Agenda Packet — Hercules City Council, January 14, 2025 (part 1 of 2)

Tuesday, January 14, 2025
6:00 PM
City of Hercules
111 Civic Drive
Hercules, CA 94547
City Council
Mayor Dion Bailey
Vice Mayor Chris Kelley
Council Member Alex Walker-Griffin
Council Member Dilli Bhattarai
Council Member Tiffany Grimsley
Dante Hall, City Manager
Christie Crowl, City Attorney
Eibleis Melendez, City Clerk
Meeting Agenda
CLOSED SESSION - 6:00 P.M., REGULAR MEETING - 7:00 P.M
In-Person in Council Chambers or
Zoom ID: 838 3474 7302 Zoom Passcode: 944690
Zoom Phone Number: 1-669-900-6833
1 January 14, 2025City Council Meeting Agenda
See last pages of agenda for information regarding meeting procedures To view webcast of meetings, live or on demand, go to the City's website at www.ci.hercules.ca.us I. SPECIAL CLOSED SESSION – CALL TO ORDER - ROLL CALL - 6:00 P.M.

IA. CONSIDER AND TAKE ACTION ON ANY REQUEST FROM A COUNCIL MEMBER TO

PARTICIPATE IN A MEETING REMOTELY DUE TO JUST CAUSE OR EMERGENCY CIRCUMSTANCES PURSUANT TO AB 2449
II. PUBLIC COMMUNICATION - CLOSED SESSION ITEMS
III. CONVENE INTO CLOSED SESSION
The Hercules City Council will meet in Closed Session regarding the following:

1. 25-010
CONFERENCE WITH LABOR NEGOTIATORS Pursuant to
Government Code Section 54957.6 - City Negotiators: Dante Hall, City Manager; Edwin Gato, Director of Finance; relative to the following employee groups:
a. Teamsters Local 315 Employee Organizations

2. 25-011
CONFERENCE WITH REAL PROPERTY NEGOTIATORS Pursuant to
Government Code section 54956.8. CONFERENCE WITH Real
Property Negotiators Property address: 1680 Refugio Valley Road, Hercules CA 94547 Agency Negotiators: Dante Hall, City Manager; Christie Crowl, City Attorney, Negotiating Parties: City of Hercules, Rodeo Hercules Fire Protection District
IV. REGULAR MEETING – CONVENE TO OPEN SESSION - ROLL CALL - 7:00 P.M.

V. REPORT ON ACTION TAKEN IN CLOSED SESSION
VI. PLEDGE OF ALLEGIANCE
VII. MOMENT OF SILENCE

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2 January 14, 2025City Council Meeting Agenda
VIII. INTRODUCTIONS/PRESENTATIONS/COMMISSION REPORTS

1. 25-002 Herculean Mile Recognition Program - 2024 Award Winners RECOMMENDATION:

Staff recommends the City Council receive an update on the Herculean Mile recognition program and present awards to the winners for the 2024 calendar year.

Staff Report - Hercules Mile Recognition Program - Award winners 2024 Attach 1 - HM Award winners #1 - S24 Guide - and process Attach 2 - HM Award winners #2 - F24 - Ernie & Kristina Attach 3 - HM Award winners #3 - WS25 - Connie & Mark
Attach 4 - Herculean Mile Winners - To date - as of Dec 2024 Attachments:

2. 22-1044 MCE Enrollment Outreach Presentation
Presentation - MCE Enrollment OutreachAttachments:

3. 25-012 Recognition Of Commander Dwayne Collard for graduating from the FBI National Academy

4. 25-007 Police Officer of the Year Proclamation
Proclamation - Police Officer of the YearAttachments:

IX. AGENDA ADDITIONS/DELETIONS
X. PUBLIC COMMUNICATIONS
This time is reserved for members of the public to address issues not included in the agenda. In accordance with the Brown Act, Council will refer to staff any matters brought before them at this time, and those matters may be placed on a future agenda.

Individuals wishing to address the City Council are asked to complete a form indicating the name and address of the speaker and the general topic to be addressed. Speakers must make their comments from the podium and will be allowed 3 minutes to discuss their concerns. All public comments are recorded and become part of the public record. A limit of 30 minutes will be devoted to taking public comment at this point in the agenda. If any speakers remain at the conclusion of the initial 30 minute period, time will be reserved at the conclusion of the meeting to take the remaining comments.

XI. PUBLIC HEARINGS

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3 January 14, 2025City Council Meeting Agenda
XII. CONSENT CALENDAR

1. 25-004 Meeting Minutes for the Special Meeting of December 4, 2024 Meeting Minutes for the Special Meeting of December 4, 2024Attachments:

2. 25-006 Meeting Minutes for the Regular Meeting of December 10, 2024 Meeting Minutes For the Regular Meeting of December 10, 2024Attachments:

3. 22-1029 Quarterly Review of the Future Agenda Items List RECOMMENDATION:

Staff recommends that the City Council receive the staff report on the quarterly review of future City Council agenda items.

Staff Report - Quarterly Review of Future Agenda Items
Attach 1 - Future Agenda Items List
Attachments:

4. 25-001 Annual Update Regarding the Following Matters:
1) Anti-Nepotism and Anti-Cronyism Ordinance;
2) Hercules Ethics Policy.

RECOMMENDATION:

Accept report; provide direction to staff if any.

Staff Report - Nepotism and Ethics Update
Attach 1 - Nepotism Cronyism Ordinance
Attach 2 - 13-051 Hercules Ethics Policy
Attachments:

5. 25-003 Recognized Obligation Payment Schedule for the period of July 1, 2025, through June 30, 2026 (ROPS 25-26)
RECOMMENDATION:

Adopt a resolution approving the Recognized Obligation Payment Schedule for the period July 1, 2025, through June 30, 2026 (ROPS 25-26).

Staff Report - Recognized Obligation Payment Schedule 25-26-Successor Agency(SA) Attach 1 - SA Resolution - ROPS 25-26
Attach 2 - Hercules ROPS 25-26
Attachments:

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4 January 14, 2025City Council Meeting Agenda
XIII. DISCUSSION AND/OR ACTION ITEMS

1. 25-005 Acceptance of the Annual Comprehensive Financial Report and other regulatory financial reports for the Fiscal Year Ended June 30, 2024.

RECOMMENDATION:

Receive the Fiscal Year (FY) 23-24 Annual Comprehensive Financial Report (ACFR) and Accept the Audited Financial Statements.

Staff Report - FY 23-24 Annual Audit & ACFR
Attach 1 - 2024 Annual Comprehensive Financial Report (ACFR)_FINAL 01.09.2024 Attach 2 - 2024 Hercules City of Wastewater Fund
Attach 3 - 2024 Hercules City of Measure B
Attach 4 - 2024 Hercules City of Measure N
Attach 5 - 2025 Hercules City of GANN
Attach 6 - 2024 Hercules City of Communication at Conclusion Letter Presentation - Pun Group
Attachments:

2. 25-009 Professional Service Agreement with Tai Ginsberg & Associates LLC (“TG&A”) for an amount not to exceed $50,000 to Provide Strategic Federal Advocacy Consulting Services to Advance the Hercules Hub Project and Appropriating $50,000 from the General Fund Capital Reserves to Fully Fund the Contract.

RECOMMENDATION:

Adopt a Resolution approving a $50,000 agreement with Tai Ginsberg & Associates LLC (“TG&A”) to provide strategic federal advocacy consulting services to advance the Hercules Hub Project and appropriating $50,000 from the General Fund Capital Reserves to fund the contract fully.

Staff Report - Approval of a Contract with Tai Ginsberg & Associates LLC (“TG&A”) to Provide Strategic Federal Advocacy Attach 1 - Resolution
Attach 2 - TGA Engagement Letter
Attachments:

3. 22-1045 Quarterly Update on FY 2024-2026 Hercules City Council Strategic Goals
RECOMMENDATION:

Receive and file the report on the FY 2024-2026 Hercules City Council Strategic Goals.

Staff Report - 2024-2026 Hercules City Council Strategic Goals Update 2 Attach 1 - FY 2024-2026 Hercules City Council Strategic Goals Report Attach 2 - FY 2024-2026 Strategic Goals Work Plan Update Attachments:

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5 January 14, 2025City Council Meeting Agenda

4. 25-008 2025 Council Appointments on Regional Committees and Council Subcommittees
RECOMMENDATIONS:

Review and make Council Appointments to Regional Committees and Council Subcommittees for 2025.

Staff Report - Council Appointments to Regional Committees 2024 City Council Appointed Representative
Attachments:

XIV. PUBLIC COMMUNICATIONS
This time is reserved for members of the public who were unavailable to attend the Public Communications period during Section X of the meeting, or were unable to speak due to lack of time. The public speaker requirements specified in Section X of this Agenda apply to this Section.

XV. CITY COUNCIL/CITY MANAGER/CITY ATTORNEY ANNOUNCEMENTS,

COMMITTEE, SUB-COMMITTEE AND INTERGOVERNMENTAL COMMITTEE REPORTS

AND FUTURE AGENDA ITEMS
This is the time for brief announcements on issues of interest to the community. In accordance with the provisions of the Brown Act, matters which do not appear on this agenda but require City Council discussion may be either (a) referred to staff or other resources for factual information or (b) placed on a future meeting agenda.

1. Regional Committee

2. City Council Committees and Subcommittees

3. Commission Liaisons
XVI. ADJOURNMENT
The next Regular Meeting of the City Council will be held on Tuesday, January 28, 2025 at 7:00p.m. in the Council Chambers.

Agendas are posted in accordance with Government Code Section 54954.2(a) or Section 54956.

Members of the public can view electronic agendas and staff reports by accessing the City website at www.ci.hercules.ca.us and can receive e-mail notification of agenda and staff report postings by signing up to receive an e-notice from the City’s homepage. Agendas and staff reports may also be obtained by contacting the City Clerk at (510) 799-8200 (Posted: January 9, 2025)

INSTRUCTIONS ON HOW TO PARTICIPATE AND WATCH THE HERCULES CITY COUNCIL AND PLANNING

COMMISSION HYBRID MEETINGS
Attend in Person: Hercules City Council Chambers – 111 Civic Drive, Hercules, CA 94547 Attend via Zoom Teleconference: Details provided below and zoom webinar login, passcode and phone numbers provided on the agenda cover.

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6 January 14, 2025City Council Meeting Agenda
How to Submit Public Comments
In Person: Attend meeting at the Hercules City Council Chambers, fill out a public speaker card located on the side table and submit it to the City Clerk.

Via Zoom: Members of the public may submit a remote public comment via Zoom video conferencing. Download the Zoom mobile app from the Apple Appstore or Google Play. If you are using a desktop computer, you can test your connection to Zoom by clicking here or go to: https://www.zoom.us/join. Zoom also allows you to join by phone at +1-669-900-6833 or +1-929-205-6099 or +1-253-215-8782.

Written Comments Submitted Electronically: All comments received before 3:00 p.m. the day of the meeting will be provided to the City Council prior to the meeting and posted to the City’s agenda website and located by clicking on the “meeting details” tab. Written comments received after 3:00 p.m. will be provided to City Council and posted to the agenda website the following day. Written comments will not be read aloud during the meeting. Email comments to [email protected]. Please indicate which item on the agenda you are commenting on in the subject line of your email.

Written comments submitted in person or via mail: Additional ways to provide your public comment is to either drop off your comment in person to the front desk receptionist located in the City Hall lobby or to mail your comment to City of Hercules, ATTN: City Clerk – Public Comment (Meeting Date), 111 Civic Drive, Hercules, CA 94547 in time to reach the City Clerk no later than 3:00 p.m. on the day of the meeting or you can submit your comment by telephone by calling (510) 799-8208 no later than 3:00 p.m. on the meeting date.

If you need assistance with public comment, please contact: Eibleis Melendez, City Clerk at [email protected] or by calling (510) 799-8208.

All public comments will become part of the official meeting record. As email containing public meeting comments are part of the official record, note that personal contact information may be published if it is included with your email. The City cannot guarantee that its network and/or the website will not be uninterrupted. To ensure that the City Council receives your written comments, you are strongly encouraged to submit your comments in writing in advance of the meeting by 3:00 p.m. on the day of the Council or Commission meeting.

OTHER WAYS TO WATCH THE MEETING
Live on Channel 28: City Council meetings will replay the following Thursday at 7:00 p.m. and Saturday at 1:00 p.m.

Planning Commission meetings will replay the following Wednesday at 7:00 p.m. and Saturday at 9:00 a.m.

Video Streamed Live on the City’s Website:

To view City Council and Planning Commission meeting videos online go to: Hercules Meeting Videos.

Instructions to view Live or On-Demand Videos from the City’s website:

1. Go to: Hercules Meeting Videos or https://hercules.legistar.com/calendar.aspx.

2. Locate the desired meeting and date.

3. Click the associated “Video” link (Video status is as follows):

Video = Video is available for on demand viewing.

In Progress = Video is available for viewing during live recording.

Not Available = Video is either unavailable or has not been recorded.

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7 January 14, 2025City Council Meeting Agenda

THE HERCULES CITY COUNCIL ADHERES TO THE FOLLOWING POLICIES,

PROCEDURES AND REGULATIONS REGARDING CITY COUNCIL MEETINGS

1. SPECIAL ACCOMMODATIONS: In compliance with the Americans with Disabilities Act, if you require special accommodations to participate at a City Council meeting, please contact the City Clerk at 510-799-8208 at least 48 hours prior to the meeting.

2. AGENDA ITEMS: Persons wishing to add an item to an agenda must submit the final written documentation 12 calendar days prior to the meeting. The City retains the discretion whether to add items to the agenda. Persons wishing to address the City Council otherwise may make comments during the Public Communication period of the meeting.

3. AGENDA POSTING: Agendas of regular City Council meetings are posted at least 72 hours prior to the meeting at City Hall, the Hercules Swim Center, Ohlone Child Care Center, and on the City’s website (www.ci.hercules.ca.us),

4. PUBLIC COMMUNICATION: Persons who wish to address the City Council should complete the speaker form prior to the Council's consideration of the item on the agenda.

Anyone who wishes to address the Council on a topic that is not on the agenda and is relevant to the Council should complete the speaker form prior to the start of the meeting. Speakers will be called upon during the Public Communication portion of the meeting. In accordance with the Brown Act, the City Council may not take action on items not listed on the agenda. The Council may refer to staff any matters brought before them at this time and those matters may be placed on a future agenda.

In the interests of conducting an orderly and efficient meeting, speakers will be limited to three (3) minutes.

Anyone may also submit written comments at any time before or during the meeting.

5. CONSENT CALENDAR: All matters listed under Consent Calendar are considered to be routine and will be enacted by one motion. There will be no separate discussion of these items unless requested by a member of the Council or a member of the public prior to the time the City Council votes on the motion to adopt.

6. LEGAL CHALLENGES: If you challenge a decision of the City Council in court, you may be limited to raising only those issues you or someone else raised at the meeting or in written correspondence delivered at, or prior to, the meeting. Actions challenging City Council decisions shall be subject to the time limitations contained in Code of Civil Procedure Section 1094.6.

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8 IN

TRODUCTIONS/PRESENTATIONS/

COMMISSION REPORTS

AGENDA ITEMS

1. 25-002

2. 22-1044

3.25-012

4.25-007
9 1

STAFF REPORT TO THE CITY COUNCIL
DATE: Regular Meeting of January 14, 2025
TO: Mayor and Members of the City Council
VIA: Dante Hall, City Manager
SUBMITTED BY: Christopher Roke, Parks and Recreation Director TOPIC: Herculean Mile Recognition Program - 2024 Award Winners RECOMMENDED ACTION:

Staff recommends the City Council receive an update on the Herculean Mile recognition program and present awards to the winners for the 2024 calendar year.

BACKGROUND:

In October of 2023, the Hercules City Council approved a new recognition program named the Herculean Mile award. The concept of the award is to celebrate individuals that have consistently gone above and beyond to make Hercules a better place. The goal is to recognize the many outstanding efforts made by community members.

The Herculean Mile award has two categories: one t hat recognizes community members/business owners, and the other t hat recognizes city employees. In order to recognize these Herculean awardees, a set of guidelines were created, a link was set up on the City of Hercules website, and nominations for deserving community members/business owners and employees were collected.

Winners of the Herculean Mile are selected three times per year, coinciding with the three seasonal activities guides produced by the Parks and Recreation Department. Each season the designated committee members will select one community member/business owner, and one employee, as the winner of the Herculean Mile for that season. At the end of the calendar year, these award winners will be recognized in front of Council during one of the January meetings.
25-002
10 2

The inaugural winners of the Herculean Mile (Karen and Tony Sanchez and Jeanne Krall) were recognized in March of 2024. Tonight, we recognize the four other winners from the 2024 calendar year that include: community members Tony Sanchez (Fall 2024) and Connie Van Putten (Winter/Spring 2025); and employees Kristina Griffith (Fall 2024) and Vergel (Mark) Botin (Winter/Spring 2025).

ANALYSIS:

The Herculean Mile program allows city leaders, staff, community members, and business owners to nominate potential recipients who have proven to be integral to Hercules's success.

In addition to all of the hardworking, dedicated employees, the City of Hercules has benefited from the many partnerships with the 14 City Recognized Nonprofit Groups, the dedicated volunteers at PD and the Senior Center, those giving their time in the Adopt a Park program, and those who volunteer in the Team Up to Clean Up program. Countless other members of the community have substantially contributed to the City of Hercules, and this is a great way to recognize some of these community members in Hercules.

FISCAL IMPACT:

There is minimal fiscal impact in creating this award. However, the pride, honor and good will gained will have a lasting impact on the award winners. Staff designed an award for the recipients that is sure to have an impact.

ATTACHMENTS:

1. First winners of the Herculean Mile Award from the 2024 Summer Activity Guide

2. Herculean Mile Award Winners from Fall 2024

3. Herculean Mile Award Winners from Winter/Spring 25

4. Names of all the winners to date

11 12

13 14
Community Award Employee Award Date of Award Activity Guide #1 Karen & Tony Sanchez Jeanne Krall March-24 Summer 2024 #2 Ernie Sanchez Kristina Griffith July-24 Fall 2024
#3 Connie Van Putten Vergel (Mark) Botin November-24 Winter/Spring 2025 #4 March-25 Summer 2025
#5 July-25 Fall 2025
#6 November-25 Winter/Spring 2026
Herculean Mile Winners
15 IN

TRODUCTIONS/PRESENTATIONS/

COMMISSION REPORTS

AGENDA ITEM

2. 22-1044
16 MCE MCE
A local, not-for-profit
electricity provider
A local, not-for-profit
electricity provider
January 14, 2025January 14, 2025
Hercules City Council
Presentation
17 22-1044
Welcome to MCE, Hercules
• Starting in April 2025, all Hercules
electric customers—re
sidential,
commercial, and municipal—will
automatically transition to MCE
electric generation service.
• Customers now have the option to
choose their energ
y source: PG&E or
MCE.
• This change reflects a decision made
by the City Council in 2023 and was
approved by the California Public
Utilities Commission.

Your Energy,
Your Choice
2 18
Who is MCE?
• Community Choice Energy provider,
serving Bay Area cust
omers since 2010.
• We are a local government agency,
governed by a boar
d of elected officials
from the communities we serve, and
regulated by the same agencies that
oversee PG&E.
• We serve nearly 600,000 customers, have
saved them over $83 million on their bills
since 2010, and eliminated more than
500,000 metric tons of CO
2 3
19 4
20 What Hercules
Customers Can Expect
• Customers will be automatically switched to MCE
service starting with the April electric bil
l.
• Solar customers will transition at time of true-up
• Monthly utility bills will still come from PG&E.
• Opt out and return to PG&E:
• Online: mcecleanenergy.org/opt-out
• By phone: (888) 632-3674.
• There is no charge to opt out within the first 60 days of MCE service. After 60 days, there is a one-time
administrative
fee to opt out:
• $5 for residential accounts
• $25 for commercial accounts.

Automatic transition to MCE service
beginning
in April
5 21
Sample Bill
With PG&E
Service
6 22
Sample Bill
MCE charges
replaces
PG&E’s
7 23
Residential Cost Comparison
Electric Generation $64.68 $69.13 $72.47
PG&E Electric Delivery $129.37 $129.37 $129.37
Additional PG&E Fees $5.44 $5.44 $4.09
Average Total Monthly Cost $199.49 $203.94 $205.93
60%

RENEWABLE
MCE
Light Green
100%

RENEWABLE
MCE
Deep Green
38%

RENEWABLE
PG&E
8 24
Getting the Word Out
Direct Mail and Emails
• All customers will receive direct mail in
February.
• Customers will then receive follow-up
notification emails in March, April, and May.

Community Workshops
• In-person workshops at Hercules City Hall
• February 26 and March 26, 6:30 PM
• Virtual workshops
• March 5, March 12 (Solar, Storage, EV)
April 16, May 7, 6:30pm
Dedicated Hercules Webpage
mcecleanenergy.org/Hercules
9 25
Thank you!
mceCleanEnergy.org
[email protected]
26 INTRODUCTIONS/PRESENTATIONS/

COMMISSION REPORTS

AGENDA ITEM

4. 25-007

27 PROCLAMATION

COMMENDING AND EXPRESSING SPECIAL RECOGNITION TO OFFICER KYLE JOHNSON OF THE HERCULES POLICE DEPARTMENT AS THE 2024

POLICE OFFICER OF THE YEAR
WHEREAS, Kyle Johnson was raised in Pinole, California, and attended Pinole Valley High School where he excelled both in his academic studies and as an athlete. At the age of 15, Kyle joined the Hercules Police Department Explorer program , where he also e xcelled as a competitor and earned multiple awards during the National Police Explorer competiti ons in Chandler, Arizona . In 2015, Kyle graduated with honors from Pinole Valley High School and continued his academic studies at the University of California, Irvine. During his junior year of college, Kyle was hired as a part -time Community Service Offi cer with the University of California, Irvine Police Department. Kyle remained focused on achievi ng academic excellence during his college career, earned a GPA of 3.78 which led to his placement on the Deans Honors List for his academic achievements. In the spring of 2018, Kyle graduated with a Bachelor of Arts degree in Criminology, Law and Society; and
WHEREAS, in 2018 Kyle returned home to Pinole, California, and worked as a security officer at the Claremont Hotel in Berkeley, California. In 2019, Kyl e was hired by the Alameda Police Department, served as Police Technician 1, and graduated from the Contra Costa County Sheriff's Academy in Pittsburg, California; and
WHEREAS, On October 26, 2020, Kyle was hired by the Hercules Police Depart ment as Police Officer and successfully completed his Field Training Program. Over the last four years, Kyle has been assigned to various specialized units including the Special Response Team (SRT) and the County Mutual Aid Mobile Field Force (MAMFF), and has served as a Defensive Tactics Instructor; and
WHEREAS, in a secret ballot of his peers , Officer Kyle Johnson was selected for Officer of the Year for 2024 in recognition of his exceptional attitude, teamwork, and unwavering dedication to both the Hercules Police Department, and citizens of Hercules.

NOW, THEREFORE, BE IT PROCLAIMED, that I, Dion Bailey, Mayor of the City of Hercules , on behalf of the enti re City Council, and the Hercules c ommunity, do hereby commend and express appreciation to Officer Ky le Johnson for his dedication to the law enforcement profession and the community he proudly serves.

In witness whereof, I have hereunto set my hand and caused the seal of the City of Hercules to be affixed this 14th day of January 2025.
__________________________________
Dion Bailey, Mayor
25-007
28 CONSENT CALENDAR

AGENDA ITEM

1. 25-004

2. 25-006

3. 22-1029

4. 25-001

5. 25-003

29 111 Civic Drive
Hercules, CA 94547City of Hercules
Meeting Minutes
City Council
Mayor Dan Romero
Vice Mayor Dion Bailey
Council Member Alex Walker-Griffin
Council Member Chris Kelley
Council Member Tiffany Grimsley
Dante Hall, City Manager
Christie Crowl, City Attorney
Eibleis Melendez, City Clerk
5:30 PMWednesday, December 4, 2024
CLOSED SESSION - 5:30 P.M., SPECIAL MEETING - 6:00 P.M.

