City of Fairfield, California
TransportaƟon Enterprise and
Capital Projects Funds
Annual Financial Report
With Independent Auditor’s Reports on the Financial Statements and on Compliance Thereon
For the Years Ended June 30, 2025 and 2024
City of Fairfield, California
Transportation Enterprise Fund & Capital Projects Fund
Annual Financial Report
For the Years Ended June 30, 2025 and 2024
Table of Contents
i
PAGE
Table of Contents i
City Council and Elected Officials ii
Management Leadership Team ii
Independent Auditor’s Report 1
Basic Financial Statements:
Transportation Enterprise Fund:
Statements of Net Position 5
Statements of Revenues, Expenses and Changes in Net Position 6 Statements of Cash Flows 7
Transportation Capital Projects Fund:
Balance Sheets 8
Statements of Revenues, Expenditures and Changes in Fund Balance 9
Notes to the Financial Statements 10
Required Supplementary Schedule (unaudited):
Transportation Enterprise Fund:
Schedule of the Transportation Enterprise Fund’s Proportionate Share of the City’s Miscellaneous Plan Net Pension Liability 23
Transportation Enterprise Fund:
Schedule of the Contributions 24
Supplementary Schedule (unaudited):
Transportation Enterprise Fund:
Schedules of Operating Expenses by Function 25
Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on Audit of Financial Statement Performed in Accordance with Government Auditing Standards, the Transportation Development Act, California Government Code 8879.55, and Senate Bill 88 (2007) 28
Pam Bertani
Vice-Mayor
District 4
Manveer Sandhu
Councilmember
District 6
Scott Tonnesen
Councilmember
District 2
Catherine Moy
Mayor
Doug Carr
Councilmember
District 3
K. Patrice Williams
Councilmember
District 1
Doriss Panduro
Councilmember
District 5
Karen L. Rees
City Clerk
Arvinda Krishnan
City Treasurer
City Council and Elected Officials
David Gassaway
City Manager
John Sturdee
Fire Chief
Naveed Ashraf
Director of Information Technology
Dave Zellers
Director of Community & Economic
Development
LaTanna Jones
Director of Housing
Kristina Kaunzinger
Director of Parks & Recreation
David Lim
City Attorney
Sanjay Mishra
Director of Public Works
John Furtado
Director of Finance
Dan Marshall
Police Chief
Farbod Pirouzmand
Assistant City Manager/
Director of Human
Resources
Management Leadership Team
ii
iii
6 Hutton Centre Drive, Suite 1200
Santa Ana, California 92707
INDEPENDENT A
UDITOR’S REPORT
To the City Council
City of Fairfi
eld, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the Transportation Capital Projects Fund and the Transportation Enterprise Fund of the City of Fairfield, California (the City), as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the City’s Transportation Devel opment Act Article 4 and 8 Program (TDA Program)’s basic financial statements as listed in the table of contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the Transportation Capital Projects Fund and the Transportation Enterprise Fund of the City, as of June 30, 2025, and the respective changes in financial positio n and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accept ed 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.
Emphasis of Matter
As discussed in Note 1, the financial statements pr esent only the Transportation Capital Projects Fund and the Transportation Enterprise Fund and do not purport to, and do not, present fairly the financial position of the City as a whole, as of June 30, 2025 and 2024, th e changes in its financial position, or, where applicable, its cash flows for the years then ended in accordance with ac counting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter.
Responsibilities of Management for the Financial Statements Management is responsible for the prep aration and fair presentation of the fi nancial statements in accordance with accounting principles generally accepted in the United Stat es 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. 1 To the City Council
City of Fairfield, California
2 Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whet her the financial statements as a whole are free from material misstatement, whether due to fraud or error, a nd 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 ar e appropriate in the circums tances, but not for the purpose of expressing an opinion on the effectiveness of the TDA Program’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.
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-re lated matters that we identified during the audits.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the schedule of the Transportation Enterprise Fund’s proportionate share of the City’s net pension liability and schedule of contributions, as listed in the table of contents, be presented to supplement the basic financial statements. Such informa tion is the responsibility of management and although not a part of the basic financ ial 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 cont ext. 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 know ledge 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.
Management has omitted the management’s discussion and analysis that the accounting principles generally accepted in the United States of America requires to be presented to supplement the basic financial statements. Such missing information, 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 financia l reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinions on the basic financial statements are not affected by the missing information.
To the City Council
City of Fairfield, California
3 Other Information
Management is responsible for the othe r information included in the annual report. The other information comprises the Introductory Section but does not in clude 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.
In connection with our audit of the basi c financial statements, our responsibility is to read the other information and consider whether a material inconsistenc y exists between the other information and the basic financial statements, or the other information otherwise appears to be materially mi sstated. 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.
Prior Year Financial Statements
The financial statements of the TDA Program as of and for the year ended June 30, 2024, were audited by other auditors, whose report, dated December 12, 2024, expressed unmodified opinions on those statements. We were not engaged to audit, review, or perform any procedures on the financia l statements of the TDA Program for the year ended June 30, 2024, and, accordingly, we do not express an opi nion or provide any assurance on them. The comparative information presented for the year ended June 30, 2024, is consistent, in all material respects, with the audited financial statements from which it has been derived.
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards , we have also issued our repor t dated December 16, 2025, on our consideration of the Transportation Capital Projects Fund and the Transportation Enterprise Fund 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 Transportation Capital Projects F und and the Transportation Enterprise Fund of the City's internal control over financial reporting or on compliance. Th at report is an integral part of an audit performed in accordance with Government Auditing Standards in consideri ng City’s internal control over financial reporting and compliance.
