TABLE OF CONTENTS
PAGE
Overview
Debt Management Program .......................................................................................................................... 1 Debt Issued During Fiscal Year 2023 ................................................................................................... 1 Debt Program Work Plan for Fiscal Year 2024 ................................................................................... 1 Debt Administration ................................................................................................................................. 2 Debt Management Projects ................................................................................................................... 2 Debt Management Policies ........................................................................................................................... 3 Citywide Debt Service .................................................................................................................................... 5 Rating Agency Overview/Actions ................................................................................................................. 7 Debt Financing Team ..................................................................................................................................... 8 Trustee Activity ................................................................................................................................................ 9 Investment Activity .......................................................................................................................................... 10 Debt Detail Report ............................................................................................................................. 11 Comparative Statistics
Municipal Financial Ratio Analysis: Fresno vs. California Top 10 by Population ................................. 16 Peer Analysis to Largest 10 Cities ............................................................................................................... 16 Debt Coverage
Airport Enterprise ............................................................................................................................................ 17 Water Enterprise ............................................................................................................................................. 18 Wastewater Enterprise ................................................................................................................................... 19 Appendix - Ratings History
Lease Revenue Bonds ................................................................................................................................... 20 Airport Revenue Bonds .................................................................................................................................. 20 Water Revenue Bonds ................................................................................................................................... 21 Wastewater (Sewer) Revenue Bonds ......................................................................................................... 21 CITY OF FRESNO | ANNUAL COMPREHENSIVE DEBT REPORT FISCAL YEAR ENDED JUNE 30, 2023 Overview
This section of the report provides an overview of the Debt Management Program, Debt Management Policies, Rating Agency Relations and Credit Maintenance, Composition of the Debt Financing Team, and Trustee activity during the year.
The City has a variety of financing tools at its disposal, with each one having its own benefits that may work best for a particular financing. Short-term debt options include Tax and Revenue Anticipation Notes, Commercial Paper, Bond Anticipation Notes, and Lines of Credit. Long-term debt options included voter approved General Obligation Bonds, Revenue Bonds, Loans, and Capital Leases. Each tool is discussed in detail in the City’s Debt Management Policies. The Annual Debt Report does not include discussions on City’s obligation for pension and other post-employment benefits.
A. Debt Management Program
Debt Management, a section within the Finance Department, is responsible for managing both the debt issuance process and subsequent debt administration for all City borrowings. This section of the report provides an overview of debt issuance in fiscal year 2023, the debt program work plan for fiscal year 2024, debt administration and debt management projects that have been completed, are currently underway, or are planned for fiscal year 2024.
1. Debt Issued During Fiscal Year 2023
Fiscal year 2023 debt issuance totaled $106.9 million, composed of the following:
• The City issued $91.1 million in Airport Revenue Bonds for the expansion of the terminal and construction of a new federal inspection station at Fresno Yosemite Airport; • Equipment lease purchases of $5.8 million placed directly with Banc of America Public Capital Corp. for police and fire vehicles, and $0.9 million for three new trolleys; and • $9.1 million drawn down from the Drinking Water State Revolving Loan Fund for the northeast Water Treatment facility to the Water Division from the California State Water Resources Control Board.
2. Debt Program Work Plan for Fiscal Year 2024
New Bonds - Debt Management staff continues to look at existing debt to find opportunities to save interest expense. In August 2023, Staff began working with the Fire Department on issuing new bonds to build two new fire stations.
New Loans - Debt Management staff remains available to assist departments with their financing needs during fiscal year 2024.
New Leases - The City has budgeted for new lease payments in fiscal year 2024 totaling $0.9 million to fund primarily public safety vehicles. The City currently has two Master Leases: one with Dell Financial Corporation for computers and Banc of America Public Capital Corp. for all other equipment. In August 2023, Staff began working with the Police Department on the financing of a new helicopter to replace one of the two existing helicopters.
CITY OF FRESNO | ANNUAL COMPREHENSIVE DEBT REPORT FISCAL YEAR ENDED JUNE 30, 2023 1 3. Debt Administration
After debt has been issued, Debt Management is responsible for administering the debt portfolio. Section I.E of this report, Debt Financing Team, provides a detailed discussion of debt administration tasks performed by Debt Management staff.
New reporting requirements were established in fiscal year 2015 by the California Debt and Investment Advisory Commission (CDIAC) of the California State Department of the Treasury requiring the filing of a Report of Proposed Debt Issuance by any agency that is increasing debt, followed up with a Report of Final Sale. These reporting requirements were codified on September 12, 2016 through California Senate Bill 1029 (SB 1029). In the past, issuers of the original debt instruments were required to file these reports, and borrowers of the debt from the issuer were not required to report. These requirements make it imperative that Debt Management staff be involved in any and all loan transactions that the City is considering.
4. Debt Management Projects
In addition to debt issuance and administration, Debt Management staff serves in a financial advisory role to other City departments and works on other projects as necessary. Various projects and administration efforts are described below and on the following pages:
Master Equipment Lease Purchase Agreement (MELPA) - The City uses a single lender for all of its equipment financing needs. The current MELPA with Banc of America Public Capital Corp. (BAPCC) will expire on December 31, 2024. As of June 30, 2023 the City has borrowed $11.1 million of its $35 million capacity under the MELPA.
TEFRA Hearings for Conduit Financings - A Tax Equity and Financial Reform Act (TEFRA) hearing is mandated by the IRS to provide a reasonable opportunity for interested individuals to express their views, either orally or in writing, on the issuance of bonds and the nature of the improvements and projects for which bond funds will be allocated. The TEFRA hearing is held in the jurisdiction in which the facilities constructed by bond proceeds are located, and must be held prior to approval by the agency issuing the bonds.
On December 28, 2018, the IRS released updated rules for noticing TEFRA Public Hearings that allows the City to publish TEFRA Public Hearing notices on the City Clerk's website. Previously, the City had to publish TEFRA Public Hearing notices in the daily newspaper of largest circulation in the project location.
In addition to the location of the publication, the IRS reduced the minimum number of days that the notice has to be published from at least 14 days prior to the hearing date to at least 7 days prior to the hearing date. These changes substantially minimize the costs of publication and timing for preparation.
The City Council of the City of Fresno held a TEFRA hearing on November 17, 2022 for a proposed bond issuance by the Michigan Finance Authority to be loaned to Trinity Health Corporation, an Indiana nonprofit corporation and sole corporate member of Saint Agnes Medical Center to be used for financing or refinancing the costs of acquisition, construction, improvement, and equipping of health care facilities owned and operated by Saint Agnes Medical Center. Debt Administration staff assisted in the preparation and publication of documents for this TEFRA Hearing.
CITY OF FRESNO | ANNUAL COMPREHENSIVE DEBT REPORT FISCAL YEAR ENDED JUNE 30, 2023 2 The City Council of the City also held a TEFRA hearing on April 27, 2023 for the proposed bond issuance by the California Enterprise Development Authority (CEDA) to be loaned to United Health Centers of the San Joaquin Valley to be used for financing the acquisition, construction, installation and equipping of a health care facility located at 4615 & 4623 North First Street.
On June 15, 2023 the City Council held a TEFRA hearing for a proposed bond issuance by the California Municipal Finance Authority (CMFA) to be loaned to Broadway Plaza Family Apartments, LP in partnership with APEC International, LLC (it's developer) for the purpose of financing the acquisition, construction, installation and equipping of the Hotel Fresno Apartments in downtown Fresno.
The City does not issue debt for these projects, but assists other agencies that are formed for this specific type of financing by holding a public hearing to hear public comments regarding the project as required by the Act.
State Revolving Loan Activity
On August 19, 2015, the City entered into a 30-year agreement to borrow $70.6 million from the California State Water Resources Control Board’s Clean Water State Revolving Fund for construction of a recycled water distribution system in the southwest quadrant of the City. The interest rate is fixed at
1.0% for the term of the loan. Principal and interest is due in semiannual installments on the amount received by the City through the interest payment date. As of June 30, 2023, the City has received $68.3 million in proceeds. Of this amount, $13.8 million is considered a grant and is not required to be repaid. Debt service payments will be funded from revenues of the Sewer Enterprise. The Project is now complete and annual debt service payments are $2.1 million.