In-Person in Council Chambers or To Watch or Listen only:

Zoom ID: 850 8407 5819 Zoom Passcode: 421542
Zoom Phone Number: 1-669-900-6833
I. SPECIAL CLOSED SESSION – CALL TO ORDER - ROLL CALL - 5:30 P.M.

IA CONSIDER AND TAKE ACTION ON ANY REQUEST FROM A COUNCIL MEMBER TO

PARTICIPATE IN A MEETING REMOTELY DUE TO JUST CAUSE OR EMERGENCY CIRCUMSTANCES PURSUANT TO AB 2449
Council Member C. Kelley, Council Member T. Grimsley, Mayor D. Romero, and Vice Mayor D. Bailey

Present: 4 -
Council Member A. Walker-GriffinAbsent: 1 -
II.

PUBLIC COMMUNICATION - CLOSED SESSION ITEMS
NONE
III. CONVENE INTO CLOSED SESSION
Meeting went into Recess
Meeting Reconvened
The Hercules City Council will meet in Closed Session regarding the following:

1. 22-1022 PUBLIC EMPLOYEE DISCIPLINE/DISMISSAL/RELEASE (California Government Code §54957)
City Attorney, ChristieCrowl, read the title of the item to be discussed in Closed Session. City Council land Staff recessed into Closed Session.

Page 1 ends

25-004
30 December 4, 2024City Council Meeting Minutes
IV. SPECIAL MEETING – CONVENE TO OPEN SESSION - ROLL CALL - 6:00 P.M.

Council Member C. Kelley, Council Member T. Grimsley, Mayor D. Romero, and Vice Mayor D. Bailey

Present: 4 -
Council Member A. Walker-GriffinAbsent: 1 -
V. REPORT ON ACTION TAKEN IN CLOSED SESSION
City Attorney, Christie Crowl, reported out on the action taken in Closed Session. On a motion by Council Member Kelley and a second by Council Member Grimsley, the Council voted to affirm the decision of the City's hearing officer and uphold the termination of the Human Resources Administrator. The vote was following:

Ayes: Council Member Kelley and Grimsley, and Mayor Romero.

No: NONE
Abstain: Vice Mayor Bailey

Absent: Council Member Walker-Griffin
VI.

PLEDGE OF ALLEGIANCE
The Pledge of Allegiance was led by VIce Mayor Bailey.

VII. MOMENT OF SILENCE
NONE
VIII. INTRODUCTIONS/PRESENTATIONS/COMMISSION REPORTS
NONE
IX. AGENDA ADDITIONS/DELETIONS
NONE
X. PUBLIC COMMUNICATIONS
NONE
This time is reserved for members of the public to address issues not included in the agenda. In accordance with the Brown Act, Council will refer to staff any matters brought before them at this time, and those matters may be placed on a future agenda.

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31 December 4, 2024City Council Meeting Minutes
XI. PUBLIC HEARINGS

1. 22-1021 2023-2031 Housing Element Update
RECOMMENDATION:

Staff recommends that the City Council adopt Resolution No. 24-XX (Attachment 1) adopting the Initial Study/Negative Declaration for the 2023-2031 Housing Element, finding that the Housing Element substantially complies with State law, and repealing the 2015-2023 Housing Element and adopting the 2023-2031 Housing Element.

Staff Report - 2023-2031 Housing Element Adoption
Attach 1 - Resolution - 2023-2031 Housing Element Adoption Attach 1a - City of Hercules 6th Cycle Housing Element
Attach 1b - Appendix A - Community Engagement
Attach 1c - Hercules Housing Element IS ND
Attach 2 - PC Resolution 24-06 - 2023-2031 Housing Element Adoption
Attach 3 - HCD substantial compliance letter
Presentation
Attachments:

Community Development Director, Tim Rood, introduced and presented the item. Council asked questions and provided comment. Director Rood provided a response. Mayor Romero opened the Public Hearing. Public comment was provided by Marcelina Magnoli and Myrna Godinez . Mayor Romero closed the Public Hearing. Comments came back to Council.

Director Rood provided a response. Action was taken on this item.

MOTION: A motion was made by Council Member Kelley, seconded by Council Member Grimsley, to adopt Resolution 24-076. The motion carried by the following vote:

Aye: Council Member C. Kelley, Council Member T. Grimsley, Mayor D. Romero, and Vice Mayor D. Bailey
4 -

Absent: Council Member A. Walker-Griffin1 -
XII. CONSENT CALENDAR
NONE
XIII. DISCUSSION AND/OR ACTION ITEMS
NONE
XIV. PUBLIC COMMUNICATIONS
NONE

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32 December 4, 2024City Council Meeting Minutes
This time is reserved for members of the public who were unavailable to attend the Public Communications period during Section X of the meeting, or were unable to speak due to lack of time. The public speaker requirements specified in Section X of this Agenda apply to this Section.

XV. CITY COUNCIL/CITY MANAGER/CITY ATTORNEY ANNOUNCEMENTS,

COMMITTEE, SUB-COMMITTEE AND INTERGOVERNMENTAL COMMITTEE REPORTS

1. Regional Committee

2. City Council Committees and Subcommittees

3. Commission Liaisons
City Attorney, Christie Crowl, had no announcements.

1. Regional Committee
Council Member Kelley promoted the Free Ferry Friday.

2. City Council Committees and Subcommittees
No reports provided

3. Commission Liaisons
No reports provided
There were no future agenda item requests.

XVI. ADJOURNMENT
Mayor Romero adjourned the meeting at 7:04 P.M.
_________________________________
Dan Romero, Mayor
Attest:
_______________________________
Eibleis Melendez, City Clerk

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33 CONSENT CALENDAR

AGENDA ITEM

2. 25-006

34 111 Civic Drive
Hercules, CA 94547City of Hercules
Meeting Minutes
City Council
Mayor Dion Bailey
Vice Mayor Chris Kelley
Council Member Alex Walker-Griffin
Council Member Dilli Bhattarai
Council Member Tiffany Grimsley
Dante Hall, City Manager
Christie Crowl, City Attorney
Eibleis Melendez, City Clerk
6:00 PMTuesday, December 10, 2024
CLOSED SESSION - 6:00 P.M., REGULAR MEETING - 7:00 P.M.

In-Person in Council Chambers or To Watch or Listen only:

Zoom ID: 812 5176 1353 Zoom Passcode: 561387
Zoom Phone Number: 1-669-900-6833
I. SPECIAL CLOSED SESSION – CALL TO ORDER - ROLL CALL - 6:00 P.M. 1A. CONSIDER AND TAKE ACTION ON ANY REQUEST FROM A COUNCIL MEMBER TO

PARTICIPATE IN A MEETING REMOTELY DUE TO JUST CAUSE OR EMERGENCY CIRCUMSTANCES PURSUANT TO AB 2449
Council Member C. Kelley, Council Member T. Grimsley, Council Member A.

Walker-Griffin, Mayor D. Romero, and Vice Mayor D. Bailey

Present: 5 -
II. PUBLIC COMMUNICATION - CLOSED SESSION ITEMS
NONE
III. CONVENE INTO CLOSED SESSION
The Hercules City Council will meet in Closed Session regarding the following:

City Attorney, Christie Crowl, noted that Agenda Item III.2, Conference with Real Property Negotiators Pursuant to Government Code section 549.56.8. Conference with Real Property Negotiator Property Address:
1680 Refugio Valley Road, Hercules, CA 94547, is being continued to the January meeting. City Attorney Crowl read the title of the one item to be discussed in the Closed Session. City Council and Staff recessed into Closed Session.

1. 22-1035
CONFERENCE WITH LABOR NEGOTIATORS Pursuant to Government Code Section 54957.6 - City Negotiators: Dante Hall, City Manager; Edwin Gato, Director of Finance; relative to the following employee groups:

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25-006
35 December 10, 2024City Council Meeting Minutes
a.

Teamsters Local 315 Employee Organizations

2. 22-1036 CONFERENCE WITH REAL PROPERTY NEGOTIATORS Pursuant to Government Code section 54956.8. CONFERENCE WITH Real Property Negotiators Property address: 1680 Refugio Valley Road, Hercules CA 94547 Agency Negotiators: Dante Hall, City Manager; Christie Crowl, City Attorney, Negotiating Parties: City of Hercules, Rodeo Hercules Fire Protection District
IV.

REGULAR MEETING – CONVENE TO OPEN SESSION - ROLL CALL - 7:00 P.M.

Council Member T. Grimsley, Council Member C. Kelley, Council Member A.

Walker-Griffin, Mayor D. Romero, and Vice Mayor D. Bailey

Present: 5 -
V. REPORT ON ACTION TAKEN IN CLOSED SESSION
There was no final or reportable action taken in Closed Session.

VI. PLEDGE OF ALLEGIANCE
The Pledge of Allegiance was lead by Council Member Grimsley.

VII. MOMENT OF SILENCE
NONE
VIII. INTRODUCTIONS/PRESENTATIONS/COMMISSION REPORTS
NONE
IX. AGENDA ADDITIONS/DELETIONS
NONE

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36 December 10, 2024City Council Meeting Minutes
X. PUBLIC COMMUNICATIONS
Public Comment was provided by Nick Barry.

This time is reserved for members of the public to address issues not included in the agenda. In accordance with the Brown Act, Council will refer to staff any matters brought before them at this time, and those matters may be placed on a future agenda.

XI. PUBLIC HEARINGS
NONE
XII.

CONSENT CALENDAR
MOTION: A motion was made by Council Member Walker-Griffin, seconded by Council Member Grimsley, to adopt the Consent Calendar as is. The motion carried by the following vote:

Aye:

Council Member C. Kelley, Council Member T. Grimsley, Council Member A. Walker-Griffin, Mayor D. Romero, and Vice Mayor D. Bailey 5 -

1. 22-1023 Meeting Minutes for the Regular Meeting of November 12, 2024 Meeting Minutes for the Regular Meeting of November 12, 2024Attachments:

APPROVED

2. 22-1024 Declaring Results of the November 5, 2024, General Municipal Election RECOMMENDATION:

It is recommended that the City Council adopt a resolution declaring the results of the Consolidated General Municipal Election held on November 5, 2024
Staff Report - Election Results 2024
Attach 1 - Resolution
Exhibit A - 2024 Election Certificate and Summary of Results Attachments:

Resolution 24-077, APPROVED.

XIII. DISCUSSION AND/OR ACTION ITEMS

1. 22-1025 Commission and Committee Appointments
RECOMMENDATION:

1. Consider making appointments to the Hercules Commissions, Regional Boards and Committees to fill vacancies and expired terms

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37 December 10, 2024City Council Meeting Minutes

2. Following appointments, direct Staff to prepare and publish the Local Appointments List (Maddy Act) pursuant to Government Code 54972 Staff Report - Commission AppointmentsAttachments:

City Manager, Dante Hall, introduced the item. City Clerk, Eibleis Melendez, presented. There was no discussion or public comment on this item. Council members voted on the Commission applicants. Action was taken on this item. The following applicants were appointed to Commissions:

Planning Commission:

Sylvia Jimenez
Kenneth Morrison
Carol Most-Walker
Finance Commission:

Janet Stallman
Sam Ahmad
Edward Ulle
Community and Library Services Commission:

Kaitlyn Azevedo
Han Chen
D. Yamamoto
Monique Hernandez, Student Commissioner
Contra Costa Advisory Council on Aging:

Sara Green
MOTION: A motion was made by Vice Mayor Bailey , seconded by Council Member Walker-Griffin, to direct Staff to prepare and publish the local appointments list per the Maddy Act . The motion carried by the following vote:

Aye:

Council Member T. Grimsley, Council Member C. Kelley, Council Member A.

Walker-Griffin, Mayor D. Romero, and Vice Mayor D. Bailey 5 -

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38 December 10, 2024City Council Meeting Minutes

CITY COUNCIL PRESENTATIONS

1. 22-1026 Vice Mayor Bailey to Present a Proclamation Commending the Dedication and Leadership of Mayor Romero.

Proclamation for Mayor Dan RomeroAttachments:

Vice Mayor Bailey presented a proclamation to Mayor Romero. Council provided comment. Public comment was provided by Harpreet Sandu, Anthony Tave, and Tanya Little.

2. 22-1032
Remarks from Mayor Romero
Mayor Romero spoke and provided remarks on his retirement from City Council. The meeting recessed briefly for pictures.

OATHS OF OFFICE & INSTALLATION OF RE-ELECTED AND NEWLY ELECTED

COUNCIL MEMBERS

1. 22-1027 Administer Oath of Office to Re-Elected Council Members Alex Walker-Griffin and Tiffany Grimsley and Newly Elected Council Member Dilli Bhattarai
Cert of Election Form - A. Walker-Griffin
Cert of Election Form - T. Grimsley
Cert of Election Form - D. Bhattarai
Attachments:

The Oath of Office was administered to the re-elected and newly elected Council Members. Council members provided comment. Public comment was provided by Devin Murphy, Anthony Tuve, and Harpreet Sndhu.

Although a motion and a vote was made at this point in the meeting to install the Mayor and Vice Mayor, the Council later took this action at the appropriate time on the agenda as part of the first item under the City Council Reorganization.

2. 22-1028 Remarks from Council Members
Council provided remarks and welcomed Council Member Dilli Bhattari to the Hercules City Council.

The Meeting went into recess for refreshments and pictures.

RECESS AND REFRESHMENTS

RECONVENE - CALL TO ORDER - ROLL CALL

CITY COUNCIL REORGANIZATION

1. 22-1030
Selection of Mayor and Vice Mayor

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39 December 10, 2024City Council Meeting Minutes
Staff Report - Selection of Mayor and Vice Mayor
Attach 1 - Council Rules of Procedure
Attachments:

The City Council meeting reconvened. Vice Mayor Bailey opened the meeting. City Attorney, Christie Crowl, made note that once the newly elected and re-elected Council Members received their oath, they were effectively seated, so the selection of Mayor and Vice Mayor should occur during this agenda item. Action was taken on this item. Council Members provided comment.

MOTION: A motion was made by Council Member Kelley, seconded by Council Member Grimsley, to nominate Dion Bailey as Mayor . The motion carried by the following vote:

MOTION: A motion was made by Vice Mayor Bailey, seconded by Council Member Bhattarai to nominate Chris Kelley as Vice Mayor . The motion carried by the following vote:

Aye:

Council Member T. Grimsley, Council Member C. Kelley, Council Member A.

Walker-Griffin, Council Member D. Bhattarai, Vice Mayor D. Bailey 5 -

2. 22-1031 City Council Regular Meeting Dates for 2025
Staff Report - Meeting Schedule 2025
Attach 1 - Draft 2025 Meeting Calendar
Attachments:

City Clerk, Eibleis Melendez, introduced and presented the item. Council members provided comment. No public comment. Action was taken on this item.

MOTION: A motion was made by Council Member Kelley, seconded by Council Member Walker-Griffin, to not have City Council meetings scheduled on the following dates in 2025: August 12 and 26, November 25 and December 23rd.

August 12th will be held as a potential meeting date if needed. The motion carried by the following vote:

Aye:

Council Member T. Grimsley, Council Member A. Walker-Griffin, Council Member D. Bhattarai, Mayor D. Bailey, and Vice Mayor C. Kelley 5 -
XIV. PUBLIC COMMUNICATIONS
NONE
This time is reserved for members of the public who were unavailable to attend the Public Communications period during Section X of the meeting, or were unable to speak due to lack of time. The public speaker requirements specified in Section X of this Agenda apply to this Section.

XV. CITY COUNCIL/CITY MANAGER/CITY ATTORNEY ANNOUNCEMENTS,

COMMITTEE, SUB-COMMITTEE AND INTERGOVERNMENTAL COMMITTEE REPORTS

AND FUTURE AGENDA ITEMS

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40 December 10, 2024City Council Meeting Minutes
This is the time for brief announcements on issues of interest to the community. In accordance with the provisions of the Brown Act, matters which do not appear on this agenda but require City Council discussion may be either (a) referred to staff or other resources for factual information or (b) placed on a future meeting agenda.

1. Regional Committee

2. City Council Committees and Subcommittees

3. Commission Liaisons
City Attorney, Christie Crowl and City Manager, Dante Hall congratulated the newly elected and re-elected Council Members. No announcements.

1. Regional Committees
No reports were provided

2. City Council Committees and Subcommittees
No reports were provided

3. Commission Liaisons
No reports were provided
Community Events-
Council Members reported out on events they attended throughout the City and County. They also promoted upcoming local events.

There were no future agenda item requests.

XVI. ADJOURNMENT
Mayor Bailey adjourned the meeting at 8:35 P.M.
_________________________________
Dion Bailey, Mayor
Attest:
_______________________________
Eibleis Melendez, City Clerk

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41 CO

NSENT CALENDAR

AGENDA ITEM

3. 22-1029
42 STAFF REPORT TO THE CITY COUNCIL
DATE: Regular Meeting of January 14, 2025
TO: Mayor and Members of the City Council
VIA: Dante Hall, City Manager
SUBMITTED BY: Eibleis Melendez, City Clerk
SUBJECT: Quarterly Review of Future Agenda Items
RECOMMENDED ACTION:

Staff recommends that the City Council receive the staff report on the quarterly review of future City Council agenda items.

BACKGROUND:

The purpose of this item is to identify issues presently known to staff or which members of the City Council wish to place on an upcoming City Council agenda. Council comment on these future agenda items is limited by the Brown Act to clarifying questions, brief announcements, or requests for additional information in connection with an item when it is discussed.

FISCAL IMPACT:

There is no direct fiscal impact associated with this report.

ATTACHMENTS:

1. Future Agenda Items List
22-1029
43 Scheduled Meeting
Date Item Presentation Public Hearing Consent Discussion Only Discussion/Action 1/14/2025
(Closed Session -
6:00 pm start) Sycamore Sewer Trunk Overflow Line Design Contract X MCE Enrollment Outreach Plan X
Strategic Goals Quarterly Update X
Proposal to Engage Infrastructure Funding Lobbyist X
Annual Comprehensive Financial Report(ACFR) & Annual Audit Results X Succesor Agency: Annual Filing of the Rocognized Obligation Patyment Schedule (ROPS) X
Council Regional Appointments X
Review of Council Policies - Ethics, Nepotism, etc X
Quarterly Review of the Future Agenda Items List X
Proclamation - Police Officer of the Year X
Recognzing Commander Collard- Graduate of the FBI National Academy X Herculean Mile Winners X
Scheduled Meeting
Date Item Presentation Public Hearing Consent Discussion Only Discussion/Action 1/28/2025 Organization Structure and Succession Plan Discussion X Hercules Hub Update X
Future Juneteenth Event X
Special Events Update X
Fourth of July Discussion X
Notice by 1/6(20 days) Zoning Amendments for Housing Element X Falcon Way Repair Design Agreement X
Acceptance of the Lower Sewer Trunkmain Project X
Police Lobbies Remodel Construction Contact Award X
Victoria By The Bay Service Levels X
Draft 2024 Speed Survey and Recommended Spedd Limit Changes X Resident Engagement Related to Strategic Plan X
Master Salary Schedule X
RGS Contract Amendment(term extension) X
Housing Succesor Loan Administration X
Tentative Future Agenda Items List
(All Items are Subject to Change)
Updated - 1/7/25
44 Scheduled Meeting
Date Item Presentation Public Hearing Consent Discussion Only Discussion/Action 2/11/2025 Community Volunteers for Housebound Residents X Solid Waste Draft Franchise Agreement X
Public Works Department Update X
Investment Report: 2nd Quarter (Ending Dec.31) X
Recogniction of Patrick Tang X
Water Smart Small-Scale WEE Grant Award X
Measure J Compliance Report X
Tentative
Shirtsleeves Meeting Item Presentation Public Hearing Consent Discussion Only Discussion/Action 2/18/2025 Revenue Enhancement X
Scheduled Meeting
Date Item Presentation Public Hearing Consent Discussion Only Discussion/Action 2/25/2025 Midyear Budget Update and Adjustments X
Animal Services Update X
Garbage Liens X
Scheduled Meeting
Date Item Presentation Public Hearing Consent Discussion Only Discussion/Action 3/11/2025 Parks and Recreation Department Update X
Strategic Goals Quarterly Update X
Update of Business Shopping Centers X
Scheduled Meeting
Date Item Presentation Public Hearing Consent Discussion Only Discussion/Action 3/25/2025 Budget Workshop(CIP) X
League Financial Diagnostic Tool X
General Plan Update X
Housing Element Annual Program Report X
Kids Expo X
Scheduled Meeting
Date Item Presentation Public Hearing Consent Discussion Only Discussion/Action 4/8/2025 Police Department Update X
Budget Workshop: Sewer and Internal Services (ISF) X
Quarterly Review of the Future Agenda Items List X
45 Annual Stormwater Parcel Assessment X
Revenue Enhancement X
Scheduled Meeting
Date Item Presentation Public Hearing Consent Discussion Only Discussion/Action 4/22/2025 MCE Enrollment Update X
Budget Workshop: General Fund and other Operating Funds X Scheduled Meeting
Date Item Presentation Public Hearing Consent Discussion Only Discussion/Action 5/13/2025 Community Development Update X
Investment Report: 3rd Quarter( Ending March 31st) X
Local Hazard Mitigation Plan Adoption X
Scheduled Meeting
Date Item Presentation Public Hearing Consent Discussion Only Discussion/Action 5/27/2025 First Public Hearing: Proposed Annual Budget X Scheduled Meeting
Date Item Presentation Public Hearing Consent Discussion Only Discussion/Action 6/10/2025 Finance Department Update X
Second Public Hearing: Adoption of the Annual Budget X
Strategic Goals Quarterly Update X
Annual Renewals of LLAD X
Annual Fiber Optic Broadband per Res. 16-084 X
Scheduled Meeting
Date Item Presentation Public Hearing Consent Discussion Only Discussion/Action 6/24/2025 Annual Investment Policy Update X
Master Fee Schedule X
Scheduled Meeting
Date Item Presentation Public Hearing Consent Discussion Only Discussion/Action 7/8/2025 Garbage Liens X
46 47

CONSENT CALENDAR

AGENDA ITEM

4. 25-001

48 STAFF REPORT TO THE CITY COUNCIL
DATE: Regular Meeting of January 14, 2025
TO: Mayor and Members of the City Council
SUBMITTED BY: Christie Crowl, City Attorney
SUBJECT: Annual Update Regarding the Following Matters:
1) Anti-Nepotism and Anti-Cronyism Ordinance;
2) Hercules Ethics Policy.

RECOMMENDED ACTION:

Accept report; provide direction to staff if any.

SUMMARY:

This report discusses items based on recommendations made by the Citizen’s Legal Advisory Committee (also referred to as the Legal Ad Hoc Committee), which served the City from 2011 to 2013.

The City Council has directed that staff report annually on compliance with the Anti- Nepotism and Anti-Cronyism Ordinance and the Hercules Ethics Policy.

Since its enactment and for the period since the last annual report to the Council through today, there have been no known violations of the Anti-Nepotism and Anti-Cronyism Policy. Likewise, there have been no known violations of the Hercules Ethics Policy.

BACKGROUND:

With the election of reform-minded council members starting in November 2010, Hercules public officials have attempted to close loopholes in state conflict of interest laws and to make local government more transparent and accountable. The Citizen’s Legal Advisory Committee (also called the Legal Ad Hoc Committee), which served the City from 2011 to 2013, was tasked by the City Council to study and propose local measures to increase transparency and accountability in local government. The matters discussed in this report stem largely from the recommendations of this Citizen’s Committee.

Equal Pay Act Ordinance : While the Council has not specifically required an annual compliance report, it should be noted that in 2021, the City adopted an Equal Pay Act Ordinance, similar to the Anti -Nepotism and Anti -Cronyism Ordinance, which requires 25-001
49 entities that contract with the City to provide Acknowledgments under penalty of perjury that they are in compliance with state law equal pay provisions. There have been no known violations of the Equal Pay Act Ordinance.