Santa Ana, California
December 16, 2025
4 City of Fairfield
Transportation Enterprise Fund
Statements of Net Position
June 30, 2025 and 2024
The notes to the financial statements are an integral part of these statements 5 2025 2024
Assets:
Current Assets
Cash and cash equivalents (Note 1) 204,037$ -$
Accounts receivable:
California Department of Transportation - 647,832
Metropolitan Transportation Commission 1,353,797 7,323,346 Federal Transit Administration 2,385,150 2,315,458
Interest and other receivables 74,983 47,277
Total current assets 4,017,967 10,333,913
Noncurrent Assets
Capital assets (Notes 1 and 2):
Construction in progress 1,456,824 -
Buildings and improvements 5,413,858 5,413,858
Equipment 25,288,568 26,768,970
Subscription software 517,245 89,649
Less: accumulated depreciation and amortization (22,774,078) (24,498,251) Total capital assets 9,902,417 7,774,226
Total noncurrent assets 9,902,417 7,774,226
Total assets 13,920,384 18,108,139
Deferred Outflows of Resources:
Deferred outflows related to pensions (Notes 1 and 8) 522,355 758,167 Total deferred outflow of resources 522,355 758,167
Liabilities:
Curre nt L iabilit ie s
Accounts payable and other current liabilities 1,033,094 1,417,157 Due to the City of Fairfield (Note 3) 1,124,382 6,304,012 Unearned revenue (Note 4) 75,483 -
Due to Metropolitan Transportation Commission (Note 3) 2,471,979 2,485,926 Compensated absences (Note 5) 6,815 6,341
Subscriptions - due within one year (Notes 5 and 6) 94,133 29,254 Total curre nt liabilitie s 4,805,886 10,242,690
Noncurre nt Liabilitie s
Compensated absences (Note 5) 129,492 120,477
Net pension liability (Notes 5 and 8) 2,630,141 3,000,009 Subscriptions - due in more than one year (Notes 5 and 6) 316,315 - Total noncurrent liabilities 3,075,948 3,120,486
Total liabilities 7,881,834 13,363,176
Deferred Inflows of Resources:
Deferred inflows related to pensions (Notes 1 and 8) 376,843 339,084 Total deferred inflow of resources 37 6,843 339,084
Net Position:
Net investment in capital assets 9,491,969 7,744,972
Unrestricted (3,307,907) (2,580,926)
Total net position (deficit) 6,184,062$ 5,164,046$
City of Fairfield
Transportation Enterprise Fund
Statements of Revenues, Expenses, and Changes in Net Position For the Years Ended June 30, 2025 and 2024
The notes to the financial statements are an integral part of these statements 6 2025 2024
Operating Revenues:
Charges for services 321,170 $ 397,710 $ Miscellaneous 58,288 50,979 Total operating revenues 379,458 448,689 Operating Expenses:
Operations 8,240,679 6,334,620 Vehicle maintenance 630,751 2,223,606 General and administrative 2,022,863 2,080,101 Depreciation and amortization 688,237 563,456
Total operating expenses 11,582,530 11,201,783 Operating income (loss) (11,203,072) (10,753,094) Nonoperating Revenues (Expenses):
Investment income 31,031 - Net increase in fair value of investments 5,101 - Interest expense - (1,172) Local Transportation Funds 7,660,681 7,030,879 State Transit Assistance Funds 170,416 328,636 Federal Transit Administration 3,585,883 3,658,810 Gain (loss) on disposition of capital assets (Note 2) (33,369) 190 Other revenue (expense) (685,501) (919,113) Total nonoperating revenues (expenses) 10,734,242 10,098,230 Income (loss) before capital contributions (468,830) (654,864) Capital Contributions:
Local Transportation Funds 1,518,469 1,816,068 State Transit Assistance Funds - 29,107 California Department of Transportation Funds 5,705 1,469,827 Federal Transit Administration - 2,980,507 Total contributions 1,524,174 6,295,509 Transfers Out:
Transfers out for City's pension obligation debt service (35,328) (35,863) Total transfers out (35,328) (35,863) Change in net position 1,020,016 5,604,782 Net Position (Deficit):
Beginning of year 5,164,046 (440,736) End of year 6,184,062$ 5,164,046 $
City of Fairfield
Transportation Enterprise Fund
Statements of Cash Flows
For the Years Ended June 30, 2025 and 2024
The notes to the financial statements are an integral part of these statements 7 2025 2024
Cash Flows from Operating Activities:
Receipts from customers and users 367,034 $ 604,461 $ Payments to suppliers (6,791,361) (5,000,147) Payments to employees (942,616) (1,095,198) Payments for interfund services used (3,688,027) (3,522,000) Net cash provided by (used for) operating activities (11,054,970) (9,012,884) Cash Flows from Noncapital Financing Activities:
Grants 16,652,155 4,647,828
Proceeds from interfund loan 1,124,382 6,304,012 Repayment of interfund loan (6,304,012) (74,404) Cash paid to other funds (35,328) (35,863) Net cash provided by (used for) noncapital
financing activities 11,437,197 10,841,573 Cash Flows from Capital and Related
Financing Activities:
Proceeds from sale of capital assets 4,400 190 Purchases of capital assets (2,320,184) (5,802,264) Capital contributions 2,242,296 4,000,066 Cash paid for subscription liabilities-principal portion (136,051) (28,674) Cash paid for subscription liabilities-interest portion - (1,172) Net cash provided by (used for) capital and
related financing activities (209,539) (1,831,854) Cash Flows from Investing Activities:
Investment income paid 31,349 - Net cash provided by (used for) investing activities 31,349 - Net increase (decrease) in cash and cash equivalents 204,037 (3,165) Cash and Cash Equivalents:
Beginning of year - 3,165 End of year 204,037$ - $
Reconciliation of Operating Income (Loss) to net
Cash Provided by Operating Activities:
Operating income (loss) (11,203,072) $ (10,753,094) $ Adjustments to reconcile operating income (loss) to
net cash provided by (used for) operating activities:
Depreciation and amortization expense 688,237 563,456 Pension expense 195,299 417,049 (Increase) decrease in accounts receivable (12,424) 155,772 (Increase) in deferred outflows related to pensions (291,596) (261,104) Increase (decrease) in accounts payable (440,903) 908,400 Increase (decrease) in compensated absences 9,489 (43,363) Total adjustments 148,102 1,740,210 Net cash provided by (used for) operating activities (11,054,970)$ (9,012,884) $
City of Fairfield
Transportation Capital Projects Fund
Balance Sheets
June 30, 2025 and 2024
The notes to the financial statements are an integral part of these statements 8 2025 2024
Assets:
Accounts receivable 1,210,487 $ - $ Total assets 1,210,487$ - $
Liabilities and Fund Balance:
Liabilities:
Due to the City of Fairfield (Note 3) 1,210,487 $ - $ Total liabilities 1,210,487 - Fund Balance:
Unassigned - - Total liabilities and fund balance 1,210,487$ - $
City of Fairfield
Transportation Capital Projects Fund
Statements of Revenues, Expenditures, and Changes in Fund Balance For the Years Ended June 30, 2025 and 2024
The notes to the financial statements are an integral part of these statements 9 2025 2024
Revenues:
Federal Transit Administration 1,210,487 $ - $ Total revenues 1,210,487 - Expenditures:
Capital outlay 1,210,487 -
Total expenditures 1,210,487 - Net change in fund balance
