual who reviewed required reports prior to submission.

Views of Responsible Officials:

Management concurs with the finding. See separate corrective action plan.

2023-005 Federal Agency: U.S. Department of Transportation Program/Cluster: Highway Planning and Construction
Federal Assistance Listing Number: 20.205
Pass-through: California Department of Transportation
Award No. and Year: STPCML-5132 (049) – 2022 and HSIPL-5132 (52) - 2022 Compliance Requirement: Special Tests and Provisions – Wage Rate Requirements Type of Finding: Significant Deficiency in Internal Control over Compliance

Criteria:

Condition:

We identified eleven (11) instances in which the City did not retain evidence to document the individual who reviewed the certified payroll for each week in which work was performed by construction contractors.

Cause:

The City’s procedures did not include documenting the review of the certified payroll received.

Effect:

Ineffective controls over this area of compliance could result in noncompliance with the wage rate compliance requirements.

Packet Page 230 of 516Attachment 3 Page 18 of 24

City of Fairfield, California
Schedule of Findings and Questioned Costs
Year Ended June 30, 2023

17 Questioned Costs:

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

Context/Sampling:

The population consisted of 104 certified payrolls required during the fiscal year. A sample of eleven (11) were selected for testwork.

Repeat Finding from Prior Year(s):

No.

Recommendation:

The City should establish controls to ensure there are procedures in place requiring the documented review of the certified payroll submitted by the construction contractors.

Views of Responsible Officials:

Management concurs with the finding. See separate corrective action plan.

2023-006 Federal Agency: U.S. Department of Housing and Urban Development Program/Cluster: Section 8 Housing Choice Vouchers Cluster Federal Assistance Listing Number: 14.871
Pass-through: N/A
Award No. and Year: CA065 - 2023
Compliance Requirement: Reporting
Type of Finding: Material Weakness in Internal Control over Compliance

Criteria:

Condition:

We identified three (3) instances in which the City did not retain evidence to document the individual who reviewed the Voucher Management System (VMS) reports prior to submission.

The City implemented a documented review process starting with the April 2023 VMS report submission. The City did not document their review of the VMS reports prior to submission prior to April 2023.

Packet Page 231 of 516Attachment 3 Page 19 of 24

City of Fairfield, California
Schedule of Findings and Questioned Costs
Year Ended June 30, 2023

18 Cause:

The City’s internal controls did not include documenting the separate management review of the VMS reports prior to submission. We noted the City implemented a change in internal controls starting with the April 2023 report whereby the reports are reviewed and approved by an employee separate from the preparer of the VMS reports prior to submission.

Effect:

Ineffective controls over this area of compliance could result in reports that are inaccurate or incomplete being submitted to the granting agency.

Questioned Costs:

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

Context/Sampling:

The population consists of twelve (12) monthly VMS reports. The sample consisted of four (4) monthly VMS reports.

Repeat Finding from Prior Year(s):

No.

Recommendation:

We recommend that the City revise its procedures to include evidence to document the individual who reviewed required reports prior to submission.

Views of Responsible Officials:

Management concurs with the finding. See separate corrective action plan.

Packet Page 232 of 516Attachment 3 Page 20 of 24

City of Fairfield, California
Schedule of Findings and Questioned Costs
Year Ended June 30, 2023

19 2023-007 Federal Agency: U.S. Department of Housing and Urban Development Program/Cluster: Section 8 Housing Choice Vouchers Cluster Federal Assistance Listing Number: 14.871
Pass-through: N/A
Award No. and Year: CA065 - 2023
Compliance Requirement: Special Tests and Provisions – Housing Quality Standards Inspections Type of Finding: Instance of Non-Compliance and Significant Deficiency in Internal Control over Compliance

Criteria:

Per the 2023 Compliance Supplement, the public housing authority (PHA) must inspect the units leased to a family at least biennially to determine if the unit meets Housing Quality Standards (HQS).

Condition:

We identified one (1) instance in which the City did not perform the required HQS inspection within a two-year period. The inspection was performed later than two years from the previous inspection.

Cause:

The City’s procedures did not ensure that the unit was inspected within the required time period.

Effect:

The City did not comply with the HQS inspections requirements.