ANALYSIS:

1. Anti-Nepotism and Anti-Cronyism Ordinance.

Initially adopted by the City Council by resolution on June 19, 2012, and then later by ordinance on April 28, 2015, the Anti-Nepotism and Anti-Cronyism Ordinance is intended to prevent the hiring and employment of, and the award of contracts to, individuals related by blood or marriage to public officials. It also prohibits employment or contracting with individuals or firms who have a “crony” relationship with public officials. The provisions are codified in the Hercules Municipal Code, Title 2, Chapter 3, Article 4, entitled “Prevention of Nepotism and Cronyism in Employment and Contracting.”

Since its passage in June of 2012, there have been no instances in the City of Hercules involving the employment of, or contracting with, prohibited individuals or businesses. Public officials are required annually to sign an acknowledgment confirming that they have reviewed the ordinance's requirements. Contractors must submit as part of their bid package and/or contracting documents that they are not in violation of the requirements. These acknowledgment and reporting requirements have been fully implemented since the adoption of the ordinance and are being tracked by the City Clerk and those members of city staff who are responsible for putting together contract documents.

2. Hercules Ethics Policy.

Upon the recommendation of the Citizen’s Legal Advisory Committee, and after discussion and due consideration, the City Council passed Resolution No. 13-051, establishing the City of Hercules Ethics Policy by a unanimous vote on May 28, 2013.

The Ethics Policy sets several ethical expectations for elected officials and appointed members of the City’s boards and commissions (“Members”). The policy enumerates the basic and broad requirements that Members shall comply with all laws pertaining to their public duties (Sec. 2). It requires that Members conduct the public’s business without even the appearance of impropriety, and refrain from abusive conduct (Sec. 3). Members must respect the public process and rules of order (Sec. 4) and make decisions based on merit (Sec. 6). Members should share with the public information they obtained from sources outside the public decision-making process (Sec. 7). Members should abide by conflict of interest laws and financial disclosure laws and shall not participate in a matter even when there is no statutory violation involved if their participation presents the appearance of impropriety (Sec. 8). Members shall refrain from receiving gifts which might compromise their independence of judgment, or which give the appearance of being compromised (Sec. 9). Council members shall not unduly influence Members serving on boards and commissions (Sec. 15). Members are reminded that they have taken an oath of office, and that they have a duty to disclose corruption, abuse, or other violation s of law (Sec. 17).

Violation of the Policy by a member of a commission, board or committee, may result in the removal of that person from office (Sec. 19).

50 Under Section 18, the Policy is intended to be self-enforcing. For this reason, it is intended to be part of the regular orientation for elected and appointed officials. Training materials have been revised to include a discussion of the Ethics Policy, and all sitting and future Members have been required to sign a statement prepared to acknowledge that they have read and understood the policy.

FISCAL IMPACT:

None.

ATTACHMENTS:

Attachment 1 – Anti-Nepotism and Anti-Cronyism Ordinance.

Attachment 2 – Resolution No. 13-051 Adopting City of Hercules Ethics Policy 51 Attachment 1

H E R C U L E S M U N I C I P A L C O D E

Article 4. Prevention of Nepotism and Cronyism in Employment and Contracting Sec. 2-3.401 Purpose.

In adopting this Article, it is the intent of the City Council to prohibit the contracting with, and employment of, relatives and friends of City officials, to ensure that no conflict of interest, favoritism, preferential treatment, or discrimination enters into the hiring, promotion, contracting and/or transfer practices of the City.

The regulations established by this Article shall apply to all City officials, as defined herein, and to all individuals or firms who provide services to the City as independent contractors or paid consultants. (Ord. 486 § 1 (part), 2015)
Sec. 2-3.402 Definitions.
“City” as used herein shall mean the City of Hercules, California. “City officials,” for the purposes of this Article, means City elected officials, City appointed officials, appointees to City ad hoc or standing committees, appointees to City commissions, and City employees, including all individuals who are employed by the City Manager, City Attorney, and City Clerk, as well as all employees of City agencies and departments.
“Consensual romantic and/or sexual relationship” means any consensual romantic and/or sexual relationship between a City official or contractor and any City official who may supervise him or her directly or indirectly, or who may influence the terms and conditions of his or her employment or contract with the City.
“Contractor” means any individual or firm providing material, equipment, or services to the City pursuant to a written or oral agreement with the City as an independent contractor or consultant, and not as an employee.
“Cronyism” means making an employment or contracting decision based upon personal, political, financial, or commercial relationships instead of merit when the person or entity benefiting from the employment, promotion, supervision or contract does not have the qualifications for the position or contract, or is being compensated at a rate that is more than the rate that would be paid other employees or contractors performing the same or similar functions. “Family relationship” means a relationship by blood, adoption, marriage, domestic partnership, foster care, and cohabitation, and includes parents, grandparents, great-grandparents, grandchildren, great- grandchildren, children, foster children, uncles, aunts, nephews, nieces, first cousins, second cousins, 52 Attachment 1

siblings, and the spouses or domestic partners of each of these relatives and cohabitants. This definition includes any relationship that exists by virtue of marriage or domestic partnership, such as in- law and step relationships, which are covered to the same extent as blood relationships. “Nepotism” means employing, promoting, supervising or contracting with a person or persons who have a family relationship or a consensual romantic and/or sexual relationship with a City official. (Ord. 486 § 1 (part), 2015)
Sec. 2-3.403 Restricting Nepotism and Cronyism in Public Employment. (a) Statement of Policy. It is the policy of the City of Hercules to hire, promote, and transfer employees on the basis of individual merit and to avoid favoritism or discrimination in making such decisions. The employment of relatives of City officials, in positions where one (1) might have influence over the other’s status or job security, is regarded as a violation of this Section. Nepotism and cronyism, as defined in Section 2-3.402, are prohibited from City employment decisions to the full extent permitted by law.

It is therefore the City’s policy to prohibit nepotism and cronyism in public employment according to the guidelines below:
(1) An individual will not be hired, promoted, transferred, or otherwise placed into a position when a person with whom the individual has a family relationship or consensual romantic and/or sexual relationship occupies a position in his or her direct supervisory chain of command. (2) Individuals will not be hired, promoted, transferred, or otherwise placed into a position when to do so would constitute cronyism.
(3) Department heads are prohibited from employing or supervising any person with whom the department head has a family relationship or consensual romantic and/or sexual relationship within his/her department in any capacity in which that person may receive compensation. (4) Department heads are prohibited from employing or supervising any individual, when to do so would constitute cronyism.
(5) City positions should be advertised to the public and filled pursuant to an objective selection process based upon qualification.
(b) Resolving a Violation. In the event nepotism or cronyism arises due to circumstances such as through promotion, transfer, the development of a consensual romantic and/or sexual relationship or marriage, the involved individuals have six (6) months in which to settle the issue voluntarily (i.e., by having one (1) of them change assignment or leave City employment).

If the affected parties are unable to resolve the situation within the time provided, their immediate supervisors will review the case at the end of the six (6) month period. The supervisor’s decision 53 Attachment 1

concerning which employee must change assignment, made after consultation with the Director of Human Resources, will be binding.
(c) Responsibility to Report. It is the responsibility of a City official to report a violation of this Section. A City employee must notify his/her supervisor, and it is the responsibility of an elected or appointed official to notify the City Manager, or the City Attorney in the case of a violation by the City Manager, when any of the following situations occur:
(1) When a person who is hired or appointed, or is being considered to be hired or appointed, has a family relationship or consensual romantic and/or sexual relationship with a City official; and/or (2) When a City official has or develops a family relationship or consensual romantic and/or sexua l relationship with another City official who occupies a position in his or her direct supervisory chain of command; and/or
(3) When hiring, promotion, appointment or supervision of a City official constitutes cronyism as defined in Section 2-3.402.

The intent of this Section is to ensure that no conflict of interest, favoritism, preferential treatment, or discrimination enters into the hiring, promotion, and/or transfer practices of the City. (d) Penalty for Failure to Report. A City official, other than an elected official, who knows or should know that a person with whom he or she has a family relationship or consensual romantic and/or sexual relationship is employed by the City, or who knows or should know of any employment decision that constitutes nepotism or cronyism and fails to report the violation, is subject to discipline, including but not limited to suspension or termination.

An elected official who knows or should know that a person with whom he or she has a family relationship or consensual romantic and/or sexual relationship is employed by the City, or who knows or should know of an employment decision that constitutes nepotism or cronyism and fails to report the violation, is subject to censure. (Ord. 486 § 1 (part), 2015)
Sec. 2-3.404 Restricting Nepotism and Cronyism in Public Contracting. (a) Statement of Policy. It is the policy of the City of Hercules to avoid favoritism or discrimination in making decisions to award contracts for supplies, construction, maintenance, professional or other services. The awarding of a contract or the approval of payments or expenses under a contract by a City official, to a person with whom she or he has a family relationship or a consensual romantic and/or sexual relationship, is regarded as a violation of this Section. Nepotism and cronyism as defined in Section 2-

3.402 are hereby prohibited from City contracting decisions to the full extent permitted by law.

It is therefore the City’s policy to prohibit nepotism and cronyism in City contracts, according to the guidelines below:
54 Attachment 1

(1) An individual contractor shall not be awarded a contract with the City when the contractor has a family relationship or consensual romantic and/or sexual relationship with a City official who may have some influence over the award or management of the contract, or when the award of a contract to that individual contractor would constitute nepotism or cronyism. (2) Firms shall not be awarded contracts with the City when an owner, manager, senior member, principal, officer, or partner of the firm has a family relationship or consensual romantic and/or sexual relationship with a City official who may have some influence over the award or management of the contract, or when the award of a contract to a firm would constitute nepotism or cronyism.
(3) A City official is prohibited from awarding contracts to any individual with whom he or she has a family relationship or consensual romantic and/or sexual relationship, or to any firm when an owner, manager, senior member, principal, officer, or partner of the firm has a family relationship or consensual romantic and/or sexual relationship with the employee or official, or when to do so would constitute nepotism or cronyism.

The intent of this Section is to ensure that no conflict of interest, favoritism, or discrimination enters into the contracting practices of the City.
(b) Responsibility to Report a Violation of Regulations Against Contracting with Relatives or Contracts that Constitute Cronyism. It is the responsibility of a City official to report a violation of this Section. A City employee must notify his or her supervisor, and an elected or appointed official must notify the Ci ty Manager, or the City Attorney in the case of a violation by the City Manager, when he or she is aware of any of the following situations:
(1) When a person who has a family relationship or consensual romantic and/or sexual relationship with a City official is being considered for the award of a contract to provide services to the City; and/or
(2) When a City official has or develops a family relationship or a romantic and/or consensual sexual relationship with a person who has an existing contract to provide services to the City; and/or
(3) When the award of a contract would constitute nepotism or cronyism as defined in Section 2-

3.402.
(c) Penalty for Failure to Report. A City official, other than an elected city official, who knows or should know that a person with whom he or she has a family relationship or consensual romantic and/or sexual relationship is being considered for or has been awarded a contract with the City in violation of this Section, and fails to report the violation, is subject to discipline, including, but not limited to, suspension or termination.
55 Attachment 1

An elected official who knows or should know that a person with whom he or she has a family relationship or consensual romantic and/or sexual relationship is being considered for or has been awarded a contract with the City in violation of this Section, and fails to report the violation, is subject to censure.

A contractor who has a contract with the City or who seeks a contract with the City and fails to report that a person with whom she or he has a family relationship or consensual romantic and/or sexual relationship is employed by the City or is a City official, or that the award of the contract constitutes cronyism in violation of this Section, may have his or her contract terminated and may be precluded from being awarded any future contracts with the City. (Ord. 486 § 1 (part), 2015) Sec. 2-3.405 Penalties Not Exclusive.

The penalties provided under this Article are not exclusive, and do not preclude punishment under any other applicable provision of law. (Ord. 486 § 1 (part), 2015) Sec. 2-3.406 Notice and Acknowledgment.
(a) The requirements of this Article shall be acknowledged annually by all City officials who are required to comply with State of California financial disclosure requirements, on a form developed by the City Attorney and provided by the City Clerk. The written acknowledgment must be submitted at the time such financial disclosures are required to be submitted.
(b) All contractors and prospective contractors shall be notified in writing of the requirements of this Article at the time the City issues a request for proposals or qualifications, and prior to entering into a sole source agreement. (Ord. 486 § 1 (part), 2015)

56 Attachment 2
57 58
59 60
61 CO

NSENT CALENDAR

AGENDA ITEM

5. 25-003
62 THE CITY OF HERCULES AS SUCCESSOR AGENCY TO THE HERCULES

REDEVELOPMENT AGENCY
DATE: Regular Meeting of January 14, 2025
TO: The City of Hercules as Successor Agency to the Hercules Redevelopment Agency
SUBMITTED BY: Dante Hall, City Manager/Executive Director Edwin Gato, Director of Finance
SUBJECT: Recognized Obligation Payment Schedule for the period of July 1, 2025, through June 30, 2026 (ROPS 25-26)
RECOMMENDED ACTION:

Adopt a resolution approving the Recognized Obligation Payment Schedule for July 1, 2025, through June 30, 2026 (ROPS 25-26).

DISCUSSION:

Health and Safety Code (HSC) Section 34177 requires that successor agencies must, amongst other things, prepare a Recognized Obligation Payment Schedules (ROPS) for each upcoming fiscal year. A ROPS document sets forth the maximum payment amounts and due dates of payments required by enforceable obligations. Enforceable obligations are defined in HSC Section 34171(d) and include the payment of bonds and loans, payments required by the federal government, judgments or settlements, any legally binding agreement or contract, and contracts or agreements necessary for the administration or operation of the successor agency.

HSC Section 34177(1) requires successor agencies to submit the ROPS to a Countywide Oversight Board and the California Department of Finance (DOF) for approval.

The ROPS template used for the ROPS 25-26 includes the following worksheets:

1. Recognized Obligation Payment Schedule Summary

2. Recognized Obligation Payment Schedule – ROPS Detail - This worksheet includes a section for ROPS A ( July 1, 2025 through December 31, 2025) and a section for ROPS 25-26 B (January 1, 2026 through June 30, 2026). 25-003
63 3. Recognized Obligation Payment Schedule – Report of Cash Balances

4. Recognized Obligation Payment Schedule – Notes

Summary of Obligations

Hercules ROPS 25-26 requests $10.0 million in obligations from Redevelopment Property Tax Trust Funds (RPTTF). Obligations consist of bond debt service and related fees ($7.9 million), payments owed to third parties pursuant to two agreements entered before dissolution ($1.8 million), and the annual administrative cost allowance ($250,000).

Prior Period Adjustment and Cash Balance

The ROPS 25-26 Report of Cash Balance worksheet shows that $7 million in RPTTF money received for ROPS 22-23 (July 1, 2022, through June 30, 2023) has been fully expended. It also reports $1.7 million in Reserve Balances that were expended or continue to be held for future ROPS.

The Recognized Obligation Payment Schedules (ROPS) are posted on the City of Hercules website (www.ci.hercules.ca.us).

ATTACHMENTS:

1. Resolution approving the Recognized Obligation Payment Schedule (ROPS) for the period July 1, 2025, through June 30, 2026

2. ROPS 25-26
64 RESOLUTION NO. __

THE CITY OF HERCULES AS SUCCESSOR AGENCY TO THE HERCULES

REDEVELOPMENT AGENCY APPROVING THE RECOGNIZED OBLIGATION PAYMENT SCHEDULE FOR THE PERIOD JULY 1, 2025 THROUGH JUNE 30, 2026 (ROPS 25-26)

WHEREAS, on December 29, 2011, the California Supreme Court issued its final decision in the litigation of California Redevelopment Association v. Matosantos, upholding Assembly Bill x1 26 (codified as Health and Safety Code 34161-34191) (“ABx1 26”) and invalidating Assembly Bill x1 27 (the legislation that would have permitted redevelopment agencies to continue operation if their sponsoring jurisdiction agreed to make certain payments for the benefit of schools and special districts); and as a result, all California redevelopment agencies were dissolved, effective February 1, 2012; and

WHEREAS, pursuant to California Health and Safety Code (“HSC”) Section 34173(d), on January 10, 2012 by Resolution No 12 -005, the Council of the City of Hercules elected to become the Successor Agency to the Hercules Redevelopment Agency (“Agency”) (non-housing); and

WHEREAS, HSC Section 34179 requires that certain Successor Agency actions are subject to Oversight Board approval; and

WHEREAS, HSC Section 34177 requires each Successor Agency to prepare a draft Recognized Obligation Payment Schedule ( “ROPS”) and HSC Section 34180 requires the Oversight Board to approve same; and

WHEREAS, HSC Section 34177 provides that each ROPS shall be forward looking to the next fiscal year; and

WHEREAS, HSC Section 34177 (o) states that the Recognized Obligation Payment Schedule shall be submitted by the Successor Agency, after a pproval by the Oversight Board to the California Department of Finance.

NOW, THEREFORE, BE IT RESOLVED that the City of Hercules as Successor Agency to the Hercules Redevelopment Agency, hereby finds and determines:

1. Approval of the ROPS for the period July 1, 2025, through June 30, 2026 (ROPS 25-26) attached hereto as Exhibit A.

2. Successor Agency staff is directed to provide a copy of this Resolution along with the approved draft ROPS to the Contra Costa County Countywide Oversight Board, County Auditor Controller, the State Controller’s Office and the State Department of Finance.

65 The foregoing Resolution was duly and regularly adopted by the City of Hercules as Successor Agency to the Hercules Redevelopment Agency at its meeting held on the 14th day of January 2025 by the following:

AYES:

NOES:

ABSENT:

ABSTAIN:

__________________________
Dion Bailey, Chair

ATTEST:

Eibleis Melendez, City Clerk

66 Recognized Obligation Payment Schedule (ROPS 25-26) - Summary Filed for the July 1, 2025 through June 30, 2026 Period Successor Agency: Hercules
County: Contra Costa
Current Period Requested Funding for Enforceable
Obligations (ROPS Detail)
25-26A Total
(July -
December)
25-26B Total
(January -
June)
ROPS 25-26
Total
A Enforceable Obligations Funded as Follows (B+C+D) $ - $ - $ - B Bond Proceeds - - -
C Reserve Balance - - -
D Other Funds - - -
E Redevelopment Property Tax Trust Fund (RPTTF) (F+G) $ 4,952,659 $ 5,055,721 $ 10,008,380 F RPTTF 4,827,659 4,930,721 9,758,380
G Administrative RPTTF 125,000 125,000 250,000
H Current Period Enforceable Obligations (A+E) $ 4,952,659 $ 5,055,721 $ 10,008,380 Certification of Oversight Board Chairman:

Name Title
Pursuant to Section 34177 (o) of the Health and Safety
code, I hereby certify that the above is a true and
accurate Recognized Obligation Payment Schedule for
the above named successor agency. /s/
Signature Date
67 Hercules
Recognized Obligation Payment Schedule (ROPS 25-26) - ROPS Detail July 1, 2025 through June 30, 2026

A B C D E F G H I J K L M N O P Q R S T U V W
Item
# Project Name Obligation
T
ype
Agreement
Execution
Date
Agreement
Termination
Date
Payee Description Project
Area
Total
Outstanding
Obligation
Retired ROPS
25-26 Total
ROPS 25-26A (Jul - Dec)
25-26A
Total
ROPS 25-26B (Jan - Jun)
25-26B
Total
Fund Sources Fund Sources
Bond
Proceeds
Reserve
Balance
Other
Funds RPTTF Admin
RPTTF
Bond
Proceeds
Reserve
Balance
Other
Funds RPTTF Admin
RPTTF
$216,994,329 $10,008,380 $- $- $- $4,827,659 $125,000 $4,952,659 $- $- $- $4,930,721 $125,000 $5,055,721 5 Catellus/
Hercules LLC

OPA/DDA/
Construction
01/01/
2009
02/15/2044 Catellus Settlement
Agreement
All 44,673,779 N $1,691,590 - - - 791,590 - $791,590 - - - 900,000 - $900,000 10 OPA (Owner
Participation
Agreement)

OPA/DDA/
Construction
11/15/
1996
11/15/2041 Hercules
Senior
Housing/
Bridge
OPA for Senior
Housing
All 2,080,000 N $130,000 -
- - 65,000 - $65,000 - - - 65,000 - $65,000
16 Co-operation
Agreement:

Loan
Repayment
Agreement
for Cash
Advances
Miscellaneous 02/09/
1983
12/31/2099 City of
Hercules
Hercules
Resolution
83-18 dated
02/09/1983
All 50,496,029 N $- - - - - - $- - - - - - $-
20 Bank and
Trustee Fees
Fees 08/01/
2005
12/31/2044 Various Bank and
trustee fees for
Redevelopment
bond and bank
accounts
All 102,000 N $6,000 - - - 6,000 - $6,000 - - - - - $-
21 SERAF SERAF/ERAF 07/01/
2009
06/30/2011 State of
California
NONE All 6,020,951 N $- - - - - - $- - - - - - $-
22 Administrative
Costs
Admin Costs 07/01/
2011
06/30/2044 Various NONE All 5,000,000 N $250,000 - - - - 125,000 $125,000 - - - - 125,000 $125,000 32 2022 Tax
Allocation
Refunding
Bond
Refunding
Bonds Issued
After 6/27/12
08/01/
2022
08/01/2042 Bank of
New
York
Pending
refinancing of
2005 and 2007
bonds (ROPS
Items 1-4)
All 108,621,570 N $7,930,790 - - - 3,965,069 - $3,965,069 - - - 3,965,721 - $3,965,721 68 Hercules
Recognized Obligation Payment Schedule (ROPS 25-26) - Report of Cash Balances July 1, 2022 through June 30, 2023
(Report Amounts in Whole Dollars)
Pursuant to Health and Safety Code section 34177 (l), Redevelopment Property Tax Trust Fund (RPTTF) may be listed as a source of payment on the ROPS, but only to the extent no other funding source is available or when payment from property tax revenues is required by an enforceable obligation.

A B C D E F G H
ROPS 22-23 Cash Balances
(07/01/22 - 06/30/23)
Fund Sources
Comments
Bond Proceeds Reserve Balance Other Funds RPTTF
Bonds issued
on or before
12/31/10
Bonds issued
on or after
01/01/11
Prior ROPS
RPTTF and
Reserve
Balances retained
for future
period(s)
Rent, grants,
interest, etc.

Non-Admin
and Admin

1 Beginning Available Cash Balance (Actual 07/01/22)
RPTTF amount should exclude "A" period distribution
amount.
1,706,230 43,719 E: PPA 20-21 applied to ROPS 23-24
epenses ($62,431) + PPA 21-22 applied to
ROPS 24-25 expenses + DS Reserve held
from ROPS 21-22 ($1,228,347) F: Other
Funds balance carried over from prior periods
2 Revenue/Income (Actual 06/30/23)
RPTTF amount should tie to the ROPS 22-23 total
distribution from the County Auditor-Controller
6,958,698
3 Expenditures for ROPS 22-23 Enforceable Obligations
(Actual 06/30/23)
1,228,347 43,719 5,158,114
4 Retention of Available Cash Balance (Actual 06/30/23) RPTTF amount retained should only include the amounts
distributed as reserve for future period(s)
477,883 1,800,584 E: PPA 20-21 applied to ROPS 23-24
epenses ($62,431) + PPA 21-22 applied to
ROPS 24-25 expenses F: Other Funds
applied to ROPS 24-25 Item 22 G: Reserve
for ROPS 23-24 Item 32 debt service
($1,800,584)
5 ROPS 22-23 RPTTF Prior Period Adjustment
RPTTF amount should tie to the Agency's ROPS 22-23 PPA
form submitted to the CAC
No entry required
69 Pursuant to Health and Safety Code section 34177 (l), Redevelopment Property Tax Trust Fund (RPTTF) may be listed as a source of payment on the ROPS, but only to the extent no other funding source is available or when payment from property tax revenues is required by an enforceable obligation.