On November 26, 2016, the City entered into a 30-year agreement to borrow $14.0 million from the California State Water Resources Control Board for construction of a new surface water treatment facility in the northeast portion of the City. The interest rate is fixed at 1.6% for the term of the loan. Principal and interest is due in semiannual installments on the amount received by the City through the interest payment date. As of June 30, 2023, the City has received $13.7 million in proceeds. Debt service payments will be funded from revenues of the Water Enterprise. The Project is now complete and annual debt service payments are $0.6 million.
Airport Bonds - Staff worked with the Airport Department to issued $91.1 million in Airport Revenue Bonds on May 25, 2023 for the expansion of the terminal and construction of a new federal inspection station at Fresno Yosemite Airport. The federal inspection station will replace a temporary facility that has been used for 20 years. The expanded terminal will accommodate increased air traffic that has increased considerabl since 2020.
B. Debt Management Policies
The City Council adopted the Taxpayer Protection Act on December 3, 2009 in order to institute formal debt financial management policies. The Act was amended on February 25, 2010 and revised again on April 6, 2017 with the latest revision updating language and bringing the policy into compliance with SB 1029. The Debt Management Policies (“Policies”) establish parameters for when and how the City may CITY OF FRESNO | ANNUAL COMPREHENSIVE DEBT REPORT FISCAL YEAR ENDED JUNE 30, 2023 3 enter into debt obligations. The Policies permit sufficient flexibility to allow the City to take advantage of opportunities that may arise. Objectives of the Policy are:
• Minimize debt service and issuance costs;
• Provide a scheduling component (planning);
• Maintain access to cost-efficient borrowing;
• Achieve the highest practical credit rating;
• Full and timely repayment of debt;
• Balance use of pay-as-you-go and debt financing;
• Maintain full and complete financial disclosure and reporting; and • Ensure compliance with applicable State and Federal laws.
The primary goal of the Policies is to achieve the highest practical credit ratings and strive to elevate and maintain those ratings in order to sustain cost-effective access to capital markets. In order to fulfill this goal and these objectives, certain ratios have been identified to quantify the City’s performance relative to direct debt. These measurements are as follows:
• Net Direct Debt (tax-supported General Fund debt, net of self-supporting and revenue anticipation debt) to Assessed Value shall not exceed 3%;
• Percentage of Principal on Net Direct Debt Retired in ten years shall average 35%; and • Net Direct Debt as a percentage of General Fund ("GF") Appropriation shall be less than 10%.
The table on the next page is an update of the table in Section 6 of the Debt Policies.
CITY OF FRESNO | ANNUAL COMPREHENSIVE DEBT REPORT FISCAL YEAR ENDED JUNE 30, 2023 4 Key Debt Ratios Description/Trend City of Fresno
FY 2023 Debt
Ratios
Net Direct Debt to Assessed Property Value %
(Favorable Trend=Lower than 3%) 0.06%
% Of Principal Net Direct Debt Retired in Ten Years GF Backed (2022 - 2023) 54.8% (Favorable Trend = Greater than 35%) GF Paid (2022 - 2023) 50.8% Net Direct Debt Service as % of General Fund Appropriations (Favorable Trend = Less than 10%) 7.01%
In addition to this table, an additional quantitative goal stated in the Debt Policies is that the average Percentage of Principal on Net Direct Debt Retired in 15 years should be at least 40%. During fiscal year 2023, this percentage was 64.05% on GF Backed Principal and 50.84% on GF Paid Principal.
C. Citywide Debt Service
The graph below illustrates the size of the City’s debt portfolio and the dollar volume of debt issued in each of the last ten years. Increases in New Issuances between fiscal year 2015 and fiscal year 2018 were due to Water and Sewer Divisions of the Department of Public Utilities borrowing funds from the California State Water Resources Control Board to meet conservation and recycling requirements imposed by the State. The reduction in Business-Type debt in fiscal year 2019 and fiscal year 2020 was due to the defeasance of $132.5 million in fiscal year 2019 of Sewer System Revenue Bonds, Series 2008A, and then the subsequent payoff of $27.3 million in fiscal year 2020. The reduction in Business- Type debt in fiscal year 2021 was due to the defeasance of $27.6 million of all Water System Revenue Bonds 2010 Series A-1. The City issued Lease Revenue Bonds in the amount of $17.1 million in fiscal year 2021 for the purpose of constructing an Animal Services Facility. In fiscal year 2023, the Airport Department issued $91.1 million to construct a new terminal and federal inspection station.
City Debt Portfolio and Debt Issuance History
Fiscal Year 2013-14 through Fiscal Year 2022-23
Outstanding Debt (in
Millions)
New Issuances
($ Millions)
General Governmental Business-Type
RDA/Successor New Issuances
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
$0
$200
$400
$600
$800
$1,000
$1,200
$0
$50
$100
$150
$200
$250
$300
CITY OF FRESNO | ANNUAL COMPREHENSIVE DEBT REPORT FISCAL YEAR ENDED JUNE 30, 2023 5 General Governmental includes debt that is not Business-Type (paid out of the Water, Sewer and Airports enterprise funds), but is paid by either the General Fund or under special circumstances, Special Revenue Funds like the Gas Tax Fund specifically designated for the payment of debt service.
The City of Fresno’s general obligation debt capacity is spelled out in the City charter, Article XII, Section 1213. The capacity is 20% of the assessed valuation of all property within the boundaries of the City of Fresno. The capacity for fiscal year 2023 is calculated as follows:
Assessed valuation as of 06/30/2023 $ 45.7 billion
Debt limit X 20%
City’s Debt Limit $ 9.1 billion
The Debt Limit is specifically related to general obligation debt, which is debt that is issued as a result of an election (voter-approved debt). Debt Limit defines voter-approved debt that could legally be outstanding rather than what the City can afford to issue. The City of Fresno has no voter-approved debt.
Additionally, the City has never had total debt outstanding of more than $1.1 billion.
As of June 30, 2023, the City had one general obligation bond, several Lease Revenue Bonds (LRBs), capital loans and capital leases outstanding that are paid in whole or part by the General Fund. The chart below shows only General Fund debt service:
Period Ending
General Fund Debt Service (in Millions)
LRBs 2002 POBs Leases Loans
20242025202620272028202920302031203220332034203520362037203820392040204120422043204420452046 $0
$5
$10
$15
$20
$25
$30
$35
$40
$45
Fiscal year 2023 General Fund Debt Service was reduced through normal debt service payments.
CITY OF FRESNO | ANNUAL COMPREHENSIVE DEBT REPORT FISCAL YEAR ENDED JUNE 30, 2023 6 The chart below shows all of the City’s debt and the source of funding that backs it:
Citywide Debt Service (in Millions)
Water Enterprise Sewer Enterprise Airport Enterprise
General Government RDA/Successor
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
2047
2048
2049
2050
2051
2052
2053
2054
$0
$15
$30
$45
$60
$75
$90
D. Rating Agency Overview/Actions
The City’s debt is rated by the three primary rating agencies (Moody’s, Standard & Poor’s, and Fitch).
Below is a scale of the ratings by each agency:
MOODY’S FITCH/S&P
Rating Rating Description Rating Rating Description
Aaa Strongest AAA Highest
Aa1, Aa2, Aa3 Very Strong AA+, AA, AA- Very High
A1, A2, A3 Above Average A+, A, A- High
Baa1, Baa2, Baa3 Average BBB+, BBB, BBB- Good
Ba1, Ba2, Ba3 Below Average BB+, BB, BB- Speculative
B1, B2, B3 Weak B+, B, B- Highly Speculative
Caa1, Caa2, Caa3 Very Weak CCC+, CCC, CCC- High Default Risk CITY OF FRESNO | ANNUAL COMPREHENSIVE DEBT REPORT FISCAL YEAR ENDED JUNE 30, 2023 7 The ratings for the City’s General obligation, lease revenue, enterprise debt and the Agency’s tax allocation bonds are summarized in the Appendix. A brief overview of the City’s current general ratings (equivalent to a general obligation bond) is provided in the section below.