Questioned Costs:

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

Context/Sampling:

The population consisted of all Section 8 Housing Choice Voucher recipients in the fiscal year (777). The sample consisted of sixty (60) recipients in the fiscal year 2023.

Repeat Finding from Prior Year(s):

No.

Packet Page 233 of 516Attachment 3 Page 21 of 24

City of Fairfield, California
Schedule of Findings and Questioned Costs
Year Ended June 30, 2023

20 Recommendation:

We recommend that the City strengthen its policies and procedures related to HQS inspections to ensure that all units are inspected within the required time period.

Views of Responsible Officials:

Management concurs with the finding. See separate corrective action plan.

2023-008 Federal Agency: U.S. Department of Housing and Urban Development Program/Cluster: Section 8 Housing Choice Vouchers Cluster Federal Assistance Listing Number: 14.871
Pass-through: N/A
Award No. and Year: CA065 - 2023
Compliance Requirement: Special Tests and Provisions – Utility Allowance Schedule Type of Finding: Instance of Non-Compliance and Material Weakness in Internal Control over Compliance

Criteria:

Per the 2023 Compliance Supplement, the public housing authority (PHA) must maintain an up- to-date utility allowance schedule. The PHA must review utility rate data for each utility category each year and must adjust its utility allowance schedule if there has been a rate change of 10 percent or more for a utility category or fuel type since the last time the utility allowance schedule was revised (24 CFR section 982.517).

The PHA’s Housing Choice Voucher (HCV) Administrative Plan states that the PHA must maintain information supporting its annual review of utility allowance and any revisions made in its utility allowance schedule.

Condition:

We identified that management did not document their annual review and acceptance of the changes to the utility allowance schedules in effect during the fiscal year 2023. Management asserted that the revisions to the utility allowance schedule are not required to be submitted to the PHA board for approval; however, the HCV Administrative Plan does not delegate the authority to management to approve changes to the utility allowance schedule.

Packet Page 234 of 516Attachment 3 Page 22 of 24

City of Fairfield, California
Schedule of Findings and Questioned Costs
Year Ended June 30, 2023

21 Cause:

The City PHA did not follow its policy to maintain information evidencing its review of revisions to the utility allowance schedule.

Effect:

The City did not comply with the utility allowance schedule requirements.

Questioned Costs:

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

Context/Sampling:

The City utilized two utility allowance schedules in the fiscal year 2023. The rates were revised January 1, 2022, and January 1, 2023.

Repeat Finding from Prior Year(s):

No.

Recommendation:

We recommend that the City follow its policy to maintain information supporting its annual review of the utility allowance schedule.

Views of Responsible Officials:

Management concurs with the finding. See separate corrective action plan.

Packet Page 235 of 516Attachment 3 Page 23 of 24

22 City of Fairfield, California
Summary Schedule of Prior Audit Findings
Year Ended June 30, 2023

Finding
No.

Program/Cluster or Finding Description Federal Assistance Listing No.

Compliance
Requirement
Status
2022-001 Financial Reporting NA N/A Implemented
2022-002 Coronavirus State and Local Fiscal
Recovery Funds

21.027 Reporting Implemented

Packet Page 236 of 516Attachment 3 Page 24 of 24

City of Fairfield, California
Corrective Action Plan
June 30, 2023

Prepared by: Myles Dixon, Accounting Manager

Packet Page 237 of 516Attachment 4 Page 1 of 6

City of Fairfield, California
Corrective Action Plan
June 30, 2023

2 I. Financial Statement Findings:

2023‐001 Systems Access, Security and Segregation of Duties Material Weakness in Internal Control over Financial Reporting Views of Responsible Officials:

We concur.

Corrective Action Plan:

As mentioned in the finding, this was the city's first year of using a new ERP system, there were significant challenges as expected in any new implementation that needed to be addressed quickly to ensure continuity of operations. During the interim, and to minimize the risk of errors and fraud the department head periodically reviewed logs and journals for abnormalities. We recognize the importance of maintaining a secure and efficient access management system. In response to your recommendations, City will take the following actions:

Formal Review and Approval of Existing Users:

Once implementation issues settled down, management began to bring in formal processes addressing permissions and workflow including creating a position within Finance to help and monitor workflow, permissions, and documentation. The city agrees with the recommendation and will initiate a comprehensive review of all existing users and their assigned access to ensure alignment with their positions and responsibilities. This review will help identify and rectify any instances of inappropriate access, ensuring a more robust segregation of duties.