Non-Admin
and Admin
6 Ending Actual Available Cash Balance (06/30/23)
C to F = (1 + 2 - 3 - 4), G = (1 + 2 - 3 - 4 - 5)
$- $- $- $- $-
70 Hercules
Recognized Obligation Payment Schedule (ROPS 25-26) - Notes July 1, 2025 through June 30, 2026
Item # Notes/Comments
5 10
16 20
21 22
32 71
DI

SCUSSION AND/OR ACTION

AGENDA ITEMS

1. 25-005

2. 25-009

3. 22-1045

4. 25-008
72 STAFF REPORT TO THE CITY COUNCIL
DATE: Regular Meeting of January 14, 2025
TO: Mayor and Members of the City Council
VIA: Dante Hall, City Manager
SUBMITTED BY: Edwin Gato, Director of Finance
SUBJECT: Acceptance of the Annual Comprehensive Financial Report and other regulatory financial reports for the Fiscal Year Ended June 30, 2024.

RECOMMENDED ACTION:

Receive the Fiscal Year (FY) 23-24 Annual Comprehensive Financial Report (ACFR) and Accept the Audited Financial Statements.

EXECUTIVE SUMMARY:

The Annual Comprehensive Financial Report (ACFR) for the fiscal year ending June 30, 2024, is now complete and ready for City Council approval. Alongside the ACFR, additional audit compliance reports are also being submitted for acceptance.

This report presents the final audited ACFR for the year ending June 30, 2024. The City received an unmodified (or "clean") audit opinion, confirming the fair presentation of its financial position as of that date. Overall, the City's finances demonstrate stability, reflecting sound management practices and prudent financial decisions.

BACKGROUND:

The Annual Comprehensive Financial Report (ACFR) presents a clear and organized overview of the City’s financial condition and activities, ensuring compliance with the accounting and financial reporting standards established by the Governmental Accounting Standards Board (GASB). This report offers valuable historical and comparative data for City staff, elected officials, and external stakeholders, including debt rating agencies, businesses, other public agencies, and City residents. The most recent ACFR, along with 25-005
73 reports from previous years, is available at the City’s libraries, the Finance Department, and the City’s Finance website at:
https://www.ci.hercules.ca.us/government/finance/comprehensive-annual-financial-reports.

The City of Hercules compiles audited financial statements for each fiscal year, as mandated by various financing covenants and regulations concerning restricted funding. To guarantee compliance with these requirements and bond indentures, the City engages an independent audit firm. The Pun Group, as the City’s external auditor, has successfully completed the independent audit and issued the audit report for the fiscal year ending June 30, 2024.

The quality of the City’s financial reporting and the ACFR is evaluated through two key measures: (1) the issuance of an unmodified audit report by independent auditors and (2) the receipt of the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association (GFOA). Attaining the latter is regarded as the highest form of recognition in governmental accounting and financial reporting.

Auditors adhere to the standards established by the American Institute of Certified Public Accountants (AICPA). These standards necessitate that auditors provide an opinion on specific aspects of the City’s financial statements, based on a comprehensive process of observations, inquiries, transaction testing, and analysis.

ANALYSIS:

We are pleased to present the City of Hercules Annual Comprehensive Financial Report (ACFR) for the fiscal year ending June 30, 2024. This report adheres to the governmental financial reporting model, which accurately represents the City as a singular government- wide entity while also offering traditional fund-based financial statements.

The City’s financial statements have been thoroughly audited by the independent auditing firm, The Pun Group. They have issued an unmodified audit opinion, often referred to as a "clean" opinion, confirming that the City's financial position as of June 30, 2024, is fairly presented. The findings in the ACFR indicate that the City continues to uphold a sound and stable financial position.

In addition, the City of Hercules has been honored with the Certificate of Achievement for Excellence in Financial Reporting by the Government Finance Officers Association of the United States and Canada (GFOA) for its fiscal year 2022 -23 ACFR. This prestigious recognition reflects the City’s ongoing commitment to transparency and accountability in its financial practices and marks the fourth consecutive year that this esteemed award has been received.

To qualify for the Certificate of Achievement, governments must prepare an annual financial report that is not only clear and well-organized but also compliant with generally accepted accounting principles and applicable legal regulations. It is important to note that this certificate is valid for one year. The FY 2023-24 ACFR has been prepared in accordance 74 with these rigorous standards and has been submitted to the GFOA for evaluation with the aim of receiving another certificate.

FILINGS WITH THE STATE CONTROLLER’S OFFICE AND ISSUANCE OF

SUPPLEMENTAL REPORTS
The City is responsible for preparing the City Financial Transactions Report, which is an important document submitted to the California State Controller’s Office. This report provides insight into the city's financial activities and ensures transparency in fiscal management.

In addition to this primary report, the City is required to produce several supplemental documents to comply with local and state regulations. These include the FY 2023 -24 Wastewater Financial Report, which outlines the financial status of the c ity's wastewater operations; the Agreed Upon Procedures (AUP) for Measures B and N, which evaluate specific financial practices; and the GANN Appropriation Limit Calculation, which determines the maximum amount of tax revenue the city can appropriate. All these reports are attached for reference.

OTHER OUTSTANDING AUDITS
The City conducts a separate single audit in accordance with the Federal Single Audit Act and guidance from the U.S. Office of Management and Budget regarding audits of state and local governments. This report must be submitted to the federal clearinghouse no later than March 31 each year. The single audit for fiscal year 2023-24 is currently in progress and will be submitted by the deadline.

FISCAL IMPACT:

The audited results for the fiscal year 2023-24 will serve as a foundational reference in the development of the fiscal year 2025-26 budget. Staff will subsequently return to the Council for the FY 2024-25 mid-year budget update.

The chart below illustrates that the City’s General Fund wrapped up the year with a modest surplus exceeding $400,000. This positive outcome reflects the careful and effective management of the City’s finances, showcasing a commitment to fiscal responsibility and prudent budgeting practices.

On June 28, 2022 , the City Council conducted a thorough review and subsequently approved amendments to the financial principles and policies during the budget adoption process, as recorded in Resolution No. 22 -056. This resolution specifies a strategic Revenues $20,329,001
Less: Expenditures (18,244,538)
Less: Transfers/Others (1,014,375)
Net (as reported in ACFR) 1,070,088
Less: Outstanding Encumbrances (626,897)
Net Annual Surplus (Deficit) $443,191
75 allocation of the General Fund surplus intended to bolster the city's financial stability and facilitate future growth. The surplus will be distributed as follows:

 25% will be designated for the Operating Reserve, ensuring the city maintains a robust financial safety net for unforeseen expenses and economic uncertainties.

 25% will fund the Section 115 trust for pensions, reinforcing the city's commitment to providing secure retirement benefits for its employees.

 50% will be invested in future capital improvement projects t o enhance public infrastructure and support community development initiatives.

These allocations reflect a prudent approach to fiscal management and a forward-looking strategy for effectively meeting the community's needs.

ATTACHMENTS:

1. FY 23-24 Annual Comprehensive Financial Report (ACFR)

2. FY 23-24 Hercules Wastewater Fund Financial Statements

3. FY 23-24 Agreed Upon Procedures (AUP) Report on Measure B

4. FY 23-24 Agreed Upon Procedures (AUP) Report on Measure N

5. FY 24-25 Agreed Upon Procedures (AUP) Report on GANN Appropriation Limit Calculation

6. FY 23-24 AU-C260_Required Communications/Conclusion Letter

7. Presentation

76 77
78 CITY OF HERCULES, CALIFORNIA

ANNUAL COMPREHENSIVE

FINANCIAL REPORT

WITH REPORTS ON AUDIT

BY INDEPENDENT

CERTIFIED PUBLIC ACCOUNTANTS

FOR THE YEAR ENDED
JUNE 30, 2024

Prepared by:

The Finance Department

79 80
City of Hercules
Annual Comprehensive Financial Report
For the Year Ended June 30, 2024

Table of Contents
Page

INTRODUCTORY SECTION
Letter of Transmittal ....................................................................................................................................................... i Public Officials of the City of Hercules ........................................................................................................................ vi Organization Chart ...................................................................................................................................................... vii GFOA Certificate of Achievement for Excellence in Financial Reporting ............................................................... viii

FINANCIAL SECTION
Independent Auditors Report on the Financial Statements ................................................................................... 1

Managements Discussion and Analysis
(Required Supplementary Information) (Unaudited) .............................................................................................. 7 Basic Financial Statements:

Government-Wide Financial Statements:

Statement of Net Position ............................................................................................................................... 23 Statement of Activities ................................................................................................................................... 24 Fund Financial Statements:

Governmental Fund Financial Statements:

Balance Sheet ........................................................................................................................................... 31 Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position ......................................................................... 32 Statement of Revenues, Expenditures, and
Changes in Fund Balances ................................................................................................................. 33 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities ...................................................................................................................... 34 Proprietary Fund Financial Statements:

Statement of Net Position ......................................................................................................................... 37 Statement of Revenues, Expenses, and Changes in Net Position ............................................................ 39 Statement of Cash Flows .......................................................................................................................... 40

Fiduciary Fund Financial Statements:

Statement of Fiduciary Net Position ........................................................................................................ 45 Statement of Changes in Fiduciary Net Position ..................................................................................... 46

Notes to the Basic Financial Statements ............................................................................................................ 51 Required Supplementary Information (Unaudited)
Budgetary Principles .......................................................................................................................................... 109 Budgetary Comparison Schedule:

General Fund ................................................................................................................................................ 110 Landscape & Lighting Assessment District (LLAD) No. 83-2 Special Revenue Fund ............................... 111 81 City of Hercules
Annual Comprehensive Financial Report
For the Year Ended June 30, 2024
Table of Contents (Continued)
Page
FINANCIAL SECTION (Continued)
Required Supplementary Information (Unaudited) (Continued)

Schedule of the City's Proportionate Share of the Plan's Net Pension Liability and Related Ratios:

CalPERS Miscellaneous Plans ..................................................................................................................... 112 CalPERS Safety Plans .................................................................................................................................. 112

Schedule of the City's Contributions to the Pension Plan:

CalPERS Miscellaneous Plan ....................................................................................................................... 114 CalPERS Safety Plan .................................................................................................................................... 114

Schedule of Changes in Net OPEB Liability and Related Ratios :

PEHMCA Plan ............................................................................................................................................ 116

Schedule of Changes in Net OPEB Liability and Related Ratios:

SOMAR Plan ................................................................................................................................................ 119

Schedule of the Citys Contributions to the OPEB Plan:

PEHMCA Plan ............................................................................................................................................. 120

Schedule of the Citys Contributions to the OPEB Plan:

SOMAR Plan ................................................................................................................................................ 122

Supplementary Information:

Schedule of Revenues, Expenditures and Change in Fund Balance - Budget and Actual Hercules Debt Service Fund .................................................................................................................. 125 Nonmajor Governmental Funds:

Combining Balance Sheet ............................................................................................................................ 131 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances .................................... 136 Schedules of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual:

State Gas Tax Special Revenue Fund .................................................................................................... 141 Measure C Special Revenue Fund ......................................................................................................... 142 C.O.P.S. Program (AB 3299) Special Revenue Fund ............................................................................ 143 Victoria By the Bay LLAD No. 2002-1 Special Revenue Fund ............................................................ 144 Hercules Village LLAD No. 2002-2 Special Revenue Fund ................................................................. 145 Baywood LLAD No. 2004-1 Special Revenue Fund ............................................................................. 146 Bayside LLAD No. 2005-1 Special Revenue Fund ............................................................................... 147 Arterial Roadways Special Revenue Fund ............................................................................................. 148 Stormwater Special Revenue Fund ........................................................................................................ 149 Development Services Special Revenue Fund ....................................................................................... 150 AB939 JPA Special Revenue Fund........................................................................................................ 151 Asset Forfeiture Special Revenue Fund ................................................................................................. 152 Bart Park and Ride Special Revenue Fund ............................................................................................ 153 Road Rehabilitation Maintenance Special Revenue Fund ..................................................................... 154 City Capital Projects Fund ..................................................................................................................... 155 Development Impact Fees Capital Projects Fund .................................................................................. 156 82 City of Hercules
Annual Comprehensive Financial Report
For the Year Ended June 30, 2024
Table of Contents (Continued)
Page
FINANCIAL SECTION (Continued)
Supplementary Information (Continued)
Internal Service Funds:

Combining Statement of Net Position .......................................................................................................... 159 Combining Statement of Revenues, Expenses, and Changes in Net Position .............................................. 160 Combining Statement of Cash Flows ........................................................................................................... 161 Fiduciary Funds - Custodial Funds:

Combining Statement of Fiduciary Net Position .......................................................................................... 165 Combining Statement of Changes in Fiduciary Net Position ....................................................................... 166 STATISTICAL SECTION (Unaudited)
Description of Statistical Section Contents ...............................................................................................................169 Financial Trends:

Net Position by Component Last Ten Fiscal Years ......................................................................................... 170 Changes in Net Position Last Ten Fiscal Years ............................................................................................... 172 Fund Balances of Governmental Funds Last Ten Fiscal Years ....................................................................... 176 Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years .................................................... 178 Revenue Capacity:

Assessed and Estimated Actual Value of Taxable Property Last Ten Fiscal Years ........................................ 180 Assessed Value of Property by Use Code Last Ten Fiscal Years .................................................................... 182 Direct and Overlapping Property Tax Rates Last Two Fiscal Years ............................................................... 184 Principal Property Taxpayers Last Fiscal Year and Nine Fiscal Years Ago .................................................... 185 Property Tax Levies and Collections Last Ten Fiscal Years ........................................................................... 186 Principal Sales Tax Producers Current Year and Nine Years Ago .................................................................. 187 Debt Capacity:

Ratio of Outstanding Debt by Type Last Ten Fiscal Years ............................................................................. 188 Computation of Direct and Overlapping Debt .................................................................................................... 191 Legal Debt Margin Information Last Ten Fiscal Years ................................................................................... 192 Wastewater Fund Debt Coverage Last Ten Fiscal Years ................................................................................. 194 Demographic and Economic Information:

Demographic and Economic Statistics Last Ten Fiscal Years ......................................................................... 195 Operating Information:

Principal Employers Current Fiscal Year and Four Years Ago ....................................................................... 196 Full-Time Equivalent City Government Employees by Function Last Ten Fiscal Years ................................ 197 Operating Indicators by Function/Program Last Ten Fiscal Years .................................................................. 198 Capital Asset Statistics by Function/Program Last Ten Fiscal Years .............................................................. 202

OTHER REPORT
Independent Auditors Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ............................................................................................ 205 83 84
i
December 19, 2024
To the Honorable Mayor, Members of the City Council and Citizens of the City of Hercules, California:

We are pleased to present the Annual Comprehensive Financial Report (ACFR) for the City of Hercules, California (the City) for the fiscal year ended June 30, 2024. The Finance Department has diligently prepared this report in accordance with the comprehensive financial reporting principles and standards established by the Governmental Accounting Standards Board (GASB).

The City takes full responsibility for the accuracy of the financial data and the integrity of the presentation, including all necessary disclosures. The information contained herein accurately reflects the Citys financial condition and the outcomes of its operations as measured by the various financial activities of its funds. Additionally, the disclosures are designed to provide readers with a thorough understanding of the City's financial dynamics.

The core financial statements of the City have undergone a comprehensive audit by The Pun Group, LLC, a reputable and licensed public accounting firm qualified to conduct audits for Californias state and local governments. The primary aim of this independent audit was to provide reasonable assurance that the Citys basic financial statements for the fiscal year ended June 30, 2024, are free of material misstatements. The findings of the independent auditors are included as the first component of the financial section of this report, thereby establishing a foundation of trust and credibility.

In accordance with generally accepted accounting principles (GAAP), management is required to furnish a narrative introduction, overview, and analysis to accompany the basic financial statements in the Management's Discussion and Analysis (MD&A). This informative section is located immediately following the independent auditors report. The letter of transmittal presented here complements MD&A and should be considered alongside it for a comprehensive understanding of the Citys financial landscape.

CITY PROFILE

The City of Hercules's distinctive history has facilitated its transformation from a small company town into a vibrant and dynamic community. In the late 1800s, the Industrial Revolution significantly altered the business landscape throughout the nation. The California Powder Works company played an essential role in this revolution and established the City, now recognized as Hercules.

CITY OF HERCULES
111 CIVIC DRIVE, HERCULES CA 94547
PHONE: (510) 799-8200
85 ii
Hercules was officially organized, formed, and incorporated according to the laws of the State of California on December 15, 1900. The City is located in western Contra Costa County, on the northeastern shore of San Pablo Bay. It is ideally situated along the I-80 corridor, providing convenient access to San Francisco and Napa. The community is characterized by a diverse population representing various ethnic groups, primarily comprising a suburban, family-oriented demographic, with an emerging New-Urbanist transit-oriented area along the bayfront.

The City operates under a "Council-Manager" form of government, wherein the City Council appoints a City Manager to serve as the Chief Executive Officer of the municipal corporation. The Council functions as the board of directors and conducts its business openly and transparently, encouraging citizen participation in the governmental process. Comprising five members elected at large, the City Council members serve staggered, non-partisan four-year terms. Annually, in December, the Council reorganizes and selects a Mayor and Vice Mayor, each serving one-year terms.

Hercules employs 61 full-time staff members and serves an estimated population of 26,000 residents within a land area of 19.99 square miles. The City offers a comprehensive range of municipal services, including public safety (police), street maintenance, public works infrastructure, urban planning, building inspection, parks and recreation, and general administrative functions.

This report outlines the organizations and activities for which the elected City officials are financially responsible. The notes accompanying the financial statements provide further insights into the City as a comprehensive financial reporting entity.

ECONOMIC CONDITION AND OUTLOOK
The City has made significant progress on each of the adopted strategic priorities. The City has adopted a balanced budget, successfully implemented business assistance programs, and made strides to further the vision of the Hercules Hub.

The City of Hercules is located along the I-80 corridor and within minutes of both San Francisco

80 80

San
Bay

4 4

80 86
iii
Furthermore, Hercules has made significant strides in restoring the Parks & Recreation programs that were closed due to the mandatory closure in 2020, addressing both immediate needs and medium to long term fiscal sustainability through community engagement and voter approval of Measure N, which removed the sunset provision that would have caused the expiration of the Utility Users Tax (UUT) in January 2025.

MAJOR INITIATIVES

The City is actively pursuing various significant initiatives, as its annual budget documents extensively outlined. For the fiscal year 2023-2024, a primary focus is enhancing infrastructure to support community growth and connectivity. One of the standout projects in this effort is the Hercules Hub (The HUB), an ambitious development set to transform the waterfront landscape overlooking the picturesque San Pablo Bay.

The HUB is designed as a vibrant, state-of-the-art community that integrates housing and transportation seamlessly. It will connect thousands of residential units to a new train stop along the bustling Capitol Corridor, making commuting more convenient. In addition to the train service, the project will feature well-planned bicycle and pedestrian pathways, efficient bus routes, carpool options, and even a ferry service, all aimed at promoting sustainable transportation.

To date, this transformative facility has already garnered $46 million in capital improvements, showcasing the Citys commitment to excellence in urban development. The City is fully dedicated to securing additional funding to finalize the design and construction of the remaining infrastructure, which will ultimately enable the Capitol Corridor train to efficiently serve the HUB and enhance accessibility for all residents and visitors.

Other key public works projects included:

Streets Annual Sidewalk Repair Program, Annual Restriping Project, Pedestrian Sidewalk Improvement at Willow and Palm Street, ADA Transition Plan and Countywide Smart Signals.

Sewer Sycamore Avenue Lower and Upper Sewer Trunk Main Projects.

Buildings & Facilities Building Facilities Plan and ADA Assessment Improvement.

Parks Park Improvement Projects, Tree Mitigation and Replacement Program, and Lupine Hill Stabilization.

BUDGETARY CONTROL
The City maintains robust budgetary controls through the annual budget adopted by the City Council. These controls ensure adherence to the legal provisions established in the approved appropriated budget. Each year, departments collaborate with the City Manager and the Finance Department to formulate operating budget requests. The City Manager and the Finance Director thoroughly review these requests and subsequently provide recommendations to the City Council regarding the overall budget.

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While budgetary control is primarily exercised at the fund level, the City has instituted appropriation and transfer procedures to enhance internal controls, foster accountability, and promote administrative responsiveness. All budgetary transfers require review and approval from the Finance Director or their designee. Furthermore, transfers that impact salaries and benefits necessitate the City Manager's or their designee's review and approval.

Budgetary control operates at several levels:

a) General Fund at the department level;
b) Other Funds at the fund level;
c) Capital Projects at the project level, the City Manager's signature is required for approval.

The City Manager can approve line-item budget transfers within a General Fund department or other funds by the budget resolution. Additionally, the City employs encumbrance accounting as a strategic method for maintaining budgetary control. An encumbrance reflects a commitment to future expenditures designated for specific purposes, thereby reducing the amount of budgetary authority available for general spending.

After the fiscal year, encumbered appropriations, uncompleted capital appropriations, Participatory Budgeting allocations, and grant projects are carried over into the subsequent year's budget, while unencumbered appropriations expire.

The City remains committed to achieving sound financial management, as demonstrated by the statements and schedules included in the financial section of this report.

INTERNAL CONTROL

The management of the City holds the responsibility of establishing and maintaining internal controls designed to protect the Citys assets from loss, theft, or misuse. Additionally, these controls ensure the compilation of adequate accounting data necessary for the preparation of financial statements in compliance with Generally Accepted Accounting Principles (GAAP).

Internal controls are structured to provide reasonable assurance, though not absolute, that these objectives are achieved. The principle of reasonable assurance recognizes that the costs associated with a control should not exceed the anticipated benefits. The evaluation of these costs and benefits involves careful estimates and judgments made by management.

All assessments of internal controls are conducted within this established framework. City management is confident that the internal accounting controls in place sufficiently safeguard assets and provide reasonable assurance regarding the accurate recording of financial transactions.

CERTIFICATE OF ACHIEVEMENT

The Government Finance Officers Association of the United States and Canada (GFOA) has recognized the City with a Certificate of Achievement for Excellence in Financial Reporting for its Annual Comprehensive Financial Report (ACFR) for the fiscal year ended June 30, 2023. This award represents the highest standard in governmental accounting and financial reporting. 88 v
In order to receive this esteemed recognition, the City is required to produce an ACFR that is both clear and well-structured, fulfilling all necessary program standards. The report must comply with Generally Accepted Accounting Principles (GAAP) and adhere to relevant legal requirements. It is pertinent to note that the Certificate of Achievement is awarded for a term of one year.

We are confident that our current annual comprehensive financial report meets the criteria set forth by the Certificate of Achievement Program. As such, we are submitting it to the GFOA for evaluation to assess its eligibility for renewal of this prestigious certificate.

ACKNOWLEDGEMENTS

The preparation and publication of this Comprehensive Annual Financial Report have been made possible through the exceptional efforts, dedication, and teamwork exhibited by the entire Finance Department, alongside the invaluable cooperation and assistance provided by all City departments.

We wish to express our sincere appreciation to our Finance staff: Deysi Ortega, Senior Accountant; Nahid Vafadari, Accounts Payable Technician; and Steve Fox, Payroll Technician, for their diligent collaboration with our auditors in finalizing this report. We also extend our gratitude to The Pun Group, LLP, the Citys audit firm, for their professional support and guidance throughout the process.

Furthermore, we acknowledge and appreciate the vision and continued support of the Honorable Mayor and the members of the City Council as they lead our efforts toward economic viability and the pursuit of long-term fiscal stability.

