NOTE 4-
City of Gustine
NOTES TO FINANCIAL STATEMENTS
June 30, 2024
DETAILED NOTES ON ALL FUNDS (continued)
F. Long-term Debt (continued)
2010 Vierra Loan Payable
In February 2010 the City entered a note payable in the amount of $350,000. The proceeds from the note were used to purchase property for the water and sewer enterprises. The note payable has an interest rate of 6.25% and the final payment is scheduled for January 2030. The note is being repaid with monthly payments of $2,558.
The annual debt service requirements for the note payable outstanding at June 30, 2024, are as follows:
Interest Total
$ 8,392 $ 30,699
6,957 30,699
5,430 30,699
3,804 30,699
2,074 30,698
367 17.908
$ 27.024 S 171.402
2012 USDA Certificates of Participation- Water System Improvements On June 1, 2012, the City agreed to issue certificates of participation in the amount of $800,000.
The proceeds from this issue were used to finance improvements to the City's municipal water system. The certificates have an interest rate of 2.75% and the final payment is scheduled for July 1, 2052. The balance outstanding as of June 30, 2024 was $647,000. - 35 -
Years Ended June 30 Principal
2025 $ 22,307
2026 23,742
2027 25,269
2028 26,895
2029 28,624
2030 17.541
Total $ 144,378
NOTE4-
City of Gustine
NOTES TO FINANCIAL STATEMENTS
June 30, 2024
DETAILED NOTES ON ALL FUNDS (continued)
F. Long-term Debt (continued)
The annual debt service requirements for the water system improvement certificates of participation payable outstanding at June 30, 2024, are as follows:
Years Ended June 30
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
2047
2048
2049
2050
2051
2052
2053
Total
Principal
$ 15,000
16,000
16,000
16,000
17,000
17,000
17,000
18,000
18,000
18,000
19,000
19,000
19,000
20,000
20,000
21,000
21,000
22,000
22,000
27,000
28,000
28,000
29,000
29,000
30,000
30,000
31,000
32,000
32,000
$ 647,000
Interest Total
$ 17,586 $ 32,586
17,160 33,160
16,720 32,720
16,280 32,280
15,826 32,826
15,359 32,359
14,891 31,891
14,410 32,410
13,915 31,915
13,420 31,420
12,911 31,911
12,389 31,389
11,866 30,866
11,330 31,330
10,780 30,780
10,216 31,216
9,639 30,639
9,048 31,048
8,443 30,443
7,679 34,679
7,013 35,013
6,243 34,243
5,459 34,459
4,661 33,661
3,850 33,850
3,025 33,025
2,186 33,186
1,320 33,320
440 32 440
$ 294,065 $ 941.,065
Vac-Con Vacuum Truck & Rausch Minicam 360 Camera System Lease-purchase agreement On April 25, 2020, the City agreed to lease-purchase a Vac-Con Vacuum Truck including a Rausch Minicam 360 Camera System. The terms of the lease include equipment costs of $468,621 and seven annual payments of $73,995 including an interest rate of 2.94%. The total payments at the end of the lease will total $517,966. The final lease payment is due 10/25/2026. - 36-
NOTE 4-
City of Gustine
NOTES TO FINANCIAL STATEMENTS
June 30, 2024
DETAILED NOTES ON ALL FUNDS (concluded)
F. Long-term Debt (concluded)
The annual debt service requirements for the Vac-Con Truck lease-purchase agreement payable outstanding at June 30, 2024, are as follows:
Years Ended June 30 Principal Interest Total
2025 $ 67,833 $ 6,162 $ 73,995
2026 69,828 4,167 73,995
2027 73.710 2114 75 824
Total $ 211,371 $ 12,443 $ 223 814
2022 CalPERS Prepayment Bond
On May 3, 2022, the City agreed to issue taxable revenue bonds in the amount of $2,353,711. The proceeds from this issue were used to prepay the city's pension liability. $152,000 was used to fund the cost of bond issuance. The remainder, $2,201,711 was paid to CalPERS reducing the pension liability. The bonds have an interest rate of 3.50% and the final payment is scheduled for April 1, 2042. The balance outstanding as of June 30, 2024 was $2,180,235.
The annual debt service requirements for the CalPERS Prepayment Bond payable outstanding at June 30, 2024, are as follows:
Years Ended June 30 Principal Interest Total
2025 $ 88,990 $ 73,194 $ 162,184
2026 92,105 69,970 162,075
2027 95,329 66,633 161,962
2028 98,665 63,180 161,845
2029 102,118 59,606 161,724
2030 105,693 55,907 161,600
2031 109,392 52,078 161,470
2032 113,220 48,115 161,335
2033 117,193 44,014 161,207
2034 121,285 39,769 161,054
2035 125,530 35,375 160,905
2036 129,923 30,828 160,751
2037 134,470 26,122 160,592
2038 139,177 21,250 160,427
2039 144,048 16,209 160,257
2040 149,090 10,991 160,081
2041 154,308 5,590 159,898
2042 159,709 159.709
Total $ 2,180,235 $ 718,830 $ 2,899,075
- 37-
NOTE 5-
City of Gustine
NOTES TO FINANCIAL STATEMENTS
June 30, 2024
PUBLIC EMPLOYEES RETIREMENT SYSTEM
General Information about the Pension Plan
Plan Description
The City contributes to the California Public Employees' Retirement System (CalPERS), an agent multiple-employer public employee defined benefit pension plan. CalPERS acts as a common investment and administrative agent for participating public entities within the State of California.