Fund Balance:
Beginning of year - - End of year -$ - $
City of Fairfield
Transportation Enterprise and Capital Projects Funds
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024
10 Note 1 Summary of Significant Accounting Policies ............................................................................ 11 Note 2 Capital Assets ................................................................................................................... 15 Note 3 Due to Metropolitan Transportation Commission (MTC) / City of Fairfield ..................................... 16 Note 4 Unearned Revenue ............................................................................................................ 16 Note 5 Long Term Obligations ........................................................................................................ 16 Note 6 Subscription-based Information Technology Agreements (SBITAs) ............................................... 17 Note 7 Fare Revenue Ratio ............................................................................................................ 17 Note 8 Pension Plan ..................................................................................................................... 22 Note 9 Contingent Liabilities .......................................................................................................... 23 Note 10 Risk Management .............................................................................................................. 23
City of Fairfield
Transportation Enterprise and Capital Projects Funds
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024
11 Note 1 Summary of Significant Accounting Policies
A. Organization and Reporting Entity
Transportation Enterprise Fund - This fund is used to account for the op erations and management of the City of Fairfield’s (City) transit operations, which are primarily supported by TDA and FTA funding.
The Transportation Enterprise Fund has provided transit se rvices in the City since Au gust 1975, when the demand responsive Dial-A-Ride Transit (DART) service was initiated with a fleet of small vans. Fixed route service was initiated in 1980 and consolidated with Suisun City’s tran sit system from 1989 to 2022 , operating as Fairfield and Suisun Transit (FAST). Suisun City chose to implement their own microtransit service beginning in 2023. Today, the City’s transit system only services the City of Fairfield and is still known as FAST.
FAST is responsible for operating the following programs:
• Five general public fixed routes (“FAST”)
• Two on-demand microtransit zones (“FAST Connect”)
• Americans with Disabilities Act (ADA) paratransit servic e for residents living within Fairfield City limits (“FAST Connect ADA”)
• Local Reduced Fare Taxi Program for residents 60 years and older living within Fairfield City limits • FAST participates in an Intercity Taxi Program for ADA-certified resid ents of Solano County that is administered by the Solano Transportation Authority
FAST also operated an intercity Solano Express routes u nder a contract with the Solano Transportation Authority (STA), originally implemented in July 2018. The Blue Line provided servic e between Sacramento and the Pleasant Hill BART station. In September 2021, the STA Board move d to a single operator for all Solano Express lines, and Solano County Transit (SolTrans) was de cided as the sole operator. FAST ceased operating the Blue Line in August 2022 during FY 2022-2023.
Transportation Capital Projects Fund - This fund is used to account for transportation capital projects, which allocate TDA, FTA, and State and Regional funding towards capital improvement projects.
B. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
Basis of Accounting - The Transportation Enterprise Fund, a proprietary fund, is accounted for using the full accrual basis of accounting. Under th is method of accounting, revenues are recogn ized 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 Transportation Capital Projects Fu nd is accounted for using the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized when they beco me both measurable and available to finance expenditures of the current period and expenditures are generally recognized when the related fund liabilities are incurred. Revenues are considered to be available if they are received within 90 days after year-end, except for grants, which is one year. Revenue from grants are recognized in the fiscal year in which all eligibility requirements have been satisfied.
Annual Financial Statements - The financial statements of the Transportation Enterp rise Fund are intended to reflect only the financial position of the transit operations, results of its op erations, and cash flows in conformity with accounting principles generally accepted in the United States of America (GAAP). The financial statements of
City of Fairfield
Transportation Enterprise and Capital Projects Funds
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024
12 Note 1 Summary of Significant Accounting Policies (continued)
The Transportation Capital Projects fund are intended to reflect only the financia l position and results of construction projects. Both financial statements are not intended to represent the financial position of the City as a whole. The City applies all applicab le GASB pronouncements to these financ ial statements. In addition to the Transportation Development Act (TDA), the City participates in a number of federally assisted grant programs through the Federal Transit Ad ministration (FTA). These federally assist ed programs are subject to the reporting requirements under the Single Audit Act in accordance with Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Prin ciples, and Audit Requirements for Federal Awards and a separate report is prepared.
Net Position - The net position of the Transportati on Enterprise Fund consists of th e net capital assets it currently uses for day-to-day operations of the transit system. All restricted funding from other agencies are applied first, before the City’s local funding source is utilized.
Statement of Cash Flows - For purposes of the cash flow statement, the City considers all pooled cash and investments of the Transportation Enterprise Fund as cash and cash equivalents.
Use of Estimates - The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
Cash and Cash Equivalents - The cash is held by the City as part of its pooled cash and investments. The pooled funds are invested in accordance with the City's investme nt policy established pursuant to state law. All monies not required for immediate expenses are invested or deposit ed to earn maximum yield consistent with safety and liquidity. Interest income is allocated to the fund based on its proportionate share of the pool. Refer to the City's Annual Comprehensive Financial Report for disclosures of cash and investments and related risk categorization.