YEAR MOODY’S S&P FITCH
Rating Outlook Rating Outlook Rating Outlook
2023 A1 ↑ Stable AA- ↑ Stable A+ ↑ Positive
2022 A2 Stable A+ Stable A Positive
2021 A2 ↑ Stable A+ Stable A Positive
2020 A3 Stable A+ Stable A Stable
2019 A3 Stable A+ Stable A Stable
2018 A3 Stable A+ Stable A Stable
2017 A3 Stable A+ ↑ Stable A Stable
2016 A3 Stable BBB- Stable A ↑ Stable
2015 A3 ↑ Stable BBB- Stable BBB+ Negative
2014 Baa1 ↓ Stable BBB- Stable BBB+ Negative
Arrows indicate an increase ( á) or decrease (â) from the prior rating.
Fiscal year 2023 was the first time in the City's history where all three major rating agencies upgraded its rating. S&P upgraded the rating to AA- from A+ on November 14, 2023. Moody's followed on December 19, 2023 with their upgrade to A1 from A2, with Fitch following on May 11, 2023 with their upgrate to A+ from A.
E. Debt Financing Team
The City of Fresno uses several individuals/organizations with expertise in their specific function to manage and administer the debt. Day-to-day administration is completed in-house by City staff, including the Controller, Assistant Controller, a Principal Accountant in charge of debt administration and an Accountant/Auditor. The Debt Administration section of the Finance Department manages day-to-day activities; including addressing monthly, semi-annual and annual state and federal reporting requirements, reconciling trustee statements, monitoring arbitrage calculations and continuing disclosure, preparing debt sections of the Annual Comprehensive Financial Report, and budgeting for debt.
The City contracts with various banks to provide trustee, paying agent, and escrow agent services.
Selection of the service provider is done through a Request for Qualifications at the time new debt is being considered. Currently, the City uses Bank of New York Mellon Corporate Trust, Wells Fargo Corporate Trust Services, and Bank of America, NA. Annual reporting requirements such as arbitrage calculations and continuing disclosure requirements are completed by Willdan Financial Services in coordination with the Principal Accountant in charge of debt administration. The City has chosen to use outside entities for arbitrage calculation and continuing disclosure reporting in order to have an experienced third party ensure accuracy and integrity of the reports and calculations.
The issuance of new debt can be very complex with many different areas of expertise needed. So, the City of Fresno has chosen to use financing teams consisting of in-house City staff with expertise relating CITY OF FRESNO | ANNUAL COMPREHENSIVE DEBT REPORT FISCAL YEAR ENDED JUNE 30, 2023 8 to the projects which are to be funded, along with Finance Department and City Attorney’s Office staff with expertise in their respective fields.
In addition to internal staff, the City engages KNN Public Finance as its expert financial adviser, Orrick Herrington & Sutcliff as its bond counsel, and Schiff Hardin as its disclosure counsel. Underwriters are selected by putting together an underwriting pool through a Request for Qualifications process conducted by the financial adviser. A firm or the firms from that pool which are selected are determined by City staff (with input from the financial adviser) to have the best expertise in the projects that will be financed.
F. Trustee Activity
Trustees provide banking services for debt and act as a conduit between the City of Fresno and their client, the bondholders and/or investors. Debt documentation typically requires that a trustee be selected to hold funds on behalf of the investor in order to ensure that the debt is used for its intended purpose.
Although selected and paid for by the City of Fresno, the trustee works for the investors.
Below is a list of each trustee and the debt instruments for which they provide services:
Trustee Debt Instrument
Fees Paid to
Trustee in
FY2023
Interest/ Dividends
Earned in FY2023
Bank of New
York Mellon
Corporate Trust
Fresno JPFA 1998 Lease Revenue Bonds $37,349 $674,368 1999 Community Facilities District #4
2001 Community Facilities District #5
2002 Pension Obligation Bonds
Fresno Redevelopment Agency 2003 TARB
2003 Community Facilities District #7
Fresno JPFA 2004 Lease Revenue Bonds
Fresno JPFA 2008 Lease Revenue Bonds
Fresno JPFA 2017 Lease Revenue Bonds
Fresno JPFA 2020 Lease Revenue Bonds
All City of Fresno Airport Bonds
All City of Fresno Sewer Bonds
All City of Fresno Water Bonds
Wells Fargo
Corporate Trust
Fresno JPFA 2001 Lease Revenue Bonds $4,800 $74,176
State Water Resources Control Board Loans
JPFA = Fresno Joint Powers Financing Authority; TARB = Tax Allocation Revenue Bonds CITY OF FRESNO | ANNUAL COMPREHENSIVE DEBT REPORT FISCAL YEAR ENDED JUNE 30, 2023 9 G. Investment Activity
While bond funds are held in Trust, the City is encouraged to invest them in a manner that is consistent with the Permitted Investments of the bond transaction and yields a favorable rate of return to maximize proceeds available to the City.
With the payoffs of large Sewer and Water bonds, the purchase of surety policies in lieu of funded reserve funds on new bond issuances, and historically low interest rates, funds available for investment were depleted to the point that locking into investments at current investment rates was no longer considered an option for bond proceeds held in trust. All bond proceeds held in trust are now invested in money market funds earning a very low rate of return.
During fiscal year 2023, $0.7 million in interest and dividends was earned on bond proceeds held in trust.
All earnings were used to pay a portion of the debt service on City bonds.
CITY OF FRESNO | ANNUAL COMPREHENSIVE DEBT REPORT FISCAL YEAR ENDED JUNE 30, 2023 10 Debt Detail Report
(sorted by Maturity Date)
The following is a description of Long-Term Debt, Excluding Capital Lease Obligation, which had activity in 2023 (in thousands):
Governmental
Revenue and Other Bonds
Fresno Joint Powers
Financing Authority:
Lease Revenue
Refunding Bonds 2017
A&B, No Neighborhood
Left Behind (NNLB)
A = $11,010
tax-exempt; B
= $1,940
taxable
Refinance No
Neighborhood Left
Behind Projects
N/A 5/10/2017 4/1/2023 Repayment payable solely by revenues pledged under Master Facilities Sublease agreement, primarily Base
Rental Payments. Principal due annually, interest due
semiannually. Lease revenue of $2,964 was equal to debt service in 2023.
N/A 0 0 0 0 2,964
Fresno Joint Powers
Financing Authority:
Lease Revenue
Refunding Bonds
(Chiller) 2017 A, City Hall
Chiller
A = $2,710
tax-exempt
Refinance City Hall
Chiller
5.000% 5/10/2017 4/1/2024 Repayment payable solely by revenues pledged under Master Facilities Sublease agreement, primarily Base
Rental Payments. Principal due annually, interest due
semiannually. Lease revenue of $746 was equal to debt
service in 2023.
$2,100 2,156 (56) 2,100 2,205 746
Taxable Pension
Obligation Bonds 2002
$205,335
taxable
Refund 2000
Taxable Pension
Obligation Bonds
6.55% 2/21/2002 6/1/2029 Repayment of bonds not limited to any special source of City funds. Principal due annually, interest due
semiannually. City uses funds throughout the City based on full-time employees assigned to funds. For the General Fund, the City uses dedicated Property Tax Override
(PTO) revenue first, and then other General Fund
revenues to make its portion of the bond payment. Other citywide revenues make up the difference between total
debt service and the General Fund portion. During 2023 $14,072 of PTO revenue was used. In addition to PTO
revenue, $0 of General Fund and $2,119 of Enterprise
Fund/Internal Service Fund revenues were used to make
the 2023 debt service payment of $16,191.