Benefit provisions and all other requirements are established by state statute and City ordinance. A full description of the pension plan regarding number of employees covered, benefit provisions, assumptions (for funding, but not accounting purposes), and membership information are listed in the June 30, 2016 Annual Actuarial Valuation Report. This report and CalPERS' audited financial statements are publicly available reports that can be obtained at CalPERS' website under Forms and Publications.
Benefit Provided
CalPERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. A classic miscellaneous member becomes eligible for Service Retirement upon attainment of age 55 with at least 5 years of credited service. PEPRA miscellaneous members become eligible for service retirement upon attainment of age 62 with at least 5 years of service. A classic safety member becomes eligible for Service Retirement upon attainment of age 50 with at least 5 years of credited service. PEPRA safety members become eligible for service retirement upon attainment of age 57 with at least 5 years of service. The service retirement benefit is a monthly allowance equal to the product of the benefit factor, years of service, and final compensation. The final compensation is the monthly average of the member's highest 36 or 12 consecutive months' full-time equivalent monthly pay. Retirement benefits for classic miscellaneous employees are calculated as 2.5% of the average final 36 months compensation.
Retirement benefits for PEPRA miscellaneous employees are calculated as 2.0% of the average final 36 months compensation.
Retirement benefits for classic safety employees are calculated as 3.0% of the average final 36 months compensation. Retirement benefits for PEPRA safety employees are calculated as 2.7% of the average final 36 months compensation.
Participant is eligible for non-industrial disability retirement if becomes disabled and has at least 5 years of credited service. There is no special age requirement. The standard non-industrial disability retirement benefit is a monthly allowance equal to 1.8 percent of final compensation, multiplied by service. Industrial disability benefits are not offered to miscellaneous employees. The City provides industrial disability retirement benefit to safety employees. The industrial disability retirement benefit is a monthly allowance equal to 50 percent of final compensation.
An employee's beneficiary may receive the basic death benefit if the employee dies while actively employed. The employee must be actively employed with the City to be eligible for this benefit. An employee's survivor who is eligible for any other pre-retirement death benefit may choose to receive that death benefit instead of this basic death benefit. The basic death benefit is a lump sum in the amount of the employee's accumulated contributions, where interest is currently credited at
7.5 percent per year, plus a lump sum in the amount of one month's salary for each completed year of current service, up to a maximum of six months' salary. For purposes of this benefit, one month's salary is defined as the member's average monthly full-time rate of compensation during the 12 months preceding death.
Benefit terms provide for annual cost-of-living adjustments to each employee's retirement allowance. Beginning the second calendar year after the year of retirement, retirement and survivor allowances will be annually adjusted on a compound basis by 2 percent. - 38-
NOTE 5-
City of Gustine
NOTES TO FINANCIAL STATEMENTS
June 30, 2024
PUBLIC EMPLOYEES RETIREMENT SYSTEM (continued)
Contributions
Section 20814(c) of the California Public Employees' Retirement Law ("PERL") requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS' annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Employer contribution rates may change as plan contracts are amended. It is the responsibility of the employer to make necessary accounting adjustments to reflect the impact due to any Employer Paid Member Contributions or situations where members are paying a portion of the employer's contribution.
Also, on August 31, 2012, the California Legislature passed AB 340, the Public Employees' Pension Reform Act of 2013 (PEPRA). As part of this reform, "new members" hired starting January 1, 2013 will have to pay their required employee contribution. Since their benefit level is much lower than the "classic members" their contribution rate is also lower. PEPRA defines "new member" as an employee hired on or after January 1, 2013, who falls into one of the following:
1. Has no prior membership in any California public retirement system.
2. Has prior membership with another California public retirement system that has no reciprocity with Cal PERS; or '
3. Has an established membership with CalPERS prior to January 1, 2013, and is re-hired by a different CalPERS employer after a break in service of greater than six months. r
For the measurement date year ended June 30, 2024, the plan's contribution and the proportionate share of aggregate employer contributions of the cost-sharing plan made for each plan was as follows: l
Total
Contributions - employer $319,466
Pension Liabilities. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
As of June 30, 2024, the City reported net pension liabilities for its proportionate share for each plan as follows:
Total
Proportionate share of net pension liability $1,824,147 The City's net pension liability for each plan is measured as the proportionate share of the net pension liability.
The net pension liability of the Plans is measured as of June 30, 2023, and the total pension liability for each Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2022 rolled forward to June 30, 2023 using standard update procedures. The City's proportion of the net pension liability was based on a projection of the City's long-term share of contributions to the pension plans relative to the projected contributions of all participating employers, actuarially determined.