Respectfully submitted,

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90 vii
91 Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Hercules
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2023
Executive Director/CEO
viii
92 INDEPENDENT AUDITORS REPORT
To the Honorable Mayor and the Members of the City Council of the City of Hercules
Hercules, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of City of Hercules, California (the City) as of and for the year ended June 30, 2024, and the related notes to the basic financial statements, which collectively comprise the Citys basic financial statements as listed in the table of contents.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2024, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

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

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

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Citys ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
93 To the Honorable Mayor and the Members of the City Council of the City of Hercules
Hercules, California

Page 2 ends

2 Auditors Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinions.

Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with auditing standards generally accepted in the United States of America and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with auditing standards generally accepted in the United States of America and Government Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit; Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements; Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Citys internal control. Accordingly, no such opinion is expressed; Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements; Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Citys ability to continue as a going concern for a reasonable period of time.

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

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that Managements Discussion and Analysis, the Budgetary Comparison Schedules General Fund and Major Special Revenue Funds, the Schedules of the Citys Proportionate Share of the Plans Net Pension Liability and Related Ratios, the Schedules of Contributions Pensions, the Schedules of Changes in Net Other Postemployment Benefits Liability and Related Ratios, and the Schedules of Contributions Other Postemployment Benefits as listed in the table of contents be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with managements responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
94 To the Honorable Mayor and the Members of the City Council of the City of Hercules
Hercules, California

Page 3 ends

3 Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Citys basic financial statements. The accompanying combining and individual nonmajor fund financial statements are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Information
Management is responsible for the other information included in the annual report. The other information comprises the Introductory Section and the Statistical Section are presented for purposes of additional analysis and are not a required part of the basic financial statements. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon.

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

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards , we have also issued our report dated December 19, 2024, on our consideration of the Citys internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Citys internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Citys internal control over financial reporting and compliance.

Santa Ana, California
December 19, 2024
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96 5
MANAGEMENTS DISCUSSION AND ANALYSIS
(UNAUDITED)

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98 CITY OF HERCULES
MANAGEMENTS DISCUSSION AND ANALYSIS (UNAUDITED)
JUNE 30, 2024

7 In this specific segment of the City of Hercules', California (the City) annual financial report, the management team offers a detailed narrative discussion and analysis of the City's financial activities for the fiscal year that concluded on June 30, 2024. This analysis aims to provide insights into the City's financial performance, highlighting key developments and trends. Unless specified otherwise, the discussion concentrates on the primary governmental activities of the City, intentionally excluding any separately reported component units such as affiliated organizations or special districts. Readers are strongly encouraged to consider the detailed information presented in conjunction with the accompanying financial statements and disclosures that follow this narrative, as they provide essential context and supporting details for the overall financial position and operations of the City.

FINANCIAL HIGHLIGHTS

As of the end of the most recent fiscal year, the City's financial position is strong, with total assets and deferred outflows exceeding liabilities and deferred inflows by $121,296,435. This favorable net position reflects the City's fiscal health and its ability to meet future obligations. Of this total, $13,368,313 is allocated for specific purposes, categorized as restricted net position, ensuring that these funds are dedicated to designated projects or needs within the community. Additionally, $80,773,682 represents the City's net investment in capital assets. The unrestricted net position amounts to $27,154,440. This portion is particularly significant, as it provides the City with the flexibility to address various operational needs and fulfill ongoing commitments to residents and creditors, demonstrating the City's dedication to responsible financial management.

The Citys governmental funds have reported a total ending fund balance of $44,807,554. Within this total, a portion amounting to $13,831,036 is specifically designated as available to address the Citys immediate and forthcoming financial requirements. This available balance represents a crucial resource for supporting various public services and initiatives aimed at enhancing the community's well-being.

The General Fund committed a total of $7,884,421 specifically to repay loans and support various capital projects essential for community development. Additionally, the fund assigned $8,595,020 reserved for insurance purposes and earmarked by the Council to address economic uncertainties and manage any potential short-term structural deficits that may arise in the future.

This careful financial planning ensures the community is prepared for current obligations and unforeseen challenges.

The total value of capital assets, after deducting depreciation and amortization, has risen to $126,424,507, compared to the previous total of $118,402,522. This increase reflects significant investments in various capital projects and includes infrastructure developments that meet the reporting standards set forth by GASB 34.

OVERVIEW OF THE FINANCIAL STATEMENTS

This discussion and analysis is intended to serve as an introduction to the Citys basic financial statements. The Citys basic financial statements comprise three components 1) Government-wide financial statements; 2) Fund financial statements and 3) Notes to the basic financial statements. This report also contains other Supplementary Information in addition to the basic financial statements.

Government-wide Financial Statements are designed to provide readers with a broad overview of City finances, in a manner similar to a private-sector business. 99 CITY OF HERCULES
MANAGEMENTS DISCUSSION AND ANALYSIS (UNAUDITED) (CONTINUED) JUNE 30, 2024

8 The statement of net position presents information on all City assets and deferred outflows and liabilities, and deferred inflows, with the difference between them, reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the Citys financial position is improving or deteriorating.

The statement of activities presents information showing 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 fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).

Both government-wide financial statements distinguish the functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include general government, public safety, streets and public works, parks and recreation, and community development. The business-type activities of the City consist of the Wastewater Fund. Fiduciary activities are not included in the government-wide statements since these assets are not available to fund City programs.

The Citys financial report includes the funds of the City (primary government) and organizations for which the City is accountable (component units). Most of these legally separated organizations operate like City departments, serve as financing vehicles for City services (revenue bond issuers), or are governed by a board that is substantively identical to the Citys board. An example of this is the Hercules Public Finance Authority, which while legally separate is in substance an extension of the City operations.

Financial data for the Hercules Public Finance Authority are combined with the presentation of the primary governments financial data and thus it is referred to as a blended component unit. A discretely presented component unit is one that is presented separately in the financial statements to emphasize its independence from the primary government. Hercules City has no discretely presented component units.

Fund Financial Statements Like other state and local governments, the City uses fund accounting to ensure and demonstrate finance-related legal compliance. A fund is a grouping of related accounts used to control resources that have been segregated for specific activities or objectives. All of the funds of the City can be divided into three categories: governmental, proprietary, and fiduciary .

Governmental funds account for the same functions as governmental activities in the government-wide financial statements. However, unlike government-wide financial statements, governmental funds financial statements focus on near-term inflows and outflows of spendable resources and on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a Citys near-term financing requirements. Governmental funds use current financial resources measurement focus and modified accrual basis of accounting.

Because the focus of governmental funds is narrower than that of the government-wide financial statements, comparing the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements is useful. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions.

Both the governmental funds' balance sheet and the governmental funds' statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities .
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CITY OF HERCULES
MANAGEMENTS DISCUSSION AND ANALYSIS (UNAUDITED) (CONTINUED) JUNE 30, 2024

9 The City maintains individual governmental funds. Information is presented separately in the governmental fund's balance sheet and the governmental fund's statement of revenues, expenditures, and changes in fund balances for the General Fund, Landscape & Lighting Assessment District (LLAD) No. 83-2 Special Revenue Fund, Hercules Debt Service Fund, and the other governmental funds combined into a single, aggregated column. Governmental Accounting Standards Board (GASB) Statement No. 34 defines major governmental funds as those with revenues, expenditures, assets, and deferred outflows or liabilities and deferred inflows that make up at least 10% of the total fund category or type (governmental or business type) and at least 5% of the aggregate amount of all governmental and enterprise funds.

Proprietary funds are maintained in two ways. The City uses enterprise fund to account for the operations of the Wastewater Fund . Enterprise funds report the same functions presented as business-type activities in government-wide financial statements. Internal services funds are an accounting device used to accumulate and allocate costs internally among the Citys various functions. The City uses three internal service funds to account for its vehicle replacement, IT equipment replacement, and facilities maintenance functions. Because internal service funds predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements.

Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail.

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 Citys programs. The City is responsible for ensuring that the assets reported in these funds are used for their intended purposes. As of February 1, 2012, the activities of the Successor Agency to the former Hercules Redevelopment Agency are reported with the Citys Fiduciary Fund as a Private Purpose Trust Fund because they are under the control of an Oversight Board.

Notes to the Financial Statements provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements.

Required Supplementary Information provides the schedule of funding progress for the City Employees Retirement Plan and Other Postemployment Benefits other than pensions. Also presented are the budgetary comparison schedules for the Citys General Fund and Major Special Revenue Funds, and notes to required supplementary information.

GOVERNMENT-WIDE FINANCIAL ANALYSIS

The net position serves as an important indicator of a government's financial stability over time. For the City, at the conclusion of the most recent fiscal year, the total value of assets and deferred outflows exceeded the total of liabilities and deferred inflows by a significant amount of $121,296,435. This figure reflects the City's overall financial health. Breaking this down further, 67% of the combined net position is attributed to the Citys investment in capital assets, such as buildings, infrastructure, and equipment, after deducting the associated debt obligations. This indicates a strong commitment to maintaining and enhancing physical assets for public benefit. Furthermore, another 11% of the City's net position is restricted externally, meaning it is earmarked for specific purposes and cannot be utilized freely. These restrictions underscore the importance of accountability in the Citys financial management. 101

CITY OF HERCULES
MANAGEMENTS DISCUSSION AND ANALYSIS (UNAUDITED) (CONTINUED) JUNE 30, 2024

10 Condensed Statements of Net Position

Governmental Business-type
Activities Activities Total
2024 2023 2024 2023 2024 2023
Assets
Current and other assets 59,060,202$ 56,557,455$ 17,314,937$ 27,170,223$ 76,375,139$ 83,727,678$ Capital assets 76,635,566 78,023,165 49,788,941 40,379,357 126,424,507 118,402,522 Total assets 135,695,768 134,580,620 67,103,878 67,549,580 202,799,646 202,130,200 Deferred Outflows of Resources
Related to OPEB 932,643 1,227,100 48,240 69,460 980,883 1,296,560 Related to pensions 7,675,747 7,924,273 400,110 445,145 8,075,857 8,369,418 Total Deferred Outflows of
Resources 8,608,390 9,151,373 448,350 514,605 9,056,740 9,665,978 Liabilities
Long-term Liabilities 42,672,778 42,024,289 27,236,668 28,792,835 69,909,446 70,817,124 Other Liabilities 5,159,088 4,875,776 3,243,022 3,609,306 8,402,110 8,485,082 Total Liabilities 47,831,866 46,900,065 30,479,690 32,402,141 78,311,556 79,302,206 Deferred Inflows of Resources
Related to OPEB 2,008,555 2,191,984 103,891 124,078 2,112,446 2,316,062 Related to pensions 1,539,203 2,606,624 85,610 136,612 1,624,813 2,743,236 Leases 8,511,136 8,888,272 - - 8,511,136 8,888,272 Total Deferred Inflows of
Resources 12,058,894 13,686,880 189,501 260,690 12,248,395 13,947,570 Net Position:

Net Investment in Capital Assets 59,889,211 60,790,322 20,884,471 19,602,539 80,773,682 80,392,861 Restricted 13,368,313 10,730,230 - - 13,368,313 10,730,230 Unrestricted 11,155,874 11,624,496 15,998,566 15,798,815 27,154,440 27,423,311 Total Net Position 84,413,398$ 83,145,048$ 36,883,037$ 35,401,354$ 121,296,435$ 118,546,402$

A substantial part of the Citys net position, amounting to $80,773,682, represents the value of its capital assets. These assets encompass a range of items such as land, easements, buildings, improvements, infrastructure, and various types of equipment. This figure is calculated after subtracting any outstanding debt that was incurred to acquire these assets. The City relies on these capital assets to provide essential services to its residents, which means they are not available for discretionary spending or future projects.

It's also crucial to understand that although the City reports its investment in capital assets after accounting for related debt, the funds necessary to repay this debt must be sourced from separate financial channels. This is because the capital assets themselves cannot be liquidated to cover these liabilities, emphasizing the importance of prudent financial management to ensure that obligations can be met.

The Citys net position is divided into two portions: restricted and unrestricted. The restricted portion amounts to $13,368,313, representing resources that have external restrictions imposed by grantors and other governments.

Meanwhile, the unrestricted portion of the Citys net position is $27,154,440. Its important to note that GASB 34 includes long-term payroll liabilities in the unrestricted category. These reclassified liabilities encompass pensions, other post-employment benefits (OPEB), and compensated absences. They can accumulate over decades as part of the Citys employment agreements, and their timing for being recognized as current-year expenses is not straightforward or easily predictable. 102

CITY OF HERCULES
MANAGEMENTS DISCUSSION AND ANALYSIS (UNAUDITED) (CONTINUED) JUNE 30, 2024

11 Changes in Net Position

Governmental Business-type
Activities Activities Total
2024 2023 2024 2023 2024 2023
Revenues
Program revenues
Fees, Fines and Charges for
Services 3,388,496$ 3,025,155$ 5,891,836$ 5,922,758$ 9,280,332$ 8,947,913$ Operating Grants/Contributions 6,413,314 8,894,994 - - 6,413,314 8,894,994 Capital Grants/Contributions 1,909,108 67,428 - - 1,909,108 67,428 General revenues
Property taxes 1,653,626 1,638,449 - - 1,653,626 1,638,449 Sales taxes 5,753,278 6,192,500 - - 5,753,278 6,192,500 Franchise taxes 972,391 988,108 - - 972,391 988,108 Utility users taxes 4,011,166 3,996,274 - - 4,011,166 3,996,274 Other taxes 952,561 650,136 - - 952,561 650,136 Motor Vehicles Taxes In-Lieu 2,556,520 2,456,900 - - 2,556,520 2,456,900 Interest and Investment Income 3,076,628 1,860,327 851,980 294,199 3,928,608 2,154,526 Total revenues 30,687,088 29,770,271 6,743,816 6,216,957 37,430,904 35,987,228 Expenses
General Government 5,378,751 4,929,390 - - 5,378,751 4,929,390 Public Safety 10,027,823 7,556,734 - - 10,027,823 7,556,734 Streets and Public Works 8,736,149 8,220,052 - - 8,736,149 8,220,052 Parks and Recreation 2,955,545 2,503,805 - - 2,955,545 2,503,805 Community Development 1,297,680 483,875 - - 1,297,680 483,875 Interest on Long-Term Debt 1,022,790 905,708 - - 1,022,790 905,708 Wastewater - 5,262,133 5,086,004 5,262,133 5,086,004 Total expenses 29,418,738 24,599,564 5,262,133 5,086,004 34,680,871 29,685,568 Increase (Decrease) in Net Position 1,268,350 5,170,707 1,481,683 1,130,953 2,750,033 6,301,660 Net Position - Beginning 83,145,048 77,974,341 35,401,354 34,270,401 118,546,402 112,244,742 Net Position - Ending 84,413,398$ 83,145,048$ 36,883,037$ 35,401,354$ 121,296,435$ 118,546,402$

FINANCIAL ANALYSIS OF THE CITYS FUNDS
As described earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.

Governmental funds . The general government functions are contained in the General, Special Revenue, and Debt Service Funds. The focus of the Citys governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the Citys financing requirements.
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CITY OF HERCULES
MANAGEMENTS DISCUSSION AND ANALYSIS (UNAUDITED) (CONTINUED) JUNE 30, 2024

12 As of June 30, 2024, the City's governmental funds reported combined fund balances totaling $44,807,554, marking an increase of $2,527,404. This growth can be primarily attributed to the continued robust economic recovery following the financial challenges posed by the COVID-19 pandemic, which led to the temporary closure of many Parks and Recreation programs, significantly affecting the department's program revenues.

Several key factors contributed to this improvement, including enhanced revenues from the Utility User Tax (UUT), increased investment income, and the successful reopening of Parks and Recreation programs. It is essential to highlight that the City is adopting a prudent approach to budgeting, considering potential economic uncertainties that may lead to a recession. This careful strategy ensures financial stability and preparation for future challenges. Notably, $13,831,036 of the combined fund balances is classified as an unassigned fund balance, available to address the City's current and future financial needs.

The General Fund serves as the City's primary operating fund. As of June 30, 2024, the unassigned fund balance was $14,754,596, with a total fund balance of $34,947,780. Analyzing the unassigned and total fund balances in relation to total fund expenditure provides insight into the General Fund's liquidity. The unassigned fund balance accounts for 81% of total General Fund expenditures, while the total fund balance equals 192%.

The fund balance for Landscape & Lighting Assessment District (LLAD) No. 83-2 increased by $325,350, which will be directed towards the ongoing maintenance of landscaping and operational streetlights along public streets and fire breaks adjacent to open spaces.

Furthermore, the Hercules Debt Service Fund recorded an increase in its fund balance of $103,330, ensuring sufficient funds were allocated from various sources to meet upcoming debt service obligations.

Additionally, other governmental funds experienced a combined increase of $1,028,636 in their fund balances, which will primarily support capital projects.

The following table presents the amount of revenues from various sources as well as increases or decreases from the prior year.

Revenues Classified by Source Governmental Funds
Percent of Percent of Percent of
Amount Total Amount Total Amount Change
Taxes and assessments 16,617,812$ 54.63% 16,705,743$ 55.94% (87,931)$ -0.53% Licenses and Permits 621,826 2.04% 647,374 2.17% (25,548) -3.95% Fines and Forfeitures 34,409 0.11% 46,057 0.15% (11,648) -25.29% Use of Money and Property 3,085,819 10.14% 1,871,556 6.27% 1,214,263 64.88% Intergovernmental 7,085,810 23.29% 8,052,573 26.96% (966,763) -12.01% Charges for Services 2,750,986 9.04% 2,339,112 7.83% 411,874 17.61% Miscellaneous 223,696 0.74% 203,170 0.68% 20,526 10.10% 30,420,358$ 100.00% 29,865,585$ 100.00% 554,773$ 1.86% 2024 2023 Increase (Decrease)

Total revenue for governmental funds increased by $554,773, which represents a growth of 1.86%. This positive change was primarily driven by a significant rise in the return on cash investments, which jumped by an impressive 64.88% compared to the previous year. However, this gain was somewhat offset by a decline in intergovernmental revenues, mainly due to reduced grant reimbursements as capital projects came to an end. Consequently, while the overall revenue figures indicate a favorable trend, the decrease in grant-related funding has moderated the benefits of the increased investment returns. 104

CITY OF HERCULES
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13 The following graph shows an illustrative picture of where the City funds come from.

Revenue by Source Governmental Funds

The following table presents expenditures by function compared to prior year amounts.

Expenditures Classified by Function
Governmental Funds

During the last fiscal year, total expenditure saw a notable increase of $1,011,014, translating to a 3.76% rise compared to the previous year. This growth can be attributed to several key factors. First, adjustments in employee salaries played a significant role, reflecting a commitment to fair compensation.

In addition, the gradual reopening of Parks and Recreation programs welcomed back community activities, further contributing to the overall increase in spending.

Moreover, the scheduling of various planned projects added to the expenditure, showcasing the organizations dedication to infrastructure and community development. It is also important to note the variations in costs that arose from normal operational fluctuations, which can influence budgeting in unpredictable ways.

A major highlight was the substantial surge in development projects, which alone accounted for an impressive $748,087, marking a staggering increase of 139.22% compared to the prior fiscal year. This significant rise underscores a vibrant development environment and an ambitious agenda for growth.

Percent of Percent of Percent of
Amount Total Amount Total Amount Total
General Government 4,768,426$ 17.08% 4,538,391$ 16.87% 230,035$ 5.07% Public Safety 9,184,101 32.91% 8,499,781 31.60% 684,320 8.05% Streets and Public Works 5,503,214 19.72% 5,486,683 20.40% 16,531 0.30% Parks and Recreation 2,677,208 9.59% 2,408,849 8.95% 268,359 11.14% Community Development 1,285,428 4.61% 537,341 2.00% 748,087 139.22% Debt Service 1,950,588 6.99% 2,466,004 9.17% (515,416) -20.90% Capital Outlay 2,541,812 9.11% 2,962,714 11.01% (420,902) -14.21% 27,910,777$ 100.00% 26,899,763$ 100.00% 1,011,014$ 3.76% 2024 2023 Increase (Decrease)
105

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MANAGEMENTS DISCUSSION AND ANALYSIS (UNAUDITED) (CONTINUED) JUNE 30, 2024

14 The following graph shows an illustrative picture of how City funds were spent.

Expenditures by Function Governmental Funds

Proprietary funds reporting focuses on determining operating income, changes in net position (or cost recovery), financial position, and cash flow using the full accrual basis of accounting.

Enterprise funds serve as a financial tool to report on the City's business-type activities, particularly focusing on the operations of the Wastewater Fund. On January 23, 2001, the cities of Hercules and Pinole entered into a collaborative agreement concerning the operation and ownership of the Pinole/Hercules Wastewater Treatment Plant. This joint agreement delineates that the City of Hercules holds a 50% undivided ownership stake in the Plant, while the City of Pinole is entrusted with the crucial responsibility of managing and operating the facility.

In addition to its ownership interest in the treatment plant, the City of Hercules is tasked with the operation and maintenance of its extensive wastewater collection system. This system is comprised of over 60 miles of underground piping, augmented by five strategically placed lift stations designed to facilitate the efficient transportation of wastewater. Meanwhile, the City of Pinole meticulously maintains the records and accounts for all financial transactions associated with the operations of the wastewater treatment plant, ensuring transparency and accuracy.

At the conclusion of the fiscal year, the enterprise fund reported a significant net investment in capital assets amounting to $20,884,471. Additionally, the fund reflected a robust unrestricted net position of $15,998,566, indicating a solid financial standing that supports ongoing operations and future investments.

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15 Internal service funds act as a financial mechanism for the City, designed to gather and distribute costs among its various operational functions. These funds play a crucial role in managing expenses related to essential services, including the replacement of vehicles, upgrades to information technology, and ongoing maintenance of city facilities.

As of the close of the fiscal year, the total net position of the internal service funds stood at $1,888,366.

This figure includes $841,295 that has been strategically invested in capital assets, such as vehicles and technological infrastructure. However, it is important to note that the net position witnessed a decrease of $344,798 compared to the previous fiscal year. This decline can be primarily attributed to significant expenditures associated with the replacement of aging vehicles and equipment, reflecting the Citys commitment to maintaining its operational efficiency and service quality.

GENERAL FUND BUDGETARY HIGHLIGHTS

The City adopts an annual appropriated budget for its General Fund. A budgetary comparison statement has been provided for the General Fund to demonstrate compliance with this budget and can be found on page 110 of this report.

During the fiscal year 2024, the General Fund revenues impressively surpassed initial projections by $1.9 million. This positive financial development can be attributed to several significant factors. Notably, there was a substantial rise in Utility User Tax (UUT) revenues, which contributed strongly to the overall increase. Additionally, the City saw a boost in investment income, reflecting favorable market conditions.

Moreover, the successful reopening of Parks and Recreation programs not only revitalized community engagement but also generated additional revenue for the City.

As we navigate a backdrop of economic uncertainties that may signal a potential recession, it is crucial to emphasize that the City is adopting a cautious and prudent approach to budgeting. This strategic mindset is designed to safeguard our financial stability and equip us to effectively address any challenges that may arise in the future.

Total expenditure reached $18.2 million, $193,375 lower than the budgeted amount. The most significant negative variances were observed in two key areas: Public Safety and Parks and Recreation. Both departments faced challenges due to various factors.

In Parks and Recreation, the successful reopening of several recreational programs resulted in costs that exceeded initial expectations. However, these increased expenses are offset by higher program revenues.

On the other hand, Public Safety experienced a notable rise in police-related projects, which required additional funding and several emergency services stemming from police activities. These factors significantly contributed to the overall overspending in these departments.

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16 CAPITAL ASSETS

As of June 30, 2024, the City has made a substantial investment in capital assets for both its governmental and business-type activities, amounting to $126,424,507 after accounting for accumulated depreciation and amortization. This significant investment reflects the Citys commitment to maintaining and enhancing its infrastructure and facilities, which include a variety of essential components. The capital assets encompass valuable land holdings, various structures and improvements that support community functions, leasehold improvements that enhance operational facilities, a range of equipment necessary for effective service delivery, and critical infrastructure such as roads and bridges that facilitate transportation and connectivity throughout the City.

The following table shows the Citys total investment in capital assets for governmental and proprietary funds.