$11,065 to
$15,195
$ 78,255 $ 0 $ 78,255 $ 97,141 $ 16,191
Fresno Joint Powers
Financing Authority:
Lease Financing
Refunding 2017 A&B,
City Hall, Garage #7,
Bee Bldg & Granite Park
A = $10,125
tax-exempt; B
= $21,980
taxable
Refinance City Hall,
Parking Garage #7,
Fresno Bee Building
and Granite Park
3.35% to
4.16%
5/10/2017 4/1/2031 Repayment payable solely by revenues pledged under Master Facilities Sublease agreement, primarily Base
Rental Payments. Principal due annually, interest due
semiannually. Lease revenue of $2,361 was equal to debt service in 2023.
$1,750 to
$2,270
15,905 0 15,905 18,912 2,361
Fresno Joint Powers
Financing Authority:
Lease Revenue Bonds
2004 A,B,C, Various
Capital Projects
A = $15,810
tax-exempt; B
= $8,100 tax-
exempt; C =
$28,870
taxable
Calcot Project, Fire
Department
Projects, Downtown
Parking Projects,
Santa Fe Depot
Project, Roeding
Business Park
Project Area, other
capital projects
5.900% 4/28/2004 10/1/2034 Repayment payable solely by revenues pledged under Master Facilities Sublease agreement, primarily Base
Rental Payments. Principal due annually, interest due
semiannually. Lease revenue of $1,533 was equal to debt service in 2023.
$1,050 to
$1,400
8,706 (6) 8,700 10,599 1,533
Fresno Joint Powers
Financing Authority:
Lease Revenue
Refunding Bonds 2017
A, Various Capital
Projects
A = $12,435
tax-exempt
Refinance Various
Capital
Improvement
Projects
5.000% 5/10/2017 4/1/2035 Repayment payable solely by revenues pledged under Master Facilities Sublease agreement, primarily Base
Rental Payments. Principal due annually, interest due
semiannually. Lease revenue of $1,144 was equal to debt service in 2023.
$40 to $1,785 10,582 (1,037) 9,545 13,773 1,144
Fresno Joint Powers
Financing Authority:
Lease Revenue
Refunding Bonds (Parks
Projects) 2017 A, Parks
Impact Fee Projects
A = $22,965
tax-exempt
Refinance
Improvements to
Various Park
Facilities
5.000% 5/10/2017 4/1/2038 Repayment payable solely by revenues pledged under Master Facilities Sublease agreement, primarily Base
Rental Payments. Principal due annually, interest due
semiannually. Lease revenue of $1,822 was equal to debt service in 2023.
$885 to
$1,755
21,003 (1,878) 19,125 27,309 1,822
Fresno Joint Powers
Financing Authority:
Lease Revenue
Refunding Bonds 2017
A, Police and Fire/Public
Safety
A = $32,065
tax-exempt
Refinance Public
Safety Capital
Improvement
Projects (Police &
Fire)
5.000% 5/10/2017 4/1/2039 Repayment payable solely by revenues pledged under Master Facilities Sublease agreement, primarily Base
Rental Payments. Principal due annually, interest due
semiannually. Lease revenue of $2,559 was equal to debt service in 2023.
$1,115 to
$2,300
28,923 (2,448) 26,475 38,191 2,559
Series Purpose
Rate
Range Issue Date
Maturity
Date Note
Annual
Principal
Outstanding
Principal
Issuance
Disc/(Prem)
Accreted Int
Net Principal
Due
Payments to
Maturity
Fiscal Year
2023 Debt
Service
Payment
11 Fresno Joint Powers
Financing Authority:
Lease Revenue Bonds
2020 A, Animal Services
Facility
A =
$17,145,000
tax-exempt
Animal Services
Facility
4.00% to
5.00%
11/3/2020 4/1/2046 Repayment payable solely by revenues pledged under Master Facilities Sublease agreement, primarily Base
Rental Payments. Principal due annually, interest due
semiannually. Lease revenue of $1,122 was equal to debt service in 2023.
$415 to
$1,075
$ 18,706 $ (2,331) $ 16,375 $ 25,752 $ 1,122
Revenue and Other Bonds Total $ 184,236 $ (7,756) $ 176,480 $ 233,882 $ 30,442 Notes Payable
HUD: Neighborhood
Streets/Parks
$1,500
Loaned
Section 108 Note to
be used for
improvements to
various
neighborhood
streets & parks
N/A 8/8/2002 8/1/2022 Annual principal payments, semiannual interest payments. N/A $ 0 $ 0 $ 0 $ 0 $ 134 Roeding Business Park $2,441
Loaned
Loaned from the
California
Infrastructure and
Economic
Development Bank
to be used to
complete the
Roeding Business
Park
N/A 3/18/2004 8/1/2033 Secured by Facility Lease on City Hall Annex. Annual principal payments, semiannual interest payments. Paid off in January 2023.
N/A 0 0 0 0 1,354
Notes Payable Total $ 0 $ 0 $ 0 $ 0 $ 1,488
Governmental Total $ 184,236 $ (7,756) $ 176,480 $ 233,882 $ 31,930 Business-Type
Revenue and Other Bonds
Fresno Joint Powers
Financing Authority:
Lease Revenue Bonds
(Conv. Ctr.) 2008 F,
Convention Center
F = $21,410
taxable
Refund a portion of
2006 Convention
Center Bonds &
finance various
Convention Center
improvements
N/A 8/14/2008 4/1/2023 Repayment payable solely by revenues pledged under Master Facilities Sublease agreement, primarily Base
Rental Payments. Principal due annually, interest due
semiannually. During 2023, the City chose to make these lease payments from the General Fund in the amount of
$1,462, which was equal to debt service in 2023. While the City has the right to use any unencumbered funding
source it wishes to use for future lease payments, it is anticipated that General Fund revenues will be used to
make these future payments, which the Authority will then use to make the debt service payment.
N/A 0 0 0 0 1,462
Sewer System Revenue
Bonds 1993 A
A = $196,280
tax-exempt
Rehabilitation and
expansion of the
City's Wastewater
Treatment Facility
N/A 10/6/1993 9/1/2023 Repayment of bonds solely from revenues derived from the operation of the City Sewer System, except connection fees and charges, refundable deposits and capital
contributions. Principal payable annually, interest
semiannually.
N/A 0 0 0 0 905
Fresno Joint Powers
Financing Authority:
Lease Revenue
Refunding Bonds 2017
A, Convention Center
A = $4,260
tax-exempt
Refinance
Convention Center
Improvement
Projects (Phase I)
5.00% 5/10/2017 4/1/2027 Repayment payable solely by revenues pledged under Master Facilities Sublease agreement, primarily Base
Rental Payments. Principal due annually, interest due
semiannually. During 2023 the City chose to make these
lease payments from the General Fund in the amount of
$568, which was equal to debt service in 2023. While the City has the right to use any unencumbered funding
source it wishes to use for future lease payments, it is anticipated that General Fund revenues will be used to
make these future payments, which the Authority will then use to make the debt service payment.
$465 to $540 2,141 (131) 2,010 2,268 568
Fresno Joint Powers
Financing Authority:
Lease Revenue Bonds
1998, Exhibit Hall
Expansion Project
$32,610 tax-
exempt
Construction of an
Exhibit Hall
N/A 9/1/1998 9/1/2028 Current Interest Serial Bonds ($25,395) and Capital Appreciation Serial Bonds ($7,215). Repayment payable
solely by revenues pledged in trust agreement, primarily Base Rental Payments pursuant to a Facilities Lease.
Principal due annually, Interest due semiannually. During 2023, the City chose to make these lease payments from
the General Fund in the amount of $750, which was equal to the debt service payment. All remaining bonds are
Capital Appreciation Bonds, so interest is accreted. While the City has the right to use any unencumbered funding
source it wishes to use for future lease payments, it is anticipated that General Fund revenues will be used to
make future lease payments, which the Authority will then use to make the debt service payment.