The following is the approach established by the plan actuary to allocate the net pension liability and pension expense to the individual employers within the risk pool. - 39-
NOTE 5-
City of Gustine
NOTES TO FINANCIAL STATEMENTS
June 30, 2024
PUBLIC EMPLOYEES RETIREMENT SYSTEM (continued)
(1) In determining a cost-sharing plan's proportionate share, total amounts of liabilities and assets are first calculated for the risk pool as a whole on the valuation date (June 30, 2022). The risk pool's fiduciary net position ("FNP") subtracted from its total pension liability ("TPL") determines the net pension liability ("NPL") at the valuation date. (2) Using standard actuarial roll forward methods, the risk pool TPL is then computed at the measurement date (June 30, 2023). The risk pool FNP at the measurement date is then subtracted from this number to compute the NPL for the risk pool at the measurement date.
For purposes of FNP in this step and any later reference thereto, the risk pool's FNP at the measurement date denotes the aggregate risk pool's FNP at June 30, 2023 less the sum of all additional side fund (or unfunded liability) contributions made by all employers during the measurement period (fiscal year 2022).
(3) The individual plan's TPL, FNP and NPL are also calculated at the valuation date. (4) Two ratios are created by dividing the plan's individual TPL and FNP as of the valuation date from by the amounts in step (1), the risk pool's total TPL and FNP, respectively. (5) The plan's TPL as of the Measurement Date is equal to the risk pool TPL generated in (2) multiplied by the TPL ratio generated in (4). The plan's FNP as of the Measurement Date is equal to the FNP generated in (2) multiplied by the FNP ratio generated in (4) plus any additional side fund (or unfunded liability) contributions made by the employer on behalf of the plan during the measurement period.
6) The plan's NPL at the Measurement Date is the difference between the TPL and FNP calculated in (5).
The City's proportionate share of the net pension liability for each plan as of June 30, 2023 was as follows:
All Plans
Proportion June 30, 2023
Proportion June 30, 2022
Change
0.01462%
0.01556%
(0.00094)%
For the measurement year ended June 30, 2023, the City recognized pension expense of $357,139. On June 30, 2024 the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
Deferred Deferred
Outflows of Inflows of
Resources Resources
Pension contributions after measurement date $ 317,855 $ Differences between actual and expected experience 115,732 (12,801) Changes in assumptions 108,100
Change in employer proportion (1,357,971)
Net difference between projected and actual earnings 270,049 Differences between actual contributions and
proportionate share of contributions 900 567 (121,514)
Total $ 1.712.303 $ (1.492,286)
- 40-
NOTE 5-
City of Gustine
NOTES TO FINANCIAL STATEMENTS
June 30, 2024
PUBLIC EMPLOYEES RETIREMENT SYSTEM (continued)
The $317,855 reported as deferred outflows of resources related to contributions after the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2025.
Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
Year Ended June 30
2025
2026
2027
2028
$ (141,020)
(118,576)
154,116
7,642
Actuarial Assumptions - The June 30, 2022, valuation was rolled forward to determine the June 30, 2023 total pension liabilities based on the following actuarial methods and assumptions:
Valuation Date
Measurement Date
Actuarial Cost Method
Actuarial Assumptions:
Discount Rate
Inflation
Salary Increases
Mortality Rate Table
Post Retirement Benefit Increase
June 30, 2022
June 30, 2023
Entry-Age Normal Cost Method
6.9%
2.3%
Varies by Entry Age and Service
Derived using CalPERS membership data for all funds
Contract COLA up to 2.3% until purchasing power
Protection allowance floor on power applies
The mortality table used was developed based on CalPERS' specific data. Generational Mortality to capture ongoing mortality improvement using 80% of Scale MP 2020 published by the Society of Actuaries. For more details, please refer to the 2021 experience study report that can be found on the CalPERS website.
Discount Rate - The discount rate used to measure the total pension liability was 6.90%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.
Long-term Expected Rate of Return - The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.
In determining the expected long-term rate of return, CalPERS considered both short-term and long-term market return expectations as well as the expected pension fund (PERF) cash flows.
Using historical returns of all funds' asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11 + years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund.
- 41-
NOTE 5-
City of Gustine
NOTES TO FINANCIAL STATEMENTS
June 30, 2024
PUBLIC EMPLOYEES RETIREMENT SYSTEM (concluded)
The expected rate of return was set by calculating the rounded single equivalent expected return that arrived at the same present value of benefits of cash flows as the one calculated using both short-term and long-term returns.
The expected rate of return was then set equivalent to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses. The expected real rates of return by asset class are as follows:
Asset Class Assumed Asset Allocation Real Return Years 1-10 12 Global equity - cap-weighted 30.00% 4.54%
Global equity - non-cap-weighted 12.00% 3.84%
Private Equity 13.00% 7.28%
Treasury 5.00% 0.27%
Mortgage-backed Securities 5.00% 0.50%
Investment Grade Corporates 10.00% 1.56%
High Yield 5.00% 2.27%
Emerging Market Debt 5.00% 2.48%
Private Debt 5.00% 3.57%
Real assets 15.00% 3.21%
Leverage -5.00% -0.59%
1. An expected inflation of 2.30% used for this period.
2. Figures are based on the 2021-22 Asset Liability Management study.
Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the City's proportionate share of the net position liability for the Plan, calculated using the discount rate for each Plan, as well as what the City's proportionate share of the net pension liability would be if.it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate:
All Plan's Net Pension Liability /(Asset)
Discount Rate -- 1% Current Discount Rate
(5.90%) (6.90%)
$ 3,687,959 $ 1,824,147
Discount Rate +1%
(7.90%)
$ 295,591
The expected average remaining service lifetime (EARSL) is calculated by dividing the total future service years by the total number of plan participants (active, inactive, and retired) in the Public Agency Cost-Sharing Multiple-Employer Plan (PERF C).
