TABLE OF CONTENTS
INTRODUCTORY SECTION PAGE
Controller's Transmittal Letter I
City Operating Fund Structure ............................................................................................................................... IX City Organizational Chart ..................................................................................................................................... X Directory of City Officials .......................................................................................................................................... XI Certificate of Achievement - Government Finance Officers Association ......................................................... XIII
FINANCIAL SECTION
Independent Auditor's Report ................................................................................................................................. 1 Management's Discussion and Analysis (Unaudited) ......................................................................................... 5 Basic Financial Statements
Government-Wide Financial Statements:
Statement of Net Position .................................................................................................................................. 29 Statement of Activities .......................................................................................................................................... 30 Fund Financial Statements:
Balance Sheet - Governmental Funds ............................................................................................................... 33 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position ................... 34 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds ............. 35 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities ..................................................................................... 36 Proprietary Fund Financial Statements:
Statement of Net Position ................................................................................................................................. 37 Statement of Revenues, Expenses and Changes in Fund Net Position ...................................................... 41 Statement of Cash Flows ..................................................................................................................................... 43 Fiduciary Fund Financial Statements:
Statement of Fiduciary Net Position - Fiduciary Funds - Trust and Custodial Funds ................................... 47 Statement of Changes in Fiduciary Net Position - Fiduciary Funds - Trust Funds ........................................ 48 CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
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Notes to the Financial Statements: PAGE
Note 1 Summary of Significant Accounting Policies ........................................................................................... 50 Note 2 Cash and Investments ................................................................................................................................. 71 Note 3 Property Taxes ............................................................................................................................................. 87 Note 4 Receivables ................................................................................................................................................... 88 Note 5 Property, Plant and Equipment - Capital Assets .................................................................................... 91 Notes 6 Leases .......................................................................................................................................................... 97 Note 7 Long-Term Liabilities ................................................................................................................................... 102 Note 8 Interfund Activity ........................................................................................................................................... 122 Note 9 Defeasances ................................................................................................................................................. 130 Note 10 Risk Management Fund ............................................................................................................................ 131 Note 11 Employee Benefit Programs .................................................................................................................... 133 Note 12 No-Commitment Debt ................................................................................................................................ 155 Note 13 Commitments and Contingencies ........................................................................................................... 156 Note 14 Securities Lending ..................................................................................................................................... 163 Note 15 Other Information ....................................................................................................................................... 164 Note 16 Deficit Fund Equity ..................................................................................................................................... 166 Note 17 Subsequent Events ................................................................................................................................... 167
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP Budgetary Basis):
General Fund ..................................................................................................................................................... 171 Grants Special Revenue Fund ......................................................................................................................... 173 Notes to the Required Supplementary Information ............................................................................................. 175 Schedule of Investment Returns - Employees, Fire and Police Retirement Systems .................................. 178 Schedule of Changes in Net Pension Liability (Asset) and Related Ratios:
Fire and Police Retirement Systems .............................................................................................................. 179 Employees Retirement Systems ................................................................................................................... 181 CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 REQUIRED SUPPLEMENTARY INFORMATION (continued) PAGE
Schedule of Employer Contributions - Pension Trust Funds:
Fire and Police Retirement Systems ....................................................................................................... 183 Employees Retirement Systems ............................................................................................................ 183 Schedule of Changes in Net OPEB Liability and Related Ratios ....................................................... 184
OTHER SUPPLEMENTARY INFORMATION
Combining and Individual Fund Financial Statements and Schedules:
Nonmajor Governmental Funds:
Combining Balance Sheet - Nonmajor Governmental Funds..................................................................... 187 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds .................................................................................................................................... 189 Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP Budgetary Basis) High Speed Rail - Special Revenue Fund .............................................................................................. 191 Special Gas Tax - Special Revenue Fund .............................................................................................. 192 Measure C - Special Revenue Fund ....................................................................................................... 193 Measure P - Special Revenue Fund ...................................................................................................... 194 Community Services - Special Revenue Fund ...................................................................................... 195 UGM Impact Fees - Special Revenue Fund .......................................................................................... 196 Low and Moderate Income Housing - Special Revenue Fund ............................................................ 197 Special Assessments - Special Revenue Fund ..................................................................................... 198 City Combined - Capital Projects Fund ................................................................................................... 199 Nonmajor Enterprise Funds:
Combining Statement of Net Position ......................................................................................................... 201 Combining Statement of Revenues, Expenses and Changes in Fund Net Position ........................... 202 Combining Statement of Cash Flows .......................................................................................................... 203 Internal Service Funds:
Combining Statement of Net Position ......................................................................................................... 205 Combining Statement of Revenues, Expenses and Changes in Fund Net Position ........................... 207 Combining Statement of Cash Flows .......................................................................................................... 208
TABLE OF CONTENTS
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 OTHER SUPPLEMENTARY INFORMATION (continued) PAGE
Fiduciary Funds:
Combining Statement of Fiduciary Net Position - Fiduciary Funds - Pension Trust Funds ............ 210 Combining Statement of Changes in Fiduciary Net Position - Fiduciary Funds - Pension Trust Funds ..................................................................................................................................................... 211 Combining Statement of Changes in Assets and Liabilities - Custodial Funds ................................ 212
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STATISTICAL SECTION
Net Position by Component - Last Ten Fiscal Years ................................................................................... 215 Change in Net Position - Last Ten Fiscal Years ........................................................................................... 216 Fund Balances, Governmental Funds - Last Ten Fiscal Years .................................................................. 218 Changes in Fund Balances, Governmental Funds - Last Ten Fiscal Years ............................................ 219 Gross Assessed Value and Estimated Actual Value of Taxable Property - Last Ten Fiscal Years .... 220 Direct and Overlapping Property Tax Rates - Last Ten Fiscal Years ....................................................... 221 Principal Property Taxpayers - Current Year and Nine Years Ago ........................................................... 222 Property Tax Levies and Collections - Last Ten Fiscal Years .................................................................... 223 Ratios of Outstanding Debt by Type - Last Ten Fiscal Years .................................................................... 224 Ratios of General Bonded Debt Outstanding - Last Ten Fiscal Years ...................................................... 226 Direct and Overlapping Governmental Activities Debt - As of March 27, 2023 ........................................... 227 Debt Coverage Ratio - Airports - Last Ten Fiscal Years ............................................................................. 228 Debt Coverage Ratio - Water System - Last Ten Fiscal Years .................................................................. 229 Debt Coverage Ratio - Sewer System - Last Ten Fiscal Years ................................................................. 230 Pledged Revenue Coverage - Last Ten Fiscal Years .................................................................................. 231 Legal Debt Margin Information - Last Ten Fiscal Years .............................................................................. 232 Demographic and Economic Statistics - Last Ten Calendar Years ........................................................... 233 Principal Employers - Current Year and Nine Years Ago ........................................................................... 234 Full Time Equivalent City Government Employees by Function/Program - Last Ten Fiscal Years 235 Operating Indicators by Function/Program - Last Ten Fiscal Years .......................................................... 236 Capital Asset Statistics by Function/Program - Last Ten Fiscal Years ..................................................... 239 CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
Jerry Dyer Georgeanne A. White
Mayor City Manager
2600 Fresno Street, Suite 2156 - Fresno, California 93721-3622 March 20, 2024
The Honorable Mayor Jerry Dyer and Members of the City Council Distinguished Citizens of the City of Fresno
We are pleased to present the Annual Comprehensive Financial Report (ACFR) of the City of Fresno, California (City) for the fiscal year ended June 30, 2023 (fiscal year 2022-2023), with the Independent Auditor’s Report, submitted in compliance with City Charter Section 804(c) and Section 1216. The ACFR has been prepared by the Finance Department in conformance with the principles and standards for financial reporting set forth by the Governmental Accounting Standards Board (GASB).
Responsibility for both the accuracy of the data, as well as the completeness and fairness of the presentation, including all disclosures, rests with the City. The existing comprehensive structure of internal accounting controls in the City provides reasonable assurance that the financial statements are free of any material misstatements. Since the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements.
The City recognizes that even sound internal controls have inherent limitations. We believe that the City's internal controls adequately safeguard assets, that the reported data is accurate in all material respects, and that its presentation fairly depicts the City’s financial position and changes in its financial position as measured by the financial activity of its various funds. We are confident that the included disclosures provide the reader with an understanding of the City’s financial affairs.
Accounting principles generally accepted in the United States (GAAP) require that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The MD&A can be found immediately following the report of the independent auditors, beginning on page 5.
General Background
The City of Fresno is located near the geographical center of California, approximately 200 miles north of Los Angeles and 170 miles south of the State capital, Sacramento. The City has land area of 115.2 square miles. With over half a million residents ( 549,242 as of January 1, 2023), Fresno is the 5th largest city in California by population, and 35th largest in the nation. The City is part of the Fresno- Clovis metropolitan area, which is the second largest metropolitan area in the Central Valley after Sacramento.
I LETTER OF TRANSMITTAL With its close proximity to Yosemite National Park (60 miles), Fresno also serves as gateway to Sequoia National Park (75 miles), Sierra National Forest (40 miles) and Kings Canyon National Park (75 miles).
Named for the abundant ash trees lining the San Joaquin River, Fresno was founded in 1872 as a railway station of the Central Pacific Railroad before it was incorporated in 1885.
Population Growth
(in thousands)
201220132014201520162017201820192020202120222023
0 100
200
300
400
500
600
Government and Budget
The City operates under the strong-Mayor form of government. Under this form of government, the Mayor serves as the City’s Chief Executive Officer, appointing and overseeing the City Manager, recommending legislation, and presenting the annual budget to the City Council (Council).
The budget of the City of Fresno, within the meaning and context of Section 1205 of the City’s Charter, must be adopted by Council resolution no later than June 30th of a given year. As provided by Section 1206 of the Charter, any adjustments in the amounts appropriated for the purposes indicated at the department/fund level shall be made only upon a motion to amend the resolution adopted by the affirmative votes of at least five Council members. Administrative changes within the department/fund level may be made without approval of Council within written guidelines established by the City Manager.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
II LETTER OF TRANSMITTAL Industry and Economy
Fresno is the economic hub of Fresno County and the San Joaquin Valley, with much of the surrounding areas in the Metropolitan region predominantly tied to large-scale agricultural production. While agriculture still makes up a large component of the region's employment base (12% of jobs), the Fresno economy continues to diversify, as evidenced by the fact that services (30% of jobs) and government (18% of jobs) employ more people than agriculture.
2010 vs. 2023 Estimated Number of Workers by Industry 2010
Agriculture
14%
Leisure &
Hospitality
8%
Government
20%
Finance, Insurance &
Real Estate
4%
Retail
10%
Wholesale
4%
Services
24%
Mining &
Construction
5%
Manufacturing
8%
Transportation &
Public Utilities
3%
2023
Agriculture
12%
Leisure &
Hospitality
9%
Government
18%
Finance, Insurance &
Real Estate
3%
Retail
9%
Wholesale
4%
Services
30%
Mining &
Construction
5%
Manufacturing
6%
Transportation &
Public Utilities
4%
Source: CA Employment Development Department
Distribution is playing a growing role in the City's economy, as evidenced by the Old Navy Pacific Distribution Center, the Ulta Beauty Fulfillment Center, and the Amazon Fulfillment Center. Public sector and healthcare employment are also major contributors to the City’s economy.
Principal Employers (Public & Private Sector)
Employer Employees
Fresno Unified School District 13,669
Community Medical Centers 9,750
County of Fresno 8,980
Amazon 6,500
Clovis Unified School District 6,400
California State University, Fresno 5,233
City of Fresno 5,015
State Center Community College District 4,367
Internal Revenue Service 4,230
Saint Agnes Medical Center 2,900
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
III LETTER OF TRANSMITTAL Economic Overview
Agriculture remains one of the backbones of the Fresno area's economy and continues to be robust.
Fresno County’s agricultural strength rests in its diversity with more than 400 commercial crops providing gross production of $8.09 billion in 2022, an increase of 0.12% from 2021.
Grapes took the lead on Fresno County's Top Ten crop ranking with $1.24 billion gross value in 2022, followed by almonds at $1.14 billion.
California produces most of the grapes grown in the United States with 99.5% of raisins coming from Fresno County. Additionally, the region is a significant exporter to many countries throughout the world.
In 2022, Fresno County exported 109 unique agricultural commodities to 90 countries around the world. 2023 Diversified Agricultural Base
Grapes
15%
Almonds
14%
Pistachios
9%
Milk
8%
Poultry
7%
Cattle
6%
Tomatoes
5%
Peaches
5%
Garlic
4%
Mandarins
3%
Other Crops
24%
Grapes Almonds Pistachios Milk
Poultry Cattle Tomatoes Peaches
Garlic Mandarins Other Crops
Source: Fresno County Agriculture Department
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
IV LETTER OF TRANSMITTAL Fiscal Year 2023 Economic Conditions & Financial Impact The Fresno economy continued to steadily progress during fiscal year 2023 while continuing to recover from the effects of the COVID-19 pandemic , as is shown in the table below:
Economic Indicator 2022 2023 Change (%)
Assessed Value $ 42,380,247,793 $ 45,743,953,707 7.9%
Taxable Sales $26,603,310,345 $27,250,068,966 2.4%
Unemployment Rate 5.60% 7.0% 25.00%
Building Permits 12,359 12,570 1.7%
Local economic improvements were similarly on display when considering key City of Fresno finance indicators as summarized below:
• Total Assets decreased -$208.3 million (-4.3%) from the fiscal year 2022 year-end Total Assets balance of $4.87 billion.
• Revenues increased $144.8 million ( 12.6%) from Revenues for fiscal year 2022, which totaled $1.15 billion.
• Expenses increased $160.4 million (17.3%) to $1.09 billion. • Total Net Position increased $210.3 million (7.4%) from fiscal year 2022's total of $2.83 billion.
Summarized below are key metrics reflecting changes within the City's General Fund:
• Total Assets increased $24.1 million ( 14.0%) over the fiscal year 2022 Total Assets year-end balance of $171.6 million. Growth in Accounts Receivable of $15.7 million was the primary driver behind the overall growth in Total Assets.
• Total Liabilities decreased -$0.7 million ( -1.5%) from the fiscal year 2022 year-end Total Liabilities of $43.8 million. A -$10.6 million decrease in Advances from Other Funds was the primary reason for this reduction.
• Revenues increased $35.6 million ( 8.7%) from fiscal year 2022's Revenues of $407.6 million .
Growth was seen in the economy-driven revenues, such as Property Tax. • Expenditures increased $28.5 million ( 7.6%) from fiscal year 2022’s $374.4 million Expenditure level. Increases in Public Protection and General Government expenditures were the primary factors of the overall increase in General Fund Expenditures.
These results and others are discussed in greater detail in the Management’s Discussion & Analysis, which begins on page 5.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
V LETTER OF TRANSMITTAL How Fresno Compares to the 25 Largest California Cities Though improved, the City of Fresno's financial position still lags behind other large cities in California when it comes to assets available for use to support the City’s population. As the table on page VII demonstrates, the difference between population ranking and assets per capita is one of the largest among the 25 largest California cities by population. It is important to note that the City’s assets are augmented by the Net Pension Asset, which no other city in the survey possesses. The lack of assets puts the City of Fresno at a disadvantage when it comes to providing services to its citizens, because there is an inadequate asset base to efficiently address the needs. Thus, it is imperative that fiscal prudence is maintained and the plan to build all assets, especially cash and capital assets, is continued.
Certificate of Achievement
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City for its ACFR for the fiscal year ended June 30, 2022 . This was the 30th consecutive year that the City has achieved this prestigious national award. The Certificate of Achievement is the highest form of recognition in the area of governmental accounting and financial reporting. In order to be awarded a Certificate of Achievement, the City must publish an easily readable and efficiently organized ACFR whose contents conform to program standards. The ACFR must satisfy both Generally Accepted Accounting Principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of only one year. We believe that our current annual comprehensive financial report continues to meet the Certificate of Achievement Program’s requirements, and are submitting it to the GFOA to determine its eligibility for another certificate.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
VI LETTER OF TRANSMITTAL Total Government-Wide Assets per Capita
Top 25 California Cities Comparison
City Total Assets ACFR
Year
Population
California Department
of Finance
As of January 1, 2020
Assets per
Capita
Population
Ranking
Per Capita
Asset
Rank
Net Pension
Asset/(Liability)
Los Angeles $ 86,880,646 2023 3,766,109 $ 23 1 2 $ (8,330,602) San Diego $ 18,243,416 2023 1,368,395 $ 13 2 9 $ (2,681,371) San Jose $ 11,313,707 2023 959,256 $ 12 3 10 $ (3,204,241) San Francisco $ 51,468,524 2023 831,703 $ 62 4 1 $ (3,067,913) Fresno $ 4,644,648 2023 543,428 $ 9 5 17 $243,329,000
Sacramento $ 5,693,595 2023 518,161 $ 11 6 11 $ (1,134,159) Long Beach $ 9,852,454 2022 458,222 $ 22 7 3 $ (1,305,415) Oakland $ 4,401,572 2023 419,556 $ 10 8 13 $ (1,855,412) Bakersfield $ 2,980,754 2022 408,373 $ 7 9 20 $ (315,293) Anaheim $ 5,598,906 2023 328,580 $ 17 10 4 $ (915,828)
Stockton $ 2,965,573 2023 319,731 $ 9 11 15 $ (559,857) Riverside $ 4,792,427 2023 313,676 $ 15 12 7 $ (297,098) Irvine* $ 3,280,729 2022 310,000 $ 11 13 12 $ (36,051)
Santa Ana $ 2,044,224 2023 303,051 $ 7 14 24 $ (383,779) Chula Vista $ 2,456,001 2023 276,785 $ 9 15 16 $ (53,514) Fremont* $ 1,563,646 2023 230,659 $ 7 16 23 $ (449,512) Santa Clarita $ 1,821,975 2023 229,467 $ 8 17 18 $ (38,788) San Bernardino $ 1,227,959 2022 223,230 $ 6 18 25 $ (326,503) Modesto $ 2,094,358 2023 216,995 $ 10 19 14 $ 416,054
Fontana $ 1,570,877 2023 213,851 $ 7 20 19 $ (204,426)
Moreno Valley $ 1,499,135 2023 208,289 $ 7 21 21 $ (84,103) Oxnard $ 3,124,356 2022 197,477 $ 16 22 6 $ (191,104)
Huntington Beach $ 1,367,093 2023 195,714 $ 7 23 22 $ (160,758) Glendale $ 2,861,322 2023 191,284 $ 15 24 8 $ (676,650) Ontario $ 2,881,638 2022 180,717 $ 16 25 5 $ 150,461
* These cities have Governmental Activities only.
** This figure represents the prefunded Net Pension Asset/over-funding applicable to future years. For peer cities, it represents the underfunding of pension liabilities.
Note: Only figures for each Primary Government were used as of June 30, 2023 AFCRs (2022 when 2023 not available). In cases where Component Units were reflected in separate Columns, Component Unit numbers were excluded.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
VII LETTER OF TRANSMITTAL Acknowledgments
The preparation and completion of the City of Fresno ACFR requires tremendous commitment and would not be possible without the dedication and professionalism of the City's Finance Department staff. Once again the team confronted numerous challenges yet maintained commitment to the successful completion of the report
Appreciation extends to numerous departments throughout the City, that worked closely with the Finance team to complete the financial statements. Without their support and contributions the completion of the report would not be possible.
Lastly, thank you to the team at The Pun Group for their professional support in the preparation of the ACFR. And thank you to the Mayor, the City Council members, and the members of the City Manager's Office for their continued leadership and support in planning and conducting the City's financial operations.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
VIII LETTER OF TRANSMITTAL CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
IX CITY OPERATING FUND STRUCTURE CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
X CITY ORGANIZATIONAL CHART
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
XI DIRECTORY OF CITY OFFICIALS This page intentionally left blank
XII
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
XIII CERTIFICATE OF ACHIEVEMENT - GFOA This page intentionally left blank
XIV
1 2
3 4
MANAGEMENT’S DISCUSSION AND ANALYSIS
(Unaudited)
For the Fiscal Year Ended June 30, 2023
CITY OF FRESNO, CALIFORNIA
This section of the City of Fresno’s (City) Annual Comprehensive Financial Report (ACFR) presents a narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2023. The reader is encouraged to consider the information presented here in conjunction with the City’s financial statements, which follow this section, and the additional information that is furnished in the letter of transmittal at the front of this report. This discussion and analysis provides comparisons primarily for the previous two years; but, may include more extensive comparisons in some instances.
FINANCIAL HIGHLIGHTS
• The assets of the City stayed over $4 billion, reaching a total of $4.66 billion. • The City had record revenue of $1.30 billion, primarily due to increases in the following areas:
Capital Grants by $106.0 million ( 72.4%), Operating Grants by $73.7 million ( 50.6%), General Revenue by $67.7 million (18.3%), and a decrease of -$102.5 million (-20.9%) related to Charges for Services.
• The City continues to record a Net Pension Asset. For fiscal year 2023, the Net Pension Asset was $ 243.3 million . The City of Fresno remains one of very few government entities in the country with a Net Pension Asset.
OVERVIEW OF FISCAL YEAR 2023 FINANCIAL STATEMENTS
The Management's Discussion and Analysis is intended to serve as an introduction to the City’s basic financial statements, which consist of three components: (1) Government-Wide Financial Statements, (2) Fund Financial Statements and (3) Notes to the Financial Statements . This report also contains other Supplementary Information in addition to the basic financial statements.
Government-Wide Financial Statements are designed to provide both long-term and short-term information about the City’s overall financial status in a manner similar to a private-sector business. • The Statement of Net Position presents information on all assets/deferred outflows of resources and liabilities/deferred inflows of resources. The difference between them is reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the City’s financial position is improving or deteriorating. • The Statement of Activities shows how the net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will result in cash flows in future periods. Examples include revenues pertaining to uncollected taxes and fees and expenses pertaining to earned but unused vacation and sick leave.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 5 MANAGEMENT'S DISCUSSION & ANALYSIS Both of the Government-Wide Financial Statements distinguish functions of the City that are principally supported by taxes and inter-governmental revenues (Governmental Activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (Business- Type Activities). The Governmental Activities of the City include general government, public protection, public ways and facilities, culture and recreation, and community development. The Business-Type Activities of the City include two airports, public transportation system, water, sewer, solid waste, community sanitation, convention center, stadium, and theater.
The Government-Wide Financial Statements include not only the City (known as the primary government), but also legally separate component units including the Fresno Joint Powers Financing Authority, City of Fresno Fire and Police Retirement System, City of Fresno Employees Retirement System, City of Fresno Employees Healthcare Plan, Fresno Revitalization Corporation, and FRC Canyon Crest, LLC. The component units have been “blended” into the City’s financial statements because the governing board (although legally separate from the City) is substantially the same as the City’s, or they provide services entirely or almost exclusively for the benefit of the City even though they do not provide services directly to the City.
As of February 1, 2012, a Successor Agency was created to replace the Redevelopment Agency of the City of Fresno (RDA). Dissolution law provided that the Successor Agency would pay all “enforceable obligations” of the former RDA. The Successor Agency is considered a separate legal entity under Assembly Bill (AB) 1484 for financial presentation purposes. Effective June 30, 2012, the Successor Agency was reported as a Private-Purpose Trust Fund. This means that the Successor Agency’s assets are considered to be held in a trustee or agency capacity for others and therefore cannot be used to support the City’s own programs.
The Government-Wide Financial Statements can be found on pages 29-30 of this report.
Fund Financial Statements focus on individual parts of the City government, reporting the City’s operations in more detail than the Government-Wide Financial Statements. They are used to maintain control over resources that have been segregated for specific activities or objectives and to ensure compliance with finance-related legal requirements. They can be divided into three categories:
• Governmental Funds are used to account for essentially the same functions reported as Governmental Activities in the Government-Wide Financial Statements (i.e., most of the City’s basic services are reported in Governmental Funds). These statements, however, focus on (1) how cash and other financial assets can be readily converted to available resources, and (2) the balances left at year-end that are available for spending. Such information may be useful in determining what financial resources are available in the near future to finance the City’s programs.
Because the focus of Governmental Funds Financial Statements is narrower than that of the Government-Wide Financial Statements, it is helpful to compare the information presented for Governmental Funds with similar information presented for governmental activities in the Government-Wide Financial Statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the Governmental Funds Balance CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 6 MANAGEMENT DISCUSSION & ANALYSIS Sheet and Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances provide a reconciliation to facilitate this comparison between Governmental Funds and Governmental Activities. These reconciliations may be found on pages 34 and 36.
The City maintains several individual Governmental Funds organized according to their type: general fund, special revenue, debt service, and capital projects. Information is presented separately in the Governmental Funds Balance Sheet and in the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances for the General Fund and Grants Special Revenue Fund (which are considered to be major funds). Data from the remaining Governmental Funds are combined into a single, aggregated presentation. Individual fund data for each of the Non-major Governmental Funds is provided in the form of combining statements elsewhere in this report.
The City adopts an annual appropriated budget. The City’s budget reflects its priorities and plans for taxpayers/ratepayers resources. Budgetary comparison schedules for the General Fund and the Grants Special Revenue Fund demonstrate compliance with the budget, and also reflect where actual results deviated from expected budgetary estimates. • Proprietary Funds are generally used to account for services for which the City charges customers (either outside customers, or internal units or departments of the City). Proprietary Funds provide the same type of information as shown in the Government-Wide Financial Statements: albeit in more detail. Proprietary Funds (Enterprise and Internal Service) utilize the same method used by the private sector businesses: the accrual basis of accounting. The City maintains the following two types of Proprietary Funds:
† Enterprise Funds are used to report the same functions as Business-Type Activities in the Government-Wide Financial Statements. The City uses Enterprise Funds to account for the operations of the Public Utilities [ Water System, Sewer System, Solid Waste Management ], Fresno Area Express [ Transit], Fresno International Airport (FYI) and the Fresno Chandler Downtown Airport (FCH) [ Airports], Fresno Convention Center, and Chukchansi Park Stadium [Stadium], all of which are considered to be major funds of the City. Community Sanitation and Parks and Recreation are considered to be Non-major Enterprise Funds of the City. † Internal Service Funds are used to report activities that provide supplies and services for certain City programs and activities. The City uses Internal Service Funds to account for its fleet of vehicles, management information systems, property maintenance, and electronics/ communication support ( General Services ); self-insurance ( Risk Management ); billing, collecting, and servicing activities for the Water, Sewer, Solid Waste and Community Sanitation Funds ( Billing and Collection ); and healthcare plans ( Employees Healthcare Plan, Retirees Healthcare Plan, Blue Collar Employees Healthcare Plan ). Because Risk Management, General Services and the healthcare plans predominantly benefit Governmental rather than Business-Type functions, they have been included within Governmental Activities in the Government-Wide Financial Statements, whereas Billing and Collection is included in the Business-Type Activities in the Government-Wide Financial Statements. The Internal Service Funds are combined into a single, aggregated presentation in the Proprietary Fund Financial CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 7 MANAGEMENT DISCUSSION & ANALYSIS Statements. Individual Fund data for the Internal Service Funds is provided in the form of combining statements.
• Fiduciary Funds are used to account for resources held for the benefit of parties outside the City.
Since the resources of Fiduciary Funds are not available to support the City’s own programs, they are not reflected in the Government-Wide Financial Statements. The accounting used for Fiduciary Funds is much like that used for Proprietary Funds. The City maintains three types of Fiduciary Funds:
† Pension Trust Funds consist of funds for Fire and Police and other Employees. † Private-Purpose Trust Fund is used to account for the assets and liabilities held in trust for the Successor Agency to the former RDA.
† Custodial Funds consist of funds used to account for City-related trust activity, such as payroll withholding and bid deposits. Custodial Funds also include Special Assessment Funds that account for debt service transactions involving special assessment districts within the City.
The basic financial statements can be found on pages 29-169 of this report.
Notes to the Financial Statements
The Notes to the Financial Statements provide additional information that is essential to the full understanding of the data provided in all of the financial statements. The Notes to the Financial Statements can be found on pages 50-169 of this report.
Required Supplementary Information (RSI)
In addition to the basic financial statements and accompanying notes, this report presents certain required supplementary information including budgetary comparison statements for major governmental funds as well as schedules of investment returns, changes in Net Pension Liability (Asset), employer contribution, and schedule of changes in Net Other Post-Employment Benefits (OPEB) Liability and related ratios. RSI and accompanying notes can be found on pages 171-184 of this report.
Combining and Individual Fund Statements and Schedules
The combining statements referred to earlier in connection with non major governmental funds, non- major enterprise funds, internal service funds, fiduciary funds and the d iscretely presented component unit are presented immediately following the appropriately labeled tabs. Combining and individual fund statements and schedules can be found on pages 187-213 of this report.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 8 MANAGEMENT DISCUSSION & ANALYSIS
GOVERNMENT-WIDE FINANCIAL ANALYSIS
The City presents its financial statements under the reporting model required by the Governmental Accounting Standards Board Statement No. 34 (GASB 34), Basic Financial Statements - and Management’s Discussion and Analysis (MD&A) - for State and Local Governments.
Net Position - Government-Wide / Primary Government
(in thousands)
Governmental
Activities
Business-Type
Activities Total Total Change
from Prior Year
2022 2023 2022 2023 2022 2023 $ %
Assets:
Current and Other Assets $ 691,619 $ 849,302 $ 640,479 $ 786,459 $ 1,332,098 $ 1,635,761 $ 303,663 22.8% Net Pension Asset 644,438 192,319 161,215 51,010 805,653 243,329 (562,324) (69.8)% Capital Assets:
Not Being Depreciated 356,254 428,272 315,804 201,905 672,058 630,177 (41,881) (6.2)% Net of Accumulated Depreciation 650,249 663,838 1,408,970 1,487,664 2,059,219 2,151,502 92,283 4.5% Total Capital Assets 1,006,503 1,092,110 1,724,774 1,689,569 2,731,277 2,781,679 50,402 1.8% Total Assets 2,342,560 2,133,731 2,526,468 2,527,038 4,869,028 4,660,769 (208,259) (4.3)% Deferred Outflows of Resources:
Charge on Refunding 3,169 2,814 138 247 3,307 3,061 (246) (7.4)% Deferred Outflows - Pension 65,621 173,598 14,115 38,966 79,736 212,564 132,828 166.6% Deferred Outflows - OPEB 22,208 20,472 9,338 8,661 31,546 29,133 (2,413) (7.6)% Total Deferred Outflows of Resources 90,998 196,884 23,591 47,874 114,589 244,758 130,169 113.6% Liabilities:
Long-Term Liabilities Due Within One
Year 82,890 98,759 24,902 22,394 107,792 121,153 13,361 12.4% Long-Term Liabilities Due in More than
One Year 551,257 560,033 662,670 732,417 1,213,927 1,292,450 78,523 6.5% Other Liabilities 164,384 248,275 102,174 114,629 266,558 362,904 96,346 36.1% Total Liabilities 798,531 907,067 789,746 869,440 1,588,277 1,776,507 188,230 11.9% Deferred Inflows of Resources:
Pension Revenue Applicable to Future
Years 372,040 14,333 91,838 3,981 463,878 18,314 (445,564) (96.1)% Unamortized OPEB Expense 51,193 43,493 22,487 19,130 73,680 62,623 (11,057) (15.0)% Unamortized OPEB Expense 1,111 330 25,059 20,990 26,170 21,320 (4,850) (18.5)% Total Deferred Inflows of Resources 424,734 43,384 139,384 44,101 564,118 87,485 (476,633) (84.5)% Net Position:
Net Investment in Capital Assets 836,439 930,489 1,094,088 1,015,061 1,930,527 1,945,550 15,023 0.8% Restricted 316,891 605,023 — 51,010 316,891 656,033 339,142 107.0% Unrestricted 56,963 (155,348) 526,841 595,300 583,804 439,952 (143,852) (24.6)% Total Net Position $ 1,210,293 $ 1,380,164 $ 1,620,929 $ 1,661,371 $ 2,831,222 $ 3,041,535 $ 210,313 7.4% CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 9 MANAGEMENT DISCUSSION & ANALYSIS Changes in Net Position - Government-Wide / Primary Government (in thousands)
Governmental
Activities
Business-Type
Activities Total Total Change
from Prior Year
2022 2023 2022 2023 2022 2023 $ %
Revenues
Program Revenues:
Charges for Services $ 159,176 $ 90,214 $ 331,195 $ 297,629 $ 490,371 $ 387,843 $ (102,528) (20.9)% Operating Grants &
Contributions 74,245 106,441 71,273 112,764 145,518 219,205 73,687 50.6% Capital Grants & Contributions 128,553 220,903 17,893 31,550 146,446 252,453 106,007 72.4% General Revenues:
Property Taxes 154,130 167,088 — — 154,130 167,088 12,958 8.4% Business Tax 21,764 26,107 — — 21,764 26,107 4,343 20.0% Sales Taxes - Shared Revenues 192,874 197,563 — — 192,874 197,563 4,689 2.4% Other Local Taxes 37,004 38,855 — — 37,004 38,855 1,851 5.0% Investment Earnings (10,409) 8,245 (24,697) (1,299) (35,106) 6,946 42,052 (119.8)% Other Financing Sources-Leases — — (224) (188) (224) (188) 36 Total Revenues 757,337 857,148 395,440 440,458 1,152,777 1,297,606 144,829 12.6% Expenses
General Government 90,035 80,926 — — 90,035 80,926 (9,109) (10.1)% Public Protection 270,465 283,947 — — 270,465 283,947 13,482 5.0% Public Ways and Facilities 101,306 118,362 — — 101,306 118,362 17,056 16.8% Culture and Recreation 30,324 52,570 — — 30,324 52,570 22,246 73.4% Community Development 57,123 130,194 — — 57,123 130,194 73,071 127.9% Interest on Long-Term Debt 12,683 13,738 — — 12,683 13,738 1,055 8.3% Sewer, Water and Solid Waste — — 232,765 247,909 232,765 247,909 15,144 6.5% Transit — — 71,038 96,519 71,038 96,519 25,481 35.9% Airports — — 40,413 44,097 40,413 44,097 3,684 9.1% Fresno Convention Center — — 9,235 7,418 9,235 7,418 (1,817) (19.7)% Community Sanitation — — 8,743 8,450 8,743 8,450 (293) (3.4)% Parks and Recreation — — 416 513 416 513 97 23.3% Stadium — — 2,925 3,264 2,925 3,264 339 11.6%
Total Expenses 561,936 679,737 365,535 408,170 927,471 1,087,907 160,436 17.3% Increase (Decrease) in Net
Position Before Transfers 195,401 177,411 29,905 32,288 225,306 209,699 (15,607) (6.9)% Transfers (7,899) (8,154) 7,899 8,154 — — — —%
Change in Net Position 187,502 169,257 37,804 40,442 225,306 209,699 (15,607) (6.9)% Net Position - Beginning 1,022,791 1,210,293 1,581,864 1,620,929 2,604,655 2,831,222 226,567 8.7% Change in Accounting Estimate — — 26 — 26 — (26) Cumulative Effect of Accounting
Change - GASB 87 — 614 1,235 — 1,235 614 (621) —% Net Position - Beginning Restated 1,022,791 1,210,907 1,583,125 1,620,929 2,605,916 2,831,836 225,920 8.7% Net Position - Ending $ 1,210,293 $ 1,380,164 $ 1,620,929 $ 1,661,371 $ 2,831,222 $ 3,041,535 $ 210,313 7.4% CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 10 MANAGEMENT DISCUSSION & ANALYSIS Analysis of Changes in Government-Wide Net Position
The City’s overall Net Position increased to $3.04 billion: a $210.3 million (7.4%) increase from fiscal year 2022’s Net Position of $2.83 billion. Most notably, the Unrestricted Net Position decreased ; going from $583.8 million in fiscal year 2022 to $440.0 million in fiscal year 2023.
Several factors contributed to the overall increase in Net Position:
• City Revenues grew $144.8 million (12.6%), going from $ 1.15 billion in fiscal year 2022 to $1.30 billion in fiscal year 2023. The overall growth in revenues was caused by a $106.0 million (72.4%) increase in Capital Grants, $67.7 million ( 18.3%) increase in General Revenues, $73.7 million ( 50.6%) increase in Operating Grants, offset by a decrease of -$102.53 million (-20.9%) in Charges for Services.
• City Expenses increased from $ 927.5 million incurred in fiscal year 2022 to $1.09 billion in fiscal year 2023. This was driven by an increase of $117.8 million (21.0%) in Governmental Activities Expenses and an increase of $42.6 million (11.7%) in Business-Type Activities Expenses. The primary causes behind the increase in Governmental Activities Expenses were a $73.1 million increase in Community Development expenses, a $22.2 million increase in Culture and Recreation expenses, a $17.1 million increase in Public Way and Facility expenses, and a $13.5 million increase in Public Protection expenses. On the Business-Type Activities side, a $25.5 million million increase in the Transit expenses, $11.5 million rise in Water's expenses, $4.6 million increase in Sewer expenses, and $3.7 million increase in expenditures in Airports. • Total Assets went from $ 4.87 billion in fiscal year 2022 to $ 4.66 billion in fiscal year 2023: a -$208.3 million (-4.3%) decrease. The decrease in Total Assets was due primarily to a -$562.3 million decrease in the Net Pension Asset (from $805.7 million in fiscal year 2022 to $243.3 million in fiscal year 2023; a -69.8% decrease), which was partially offset by a decrease in two areas:
– a $109.7 million increase in Restricted Cash (from $374.2 million in fiscal year 2022 to $483.9 million in fiscal year 2022; a 29.3% increase); and, – a $92.9 million increase in Cash and Investments (from $653.3 million in fiscal year 2022 to 746.2 million in fiscal year 2023: a 14% increase).
• Total Deferred Outflows of Resources increased by $130.2 million ( 113.6%) from fiscal year 2022's figure of $114.6 million , mainly due to a $132.8 million increase of Deferred Outflows - Pensions and a -$2.4 million decrease in Deferred Outflows - OPEB. • Total Liabilities increased by $188.2 million (11.9%) from $1.59 billion in fiscal year 2022 to $1.78 billion in fiscal year 2023. The overall increase in Total Liabilities was mainly attributable to an increase of $78.5 million in Long Term Liabilities (primarily caused by increases in long-term debt related to Airports at the end of fiscal year 2023) and an increase of $54.1 million in Unearned Revenue (primarily due to a $49.5 million increase in Grant Deferred Revenue and Unearned Deposit Revenue).
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 11 MANAGEMENT DISCUSSION & ANALYSIS • A -$450.46 (- 83.7%) decrease in the Deferred Inflows of Resources, specifically, the Pension Revenue Applicable to Future Years.
Governmental Activities
In fiscal year 2023, Governmental Activities increased their Net Position by $169.9 million ( 14.0%) to $1.38 billion. The increase in Net Position occurred primarily within the Net Investment in Capital Assets, which grew by $94.1 million to fiscal year 2023's Net Investment in Capital Assets of $930.5 million, and Public Ways and Facilities, which increased by $39.5 million to fiscal year 2023’s Public Ways and Facilities ending Net Position of $168.2 million. These increases were offset by the Unrestricted Net Position Deficit decrease of -$212.3 million, which ended the fiscal year at -$155.3 million. Key factors affecting the Unrestricted Net Position Deficit were:
• Revenues grew strongly, going from $ 757.3 million in fiscal year 2022 to $ 857.1 million in fiscal year 2023: a $ 99.8 million (13.2%) increase. The overall increase was primarily the product of growth in two revenue categories. First, Capital Grants and Contributions increased 92.4 million (71.8%) to $220.9 million. Second, General Revenues increased by $44.2 million (11.2%): from $395.4 million in fiscal year 2022 to $439.6 million in fiscal year 2023. Almost all of the growth in this category can be attributed to a $42.1 million increase in Investment Earnings. • Expenses increased from $ 561.9 million in fiscal year 2022 to $ 679.7 million in fiscal year 2023, led by a 16.8% increase in Public Ways and Facilities expenses (from $101.3 million in fiscal year 2022 to $118.4 million in fiscal year 2023), a 5.0% increase in Public Protection expenses (from $270.5 million in fiscal year 2022 to $283.9 million in fiscal year 2023), and a 73.4% increase in Culture and Recreation costs (from $30.3 million in fiscal year 2022 to $52.6 million in fiscal year 2023. Most of the increase in the Public Protection and Public Ways and Facilities expenses can be attributed to increased personnel Pension expenses. Increases in Culture & Recreation expenses can be attributed to an increase in council motion and Fleet Acquisition expenses. • Total Assets decreased by -$208.8 million (-8.9%) from fiscal year 2022’s Total Assets balance of $2.34 billion. The overall decrease in Total Assets was primarily caused by a decrease of -$452.1 million (-70.2%) in the Net Pension Asset to $ 192.3 million. This decrease was partially offset by an increase in Restricted Cash of $38.7 million (29.0%) to $171.9 million. • Total Liabilities increased by 13.6%, or $ 108.5 million, from fiscal year 2022’s Total Liabilities of $798.5 million. A $58.6 million increase in Unearned Revenue (from $106.6 million in fiscal year 2022 to $165.3 million in fiscal year 2023) generated by unspent grant funds and increase in total Long-Term Liabilities (Due Within a Year and Due in More than One Year, combined) of $24.6 million (3.9%) caused by normal debt service payments made during the year.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 12 MANAGEMENT DISCUSSION & ANALYSIS Governmental Activities - Charts and Graphs
The following charts and graphs illustrate the City’s governmental revenues by source and its expenses and revenues by function. As can be seen, Public Protection is by far the largest function reflecting the City’s greatest overall expenses.
Fiscal Year
% of Total Revenue
Governmental Activities
Revenue by Type (2 Year Comparative)
11%
21%
12%
10%
26%
17%
3%
3%
23%
25%
19%
19%
4%
5%
Charges for Services
Operating Grants & Contributions
Capital Grants & Contributions
Business Taxes
Sales Tax
Property Taxes
Other Local Taxes
2023
2022
0 20 40 60 80 100
Fiscal Year
% of Total Expenses
Governmental Activities
Expenses by Type (2 Year Comparative)
42%
49%
17%
18%
19%
10%
8%
5%
12%
16%
2%
2%
Public Protection
Public Ways and Facilities
Community Development
Culture and Recreation
General Government
Interest and Long-Term Debt
2023
2022
0 20 40 60 80 100
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 13 MANAGEMENT DISCUSSION & ANALYSIS (in Millions)
Program Revenues and Expenses - Governmental Activities (2 Year Comparative)
2023 Program Revenues 2022 Program Revenues
2023 Expenses 2022 Expenses
Public Protection Public Ways
and Facilities
Community
Development
Culture and
Recreation
General
Government
Interest on
Long-Term Debt
$0
$50
$100
$150
$200
$250
$300
The following is an analysis of some of the funds within the Governmental Activities category:
General Fund
Fund Balance in the General Fund increased from $104.7 million in fiscal year 2022 to $127.4 million in fiscal year 2023. It is significant to note that the Unassigned Fund Balance increase from $37.1 million in fiscal year 2022 to $54.3 million in fiscal year 2023: a $17.2 million (46.3%) increase.
Fiscal year 2023's revenues showed marked growth when compared to fiscal year 2022’s revenues; increasing by $35.6 million ( 8.7%) from fiscal year 2022’s total of $ 407.6 million . The increase was primarily in Taxes, which increased $20.1 million (5.6%). The main driver in the overall increase in Tax Revenue came from a $13.0 million growth in Property Taxes due to increased property assessed valuations. Additional growth in the Tax Revenue category was provided by Sales Tax, which grew $4.7 million, and Business Tax, which increased by $4.3 million compared to the prior fiscal year.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 14 MANAGEMENT DISCUSSION & ANALYSIS General Fund expenditures increased by $28.5 million, or 7.6%, to a total of $ 402.9 million. The change in expenditures can be explained by the following factors:
• An increase in Public Protection expenditures, which increased from $263.2 million in fiscal year 2022 to $281.8 million in fiscal year 2023: a $18.7 million, or 7.1% increase. • An increase in General Government expenditures, which increased from $27.1 million in fiscal year 2022 to $37.3 million in fiscal year 2023: a $10.2 million, or 37.5% increase. • An increase in Public Ways and Facilities expenditures, which increased from $11.3 million in fiscal year 2022 to $18.6 million in fiscal year 2023: a $7.3 million, or 64.5% increase. • The increases in expenditures were offset by Capital Outlay expenditures, which decreased from $19.6 million in fiscal year 2022 to $4.5 million in fiscal year 2023; a -$15.1 million, or -76.8%, decrease. The reduction in Capital Outl ay was primarily due to a -$11.2 million reduction in Land Acquisition Costs and -$4.5 million decrease in Contract Construction expenses.
A large portion of the difference between actual expenditures and actual revenues was funded by transfers from other funds. Overall, Transfers In increased $17.0 million (198.1%) to $25.6 million.
The additional revenues produced a large increase in Total Assets, which grew $24.1 million (14.0%) to $195.7 million. The increase was driven by two accounts:
• Accounts Receivable, which increased $3.9 million (8.1%) to $51.7 million • Restricted Cash, which rose $5.9 million (12.3%) to $54.1 million While Total Assets grew significantly, the percentage growth in Total Liabilities decreased compared to the prior fiscal year. Total Liabilities decreased -$0.7 million ( -1.5%) to $43.1 million. The overall decrease in Total Liabilities can be attributed to a decrease of -$10.6 million (- 97.9%) in Advances to Others and a decrease of -$3.4 million (-7.9%) in Intergovernmental Assets.
Significant committed fund balance amounts of the General Fund include:
• $44.2 million for the General Fund Emergency Reserve, • $6.1 million for the General Fund - Housing Reserve, and • $3.42 million for the 27th Pay Period Reserve.
General Fund Budget to Actual Comparison
The fiscal year 2023 Adopted Budget was made up of $ 653.3 million of budgeted revenues and $ 601.6 million of appropriations. After various amendments were made throughout the fiscal year, the General Fund ended the fiscal year with $593.6 million of budgeted revenues and $541.9 million of appropriations.
Actual results on a budgetary (cash) basis of accounting were $ 555.7 million of revenues and $ 466.1 million of expenditures. Thus, the actual revenues were $ -38.0 million (-6.4%) under the fiscal year-end budgeted revenues, while the actual expenditures were $ -$50.0 million (- 9.2%) under fiscal year-end appropriations.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 15 MANAGEMENT DISCUSSION & ANALYSIS The major differences between the budget and the actual results are noted below (Actual Budgetary Basis excludes all FY23 activity that posted after June 30, 2023):
Comparison of Revenues and Expenditures - Budget to Actual / General Fund (in thousands)
Budgeted
Original
Budgeted
Final
Actual
Budgetary
Basis
Over (Under)
Final Budget Explanation
Revenues:
Property
Taxes $159,673 $159,673 $166,659 $6,986 Assessed values of homes continued to increase due to the strong demand for housing in the Central Valley.
Sales Tax $161,666 $161,666 $125,446 ($36,220)
Lower than anticipated sales tax due to economic uncertainty and rising inflation costs which has resulted in less consumer spending.
Charges for
Services $35,415 $35,415 $31,574 ($3,841)
Lower than anticipated due to RDA Loan Repayment revenue moving to Low and Moderate Housing and a reduction in
Police Event Service fee revenues.
Expenditures:
Other General
Government $62,898 $51,375 $38,427 ($12,948) COVID-19 Response expenditures were less than budget.
Public Ways &
Facilities $48,940 $38,865 $22,761 ($16,104)
Spending on street repair and replacement, median island maintenance, street sweeping, and neighborhood
infrastructure projects was less than budget..
Community
Development $55,642 $52,726 $37,580 ($15,146) Expenditures for special projects in Planning and Development were less than budget.
Capital Outlay $49,113 $15,520 $3,465 ($12,055)
Expenditures for capital projects were lower than budget due to less spending related to minor capital activities, including capital projects funded by ARPA reimbursements.
A more detailed look at the budget versus actual comparison for the General Fund can be found on page 171 in the Required Supplementary Information section.
Grants Special Revenue Fund
Fund Balance in the Grants Special Revenue Fund rose from $ 32.3 million in fiscal year 2022 to $ 43.5 million in fiscal year 2023. Total Liabilities increased from $117.1 million in fiscal year 2022 to $171.7 million in fiscal year 2023: a $54.6 million ( 46.7%) increase. This is mainly due to Unearned Revenue increasing from $97.7 million in fiscal year 2022 to $147.2 million in fiscal year 2023: a 50.6% increase.
Fiscal year 2023 revenues in the Grants Special Revenue Fund were up $118.6 million ( 112.9%) to $223.6 million. Expenditures grew $69.6 million (57.4%) from fiscal year 2022’s level of $121.2 million to fiscal year 2023’s total of $ 190.8 million . Large increases were seen in the General Government category (up $0.8 million, or 2.2%), Public Ways and Facilities (up $4.56 million or 23.3%), Culture and Recreation (up $2.62 million or 207.4%), Capital Outlay (up $0.3 million, or 1.4%), and Community Development category (up $66.8 million, or 342.6%). The increase in the Community Development category was due to multiple large infrastructure projects underway in fiscal year 2023 related to affordable housing in the City of Fresno. Additionally, several public works infrastructure projects were implemented causing an increase in the Public Ways and Facilities category.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 16 MANAGEMENT DISCUSSION & ANALYSIS Other Governmental Funds
Fund Balance for the Other Governmental Funds rose $ 40.5 million between fiscal year 2022 and fiscal year 2023 ($ 219.6 million versus $ 260.1 million , respectively) . The growth in the Fund Balance was primarily due to a $24.4 million increase in Fund Balance for the Measure P fund, a $11.3 million increase in the UGM fund, and a $8.8 million increase in the Measure C fund.
Business-Type Activities
Business-Type Activities for fiscal year 2023 decreased the Net Position by -$10.6 million (-0.7%) over fiscal year 2022’s Business-Type Activities Net Position of $1.62 billion. Key factors affecting the Net Position were:
• Total Assets increased by $0.6 million ( 0.02%) from fiscal year 2022’s Total Asset balance of $2.53 billion. This was primarily due to a -$113.9 million (-36.1%) reduction in assets Not Being Depreciated compared to the fiscal year 2022 figure of $315.8 million and a -$110.2 (-68.4%) decrease in the Net Pension Asset to the fiscal year 2022 figure of $161.2 million. This was offset by a $78.7 million (5.6%) increase in Net of Accumulated Depreciation to the fiscal year 2022 figure of $1.41 billion, a $71.0 million (29.5%) increase in Restricted Cash to the fiscal year 2022 figure of $241.0 million, and a $63.1 million (20.5%) increase in Cash and Investments compared to the fiscal year 2022 figure of $307.1 million.
• Total Liabilities rose by 10.1%, or $79.7 million, from fiscal year 2022’s Total Liabilities of $789.7 million. The increase was primarily due to a $69.7 million ( 10.5%) increase in Long-Term Liabilities.
• Revenues went from $395.4 million in fiscal year 2022 to $440.5 million in fiscal year 2023: a $45.2 million ( 11.4%) increase. This growth can be attributed to a $35.1 million ( 55.8%) increase in Transit Operating Grants and a $14.6 million (142.2%) increase in Transit General Revenues. The increase in Operating and General revenue was offset by a -$33.6 million (-10.1%) decrease in Charges for Services compared to the prior year. The decrease in Charges for Services were primarily driven by a decrease of -$13.6 million, (-9.8%) in the Water Fund and a decrease of -$7.6 million, (-67.3%) in the Transit Fund. • Expenses went from $ 365.5 million in fiscal year 2022 to $408.2 million in fiscal year 2023; a $42.6 million ( 11.7%) increase. The primary driver behind this increase was $25.5 million (35.9%) of growth in the Transit Fund's expenses. Additionally, growth of $11.5 million (10.2%) in the Water Fund's expenses and $4.6 million (5.8%) in the Sewer Fund's expenses.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 17 MANAGEMENT DISCUSSION & ANALYSIS Business-Type Activities - Charts and Graphs
The following charts and graphs illustrate the City’s Business-Type revenues and expenses by both source and function. Sewer, Water, and Solid Waste are the largest Business-Type Activities reflecting the City’s greatest overall expenses.
Fiscal Year
% of Total Revenue
Business-Type Activities
Revenue by Type
(2 Year Comparative)
68%
84%
26%
18%
7%
Charges for Services
Operating Grants
& Contributions
Capital Grants
& Contributions
Interest & Investment
Income
2023
2022
0 20 40 60 80 100
Fiscal Year
% of Total Expenses
Business-Type Activities
Expenses by Type
(2 Year Comparative)
24%
19%
63%
66%
2%
3%
12%
12% 1%
Transit
Sewer, Water, Solid Waste,
& Community Sanitation
Convention Center
Airport
Stadium
2023
2022
0 20 40 60 80 100
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 18 MANAGEMENT DISCUSSION & ANALYSIS (in Millions)
Business-Type Activities
Program Revenues and Expenses
(2 Year Comparative)
2023 Program Revenues 2022 Program Revenues
2023 Expenses 2022 Expenses
Airport Convention Center Parks &
Recreation
Stadium Sewer, Water,
Solid Waste &
Community
Sanitation
Transit
$0
$25
$50
$75
$100
$125
$150
$175
$200
$225
$250
$275
$300
The following is an analysis of some of the funds within the Business-Type Activities category:
Water
The Water Fund's (Water) Net Position showed an increase over fiscal year 2022’s levels. Net Position increased from $534.8 million in fiscal year 2022 to $541.7 million in fiscal year 2023: a $6.9 million (1.3%) increase. The change in net position was driven by the following factors:
• Water's deferred inflows decreased from $23.3 million in fiscal year 2022 to $5.4 million; a -$17.9 million ( -77.0%) decrease. The decrease was primarily driven by a -$16.0 million ( -95.7%) reduction in Unamortized Pension Expenses.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 19 MANAGEMENT DISCUSSION & ANALYSIS • Water's Operating Expenses increase by $9.4 million (9.5%) to $108.8 million in fiscal year 2023.
The increase in expenses was primarily the result of a $3.8 million (7.6%) increase in Costs of Services costs (primarily in water purchases) and a $4.6 million (15.5%) increase in Depreciation costs.
• Water's Non-Operating Revenue increased from -$20.2 million to -$7.5 million; a $12.7 million (62.7%) increase. This was primarily caused due to a reduction in Unrealized Gain (Loss) on Cash Value of $7.0 million ( -61.4%); changing from -$11.3 million in fiscal year 2022 to -$4.4 million in fiscal year 2023. In addition, Operating Grants increased from $0.2 million in fiscal year 2022 to $4.1 million in fiscal year 2023; a $3.9 million (2,023.4%) difference. • Total Assets decreased from $1.03 billion in fiscal year 2022 to $986.0 million in fiscal year 2023, a $-$39.8 million (-3.9%) decrease. A -$29.5 million (-97.4%) decrease in the Unamortized CVP Water Settlement and a -$18.9 million ( -62.3%) decrease in the Net Pension Asset was the primary cause of the overall decrease in Water's assets.
Sewer
The Sewer Fund's Net Position increased by $5.2 million (0.7%), from $722.7 million in fiscal year 2022 to $727.9 million in fiscal year 2023. The driver behind the Net Position increase was an increase of $31.6 million (23.5%) in Current Assets, an increase of $2.3 million (3.7%) in Total Restricted Assets, an increase of $3.4 million (91.3%) in Deferred Outflows, and a -$15.4 million (-72.6%) decrease in Total Deferred Inflows from fiscal year 2022's figure of $21.3 million. This was offset by a -$30.0 million (-69.4%) decrease in Total Other Assets and a -$19.7 million (-3.1%) decrease in Capital Assets.
The decrease in Total Other Assets and Capital Assets contributed to the decrease of -$15.8 million (-1.8%) in Total Assets to $860.5 million . The overall decrease in Total Other Assets was primarily caused by a -$17.6 million decrease in Net Pension Asset and -$11.1 million decrease in Advances to Other Funds. The overall decrease in Capital Assets was due to a -$28.7 million decrease in Accumulated Depreciation. These decreases were partially offset by an increase in Current Assets of $31.6 million (23.5%). The increase in Current Assets was mainly caused by a $28.7 million (27.2%) increase in Cash and Investments.
The reduction in Total Liabilities was primarily caused by a -$2.6 million (-2.8%) decrease in Long-Term Notes Payable and a decrease of -$1.3 million ( -90.5%) related to Other Liabilities. The decrease in Long-Term Liabilities was offset by an increase in Deposits Held For Others totaling $1.3 million (10.7%).
Revenues were up slightly $6.1 million, or (7.9%) due to increases in Charges for Services; mainly due to an increase in Customer User Charges of $3.8 million. Operating Expenses grew by $10.0 million (14.3%). The Operating Expense growth consisted primarily of a $ 4.8 million (16.9%) increase in Costs of Services and $3.8 million (15.5%) in Depreciation.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 20 MANAGEMENT DISCUSSION & ANALYSIS Solid Waste Management
The Solid Waste Management Fund's (Solid Waste) Net Position declined from fiscal year 2022’s figure of $29.4 million to fiscal year 2023’s figure of $28.2 million; a -$1.1 million (-3.9%) decrease. The Net Position decrease was primarily due to a -$13.9 million (-45.5%) decrease in Total Other Assets, which included a -$12.9 million ( -64.1%) decrease in Net Pension Asset to the fiscal year 2022 total of $20.2 million. In addition, Total Restricted Assets decreased by -$4.8 million ( -47.1%) to $5.4 million.
These decreases were offset by a -$11.2 million (-82.0%) decrease in Total Deferred Inflows, mainly due to a decrease in Unamortized Pension Expenses of -$10.8 million (-95.7%).