$162 to $211 3,841 (2,728) 1,113 4,500 750
Series Purpose
Rate
Range Issue Date
Maturity
Date Note
Annual
Principal
Outstanding
Principal
Issuance
Disc/(Prem)
Accreted Int
Net Principal
Due
Payments to
Maturity
Fiscal Year
2023 Debt
Service
Payment
12 Fresno Joint Powers
Financing Authority:
Lease Revenue
Refunding Bonds 2017
A, Exhibit Hall Expansion
Project Refunding
A = $11,665
tax-exempt
Refinance Exhibit
Hall Expansion
Project
5.00% 5/10/2017 4/1/2029 Repayment payable solely by revenues pledged under Master Facilities Sublease agreement, primarily Base
Rental Payments. Principal due annually, interest due
semiannually. Lease revenue of $1,406, which was equal to debt service in 2023. While the City has the right to use any unencumbered funding source it wishes to use for
future lease payments, it is anticipated that General Fund revenues will be used to make these future payments,
which the Authority will then use to make the debt service payment.
$1,050 to
$1,330
$ 7,688 $ (578) $ 7,110 $ 8,404 $ 1,406
Airport Revenue
Refunding Bonds 2013,
Concourse Expansion
A = $10,810
Non-AMT; B =
$22,820 AMT
(Subject to
Alternative
Minimum Tax)
Refund 2000 Airport
Revenue Bonds
N/A 8/6/2013 7/1/2030 Repayment of bonds solely from operation of the City Airport System. Bond Indenture requires a minimum
$1,600 of PFC Contribution toward annual debt service
from Passenger Facility Charges (PFC). During Fiscal
Year 2023 $1,600 of PFC and $21,256 of eligible Airports operation revenues were used to make the debt service
payment. These bonds were current-refunded with the
2023 Airport Revenue Bonds.
N/A 0 0 0 0 22,856
Fresno Joint Powers
Financing Authority:
Lease Revenue
Refunding Bonds 2017
A, Stadium Project
A = $13,510
tax-exempt
Refinance
MultiPurpose
Stadium Project
5.00% 5/10/2017 4/1/2031 Repayment payable solely by revenues pledged under Master Facilities Sublease agreement, primarily Base
Rental Payments. Principal due annually, interest due
semiannually. During 2023, the City chose to make these lease payments from the General Fund in the amount of
$1,370, which was equal to the debt service payment.
While the City has the right to use any unencumbered
funding source it wishes to use for future lease payments, it is anticipated that General Fund revenues will be used to make future lease payments, which the Authority will then use to make the debt service payment.
$925 to
$1,300
9,635 (815) 8,820 10,917 1,370
Fresno Joint Powers
Financing Authority:
Lease Revenue Bonds
2001 A & B, Stadium
Project
A = $23,615
tax-exempt; B
= $22,235
taxable
Acquire and
construct a
MultiPurpose
Outdoor Stadium
6.93% to
7.03%
6/12/2001 6/1/2031 Repayment payable solely by revenues pledged in trust agreement, primarily Base Rental Payments pursuant to a Facilities Lease. Principal due annually, interest due
semiannually. During 2023, the City chose to make these lease payments from the General Fund in the amount of
$1,815, which was equal to the debt service payment.
While the City has the right to use any unencumbered
funding source it wishes to use for future lease payments, it is anticipated that General Fund revenues will be used to make future lease payments, which the Authority will then use to make the debt service payment.
$1,055 to
$1,700
10,849 (9) 10,840 14,540 1,815
Airport Revenue Bonds
2007, Consolidated
Rental Car Facility
$22,000
taxable
Construction of a
Consolidated Rental
Car Facility and
related
improvements
5.83% 6/14/2007 7/1/2037 Repayment of bonds solely from operation of the City Airport System. While not required under the Bond
Indenture, Airports uses Customer Facility Charge (CFC) revenues first to meet the debt payment, and then uses
other permitted revenues to cover any difference between CFC's and the debt payment. Principal due annually,
interest due semiannually. During Fiscal Year 2023 $1,649 of CFC revenues was used to fully cover the debt service payment.
$570 to
$2,265
$ 19,450 $ 0 $ 19,450 $ 29,917 $ 1,649
Fresno Joint Powers
Financing Authority:
Lease Revenue
Refunding Bonds
(Riverside Golf Course)
2017 A, Riverside Golf
Course
A = $1,615
tax-exempt
Refinance
Improvements to
Riverside Golf
Course
5.00% 5/10/2017 4/1/2038 Repayment payable solely by revenues pledged under Master Facilities Sublease agreement, primarily Base
Rental Payments. Principal due annually, interest due
semiannually. During 2023, the City chose to make these lease payments from the General Fund in the amount of
$128, which was equal to the debt service payment. While the City has the right to use any unencumbered funding
source it wishes to use for future lease payments, it is anticipated that General Fund revenues will be used to
make future lease payments, which the Authority will then use to make the debt service payment.
$65 to $125 1,472 (132) 1,340 1,911 128
Water System Revenue
Bonds (Taxable Build
America Bonds) 2010
A-2, Water
A-2 = $91,340
taxable
Improvements to
the Water System
6.50% to
6.75%
2/3/2010 6/1/2040 Repayment of bonds solely from revenues derived from the operation of the City Water System, except connection fees and charges, refundable deposits and capital
contributions. Principal payable annually, interest
semiannually. During Fiscal Year 2023, a federal Build
America Bonds subsidy of $2,012 was received.
$4,090 to
$7,715
$ 90,418 $ 922 $ 91,340 $ 155,116 $ 6,097
Airport Revenue Bonds
2019, Airport Parking
$35,000
taxable
Construction of a
Parking Garage
3.450% 5/3/2019 7/1/2048 Bonds privately placed with the California Infrastructure and Development Bank (I-Bank). Interest rate includes
3.15% charged by the I-Bank for interest plus 0.30%
charged by the I-Bank as a fee. Repayment of bonds
solely from operation of the City Airport System. Principal due annually, interest due semiannually.
$830 to
$1,802
32,660 0 32,660 49,252 1,945
Series Purpose
Rate
Range Issue Date
Maturity
Date Note
Annual
Principal
Outstanding
Principal
Issuance
Disc/(Prem)
Accreted Int
Net Principal
Due
Payments to
Maturity
Fiscal Year
2023 Debt
Service
Payment
13 Airport Revenue Bonds
2023, Airport Concourse
& Federal Inspection
Station
A = $94,485
AMT
B = $5,690
Non-AMT
Construction of
Concourse and
Federal Inpection
Station
5.00% 5/25/2023 7/1/2053 Repayment of bonds solely from operation of the City Airport System. Bond Indenture requires a minimum
$1,600 of PFC Contribution toward annual debt service
from Passenger Facility Charges (PFC).
$1,620 to
$4,830
91,085 0 91,085 167,649 0
Revenue and Other Bonds Total $ 269,239 $ (3,471) $ 265,768 $ 444,474 $ 40,951 Notes Payable
Water: Safe-Drinking
Water Program
$51,405
Loaned
Contract between
the State Water
Resources Control
Board and the City
for installation of
water meters
throughout the City
of Fresno
0.00% 4/10/2012 10/1/2022 No interest loan. Repayment of the loan is funded from revenues of the Water Fund. Pledged in parity with the
pledges securing the 2010 Bonds and other State loans for Water. Principal due in semiannual installments of $1,285. $2,570 $ 28,273 $ 0 $ 28,273 $ 28,273 $ 2,570
Water: Safe Drinking
Water Program
$1,947
Loaned
Contract between
the State Water
Resources Control
Board and the City
to protect the City's
drinking water
supplies from
Possible
Contaminating
Activities (PCA's)
2.29% 7/1/2009 7/1/2031 Repayment of loan is funded from revenues of the Water Fund. Pledged in parity with the pledges securing the
2010 Bonds and other State loans for Water. Principal and interest due in semiannual installments of $61.
$61 to $119 939 0 939 1,038 122
Water: Safe Drinking
Water Program
$1,245
Loaned
Contract between
the State Water
Resources Control
Board and the City
for improvements
on the Enterprise
and Jefferson
Canals
2.29% 7/1/2009 1/1/2032 Repayment of loan is funded from revenues of the Water Fund. Pledged in parity with the pledges securing the
2010 Bonds and other State loans for Water. Principal and interest due in semiannual installments of $39.
$39 to $76 599 0 599 663 78
Sewer: Clean Water
State Revolving Fund
Project
$33,213
Loaned
Contract between
the State Water
Resources Control
Board and the City
for construction of a
tertiary treatment
facility
1.00% 10/17/2015 7/12/2046 Repayment of loan solely from all revenues derived from the operation of the City Sewer System, except connection fees and charges, refundable deposits and capital
contributions. Pledged subordinate to the pledge securing the 1993 Bonds and in parity with State loans for Sewer.