The EARSL for PERF C for the measurement period ending June 30, 2024, is 3.8 years, which was obtained by dividing the total service years of 630,177 (the sum of remaining service lifetimes of the active employees) by 166,163 (the total number of participants: active, inactive, and retired) in PERF C. Inactive employees and retirees have remaining service lifetimes equal to 0. Total future service is based on the members' probability of decrementing due to an event other than receiving a cash refund.
Pension Plan Fiduciary Net Position
Detailed information about the Plans' fiduciary net position is available in the separately issued CalPERS financial report.
- 42-
NOTE 6-
NOTE 7-
City of Gustine
NOTES TO FINANCIAL STATEMENTS
June 30, 2024
OTHER INFORMATION
A. Self-Insurance
The City participates with other public entities in a joint venture under a joint powers agreement which establishes the Central San Joaquin Valley Risk Management Authority (CSJVRMA). The relationship between the City and CSJVRMA is not a component unit of the City for financial reporting purposes.
The City is covered for the first $1,000,000 of each general liability claim and $250,000 of each worker's compensation claim through the CSJVRMA. The City has the right to receive dividends or the obligation to pay assessments based on a formula which, among other expenses, charges the City's account for liability losses under $10,000 and workers' compensation losses under $10,000.
The CSJVRMA participates in an excess pool, which provides general liability coverage from $1,000,000 to $10,000,000. The CSJVRMA participates in an excess pool, which provides Worker's Compensation coverage from $250,000 to $500,000 and purchases excess insurance above the $500,000 to the statutory limit.
The CSJVRMA is a consortium of fifty-four (54) cities in San Joaquin Valley, California. It was established under provisions of California Government Code Section 6500 et seq. The CSJVRMA is governed by a Board of Directors, which meets three to four times per year, consisting of one member appointed by each member city. The day-to-day business is handled by a management group employed by the CSJVRMA. The annual financial report may be obtained from the consortium's executive office at 6371 Auburn Blvd., Citrus Heights, California 95621.
B. Contingent Liabilities
The City participates in a few federal, state and local grant programs. These programs are subject to financial and compliance audits by the grantors or their representatives. The audits of these programs for earlier years and the year ended June 30, 2024 have not been completed in all cases; accordingly, final determination of the City's compliance with applicable grant requirements may be established at some future date: The amount, if there is any, of expenditures which may be disallowed by the granting agencies cannot be determined at this time. The City believes any such claims would be immaterial to the City's financial position on June 30, 2024. Receipt of these grant revenues is not assured in the future.
SUBSEQUENT EVENTS
In preparing these financial statements, the City has evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued. - 43-
REQUIRED
SUPPLEMENTARY INFORMATION
City of Gustine
SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES-BUDGET AND ACTUAL
GENERAL FUND
For the Year Ended June 30, 2024
Variance
Original Final over/(under)
Budget Budget Actual budget
REVENUES
Property taxes $ 785,569 $ 745,334 $ 776,824 $ 31,490
Sales taxes 775,000 921,255 746,674 (174,581)
Business licenses/franchise fee 43,950 47,219 534,116 486,897 Other taxes 95,000 126,067 126,067
Licenses and permits 599,920 549,434 362,917 (186,517)
Fines and forfeitures 11,500 16,229 9,977 (6,252)
Use of money and property 107,592 111,390 115,500 4,110 From other agencies 350,000 293,703 508,819 215,116
Charges for services 180,590 364,560 31,779 (332,781)
Other revenue 61,700 181,348 108,307 (73,041)
Total revenue 3,010,821 3,356,539 3,320,980 (35,559)
EXPENDITURES
General government 508,272 608,675 321,404 287,271
Public safety 1,570,014 1,841,112 1,823,503 17,609
Community development 497,071 586,959 272,498 314,461
Cultural and recreation
�
288,865 343,987 291,048 52,939
Debt service:
Principal 24,490 24,490 91,314 (66,824)