Capital Assets - Capital assets capitalized in the Transportation Enterprise Fund are valued at historical cost (except for right-to-use subscription assets, the measurement of which is discussed in Note 7) . Depreciation is computed using the straight line me thod over the estimated useful lives of thirty years for buildings, ten years for building improvements and five to twelve years for equipment.
Deferred Outflows/Inflows of Resources - In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of re sources. This separate financial statement element, deferred outflows of resources, represents a consumption of net assets that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then.
In addition to liabilities, the stat ement of net position will sometimes re port a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net assets that applie s to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time.
Amounts reported as deferred outflows of resources and deferred inflows of resources are related to the Transportation Enterprise Fund’s propor tion of the City’s Miscellaneous Pen sion Plan and will be recognized in pension expense in future periods.
Long Term Obligations Compensated Absences - The City provides employees with vacation, sick, compensatory time-off and personal leave benefits. A liability for compen sated absences is recognized when the leave is earned, and it is more likely than no t that the leave will be used or otherwise paid or settled. The liability is measured using employee's pay rate as of the date of the financ ial statement, including cert ain salary-related payment directly associated with the leave.
City of Fairfield
Transportation Enterprise and Capital Projects Funds
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024
13 Note 1 Summary of Significan t Accounting Policies (continued)
Pensions - For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, information about the fiduciary net position of the City of Fairfield’s California Public Employees Retirement System (CalPERS) Miscellaneous Plan and a dditions to/deductions from the Plan’s fiduciary net position have been determined on the same basis as th ey are reported by CalPERS. For this purpose, benefit payments (including refunds of employee contributions) ar e recognized when due and payable in accordance with the benefit terms. Investments are reported at fair valu e. Refer to the City's Annual Comprehensive Financial Report Note 14 and Note 6 of this report for additional disclosures of pension plans.
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 te rm. Right-to-use subscription IT assets are measured at the initial value of the subscription liability plus an y payments made to the vendor at or before the commencement date of the subscription term, plus any ca pitalizable 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 comme ncement 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 Subscripti on-Based Information Techno logy 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.
Implementation of New GASB Pronouncements – In fiscal year 2024-2025, the City implemented the following new accounting standards in order to conform to the following Governmental Accounting Standards Board (GASB) Statements:
GASB Statement No. 101 – In June 2022, the GASB issued Statement No. 101, Compensated Absences . The objective of this Statement is to better meet the informat ion needs of financial statement users by updating the recognition and measurement guidance for compensated absences . That objective is achi eved by aligning the recognition and measurement guidance under a unified model and by amending certain previously required disclosures. The Statement did not have a material effect on the financial statements.
GASB Statement No. 102 – In December 2023, the GASB issued Statement No. 102, Certain Risk Disclosures . The objective of this Statement is to provide users of govern ment financial statements with essential information about risks related to a government’s vulnerabilities due to certain concentrations or constraints. The disclosures will provide users with timely informat ion regarding certain concen trations or constraints and related events that have occurred or have begun to occur that make a government vulnerable to a substantial impact. As a result, users will have better information with which to unders tand and anticipate certain risks to a government’s financial condition. The Statement did not have a material effect on the financial statements.
City of Fairfield
Transportation Enterprise and Capital Projects Funds
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024
14 Note 1 Summary of Significant Accounting Policies (continued)
Transportation Development Act (TDA) - The State of California established the TDA to provide funds for public transportation. The TDA created Local Transportation Funds (LTF) around the State for the transportation purposes specified in the Act for variou s transportation agencies. Revenues of the LTF are derived from a 1/4 of one percent sales tax collected in each county, including Solano County. The City's LTF is administered by Solano County in collaboration with the Metr opolitan Transportation Commission (MTC ). The City has obtained funds from the LTF for transit operations and capital needs. Th e TDA projects are administered by the City. Articles of the TDA under which the City operates are:
1) Article 4 - funds operation and capital outlays for the public transportation systems in California.
2) Article 8 - funds service provided to elderly and handicapped persons under a contract between the City and MV Transportation.
3) State Transit Assistance Funds – Begi nning in 1980, these funds were derived from a statewide sales tax on diesel fuel and the revenue-based funds can be used for the operations and capital needs.
Federal Transit Administration (FTA) - The FTA has awarded operating, capital and planning grants to the City under various sections of the Urban Mass Transportation Act of 1964 and the amended Federal Transit Act of 1993. Sections of the FTA under which the City received funds are:
1) Section 5307 - Federal funds for operating and capital support of public transportation system.
2) Section 5339 - Federal funds to replace, rehabilit ate and purchase buses and related equipment and to construct bus-related facilities.
3) Other competitive grant programs offered by FTA
State and Regional Funding - Below are the other funding sources received to support the operations and capital needs of the public transportation system:
1) The Low Carbon Transit Operations Program (LCTOP) is one of several programs that are part of the Transit, Affordable Housing, and Sustainable Co mmunities Program estab lished by the California Legislature in 2014 by Senate Bill 862. The LCTOP was created to provide operating and capital assistance for transit agencies to reduce gr eenhouse gas emission and improve mobilit y, with a priority on serving disadvantaged communities. Approved projects in LCTOP will support new or expanded bus or rail services, expand intermodal transit facilities, a nd may include equipment acquisition, fueling, maintenance and other costs to op erate those services or facilitie s, with each project reducing greenhouse gas emissions. For agencies whose service area includes disadvantaged communities, at least 50 percent of the total moneys received shall be ex pended on projects that will benefit disadvantaged communities. Senate Bill 862 continuously appropriates five percent of the annual auction proceeds in the Greenhouse Gas Reduction Fund (Fund) for LCTOP, beginning in 2015-16.
2) State Transportation Assistance - State of Good Repair (STA - SGR) - The Road Repair and Accountability Act of 2017, Senate Bill (S B) 1 (Chapter 5, Statues of 2017), signe d by the Governor on April 28, 2017, includes a program that will provide additional revenues for transit in frastructure repair and service improvements. This investment in public transit will be referred to as the State of Good Repair program.