Capital Assets

Governmental Business-type
Activities Activities Total
2024 2023 2024 2023 2024 2023
Land 5,081,587$ 5,081,587$ 191,700$ 191,700$ 5,273,287$ 5,273,287$ Construction in progress 1,565,252 1,560,376 13,642,030 3,264,814 15,207,282 4,825,190 Land Improvements 16,001,080 15,911,314 - - 16,001,080 15,911,314 Buildings & Improv ements 26,792,183 26,792,183 38,325,271 38,325,271 65,117,454 65,117,454 Equipment 7,892,230 7,747,692 250,345 250,345 8,142,575 7,998,037 Infrastructure 115,367,125 113,444,645 14,945,319 14,945,319 130,312,444 128,389,964 Intangible - Right to Use Assets 99,859 125,280 - - 99,859 125,280 Total 172,799,316 170,663,077 67,354,665 56,977,449 240,153,981 227,640,526 Accumulated Depreciation and Amortization (96,163,750) (92,639,912) (17,565,724) (16,598,092) (113,729,474) (109,238,004) Net Capital Assets 76,635,566$ 78,023,165$ 49,788,941$ 40,379,357$ 126,424,507$ 118,402,522$

Additional information regarding capital assets is presented in note 6.

DEBT ADMINISTRATION

As of the conclusion of the current fiscal year, the City has a total of $49,803,696 in outstanding long- term obligations. This amount encompasses $20,446,619 in bonds that are secured by the Citys lease rental payments and other dedicated revenue sources. These financial instruments reflect the Citys commitment to funding essential projects while managing its debt obligations through consistent revenue streams.

The following table shows the composition of the Citys bonds and notes outstanding for governmental and proprietary funds.

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17 Long-Term Obligations

Governmental Business-Type
Activities Activities Total
2024 2023 2024 2023 2024 2023
Bonds Payable 12,716,619$ 13,420,180$ 7,730,000$ 8,095,000$ 20,446,619$ 21,515,180$ Unamortized Discount/Refunding (242,144) (259,441) - - (242,144) (259,441) Lease Payable 3,878,809 4,015,168 - - 3,878,809 4,015,168 Subscription Liability 33,133 56,936 - - 33,133 56,936 Loans Payable 5,037,588 5,113,521 19,856,034 21,009,706 24,893,622 26,123,227 Compensated Absences 737,611 729,432 56,046 52,166 793,657 781,598 Total 22,161,616 23,075,796 27,642,080 29,156,872 49,803,696 52,232,668 Less Current Portion (1,504,863) (1,495,913) (1,590,320) (1,557,797) (3,095,183) (3,053,710) Net Long-Term Obligations 20,656,753$ 21,579,883$ 26,051,760$ 27,599,075$ 46,708,513$ 49,178,958$

Other obligations include compensated absences (accrued vacation and sick leave). More detailed information about the Citys long-term liabilities is presented in note 7.

ECONOMIC FACTORS AND NEXT YEARS BUDGET

On June 11, 2024, the City Council approved a balanced budget of $41 million for the fiscal year 2024-

25. This budget reflects the City Council's commitment to key priorities, including prudent financial management, traffic, transportation and infrastructure, public safety, quality of life, and future planning and policy initiatives. The primary objectives for FY 2024-25 encompass several multiyear goals:

Development of a multimodal station (Hercules HUB).

Expansion of retail and commercial development to better serve the community.

Establishment of a long-term financial plan.

In setting annual goals and objectives, the City Council reaffirmed its dedication to maintaining sound and conservative financial practices. These practices ensure the City's ability to provide a safe and enriching environment, enhance communication with the community, deliver cost-effective and efficient services to the public, and foster a positive atmosphere for new businesses and business retention.

For FY 2024-25, the budget for employee services has increased by 3%. This adjustment accommodates cost-of-living increases, rising healthcare costs, and retirement benefits. The City remains committed to meeting its actuarially required contributions toward its pension plan with CalPERS.

General fund expenditures and transfers are projected to reach $19 million in FY 2024-25, reflecting a modest increase compared to the FY 2023-24 budget. This rise is primarily attributable to salary cost-of- living adjustments (COLA), inflationary increases, and targeted adjustments aimed at enhancing organizational efficiency and effectiveness.

The City strategically plans and pre-funds certain Capital Improvement Projects (CIP) over a five-year period, ensuring that funding is readily available when projects are scheduled to begin. Several major capital initiatives are planned for FY 2024-25, with a total estimated cost of $6 million, which includes:

109

CITY OF HERCULES
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18 Hercules Hub As a top priority, the development of Hercules Hub aims to transform the Hercules Bayfront into a model transit-oriented community for the Bay Area and beyond. This hub will connect numerous residences with a new train stop along the Capitol Corridor, as well as bicycle and pedestrian pathways, bus routes, carpool options, and a future ferry service. The project is designed to alleviate congestion on I-80 and to reduce vehicle miles traveled (VMT) along with greenhouse gas emissions.

Major Sewer system Improvements This initiative focuses on continuing the advancements outlined in the City's adopted Sewer Master Plan, which includes enhancements to Sycamore Avenue's Lower and Upper Trunk Mains, among other projects.

Parks Projects This initiative includes the construction of a picnic area and shade structure at Refugio Park, completion of the final design for Beechnut Park, resurfacing of the Foxboro Basketball Court, and repairs to the Bay Trail Wall.

In summary, despite challenges presented by record inflation and international instabilities, several key revenue sources within the City have performed better than anticipated. During the upcoming annual strategic planning session, staff will continue to provide essential services to residents through technology upgrades and enhancements to both internal and public-facing city operations. Through diligent fiscal management, the City's financial position remains robust, reinforcing its commitment to sound and conservative financial practices.

REQUEST FOR INFORMATION

This financial report is designed to provide a general overview of the Citys finances for all those with an interest in the governments finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Department of Finance at 111 Civic Drive, Hercules, California, 94547.
110

BASIC FINANCIAL STATEMENTS
19 111
20 112

GOVERNMENT-WIDE FINANCIAL STATEMENTS
21 113
22 114
Governmental Business-Type
Activities Activities Total
ASSETS
Cash and investments 40,777,509$ 17,298,713$ 58,076,222$ Cash and investments with fiscal agent 2,176,241 2,888 2,179,129 Cash and investments held in trust 2,391,824 - 2,391,824 Accounts receivable 3,604,884 - 3,604,884 Prepaid items 8,591 - 8,591 Loan receivable 1,313,328 - 1,313,328 Lease receivable 8,530,001 - 8,530,001 Net other postemployment benefits ("OPEB") assets - PEHMCA 257,824 13,336 271,160 Capital Assets:

Nondepreciable 6,646,839 13,833,730 20,480,569 Depreciable and amortizable, net 69,988,727 35,955,211 105,943,938 Total assets 135,695,768 67,103,878 202,799,646

DEFERRED OUTFLOWS OF RESOURCES
Pension-related deferred outflows of resources 7,675,747 400,110 8,075,857 OPEB-related deferred outflows of resources (PEHMCA) 369,478 19,111 388,589 OPEB-related deferred outflows of resources (SOMAR) 563,165 29,129 592,294 Total deferred outflows of resources 8,608,390 448,350 9,056,740

LIABILITIES
Accounts payable 1,116,968 1,055,480 2,172,448 Retention Payable 80,215 569,264 649,479 Salaries and benefits payable 251,448 12,627 264,075 Accrued interest payable 512,805 15,331 528,136 Deposit payable 1,197,343 - 1,197,343 Claims payable, due in one year 495,446 - 495,446 Long-term debt:

Due within one year 1,504,863 1,590,320 3,095,183 Due in more than one year 20,656,753 26,051,760 46,708,513 Net aggregate pension liabilities 20,204,442 1,091,205 21,295,647 Net OPEB liabilities - SOMAR 1,811,583 93,703 1,905,286 Total liabilities 47,831,866 30,479,690 78,311,556

DEFERRED INFLOWS OF RESOURCES
Pension-related deferred inflows of resources 1,539,203 85,610 1,624,813 OPEB-related deferred inflows of resources (PEHMCA) 1,431,849 74,061 1,505,910 OPEB-related deferred inflows of resources (SOMAR) 576,706 29,830 606,536 Leases 8,511,136 - 8,511,136 Total deferred inflows of resources 12,058,894 189,501 12,248,395

NET POSITION
Net investment in capital assets 59,889,211 20,884,471 80,773,682 Restricted for:

Public safety 243,188 - 243,188 Streets and roads 4,929,254 - 4,929,254 Development 3,632,277 - 3,632,277 Debt service 2,171,770 - 2,171,770 Pension 2,391,824 - 2,391,824 Total restricted 13,368,313 - 13,368,313 Unrestricted 11,155,874 15,998,566 27,154,440 Total net position 84,413,398$ 36,883,037$ 121,296,435$ Primary Government
City of Hercules
Statement of Net Position
June 30, 2024
See accompanying Notes to the Basic Financial Statements. 23 115
Operating Capital
Charges for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions Total Primary Government
Governmental Activities:

General government 5,378,751$ 767,385$ -$ -$ 767,385$ Public safety 10,027,823 109,122 432,230 - 541,352 Streets and public works 8,736,149 547,178 5,980,486 1,909,108 8,436,772 Parks and recreation 2,955,545 1,649,166 - - 1,649,166 Community development 1,297,680 315,645 598 - 316,243 Interest 1,022,790 - - - - Total governmental activities 29,418,738 3,388,496 6,413,314 1,909,108 11,710,918 Business-Type Activities:

Wastewater 5,262,133 5,891,836 - - 5,891,836 Total business-type activities 5,262,133 5,891,836 - - 5,891,836 Total primary government 34,680,871 9,280,332 6,413,314 1,909,108 17,602,754 Program Revenues
City of Hercules
Statement of Activities
For the Year Ended June 30, 2024
See accompanying Notes to the Basic Financial Statements. 24 116
Governmental Business-Type
Functions/Programs Activities Activities Total
Primary Government
Governmental Activities:

General government (4,611,366)$ -$ (4,611,366)$ Public safety (9,486,471) - (9,486,471) Streets and public works (299,377) - (299,377) Parks and recreation (1,306,379) - (1,306,379) Community development (981,437) - (981,437) Interest (1,022,790) - (1,022,790) Total governmental activities (17,707,820) - (17,707,820) Business-Type Activities:

Wastewater - 629,703 629,703 Total business-type activities - 629,703 629,703 Total primary government (17,707,820) 629,703 (17,078,117) General Revenues:

Property taxes 1,653,626 - 1,653,626 Sales and use taxes 5,753,278 - 5,753,278 Franchise taxes 972,391 - 972,391 Utility users taxes 4,011,166 - 4,011,166 Other taxes 952,561 - 952,561 Unrestricted motor vehicle taxes in-lieu 2,556,520 - 2,556,520 Use of money and property 3,076,628 851,980 3,928,608 Total general revenues 18,976,170 851,980 19,828,150 Changes in net position 1,268,350 1,481,683 2,750,033 Net Position:

Beginning of year 83,145,048 35,401,354 118,546,402 End of year 84,413,398$ 36,883,037$ 121,296,435$ Changes in Net Position
Net (Expense) Revenue and
City of Hercules
Statement of Activities (Continued)
For the Year Ended June 30, 2024
See accompanying Notes to the Basic Financial Statements. 25 117
26 118

FUND FINANCIAL STATEMENTS
27 119
28 120
Other Governmental Funds - These funds are special revenue funds or capital project funds that have not been determined to be major funds, as defined by GASB Statement No. 34.

GOVERNMENTAL FUND FINANCIAL STATEMENTS
General Fund - This fund is used to account for all revenues and expenditures necessary to carry out basic governmental activities of the City that are not accounted for through other funds. For the City, the General Fund includes such activities as police, planning, engineering, public works, operations and maintenance, and legal and administrative services.

Hercules Debt Service Fund - This fund is used to account for the accumulation of resources for, and the payment of, principal and interest on various Lease Revenue Bonds issued to cover the refinancing of the original City Hall debt issue and to generate additional resources to assist in the construction of a new library building and other general government projects.

Landscape & Lighting Assessment District (LLAD) No. 83-2 Special Revenue Fund- This fund accounts for special assessments on property withindistrict boundaries for the restricted purpose of providing landscaping and lighting services within the specified districts.
29 121
30 122
Landscape &
Lighting Assessment Other
General District Hercules Deb t Governmental
Fund (LLAD) No. 83-2 Service Fund Funds Total
ASSETS
Cash and investments 30,056,991$ 938,569$ -$ 7,904,290$ 38,899,850$ Cash and investments with fiscal agent - - 2,176,241 - 2,176,241 Cash and investments held in trust 2,391,824 - - - 2,391,824 Accounts receivable 1,659,814 - - 1,945,070 3,604,884 Prepaid items 8,591 - - - 8,591 Due from other funds 1,482,018 - - - 1,482,018 Advances to other funds 521,703 - - - 521,703 Loans receivable 1,313,328 - - - 1,313,328 Lease receivable 408,855 - 8,121,146 - 8,530,001 Total assets 37,843,124 938,569 10,297,387 9,849,360 58,928,440

LIABILITIES
Accounts payable 609,517 79,808 - 385,513 1,074,838 Retention Payable - - - 80,215 80,215 Accrued wages 217,009 8,451 - 15,277 240,737 Deposit payable 1,158,545 - - 38,798 1,197,343 Claims payable 495,446 - - - 495,446 Due to other funds - - 4,471 1,477,547 1,482,018 Advances from other funds - 418,803 - 102,900 521,703 Total liabilities 2,480,517 507,062 4,471 2,100,250 5,092,300

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue 24,837 - - 492,613 517,450 Leases 389,990 - 8,121,146 - 8,511,136 Total deferred inflows of resources 414,827 - 8,121,146 492,613 9,028,586

FUND BALANCES
Nonspendable 1,321,919 - - - 1,321,919 Restricted 2,391,824 431,507 2,171,770 7,855,762 12,850,863 Committed 7,884,421 - - 324,295 8,208,716 Assigned 8,595,020 - - - 8,595,020 Unassigned (deficit) 14,754,596 - - (923,560) 13,831,036 Total fund balances (deficit) 34,947,780 431,507 2,171,770 7,256,497 44,807,554 Total liabilities, deferred inflows
of resources and fund balances 37,843,124$ 938,569$ 10,297,387$ 9,849,360$ 58,928,440$ City of Hercules
Balance Sheet
Governmental Funds
June 30, 2024
Major Funds
See accompanying Notes to the Basic Financial Statements. 31 123
Total fund balances of governmental funds 44,807,554$
Amounts reported for governmental activities in the Statement of Net Position are different because:

Amount reported in Government-Wide Statement of Net Position 76,635,566 Less: Amount reported in Internal Service Funds (865,243) (512,805)
517,450
Compensated absences, net of Internal Service Funds of $48,682 (688,929) Loans, leases, and bonds (21,400,057)
Pension-related deferred outflows of resources, net of Internal Service Funds of $305,500 7,370,247 Net pension liability, net of Internal Service Funds of $833,179 (19,371,263) Pension-related deferred inflows of resources, net of Internal Service Funds of $65,367 (1,473,836) OPEB-related deferred outflows of resources (PEHMCA), net of Internal Service Funds of $19,111 350,367 OPEB-related deferred outflows of resources (SOMAR), net of Internal Service Funds of $29,129 534,036 Net OPEB assets - PEHMCA, net of Internal Service Funds of $13,335 244,489 Net OPEB liability - SOMAR, net of Internal Service Funds of $93,703 (1,717,880) OPEB-related deferred inflows of resources (PEHMCA), net of Internal Service Funds of $74,061 (1,357,788) OPEB-related deferred inflows of resources (SOMAR), net of Internal Service Funds of $29,830 (546,876) 1,888,366
Net position of governmental activities 84,413,398$
Unavailable revenues represent amounts that are not available to fund current expenditures and, therefore, are not reported in the governmental funds.

Interest payable on long-term debt does not require current financial resources, Therefore, interest payable is not reported as a liability in the Governmental Funds Balance Sheet.

Internal Service Fundss are used by the City to charge the cost of its vehicle replacement, IT services and facilities maintenance activities to individual funds. The assets and liabilities of the Internal Service Fundss are included in governmental activities in the statement of net position.

City of Hercules
Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Positio
n
June 30, 2024
Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the governmental funds.

Long-term liabilities are not due and payable in the current period and therefore, are not reported in the governmental funds:

Net pension liability and related deferred outflows and inflows of resources are not due and payable in the current period; therefore, are not reported as governmental funds' liabilities. They are reported in the Statement of Net Position.

Net OPEB liability and related deferred outflows and inflows of resources are not due and payable in the current period; therefore, are not reported as governmental funds' liabilities. They are reported in the Statement of Net Position.

See accompanying Notes to the Basic Financial Statements. 32 124
Landscape &
Lighting Assessment Other
General District Hercules Deb t Governmental
Fund (LLAD) No. 83-2 Service Fund Funds Total
REVENUES:

Taxes and assessments 12,992,128$ 2,218,229$ -$ 1,407,455$ 16,617,812$ Licenses and permits 445,620 - - 176,206 621,826 Fines and forfeitures 34,409 - - - 34,409 Use of money and property 1,623,561 57,927 1,014,960 389,371 3,085,819 Intergovernmental 2,666,458 - - 4,419,352 7,085,810 Charges for services 2,412,068 - - 338,918 2,750,986 Other revenues 154,757 - - 68,939 223,696 Total revenues 20,329,001 2,276,156 1,014,960 6,800,241 30,420,358 EXPENDITURES:

Current:

General government 4,768,426 - - - 4,768,426 Public safety 9,154,124 - - 29,977 9,184,101 Streets and public works 571,231 1,600,464 - 3,331,519 5,503,214 Parks and public works 2,677,208 - - - 2,677,208 Community development 811,819 - - 473,609 1,285,428 Capital outlay 21,984 116,319 - 2,403,509 2,541,812 Debt services:

Principal 114,945 - 703,561 127,479 945,985 Interest and fiscal agent fee 124,801 - 771,385 108,417 1,004,603 Total expenditures 18,244,538 1,716,783 1,474,946 6,474,510 27,910,777

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 2,084,463 559,373 (459,986) 325,731 2,509,581

OTHER FINANCING SOURCES (USES)
Inception of subscription liability 17,823 - - - 17,823 Transfers in 406,727 31,037 563,316 1,342,551 2,343,631 Transfers (out) (1,438,925) (265,060) - (639,646) (2,343,631) Total other financing sources (uses) (1,014,375) (234,023) 563,316 702,905 17,823 NET CHANGES IN FUND BALANCES 1,070,088 325,350 103,330 1,028,636 2,527,404 FUND BALANCES:

Beginning of year 33,877,692 106,157 2,068,440 6,227,861 42,280,150 End of year 34,947,780$ 431,507$ 2,171,770$ 7,256,497$ 44,807,554$ Major Funds
City of Hercules
Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds
For the Year Ended June 30, 2024
See accompanying Notes to the Basic Financial Statements. 33 125
Net change in fund balances - total governmental funds: 2,527,404$ Amounts reported for governmental activities in the Statement of Activities are different because:

Capital outlay expenditures, net of $175,680 reported in Internal Service Funds 2,017,122$ Depreciation and amortization expenses, net of $247,391 reported in Internal Service Funds (3,333,010) (1,315,888) 266,725
Inception of subscription liability (17,823)
Principal repayment of loans, leases, subscription liability and bonds 945,985 Change in accrued interet expense (890)
Amortization of bond discount (17,297)
Change in compensated absences, net of Internal Service Funds of $3,620 (4,559) Pension expense of CalPERS Plan, net of pension contribution made after measurement date in the amount of $2,051,741 (666,146) OPEB (PEHMCA) credit 14,802
OPEB (SOMAR) expense (119,165)
(344,798)
Change in net position of governmental activities 1,268,350$ Some expenses reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in the governmental funds:

City of Hercules
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities For the Year Ended June 30, 2024
Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost of those assets is allocated over the estimated useful lives as depreciation and amortization expenses. This is the amount by which capital expenditures exceeded depreciation in the current period:

Revenues that are measurable but not available and are reported as unavailable revenue under the modified accrual basis of accounting in the governmental funds.

Proceeds from long-term debt provided current financial resources to governmental funds, but issuing debt increased long-term liabilities in the Government-Wide Statement of Net Position. Repayment of bond principal was an expenditure in the governmental funds
, but the repayment reduced long-term liabilities in the Government-Wide Statement of Net Position.

Internal service funds are used by management to charge the costs of certain activities, such as fleet repair and maintenance, central stores and printing services to individual funds. The net revenue (expense) of these internal service funds are reported as governmental activities.

See accompanying Notes to the Basic Financial Statements. 34 126

PROPRIETARY FUND FINANCIAL STATEMENTS
Internal Service Funds These funds account for activities related to vehicle replacement, IT equipment replacement, and facilities maintenance.