Interest 18,302 18,302 90,849 (72,547)
Capital outlays 2,677 2,677 74,376 (71,699)
Total expenditures 2,909,691 3,426,202 2,964,992 461,210 Excess ( deficiency) of revenues
over (under) expenditures 101,130 (69,663) 355,988 425,651 OTHER FINANCING SOURCES {USES)
Transfers in 240,224 240,224 134,100 (106,124)
Transfers out (210,887) (134,100) (134,100)
Total other financing sources (uses) 29,337 106,124 (106,124) Net changes in fund balances $ 130,467 $ 36,461 355,988 $ 319,527 Fund balances-beginning 1,560,211
Fund balances-ending $ 1,916,199
- 44-
City of Gustine
SCHEDULE OF THE CITY'S PROPORTIONATE
SHARE OF THE NET PENSION LIABILITY (ASSET)
June 30, 2024
Fiscal Year End 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 Measurement Date, June 30 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 Proportion of the net pension liability 0.01462% 0.01556% 0.03879% 0.03119% 0.03095% 0.03089% 0.03056% 0.03006% 0.03016% 0.03112% Proportion share of the net pension liability $ 1,824,147 $ 1,797,492 $ 2,097,883 $ 3,393,913 $ 3,171,441 $ 2,976,827 $ 3,030,661 $ 2,684,397 $ 2,189,560 $ 1,977,851 Covered - employee payroll $ 1,676,328 $ 1,682,595 $ 1,543,463 $1,367,146 $1,175,247 $ 815,433 $1,054,390 $1,054,690 $ 1,012,431 $ 1,216,497 Proportionate share of the net pension liability
as percentage of covered-employee payroll 108.82% 106.83% 135.92% 248.25% 269.85% 365.06% 287.35% 254.52% 216.27% 162.59% Plan fiduciary net position as a percentage
of the total pension liability 76.21% 76.68% 88.29% 75.10% 75.26% 75.26% 73.31% 263.53% 340.16% 364.39% Notes to Schedule:
Changes of Assumptions: There were no changes of assumptions. -45-
City of Gustine
SCHEDULE OF CONTRIBUTIONS
June 30, 2024
Fiscal Year End 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 Contractually required contribution
(actuarially determined) $ 317,855 $ 322,964 $ 427,512 $ 460,471 $ 407,405 $ 341,654 $ 308,533 $ 308,533 $ 289,970 $ 257,804 Contributions in relation to the actuarially
determined contributions (317,855) (322,964) (2,629,223) (460,471) (407.405) (341,654) (308,533) (308,533) (289,970) (257,804) Contribution deficiency (excess) $ $ $(2,201, 711) $ $ $ $ $ $ $ Covered - employee payroll* $ 1,956,054 $ 1,676,328 $ 1,682,595 $ 1,543,463 $ 1,367,146 $ 1,175,247 $ 815,433 $ 815,433 $ 1,054,690 $ 1,012,431 Contributions as a percentage of covered-employee payroll 16.25% 19.27% 156.26% 29.83% 29.80% 29.07% 37.84% 37.84% 27.49% 25.46% Notes to Schedule: Benefit Changes: There were no changes to benefit terms that applied to all members of the Public Agency Pool. Changes of Assumptions: There were no changes of assumptions. - 46 -
SUPPLEMENTARY INFORMATION
City of Gustine
COMBINING BALANCE SHEETS
NON-MAJOR GOVERNMENTAL FUNDS
June 30, 2024
ASSETS
Cash and investments Receivables Due from other funds Long-term note receivable Total assets
Utility Tax
COPS General
_SLESF_ Pubic safety Capilallmpr _CDEG
Gas Tax Transportation
Sidewalk
Maintenance Citywide
Community Sub Total Swimming Lighting &
Center (Seepage 51) Foo! Landscaping
Separate
Re. Borrelli Southport Impact
Traffic & development Asmt Asmt Fees Sub Total
Safety Recreation Mousing District District (See page 53) Measure v Sub Total
Non-Major
SRF
$ 241,254 $ 20,372 $ 39,690 $ 148,831 $ 222,678 $ $ 2,024,849 6,939 $ 92,506 $ 62,436 $ $ $ 31,726 $ 36,218 $ 1,294,343 869,585 5,091,427 11,136 83,219 94,355
250,423 250,423
28,333 ---- ---- ---- ---- ---- ---- ---- 28,333
± 531.146 $ 20,372 $ 39,690 $ 148,831 ± 222678 _$ ___ $ 2,024,849 + 6939 $ 92,506 + 62436_$ ___ _$ ___ • 31.726
5 36218 $ 1.294,343 $ 952,804 5.464538
LIABILITIES AND FUND BALANCES Liabilities:
Accounts payable $ 9,765 $ $ $ $ $ 666 $ 21,708 $ 10,714 $ 5.303 $ . $ 1,631 $ 1,011 $ $ 65,665 $ 116,463 Due to other funds ---- ---- ---- ---- ---- 26,343 ---- ---- ---- -53,843 91 ---- 82,277 Total liabilities -9,765 ---- 29,009 21,708 - 10714
5.3$03 55474
- 8l
1011 85.665 198,740
Fund balances:
Restricled 521,381 20,372 39,690 148,831 222,678 2,003,141 87.203 62,436 30,715 36,218 1,294,343 887,139 5,354,147 Unassigned (deficit) ---- ---- - ---- ---- (29,009) ---- (3,775) (55.479) (9D (88,349) Total fund balances -521,381 20,372 39,690 148,831 222,678 -(29,009) 2,003,141 (7759) 87.203 62,436 -(55479) (9D 30,715 36,218 1,294,343 887,139 5,265,798 Total liabilities and fund balances $ 531,146 20.372 $ 39.,690 $ 148,83f $ 222678 _$ ___ $ 2.024,849 $ 6,939 s 92.506 $ 62.436 _s ___ _ $ ___ - • 31.726