This program provides funding of approximately $105 million annually to the State Transit Assistance (STA) Account. These funds are to be made available for eligible tran sit maintenance, rehabilitation and capital projects.
City of Fairfield
Transportation Enterprise and Capital Projects Funds
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024
15 Note 2 Capital Assets
Capital assets for the Transportation Enterprise Fund are as follows for the years ended June 30, 2025 and 2024:
Balance Balance
July 1, 2024 Additions Deletions June 30, 2025
Nondepreciable capital assets:
Work in progress 1,456,824 $ 1,456,824 $
Total nondepreciable capital assets - $ 1,456,824 - $ 1,456,824 Assets being depreciated/amortized:
Building and improvements 5,413,858 5,413,858
Communication equipment 1,817,745 232,968 2,050,713 Transportation equipment 24,932,422 657,660 (2,371,030) 23,219,052 Office equipment 18,803 18,803
Subscription software 89,649 517,245 (89,649) 517,245 Total assets being depreciated/amortized 32,272,477 1,407,873 (2,460,679) 31,219,671 Accumulated depreciation/amortization:
Building and improvements (4,508,774) (114,289) (4,623,063) Communication equipment ( 1,803,839) (11,671) (1,815,510) Transportation equipment (18,11 1,318) (493,028) 2,339,656 (16,264,690) Office equipment (16,116) (2,687) (18,803) Subscription software (58,204) (66,562) 72,754 (52,012) Total accumulated depreciation/amortizaton (24,498,251) (688, 237) 2,412,410 (22,774,078) Total depreciable/amortizable capital assets, net 7,774,226 719,636 (48,269) 8,445,593 Total net capital assets 7,774,226 $ 2,176,460 $ (48,269) $ 9,902,417$ Balance Balance
July 1, 2023 Additions Deletions June 30, 2024
Assets being depreciated/amortized:
Building and improvements 5,413,858 $ 5,413,858 $ Communication equipment 1,817,745 1,817,745 Transportation equipment 18,636,913 6,295,509 $ 24,932,422 Office equipment 18,803 18,803
Subscription software 89,649 89,649
Total assets being depreciated/amortized 25,976,968 6,295,509 - $ 32,272,477 Accumulated depreciation/amortization:
Building and improvements (4,378,399) (130,375) (4,508,774) Communication equipment ( 1,801,421) (2,418) (1,803,839) Transportation equipment ( 17,712,443) (398,875) (18,111,318) Office equipment (13,430) (2,686) (16,116) Subscription software (29,102) (29,102) (58,204) Total accumulated depreciation/amortizaton (23,934,795) (563,456) - (24,498,251) Total depreciable/amortizable capital assets, net 2,042,173 5,732,053 - 7,774,226 Total net capital assets 2,042,173 $ 5,732,053 $ - $ 7,774,226$
City of Fairfield
Transportation Enterprise and Capital Projects Funds
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024
16 Balance Incurred or Satisfied or Balance Due within More than 7/1/2024 Issued Matured 6/30/2025 One Year One Year
Compensated absences* 126,818 $ 9,489 $ 136,307 $ 6,815 $ 129,492$ N e t pe nsion liability 3,000,009 276,893 646,761 $ 2,630,141 2,630,141 Subscriptions 29,254 517,245 136,051 410,448 94,133 316,315 Total long t e rm obligat ions 3,156,081$ 803,627 $ 782,812 $ 3,176,896 $ 100,948 $ 3,075,948 $ Balance Incurred or Satisfied or Balance Due within More than 7/1/2023 Issued Matured 6/30/2024 One Year One Year
Compensated absences* 170,181 $ (43,363) $ 126,818 $ 6,341 $ 120,477$ N e t pe nsion liability 3,479,127 443,610 922,728 $ 3,000,009 3,000,009 Subscriptions 57,928 28,674 29,254 29,254 0
Total long t e rm obligat ions 3,707,236$ 400,247 $ 951,402 $ 3,156,081 $ 35,595 $ 3,120,486$ * The change i n the compensated absences l i abi l i ty i s presented as a net change.
Note 3 Due to Metropolitan Transportation Commission (MTC) / City of Fairfield
The Transportation Enterprise Fund reflects a payable back to MTC as of June 30, 2025 and 2024, in the amount of $2,471,979 and $2,485,926, respectively, to be deposited into the City’s LTF account. This money will be available for future transit operations and capital projects.
The Transportation Enterprise Fund reflects a payable back to the City as of June 30, 2025 and 2024, in the amount of $1,124,382 and $6,304,012, respec tively. This is a short-term advance fo r financial statement purposes due to pending grant receipts, where a one-day, non-interest bearing borrowing from the City of is recorded as of June 30 th and repaid the following day. The Transportation Capital Projects Fund reflects a payable back to the City as of June 30, 2025, in the amount of $1,210,487. All capital project expenditures are funded by the City and the City will be reimbursed by the LTF accounts.
Note 4 Unearned Revenue
The City received various funding for certain capital projects which are eligible but have yet to be completed at the end of the fiscal year. Funding includes Low Carbon Transit Operations Program and the State of Transportation – State of Good Repair. As of June 30, 2025, there was unearned revenue of $75,483 for the Transportation Enterprise Fund and as of June 30, 2024, the unearned revenues for the Transportation Enterprise Fund were $0, which was used to fund various equipment and projects, as noted below.
2025 2024
Beginning balance - $ 400,478$ Additions:
LCTOP 52,700 1,100,094
STA-SGR 20,948 42,664
Interest earned 1,835 19,936
Total additions 75,483 1,162,694
Reductions:
Bus and bus equipment (29,107)
Electric infrastructure (1,534,065)
Total reductions - (1,563,172) Ending balance 75,483 $ - $
Transportation Enterprise Fund
Note 5 Long Term Obligations
The following is a summary of the long-term obligation transactions of the Transportation Enterprise Fund for the years ended June 30, 2025 and 2024:
City of Fairfield
Transportation Enterprise and Capital Projects Funds
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024
17 Note 6 Subscription-based Informatio n Technology Agreements (SBITAs)
As of year-end June 30, 2025, the City had entered into a subscription for the use of Swiftly software, with a term of five years. As of June 30, 2025 and 2024, the value of the subscription liability outstanding are $410,448 and $29,254, respectively. The City is requ ired to make annual fixed payments, an d this subscription has an interest rate of 2.5110%. The right-to-use subscription asset is reco gnized as a capital asset (see Note 2), and the value of the right-to-use subscription asset as of June 30, 2025 and 2024 are $517,245 and $89,649, with accumulated amortization of $52,012 and $58,204, respectively.