Solid Waste's Net Operating Revenue increased to -$1.0 million in fiscal year 2023, a $2.4 million (69.3%) increase compared to fiscal year 2022's figure of -$3.4 million. This change was mainly due to Total Operating Expenses decreasing by -$5.3 million ( -13.6%) to fiscal year 2022's figure of $38.8 million.
Transit
The Transit Fund continues to experience growth post-pandemic and ridership increased in 2023. Transit transported 8.0 million passengers in fiscal year 2023, a 14.3% increase from fiscal year 2022’s ridership
7.0 million passengers. Overall, transit ridership continues to increase and should reach pre-pandemic levels by 2025.
Transit's revenues decreased -$7.6 million ( -67.3%) to $3.7 million . Operating Expenses grew $20.1 million ( 28.9%). Transit's operating results would have resulted in a significant reduction in Net Position were it not for a large influx of grant funding from federal and state agencies. That influx can be seen in a $35.1 million (55.8%) increase in Operating Grant Revenue to $98.0 million. These awards also drove growth in Total Current Assets, which went from $29.8 million in fiscal year 2022 to $65.7 million in fiscal year 2023; a $35.9 million (120.7%) increase. The increase in Total Current Assets was offset by a decrease in the Net Pension Asset of -$38.8 million (-75.1%) and Total Restricted Assets of -$12.8 million (-23.8%). The impact of additional grant funding caused the Transit Fund's Net Position to grow by $35.0 million (22.6%) from $154.6 million in fiscal year 2022 to $ 189.6 million in fiscal year 2023.
Airports
Airports' Fund is exceeding pre-pandemic passenger levels with fiscal year 2023's origin and destination passengers numbering 2.4 million, 14.0% higher than the prior fiscal year's passenger count of 2.1 million. The Airport Fund's passenger performance continues to outpace other small hub airports in the Western Pacific Region. The increase in passengers also translated into an increase in non-airline revenues.
The increase in passenger traffic had an impact on Operating Revenues, which increased $0.7 million (2.0%) to $35.1 million . The overall increase in Operating Revenues was powered by increases in passenger driven and airline activity revenues, particularly Parking Revenues, which rose to $1.1 million CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 21 MANAGEMENT DISCUSSION & ANALYSIS (11%). Operating Expenses increased by $5.2 million (15.0%) to a total of $39.6 million. The increase in Operating Expenses was primarily driven by an increase of $2.3 million (15.4%) in Costs of Services and a $ 2,562,000 ( 32.2%) increase in Administration related expenses. The increase in Operating Expenditures was offset by a $4.0 million (58.7%) increase in Non-Operating Revenue, mainly due to an increase of $2.7 million (34.1%) in Operating Grants.
The increase in revenues and small change in expenses had a predictable effect on Total Assets, which increased $78.8 million ( 25.4%) to $389.4 million . The overall increase in Total Assets was due to several factors:
• A $75.7 million (197.5%) increase in Restricted Assets, • A $13.2 million (29.2) increase in Construction in Progress, • A $5.0 million (653.7%) increase in Grants Receivable, • A -$12.0 million (-8.0%) decrease in Accumulated Depreciation, and • A -$10.7 million (-72.8%) decrease in Advances to Other Funds.
In addition to the increase in Total Assets, Airports experienced an increase in Total Liabilities, which grew $83.2 million (96.3%) to $169.6 million. This was mainly due to an increase of $75.2 (103.8%) in Long-Term Bonds Payable compared to fiscal year 2022's figure of $72.4 million due to the Airport Revenue Bonds 2023 A and B for the terminal expansion and an increase of $7.2 million (134.0%) in Accrued Liabilities compared to fiscal year 2022's figure of $5.4 million. These increases were offset by a decrease of -$11.0 million (-40.6%) in Deferred in-flows.
The net effect of these changes caused the Total Net Position to increase by $8.5 million (4.2%) from fiscal year 2021's Net Position of $199.5 million to $207.9 million.
Convention Center
Convention Center recorded $4.3 million of revenue in fiscal year 2023; a -$1.4 million (-25%) decrease compared to the fiscal year 2022 figure of $5.7 million. Convention Center's expenses also decreased in fiscal year 2023 to $6.8 million from fiscal year 2022’s expenses of $ 8.4 million ; a difference of -$1.6 million (-19.2%). The decreases in expenses were mainly due to a -$1.3 million (-24.8%) decrease in the Cost of Services.
The Convention Center's Net Position grew from $2.6 million in fiscal year 2022 to $4.5 million in fiscal year 2023: a $1.9 million (74.2%) improvement. A drop of -$1.5 million (-7.7%) in Total Liabilities, mainly caused by a -$3.3 million decline in Bonds Payable as a result of scheduled debt service payments, contributed significantly to the improvement in Net Position. This decline in Bonds Payable was partially offset by an increase in Deposits Held for Others of $1.6 million (380.0%) from fiscal year 2022's figure of $0.4 million. In addition, Total Assets increased by $0.4 million (1.8% ) from fiscal year 2022's figure of $21.7 million; this was primarily due to a $3.5 million (586.1%) increase in Restricted Cash.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 22 MANAGEMENT DISCUSSION & ANALYSIS Stadium
In December 2020, Major League Baseball completed its overhaul of the minor league system. As a result of that overhaul, Fresno's baseball team moved from a AAA affiliation to an A affiliation. This move to a lower affiliation resulted in modification to the operating lease between the City and the team.
Among the changes to the terms of the lease were:
• Annual rent was reduced from $500,000/year to $100,000/year. • City agreed to pay up to $300,000/year in utility costs. • Annual capital contribution made by the team and the City decreased from $300,000/year to $50,000/year from each party and shall escalate at 2% annually. • City will receive 15% of any naming rights revenues above $650,000/year (escalating 2% per year).
• Team will pay $1/ticket for any turnstile attendance over 150,000/year.
In spite of the reduced financial contribution from the team, the Stadium Fund continued to build on the improvement in Net Position it displayed in fiscal year 2022. Net Position grew from $6.2 million in fiscal year 2022 to $8.8 million in fiscal year 2023; an increase of $2.6 million (42.2%). Two factors drove the overall increase in Net Position:
• A reduction in Long-Term Liabilities of -$2.7 million (-11.4%); mainly caused by a -$2.1 million (-9.1%) decrease in Bonds Payable as a result of scheduled debt service payments. • A reduction in Current Liabilities of -$0.5 million (-18.0%); primarily due to a -$0.6 million (-71.4%) decrease in Accrued Liabilities.
Internal Service Funds
The Net Position deficit in the Internal Service Funds grew by -$42.3 million (-74.7%) to -$98.9 million in fiscal year 2023. The increase in the Net Position deficit was primarily due to an increase of $30.1 million (14.49%) in the Short-Term and Long-Term (combined) Liability for Self-Insurance and $6.8 million (20.6%) increase in Due to Other Funds. Partially offsetting these liability increases were increases of $18.1 million (19.2%), mainly driven by a $16.2 million (11.0%) increase in Machinery and Equipment and $9.1 million (73.0%) increase in Buildings, Systems, and Improvements.
The Internal Service Funds' Statement of Revenues, Expenses, and Changes in Net Position mirrored the results of the Statement of Net Position. Contributors to the increase in expenses are a $2.9 million and $2.8 million increase of the Fleet Management Fund's Amortization and Fleet Acquisition and a $16.7 million and $4.5 million increase in Refunds/Claims and Insurance Payments for the Risk Fund.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 23 MANAGEMENT DISCUSSION & ANALYSIS
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
The City’s capital assets for its Governmental and Business-Type Activities, before Component Units, as of June 30, 2023, amount to $2.78 billion (net of accumulated depreciation). Capital assets include land, buildings and improvements, machinery and equipment, park facilities, roads, streets, traffic signals, streetlights, bridges, and construction in progress. The City’s capital assets net increase for the current fiscal year was approximately 1.8% (a 8.5% increase for Governmental Activities, a -2.0% decrease for Business-Type Activities) as shown in the table below. Capital assets for the fiscal year ended June 30, 2022 amounted to $2.73 billion million (net of accumulated depreciation).
Changes in Capital Assets, Net of Depreciation
(in thousands)
Asset Category Governmental
Activities
Business-Type
Activities
Total
Government-Wide
2022 2023 2022 2023 2022 2023
Land $270,918 $291,550 $53,867 $53,868 $324,785 $345,418 Intangibles (Indefinite Life) — — 18,897 18,897 18,897 18,897 Buildings and Improvements,
Net 178,525 178,622 847,332 811,435 1,025,857 990,057 Machinery and Equipment, Net 65,982 72,483 39,798 41,167 105,780 113,650 Infrastructure 397,715 397,540 521,307 631,821 919,022 1,029,361 Rights to Use Assets Being
Amortized 8,027 15,193 533 3,241 8,560 18,434
Construction In Progress 85,336 136,722 243,040 129,140 328,376 265,862 Total $1,006,503 $1,092,110 $1,724,774 $1,689,569 $2,731,277 $2,781,679 Major capital asset events during fiscal year 2023, some of which were in progress during the previous fiscal year, included the following:
† Clarion Pointe Triage
In FY23, the City purchased the Clarion Pointe motel to provide interim shelter for homeless residents in conjunction with the City’s Encampment Resolution Fund Round 2 (ERF-2) and Homeless Housing Assistance and Prevention (HHAP) programs. This motel had been recently renovated and did not require any rehabilitation prior to operation. The Poverello House, a local non-profit organization, serves as the operator for this site to provide Triage Center emergency shelter and bridge housing services. The facility provides 90 shelter beds for the City’s ERF-2 program and 30 shelter beds for the HHAP program. Wraparound services provided at Clarion Pointe are intended to create a pathway to permanent housing for homeless individuals residing in the shelter. This program uses evidence-based practices to ensure that these interventions are successfully connecting the most vulnerable to housing and helping to ensure stability for those housed.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 24 MANAGEMENT DISCUSSION & ANALYSIS † FAT Terminal Expansion Project
The City’s Airport Department has completed the design and is currently in the Construction phase of expansion of over 116,000 square feet if terminal facility. This $150 million Terminal Expansion project, the largest in the history of the airport, is funded with $70 million in Airport Revenue Bonds with the balance coming from other sources including federal grants and passenger facility charges. The expansion project will result in a new terminal concourse with two jet bridge gates for domestic and international use, new concessions, and tenant facilities; new federal inspection service facility, with attached arrivals lobby and outdoor plaza; an expanded passenger screening checkpoint; and a new Checked Baggage Inspection System (CBIS).
Construction is underway with an expected opening of Fall 2025. † North Ave Sewer Trunk Main Realignment
The Department of Public Utilities, Wastewater Management Division worked to design and construct a realignment of the sewer main and repair to divert flow away from an extremely deteriorated section of sewer pipe. Work began on the Installation of a 66" sewer pipe diversion on North Ave sewer trunk main between Cedar and Maple Avenues. Emergency work included the installation of a sewer bypass facility, video inspections for assessing the feasibility of performing repairs, obtaining railroad permits, and the construction repair. The project is designed to convey the flow through a new pipe structure and allow for the replacement of the existing main and will run in parallel with another large diameter pipeline.
At June 30, 2023 , the City had commitments related to various construction projects associated with Governmental Activities totaling $ 93.2 million. Commitments connected with Business-Type Activities at fiscal year-end amounted to $ 28.9 million. The most significant of the Governmental Activities project was Phase 2 of the FAT Terminal Expansion ( $85.4 million). The most significant of the Business-Type Activities projects were the Clarion Pointe Triage ( $9.1 million) and Parkway Inn Property Repairs ($2.7 million). A complete list of projects appear in Note 13(G) - Commitments and Contingencies, page 162 under Construction and Other Significant Commitments.
Debt Administration
At the end of fiscal year 2023, the City had total long-term bond obligations, notes, and leases payable outstanding of $916.1 million. Of this amount, $76.3 million are obligation bonds, backed by the full faith and credit of the City, while $681.2 million are revenue bonds and notes of the City’s business enterprises, and $1.1 million are tax allocation debt issued by the Successor Agency of the Redevelopment Agency. The remaining $155.6 million includes lease revenue bonds, notes and capital leases for general governmental projects. For detailed information on the City's debt, see Note 7-Long Term Liabilities, pages 102-120.
During fiscal year 2023, the City’s total bonded debt decreased by $22.4 million. This decrease was due to both normal debt service payments made during the year, netted by an increase in loans to the Water Division by the State Water Resources Control Board.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 25 MANAGEMENT DISCUSSION & ANALYSIS The City also took the following actions in fiscal year 2023:
• Drew down an additional $9.1 million in already-approved loans from the California State Water Resources Control Board for water transport projects.
• Borrowed an additional $3.6 million through the Master Equipment Lease Purchase Agreement with Banc of America Public Capital Corp. in fiscal year 2023 for public safety vehicles. • Issued $91.1 million in new Airport Revenue Bonds to refinance the 2013 Airport Revenue Refunding Bonds and expand Fresno Yosemite International Airport terminal for additional domestic and international travel.
The ratio of net general obligation bonded debt to taxable valuation and the amount of bonded debt per capita are useful indicators of the City's debt position to management, citizens and investors. A comparison of these indicators (as stated in thousands) follows:
Fiscal Year
2023 2022 2021
General Bonded Debt (Par Amount) $ 78,255 $ 88,640 $ 98,395 General Bonded Debt Per Capita $ 142.00 $ 163.00 $ 180.00 Debt Service Tax Rate Per $100 Taxable Valuation $ 0.17 $ 0.21 $ 0.24 Although the City’s Charter imposes a limit on the amount of general obligation bonds that the City can have outstanding at any given time of 20% of the assessed value of property in the City, the City realizes that it cannot currently support debt of that magnitude with its current tax base and is very cautious about issuing general obligation debt. Currently, there are no general obligation bonds outstanding
FINANCIAL OUTLOOK
The City continued to experience a strong rebound in financial performance from the impacts of the pandemic. Sales tax revenue experienced another record year of growth resulting in $197.6 million for fiscal year 2022 . Meanwhile property taxes continued with steady growth due to assessed valuation increases resulting from sales. The City's local economy boasts the second strongest recovery in the United States, evidence of it's resiliency. Additionally, the City's allocation of the American Rescue Plan Act (ARPA) continue to support recovery efforts.
Nationally, risks to economic growth are increasingly present. Confronted with concerns of rising inflation, the Federal Reserve has raised interest rates multiple times in an effort to cool economic activity while avoiding a recession, a task the Legislative Analyst's Office labels as "narrow". Already, the effects of Federal Reserve actions can be seen statewide with decreases in home sales, car sales and stock prices. Unemployment rates remain under 10.0%; creating strain for employers to meet demand. These realities underscore the importance of prudent financial management with a sound reserve management policy. The City concluded the 2023 fiscal year with a $43.9 million General Fund Emergency Reserve.
The City will continue to monitor sources with particular expertise of influencing factors that may effect the CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 26 MANAGEMENT DISCUSSION & ANALYSIS fiscal condition and outlook of economic activity. Publications provided by the Legislative Analyst's Office, the UCLA Anderson Forecast and others provide invaluable insights that help shape planning.
CONCLUSION
Fiscal year 2023 continued to demonstrate financial stability along the path to broader economic recovery from the effects of the pandemic. While encouraging, risks remain going forward. In addition to the aforementioned conditions facing the national economic landscape, significant geopolitical pressures exist threatening economic growth. These conditions cannot be understated and will surely shape planning going forward as the City seeks to provide stability in services for the citizens of Fresno.
REQUESTS FOR INFORMATION
This financial report is designed to provide citizens, taxpayers, customers, investors and creditors with a general overview of the City’s finances and to demonstrate the City’s accountability for the money it receives. Below is the contact information for questions about this report or requests for additional financial information.
Documents can be made accessible in alternative ADA compliant formats upon request. To request documents in alternative ADA Compliant formats, contact the Finance Department at [email protected] or (559) 621-7001.
CITY OF FRESNO
Office of the Controller/Finance Department
2600 Fresno Street, Room 2156
Fresno, California 93721-3622
www.fresno.gov
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 27 MANAGEMENT DISCUSSION & ANALYSIS
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28 CITY OF FRESNO, CALIFORNIA
Statement of Net Position
June 30, 2023
(in thousands)
Primary Government
Governmental
Activities
Business-Type
Activities Total
Assets
Cash and Investments $ 376,012 $ 370,186 $ 746,198
Accounts Receivables, Net 161,538 133,136 294,674
Internal Balances 55,895 (55,895) —
Inventories 1,491 10,138 11,629
Prepaid Items 440 2,167 2,607
Other Assets 1,006 701 1,707
Property Held for Resale 3,600 — 3,600
Restricted Cash and Investments 171,879 312,066 483,945 Restricted Interest Receivable — 814 814
Loans, Notes, Leases, and Other Receivables, Net 77,441 13,146 90,587 Net Pension Asset 192,319 51,010 243,329
Capital Assets:
Not Being Depreciated 428,272 201,905 630,177
Net of Accumulated Depreciation/Amortization 663,838 1,487,664 2,151,502 Total Assets 2,133,731 2,527,038 4,660,769
Deferred Outflows of Resources
Charge on Refunding 2,814 247 3,061
Deferred Outflows - Pensions 173,598 38,966 212,564
Deferred Outflows - OPEB 20,472 8,661 29,133
Total Deferred Outflows of Resources 196,884 47,874 244,758 Liabilities
Accrued Liabilities 66,076 41,838 107,914
Unearned Revenue 165,287 50,799 216,086
Deposits from Others 16,912 21,860 38,772
Other Liabilities — 132 132
Long-Term Liabilities:
Due Within One Year 98,759 22,394 121,153
Due in More than One Year 560,033 732,417 1,292,450
Total Liabilities 907,067 869,440 1,776,507
Deferred Inflows of Resources
Deferred Inflows - Pension 14,333 3,981 18,314
Deferred Inflows - OPEB 43,493 19,130 62,623
Deferred Inflows - Leases 330 20,990 21,320
Total Deferred Inflows of Resources 43,384 44,101 87,485 Net Position
Net Investment in Capital Assets 930,489 1,015,061 1,945,550 Restricted for:
General Government 26,901 — 26,901
Public Protection 8,632 — 8,632
Public Ways and Facilities 168,216 — 168,216
Culture and Recreation 62,058 — 62,058
Community Development 92,431 — 92,431
Net Pension Asset 192,319 51,010 243,329
Emergency Reserve 44,182 — 44,182
27th Pay Period Reserve 3,415 — 3,415
Housing Reserve 6,109 — 6,109
Asset Sale Reserve 760 — 760
Unrestricted (Deficit) (155,348) 595,300 439,952
Total Net Position $ 1,380,164 $ 1,661,371 $ 3,041,535
The notes to the financial statements are an integral part of this statement. 29 CITY OF FRESNO, CALIFORNIA
Statement of Activities
Fiscal Year Ended June 30, 2023
(in thousands)
Net (Expense) Revenue and Changes in
Net Position
Program Revenue Primary Government
Operating Capital
Charges for Grants and Grants and Governmental Business-Type Functions/Programs Expenses Services Contributions Contributions Activities Activities Total Primary Government
Governmental Activities
General Government $ 80,926 $ 23,448 $ 2,127 $ 71,203 $ 15,852 $ — $ 15,852 Public Protection 283,947 9,092 6,242 8,756 (259,857) — (259,857) Public Ways and Facilities 118,362 42,770 63,344 65,625 53,377 — 53,377 Culture and Recreation 52,570 412 7,490 791 (43,877) — (43,877) Community Development 130,194 14,492 27,238 74,528 (13,936) — (13,936) Interest on Long-term Debt 13,738 — — — (13,738) — (13,738) Total Governmental Activities 679,737 90,214 106,441 220,903 (262,179) — (262,179) Business-Type Activities
Water System 123,770 124,858 4,078 691 — 5,857 5,857 Sewer System 83,232 84,086 — 3,600 — 4,454 4,454 Solid Waste Management 40,907 32,517 5 — — (8,385) (8,385) Transit 96,519 3,678 98,008 24,835 — 30,002 30,002 Airports 44,097 37,835 10,673 2,324 — 6,735 6,735 Fresno Convention Center 7,418 4,307 — — — (3,111) (3,111) Community Sanitation 8,450 9,559 — — — 1,109 1,109 Parks and Recreation 513 687 — — — 174 174
Stadium 3,264 102 — 100 — (3,062) (3,062)
Total Business-Type Activities 408,170 297,629 112,764 31,550 — 33,773 33,773 Total Primary Government $ 1,087,907 $ 387,843 $ 219,205 $ 252,453 $ (262,179) $ 33,773 $ (228,406) General Revenues:
Taxes and Licenses:
Property Taxes 167,088 — 167,088
Sales Taxes - Shared Revenues 197,563 — 197,563
Franchise Taxes 20,180 — 20,180
Business Tax 26,107 — 26,107
Room Tax 16,454 — 16,454
Other Taxes 2,221 — 2,221
Investment Earnings 8,245 (1,299) 6,946
Other Financing Source-Leases — (188) (188)
Gain on Sale of Capital Assets 1,732 2 1,734
Transfers (8,154) 8,154 —
Total General Revenues and Transfers 431,436 6,669 438,105 Change in Net Position 169,257 40,442 209,699
Net Position - Beginning 1,210,293 1,620,929 2,831,222 Cumulative Effect of Accounting Change 614 — 614
Net Position - Beginning, Restated 1,210,907 1,620,929 2,831,836 Net Position - Ending $ 1,380,164 $ 1,661,371 $ 3,041,535 The notes to the financial statements are an integral part of this statement. 30 This page intentionally left blank
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32 CITY OF FRESNO, CALIFORNIA
Balance Sheet
Governmental Funds
June 30, 2023
(in thousands)
General
Fund
Grants
Special
Revenue Fund
Other
Governmental
Funds
Total
Governmental
Funds
ASSETS
Cash and Investments $ 51,698 $ 19,033 $ 214,661 $ 285,392 Receivables, Net 33,937 1,232 2,434 37,603
Grants Receivable 54 45,372 9,072 54,498
Intergovernmental Receivables 39,286 — 24,310 63,596 Due From Other Funds 16,628 4,748 6,607 27,983
Advances to Other Funds, Net — 4,565 — 4,565
Property Held for Resale — — 3,600 3,600
Restricted Cash 54,109 115,822 1,948 171,879
Loans, Notes, Leases, Other Receivables, Net — 53,660 23,781 77,441 Total Assets $ 195,712 $ 244,432 $ 286,413 $ 726,557
LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities
Accrued Liabilities $ 17,102 $ 19,468 $ 13,785 $ 50,355 Unearned Revenue 5,818 147,184 495 153,497
Due to Other Funds 3,080 5,063 3,783 11,926
Advances From Other Funds 227 — 1,718 1,945
Deposits From Others 16,875 6 31 16,912
Total Liabilities 43,102 171,721 19,812 234,635
Deferred Inflows of Resources
Unavailable Revenue - Property Tax 3,515 — — 3,515
Unavailable Revenue - Other 21,712 29,261 6,487 57,460 Total Deferred Inflows of Resources 25,227 29,261 6,487 60,975 Fund Balances
Restricted — 43,450 231,640 275,090
Committed 54,466 — — 54,466
Assigned 18,633 — 31,061 49,694
Unassigned (deficit) 54,284 — (2,587) 51,697
Total Fund Balances 127,383 43,450 260,114 430,947
Total Liabilities, Deferred Inflows of
Resources and Fund Balances $ 195,712 $ 244,432 $ 286,413 $ 726,557 The notes to the financial statements are an integral part of this statement. 33 CITY OF FRESNO, CALIFORNIA
Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position June 30, 2023
(in thousands)
Total Governmental Fund Balances $ 430,947
Amounts reported for Governmental Activities in the Statement of Net Position are different because:
The Net Pension Asset is not a current financial resource, and therefore, is not reported in the funds. 192,319 Capital assets used in Governmental Activities are not current financial resources, and therefore, are not reported in the funds. 1,092,110
Prepaids in Governmental Activities are not current financial resources, and therefore, are not reported in the funds. 440
Deferred outflows of resources reported in the Statement of Net Position 196,884 Accrued interest on long-term debt is not accrued in the funds, but rather, it is recognized as an expenditure when due. (1,791)
Long-term liabilities, including bonds payable, are not due and payable in the current period and, therefore, are not reported in the funds. (651,035)
Difference between deferred inflows of resources reported in the Statement of Net Position and unavailable revenue reported in the Balance Sheet - Governmental Funds 17,591 Prepaid bond insurance and original issue premium and discount represent costs associated with the issuance of long-term debt, which are deferred and amortized over the period the debt is outstanding.
These costs are reported as expenditures of the current period in the funds. (6,750) Internal service funds are used by management to charge the costs of various activities, such as fleet and insurance to individual funds. Assets and liabilities of certain internal service funds are included in Governmental Activities in the Statement of Net Position. 109,449 Net Position of Governmental Activities $ 1,380,164
The notes to the financial statements are an integral part of this statement. 34 CITY OF FRESNO, CALIFORNIA
Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds
Fiscal Year Ended June 30, 2023
(in thousands)
General
Fund
Grants
Special
Revenue Fund
Other
Governmental
Funds
Total
Governmental
Funds
Revenues
Taxes $ 380,910 $ — $ 75,533 $ 456,443
Licenses and Permits 9,064 — — 9,064
Intergovernmental 2,967 215,937 31,086 249,990
Charges for Services 40,072 154 41,740 81,966
Fines 2,482 — — 2,482
Use of Money and Property 4,489 4,459 1,609 10,557
Miscellaneous 3,204 3,089 2,869 9,162
Total Revenues 443,188 223,639 152,837 819,664
Expenditures
Current:
General Government 37,298 36,790 928 75,016
Public Protection 281,813 16,201 2,958 300,972
Public Ways and Facilities 18,604 24,090 46,391 89,085 Culture and Recreation 19,825 3,882 18,513 42,220
Community Development 37,633 86,276 2,571 126,480
Capital Outlay 4,548 23,563 39,395 67,506
Debt Service:
Principal 2,633 — 21,050 23,683
Interest 555 — 10,939 11,494
Total Expenditures 402,909 190,802 142,745 736,456
Excess (Deficiency) of Revenues Over (Under) Expenditures 40,279 32,837 10,092 83,208 Other Financing Sources (Uses)
Transfers In 25,599 101 36,488 62,188
Transfers Out (43,186) (21,787) (6,670) (71,643)
Total Other Financing Sources (Uses) (17,587) (21,686) 29,818 (9,455) Net Changes in Fund Balances 22,692 11,151 39,910 73,753 Fund Balances - Beginning 104,691 32,299 219,567 356,557 Cumulative Effect of Accounting Change — — 637 637
Fund Balances - Beginning, Restated 104,691 32,299 220,204 357,194 Fund Balances - Ending $ 127,383 $ 43,450 $ 260,114 $ 430,947 The notes to the financial statements are an integral part of this statement. 35 CITY OF FRESNO, CALIFORNIA
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities Fiscal Year Ended June 30, 2023
(in thousands)
Net change in fund balances - total governmental funds $ 73,753 Amounts reported for Governmental Activities in the Statement of Activities are different because:
Governmental funds report capital outlays as expenditures. However, in the Statement of Activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which cost of capital assets of $89,808 exceeded depreciation of $45,645 in the current period. 56,909 Some expenses, retention payable, and Net OPEB Liability reported in the Statement of Activities do not require the use of current financial resources, and therefore, are not reported as expenditures in governmental funds. 1,095
In the Statement of Net Position, acquiring debt increases Long-Term Liabilities and does not affect the Statement of Activities. Additionally, repayment of principal is an expenditure in the governmental funds but reduces liability in the Statement of Net Position. 20,585 Under the modified accrual basis of accounting used in the governmental funds, expenditures are not recognized for transactions that are not normally paid with expendable available financial resources. In the Statement of Activities, however, which is presented on the accrual basis of accounting, expenses and liabilities are reported regardless of when financial resources are available. In addition, interest on long-term debt is not recognized under the modified accrual basis of accounting until due, rather than as it accrues. (6,791)
Changes to the net pension asset and pension related deferred outflows and inflows of resources do not provide current financial resources, and therefore, are not reported in the governmental funds. 13,129
Revenues recognized in the Statement of Activities in previous years and recognized in the governmental fund statements in the current year were less than revenues recognized in the Statement of Activities in the current year but not reported in the governmental funds as they do not provide current financial resources. 33,115 Internal Service Funds are used by management to charge the costs of certain activities, such as insurance and fleet, to individual funds. The net revenues of certain activities of internal service funds are reported with Governmental Activities in the Statement of Activities. (22,538)
Change in net position of Governmental Activities $ 169,257 The notes to the financial statements are an integral part of this statement. 36 CITY OF FRESNO, CALIFORNIA
Statement of Net Position
Proprietary Funds
June 30, 2023
(in thousands)
Business-Type Activities - Enterprise Funds
Water
System
Sewer
System
Solid Waste
Management Transit Airports
Assets
Current Assets:
Cash and Investments $ 146,567 $ 134,258 $ 5,006 $ 26,247 $ 31,306 Interest Receivable 1,344 1,033 76 301 457
Accounts Receivables, Net 29,067 17,782 9,102 163 17,354 Grants Receivable 3,649 — — 19,267 5,751
Inventories 3,228 5,519 — 926 405
Prepaid Items 474 42 19 60 1,428
Intergovernmental Receivables — 602 — 18,552 411
Due from Other Funds 10,499 6,840 3,162 208 218
Restricted Cash and Investments — — — — —
Total Current Assets 194,828 166,076 17,365 65,724 57,330 Noncurrent Assets:
Restricted:
Cash and Cash Equivalents 75,944 65,515 5,401 41,004 113,977 Interest Receivable 361 453 — — —
Total Restricted Assets 76,305 65,968 5,401 41,004 113,977 Other Assets:
Other Receivables 1,184 1,820 — — —
Other Assets — — — — 445
Net Pension Asset 11,411 10,193 7,234 12,869 4,005 Unamortized CVP Water Settlement 797 — — — —
Solid Waste Rate Payers — — 9,345 — —
Advances to Other Funds, Net 2,985 1,187 — — —
Total Other Assets 16,377 13,200 16,579 12,869 4,450 Capital Assets:
Land and Intangibles 34,029 17,513 2,803 2,216 11,318 Buildings, Systems and Improvements 500,614 589,415 1,567 78,428 218,774 Machinery and Equipment 1,017 6,114 5,699 88,464 5,562 Infrastructure 445,280 359,278 — — 78,321
Right to Use Assets Being Amortized — 209 — — 3,460 Construction in Progress 17,093 30,716 2,567 17,039 58,340 Less Accumulated Depreciation (299,515) (387,963) (4,571) (77,277) (162,086) Total Capital Assets, Net 698,518 615,282 8,065 108,870 213,689 Total Noncurrent Assets 791,200 694,450 30,045 162,743 332,116 Total Assets 986,028 860,526 47,410 228,467 389,446 Deferred Outflows of Resources
Charge on Refunding — — — — 146
Pension Contributions 1,486 1,386 1,019 3,053 828
Deferred Outflows - Pension 4,462 4,475 3,207 12,535 2,684 Deferred Outflows - OPEB 1,399 1,303 905 3,163 746 Total Deferred Outflows of Resources $ 7,347 $ 7,164 $ 5,131 $ 18,751 $ 4,404 The notes to the financial statements are an integral part of this statement. 37 Business-Type Activities - Enterprise Funds
Fresno
Convention
Center
Stadium
Other
Enterprise
Funds
Total
Internal
Service
Funds
Assets
Current Assets:
$ 999 $ 158 $ 1,784 $ 346,325 $ 114,480 Cash and Investments (4) (8) 29 3,228 870 Interest Receivable
372 1,977 4,007 79,824 2,256 Accounts Receivables, Net — — — 28,667 — Grants Receivable
59 — — 10,137 1,491 Inventories
41 — — 2,064 544 Prepaid Items
— — — 19,565 — Intergovernmental Receivables
— — 1,384 22,311 3,200 Due from Other Funds
4,103 — — 4,103 — Restricted Cash and Investments
5,570 2,127 7,204 516,224 122,841 Total Current Assets Noncurrent Assets:
Restricted:
776 860 2,210 305,687 2,277 Cash and Investments
— — — 814 — Interest Receivable
776 860 2,210 306,501 2,277 Total Restricted Assets Other Assets:
— — — 3,004 — Other Receivables
73 170 13 701 — Other Assets
— — 3,033 48,745 7,423 Net Pension Asset
— — — 797 — Unamortized CVP Water Settlement
— — — 9,345 — Solid Waste Rate Payers
— — — 4,172 — Advances to Other Funds, Net
73 170 3,046 66,764 7,423 Total Other Assets
Capital Assets:
4,163 710 12 72,764 — Land and Intangibles
86,632 43,489 3,743 1,522,662 21,668 Buildings, Systems and Improvements 309 2,783 67 110,015 163,939 Machinery and Equipment — — 122 883,001 — Infrastructure
— — — 3,669 12,876 Right to Use Assets Being Amortized — 3,343 — 129,098 30,756 Construction in Progress
(75,427) (22,482) (2,480) (1,031,801) (104,056) Less Accumulated Depreciation 15,677 27,843 1,464 1,689,408 125,183 Total Capital Assets, Net 16,526 28,873 6,720 2,062,673 134,883 Total Noncurrent Assets 22,096 31,000 13,924 2,578,897 257,724 Total Assets Deferred Outflows of Resources
40 16 45 247 — Charge on Refunding
— — 299 8,071 2,462 Pension Contributions
— — 576 27,939 10,314 Deferred Outflows - Pension
14 — 386 7,916 2,310 Deferred Outflows - OPEB
$ 54 $ 16 $ 1,306 $ 44,173 $ 15,086 Total Deferred Outflows of Resources The notes to the financial statements are an integral part of this statement. 38 CITY OF FRESNO, CALIFORNIA
Statement of Net Position
Proprietary Funds
June 30, 2023 (continued)
(in thousands)
Business-Type Activities - Enterprise Funds
Water
System
Sewer
System
Solid Waste
Management Transit Airports
Liabilities
Current Liabilities:
Accrued Liabilities $ 11,567 $ 6,589 $ 2,420 $ 5,608 $ 12,641 Accrued Compensated Absences and HRA 329 382 346 659 368 Liability for Self-Insurance — — — — —
Unearned Revenue 8,296 12,859 983 28,395 —
Due to Other Funds 193 137 507 102 66
Bonds Payable — — — — 1,400
Accrued Closure Cost — — 900 — —
Capital Finance Obligations — — — — —
Notes Payable 12,123 1,036 — — —
Lease Liability — 18 — — 726
Total Current Liabilities 32,508 21,021 5,156 34,764 15,201 Noncurrent Liabilities
Accrued Compensated Absences and HRA 1,968 1,839 1,475 3,363 1,595 Capital Finance Obligations — — — — —
Liability for Self-Insurance — — — — —
Bonds Payable 90,418 — — — 147,561
Accreted Interest Payable on Capital
Appreciation Bonds — — — — —
Notes Payable 314,865 92,038 — — —
CVP Litigation Settlement 103 — — — —
Lease Liability — 156 — — 1,785
Pollution Remediation Obligation — — — — 366
Other Liabilities — 132 — — —
Accrued Closure Costs — — 9,526 — —
Advances from Other Funds — — 2,227 — —
Net OPEB Liability 5,372 5,096 3,469 11,038 2,662
Deposits Held for Others 1,094 13,671 — — 451
Total Noncurrent Liabilities 413,820 112,932 16,697 14,401 154,420 Total Liabilities 446,328 133,953 21,853 49,165 169,621 Deferred Inflows of Resources
Deferred Inflows - Pension 716 652 483 1,328 378
Deferred Inflows - OPEB 2,961 2,779 1,970 7,095 1,653 Deferred Inflows - Leases 1,681 2,406 — — 14,028
Total Deferred Inflows of Resources 5,358 5,837 2,453 8,423 16,059 Net Position
Net Investment in Capital Assets 280,008 535,912 8,065 108,870 68,193 Restricted for Net Pension Asset 11,411 10,193 7,234 12,869 4,005 Unrestricted (Deficit) 250,270 181,795 12,936 67,891 135,707 Total Net Position (Deficit) $ 541,689 $ 727,900 $ 28,235 $ 189,630 $ 207,905 The notes to the financial statements are an integral part of this statement. 39 Business-Type Activities - Enterprise Funds
Fresno
Convention
Center
Stadium
Other
Enterprise
Funds
Totals
Internal
Service
Funds
Liabilities
Current Liabilities:
$ 1,605 $ 239 $ 351 $ 41,020 $ 14,749 Accrued Liabilities — — 58 2,142 756 Accrued Compensated Absences and HRA — — — — 51,946 Liability for Self-Insurance
— — — 50,798 11,791 Unearned Revenue
— 2 595 1,602 39,966 Due to Other Funds
1,726 1,980 65 5,171 — Bonds Payable
— — — 900 — Accrued Closure Cost
— — — — 7,203 Capital Finance Obligations
— — — 13,159 — Notes Payable
— — — 744 3,549 Lease Liability
3,331 2,221 1,069 115,536 129,960 Total Current Liabilities Noncurrent Liabilities
— — 288 10,528 5,614 Accrued Compensated Absences and HRA — — — — 26,234 Capital Lease Obligations
— — — — 186,115 Liability for Self-Insurance
9,183 18,503 1,407 267,072 — Bonds Payable
Accreted Interest Payable on Capital
3,078 — — 3,078 — Appreciation Bonds
— — — 406,903 — Notes Payable
— — — 103 — CVP Litigation Settlement
— — — 1,941 5,291 Lease Liability
— — — 366 — Pollution Remediation Obligation
— — — 132 — Other Liabilities
— — — 9,526 — Accrued Closure Costs
— — — 2,227 — Advances from Other Funds
71 — 1,311 29,019 5,271 Net OPEB Liability
1,963 — — 17,179 4,679 Deposits Held for Others
14,295 18,503 3,006 748,074 233,204 Total Noncurrent Liabilities 17,626 20,724 4,075 863,610 363,164 Total Liabilities Deferred Inflows of Resources
— — 158 3,715 1,067 Deferred Inflows - Pension
21 — 836 17,315 7,176 Deferred Inflows - OPEB
— 1,535 1,341 20,991 330 Deferred Inflows - Leases
21 1,535 2,335 42,021 8,573 Total Deferred Inflows of Resources Net Position
5,484 8,199 168 1,014,899 86,753 Net Investment in Capital Assets — — 3,033 48,745 7,423 Restricted for Net Pension Asset (981) 558 5,619 653,795 (193,103) Unrestricted (Deficit) $ 4,503 $ 8,757 $ 8,820 1,717,439 $ (98,927) Total Net Position (Deficit) Some amounts reported for Business-Type Activities in
the Statement of Net Position are different due to certain Internal Service Fund assets and liabilities being
included with Business-Type Activities. (56,068)
Net position of Business-Type Activities $ 1,661,371
The notes to the financial statements are an integral part of this statement. 40 CITY OF FRESNO, CALIFORNIA
Statement of Revenues, Expenses and Changes in Fund Net Position Proprietary Funds
Fiscal Year Ended June 30, 2023
(in thousands)
Business-Type Activities - Enterprise Funds
Water
System
Sewer
System
Solid Waste
Management
Transit Airports
Operating Revenues:
Charges for Services $ 124,858 $ 84,086 $ 32,517 $ 3,678 $ 35,124 Operating Expenses:
Cost of Services 53,960 32,873 22,096 64,595 17,098 Administration 20,733 17,886 10,927 16,767 10,511
Amortization — 19 — — 225
Depreciation 34,110 28,708 538 8,408 11,810
Total Operating Expenses 108,803 79,486 33,561 89,770 39,644 Operating Income (Loss) 16,055 4,600 (1,044) (86,092) (4,520) Non-Operating Revenue (Expenses):
Operating Grants 4,077 — 5 98,009 10,673
Interest Income 4,037 3,174 199 600 1,435
Net Increase (Decrease) in Cash Fair Value (4,379) (4,722) (57) (894) (871) Interest Expense (11,261) (1,093) (46) — (2,878)
Other Financing Sources - Leases — — — — (188)
Passenger Facility Charges — — — — 396
Customer Facility Charges — — — — 2,315
Gain (Loss) on Disposal of Capital Assets — — (138) (43) 2 Total Non-Operating Revenue (Expenses) (7,526) (2,641) (37) 97,672 10,884 Income (Loss) Before Contributions & Transfers 8,529 1,959 (1,081) 11,580 6,364 Capital Contributions 691 3,600 — 24,836 2,324
Transfers In 73 — 2,232 — —
Transfers Out (2,437) (397) (2,287) (1,424) (235)
Change in Net Position 6,856 5,162 (1,136) 34,992 8,453 Total Net Position (Deficit) - Beginning 534,833 722,738 29,371 154,638 199,452 Total Net Position (Deficit) - Ending $ 541,689 $ 727,900 $ 28,235 $ 189,630 $ 207,905 The notes to the financial statements are an integral part of this statement. 41 Business-Type Activities - Enterprise Funds
Fresno
Convention
Center Stadium
Other
Enterprise
Funds Totals
Internal
Service
Funds
Operating Revenues:
$ 4,307 $ 102 $ 10,246 $ 294,918 $ 210,165 Charges for Services Operating Expenses:
3,933 656 5,641 200,852 197,642 Cost of Services
827 75 1,944 79,670 42,479 Administration
— — — 244 — Amortization
2,035 1,403 193 87,205 17,078 Depreciation
6,795 2,134 7,778 367,971 257,199 Total Operating Expenses (2,488) (2,032) 2,468 (73,053) (47,034) Operating Income (Loss) Non-Operating Revenue (Expenses):
— — — 112,764 — Operating Grants
18 28 104 9,595 2,347 Interest Income
3 (16) (40) (10,976) (1,200) Net Increase (Decrease) in Cash Fair Value (623) (1,131) (58) (17,090) (1,039) Interest Expense — — — (188) — Other Financing Sources - Leases
— — — 396 — Passenger Facility Charges
— — — 2,315 — Customer Facility Charges
— — — (179) 237 Gain (Loss) on Disposal of Capital Assets (602) (1,119) 6 96,637 345 Total Non-Operating Revenue (Expenses) (3,090) (3,151) 2,474 23,584 (46,689) Income (Loss) Before Contributions & Transfers — 100 — 31,551 — Capital Contributions
5,008 5,649 — 12,962 5,175 Transfers In
— — (1,113) (7,893) (789) Transfers Out
1,918 2,598 1,361 60,204 (42,303) Change in Net Position 2,585 6,159 7,459 (56,624) Total Net Position (Deficit) - Beginning $ 4,503 $ 8,757 $ 8,820 $ (98,927) Total Net Position (Deficit) - Ending Some amounts reported for Business-Type
Activities in the Statement of Activities are
different due to the net revenue (expenses) of
certain Internal Service Funds being reported
with Business-Type Activities. (19,762)
Change in net position of Business-Type
Activities $ 40,442
The notes to the financial statements are an integral part of this statement. 42 CITY OF FRESNO, CALIFORNIA
Statement of Cash Flows
Proprietary Funds
Fiscal Year Ended June 30, 2023
(in thousands)
Business-Type Activities - Enterprise Funds
Water
System
Sewer
System
Solid Waste
Management
Transit Airports
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash Received from Customers $ 117,194 $ 95,755 $ 31,089 $ 4,813 $ 35,118 Cash Received from Interfund Services Provided 656 — — — — Cash Payments (to) from Suppliers for Services (68,575) (30,890) (31,734) (28,884) (15,008) Cash Paid for Interfund Services Used 11,195 (8,309) 11,274 (9,226) (2,167) Cash Payments to Employees for Services (17,692) (16,887) (13,548) (43,087) (10,795) Cash Payments for Claims and Refunds — — — — —
Net Cash Provided by (Used for) Operating Activities 42,778 39,669 (2,919) (76,384) 7,148
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES:
Capital Contributions 691 4,855 — 24,228 4,488
Passenger and Customer Facility Charges 2,710
Interest Payments on Capital Debt (11,066) (844) (47) — (3,617) Proceeds from Issuance of Capital Debt 9,131 — — — (14,329) Payment for Cost of Issuance — — — — (342)
Principal Payments on Capital Debt-Bonds — (885) — — (3,054) Principal Payments on Capital Debt-Notes (11,828) (2,582) — — — Principal Payments on Capital Lease Obligations — — — — — Proceeds (Loss) from Sale of Capital Assets — — 4 (697) (186) Acquisition and Construction of Capital Assets (4,902) (6,733) (172) (16,432) (11,295) Net Cash Provided by (Used for) Capital and Related
Financing Activities (17,974) (6,189) (215) 7,099 65,460
CASH FLOWS FROM NON-CAPITAL FINANCING
ACTIVITIES:
Operating Grants 4,078 — 988 68,225 5,411
Borrowing Receipt from (Payment to) Other Funds — — — — — Transfers In 73 — 2,232 — —
Transfers Out (2,437) (397) (2,287) (1,424) (235)
Net Cash Provided by (Used for) Non-Capital
Financing Activities 1,714 (397) 933 66,801 5,176
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest and Dividends Received (Paid) on Investments (1,139) (2,280) 152 233 345 Net Cash Provided by (Used for) Investing Activities (1,139) (2,280) 152 233 345 Net Increase (Decrease) in Cash and Cash Equivalents 25,379 30,803 (2,049) (2,251) 78,129 Cash and Cash Equivalents, Beginning of Year 197,132 168,970 12,456 69,502 67,154 Cash and Cash Equivalents, End of Year $ 222,511 $ 199,773 $ 10,407 $ 67,251 $ 145,283 The notes to the financial statements are an integral part of this statement. 43 Business-Type Activities - Enterprise Funds
Fresno
Convention
Center
Stadium
Other
Enterprise
Funds
Totals
Internal
Service
Funds
CASH FLOWS FROM OPERATING ACTIVITIES:
$ 5,810 $ — $ 8,387 $ 298,166 $ 72,259 Cash Received from Customers — 67 1,223 1,946 86,549 Cash Received from Interfund Services Provided (2,360) (710) (2,179) (180,340) (32,322) Cash Payments (to) from Suppliers for Services — — (1,550) 1,217 (49,305) Cash Paid for Interfund Services Used (1,989) — (3,895) (107,893) (9,498) Cash Payments to Employees for Services — — — — (52,998) Cash Payments for Claims and Refunds 1,461 (643) 1,986 13,096 14,685 Net Cash Provided by (Used for) Operating Activities
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES:
— 100 — 34,362 9,597 Capital Contributions
— 2,710 — Passenger and Customer Facility Charges
(871) (1,337) (75) (17,857) (1,021) Interest Payments on Capital Debt — — — (5,198) — Proceeds from Issuance of Capital Debt — — 5 (337) — Payment for Cost of Issuance
(3,037) (1,870) (60) (8,906) — Principal Payments on Capital Debt-Bonds — — — (14,410) — Principal payments on Capital Debt-Notes — — — — (6,925) Principal Payments on Capital Lease Obligations — — — (879) 237 Proceeds from Sale of Capital Assets — (1,894) — (41,428) (28,206) Acquisition and Construction of Capital Assets (3,908) (5,001) (130) 39,142 (26,318)
Net Cash Provided by (Used for) Capital and Related
Financing Activities
CASH FLOWS FROM NON-CAPITAL FINANCING
ACTIVITIES:
— — 78,702 — Operating Grants
— (539) (539) (7,087) Borrowing Receipt from (Payment to) Other Funds 5,008 5,649 — 12,962 5,175 Transfers In
— — (1,113) (7,893) (789) Transfers Out
5,008 5,649 (1,652) 83,232 (2,701)
Net Cash Provided by (Used for) Non-Capital
Financing Activities
CASH FLOWS FROM INVESTING ACTIVITIES:
25 26 53 (2,585) 799 Interest and Dividends Received (Paid) on Investments 25 26 53 (2,585) 799 Net Cash Provided by (Used for) Investing Activities 2,586 31 257 132,885 (13,535) Net Increase (Decrease) in Cash and Cash Equivalents 3,292 987 3,737 523,230 136,671 Cash and Cash Equivalents, Beginning of Year $ 5,878 $ 1,018 $ 3,995 $ 656,115 $ 123,136 Cash and Cash Equivalents, End of Year (Continued)
The notes to the financial statements are an integral part of this statement. 44 CITY OF FRESNO, CALIFORNIA
Statement of Cash Flows
Proprietary Funds
Fiscal Year Ended June 30, 2023 (Continued)
(in thousands)
Business-Type Activities - Enterprise Funds
Water
System
Sewer
System
Solid Waste
Management
Transit Airports
Reconciliation of Operating Income (Loss) to Net Cash
Provided by (Used for) Operating Activities:
Operating income (loss) $ 16,055 $ 4,600 $ (1,044) $ (86,092) $ (4,520) Adjustment to reconcile operating income (loss) to net cash provided by (used for) operating activities:
Depreciation expense 34,110 28,708 538 8,408 11,810 Amortization Expense — 19 — — 225
Change in assets and liabilities:
Decrease (increase) in accounts receivable (2,501) (1,880) (2,495) 48 807 Decrease (increase) in other receivables (1,184) 1,269 914 — — Decrease (increase) in due from other funds (683) (127) (138) (47) 225 Decrease (increase) in due from other governments — 318 — (995) — Decrease (increase) in material and supplies inventory (1,599) (679) — (172) (60) Decrease (increase) in prepaid items 410 (10) (10) (19) (1,159) Decrease (increase) in net pension asset & deferred outflows 15,627 14,180 10,494 27,911 8,852 Decrease (increase) in advances to other funds 1,034 11,115 (742) — — Decrease (increase) in prepaid insurance — 5 — — (237) (Decrease) increase in accounts payable 1,547 1,659 1,025 489 638 (Decrease) increase in salaries payable 224 150 154 907 257 (Decrease) increase in due to other funds 78 1 (57) (38) 31 (Decrease) increase in other liabilities — (1,264) — — — (Decrease) increase in retention payable 698 (3,462) — 689 726 (Decrease) increase in accrued closure costs (748)
(Decrease) increase in unearned revenue — — — 968 265 (Decrease) increase in liability for self-insurance
(Decrease) increase in deposits — — — — (12)
(Decrease) increase in pollution remediation liability (39) (Decrease) increase in net OPEB liability 527 495 354 1,303 302 (Decrease) increase in deferred inflows of resources (17,915) (15,428) (11,164) (29,744) (10,963) Net Cash Provided by (Used For) Operating Activities $ 46,428 $ 39,669 $ (2,919) $ (76,384) $ 7,148 Reconciliation of Cash and Cash Equivalents to the
Statement of Net Position:
Cash and Investments:
Unrestricted $ 146,567 $ 134,258 $ 5,006 $ 26,247 $ 31,306 Restricted - Current and Noncurrent 75,944 65,515 5,401 41,004 113,977 Cash and Cash Equivalents at End of Year on Statement
of Cash Flows $ 222,511 $ 199,773 $ 10,407 $ 67,251 $ 145,283 Noncash Investing, Capital, and Financing Activities:
Acquisition/construction of capital assets on accounts payable $ 617 $ 4,877 $ — $ 763 $ 7,964 Amortization of bond premium, discount and loss on refunding 88 — — — (200) Borrowing under capital financing — — — — —
Decrease (increase) in fair value of investments (13,492) (4,722) 57 (4,225) (3,732) Decrease in unamortized CVP water settlement receivable and decrease in CVP litigation settlement payable (103) The notes to the financial statements are an integral part of this statement. 45 Business-Type Activities - Enterprise Funds
Fresno
Convention
Center
Stadium
Other
Enterprise
Funds
Totals
Internal
Service
Funds
Reconciliation of Operating Income (Loss) to Net Cash
Provided by (Used for) Operating Activities:
$ (2,488) $ (2,032) $ 2,468 $ (73,053) $ (47,034) Operating income (loss) Adjustment to reconcile operating income (loss) to net cash provided by (used for) operating activities:
2,035 1,403 193 87,205 17,078 Depreciation expense
— — — 244 — Amortization expense
Change in assets and liabilities:
(54) 77 (493) (6,491) (432) Decrease (increase) in accounts receivable — — — 999 — Decrease (increase) in other receivables — — (475) (1,245) (543) Decrease (increase) in due from other funds — — — (677) — Decrease (increase) in due from other governments 7 — — (2,503) (418) Decrease (increase) in material and supplies inventory 124 — — (664) 18 Decrease (increase) in prepaid items 2 — 3,561 80,627 22,166 Decrease (increase) in net pension asset & deferred outflows — 21 — 11,428 — Decrease (increase) in advances to other funds — — 1 (231) — Decrease (increase) in prepaid insurance 283 — (10) 5,631 (4,530) (Decrease) increase in accounts payable — — 116 1,808 579 (Decrease) increase in salaries payable — 2 487 504 14,091 (Decrease) increase in due to other funds — — — (1,264) — (Decrease) increase in other liabilities — — — (1,349) — (Decrease) increase in retention payable — (748) — (Decrease) increase in accrued closure costs — — — 1,233 5,948 (Decrease) increase in unearned revenue — — 30,134 (Decrease) increase in liability for self-insurance 1,553 — — 1,541 — (Decrease) increase in deposits
— (39) — (Decrease) increase in pollution remediation liability 3 — 152 3,136 1,474 (Decrease) increase in net OPEB liability (4) (114) (4,014) (89,346) (23,845) (Decrease) increase in deferred inflows of resources $ 1,461 $ (643) $ 1,986 $ 16,746 $ 14,686 Net Cash Provided by (Used For) Operating Activities Reconciliation of Cash and Cash Equivalents to the
Statement of Net Position:
Cash and Investments:
$ 999 $ 158 $ 1,784 $ 346,325 $ 114,480 Unrestricted
4,879 860 2,210 309,790 2,277 Restricted - Current and Noncurrent Cash and Cash Equivalents at End of Year on Statement
$ 5,878 $ 1,018 $ 3,994 $ 656,115 $ 116,757 of Cash Flows Noncash Investing, Capital, and Financing Activities:
$ — $ — $ — $ 14,221 $ 13,148 Acquisition/construction of capital assets on accounts payable (231) (191) (16) (550) — Amortization of bond premium, discount and loss on refunding — — — — 6,379 Borrowing under capital financing
— (64) (172) (26,350) (5,483) Decrease (increase) in fair value of investments — (103) —
Decrease in unamortized CVP water settlement receivable and decrease in CVP litigation settlement payable
The notes to the financial statements are an integral part of this statement. 46 CITY OF FRESNO, CALIFORNIA
Statement of Fiduciary Net Position
Fiduciary Funds - Trust and Custodial Funds
June 30, 2023
(in thousands)
Pension
Trust Funds
Successor Agency
to the Fresno
Redevelopment
Agency Private-
Purpose Trust Fund
Custodial
Funds
Assets
Cash and Investments $ 1,251 $ 3,321 $ 2,260
Restricted Cash and Investments Held by Fiscal Agent — — 717 Total Cash and Investments 1,251 3,321 2,977
Receivables:
Receivables for Investments Sold 39,156 — —
Interest and Dividends Receivable 3,723 — 16
Other Receivables 10,950 — —
Due from Other Governments — — 203
Total Receivables 53,829 — 219
Investments, at Fair Value:
Short-Term Investments 19,232 — —
Domestic Equity 945,709 — —
Corporate Bonds 810,113 — —
International Developed Market Equities 224,957 — —
Government Bonds 461,591 — —
Alternatives 784,421 — —
Real Estate 34,292 — —
Total Investments 3,732,196 — —
Collateral Held for Securities Lent 49,326 — —
Capital Assets, Net of Accumulated Depreciation 694 — — Other Assets 270 — —
Property Held for Resale — 293 —
Total Assets 3,837,566 3,614 3,196
Deferred Outflows of Resources
Pension Contributions — 296 —
Total Deferred Outflows of Resources — 296 —
Liabilities
Accrued Liabilities 42,106 175 46
Collateral Held for Securities Lent 49,326 — —
Due To Other Funds —
Due to Other Governments — — 3
Other Liabilities 16,985 — —
Long-Term Debt:
Due Within One Year — 97 —
Due in More than One Year — 1,027 —
Advances From Other Funds (Due to City of Fresno) — 4,565 — Net Pension Liability — 694 —
Total Liabilities 108,417 6,558 49
Deferred Inflows of Resources
Unamortized Pension Expense — 71 —
Net Position
Restricted for Pension Benefits 3,729,149 (2,719) —
Restricted for Individuals, Organizations, and Other
Governments — — 3,147
Held in Trust for Redevelopment Dissolution — — —
Total Net Position (Deficit) $ 3,729,149 $ (2,719) $ 3,147 The notes to the financial statements are an integral part of this statement. 47 CITY OF FRESNO, CALIFORNIA
Statement of Changes in Fiduciary Net Position
Fiduciary Funds - Trust Funds
Fiscal Year Ended June 30, 2023
(in thousands)
Pension
Trust Funds
Successor Agency
to the Fresno
Redevelopment
Agency Private-
Purpose Trust Fund
Custodial
Funds
Additions
Contributions:
Employer $ 49,304 $ — $ —
System Members 26,948 — —
Total Contributions 76,252 — —
Investment Income:
Net Appreciation in Fair Value of Investments 376,741 — — Interest 21,202 — 38
Dividends 19,796 — —
Other Investment Related 131 108 —
Total Investment Income 417,870 108 38
Less Investment Expense (55,539) — —
Total Net Investment Income 362,331 108 38
Securities Lending Income:
Securities Lending Earnings 4,190 — —
Less Securities Lending Expense (3,530) — —
Net Securities Lending Income 660 — —
Property Taxes — 2,856 —
Taxes Collected for Organizations and Other
Governments — — 1,102
Fees Collected for Organizations and Other
Governments — — 6,944
Other Income — 85 366
Total Additions 439,243 3,049 8,450
Deductions
Benefit Payments (including post retirement
supplemental benefits) 156,340 — —
Refund of Contributions 2,470 — —
Redevelopment Expenses — 121 —
General and Administrative Expenses 4,547 326 379
Deposits Held for Others — — 9,040
Interest on Debt — 105 —
Total Deductions 163,357 552 9,419
Change in Net Position 275,886 2,497 (969)
Net Position - Beginning (Deficit) 3,453,263 (5,216) 4,116 Net Position - Ending (Deficit) $ 3,729,149 $ (2,719) $ 3,147 The notes to the financial statements are an integral part of this statement. 48 This page intentionally left blank
49 Note 1. Summary of Significant Accounting Policies
The financial statements of the City of Fresno (City) have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), as applied to governmental agencies. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles.