Formal Review and Approval of Access Changes:

We acknowledge the significance of formalizing the review and approval process for changes made to user access assignments. The implementation of this measure has already started, and staff has developed a formal process and form for authorization and approval of access during onboarding, offboarding and change of job duties for any employee. This measure will be implemented promptly to enhance accountability and prevent unauthorized changes that could compromise security.

Periodic Reviews of User Access:

We will establish a protocol for conducting periodic reviews of users and their assigned access.

These reviews will be conducted regularly to ensure that the access granted to individuals remains appropriate for their evolving roles and responsibilities.

Responsible Individual(s):

Savita Chaudhary, IT Director/Asst. City Manager

Anticipated Completion Date:

To be completed by 6/30/2024

2023‐002 Prior Period Adjustment, Manual Adjustments and Chart of Accounts for Financial Reporting Material Weakness in Internal Control over Financial Reporting Views of Responsible Officials:

We concur.

Packet Page 238 of 516Attachment 4 Page 2 of 6

City of Fairfield, California
Corrective Action Plan
June 30, 2023

3 Corrective Action Plan:

The City’s new financial system is robust and correctly maps the chart of accounts in the General ledger. The preparation of the financial statements is done in external ACFR workbooks, these workbooks were customized to the old financial system and therefore required significant remapping and translation. The City agrees with the recommendation. The City will review the new system's capabilities to see if it can minimize the manual input in the preparation of the financial statements and ensure the review is documented, while also looking at other options for software that assist in the preparation of the financial statements. Currently, all adjustments have and are documented (through our audit work papers), reviewed, and approved before the preparation of the financial statements. The Issue with the north bay treatment plant is a little more complex and as such requires offline adjustments. The north Bay water treatment plant is a joint venture with the City of Vacaville and managed by the City of Fairfield, thus requiring us to show its activities on a standalone basis while also consolidating our ownership into our water utility funds thus requiring adjusting entries for presentation purposes only. The City has made changes to north bay water treatment plant and going forward this adjustment will be reflected in the accounting system to the extent possible.

Responsible Individual(s):

Myles Dixon, Accounting Manager

Anticipated Completion Date:

To be completed by 6/30/2024

2023‐003 Reconciliations
Significant Deficiency in Internal Control over Financial Reporting Views of Responsible Officials:

We concur.

Corrective Action Plan:

The City performs a comprehensive reconciliation of all its subsidiary ledgers. The City has multiple subsidiary systems for billing revenue and Accounts receivable besides also using the financial system for Receivable sub‐ ledgers. In this instance, we were dealing with data from 2 financial systems sub‐ledgers as well as other ancillary systems and therefore we provided a detailed Excel reconciliation. Our reconciliation also indicates accounts that were marked for write‐off or were deemed uncollectable by the respective department. Since our policies require us to get council approvals for all write‐offs, we decided to retain these on the receivables side while booking a deferred revenue / uncollectable to remove any impacts of revenue recognition. We plan to take forward an item to the city council to get authorization to write off the uncollectable balances from the subsidiary ledgers as well as ancillary systems prior to the closing of books this year.

Responsible Individual(s):

Myles Dixon, Accounting Manager

Anticipated Completion Date:

To be completed by 6/30/2024

Packet Page 239 of 516Attachment 4 Page 3 of 6

City of Fairfield, California
Corrective Action Plan
June 30, 2023

4 II. Federal Award Findings and Questioned Costs:

Finding 2023‐004
Federal Agency: U.S. Department of Homeland Security
Program/Cluster: Staffing for Adequate Fire & Emergency Response Federal Assistance Listing Number: 97.083
Pass‐through: N/A
Award No. and Year: EMW‐2020‐FF‐00816, 2020
Compliance Requirement: Reporting
Type of Finding: Material Weakness in Internal Control over Compliance

Views of Responsible Officials and Corrective Action Plan:

The Fire Department has addressed this issue when the City was informed in March 2023 there was not enough documentation prior to online grant reporting for the auditors to verify grant reports were reviewed prior to submission on other grants being audited. The two (2) submissions in question were reviewed and verified by management but were not documented for the auditors to verify when the review was completed, prior to the City being notified in March 2023 to further document the review process. The City has implemented this recommendation.