$ 36,218 $ 1294,343 $ 952,804 $ 5,464.538
- 47-
City of Gustine
COMBINING BALANCE SHEETS
NON-MAJOR GOVERNMENTAL FUNDS
June 30, 2024
Pioneer Park
Rehab#dilation
Act American Grant Sub Tolal Total Cannab PAL ive is
Per Capita Swimming Community Insurance Abandoned Explorers PD Recycling Transportaton Tobacco Rescue Plan impact Bodywom CAL VIP Non-Major Non-Major Oran! Pool Capital Fire Services _contbutes _firewors. Solisgen Trust Vehicle Programs_ coPs Gant Revenue solarProect Pan grant (ARPA) Fees camera Gant Grant SRF SRF ASSETS
Cash and investments 4,175 $ 72,316 $ 11,433 $ $ 56,428 $ 5,457 47,160 29,297 $ 25,956 37,590 $ 93,033 2,904 $ 713,307 $ 18,000 $ 5,091,427 $ 6,208.463 Recervables 94,355 94,355 Due from other funds 374,893 250,423 625,316 Long-term note receivable --- --- --- --- --- --- . --- --- ---- --- --- ---- --- --- --- ---- --- -28.333 -28333 Tolal assets _s ___ s 4175 $ 72,316 5 11433$ ___ • $ 56,428 s 5457 $ 47,160 $ 29,297 $ 25,956 $ 37,590 $ 93,033 $ 2904$ ___ $ 1,088,200 $ ___ $ 18,000 $ ___ $ 5,464,538 $ 6,956,487 LIABILITIES AND FUND BALANCES Liabilities:
Accounts payable $ 1,063 844 $ 800 $ 111,700 116,463 230.870 Dua to other funds 36,278 1,967 195,083 47,868 93,697 82.277 457,170 Deposit and other liabilities --- --- --- --- --- 4.613 --- ---- --- --- ---- --- --- --- --- --- ---- 4,613 Tolal liabilities 36,279 --- --- 3,030 --- 5457 --- --- ---- 80o --- ---- 195,083 -111.7o0 47.868 --- 93.697 19a4.740 - 692.653 Fund balances:
Restricted 4,175 72,316 11,433 56,428 47,160 29,297 25.965 36,790 93,033 2,904 976,500 5,354,147 6,710,139 Unassigned (deficit) ___ . --- --- ---- --- --- --- ---- --- --- ---- �---- -(47.868) 18.000 (93.697 (88,349) (446,305) Total fund balances -(36,278) 4,175 72,316 11.433 (3030) 56,428 --- 47,160 - 29.297
25958 36.790 93,033 2.904 (195,083) 976,500 -(47,866) 18,000 -[93,089 5,265,798 6,263,834 Total liabilities and fund balances _$ ___ + 4.175 $ 72.316 5 11433_$ ___ • $ 56,428 5497 $ 47,160 ± 229! $ 25,956 $ 37590 $ 93,033 + 2904 s ___ . 51084.200 _$ ___ $ 18,000 $ ___ $ 5,464,538 $ 6,956,487 -48 -
City of Gustine
COMBINING SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
NON-MAJOR GOVERNMENTAL FUNDS
For the Year Ended June 30, 2024
Gas Tax Separale
Trans- Impact
portation
Sidewalk MOVEOTO Fees Sub Sub Total
Maintenance Citywide MAJOR Re- Borrelli Southport Total Non-Major COPS Public General Community Sub Total Swimming Lighting & Traffic & FUND development Asml Asmt (Seepage Special Utility Tax SLESF Safety Capital [mp CDBG Center (See page 52) Pool Landscaping Safety Recreation CMA Housing District District 54) Measure V Revenue
REVENUES
Olher laxes $ 371,653 $ $ s $ $ $ s $ $ s $ $ $ $ $ $ 371,653 Licenses and permits 3,396 3,396 Fines and forfeitures 3.128 3,128 Use of money and property 323 323 Intergovernmental 484,952 389,271 874,223 Charges for services 18,370 44,516 193,311 35,611 16,923 3,759 342 312,832 Other revenue 3.000 ---- ---- ---- 10.389 7f
- 451---- 310 -14,205 Tolal revenue 374,653 ---- ---- ---- 16,370 488,348 54,885 192.709 3579 35.611 ---- 1233 3.759 -342 389,271 1,579,760
EXPENDITURES
Current:
Transportalion 152,245 12,562 893 23,540 189,240 Cultural and recreation 208,729 68,233 204,356 195.667 130,432 807,417 Capital outlays 60,000 ---- ---- ----
204,356 ---- ---- ---- - ----
156,042 216,042
Tolal expenditures 208,729 -60.000 ---- 88,233 152,245 195,667 ---- 130,432 ---- ---- 12.,562 893 179,582 1,212,699 excess (enciency) or revenues over (under) expendilures 165,924 (60.,000) (49.863) 336.103 -44a.49 (1958) 3579 (94.82D ---- 4671 2,866 -342 209,689 367,061
OTHER FINANCING SOURCES (USES)
Transfers in 46,121 1$2.246 87,978 286,345 Transfers out (286,345) ---- ---- ---- ---- ---- ---- ---- ---- (286,345) Total other financing sources (uses) (286,345) ---- ---- 46.12f ---- -152.246 ---- 87,978 ---- ---- ---- ---- Net changes in fund balances (120,421) (60,000) (3,742) 336, 103 2,775 (1,958) 3,579 (6,843) 4,671 2,866 342 209,689 367,061 Fund balances-beginning 641,802 80,372 39,690 148,831 222,678 -(s,2sD 1,687.038 (6.550) 89.181 589,8s7 (48.630 (81 26,044 33,352 1,294,001 677,450 4,898,737 Fund balances-ending $ 521,381 + 20372$ 39,690 $ 148,831 $ 222,678 $ (29,009) $2.003,141 S (3779) $ 87203 $ 62436 $ (55474) 5 ± (995 30715 ± 36210 $ 1,294,343 s a87.139 $ 5,265,798 -49-