Principal and interest due in annual installments of $1,286. $1,013 to
$1,282
26,320 0 26,320 29,595 1,286
Sewer: Clean Water
State Revolving Fund
Project No. 8061-110
$70,600
Loaned
Contract between
the State Water
Resources Control
Board and the City
for construction of a
recycled water
distribution system
in the southwest
quadrant of the City
1.00% 8/19/2015 5/30/2047 Repayment of loan solely from all revenues derived from the operation of the City Sewer System, except connection fees and charges, refundable deposits and capital
contributions. Pledged subordinate to the pledge securing the 1993 Bonds, and in parity with State loans for Sewer.
In fiscal year 2023 the Project completed and $15 million was determined to be a non-repaid grant. Principal and
interest due in semiannual installments of $1,055.
$1,569 to
$2,090
52,914 0 52,914 26,941 2,111
Water: Drinking Water
State Revolving Fund
Project 1010007-029C
$26,520
Loaned
Contract between
the State Water
Resources Control
Board and the City
for construction of
the Friant-Kern
Canal Raw Water
Pipeline
1.60% 4/5/2016 7/1/2048 Repayment of loan is funded from the revenues of the Water Fund. Pledged in parity with the pledges securing the 2010 Bonds and other State loans for Water. Principal and interest due in semiannual installments of $451.
$598 to $890 18,507 0 18,507 22,946 901
Water: Drinking Water
State Revolving Fund
Project 1010007-031C
$65,876
Loaned
Contract between
the State Water
Resources Control
Board and the City
for construction of a
Kings River Pipeline
1.60% 4/5/2016 7/1/2048 Repayment of loan is funded from the revenues of the Water Fund. Pledged in parity with the pledges securing the 2010 Bonds and other State loans for Water. Principal and interest due in semiannual installments of $1,217.
$1,615 to
$2,405
49,992 0 49,992 56,014 2,434
Series Purpose
Rate
Range Issue Date
Maturity
Date Note
Annual
Principal
Outstanding
Principal
Issuance
Disc/(Prem)
Accreted Int
Net Principal
Due
Payments to
Maturity
Fiscal Year
2023 Debt
Service
Payment
14 Water: Drinking Water
State Revolving Fund
Project 1010007-028C
$195,489
Loaned
Contract between
the State Water
Resources Control
Board and the City
for construction of a
Southeast Surface
Water Treatment
Facility
1.66% 7/15/2015 1/1/2049 Repayment of loan is funded from the revenues of the Water Fund. Pledged in parity with the pledges securing the 2010 Bonds and other State loans for Water. Principal and interest due in semiannual installments of $3,631. $3 million of the loan was forgiven by the State Water
Resources Control Board.
$3,691 to
$7,292
154,193 0 154,193 184,361 7,444
Water: Drinking Water
State Revolving Fund
Project 1010007-030C
$75,900
Loaned
Contract between
the State Water
Resources Control
Board and the City
for construction of a
raw water pipeline
to replace the
Enterprise Canal for
the Northeast
Surface Water
Treatment Facility
1.60% 8/23/2016 1/1/2049 Repayment of loan is funded from the revenues of the Water Fund. Pledged in parity with the pledges securing the 2010 Bonds and other State loans for Water. Principal and interest due in semiannual installments $1,413.
$1,409 to
$2,784
$ 61,137 $ 0 $ 61,137 $ 60,887 $ 2,840
Water: Drinking Water
State Revolving Fund
Project 1010007-032C
$14,000
Loaned
Contract between
the State Water
Resources Control
Board and the City
for construction of a
Northeast Surface
Water Treatment
Facility
1.80% 11/26/2016 1/1/2051 Repayment of loan is funded from the revenues of the Water Fund. Pledged in parity with the pledges securing the 2010 Bonds and other State loans for Water. Principal and interest due in semiannual installments of $608.
$369 to $635 13,348 0 13,348 17,056 407
Notes Payable Total $ 406,222 $ 0 $ 406,222 $ 427,774 $ 20,193 Business-Type Total $ 675,461 $ (3,471) $ 671,990 $ 872,248 $ 61,144 Fiduciary
Tax Allocation Bonds
Tax Allocation Refunding
Bonds 2003, Mariposa
Project Area
$5,005 tax-
exempt
Refund the
Agency's 1993 Tax
Allocation Bonds
(Mariposa Project
Area)
N/A 2/1/2012 2/1/2023 Principal is due in annual installments, interest is due semiannually. Repayment of bonds is payable solely from tax increment revenues allocated by the Successor
Agency to the City of Fresno Redevelopment Agency's
Mariposa Project area. All such revenues are pledged. Tax increment in Mariposa Project Area of $442 was equal to debt service in 2023.
N/A $ 0 $ 0 $ 0 $ 0 $ 442
Tax Allocation Bonds Total $ 0 $ 0 $ 0 $ 0 $ 442
Notes Payable
RDA: Roeding Business
Park
$2,118
Loaned
Loaned from the
California
Infrastructure and
Economic
Development Bank
to be used to
complete the
Roeding Business
Park
3.530% 3/18/2004 8/1/2033 Principal and interest due in annual installments. Secured by Tax Increment revenue received into the Roeding
Business Park Project area.
$78 to $114 $ 1,059 $ 0 $ 1,059 $ 1,278 $ 116
Notes Payable Total $ 1,059 $ 0 $ 1,059 $ 1,278 $ 116
Fiduciary Total $ 1,059 $ 0 $ 1,059 $ 1,278 $ 558
Grand Total $ 860,756 $ (11,227) $ 849,529 $ 1,107,408 $ 93,632 Series Purpose
Rate
Range Issue Date
Maturity
Date Note
Annual
Principal
Outstanding
Principal
Issuance
Disc/(Prem)
Accreted Int
Net Principal
Due
Payments to
Maturity
Fiscal Year
2023 Debt
Service
Payment
15 Comparative Statistics
Data in the tables below are from fiscal year 2022 Annual Comprehensive Financial Reports. Fiscal year 2023 Annual Comprehensive Financial Reports for all comparative cities were not available as of the date of this publication.
Municipal Financial Ratio Analysis: Fresno vs. California Top 10 by Population Group Medians (Most Recent Available)
Moody’s Ratings
Selected Medians Aa – CA 10 A3–Fresno
General Fund Net Position as % of Revenues 52.79% 29.87% Direct Net Debt as % of Assessed Value 1.02% 1.29%
Total Assessed Value (in thousands) $238,661,565 $95,417,044 Assessed Value Per Capita $199,394 $109,393
Population Estimates 1,196,932 436,120
Per Capital Income (Estimated) $87,055 $59,053
All California Top 10 in Population cities except for the City and County of San Francisco are in the Aa range.
Peer Analysis to Largest 10 Cities
Metric Median City of Fresno Ranking
General Fund Net Position % of Revenues 35.1% 25.7% 8th Unassigned General Fund Net Position % of Revenues 9.4% 9.1% 5th Direct Net Debt (in thousands) $1,835 $536 7th
Direct Net Debt Per Capita $1,902 $985 8th
Debt Burden 95.3% 131.5% 4th
Per Capital Income $75,323 $59,053 8th
Assessed Value Per Capita $186,443 $77,954 10th
Ranking: 1st is the highest and 10th is the lowest of the largest 10 cities in California ( Good , Average , Not Good ).
Glossary of Terms
Direct Net Debt: Total Debt less any Pension Bonds Outstanding.
Assessed Value: Total Assessed Valuation within the boundaries of the City.