Responsible Individual(s):

Taylor Armour, Administration Division Manager

Anticipated Completion Date:

June 30, 2023

Finding 2023‐005
Federal Agency: U.S. Department of Transportation
Program/Cluster: Highway Planning and Construction
Federal Assistance Listing Number: 20.205
Pass‐through: California Department of Transportation
Award No. and Year: STPCML‐5132 (049) – 2022 and HSIPL‐5132 (52) ‐ 2022 Compliance Requirement: Special Tests and Provisions – Wage Rate Requirements Type of Finding: Significant Deficiency in Internal Control over Compliance

Views of Responsible Officials and Corrective Action Plan:

The Public Works Department does review the certified payroll by management and files it within the project folder yet there was no documented sign off to verify when this review was completed. The City will add an additional step to document the verification of the review by management for future projects.

Responsible Individual(s):

Roger Dunham, Administration Division Manager

Anticipated Completion Date:

March 1, 2024

Packet Page 240 of 516Attachment 4 Page 4 of 6

City of Fairfield, California
Corrective Action Plan
June 30, 2023

5 Finding 2023‐006
Federal Agency: U.S. Department of Housing and Urban Development Program/Cluster: Section 8 Housing Choice Voucher Cluster Federal Assistance Listing Number: 14.871
Pass‐through: N/A
Award No. and Year: CA065‐2023
Compliance Requirement: Reporting
Type of Finding: Material Weakness in Internal Control over Compliance

Views of Responsible Officials:

We concur.

The Housing Authority addressed this issue when the City was informed in March 2023 there was not enough documentation prior to online grant reporting for the auditors to verify grant reports were reviewed prior to submission on other grants being audited. The Housing Authority has continuously maintained a check and balance approach for preparing and reviewing VMS reports before HUD submission. All reports are prepared by the Housing Authority and finance staff, then reviewed by either the Housing Authority Manager or the Deputy Executive Director before submission to HUD. The reviewer is now documenting their review prior to submitting the VMS reports.

Responsible Individual(s):

Tanya Tran, Housing Division Manager

Anticipated Completion Date:

June 30, 2023

Finding 2023‐007

Federal Agency: U.S. Department of Housing and Urban Development Program/Cluster: Section 8 Housing Choice Voucher Cluster Federal Assistance Listing Number: 14.871
Pass‐through: N/A
Award No. and Year: CA065‐2023
Compliance Requirement: Housing Quality Standards Inspection Type of Finding: Instance of Non‐Compliance and Significant Deficiency in Internal Control over Compliance

Views of Responsible Officials:

We concur.

The Housing Authority will ensure that HQS inspections are completed at least biennially for all units in the program. Each Housing Specialist maintains a tabulation of inspection deadlines for each unit; hence, 98% of the 60‐unit test group was completed on time. However, Management will more frequently monitor the inspection deadlines with the specialist to avoid even a 2% margin of error, as indicated in this audit assessment.

Packet Page 241 of 516Attachment 4 Page 5 of 6

City of Fairfield, California
Corrective Action Plan
June 30, 2023

6 Responsible Individual(s):

Tanya Tran, Housing Division Manager

Anticipated Completion Date:

June 1, 2024

Finding 2023‐008

Federal Agency: U.S. Department of Housing and Urban Development Program/Cluster: Section 8 Housing Choice Voucher Cluster Federal Assistance Listing Number: 14.871
Pass‐through: N/A
Award No. and Year: CA065‐2023
Compliance Requirement: Utility Allowance Schedule
Type of Finding: Instance of Non‐Compliance and Material Weakness in Internal Control over Compliance

Views of Responsible Officials:

The Housing Authority fully complied with 24CFR 982.517(C)(1) of HUD regulations that states that "A PHA must review its schedule of utility allowances each year and must revise its allowance for a utility category if there has been a change of 10 percent or more in the utility rate since the last time the utility allowance schedule was revised. The PHA must maintain information supporting its annual review of utility allowances and any revisions made in its utility allowance schedule." Each year, the Housing Authority hires a consultant to analyze the Utility allowances for the Fairfield jurisdiction. Once that assessment is completed, Housing Authority staff and Management review it. The Housing Authority staff then meets with the Consultant to discuss any irregularities found or resolve questions emanating from its review. Once staff and Management are satisfied with the information, have clear documentation explaining the Consultant's conclusions, and memorialize any categories that have changed 10% or more, Management will finalize its review of the Utility Allowance Schedule. The Housing Authority will document Management’s approval of the utility allowance adjustments, if any.