Wastewater Fund This fund accounts for wastewater treatment to the cities of Hercules and Pinole and for the maintenance of the City's sewer lines and related facilities. It is a self-supporting activity which provides services on a user charge basis to residences and businesses.
35 127
36 128
Business-Type
Activities
Enterprise Governmenta l
Fund Activities
Wastewater Internal
Fund Service Funds
ASSETS
Current assets:

Cash and investments 17,298,713$ 1,877,659$
Cash and investments with fiscal agent 2,888 -
Total current assets 17,301,601 1,877,659
Noncurrent assets:

Net OPEB assets - PEHMCA 13,336 13,335
Capital assets:

Nondepreciable 13,833,730 -
Depreciable and amortizable, net 35,955,211 865,243
Total noncurrent assets 49,802,277 878,578
Total assets 67,103,878 2,756,237

DEFERRED OUTFLOWS OF RESOURCES
Pensions-related deferred outflows of resources 400,110 305,500 OPEB-related deferred outflows of resources (PEHMCA) 19,111 19,111 OPEB-related deferred outflows of resources (SOMAR) 29,129 29,129 Total deferred outflows of resources 448,350 353,740

LIABILITIES
Current liabilities:

Accounts payable 1,055,480 42,130
Retention Payable 569,264 -
Salaries and benefits payable 12,627 10,711
Accrued interest payable 15,331 -
Long-term debt - due within one year 1,590,320 48,006
Total current liabilities 3,243,022 100,847
Noncurrent liabilities:

Long-term debt - due in more than one year 26,051,760 24,624 Net pension liabilities 1,091,205 833,179
Net OPEB liabilities - SOMAR 93,703 93,703
Total noncurrent liabilities 27,236,668 951,506
Total liabilities 30,479,690 1,052,353

DEFERRED INFLOWS OF RESOURCES
Pensions-related deferred outflows of resources 85,610 65,367 OPEB-related deferred outflows of resources (PEHMCA) 74,061 74,061 OPEB-related deferred outflows of resources (SOMAR) 29,830 29,830 Total deferred inflows of resources 189,501 169,258

NET POSITION
Net investment in capital assets 20,884,471 841,295 Unrestricted 15,998,566 1,047,071
Total net position 36,883,037$ 1,888,366$
City of Hercules
Statement of Net Position
Proprietary Funds
June 30, 2024
See accompanying Notes to the Basic Financial Statements. 37 129
38 130
Business-Type
Activities
Enterprise Governmenta l
Fund Activities
Wastewater Internal
Fund Service Funds
OPERATING REVENUES:

Charges for services 5,891,836$ 2,105,798$
Other operating revenues - 27,758 Total operating revenues 5,891,836 2,133,556
OPERATING EXPENSES:

Salaries and benefits 749,431 657,273
Services and supplies 2,959,916 1,572,892
Depreciation 967,632 247,391
Total operating expenses 4,676,979 2,477,556
Operating income 1,214,857 (344,000)

NONOPERATING REVENUES (EXPENSES)
Interest income 851,980 -
Interest (expenses) (544,759) (798)
Loss on capital asset disposal (40,395) -
Total nonoperating revenues (expenses) 266,826 (798) CHANGES IN NET POSITION 1,481,683 (344,798)
NET POSITION:

Beginning of year 35,401,354 2,233,164
End of year 36,883,037$ 1,888,366$
City of Hercules
Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds
For the Year Ended June 30, 2024
See accompanying Notes to the Basic Financial Statements. 39 131
Business-Type
Activities
Enterprise Governmenta l
Fund Activities
Wastewater Internal
Fund Service Funds
CASH FLOWS FROM OPERATING ACTIVITIES:

Cash receipts from customers 5,891,836$ -$
Cash receipts from internal services provided - 2,133,556 Cash paid to suppliers for goods and services (3,831,626) (1,570,612) Cash paid to employees for services (756,690) (599,455) Net cash provided by (used in) operating activities 1,303,520 (36,511)

CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES:

Payments related to the acquisition of capital assets (9,947,835) (175,680) Principal repayments related to capital purposes (1,518,672) (11,494) Interest repayments related to capital purposes (545,483) (798) Net cash (used in) capital and related
financing activities (12,011,990) (187,972)
CASH FLOWS FROM INVESTING ACTIVITIES:

Investment income 851,980 -
Net cash provided by investing activities 851,980 - NET CHANGES IN CASH AND CASH EQUIVALENTS (9,856,490) (224,483) CASH AND CASH EQUIVALENTS:

Beginning of year 27,158,091 2,102,142
End of year 17,301,601$ 1,877,659$

RECONCILIATION OF CASH AND CASH EQUIVALENTS
TO STATEMENT OF NET POSITION:

Cash and investments 17,298,713$ 1,877,659$
Cash and investments with fiscal agent 2,888 - Total cash and cash equivalents 17,301,601$ 1,877,659$ (Continued)
City of Hercules
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2024
See accompanying Notes to the Basic Financial Statements. 40 132
Business-Type
Activities
Enterprise Governmenta l
Fund Activities
Wastewater Internal
Fund Service Funds

RECONCILIATION OF OPERATING INCOME

TO NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES:

Operating income 1,214,857$ (344,000)$
Adjustments to reconcile operating income
to net cash provided by (used in) operating activities:

Depreciation 967,632 247,391
(Increase) Decrease in Assets and Deferred Outflows
Pensions-related deferred outflows 45,035 (1,330) OPEB-related deferred outflows 21,220 21,220 Increase (Decrease) in Liabilities and Deferred Inflows Accounts payable (871,710) 2,280
Salaries and benefits payable 3,851 4,447 Net pension liability (1,680) 86,404
Net OPEB liability (8,376) (7,172)
Pensions-related deferred inflows (51,002) (27,981) OPEB-related deferred inflows (20,187) (21,390) Compensated absences 3,880 3,620
Total adjustments 88,663 307,489
Net cash provided by (used in) operating activities 1,303,520$ (36,511)$

NONCASH ITEMS
Loss on disposal of capital assets (40,395)$ -$ (Concluded)
Proprietary Funds
For the Year Ended June 30, 2024
City of Hercules
Statement of Cash Flows (Continued)
See accompanying Notes to the Basic Financial Statements. 41 133
42 134

FIDUCIARY FUND FINANCIAL STATEMENTS
Private Purpose Trust Fund - is a fiduciary fund type used by the City to report trust arrangements under which principal and income benefit other governments. This fund reports the assets, liabilities, and activities of the Hercules Redevelopment Successor Agency. The sole purpose of this fund is to retire debt of the former redevelopment agency.

Custodial Funds - are used to account for assets held by the government in a trustee capacity. Custodial funds are used to account for assets held by the government as an agent for individuals, private organizations, other governments, and/or other funds. 43 135
44 136
Successor
Agency
Private Purpose Custodial
Trust Fund Funds
ASSETS
Cash and investments 9,443,833$ 431,725$
Cash and investments with fiscal agent - 55,798 Prepaid items 464,072 -
Loans receivable, net 8,010,061 -
Capital Assets:

Nondepreciable 14,090,684 -
Depreciable, net 7,116,850 -
Total assets 39,125,500 487,523

LIABILITIES
Accounts payable 131,482 -
Unearned revenue 891,798 -
Long-term debt:

Due within one year 455,000 -
Due in more than one year 80,711,935 -
Total liabilities 82,190,215 -

DEFERRED INFLOWS OF RESOURCES
Deferred amount on refunding 757,667 -
Total deferred inflows of resources 757,667 -

NET POSITION (DEFICIT)
Held in trust (deficit) (43,822,382) -
Individuals, organization, and other government - 487,523 Total net position (deficit) (43,822,382)$ 487,523$
City of Hercules
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2024
See accompanying Notes to the Basic Financial Statements. 45 137
Successor
Agency
Private Purpose Custodial
Trust Fund Funds
ADDITIONS:

Redevelopment property tax trust fund 6,910,188$ 228,616$ Investment income (loss) 575,799 21,356
Other revenue 838,438 -
Total additions 8,324,425 249,972
DEDUCTIONS:

Community development 4,597,218 -
Administration 38,195 6,885
Depreciation 668,591 -
Interest expenses 3,605,166 55,695
Principal payment to refunding escrow - 164,943 Total deductions 8,909,170 227,523
CHANGES IN FIDUCIARY NET POSITION (584,745) 22,449 FIDUCIARY NET POSITION (DEFICIT):

Beginning of year (43,237,637) 465,074
End of year (43,822,382)$ 487,523$
City of Hercules
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the Year Ended June 30, 2024
See accompanying Notes to the Basic Financial Statements. 46 138
47 NOTES TO THE BASIC FINANCIAL STATEMENTS
139
48 140
City of Hercules
Index to the Notes to the Basic Financial Statements
For the Year Ended June 30, 2024
49 Page
Note 1 Summary of Significant Accounting Policies ..................................................................................... 51 A. Financial Reporting Entity .............................................................................................................. 51 B. Basis of Accounting and Measurement Focus ................................................................................ 51 C. Cash and Investments ..................................................................................................................... 54 D. Cash and Investments with Fiscal Agents ...................................................................................... 54 E. Fair Value Measurements ............................................................................................................... 5 4 F. Interfund Transactions .................................................................................................................... 55 G. Prepaid Items .................................................................................................................................. 55 H. Capital Assets ................................................................................................................................. 55 I. Leases ............................................................................................................................................. 56 J. Subscription Based Information Technology
Arrangements (SBITA) Asset and Liabilities .......................................................................... 57 K. Long-Term Debt ............................................................................................................................. 58 L. Unearned and Unavailable Revenue ............................................................................................... 58 M. Compensated Absences .................................................................................................................. 59 N. Property Taxes ................................................................................................................................ 59 O. Interfund Transactions .................................................................................................................... 59 P. Claims Payable ............................................................................................................................... 59 Q. Pensions ..........................................................................................................................................

R. Other Postemployment Benefits (OPEB) .................................................................................... 60 S. Deferred Outflows of Resources and Deferred Inflows of Resources ............................................ 61 T. Net Position .................................................................................................................................... 61 U. Use of Estimates ............................................................................................................................. 61 V. Fund Balances ................................................................................................................................. 61 W. Spending Policy .............................................................................................................................. 62 X. Implementation of New GASB Pronouncements ........................................................................... 62 Y. Upcoming New GASB Pronouncements ........................................................................................ 63 Note 2 Cash and Investments .......................................................................................................................... 63 A. Demand Deposits ............................................................................................................................ 64 B. Investments Authorized by the California Government Code and the City's Investment Policy ........................................................................................................... 64 C. Investments Authorized by Debt Agreements ................................................................................ 65 D. Risk Disclosures ............................................................................................................................. 65 E. Investment in Local Agency Investment Fund (LAIF) ............................................................... 67 F. Investment in Money Market Mutual Funds .................................................................................. 67 Note 3 Loans Receivable .................................................................................................................................. 67 A. Governmental Activities ................................................................................................................. 67 B. Fiduciary Fund Financial Statements ............................................................................................. 67 Note 4 Lease Receivable ................................................................................................................................... 68 A. Bio-Rad Laboratories Lease Receivable ......................................................................................... 68 B. Other Lease Receivable .................................................................................................................. 69 Note 5 Interfund Transactions ........................................................................................................................ 69 A. Due From and To Other Funds ....................................................................................................... 69 B. Advances To and From Other Funds .............................................................................................. 69 C. Transfers In and Out ....................................................................................................................... 70 141
City of Hercules
Index to the Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2024
50 Page
Note 6 Capital Assets ......................................................................................................................................... 71 A. Governmental Activities .................................................................................................................. 71 B. Business-Type Activities ................................................................................................................. 72 C. Fiduciary Fund Financial Statements .............................................................................................. 73 Note 7 Long-Term Debt .................................................................................................................................... 74 A. Governmental Activities .................................................................................................................. 74 B. Business-Type Activities ................................................................................................................. 77 C. Fiduciary Fund Financial Statements .............................................................................................. 79 D. Non-City Obligations ....................................................................................................................... 80 Note 8 Retirement Plans .................................................................................................................................... 81 A. General Information About the Pension Plans ................................................................................. 82 B. Pension Liabilities, Pension Expenses, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pension ............................................................... 84 C. Payable to the CalPERS Pension Plans ........................................................................................... 89 D. Liquidating Net Pension Liability .................................................................................................... 89 Note 9 Deferred Compensation Plan ................................................................................................................ 90 A. 457 Plan ........................................................................................................................................... 90 B. 401A Plan ........................................................................................................................................ 90 C. PARS ............................................................................................................................................... 90 Note 10 Other Postemployment Benefits ......................................................................................................... 91 A. Retiree Healthcare Plan (PEHMCA) ............................................................................................... 92 B. Retiree Cash Benefit Plan (SOMAR Plan) ...................................................................................... 95 Note 11 Risk Management ................................................................................................................................ 99 Note 12 Commitments and Contingencies ..................................................................................................... 101 A. Lawsuits ......................................................................................................................................... 101 B. Commitments ................................................................................................................................. 101 Note 13 Joint Powers Agreements .................................................................................................................. 101 A. West Contra Costa Transportation Advisory Committee (WCCTAC) ......................................... 101 B. West Contra Costa Integrated Waste Management Authority (WCCIWMA) .............................. 102 C. Pinole/Hercules Wastewater Treatment Plant ............................................................................... 102 Note 14 Stewardship, Compliance, and Accountability ............................................................................... 102 A. Deficit Fund Balances/Net Position ............................................................................................... 102 B. Expenditures in Excess of Appropriations ..................................................................................... 103 Note 15 Fund Balance Classification .............................................................................................................. 104 Note 16 Net Investment in Capital Assets ...................................................................................................... 105 142
City of Hercules
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024
51 Note 1 Summary of Significant Accounting Policies
The basic financial statements of the City of Hercules, California, (the City) have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. 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 following is a summary of the Citys significant policies:

A. Financial Reporting Entity

The City was incorporated under the General Laws of the state of California and enjoys all the rights and privileges pertaining to such General Law cities. The City uses the City Council/Manager form of government.

In evaluating how to define the City for financial reporting purposes, management has considered all potential component units. The primary criteria for including a potential component unit within the reporting entity are the governing bodys financial accountability and a financial benefit or burden relationship and whether it is misleading to exclude. A primary government is financially accountable and shares a financial benefit or burden relationship, if it appoints a voting majority of an organizations governing body and it is able to impose its will on the organization, or if there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on the primary government. A primary government may also be financially accountable if an organization is fiscally dependent on the primary government regardless of whether the organization has a separately elected governing board, a governing board appointed by a higher level of government, or a jointly appointed board, and there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on the primary government.

Blended Component Units:

Management determined that the following entities should be reported as blended component units based on the criteria above. Although the following is legally separate from the City, it has been blended as though it is part of the City because the component units governing body is substantially the same as the Citys and there is a financial benefit or burden relationship between the City and the component unit; management of the City has operational responsibilities for the component unit; and/or the component unit provides services entirely, or almost entirely, to the City or otherwise exclusively, or almost exclusively, benefits the City, even though it does not provide services directly to it.

The Hercules Public Financing Authority The Hercules Public Financing Authority (the Authority) was established July 24, 2001, by and between the City and the Authority, pursuant to the state of California Government Code. The purpose of the Authority is to finance the acquisition, construction, and improvement of public capital improvements, working capital requirements, or insurance programs. Separate detailed financial statements are available from the Citys Finance Department.

B. Basis of Accounting and Measurement Focus

The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for by providing a separate set of self-balancing accounts that comprise its assets, deferred outflows of resources, liabilities, deferred inflows of resources, fund balance or net position, revenues and expenditures or expenses, as appropriate. City resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled.
143
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
52 Note 1 Summary of Significant Accounting Policies (Continued) B. Basis of Accounting and Measurement Focus (Continued) Government-Wide Financial Statements
The government-wide financial statements are presented on an economic resources measurement focus and the accrual basis of accounting. Accordingly, all of the Citys assets, deferred outflows of resources, liabilities, and deferred inflows of resources, including capital assets, as well as infrastructure assets, and long-term liabilities, are included in the accompanying statement of net position. The statement of activities presents changes in net position.

Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. Fiduciary activities of the City are not included in these statements.

Certain types of transactions are reported as program revenues for the City in three categories:

Charges for services
Operating grants and contributions
Capital grants and contributions

Certain eliminations have been made in regards to interfund activities, payables and receivables. All internal balances in the statement of net position have been eliminated. In the statement of activities, internal service fund transactions have been included in the governmental activities. The following interfund activities have been eliminated:

Due from and to other funds, which are short-term loans within the primary government.

Advances to and from other funds, which are long-term loans within the primary government.

Transfers in and out, which are flows of assets between funds without the requirement for repayment.

Governmental Fund Financial Statements
All governmental funds are accounted for on a spending or current financial resources measurement focus and the modified accrual basis of accounting. Accordingly, only current assets, current liabilities, and deferred inflows of resources are included on the balance sheet. The statement of revenues, expenditures and changes in fund balances presents increases (revenue and other financing sources) and decreases (expenditures and other financing uses) in fund balances. Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expenditures of the current period.

Revenues are recorded when received in cash, except those revenues subject to accrual (generally 60 days after year-end) which are recognized when due. The primary revenue sources that have been treated as susceptible to accrual by the City are property taxes, intergovernmental revenues and other taxes. Business license fees are recorded as received, except at year-end when they are accrued pursuant to the modified accrual basis of accounting.

Expenditures are recorded in the accounting period in which the related fund liability is incurred.

Reconciliations of the fund financial statements to the government-wide financial statements are provided to explain the differences.

144
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
53 Note 1 Summary of Significant Accounting Policies (Continued) B. Basis of Accounting and Measurement Focus (Continued) Governmental Fund Financial Statements (Continued)
The City reports the following major Governmental Funds:

General Fund accounts for all revenues and expenditures necessary to carry out basic governmental activities of the City that are not accounted for through other funds, For the City, the General Fund includes such activities as police, planning, engineering, public works, operations and maintenance, and legal and administrative services.

Hercules Debt Service Fund accounts for the accumulation of resources for, and the payment of, principal and interest on the Lease Revenue Bonds, Series 2003A issued to cover capital costs for the Hercules Municipal Utility and principal and interest on the Lease Revenue Bonds, Series 2003B issued to cover the financing of the original City Hall debt issue and to generate additional resources to assist in the construction of a new library building, Series 2009 issued for the purpose of financing the acquisition of certain commercial condominium property (Bio-Rad).

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

A separate column representing internal service funds is also presented in these statements. However, internal service balances and activities have been combined with the governmental activities in the Government-Wide Financial Statements. The Citys internal service funds include three individual funds that provide services directly to other City funds. These services include vehicle replacement, technology services, and facilities maintenance.

Proprietary funds are accounted for using the "economic resources" measurement focus and the accrual basis of accounting. Accordingly, all assets, deferred outflows of resources, liabilities (whether current or noncurrent), and deferred inflows of resources are included on the Statement of Net Position. The Statement of Revenues, Expenses and Changes in Fund Net Position presents increases (revenues) and decreases (expenses) in total Net Position.

Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. In these funds, receivables have been recorded as revenue and provisions have been made for uncollectible amounts.

Operating revenues in the proprietary funds are those revenues that are generated from the primary operations of the fund. All other revenues are reported as nonoperating revenues. Operating expenses are those expenses that are essential to the primary operations of the fund. All other expenses are reported as nonoperating expenses.

The City reports the following major Proprietary Fund:

Wastewater Fund accounts for wastewater treatment to the cities of Hercules and Pinole and for the maintenance of the Citys sewer lines and related facilities. It is a self-supporting activity which provides services on a user charge basis to residences and businesses. 145
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
54 Note 1 Summary of Significant Accounting Policies (Continued) B. Basis of Accounting and Measurement Focus (Continued)

Proprietary Fund Financial Statements (Continued)
Internal service funds are presented in the proprietary fund financial statements. Internal service funds account for activities related to vehicle replacement, technology services, and facilities maintenance. However, internal service balances and activities have been combined with the governmental activities in the government-wide financial statements.

Fiduciary Fund Financial Statements
Fiduciary fund financial statements include a Statement of Net Position and a Statement of Changes in Fiduciary Net Position. The Citys fiduciary funds represent custodial funds and private purpose trust funds. Both custodial funds and the private purpose trust funds are accounted for an economic resources measurement focus on the full accrual basis of accounting.

The City reports the following fiduciary funds:

Private-Purpose Trust Fund This fund is used to account for the balances and transactions of the Successor Agency to the former Hercules Redevelopment Agency.

Custodial Funds These funds account for resources held by the City in custodial capacity for special assessment collected for Reassessment District 05-01 debt service payments, affordable housing set-aside funds, and for waste management service. The City is responsible for ensuring that the assets reported in these funds are used for their intended purposes.

C. Cash and Investments

The Citys cash and cash equivalents are comprised of cash on hand, demand deposits, and short-term investments with original maturity of three months or less from the date of acquisition. All cash and investments of proprietary funds are held in the Citys investment pool. These cash pools have the general characteristics of a demand deposit account, therefore, all cash and investments in the proprietary funds are considered cash and cash equivalents for statement of cash flows purposes.

Investments are stated at fair value (quoted market price or best available estimate thereof).

D. Cash and Investments with Fiscal Agents

Cash and investments are held by fiscal agents for the redemption of bonded debt and maintaining required reserves.

E. Fair Value Measurements

U.S. GAAP defines fair value, establishes a framework for measuring fair value and establishes disclosures about fair value measurement. Investments, unless otherwise specified, recorded at fair value in the financial statements, are categorized based upon the level of judgment associated with the inputs used to measure their fair value.

146
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
55 Note 1 Summary of Significant Accounting Policies (Continued)

E. Fair Value Measurements (Continued)

The three levels of the fair value measurement hierarchy are described below:

Level 1 Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date.

Level 2 Inputs, other than quoted prices included in Level 1, that are observable for the assets or liabilities through corroboration with market data at the measurement date.

Level 3 Unobservable inputs that reflect managements best estimate of what market participants would use in pricing the assets or liabilities at the measurement date.

F. Interfund Transactions

Activities between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as due from/to other funds (i.e., current portion of interfund loans).

G. Prepaid Items

Prepaid items are payments made to vendors for services that will benefit periods beyond the fiscal year ended using the purchase method.

H. Capital Assets

In the government-wide financial statements, capital assets, which include land, buildings, improvements, equipment, furniture, and infrastructure assets (e.g., roads, sidewalks, and similar items), are recorded at historical cost or estimated historical if purchased or constructed. Donated capital assets are valued at their estimated acquisition value on the date donated. City policy has set the capitalization threshold for reporting capital assets with an initial, individual cost of more than $2,500 for general capital asserts and $5,000 for infrastructure capital assets, and an estimated useful life of one year or more.

The City defines infrastructure as the basic physical assets that allow the City to function. The assets include:

Street system
Site amenities such as parking and landscaped areas used by the City in conduct of its business.

Each major infrastructure system can be divided into subsystems. For example, the street system can be subdivided into pavement, curb and gutters, sidewalks, medians, streetlights, traffic control devices (signals), and land. These subsystems were not delineated in the basic financial statements. The appropriate operating department maintains information regarding the subsystems.

The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized.

147
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
56 Note 1 Summary of Significant Accounting Policies (Continued)

H. Capital Assets (Continued)
Capital assets used in operations are depreciated over their estimated useful lives using the straight-line method.

The estimated useful lives used for depreciation purposes are as follows:

Building and improvements 15-50 Years
Land improvements 20 Years
Machinery and equipment 5-20 Years
Infrastructure 15-50 Years

I. Leases

Lessee

The City has a policy to recognize a lease liability and a right-to-use asset (lease asset) in the financial statements with an initial, individual value of $5,000 or more with a lease term greater than one year. Variable payments based on future performance or usage of the underlying assets are not included in the measurement of the lease liability.

At the commencement of a lease, the lease liability is measured at the present value of payments expected to be made during the lease term. Subsequently, the lease liability is reduced by the principal portion of lease payments made.

Lease assets are recorded at the amount of the initial measurement of the lease liabilities and modified by any lease payments made to the lessor at or before the commencement of the lease term, less any lease incentives received from the lessor at or before the commencement of the lease term along with any initial direct costs that are ancillary charges necessary to place the lease assets into service. Lease assets are amortized using the straightline method over the shorter of the lease term or the useful life of the underlying asset, unless the lease contains a purchase option that the State has determined is reasonably certain of being exercised. In this case, the lease asset is amortized over the useful life of the underlying asset.

Key estimates and judgments related to leases include how the City determines (1) the discount rate it uses to discount the expected lease payments to present value, (2) lease term, and (3) lease payments.

The City uses the interest rate charged by the lessor as the discount rate. When the interest rate charged by the lessor is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate for leases.

The lease term includes the noncancelable period of the lease, plus any option periods that are reasonably certain to be exercised.

Lease payments included in the measurement of the lease liability are composed of fixed payments and purchase option price that the City is reasonably certain to exercise. The City monitors changes in circumstances that would require a remeasurement of a lease and will remeasure any lease asset and liability if certain changes occur that are expected to significantly affect the amount of the lease liability.

Right to use the lease assets are reported as intangible assets along with other capital assets and lease liabilities are reported with long-term debt on the statement of net position. 148
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
57 Note 1 Summary of Significant Accounting Policies (Continued) I. Leases (Continued)
Lessor

The City is a lessor for leases of buildings and land and recognizes leases receivable and deferred inflows of resources in the financial statements. Variable payments based on future performance or usage of the underlying asset are not included in the measurement of the lease receivable.

At the commencement of a lease, the lease receivable is measured at the present value of payments expected to be received during the lease term. Subsequently, the lease receivable is reduced by the principal portion of lease payments received. The deferred inflows of resources are initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date. Subsequently, the deferred inflows of resources are recognized as revenue over the life of the lease term in a systematic and rational method.

Key estimates and judgments include how the City determines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) lease term, and (3) lease receipts.

The City uses the incremental borrowing rate (IBR) provided by our financial institution at July 1, 2021 for existing leases or the current rate at the time a new lease is executed.

The lease term includes the noncancelable period of the lease plus any option periods that are likely to be exercised.

Lease receipts included in the measurement of the lease receivable is composed of fixed payments from the lessee.

The City monitors changes in circumstances that would require a remeasurement of its lease and will remeasure the lease receivable and deferred inflows of resources if certain changes occur that are expected to significantly affect the amount of the lease receivable.

The City has a policy to recognize a SBITA liability and a right-to-use subscription asset (SBITA asset) in the financial statements with an initial, individual value of $5,000 or more with a subscription term greater than one year. At the commencement of a subscription, when the subscription asset is placed into service, the SBITA liability is measured at the present value of payments expected to be made during the subscription term. Future subscription payments are discounted using the City's incremental borrowing rate and the City recognizes amortization of the discount on the subscription liability as interest expense in subsequent financial reporting periods.