The more significant accounting policies of the City are described below.
A. Reporting Entity
The City is a political subdivision chartered by the State of California and, as such, can exercise the powers specified by the Constitution and laws of the State of California. The City operates under its own Charter and is governed by a directly elected strong Mayor and a seven-member City Council (Council).
The City Manager serves as the head of the administrative branch of the City and is appointed by the Mayor.
As required by GAAP, these basic financial statements present the financial status of the City (the primary government) and its component units (entities for which the City is considered to be financially accountable). The blended component units, although legally separate entities, are substantially part of the City's operations. Thus, data from these units are combined with data of the primary government.
As a government agency, the City is exempt from both federal income taxes and state franchise taxes.
B. Government-Wide and Fund Financial Statements
The Government-Wide Financial Statements (the Statement of Net Position and the Statement of Activities) report information on all of the non-fiduciary activities of the primary government and its blended component units. For the most part, the effect of interfund activity has been removed from these statements. Interfund services provided and used are not eliminated in the consolidation process.
Governmental Activities, which normally are supported by taxes and inter-governmental revenues, are reported separately from Business-Type Activities, which rely to a significant extent on fees and charges for support.
The Statement of Activities demonstrates the degree to which the clearly identifiable direct expenses of a given function or segment is offset by program revenues. Program revenues include (1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and (2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not included among program revenues are reported instead as general revenues. The accounts of the City are organized on the basis of funds. A fund is a separate accounting entity with a self-balancing set of accounts. Each fund was established for the purpose of accounting for specific activities in accordance with applicable regulations, restrictions, or limitations. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds (though the latter are excluded from the Government-Wide Financial Statements). Major individual governmental funds and major individual enterprise funds are reported by separate columns in the Fund Financial Statements.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 50 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The Government-Wide, Proprietary Fund, and Trust Fund Financial Statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements have been met.
Proprietary Funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services in connection with the fund’s principal, ongoing operations. The principal operating revenues of the City’s enterprise and internal service funds are charges to customers for sales and for services. Operating expenses for enterprise funds and internal service funds include the cost of services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses.
Custodial Fund Financial Statements use the economic resources measurement focus and the accrual basis of accounting.
Governmental Fund Financial Statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. The City considers property tax revenues, local taxes, licenses, interest, and other intergovernmental revenues to be available if they are collected within 60 days of the end of the current fiscal period. All other revenue items are considered to be measurable and available only when the City receives cash.
Expenditures generally are recorded when a liability is incurred. However, debt service, vacation, sick leave, claims and judgments expenditures are recorded only when payment is due. Prepaids are reported using the purchases method.
The City reports on the following major governmental funds, proprietary (enterprise) funds, and fiduciary funds:
1. Major Governmental Funds
General Fund is the City’s primary operating fund. It accounts for all financial resources of the City except those required to be accounted for in another fund.
Grants Special Revenue Fund accounts for grants received from federal, state, and other agencies, which are to be used for various purposes identified within the confines of the individual grant.
2. Major Proprietary (Enterprise) Funds
Water System Fund accounts for the construction, operation, and maintenance of the City's water distribution system. Revenues are derived from water service fees and various installation charges.
Sewer System Fund accounts for the construction, operation, and maintenance of the City's sewer system. Revenues are derived from sewer service fees and various installation charges.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 51 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Solid Waste Management Fund accounts for the operations of the City's residential solid waste disposal service. Revenues are primarily derived from solid waste service fees.
Transit Fund accounts for the operation and maintenance of the City's mass transportation service.
Primary revenue sources are rider fares, federal grants, and state operating grants.
Airports Fund accounts for the City's two airport operations. Revenues are primarily derived from fees and rents.
Fresno Convention Center Fund accounts for the operation and maintenance of the City's convention center. Revenues are primarily derived from fees charged for using the facilities, supplemented by General Fund support.
Stadium Fund accounts for the construction, operation and maintenance of the City’s baseball stadium. Revenues are derived from the leasing of the facilities, supplemented by General Fund support.
3. Nonmajor Governmental Funds
Nonmajor Special Revenue Funds are used to account for the proceeds of revenue sources that are restricted or committed to expenditure for specified purposes other than debt service and capital projects. Funds listed under Special Revenue Funds include High Speed Rail Fund, Fresno Revitalization Corporation Fund, Special Gas Tax Fund, Measure C Fund, Community Services Fund, Urban Growth Management (UGM) Impact Fees Fund, Low and Moderate Income Housing Fund, and Special Assessments Fund.
Debt Service Funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditures for principal and interest. Numbers for City debt and Financing Authorities/Corporations debt are presented in separate columns on the financial statements.
Capital Projects Funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditure for capital outlays.
4. Nonmajor Proprietary Funds
Nonmajor Enterprise Funds account for operations that are financed and operated in a manner similar to private business enterprises. Costs are financed or recovered primarily through user charges. Funds listed under Nonmajor Enterprise Funds include Community Sanitation Fund and Parks and Recreation Fund.
Internal Service Funds account for the financing of goods or services provided by one City department to another City department on a cost reimbursement basis. The General Services Fund accounts for the activities of the equipment maintenance services, centralized telecommunications, information services, and central printing. The Risk Management Fund accounts for the City’s self- insurance, including provision for losses on property, liability, workers’ compensation, and unemployment compensation. The Billing and Collection Fund accounts for the billing, collecting, and servicing activities for the Water System, Sewer System, Solid Waste Management, and Community Sanitation Funds.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 52 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Employees’ Healthcare Plan Fund and the Retirees’ Healthcare Plan Fund account for the assets held on behalf of the City of Fresno Employees’ Healthcare Plan for claim payments on behalf of qualified employees and retirees. While there is only one plan, there is separate accounting for active employees and retirees. There are no standalone financial reports issued for either Healthcare Plan Fund.
5. Fiduciary Funds
Fiduciary Funds are used to account for resources held for the benefit of parties outside the government. Fiduciary Funds are not reflected in the Government-Wide Financial Statements because the resources of those funds are not available to support the City’s own programs. The accounting used for fiduciary funds is much like that used for other Proprietary Funds.
The City Departmental and Special Purpose Fund account for City-related trust activity, such as fees collected for other entities. The Special Assessments District Fund accounts for the receipts and disbursements for the debt service activity of bonded assessment districts within the City. Custodial Funds use the economic resources measurement focus.
When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, then unrestricted resources as they are needed.
Pension Trust Funds account for the assets held on behalf of the City of Fresno Fire and Police Retirement System and the City of Fresno Employees Retirement System for pension benefit payments to qualified employees and retirees. Pension Trust Funds are accounted for in essentially the same manner as other Proprietary Funds.
• City of Fresno Fire and Police Retirement System (Fire and Police): Fire and Police was established on July 1, 1955, to provide benefits to the public safety employees and retirees of the City. Fire and Police is maintained and governed by Articles 3 and 4 of Chapter 3 of the Fresno Municipal Code. Fire and Police responsibilities include: administration of the trust fund; delivery of retirement, death and disability benefits to eligible members; administration of programs; and general assistance in retirement and related benefits. The governing board is made up of two members appointed by the Mayor, an elected police member, an elected fire member and a board-appointed member.
The activity for Fire and Police is reflected within Fiduciary Funds. Separate financial statements are prepared for the Fire and Police Retirement System and may be obtained from the Retirement Office at 2828 Fresno Street, Fresno, CA 93721-3604 or at https://www.cfrs- ca.org/fire-and-police-retirement-system/financial/.
• City of Fresno Employees Retirement System (Employees): Employees was established on June 1, 1939, to provide benefits to the general employees and retirees of the City. Employees is governed by Article 5 of Chapter 3 of the Fresno Municipal Code.
Employees responsibilities include: administration of the trust fund; delivery of retirement, disability, and death benefits to eligible members; administration of programs; and general assistance in retirement and related benefits. The governing board is made up of two Mayor- appointed members, two elected members and one board-appointed member. The activity for Employees is reflected within Fiduciary Funds. Separate financial statements are prepared for the Employees Retirement System and may be obtained from the Retirement Office at 2828 CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 53 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Fresno Street, Fresno, CA 93721-3604, or at https://www.cfrs-ca.org/employee-retirement- system/ers-financial/.
Private-Purpose Trust Funds account for the custodial responsibilities that are assigned to the Successor Agency to the Redevelopment Agency with the passage of the Redevelopment Dissolution Act.
Custodial Funds account for assets held by the City in a custodial capacity on behalf of individuals or other governmental units.
6. Component Units
In addition to the primary governmental unit, the City also has several component units whose functions are described below:
a. Blended Component Units
Although the following component units are legally separate from the City, the component units have been "blended" into the City's basic financial statements for financial reporting purposes because the governing board is substantially the same as the City Council, there is a financial benefit/burden relationship between the component unit and the City, or City management has the operational responsibility for the component unit. In addition, the component unit provides services exclusively to the primary government or the component unit’s total debt outstanding is expected to be repaid with resources of the primary government.
All potential component units were evaluated, resulting in the inclusion of the following entities in the basic financial statements.
Fresno Joint Powers Financing Authority (Authority): The Authority, an independent public entity created in 1988, acquires telecommunications equipment, office furniture, and streetlights; constructs facilities; and installs street improvements through the issuance of limited obligation bonds, certificates of participation and revenue bonds. The Authority currently is leasing these assets to the City. The Authority’s three member governing board, consisting of the Mayor and two Council Members, is responsible for the Authority’s fiscal and administrative decisions. The financial activity for the Authority is included in the Financing Authorities and Corporations Debt Service Fund. All lease obligations between the Authority and the City have been eliminated in the financial statements. The Authority does not issue separate financial statements.
City of Fresno Employees Healthcare Plan: This component unit provides healthcare to City employees not represented by the Stationary Engineers Local and retired employees who elect to be covered or are covered by the Fresno City Employees Health and Welfare Trusts (Trusts).
The Trusts are self-insured trusts administered by an outside third party administrator. The activity for the Trusts is reflected within Internal Service Funds.
Fresno Revitalization Corporation: The Fresno Revitalization Corporation (FRC) is a non- profit public benefit corporation created in 1995 for the purpose of developing a revitalization policy and assisting with the downtown Fresno area development, redevelopment and renewal.
The organization received a substantial portion of its support from the former Redevelopment Agency (RDA) and the general public. The seven Council Members of the City and the Mayor became members of the FRC’s Governing Board on January 26, 2012.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 54 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FRC Canyon Crest, LLC: FRC Canyon Crest, LLC is a special purpose limited liability company owned by the FRC. The purpose of FRC Canyon Crest, LLC was to acquire, operate, maintain, and rehabilitate a 118-unit low income multi-family complex. The complex was owned by a lender in Chicago as a result of a foreclosure of the previous owner. On March 4, 2010, the City Council approved the award of $2.7 million in Neighborhood Stabilization Program (NSP) set aside funds to the FRC to acquire the property. FRC Canyon Crest, LLC acquired the property, while the RDA guaranteed the loan from the seller. The RDA also provided administrative, financial, and technical support to FRC Canyon Crest, LLC in the acquisition and operation of the property through a contractual services agreement. The Agency Loan Guarantee and Operating Agreement also contained a Declaration of Restrictions creating the affordability covenants and long-term maintenance and operating restrictions, which were recorded against and run with the property.
The RDA and FRC Canyon Crest, LLC marketed the property for sale upon rehabilitation and stabilization to a qualified affordable housing developer for ongoing management and property improvements. In September 2011, the FRC and FRC Canyon Crest, LLC entered into an Assignment/Assumption Agreement with a developer as required by the U.S. Department of Housing and Urban Development (HUD). Final purchase of the property by the developer occurred on April 2012. However, the FRC and FRC Canyon Crest, LLC still hold a $500,000 residual receipts note on the property.
As the City is the sole member of FRC Canyon Crest, LLC, the seven City Council members and the Mayor are Board members of FRC Canyon Crest, LLC, the activities of FRC Canyon Crest, LLC are blended into the FRC (and, by extension, the City) because: (1) its governing board is substantially the same as the City Council; (2) it provides services exclusively or almost exclusively for the benefit of the City even though it does not provide services directly to the City; and (3) the City is financially accountable for FRC Canyon Crest, LLC.
Fresno Enhanced Infrastructure Financing District (Fresno EIFD) : On September 17, 2020, the Fresno City Council approved the creation of the Fresno EIFD. The Fresno EIFD is intended to serve as a catalyst for private sector investment and critical infrastructure in the City’s Downtown Planning Area and the southern portion of the Blackstone Avenue Bus Rapid Transit (BRT) Corridor as characterized in the City General Plan. The Fresno EIFD encompasses approximately 4,237 acres of land, representing approximately 5.8% of the City’s total (approximately) 73,400 acres. The Fresno EIFD obtains its funding through property tax increment that is generated above the base fiscal year (2021) amount of property tax. The Fresno EIFD intends to utilize the tax increment revenue stream to issue bonds that will fund approximately $100 million (present value dollars) in multi-modal transportation, mobility, and related improvements, including but not limited to the following:
• Safety and accessibility improvements for car, bicycle, and pedestrian travel modes. • Roadway and bus infrastructure investments.
• Streetscape, urban greening, and lighting enhancements. • Improved gateway and wayfinding signage.
The Fresno EIFD is governed by a five member board, which is made up of three City councilmembers and two appointed members of the public that live within the Fresno EIFD.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 55 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES While there are no financial results from the Fresno EIFD in the Fiscal Year 2023 Annual Comprehensive Financial Report (ACFR), there will be results in future fiscal years as the district receives tax increment, issues bonds, and completes projects. The Fresno EIFD will be reported as a Debt Service Fund.
b. Fiduciary Component Unit
Successor Agency to the Redevelopment Agency of the City of Fresno (Successor Agency): The Successor Agency was created to serve as custodian for the assets and to wind down the affairs of the former RDA. The Governing Board of the Successor Agency consists of the City Council. Over the Successor Agency's Governing Board is the Countywide Oversight Board, which replaced the fifteen oversight boards previously created by successor agencies in Fresno County. Fresno County Oversight Board is comprised of six-member representatives: a representative from the County Board of Supervisors, a representative from the cities within Fresno County, a representative from the independent special district within Fresno County, a representative from the County Office of Education, a representative of the California Community College districts in Fresno County, and a resident of Fresno County.
In general, the Successor Agency’s assets can only be used to pay enforceable obligations in existence at the date of dissolution (including the completion of any unfinished projects that were subject to legally enforceable contractual commitments). In future fiscal years, the Successor Agency will only be allocated revenue in the amount that is necessary to pay the estimated annual installment payments on enforceable obligations of the former RDA until all of those enforceable obligations have been paid in full and all assets have been liquidated.
The City became the Housing Successor Agency and has the sole legal authority to administer the former RDA’s housing assets. The City may move forward with completing projects under contract at the time of the dissolution and liquidate surplus real estate for the purpose of distributing proceeds to taxing entities, pursuant to approval of repayment of the RDA's obligations to the City.
The Successor Agency is a separate legal entity under Assembly Bill (AB) 1484. The Successor Agency is reported as a Private-Purpose Trust Fund in the City’s financial statements.
This means that the Successor Agency’s assets are considered to be held in a trustee or agency capacity for others and cannot be used to support the City’s government’s own programs. The housing activity of the former RDA is presented within the Low and Moderate Income Housing Fund, a special revenue fund.
Separate financial statements are prepared for the Successor Agency and can be obtained from the Successor Agency Office at 2344 Tulare Street, Suite 200, Fresno, CA 93721. There is no separate financial report prepared for the Housing Successor Agency.
D. Budgetary Data
The budget of the City is a detailed operating plan which identifies estimated costs and results in relation to estimated revenues. The budget includes (1) programs, projects, services, and activities to be CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 56 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES provided during the fiscal year, (2) the estimated resources (inflow) and amounts available for appropriation, and (3) the estimated charges to appropriations. The budget represents a process through which policy decisions are made, implemented, and controlled. The City Charter prohibits expending funds for which there is no legal appropriation.
1. Fund Structure
The budget document is organized to reflect the fund structure of the City’s finances. Fund revenues and expenditures are rolled up to the various object levels by division and department for presentation of information to the public. Budget adoption and subsequent administration is carried out on a fund basis.
2. Basis of Accounting
The City adopts annual budgets for most governmental and business-type funds (except Financing Authorities/Corporations and City Debt Service) on the cash basis of accounting plus encumbrances.
Major General Fund revenues, such as sales tax and property tax, are budgeted on the modified accrual basis of accounting. Supplemental appropriations during the year must be approved by the City Council. Budgeted amounts are reported as amended.
Encumbrances are commitments related to executed contracts for goods or services. Encumbrance accounting is utilized for budgetary control and accountability and to facilitate cash planning and control. Encumbrances outstanding at year-end are reported as part of restricted, committed, or assigned fund balance. As of June 30, 2023 , encumbrances totaled $18.6 million in the General Fund, $67.6 million in the Grants Special Revenue Fund, and $58.0 million in the Non major Governmental Funds.
3. Revenue Estimation
The methodology for calculating revenue estimates varies depending on the source of revenue.
Considerable weight generally has been given to historical trends. This emphasis on historical trends is used because of the composition of the Fresno economy, which differs from California in general.
The General Fund is the City’s most versatile funding source, since it has the fewest restrictions. Its revenue comes from property and sales taxes, business tax fees, room tax (Transient Occupancy Tax), charges for services, development fees, and revenues from other governmental agencies.
Property tax is the largest revenue source in the General Fund. The main source for projecting this revenue is assessed value information received from the County of Fresno.
Revenue estimates for Enterprise and Internal Service Funds are also rooted in historical trends. As those funds are generally self-supporting (meaning, they do not generally receive tax dollars to cover operational costs), revenue estimates also take into account any adjustments to fees assessed by the Enterprise or the Internal Service Funds. Additionally, any anticipated changes in service levels are also reflected in the revenue estimates.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 57 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
4. Budget Administration
The budget establishes appropriation and expenditure levels. Expenditures may be below budgeted amounts at year-end due to unanticipated or mandated savings. The existence of a particular appropriation in the budget does not automatically mean funds are expended. Because of the time span between preparing the budget and the subsequent adoption by the governing body, actual expenditures are likely to be different than the budgeted amounts.
Each expenditure is reviewed prior to any disbursement. These expenditure review procedures assure compliance with the City’s requirements and provide some degree of flexibility for modifying programs to meet changing needs and priorities.
E. New Accounting Pronouncements - Implemented
1. GASB Statement No. 91 - Conduit Debt Obligations
The primary objectives of this Statement are to provide a single method of reporting conduit debt obligations by issuers and eliminate diversity in practice associated with (1) commitments extended by issuers, (2) arrangements associated with conduit debt obligations, and (3) related note disclosures. This Statement achieves those objectives by clarifying the existing definition of a conduit debt obligation; establishing that a conduit debt obligation is not a liability of the issuer; establishing standards for accounting and financial reporting of additional commitments and voluntary commitments extended by issuers and arrangements associated with conduit debt obligations; and improving required note disclosures. Implementation of this Statement did not have a significant effect on City's financial statements for the fiscal year ended June 30, 2023.
2. GASB Statement No. 94 - Public-Private and Public-Public Partnerships and Availability Payment Arrangements
The primary objective of this Statement is to improve financial reporting by addressing issues related to public-private and public-public partnership arrangements (PPPs). As used in this Statement, a PPP is an arrangement in which a government (the transferor) contracts with an operator (a governmental or nongovernmental entity) to provide public services by conveying control of the right to operate or use a nonfinancial asset, such as infrastructure or other capital asset (the underlying PPP asset), for a period of time in an exchange or exchange-like transaction. Implementation of this statement did not have a significant effect on City's financial statements for the fiscal year ended June 30, 2023.
3. GASB Statement No. 96 - Subscription-Based Information Technology Arrangements This Statement provides guidance on the accounting and financial reporting for subscription- based information technology arrangements (SBITAs) for government end users (governments).
This Statement (1) defines a SBITA; (2) establishes that a SBITA results in a right-to-use subscription asset—an intangible asset—and a corresponding subscription liability; (3) provides the capitalization criteria for outlays other than subscription payments, including implementation CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 58 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES costs of a SBITA; and (4) requires note disclosures regarding a SBITA. Implementation of this Statement had a moderate effect on City's financial statements for the fiscal year ended June 30, 2023.
4. GASB Statement No. 99 - Omnibus 2023
The objectives of this Statement are to enhance comparability in accounting and financial reporting and to improve the consistency of authoritative literature by addressing (1) practice issues that have been identified during implementation and application of certain GASB Statements and (2) accounting and financial reporting for financial guarantees. Implementation of this Statement did not have a significant effect on City's financial statements for the fiscal year ended June 30, 2023.
F. New Accounting Pronouncements - Issued But Not Yet Adopted The City is assessing what effect, if any, the implementation of the following standards will have on the City’s financial statements.
1. GASB Statement No. 100 - Accounting Changes and Error Corrections- an Amendment to GASB Statement No. 62
The primary objective of this Statement is to enhance accounting and financial reporting requirements for accounting changes and error corrections to provide more understandable, reliable, relevant, consistent, and comparable information for making decisions or assessing accountability. Application of this statement is effective for City’s fiscal year ending June 30, 2024.
2. GASB Statement No. 101 - Compensated Absences
The objective of this Statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated absences. That objective is achieved by aligning the recognition and measurement guidance under a unified model and by amending certain previously required disclosures. Application of this statement is effective for City’s fiscal year ending June 30, 2025.
3. GASB Statement No. 102 - Certain Risk Disclosures
The objective of this Statement is to provide users of government financial statements with essential information about risks related to a government’s vulnerabilities due to certain concentrations or constraints. That objective is achieved by requiring governments to assess whether a concentration or constraint makes the primary government reporting unit or other reporting units that report a liability for revenue debt vulnerable to the risk of a substantial impact.
The statement also requires a government to assess whether an event or events associated with a concentration or constraint that could cause the substantial impact have occurred, have begun to occur, or are more likely than not to begin to occur within 12 months of the date the financial statements are issued. Application of this statement is effective for the City’s fiscal year ending June 30, 2025. Earlier application is encouraged.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 59 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES G. Deposits and Investments
1. Investment in the Treasurer’s Pool - The City Controller/Treasurer invests on behalf of most funds of the City in accordance with the City’s investment policy and the California Government Code Section 53601. The City Treasurer, who reports investments and earnings on a monthly basis to the City Council, manages the Treasurer’s Investment Pool. The Treasurer’s Investment Pool consists of two components: 1) pooled deposits and investments and 2) dedicated investment funds. The dedicated investment funds represent restricted funds related to bond issuances of Enterprise Funds. In addition to the Treasurer’s Investment Pool, the City has other funds that are held by trustees. These funds are related to the issuance of Non-Enterprise Fund bonds and certain loan programs of the City.
2. Investment Valuation - The City categorizes its investments at fair value measurement within the fair value hierarchy established by generally accepted accounting principles as codified in GASB Statement No. 72, Fair Value Measurement and Application.
All City investments are authorized by statute. The City is invested in the following authorized investment instrumentalities: obligations of the U.S. Treasury, agencies, state and local agencies, and supranationals, negotiable and non-negotiable certificates of deposit, medium term corporate notes, money market mutual funds, and the State Treasurer's investment pool. All are stated at fair value except for the non-negotiable certificates of deposit and money mutual fund which are stated at amortized cost.
3. Investment Income - Cash balances of each of the City’s funds, except for certain Trust and Custodial Funds and other restricted accounts, are pooled and invested by the City. Interest income from pooled investments is allocated to the individual funds based on the fund participant’s average daily cash balance at month end in relation to total pooled investments.
The City’s policy is to charge interest to those funds that have a negative average daily cash balance at month end. Fiscal year-end deficit cash balances are reclassified as Due to Other Funds and funded by operating funds with positive cash balances.
H. Loans Receivable
For the purposes of the Fund Financial Statements, Special Revenue and Capital Projects Funds expenditures relating to long-term loans arising from loan subsidy programs are recorded as loans receivable net of an estimated allowance for potentially uncollectible loans. In some instances, amounts due from external participants are recorded with an offset to an allowance account. The balance of long- term loans receivable includes loans that may be forgiven if certain terms and conditions of the loans are met.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 60 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES I. Inventories
Inventories recorded in the Proprietary Funds primarily consist of construction materials and maintenance supplies. Generally, Proprietary Funds value inventory at cost or average cost. Inventory is expensed as it is consumed (the consumption method of inventory accounting). The City uses the purchases method of accounting for inventories in governmental fund types, whereby inventory items are considered expenditures when purchased and are not reported in the balance sheet.
J. Former Redevelopment Agency Property Held for Resale Property of the former RDA, some of which was allocated to Low and Moderate Income Housing (LMIH) ($3.6 million) and some to the Successor Agency ( $0.3 million), is being held for resale per the law dissolving the RDA. The property is recorded at the current determination of the lower of estimated cost or market as documented in its approved Long-Range Property Management Plan (LRPMP). The LRPMP addresses the anticipated disposition and use of the real properties of the former RDA. At June 30, 2023, the adjusted value of the property was $3.9 million.
Property held for sale may, during the period it is held by the City, generate rental income. This rental income is recognized as it becomes due and is considered collectible. The property held by the LMIH appears on the Nonmajor Governmental Fund Financial Statements and Government-Wide Financial Statements as Property Held for Resale. Property held for resale by the Successor Agency is included in the fiduciary funds.
K. Restricted Assets
Restricted cash is classified as restricted assets on the financial statements because it is maintained in separate bank accounts or tracked separately in the City Treasury group of accounts. Use of the proceeds is limited by applicable bond covenants and resolutions. Restricted assets account for the principal and interest amounts accumulated to pay debt service, unspent bond proceeds and amounts restricted for future capital projects. Restricted grants and interest receivable represent cash and receivables contributed for capital projects and the associated interest.
L. Capital Assets
Capital assets, which include land, buildings and improvements, machinery and equipment, infrastructure, and intangible assets, are reported in the applicable Governmental Activities or Business- Type Activities columns in the Government-Wide Financial Statements and in the Private-Purpose Trust Fund (former RDA). All land not included in property held for resale is defined as Capital Assets, regardless of the acquisition cost of the land. All other acquisitions or constructions (excluding Infrastructure) with an initial cost of $15,000 or more (excluding bundled purchases) and having an estimated useful life in excess of two years are defined as Capital Assets. Computer purchases acquired through a capital lease are capitalized in bulk and not on an individual basis.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 61 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Infrastructure with an initial cost of more than $50,000 is capitalized. Improvements that extend an asset’s life or efficiency by over 25% are also capitalized. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed unless they fall below the initial cost threshold.
Asset Category Capitalization
Threshold
Land All Land
Buildings, Improvements, and Machinery & Equipment More than $15,000 Infrastructure More than $50,000
Donated capital assets, donated works of art and similar items, and capital assets received in a service concession arrangement are recorded at acquisition value at the date of donation. Capital outlay is recorded as expenditures of the General, Special Revenue, and Capital Projects Funds and as assets in the Government-Wide Financial Statements to the extent the City’s capitalization threshold is met. In prior years, interest cost incurred during the construction phase of capital assets of Business-Type Activities was included as part of the capitalized value of the assets constructed. Amortization of assets acquired under capital lease is included in depreciation and amortization.
Buildings and improvements, infrastructure, and machinery and equipment of the primary government, as well as the component units, are depreciated using the straight-line method over the following estimated used lives:
Asset Category Useful Life
(Years)
Buildings and Improvements 20 to 40
Infrastructure 15 to 55
Machinery and Equipment 3 to 12
Works of art and historical treasures held for public exhibition, education, or research in furtherance of public service, rather than financial gain, are not capitalized. These items are protected, kept unencumbered, cared for and preserved by the City.
Airports Department capitalizes noise mitigation costs consistent with GASB Statement No. 51 - Intangible Assets. Water Rights, in the Water Fund, are also capitalized as Intangible Assets with indefinite useful lives and no amortization. The Airports' Noise Mitigation program consists of improvements made to properties falling within Federal Aviation Administration (FAA) designated high noise impact areas. Although the properties do not belong to Airports, noise insulation measures are installed to reduce the impact of sound decibels inside properties located within the flight path of the airport. In exchange, property owners grant aviation easements to the Airports Department with the easement having an indefinite life. Funding for the program is provided through federal grants.
As of fiscal year end 2023, $18.9 million has been capitalized as an intangible asset. Included in this amount are noise mitigation assets of $2.7 million and Water Rights in the amount of $16.2 million.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 62 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Capital Financing Activities
Property, plant and equipment include the following property held under capital financing obligation at June 30, 2023 (in thousands):
Governmental
Activities
Machinery and Equipment $ 48,594
Less: Accumulated Depreciation (32,845)
Net Machinery and Equipment $ 15,749
M. Bond Prepaid Insurance, Bond Premiums and Discounts and Accreted Interest Payable In the Government-Wide Financial Statements, as well as in the Proprietary Fund type and the Fiduciary Fund type in the Fund Financial Statements, long-term debt and other long-term obligations are reported as liabilities in the applicable Governmental Activities, Business-Type Activities, or Proprietary Fund and Fiduciary Fund Statement of Net Position. Bond prepaid insurance is reported as other assets and amortized over the term of the related debt. Bond issuance premiums and discounts are amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond issuance premium or discount. Interest accrued on capital appreciation bonds is reported as accreted interest payable in the Proprietary Fund and as Long-Term Liabilities, Due In More Than One Year in the Government-Wide Statements.
N. Deferred Outflows of Resources
1. Refunding of Debt
The City records deferred outflows of resources in its Proprietary, Fiduciary, and Government- Wide Financial Statements which represent a consumption of net assets that applies to future periods. These financial statement elements are distinct from assets.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 63 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Unamortized losses occurring from advance refunding of debt are reported as deferred outflows of resources. As of June 30, 2023 , the ending balance of refunding charges yet to be amortized into expense consists of the following (in thousands):
Bonds Charge on Refunding
Governmental Activities:
Lease Revenue Bonds 2017 A&B, NNLB $ —
Lease Revenue Bonds 2017, Parks Impact 640
Lease Revenue Bonds 2017, Various Capital Projects 13
Lease Revenue Bonds 2017, City Hall Chiller 15
Lease Revenue Bonds 2017, Public Safety 2,146
Total Governmental Activities 2,814
Business-Type Activities:
Airport Revenue Refunding Bonds 2013 146
Lease Revenue Bonds 2017, Convention Center (3)
Convention Center Improvements 2008 E&F —
Lease Revenue Bonds 2017, Stadium 16
Lease Revenue Bonds 2017, Exhibit Hall 43
Lease Revenue Bonds 2017, Golf Course 45
Total Business-Type Activities 247
Total Charge on Refunding $ 3,061
2. Pension and OPEB
In the Government-Wide Financial Statements and the Proprietary Fund type in the Fund Financial Statements, deferred outflows of resources are recorded for the current year employer pension contributions to the retirement systems, which represent contributions made after the measurement period in accordance with GASB Statement No. 71. For the OPEB plan, the the employer contribution made after the measurement period is the implicit subsidy for the current fiscal year. Refer to Note 1 (V) and 1 (W) for additional information.
O. Unearned Revenues
Unearned revenues arise when resources are received by the City before it has a legal claim to them (i.e., upfront grants or when the City bills certain fixed rate services in advance). Amounts billed, but not yet earned, are amortized over the service period.
P. Deferred Inflows of Resources
The City records deferred inflows of resources in its Governmental, Proprietary, and Government-Wide Financial Statements which represent an acquisition of net assets that applies to future periods. In the Government-Wide Financial Statements and the Proprietary Fund type in the Fund Financial Statements, deferred inflows of resources are recorded for unamortized pension revenue and unamortized OPEB expense.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 64 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES In the governmental fund statements, deferred inflows of resources consist of revenues not collected within the availability period after fiscal year-end. The deferred inflows of resources balance as of June 30, 2023 consists of the following unavailable resources (in thousands):
Deferred Inflows of Resources
General
Fund
Grants
Special
Revenue
Fund
Other
Governmental
Funds
Total
Governmental
Funds
Property Taxes $ 3,515 $ — $ — $ 3,515
Franchise Taxes 3,514 — — 3,514
Business Tax 5,481 — — 5,481
Measure C and Other Tax — — 3,317 3,317
Code Enforcement Revenue 6,444 — — 6,444
Fire Revenue 1,311 — — 1,311
Grant Revenue 11 29,261 2,665 31,937
Parking Citations, Fines and Other Revenue 1,608 — — 1,608 Leases 3,343 — 505 3,848
Total $ 25,227 $ 29,261 $ 6,487 $ 60,975
Q. Interfund Transfers
Interfund transfers are generally recorded as transfers in (out). The following types of transactions would not be considered Interfund Transfers, and therefore would not be recorded as an interfund item in the external financial statements. These exceptions include the following:
1. Charges for services are recorded as both revenues of the performing fund and expenditures of the requesting fund. Unbilled costs are recognized as an asset of the performing fund at the end of the fiscal year.
2. Reimbursements for expenditures initially made by one fund which are properly applicable to another fund are recorded both as expenditures in the reimbursing fund and as a reduction of expenditures in the fund that is reimbursed.
R. Fund Balance (Deficit)
In the fund financial statements, fund balances of the governmental funds are reported in a hierarchy of classifications which are based on the extent to which the City is bound to honor constraints on the specific purposes for which the amounts in the funds can be spent. Governmental fund balance classifications consist of the following:
1. Nonspendable - Includes amounts that are either not in spendable form or are legally/ contractually required to be maintained intact. These items include those not expected to be converted to cash, such as inventories, prepaid items, and certain long-term receivables.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 65 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2. Restricted - Includes amounts which have constraints placed on the use of the resources. The constraints are either externally imposed by creditors, grantors, contributors, the legally enforceable laws or regulations of other governments, or by the legally enforceable laws or enabling legislation of the government itself.
3. Committed - Includes amounts that can only be used for specific purposes. Various reserves, including the City’s Emergency Reserve, are included as a committed reserve.
Resolution No. 2011-64 established the Reserve Management Act which set forth policy with stringent limitations on the reserve funds. This Act increased the minimum reserve balance to 10% of the adopted budget for the next year’s General Fund appropriations.
A November 16, 2012 ballot measure amended Section 1212 of the City Charter to require that the Council establish a policy for managing the City Reserves. The measure also defined several “qualifying events” under which the City’s Emergency Reserve could be used. Qualifying events were deemed to be 1) Natural catastrophe; 2) An immediate threat to health and public safety; or 3) A significant decline in General Fund Revenues, which in the opinion of the City Manager, impairs his/her ability to administer the Council adopted budget. All qualifying events must be declared by the Mayor and ratified by a super majority Council vote.
The Reserve Management Act (the Act) was further amended through Resolution 2015-77, which was adopted on May 15, 2015. The amendment to the Act permitted the use of the Emergency Reserve for year-end cash balancing purposes, with the approval of the Council.
On June 30, 2023 , the Reserve balance identified as Committed Fund Balance was at $54.5 million, including $44.2 million for the General Fund Emergency Reserve.
On December 7, 2017, with the adoption of Resolution No. 2017-334, the Act was again amended. The Resolution stated that any real or personal asset sale of City property with proceeds greater than $15,000, which would otherwise be deposited into the General Fund, shall instead be deposited into an Asset Sale/Special Windfall Reserve Fund. Proceeds deposited into this new fund are amortized over a five-to-ten year period and used to provide a revenue stream for General Fund items deemed necessary to deliver core City services for the protection and benefit of the citizens of Fresno. Monies from the Asset Sale/Special Windfall Reserve Fund are currently being used to fund salaries of additional police dispatchers. The Committed Fund Balance as of June 30, 2023 includes $0.8 million within this fund.
In addition to the City's Emergency Reserve, the Committed Fund Balance as of June 30, 2023 also consists of $3.4 million designated exclusively for use in a year when a 27th pay period occurs. Monies are set aside each year to fund the extra pay period that is a product of paying employees bi-weekly. The next fiscal year containing a 27th pay period is fiscal year 2028.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 66 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Committed Fund Balance as of June 30, 2023 also includes $6.1 million for the Housing Reserve. Funds in this reserve are to be used exclusively for construction of low-income housing, or subsidizing private sector development of low-income housing.
4. Assigned - Includes amounts that are not classified as nonspendable, restricted, or committed, but which are intended by the City to be used for specific purposes. Intent is expressed by legislation or action of the City Council, the Mayor, or the City Manager which legislation has delegated the authority to assign amounts for specific purposes.
5. Unassigned - The residual classification for fund balance, which includes all amounts not reported as nonspendable, restricted, committed, or assigned. The General Fund may report either a positive or negative unassigned fund balance. Unassigned amounts are available for any purpose. Other governmental funds may report only negative unassigned fund balances if expenditures incurred for specific purposes exceeded amounts restricted, committed or assigned for those purposes.
When multiple classifications of resources are available for use, it is the City’s policy to use resources in the order of restricted, committed, assigned, and unassigned.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 67 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Fund Balances of the governmental funds at June 30, 2023 consisted of the following (in thousands):
Grants Other Total
General Special Revenue Governmental Governmental
Fund Fund Funds Funds
Fund Balances:
Restricted:
Debt Service $ — $ — $ 5,020 $ 5,020
Revitalization — — 613 613
Culture and Recreation — — 55,619 55,619
Street Works — — 19,519 19,519
Transportation — — 31,072 31,072
Pedestrian and Bicycle Program — — 1,622 1,622
Prop 42 Traffic Congestion Relief — — 215 215
AD #131 UGM Reimbursement — — 1,868 1,868
Forfeitures — 450 450
CASP Program Senate Bill 1186 — — 825 825
CARES, Emergency Rental Assist, ARPA Grants — 10,744 — 10,744 Impact Fees — 32,706 65,411 98,117
Special Assessment Projects — — 14,788 14,788
Low to Moderate Income Housing — — 34,618 34,618
Committed:
27th Pay Period Reserve 3,415 — — 3,415
Emergency Reserve General Fund 44,182 — — 44,182
Asset Sale Reserve Fund 760 — — 760
Housing Reserve 6,109 — — 6,109
Assigned:
Public Works Maintenance 2,206 — — 2,206
Cable PEG, Nonprofit Media JPA — — 1 1
Median Island Maintenance — — 4 4
Parks Maintenance 2,422 — 821 3,243
Right of Ways Acquisition — — 2,949 2,949
Street Tree Fees — — 49 49
Public Protection 181 — 670 851
General Purpose 10,810 — — 10,810
Enterprise Zone — — 4 4
City Hall Improvements — — 179 179
Miscellaneous Paving — — 95 95
PD Capital Projects — — 21,284 21,284
Memorial Auditorium — — 4,588 4,588
Parks Impact Fees — — 201 201
Parks Capital Projects — — 110 110
Street Improvements — — 100 100
Police Administration & Patrol 378 — — 378
Planning & Community Revitalization 2,636 — — 2,636 Local Agency Protects — — 6 6
Unassigned (Deficit) 54,284 — (2,587) 51,697
Total Fund Balance (Deficit) $ 127,383 $ 43,450 $ 260,114 $ 430,947 CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 68 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES S. Net Position/(Deficit)
Net position/(deficit) represents the difference between assets/deferred outflows of resources and liabilities/deferred inflows of resources in the Government-Wide and Proprietary Fund Statements of Net Position. Net investment in capital assets consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowings used for the acquisition, construction or improvement of those assets. The restricted component of net position consists of restricted assets reduced by liabilities and deferred inflows of resources related to those assets.
Generally, a liability relates to restricted assets if the asset results from a resource flow that also results in the recognition of a liability or if the liability will be liquidated with the reported restricted assets.
Unrestricted net position represents net position elements which are not restricted.
T. Cash Flows
The Statements of Cash Flows are presented for Proprietary Fund types. Cash and cash equivalents include all unrestricted and restricted highly liquid investments with original purchase maturities of three months or less. Pooled cash and investments in the City’s Treasury represent monies in a cash management pool and such accounts are similar in nature to demand deposits.
U. Regulatory Assets and Liabilities
At June 30, 2023 , the Statement of Net Position Business-Type Activities reflected approximately $0.8 million in regulatory assets related to the Central Valley Project (CVP) Water Settlement. These assets will continue to have an impact on water rates which are to be charged to customers over approximately the next 20 years. The settlement for past deficiencies was negotiated between the City and the United States Bureau of Reclamation (USBR). Under GASB Statement No. 62, Codification of Accounting and Financial Reporting Guidance, regulatory assets represent future revenue associated with certain costs (CVP Litigation Settlement) that will be recovered from customers through the ratemaking process.
V. Pensions
For purposes of measuring the net pension asset, deferred outflows/inflows of resources related to pensions and pension revenue/expense, information about the fiduciary net position of the City’s two pension plans, City of Fresno Employees Retirement System and the City of Fresno Fire and Police Retirement System (Plans), and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis as they are reported by the Plans, which is the accrual basis of accounting. Employer and employee contributions are recognized as revenue when due. Contributions are recorded in the period the related salaries are earned and become measurable. Investment income is recognized when it is earned. The net appreciation in fair value of investments held by the Plans is recorded as an increase to investment income based on the valuation of investments at fiscal year-end, which includes both realized and unrealized gains and losses on investments. Retirement benefits and refunds are recognized when due and payable under the terms of the Plans.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 69 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES W. Other Post-Employment Benefits (OPEB)
For purposes of measuring the net OPEB liability, deferred outflows/inflows of resources related to OPEB, and OPEB revenue/expense, information about the fiduciary net position of the City’s OPEB Plan, and additions to/deductions from the OPEB Plan's fiduciary net position have been determined on the same basis, which is the accrual basis of accounting. For this purpose, the OPEB Plan recognizes benefit payments when due and payable in accordance with the benefit terms. While participant retirees pay 100% of their premium costs, they are allowed to purchase insurance at blended premium rates.
Thus, the City's contribution is deemed to be equal to the implicit subsidy, which is that portion of retiree claims costs over premiums contributed by retirees.
X. 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.
Y. Prior Period Adjustments
1. Restatement of Beginning Fund Balance for Low and Moderate Income Housing Special Revenue Fund - The City restated beginning fund balance to increase fund balance by $637,000.
In the prior year the City conveyed property to a developer under a grant deed; however, there was also a related loan agreement that was not reported. The City should have recorded the loan receivable but instead wrote off the property values as a loss. The loan amount of $637,000 was recorded in fiscal year 2023.
2. Restatement of Beginning Net Position for Governmental Activities - The City restated beginning net position to decrease by $23,000 due to implementation of GASB Statement No. 96 Subscription Based Information Technology Agreements. This reduction offset the restatement related to Non-Major governmental funds ($637,000) to a net increase of $614,000 for Governmental Activities.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 70 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Note 2. Cash and Investments
A. City Cash and Investments
1. Sponsored Investment Pool
As part of the City’s total cash and investment portfolio, the Treasury Officer and staff, under the supervision of the Controller, manage an investment pool that includes only internal investors and is available for use by all funds. The pool is not registered with the Securities and Exchange Commission as an investment company. Investment activity is reported monthly to the City Council by posting reports to the City’s web page and annually through an investment policy submitted to the Council for review and approval. The investments are reported at fair value, which is determined monthly. Participants’ shares are determined by the daily cash balance deposited in the pool (the value of its pool shares). Investment income earned by the pooled investments is allocated to the various funds on a monthly basis, based on each fund's daily cash balance. Interest payments are paid to the various funds also on a monthly basis. The value of the pool shares is based upon amortized cost in day-to-day operations, but is adjusted to the fair value at year-end. The value of the shares is supported by the value of the underlying investments. Each fund type's portion of this pool is displayed on the financial statements as “Cash and Investments.” In addition, certain funds related to debt issues have investments with trustees.
The following is a summary of cash, deposits, and investments at June 30, 2023 (in thousands):
(in thousands) Primary Government
Category
Governmental
Activities
Business-Type
Activities
Fiduciary
Funds Total
Cash and Investments $ 376,012 $ 370,186 $ 6,832 $ 753,030 Restricted Cash and Investments 171,879 312,066 717 484,662 Pension Trust Investments at Fair Value — — 3,732,196 3,732,196 Collateral Held for Securities Lent — — 49,326 49,326 Total $ 547,891 $ 682,252 $ 3,789,071 $ 5,019,214
2. Cash and Deposits
At year-end, the City's bank balance was $ 39.9 million inclusive of Successor Agency to the Fresno Redevelopment Agency Private-Purpose Trust Fund and pension trust funds. The recorded balance reflected in the June 30, 2023 financial statements was $36.6 million. The difference is due to deposits in transit and outstanding checks.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 71 NOTE 2 - CASH AND INVESTMENTS
3. Fair Value Hierarchy
The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. These principles recognize a three-tiered fair value hierarchy, as follows:
• Level 1: Investments reflect prices quoted (unadjusted) for identical assets or liabilities in active markets.
• Level 2: Inputs other than quoted prices included in Level 1 that are observable for an asset or liability, either directly or indirectly. Inputs to the valuation include prices that are based on a similar observable asset either directly or indirectly, which may include inputs in markets that are not considered to be active.
• Level 3: Inputs are unobservable inputs for an asset or liability where there are little market activities. The inputs into the determination of fair value are based upon unobservable sources and may require estimation.
The City uses the market approach as a valuation technique in the application of GASB Statement No. 72. This method uses prices and other relevant information generated by market transactions involving identical or comparable assets or group of assets. Fair value is the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. Securities listed on the fair value hierarchy are valued by the custodial bank using Data Feed purchased from Interactive Data Corporation (IDC). The Level 2 Data Feed provides end of day independent valuations utilizing rules based on logic and standard valuation techniques. It maximizes the use of relevant observable inputs including quoted prices for similar assets, benchmark yield curves, and market corroborated inputs.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 72 NOTE 2 - CASH AND INVESTMENTS The following is a summary of the fair value of the City’s investments using the hierarchy previously discussed (in thousands):
Pooled Investments by Fair Value Level June 30, 2023 Level 1 Level 2 Federal Farm Credit Bank Bonds $ 110,287 $ — $ 110,287
Federal Home Loan Bank Bonds 186,798 — 186,798
Federal Home Loan Mortgage Corporation Bonds 47,070 — 47,070 Federal National Mortgage Association Bonds 22,790 — 22,790 Federal Ag Mortgage Corporation 22,616 — 22,616
U.S. Treasury Securities 57,168 57,168 —
U.S. Sovereign Bonds 4,812 — 4,812
Medium Term Corporate Notes 258,875 — 258,875
Negotiable Certificates of Deposit 47,974 — 47,974
Total Pooled Investments by Fair Value 758,390 57,168 701,222 Pooled Investments Not Subject to the Fair Value Hierarchy State Local Agency Investment Fund (LAIF) 15,128
Municipal Bonds 168,640
Supranationals 27,444
Money Market Funds 136,000
Total Pooled Investments Not Subject to the Fair Value Hierarchy 347,212 Total Pooled Investments 1,105,602
Investments Held Outside the Treasurer's Pool Not Subject to the Fair Value Hierarchy
Money Market Mutual Funds 95,299
Total Investments Held Outside the Treasurer's Pool Not Subject to the Fair Value Hierarchy 95,299
Total Investments Held Outside the Treasurer's Pool 95,299 Grand Total of Investments $ 1,200,901 $ 57,168 $ 701,222 Note: There are no level 3 investments.
According to GASB Statement No. 72, money market investments and participating interest- earning investment contracts that have a remaining maturity at the time of purchase of one year or less should be measured at amortized cost, and as such, are not shown in the fair value hierarchy.
In addition, the City's investment in LAIF is also not subject to the fair value hierarchy, as the amount available for withdrawal is based on the amortized cost.
4. Cash, Deposits, and Investments
Cash includes amounts in demand and time deposits. Investments are reported in the accompanying financial statements at fair value, except for certain certificates of deposit and investment contracts that are reported at cost because they are not transferable and they have terms that are not affected by changes in market interest rates.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 73 NOTE 2 - CASH AND INVESTMENTS Changes in fair value that occur during a fiscal year are recognized as income from property and investments. Income from property and investments includes interest earnings; changes in fair value; any gains or losses realized upon the liquidation, unrealized gains and losses, maturity, or sales of investments; property rentals and the sale of City owned property.
5. Investments Authorized by the California Government Code and the City’s Investment Policy
The City maintains a formal investment policy, which is adopted annually by the City Council. All investments held in the Treasurer's Pool are consistent with the City's investment policy objectives of preservation of principal, adequacy of liquidity, and achievement of an average market rate of return.
The policy addresses the soundness of financial institutions in which the City will deposit funds, types of investment instruments as permitted by the California Government Code, and the percentage of the portfolio that may be invested in certain instruments with longer terms to maturity. A copy of the City’s current investment policy can be found at www.fresno.gov/finance/ investmentpolicy.pdf.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 74 NOTE 2 - CASH AND INVESTMENTS The following graphs depict the allocation of the Treasury Pool’s assets among the various authorize d investments, as well as maturity periods, as of June 30, 2022 and June 30, 2023:
City of Fresno Treasurer's Pool (Fair Value)
June 30, 2022
5.20%
3.95%
24.32%
4.81%
5.56%
0.66%17.42%
5.97%
5.95%
0.57%
11.95%
0.65%
0.73%
10.96%
1.32%
Federal Home Loan Mortgage Corporation State Local Agency Investment Fund Medium Term Corporate Notes Negotiable Certificates of Deposit Federal Home Loan Bank Federal National Mortgage Association Money Market Funds Federal Farm Credit Bank
Cash Accounts Time Deposits
U.S. Treasury Securities Collateralized Mortgage Obligations U.S. Sovereign Bonds Municipal Bonds
Supranationals
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 75 NOTE 2 - CASH AND INVESTMENTS City of Fresno Treasurer's Pool (Fair Value)
June 30, 2023
4.19%
1.35%
23.05%
4.27%
16.64%
2.03%
12.11%
9.82%
3.55%
5.09%
0.43%
15.02%
2.44%
Federal Home Loan Mortgage Corporation State Local Agency Investment Fund Medium Term Corporate Notes Negotiable Certificates of Deposit Federal Home Loan Bank Federal National Mortgage Association Money Market Funds Federal Farm Credit Bank
Cash Accounts Time Deposits
U.S. Treasury Securities Collateralized Mortgage Obligations U.S. Sovereign Bonds Municipal Bonds
Supranationals
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 76 NOTE 2 - CASH AND INVESTMENTS City of Fresno
Treasurer's Pool Maturity Schedule
As of June 30, 2022
35.91%
16.41%
16.34%
17.14%
14.21%
Less than 1 Year
1 - 2 Years
2 - 3 Years
3 - 4 Years
4 - 5 Years
As of June 30, 2023
32.56%
18.42%20.03%
15.88%
13.11%
B. Investments Authorized by Debt Agreements
Investment of debt proceeds held by bond trustees is governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City’s investment policy.
Investments held outside the Treasurer's Pool consist mainly of required reserve funds for various bond issues. They are held by trustees, and are not available for the City's general expenditures.
Investment agreements are used for the investment of bond proceeds in accordance with the permitted investment provisions of the specific bond indentures, which are prepared in accordance with numerous safeguards to reduce the risk associated with a provider’s ability to meet its contractual obligations.
The City has invested bond trust monies into securities with maturity periods of one to three years under a “ladder” approach to investing. Such a structure allows for reinvestment in the short-term until interest rates begin to rise. Staff believes that investing in the long-term at this time would commit the City into low earnings, instead of taking advantage of opportunities in case rates begin to rise. During fiscal year 2023, total interest of $ 115.78 million was earned from the following instruments:
• Money Market Funds - $115.78 million
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 77 NOTE 2 - CASH AND INVESTMENTS C. Types of Risk Associated with the Treasury Pool’s Investments
1. Investment Risk
The City invests in no derivatives other than structured (step-up) notes, which guarantee coupon payments. These are minimal risk instruments. All investments are held by a third-party custodian in the City’s name.
2. Deposit and Investment Risk
The risk disclosures below apply to the City's internal investment pool and deposits as well as investments held by trustees for debt service funds or bond proceeds. Portfolio investments are exposed to four main types of risk: concentration, interest rate, default, and custodial risk. Deposits are exposed primarily to custodial credit risk.
3. Concentration of Credit Risk
The investment policy of the City contains limitations on the amount that can be invested in any one issuer, which are more restrictive than those stipulated by the California Government Code. While the State has no limit on the percentage of the portfolio that can be invested in a single U.S.
Government Agency Security, the City’s Investment Policy limits investment in any one issuer to 50% of the portfolio. Also, while the State limits investments to 30% of the Portfolio for any single issuer of Medium Term Notes, the City's Investment Policy limits investments to 20% of the portfolio invested in any single issuer. Investments in any one issuer (other than U.S. Treasury securities, money market funds, and external investment pools) that represent 5% or more of the total Treasurer’s Pool investments or investments with trustees are as follows (in thousands):
Treasurer's Pool Investments
Issuer Investment Type Amount % of Total
Treasurer's Pool Investments:
Federal Farm Credit Bank U.S. Government Agency $ 110,287 9.63 % Federal Home Loan Bank U.S. Government Agency 186,798 16.31 % Medium Term Corporate Notes
n
kPooled Investments 258,875 22.60 %
Municipal Bonds
n
kPooled Investments 168,640 14.72 %
$ 724,600 63.26 %
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 78 NOTE 2 - CASH AND INVESTMENTS
4. Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally the longer the maturity of an investment, the greater will be the sensitivity of its fair value to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer term investments. Another way the City mitigates this risk is by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time to provide the cash flow and liquidity needed for operations. The City monitors the interest rate risk inherent in its portfolio by measuring the weighted average maturity of its portfolio. The Investment Policy limits the portfolio's weighted average maturity to three years, except for debt agreements held by trustees which are governed by the indentures and may be longer.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 79 NOTE 2 - CASH AND INVESTMENTS Interest rate risk for the Treasurer’s Pool and for investments with trustees is disclosed in the following table. As of June 30, 2023, the City had the following cash and investments in its portfolio (in thousands):
Investment Maturities
Treasurer's Pool Fair Value
Less than 1
Year
1 to 5
Years
5 to 10
Years
More than
10 Years
Cash Accounts $ 39,917
Treasurer's Pool Investments
U.S. Government Agencies:
Federal Farm Credit Bank 110,287 $ 26,719 $ 83,568 $ — $ — Federal Home Loan Bank 186,798 38,866 147,932 — —
Federal Home Loan Mortgage Corp. 47,070 — 47,070 — — Federal National Mortgage Association 22,790 — 22,790 — — Federal Ag Mortgage Corporation 22,615 — 22,615 — — Subtotal of U.S. Government Agencies 389,560 65,585 323,975 — — U.S. Treasury Securities 57,168 19,754 37,414 — —
U.S. Sovereign Bonds 4,812 4,812 — — —
Medium Term Corporate Notes 258,875 69,239 189,636 — — Negotiable Certificates of Deposit 47,974 14,779 33,195 — — State Local Agency Investment Fund (CA LAIF) 15,128 15,361 (233) — — Municipal Bonds 168,640 24,729 143,912 — —
Supranationals 27,444 9,824 17,620 — —
Money Market Mutual Funds 136,000 136,000 — — —
Total Treasurer's Pool Investments 1,145,518 $ 360,083 $ 745,519 $ — $ — Investments Held Outside the Treasurer's Pool
Debt Service Funds/Bond Proceeds:
Mutual Funds 95,299 95,299 — — —
$ 95,299 $ — $ — $ —
Other Deposits 4,265
Outstanding Checks (9,049)
Deposits in Transit 1,466
Petty Cash 193
Pension Trust Assets (See separate ACFRs) 3,781,522
Total Cash and Investments $ 5,019,214
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 80 NOTE 2 - CASH AND INVESTMENTS
5. Default Credit Risk
Generally, default credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This risk is measured by the assignment of a rating by a nationally recognized statistical rating organization.