Responsible Individual(s):

Tanya Tran, Housing Division Manager
LaTanna Jones, Deputy Executive Director

Anticipated Completion Date:

June 1, 2024

Packet Page 242 of 516Attachment 4 Page 6 of 6

1 January 30, 2024
To the Honorable Mayor and Members of the City Council
City of Fairfield, California
We have audited the financial statements of the City of Fairfield, California (City) as of and for the year ended June 30, 2023, and have issued our report thereon dated January 30, 2024. Professional standards require that we advise you of the following matters relating to our audit.

Our Responsibility in Relation to the Financial Statement Audit under Generally Accepted Auditing Standards and Government Auditing Standards
As communicated in our letter dated June 12, 2023, our responsibility, as described by professional standards, is to form and express an opinion about whether the financial statements that have been prepared by management with your oversight are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America. Our audit of the financial statements does not relieve you or management of your respective responsibilities.

Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain reasonable, rather than absolute, assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, as part of our audit, we considered the internal control of the City solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control.

We are also responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process. However, we are not required to design procedures for the purpose of identifying other matters to communicate to you.

We have provided our comments regarding internal controls during our audit in our Independent Auditor’s Report on Internal Controls over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards dated January 30, 2024.

Planned Scope and Timing of the Audit
We conducted our audit consistent with the planned scope and timing we previously communicated to you.

2 Compliance with All Ethics Requirements Regarding Independence The engagement team, others in our firm, as appropriate, our firm, and other firms utilized in the engagement, if applicable, have complied with all relevant ethical requirements regarding independence.

Qualitative Aspects of the Entity’s Significant Accounting Practices Significant Accounting Policies
Management has the responsibility to select and use appropriate accounting policies. A summary of the significant accounting policies adopted by the City is included in Note 1 to the financial statements. As described in Note 1, the City changed accounting policies related to accounting for right-to-use subscription assets to adopt the provisions of GASB Statement No. 96, Subscription-Based Information Technology Arrangements.

Accordingly, the accounting change has been retrospectively applied to the financial statements beginning July 1, 2022. No matters have come to our attention that would require us, under professional standards, to inform you about (1) the methods used to account for significant unusual transactions and (2) the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus.

Accounting Estimates
Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s current judgments. Those judgments are normally based on knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ markedly from management’s current judgments.

The most sensitive accounting estimates affecting the financial statements are:
•The net pension liability and related deferred inflows of resources and deferred outflows of resources and disclosures are based on actuarial valuations.
•The net other post-employment benefits (OPEB) liability and related deferred inflows of resources and deferred outflows of resources are based on actuarial valuations. •Self-insurance claims liabilities are based on actuarial studies performed by the City's independent actuaries.
•The estimation of lease receivables and deferred inflows of resources using the discount rate developed by management.

We evaluated key factors and assumptions used to develop the estimates in determining that they are reasonable in relation to the financial statements taken as a whole.

Financial Statement Disclosures
Certain financial statement disclosures involve significant judgment and are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the City’s financial statements relate to:

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3 The City’s disclosure of the defined benefit pension plans, net pension liability and related deferred inflows of resources and deferred outflows of resources in Note 14 to the financial statements. The valuation of the net pension liability and related deferred outflows/inflows of resources are sensitive to the underlying actuarial assumptions uses including, but not limited to, the investment rate of return and discount rate. As disclosed in Note 14, a 1% increase or decrease in the discount rate has a material effect on the City’s net pension liability.

Significant Difficulties Encountered during the Audit
We encountered no significant difficulties in dealing with management relating to the performance of the audit.