The future principal and interest subscription payments as of June 30, 2025, were as follows:
Fiscal Year Ending Principal Interest Total
2026 94,133 $ 10,306 $ 104,439 $
2027 99,629 7,943 107,572
2028 105,358 5,441 110,799
2029 111,328 2,795 114,123
Totals 410,448$ 26,485 $ 436,933 $
Note 7 Fare Revenue Ratio
Under the Transportation Development Act, the Transporta tion Enterprise Fund is required to maintain a ratio of fare revenue to operating expense of at least 20% for th e fixed route service and spec ialized services combined.
The specialized service includes Loca l Special Fare Assistance, which consist s of TDA collected from other local governmental agencies to run the Solano County inter-city taxi program and is included for the purpose of calculating the fare revenue ratio. Due to the impact on fares from the Covid-19 pandemic, the 20% fare revenue ratio requirement was waived for FY 24- 25 and FY 23-24 (by Assembly Bill No 125). The calculation of the fare revenue for the fiscal years ended June 30, 2025 and 2024 is as follows:
Fixed Specialized
Route Service Total
Operating income
Passenger fares 232,105 $ 89,065 $ 321,170 $ Miscellaneous 58,288 - 58,288 Total operating income 290,393 $ 89,065 $ 379,458 $ Operating expenses 7,375,254 $ 4,207,276 $ 11,582,530 $ Less: Depreciation/amortization (522,014) (166,223) (688,237) Adjusted operating expenses 6,853,240$ 4,041,053 $ 10,894,293 $ Fare revenue ratio 4.24% 2.20% 3.48%
Fixed Specialized
Route Service Total
Operating income
Passenger fares 289,957 $ 107,753 $ 397,710 $ Miscellaneous 44,158 6,821 50,979 Total operating income 334,115 $ 114,574 $ 448,689 $ Operating expenses $7,615,155 $3,586,628 11,201,783 $
Less: Depreciation/amortization (491,386) (72,070) (563,456) Adjusted operating expenses 7,123,769$ 3,514,558 $ 10,638,327 $ Fare revenue ratio 4.69% 3.26% 4.22%
2025
2024
City of Fairfield
Transportation Enterprise and Capital Projects Funds
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024
18 Note 8 Pension Plan
A. General Information about the Pension Plan
The Transportation Enterprise Fund participates in the City’s Miscellaneous Pension Plan by sharing the costs related to the pension plan with the City for eligible employees. All plan information described below pertains to the overall plan for the City.
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 employees of the Transportation Enterprise Fund are elig ible to participate in the City’s Miscellaneous Plan. Benefit provisions under the Plans are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of th e pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website at www.calpers.ca.gov.
Benefits Provided - CalPERS provides retirement and disability be nefits, 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 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 st atutorily reduced benefits. All members are eligible for non-duty disability be nefits after 10 years of service. Th e 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, 2025, are summarized as follows:
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% 7.75% Required employer contribution rates 9.280% 9.280% 11.780% Miscellaneous
Contributions - Section 20814(c) of the Calif ornia Public Employees’ Retirement law requires that the employer contribution rates for all public employers ar e 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 the City’s Miscellaneous Plan is determined annua lly on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrue d liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rates of employees.
For the year ended June 30, 2025 and 2024, the Transportation Enterprise Fund’s proportionate share of the City’s contribution to the City’s Miscellaneous Plan was $291,596 and $261,104, respectively.
City of Fairfield
Transportation Enterprise and Capital Projects Funds
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024
19 Note 8 Pension Plan (continued)
B. Net Pension Liability
As of June 30, 2025 and 2024, the Transportation Enterp rise Fund reported a liability of $2,630,141 and $3,000,009, respectively, for its proportionate share of the City's ne t pension liability. The June 30, 2025 net pension liability of the City’s Misce llaneous Plan was measured as of J une 30, 2024 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2023 rolled forward to June 30, 2024. The Transportation Enterprise Fund’s proportion of the City's net pension liability was based on the Transportation Enterprise Fund’s fiscal year 2024 actual contributions to the City's pension plan relative to the total contribution of the City’s Miscellaneous Plan.
The June 30, 2024 net pension liability of the City’s Miscellaneous Plan was measured as of June 30, 2023 and the total pension liability used to calculate the net pen sion liability was determined by an actuarial valuation as of June 30, 2022, rolled forward to June 30, 2023. The Transportation Enterprise Fund’s proportion of the City's June 30, 2023 net pension liability was based on the Transportation Enterp rise Fund’s fiscal year 2023 actual contributions to the City's pension plan relative to the total contribution of the City’s Miscellaneous Plan.
At June 30, 2025 and 2024, the Transportation Enterprise Fund’s proportion of the City’s Miscellaneous Plan was 1.95% and 2.24% respectively.
Actuarial Assumptions - The total pension liability in the June 30 , 2023 and 2022 Miscellaneous Plan actuarial valuations were determined using the following actuarial assumptions:
2025 2024
Valuation Date June 30, 2023 June 30, 2022
Measurement Date June 30, 2024 June 30, 2023
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 Varies by entry ag e and service Varies by entry age and service Mortality (2) Derived using CalP ERS’ Derived using CalPERS’ Membership Data for all Funds Membership Data for all Funds (1) The mortality table used was developed based on CalPERS-specific data. The probabilities of mortality are based on the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. Mortality rates incorporate full 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 2021 experience study from November 2021 that can be found on the CalPERS website.