The following table represents the minimum rating required by (where applicable) the California Government Code, the City’s investment policy, or debt agreements, and the actual rating as of year-end for each investment type:
Treasurer's Pool Investments:
U.S. Government Agency Securities:
Federal Farm Credit Bank $ 110,287 A AA+ 9.63%
Federal Home Loan Bank 186,798 A AA+ 16.31%
Federal Home Loan Mortgage Corporation 47,070 A AA+ 4.11% Federal National Mortgage Association 22,790 A AA+ 1.99% Federal Ag Mortgage Corporation 22,616 Unrated Unrated 1.97% U.S. Treasury Securities 57,168 A Aaa 4.99%
U.S. Sovereign Bonds 4,812 A AA+U 0.42%
Medium Term Corporate Notes:
Aig Global Funding 4,741 A A+ 0.41%
Apple Inc 14,251 A AA+ 1.24%
Bank Of America 17,747 A A- 1.55%
Bank Of New York 7,412 A A 0.65%
Caterpillar Finl Svcs Corp 4,786 A AA 0.42%
Cit Group Holdings Inc 9,722 A A 0.85%
Equitable Financial Life 4,902 A AA- 0.43%
Exxon Mobil Corporation 4,816 A A 0.42%
Florida Power & Light 4,802 A A 0.42%
Guardian Life 8,467 A A+ 0.74%
Harvard Pres & Fellows 3,969 A A+ 0.35%
Hsbc Usa Inc 4,883 A AA- 0.43%
Jp Morgan Chase 8,958 A A+ 0.78%
Lloyds Bank 4,767 A AAA 0.42%
Massmutual Global Fund 9,981 A A- 0.87%
Met Life Glob 4,453 A A- 0.39%
Meta Platforms Inc 9,491 A A+ 0.83%
National Secs Clearing 4,969 A AA+ 0.43%
New York Life 17,471 A AA- 1.53%
Northwestern Mutual Glbl 8,943 A AA+ 0.78%
Pacific Life 4,941 A AA- 0.43%
Pricoa Global Funding 4,978 A AA- 0.43%
Principal Lfe Glb Fnd Ii 4,561 A AA- 0.40%
Protective Life 4,478 A A+ 0.39%
Royal Bank Of Canada 14,108 A AA- 1.23%
Shell International Fin 9,749 A A 0.85%
Toyota Motor Credit Corp 32,650 A AA 2.85%
U.S. Bancorp 9,236 A A+ 0.81%
Us Bank Na Cincinnati 9,765 A A+ 0.85%
Wal-Mart Stores 4,875 A A+ 0.43%
Municipal Bonds
Antelope Vally Union High 1,673 NA NA 0.15%
Chaffey Community College 2,612 NA NA 0.23%
Issuer Amount
(in thousands)
Minimum
Legal
Rating
Rating at
Year-End
% of
Treasurer's
Pool
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 81 NOTE 2 - CASH AND INVESTMENTS City Of Vallejo — NA AA —%
Contra Costa Ca Cmnty Clg Dist 2,525 NA AA 0.22%
County Of Riverside Ca 4,777 NA AA+ 0.42%
County Of Westchester Ny 1,773 NA A+ 0.15%
Fresno County Ca Pension Oblg 7,497 NA A+ 0.65%
Golden State Tobacco 15,666 NA NA 1.37%
Kern County Ca Pension Obllg 13,298 NA Aa3 1.16%
Los Altos School Dist 4,729 NA A+ 0.41%
Los Angles Unified School Dist 16,842 NA AA+ 1.47%
Marin Ca Cmnty Clg Dist 2,713 NA AA+ 0.24%
Massachusetts St Spl Oblg 9,993 NA Aa1 0.87%
New York State Dormitory 1,531 NA Aa1 0.13%
New York State Urban Dev 4,874 NA AA- 0.43%
State Of California 27,796 NA AA- 2.43%
State Of Connecticut 9,624 NA AA- 0.84%
State Of Hawaii 18,303 NA A+ 1.60%
State Of New York 6,440 NA AA+ 0.56%
Texas A&M University 2,876 NA AA 0.25%
University Of California 13,099 NA AAA 1.14%
Supranational
Inter American Development Bank 14,551 AA AAA 1.27%
International Bank for Reconstruction & Dev 12,892 AA AAA 1.13% Negotiable Certificates of Deposit 47,974 NA Unrated 4.19% State Local Agency Investment Pool 15,128 NA Unrated 1.32% Money Market Mutual Funds 136,000 NA Unrated 11.87%
Total Treasurer's Pool Investments $ 1,105,599 96.53%
Investments with Trustees:
Money Market Funds $ 95,299 NA Unrated 100.00%
U.S. Government & Treasury Securities — NA AAA —%
Total Investments with Trustees $ 95,299 100.00%
1Standard & Poor's rating of SP-1 indicates a strong capacity to pay principal and interest. An issue determined to possess a very strong capacity to pay debt service is given a plus (+) designation.
Issuer Amount
(in thousands)
Minimum
Legal
Rating
Rating at
Year-End
% of
Treasurer's
Pool
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 82 NOTE 2 - CASH AND INVESTMENTS The City of Fresno’s Investment Policy requires that the City only invest in high quality obligations, which means only those with a rating category of “A” or better by a nationally recognized rating service.
6. Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The City maintains cash accounts at Bank of America. The City maintains separate accounts for payment of general accounts payable checks, payroll checks, and utility refund checks. Amounts in excess of $250,000 are securitized in accordance with California Government Code Section 53652. The California Government Code and the City’s investment policy contain legal or policy requirements that limit the exposure to custodial credit risk for deposits. The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies.
California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. The collateral pledged to cover the public fund deposits in California is held in the name of the California Collateral Pool Administrator and is held in their name by the Federal Reserve Bank as custodian. The City had no uncollateralized cash at June 30, 2023 . As of June 30, 2023 , the City’s deposits with institutions in excess of federal depository insurance limits were $ 33.7 million held in accounts collateralized in accordance with California law as described above.
The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to the transaction, a government will not be able to recover the value of its investment of securities that are in the possession of the counterparty. As of June 30, 2023, in accordance with the City's investment policy, none of the City's investments were held with a counterparty. All of the City's investments were held with an independent third party custodian bank. The City uses Bank of New York Trust Company (BNY) as a third-party custody and safekeeping service for its investment securities. Custodial credit risk is the risk that the City will not be able to recover the value of its investments in the event of a BNY failure. All City investments held in custody and safe-keeping by BNY are held in the name of the City and are segregated from securities owned by the bank. This is the lowest level of custodial credit risk exposure.
D. Investment in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF), which is regulated by the California Government Code under the oversight of the Treasurer of the State of California. The fair value of the City's investment in this pool is reported in the accompanying financial statements at amounts based upon the City's pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 83 NOTE 2 - CASH AND INVESTMENTS accounting records maintained by LAIF, which are recorded on a fair value cost basis. The total amount invested by all public agencies in LAIF as of June 30, 2023 , was $26.3 billion. LAIF is part of the California Pooled Money Investment Account (PMIA), which at June 30, 2023 , had a balance of $178.4 billion. Of that amount, 2.78% was invested in medium-term and short-term structured notes and asset-backed securities. The average maturity of PMIA investments was 260 days as of June 30, 2023.
LAIF has the following restrictions on withdrawals:
• For same day transactions, the requesting agency must contact LAIF by 10 a.m. PST. • Transaction calls received after 10 a.m. are processed the following business day. • A requesting agency can only conduct a maximum of 15 transactions (combination of deposits and withdrawals) per month.
• 24-hour notice is needed for withdrawals of $10 million or more. • The minimum transaction amount is $5,000, with amounts above the minimum transacted in increments of $1,000.
• Prior to the funds transfer, an authorized person from the requesting agency must call LAIF to do a verbal transaction.
E. Pension Trust (Retirement Systems) Deposits and Investments The investment guidelines for the City of Fresno’s Retirement Systems (Systems) reflect the duties imposed by an investment standard known as the “prudent expert rule.” The prudent expert rule includes anyone who has discretionary authority with respect to the Systems’ investments.
The Fire and Police Retirement System's Investment Policy can be found at https://www.cfrs- ca.org/fire-and-police-retirement-system_investments, while the Employees Retirement System's Investment Policy can be found at https://www.cfrs-ca.org/employee-retirement-system/investments.
Both investment policies can also be obtained by contacting the Retirement Office at 2828 Fresno Street, Suite 201, Fresno, CA 93721.
Northern Trust serves as custodian of the Systems’ investments. The Systems’ asset classes include U.S. Equity, International Equity, U.S. Fixed Income, International Fixed Income, Direct Lending, and Real Estate. Any class may be held in direct form, pooled form, or both. The Systems have 15 external investment managers, managing 19 individual portfolios.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 84 NOTE 2 - CASH AND INVESTMENTS Investments at June 30, 2023 consist of the following (in thousands):
Investments at Fair Value
Domestic Equities $ 945,709
International Equities 224,957
Private Equity 451,881
Fixed Income 34,292
Private Debt/Credit 461,591
Real Assets 810,113
Multi-Assets 19,232
Short-Term Investments 784,421
Total Investments at Fair Value $ 3,732,196
Both Retirement Boards have established policies for investing, specifying the following target allocations with a minimum and maximum range for each of these asset classes:
Asset Class Minimum Target Maximum
Domestic Large Cap Equities 15.0% 24.0% 36.0%
Domestic Small Cap Equities 0.0% 0.0% 0.0%
International Developed Market Equities 10.0% 20.0% 25.0% International Emerging Market Equities 0.0% 0.0% 0.0%
Core Fixed Income 5.0% 13.0% 20.0%
High Yield Bonds 0.0% 0.0% 5.0%
Core Real Estate 5.0% 10.0% 15.0%
Value Add Real Estate/REITs 2.0% 5.0% 8.0%
Infrastructure 2.0% 7.0% 10.0%
Alternative Credit 0.0% 4.0% 7.0%
Private Equity 0.0% 5.0% 10.0%
Direct Lending/Private Debt 5.0% 12.0% 20.0%
100.0%
The Retirement Systems have investments in Tiers 1, 2, and 3 as defined under GASB Statement No.
72. For further information regarding the Retirement Systems’ classification of investment, please see the Retirement Systems’ Annual Comprehensive Financial Reports (Systems' ACFRs).
Investments of the Systems are exposed to custodial credit risk, credit and interest rate risk, concentration risk, and foreign currency risk. In addition to those risks, the Systems are also exposed to credit risk and market risk associated with their derivatives investments. For a detailed description of all of the risks associated with the Systems’ investments, please see the Systems’ ACFRs which can be found at https://www.cfrs-ca.org/fire-and-police-retirement-system/financial/ and https://www.cfrs- ca.org/employee-retirement-system/ers-financial/ or by contacting the Retirement Office at 2828 Fresno Street, Suite 201 Fresno, CA 93721.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 85 NOTE 2 - CASH AND INVESTMENTS F. Stewardship, Compliance and Accountability
There have been no material violations of finance-related legal or contractual provisions.
G. Restricted Assets
Restricted cash includes funds held by trustees relating to bonds payable and those amounts held by each fund for which a specific, non-operating use has been determined. Restricted interest receivable is interest earned with the trustee.
Restricted assets are reported in the following funds at June 30, 2023 (in thousands):
Cash and
Investments
Current and
Noncurrent
Interest
Receivable Total
Governmental Activities:
General Fund $ 54,109 $ — $ 54,109
Grants Special Revenue Fund 115,822 — 115,822
Nonmajor Governmental Funds 1,948 — 1,948
Subtotal $ 171,879 $ — $ 171,879
Business-Type Activities
Water System 75,944 361 76,305
Sewer System 65,515 453 65,968
Solid Waste Management 5,401 — 5,401
Transit 41,004 — 41,004
Airports 113,977 — 113,977
Convention Center 4,879 — 4,879
Stadium 860 — 860
Nonmajor Enterprise Funds 2,210 — 2,210
Internal Service Funds 2,277 — 2,277
Subtotal $ 312,067 $ 814 $ 312,881
Fiduciary:
Custodial Funds 717 — 717
Subtotal $ 717 $ — $ 717
Total $ 484,663 $ 814 $ 485,477
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 86 NOTE 2 - CASH AND INVESTMENTS Note 3. Property Taxes
Article XIII of the California Constitution (Proposition 13) limits ad valorem taxes on real property to 1% of value plus taxes necessary to pay indebtedness approved by voters prior to July 1, 1978. The Article also established the 1975/1976 assessed valuation as the base and limits annual increases to the cost- of-living adjustment, not to exceed 2% for each year thereafter. Property may also be reassessed to full market value after a sale, transfer of ownership, or completion of new construction. The State is prohibited under the Article from imposing new ad valorem, sales, or transaction taxes on real property.
Local government may impose special taxes (except on real property) with the approval of two-thirds of the qualified electors.
All property taxes are collected and allocated by the County of Fresno to the various taxing entities.
Property taxes are determined annually as of January 1 and attached as enforceable liens on real property. Taxes are due November 1 and February 1 and are delinquent if not paid by December 10 and April 10, respectively. Secured property taxes become a lien on the property on January 1. Property taxes on the unsecured roll are due on the January 1 (lien date) and become delinquent if unpaid on August 31. Property tax revenues are recognized in the governmental funds in the fiscal period for which they are levied and collected, adjusted for any amounts deemed uncollectible and amounts expected to be collected more than 60 days after the fiscal year.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
87 NOTE 3 - PROPERTY TAXES Note 4. Receivables
Receivables are presented in the financial statements net of the allowance for uncollectible accounts.
The uncollectible accounts related to accounts receivable at June 30, 2023 were $ 3.8 million for the General Fund, $ 3.1 million for Water System, $ 2.0 million for Sewer System, $ 1.9 million for Solid Waste Management, $ 0.4 million for Airports, and $ 1.3 million for Other Enterprise Funds. The uncollectible accounts related notes receivables at June 30, 2023 were $ 8.2 million for Grants Special Revenue Fund and $ 1.8 million for Other Governmental Funds. Accounts not scheduled for collection during the subsequent year are $77.2 million for Governmental notes and loans and $17.4 million for Business-Type notes and loans.
The allowance for doubtful accounts is a Statement of Net Position and/or Balance Sheet account that reduces the reported amount of a receivable. Providing an allowance for doubtful accounts presents a more realistic picture of how much of the receivable is likely to be turned into cash, particularly in the near term. The amount of the allowance for each fund is a determination made by management at the end of the fiscal year through a review of past collections received on each account. This analysis includes reviewing the aging of the receivable balance, past account write-offs and other known variables.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
88 NOTE 4 - RECEIVABLES
Receivables, net of amounts uncollectible, (in thousands) as of June 30, 2023 were as follows:
Intergovernmental
Receivable
Interest
Accounts
Receivable
Grants
Receivable
Property
Taxes Other
Notes,
Loans &
Other
Receivable
Operating
Lease
Receivable Total
Governmental Activities
General Fund $ 623 $ 33,314 $ 54 $ 39,286 $ — $ — $ — $ 73,277 Grants Special Revenue
Fund 1,201 31 45,372 — — 53,660 — 100,264
Other Governmental Funds 1,512 922 9,072 — 24,310 23,781 — 59,597 Internal Service Funds 668 607 — — — — — 1,275
Subtotal $ 4,004 $ 34,874 $ 54,498 $ 39,286 $ 24,310 $ 77,441 $ — 234,413 Advances to Successor
Agency and Due To(From)
Fiduciary Funds 4,566
Total $ 238,979
Business-Type Activities
Water System $ 1,705 $ 27,349 $ 3,649 $ — $ — $ 1,981 $ 1,718 $ 36,402 Sewer System 1,486 15,335 — — 602 1,820 2,447 21,690 Solid Waste Management 76 9,102 — — — 9,345 — 18,523 Transit 301 163 19,267 — 18,552 — — 38,283
Airports 457 3,289 5,751 — 411 — 14,065 23,973
Fresno Convention Center (4) 372 — — — — — 368
Stadium (8) 418 — — — — 1,559 1,969
Other Enterprise Funds 29 2,598 — — — — 1,409 4,036 Internal Service Funds 202 1,309 — — — — 340 1,851 Total $ 4,244 $ 59,935 $ 28,667 $ — $ 19,565 $ 13,146 $ 21,538 $ 147,095 CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
89 NOTE 4 - RECEIVABLES
Receivables are presented on the Statement of Net Position as follows (in thousands):
Governmental
Activities
Business-Type
Activities Total
Accounts Receivables, Net $ 161,538 $ 133,136 $ 294,674 Restricted Interest Receivable — 814 814
Loans, Notes, Leases and Other Receivables, Net 77,441 13,146 90,587 Total $ 238,979 $ 147,096 $ 386,075
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
90 NOTE 4 - RECEIVABLES
Note 5. Property, Plant and Equipment - Capital Assets A. Citywide Capital Assets
The following is a summary of capital assets as of June 30, 2023 (in thousands):
Primary Government
Governmental
Activities
Business-Type
Activities
Fiduciary
Funds Total
Capital Assets Not Being Depreciated:
Land $ 291,550 $ 53,868 $ — $ 345,418
Intangibles (Indefinite Life) — 18,897 — 18,897
Construction in Progress 136,722 129,140 — 265,862
Total Capital Assets Not Being Depreciated 428,272 201,905 — 630,177 Capital Assets Being Depreciated:
Buildings and Improvements 361,621 1,522,789 — 1,884,410 Machinery and Equipment 200,754 110,135 2,987 313,876 Infrastructure 1,513,700 883,001 — 2,396,701
Total Capital Assets Being Depreciated 2,076,075 2,515,925 2,987 4,594,987 Less: Accumulated Depreciation for:
Buildings and Improvements (182,999) (711,354) — (894,353) Machinery and Equipment (128,271) (68,968) (2,293) (199,532) Infrastructure (1,116,160) (251,180) — (1,367,340)
Total Accumulated Depreciation (1,427,430) (1,031,502) (2,293) (2,461,225) Total Capital Assets Being Depreciated, Net 648,645 1,484,423 694 2,133,762 Total Capital Assets, Net $ 1,076,917 $ 1,686,328 $ 694 $ 2,763,939 Right to Use Assets Being Amortized
Land 1,273 209 — (126)
Buildings and Improvements 6,039 508 — (1,952)
Machinery and Equipment 14,326 2,952 — (4,795)
Total Right to Use Assets Being Amortized 21,638 3,669 — 25,307 Less: Accumulated Amortization for:
Land (88) (38) — (126)
Buildings and Improvements (1,622) (330) — (1,952)
Machinery and Equipment (4,735) (60) — (4,795)
Total Accumulated Amortization (6,445) (428) — (6,873) Total Right to Use Assets, Net $ 15,193 $ 3,241 $ — $ 18,434 Total Capital and Right to Use Assets $ 1,092,110 $ 1,689,569 $ 694 $ 2,782,373 CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
91 NOTE 5 - PROPERTY, PLANT & EQUIPMENT - CAPITAL ASSETS B. Governmental Activities
Capital asset activity related to governmental activities for the fiscal year ended June 30, 2023 was as follows (in thousands):
Beginning
Balance
as restated
Increases Transfers Decreases Ending
Balance
Capital Assets Not Being Depreciated:
Land $ 270,918 $ 20,632 $ — $ — $ 291,550
Construction in Progress 85,336 86,588 — (35,202) 136,722 Total Capital Assets Not Being Depreciated $ 356,254 $ 107,220 $ — $ (35,202) $ 428,272 Capital Assets Being Depreciated:
Buildings and Improvements $ 346,036 $ 15,585 $ — $ — $ 361,621 Machinery and Equipment 184,420 22,810 — (6,476) 200,754 Infrastructure 1,485,807 27,893 — — 1,513,700
Total Capital Assets Being Depreciated $ 2,016,263 $ 66,288 $ — $ (6,476) $ 2,076,075 Less: Accumulated Depreciation for:
Buildings and Improvements $ (171,727) $ (11,272) $ — $ — $ (182,999) Machinery and Equipment (119,064) (15,630) — 6,423 (128,271) Infrastructure (1,083,252) (32,908) — — (1,116,160) Total Accumulated Depreciation $ (1,374,043) $ (59,810) $ — $ 6,423 $ (1,427,430) Total Capital Assets Being Depreciated, Net $ 642,220 $ 6,478 — (53) 648,645 Total Capital Assets, Net $ 998,474 $ 113,698 $ — $ (35,255) $ 1,076,917 Right to Use Assets Being Amortized
Land $ 1,273 $ — $ — $ — $ 1,273
Buildings and Improvements 6,039 — — — 6,039
Machinery and Equipment 14,326 — — 14,326
Total Right to Use Assets Being Amortized $ 21,638 $ — $ — $ — $ 21,638 Less: Accumulated Amortization for:
Land $ (88) $ — $ — $ (88)
Buildings and Improvements (1,622) — — (1,622)
Machinery and Equipment (4,735) — — (4,735)
Total Accumulated Amortization $ (6,445) $ — $ — $ — $ (6,445) Total Right to Use Assets Being Amortized, Net $ 15,193 $ — $ — $ — $ 15,193 Total Capital and Right to Use Assets $ 1,013,667 $ 113,698 $ — $ (35,255) $ 1,092,110 CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
92 NOTE 5 - PROPERTY, PLANT & EQUIPMENT - CAPITAL ASSETS Depreciation/Amortization was charged to functions as follows (in thousands):
Function Amount
General Government $ 18,585
Public Protection 5,501
Public Ways and Facilities 35,246
Culture and Recreation 4,494
Community Development 1,182
Total Governmental Activities Depreciation and
Amortization Expense $ 65,008
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
93 NOTE 5 - PROPERTY, PLANT & EQUIPMENT - CAPITAL ASSETS C. Business-Type Activities
Capital asset activity related to Business-Type Activities for the fiscal year ended June 30, 2023 was as follows (in thousands):
Beginning
Balance
as restated
Increases Transfers Decreases Ending
Balance
Capital Assets Not Being Depreciated:
Land $ 53,867 $ 1 $ — $ — $ 53,868
Intangibles (Indefinite Life) 18,897 — — — 18,897
Construction in Progress 243,040 50,102 — (164,002) 129,140 Total Capital Assets Not Being Depreciated 315,804 50,103 (164,002) 201,905 Capital Assets Being Depreciated:
Buildings and Improvements 1,505,044 17,745 459,849 — 1,982,638 Machinery and Equipment 102,881 8,332 611 (1,078) 110,746 Infrastructure 745,682 137,319 (460,460) — 422,541 Total Capital Assets Being Depreciated 2,353,607 163,396 — (1,078) 2,515,925 Less: Accumulated Depreciation for:
Buildings and Improvements (657,712) (53,642) — — (711,354) Machinery and Equipment (63,083) (6,764) — 879 (68,968) Infrastructure (224,375) (26,805) — — (251,180)
Total Accumulated Depreciation (945,170) (87,211) — 879 (1,031,502) Total Capital Assets Being Depreciated, Net 1,408,437 76,185 — (199) 1,484,423 Total Capital Assets, Net $ 1,724,241 $ 126,288 $ — $ (164,201) $ 1,686,328 Right to Use Assets Being Amortized
Land 209 — — — 209
Buildings and Improvements 508 — — — 508
Machinery and Equipment — 2,952 — — 2,952
Total Right to Use Assets Being Amortized 717 2,952 — — 3,669 Less: Accumulated Amortization for:
Land (19) (19) — — (38)
Buildings and Improvements (165) (165) — — (330)
Machinery and Equipment — (60) — — (60)
Total Accumulated Amortization (184) (244) — — (428) Total Right to Use Assets Being Amortized,
Net $ 533 $ 2,708 $ — $ — $ 3,241
Total Capital and Right to Use Assets $ 1,724,774 $ 128,996 $ — $ (164,201) $ 1,689,569 CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
94 NOTE 5 - PROPERTY, PLANT & EQUIPMENT - CAPITAL ASSETS Depreciation/Amortization was charged to functions as follows (in thousands):
Function Amount
Water System $ 34,110
Sewer System 28,726
Solid Waste Management 539
Transit 8,408
Airports 12,035
Fresno Convention Center 2,035
Stadium 1,403
Other Enterprise Funds 193
Total Business-Type Activities Depreciation and
Amortization Expense $ 87,455
D. Fiduciary Funds
Capital asset activity related to fiduciary funds for the fiscal year ended June 30, 2023 was as follows (in thousands):
Beginning
Balance Increases Transfers Decreases Ending
Balance
Capital Assets Being Depreciated:
Machinery and Equipment $ 2,978 $ 9 $ — $ — $ 2,987
Less: Accumulated Depreciation for:
Machinery and Equipment (2,014) (279) — (2,293)
Total Capital Assets Being Depreciated, Net 964 (270) — — 694 Total Capital Assets, Net $ 964 $ (270) $ — $ — $ 694
Depreciation was charged to functions as follows (in thousands):
Function Amount
Fire & Police Retirement System Pension Trust Funds $ 140 Employee Retirement System Pension Trust Funds 139
Total Fiduciary Activities Depreciation Expense $ 279
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
95 NOTE 5 - PROPERTY, PLANT & EQUIPMENT - CAPITAL ASSETS E. Construction in Progress
At June 30, 2023, Construction in Progress consisted of the following (in thousands):
Project Title Construction Costs
To Date
Governmental Activities:
Bike/Trail Projects $ 4,412
Neighborhood Improvements 8,838
Parks General Improvements 6,720
Public Protection Construction Projects 2,916
Public Works Projects 79,371
Other Miscellaneous Projects 34,464
Total Governmental Activities $ 136,721
Business-Type Activities:
Water Capital Projects $ 17,093
Sewer/Wastewater/Solid Waste Capital Projects 33,283
Transit Capital Projects 17,039
Airports Capital Projects 58,339
Stadium Capital Projects 3,386
Total Business-Type Activities $ 129,140
Total Construction in Progress $ 265,861
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
96 NOTE 5 - PROPERTY, PLANT & EQUIPMENT - CAPITAL ASSETS Note 6. Leases and Subscription-Based Information Technology Arrangements
A. Leases
The City has adopted the following policies to account for agreements in accordance with the requirements of GASB 87. The primary objective of this statement is to enhance the relevance and consistency of information about governments' leasing activities. This statement establishes a single model for lease accounting based on the principle that leases are financings of the right-to-use an underlying asset. Under this Statement, a lessee is required to recognize a lease liability and intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources.
B. Subscription-Based Information Technology Arrangements (SBITA) The City adopted GASB Statement No. 96 "SBITA" for its basic financial statements at the beginning of the fiscal year 2023. The City recognized intangible RTU subscription assets with related accumulated amortization, subscription liabilities, subscription expense, amortization expense, and accrued interest payable. SBITA liabilities are presented in amounts equal to the present value of the subscription payments during the remaining SBITA term, discounted using the City's incremental borrowing rate (IBR) if not explicitly stipulated in the contract.
The City has a variety of variable and prepaid payment clauses within its IT subscription arrangements.
Components of variable payments that are fixed in substance are included in the measurement of the SBITA liability, while variable payments based on the usage of the underlying IT asset are excluded from the SBITA liability. RTU subscription assets cover fixed, fixed in substance and prepaid IT subscriptions.
SBITAs that have maximum possible term under the SBITA contract of twelve months or less are considered a short-term SBITA and recognized as outflows of resources. Subscription arrangements with maximum terms of twelve months or less, those with termination clauses by either party without notice are excluded from GASB Statement No. 96.
C. Basis of Lease Classification
In accordance with GASB No. 87, the City does not recognize a lease receivable and a deferred inflow of resources for short-term leases. Short-term leases are certain leases that, at the commencement of the lease term, has a maximum possible term under the lease contract of 12 months or less, including any options to extend, regardless of their probability of being exercised. The City, being a lessee and lessor, recognizes short-term lease payments as outflows of resources (expenditures) or inflows of resources (revenue), respectively, based on the payment provisions of the lease contract.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 97 Note 6 - Leases D. Term
At the time of lease commencement or conversion, the term of the lease will include possible extension periods that are deemed to be reasonably certain given all available information, regarding the likelihood of renewal.
E. Discount Rate
Unless explicitly stated in the lease agreement, known by the City, or the City is able to determine the rate implicit within the lease, the discount rate used to calculate lease right-to-use assets and liabilities and related lease receivable is the City’s incremental borrowing rate at the end of each fiscal year. As of June 30, 2023, the City's incremental borrowing rate was 2.79%. This was the discount rate utilized for applicable leases reported in fiscal year 2023. All applicable leases reported in the prior fiscal year used a discount rate of 2.21%, which was the City's incremental borrowing rate as of June 30, 2022.
F. Variable Payments
Variable payments based on the future performance of the lessee or lessor or usage of the underlying asset are not included in the measurement of lease assets or liabilities.
G. The City of Fresno as Lessee
The City, as lessee, has entered into various agreements for land and buildings with lease terms expiring between 2024 and 2053, with some leases containing options to renew. The terms and conditions for these leases vary by the type of underlying asset. All these agreements have fixed, periodic payments over the lease term, and do not contain variable payments or guaranteed residual values in the lease agreements. For those agreements that are cancellable by the lessors or the City with an advance notice, they are considered as non-cancellable in accordance with GASB Statement No. 87. In accordance with GASB No. 87, as lessee, th e City recognized $1.4 million of amortization expense in the year ended June 30, 2023. More information on the value of leased assets and their associated amortization can be found in Note 5, beginning on page 91.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 98 Note 6 - Leases Future payments, under these non-regulated leases for each of the next five years and in five- year increments thereafter are as follows (amounts in thousands):
Beginning Balance Payments Interest Ending Balance
2024 $7,333 $1,434 $149 $6,047
2025 6,047 1,220 122 4,950
2026 4,950 1,179 98 3,869
2027 3,869 747 79 3,200
2028 3,200 590 65 2,675
2029-2033 2,675 1,981 181 875
2034-2038 875 313 84 647
2039-2043 647 313 58 392
2044-2048 392 313 28 107
2049-2053 107 109 2 —
H. The City of Fresno as Lessor
The City, as a lessor, recognizes a lease receivable and a deferred inflow of resources at the commencement of the lease term, with certain exceptions for regulated leases and short-term leases. As lessor, the asset underlying the lease is not derecognized. The lease receivable is measured at the present value of the lease payments expected to be received during the lease term. The leases typically include provisions for rent changes based on the consumer price index or other market indexes, resulting in additional variable lease revenues that are not included in the measurement of the lease receivables.
These variable payments based on index are considered to be 'fixed in substance' and are included in the calculation of the lease receivable. The deferred inflow of resources is measured at the value of the lease receivable in addition to any payments received at or before the commencement of the lease term that relate to future periods.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 99 Note 6 - Leases Future receipts, under these non-regulated leases for each of the next five years and in five-year increments thereafter are as follows (amounts in thousands):
Beginning Balance Lease Receipt Interest Income Ending Balance 2024 $27,183 $6,092 $531 $21,622
2025 21,622 3,232 434 18,824
2026 18,824 2,078 386 17,132
2027 17,132 2,011 350 15,470
2028 15,470 1,870 316 13,916
2029-2033 13,916 6,422 1,210 8,704
2034-2038 8,704 5,165 701 4,240
2039-2043 4,240 2,832 341 1,748
2044-2048 1,748 1,344 111 516
2049-2053 516 543 27 —
I. City as SBITA Service Receiver
The City recognizes a subscription liability and an intangible RTU subscription asset at the beginning of an SBITA unless it is considered a short-term SBITA. A subscription liability is measured at the present value of subscription payments expected to be made during the subscription term using the City's incremental borrowing rate. The City's SBITA contracts have terms expiring between 2023 and 2028.
A subscription asset is amortized on a straight-line basis over the shorter of the subscription term or the useful life of the underlying subscription asset. Remeasurement of subscription liability occurs when there is a change in the subscription term and/or other changes that are likely to have a significant impact on the subscription liability. Variable payments based on the usage of the underlying assets are not included in the subscription liability calculations but are recognized as outflows of resources in the period in which the obligation was incurred.
As of June 30, 2023, the City's SBITA RTU subscription assets are $11.3 million with accumulated amortization of $4.0 million, while the City's principal and interest requirements to maturity for the SBITA liability are as follows (in thousands):
Principal Interest
2024 $4,660 $291
2025 4,266 163
2026 974 43
2027 607 15
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 100 Note 6 - Leases J. Regulated Leases
In accordance with GASB Statement No. 87, The City does not recognize a lease receivable and a deferred inflow of resources for regulated leases. Regulated leases are certain leases that are subject to external laws, regulations, or legal rulings, e.g. the U.S. Department of Transportation and the Federal Aviation Administration, regulated aviation leases between airports and air carriers and other aeronautical users.
During the year ended June 30, 2023, the City recognized the following related to its regulated lease agreements:
Regulated – Hangar Rentals (Fixed)
Lease revenue $2,041,087 Revenue from variable payments excluded from the
schedule of expected future minimum payments $652,764 Future expected minimum payments related to the City’s regulated leases at June 30, 2023 are as follows:
Regulated – Hanger Rentals (Fixed)
Principal Interest Total
2024 $ 1,613 $ — $ 1,613
2025 1,599 — 1,599
2026 1,590 — 1,590
2027 3,989 — 3,989
2028 701 — 701
2029 85 — 85
R eport Total $ 9,577 $ — $ 9,577
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 101 Note 6 - Leases Note 7. Long-Term Liabilities
A. Summary of Long-Term Liabilities
The following is a summary of the City's Long-Term Liabilities as of June 30, 2023 (in thousands):
Primary Government
Governmental
Activities
Business-Type
Activities
Fiduciary
Funds
Total Primary
Government
Long-Term Debt
Revenue and Other Bonds $ 176,480 $ 234,642 $ — $ 411,122 Bonds From Direct Placements — 32,660 — 32,660
Notes Payable From Direct Borrowings — 420,062 1,059 421,121 Subtotal Net Principal Due 176,480 687,364 1,059 864,903 Accreted Interest — 2,223 — 2,223
Issuance Premiums (Discounts) 7,756 5,797 — 13,553
Subtotal Accreted Interest, Issuance Prem/(Disc) 7,756 8,020 — 15,776 Capital Financing Activities 49,606 — — 49,606
Total Long-Term Debt 233,842 695,384 1,059 930,285
Other Long-Term Liabilities
Retention Payable 4,675 — — 4,675
Compensated Absences and Health Retirement
Arrangement (HRA) 92,083 14,289 65 106,437
Net OPEB Liability 79,422 31,559 — 110,981
Liabilities for Self-Insurance 238,060 — — 238,060
CVP Litigation Settlement — 103 — 103
Accrued Closure Cost — 10,426 — 10,426
Pollution Remediation — 367 — 367
Operating Leases 15,120 2,685 17,805
Total Other Long-Term Liabilities 429,360 59,429 65 488,854 Total Long-Term Liabilities Government-Wide
Statement of Net Position $ 663,202 $ 754,813 $ 1,124 $ 1,419,139 Due Within One Year $ 103,167 $ 22,394 $ 97 $ 125,658
Due Within More Than One Year 560,036 732,418 1,027 1,293,481 Total Long-Term Liabilities Government-Wide
Statement of Net Position $ 663,203 $ 754,812 $ 1,124 $ 1,419,139
Internal service funds (ISFs), except for Utility Billing and Collection, primarily serve the governmental funds. Accordingly, Long-Term Liabilities for ISFs are included as part of the above totals for governmental activities, while the long-term liabilities for Utility Billing and Collection are included as part of the totals for Business-Type Activities. Governmental Activities also reflect compensated absences which are generally liquidated by the General Fund, claims/judgments which are liquidated by Risk Management and the Employees Healthcare Plan, and net OPEB liability which is liquidated by the Employees Healthcare Plan.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
102 NOTE 7 - LONG-TERM LIABILITIES Activity of Long-Term Liabilities - Governmental (In Thousands) Beginning
Balance
as restated Additions Reductions
Ending
Balance
Due Within
One Year
Governmental Activities:
Bonds Payable (Revenue and Other Bonds):
Lease Revenue Bonds, Series 2004 $ 9,690 $ — $ 990 $ 8,700 $ 1,050 Taxable Pension Obligation Bonds Refunding
Series 2002 88,640 — 10,385 78,255 11,065
Lease Revenue Bonds 2017A, City Hall Refunding,
Fresno Bee Building, Granite Park, Improvements 17,595 — 1,690 15,905 1,750 Lease Revenue Bonds, Series 2017A, City Hall
Chiller 2,710 — 610 2,100 2,100
Lease Revenue Bonds, Series 2017A Parks
Projects 19,970 — 845 19,125 885
Lease Revenue Bonds, Series 2017A&B, NNLB 2,830 — 2,830 — — Lease Revenue Bonds, Series 2017A, Police and
Fire/Public Safety 27,705 — 1,230 26,475 1,115
Lease Revenue Bonds, Series 2017A, Various 10,180 — 635 9,545 665 Lease Revenue Bonds, Series 2020A, Animal Svcs 16,770 — 395 16,375 415 Total Revenue and Other Bonds 196,090 — 19,610 176,480 19,045 Less: Unamortized Amounts:
For Issuance Premiums/(Discounts) 8,712 — 956 7,756 — Notes Payable From Direct Borrowings:
California Infrastructure Bank - City 1,310 — 1,310 — — HUD Sec 108 Note Neighborhood Streets/Parks 130 — 130 — — Total Notes Payable From Direct Borrowings 1,440 — 1,440 — — Capital Financing Activities 52,568 6,692 9,654 49,606 10,252 Total Long-Term Debt 258,810 6,692 31,660 233,842 29,297 Other Liabilities:
Retention Payable 3,460 1,215 — 4,675 4,675
Compensated Absences and Health Retirement
Arrangement 84,120 20,958 12,995 92,083 12,146
Net OPEB Liability 71,680 7,742 — 79,422 —
Liability for Self-Insurance 207,927 131,783 101,650 238,060 51,945 Leases 6,990 10,244 2,114 15,120 5,103
Total Other Liabilities 374,177 161,698 114,645 429,360 73,869 Governmental Long-Term Liabilities Total $ 632,987 $ 168,390 $ 146,305 $ 663,202 $ 103,166 Retention Payable - Variance of $4.4 million is included in the accrued liabilities and not recategorized to retention payable.
Leases - Leases Liability includes both GASB 87 Leases and GASB 96 SBITAs.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
103 NOTE 7 - LONG-TERM LIABILITIES Activity of Long-Term Liabilities - Business-Type (In Thousands) Beginning
Balance
as restated Additions Reductions
Ending
Balance
Due Within
One Year
Business-Type Activities:
Bonds Payable (Revenue and Other Bonds):
Water System Revenue Bonds 2010 $ 91,340 $ — $ — $ 91,340 $ — Sewer System Revenue Bonds 1993 A 885 — 885 — —
Lease Revenue Bonds 1998 - Exhibit Hall Expansion 1,335 — 434 901 — Airport Revenue Refunding Bonds 2013 21,845 — 21,845 — — Airport Revenue Refunding Bonds 2023 — 91,085 — 91,085 — Lease Revenue Bonds 2001 A and B - Stadium 11,825 — 855 10,970 1,055 Airport Revenue Bonds 2007 - Cons. Rental Car 19,950 — — 19,950 570 Lease Revenue Bonds 2008 - Convention Center 1,370 — 1,370 — — Lease Revenue Bonds 2017A - Exhibit Hall Expansion 8,110 — 185 7,925 1,050 Lease Revenue Bonds 2017A - Convention Center 2,455 — 140 2,315 465 Lease Revenue Bonds 2017A - Stadium 9,705 — 890 8,815 925 Lease Revenue Bonds 2017A - Riverside Golf Course 1,400 — 60 1,340 65 Total Revenue and Other Bonds 170,220 91,085 26,664 234,641 4,130 Bonds Payable From Direct Placements:
Airport Revenue Bonds 2019 - Airport Parking 33,464 — 804 32,660 830 Plus Accreted Interest:
Accreted Interest on Capital Appreciation Bonds 3,078 212 1,066 2,224 — Less: Unamortized Amounts
For Issuance Premiums/(Discounts) 1,259 5,766 1,228 5,797 — Notes Payable From Direct Borrowings:
Construction of Water Supply Disinfection Buildings 1,037 — 99 938 102 Improvements on the Enterprise and Jefferson Canals 662 — 63 599 65 Water Meter Project 30,843 — 2,570 28,273 2,570
Southeast Surface Water Treatment Facility 159,013 — 4,820 154,193 4,900 Tertiary Treatment Facility 27,333 — 1,013 26,320 1,023 Enterprise Canal Raw Water Pipeline 19,105 — 598 18,507 607 Regional Transmission Mains 62,977 — 1,839 61,138 1,869 Kings River Pipeline 51,607 — 1,615 49,992 1,641
Southwest Quadrant Recycled Water Dist. System 68,323 — 1,570 66,753 12 Northeast Surface Water Treatment Facility 4,441 9,131 224 13,348 369 Total Notes Payable From Direct Borrowings 425,341 9,131 14,411 420,061 13,158 Total Long-Term Debt 633,362 106,194 44,173 695,383 18,118 Other Long-Term Liabilities:
Compensated Absences & Health Retirement
Arrangement 13,883 2,936 2,530 14,289 2,420
Net OPEB Liability 28,081 3,479 — 31,560 —
CVP Litigation Settlement 127 — 24 103 —
Accrued Closure Cost 11,174 748 10,426 960
Pollution Remediation 407 — 39 368 —
Operating Leases 525 — 355 170 895
Total Other Long-Term Liabilities 54,197 6,415 3,696 56,916 4,275 Business-Type Long-Term Liabilities Total $ 687,559 $ 112,609 $ 47,869 $ 752,299 $ 22,393 CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
104 NOTE 7 - LONG-TERM LIABILITIES Activity of Long-Term Liabilities - Fiduciary (In Thousands) Beginning
Balance Additions Reductions
Ending
Balance
Due Within
One Year
Fiduciary Funds:
Successor Agency to the Fresno
Redevelopment Agency:
Tax Allocation Bonds:
Series 2003, Mariposa Project Area $ 418 $ — $ 418 $ — $ — Total Tax Allocation Bonds 418 — 418 — —
Less: Unamortized Amounts:
For Issuance Premiums/(Discounts) — — — — —
Total Unamortized Amounts — — — — —
Notes Payable From Direct Borrowings:
California Infrastructure Bank 1,137 — 78 1,059 80 Total Notes Payable From Direct Borrowings 1,137 — 78 1,059 80 Total Long-Term Debt 1,555 — 496 1,059 80
Other Liabilities:
Compensated Absences 56 16 7 65 17
Total Other Long-Term Liabilities 56 16 7 65 17
Fiduciary Funds Long-Term Liabilities Total $ 1,611 $ 16 $ 503 $ 1,124 $ 97 CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
105 NOTE 7 - LONG-TERM LIABILITIES The following is a description of Long-Term Debt, Excluding Capital Financing Obligations, which had activity in 2023 (in thousands):
Governmental
Revenue and Other Bonds
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 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
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
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 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 (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
106 NOTE 7 - LONG-TERM LIABILITIES 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
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
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
(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
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
107 NOTE 7 - LONG-TERM LIABILITIES 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
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
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
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
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
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
108 NOTE 7 - LONG-TERM LIABILITIES 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
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
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
96,851 (5,766) 91,085 167,649 0
Revenue and Other Bonds Total $ 275,005 $ (9,237) $ 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
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
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
109 NOTE 7 - LONG-TERM LIABILITIES 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 1010007-031C
$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
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
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
Notes Payable Total $ 406,222 $ 0 $ 406,222 $ 427,774 $ 20,193 Business-Type Total $ 681,227 $ (9,237) $ 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
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
110 NOTE 7 - LONG-TERM LIABILITIES 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 $ 866,522 $ (16,993) $ 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
111 NOTE 7 - LONG-TERM LIABILITIES B. Debt Service Requirements (Excluding Capital Financing Activities) The annual debt service requirements excluding capital financings for the City's long-term debt outstanding as of June 30, 2023 are as follows (in thousands):
Governmental Activities Business-Type Activities Fiduciary Funds Year Ending
June 30 Principal Interest Principal
Interest
Accretion Interest Principal Interest
2024 $ 19,045 $ 9,716 $ 4,341 $ 539 $ 12,164 $ — $ 24
2025 17,940 8,610 10,309 551 13,690 — —
2026 18,270 7,546 11,059 561 13,095 — —
2027 19,370 6,450 12,945 570 12,429 — —
2028 20,535 5,285 13,071 579 11,693 — —
2029-2033 46,295 13,093 57,852 588 44,811 — —
2034-2038 25,190 5,198 53,055 — 28,244 — —
2039-2043 6,730 1,252 28,270 — 13,421 — —
2044-2048 3,105 252 39,178 — 12,474 — —
2049-2053 — — 3,028 — 90 — —
2054-2058 — — — — — — —
Subtotal 176,480 57,402 233,108 3,388 162,111 — 24 Direct Direct Direct Direct Direct Direct
Borrowings Borrowings Borrowings Borrowings Borrowings Borrowings Principal Interest Principal Interest Principal Interest 2024 — — 15,555 6,782 80 36
2025 — — 15,765 6,569 83 33
2026 — — 15,979 6,352 86 30
2027 — — 16,197 6,131 89 27
2028 — — 16,419 5,905 92 24
2029-2033 — — 85,263 26,008 514 67
2034-2038 — — 80,370 19,822 114 2
2039-2043 — — 84,421 13,087 — —
2044-2048 — — 89,087 5,725 — —
2049-2053 — — 20,010 402 — —
2054-2058 — — — — — —
Subtotal — — 439,066 96,783 1,058 219
Issuance
Premiums/
(Discounts) 7,756 — 5,797 — — — —
Unaccreted Interest — — — (1,166) — — —
Total $ 184,236 $ 57,402 $ 677,971 $ 2,223 $ 258,894 $ 1,058 $ 243 C. Debt Compliance
There are a number of limitations and restrictions contained in the various loan, note and bond indentures. The City believes it is in compliance with all significant limitations, restrictions and covenants.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 112 NOTE 7 - LONG-TERM LIABILITIES D. Debt Management Policy
The City maintains a Debt Management Policy (Policy) which sets forth certain debt management objectives, establishes overall parameters, and provides general direction in the planning, issuing, and administering of the City’s debt. The purpose of the Policy is to assist in the City’s ability to incur debt and other long-term obligations at favorable interest rates for capital improvements, facilities and equipment which are beneficial to the City and necessary for providing essential services.
The Policy integrates the best practices of other debt management plans utilized by similar California cities and is consistent with the provisions of the City Charter, and any enabling legislation.
As part of the Lease Revenue Bond refinancing that took place in 2017, the City’s Debt Management Policy was reviewed to ensure compliance with Senate Bill 1029 (SB 1029). That update was approved by Council on April 6, 2017.
E. Legal Debt Limit and Legal Debt Margin
Article XVI, Section 18 of the California Constitution, (the “debt limit”) prohibits cities (including chartered cities), counties, and school districts from entering into indebtedness or liability that in any year exceeds the income and revenue provided for such year unless the local agency first obtains two-thirds voter approval for the obligation. This general limitation has several important exceptions as described below.
It is important to remember that this limitation applies not only to traditional bonds, but could apply to many forms of indebtedness or liability, such as installment payment obligations, long-term service or construction contracts, letter-of-credit reimbursement agreements, and other types of arrangements commonly seen in public finance transactions. In determining whether the arrangement under consideration might pose a problem under the debt limit it is useful to ask the following questions:
• Does the arrangement provide for payment in future fiscal years that comes out of revenue generated in those years?
• Does the arrangement call for payments by a city, county, or school district (as opposed to other types of governmental agencies)?
If the answer to these two questions is “yes", then the analysis should proceed to determine if one of the exceptions to the debt limit applies. There are three major exceptions to the debt limit that have been recognized by California courts: the Offner-Dean lease exception, the special fund doctrine, and the “obligations imposed by law” exception.
As of June 30, 2023 , the City’s debt limit (20% of valuation subject to taxation) was $ 9.15 billion. This number was calculated by taking the Total Assessed Values (Gross) from the County of Fresno Tax Rate Book, page 14 multiplied by 20%. This is in comparison with debt limits of $ 8.48 billion in 2022. The City’s legal debt margin is equal to the City’s debt limit because it has no debt subject to the limitation.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 113 NOTE 7 - LONG-TERM LIABILITIES F. Arbitrage
Under U.S. Treasury Department regulations, all governmental tax-exempt debt issued after August 31, 1986 is subject to arbitrage rebate requirements. The requirements stipulate, in general, the earnings from the investment of tax-exempt bond proceeds that exceed related interest expenditures on the bonds must be remitted to the federal government on every fifth anniversary of each bond issue. The City has evaluated each general obligation bond and lease revenue bond issue subject to the arbitrage rebate requirements and has deferred credits and other liabilities in the governmental funds. Each Enterprise Fund has performed a similar analysis of the debt the respective enterprise has issued which is subject to arbitrage rebate requirements. Any material arbitrage liability related to the debt of the Enterprise Funds has been recorded as a liability in the respective fund. In addition, the Successor Agency to the former Redevelopment Agency records any arbitrage liability in deferred credits and other liabilities. As of June 30, 2023, the City had no arbitrage liability.
G. State Loan Program (Projects Currently In Progress)
On August 19, 2015 , the City entered into a 30-year agreement to borrow $ 70,600,000 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 $68,322,664 in proceeds. Debt service payments will be funded from revenues of the Sewer Enterprise.
Construction is now complete and annual debt is $2,111,023.
On November 26, 2016, the City entered into a 30-year agreement to borrow $14,000,000 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 due in semiannual installments will begin once the project is completed and continue for 30 years. As of June 30, 2023 , the City has received $13,651,557 in proceeds. Construction is now complete and the annual debt is $607,971.
H. Capital Financing Activities
The Fresno Yosemite International Airport received $70 million from the issuance of Series 2023 Bonds for the capital costs of the Terminal/FIS Expansion Project, net of fund deposits and Issuance Costs. The total estimated cost of the project is anticipated to be $145.1 million and will provide the design and construction of:
• An expanded security checkpoint to provide a minimum of 5 lanes and related offices for Transportation Security Administration (TSA).
• A new concourse to the east of the expanded security checkpoint, with two additional gates on the second floor equipped with loading bridges.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 114 NOTE 7 - LONG-TERM LIABILITIES • A new FIS facility with a target throughput of 400 arrivals per hour compared to the current capacity of 150 arrivals per hour, with a baggage claim unit located on the first floor of the new concourse and the processing facility to the east.
• An in-line baggage screening facility between the expanded security checkpoint and the new concourse.
• Additional airline ticket offices in the existing ticket lobby, converted from prior baggage makeup and screening space.
• Other supporting concession space.
Additional costs for this project will be paid by grants and cash on hand.
The City has entered into several Master Lease Agreements that allowed for a set amount of financing over the term of the Master Lease. Several financings took place under these Master Leases whose maturities exceeded the term of the agreement. These agreements qualify as capital financing activities for accounting purposes. Prior capital financing agreements with outstanding balances are with Community Leasing Partners and Key Government Finance, Inc.
On December 13, 2013, the City entered into a Master Lease Agreement with Dell Financial Services to finance the purchase of computers. Each schedule represents a separate capital financing purchase with annual upfront payment terms provided by the lender at the time the computers are purchased. To date, there have been forty-five schedules executed totaling $1,166,318 with interest rates ranging from 3.96% to 10.15% and terms between three and five years. As of June 30, 2023, only one of these financed purchases remain outstanding.
On January 13, 2017, the City entered into a Master Equipment Lease-Purchase Agreement with Banc of America Public Capital Corp. (BAPCC). Each schedule represents a separate capital financing with annual upfront payment terms provided by the lender at the time the equipment is purchased. There were nineteen schedules executed totaling $25,184,972 with interest rates ranging from 1.92% to 3.16% and terms between five and ten years. Early in fiscal year 2019, the City reached the maximum amount available to borrow under this master agreement which was $25 million.
On December 6, 2018, the City entered into a new Master Equipment Lease-Purchase Agreement with BAPCC. This agreement expired on December 31, 2021. There were twenty schedules executed totaling $17,832,047 with interest rates ranging between 0.91% and 2.83%.
On October 14, 2019, the City entered into a new $134,076 lease purchase agreement with AT&T Capital Services, Inc. at a rate of 3.87%. The funds were used to update communication equipment on fire vehicles.
On February 21, 2020, the City entered into a new $5.6 million lease purchase agreement with Alliance Funding Solution, Inc., at a rate of 2.95%. The funds were used to install solar equipment and other energy efficient equipment at both City Hall and the City's Municipal Service Center.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 115 NOTE 7 - LONG-TERM LIABILITIES On January 13, 2022, the City entered into a new Master Equipment Lease-Purchase Agreement with BAPCC. Each schedule represents a separate capital financing with annual upfront payment terms provided by the lender at the time of financing. The purpose of these finance purchases is to finance new and replacement equipment throughout the City. To date, there have been nine schedules executed totaling $11.1 million with interest rates ranging from 1.66% to 3.86% and terms of five to ten years. This new master agreement will expire at an aggregate of $35 million financed or December 31, 2024, whichever comes first.
On February 10, 2022, the city entered into a 15-year agreement to borrow $19.9 million from Alliance Building Solutions, Inc for a design-build contract to build turn-key PARCS and Public Safety facilities which will include upgrades to lighting to convert to LED efficient lighting, HVAC upgrades and replacements, system controls and monitoring, lighting controls, and transformer upgrades for implementation of a robust list of energy related and sustainability services. The interest rate is fixed at
2.62% for the term of the lease. Principal and interest due in semiannual installments that begin on August 16, 2022. Expected energy bill savings are expected to exceed $23 million over the life of the agreement by creating 3.5 million kilowatt hours per year, which is equivalent to taking 539 gas-powered vehicles off the road every year or powering nearly 300 homes annually. This aligns with the City's GHG Reduction Plan (Climate Action Plan) Municipal Strategies section 5.1.7 which targets GHG emissions generated at City facilities and operations.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 116 NOTE 7 - LONG-TERM LIABILITIES The following table lists the City’s capital financing activities by lender as of June 30, 2023 (in thousands):
Community First National Bank 7/13/2015 10 2015 Smeal Engines on Spartan Metrostar Chassis (4) 2.92% $ 105 Community First National Bank 9/22/2015 10 2015 Smeal Engines on Metrostar (3) & Aerial on Gladiator (1) 2.69% 340 Community First National Bank 2/22/2016 10 2015 Smeal Engine & 2016 Water Tender on Kenworth 2.09% 157 Dell Financial Services 9/1/2018 5 Dell OptiPlex 5050SFF(36) & Latitude 3580 (6) 5.63% 10 Dell Financial Services 3/1/2020 4 Dell Latitude Laptops (3) 3.96% 1 Dell Financial Services 5/1/2020 4 Computers Various Models (55) 4.28% 14 Dell Financial Services 5/1/2020 3 Computers Various Models (85) 5.32% 37 Key Government Finance, Inc. 4/10/2019 5 City-Wide Date System 3.88% 1,950 Banc of America Public Capital Corp 5/2/2017 10 Fire Engines & Pumpers 2.52% 464 Banc of America Public Capital Corp 11/20/2017 5 Police Vehicles (55) 2.14% 587 Banc of America Public Capital Corp 8/1/2017 5 Police Motorcycles (14) & Fire Vehicles (9) 1.92% 164 Banc of America Public Capital Corp 11/29/2017 5 DARM Ford F-150 Pickup Trucks (24) 2.14% 115 Banc of America Public Capital Corp 11/23/2017 7 Microwave Date & Radio Console Network 2.46% 783 Banc of America Public Capital Corp 2/2/2018 5 Police MAGEC Vehicles (4) 2.44% 28 Banc of America Public Capital Corp 4/24/2018 5 DARM Ford-150 Pickup Trucks (14) & Parks (4) 2.62% 95 Banc of America Public Capital Corp 6/26/2018 10 Fire Ladder Truck & Pumpers (3) 3.16% 371 Banc of America Public Capital Corp 7/2/2018 5 Police CIT Vehicles (5) 2.76% 134 Banc of America Public Capital Corp 7/17/2018 5 Parks Ford Transit Wagon (1) 2.74% 4 Banc of America Public Capital Corp 7/17/2018 5 Police MAGEC Vehicle (1) 2.74% 7 Banc of America Public Capital Corp 9/14/2018 5 Fire Light Duty Vehicles (5) 2.73% 34 Banc of America Public Capital Corp 9/28/2018 5 Parks John Deere Tractor (1) 2.75% 9 Banc of America Public Capital Corp 10/5/2018 5 Police Vehicles (50) 2.84% 540 Banc of America Public Capital Corp 10/11/2018 5 Police Motorcycles (10) 2.86% 67 Banc of America Public Capital Corp 11/2/2018 5 DARM Ford-150 Pickup Trucks (27) 2.91% 147 Banc of America Public Capital Corp 11/9/2018 5 Police Undercover Vehicles (33) 2.90% 193 Banc of America Public Capital Corp 3/20/2019 5 Police SRO Vehicles (16) & Undercover (2) 2.73% 204 Banc of America Public Capital Corp 4/2/2019 5 Police F-150 Super Crew Pickup Trucks (15) 2.72% 118 Banc of America Public Capital Corp 5/29/2019 10 Fire Pumper Trucks (3) 2.83% 239 Banc of America Public Capital Corp 6/6/2019 5 Police Undercover Vehicles (10) 2.43% 109 Banc of America Public Capital Corp 8/30/2019 5 2019 Police Motorcycles (10) 1.90 % 75 Banc of America Public Capital Corp 11/12/2019 5 2020 Fire Ford Escapes (4), Ford F-250's (2) 1.95 % 60 Banc of America Public Capital Corp 2/11/2020 5 2020 Police U.C. Vehicles (28) 1.97 % 197 Banc of America Public Capital Corp 4/10/2020 5 2020 Police Vehicles (30) 1.11 % 359 Banc of America Public Capital Corp 4/21/2020 5 2020 Police U.C. Vehicles (3) 1.09 % 26 Banc of America Public Capital Corp 5/4/2020 5 2020 Fire Ford F-350 (1) & Ford Interceptor (1) 1.03 % 31 Banc of America Public Capital Corp 5/15/2020 10 2020 Fire Engines (4) 1.34 % 311 AT&T Capital Services, Inc. 10/14/2019 5 Cradlepoint System 3.87 % 33 Alliance Funding Solutions, Inc. 2/21/2020 15 Energy Efficient Equipment and Solar PPA (City Hall & MSC) 2.95 % 417 Banc of America Public Capital Corp 8/17/2020 10 Type III Fire Engines (2) 1.26% 82 Banc of America Public Capital Corp 11/19/2020 5 PARCS Ford Transit Van (1) 0.92% 8 Banc of America Public Capital Corp 11/19/2020 5 Freightliner Street Sweepers (2) 0.92% 163 Banc of America Public Capital Corp 1/19/2021 5 Fire Ford F-250 (1) 0.91% 10 Banc of America Public Capital Corp 2/19/2021 5 Fire Squad Vehicle (1) 0.92% 29 Banc of America Public Capital Corp 3/25/2021 5 IPS Parking Meters 1.03% 413 Banc of America Public Capital Corp 6/9/2021 10 Fire Engines (2) & Truck (1) 1.73% 319 Banc of America Public Capital Corp 6/18/2021 5 Fire Light Duty Vehicle (3) 1.06% 60 Banc of America Public Capital Corp 11/3/2021 5 2021 Undercover Vehicles (5) 1.32% 21 Banc of America Public Capital Corp 2/8/2022 5 2021 Fire Ford F-350 Chassis (8) 1.66% 730 Banc of America Public Capital Corp 5/11/2022 5 2022 Fire Ford Vehicles (13) 2.76% 757 Lender
Date of
Loan
Term
(Years) Purchased
Interest
Rate
Annual
(P&I Payment)
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 117 NOTE 7 - LONG-TERM LIABILITIES Banc of America Public Capital Corp 6/16/2022 5 2022 Dodge Durangos (33) 2.70% 2,891 Banc of America Public Capital Corp 12/3/2022 10 Fire Engines (2) & Fire Truck 3.75% 3,098 Banc of America Public Capital Corp 1/20/2023 5 Police Vehicles (27 3.86% 1,516 Banc of America Public Capital Corp 4/20/2023 5 Fire Ford F-250 3.66% 126 Banc of America Public Capital Corp 6/29/2023 5 2023 Fire Ford Maverick 3.81% 75 Banc of America Public Capital Corp 6/29/2023 5 Trolleys (3) 3.86% 866 Banc of America Public Capital Corp 6/29/2023 5 Police BMW Motorcycles (26) 3.86% 1,011 Total $ 20,710
Lender
Date of
Loan
Term
(Years) Purchased
Interest
Rate
Annual
(P&I Payment)
Capital Financing Activities debt service requirements are presented below (in thousands). Interest rates range from 0.91% to 5.63%.