Uncorrected and Corrected Misstatements
For purposes of this communication, professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that we believe are trivial, and communicate them to the appropriate level of management. Further, professional standards require us to also communicate the effect of uncorrected misstatements related to prior periods on the relevant classes of transactions, account balances or disclosures, and the financial statements as a whole. Uncorrected misstatements or matters underlying those uncorrected misstatements could potentially cause future-period financial statements to be materially misstated, even though the uncorrected misstatements are immaterial to the financial statements currently under audit. The attached schedule of corrected misstatements that we identified as a result of our audit procedures were brought to the attention of, and corrected by, management. There were no uncorrected misstatements.

Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter, which could be significant to the City ’s financial statements or the auditor’s report. No such disagreements arose during the course of the audit.

Circumstances that Affect the Form and Content of the Auditor’s Report For purposes of this letter, professional standards require that we communicate any circumstances that affect the form and content of our auditor’s report. As described in Note 1 and Note 22 to the financial statements, due to the adoption of GASB Statement 96, Subscription-Based Information Technology Arrangements, the City restated opening balances as of July 1, 2022. We have included an emphasis of matter in our report regarding this restatement. Additionally, the report included an emphasis of matter relating to the correction of an error.

We have included an emphasis of matter in our report regarding this restatement.

Representations Requested from Management
We have requested certain written representations from management which are included in the management representation letter dated January 30, 2024.

Management’s Consultations with Other Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting matters. Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing and accounting matters.

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4 Other Significant Matters, Findings, or Issues
In the normal course of our professional association with the City, we generally discuss a variety of matters, including the application of accounting principles and auditing standards, significant events or transactions that occurred during the year, operating conditions affecting the entity, and operating plans and strategies that may affect the risks of material misstatement. None of the matters discussed resulted in a condition to our retention as the City’s auditors.

Other Information Included in Annual Reports
Pursuant to professional standards, our responsibility as auditors for other information, whether financial or nonfinancial, included in the City’s annual reports, does not extend beyond the financial information identified in the audit report, and we are not required to perform any procedures to corroborate such other information.

Additionally, in accordance with such stanards, we read the other information and considered whether such information, or the manner of its presentation, was materially inconsistent with its presentation in the financial statements.

Our responsibility also includes communicating to you any information which we believe is a material misstatement of fact. Nothing came to our attention that caused us to believe that such information, or its manner of presentation, is materially inconsistent with the information, or manner of its presentation, appearing in the financial statements.

Group Audits
The financial statements include the financial statements of the Fairfield Public Financing Authority, Fairfield Water Facilities Improvement District No. 1, Fairfield Municipal Park Improvement District No. 1, Fairfield Storm Drain Facilities Improvement District No. 1, Fairfield Community Facilities Districts, and Housing Authority of the City of Fairfield, which are blended component units of the City, which for the purposes of our audit we did not consider to be significant components within the financial statements. Consistent with the audit of the financial statements as a whole, our audit included obtaining an understand of the component units and their environment, including internal control, sufficient to assess the risks of material misstatements of the financial statements and completion of further audit procedures.

This report is intended solely for the information and use of the City Council, and management of the City and is not intended to be, and should not be, used by anyone other than these specified parties.

Sacramento, California
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City of Fairfield, California
Schedule of Corrected Misstatements
For the Year Ended June 30, 2023

5 Number Opinion Unit(s)Account/Description Debit Credit 1 Transportation Enterprise Fund Nonoperating other revenue (expense)1,069,520$ Nonoperating intergovernmental revenues 1,069,520$
2 Transportation Enterprise Fund Nonoperating other revenue (expense)219,700 Gain (loss) on disposition of capital assets 219,700
Golf Courses Enterprise Fund Nonoperating other revenue (expense)10,550 Gain (loss) on disposition of capital assets 10,550
Vehicle Services / Replacement
Internal Service Fund Nonoperating other revenue (expense)335,255 Gain (loss) on disposition of capital assets 335,255
Public Facilities Internal Service Fund Nonoperating other revenue (expense)20,000 Gain (loss) on disposition of capital assets 20,000
3 North Bay Treatment Plant Enterprise
Fund Nonoperating other revenue (expense)824,937
Beginning net position 1,262,003
Receivables, net 2,086,940
Unrestricted net position 2,086,940
Restricted for major maintenance 2,086,940
4 General Fund Miscellaneous 110,474
Investment income 110,474
5 Water Utility Enterprise Fund Net pension liability 2,437,259 Deferred outflows of resources related to pension 1,398,047 Deferred inflows of resources related to pension 549,456 489,756
North Bay Treatment Plant Enterprise
Fund Net pension liability 963,600
Deferred outflows of resources related to pension 705,001 Deferred inflows of resources related to pension 93,864 Pension expense 164,735
Transportation Enterprise Fund Net pension liability 131,944 Deferred outflows of resources related to pension 135,423 Pension expense 3,479
Governmental Activities Net pension liability 3,532,803 Deferred outflows of resources related to pension 2,881,791 Pension expense 651,012
(To correct the allocation of the net pension liability and related deferred outflows and deferred inflows of resources.) (To correct the classification of investment income incorrectly classified in miscellaneous revenues in error.) (To correct for improper classification of net position and correction of revenues/expenses recognized in error.) (To move the intergovernmental revenues improperly classified as other revenues.) (To correct the classification of revenues generated from the sale of capital assets.)