Debt Burden: Direct Net Debt as a percentage of Revenues.
CITY OF FRESNO | ANNUAL COMPREHENSIVE DEBT REPORT FISCAL YEAR ENDED JUNE 30, 2023 16 Debt Coverage
Airport Enterprise
(in thousands)
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Operating Revenues (1) $ 21,216 $ 21,802 $ 22,976 $ 24,500 $ 25,891 $ 27,308 $ 26,789 $ 33,470 $ 41,093 $ 44,994 Less Operating Expenses (2) 14,262 14,428 14,934 16,117 17,355 18,701 19,962 20,626 21,290 24,165 Other Available Funds (3) 95 350 359 368 377 386 395 — 416 412 Net Revenues $ 7,049 $ 7,724 $ 8,401 $ 8,751 $ 8,913 $ 8,993 $ 7,222 $ 12,844 $ 20,219 $ 21,241 Series 2000 Bonds $ 0 $ 0 $ 0 $ 0 $ — $ — $ — $ — $ — $ — Series 2013 Bonds 3,288 2,805 2,808 2,803 2,801 2,802 2,801 — 2,804 2,700 Less
Minimum PFC Contribution(4) (1,600) (1,600) (1,600) (1,600) (1,600) (1,600) (1,600) (1,600) (1,600) (1,600) Bond proceeds — — — — — — — — — —
Additional PFC Contribution (231) 0 (200) 0 — — — — — — Net Series 2000/2013 Debt Service $ 1,457 $ 1,205 $ 1,008 $ 1,203 $ 1,201 $ 1,202 $ 1,201 $ -1,600 $ 1,204 $ 1,100 Series 2007 Bonds 1,369 1,399 1,437 1,472 1,509 1,544 1,581 — 1,664 1,649 Series 2019 Bonds 1,959 1,945
Annual Adjusted Debt Service $ 2,826 $ 2,604 $ 2,445 $ 2,675 $ 2,710 $ 2,746 $ 2,782 $ -1,600 $ — $ 4,694 Annual Adjusted Debt Service Coverage (5) (6)
2.49 2.97 3.44 3.27 3.29 3.27 2.60 -8.03 Not
Applicable 4.53
Notes:
(1)State of California law requires the exclusion of Customer Facility Charge (CFC) Revenues from the calculation of Debt Service coverage in excess of annual Debt Service on the Series 2007 bonds
(2)Fiscal year 2023 Revenues include $5.2 million of CARES Act monies. The Indenture of Trust defines federal operation grants as Revenues. (3)For all fiscal years, reflects Operating Expenses in operating funds only and does not include costs expensed out of Airports capital funds. (4)Per the indenture, unencumbered CFC funds equal to 25% of Adjusted Debt Service may be designated by the City as Other Available Funds prior to the beginning of any fiscal year, and be transferred to the Revenue Fund at the beginning of such fiscal year. Since fiscal year 2015, the City's policy has been to annually designate available CFC funds equal to 25% of debt service associated with 2007 Bonds as Other Available Funds. (5)Fiscal year 2022 Debt Service associated with Series 2013 Bonds, Series 2007 Bonds and 2019 Bonds. (6)Under the Supplemental Indenture, the Minimum Passenger Facility Charge (PFC) Contribution is increased from $1.1 million to $1.6 million. 17 Water Enterprise
(in thousands) Fiscal Year
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Revenues
Charges for Services $ 90,096 $ 74,285 $ 77,959 $ 101,895 $ 107,377 $ 119,029 $ 120,252 $ 127,651 $ 136,479 $ 122,837 Less: Connection Fee Charges for Services (1,667) (1,496) (1,563) (1,917) (2,531) (2,138) (2,596) (1,835) (1,643) (1,206) Net Charges for Services (1) 88,429 72,789 76,396 99,978 104,846 116,891 117,656 125,816 134,836 121,631 Other Operating Revenues and Interest Income 329 573 1,147 17 — 4,974 6,906 (627) (9,267) (343) Total Revenues $ 88,758 $ 73,362 $ 77,543 $ 99,995 $ 104,846 $ 121,865 $ 124,562 $ 125,189 $ 125,569 $ 121,288 Expenses
Labor and Benefits $ 13,525 $ 11,378 $ 12,436 $ 12,401 $ 12,176 $ 14,581 $ 13,075 $ 15,428 $ 15,232 $ 16,957 Pumping Power 9,292 8,501 8,150 9,064 9,549 8,358 9,419 10,252 11,516 11,508 Source of Supply 1,780 5,613 6,630 4,188 9,751 6,535 9,027 6,531 8,739 9,177 All Other Operating and Maintenance (2) 18,151 17,473 17,166 21,547 17,692 35,143 26,148 24,728 30,600 50,862 Total Operating Expenses (3) $ 42,748 $ 42,965 $ 44,382 $ 47,200 $ 49,168 $ 64,617 $ 57,669 $ 56,939 $ 66,087 $ 88,504 Net Current Revenues $ 46,010 $ 30,397 $ 33,161 $ 52,795 $ 55,678 $ 57,248 $ 66,893 $ 68,250 $ 59,482 $ 32,784 2003A Senior Bond Debt Service (4)
$ 1,378 $ 1,374 $ 1,381 $ 1,380 $ 1,376 $ 1,379 $ 1,379 $ 0 $ 0 $ 0 State Loans Debt Service 120 120 120 — — — — — — — Total Senior Debt $ 1,498 $ 1,494 $ 1,501 $ 1,380 $ 1,376 $ 1,379 $ 1,379 $ 0 $ 0 $ — Senior Coverage Ratio 30.71 20.35 22.09 38.26 40.46 41.51 48.51 #DIV/0! Not Applicable Not Applicable Net Revenue Available for Parity Debt
Service $ 44,512 $ 28,903 $ 31,660 $ 51,415 $ 54,302 $ 55,869 $ 65,514 $ 68,250 $ 59,482 $ 32,784 2010 Series A Bond Debt Service (5)
$ 12,509 $ 12,509 $12,531 $12,508 $12,509 $12,504 $12,510 $7,020 $4,085 $4,084 State Loans Debt Service $ 338 $ 2,770 $ 2,786 $ 3,533 $ 6,021 $ 10,937 $ 18,562 $ 16,190 $ 16,489 $ 16,489 Total Parity Debt Service $ 12,847 $ 15,279 $ 15,317 $16,041 $18,530 $23,441 $31,072 $23,210 $20,574 $ 20,573 Parity Coverage Ratio 3.46 1.89 2.07 3.21 2.93 2.38 2.11 2.94 2.89 1.59 Notes:
(1)1993 Indenture defines "Current Revenues" as all revenue from the operation of the Water System except for connection fees and charges. Beginning in fiscal year 2022, the BAB Subsidy is no longer included in Net Revenues and is now netted against interest expense on the 2010 Series A-2 Bonds. (2)All Other Operating and Maintenance includes Fleet Depreciation Charge (vehicle replacement fees paid to Fleet Department). (3)1993 Indenture defines "Maintenance and Operation Costs" as all expenses incurred for maintaining and operating the Water System except for Debt Service, Depreciation, and Amortization.