Year Ended Governmental Activities
June 30 Principal Interest
2024 $ 10,252 $ 1,239
2025 7,207 995
2026 5,957 826
2027 5,094 678
2028 3,727 546
2029-2033 10,937 1,646
2034-2038 6,432 368
Total $ 49,606 $ 6,298
I. General Fund Short-Term Borrowing Obligations
The City did not issue any short-term debt during fiscal year 2023 and did not have any short-term debt outstanding during the fiscal year.
J. Unused Lines of Credit
The following table lists the City's unused lines of credit as of June 30, 2023 (in thousands):
Line of Credit Contract Amount Used Unused
CA State Water Resources Control Board
Drinking Water State Revolving Fund (1010007-32C) $ 14,000 $ 13,651 $ 349 Banc of America Public Capital Corporation
Police Vehicles 5,416 2,417 2,999
Fire Vehicles 1,101 901 200
Microwave Data & Radio Console Network 5,018 5,018 —
Key Government Finance, Inc
Citywide Data System 9,500 9,500 —
Alliance Funding Solutions, Inc.
Energy Efficient Equipment & Solar 21,803 21,803 —
Total $ 56,838 $ 53,290 $ 3,548
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 118 NOTE 7 - LONG-TERM LIABILITIES K. Debt Collateral
The following table lists the City's assets that are pledged as collateral for various City debts:
Debt Asset Pledged Expiration Date
JPFA Lease Revenue Bonds
1998 B Exhibit Hall Expansion Project Fresno Convention Center, 848 M. Street September 1, 2028 2001 A&B Stadium Project Fire Station #19, 2187 W. Belmont Ave June 1, 2031 Saroyan Theater, 730 M. Street June 1, 2031
2004 A,B,C Various Capital Projects Convention Center Parking Garage, Inyo & O Streets October 1, 2034 Fire Station #15, 5630 E. Park Circle October 1, 2024
Fire Station #17, 10512 N. Maple Ave October 1, 2024
2008 F Convention Center Fresno City Hall, 2600 Fresno Street April 1, 2046 2017 A Various Refunding Bond Fire Station #16, 2510 N. Polk Ave April 1, 2039 Fresno Memorial Auditorium, 2425 Fresno Street April 1, 2039 Fresno Municipal Center, 1325 El Dorado Street April 1, 2039 Parking Garage #4, 1919 Tulare Street April 1, 2039
Parking Garage #8, 1077 Van Ness Ave April 1, 2024
Police Regional Training Center, 6375 W. Central Ave April 1, 2039 Selland Arena, 700 M Street April 1, 2024
Chukchansi Park, 1800 Tulare Street April 1, 2031
Valdez Hall, 702 M Street April 1, 2039
Southern Portion of Woodward Park, 7775 N. Friant Road April 1, 2024 2020 A Animal Services Center Fresno City Hall, 2600 Fresno St. April 1, 2046 L. Significant Events of Default, Termination and Subjective Acceleration Clauses The City’s debt agreements contain the following terms regarding significant Events of Default, Termination and Subjective Acceleration Clauses:
Bonds
For all City bonds, an Event of Default is generally classified as one or more of the following (1) nonpayment or late payment of principal and/or interest due on the bonds, (2) failure to be in compliance with debt covenants and agreements, and (3) the City filing for bankruptcy. If an Event of Default occurs, the majority owners of the bonds (not less than 51%) may declare the principal amount of all bonds outstanding and the interest accrued on them to be due and payable immediately. This applies to all City bonds except for the Series 2003 Tax Allocation Bonds. Only 25% of bond owners are required to declare the bonds due and payable immediately.
The City’s bond agreements do not contain Subjective Acceleration Clauses.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 119 NOTE 7 - LONG-TERM LIABILITIES Notes & Loans
For City loans associated with the construction of Water Supply Disinfection Buildings, improvements to the Enterprise and Jefferson Canals, and the City’s Water Meter Project, an Event of Default is generally classified as one or more of the following: (1) nonpayment of any installment when due, (2) failure to make any remittances required by the agreement, (3) substantial breach to the agreement, (4) making any false warranty, representation, or statement with respect to the agreement, and (5) loss, theft or damages to any collateral given as security under the agreement. In an Event of Default, the State of California may do any or all of the following: (1) declare the City’s obligations due and payable immediately, (2) terminate any obligation to make further cash disbursements to the City, and (3) exercise all rights and remedies available to a secured creditor after default.
For City loans associated with the Southeast Surface Water Treatment Facility, the Regional Transmission Mains, the Enterprise Canal Raw Water Pipeline, the Kings River Pipeline, the Southwest Quadrant Recycled Water Distribution System, and the Tertiary Treatment Facility, the agreements can be terminated by the State Water Resources Control Board (SWRCB) if the City violates any material provision of the agreement. Some examples of violations would be if the City fails to notify the SWRCB of (1) principal and interest payment delinquencies, (2) unscheduled draws on debt service reserves, (3) bankruptcy or insolvency of the City. If a termination event occurs, the City can be demanded by the SWRCB to immediately repay an amount equal to the funds disbursed to them plus accrued interest and penalties.
For City loans associated with HUD Section 108, an Event of Default under these agreements is generally classified as one or more of the following: (1) failure to pay an installment of principal or interest due, (2) failure to properly comply with any covenant or condition of the agreement, and (3) failure to comply substantially with Title I of The Housing and Community Development Act of 1974. In an Event of Default, the Department of Housing and Urban Development Secretary (Secretary) may do any or all of the following: (1) use funds or security pledged under the agreement to (a) continue to make payments due on the note, (b) make an acceleration payment of the principal amount subject to Optional Redemption, (c) pay any interest due for late payment, or (d) pay any other expense incurred by the Secretary as a result of the City’s default; (2) withhold the grants not yet disbursed; (3) direct the City’s financial institution to refuse to honor any draws on the Guaranteed Loan Funds Account or the Loan Repayment Account by the City; (4) accelerate the note amount subject to Optional Redemption, and (5) exercise any other remedies available by law including recovery of Guaranteed Loan Funds or reimburse any expense incurred as a result of City’s default.
The City’s note and loan agreements do not contain Subjective Acceleration Clauses.
Capital Financing Activities
For all City's financed purchases associated with Banc of America Public Capital Corp (BAPCC), an Event of Default is classified as one or more of the following: (1) failure to pay in full the rental payment due, (2) failure to comply with any covenant or agreement of the lease, (3) filing for bankruptcy, (4) any warranty, representation or statement made by the City to be found materially incorrect, (5) any default CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 120 NOTE 7 - LONG-TERM LIABILITIES occurring under any other debt agreement the City has, and (6) the City selling, leasing, or encumbering any of the equipment under the lease. In an Event of Default, BAPCC may do any or all of the following:
(1) immediately terminate the lease and repossess the equipment and (2) exercise any other remedies available by law.
For the City's financed purchases associated with Key Government Finance, Inc., an Event of Default is classified as one or more of the following: (1) failure to pay any rental payment, (2) failure to observe and perform any covenant or condition under the agreement, (3) any warranty, representation or statement made by the City to be found materially incorrect, and (4) filing for bankruptcy by the City. In an Event of Default, Key Government Finance, Inc. may do any or all of the following: (1) declare all rental payments and other amounts payable to the end of the then current budget year to be due, (2) retake possession of the property under the lease, (3) instruct the escrow agent to release all proceeds and any earnings thereon to Key Government Finance, Inc. and (4) take any action that is permitted by law to protect its rights under the agreement.
For the City's financed purchases associated with Alliance Funding Solutions, Inc., an Event of Default is classified as one or more of the following: (1) failure to make rental payments when due, (2) failure to maintain insurance on leased property, (3) failure to perform or observe any obligations, covenants or conditions under the lease, (4) filing for bankruptcy by the City, and (5) any warranty, representation or statement made by the City to be found materially incorrect. In an Event of Default, lessor may do any or all of the following: (1) require the City to pay all amounts currently due and all payments remaining due during the fiscal year in which default occurs, (2) exercise any other remedies available under the law, (3) take possession of the equipment and sell or lease it to pay for past due lease payments owed by the City, (4) terminate the lease, and (5) terminate the escrow fund and apply any remaining amount to the balance owed by the City.
The City’s capital lease agreements do not contain Subjective Acceleration Clauses.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 121 NOTE 7 - LONG-TERM LIABILITIES Note 8. Interfund Activity
A. Due to/from Other Funds
Due to/from Other Funds represents short-term borrowings resulting from a fund’s temporary need for additional cash. Primarily, these amounts have been recorded when timing differences between when services are provided and when they are paid for/reimbursed causes the funds to temporarily overdraw their share of pooled cash. These balances are generally expected to be repaid within the next few months and not longer than a 12-month fiscal operating cycle.
The composition of interfund balances as of June 30, 2023, is as follows (in thousands):
General Fund Grants Special Revenue Fund $ 5,025
Nonmajor Governmental Funds 2,670
Nonmajor Enterprise Funds 539
Internal Service Funds 8,394
16,628
Grants Special Revenue Fund General Fund 1,619
Nonmajor Governmental Funds 118
Internal Service Funds 3,011
4,748
Nonmajor Governmental Funds General Fund 328
Grants Special Revenue Fund 19
Nonmajor Governmental Funds 16
Internal Service Funds 6,244
6,607
Water System Internal Service Funds 10,499
10,499
Sewer System Internal Service Funds 6,840
6,840
Solid Waste Internal Service Funds 3,162
3,162
Receivable Fund Payable Fund Amount
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
122 NOTE 8 - INTERFUND ACTIVITY Transit Internal Service Funds 208
208
Airports Internal Service Funds 218
218
Nonmajor Enterprise Funds Internal Service Funds 1,384 1,384
Internal Service Funds General Fund 1,133
Grants Special Revenue Fund 19
Nonmajor Government Funds 980
Water System 193
Sewer System 137
Solid Waste Management 507
Transit 102
Airports 66
Stadium 2
Nonmajor Enterprise Funds 56
Internal Service Funds 5
3,200
Total Due to/from Other Funds $ 53,494
Receivable Fund Payable Fund Amount
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
123 NOTE 8 - INTERFUND ACTIVITY B. Advances
Advances represent long-term borrowing between funds.
Fire Station No. 18
On November 14, 2019, a loan was executed between the City's UGM Area Wide Oversized Sewer fund, the City's UGM Wellhead Treatment Area 101S Fund, and the City of Fresno's Fire Station 18 Construction Fund, whereby funds were loaned to the Fire Station 18 Construction Fund to cover building costs of Fire Station 18. An amount not to exceed $2.4 million was borrowed from the UGM Area Wide Oversized Sewer Fund and $1.46 million was borrowed from the UGM Wellhead Treatment Area 101S Fund. The term of the loan will be not more than five (5) years and shall be repaid in full by July 31, 2024. Interest will accrue at a rate equal to the City's Pooled Investment Rate, which was 2.325% as of the effective date of the Loan Agreement. Each year, Fire Station 18 Construction Fund shall pay at least 1/5th of the principal balance of the loan plus interest accrued to the payment date. To the UGM Area Wide Oversized Sewer Fund, the annual principal payment is $480,000, while the annual payment to the UGM Wellhead Treatment Area 101S Fund is $291,540. As of June 30, 2023, $3.9 million of proceeds from this loan had been transferred to the Fire Station 18 Construction Fund, $2.1 million had been repaid and $1.8 million remains outstanding.
Animal Center
On June 1, 2020, a loan was budgeted between the City's Water Enterprise Fund and the City of Fresno Animal Center Construction Fund, whereby funds were loaned to the Animal Center Construction Fund to cover building costs of a new Animal Center. An amount not to exceed $18.5 million was budgeted to be borrowed from the Water Enterprise Fund. The term of the loan will be not more than five (5) years.
Interest will accrue at a rate equal to the City's Pooled Investment Rate, which was 2.042% as of March 2020. Each year, the Animal Center Construction Fund shall pay at least 1/5th of the principal balance of the loan plus interest accrued to the payment date. During fiscal year 2021, bond proceeds from the 2020-A Animal Services Facility Lease Revenue Bonds became available to fund construction. As of June 30, 202 3, no proceeds from the Water Fund had been nor are expected to be transferred to the Animal Shelter Construction Fund in the future.
DPU Facility
On April 1, 2021, a loan was executed between the City's Water Division and the Solid Waste Division, whereby $3.7 million was loaned to the Solid Waste Division for the joint purchase of a facility to bring all Utility services that can be merged, into one facility. The term of the loan will be 5 years from the effective date of the loan, or April 1, 2026, and will accrue interest at a rate equal to the City's pooled rate, which was 1.78% as of the effective date of the loan agreement. The Solid Waste Division shall make principal payments in the amount of 1/10th of the loan amount and interest payments twice per year on October 1st and April 1st of each fiscal year. As of June 30, 2023, all $3.7 million of proceeds from this loan had been transferred to the Solid Waste Fund, $1.5 million had been repaid and $2.2 million remains outstanding.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
124 NOTE 8 - INTERFUND ACTIVITY Valley Inn
On June 29, 2021, a loan was executed between the City's Sewer Operations Fund and the General Fund, whereby $10 million was loaned to the General Fund for the purchase of a local motel for the purpose of housing the City's homeless population, as well as providing rehabilitation and property management services. The term of the loan was originally set to expire on June 30, 202 2 but was amended and has expired as of December 31, 2022. The loan will accrue interest at a rate equal to the City's pooled rate, which was 1.78% as of the effective date of the loan agreement. As of June 30, 2023, all $10 million of proceeds from this loan had been transferred to the General Fund and $10 million has been repaid.
Redevelopment Agency
Advances over the years between the City and the former Redevelopment Agency (RDA) were made to provide funds for the purpose of eliminating blight and developing, constructing, rehabilitating, and revitalizing Fresno’s inner-city neighborhoods, downtown, and industrial areas. The advances had all been secured by and payable from the incremental property tax revenues of the redeveloped properties.
Interest rates varied between 5% and 9%, with payments on the advances and related interest based upon budgetary priority as approved by the former RDA.
In June 2011, all California RDAs were required to dissolve effective February 1, 2012. The law dissolving the RDAs called for the creation of a Successor Agency (SA) to wind down RDA business.
The initial dissolution law provided that the SA would pay “enforceable obligations” of the former RDA.
However, the law initially excluded debt a former agency owed to the city that created it from the definition of enforceable obligations, unless the debt was created in the first two years following the agency’s creation or was debt that represented third party obligations. Subsequent legislation allowed limited, conditional repayment of loans by the SA to the community that created it.
When the RDA dissolution process began, City staff considered it to be premature to consider the debt owed by the former RDA to the City as being current. Thus, an allowance for doubtful accounts was created by the City, which at June 30, 2011, totaled $80.1 million. This amount, which was equal to the calculated amount of the debt, was reflective primarily of principal and interest accrued over the years on the advances. As payments on the debt have been received and legal decisions have been rendered, which further defined an "enforceable obligation", staff revisited that initial allowance for doubtful accounts amount and refined it. At the end of fiscal year 2023, the allowance for doubtful accounts stood at $ 6.6 million.
As the funds are received, 20% of any loan repayment received by the City must be deducted from the loan repayment amount and be transferred to the Low and Moderate Income Housing Fund. In fiscal year 2023, this amount totaled $ 0.5 million. The repayment is reflected in the ACFR on the Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds, under the Special Revenue Low and Moderate Income Housing Fund.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
125 NOTE 8 - INTERFUND ACTIVITY On June 23, 2016, the City Council approved a resolution requiring any amount of the annual repayments of RDA debt that are received and not related to Enterprise Fund related loans would go toward the rebuilding of the City’s Emergency Reserve Fund. Through June 30, 2023, the City had received $ 34.8 million in loan repayments from the SA. With the adoption of the fiscal year 2019 budget and the corresponding achievement of a 10% reserve, these repayments became a General Fund revenue source.
City of Fresno Advances to Former Redevelopment Agency (In Thousands) Principal Cumulative Interest Cumulative Total
Receivable Fund
Beginning
Balance
Advances/
Adjustments
Payments/
Write-offs
Ending
Balance
Beginning
Balance
Accruals/
Adjustments
Payments/
Write-offs
Ending
Balance
Total
Receivable
Allowance
for
Doubtful
Receivable
(Net of
Allowance)
General Fund:
General Fund $ 838 $ — $ — $ 838 $ 646 $ 25 $ — $ 671 $ 1,509 $ (1,509) $ — Parking Trust 150 — — 150 116 5 — 121 271 (271) — 988 — — 988 762 30 — 792 1,780 (1,780) —
Grants Special
Revenue Fund 4,769 — (2,000) 2,769 4,251 83 (335) 3,999 6,768 (2,203) 4,565 Nonmajor
Governmental Funds:
Gas Tax 1,150 — — 1,150 893 34 — 927 2,077 (2,077) — 1,150 — — 1,150 893 34 — 927 2,077 (2,077) —
Fresno Convention
Center 304 — — 304 228 9 — 237 541 (541) —
304 — — 304 228 9 — 237 541 (541) —
Total $ 7,211 $ — $ (2,000) $ 5,211 $ 6,134 $ 156 $ (335) $ 5,955 $ 11,166 $ (6,601) $ 4,565 Subsequent to fiscal year-end, the City received a reimbursement on loans made to the former RDA.
The amount received was $2.0 million, of which $ 1.6 million was paid to the City and $ 0.4 million was paid to the Housing Successor.
Redevelopment Agency - Housing Assets
The City became the “Housing Successor” of the former RDA’s Housing Assets. These assets were transferred to the City, who has sole legal authority to administer housing assets pursuant to the Redevelopment Dissolution Laws. This allows the City to complete projects under contract, liquidate surplus real estate and distribute proceeds to taxing entities, pursue repayment of RDA obligations to the City, and administer housing assets.
Other Advances
The Sewer System sold land to the General Fund for the purpose of constructing a regional public safety training facility. Interest for the advance is equal to two percent (2%) above the City’s monthly Pooled Investment Rate. The first interest only payment was due July 31, 2008. Principal, at not less than 1/29th of the original principal, and interest payments are due annually thereafter. The remaining advances are interest free and payable on demand. The amounts are not expected to be repaid within the next twelve-month fiscal operating cycle.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
126 NOTE 8 - INTERFUND ACTIVITY The composition of interfund balances (advances from/to other funds) as of June 30, 2023, is as follows (in thousands):
Receivable Fund Payable Fund Amount
Grants Special Revenue Fund Fiduciary Funds $ 4,565
Nonmajor Governmental Funds Nonmajor Governmental Funds — Water System Nonmajor Governmental Funds 758
Solid Waste 2,227
2,985
Sewer System General Fund 227
NonMajor Governmental Funds 960
1,187
Total Advances $ 8,737
C. Transfers
Transfers represent subsidies by one fund to another in accordance with the budget and provide for various City programs and provide resources for the payment of debt service.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
127 NOTE 8 - INTERFUND ACTIVITY The following is a summary of interfund transfers for the fiscal year ended June 30, 2023 (in thousands):
Receiving Fund Paying Fund Amount
General Fund Grants Special Revenue Fund $ 21,064
Nonmajor Governmental Funds 3,230
Solid Waste Management 708
Transit 597
25,599
Grants Special Revenue Fund General Fund 101
101
Nonmajor Governmental Funds General Fund 29,392
Grants Special Revenue Fund 723
Nonmajor Governmental Funds 3,441
Water System 355
Sewer System 324
Solid Waste Management 307
Transit 826
Airports 235
Nonmajor Enterprise Funds 96
Internal Service Funds 789
36,488
Water System Sewer System 73
73 Solid Waste Management General Fund 1,215
Nonmajor Enterprise Funds 1,017
2,232
Fresno Convention Center General Fund 5,008
Stadium General Fund 5,649
Internal Service Funds General Fund 1,821
Water System 2,082
Solid Waste Management 1,272
5,175
Total Transfers $ 80,325
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
128 NOTE 8 - INTERFUND ACTIVITY The General Fund transferred $29.4 million to Nonmajor Governmental Funds to provide support for debt service payments and capital projects; $ 5.0 million to the Convention Center for debt service as well as general operating support; $ 1.8 million to Internal Service Funds for provided services; $ 1.2 million to Solid Waste for transverse charges and $5.6 million to the Stadium Fund for debt service payments.
Nonmajor Governmental Funds transferred $ 6.7 million for debt service and miscellaneous purposes.
Internal Service Funds transferred $ 0.8 million to Nonmajor Governmental Funds for debt service payments.
D. Recap of Interfund Activity
The following schedule recaps Interfund Activity at June 30, 2023 (in thousands):
Due from
Other
Funds
Due to
Other
Funds
Advances
Receivable
from Other
Funds
Advances
Payable to
Other
Funds
Transfers
In
Transfers
Out
Governmental Funds:
General Fund $ 16,628 $ 3,080 $ — $ 227 $ 25,599 $ 43,186 Grants Special Revenue Fund 4,748 5,063 4,565 — 101 21,787 Nonmajor Governmental Funds 6,607 3,783 — 1,718 36,488 6,670 Total Governmental Funds 27,983 11,926 4,565 1,945 62,188 71,643 Proprietary Funds:
Water System 10,499 193 2,985 — 73 2,437
Sewer System 6,840 137 1,187 — — 397
Solid Waste Management 3,162 507 — 2,227 2,232 2,287 Transit 208 102 — — — 1,424
Airports 218 66 — — — 235
Fresno Convention Center — — — — 5,008 —
Stadium — 2 — — 5,649 —
Nonmajor Enterprise Funds 1,384 595 — — — 1,113
Internal Service Funds 3,200 39,966 — — 5,175 789 Total Proprietary Funds 25,511 41,568 4,172 2,227 18,137 8,682 Fiduciary Funds:
Major Governmental Funds — — — 4,565 — —
Total Fiduciary Funds — — — 4,565 — —
Total $ 53,494 $ 53,494 $ 8,737 $ 8,737 $ 80,325 $ 80,325 CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
129 NOTE 8 - INTERFUND ACTIVITY Note 9. Defeasances
Current Year Defeasances
On May 1, 2023, the City of Fresno issued Airport Revenue Bonds, Series 2023A and 2023B with a Par Amount of $91,085,000. Part of the issuance was to defease the Airport Revenue Bonds, Series 2013A and 2013B on their next interest payment due date of July 1, 2023. Airport Revenue Bonds, Series 2013A and 2013 B had an outstanding Par Amount at defeasance of $20,095,000. Bond proceeds were placed into an escrow account and were used to pay the bonds off July 1, 2023.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
130 NOTE 9 - DEFEASANCES Note 10. Risk Management Fund
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; business interruption; errors and omissions; automobile liability and accident claims; natural disasters; employee health benefit claim payments; and injuries to employees (workers’ compensation). With certain exceptions, it is the policy of the City to use a combination of self-insurance and purchased commercial insurance against property, liability, or workers’ compensation risks. The City believes it is more economical to manage its risks internally and set aside funds as needed for estimated current claim settlements and unfavorable judgments through annual appropriations and supplemental appropriations.
The City maintains limited coverage for certain risks that cannot be eliminated. The Risk Management Division investigates and manages all liability claims and property losses, evaluates risk exposure and insurance needs, protects against contractual loss by reviewing/preparing insurance and indemnification portions of contractual documents, emphasizes ongoing operational loss control, and purchases all insurance coverage for the City.
The City maintains General Liability insurance, with limits of liability of $25 million per occurrence and $25 million aggregate in Excess Liability coverage. There is a $ 5 million self-insured retention (SIR).
Coverage is provided by the Safety National Insurance Company ($ 5 million/$5 million), Allied Insurance Company ($10 million/$10 million), StarStone Specialty ($5 million / $5 million ) and Gemini Insurance ($5 million/$5 million ). The City has procured Automobile Physical Damage coverage through Hanover Insurance Company with a $10 million limit. For this policy, the deductible is $50,000 for vehicles valued at less than $ 150,000, while the deductible is $ 100,000 for vehicles valued at $ 150,000 or more. The City carries Government Crime coverages with a $ 5 million limit secured through Zurich Insurance Company with a $50,000 deductible. The City has Cyber liability coverage under AXA XL with a $500,000 SIR and a $ 5 million limit and excess Cyber liability coverage under Starr Surplus Lines Insurance Company ($ 5 million /$5 million ). The City also maintains Airport Owners and Operators General Liability insurance and Aviation (Aircraft Liability), with limits of liability of $ 100 million . There is no deductible or SIR. Coverage is provided by Old Republic Insurance Company through Phoenix Aviation Managers (Texas), Inc.
Furthermore, the City maintains Property insurance and Boiler and Machinery insurance with Travelers Insurance, with total insured values of $ 2,391,550,746 and limits of liability of $ 500,000,000. There is a $100,000 deductible for most losses. Flood losses have a $ 250,000 deductible. Property insurance does not cover losses due to seismic events. Finally, the City maintains Aviation (Aircraft Hull) insurance for two helicopters, with limits of liability of $50 million. There is a 1% of insured value each claim, subject to a maximum of $ 15,000.00, rotors in-motion deductible and $ 0.00 rotors not in-motion deductible of each helicopter. Coverage is provided by Old Republic Insurance Company through Phoenix Aviation Managers (Texas), Inc.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
131 NOTE 10 - RISK MANAGEMENT FUND The City’s Workers’ Compensation Program consists of $ 2 million SIR, with purchased excess insurance layers up to the statutory limits. Settled claims have not exceeded the SIR in any of the last five fiscal years. The claims liabilities and workers’ compensation liabilities reported on the Statement of Net Position have been actuarially determined and include an estimate of incurred but not reported losses.
The estimated liabilities of the Risk Management ISF as of June 30, 2023 are determined by the City based on recommendations from an independent actuarial evaluation. The liabilities are based on estimates of the ultimate cost of claims (including future claim adjustments expenses) that have been reported but not settled, and claims that have been incurred but not reported (IBNR). The claims liability of $230.2 million reported in the Risk Management Internal Service Fund at June 30, 2023 is based on the requirement that claims be reported if information prior to the issuance of the financial statements indicates it is probable that a liability has been incurred at the date of the financial statements and the amount of loss can be reasonably estimated.
The recorded liabilities for each program at June 30, 2023 are as follows (in thousands):
Workers' Compensation * $ 148,029
Liability and Property Damage * 82,131
Total $ 230,160
* The liabilities for workers' compensation and general liability are presented at present value, using a discount rate of 3% .
Changes in the funds claims liability amount for the last three fiscal years are as follows (in thousands):
Fiscal Year
Ended June 30
Beginning of
Fiscal Year
Liability
Current Year Claims
and Changes in
Estimates
Claims
Payments
End of Fiscal
Year Liability
2021 $ 150,308 $ 59,722 $ 24,297 $ 185,733
2022 $ 185,733 $ 45,009 $ 30,215 $ 200,527
2023 $ 200,527 $ 65,117 $ 35,484 $ 230,160
See Note 10 Section G for changes in funds claims liability related to Employees Healthcare Plan.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
132 NOTE 10 - RISK MANAGEMENT FUND Note 11. Employee Benefit Programs
A. Retirement Plans
The City sponsors two single-employer, contributory, defined benefit pension plans. The City of Fresno Employees Retirement System and the City of Fresno Fire and Police Retirement System (Systems) were established under Charter Section 910 and are governed by Article 5 Chapter 3 (Employees) and Articles 3 and 4 Chapter 3 (Fire and Police) of the City of Fresno Municipal Code, respectively. The Systems provide lifetime retirement, disability, and death benefits to its members.
The Systems are administered by their respective Retirement Boards (Boards) which operate in compliance with the City of Fresno Municipal Code, and also in accordance with the California Pension Protection Act of 1992. The Boards do not operate under the control of the City Council. Rather, the Boards have the sole and exclusive responsibility to administer the respective Systems in a manner that will assure prompt delivery of benefits and related services to the members and their beneficiaries.
Membership and Benefit Eligibility
All permanent full-time employees of the City, except sworn Fire and Police personnel, are eligible to participate in the Employees’ plan. The Fire and Police is one System with two tiers. Effective August 28, 2008, the City of Fresno added the Fire and Police Tier 2 for all full-time sworn Fire, Police and Airport safety personnel hired on or after that date (and closed the Fire and Police Tier 1 to new entrants).
Employees become eligible for membership on their first day of full-time regular employment, and become fully vested after earning 5 years of service credit. Employees working in limited, interim, provisional, temporary, seasonal or part-time positions are not eligible to participate in the Systems.
Participation is mandatory if an employee is eligible, except in the case of the City Manager, City Attorney, City Clerk, Department Heads and Council Assistants who may negotiate other retirement benefits if such an agreement is established by resolution of the Council as provided for in the Fresno Municipal Code (FMC) Section 5-318.
Total participants in each System were comprised of the following, as of June 30, 2023:
Employees Fire & Police Total
Active Members
Vested 1,410 878 2,288
Non-Vested 1,284 325 1,609
Total Active Members 2,694 1,203 3,897
Retirees and Beneficiaries of Deceased Retirees
Retirees, Currently Receiving Benefits 2,226 1,187 3,413 Inactive Vested Members 213 62 275
Total Retirees and Inactive Members 2,439 1,249 3,688 Grand Total 5,133 2,452 7,585
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 133 NOTE 11 - EMPLOYEE BENEFIT PROGRAMS Benefit Provisions
The retirement (pension) benefits that Employees members receive are based upon a combination of age at retirement, years of credited service, final average monthly salary, and the distribution option selected by the participant. For Fire and Police, the benefits are further based upon the tier and option selected by the participant. Members' contributions, including interest, are 100% vested at all times. Employer contributions do not become vested until completion of five years of credited service, and are not payable until the member attains the age of 55. Effective January 28, 2008, members may retire between ages 50-55 with an actuarial equivalent service retirement benefit. For Fire and Police, the employer contributions do not become vested until completion of ten years of credited service under Tier 1 and five years of credited service under Tier 2. Those benefits are not payable until the member attains the age of 50 under both tiers. Contributions are made by the members and the employer at rates recommended by the Systems’ actuary and adopted by the Boards.
Member Retirement Benefits
Employee members are eligible for service retirement benefits upon completion of at least five years of service upon termination of service (if they have left their contributions and interest with the System) and are at least age 55. They are also eligible if their permanent termination from City service was caused by a layoff. In those cases, they can retire at age 50 at a reduced benefit. They may also be eligible for service retirement benefit if they have less than five years of service with the City, have established reciprocity with a prior employer, and are eligible to retire from that agency.
The service retirement monthly benefit calculated pursuant to the provisions of the Fresno Municipal Code is equal to 2% of final compensation times each of the first 25 years of accrued retirement service credit plus 1% of final compensation times any years of accrued retirement service credit in excess of 25 years, multiplied by the age factor at retirement age. Final average compensation consists of the highest average consecutive 36 months of earnable compensation calculated using the rate of pay in effect at the time of retirement.
Fire and Police members of Tier 1 are eligible to retire once they attain the age of 65 regardless of service, or at age 50 and have acquired ten or more years of retirement service credit. The Tier 1 monthly benefit for a member with at least 20 years of service who retires from active status is equal to 55% of final compensation plus 2% of final compensation for each year of service in excess of 20 years completed after age 50. For Tier 1, final average compensation consists of the final highest consecutive 36 months of compensation earnable calculated using the rate of pay actually earned by the member in effect at the time of retirement. Some members can elect to have their final compensation based on a rank average. Members of Tier 2 are eligible to retire once they attain the age of 65 regardless of service or at age 50 and have acquired 5 or more years of retirement service credit. The Tier 2 monthly benefit for a member who is age 55 or older is equal to 2.70% of final compensation times years of accrued retirement service credit. The maximum monthly retirement allowance is 75% of final compensation. Tier 2 final average compensation consists of the highest consecutive 36 months of compensation earnable before the date of retirement.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
134 NOTE 11 - EMPLOYEE BENEFIT PROGRAMS The members of each System may elect an unmodified retirement allowance, or choose one of four optional retirement allowances. Each of the optional retirement allowances require a reduction in the unmodified retirement allowance in order to allow the members the ability to provide certain benefits to a surviving spouse, domestic partner, or named beneficiary having an insurable interest in the life of the member. For Employee members, the unmodified retirement allowance provides the highest monthly benefit and 50% continuance to an eligible surviving spouse or domestic partner. For Fire and Police members, the unmodified retirement allowance also provides the highest monthly benefit and a 66 2/3% continuance to an eligible surviving spouse or domestic partner.
The Municipal Code provides that the Retirement staff must research the percentage change in the Consumer Price Index (CPI) (US city-average for urban wage earners and clerical workers - all items) and propose that percentage to the appropriate Boards as the cost-of-living adjustments (COLA) to be adopted for the following year. This procedure must be completed by the end of April of each year for implementation in July (employees) or January (public safety). The COLA is limited to a 5% maximum change per year (employee) or 3% maximum change (public safety). Any excess over the maximum change is “banked” for use in a year where the percent of CPI change is less than the maximum.
The Fire and Police Tier 1 COLA depends on the type of method chosen by the member at retirement. If the member chose the Career Rank method, the COLA is a recalculation of his/her retirement based on the new salaries adopted for the current year. If the method chosen by the retiree is the final 3-year method, the COLA is based on the change in the weighted mean average compensation attached to all ranks in the department, with a cap of 5% per year. Any excess over the 5% is “banked” for use in years when the COLA calculated is less than 5%.
Each System also has a Deferred Retirement Option Program (DROP), which is an optional voluntary program that allows the member to have his or her retirement benefits deposited in a special account within the Systems while the member continues to work in his or her current position. It is a voluntary method of receiving a distribution of their retirement benefits; it is not an additional retirement benefit.
Additional information on DROP may be found in the ACFR for each respective System.
Terminated Member Benefits
If a member terminates before earning five years of credited service, the member forfeits the right to receive his or her service retirement benefit and is entitled to withdraw refundable contributions made, together with accumulated interest. If the member enters a reciprocal retirement system within 180 days (6 months) of terminating employment with the City and elects to leave their accumulated contributions on deposit with the System, then the member will receive a deferred retirement allowance when eligible.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
135 NOTE 11 - EMPLOYEE BENEFIT PROGRAMS Death and Disability Benefits
Death benefits are based upon whether the death occurred before or after retirement. Disability benefits are based upon whether the member has at least ten years of credited service, over or under age 55 and whether the permanent incapacity is found to be service or non-service connected.
Basis of Accounting
The Systems’ financial statements are prepared using the accrual basis of accounting and in accordance with Generally Accepted Accounting Principles Generally Accepted in the United States of America (GAAP), under which revenues are recognized when earned and deductions are recorded when the liability is incurred. Securities lending transactions are accounted for in accordance with GASB Statement No. 28, Accounting and Financial Reporting for Securities Lending Transactions.
Valuation of Investments
For financial reporting purposes, the Systems’ investments are reported at fair value. Fair value for investments of publicly traded securities is based upon closing sales prices reported on recognized securities exchanges on the last business day of the period or for listed securities having no sales reported and for unlisted securities, based upon last reported bid prices. All purchases and sales of securities are accounted for on a trade date basis. Dividends declared but not received are accrued on the ex-dividend date. Short-term investments are reported at cost, which approximates fair value.
Securities traded on national or international exchanges are valued at the last reported sales price at current exchange rates. Investments in both bonds and mortgage backed pass-through certificates are carried at fair value. Cost values are derived from Master Custodial Transaction Records. The fair value of real estate investments is based on independent appraisals. Investments that do not have an established market are reported at estimated fair values.
For asset/liability calculation purposes and for actuarial purposes, asset valuation is based on market value of assets less unrecognized returns from each of the last five years. Unrecognized returns are equal to the difference between the actual market return and the expected return on a market value basis and are recognized over a five-year period. The Actuarial Value of Assets is reduced by the value of the non-valuation reserves.
Rate of Return
For the fiscal year ended June 30, 2023 , the annual money-weighted rate of return on pension plan investments, net of investment expense was 9.52%, for the Employees and Fire and Police. The money- weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
136 NOTE 11 - EMPLOYEE BENEFIT PROGRAMS Reporting
The following data is for employer reporting as required by GASB Statement No. 68 as of June 30, 2023.
The results used in preparing the GASB Statement No. 68 report are comparable to those used in preparing the GASB Statement No. 67 report for the plan based on a reporting date and measurement date as of June 30, 2022. The valuation is based upon:
• The benefit provisions of the Systems as administered by the Boards; • The characteristics of covered active members, terminated vested members, and retired members and beneficiaries as of June 30, 2022;
• The assets of each Plan as of June 30, 2022;
• Economic assumptions regarding future salary increases and investment earnings; and • Other actuarial assumptions, regarding employee termination, retirement, death, etc.
The Total Pension Liability (TPL) and the Plans’ Fiduciary Net Positions include liabilities and assets held for DROP, Post-Retirement Supplemental Benefits (PRSB) and City Surplus reserves. The Net Pension Liability (NPL) is equal to the difference between the TPL and the each Plan’s Net Position. Each Plan’s Fiduciary Net Position is equal to the market value of assets and therefore, the NPL measure is very similar to an Unfunded/(Prefunded) Actuarial Accrued Liability calculated on a market value basis. The NPL was measured as of June 30, 2022 and determined from the actuarial valuations as of June 30, 2022. The Plans’ Fiduciary Net Positions (Plan Assets) were valued as of the measurement dates.
Consistent with the provisions of GASB Statement No. 68, the assets and liabilities measured as of June 30, 2022 were not adjusted or rolled forward to the June 30, 2023 reporting date. The discount rates used for each Plan to determine the TPL and NPL as of June 30, 2022 was 6.75%, following the same assumptions used by the Retirement Systems in the funding valuations as of the same dates.
Funding Policy
The City contributes to the retirement plans based upon actuarial determined contribution rates adopted by the Boards. Employer contribution rates are adopted annually based upon recommendations received from the Retirement Systems' actuary after the completion of the annual actuarial valuation.
For the Employees System, the average employer contribution rate as of June 30, 2023 , for 2022-2023 (based on the June 30, 2021 valuation) was 11.97% of compensation. The average employee member contribution rate as of June 30, 2023 for 2022-2023 (based on the June 30, 2021 valuation) was 8.12% of compensation.
For the Fire and Police System, the average employer contribution rate as of June 30, 2023 , for 2022-2023 (based on the June 30, 2021 valuation) was 20.34% of compensation. The average employee member contribution rate as of June 30, 2023 for 2022-2023 (based on the June 30, 2021 valuation) was 8.89% of compensation.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
137 NOTE 11 - EMPLOYEE BENEFIT PROGRAMS All active Fire and Police members are required to make contributions to the System. Employee contribution rates vary in the First Tier according to entry age. The Tier 1 average member contribution rate as of June 30, 2023 for 2022-2023 (based on the June 30, 2021 valuation) was 0.00% of compensation. Employee contribution rates in the Second Tier are established at 9% of pensionable base pay.
The aggregate employer contribution rate for the Fire and Police System as of June 30, 2023 for 2022-2023 (based on the June 30, 2021 valuation) was 20.34% of compensation.
Actuarial Funding Policy and Actuarial Cost Methodology for Funding Purposes The City currently funds, at a minimum, the amounts recommended by the actuary and approved by the Boards. These minimum contributions are recognized currently in each System’s statement of changes in fiduciary net position. Employees' contributions are funded and recognized currently through payroll deductions in amounts recommended by the actuary. Costs of administering the System are charged against System assets.
Funding Status and Method
The Employees System Board adopted a Comprehensive Actuarial Funding Policy on November 7, 2012. For the Employees Retirement System, this policy included a change in actuarial cost methodology from the Projected Unit Credit (PUC) method previously used for funding purposes to the Entry Age Normal (EAN) method.
On the same date, the Fire and Police Board adopted a Comprehensive Actuarial Funding Policy. For the Fire and Police Retirement System, this policy included a change in actuarial cost methodology from the aggregate EAN funding method to the individual EAN method. The Boards made the change due to the adoption of GASB Statement No. 67 in fiscal year 2014.
Funding Requirements and Policy Components
The Systems’ annual funding requirements are comprised of a payment of the Normal Cost and a payment on the Unfunded Actuarial Accrued Liability (UAAL), if applicable. The Normal Cost and the amount of the payment on UAAL are determined by three components of the respective Board’s funding policy: 1) Actuarial Cost Method - the techniques used to allocate the cost/liability of retirement benefits to a given period; 2) Asset Smoothing Method - the techniques that spread the recognition of investment gains or losses over a period of time for the purposes of determining the Actuarial Value of Assets used in the actuarial valuation process; and 3) Amortization Policy - the decisions on how, in terms of duration and pattern, to fund the difference between the UAAL and the Actuarial Value of Assets in a systematic manner.
As of June 30, 2023, the Systems did not have UAAL.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
138 NOTE 11 - EMPLOYEE BENEFIT PROGRAMS The Boards adopted an Amortization Policy, which sets forth the amortization procedures for funding any UAAL or amortization and allocation of any available Surplus in the Systems. A detailed description of the policy can be found in the Notes to the Financial Statements for the Retirement Systems, which are located at http://www.cfrs-ca.org/Employee/Communications/Reports.asp for the Employees System or at http://www.cfrs-ca.org/Fire-Police/Communications/Reports.asp for the Fire and Police System.
The Systems use a 5-year smoothing of market gains and losses above and below the assumed actuarial rate of return to derive the actuarial value of assets. As of the fiscal year end on June 30, 2023 , the actuarial valuation value of the Employees’ System assets was $ 1.51 with a funded percentage of 111.1% on a valuation value of assets, whereas the actuarial value of Fire and Police assets was $ 1.876 billion with a funded percentage of 116.7% on a valuation value of assets.
Contributions Required and Contributions Made
The employer’s required normal contributions to the Systems have two components: basic and COLA.
For fiscal year 2023, the City’s required normal contributions (basic and COLA) to the Systems were as follows (in thousands):
Normal Cost
Employees System
FY 2023
Employer Contributions $ 24,637
Prior Year Contribution (Surplus)/Shortfall (2,401)
Net Employer Contributions $ 22,236
Pensionable Payroll $ 186,219
Member Contributions $ 14,894
Employer Contribution Rate 13.23%
Employer and employee contributions represented 11.97% and 8.12% respectively, of the fiscal year 2023 covered payroll for the Employees System.
Normal Cost
Fire and Police System
(In Thousands)
FY 2023
Tier 1 Tier 2 Total
Employer Contributions $ 80 $ 33,838 $ 33,918
Prior Year Contribution (Surplus)/Shortfall (73) (6,777) (6,850) Net Employer Contributions $ 7 $ 27,061 $ 27,068
Pensionable Payroll $ 767 $ 133,485 $ 134,252
Member Contributions $ 43 $ 12,010 $ 12,053
Employer Contribution Rate 29.8% 25.35 %
Employer and employee contributions represented 20.34% and 8.89%, respectively, of the fiscal year 2023 covered payroll for the Fire and Police System.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
139 NOTE 11 - EMPLOYEE BENEFIT PROGRAMS Net Pension Asset
The net pension liability (asset) reported as of June 30, 2023 was measured as of June 30, 2022 , and determined based upon the total pension liability (on GASB Statement No. 68 basis) from actuarial valuations as of June 30, 2022.
The City’s total pension liability, plan fiduciary net position, and net pension liability (asset) for each System as of June 30, 2023 were as follows (in thousands):
Employees
System
Fire and Police
System
Total Pension Liability $ 1,566,984 $ 1,865,741
Plan Fiduciary Net Position (1,683,313) (2,045,837)
Net Pension Liability (Asset) $ (116,329) $ (180,096)
Plan Fiduciary Net Position as a percentage of the total pension liability 107.42% 109.65%
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
140 NOTE 11 - EMPLOYEE BENEFIT PROGRAMS Changes in Net Pension Liability (Asset)
The components of the net pension liability (asset) for each System as of June 30, 2023 and a measurement date of June 30, 2022 were as follows (in thousands):
Employees
System
Fire and Police
System
Total Pension Liability (Asset)
Beginning Balance $ 1,379,433 $ 1,636,521
Service Cost 32,382 38,322
Interest 96,311 114,608
Differences Between Expected & Actual Experience 40,833 22,226 Benefit Payments, Including Refunds (71,884) (75,178) Changes of Assumptions (4,262) 624
Net Change in Total Pension Liability 93,380 100,602
Ending Balance $ 1,472,813 $ 1,737,123
Plan Fiduciary Net Position
Beginning Balance $ 1,731,237 $ 2,090,370
Contributions - Employer 22,017 27,556
Contributions - Employee 15,493 10,973
Net Investment Income (132,625) (160,517)
Benefit Payments (Including Refunds, PRSB) (71,884) (75,178) Administrative & Professional Expense (2,050) (2,126) Net Change in Plan Fiduciary Net Position (169,049) (199,292) Ending Balance 1,562,188 1,891,078
Net Pension Liability (Asset) $ (89,375) $ (153,955)
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
141 NOTE 11 - EMPLOYEE BENEFIT PROGRAMS Discount Rate and Sensitivity of the Net Pension Liability to Changes in the Discount Rate The discount rate used to measure the TPL was 6.75% as of June 30, 2022 and June 30, 2021 . The projection of cash flows used to determine the discount rate assumed plan member contributions will be made at the current contribution rate and that employer contributions will be made at rates equal to the actuarial determined contribution rates. For this purpose, only employer contributions that are intended to fund benefits for current plan members and their beneficiaries are included. Projected employer contributions that are intended to fund the service costs for future plan members and their beneficiaries, as well as projected contributions from future plan members, are not included. Based on those assumptions, the pension Plan Fiduciary Net Position was projected to be available to make all projected future benefit payments for current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the TPL as of both June 30, 2022 and June 30, 2021.
The following presents the NPL of the Employees and Fire and Police Retirement Systems as of June 30, 2022. The Systems use the current discount rate to measure the TPL for the measurement date of June 30, 2022 , as well as what the NPL would be if it were calculated using a discount rate that is 1- percentage-point lower (5.75%) or 1-percentage-point higher (7.75%) than the current rate:
NPL of Employees and Fire and Police Retirement Systems As of June 20, 2022
(In Thousands)
1% Decrease Current
Discount Rate 1% Increase
5.75% 6.75% 7.75%
Employees System $ 67 $ (116,329) $ (266,738)
Fire and Police System $ 76 $ (180,096) $ (386,356)
Long-Term Expected Real Rate of Return
The long-term expected rate of return on the Systems’ investments was determined using a building- block method in which expected future real rates of return (expected returns, net of pension plan investment expense and net of inflation) are developed for each major asset class. This information is combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation and deducting expected investment expenses and a risk margin. The target allocation and projected arithmetic real rates of return for each major asset class, after deducting inflation, but before deducting investment expense, used in the derivation of the long-term expected rate of return assumption are summarized in the following table:
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
142 NOTE 11 - EMPLOYEE BENEFIT PROGRAMS Asset Class/Target Allocation/Long-Term Expected
Rate Return Table
As of June 30, 2023
Asset Class
Target Asset
Allocation
Weighted Average
Long-Term Expected
Rate of Return
(Arithmetic)
Large Cap U.S. Equity 18.0% 5.4%
Small Cap U.S. Equity 3.0% 6.17%
Developed International Equity 13.0% 6.13%
Emerging Market Equity 5.0% 8.17%
Private Equity 8.0% 7.18%
U.S. Core Bonds 1.3% 9.53%
Domestic Fixed Income —%
High Yield Bonds —% —%
Private Debt/Direct Lending 14.0% 5.93%
Midstream Energy —% —%
Real Estate 15.0% 4.59%
Private Real Assets - Infrastructure/Land 7.0% 6.19%
Private Credit - Credit Opportunities 2.5% 7.18%
Hedge Fund Macro 1.3% 2.72%
Total 100.0%
Mortality Rates
For the Employees System, the mortality rates used in the latest actuarial valuation are based on Pub-2010 General Healthy Retiree Amount-Weighted Mortality Table (separate tables for males and females) times 105% for healthy members and beneficiaries, projected generationally with the two- dimensional mortality improvement scale MP-2018. For disabled members, the mortality rates used in the latest actuarial valuation are based on Pub-2010 Non-Safety Disabled Retiree Amount-Weighted Mortality Table (separate tables for males and females), projected generationally with the two- dimensional mortality improvement scale MP-2018.
For the Fire and Police System the mortality rates used in the latest actuarial valuation are based on Pub-2010 Safety Healthy Retiree Amount-Weighted Mortality Table (separate tables for males and females) for healthy members, projected generationally with the two-dimensional mortality improvement scale MP-2018. For Beneficiaries, Pub-2010 General Healthy Retiree Amount Weighted Mortality Table (separate tables for males and females) times 105%, projected generationally with the tw0-dimentional mortality improvement scale MP-2018. For disabled members, Pub-2010 Safety Disabled Retiree Amount-Weighted Mortality Table (separate tables for males and females), projected generationally with the two dimensional mortality improvement scale MP-2018. These mortality tables were adjusted to future years using the generational projection to reflect future mortality improvement between the measurement date and those years.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
143 NOTE 11 - EMPLOYEE BENEFIT PROGRAMS Actuarial Assumptions
The TPL as of June 30, 2022 was determined by an actuarial valuation as of June 30, 2022 . The actuarial assumptions used in the valuation were based on the results of an experience study for the period from July 1, 2015 through June 30, 2018.
In particular, the following actuarial assumptions were applied to all periods included in the measurement:
Inflation 2.75%
Salary increases
3.75% to 11.25%, varying by service, including inflation (Employees).
4.00% to 12.75%, varying by service, including inflation (Fire and Police).
Investment rate of return 7.00%, net of pension plan investment expense, including inflation.
Other assumptions
See Appendix A in the ACFR for the Employee's Plan and the Fire/Police Plan for the service retirement rates after they have been adjusted to treat DROP participation as service retirement.
Net Position Restricted for Pension Benefits
Net position restricted for pension benefits is segregated into Active Members Reserve (members’ accumulated contributions) and reserves established by the Boards for various benefit payments.
Reserves are established by the Systems from member and employer contributions and the accumulation of investment income after satisfying investment and administrative expenses.
Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions For the fiscal year ending June 30, 2023 , the City incurred pension expense of $15.2 million for the employees Plan and $17.4 million for the Fire and Police Plan for a total pension expense of $32.6 million.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
144 NOTE 11 - EMPLOYEE BENEFIT PROGRAMS As of June 30, 2023 , the City has deferred outflows and deferred inflows of resources related to the pensions as follows:
Pension Expense and Deferred Outflows and Inflows of Resources (in thousands) Employees Fire and Police
Components of Pension Expense System System
Service cost $ 32,382 $ 38,322
Interest on the total pension liability 96,311 114,608 Expensed portion of current-period difference between expected and actual experience in the Total Pension Liability 10,802 5,292 Actual member contributions (15,493) (10,973)
Projected earnings on plan investments (119,912) (144,969) Expensed portion of current-period differences between actual and projected earnings on plan investments 50,507 61,097
Expensed portion of current-period effects of Assumption Changes (1,127) 149 Administrative expense 2,050 2,126
Recognition of beginning of year deferred outflows of resources as pension expense 29,615 37,613 Recognition of beginning of year deferred inflows of resources as pension expense (69,914) (85,881) Pension Expense $ 15,221 $ 17,384
Deferred Outflows of Resources and Deferred Inflows of Resources Deferred Outflows of Resources
Contributions subsequent to Measurement Date $ 20,670 $ 24,776 Changes of assumptions or other outputs — 10,359
Difference between expected and actual experience in the Total Pension Liability 31,002 17,022 Net difference between projected and actual earnings on pension plan investments 49,149 59,587 Deferred Outflows of Resources $ 100,821 $ 111,744
Deferred Inflows of Resources
Net difference between projected and actual earnings on pension plan investments $ — $ — Changes of assumptions 3,134 5,002
Difference between expected and actual experience in the Total Pension Liability 6,001 4,177 Deferred Inflows of Resources $ 9,135 $ 9,179
The $20.7 million and $24.8 million reported as deferred outflows of resources related to contributions subsequent to the June 30, 2022 measurement date will be recognized as a reduction of the total Pension liability during the fiscal year ending June 30, 2023. Deferred outflows of resources and deferred inflows of resources related to pension will be recognized as follows:
2024 $ 15,309 $ 19,369
2025 9,917 5,813
2026 (4,719) 9,577
2027 50,507 62,185
Totals $ 71,014 $ 96,944
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
145 NOTE 11 - EMPLOYEE BENEFIT PROGRAMS Any differences between projected and actual investment earnings on pension plan investments are recognized over a period of five years beginning with the year in which they occur. Differences between expected and actual experiences are recognized over the average of the expected remaining service lives of all employees that are provided with pensions through the Retirement Systems determined as of June 30, 2021 (the beginning of the measurement period ending June 30, 2022) and is
3.78 years for the Employees System and 4.2 years for the Fire & Police System.
Administrative Expenses
The Fresno Municipal Code (FMC) provides that all administrative costs of the Systems shall be a charge against the assets of the Systems. Per the FMC, the Administrative expenses are a component of the City’s contribution calculation.
The Systems issue publicly available financial reports that include financial statements and required supplementary information for the Employees Retirement System and the Fire and Police Retirement System. The reports may be obtained by writing the City of Fresno Retirement Office, 2828 Fresno Street, Suite 201, Fresno, California 93721, or by visiting:
https://www.cfrs-ca.org/employee-retirement-system/ers-financial/ for the Employee System, or https://www.cfrs-ca.org/fire-and-police-retirement-system/financial/ for the Fire and Police System.
Successor Agency Retirement Plan
The Successor Agency participates in a public agency cost-sharing multiple-employer defined benefit pension plan (the Plan) administered by the California Public Employees' Retirement System (CalPERS).
Employer contribution rates are determined on an annual basis by an actuary and are effective on the July 1 following notice of a change in the rate.
The Plan fiduciary net position disclosed in the Successor Agency’s accounting valuation may differ from the Plan assets reported in the Successor Agency’s funding actuarial valuation report due to CalPERS keeping various items included in its fiduciary net position which are excluded for rate setting purposes in the Successor Agency’s funding actuarial valuation. Differences may also result from timing of financial reporting by CalPERS and final reconciled reserves.
As of the beginning of the measurement period (July 1, 2022), the net pension liability for the Plan is $317,599. For the measurement period ended June 30, 2023 (the measurement date), the net pension liability for the Plan is $ 693,565 and the Successor Agency incurred pension expense of $ 14,110 for the Plan.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
146 NOTE 11 - EMPLOYEE BENEFIT PROGRAMS As of June 30, 2023, the Successor Agency reports other amounts for the Plan as deferred outflows and deferred inflows of resources related to pensions as follows (in thousands):
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Contributions made after the measurement date $ 61 $ —
Difference between expected and actual experience 14 9 Changes in assumptions 71 —
Net difference between projected and actual earnings on pension plan investments 127 — Changes in employer's proportions 23 —
Difference between the employer's contributions and the employer's proportionate share of contributions — 62
Total $ 296 $ 71
For more detailed information related to the Successor Agency’s retirement plan, refer to the Successor Agency’s separate audited financial statements which can be obtained by contacting the Successor Agency at 2344 Tulare Street, Suite 200, Fresno, CA 92721.
B. Deferred Compensation Plan
The City offers its employees a deferred compensation plan in accordance with Internal Revenue Code (IRC) Section 457. The deferred compensation plan (the Plan), available to all permanent full-time and part-time employees and Council Members, permits deferral of a portion of the employee’s salary into a tax-deferred program. The deferred compensation is not available to employees or other beneficiaries for withdrawal until termination, retirement, death, or unforeseeable emergency, or loan program. Upon separation from employment with the City, an individual may roll over their deferred account into another IRS Allowable Plan or, upon receipt, the distribution will become taxable.
The Deferred Compensation Board contracted with Fidelity Management Trust Company (Fidelity) as the trustee and plan administrator. The City’s Retirement System Administration assists Fidelity in the administration of the Plan. In addition to the Retirement Office, City staff in the Payroll section of the Finance Department, the City Attorney’s Office, and Information Services Department all assist in the administration of the Plan. The City has no fiduciary accountability for the Plan. Accordingly, the Plan assets and related liabilities to Plan participants are not included in the basic financial statements.