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Management Letter
For Fiscal Year Ended June 30, 2023
City of Fairfield, California
eidebailly.com
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1 To the Management of City of Fairfield
Fairfield, California
In planning and performing our audit of the financial statements of the City of Fairfield, California (City), as of and for the year ended June 30, 2023, in accordance with auditing standards generally accepted in the United States of America, we considered the City’s internal control over financial reporting (internal control) as a basis for designing auditing procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.

During our audit we became aware of deficiencies in internal control other than significant deficiencies and material weaknesses that are opportunities for strengthening internal controls and operating efficiency. The observations and recommendations are summarized below. This letter does not affect our report dated January 30, 2024, on the financial statements of the City.

We will review the status of these comments during our next audit engagement. We will be pleased to discuss these items in further detail at your convenience, to perform any additional study of these matters, or to assist you in implementing the recommendations.

CURRENT YEAR OBSERVATIONS AND RECOMMENDATIONS

DATA SECURITY
Observation:

In discussions with those responsible for the administration of the Cayenta application, the City’s general ledger system, it was stated that data maintained in the Cayenta application was not stored in an encrypted state. This data includes sensitive personal identifiable information (PII), and the information would not be encrypted until the City migrates from Cayenta to a new system (Tyler Munis).

The payroll/human resources module went live in January 2023, but Cayenta is still being retained for the time being during the ongoing transition.

This is a recurring observation from the fiscal year ended June 30, 2021, and 2022.

Recommendation:

As a best practice and data security standard, we recommend that the City take steps to store all sensitive data in an encrypted state.

2 Management’s Response:

The City has acknowledged the risk present with unencrypted PII data at rest and has identified some fields in the City’s current ERP database (Cayenta) that do contain personal identifiable information (PII), which is in concurrence with this year’s internal control audit findings.

In an effort to mitigate this risk, the city has made the following observations and implemented the most appropriate mitigation factors to reduce the level of risk to an acceptable level until we are able to decommission the present ERP system. The Cayenta system is an on-premises system, and all access is controlled with limited employees having access. The Cayenta system runs on a database management system that is always on with the database files attached to the system always in motion. However, we also recognize that once the files are backed up to file, that data is at rest.

Completed - The following measures have been applied:
•Implemented current encryption standards and procedures to safeguard this PII data at rest in the database backup files.
•Encrypted network communications to protect these static encrypted files when they are in motion.
•Database files themselves, while already in motion, are also split across many physical disks with an encrypted configuration, making the individual disks unusable without the entire proprietary disk management array.
•Configured 24/7 network and endpoint monitoring powered by AI for alerting on intrusion, authentication, suspicious or malicious activity. This system is monitored 24/7 by a live person at our security operations center (SOC), and City staff is on call to respond. •Implemented privilege separation to protect access to critical systems including all database systems. City’s datacenter itself is setup inside the police department and is protected by badged access with recorded camera monitoring.