City of Gustine
COMBINING SCHEDULE OE REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
NON-MAJOR GOVERNMENTAL FUNDS
For the Year Ended June 30, 2024
oneer Park
Rehabiltatlon Sub Total Total
Cannabis PAL Active American Grant Non-Mayor Non-Mayor
Per Capila Swimming Community Insurance Abandoned Explorers PD Recycling Transportatio Tobacco Rescue Plan Impact Bodyworm CAL VIP Special Special Ste!_Poor cpto! Fire Services Contributes Fu&woes Sosgen-Ts! -Vehicle Programs cops Grant Revenue Solar Project Flan Grant_ (ARPA) face Carrera Grant Grant Revenue fevenue REVENUES OIher taxes $ $ $ $ s $ s $ $ s $ $ $ $ $ 371,653 371,653 Licenses and permits 3,396 3,396 Fines and tortures 3,128 3,128 Use of money and properly 323 323 Intergovernmental 1,546 24,270 17,769 18,000 66,740 674,223 1,002,548 Charges for services 312,832 312,832 Other revenue ___ 5_5 --- 29.408 --- --- --- 7850 --- --- --- --- ---- --- --- --- 14.205 51,518 Total revenue -"t --- --- -29.408 --- 1.546 7,850 24.270 17,769 --- --- --- ---- 18,000 88.740 1,579,760 1,745,398 EXPENDITURES Current
General governmenl 144,836 1,211 146.047 Public Sally 1,996 97,196 90,228 189,420 Transportation 189,240 189.240
Community development 11,442 11,442 Cultural and recreation 28,567 40,434 807,417 876,418 Capital outlays --- --- --- --- --- --- --- --- --- --- --- --- --- 85,190 --- --- 216,042 301.232 Tolal expenditures --- --- --- 28.567 -40,434 --- 1996 1442 --- --- 97.196 -230.026 -1211 --- 90,228 1,212,699 1,713,799 txcess (encency] ot revenues over (under) expenditures -+ --- (28.567) (11020) • --- 1.546 -5854 24.270 637 --- --- (97.198) (230.029) (1211 18,000 -(3.489) 367,061 31.599
OTHER FINANCING SOURCES (USES)
Translers in 286,345 286,345 Transfers out --- --- --- --- --- --- --- --- --- --- --- --- --- ---- --- --- --- -(es4) (@s.3491 Total other financing sources (uses) --- --- . . --- --- --- --- . . ------ �--- --- --- --- ---- --- - --- ---- ---- Nel changos in fund balances 55 (28,567) (11,026) 1.546 5,854 24,270 6,327 (97,196) (230,026) (1,211) 18,000 (23,488) 367,061 31,599 Fund balances-beginning -(36,333) 4.175 72316 40.000 7,996 56.428 --- 4584 23443 1.886 30.463 --93,033 2904 (97.887) 1206,526 (16.657) - -(0.209) 4.s98,737 5,232,235 Fund balances-ending $ (36278) 5 $,1Y5 + 7236± 1143 ± (3939) $ 56428 ' • 4egs 2,2gr $ 25,956 s 38790 $ 93,033 ± 2,804 $[19s083) s g76500 s (e69) S 18.0009 s (93697) $ 5.265.7g@ $ 6,263,834 , - 50-
ITEM NO. 11
COUNCIL AGENDA ITEM
MARCH 3, 2026
PREPARED BY: Ruben Chavez, Chief of Police
SUBJECT: Discussion and Direction: Prohibition of the Sale and/or Advertisements of Whippit Canisters Ordinance
STRATEGIC PLAN GOALS: 1. Enhanced Community Policing
BACKGROUND
The City of Gustine does not currently have an ordinance against the sale and/or advertisement of whippit canisters. In essence, these are cans of nitrous oxide that are used in the culinary industry. The cans are most known for being used in cans of whip cream for various deserts. Due to their freezing properties, the cans have evolved into being used to create many fancy cocktails and other food items.
Currently, the cans have become known to be purchased and abused by individuals inhaling the contents of the can to create a short-lived high. Across the country, many communities are facing an epidemic of abuse of these canisters. Its use can become highly addictive. However, in many cases, it can result in significant health issues. The effects of nitrous oxide addiction can result in:
1 . Nerve damage or numbness
2. Spinal cord injury or paralysis
3. Cognitive impairment or memory loss
4. Cardiac complications
5. Wrongful death due to inhalation
6. Health issues linked to repeated nitrous oxide usage, such as vitamin B 12 depletion and cognitive problems
There are several laws in the penal code that prohibit the ingestion of gases.
Under California Penal Code Section 381:
· Section 381 b prohibits possession of nitrous oxide with intent to inhale for intoxication.
· Section 381 c makes it unlawful to sell or distribute nitrous oxide to anyone under the age of 18.