C. Compensated Absences
Vacation pay, which may be accumulated up to 600 hours depending on an employee’s bargaining group and length of service, is payable upon termination. Sick leave, which may be accumulated up to 12 hours per month, has no maximum. If eligible, most bargaining units receive a portion of the value of their sick leave balance at termination in their Health Reimbursement Account (HRA). Otherwise, employees do not receive any value from their sick leave balances at termination.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
147 NOTE 11 - EMPLOYEE BENEFIT PROGRAMS Annual leave, which may be accumulated up to 1,200 hours, depending upon bargaining unit and length of service, is payable upon termination or retirement. Holiday leave may be accumulated indefinitely depending upon the bargaining groups and is payable for active employees as well as at termination or retirement. Annual leave allows for the cashing out of the higher of 10% of the accumulated balance or 48 hours, once per fiscal year. Supplemental sick leave is awarded to unrepresented management, professionals and to white collar employees at the rate of 40 hours at the beginning of each fiscal year. The balance can only be used after other leave balances are exhausted, or for other specific reasons outlined in the various Memoranda of Understanding (MOU’s) or the current Salary Resolution. The balance is payable at termination/retirement or is accounted for as part of an HRA which is unfunded and expended on a pay-as-you-go basis.
Starting in fiscal year 2006, some bargaining units selected to account for some or all of their sick leave and supplemental sick leave balances as an HRA. The book value of these balances is accounted for (by employee) in off-line spreadsheets, administered by HealthComp, is given credit for calculated interest, and is used to pay health premiums for the employee, their spouse and dependents until their individual balance is exhausted. The HRA is not held in a trust, but is funded on a pay-as-you-go-basis.
The portion of the City's obligation relating to employees' rights to receive compensation for leave balances attributable to services already rendered is accrued when incurred in the Government-Wide, Proprietary, and Fiduciary Fund Financial Statements. Compensated absences upon termination are funded through a cost allocation formula which is based upon a citywide history of payouts (approximately $2 million per year). Accruals are reviewed by bargaining unit and the $2 million base is allocated in proportion to each unit’s current liability for a contribution per unit cost. This unit cost is then converted to a cost per employee and becomes part of the budgeted employee service cost in each department’s annual base budget.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
148 NOTE 11 - EMPLOYEE BENEFIT PROGRAMS Accrued Employee Leave balances as of June 30, 2023, are as follows (in thousands):
Department/Activity
Total Accrued
Vacation,
Sick Leave, and HRA
Current
Portion
Governmental Activities:
General Fund $ 81,596 $ 11,023
Grants Special Revenue Fund 1,614 104
Special Gas Tax 912 157
Measure C 1,912 220
Measure P 559 42
Community Services 403 48
City Combined 213 —
Special Assessment — 55
General Services 4,551 457
Risk Management 323 40
Total Governmental Activities $ 92,083 $ 12,146
Business-Type Activities:
Water System $ 2,378 $ 385
Sewer System 2,320 408
Solid Waste Management 1,865 348
Transit 4,156 675
Airports 2,099 450
Convention Center — —
Community Sanitation 460 58
Parks and Recreation 11 3
Billing and Collection 1,663 296
Total Business-Type Activities $ 14,952 $ 2,623
Fiduciary Funds:
Private-Purpose Trust Fund $ 65 $ 17
Total $ 107,100 $ 14,786
Accrued employee leave balances related to governmental activities are recorded in the Government- Wide Financial Statements under Long-Term Liabilities.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
149 NOTE 11 - EMPLOYEE BENEFIT PROGRAMS D. Termination Benefits
During fiscal year 2023, there were no employees who received severance pay.
E. Health Benefit Plan
The City offers its employees participation in the Fresno City Employees Health and Welfare Trust Plan (Trust). The Trust offers a self-insured medical plan for full-time and permanent part-time employees and their dependents. The Trust also provides dental, vision, pharmacy, mental health, and chiropractic coverage.
There are two medical plan options available to employees. Employees have the opportunity, on an annual basis, to elect either a higher benefit level Preferred Provider Organization (PPO) option or a reduced benefit level PPO option. Employees electing to receive the higher benefit level option pay a percentage of the monthly premium through payroll deductions. Employees electing the lower benefit level pay nothing for their coverage.
The first option is a higher benefit level PPO plan which has a $200 individual annual deductible and a $600 family maximum annual deductible. Under this option, the plan pays 80% of covered charges and the employee is responsible for 20% of the covered charges. Once a covered member incurs $15,000 in covered charges, the plan then pays 100% until the end of the plan year.
The second option is a reduced benefit level PPO plan which has a $1,300 individual annual deductible with a $2,600 family maximum annual deductible. The benefit reduction amount is set by the Board of Trustees for the plan and depends on the amount of contributions received by the Trust on behalf of the employee.
The percentage of the premium the employee is required to pay to receive the higher benefit level is negotiated by each bargaining unit.
During fiscal year 2014, a number of units negotiated a 75% - 25% contribution split. For these units, the City contributes 75% of the premium and the employees, if they wish to have the higher benefit level PPO, contribute 25% of the premium. If they choose not to make the contribution, the medical benefits are reduced by 30%. This reduction results in the plan paying 56% of covered charges and the employee is responsible for 44% of covered charges.
Only one bargaining unit continues to have a different contribution amount than the balance of the Unions. For Fresno City Employees Association, Inc. (FCEA) employees hired after July 11, 2011, the City contributes 70% of the premium and the employees, if they wish to have the higher benefit level PPO, contribute 30% of the premium. If they choose not to make the contribution, the medical benefits are reduced by 35%. This reduction results in the plan paying 52% of covered charges and the employee is responsible for 48% of covered charges. Employees in the FCEA hired before July 11, 2011, continue to have an 80% - 20% contribution split as described above.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
150 NOTE 11 - EMPLOYEE BENEFIT PROGRAMS City retirees are also eligible for participation in the plans by paying the full blended premium cost. The City continues to assess the impact of the federal healthcare reform legislation on the City’s liabilities.
The Health and Welfare Trust Board approved the purchase of a $500,000 stop-loss insurance policy on May 11, 2016. The policy was purchased in fiscal year 2017. The purpose of the policy was to protect the Trust from having to pay any claim or series of claims associated with one case that totaled more than $500,000. In addition to the stop-loss insurance, the Health and Welfare Trust Board also approved a policy of setting aside a portion of the Health and Welfare Trust Fund's fund balance for the payment of catastrophic health claims.
F. Other Post-Employment Benefits
Plan Description
The City of Fresno Retirees Healthcare Plan is a single-employer defined benefit medical plan administered by HealthComp and funded through the City of Fresno Health and Welfare Trust. It is reported as an Internal Service Fund of the City and provides Other Post-Employment Benefits (OPEB) to eligible retirees and his/her dependents, spouse or domestic partner. The City does not accumulate assets in a dedicated trust, or equivalent arrangement, for the purpose of funding its retirement healthcare obligation. Therefore, the actuarial value of plan assets are zero. The trust does not issue separate publicly available financial statements.
GASB Statement No. 75, Accounting and Financial Reporting by Employers for Post-Employment Benefits Other than Pensions, requires governments to account for OPEB on an accrual basis of accounting, rather than on a pay-as-you-go basis. The effect is the recognition of an actuarially determined expense on the Statement of Activities when a future retiree earns their post-employment benefits, rather than when they use their post-employment benefits. The post-employment benefit liability is recognized on the Statement of Net Position over time.
Contributions
The City provides post-employment healthcare benefits for certain eligible retirees. OPEB includes the authorization for retirees to purchase health insurance through the plan at current employee rates. The establishment and amendment of benefit provisions are negotiated between the employee bargaining units and the City, and are recommended by the City Manager subject to the approval of the Mayor and the City Council. While participant retirees pay 100% of their premium costs, they are allowed to purchase insurance at blended premium rates. Thus, the City's contribution is deemed to be that portion of retiree claims costs over premiums required to be contributed by retirees. Currently, the City does not pre-fund retiree health benefits and instead provides for benefits on a pay-as-you-go basis.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
151 NOTE 11 - EMPLOYEE BENEFIT PROGRAMS Employees Covered
As of June 30, 2023, the following employees were covered by the benefit terms:
Inactive employees or beneficiaries currently receiving benefit payments 234 Inactive employees entitled to but not yet receiving benefit payments — Active employees 3,308
Total participants covered by OPEB Plan 3,542
Net OPEB Liability
The City's net OPEB liability of $111.0 million was measured as of June 30, 2022 , and was determined by an actuarial valuation as of that date to determine the June 30, 2023 total OPEB liability.
Actuarial Assumptions and Other Inputs
The net OPEB liability was determined using the following actuarial assumptions and other inputs, applied to all periods included in the measurement, unless otherwise specified:
Reporting Date June 30, 2023
Measurement Date June 30, 2022
Valuation Date June 30, 2021
Discount Rate 3.65%
Healthcare Cost Trend Rates:
Current Year Trend 5.78% / 12.81%
Second Year Trend 7.50% / 4.54%
Decrement NA
Ultimate Trend 4.54%
Year Ultimate Trend is Reached 2090 / 2023
Salary Increases 3.50%
Actuarial Cost Method Entry Age Normal (Percent of Salary) The discount rate was based on the index provided by Bond Buyer 20-Year General Obligation Index based on the 20 year AA municipal bond rate as of June 30, 2020.
Mortality rates were based on the SOA RP-2014 Total Dataset Mortality with Scale MP-2019 (Base Year 2006).
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
152 NOTE 11 - EMPLOYEE BENEFIT PROGRAMS Sensitivity of the Net OPEB Liability to Changes in the Discount Rate The June 30, 2021 valuation was prepared using a discount rate of 3.65%. If the discount rate were 1% higher than what was used in this valuation, the Net OPEB Liability would decrease to $ 97.5 million or by (12.11)%. If the discount rate were 1% lower than was used in this valuation, the Net OPEB Liability would increase to $127.5 million, or by 14.88%.
1% Decrease Current
Discount Rate 1% Increase
2.65% 3.65% 4.65%
Net OPEB Liability
(in thousands) $ 127,501 $ 110,982 $ 97,544
Sensitivity of the Net OPEB Liability to Changes in the Healthcare Cost Trend Rates The June 30, 2021 valuation was prepared using an initial trend rate of 5.78% / 12.81%. If the trend rate were 1% higher than what was used in this valuation, the Net OPEB Liability would increase to $133.3 million or by (20.08)%. If the trend rate were 1% lower than was used in this valuation, the Net OPEB Liability would decrease to $93.5 million or by 15.71%. 1% Decrease
Current
Healthcare Cost
Trend Rates
1% Increase
-1% 5.78% / 12.81% 1%
Net OPEB Liability
(in thousands) $ 93,543 $ 110,982 $ 133,267
Changes in the Net OPEB Liability
The changes in the Net OPEB Liability for the City OPEB Plan are as follows:
Net OPEB Liability
Increase / (Decrease)
(in thousands)
Net OPEB Liability as of June 30, 2022 $ 99,761
Changes for the Year:
Service Cost 6,908
Interest 3,946
Assumption Changes 2,444
Benefit Payments (2,077)
Net Changes 11,221
Net OPEB Liability as of June 30, 2022 $ 110,982
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
153 NOTE 11 - EMPLOYEE BENEFIT PROGRAMS OPEB Expense, Deferred Outflows of Resources, and Deferred Inflows of Resources For the year ended June 30, 2023, the City recognized an OPEB expense of million. At June 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources (in thousands):
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
OPEB Contributions Subsequent to the Measurement Date $ 2,153 $ — Changes of Assumptions 26,813 (43,454)
Difference Between Actual and Expected Experience 168 (19,169) Total $ 29,134 $ (62,623)
The $2.2 million reported as deferred outflows of resources related to contributions subsequent to the June 30, 2022 measurement date will be recognized as a reduction of the total OPEB liability during the fiscal year ending June 30, 2024. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows (in thousands):
Fiscal
Year
Deferred
Outflows/(Inflows)
of Resources
2024 $ (6,124)
2025 (6,124)
2026 (6,124)
2027 (4,664)
2028 (4,579)
Thereafter (8,027)
Total: $ (35,642)
G. Healthcare Plan Claims Liability
The recorded liability for the Employees Healthcare Plan at June 30, 2023 for employee health benefit claim payments for direct provider care is $7.9 million.
Changes in the funds claims liability amount for the last two fiscal years are as follows (in thousands):
Fiscal Year
Ended
June 30
Beginning of
Fiscal Year
Liability
Current Year
Claims and
Changes in
Estimates
Claims
Payments
End of
Fiscal
Year
Liability
2022 $ 6,500 $ 56,632 $ 55,732 $ 7,400
2023 7,400 66,667 66,167 7,900
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
154 NOTE 11 - EMPLOYEE BENEFIT PROGRAMS Note 12. No-Commitment Debt
The City is not liable for repayment of any of the following bonds, and accordingly, they are not reflected in the accompanying basic financial statements.
A. Special District Debt
The City is not obligated in any manner for the Special District debt, but is acting as an agent for property owners in collecting the taxes/assessments, forwarding the collections to the trustee/paying agent, and initiating foreclosure proceedings, if appropriate. Special District debt payable to bond holders was $ 2.35 million at June 30, 2023, as compared to $2.57 million at June 30, 2022.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 155 NOTE 12 - NO-COMMITMENT DEBT Note 13. Commitments and Contingencies
A. Closure and Post-Closure Care Cost
The City continues to monitor a former landfill site as part of the Environmental Protection Agency's (EPA) Superfund program. Management estimates the remaining monitoring costs as of June 30, 2023 to be $10.4 million. A liability in this amount has been recorded in the Solid Waste Management Fund. It is anticipated that approximately $0.9 million in monitoring costs and landfill site closure costs will be paid in fiscal year 2024. The Fresno sanitary landfill has not received solid waste since 1987. It was redesigned as part of a 350-acre “green” facility to integrate the Fresno sanitary landfill site into a championship caliber sports complex/regional park. The estimated total remaining post-closure care costs are based on the equipment, facilities, and services required to monitor/maintain the closed landfill.
The liability for post-closure care costs is an estimate and subject to change resulting from inflation, deflation, technology or changes in applicable laws.
Fees paid by utility users will be used to cover the remaining monitoring costs. A receivable totaling $ 9.3 million has been recorded in the Solid Waste Management Fund.
B. CVP Water Contract
The City’s 60,000 acre-foot water supply entitlement from the United States Bureau of Reclamation (USBR, or the Bureau) is equivalent to approximately 40% of the City’s annual water demand. This supply, derived from the Friant Dam on the San Joaquin River, is the primary resource for the operation of the City’s current and future surface water treatment facilities.
The City and the Bureau have what is known as a Repayment Contract. While most traditional federal Reclamation Law provisions continue to apply, the City receives some important benefits by utilizing the Repayment Contract, including:
1. Permanent water supply - The Repayment Contract provides for an ongoing, permanent annual supply of up to 60,000 acre-feet of water from the Friant Division of the CVP. No further periodic renewal negotiations are required.
2. Pricing benefits - Certain components of the Bureau water rate structure, such as tiered pricing, are eliminated.
3. Financing cost savings - Under the previous Bureau rate structure, the City paid certain financing costs and interest on the outstanding capital and operation and maintenance obligations that the Bureau attributed to the City. Under a Repayment Contract, those costs are not passed on to the City.
Because repayment contracts do not require periodic renewal, compliance with the California Environmental Quality Act (CEQA) and the National Environmental Policy Act (NEPA) need not be repeated. This obligation is amortized and included in the volumetric water rates the City pays the CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 156 NOTE 13 - COMMITMENTS AND CONTINGENCIES USBR. The present value of the City’s debt obligation to the Bureau has been fully capitalized in the Water Fund under the caption “Unamortized CVP Water Settlement”, and is being amortized against expected future revenues generated through water rates. The “Unamortized CVP Water Settlement” totaled $0.8 million on June 30, 2023 , while the related liability reported as “CVP Litigation Settlement” totaled $0.1 million on June 30, 2023.
C. Other Litigation
There are various other lawsuits and claims pending against the City. Although the outcome of these claims and lawsuits is not presently determinable, management, after consultation with legal counsel, is of the opinion that a majority of these matters will not have a material adverse effect on the financial condition of the City at June 30, 2023.
D. Toxics Mitigation
Old Hammer Field
Contamination, primarily from the common solvent trichloroethylene (TCE), was discovered and identified in 1989 in soils and groundwater beneath property currently owned by the City. The site known as Old Hammer Field (OHF), a prior Army military base in the 1940’s, was the subject of investigation and cleanup efforts which had previously been jointly funded by the Boeing Company (Boeing), the U.S.
Army Corps of Engineers and the City of Fresno. The area had been used for the repair, overhaul, maintenance, refurbishing and construction of aircraft during and after World War II. The California Department of Toxic Substances Control (DTSC) was the lead regulatory agency overseeing site cleanup.
After years of legal negotiations, a settlement agreement between the U.S. Army Corps of Engineers, the Boeing Company, and the City was reached. The settlement called for the Airports Department to be responsible, going forward, for 10% of the cleanup costs. The settlement also called for the U.S. Army Corps of Engineers and Boeing to make a joint one-time payment of $1,350,000 for past costs. This payment was made in fiscal year 2011.
The Court approved the settlement agreement which included the one-time payment noted above, covenants not to sue and an operating agreement for purposes of coordinating further efforts to implement the State-Approved Remedial Action Plan to obtain Site Closure. All parties agreed to bear their own costs and expenses, including attorney’s fees in the case.
A liability for future cleanup costs on the Old Hammer Field site is recorded on the fiscal year 2023 ACFR in the amount of $366,528. Total costs have been estimated to range between $10 and $20 million, with the City’s share of cleanup costs to be 10%. The cleanup time frame has also been estimated and is expected to continue for 20 to 40 years. Cleanup costs totaled $39,405 in fiscal year 2023.
The City will re-evaluate this accrual annually and make adjustments as necessary.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 157 NOTE 13 - COMMITMENTS AND CONTINGENCIES DBCP Groundwater Contamination
The occurrence of DBCP, an agricultural pesticide, in certain groundwater has been identified throughout the Fresno Metropolitan Area. At various City well sites, DBCP exceeds drinking water limits and is removed by Granular Activated Carbon (GAC) treatment. The City fronted the costs of clean up with respect to the known wells and reimbursed itself from a litigation settlement in an original amount of approximately $21 million. $10 million was stipulated to be used toward past costs, and $11 million was to be applied toward the installation of additional GAC treatment units, all of which have been completed.
Subject to numerical limits, the settlement arrangement also provides for the City to be reimbursed for the capital costs of the installation of GAC treatments at wells exceeding maximum contaminant levels, with reimbursements ranging from $337,500 to $540,000 depending on the well site. Funding also is provided for the ongoing operation and maintenance cleanup costs of approximately $27,900 to $31,000 per contaminated well (depending on type), adjusted for inflation, with such payment obligations ending on June 26, 2035. The City is not responsible for “cleanup” in the context common to hazardous material remediation.
The City can elect to treat wells or simply shut them down. Future costs to clean up and monitor new discoveries of contamination at existing sites or additional sites that may be identified are eligible for reimbursement under the settlement agreement through June 26, 2035.
An obligating event as defined by GASB Statement No. 49 has not occurred during the fiscal year; therefore, no liability exists.
Pollution Remediation
Although the Successor Agency is generally not involved with operations that pose a high risk for environmental liabilities, properties acquired for redevelopment purposes could be contaminated or may contain hazardous substances, such as petroleum products, lead, and/or asbestos. The former RDA’s due diligence property acquisition policies required that the RDA obtain a Phase I Environmental Site Assessment (ESA) report on all properties to be acquired by the RDA to minimize or avoid potential environmental liabilities. If the Phase I ESA findings and conclusions indicate the need for further environmental investigation, a Phase II ESA is commissioned. In the event of an acquisition leading to demolition, the former RDA obtained a Phase I and/or Phase II report and, if necessary, remediated the property according to state and federal laws prior to demolition. In instances where hazardous substances or petroleum products were detected by the Phase II ESA, environmental remediation (cleanup) is subsequently planned and executed. The Phase II ESA and cleanup work are normally supervised and sanctioned by local environmental agencies such as the California Regional Water Quality Control Board (RWQCB). This agency accepts the completion of the cleanup work by issuing a “Case Closure” letter that officially declares the property free of hazardous substances or petroleum products.
During fiscal year 2016, the Successor Agency held one parcel subject to environmental investigation at 655 “G” Street - Chinatown. In February 2009, the City transferred title to four parcels in the Chinatown project area to the RDA. In October 1995, a Phase II ESA was completed for the four CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 158 NOTE 13 - COMMITMENTS AND CONTINGENCIES parcels. The parcel at 718 “F” Street and two parcels at 705 “G” Street were free of hazardous substances or petroleum products. The fourth parcel at 655 “G” Street was found to be in need of further assessment (Phase II ESA) because suspected leaking gasoline tanks had been removed from the site. The RWQCB advised the City that additional assessment was necessary to further evaluate impacted soils and groundwater and required a work plan outlining the assessment. Recently, the Successor Agency obtained an EPA grant to assess 655 “G” Street, as required by the RWQCB. The work plan and field work have been completed and test results have been received. Monitoring wells have been installed at the site and water samples are to be tested quarterly. RWQCB will review the results and advise if further action is needed. At this time, any potential costs cannot be estimated with any degree of certainty. Until such time as the costs can be estimated with more certainty, no liability will be accrued.
E. Measure Z, Zoo Accreditation, Fresno Chaffee Zoo Corporation In accordance with an agreement between the City and the Fresno Chaffee Zoo Corporation (FCZC), a California benefit corporation, a non-profit board operates the Chaffee Zoo (Zoo). The City and the FCZC also negotiated a lease and a financing arrangement.
The lease agreement, dated January 1, 2006, was negotiated for a 30-year period. There is also a 25- year renewal of the term if the Zoo Tax was reinstated after its initial 10-year term, or two additional 10- year renewal options if the tax was not renewed. On November 4, 2014, a new incarnation of Measure Z which extends the tax for another 10 years was passed triggering the 25-year lease renewal. The lease rate is at $1.00 per year.
The lease agreement sets forth the terms and conditions between the City and FCZC, with respect to the Zoo premises and any expansion that might occur in a designated expansion area. The City is responsible for all maintenance and operation costs in the expansion area, until such time as the FCZC takes possession of the expansion area by exercising its rights in accordance with lease provisions.
The City retained ownership of the land, buildings, structures, permanent fixtures, and improvements in existence at the commencement date of the lease, while the FCZC is the owner of all buildings, structures, and improvements constructed thereafter until the end of the lease term.
The Financing Agreement conveyed the Zoo animals and Zoo personal property to the FCZC, along with all obligations the City had with respect to the animals exhibited, housed or otherwise kept or cared for at the Zoo during the term of the lease. At the termination of the lease or the end of the lease term, should the City decide not to continue operations of the Zoo, the FCZC has the right to sell or dispose of the Zoo animals and keep the proceeds of any sale or disposition at its sole cost or expense. The FCZC also has the authority to acquire, sell or dispose of Zoo animals in the course of the lease so long as the compliment of animals at all times is similar in type and proportion to the Zoo animals on hand upon commencement of the lease.
The FCZC must maintain Association of Zoo & Aquariums (AZA) accreditation of the Chaffee Zoo.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 159 NOTE 13 - COMMITMENTS AND CONTINGENCIES F. Granite Park
In 2005, the City entered into a Contingent Debt Purchase Agreement guaranteeing a loan regarding a 20-acre sports-related complex under development and adjacent to office and commercial retail amenities, known as Granite Park.
On June 30, 2009, a formal demand was made on the City to purchase the Loan Package for a stipulated purchase price. On September 17, 2009, the City deposited $5,105,271 in a loan purchase escrow. The City utilized funds from its cash pool with the intention of ultimately issuing long-term bonds to finance the acquisition over 30 years.
The City proceeded to purchase the Granite Park property at a unified foreclosure sale and took title to and possession of Granite Park sports fields pursuant to a Trustee’s Deed recorded in Fresno County on March 16, 2010. The City paid $5,105,218 and holds the property for possible use, development and/or disposition.
The City entered into a 25-year ground lease and 10-year service contract with Central Valley Community Sports Foundation (CVCSF) on September 24, 2015. The ground lease calls for the CVCSF to make rent payments of $62,500/year, which are increased annually by 2.75%/year. The CVCSF is responsible for maintenance of Granite Park's sports-related complex, as well as the financing of various capital improvements. Under the service contract, the City pays the CVCSF $150,000/year to provide a variety of sports and recreational programming.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 160 NOTE 13 - COMMITMENTS AND CONTINGENCIES G. Construction and Other Significant Commitments
On June 30, 2023, the City had commitments for the following major construction projects (in thousands):
Project Title
Remaining
Construction
Committed
Governmental:
Phase 2 - FAT Terminal Expansion $ 85,385
North Ave Sewer Trunk Main Realignment 5,183 Clinton, University, Fruit & Teilman WM Replacements 1,260 Replace & Repairs of Struct Comp at RWRF - Phase 1 828 Cleaning, Dewatering, & Rehab of Digesters 1 & 12 561
Total Governmental 93,217
Proprietary:
Clarion Pointe Triage 9,085 Parkway Inn Property Repairs 2,703 Fire Regional Training Center 2,685
Travel Inn Triage 2,406
Welcome Home 96-Unit Youth Permanent Housing 2,176 ITS Jensen Ave. REBID Jenson Ave. Corridor ITS 1,461 Belmont (Abby to Millbrook) Median/Ramps/LS/Irr/FA 1,404 Central Orange 1,301
ConstContract-Multipurpose Trail 1,122 Golden State Triage Center 1,047 E Bullard Ave Pavement Grind & Overlay N. First St 871
Bridge Point Triage Center 708
Small Business Façade Improvement Grant Program 668 Ashlan Ave Corridor (Cornelia to Blackstone) ITS 665
Muir Elementary Safe Routes 574 Total Proprietary 28,876
Total Major Construction Projects $ 122,093
H. Discolored Water
In February 2016, the City undertook a broad investigation into reports of discolored water and the presence of lead in drinking water in certain homes located in Northeast Fresno. The City conducted the investigation with oversight from the State Water Resources Control Board - Division of Drinking Water (DDW), Fresno County Department of Public Health, and the U.S. Environmental Protection Agency (EPA). The investigation has included, for example, water quality sampling, soil sampling, pipe testing, field investigations and home inspections, consultations with national corrosion experts, multiple community meetings and presentations, and public distribution of information and education materials.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 161 NOTE 13 - COMMITMENTS AND CONTINGENCIES In early 2017, the EPA conducted a comprehensive review of the City and the State of California’s oversight of the City’s drinking water treatment and testing program. The EPA concluded that the City has historically complied with the regulatory action level for lead, and that the City’s water system has been optimized for corrosion control since 1996.
In September 2016 and May 2017, groups of residents filed two lawsuits against the City and other parties seeking damages for harm allegedly caused by the City’s water supply. Litigation is currently ongoing. The City will continue to vigorously defend itself in these matters.
The City continues to work with residents by regularly monitoring their water. For more information regarding the City’s continued efforts to resolve discolored water issues, please see https:// www.fresno.gov/publicutilities/water-quality-operations-testing/.
The City has spent $ 5,122,123 through June 30, 2023 to investigate and address the discolored water complaints. All of these costs have been and will continue to be recorded in the Water Fund.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 162 NOTE 13 - COMMITMENTS AND CONTINGENCIES Note 14. Securities Lending
The City does not engage in securities lending with any investment instruments that it holds. The City’s Retirement Systems are permitted under the City’s Municipal Code and Retirement Boards’ policies to enter into securities lending transactions. For a detailed description of the Retirement Systems’ security lending policies and the financial effect of such lending, please see the Retirement Systems’ ACFRS, which can be found at https://www.cfrs-ca.org/fire-and-police-retirement-system/financial/ for the Fire and Police Retirement System and https://www.cfrs-ca.org/employee-retirement-system/ers- financial/ for the Employees Retirement System.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 163 NOTE 14 - SECURITIES LENDING Note 15. Other Information
Construction Retainage Escrow Accounts
The City enters into construction contracts with various outside third-party contractors with respect to major capital projects. As the construction progresses, progress payments are made to the contractors.
Portions of the payments, called retention payments, are paid into an escrow account. While these funds are earned by the contractors, generally 5% to 10% of the contract amount, they are not released out of the escrow account to the contractor until some agreed upon date, usually the completion of the job.
These amounts are retained for a variety of reasons, as an incentive to complete the job in a timely manner, or as a fund for the benefit of suppliers and subcontractors. The City may not convert the funds in these escrow accounts for its use unless a breach of contract occurs.
COVID-Related Funding
The City has received a substantial amount of funding from the Federal and State government since the beginning of the COVID-19 pandemic to offset the pandemic’s health and economic impacts. The following are the major COVID-19 mitigation funding sources that have been awarded to/received by the City as of June 30, 2023.
Transit CARES - The City’s Transportation Department (Transit) was awarded $32.5 million to assist in Fixed Route Operation, Handy Ride Operating Support, and bus purchases. This funding was intended to offset funding losses caused due to COVID-related shutdowns of service or ridership restrictions. As of June 30, 2023, Transit has received $31.8M of the awarded amount, which reimbursed expenses incurred in FY20 and FY21. Remaining funds will be attributed to the next eligible bus purchase.
Airport CARES - The City's Airports Department was awarded $13 million in May 2020 and has fully expended all CARES funding as of April 2023. Funding was used for operating expenses and debt service.
American Rescue Plan Act (ARPA) funding the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) – In March 2021, the City was awarded $170.8 million of SLFRF funding and has allocated all funding to various City led and Community Based Organization led projects. As of June 30, 2023, the City has expended $63.6 million in SLFRF funding and continues to implement identified projects throughout the City of Fresno.
Airport American Rescue Plan Act (ARPA) funding the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) – In March 2021, the City’s Airports Department was awarded three grants totaling $9.8 million of SLFRF funding. The funding is for concession relief and operating expenses. As of June 30, 2023, the City has expended $3.4 million related to this SLFRF funding.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 164 NOTE 15 - OTHER INFORMATION Emergency Rental Assistance Program (ERAP) – The City was awarded $69.3 million in ERAP funding:
$35.6 million from the Federal government and $33.7 million from the State. As of June 30, 2023, the City had received all funding allocations. The program is designed to assist qualified residents in retaining housing and utilities by reimbursing landlords and utility providers for past due billings. As of June 30, 2023, the City had expended $66.7 million of its awarded amount, with $57.2 million paid directly to landlords and utility providers for delinquent rent and utilities.
Coronavirus Response and Relief Supplemental Appropriation Act (CRRSAA) - The City's Transit Department was awarded $5.6 million in CRRSAA funds in 2021. The funds reimburse operating expenses incurred during fiscal year 2022. As of June 30, 2023 Transit has received their CRRSAA award in full.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023
165 NOTE 15 - OTHER INFORMATION
Note 16. Deficit Fund Equity
The Risk Management Internal Service Fund and High Speed Rail Fund had a deficit net position/fund balances as of June 30, 2023.
The deficit net position in the Risk Management Fund at June 30, 2023 was $227.1 million, an increase of $34.1 million. The increase was due to the City reflecting a Liability for Self-Insurance on its Combining Statement of Net Position in the amount of $230.2 million. This liability grew by $29.6 million between fiscal years 2022 and 2023.
The deficit fund balance in the High Speed Rail Fund at June 30, 2023 was $2.5 million. The deficit net position of this fund at the end of fiscal year 2022 was $2.7 million . The decrease in the deficit net position was $0.2 million.
City management continues to carefully monitor these funds and evaluate strategies for reducing and eliminating these deficit fund equity balances.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 166 NOTE 16 - DEFICIT FUND EQUITY Note 17. Subsequent Events
In compliance with accounting standards, management has evaluated events that have occurred after fiscal year-end to determine if these events are required to be disclosed in the basic financial statements.
A. Bond Ratings
Moody's Investors Service ("Moody's) upgraded the Airport Revenue Bond rating from Baa1 to A3 and maintained a Stable outlook. As justification for the rating action, the agency cited strong enplanement trends coupled with healthy financial metrics and the expectation that those will remain solid.
The most current Airport ratings are as follows:
Rating
Agency
Effective
Date Rating Outlook
Airport Revenue Bonds
Fitch 10/2017 BBB+ Stable
Standard & Poor’s 2/2024 A3 Stable
Moody’s 10/2021 A Stable
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 167 NOTE 17 - SUBSEQUENT EVENTS B. Animal Center Transition
The City of Fresno took control of the Fresno Animal Center on November 30, 2023 to provide animal control services that were previously outsourced to the Fresno Humane Animal Services (FHAS). The City will be responsible for providing animal control services, including but not limited to licensing of dogs, vaccination requirements, animals at large, reporting dog bites, veterinary, and other related services to City residents. As a result of this transition, the City created the Animal Center department and allocated $6.7 million in appropriations out of General City Purpose to support these operations. There will be 76.4 FTE budgeted for the Animal Center department in 2023-2024.
In addition, the Animal Center Department will be comprised of four divisions • Administration- will be tasked with the day-to-date administration functions that include budget, finance, personnel management, policy and procedure development, safety and risk management, licensing, purchasing and procurement, volunteer recruitments, data analytics and transparency reporting, and grant funding opportunities. • Animal Care Operations Division- will provide intake health assessment and vaccination to ensure health of the animal(s) entering the center.
• Community Engagement Division- will be the main point of contact through outreach with the purpose of increasing life-saving outcomes via adoptions, fostering, rescuing transfer programs and transport.
• Veterinary Services Division- veterinary staff will be focused on the physical well-being of the animals in the center and help accelerate the mandatory sterilization prior to adoption.
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CITY OF FRESNO, CALIFORNIA
Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP Budgetary Basis) - General Fund
Fiscal Year Ended June 30, 2023
(in thousands)
Budgeted Amounts Actual
Amounts
Budgetary
Basis
Over
(Under)
Final BudgetOriginal Final
Budgetary Fund Balance, July 1 $ 105,725 $ 108,108 $ 102,908 $ (5,200) Resources (inflows):
Taxes:
Property Taxes 159,673 159,673 166,659 6,986
Sales Taxes 161,666 161,666 125,446 (36,220)
Other Taxes 41,149 41,149 38,319 (2,830)
Franchise Taxes 15,959 15,959 18,303 2,344
Licenses and Permits 14,393 14,393 9,699 (4,694)
Intergovernmental:
State Motor Vehicle In-Lieu 352 352 557 205
Other State Revenue 1,723 2,148 2,162 14
Other Intergovernmental 12,493 12,493 12,373 (120)
Charges for Services:
Charges for Services 35,415 35,415 31,574 (3,841)
Fines and Violations 3,429 3,429 2,393 (1,036)
Use of Money and Property 1,541 1,541 1,953 412
Miscellaneous 22,268 22,268 24,644 2,376
Other Financing Sources:
Transfers from Other Funds 77,526 15,037 18,674 3,637 Total Available for Appropriations 653,312 593,631 555,664 (37,967) Charges to Appropriations (outflows):
General Government:
Mayor and City Council 13,704 14,872 10,811 (4,061) Other General Government 62,898 51,375 38,427 12,949 Public Protection:
Police Department 223,110 222,317 213,442 (8,875)
Fire Department 83,182 82,588 83,100 512
Public Ways & Facilities 48,940 38,865 22,761 (16,104) Culture and Recreation 26,744 24,512 19,919 (4,593) Community Development 55,642 52,726 37,580 (15,146) Capital Outlay 49,113 15,520 3,465 (12,055)
Other Financing Uses:
Transfers to Other Funds 38,284 39,162 36,576 (2,586) Total Charges to Appropriations 601,617 541,937 466,081 (49,959) Less Estimated Attrition Savings — — — —
Excess Resources Over Appropriations $ 51,695 $ 51,694 $ 89,583 $ 11,992 See accompanying notes to the required supplementary information. 171
CITY OF FRESNO, CALIFORNIA
Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP Budgetary Basis) - General Fund
Fiscal Year Ended June 30, 2023 (Continued)
(in thousands)
Explanation of differences between budgetary inflows and outflows and GAAP Revenues and Expenditures:
Sources/Inflows of Resources:
Actual amounts (budgetary basis) available for appropriation from the Budget to Actual Comparison Schedule. $ 555,664
Differences - Budget to GAAP:
The City budgets for taxes, intergovernmental and miscellaneous revenue on the cash basis of accounting, rather than on the modified accrual basis of accounting. 25,085 Interfund reimbursements are not revenues and are expenditures for financial reporting. 2,429 Carryovers are inflows of budgetary resources but are not revenues for financial reporting purposes. (102,908)
Transfers from other funds are inflows of budgetary resources but are not revenues for financial reporting purposes. (18,673)
Nonreciprocal interfund activity is not revenue and is a transfer for financial reporting. (18,409) Total revenues as reported on the Statement of Revenues, Expenditures, and Changes in Fund Balances-Governmental Funds. $ 443,188
Uses/Outflows of Resources:
Actual amounts (budgetary basis) "total charges to appropriations" from the Budget to Actual Comparison Schedule. $ 466,081 Differences - Budget to GAAP:
The City budgets for expenditures on the cash basis of accounting, rather than on the modified accrual basis of accounting. (29,784)
Interfund reimbursements are a reduction of expenditures for financial reporting. (2,429) Pension Obligation bond debt payments and City Hall rent are recognized as transfers out to other funds. (12,893)
Transfers to other funds are outflows of budgetary resources, but are not expenditures for financial reporting purposes. (23,683) Return on capital asset as offset for Advances to Other Funds Capital financing activity additions are expenditures for financial reporting purposes. 5,617 Total charges to appropriations as reported on the Statement of Revenues, Expenditures, and Changes in Fund Balances-Governmental Funds. $ 402,909 See accompanying notes to the required supplementary information. 172
CITY OF FRESNO, CALIFORNIA
Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP Budgetary Basis) - Grants Special Revenue Fund Fiscal Year Ended June 30, 2023
(in thousands)
Budgeted Amounts Actual
Amounts
Budgetary
Basis
Over
(Under)
Final BudgetOriginal Final
Budgetary Fund Balance, July 1 $ 81,665 $ 81,665 $ 28,865 $ (52,800) Resources (inflows):
Intergovernmental:
Federal Grants 88,541 95,902 130,366 34,464
State Grants 74,446 148,588 117,827 (30,761)
Local Support 2,770 2,910 70 (2,840)
Charges for Services 1,629 1,629 1,630 1
Use of Money and Property 1,057 1,057 726 (331)
Miscellaneous — — 4,863 4,863
Other Financing Sources:
Transfers from Other Funds 193 193 11 (182)
Total Available for Appropriations 250,301 331,944 284,358 (47,586) Charges to Appropriations (outflows):
General Government 77,785 57,007 36,570 (20,437)
Public Protection 5,078 27,904 12,739 (15,165)
Public Ways & Facilities 38,088 53,205 22,154 (31,051) Culture and Recreation 3,233 5,378 2,029 (3,349)
Community Development 90,930 191,924 73,124 (118,800) Capital Outlay 48,648 77,239 (76) (77,315)
Other Financing Uses:
Transfers to Other Funds 70,676 3,422 19,204 15,782 Total Charges to Appropriations 334,438 416,079 165,744 (250,335) Excess (Deficit) Resources Over Appropriations $ (84,137) $ (84,135) $ 118,614 $ 202,749 See accompanying notes to the required supplementary information. 173
CITY OF FRESNO, CALIFORNIA
Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP Budgetary Basis) - Grants Special Revenue Fund Fiscal Year Ended June 30, 2023 (Continued)
(in thousands)
Explanation of differences between budgetary inflows and outflows and GAAP Revenues and Expenditures:
Sources/Inflows of Resources:
Actual amounts (budgetary basis) available for appropriation from the Budget to Actual Comparison Schedule. $ 284,359
Differences - Budget to GAAP:
Grant reimbursements are budgeted on the cash basis of accounting rather than on the modified accrual basis of accounting. (32,327)
Transfers from other funds are inflows of budgetary resources but are not revenues for financial reporting purposes. (11)
Interfund reimbursements are not revenues and are expenditures for financial reporting. 483 Carryovers are inflows of budgetary resources but are not revenues for financial reporting purposes. (28,865)
Total revenues as reported on the Statement of Revenues, Expenditures, and Changes in Fund Balances-Governmental Funds. $ 223,639
Uses/Outflows of Resources:
Actual amounts (budgetary basis) "total charges to appropriations" from the Budget to Actual Comparison Schedule. $ 165,744 Differences - budget to GAAP:
The City budgets for expenditures on the cash basis of accounting rather than on the modified accrual basis of accounting. 44,263 Interfund reimbursements are a reduction of expenditures for financial reporting. 483 The issuance of notes receivable are outflows of budgetary resources but are not expenditures for financial reporting purposes. 483 Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes. (19,204) Total charges to appropriations as reported on the Statement of Revenues, Expenditures, and Changes in Fund Balances-Governmental Funds. $ 191,769 See accompanying notes to the required supplementary information. 174
Notes to the Required Supplementary Information
A. Budgetary Data
The City of Fresno (the City) operates under the Strong-Mayor form of government. Under the Strong- Mayor form of government, the Mayor serves as the City’s Chief Executive Officer, appointing and overseeing the City Manager, recommending legislation, and presenting the annual budget to the City Council.
The City adopts annual budgets for all governmental and business-type funds (except Fresno Revitalization Corporation, Financing Authorities and Corporations, and City Debt Service) on the cash basis of accounting plus encumbrances. The budget includes: (1) the programs, projects, services, and activities to be provided during the fiscal year, (2) the estimated resources (inflows) and amounts available for appropriation, and (3) the estimated charges to appropriations. The budget represents a process through which policy decisions are made, implemented, and controlled. The City Charter (the Charter) prohibits expending funds for which there is no legal appropriation.
The budget of the City of Fresno, within the meaning and context of Section No. 1205 of the Charter, must be adopted by resolution of the City Council by June 30 of a given year. The following procedures are used in establishing the budgetary data reflected in the budgetary comparison schedules.
As provided by Section No. 1206 of the Charter, any adjustments in the amounts appropriated for the purposes indicated at the department/fund level are made only upon a motion to amend the resolution adopted by the affirmative votes of at least five City Council members.
B. Budget Development
The preparation of the budget document is the result of a Citywide effort. Each department is presented with an operating base budget that is used as the foundation for building their requests for the operations of their organizations. All one-time expenditure increases are removed, except for those demonstrable and mandatory. A five-year capital budget is required from all departments. The purpose is to give the Mayor and City Council a tool to plan for the future as well as to more realistically reflect the timing of many capital projects that take more than one year to complete.
Departments submit their requests to be analyzed and reviewed by the City’s Budget and Management Studies Division (BMSD). Requests are evaluated based on individual operations, City funding resources, and the goals and strategies identified by each organization related to the impact on performance measures. Recommendations are presented to the Mayor and City Manager in a series of review meetings comprised of the Mayor, Mayor’s Chief of Staff, City Manager, Assistant City Managers, Budget Manager, Department Directors and representatives from each department, and BMSD. Upon final decisions of format and content, the Mayor’s Recommended Budget Document is printed and presented to the City Council for deliberation and adoption.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 175 NOTES TO THE
REQUIRED SUPPLEMENTARY INFORMATION
C. Original Budget
Prior to June 1, the Mayor submits to the City Council a recommended detailed operating budget for the fiscal year commencing July 1. The operating budget includes proposed expenditures and the means of financing them.
Public hearings are conducted to obtain taxpayer comment on the proposed annual budget. The Mayor and his staff analyze, review, and refine the budget submittals.
Prior to July 1, the budget is legally enacted through adoption of a resolution by the City Council.
D. Final Budget
Certain annual appropriations are budgeted on a project or program basis. If such projects or programs are not completed at the end of the fiscal year, unexpended appropriations are carried forward to the following year though either an encumbrance or an amendment to the budget. In certain circumstances, other programs and regular annual appropriations may be carried forward after appropriate approval.
Annually appropriated funds not authorized to be carried forward lapse at the end of the fiscal year.
Appropriations carried forward from the prior year are included in the final budgetary data.
The City Manager is authorized to transfer funds already appropriated within a department's budget within a fund. However, any revisions that alter the total appropriations of a department within a fund must be approved by the City Council. Expenditures may not legally exceed budgeted appropriations at the department level within a fund.
The City adopts an annual budget for all governmental and business-type funds. The Adopted Budget Document is prepared to include all the various changes approved by the City Council. No budgets are legally adopted for Fresno Revitalization Corporation, and Fresno Enhanced Infrastructure Financing District. Budgeted amounts are reported as amended. During the year, several supplementary appropriations were necessary, but were not material in relation to the original appropriations.
E. Budgetary Results Reconciliation
1. Basis Differences
The City’s budgetary process is based upon an accounting basis other than accounting principles generally accepted in the United States (GAAP). The results of operations (actual) are presented in the budget and actual comparison schedule in accordance with the budgetary process (Budget basis) to provide a meaningful comparison with the budget, while the financial statements are presented using the GAAP basis. Loan proceeds, loan repayments, transfers, and interfund reimbursements primarily cause the basis differences.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 176 NOTES TO THE
REQUIRED SUPPLEMENTARY INFORMATION
2. Timing Differences
One of the major differences between the Budget basis and GAAP basis are timing differences.
Timing differences represent transactions that are accounted for in different periods for the Budget basis as opposed to the GAAP basis of reporting. Revenues such as grant revenues recognized on a cash basis are unavailable for GAAP reporting, while various expenditures not recognized on a cash basis have been accrued for GAAP reporting.
Administrative amendments within the same department/fund level may be made without approval of the City Council within written guidelines established by the Chief Administrative Officer/City Manager.
For accounting and auditing convenience, appropriations for capital improvements may be established in two or more different funds for the same capital project.
The objective of budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City Council. Activities of the General Fund and Special Revenue Funds are included in the annual appropriated budget. Project-length financial plans are adopted for certain capital projects. The level of budgetary controls (the level at which expenditures cannot legally exceed the appropriated amount) is maintained at the department level by major expenditure category. Purchase orders that result in an overrun (encumbrance exceeding available appropriations) of department-level balances by object are not released until additional appropriations are made available. Open encumbrances at June 30 are reported as restricted, committed, or assigned fund balance in the governmental funds Balance Sheet.
The City assumed an attrition savings amount of $0.0 million in its fiscal year 2023 budget. The amount was in recognition of the fact that not all positions budgeted in the General Fund are filled during the entire fiscal year. The attrition savings was established as a negative appropriation in each General Fund department's Personnel Services budget. However, no actual savings accrued against the attrition savings account. For purposes of the Budget-to-Actual report in the Required Supplementary Information, the difference between the negative appropriation and the actual lack of activity results in the account appearing to be over-budget.
Actual Transfers from Other Funds were $ 3.6 million higher than budgeted levels in fiscal year 2023.
The overage was mostly due to transfers from the CARES Grant fund for eligible expenditures.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 177 NOTES TO THE
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Investment Returns
PENSION TRUST FUNDS
EMPLOYEES, FIRE AND POLICE RETIREMENT SYSTEMS
Last Ten Fiscal Years
Fiscal Year
Ending June 30
Annual Money-Weighted Rate of Return
Gross of Investment Expenses
Annual Money-Weighted Rate of Return
Net of Investment Expense
2023 9.74% 9.52%
2022 (7.12)% (7.28)%
2021 30.85% 30.43%
2020 1.61% 1.26%
2019 5.54% 5.20%
2018 8.93% 8.57%
2017 17.73% 14.35%
2016 0.82% 0.53%
2015 3.32% 2.93%
2014 17.61% 17.16%
The Schedule of Investment Returns above shows the annual money-weighted rate of return on the assets of the Systems, both gross and net of investment expense for ten fiscal years ( 2014-2023). The money-weighted rate of return expresses investment performance adjusted for timing of cash flows and the changing amounts actually invested. These returns differ slightly from the time-weighted rate of returns calculated and reported by the Systems' custodian, Northern Trust, and as independently reported by the Systems' investment consulting firm, NEPC, LLC. The Systems' custodian and investment consulting firm must use time-weighted returns as opposed to money-weighted returns in order to meet Global Investment Performance Standards for the purposes of effectively evaluating and reporting the performance of the Systems' investment managers.
The time-weighted return method is a measure of the compound rate of return of a portfolio over a stated period of time. It requires a set of sub- period returns to be calculated whenever there is an external cash flow, such as a deposit or withdrawal from the portfolio. In essence, it calculates the geometric total and mean return as opposed to the arithmetic total and mean return. This method does not include or have any distortions created when money is deposited or withdrawn from a portfolio. This is in contrast to money-weighted returns.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 178
Schedule of Changes in the Net Pension Liability (Asset) and Related Ratios
PENSION TRUST FUNDS
FIRE AND POLICE RETIREMENT SYSTEMS
Schedule of Changes in the Net Pension Liability (Asset) and Related Ratios(2) Change in Net Pension Liability (in thousands)
For the Fiscal Year Ended: 6/30/2023 6/30/2022 6/30/2021 6/30/2020 6/30/2019 Reporting Date: 6/30/2023 6/30/2022 6/30/2021 6/30/2020 6/30/2019 Measurement Date: 6/30/2022 6/30/2021 6/30/2020 6/30/2019 6/30/2018 Total Pension Liability
Service Cost $ 32,382 $ 37,563 $ 37,619 $ 33,211 $ 30,298 Interest $ 96,311 109,740 105,570 100,609 95,274
Differences between expected &
actual experience $ 40,833 (5,449) 260 (7,067) 6,722 Changes of assumptions $ (4,262) — (14,745) 55,856 2,891 Benefit payments, including refunds (71,884) (70,963) (67,202) (65,962) (63,071) Net Change in Total Pension
Liability 93,380 70,891 61,502 116,647 72,114
Total Pension Liability - Beginning 1,379,433 1,565,631 1,504,129 1,387,482 1,315,368 Total Pension Liability - Ending (a)* $ 1,472,814 $ 1,636,522 $ 1,565,631 $ 1,504,129 $ 1,387,482 Plan Fiduciary Net Position
Contributions - employer $ 22,017 $ 26,315 $ 22,324 $ 20,604 $ 19,697 Contributions - employee $ 15,493 10,256 10,012 9,597 8,964 Net Investment Income $ (132,625) 491,744 24,206 82,872 129,163 Benefit Payments including Refunds,
PRSB $ (71,884) (70,963) (67,202) (65,962) (63,071) Administrative & Professional
Expense (2,050) (2,282) (1,839) (1,897) (1,710)
Net Change in Plan Fiduciary Net
Position (169,050) 455,070 (12,499) 45,214 93,043
Plan Fiduciary Net Position - Beginning 1,731,237 1,635,301 1,647,800 1,602,586 1,509,543 Plan Fiduciary Net Position - Ending (b) $ 1,562,187 $ 2,090,371 $ 1,635,301 $ 1,647,800 $ 1,602,586 Plan Net Pension Liability (Asset) -
Ending (a) - (b) $ (89,374) $ (453,849) $ (69,670) $ (143,671) $ (215,104) Plan Fiduciary Net Position as a
percentage of Total Pension Liability 106.07 % 127.73 % 104.45 % 109.55 % 115.50 % Covered Payroll (1) $ 164,642 $ 115,341 $ 113,843 $ 109,803 $ 103,934 Plan Net Pension Liability as a
percentage of covered payroll (54.28) % (393.48) % (61.20) % (130.84) % (206.96) % * Data above is provided in accordance with provisions of GASB Statement No. 68 for determining Total Pension Liability which for financial reporting purposes uses a version of the Entry Age method whereby the Actuarial Accrued Liability is fully accrued when a member either enters DROP or is expected to elect DROP. (1) Covered payroll represents payroll in which contributions to the Systems are based. (2) Ten year data will be presented in future years as information becomes available.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 179
PENSION TRUST FUNDS
FIRE AND POLICE RETIREMENT SYSTEMS
Schedule of Changes in the Net Pension Liability (Asset) and Related Ratios (cont) Change in Net Pension Liability (in thousands)
6/30/2018 6/30/2017 6/30/2016 6/30/2015 For the Fiscal Year Ended:
6/30/2018 6/30/2017 6/30/2016 6/30/2015 Reporting Date:
6/30/2017 6/30/2016 6/30/2015 6/30/2014 Measurement Date:
Total Pension Liability
$ 28,838 $ 26,569 $ 26,518 $ 28,058 Service Cost
90,185 88,363 86,771 86,092 Interest
10,896 (42,952) (36,528) (49,879)
Differences between expected &
actual experience
— 49,427 — — Changes of assumptions
(59,273) (56,581) (54,612) (52,720) Benefit payments, including refunds 70,646 64,826 22,149 11,551
Net Change in Total Pension
Liability
1,244,722 1,179,896 1,157,747 1,146,196 Total Pension Liability - Beginning $ 1,315,368 $ 1,244,722 $ 1,179,896 $ 1,157,747 Total Pension Liability - Ending (a)* Plan Fiduciary Net Position
$ 18,543 $ 18,738 $ 18,967 $ 18,575 Contributions - employer 8,169 7,748 7,385 7,294 Contributions - employee
192,315 6,063 39,164 201,838 Net Investment Income
(59,273) (56,581) (54,612) (52,720)
Benefit Payments including Refunds,
PRSB
(1,500) (1,397) (1,108) (1,119)
Administrative & Professional
Expense
158,254 (25,429) 9,796 173,868
Net Change in Plan Fiduciary Net
Position
1,351,289 1,376,718 1,366,922 1,193,054 Plan Fiduciary Net Position - Beginning $ 1,509,543 $ 1,351,289 $ 1,376,718 $ 1,366,922 Plan Fiduciary Net Position - Ending (b) $ (194,175) $ (106,567) $ (196,822) $ (209,175)
Plan Net Pension Liability (Asset) -
Ending (a) - (b)
114.76 % 108.56 % 116.68 % 118.07 %
Plan Fiduciary Net Position as a
percentage of Total Pension Liability
$ 97,369 $ 94,266 $ 91,075 $ 91,721 Covered Payroll (1) (199.42) % (113.05) % (216.11) % (228.06) %
Plan Net Pension Liability as a
percentage of covered payroll
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 180
PENSION TRUST FUNDS
EMPLOYEES RETIREMENT SYSTEMS
Schedule of Changes in the Net Pension Liability (Asset) and Related Ratios(2) Change in Net Pension Liability (in thousands)
For the Fiscal Year Ended: 6/30/2023 6/30/2022 6/30/2021 6/30/2020 6/30/2019 Reporting Date: 6/30/2023 6/30/2022 6/30/2021 6/30/2020 6/30/2019 Measurement Date: 6/30/2022 6/30/2021 6/30/2020 6/30/2019 6/30/2018 Total Pension Liability
Service Cost $ 32,382 $ 30,993 $ 28,762 $ 23,509 $ 21,275 Interest $ 96,311 93,358 89,222 86,110 82,833
Differences between expected &
actual experience $ 40,833 (12,980) 5,748 (446) (4,164) Changes of assumptions $ (4,262) — — 35,773 2,939
Benefit payments, including refunds (71,884) (69,246) (64,519) (62,144) (57,666) Net Change in Total Pension
Liability 93,380 42,125 59,213 82,802 45,217
Total Pension Liability - Beginning 1,379,433 1,337,308 1,278,096 1,195,294 1,150,077 Total Pension Liability - Ending (a)* $ 1,472,814 $ 1,379,433 $ 1,337,309 $ 1,278,096 $ 1,195,294 Plan Fiduciary Net Position
Contributions - employer $ 22,017 $ 20,144 $ 16,554 $ 14,627 $ 14,609 Contributions - employee $ 15,493 13,750 11,028 10,515 10,330 Net Investment Income $ (132,625) 407,811 20,109 69,389 108,915 Benefit Payments including Refunds,
PRSB $ (71,884) (69,246) (64,519) (62,144) (57,666) Administrative & Professional
Expense (2,050) (2,058) (1,749) (1,663) (1,619)
Net Change in Plan Fiduciary Net
Position (169,050) 370,401 (18,577) 30,724 74,569
Plan Fiduciary Net Position - Beginning 1,731,237 1,360,838 1,379,415 1,348,691 1,274,122 Plan Fiduciary Net Position - Ending (b) $ 1,562,187 $ 1,731,239 $ 1,360,838 $ 1,379,415 $ 1,348,691 Plan Net Pension Liability (Asset) -
Ending (a) - (b) $ (89,374) $ (351,806) $ (23,529) $ (101,319) $ (153,397) Plan Fiduciary Net Position as a
percentage of Total Pension Liability 106.07 % 125.50 % 101.76 % 107.93 % 112.83 % Covered Payroll (1) $ 164,642 $ 154,031 $ 149,403 $ 138,396 $ 128,461 Plan Net Pension Liability as a
percentage of covered payroll (54.28) % (228.40) % (15.75) % (73.21) % (119.41) % * Data above is provided in accordance with provisions of GASB Statement No. 68 for determining Total Pension Liability which for financial reporting purposes uses a version of the Entry Age method whereby the Actuarial Accrued Liability is fully accrued when a member either enters DROP or is expected to elect DROP. (1) Covered payroll represents payroll in which contributions to the Systems are based. (2) Ten year data will be presented in future years as information becomes available.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 181
PENSION TRUST FUNDS
EMPLOYEES RETIREMENT SYSTEMS
Schedule of Changes in the Net Pension Liability (Asset) and Related Ratios (cont) Change in Net Pension Liability (in thousands)
6/30/2018 6/30/2017 6/30/2016 6/30/2015 For the Fiscal Year Ended:
6/30/2018 6/30/2017 6/30/2016 6/30/2015 Reporting Date:
6/30/2017 6/30/2016 6/30/2015 6/30/2014 Measurement Date:
Total Pension Liability
$ 18,885 $ 18,687 $ 18,476 $ 19,342 Service Cost
79,266 79,763 78,212 77,010 Interest
5,263 (24,394) (24,691) (29,889)
Differences between expected &
actual experience
— 9,612 — — Changes of assumptions
(55,550) (52,529) (50,546) (48,581) Benefit payments, including refunds 47,864 31,139 21,451 17,882
Net Change in Total Pension
Liability
1,102,213 1,071,074 1,049,623 1,031,741 Total Pension Liability - Beginning $ 1,150,077 $ 1,102,213 $ 1,071,074 $ 1,049,623 Total Pension Liability - Ending (a)* Plan Fiduciary Net Position
$ 15,205 $ 13,060 $ 12,327 $ 11,440 Contributions - employer 10,181 9,098 8,750 7,945 Contributions - employee
162,374 5,089 33,310 172,773 Net Investment Income
(55,550) (52,529) (50,546) (48,581)
Benefit Payments including Refunds,
PRSB
(1,387) (1,346) (1,071) (1,086)
Administrative & Professional
Expense
130,823 (26,628) 2,770 142,491
Net Change in Plan Fiduciary Net
Position
1,143,299 1,169,927 1,167,157 1,024,666 Plan Fiduciary Net Position - Beginning $ 1,274,122 $ 1,143,299 $ 1,169,927 $ 1,167,157 Plan Fiduciary Net Position - Ending (b) $ (124,045) $ (41,086) $ (98,853) $ (117,534)
Plan Net Pension Liability (Asset) -
Ending (a) - (b)
110.79 % 103.73 % 109.23 % 111.20 %
Plan Fiduciary Net Position as a
percentage of Total Pension Liability
$ 119,007 $ 108,541 $ 105,820 $ 103,597 Covered Payroll (1) (104.23) % (37.85) % (93.42) % (113.45) %
Plan Net Pension Liability as a
percentage of covered payroll
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 182
Schedule of Employer Contribution - Pension Trust Funds
FIRE AND POLICE RETIREMENT SYSTEM
Schedule of Employer Contributions
Last Ten Fiscal Years
(in thousands)
Fiscal Year
Ending
June 30
Actuarially
Determined
Contribution
(ADC)1
Contributions
in Relation to
the ADC
Contribution
Deficiency
(Excess)
Covered
Payroll
Contributions as a
Percentage of
Covered Payroll
2023 $ 27,068 $ 27,068 $ — $ 134,252 20.16%
2022 $ 27,556 $ 27,556 $ — $ 122,634 22.47%
2021 $ 26,315 $ 26,315 $ — $ 115,341 22.81%
2020 22,324 22,324 — 113,843 19.61%
2019 20,604 20,604 — 109,803 18.76%
2018 19,697 19,697 — 103,934 18.95%
2017 18,543 18,543 — 97,369 19.04%
2016 18,738 18,738 — 94,266 19.88%
2015 18,967 18,967 — 91,075 20.83%
2014 18,575 18,575 — 91,721 20.25%
EMPLOYEES RETIREMENT SYSTEM
Schedule of Employer Contributions
Last Ten Fiscal Years
(in thousands)
Fiscal Year
Ending
June 30
Actuarially
Determined
Contribution
(ADC)1
Contributions
in Relation to
the ADC
Contribution
Deficiency
(Excess)
Covered
Payroll
Contributions as
a Percentage of
Covered Payroll
2023 $ 22,236 $ 22,236 $ — $ 186,219 11.94%
2022 $ 22,017 $ 22,017 $ — $ 164,642 13.37%
2021 $ 20,144 $ 20,144 $ — $ 154,031 13.08%
2020 16,554 16,554 — 149,403 11.08%
2019 14,627 14,627 — 138,396 10.57%
2018 14,609 14,609 — 128,461 11.37%
2017 15,205 15,205 — 119,007 12.78%
2016 13,060 13,060 — 108,541 12.03%
2015 12,327 12,327 — 105,820 11.65%
2014 11,440 11,440 — 103,597 11.04%
1 Actuarially determined contribution rates are calculated as of June 30, two years prior to the end of the fiscal year in which contributions are reported. As such, the actuarial valuation dated June 30, 2020, will impact the contribution rate for the fiscal year ended June 30, 2022.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 183
SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY AND RELATED RATIOS For Fiscal Year Ending June 30
(in thousands)
2019 2020 2021 2022 2023
Net OPEB Liability Beginning of Year $ 92,820 $ 113,700 $ 148,672 $ 152,605 $ 99,761 Changes for the Year:
Service Cost $ 5,777 $ 10,885 $ 10,052 $ 6,603 $ 6,908
Interest 3,688 3,012 3,045 3,221 3,946
Difference between Actual and
Expected Experience — (7,800) — (19,028) —
Assumption Changes 30,935 (6,622) (40,728) 2,444
Benefit Payments (1,990,681) (2,061) (2,542) (2,912) (2,078) Net Changes 7,474 34,971 3,933 (52,844) 11,220
Net OPEB Liability End of Year $ 100,294 $ 148,671 $ 152,605 $ 99,761 $ 110,981 Covered-Employee Payroll as of
December 311 $ 236,134 $ 250,860 $ 257,132 $ 294,493 $ 304,801 Net OPEB Liability as a percentage of
covered-employee payroll 48.15% 59.26% 59.35% 33.88% 36.41% Notes to Schedule
Historical information is required only for measurement periods for which GASB Statement No. 75 is applicable.