City of Fairfield
Transportation Enterprise and Capital Projects Funds
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024
20 Note 8 Pension Plan (continued)
Discount Rate – As of June 30, 2025 an d 2024, the discount ra tes used to measure th e total pension liability were both 6.90% for the Ci ty’s Miscellaneous Plan. The projection of cash flows used to determine the discount rate assumed that contributions from pl an 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 pl an investments was determin ed 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 took into account both short-term and long- term market return expectations. Using historical re turns of all of the funds’ asset classes, expected compound (geometric) returns were calculated over the next 20 years using a buil ding-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 followed:
Asset Class
Asummed asset
allocation
Real Return
(1) (2)
Asummed asset
allocation
Real Return
(1) (2)
Global Equity - Cap-weighted 30.0% 4.54% 30.0% 4.54%
Global Equity - Non-Cap-weighted 12.0% 3.84% 12.0% 3.84% Private Equity 13.0% 7.28% 13.0% 7.28%
Treasury 5.0% 0.27% 5.0% 0.27%
Mortgage-backed Securities 5.0% 0.50% 5.0% 0.50%
Investment Grade Corporates 10.0% 1.56% 10.0% 1.56%
High Yield 5.0% 2.27% 5.0% 2.27%
Emerging Market Debt 5.0% 2.48% 5.0% 2.48%
Private Debt 5.0% 3.57% 5.0% 3.57%
Real Assets 15.0% 3.21% 15.0% 3.21%
Leverage -5.0% -0.59% -5.0% -0.59%
Total 100% 100%
(1) An expected inflation of 2.30% used for this period. (2) Figures are based on the 2021 Asset Liability Management Study. 2025 2024
City of Fairfield
Transportation Enterprise and Capital Projects Funds
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024
21 Note 8 Pension Plan (continued)
Sensitivity of the Transportation Enterprise Fund’s prop ortionate share of the City’s Net Pension Liability to Changes in the Discount Rate - As of June 30, 2025 and 2024, the following presents the net pension liability of the Transportation Enterprise Fund’s propor tionate share of the City of Fairfi eld’s net pension liability as of the measurement date, calculated using the discount rates of 6.90% for both years, as well as what the Transportation Enterprise Fund’s proportionate share of the City’s net pension liability woul d be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate:
2025 2024
1% Decrease 5.90% 5.90%
Net Pension Liability 3,711,293 $ 4,189,466 $ Current Discount Rate 6.90% 6.90%
Net Pension Liability 2,630,141 $ 3,000,009 $ 1% Increase 7.90% 7.90%
Net Pension Liability 1,735,385 $ 2,015,354 $
Pension Plan Fiduciary Net Position - Detailed information about the City’s collective pension plans’ fiduciary net position is available in the separately issued CalPERS financial report.
C. Pension Expense and Deferred Outflows/Inflows of Resources Related to Pensions
For the years ended June 30, 2025 and 2024, the Transportation Enterprise Fund recognized pension expense of $195,299 and $417,049, respectively. At June 30, 2025 and 2024, the Transportation Enterprise Fund reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Pension contributions subsequent to measurement date 291,596$ 261,104 $ Differences between actual and expected experience 148,664 106,105 Changes in assumption 86,574
Change in proportion (376,843) $ 19,798 (339,084) $ Net differences between projected and actual earning on plan investments 82,095 284,586
Total 522,355$ (376,843) $ 758,167 $ (339,084) $ 2025 2024
The amount of $291,596 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2026. The amount reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
Fiscal
Year Ended
2026 (184,487)$
2027 93,078
2028 (24,025)
2029 (30,650)
Total (146,084)$
City of Fairfield
Transportation Enterprise and Capital Projects Funds
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024
22 Note 9 Contingent Liabilities
Federal and State grant funds were received by the City to be expended for specific purposes that are subject to review and audit by the grantor agencies. Such audits co uld lead to a request for reimbursement for expenditures disallowed under the terms of the grants. The amount, if any, of expenditures that may be disallowed by the granting agencies related to this program cannot be dete rmined at this time, althou gh the City expects such amounts, if any, to be immaterial.
Note 10 Risk Management
The City is exposed to various risk of torts, theft of, damage to, and dest ruction of assets, errors and omissions, injuries to employees and natural disasters. The City is pa rtially self-insured for work ers’ compensation insurance with $750,000 retention per occurrence and general liability coverage with $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 insu rance, short-term disability insurance, other post- employment benefits (OPEB) and dental insurance coverage programs. All funds participate in the City’s risk management program.
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 th e California State Association of Countie s Excess Insurance Authority, a risk sharing pool of California public agencies, dedicated to controlling losses and providing effective risk management.
For general liability, the City is a memb er of the California Joint Powers R isk Management Auth ority (CJPRMA), a joint exercise of powers agency which provides the City with additional $40,000,000 liability coverage over and above the self-insured retention of $750,000. A property insurance policy is purchased by the member entities of CJPRMA. The deductible amount is $250,000. The CJPRMA is a legal entity separate and distinct from its member entities, as permitted by the California Government Code. Please refer to the City ’s Annual Comprehensive Financial Report for additional information regarding the City’s self-insured program.
City of Fairfield
Transportation Enterprise Fund
Required Supplementary Information
Schedule of the Transportation Enterprise Fund’s Proportionate Share Of the City’ Miscellaneous Plan Net Pension Liability
23 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Transportation Enterprise Fund's proportion to the City's net pension liability 2.62% 2.61% 2.76% 2.87% 3.26% 3.14% 2.89% 2.74% 2.24% 1.9 5% Transportation Enterprise Fund's proportion share of the City's net pension liability 1,737,605 $ 2,061,010 $ 2,394,419 $ 2,434,218 $ 2,657,008 $ 2,892,942 $ 1,873,582 $ 3,479,127 $ 3,000,009 $ 2,630,141 $ Covered payroll (from prior year) 642,096 650,352 661,510 716,042 790,193 953,437 963,306 927,181 960,935 808,914 Transportation Enterprise Fund's proportion share of the City's net pension liability as a percentage of covered payroll - employee payroll 270.61% 316.91% 361.96% 339.95% 336.25% 303.42% 194.50% 375.24% 312.20% 325.14% Miscellaneous Plan fiduciary net position as a percentage of the total pension liability 75.96% 72.24% 71.05% 71.81% 71.32% 70.27% 80. 81% 68.19% 67.82% 69.14% Measurement date 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022 6/30/2023 6/30/2024 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 d iscount liabilities was informed by the long-term projected portfolio return. In addition, demographic assumptions and the inflation ra te 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.