· Section 381 e requires those who sell or dispense the gas to maintain transaction records available for inspection.
· Section 381 d makes it a misdemeanor to provide nitrous oxide to someone who is known-or should reasonably be known-to intend inhalation, particularly if such use results in great bodily harm or death.
While these products are used by bakers and chefs for legitimate reasons, they are in
fact being abused by individuals looking for a cheap and quick euphoric experience.
Many states across the country have banned the sale and/or advertisement of nitrous oxide or have significant restrictions to ensure the products are being purchased for the intended use by those in the culinary industry. More recently, the states of New York, Wisconsin, Florida, Massachusetts, Alabama, and Minnesota, and the cities of Santa Ana and Costa Mesa, California, have banned their sale for recreational use.
While whip cream cans have been around for a long time, the manufacturing of larger nitrous cans for commercial use have created a loophole, which is being exploited. The larger canisters are available to lawfully purchase by anyone over 18 years old without the need to show the intent of its use.
ANALYSIS/DISCUSSION
Below are examples of the products banned for recreational use by other cities in Calfornia.
City of Santa Ana Website News posting dated May 21, 2025 "Santa Ana, CA - In a decisive move to protect public health and safety, the Santa Ana City Council unanimously adopted an ordinance that prohibits the sale and distribution of nitrous oxide on Tuesday, May 20.
The ordinance addresses growing concerns over the recreational misuse of nitrous oxide commonly referred to as "laughing gas" or "whippits" by closing loopholes in current state law that allow easy access to the gas for non-legitimate use. The Santa Ana Police Department proposed the ordinance in response to concerns from the City Council and the community about the increasing misuse of nitrous oxide, which poses risks to public health and safety.
"This ordinance is a clear message that Santa Ana will not tolerate the distribution of dangerous substances that threaten the well-being of our residents, particularly our young people," Mayor Valerie Amezcua said. "This law gives our officers a muchneeded tool to prevent abuse and protect lives." Under the ordinance, it will be illegal to sell, offer, or distribute nitrous oxide or related dispensing devices in Santa Ana, except in specific circumstances where the product is used legally and safely, such as medical or dental uses. Violations of the ordinance can be charged as either a misdemeanor or an infraction, depending on the circumstances.
The City will launch a public health campaign to educate the community about the dangers of nitrous oxide abuse, common methods of distribution, and the new legal prohibitions and penalties.
This ordinance marks a significant step forward in safeguarding Santa Ana's neighborhoods from the dangers of nitrous oxide abuse. By coupling enforcement with education and accountability, the City is taking a balanced and proactive approach to protect its residents especially its youth from the harmful effects of this substance."
City of Costa Mesa Agenda Report dated September 2, 2025 [segments only):
From January 2020 through May 2025, Costa Mesa has seen a concerning rise in nitrous oxide related activity, posing increasing risks to public safety. Additionally, the report noted a slight increase of nitrous oxide involvement in traffic collisions and overdose cases. Often referred to as "laughing gas," "nox," or "whippits," nitrous oxide is a colorless and odorless gas with legitimate applications in medical, dental, industrial, and food preparation. However, the rise in non-medical, recreational use, driven by its low cost and easy retail access, has become a public health issue. Some retailers have chosen to sell nitrous oxide due to legal gaps, even when it is clear that the purchaser intends to misuse the substance. Scientific studies have documented the serious health risks associated with recreational inhalation, further highlighting the need for local regulation.
Despite these state-level restrictions, local availability and misuse continue to persist due to a lack of local regulations. Costa Mesa currently has no municipal restrictions in place governing the sale or distribution of nitrous oxide. This proposed ordinance seeks to address that gap by reducing unlawful access and discouraging irresponsible sales practices. The proposed ordinance would make it unlawful for any individual to sell, offer, distribute, or otherwise provide nitrous oxide or devices intended for its administration to any person. However, several important exceptions are included to protect legitimate commercial and medical uses:
· Products containing nitrous oxide as a propellant in food items; · Wholesale transactions where the seller does not have reason to believe the product will be misused;
· Devices and canisters used specifically for enhancing automotive performance; · Medical or dental uses under the supervision of licensed professionals; · Sales by pharmacists, pharmacy interns, or licensed wholesalers in accordance with state law;
· Any other exceptions as provided under applicable laws.
Violations of the ordinance may be prosecuted as misdemeanors at the discretion of the citing Officer or City Attorney. Upon conviction, penalties may include a fine of up to $1,000, imprisonment for up to six months in County Jail, or both.
COMMUNITY OUTREACH
The police department has received several calls of concern of these products being sold in Gustine being used for its unintended purpose. This item provides an opportunity for further discussion with Council and members of the community.
FISCAL IMPACT
There is no fiscal impact associated with this item.
STRATEGIC PLAN GOALS
Discussion and actions on this topic fall under the Strategic Plan Goal of Enhanced Community Policing, more specifically, looking at ways to limit the abuse of addiction of the nitrous oxide by individuals in and around our community.
RECOMMENDATION
This item is being brought forth for a discussion on whether Council is interested in directing staff to prepare a draft ordinance to limit or ban the sale of nitrous oxide and/or the advertising of the product.
E
XHIBIT(S)
None
ROVE
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APP D
BY·
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Manager · Melanie Correa, 1 Y