Future years information will be displayed up to 10 years as information becomes available.
The City does not accumulate assets in a dedicated trust, or equivalent arrangement, for the purpose of funding its retiree healthcare obligation. Therefore, the actuarial value of plan assets is zero. 1Covered-employee payroll used in the most recent valuation was calculated based on mid-year, as it was considered representative of the payroll during the fiscal year.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 184
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CITY OF FRESNO, CALIFORNIA
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2023
(in thousands)
Special Revenue
High
Speed
Rail
Fresno
Revitalization
Corporation
Special
Gas Tax Measure C Measure P
Community
Services
UGM
Impact Fees
Assets
Cash and Investments $ — $ 718 $ 15,303 $ 23,901 $ 47,819 $ 5,500 $ 65,425 Receivables, Net — — 148 272 306 856 478
Grants Receivable 405 — — 3,569 — 5,098 —
Intergovernmental Receivables — — 3,322 12,722 8,134 23 — Due From Other Funds — — 2,195 339 1,619 244 1,653 Advances to Other Funds — — — — — — —
Property Held for Resale — — — — — — —
Restricted Cash — — — — — 1,776 —
Loans, Notes, Leases, Other
Receivables, Net — — — — — — —
Total Assets $ 405 $ 718 $ 20,968 $ 40,803 $ 57,878 $ 13,497 $ 67,556 Liabilities
Accrued Liabilities $ 56 $ 105 $ 2,210 $ 2,996 $ 1,307 $ 5,160 $ 427 Unearned Revenue — — — — — 495 —
Due to Other Funds 2,531 — 97 115 951 54 —
Advances From Other Funds — — — — — — 1,718
Deposits From Others — — — — — 31 —
Total Liabilities 2,587 105 2,307 3,111 2,258 5,740 2,145 Deferred Inflows of Resources
Unavailable Revenue-Other 366 — — 3,317 — 2,804 — Total Deferred Inflows of Resources 366 — — 3,317 — 2,804 — Fund Balances
Restricted 39 613 18,661 34,375 55,620 4,953 65,411 Assigned — — — — — — —
Unassigned (Deficit) (2,587) — — — — — —
Total Fund Balances (2,548) 613 18,661 34,375 55,620 4,953 65,411 Total Liabilities, Deferred Inflows of
Resources and Fund Balances $ 405 $ 718 $ 20,968 $ 40,803 $ 57,878 $ 13,497 $ 67,556 187
Debt Service
Capital
Projects
Fresno
E.I.F.D.
Low and
Moderate
Income
Housing
Special
Assessments City Debt
Financing
Authorities
and
Corporations
City
Combined
Total
Nonmajor
Governmental
Funds
Assets
$ 74 $ 7,237 $ 14,420 $ 19 $ 2,273 $ 31,972 $ 214,661 Cash and Investments — — 107 11 16 240 2,434 Receivables, Net
— — — — — — 9,072 Grants Receivable
— — 109 — — — 24,310 Intergovernmental Receivables — — 520 — — 37 6,607 Due From Other Funds
— — — — — — — Advances to Other Funds
— 3,600 — — — — 3,600 Property Held for Resale
— — — 11 161 — 1,948 Restricted Cash
— 23,781 — — — — 23,781
Loans, Notes, Leases, Other
Receivables, Net
$ 74 $ 34,618 $ 15,156 $ 41 $ 2,450 $ 32,249 $ 286,413 Total Assets Liabilities
$ 3 $ — $ 333 $ — $ — $ 1,188 $ 13,785 Accrued Liabilities — — — — — — 495 Unearned Revenue
— — 35 — — — 3,783 Due to Other Funds
— — — — — — 1,718 Advances From Other Funds
— — — — — — 31 Deposits From Others
3 — 368 — — 1,188 19,812 Total Liabilities
Deferred Inflows of Resources
— — — — — — 6,487 Unavailable Revenue-Other
— — — — — — 6,487
Total Deferred Inflows of
Resources
Fund Balances
71 34,618 14,788 41 2,450 — 231,640 Restricted
— — — — — 31,061 31,061 Assigned
— — — — — — (2,587) Unassigned (Deficit)
71 34,618 14,788 41 2,450 31,061 260,114 Total Fund Balances $ 74 $ 34,618 $ 15,156 $ 41 $ 2,450 $ 32,249 $ 286,413
Total Liabilities, Deferred Inflows of
Resources and Fund Balances
188
CITY OF FRESNO, CALIFORNIA
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental FundsFiscal Year Ended June 30,
2023
(in thousands)
Special Revenue
High Speed
Rail
Fresno
Revitalization
Corporation
Special
Gas Tax Measure C Measure P
Community
Services
UGM
Impact
Fees
Revenues
Taxes $ — $ — $ — $ 27,287 $ 45,712 $ 2,454 $ —
Intergovernmental 1,886 — 26,427 — — 2,752 —
Charges for Services 965 217 — — — 17,304 14,331 Use of Money and Property — — 108 409 671 589 (334) Miscellaneous 1 — (3) 583 28 1 3
Total Revenues 2,852 217 26,532 28,279 46,411 23,100 14,000 Expenditures
Current:
General Government — — — — 81 678 —
Public Protection — — — — — 2,299 75
Public Ways and Facilities 1,214 — 17,047 13,414 1,296 4,175 2,275 Culture and Recreation — — — — 17,713 1,156 (449) Community Development — 231 — 186 — 1,884 —
Capital Outlay 1,508 — 6,812 5,063 2,888 18,597 1,955 Debt Service:
Principal — — — — — — —
Interest — — — — — — 61
Total Expenditures 2,722 231 23,859 18,663 21,978 28,789 3,917 Excess (Deficiency) of Revenues
Over (Under) Expenditures 130 (14) 2,673 9,616 24,433 (5,689) 10,083 Other Financing Sources (Uses)
Transfers In — — — — — 143 3,127
Transfers Out — — (349) (789) (16) (702) (1,932) Total Other Financing
Sources (Uses) — — (349) (789) (16) (559) 1,195
Net Change in Fund Balances 130 (14) 2,324 8,827 24,417 (6,248) 11,278 Fund Balances (Deficit) - Beginning (2,678) 627 16,337 25,548 31,203 11,201 54,133 Cumulative Effect of Accounting
Change — — — — — — —
Fund Balances (Deficit) - Beginning,
Restated (2,678) 627 16,337 25,548 31,203 11,201 54,133 Fund Balances (Deficit) - Ending $ (2,548) $ 613 $ 18,661 $ 34,375 $ 55,620 $ 4,953 $ 65,411 189
Debt Service
Capital
Projects
Fresno
E.I.F.D.
Low and
Moderate
Income
Housing
Special
Assessments City Debt
Financing
Authorities
and
Corporations
City
Combined
Total
Nonmajor
Governmental
Funds
Revenues
$ 80 $ — $ — $ — $ — $ — $ 75,533 Taxes
— 21 — — — — 31,086 Intergovernmental
— — 8,923 — — — 41,740 Charges for Services
(5) 14 20 31 68 38 1,609 Use of Money and Property — — 5 — — 2,251 2,869 Miscellaneous
75 35 8,948 31 68 2,289 152,837 Total Revenues
Expenditures
Current:
— — — 6 12 151 928 General Government
— — — — 2 582 2,958 Public Protection
4 — 6,845 4 — 117 46,391 Public Ways and Facilities — — — — 2 91 18,513 Culture and Recreation
— 271 — — — (1) 2,571 Community Development
— — 522 — — 2,050 39,395 Capital Outlay
Debt Service:
— — — 11,825 9,225 — 21,050 Principal
— — — 5,854 5,024 — 10,939 Interest
4 271 7,367 17,689 14,265 2,990 142,745 Total Expenditures 71 (236) 1,581 (17,658) (14,197) (701) 10,092
Excess (Deficiency) of Revenues
Over (Under) Expenditures
Other Financing Sources (Uses)
— 467 — 17,689 13,744 1,318 36,488 Transfers In
— — (752) — (2,107) (23) (6,670) Transfers Out
— 467 (752) 17,689 11,637 1,295 29,818
Total Other Financing
Sources (Uses)
71 231 829 31 (2,560) 594 39,910 Net Change in Fund Balances — 33,750 13,959 10 5,010 30,467 219,567 Fund Balances (Deficit) - Beginning — 637 — — — — 637
Cumulative Effect of Accounting
Change
— 34,387 13,959 10 5,010 30,467 220,204
Fund Balances (Deficit) - Beginning,
Restated
$ 71 $ 34,618 $ 14,788 $ 41 $ 2,450 $ 31,061 $ 260,114 Fund Balances (Deficit) - Ending 190
CITY OF FRESNO, CALIFORNIA
Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP Budgetary Basis) - High Speed Rail - Special Revenue Fund Fiscal Year Ended June 30, 2023
(in thousands)
Budgeted Amounts Actual
Amounts
Budgetary
Basis
Over
(Under)
Final Budget
Budget
To GAAP
Reconciliation
Actual
Amounts
GAAP
BasisOriginal Final
Budgetary Fund Balance, July 1 $ (3,679) $ (3,679) $ (3,726) $ (47) $ 3,726 $ — Resources (inflows):
Intergovernmental 2,481 2,895 1,919 (976) (33) 1,886 Charges for Services 680 1,380 965 (415) — 965
Use of Money and Property (45) (45) (9) 36 9 —
Miscellaneous — — — — 1 1
Other Financing Sources:
Transfers from Other Funds 46 46 — (46) — —
Total Available
for Appropriations (517) 597 (851) (1,448) 3,703 2,852 Charges to Appropriations
(outflows):
Public Ways and Facilities 1,055 1,755 1,362 (393) (148) 1,214 Community Development — — — — — —
Capital Outlay — 414 334 (80) 1,174 1,508
Other Financing Uses:
Transfers to Other Funds — — — — — —
Total Charges
to Appropriations 1,055 2,169 1,696 (473) 1,026 2,722 Excess (Deficit) Resources
Over (Under) Appropriations $ (1,572) $ (1,572) $ (2,547) $ (975) $ 2,677 $ 130 191
CITY OF FRESNO, CALIFORNIA
Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP Budgetary Basis) - Special Gas Tax - Special Revenue Fund Fiscal Year Ended June 30, 2023
(in thousands)
Budgeted Amounts Actual
Amounts
Budgetary
Basis
Over
(Under)
Final Budget
Budget
To GAAP
Reconciliation
Actual
Amounts
GAAP
BasisOriginal Final
Budgetary Fund Balance, July 1 $ 7,631 $ 7,798 $ 10,313 $ 2,515 $ (10,313) $ — Resources (inflows):
Taxes 24,161 24,161 25,096 935 (25,096) —
Intergovernmental — — — — 26,427 26,427
Use of Money and Property 171 170 69 (101) 39 108 Miscellaneous 142 142 423 281 (426) (3)
Other Financing Sources:
Transfers From Other Funds — — — — — —
Total Available
for Appropriations 32,105 32,271 35,901 3,630 (9,369) 26,532 Charges to Appropriations
(outflows):
Public Ways and Facilities 22,240 22,498 19,483 (3,015) (2,436) 17,047 Capital Outlay 8,431 8,341 2,481 (5,860) 4,331 6,812 Other Financing Uses:
Transfers to Other Funds — — 200 200 149 349
Total Charges
to Appropriations 30,671 30,839 22,164 (8,675) 2,044 24,208 Excess (Deficit) Resources
Over (Under) Appropriations $ 1,434 $ 1,432 $ 13,737 $ 12,305 $ (11,413) $ 2,324 192
CITY OF FRESNO, CALIFORNIA
Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP Budgetary Basis) - Measure C - Special Revenue Fund Fiscal Year Ended June 30, 2023
(in thousands)
Budgeted Amounts Actual
Amounts
Budgetary
Basis
Over
(Under)
Final Budget
Budget
To GAAP
Reconciliation
Actual
Amounts
GAAP
BasisOriginal Final
Budgetary Fund Balance, July 1 $ 3,267 $ 3,317 $ 6,799 $ 3,482 $ (6,799) $ — Resources (inflows):
Taxes 22,176 22,177 20,808 (1,369) 6,479 27,287
Use of Money and Property 199 199 91 (108) 318 409 Miscellaneous 1,411 1,411 808 (603) (225) 583
Other Financing Sources:
Transfers from Other Funds 16 16 — (16) — —
Total Available
For Appropriations 27,069 27,120 28,506 1,386 (227) 28,279 Charges to Appropriations
(outflows):
Public Ways and Facilities 24,630 24,566 11,976 (12,590) 1,438 13,414 Community Development — — — — — 186
Capital Outlay 30,974 31,239 3,526 (27,713) 1,537 5,063 Other Financing Uses:
Transfers to Other Funds 175 175 600 425 189 789
Total Charges
to Appropriations 55,779 55,980 16,102 (39,878) 3,164 19,452 Excess (Deficit) Resources
Over (Under) Appropriations $ (28,710) $ (28,860) $ 12,404 $ 41,264 $ (3,391) $ 8,827 193
CITY OF FRESNO, CALIFORNIA
Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP Budgetary Basis) - Measure P - Special Revenue Fund Fiscal Year Ended June 30, 2023
(in thousands)
Budgeted Amounts Actual
Amounts
Budgetary
Basis
Over
(Under)
Final Budget
Budget
To GAAP
Reconciliation
Actual
Amounts
GAAP
BasisOriginal Final
Budgetary Fund Balance, July 1 $ 16,509 $ 16,509 $ 21,859 $ 5,350 $ (21,859) $ — Resources (inflows):
Taxes 58,344 58,344 45,089 (13,255) 623 45,712
Use of Money and Property 15 15 106 91 565 671
Miscellaneous — — 38 38 (10) 28
Other Financing Sources:
Transfers from Other Funds — — — — — —
Total Available
For Appropriations 74,868 74,868 67,092 (7,776) (20,681) 46,411 Charges to Appropriations
(outflows):
General Government 55 55 28 (27) 53 81
Public Ways and Facilities 6,821 6,821 1,004 (5,817) 292 1,296 Culture and Recreation 30,532 31,911 16,680 (15,231) 1,033 17,713 Capital Outlay 26,111 24,732 2,425 (22,307) 463 2,888 Other Financing Uses:
Transfers to Other Funds — — — — 16 16
Total Charges
to Appropriations 63,519 63,519 20,137 (43,382) 1,857 21,994 Excess (Deficit) Resources
Over (Under) Appropriations $ 11,349 $ 11,349 $ 46,955 $ 35,606 $ (22,538) $ 24,417 194
CITY OF FRESNO, CALIFORNIA
Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP Budgetary Basis) - Community Services - Special Revenue Fund Fiscal Year Ended June 30, 2023
(in thousands)
Budgeted Amounts Actual
Amounts
Budgetary
Basis
Over
(Under)
Final Budget
Budget
to GAAP
Reconciliation
Actual
Amounts
GAAP
BasisOriginal Final
Budgetary Fund Balance, July 1 $ (21,727) $ (21,560) $ (13,670) $ 7,890 $ 13,670 $ — Resources (inflows):
Taxes 4,541 4,541 2,454 (2,087) — 2,454
Intergovernmental 4,517 4,518 3,060 (1,458) (308) 2,752 Charges for Services 6,761 6,796 14,112 7,316 3,192 17,304 Use of Money and Property 253 253 318 65 271 589
Miscellaneous 4 4 1 (3) — 1
Other Financing Sources:
Transfers from Other Funds 493 493 141 (352) 2 143 Total Available
For Appropriations (5,158) (4,955) 6,416 11,371 16,827 23,243 Charges to Appropriations
(outflows):
General Government 750 750 678 (72) — 678
Public Protection 3,266 3,479 2,589 (890) (290) 2,299 Public Ways and Facilities 5,791 5,791 1,226 (4,565) 2,949 4,175 Culture and Recreation 1,734 1,734 1,010 (724) 146 1,156 Community Development 3,801 3,801 1,884 (1,917) — 1,884 Capital Outlay 5,722 5,711 56 (5,655) 18,541 18,597 Other Financing Uses:
Transfers to Other Funds 630 630 634 4 68 702
Total Charges
to Appropriations 21,694 21,896 8,077 (13,819) 21,414 29,491 Excess (Deficit) Resources
Over (Under) Appropriations $ (26,852) $ (26,851) $ (1,661) $ 25,190 $ (4,587) $ (6,248) 195
CITY OF FRESNO, CALIFORNIA
Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP Budgetary Basis) - UGM Impact Fees - Special Revenue Fund Fiscal Year Ended June 30, 2023
(in thousands)
Budgeted Amounts Actual
Amounts
Budgetary
Basis
Over
(Under)
Final Budget
Budget
To GAAP
Reconciliation
Actual
Amounts
GAAP
BasisOriginal Final
Budgetary Fund Balance, July 1 $ 50,630 $ 51,117 $ 56,178 $ 5,061 $ (56,178) $ — Resources (inflows):
Charges for Services 19,558 19,558 14,711 (4,847) (380) 14,331 Miscellaneous (54) (54) 57 3
Use of Money and Property 552 552 239 (313) (573) (334) Other Financing Sources:
Transfers from Other Funds 32 32 3,207 3,175 (80) 3,127 Total Available
for Appropriations 70,772 71,259 74,281 3,022 (57,154) 17,127 Charges to Appropriations
(outflows):
Public Protection — — — — 75 75
Culture and Recreation — — — — (449) (449)
Public Ways and Facilities 13,771 12,892 2,263 (10,629) 12 2,275 Capital Outlay 18,951 20,205 1,149 (19,056) 806 1,955 Debt Service
Interest — — — — 61 61
Other Financing Uses:
Transfers to Other Funds 3,790 3,851 2,783 (1,068) (851) 1,932 Total Charges
to Appropriations 36,512 36,948 6,195 (30,753) (346) 5,849 Excess (Deficit) Resources
Over (Under) Appropriations $ 34,260 $ 34,311 $ 68,086 $ 33,775 $ (56,808) $ 11,278 196
CITY OF FRESNO, CALIFORNIA
Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP Budgetary Basis) - Low and Moderate Income Housing - Special Revenue Fund Fiscal Year Ended June 30, 2023
(in thousands)
Budgeted Amounts Actual
Amounts
Budgetary
Basis
Over
(Under)
Final Budget
Budget
To GAAP
Reconciliation
Actual
Amounts
GAAP
BasisOriginal
Budgetary Fund Balance, July 1 $ — $ — $ — $ — $ —
Resources (inflows):
Intergovernmental 21 21 — — 21
Use of Money and Property 534 14 (520) — 14
Other Financing Sources:
Transfers from Other Funds 830 467 (363) — 467
Total Available
for Appropriations 1,385 502 (883) — 502
Charges to Appropriations (outflows):
General Government 217 — (217) — —
Community Development 30 271 241 — 271
Total Charges
to Appropriations 247 271 24,000 — 271
Excess (Deficit) Resources
Over (Under) Appropriations $ 1,138 $ 231 $ (907) $ — $ 231 197
CITY OF FRESNO, CALIFORNIA
Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP Budgetary Basis) - Special Assessments - Special Revenue Fund Fiscal Year Ended June 30, 2023
(in thousands)
Budgeted Amounts Actual
Amounts
Budgetary
Basis
Over
(Under)
Final Budget
Budget
To GAAP
Reconciliation
Actual
Amounts
GAAP
BasisOriginal Final
Budgetary Fund Balance, July 1 $ 12,693 $ 12,693 $ 14,486 $ 1,793 $ (14,486) $ — Resources (inflows):
Charges for Services 6,687 6,687 8,923 2,236 — 8,923 Use of Money and Property 206 206 58 (148) (38) 20 Miscellaneous 3 3 5 2 — 5
Other Financing Sources:
Transfers from Other Funds 363 363 — (363) — —
Total Available
for Appropriations 19,952 19,952 23,472 3,520 (14,524) 8,948 Charges to Appropriations
(outflows):
Public Ways and Facilities 10,714 10,714 7,255 (3,459) (410) 6,845 Capital Outlay 1,826 1,826 498 (1,328) 24 522
Other Financing Uses:
Transfers to Other Funds 387 387 700 313 52 752
Total Charges
to Appropriations 12,927 12,927 8,453 (4,474) (334) 8,119 Excess (Deficit) Resources
Over (Under) Appropriations $ 7,025 $ 7,025 $ 15,019 $ 7,994 $ (14,190) $ 829 198
CITY OF FRESNO, CALIFORNIA
Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP Budgetary Basis) - City Combined - Capital Projects Fund Fiscal Year Ended June 30, 2023
(in thousands)
Budgeted Amounts Actual
Amounts
Budgetary
Basis
Over
(Under)
Final Budget
Budget
To GAAP
Reconciliation
Actual
Amounts
GAAP
BasisOriginal Final
Budgetary Fund Balance, July 1 $ 24,525 $ 25,438 $ 26,901 $ 1,463 $ (26,901) $ — Resources (inflows):
Intergovernmental — — — — — —
Use of Money and Property 36 36 133 97 (95) 38
Miscellaneous 2,442 4,204 3,558 (646) (1,307) 2,251 Other Financing Sources:
Transfers Budgeted as
Bond Proceeds 5,668 5,729 284 (5,445) 1,034 1,318 Total Available
for Appropriations 32,671 35,407 30,876 (4,531) (27,269) 3,607 Charges to Appropriations
(outflows):
Capital Outlay 10,937 13,581 1,145 (12,436) 1,845 2,990 Other Financing Uses:
Transfers to Other Funds 1,817 1,817 — (1,817) 23 23 Total Charges
to Appropriations 12,754 15,398 1,145 (14,253) 1,868 3,013 Excess (Deficit) Resources
Over (Under) Appropriations $ 19,917 $ 20,009 $ 29,731 $ 9,722 $ (29,137) $ 594 199
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200
CITY OF FRESNO, CALIFORNIA
Combining Statement of Net Position
Nonmajor Enterprise Funds
June 30, 2023
(in thousands)
Business-Type Activities - Enterprise Funds
Community
Sanitation
Parks and
Recreation
Total Nonmajor
Enterprise Funds
Assets
Current Assets:
Cash and Investments $ 2,744 $ (960) $ 1,784
Interest Receivable 25 4 29
Accounts Receivable, Net 2,598 1,409 4,007
Due from Other Funds 1,384 — 1,384
Total Current Assets 6,751 453 7,204
Noncurrent Assets:
Restricted:
Cash and Investments — 2,210 2,210
Total Restricted Assets — 2,210 2,210
Other Assets:
Other Assets — 13 13
Net Pension Asset 3,033 — 3,033
Total Other Assets 3,033 13 3,046
Capital Assets:
Land and Intangibles — 12 12
Buildings, Systems and Improvements — 3,743 3,743
Machinery and Equipment 67 — 67
Infrastructure — 122 122
Less Accumulated Depreciation (65) (2,415) (2,480)
Total Capital Assets, Net 2 1,462 1,464
Total Noncurrent Assets 3,035 3,685 6,720
Total Assets 9,786 4,138 13,924
Deferred Outflows of Resources
Charge on Refunding — 45 45
Deferred Outflows - Pensions 875 — 875
Deferred Outflows - OPEB 386 — 386
Total Deferred Outflows of Resources 1,261 45 1,306
Liabilities
Current Liabilities:
Accrued Liabilities 338 13 351
Accrued Compensated Absences and HRA 55 3 58
Due to Other Funds 56 539 595
Bonds Payable — 65 65
Total Current Liabilities 449 620 1,069
Noncurrent Liabilities:
Accrued Compensated Absences and HRA 280 8 288
Bonds Payable — 1,407 1,407
Net OPEB Liability 1,311 — 1,311
Total Noncurrent Liabilities 1,591 1,415 3,006
Total Liabilities 2,040 2,035 4,075
Deferred Inflows of Resources
Unamortized Pension Expense 158 — 158
Unamortized OPEB Expense 836 — 836
Deferred Inflows - Leases — 1,341 1,341
Total Deferred Inflows of Resources 994 1,341 2,335
Net Position
Net Investment in Capital Assets 2 166 168
Restricted for Net Pension Asset 3,033 — 3,033
Unrestricted 4,978 641 5,619
Total Net Position $ 8,013 $ 807 $ 8,820
201
CITY OF FRESNO, CALIFORNIA
Combining Statement of Revenues, Expenses and Changes in Fund Net Position Nonmajor Enterprise Funds
Fiscal Year Ended June 30, 2023
(in thousands)
Business-Type Activities - Enterprise Funds
Community
Sanitation
Parks and
Recreation
Total Nonmajor
Enterprise Funds
Operating Revenues:
Charges for Services $ 9,559 $ 687 $ 10,246
Operating Expenses:
Cost of Services 5,394 247 5,641
Administration 1,926 18 1,944
Depreciation 3 190 193
Total Operating Expenses 7,323 455 7,778
Operating Income (Loss) 2,236 232 2,468
Non-Operating Revenue (Expenses):
Interest Income 63 41 104
Net Increase (Decrease) in Cash Fair Value (40) — (40) Interest Expense — (58) (58)
Total Non-Operating Revenue (Expenses) 23 (17) 6
Income (Loss) Before Transfers 2,259 215 2,474
Transfers In — — —
Transfers Out (1,113) — (1,113)
Change in Net Position 1,146 215 1,361
Total Net Position - Beginning 6,867 592 7,459
Total Net Position - Ending $ 8,013 $ 807 $ 8,820
202
CITY OF FRESNO, CALIFORNIA
Combining Statement of Cash Flows
Nonmajor Enterprise Funds
Fiscal Year Ended June 30, 2023
(in thousands)
Business-Type Activities - Enterprise Funds
Community
Sanitation
Parks and
Recreation
Total Nonmajor
Enterprise Funds
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash Received from Customers $ 8,387 $ — $ 8,387
Cash Payments to Suppliers for Services (1,873) (306) (2,179) Cash Paid for Interfund Services Used (1,550) — (1,550) Cash Payments to Employees for Services (3,887) (8) (3,895) Net Cash Provided by (Used for) Operating Activities 1,077 (314) 763
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES:
Interest Payments on Capital Debt — (75) (75)
Payment for Cost of Issuance — 5 5
Principal Payments on Capital Debt-Bonds — (60) (60) Acquisition and Construction of Capital Assets — — — Net Cash Provided by (Used for) Capital and Related Financing Activities — (130) (130)
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES:
Borrowing Receipt from (Payment to) Other Funds — (539) (539) Transfers In — — —
Transfers Out (1,113) — (1,113)
Net Cash Provided by (Used for) Non-Capital Financing
Activities (1,113) (539) (1,652)
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest and Dividends Received (Paid) on Investments 13 40 53 Net Cash Provided by (Used for) Investing Activities 13 40 53 Net Increase (Decrease) in Cash and Cash Equivalents (23) (943) (966) Cash and Cash Equivalents, Beginning of Year 2,767 970 3,737 Cash and Cash Equivalents, End of Year $ 2,744 $ 27 $ 2,771 203
CITY OF FRESNO, CALIFORNIA
Combining Statement of Cash Flows
Nonmajor Enterprise Funds
Fiscal Year Ended June 30, 2023 (Continued)
Business-Type Activities - Nonmajor Enterprise Funds
Community
Sanitation
Parks and
Recreation
Total Nonmajor
Enterprise Funds
Reconciliation of Operating Income (Loss) to Net Cash
Provided by (Used for) Operating Activities:
Operating income (loss) $ 2,236 $ 232 $ 2,468
Adjustments to reconcile operating income (loss) to net cash provided by operating activities:
Depreciation expense 3 190 193
Change in assets and liabilities:
Decrease (increase) in accounts receivable (682) 189 (493) Decrease (increase) in prepaid items — — —
Decrease (increase) in net pension asset and deferred outflows pensions 3,561 — 3,561 Decrease (increase) in prepaid insurance — 1 1
(Decrease) increase in accounts payable 48 (58) (10) (Decrease) increase in salaries payable 109 7 116
(Decrease) increase in due to other funds (78) 565 487 (Decrease) increase in net OPEB liability 152 — 152
(Decrease) increase in deferred inflows of resources pensions (3,797) (217) (4,014) Net Cash Provided by (Used for) Operating Activities $ 1,077 $ 909 $ 1,986 Reconciliation of Cash and Cash Equivalents to
the Statement of Net Position:
Cash and Investments:
Unrestricted $ 2,744 $ (960) $ 1,784
Restricted - Current and Noncurrent — 2,210 2,210
Cash and Cash Equivalents at End of Year on Statement
of Cash Flows $ 2,744 $ 1,250 $ 3,994
Noncash Investing, Capital, and Financing Activities:
Amortization of bond premium, discount and loss on refunding — (16) (16) Decrease (increase) in fair value of investments (172) — (172) 204
Assets
Current Assets:
Cash and Investments $ 23,861 $ 57,475 $ 7,891 $ 25,253 $ — $ 114,480 Interest Receivable 202 361 81 226 — 870
Accounts Receivable, Net 1,649 363 244 — — 2,256
Inventories — 1,491 — — — 1,491
Prepaid Items 104 440 — — — 544
Due from Other Funds — 3,200 — — — 3,200
Total Current Assets 25,816 63,330 8,216 25,479 — 122,841 Noncurrent Assets:
Restricted:
Cash and Investments 2,277 — — — — 2,277
Total Restricted Assets 2,277 — — — — 2,277
Other Assets:
Net Pension Asset 2,266 5,157 — — — 7,423
Total Other Assets 2,266 5,157 — — — 7,423
Capital Assets:
Buildings, Systems & Improvements 125 21,543 — — — 21,668 Machinery & Equipment 121 163,818 — — — 163,939
Right to Use Assets Being Amortized — 12,876 — — — 12,876 Construction in Progress 43 30,713 — — — 30,756
Less Accumulated Depreciation and
Amortization (127) (103,929) — — — (104,056)
Total Capital Assets, Net 162 125,021 — — — 125,183 Total Noncurrent Assets 4,705 130,178 — — — 134,883 Total Assets 30,521 193,508 8,216 25,479 — 257,724 Deferred Outflows of Resources
Pension Contributions 594 1,868 — — — 2,462
Deferred Outflows - Pension 2,363 7,951 — — — 10,314 Deferred Outflows - OPEB 745 1,382 183 — — 2,310
Total Deferred Outflows of Resources 3,702 11,201 183 — — 15,086
CITY OF FRESNO, CALIFORNIA
Combining Statement of Net Position
Internal Service Funds
June 30, 2023
(in thousands)
Billing
and
Collection
General
Services
Risk
Management
Employees
Healthcare
Plan
Retirees
Healthcare
Plan Totals
205
Liabilities
Current Liabilities:
Accrued Liabilities 820 9,520 4,334 75 — 14,749
Accrued Compensated Absences & HRA 278 438 40 — — 756 Liability for Self-Insurance — — 44,046 7,900 — 51,946 Unearned Revenue — 11,791 — — — 11,791
Due to Other Funds 18,465 21,501 — — — 39,966
Capital Finance Obligations — 7,203 — — — 7,203
Lease Liability — 3,549 — — — 3,549
Total Current Liabilities 19,563 54,002 48,420 7,975 — 129,960 Noncurrent Liabilities:
Accrued Compensated Absences & HRA 1,343 3,987 284 — — 5,614 Capital Lease Obligations — 26,234 — — — 26,234
Liability for Self-Insurance — — 186,115 — — 186,115 Lease Liability — 5,291 — — — 5,291
Net OPEB Liability 2,541 3,201 (471) — — 5,271
Deposits Held for Others 4,679 — — — — 4,679
Total Noncurrent Liabilities 8,563 38,713 185,928 — — 233,204 Total Liabilities 28,126 92,715 234,348 7,975 — 363,164 Deferred Inflows of Resources
Unamortized Pension Expense 267 800 — — — 1,067
Unamortized OPEB Expense 1,814 4,261 1,101 — — 7,176 Deferred Inflows - Leases — 330 — — — 330
Total Deferred Inflows of Resources 2,081 5,391 1,101 — — 8,573 Net Position
Net Investment in Capital Assets 161 86,592 — — — 86,753 Restricted for Net Pension Asset 2,266 5,157 — — — 7,423 Unrestricted (Deficit) 1,589 14,854 (227,050) 17,504 — (193,103) Total Net Position (Deficit) $ 4,016 $ 106,603 $ (227,050) $ 17,504 $ — $ (98,927)
CITY OF FRESNO, CALIFORNIA
Combining Statement of Net Position
Internal Service Funds
June 30, 2023
(in thousands)
Billing
and
Collection
General
Services
Risk
Management
Employees
Healthcare
Plan
Retirees
Healthcare
Plan Totals
206
CITY OF FRESNO, CALIFORNIA
Combining Statement of Revenues, Expenses and Changes in Fund Net Position Internal Service Funds
Fiscal Year Ended June 30, 2023
(in thousands)
Billing
and
Collection
General
Services
Risk
Management
Employees
Healthcare
Plan
Retirees
Healthcare
Plan Totals
Operating Revenues:
Charges for Services $ 12,146 $ 83,923 $ 47,360 $ 59,224 $ 7,512 $ 210,165 Operating Expenses:
Cost of Services 7,704 54,721 69,050 59,442 6,725 197,642 Administration 4,567 18,020 12,543 6,562 787 42,479 Depreciation 6 17,072 — — — 17,078
Total Operating Expenses 12,277 89,813 81,593 66,004 7,512 257,199 Operating Income (Loss) (131) (5,890) (34,233) (6,780) — (47,034) Non-Operating Revenue (Expenses):
Interest Income 530 1,049 177 591 — 2,347
Net Increase (Decrease) in Cash Fair
Value (449) (692) (59) — — (1,200)
Interest Expense — (1,039) — — — (1,039)
Gain (loss) on Disposal of Capital Assets — 237 — — — 237 Total Non-Operating Revenue (Expenses) 81 (445) 118 591 — 345 Income (Loss) Before Contributions &
Transfers (50) (6,335) (34,115) (6,189) — (46,689) Transfers In 3,354 1,821 — — — 5,175
Transfers Out (270) (491) (28) — — (789)
Change in Net Position 3,034 (5,005) (34,143) (6,189) — (42,303) Total Net Position (Deficit) - Beginning 982 111,608 (192,907) 23,693 — (56,624) Total Net Position (Deficit) - Ending $ 4,016 $ 106,603 $ (227,050) $ 17,504 $ — $ (98,927) 207
CITY OF FRESNO, CALIFORNIA
Combining Statement of Cash Flows
Internal Service Funds
Fiscal Year Ended June 30, 2023
(in thousands)
Billing and
Collection
General
Services
Risk
Management
Employees
Healthcare
Plan
Retirees
Healthcare
Plan Total
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash Received from Customers $ (1,688) $ 56,716 $ — $ 11,873 $ 5,358 $ 72,259 Cash Received from Interfund Services Provided 12,635 24,410 — 47,351 2,153 86,549 Cash Payments from (to) Suppliers for Services (4,093) (59,029) 36,920 (5,333) (787) (32,322) Cash Paid for Interfund Services Used (2,130) (826) (46,349) — — (49,305) Cash Payments to Employees for Services (6,740) 2,588 (5,020) (326) — (9,498) Cash Payments for Claims and Refunds 13,168 (59,442) (6,724) (52,998) Net Cash Provided by (Used for) Operating
Activities (2,016) 23,859 (1,281) (5,877) — 14,685
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES:
Capital Contributions — 9,597 — — — 9,597
Interest Payments on Capital Debt — (1,021) — — — (1,021) Proceeds from Capital Finance Activity — (6,379) — — — (6,379) Principal Payments on Capital Lease Obligations — (6,925) — — — (6,925) Proceeds from Sale of Capital Assets — 237 — — — 237 Acquisition and Construction of Capital Assets — (28,206) — — — (28,206) Net Cash Provided by (Used for) Capital and
Related Financing Activities — (32,697) — — — (32,697)
CASH FLOWS FROM NON-CAPITAL FINANCING
ACTIVITIES:
Borrowing Receipt from (Payment to) Other Funds 186 (7,273) — — — (7,087) Transfers In 3,354 1,821 — — — 5,175
Transfers Out (270) (491) (28) — — (789)
Net Cash Provided by (Used for) Non-Capital
Financing Activities 3,270 (5,943) (28) — — (2,701) CASH FLOWS FROM INVESTING ACTIVITIES:
Interest and Dividends Received (Paid) on Investments (25) 210 89 525 — 799 Net Cash Provided by (Used for) Investing
Activities (25) 210 89 525 — 799
Net Increase (Decrease) in Cash and Cash Equivalents 1,229 (14,571) (1,220) (5,352) — (19,914) Cash and Cash Equivalents, Beginning of Year 24,909 72,046 9,111 30,605 — 136,671 Cash and Cash Equivalents, End of Year $ 26,138 $ 57,475 $ 7,891 $ 25,253 $ — $ 116,757 208
CITY OF FRESNO, CALIFORNIA
Combining Statement of Cash Flows
Internal Service Funds
Fiscal Year Ended June 30, 2023 (Continued)
Billing and
Collection
General
Services
Risk
Management
Employees
Healthcare
Plan
Retirees
Healthcare
Plan Total
Reconciliation of Operating Income (Loss) to Net
Cash Provided by (Used for) Operating Activities:
Operating income (loss) $ (131) $ (5,890) $ (34,233) $ (6,780) $ — $ (47,034) Adjustments to reconcile operating income (loss) to net cash provided by (used for) operating activities:
Depreciation expense 6 17,072 — — — 17,078
Change in assets and liabilities:
Decrease (increase) in accounts receivable (770) 7 4 327 — (432) Decrease (increase) in due from other funds — (551) 8 — — (543) Decrease (increase) in material and supplies inventory — (418) — — — (418) Decrease (increase) in prepaid items (104) 122 — — — 18 Decrease (increase) in net pension asset and deferred
outflows pensions 5,600 16,601 (35) — — 22,166
(Decrease) increase in accounts payable (302) (7,678) 3,048 402 — (4,530) (Decrease) increase in salaries payable (34) 730 210 (327) — 579 (Decrease) increase in due to other funds 379 13,712 — — — 14,091 (Decrease) increase in unearned revenue (1,065) 7,013 — — — 5,948 (Decrease) increase in liability for self-insurance — — 29,634 500 — 30,134 (Decrease) increase in deposits — — — — — —
(Decrease) increase in net OPEB liability 343 873 258 — — 1,474 (Decrease) increase in deferred inflows of resources
pensions (5,937) (17,734) (174) — (23,845)
Net Cash Provided by (Used for) Operating
Activities $ (2,015) $ 23,859 $ (1,280) $ (5,878) $ — $ 14,686 Reconciliation of Cash and Cash Equivalents
to the Statement of Net Position:
Cash and Investments:
Unrestricted $ 23,861 $ 57,475 $ 7,891 $ 25,253 $ — $ 114,480 Restricted - Current and Noncurrent 2,277 — — — — 2,277 Cash and Cash Equivalents at End of Year
on Statement of Cash Flows $ 26,138 $ 57,475 $ 7,891 $ 25,253 $ — $ 116,757 Noncash Investing, Capital, and Financing Activities:
Acquisition and construction of capital assets on
accounts payable $ 43 $ 13,105 $ — $ — $ — $ 13,148
Borrowing under capital financing — 6,379 — — — 6,379 Decrease (increase) in fair value of investments (1,642) (3,345) (496) — — (5,483) 209
CITY OF FRESNO, CALIFORNIA
Combining Statement of Fiduciary Net Position
Fiduciary Funds - Pension Trust Funds
June 30, 2023
(in thousands)
Pension Trust Funds
Fire and Police Employees
Retirement Retirement Total
System System
Assets
Cash and Investments $ 704 $ 547 $ 1,251
Receivables:
Receivables for Investments Sold 21,375 17,781 39,156 Interest and Dividends Receivable 2,043 1,680 3,723
Other Receivables 6,007 4,943 10,950
Total Receivables 29,425 24,404 53,829
Investments, at Fair Value:
Short-Term Investments 10,553 8,679 19,232
Domestic Equity 518,942 426,767 945,709
Corporate Bonds 444,536 365,577 810,113
International Developed Market Equities 123,441 101,516 224,957 Government Bonds 253,290 208,301 461,591
Alternatives 430,097 354,324 784,421
Real Estate 18,817 15,475 34,292
Total Investments, at Fair Value 2,047,638 1,684,558 3,732,196 Collateral Held for Securities Lent 27,067 22,259 49,326 Capital Assets, Net of Accumulated Depreciation 347 347 694 Other Assets 135 135 270
Total Assets 2,105,316 1,732,250 3,837,566
Liabilities
Accrued Liabilities 23,105 19,001 42,106
Collateral Held for Securities Lent 27,067 22,259 49,326 Other Liabilities 9,308 7,677 16,985
Total Liabilities 59,480 48,937 108,417
Net Position
Net Position Restricted for Pension Benefits $ 2,045,836 $ 1,683,313 $ 3,729,149 210
CITY OF FRESNO, CALIFORNIA
Combining Statement of Changes in Fiduciary Net Position Fiduciary Funds - Pension Trust Funds
Fiscal Year Ended June 30, 2023
(in thousands)
Pension Trust Funds
Fire and Police Employees
Retirement Retirement Total
System System
Additions
Contributions:
Employer $ 27,068 $ 22,236 $ 49,304
System Members 12,054 14,894 26,948
Total Contributions 39,122 37,130 76,252
Investment Income:
Net Appreciation in Fair Value of Investments 206,516 170,225 376,741 Interest 11,621 9,581 21,202
Dividends 10,853 8,943 19,796
Other Investment Related 65 66 131
Total Investment Income 229,055 188,815 417,870
Less Investment Expense (30,441) (25,098) (55,539)
Total Net Investment Income 198,614 163,717 362,331
Securities Lending Income:
Securities Lending Earnings 2,299 1,891 4,190
Less Securities Lending Expense (1,937) (1,593) (3,530) Net Securities Lending Income 362 298 660
Total Additions 238,098 201,145 439,243
Deductions
Benefit Payments (including post retirement supplemental benefits) 80,315 76,025 156,340
Refund of Contributions 622 1,848 2,470
General and Administrative Expenses 2,401 2,146 4,547 Total Deductions 83,338 80,019 163,357
Change in Net Position 154,760 121,126 275,886
Net Position - Beginning 1,891,076 1,562,187 3,453,263 Net Position - Ending $ 2,045,836 $ 1,683,313 $ 3,729,149 211
CITY OF FRESNO, CALIFORNIA
Combining Statement of Fiduciary Net Position
Custodial Funds
Fiscal Year Ended June 30, 2023
(in thousands)
City Special Total
Departmental Assessment District Custodial Funds
Assets
Cash and Investments $ 2,259 $ 1 $ 2,260
Restricted Cash and Investments Held by Fiscal Agent — 717 717 Interest Receivable 16 — 16
Due From Other Governments — 203 203
Total Assets $ 2,275 $ 921 $ 3,196
Liabilities
Accrued Liabilities $ 46 $ — $ 46
Due to Other Funds — — —
Due to Other Governments 3 — 3
Total Liabilities $ 49 $ — $ 49
Net Position
Restricted for:
Individuals, Organizations, and Other Governments 2,226 921 3,147 Total Net Position $ 2,226 $ 921 $ 3,147
212
CITY OF FRESNO, CALIFORNIA
Combining Statement of Changes in Fiduciary Net Position Custodial Funds
Fiscal Year Ended June 30, 2023
(in thousands)
City Special Total
Departmental Assessment District Custodial Funds
Additions:
Fees Collected for Organizations and Other Governments $ 6,944 $ — $ 6,944 Taxes Collected for Organizations and Other Governments 776 — 776 Special Assessments for Organizations and Other
Governments — 326 326
Investment Income 37 1 38
Total Additions 7,757 693 8,450
Deductions:
Payments on Conduit Bonds - Principal $ — $ — $ —
Payments on Conduit Bonds - Interest — — —
Payments to Individuals, Organizations, and Other
Governments 8,487 553 9,040
Total Deductions 8,487 932 9,419
Change in Net Position (730) (239) (969)
Net Position:
Beginning of Year 2,956 1,160 4,116
Restricted for Individuals, Organizations, and Other
Governments $ 2,226 $ 921 $ 3,147
213
Statistical Section
This section of the City's Annual Comprehensive Financial Report (ACFR) presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information depicts about the City's financial health.
Contents
Financial Trends
These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time. (pages 215-219) Revenue Capacity
These schedules contain information to help the reader assess the City's most significant local revenue source: The property tax. (pages 220-223)
Debt Capacity
These schedules present information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future. (pages 224-232) Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place. (pages 233-234) Operating Information
These schedules contain information about the City's operations and resources to help the reader understand how the City's financial information relates to the services the City provides and the activities it performs. (pages 235-239)
Source(s):
Unless otherwise noted, the information in these schedules is derived from the annual comprehensive financial reports for the relevant year.