Last Ten Years
City of Fairfield
Transportation Enterprise Fund
Required Supplementary Information
Schedule of Contributions
24 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Actuarially determined contributions 128,994 $ 145,721 $ 173,526 $ 213,754 $ 295,595 $ 310,676 $ 322,073 $ 345,686 $ 261,104 $ 291,596 $ Contributions in relation to the actuarially determined contributions (128,994) (145,721) (173,526) (213,754) (295,595) (310,676) (322,073) (345,686) (261,104) (291,596) Contributions deficiency (excess) - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ Covered payroll (from current year) 650,352 $ 661,510 $ 716,042 $ 790,193 $ 953,437 $ 963,306 $ 927,181 $ 960,935 $ 808,914 $ 740,269 $ Contributions as a percentage of covered payroll 19.83% 22.03% 24.23% 27.05% 31.00% 32.25% 34.74% 35.97% 32.28% 39.39% Last Ten Years
City of Fairfield
Transportation Enterprise Fund
Schedules of Operating Expenses by Function
For the Years Ended June 30, 2025 and 2024
25 2025 2024
Operations:
Services 2,819,831$ 1,329,001$
Electricity, fuels and lubricants 512,612 556,041 Casualty and liability costs 462,462 365,195 Utilities 245,939 233,513
Purchased transportation 4,166,164 3,834,219 Materials and supplies 1,472 6,012
Miscellaneous 32,199 10,639
Total operations 8,240,679 6,334,620
Vehicle maintenance:
Services 630,751 2,223,606
Total vehicle maintenance 630,751 2,223,606 General and administration:
Salaries 537,063 495,678
Fringe benefits 318,746 450,406
Services 1,160,506 1,128,714
Materials and supplies 4,027 2,892
Miscellaneous 2,521 2,411
Total general and administration 2,022,863 2,080,101 Transfers out:
Transfers out 35,328 35,863
Total transfers out 35,328 35,863
Depreciation and amortization 688,237 563,456 Total operating expenses 11,617,858$ 11,237,646$ 6 Hutton Centre Drive, Suite 1200
Santa Ana, California 92707
REPORT ON INTERNAL CONT
ROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND
OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS, THE TRANSPORTATION DEVELOPMENT ACT, CALIFORNIA GOVERNMENT CODE §8879.55,
STATE SENATE BILL 88 (2007)
Independent Auditor’s Report
To the Board of Directors
of the City of
Fairfield
Fairfield, California
We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to fina ncial audits contained in Government Auditing Standards , issued by the Comptroller General of the United States (Government Auditing Standards), the financial statements of the Transportation Capital Projects Fund and the Transportation Enterprise Fund of the City of Fairfield, California (the City), as of and for the year ended June 30, 2025, and the related notes to the fina ncial statements, which collectively comprise the City’s Transportation Development Act Article 4 and 8 Program’s (TDA Program) b asic financial statements and have issued our report thereon dated December 16, 2025. Our re port includes an emphasis of matter paragraph noting that the financial statements present only the Transportation Ca pital Projects Fund and the Transportation Enterprise Fund and do not purport to and do not present fairly the financial position of the City as of June 30, 2025.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial stat ements, 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 cont rol. Accordingly, we do not express an opinion on the effectiveness of City’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assi gned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material wea knesses or significant deficiencies may exist that were not identified.
26 To the Board of Directors
of the City of Fairfield
Fairfield, California
27 Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the TDA Program's financial statements are free from material misstatement, we performed tests of its complian ce with certain provisions of laws, regulations, contracts, and grant agreements, including the applicable provisions of §6666 and §6667 of Title 21, Chapter 3, Subchapters 2 of the California Code of Regulations, California Govern ment Code §8879.55 (Public Tr ansportation Modernization, Improvement, and Service Enhancement Account), and California State Senate Bill 88 (2007) et seq., noncompliance with which could have a direct and material effect on th e 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 or §6666 and §6667 of Title 21 of the California Code of Regulations, California Government Code §8879.50 and California State Senate Bill 88(2007), et seq.
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 entit y’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.
Santa Ana, California
December 16, 2025
TDA Programs
Schedule of Findings and Questioned Costs
For the Year Ended June 30, 2025
28 A. Current Year Findings
No current year findings were reported.
B. Prior Year Findings
Finding 2024-001 Systems Access Reviews
Type of Finding: Significant Deficiency in Internal Control over Financial Reporting Criteria:
Management is responsible for estab lishing 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 responsibiliti es, removing access when those individuals no longer require it, and reviewing the assigned access for conflicts with segregation of duties.
Condition:
There was no documentation of the review of user access in Tyler to verify the appropriateness of permissions based on their role and job duties. We corroborated with City employees that a review was performed, but there was no documentation of the review and the results of the review.
Cause:
The City’s procedures do not include documenting the results of its periodic review of user access in Tyler.
Effect:
By not reviewing the user access in Tyler, there is an increased risk of individuals having inappropriate access and conflicting segregation of duties which increases the ri sk of fraud or error occurring within the accounting system and not being identified by management.
Recommendation:
We recommend that management formally document their periodic review of users and their access granted in Tyler to ensure that their current assigned access in appropriate for their position and responsibilities.
Views of Responsible Officials:
The City hired an expert to review all permissions and build a robust workflow model, this review and implementation was completed in November 2024, and while the city has consistently been reviewing permissions in the past there were too many changes made over the course of the first year of implementation to formally document. When the City conducts future periodic reviews, the process will be documented to reflect the outcome of the review.
Status:
Corrective action has been implemented.