(4)2003 Water Bonds were the only remaining Senior Bond Debt Service after fiscal year 2016, and were paid off in fiscal year 2020. (5)Paid off Remaining 2010 Series A-1 Bonds in fiscal year 2021 with surplus cash. Beginning in fiscal year 2022, the BAB Subsidy is netted against interest expense. 18 Wastewater Enterprise
(in thousands) Fiscal Year
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Charges for Services(1)
$ 76,201 $ 81,955 $ 78,186 $ 83,635 $ 81,651 $ 81,085 $ 77,249 $ 77,940 $ 87,795 $ 84,086 Interest Income 1,546 1,787 2,779 492 2,046 5,548 4,702 (720) (7,943) (1,548) Less: Wastewater Facility Connection Fee (1,981) (1,709) (1,844) (1,968) (1,996) (3,290) (2,600) (3,426) (3,393) (2,028) Total Senior Lien Revenues $ 75,766 $ 82,033 $ 79,121 $ 82,159 $ 81,701 $ 83,343 $ 79,351 $ 73,794 $ 76,459 $ 80,510 Operating Expenses(2) 36,339 37,391 35,935 38,058 37,237 45,835 43,522 44,630 51,088 $ 32,873 Net Income Before Debt Service $ 39,427 $ 44,642 $ 43,186 $ 44,101 $ 44,464 $ 37,508 $ 35,829 $ 29,164 $ 25,371 $ 47,637 Senior Lien Debt Service(3) $ 10,714 $ 10,695 $ 10,723 $ 10,712 $ 10,701 $ 10,684 $ 373 $ 6,234 $ 40 $ 905 Coverage Ratio(4) 3.68 4.17 4.03 4.12 4.16 3.51 95.96 4.68 637.08 52.64 100% Coverage-Subordinate Lien: Net Current
Revenue after Senior Lien Debt (before
Connection Fees) $ 28,713 $ 33,947 $ 32,463 $ 33,389 $ 33,763 $ 26,824 $ 35,456 $ 22,930 $ 25,331 $ 46,732 Available from Senior Lien Revenues $ 28,713 $ 33,947 $ 32,463 $ 33,389 $ 33,763 $ 26,824 $ 35,456 $ 22,930 $ 25,331 $ 46,732 Subordinate Lien Debt Service(5)
$ 7,949 $ 7,949 $ 7,949 $ 7,949 $ 9,229 $ 5,928 $ 4,853 $ 1,286 $ 1,286 $ 3,397 Coverage Ratio 3.61 4.27 4.08 4.20 3.66 4.52 7.31 17.83 19.69 13.76 120% & 125% Coverage Subordinate Lien: Net
Current Revenue (Excluding Connection
Fees) $ 28,713 $ 33,947 $ 32,463 $ 33,389 $ 33,763 $ 26,824 $ 35,456 $ 22,930 $ 25,331 $ 46,732 Wastewater Facility Connection Fee 1,981 1,709 1,844 1,968 1,996 3,290 2,600 3,426 3,393 $ 2,028 Transfers From/To Rate Stabilization Fund — — — — — — — — — $ — Net Current Revenue (Including Connection
Fees) $ 30,694 $ 35,656 $ 34,307 $ 35,357 $ 35,759 $ 30,114 $ 38,056 $ 26,356 $ 28,724 $ 48,760 Portion Pledged to Senior Lien Coverage
Available From Senior Lien Revenues $ 30,694 $ 35,656 $ 34,307 $ 35,357 $ 35,759 $ 30,114 $ 38,056 $ 26,356 $ 28,724 $ 48,760 Subordinate Lien Debt Service(5) $ 7,949 $ 7,949 $ 7,949 $ 7,949 $ 9,229 $ 5,928 $ 4,853 $ 1,286 $ 1,286 $ 3,397 Coverage Ratio 3.86 4.49 4.32 4.45 3.87 5.08 7.84 20.49 22.33 14.35 Net Income After Debt Service(6) $ 22,745 $ 27,707 $ 26,358 $ 27,408 $ 26,530 $ 24,186 $ 33,203 $ 25,070 $ 27,438 $ 45,363 Notes:
(1)Includes revenue paid by the City of Clovis for Operations and Maintenance pursuant to the 1977 Fresno-Clovis Sewerage System Joint Powers Agreement through Fiscal Year 2023. (2)The 1993 Indenture specifically excludes from Operating Expenses Debt Service, Amortization and Depreciation. (3)1993 Sewer System Revenue Bonds, Series A.
(4)Coverage Ratio is calculated by dividing Net Income before Debt Service by Senior Lien Debt Service. (5)2008 Sewer System Revenue Refunding Bonds, Series A & Clean Water Loan for Tertiary Treatment Facility. The City redeemed $132.54 million of the 2008 Sewer System Revenue Refunding bonds on 09/01/2018, and redeemed the remaining 2008 Sewer System Revenue Refunding bonds on 09/01/2019. (6)Net Income after Debt Service and before cash financed capital expenses and any other expenses for lawful purposes. 19 Appendix - Ratings History
Lease Revenue Bonds
Year
Moody’s S&P Fitch
Rating Outlook Rating Outlook Rating Outlook
2023 A2 ↑ Stable A+ ↑ Stable A ↑ Positive
2022 A3 Stable A- Stable A- Positive
2021 A3 ↑ Stable A- Stable A- Positive
2020 Baa1 Positive A Stable A- Stable
2019 Baa1 Positive A Stable A- Stable
2018 Baa1 Positive A Stable A- Stable
2017 Baa1 ↑ Positive A ↑ Stable A- Stable
2016 Baa2/Baa3 ↑ Positive BB+ Stable A- ↑ Stable
2015 Ba1/Ba2 ↑ Stable BB+ Stable BBB- Stable
2014 Ba2/Ba3 ↓ Positive BB+ Stable BBB- Stable
Airport Revenue Bonds
Year
Moody’s S&P Fitch KBRA
Rating Outlook Rating Outlook Rating Outlook Rating Outlook 2023 Baa1 Stable A ↓ Stable BBB+ Stable A+ Stable
2022 Baa1 Stable AA Stable BBB+ Stable
2021 Baa1 Stable AA ↑ Stable BBB+ Stable
2020 Baa1 Stable A Negative BBB+ Stable
2019 Baa1 Stable A Stable BBB+ Stable
2018 Baa1 Positive A ↑ Stable BBB+ ↑ Stable
2017 Baa1 Positive BBB+ ↑ Stable BBB Positive
2016 Baa1 Positive BBB Positive BBB Positive
2015 Baa1 Stable BBB Positive BBB Stable
2014 Baa1 Stable BBB Stable BBB Stable
Arrows indicate an increase (á) or decrease (â) from the prior rating.
Note: Ratings for S&P in 2021 and 2022 reflect insured ratings. The underlying rating has been stable at "A". With the issuance of the 2023 Airport Revenue Bonds, the City solicited a rating for the first time from Kroll Bond Rating Agency ("KBRA").
CITY OF FRESNO | ANNUAL COMPREHENSIVE DEBT REPORT FISCAL YEAR ENDED JUNE 30, 2023 20 Water Revenue Bonds
Year
Moody’s S&P Fitch
Rating Outlook Rating Outlook Rating Outlook
2023 A3 Positive AA- Stable AA/A+ Stable
2022 A3 Positive AA- Stable AA/A+ Stable
2021 A3 Positive AA- Stable AA/A+ Stable
2020 A3 Positive AA- Stable AA/A+ Stable
2019 A3 Positive AA- Stable AA/A+ Stable
2018 A3 Positive AA- Stable AA/A+ Stable
2017 A3 Positive AA- Stable AA/A+ Stable
2016 A3 Positive AA- ↑ Stable AA/A+ Stable
2015 A3 Positive A+/A Stable AA/A+ Stable
2014 A3 Stable A+/A Stable AA/A+ Stable
Wastewater (Sewer) Revenue Bonds
Year
Moody's S&P Fitch
Rating Outlook Rating Outlook Rating Outlook
2023 A1 Positive AA+/AA Stable AA/AA- Stable
2022 A1 Positive AA+/AA Stable AA/AA- Stable
2021 A1 Positive AA+/AA Stable AA/AA- Stable
2020 A1 Positive AA+/AA Stable AA/AA- Stable
2019 A1 Positive AA+/AA Stable AA/AA- Stable
2018 A1 Positive AA+/AA Stable AA/AA- Stable
2017 A1 Positive AA+/AA Stable AA/AA- Stable
2016 A1 Positive AA+/AA Stable AA/AA- Stable
2015 A1 Positive AA+/AA Stable AA/AA- Negative
2014 A1 Stable AA+/AA ↑ Stable AA/AA- Negative
Arrows indicate an increase (á) or decrease (â) from the prior rating.
CITY OF FRESNO | ANNUAL COMPREHENSIVE DEBT REPORT FISCAL YEAR ENDED JUNE 30, 2023 21