CITY OF FRESNO | ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2023 214
CITY OF FRESNO, CALIFORNIA
Net Position By Component
Last Ten Fiscal Years
(dollars in thousands)
Fiscal Year
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Governmental Activities
Net Investment in Capital
Assets $ 744,074 $ 771,198 $ 795,884 $ 787,522 $ 796,242 $ 793,963 $ 787,395 $ 794,759 $ 836,439 $ 930,489 Restricted 141,123 146,174 151,345 168,927 171,473 178,858 239,898 304,925 308,444 605,023 Unrestricted (Deficit) (215,416) (86,424) (22,058) 28,252 43,380 105,676 27,932 (76,811) 56,963 (155,348) Total Governmental
Activities $ 669,781 $ 830,948 $ 925,171 $ 984,701 $ 1,011,095 $ 1,078,497 $ 1,055,225 $ 1,022,873 $ 1,201,846 $ 1,380,164 Business-Type Activities
Net Investment in Capital
Assets $ 835,290 $ 841,773 $ 896,818 $ 955,128 $ 958,169 $ 1,054,185 $ 1,090,352 $ 1,120,876 $ 1,094,088 $ 1,015,061 Restricted — — — — — — — — — 51,010
Unrestricted (Deficit) 264,090 300,296 307,315 353,436 440,872 414,184 472,210 460,988 526,841 595,300 Total Business-Type
Activities $ 1,099,380 $ 1,142,069 $ 1,204,133 $ 1,308,564 $ 1,399,041 $ 1,468,369 $ 1,562,562 $ 1,581,864 $ 1,620,929 $ 1,661,371 Primary Government
Net Investment in Capital
Assets $ 1,579,364 $ 1,612,971 $ 1,692,702 $ 1,742,650 $ 1,754,411 $ 1,848,148 $ 1,877,747 $ 1,915,635 $ 1,930,527 $ 1,945,550 Restricted 141,123 146,174 151,345 168,927 171,473 178,858 239,898 304,925 308,444 656,033 Unrestricted (Deficit) 48,674 213,872 285,257 381,688 484,252 519,860 500,142 384,177 583,804 439,952 Total Primary
Government $ 1,769,161 $ 1,973,017 $ 2,129,304 $ 2,293,265 $ 2,410,136 $ 2,546,866 $ 2,617,787 $ 2,604,737 $ 2,822,775 $ 3,041,535 Source(s): City of Fresno, Finance Department
Fiscal Years
$ Dollars
Governmental Activities
Net Investment in Capital Assets
Restricted
Unrestricted
2014201520162017201820192020202120222023
$-400,000,000
$-200,000,000
$0
$200,000,000
$400,000,000
$600,000,000
$800,000,000
$1,000,000,000
Fiscal Years
$ Dollars
Business-Type Activities
Net Investment in Capital Assets
Restricted
Unrestricted
2014201520162017201820192020202120222023
$0
$200,000,000
$400,000,000
$600,000,000
$800,000,000
$1,000,000,000
$1,200,000,000
215
CITY OF FRESNO, CALIFORNIA
Change in Net Position
Last Ten Fiscal Years
(dollars in thousands)
Fiscal Year
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Expenses
Governmental Activities:
General Government $ 26,997 $ 28,590 $ 32,206 $ 44,157 $ 31,319 $ 42,785 $ 46,114 $ 90,218 $ 90,035 $ 80,926 Public Protection 192,124 177,829 187,733 196,006 206,163 214,903 271,085 305,172 270,465 283,947 Public Ways and Facilities 68,914 64,430 60,875 72,984 76,289 80,369 93,243 123,068 101,306 118,362 Culture and Recreation 17,895 20,036 20,223 23,500 19,771 23,809 26,039 30,882 30,324 52,570 Community Development 23,757 29,257 28,789 28,913 30,412 29,188 31,102 41,053 57,123 130,194 Redevelopment — — — — — — — — — —
Interest on Long-Term Debt 20,275 19,519 18,787 18,658 14,413 14,101 13,652 12,552 12,683 13,738 Total Governmental Activities 349,962 339,661 348,613 384,218 378,367 405,155 481,235 602,945 561,936 679,737 Business-Type Activities:
Water System 63,375 62,205 64,454 63,753 73,677 94,066 101,406 100,181 112,301 123,770 Sewer System 65,145 66,148 63,980 64,124 65,991 71,793 65,166 74,428 78,646 83,232 Solid Waste Management 33,345 32,976 26,650 26,605 30,353 31,702 36,915 41,713 41,818 40,907 Transit 45,287 45,435 44,191 47,958 53,937 57,864 62,016 66,135 71,038 96,519 Airports 28,498 28,164 28,509 29,938 31,192 33,262 35,984 41,090 40,413 44,097 Fresno Convention Center 9,982 10,147 9,750 10,798 8,856 8,701 7,108 5,096 9,235 7,418 Community Sanitation 7,949 8,235 6,904 8,978 10,077 10,093 9,147 8,698 8,743 8,450 Parking — — — — — — — — — —
Parks and Recreation 372 340 316 410 283 502 586 572 416 513 Development Services — — — — — — — — — —
Stadium 3,336 3,266 3,191 3,539 2,710 2,600 2,702 2,739 2,925 3,264 Total Business-Type Activities 257,289 256,916 247,945 256,103 277,076 310,583 321,030 340,652 365,535 408,170 Total Primary Government Expenses $ 607,251 $ 596,577 $ 596,558 $ 640,321 $ 655,443 $ 715,738 $ 802,265 $ 943,597 $ 927,471 $ 1,087,907 Program Revenues
Governmental Activities:
Charges for Services:
General Government $ 17,038 $ 23,194 $ 22,580 $ 46,742 $ 17,171 $ 19,075 $ 14,805 $ 15,315 $ 22,040 $ 23,448 Public Protection 18,898 31,872 44,037 22,382 32,275 40,945 15,599 16,544 62,152 9,092 Public Ways and Facilities 14,898 17,426 20,468 21,911 21,009 20,461 22,219 27,060 37,839 42,770 Culture and Recreation 4,680 4,577 4,949 3,645 3,935 3,711 1,742 1,364 4,840 412 Community Development 19,432 21,130 25,239 23,496 23,033 20,347 19,400 13,050 32,305 14,492 Operating Grants and Contributions 48,503 39,550 34,015 25,016 26,488 40,278 39,037 40,393 74,245 106,441 Capital Grants and Contributions 49,651 62,472 57,955 44,586 38,584 37,525 49,161 135,064 128,553 220,903 Total Governmental Activities Program
Revenues 173,100 200,221 209,243 187,778 162,495 182,342 161,963 248,790 361,974 417,558 Business-Type Activities:
Charges for Services:
Water System 90,096 74,285 77,959 101,895 107,377 119,029 120,252 127,651 138,492 124,858 Sewer System 76,201 81,955 78,186 83,635 81,651 81,085 77,249 77,940 87,795 84,086 Solid Waste Management 29,404 31,208 31,975 31,170 30,100 31,804 29,546 29,132 35,423 32,517 Transit 10,914 13,089 12,479 11,452 10,746 9,348 2,516 (2,328) 11,242 3,678 Airports 24,991 25,670 27,646 27,835 29,634 32,011 29,192 25,991 40,884 37,835 Fresno Convention Center 2,626 2,960 3,634 3,752 3,318 3,796 2,415 (2) 5,744 4,307 Community Sanitation 8,956 9,746 9,733 9,613 9,422 9,841 8,982 8,786 10,706 9,559 Parking — — — — — — — — — —
Parks and Recreation 329 329 325 340 323 410 278 411 630 687 Development Services — — — — — — — — — —
Stadium 798 1,248 677 1,082 238 406 344 580 279 102 Operating Grants and Contributions 44,211 40,215 29,190 37,187 22,939 37,910 80,766 56,334 71,273 112,764 Capital Grants and Contributions 14,754 14,791 18,015 47,576 69,570 33,249 38,027 29,884 17,893 31,550 Total Business-Type Activities Program
Revenues 303,280 295,496 289,819 355,537 365,318 358,889 389,567 354,379 420,361 441,943 Total Primary Government Program
Revenues $ 476,380 $ 495,717 $ 499,062 $ 543,315 $ 527,813 $ 541,231 $ 551,530 $ 603,169 $ 782,335 $ 859,501 216
CITY OF FRESNO, CALIFORNIA
Change in Net Position
Last Ten Fiscal Years (Continued)
(dollars in thousands)
Fiscal Year
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Net (Expense)/Revenue
Governmental Activities $ (176,862) $ (139,440) $ (139,370) $ (196,440) $ (215,872) $ (222,813) $ (319,272) $ (354,155) $ (199,962) $ (262,179) Business-Type Activities 45,991 38,580 41,874 99,434 88,242 48,306 68,537 13,727 54,826 33,773 Total Primary Government Net Expense $ (130,871) $ (100,860) $ (97,496) $ (97,006) $ (127,630) $ (174,507) $ (250,735) $ (340,428) $ (145,136) $ (228,406) General Revenues and Other Changes
in Net Position
Governmental Activities:
Property Taxes $ 107,635 $ 113,655 $ 117,048 $ 123,858 $ 130,109 $ 138,201 $ 142,250 $ 149,822 $ 154,130 $ 167,088 Sales Taxes - Shared Revenues 59,328 61,571 74,010 86,128 85,512 96,939 98,531 125,279 192,874 197,563 In-Lieu Sales Tax 19,190 19,907 10,559 — — — — — — — Franchise Taxes 12,751 13,469 13,722 14,335 14,811 14,493 16,101 17,729 18,271 20,180 Business Tax 18,868 17,781 16,879 19,101 20,982 18,162 20,868 20,577 21,764 26,107 Room Tax 10,019 11,006 12,045 13,127 13,936 13,998 12,453 12,566 15,205 16,454 Other Taxes 2,324 2,407 2,521 2,348 2,304 2,855 2,241 1,825 3,528 2,221 Investment Earnings 795 879 1,652 1,215 1,348 8,413 11,863 1,786 (10,409) 8,245 Gain on Sale of Capital Assets 42 402 218 214 223 2,517 2 — — 1,732 Special Item - Loss on Receivable/
Transfer of Assets — — — — (8,152) — — — — —
Extraordinary (Loss):
Redevelopment Agency Net Position
Distributed to Successor Agency — — — — — — — — — — Transfers: (5,699) (6,290) (15,061) (4,356) (4,820) (5,363) (8,309) (7,781) (7,899) (8,154) Total Governmental Activities 225,253 234,787 233,593 255,970 256,253 290,215 296,000 321,803 387,464 431,436 Business-Type Activities:
Investment Earnings 2,316 2,998 5,129 641 2,614 15,624 17,316 (2,206) (24,697) (1,299) Debt Forgiveness — — — — — — — — — —
Gain on Sale of Capital Assets 1 38 — — 36 35 31 — — 2 Transfers: 5,698 6,290 15,061 4,356 4,820 5,363 8,309 7,781 7,899 8,154 Total Business-Type Activities 8,015 9,326 20,190 4,997 7,470 21,022 25,656 5,575 (16,798) 6,857 Total Primary Government $ 233,268 $ 244,113 $ 253,783 $ 260,967 $ 263,723 $ 311,237 $ 321,656 $ 327,378 $ 370,666 $ 438,293 Change in Net Position
Governmental Activities $ 48,391 $ 95,347 $ 94,223 $ 59,530 $ 40,381 $ 67,402 $ (23,272) $ (32,352) $ 187,502 $ 169,257 Business-Type Activities 54,006 47,906 62,064 104,431 95,712 69,328 94,193 19,302 37,804 40,442 Total Primary Government $ 102,397 $ 143,253 $ 156,287 $ 163,961 $ 136,093 $ 136,730 $ 70,921 $ (13,050) $ 225,306 $ 209,699 Source(s): City of Fresno, Finance Department
217
CITY OF FRESNO, CALIFORNIA
Fund Balances, Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
(dollars in thousands)
Fiscal Year
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
General Fund
Nonspendable $12,691 $12,691 $12,691 $18,417 $ 3,919 $ 2,071 $ — $ — $ — $ — Restricted 7 105 11 37 16 10 6 — — —
Committed 2,351 5,207 1,610 22,104 25,565 37,004 37,718 40,655 48,360 54,466 Assigned 1,006 1,874 2,811 3,890 2,845 4,562 5,158 19,249 19,215 18,633 Unassigned 8,192 24,643 31,808 26,749 19,533 25,312 33,046 43,039 37,116 54,284 Total General Fund $ 24,247 $ 44,520 $ 48,931 $ 71,197 $ 51,878 $ 68,959 $ 75,928 $ 102,943 $ 104,691 $ 127,383 All other Governmental
Funds
Restricted $ 145,763 $ 146,002 $ 151,726 $ 163,802 $ 166,207 $ 172,587 $ 197,325 $ 255 $ 216,922 $ 275,090 Assigned 15,752 15,928 15,847 12,177 16,115 16,137 11,194 13 37,622 31,061 Unassigned (Deficit) (7,749) (9,670) (6,284) (788) (809) (1,950) (5,590) (57) (2,678) (2,587) Total all other
Governmental Funds $ 153,766 $ 152,260 $ 161,289 $ 175,191 $ 181,513 $ 186,774 $ 202,929 $ 211 $ 251,866 $ 303,564 Source(s): City of Fresno, Finance Department
218
CITY OF FRESNO, CALIFORNIA
Changes in Fund Balances, Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
(dollars in thousands)
Fiscal Year
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Revenues
Taxes $ 263,470 $ 276,847 $ 266,521 $ 298,425 $ 289,140 $ 315,903 $ 330,423 $ 366,645 $ 452,241 $ 456,443 Licenses and Permits 6,331 6,569 7,102 7,291 7,829 7,337 7,915 9,276 8,332 9,064 Intergovernmental 48,910 41,915 39,036 38,770 39,318 41,706 55,879 126,391 138,674 249,990 Charges for Services 46,277 44,692 46,398 49,538 51,294 57,413 53,493 64,462 66,961 81,966 Fines 3,746 3,392 4,271 3,487 3,872 3,643 3,315 1,792 2,726 2,482 Use of Money and Property 1,585 1,643 2,105 1,285 1,305 6,542 9,538 1,684 (7,050) 10,557 Contributions and Donations — — — — — — — — — — Miscellaneous 5,612 8,800 8,156 36,448 4,504 3,640 2,017 3,125 8,436 9,162 Total Revenues 375,931 383,858 373,589 435,244 397,262 436,184 462,580 573,375 670,320 819,664 Expenditures
General Government 11,742 13,841 17,490 26,257 21,285 28,077 29,286 71,211 65,503 75,016 Public Protection 185,911 188,050 201,656 212,828 221,043 226,108 243,099 256,635 287,640 300,972 Public Ways and Facilities 39,190 35,607 38,293 42,430 41,682 50,561 53,686 63,186 73,443 89,085 Culture and Recreation 14,247 15,433 17,735 16,928 18,257 18,140 20,911 26,131 25,623 42,220 Community Development 23,666 30,320 29,511 29,360 31,483 30,961 32,970 39,983 57,344 126,480 Capital Outlays 28,375 38,984 23,145 29,990 31,401 26,168 27,605 54,776 75,441 67,506 Debt Service:
Principal 17,814 19,218 17,435 19,196 17,568 18,956 19,911 21,191 20,782 23,683 Interest 20,347 19,511 18,629 17,779 14,752 14,515 13,692 12,602 12,357 11,494 Total Expenditures 341,292 360,964 363,894 394,768 397,471 413,486 441,160 545,715 618,133 736,456 Excess (Deficiency) of Revenues
Over (Under) Expenditures 34,639 22,894 9,695 40,476 (209) 22,698 21,420 27,660 52,187 83,208 Other Financing Sources (Uses)
Transfers In 42,716 44,695 45,251 55,930 49,397 41,142 51,823 116,697 64,700 62,188 Transfers Out (47,267) (50,573) (49,446) (59,055) (57,418) (46,110) (59,145) (128,855) (74,690) (71,643) Discount on Debt Issued — — — 835 — — — — — — Issuance of Refunding Bonds — — — 108,903 — — — — — — Refunded Bond Redeemed — — — (128,621) — — — — — — Long-Term Debt Issued — — — — — — — 17,145 — — Premium on Debt Issued — — — 11,528 — — — 2,773 — — Capital Lease Financing 621 966 7,331 4,126 3,162 2,228 9,026 83 — — Proceeds for Capital Lease
Obligations — — — — — — — — — —
Sale of Capital Assets 8 785 609 2,046 223 2,382 — — — — Total Other Financing Sources
(Uses) (3,922) (4,127) 3,745 (4,308) (4,636) (358) 1,704 7,843 (9,990) (9,455) Special Item
Loss on Receivable — — — (8,152) — — — — — —
Net Change in Fund Balances $ 30,717 $ 18,767 $ 13,440 $ 36,168 $ (4,845) $ 22,340 $ 23,124 $ 35,503 $ 42,197 $ 73,753 Debt Service as a Percentage of
Non-Capital Expenditures 12.45 % 11.94 % 11.00 % 10.29 % 9.11 % 8.83 % 8.16 % 6.55 % 6.27 % 5.55 % Source(s): City of Fresno, Finance Department
Note(s): To properly calculate the ratio of total debt service expenditures to non-capital expenditures, only governmental fund expenditures for the acquisition and construction of assets that are classified as capital assets for reporting in the Government-Wide Financial Statements have been subtracted from the total governmental fund expenditures. These figures by fiscal year are as follows: (2014) $34,893,624; (2015) $46,135,229; (2016) $35,295,704; (2017) $35,500,989; (2018) $42,738,629; (2019) $34,667,433; (2020) $29,289,000; (2021) $29,973,000; (2022) $89,808,000 and (2023) $103,059,000. 219
CITY OF FRESNO, CALIFORNIA
Gross Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years
Fiscal Year Secured Estimated
Actual
Unsecured
Estimated Actual
Total Taxable
Assessed Value
Total Direct Tax
Rate
Assessed Value
as a Percent of
Estimated Actual
Value
2014 $ 26,754,005,601 $ 1,449,421,705 $ 28,203,427,306 1.032438 100% 2015 28,638,669,937 1,444,805,569 30,083,475,506 1.032438 100 2016 30,026,361,027 1,500,061,596 31,526,422,623 1.032438 100 2017 31,344,820,623 1,596,315,117 32,941,135,740 1.032438 100 2018 32,837,504,668 1,616,397,886 34,453,902,554 1.032438 100 2019 34,713,392,408 1,899,808,202 36,613,200,610 1.032438 100 2020 36,659,070,484 1,899,510,831 38,558,581,315 1.032438 100 2021 38,644,667,812 2,225,286,118 40,869,953,930 1.032438 100 2022 40,198,896,767 2,181,351,026 42,380,247,793 1.032438 100 2023 43,203,054,898 2,540,898,809 45,743,953,707 1.155884 100 Fiscal Years
$ Dollars
Estimated Value of Taxable Property
Secured
Unsecured
2014 2015 2016 2017 2018 2015 2020 2021 2022 2023
$0
$10,000,000,000
$20,000,000,000
$30,000,000,000
$40,000,000,000
Source(s): County of Fresno
Note(s): Fresno County does not collect Actual Value (Market Value) information on taxable properties or on tax exempt properties. The estimated actual value of taxable property is the same as the gross assessed value. 220
CITY OF FRESNO, CALIFORNIA
Direct and Overlapping Property Tax Rates
Last Ten Fiscal Years
(Percentage per $100 of Assessed Value)
Overlapping Rates
City Direct Rate Schools
Fiscal Year Property Tax
Rate
Fresno
Pension
Total Direct
Tax Rate
Fresno
Unified
School
District
State Center
Community
College
District
Total Direct
and
Overlapping
Property Tax
Rate
2014 1.0 0.032438 1.032438 0.188834 0.009602 1.230874 2015 1.0 0.032438 1.032438 0.188860 0.009308 1.230606 2016 1.0 0.032438 1.032438 0.188860 0.008064 1.229362 2017 1.0 0.032438 1.032438 0.188864 0.008480 1.229782 2018 1.0 0.032438 1.032438 0.188864 0.025934 1.247236 2019 1.0 0.032438 1.032438 0.188864 0.022966 1.244268 2020 1.0 0.032438 1.032438 0.178012 0.025786 1.236236 2021 1.0 0.032438 1.032438 0.188864 0.025786 1.247088 2022 1.0 0.032438 1.032438 0.213864 0.018088 1.264390 2023 1.0 0.032438 1.032438 0.213864 0.018088 1.264390 Source(s): County of Fresno
Note(s): On June 6, 1978, California voters approved a constitutional amendment to Article XIIIA of the California Constitution, commonly known as Proposition 13, which limits the taxing power of California public agencies. Legislation enacted by the California Legislature to implement Article XIIIA (Statutes of 1978, Chapter 292, as amended) provides that, notwithstanding any other law, local agencies may not levy any property tax except to pay debt service on indebtedness approved by voters prior to July 1, 1978, and that each county will levy the maximum tax permitted by Article XIIIA of $1.00 per $100.00 of full cash value. Assessed value is equal to full cash value, pursuant to Senate Bill 1656, Statutes of 1978.
221
CITY OF FRESNO, CALIFORNIA
Principal Property Taxpayers
Current Year and Nine Years Ago
2023 2014
Taxpayer Type of Business
Taxable
Assessed
Value
Rank
% of Total
County
Assessed
Value
Taxable
Assessed
Value
Rank
% of Total
County
Assessed
Value
River Park Properties
Commercial $ 186,565,341 1 0.41 % $ 154,230,663 2 0.55 % Amazon.com Services LLC No Secured Property 180,377,500 2 0.39 % — — — % Meganova LP Apartments 180,350,568 3 0.39 % — — — % Gap Inc. Commercial 168,885,447 4 0.37 % 111,779,200 4 0.40 % Macerich Fresno Limited Partnership
Commercial 149,820,383 5 0.33 % 134,823,555 3 0.48 % Gallo E & J Winery
Commercial 106,896,791 6 0.23 % 155,347,314 1 0.0055 Colony 2019 3 Bulk Industrial LLC Commercial 102,595,022 7 0.22 % — — — Comcast of Fresno Inc.
No Secured Property 101,751,800 8 0.22 % 92,412,100 5 0.0033 Fresno CA I FGF LLC Commercial 95,905,000 9 0.21 % — — — % RPI Fig Garden LP Commercial 84,883,768 10 0.19 % — — — % Zinkin, De Wayne & Sandra — — 75,461,582 6 0.27 %
Donahue Schriber Realty Group LP — — 72,094,375 7 0.26 % Capri Sun Inc. — — 61,704,369 8 0.22 %
M L Street Properties — — 53,025,155 9 0.19 %
NMSBPCSLDHB — — 50,960,339 10 0.18 %
Total $ 1,358,031,620 2.9600 % $ 961,838,652 3.4300 % Source(s): Avenu Insights & Analytics and California Municipal Statistics, Inc., as compiled by Willdan Financial Services.
Note(s): 2022/23 Taxable Assessed Valuation: $45,743,953,707. 2013/14 Taxable Assessed Valuation: $28,203,427,306.
222
CITY OF FRESNO, CALIFORNIA
Property Tax Levies and Collections
Last Ten Fiscal Years
Current Tax Collections
Fiscal
Year
Total Net
Tax Levy
(Original
Levy)
Supplemental
Assessments
Redevelopment
Return of
Increment
Total
Adjusted
Tax Levy
Amount
Collected
Percentage
of Net Tax
Levy
Delinquent
Tax
Collections
Total Tax
Collections
Percent of
Collection
of Adjusted
Tax Levy
2014 $ 90,601,174 $ 9,698,694 $ 2,171,963 $ 102,471,831 $ 101,452,992 99.01 % $ 421,496 $ 101,874,488 99.42 % 2015 96,468,363 11,900,327 1,609,109 109,977,799 106,989,456 97.28 395,578 107,385,034 97.64 2016 100,946,941 12,082,212 2,306,017 115,335,170 113,633,713 98.52 508,181 114,141,894 98.97 2017 105,199,432 13,077,130 2,014,329 120,290,891 119,336,199 99.21 386,236 119,722,435 99.53 2018 109,890,834 13,565,677 2,278,284 125,734,795 123,764,163 98.43 649,161 124,413,324 98.95 2019 116,141,387 14,916,496 2,786,268 133,844,151 132,157,601 98.74 543,876 132,701,477 99.15 2020 122,120,737 14,809,607 3,366,768 140,297,112 136,883,021 97.57 745,241 137,628,262 98.10 2021 128,697,400 17,130,950 5,378,795 151,207,145 144,896,990 95.83 1,443,494 146,340,484 96.78 2022 133,834,626 14,994,674 5,750,554 154,579,854 145,788,069 94.31 41,485 145,829,554 94.34 2023 143,687,506 17,402,250 3,831,083 164,920,839 162,101,358 98.29 390,299 162,491,657 98.53 Average
Collections 98.14 %
Source(s): County of Fresno
Note(s):
Supplemental Assessments include voter approved indebtedness for Fire and Police Pensions and supplemental assessments added whenever new construction is completed and whenever real property changes ownership under Chapter 3.5 of Part 0.5 of Division 1 of the California Revenue and Taxation Code. 223
CITY OF FRESNO, CALIFORNIA
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
(dollars in thousands, except per capita)
Governmental Activities Business-Type Activities
Fiscal
Year
General
Obligation
Bonds
Lease
Revenue
Bonds
Tax
Allocation
Bonds
Certificates
of
Participation
Notes
Payable
Capital
Finance
Obligation
Airport
Revenue
Bonds
Solid
Waste
Revenue
Bonds
Sewer
Revenue
Bonds
Water
Revenue
Bonds
2014 $ 153,930 $ 171,806 $ — $ — $ 5,283 $ 7,738 $ 56,138 $— $ 215,611 $ 152,785 2015 147,177 161,435 — — 4,569 10,113 54,590 — 207,280 147,569 2016 139,999 153,279 — — 3,813 17,220 53,098 — 198,436 142,148 2017 131,840 144,697 — — 3,016 20,884 51,508 — 189,134 136,569 2018 124,245 136,021 — — 2,466 28,271 49,825 — 179,351 130,774 2019 116,160 126,191 — — 2,033 39,338 83,039 — 34,943 124,759 2020 107,555 116,139 — — 1,846 43,121 81,145 — 6,934 118,501 2021 98,395 125,464 — — 1,648 41,153 78,383 — 885 90,241 2022 88,640 116,162 — — 1,440 52,568 75,459 — 885 90,329 2023 78,255 105,982 — — — 49,606 52,110 — — 90,418 Source(s): Debt Information - City of Fresno, Finance Department Population Information - State of California Department of Finance, Demographic Research Unit Note(s): See the Schedule of Demographic and Economic Statistics for personal income and population data on page 233.
Information pertaining to Personal Income is obtained from the Bureau of Economic Analysis (BEA).
Personal income and Per Capita Personal Income figures for fiscal year 2021 & 2022 are not currently available from the BEA.
The City is not obligated in any manner for the Special Assessment debt, but is acting as an agent for property owners in collecting the assessments and forwarding the collections to the trustee or paying agent and initiating foreclosure proceedings, if appropriate.
Beginning in fiscal year 2012, the Tax Allocation Bonds are no longer reported on this schedule, due to the dissolution of the Redevelopment Agency, effective February 1, 2012. The bonds are assumed by the Successor Agency. 224
CITY OF FRESNO, CALIFORNIA
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years (Continued)
(dollars in thousands, except per capita)
Business-Type Activities Primary Government
Fiscal
Year
Lease
Revenue
Bonds
Accreted
Interest
Certificates
of
Participation
Notes
Payable
Capital
Leases
Total
Primary
Government
Percentage
of Personal
Income
Net Debt per
Capita
2014 $ 84,106 $ — $ — $ 54,929 $ — $ 902,326 2.57 % $ 1,750 2015 79,908 — — 52,080 — 864,721 2.31 % 1,662
2016 75,465 — — 82,795 — 866,253 2.20 % 1,664
2017 69,492 — — 208,855 — 955,995 2.33 % 1,818
2018 61,242 — — 364,624 — 1,076,819 2.51 % 2,000
2019 55,832 — — 403,612 — 985,907 2.17 % 1,837
2020 50,211 3,595 — 407,096 — 936,143 1.93 % 1,715 2021 44,362 3,355 — 424,550 — 908,436 1.74 % 1,661 2022 38,270 — — 425,341 — 889,094 1.73 % 1,635
2023 — — — 406,406 — 782,777 Not yet available 1,425 225
CITY OF FRESNO, CALIFORNIA
Ratios of General Bonded Debt Outstanding
Last Ten Fiscal Years
General Bonded Debt
Outstanding
Fiscal Year General Bonded
Debt
Tax Allocation
Bonds Total
Percent of
Actual Taxable
Value of
Property
Population Net Debt per
Capita
2014 $ 153,930,355 $ — $ 153,930,355 0.546 % 515,609 $ 299 2015 147,177,000 — 147,177,000 0.489 % 520,159 283 2016 139,998,791 — 139,998,791 0.444 % 520,453 269 2017 131,840,000 — 131,840,000 0.400 % 525,832 251 2018 124,245,000 — 124,245,000 0.361 % 538,330 231 2019 116,160,000 — 116,160,000 0.317 % 536,683 216 2020 107,555,000 — 107,555,000 0.279 % 545,769 197 2021 98,395,000 — 98,395,000 0.241 % 546,770 180
2022 88,640,000 — 88,640,000 0.209 % 543,660 163
2023 78,255,000 — 78,255,000 0.171 % 549,242 142
Source(s): General Bonded Debt Information - City of Fresno Department of Finance Population Information - State of California Department of Finance, Demographic Research Unit Note(s): Details regarding the City's outstanding debt can be found in the notes to the basic financial statements.
See Gross Assessed Value and Estimated Actual Value of Taxable Property schedule for property value information on page 220. 226
CITY OF FRESNO, CALIFORNIA
Direct and Overlapping Governmental Activities Debt
As of March 27, 2023
2022-23 Gross Assessed Valuation: $45,743,953,707
Estimated
Percent
Applicable
Debt
Applicable
Combined Direct Debt
City of Fresno Pension Obligation 100% 78,255
Lease Revenue Bonds 100 105,981
Notes Payable 100 —
Capital Leases 100 49,606
Total Combined Direct Debt 233,842
Overlapping Tax, and Assessment Debt
City of Fresno Community Facilities District No. 4 100% $ 645,000 City of Fresno Community Facilities District No. 5 100 515,000 City of Fresno Community Facilities District No. 7 100 1,055,000 State Center Community College District 42.43 167,560,313 Clovis Unified School District 47.792 203,867,169
Fresno Unified School District 84.489 702,535,768
Central Unified School District 81.764 197,126,159
Other School Districts Various 80,613,911
California Statewide Communities Development Authority Community Facilities District No. 2012-01 100 4,005,000 California Statewide Communities Development Authority Community Facilities District No. 2022-08 100 3,940,000 Total Overlapping Tax, and Assessment Debt 1,361,863,320 Overlapping General Fund Obligation Debt
Fresno County Pension Obligations 46.338% $ 88,673,959
Fresno County General Fund Obligations 46.338 11,065,514 Clovis Unified School District Certificates of Participation 47.921 56,012,683 Fresno Unified School District Certificates of Participation 84.489 4,929,933 Central Unified School District Certificates of Participation 81.764 21,185,041 Other School District Certificates of Participation Various 37,246,877 Total Overlapping General Fund Debt 219,114,007
Overlapping Tax Increment Debt (Successor Agency)
Fresno Redevelopment Mariposa Medical Project Area 100% $ 1,185,000 Total Overlapping Tax Increment Debt 1,185,000
Total Overlapping Tax and Assessment, General Fund and Tax Increment Debt 1,582,162,327 Total Overlapping and Direct Debt $ 1,582,396,169
Ratios to 2022-23 Assessed Valuation:
Combined Direct Debt 0.001 %
Overlapping Tax, and Assessment Debt 0.009 %
Combined Total Overlapping and Direct Debt 0.488 %
Overlapping Tax Increment Debt (Successor Agency) 0.003 % Note(s): Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City of Fresno. This process recognizes that, when considering the City's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account.
The percentage of overlapping debt applicable to the City of Fresno is estimated using taxable assessed property value. Applicable percentages were estimated by determining the portion of overlapping district's taxable assessed value that is within the boundaries of the City of Fresno divided by the District's total taxable assessed value.
The Direct and Overlapping Governmental Activities Debt excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds and non-bonded capital lease obligations. Qualified Zone Academy Bonds are included based on principal due at maturity.
The Overlapping Tax, Assessment Debt and General Fund Debt percentages and figures are provided by Cal Municipal Services, Inc. and are as of March 27, 2023. Direct Debt figures are provided by the Finance Department at the City of Fresno and are as of June 30, 2023. 227
CITY OF FRESNO, CALIFORNIA
Debt Coverage Ratio - Airports
Last Ten Fiscal Years (in thousands)
Fiscal Year
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Revenues (1) (2) $ 21,216 $ 21,802 $ 22,976 $ 24,500 $ 25,022 $ 27,308 $ 26,789 $ 33,470 $ 41,093 $ 44,994 Less Operating Expenses (3) 14,262 14,428 14,934 16,117 17,355 18,701 19,962 20,626 21,290 24,165 Plus: Other Available Funds (4) 95 350 359 368 377 386 395 — 416 412 Net Revenues $ 7,049 $ 7,724 $ 8,401 $ 8,751 $ 8,044 $ 8,993 $ 7,222 $ 12,844 $ 20,219 $ 21,241 Adjusted Debt Service
Series 2000 Bonds $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — Series 2013 Bonds (5) 3,288,000 2,805,000 2,808 2,803 2,801 2,802 2,801 — 2,804 2,700 Less
Minimum PFC Contribution (6) (1,600) (1,600) (1,600) (1,600) (1,600) (1,600) (1,600) (1,600) (1,600) (1,600) Additional PFC Contribution (231) — (200) — — — — — — — 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 (5) 1,369 1,399 1,437 1,472 1,509 1,544 1,581 — 1,664 1,649 2019 Bonds (5) — — — — — — — 2,141 — 1,945
Annual Adjusted Debt Service (7) $ 2,826 $ 2,604 $ 2,445 $ 2,675 $ 2,710 $ 2,746 $ 2,782 $ (1,600) $ 2,868 $ — Annual Adjusted Debt Service Coverage (8) 2.46 2.83 3.44 3.27 2.97 3.27 2.60 23.74 7.05 4.53 Note(s):
(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 2021 Revenues include $7.7 million of CARES Act monies. The Indenture of Trust defines Federal operating 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, such as Federal grant-funded Master Plan in fiscal year 2018 and fiscal year 2019.
(4)
Per the Indenture, unencumbered 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 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 percent of debt service associated with 2007 Bonds as Other Available Funds.
(5) Fiscal year 2021 Debt Service associated with Series 2013 Bonds, Series 2007 Bonds, and 2019 Bonds was prepaid on September 2020 with existing cash balances. (6) Under the Supplemental Indenture that authorized the 2013 Bonds, the Minimum Passenger Facility Charge (PFC) Contribution was increased from $1.1 million to $1.6 million. (7) Fiscal year 2021 Adjusted Debt Service was prepaid with existing cash balances (and was not paid with fiscal year 2021 Net Revenues). (8) Had fiscal year 2021 Adjusted Debt Service not been prepaid, fiscal year 2021 Debt Service coverage would have been 2.77. 228
CITY OF FRESNO, CALIFORNIA
Debt Coverage Ratio - Water System
Last Ten Fiscal Years (in thousands)
Fiscal Year
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Revenues
Charges for Services and Other Operating Revenue $ 90,096 $ 74,285 $ 77,959 $ 101,895 $ 107,377 $ 119,029 $ 120,252 $ 127,651 $ 138,341 $ 122,837 Less: Connection Fee Charges for Services (1,667) (1,496) (1,563) (1,917) (2,531) (2,138) (2,596) (1,835) (1,641) (1,206) Net Charges for Services (1) 88,429 72,789 76,396 99,978 104,846 116,891 117,656 125,816 136,700 121,631 Other Operating Revenues and Interest Income 329 573 1,147 17 (238) 4,974 6,906 (627) (9,378) (343) Total Revenues 88,758 73,362 77,543 99,995 104,608 121,865 124,562 125,189 127,322 121,288 Operating Expenses
Labor and Benefits 13,525 11,378 12,437 12,401 12,176 14,581 13,075 15,428 15,171 16,957 Pumping Power 9,292 8,501 8,150 9,064 9,550 8,358 9,419 10,252 11,516 11,508 Source of Supply 1,780 5,613 6,630 4,188 9,751 6,536 9,027 6,531 8,699 9,177 All Other Operating and Maintenance (2) 18,151 17,473 17,166 21,547 17,692 35,143 26,148 24,728 31,266 50,862 Total Operating Expenses (3) 42,748 42,965 44,383 47,200 49,169 64,618 57,669 56,939 66,652 88,504 Net Current Revenue $ 46,010 $ 30,397 $ 33,160 $ 52,795 $ 55,439 $ 57,247 $ 66,893 $ 68,250 $ 60,670 $ 32,784 Senior Bond Debt Service (4) $ 1,378 $ 1,374 $ 1,381 $ 1,380 $ 1,376 $ 1,379 $ 1,379 $ — $ — $ — State Loans Debt Service (5) 120 120 120 — — — — — — — Total Senior Debt Service 1,498 1,494 1,501 1,380 1,376 1,379 1,379 — — — Senior Coverage Ratio 30.71 20.35 22.09 38.26 40.29 41.51 48.51 Not Applicable Not Applicable Not Applicable Net Revenue Available for Parity Debt Service $ 44,512 $ 28,903 $ 31,659 $ 51,415 $ 54,063 $ 55,868 $ 65,514 $ 68,250 $ 60,670 $ 32,784 2010 Series A Bond Debt Service (6) $ 12,509 $ 12,509 $ 12,531 $ 12,508 $ 12,509 $ 12,504 $ 12,510 $ 7,020 $ 6,097 $ 4,084 State Loans Debt Service (5) 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 $ 22,586 $ 20,573 Parity Coverage Ratio 3.56 1.89 2.07 3.21 2.92 2.38 2.11 2.94 2.69 1.59 Note(s): (1) 1993 Indenture defines "Current Revenues" as all revenue from the operation of the Water System except for connection fees and charges. (2) All other operating and Maintenance includes Fleet Depreciation Charge (vehicle replacement fees paid to the Fleet Department). (3) 1993 Indenture defines "Maintenance and Operation Costs" as all costs 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 FY 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. 229
CITY OF FRESNO, CALIFORNIA
Debt Coverage Ratio - Sewer System
Last Ten Fiscal Years (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 1,547 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 75,767 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 $ 39,428 $ 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 10,387 10,712 10,701 10,684 373 6,234 40 905 Coverage Ratio (4) 3.68 4.17 4.16 4.12 4.16 3.51 96.06 4.68 634.28 52.64 100% Coverage-Subordinate Lien:
Net Current Revenue after Senior Lien Debt (before Connection Fees) $ 28,714 $ 33,947 $ 32,799 $ 33,389 $ 33,763 $ 26,824 $ 35,456 $ 22,930 $ 25,331 $ 46,732 Available from Senior Lien Revenues $ 28,714 $ 33,947 $ 32,799 $ 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 $ 7,949 $ 667 $ 2,280 $ — $ — $ — State Loan Debt Service (6) — — — — 1,280 1,286 2,573 1,286 1,286 3,397 Coverage Ratio 3.61 4.27 4.13 4.20 4.25 40.22 15.55 17.83 19.70 13.76 120% & 125% Coverage Subordinate Lien:
Net Current Revenue (Excluding Connection Fees) $ 28,714 $ 33,947 $ 32,799 $ 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) $ 30,695 $ 35,656 $ 34,643 $ 35,357 $ 35,759 $ 30,114 $ 38,056 $ 26,356 $ 28,724 $ 48,760 Available From Senior Lien Revenues $ 30,695 $ 35,656 $ 34,643 $ 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 $ 7,948.844 $ 7,949 $ 7,949 $ — $ — $ — State Loan Debt Service (6) — — — — 1,280 1,286 2,573 1,286 1,286 3,397 Coverage Ratio 3.86 4.49 4.36 4.45 3.87 3.26 3.62 20.49 22.34 14.35 Net Income After Debt Service (7) $ 22,746 $ 27,707 $ 26,694 $ 27,408 $ 26,530.156 $ 20,879 $ 27,534 $ 25,070 $ 27,438 $ 45,363 Note(s): (1) Includes revenue paid by the City of Clovis for Operations & Maintenance pursuant to the 1977 Fresno-Clovis Sewerage System Joint Powers Agreement. (2) The 1993 Indenture specifically excludes from Operating Expenditures: 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. (6) State Loan Debt Service
(7) Net Income after Debt Service and before cash financed capital expenditures and any other expenditures for lawful purposes. 230
CITY OF FRESNO, CALIFORNIA
Pledged Revenue Coverage - GASB 44 Methodology
Last Ten Fiscal Years (in thousands)
Fresno Convention Center Revenue Bonds
Debt Service
Fiscal
Year
Charges for
Services
Less: Operating
Expenses
Net Available
Revenue Principal Interest Coverage
2014 $ 2,626 $ 3,710 $ (1,084) $ 2,799 $ 2,586 (0.20)
2015 2,960 3,844 (884) 2,904 2,469 (0.16)
2016 3,634 4,929 (1,295) 3,030 2,346 (0.24)
2017 3,752 4,929 (1,177) 22,762 2,213 (0.05)
2018 3,318 3,958 (640) 2,189 1,171 (0.19)
2019 3,796 4,350 (554) 3,260 1,882 (0.11)
2020 1,911 3,528 (1,617) 3,422 1,716 (0.31)
2021 (2) 1,719 (1,721) 3,596 1,541 (0.34)
2022 5,744 6,387 (643) 3,784 1,351 (0.13)
2023 4,307 4,760 (453) 3,037 1,148 (0.11)
Stadium Bonds
Debt Service
Fiscal
Year
Charges for
Services
Less: Operating
Expenses
Net Available
Revenue Principal Interest Coverage
2014 $ 798 $ 30 $ 768 $ 1,185 $ 2,260 0.22
2015 1,248 31 1,217 1,255 2,189 0.35
2016 677 224 453 1,335 2,114 0.13
2017 1,082 224 858 17,210 1,597 0.05
2018 2,488 90 2,398 1,355 1,714 0.78
2019 406 111 295 1,490 1,705 0.09
2020 644 51 593 1,575 1,616 0.19
2021 580 154 426 1,670 1,522 0.13
2022 279 426 (147) 1,770 1,422 (0.05)
2023 102 731 (629) 1,870 1,316 (0.20)
Park Bonds
Debt Service
Fiscal
Year
Charges for
Services
Less: Operating
Expenses
Net Available
Revenue Principal Interest Coverage
2014 $ 329 $ 82 $ 247 $ 50 $ 104 1.61
2015 329 65 264 55 102 1.68
2016 325 102 223 55 100 1.44
2017 340 102 238 2,030 98 0.11
2018 323 38 285 60 73 2.15
2019 410 256 154 50 79 1.19
2020 278 345 (67) 55 77 (0.51)
2021 411 326 85 55 74 0.66
2022 630 170 460 55 71 3.65
2023 687 265 422 60 68 3.29
Note(s) Operating Expenses do not include interest, amortization or depreciation expenses.
The City issued new lease-revenue bonds to refinance several existing lease-revenue bonds for economic savings on May 10, 2017. Any bonds that were callable and produced savings were included, even if it meant redeeming one project in part because there was a non-callable portion that could not be redeemed. 231
CITY OF FRESNO, CALIFORNIA
Legal Debt Margin Information
Last Ten Fiscal Years
(Dollars in Thousands)
Legal Debt Limit Calculation for
Fiscal Year 2023
Assessed Value $ 45,743,954
Debt Limit (20% of assessed
value, pursuant to City Charter) 9,148,791
Debt applicable to the limit:
General obligation bonds — Less amount set aside for
repayment of general obligation
debt —
Total net debt applicable to limit —
Legal debt margin $ 9,148,791
Fiscal Year Debt Limit
Total Net Debt
Applicable to
Limit
Legal
Debt Margin
Total Net Debt
Applicable to the
Limit as a
Percentage of
Debt Limit
2014 $ 5,640,685 $ — $ 5,640,685 0.00 %
2015 6,016,695 — 6,016,695 0.00
2016 6,305,285 — 6,305,285 0.00
2017 6,588,227 — 6,588,227 0.00
2018 6,890,781 — 6,890,781 0.00
2019 7,322,640 — 7,322,640 0.00
2020 7,711,716 — 7,711,716 0.00
2021 8,173,990 — 8,173,990 0.00
2022 8,476,049 — 8,476,049 0.00
2023 9,148,790 — 9,148,790 0.00
Source(s): Assessed Valuation Information - County of Fresno, Tax Rate Book Note(s): The City's Judgment and Pension obligation bonds were the result of legal judgments that were financed to be paid out over a period of time.
Per Article XVI, Section 18 of the California Constitution "obligations imposed by law" are deemed exceptions to the debt limit. 232
CITY OF FRESNO, CALIFORNIA
Demographic and Economic Statistics
Last Ten Calendar Years
Calendar Year Population Personal Income
Per Capita
Personal
Income
Unemployment Rate Area Square
Miles
2014 515,609 $ 35,172,162,000 $ 36,448 11.580% 113.13
2015 520,159 37,359,815,000 38,323 10.200% 114.20
2016 520,453 39,295,335,000 40,101 9.500% 114.34
2017 525,832 41,024,000,000 41,470 8.480% 114.67
2018 538,330 42,842,800,000 43,084 7.500% 115.21
2019 536,683 45,445,944,000 45,487 7.300% 116.48
2020 545,769 48,539,267,000 48,495 12.124% 116.48
2021 546,770 52,120,107,000 51,422 12.131% 116.93
2022 543,660 51,316,407,000 50,549 5.600% 116.93
2023 549,242 Not yet available Not yet available 7.000% 116.93 Source(s): Population Information - State of California Department of Finance, Demographic Research Unit Unemployment Information - California Employment Development Department (EDD), Labor Market Information Division
Per Capita Income and Personal Income - Bureau of Economic Analysis (BEA).
Note(s): Personal Income and Per Capita Personal Income information pertains to Fresno, CA, Metropolitan Statistical Area (MSA). 2022-2023 Personal Income and Per Capita Income data is not yet available from the BEA.
The 2023 Unemployment Rate is the average of estimates for the first 10 months of calendar year 2023 as provided by California Employment Development Department.
The 2023 Population is as of 1/1/2023.
233
CITY OF FRESNO, CALIFORNIA
Principal Employers
Current Year and Nine Years Ago
2023 2014
Employer
Employees Rank
Percent of
Total City
Employment
Employees Rank
Percent of Total
City
Employment
Fresno Unified School District 13,669 1 3.55% 6,829 1 3.49 Community Medical Centers 9,750 2 2.53% 3,894 4 1.99%
County of Fresno 8,980 3 2.33% 6,568 2 3.35%
Amazon 6,500 4 1.69% — — —
Clovis Unified School District 6,400 5 1.66% — — —
California State University, Fresno 5,233 6 1.36% 1,524 7 0.78% City of Fresno 5,015 7 1.30% 4,100 3 2.09%
State Center Community College District 4,367 8 1.13% 1,183 8 0.60% Internal Revenue Service 4,230 9 1.10% — — —%
Saint Agnes Medical Center 2,900 10 0.75% 1,602 6 0.82% VA Central California Healthcare System — — — 1,062 9 0.54% Ameriguard Security Services — — — 650 10 0.33%
— — —
— — —
Total 67,044 17.4% 29,177 14.89%
Fresno City Employment 384,900 195,800
Source(s): Employer Information - Fresno County Economic Development Corporation (EDC) City of Fresno Employment information - Employment Development Department (EDD) - Labor Market Information, State of California Note(s): Fiscal year 2023 employer information provided by the Fresno County Economic Development Corporation (EDD) and represents private and public sector full- time employees.
The fiscal year 2023 employer information for the County of Fresno is estimated to be within the City of Fresno.
The Employer Information for the Internal Revenue Service includes employees from all Fresno offices.
Fiscal year 2023 Fresno City Employment figures are for June 2023 as currently available from the California EDD for Fresno (MSA). 234
CITY OF FRESNO, CALIFORNIA
Full-Time Equivalent City Government Employees by Function/Program Last Ten Fiscal Years
Fiscal Year
General Government 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Management 79.50 79.50 80.25 85.25 96.84 101.50 189.00 199.00 226.25 262.65 Finance 56.00 58.00 58.75 60.75 54.75 55.00 118.00 116.00 115.75 116.00 Other 94.80 95.00 96.25 103.50 106.00 112.00 117.00 121.00 130.00 204.00 Enterprise Functions
Transportation
Airports
Sworn 5.00 15.00 15.00 19.00 19.00 19.00 19.00 19.00 21.00 24.00 Civilian 77.40 72.00 72.00 77.35 80.05 82.00 85.65 99.40 95.40 109.65 FAX Department 407.00 422.00 435.50 492.25 508.00 515.50 533.00 534.00 541.00 492.00 Public Utilities 614.75 634.75 640.50 643.80 643.80 646.80 587.75 589.00 613.50 608.55 Economic Growth and Expansion
Development and Resource
Management Department 166.60 174.60 184.60 204.80 218.70 — — — — — Planning and Development Services — — — — — 218.20 138.70 141.20 161.35 196.40 Public Works 272.50 292.75 288.75 305.25 315.25 339.50 356.75 358.00 392.50 407.25 Culture and Recreation
Parks, Recreation and Community
Services 52.00 66.00 71.00 73.50 75.00 75.75 76.00 88.00 72.00 132.50 Public Protection
Police
Sworn 717.00 717.00 775.00 804.00 830.00 835.00 835.00 838.00 850.00 888.00 Civilian 238.00 278.00 244.56 274.65 270.34 273.75 292.00 297.60 316.90 367.50 Fire
Sworn 304.00 310.00 314.00 334.00 334.00 334.00 302.00 305.00 347.00 371.00 Civilian 42.20 46.75 45.00 42.91 47.75 42.50 43.50 45.30 48.50 47.92 Total 3,126.75 3,261.35 3,321.16 3,521.01 3,599.48 3,650.50 3,693.35 3,750.50 3,931.15 4,371.17 Source(s): City of Fresno Budget Management & Studies Division - Adopted Budgets, Authorized Positions.
Note(s): Figures for Full-Time Equivalents (FTE's) include Permanent and Permanent Part-Time employees only.
Authorized Positions are established by resolution of the City Council and represent the total number of permanent, permanent part-time and permanent intermittent positions in which persons may be employed by the City during a Fiscal Year. Changes in the total number of positions can only be accomplished by resolution of the City Council.
Total permanent positions for each fiscal year are represented as of the following dates: fiscal year 2012 as of May 2012; fiscal year 2013 as of September 2012; fiscal year 2014 as of June 2013; fiscal year 2015 as of September 2014; fiscal year 2016 as of September 2015; fiscal year 2017 as of June 2017; fiscal year 2018 as of June 2018; fiscal year 2019 as of June 2019; fiscal year 2020 as of June 2020 and fiscal year 2021 as of June 2021.
In fiscal year 2017, the Transportation FAX Department added service, management and support staff positions for a variety of service additions such as Bus Rapid Transit (BRT), extended night and weekend service, and increased frequencies on four major avenues.
In fiscal year 2017, positions were added to address reductions that occurred in recent years. Additions to the Police Department included Police Officer Recruits, Police Officer Cadets and a Police Sergeant. Additions to the Fire Department included Firefighters and an administrative position.
In fiscal year 2018, the Budget and Management Studies Division was relocated from the Finance Department to the City Manager's Office.
In fiscal year 2019, Development and Resource Management Department (DARM) became Planning & Development Services. 235
CITY OF FRESNO, CALIFORNIA
Operating Indicators by Function/Program
Last Ten Fiscal Years
Fiscal Year
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
General Government
Building Permits Issued
Commercial 1,835 1,878 1,641 1,948 1,876 1,688 1,731 1,387 1,322 1,774 Residential 7,931 9,084 8,313 11,227 10,998 7,770 9,753 9,045 9,458 10,796 Police
Physical Arrests 39,689 43,729 37,816 26,893 27,920 28,337 20,885 18,006 10,939 12,341 Traffic Violations (citations issued) 51,940 44,954 58,927 58,927 39,488 57,691 43,992 21,769 22,892 28,174 Calls Received for Police Service 957,532 950,099 1,026,458 950,099 1,013,411 924,016 920,020 905,206 1,256,230 1,178,900 Fire
Emergency Medical Service Calls 19,413 20,191 19,174 21,773 21,430 32,071 27,964 21,640 25,487 25,034 Fire Incidents 15,953 16,326 18,257 16,702 16,830 25,194 14,906 19,352 22,281 21,765 Fire Inspections 11,187 9,780 12,581 13,292 12,679 12,747 13,692 11,329 14,871 16,124 Fire Hydrant Inspections 30,420 26,811 17,025 17,000 17,252 17,252 17,381 17,859 17,004 17,266 Wastewater Treatment
Average Daily Sewage Treatment
(million gallons per day) 60.2 57.2 55.9 56.9 57.1 56.2 56.1 58 57.38 57.66 Wastewater Treatment Capacity (million
gallons per day) 80 80 80 80 80 92 91.5 91.5 94.5 91.5
Solid Waste
Refuse Collected (tons per day) 451 505 623 650 648 662 650 750 750 730 Recyclables Collected (tons per day) 116 117 154 156 154 156 159 179 180 353 Green Waste Collected (tons per day) 293 275 348 358 353 365 366 368 359 169 Other Public Works
Street Resurfacing (miles) 12.3 17.0 18.6 16.8 15.1 28.3 13.8 91.4 13.1 64.1 Parking Violations (citations issued) 49,313 49,326 47,531 53,760 54,865 45,407 34,514 16,524 29,251 25,751 Parks and Recreation
Athletic Field Permits Issued 4,317 5,921 6,949 8,332 5,392 6,795 5,182 556 2,967 6,886 Memorial Auditorium User Groups 26 16 27 18 13 23 8 1 8 8 Memorial Auditorium, Audience 21,600 21,000 45,900 18,900 16,500 19,500 10,800 1,106 5,225 3,350 Senior Hot Meal Participants (All Sites) 38,874 38,103 45,070 44,686 47,605 46,604 29,007 — — 165 Meals Served (Not Senior Hot Meals) — — — 32,328 40,830 26,879 22,878 — — 3 Picnic Shelter/Table Reservations
(Roeding & Woodward) 3,058 2,194 2,457 2,053 1,907 1,841 2,438 21 4,838 7,052 Average Daily Attendance (Neighborhood
Parks with Centers) — — 1,653 1,732 1,976 2,083 1,656 357 20 16 236
CITY OF FRESNO, CALIFORNIA
Operating Indicators by Function/Program
Last Ten Fiscal Years (Continued)
Fiscal Year
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Convention Center
Event Days 322 297 209 313 300 296 170 — 155 235 Gross Ticket Sales $ 7,905,120 $ 5,594,470 $ 7,272,305 $ 8,049,133 $ 6,741,116 $ 12,048,880 $ 3,792,771 $ — $ 8,537,274 $ 6,818,629 Attendance 442,070 428,086 455,491 455,587 417,918 478,541 278,299 — 234,718 251,265 Water
Number On-Service Accounts 131,910 133,163 134,381 135,448 136,408 137,251 138,332 140,140 141,196 142,569 Main/Service Leaks Repaired 705 558 378 408 663 737 776 842 541 940 Average Daily Per Capita Consumption (gallons) 231 208 183 198 208 189 197 203 198 186 Peak Daily Consumption (MGD - Million Gallons per
Day) 199.4 187.36 169.88 180.6 183.42 156.91 170.01 174.2 172.44 199.2 Transportation
Airports
Number of Commercial Airlines 10 9 8 8 8 8 8 9 9 8
Number of Cargo Carriers 3 3 3 3 3 3 3 3 2 2
Total Number Tenant Aircraft 408 408 320 303 277 301 287 287 287 287 Annual Fuel Consumption (gallons) 10,454,758 9,548,919 10,541,916 10,592,430 8,698,431 2,648,061 2,002,465 2,247,020 2,549,932 2,380,532 Origin and Destination Passengers
Domestic 1,283,770 1,252,962 1,292,784 1,328,929 1,423,248 1,621,990 1,298,554 1,094,020 1,907,434 1,945,419 International 147,094 153,244 182,225 208,947 212,075 235,667 207,037 200,785 302,571 320,566 Origin and Destination Mail (lbs.) 183 — 316 17,818 9,362 12,649 — — — 5,822 Origin and Destination Freight (lbs.) 24,393,421 25,843,389 24,546,856 19,873,695 20,965,016 22,399,354 34,921,956 33,956,904 34,348,311 27,125,646 Fresno Area Express (FAX)
Actual Route Miles 4,218,412 4,157,174 4,175,783 4,208,890 4,337,684 4,649,397 4,701,969 4,693,498 4,788,756 4,833,345 Passengers 12,059,050 11,364,431 10,672,577 9,622,874 9,750,800 10,551,665 9,058,367 5,604,780 6,985,740 8,184,510 Mini-Buses - Purchased Transportation 48 50 58 63 69 56 48 43 40 38 237
Source(s): City of Fresno - Various Departments
Note(s): Building Permits Issued includes individual units and structures and is a composite of new construction, additions, alterations, repairs and relocations.
Police department figures are based on calendar year and are as of January 1 of reported year. FY2020 physical arrest figures are reported as of September 2019.
Information is combined for Fresno Yosemite International (FYI) and Chandler Executive Airport (FCH) for Number of Cargo Carriers, Number of Tenant Aircraft, Annual Fuel Consumption and Origin and Destination Freight.
Fire inspection figures reflect only those performed in the City of Fresno and excludes service calls for neighboring fire districts.
Fire hydrant inspections decreased in FY2016 because of an inspection schedule change. Beginning in FY2016, fire hydrant inspections are scheduled for annual inspections instead of bi-annual inspections.
The FY2016 Mini bus figure includes 8 sedans as is consistent with National Transit Database (NTD) reporting.
The FY2019 increase in FAX functional areas was due to a steady increase in FAX ridership due to strategic planning efforts, namely the addition of Bus Rapid Transit service in February 2018 and an additional line (Route 12) west of highway 99.
The FY2019 drop in fuel consumption was due to a loss of a large fixed based operator and a significant drop in the extent of fires, resulting in less military and forest service.
The FY2020 & FY2021 reduction in parking violations was related to relaxed enforcement due to COVID-19.
The FY2021 decrease in number of mini-buses was due to life cycle retirements. Passenger decrease was a direct result of COVID-19, ridership was restricted to allow for social distancing. Beginning March 2020, the passenger limit affected subsequent months and continued through June 20, 2021.
The FY2021 reduction of Parks & Recreation operations was due to the shuttering of facilities due to COVID-19.
The FY2021 increase in street resurfacing miles was due to the inclusion of Street Paving, Slurry & Construction Management miles.
The FY2021 decrease of Convention Center operations was due to the reduction of events hosted in response to COVID-19.
The FY2021 decrease in Police traffic violations was due to less people on the roads in response to COVID-19 The FY2022 increase of Convention Center operations was due to the increase of events hosted.
The FY2023 for Athletic Field Permits Issued includes Tennis The FY2023 Meals and Senior Hot Meals increased as they were not served in FY2022 due to the Covid Pandemic The FY2023 paratransit statistics are not included in the Revenue Miles (Actual Route Miles) or Number of Passengers categories listed within this table.
T h e F Y 2 0 2 3 i n c r e a s e i n f i x e d r o u t e p a s s e n g e r s i s d u e t o t h e r e m o v a l o f C O V I D - 1 9 r e l a t e d r e s t r i c t i o n s .
T h e F Y 2 0 2 3 d e c r e a s e i n b o t h d i r e c t l y o p e r a t e d f i x e d r o u t e b u s e s a n d p a r a t r a n s i t c u t a w a y s a r e d u e t o l i f e c y c l e r e t i r e m e n t s . T h e D e p a r t m e n t h a s f u n d i n g a v a i l a b l e t o r e p l e n i s h t h e l o s t v e h i c l e s i n s u c c e e d i n g f i s c a l y e a r s , h o w e v e r , C O V I D - 1 9 staffing inconsistencies have led to procurement delays.
Information was not available for all years for all categories. 238
CITY OF FRESNO, CALIFORNIA
Capital Asset Statistics by Function/Program
Last Ten Fiscal Years
Fiscal Year
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Police Department
Stations 4 4 4 5 5 5 5 5 5 5
Patrol Bureaus 4 4 4 5 5 5 5 5 5 5
Vehicular Patrol Units 261 257 276 334 360 356 390 388 435 470 Plain Cars (No specialty vehicles) 175 175 173 198 197 200 228 239 64 218 Motorcycles 71 85 72 70 74 70 66 74 57 69
Helicopters 2 2 2 2 2 2 2 2 2 2
Fixed Wing Aircraft 1 1 1 1 1 — — — — —
Fire Department
Fire Stations 20 20 20 20 20 20 20 20 20 20
Squad Companies — — — — — — — — 3 3
Engine Companies 16 18 18 17 17 18 18 18 18 18
Truck Companies 4 4 4 5 5 5 5 5 5 5
Public Works
Streets (miles) 1,490 1,672 1,500 1,511 1,692 1,700 1,714 1,721 1,721 1,721 Street Lights 41,500 42,051 42,207 42,405 43,318 43,450 43,570 43,811 44,048 44,297 Traffic Signals 466 489 467 468 481 488 486 488 493 503 Solid Waste Division
Collection Trucks 83 84 89 81 85 86 86 88 88 84
Water Division
Water Mains (miles) 1,803 1,799 1,801 1,809 1,827 1,859 1,871 1,880 1,889 1,897 Wells 271 260 261 260 263 262 262 264 271 271
Fire Hydrants 13,139 13,170 13,218 13,332 13,484 13,536 13,638 13,717 13,784 13,865 Sewer Maintenance Division
Sewer Mainlines (miles) 1,529 1,533 1,536 1,539 1,613 1,558 1,628 1,579 1,593 1,597 Manholes 23,644 23,776 22,834 23,947 24,146 24,359 25,546 25,546 25,046 25,238 Lift Stations 15 15 15 15 15 14 16 16 17 16
Parks
Metropolitan Parks (Regional) 3 3 3 3 3 3 3 3 3 3
Neighborhood Parks 31 32 33 34 34 34 34 34 34 47
Pocket Parks 21 21 21 21 21 21 21 21 21 18
Zoo 1 1 1 1 1 1 1 1 1 1
Golf Courses 2 2 2 2 2 2 2 2 2 1
Community Parks 1 1 1 1 1 1 1 1 1 10
Skate Parks 6 6 8 8 8 8 8 8 8 8
Tennis Courts 40 40 42 42 42 42 42 42 42 42
Acres of Parks 1,535 1,384 1,392 1,393 1,393 1,393 1,393 1,393 1,393 1,288 Neighborhood Centers 12 12 12 12 12 12 12 12 12 12
Community Center 5 5 5 5 7 7 7 7 7 7
Swimming Pools 9 9 9 9 9 8 8 8 8 8
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CITY OF FRESNO, CALIFORNIA
Capital Asset Statistics by Function/Program
Last Ten Fiscal Years (continued)
Fiscal Year
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Transportation
Airports 2 2 2 2 2 2 2 2 2 2
Municipal Airport Total Acreage 1,875 1,875 1,875 1,875 2,050 2,050 2,050 2,050 2,050 2,050 Length of Longest Runway (surfaced) -
Linear Feet 9,539 9,539 9,539 9,539 9,539 13,165 13,165 13,165 13,165 13,165 Number of Runways 3 3 3 3 3 3 3 3 3 3
Number of Terminals 2 2 2 2 2 2 2 2 2 2
Terminals (square footage) 193,364 193,364 193,364 193,364 193,364 193,364 193,364 193,364 193,364 193,364 Number of Parking Spaces (surface lot) 2,365 2,365 2,355 2,664 2,664 2,664 2,812 3,074 4,038 4,031 Air Cargo Ramp Spaces 9 9 8 8 9 9 9 8 8 8
Air Cargo Ramp (surface square
footage) 806,390 806,390 806,390 806,390 806,390 806,390 806,390 806,390 806,309 806,309 Number of Hangars 302 302 303 303 303 303 303 303 303 303 Buses - Directly Operated 111 105 105 129 138 102 100 102 105 103 Source(s): City of Fresno - Various Departments
Note(s): Information combined for Fresno Yosemite International (FYI) and Chandler Executive Airport (FCH).
The FY2016 reduction in Street(miles) is due to the non-inclusion of secondary segments on the major divided roads and is not associated with any road removal.
The Regional Sports Complex reported acreage was reduced from 268 acres to 114. While part of the Complex footprint, 154 acres are presently not available for public access.
Three acres were added due to the opening of Martin Ray Reilly Park in FY2015. 8.3 acres were added in FY2016 due to the opening of Inspiration Park.
In FY2020, Airports added stalls to a designated area not previously used for parking. This increased the number of stalls and had no affect on acreage.
In FY2022, there was a significant increase in the number of parking stalls at the airport due to completion of the new parking garage on the current parking lot location. Parking stalls no longer designated Hourly/Daily.
They are now Daily/Economy.
In FY2022, Squad companies were established to respond to medical and fire calls in a pickup rather than an engine or a truck.
Information not available for all years for all categories. 240
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