In Progress - The following measures are in progress:
•There are only 2 departments (Public Works and Parks and Recreation) remaining on the older system for timekeeping only and are being transitioned to Tyler Munis •Police will be replacing the timekeeping system and Fire department is upgrading their timekeeping system in 2024 and both systems will integrate directly with Tyler Munis thus reducing /eliminating the dependency on the Cayenta system The Cayenta system is currently in the process of being replaced to a new system (Tyler Munis) in fact at this time it is only used for capturing time, The GL, Budget, AR and all other modules have already been transitioned to Tyler Munis, and the decision to replace it was partially based upon the PII encryption risk presented by that system. The City did explore the possibility of encrypting individual fields in the Cayenta system and found that the cost including contract labor would likely be more than $150,000 and take approximately six months to work through the software customization process with the vendor. This would include in-depth regression testing for the custom modifications to the existing software that would be required to allow it to handle the encryption. The process would also cause a delay in the implementation of the new ERP system, increasing its cost and delaying the city’s ability to fully mitigate the risk through the replacement of the Cayenta system.

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3 The City did explore other methods of mitigating this specific risk and found that this mitigation plan would be the most effective and timely method to achieve full mitigation. Due to the high cost and high risk involved through software customization and the delay in implementing the new ERP system which would eliminate this risk, the city feels that the current actions that have already been taken to mitigate this specific risk are the appropriate action with both the PII data and available resources including taxpayer dollars.

INFORMATION TECHNOLOGY
Observation:

In discussion with the City’s information technology department, we observed the following for FY 2023:

1.The City’s Technology Disaster Recovery Plan policy covering Backup and Replication procedures has not been reviewed since 2020 (no documented review).

2.The City does not have a formal process in place to complete comprehensive data restoration tests on a defined basis and documents the results.

3.The City does not have a formal information security policy in place.

4.The City does not consistently conduct formal logical and physical access reviews on a defined basis.

5.The City has not established policies and procedures to govern the use of or process integrity review of spreadsheets used in the financial reporting process, including considerations for security, availability, and data integrity.

Recommendation:

As a best practice and industry standard, we recommend the following for the observations noted above:

1.Review and approve important policies and procedures supporting critical business and technology processes at least annually/defined periodic basis.

2.Establish a formal process for conducting Data Restoration tests on a defined basis based on their business risk and business needs and to document the results.

3.Establish formal, documented information security policies that are approved by senior management and addresses key elements of security management, including the following:
a.Access control
b.Change management
c.Security awareness training
d.Security-incident procedures
e.Data backup and recovery
The City should also establish formal policies and procedures related to information security, addressing the areas of access control, segregation of incompatible duties, software development, and change management.

4.Establish formal procedures for resource owners to perform periodic reviews of current user access permissions on the financial applications, underlying infrastructure and data center to ensure continued appropriateness.

5.Establish internal control of spreadsheets used in the financial reporting process, including considerations for security, availability, and data integrity.

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4 Management’s Response:

1.In Progress - IT department has hired a consultant to develop these critical policies and procedures in FY 2024/FY2025. All existing Admin policies were updated - Technology Use, Email Use, Internet Use, Red Flag Policy, Telephone Use Policy and Technology Asset Management Policy. In addition, there are additional policies and procedures being developed such as those identified by Cybersecurity Resilience Plan and to accommodate for technology changes such as Generative AI Use Policy and Guidelines.

2.In Progress - IT department has hired a consultant to develop a Business Continuity and Disaster Recovery Plan and will be completed by June 2025. Initial Departmental Interviews have completed.

3.The City has completed the development of the 5-year roadmaps for the Digital Strategic Plan, Cyber Resilience Plan and a GIS masterplan. All of these plans identified the need for the policy development.
o In Progress Recommendation 3(a), the goal is to have these policies developed by June 2024.
o Completed Recommendation 3(b), Change Management Procedure is already in place and was submitted to Auditors.
o Completed Recommendation 3(c), security awareness training is already in place and is included with the new-hire package to review and complete and conducted citywide on an annual basis. City uses Right Hand Security for cybersecurity training and information was submitted to the auditors.
o In Progress Recommendation 3(d), IT department developed a Cyber Security Incident Response Plan and completed a Tabletop exercise with IT staff in 2023. The second Tabletop exercise with Senior Leadership Team will be completed by DEC 2024. The Incident Response Plan was submitted to Auditors
o Completed Recommendation 3(e), City recently replaced its Backup system. o Completed City doesn’t do software development.

Fairfield City CouncilMarch 19, 2024

Fairfield City Council
March 19, 2024