J. Subscription Based Information Technology Arrangements (SBITA) Asset and Liabilities

The City has a policy to recognize a SBITA liability and a right-to-use asset (SBITA asset) in the financial statements with an initial, individual value of $5,000 or more with a contract term greater than one year. SBITA assets are measured as the sum of the initial subscription liability, payments made to the SBITA vendor before the commencement of the lease term, and capitalizable implementation costs less any incentives received from the SBITA vendor at or before the commencement of the subscription term. Subscription assets are amortized using the straight-line method over the subscription term.

149
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
58 Note 1 Summary of Significant Accounting Policies (Continued) J. Subscription Based Information Technology Arrangements (SBITA) Asset and Liabilities (Continued)

Key estimates and judgments related to SBITAs include how the Authority determines (1) the discount rate it uses to discount the expected subscription payments to present value, (2) subscription term, and (3) subscription payments.

The City uses the interest rate charged by the SBITA vendor as the discount rate. When the interest rate charged by the SBITA vendor is not provided, the Authority generally uses its estimated incremental borrowing rate as the discount rate for SBITAs.

The subscription term includes the period during which the City has a noncancelable right to use the underlying IT asset. The subscription term also includes periods covered by an option to extend if it is reasonably certain to be exercised.

Subscription payments included in the measurement of the subscription liability are composed of fixed payments and purchase option years that the Authority is reasonably certain to exercise. The Authority monitors changes in circumstances that would require a remeasurement of a subscription and will remeasure any subscription asset and liability if certain changes occur that are expected to significantly affect the amount of the subscription liability.

Right-to-use subscription assets are reported along with other capital assets and subscription liabilities are reported with long-term debt on the statement of net position.

K. Long-Term Debt

In the government-wide financial statements, long-term debt and other long-term debts are reported as liabilities in the Statement of Net Position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable bond premium or discount.

In the governmental fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuance are reported as other financing sources while discounts on debt issuance are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

L. Unearned and Unavailable Revenue

In the government-wide financial statements, unearned revenue is recognized for transactions for which revenue has not yet been earned. Typical transactions recorded as unearned revenues in the government-wide financial statements are cell phone site license lease payments received in advance, prepaid charges for services and facility rentals paid in advance.

In the governmental fund financial statements, unearned and unavailable revenue is recorded when transactions have not yet met the revenue recognition criteria based on the modified accrual basis of accounting. The City records unearned revenue for transactions for which revenues have not been earned, and unavailable revenue when funds are not available to meet current financial obligations. Typical transactions for which unearned or unavailable revenue is recorded are lease payments, quarterly encroachment fees and advance registration for recreation classes which were not yet earned.

150
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
59 Note 1 Summary of Significant Accounting Policies (Continued)

M. Compensated Absences

City employees have vested interest in varying levels of vacation, sick leave and compensatory time based on their length of employment. It is the policy of the City to pay all accumulated vacation pay and all or a portion of sick pay when an employee retires or terminates. The long-term amount is included as a liability in the governmental activities of the government-wide financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. The General Fund is typically used to liquidate compensated absences. In proprietary funds, compensated absences are expensed to the various funds in the period they are earned, and such funds share of the unpaid liability is recorded as a long- term liability of the fund.

N. Property Taxes

Property tax revenue is recognized in the fiscal year for which the taxes have been levied providing they become available. Available means due, or past due and receivable within the current period and collected within the current period or expected to be collected soon enough thereafter (not to exceed 60 days) to be used to pay liabilities in the current period.

Under California law, property taxes are assessed and collected by the counties at up to 1% of assessed value, plus other increases approved by the voters. The property taxes go into a pool, and are then allocated to the cities based on complex formulas. The County of Contra Costa levies, bills and collects property taxes and special assessments for the City and remits the full assessment regardless of the amounts received under a Teeter plan arrangement.

Secured Unsecured
Lien Date January 1 preceding fiscal year January 1 preceding fiscal year Due Date November 1 & February 1 August 31
Delinquent Date December 10 & April 10 September 1

O. Interfund Transactions

P. Claims Payable

The City records a liability to reflect an actuarial estimate of ultimate uninsured losses for both general liability claims (including property damage claims) and workers compensation claims. The estimated liability for workers compensation claims and general liability claims includes incurred but not reported (IBNR) claims. There is no fixed payment schedule to pay these liabilities.

Q. Pensions

For purposes of measuring the aggregate net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the 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 (Note 8). For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with benefit terms. Investments are reported at fair value.

151
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
60 Note 1 Summary of Significant Accounting Policies (Continued) Q. Pensions (Continued)

The following timeframes are used for pension reporting:

CalPERS
Valuation Date June 30, 2022
Measurement Date June 30, 2023
Measurement Period July 1, 2022 - June 30, 2023

Gains and losses related to changes in total pension liability and fiduciary net position are recognized in pension expense systematically over time. The first amortized amounts are recognized in pension expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to pensions and are to be recognized in future pension expense. The amortization period differs depending on the source of the gain or loss. The difference between projected and actual earnings is amortized straight-line over 5 years. All other amounts are amortized straight-line over the average expected remaining service lives of all members that are provided with benefits (active, inactive, and retired) as of the beginning of the measurement period.

The General Fund is typically used to pay pension benefits. In proprietary funds, pension benefits are expensed to the various funds in the period they are earned, and such funds share of the unpaid liability is recorded as a long- term liability of the fund.

R. Other Postemployment Benefits (OPEB)

For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the plans and additions to/deductions from OPEB Plan's fiduciary net position have been determined on the same basis as they are reported by the plan (Note 10). For this purpose, the OPEB plan recognizes benefit payments when due and payable in accordance with the benefit terms. Investments are reported at fair value.

The following timeframes are used for OPEB reporting:

OPEB
Valuation Date June 30, 2023
Measurement Date June 30, 2024
Measurement Period July 1, 2023 - June 30, 2024

Gains and losses related to changes in total OPEB liability and fiduciary net position are recognized in OPEB expense systematically over time. The first amortized amounts are recognized in OPEB expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to OPEB and are to be recognized in future OPEB expense. The amortization period differs depending on the source of gain or loss. The difference between projected and actual earnings is amortized on a straight-line basis over 5 years. All other amounts are amortized on a straight-line basis over the average expected remaining service lives of all members that are provided with benefits (active, inactive, and retired) at the beginning of the measurement period.
152
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
61 Note 1 Summary of Significant Accounting Policies (Continued) S. Deferred Outflows of Resources and Deferred Inflows of Resources

The Statement of Net Position and the Balance Sheet Governmental Funds report separate sections for Deferred Outflows of Resources and Deferred Inflows of Resources, when applicable.

Deferred Outflows of Resources represent a consumption of net assets that applies to future periods.

Deferred Inflows of Resources represent an acquisition of net assets that applies to future periods.

T. Net Position

In the government-wide financial statements and proprietary fund financial statements, net position is classified as follows:

Net Investment in Capital Assets This component of net position consists of capital assets, net of accumulated depreciation and amortization and reduced by any debt outstanding and any deferred outflows/inflows of resources related to such borrowings that are attributable to the acquisition, construction or improvement of those assets. If there are significant unspent related debt proceeds at year-end, the portion of the debt attributable to the unspent proceeds is not included in the calculation of net investment in capital assets. Rather, that portion of the debt is offset by unspent proceeds.

Restricted This component of net position consists of restricted assets reduced by liabilities and deferred inflows of resources related to those assets.

Unrestricted This component of net position is the amount of the assets, deferred outflows of resources, liabilities, and deferred inflows of resources that are not included in the determination of net investment in capital assets or the restricted component of net position.

U. Use of Estimates

The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

V. Fund Balances

In the governmental fund financial statements, fund balances are classified as follows:

Nonspendable Nonspendable fund balances include amounts that cannot be spent because they are not in a spendable form, such as loans receivable or inventory, or because resources legally or contractually must remain intact.

Restricted Restricted fund balances are the portion of fund balance that have externally enforceable limitations on their usage through legislation or limitations imposed by creditors, grantor, laws and regulations of other governments or enabling legislation.

153
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
62 Note 1 Summary of Significant Accounting Policies (Continued)

V. Fund Balances (Continued)

Committed Committed fund balances are self-imposed limitations by the highest level of decision-making authority, namely the City Council, prior to the end of the reporting period. City Council adoption of a resolution is required to commit resources or to rescind the commitment.

Assigned Assigned fund balances are limitations imposed by management based on the intended use of the funds. Modifications or rescissions of the constraints can be removed by the same type of action that limited the use of the funds. Assignment of resources can be done by the highest level of decision making or by a committee or official designated for that purpose. The City Council has authorized the City Manager for that purpose.

Unassigned Unassigned fund balances represent the residual net resources in excess of the other classifications. The general fund is the only fund that reports a positive unassigned fund balance amount. In other governmental funds, it is not appropriate to report a positive unassigned fund balance amount. However, in governmental funds other than general fund, if expenditures incurred for specific purposes exceed the amounts that are restricted, committed, or assigned to those purposes, it may be necessary to report a negative unassigned fund balance in that fund.

W. Spending Policy

Government-Wide Financial Statements and the Proprietary Fund Financial Statements When expenses are incurred for purposes for which both restricted and unrestricted components of net position are available, the Citys policy is to apply the restricted component of net position first, then the unrestricted component of net position as needed.

Governmental Fund Financial Statements
When expenditures are incurred for purposes for which both restricted and unrestricted fund balances are available, the Citys policy is to apply restricted fund balances first, then unrestricted fund balances as needed.

When expenditures are incurred for purposes where only unrestricted fund balances are available, the City uses the unrestricted resources in the following order, except for instances wherein an ordinance specifies the fund balance:

Committed
Assigned
Unassigned

X. Implementation of New GASB Pronouncements

GASB Statement No. 100 In June 2022, GASB issued Statement No. 100, Accounting Changes and Error Corrections an Amendment of 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. Implementation of this Statement did not have a significant effect on the Citys financial statements for the fiscal year ended June 30, 2024.

154
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
63 Note 1 Summary of Significant Accounting Policies (Continued)

Y. Upcoming New GASB Pronouncements

The City is currently evaluating its accounting practices to determine the potential impact on the financial statements for the following GASB Statements:

GASB Statement No. 101 In June 2022, GASB issued 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 the Citys fiscal year ending June 30, 2025.

GASB Statement No. 102 In December 2023, GASB issued Statement No. 102, Disclosure of Certain Capital Assets. This Statement requires a government 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. Additionally, this Statement 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 Citys fiscal year ending June 30, 2025.

GASB Statement No. 103 In April 2024, GASB issued Statement No. 103, Financial Reporting Model Improvements. The objective of this Statement is to improve key components of the financial reporting model to enhance its effectiveness in providing information that is essential for decision making and assessing a governments accountability. Application of this statement is effective for the Citys fiscal year ending June 30, 2026.

GASB Statement No. 104 In September 2024, GASB issued Statement No. 104, Disclosures of Certain Capital Assets. This Statement requires certain types of capital assets to be disclosed separately in the capital assets note disclosures required by Statement 34. Lease assets recognized in accordance with Statement No. 87, Leases, and intangible right-to-use assets recognized in accordance with Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements, should be disclosed separately by major class of underlying asset in the capital assets note disclosures. Subscription assets recognized in accordance with Statement No. 96, Subscription-Based Information Technology Arrangements , also should be separately disclosed. In addition, this Statement requires intangible assets other than those three types to be disclosed separately by major class.

Application of this statement is effective for the Citys fiscal year ending June 30, 2026.

Note 2 Cash and Investments

The City maintains a cash and investment pool, which includes cash balances and authorized investments of all funds.

The City had the following cash and investments at June 30, 2024:

Governmental Business-type Fiduciary
Activities Activities Funds Total
Cash and investments 40,777,509$ 17,298,713$ 9,875,558$ 67,951,780$ Cash and investments with fiscal agent 2,176,241 2,888 55,798 2,234,927 Cash and investments held in trust 2,391,824 - - 2,391,824 Total 45,345,574$ 17,301,601$ 9,931,356$ 72,578,531$ Primary Government
155
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
64 Note 2 Cash and Investments (Continued)
The Citys cash and investments at June 30, 2024 in more detail:

Cash on hand 2,005$
Deposits with financial institutions 7,077,060
Deposits with trust 2,391,824
Investments 63,107,642
Total 72,578,531$

A. Demand Deposits
The carrying amounts of the Citys demand deposits were $7,077,060 at June 30, 2024. Bank balances at that date were $7,350,733 and the total amount of which was insured or collateralized with accounts held by the pledging financial institutions in the Citys name as discussed below.

The California Government Code requires California banks and savings and loan associations to secure the Citys cash deposits by pledging securities as collateral. This Code states that collateral pledged in this manner shall have the effect of perfecting a security interest in such collateral superior to those of a general creditor. Thus, collateral for cash deposits is considered to be held in the Citys name.

The market value of pledged securities must equal at least 110% of the Citys cash deposits. California law also allows institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the Citys total cash deposits. The City may waive collateral requirements for cash deposits, which are fully insured up to $250,000 by the Federal Deposit Insurance Corporation (FDIC). The City, however, has not waived the collateralization requirements.

B. Investments Authorized by the California Government Code and the City's Investment Policy The table below identifies the investment types that are authorized by the City's investment policy and the California Government Code. The table also identifies certain provisions of the California Government Code (or the City's investment policy, if more restrictive) that address interest rate risk, credit risk, and concentration of credit risk.

This table does not address investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City's investment policy.

Maximum Maximum
Maximum Percentage Investment
Authorized Investment Type Maturity of Portfolio in One Issuer Local Agency Investment Fund (State Pool) N/A $50 Million $50 Million U.S. Treasury Obligations 5 Years None None
U.S. Government Agency Issues 5 Years None None
Insured Deposits with Banks and Savings and Loans N/A None None Bankers Acceptance (Must be Dollar Denominated) 180 Days 40% 30% Commercial Paper 270 Days 15% 10%
Negotiable Time Certificates of Deposits 5 Years 30% $100,000 Nonnegotiable Time Certificates of Deposits 5 Years 30% $100,000 Federally Issued Time Deposits 5 Years None $100,000
Repurchase Agreements 30 Days None 10%
Reverse Repurchase Agreements 92 Days 20% None
Medium-Term Notes 5 Years 30% 15%
Money M arket Mutual Funds N/A 20% 10%
Insured or Passbook Savings Accounts N/A None $100,000

*The table is based on state law requirements or investment policy requirements, whichever is more restrictive. 156
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
65 Note 2 Cash and Investments (Continued)

C. Investments Authorized by Debt Agreements
Maximum Maximum
Maximum Percentage Investment
Authorized Investment Type Maturity of Portfolio in One Issuer Local Agency Investment Fund (State Pool) N/A $50 Million $50 Million U.S. Treasury Obligations 30 Years 20% None
U.S. Government Agency Issues 30 Years 20% None
Insured Deposits with Banks and Savings and Loans N/A None None Bankers Acceptance (Must be Dollar Denominated) 6 Months 40% 30% Commercial Paper 6 Months 15% 10%
Negotiable Time Certificates of Deposits 5 Years 30% $100,000 Nonnegotiable Time Certificates of Deposits 5 Years 30% $100,000 Federally Issued Time Deposits 1 Years 20% None
Repurchase Agreements 30 Days None None
Reverse Repurchase Agreements 92 Days 20% None
Medium-Term Notes 5 Years 30% 15%
Mutual Funds N/A 20% None
Money M arket Funds N/A None None
Insured or Passbook Savings Accounts N/A None $100,000
Guaranteed Investment Contract N/A None None
Investments of debt proceeds held by bond trustee are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City's investment policy. The table below identifies the investment types that are authorized for investments held by bond trustee. The table also identifies certain provisions of these debt agreements that address interest rate risk, and concentration of credit risk.

D. Risk Disclosures
Disclosures Relating to 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 is, the greater 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 and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.

Information about the sensitivity of the fair values of the City's investments (including investments held by bond trustees) to market interest rate fluctuations is provided by the following table that shows the distribution of the City's investments by maturity:

Disclosures Relating to Interest Rate Risk
Maturity
12 Months
Investment Type Total or Less
Investments:

Local Agency Investment Fund 60,872,715$ 60,872,715$ Investments with fiscal agents:

Money Market M utual Funds 2,234,927 2,234,927 Total 63,107,642$ 63,107,642$

157
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
66 Note 2 Cash and Investments (Continued)
D. Risk Disclosures (Continued)

Investments with Fair Values Highly Sensitive to Interest Rate Fluctuations Interest rate risk is the market value fluctuation due to overall changes in the interest rates. It is mitigated by limiting the average maturity of the Citys portfolio, not to exceed three years.

As a means of maintaining liquidity and minimizing interest rate risk, the Citys investment policy limits are as follows:

Percentage
M aturity of Portfolio
Up to One Year 10% M inimum
One Year to Five Years 60% M aximum
M ore Than Five Years 30% M aximum

Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization.

Presented below is the minimum rating required by (where applicable) the California Government Code or the City's investment policy, or debt agreements, and the actual rating as of fiscal year end for each investment type.

Minimum
Legal Not
Investment Type Total Rating AAA Rated
Investments:

Local Agency Investment Fund 60,872,715$ N/A -$ 60,872,715$ Investments with fiscal agents:

Money M arket M utual Funds 2,234,927 N/A 2,234,927 - Total 63,107,642$ 2,234,927$ 60,872,715$ S&P Rating as of Fiscal Year Ended

Concentration of Credit Risk
The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. The City has no investments in any one issuer (other than mutual funds and external investment pools) that represent 5% or more of total City investments.

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 custodial credit risk for investments is the risk that in the event of the failure of the counterparty (e.g., broker dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City's investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the provision for deposits as disclosed in Note 2A.

For investments identified herein as held by bond trustee, the bond trustee selects the investment under the terms of the applicable trust agreement, acquires the investment, and holds the investment on behalf of the reporting government.
158
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
67 Note 2 Cash and Investments (Continued)
E. Investment in Local Agency Investment Fund (LAIF)
The City is a participant in LAIF which is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. As of June 30, 2024, the City had $60,872,715 invested in LAIF. LAIF determines fair value on its investment portfolio based on market quotations for those securities where market quotations are readily available and based on amortized cost or best estimate for those securities where market value is not readily available. LAIF is reported at amortized cost, which approximates fair value.

F. Investment in Money Market Mutual Funds
At June 30, 2024, investments in money market mutual funds are reported at fair value. The City values investments in money market mutual funds at the amortized cost. The funds investment objectives seek preservation of capital, daily liquidity and maximum current income. The portfolios consist of liquid, high-quality debt securities issued by the U.S. Government. The funds offer same day liquidity and as of June 30, 2024 the City had $2,234,927 invested in Money Market Mutual Funds.

Note 3 Loans Receivable
A. Governmental Activities
At June 30, 2024, loans receivable consisted of the following:

Bio-Rad Loan 1,313,328$
Total 1,313,328$

Bio-Rad Loan
The City advanced Bio-Rad Laboratories, Inc. $2,000,000 to construct various tenant improvements in one or more of the buildings located at 203-295 Linus Pauling Drive. The terms of the loan call for monthly payments of $10,418, at an interest rate of 4.5% per annum, with repayments commencing May 15, 2010, through September 14, 2038. The balance outstanding as of June 30, 2024 was $1,313,328.

B. Fiduciary Fund Financial Statements
At June 30, 2024, loans receivable consisted of the following:

Business Development Loans 1,303,012$
Bridge Housing Corporation 2,290,561
Home Emergency Loan 8,293
First Time Homebuyers 765,466
Homeowner Retention/Loss Mitigation 2,424,436
Revitalization and Beautification 178,195
Other Assistance Programs 1,040,098
Total 8,010,061$

Amounts shown above are net of an allowance for uncollectible accounts of $335,016 for Housing Program Loans.

The Successor Agency to the Redevelopment Agency of the City of Hercules, a private purpose trust fund continues to administer the above listed outstanding loans receivable as it winds down the activities of the former Redevelopment Agency.
159
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
68 Note 4 Lease Receivable
At June 30, 2024, lease receivable consisted of the following:

Bio-Rad Laboratories, Inc. 8,121,146$
Other lease receivable 408,855
Total 8,530,001$

A. Bio-Rad Laboratories Lease Receivable

On August 14, 2008, the City and Bio-Rad Laboratories, Inc. entered in to a lease agreement, which Bio-Rad agreed to lease from the City, the premises, consisting of the land located in the City of Hercules, County of Contra Costa, state of California, commonly known as the Venture Commerce Center located at 203-295 Linus Pauling Drive, including five (5) buildings consisting of approximately 96,847 rentable square feet, together with the parking lot and associated improvements serving the buildings.

The term of this lease shall be for thirty (30) years, commencing on September 15, 2008 and ending on September 14, 2038, or terminated sooner pursuant to the terms of this lease. Bio-Rad Laboratories, Inc. has the option to terminate this lease anytime on or after the fifteenth (15th) anniversary date as to a portion or the entire premises by delivering to the City not later than three (3) months prior to said fifteenth (15th) anniversary date or any applicable later termination date, a notice of such election.

The City granted to Bio-Rad Laboratories, Inc. the option to purchase the premises, Bio-Rad Laboratories, Inc. may elect to exercise the Purchase Option by delivering to the City written notice of such election within 30 days prior to either of the following dates: (i) the fifteenth (15th) anniversary date; (ii) the twentieth (20th) anniversary date; or (iii) the twenty-fifth (25th) anniversary date, If Bio-Rad Laboratories, Inc. has not elected to exercise the Purchase Option during the time period said above, then the Purchase Option shall automatically be deemed elected by Bio- Rad Laboratories, Inc. as of the expiration date unless Bio-Rad Laboratories, Inc., provides prior written notice to the City of Hercules within fifteen (15) days prior to the expiration date electing not to pursue the Purchase Option, If Bio-Rad Laboratories, Inc. elects to exercise the Purchase Option on the expiration date, the purchase price for the premises shall be one dollar ($1.00).

Total lease revenue of $26,723,100 will be received from the Bio-Rad Laboratories, Inc. during the term of lease.

The interest rate on the lease payments is 8.0381%. Monthly lease payments vary from $55,300 to $83,699 will be received on the first day of each month without notice, offset, deduction, or demand, in advance, during the lease term. For the year ended June 30, 2024, the City recognized $253,325 in lease revenue and $667,653 in interest revenue.

The outstanding receivable is in the amount of $8,121,146. The future required payments for this lease, including interest, is as follows:

Year Ending June 30, Principal Interest Total
2025 281,064$ 646,166$ 927,230$
2026 311,131 622,351 933,482
2027 343,720 596,014 939,734
2028 379,042 566,943 945,985
2029 423,101 534,737 957,838
2030-2034 2,860,709 2,053,161 4,913,870
2035-2039 3,522,379 639,693 4,162,072
8,121,146$ 5,659,065$ 13,780,211$
Governmental Activities

160
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
69 Note 4 Lease Receivable (Continued)
B. Other Lease Receivable

Lease receivables consist of agreements with others for the righttouse of the underlying assets for land and building owned by the City at various locations. The remaining terms of the agreements range from 1 to 10 years.

The incremental borrowing rates used ranged from 2.38%. For the year ended June 30, 2024, the City recognized $123,812 in lease revenue and $11,222 in interest revenue. The outstanding receivables are in the amounts of $408,855. The future required payments for these leases, including interest, are as follows:

Year Ending June 30, Principal Interest Total
2025 91,726$ 8,737$ 100,463$
2026 95,028 6,518 101,546
2027 91,306 4,226 95,532
2028 48,458 2,500 50,958
2029 19,856 1,744 21,600
2030-2032 62,481 2,319 64,800
408,855$ 26,044$ 434,899$
Governmental Activities

Note 5 Interfund Transactions

A. Due From and To Other Funds

At June 30, 2024, the Citys Due to and from Other Funds are as follows:

Due From Other Funds (Receivable) Due To Other Funds (Payable) Amount General Fund Hercules Debt Service Fund 4,471$
General Fund Nonmajor Governmental Funds 1,477,547
Total 1,482,018$

The due to/from other funds are to provide cash flow for the funds with negative cash and for other short-term borrowings between funds.

B. Advances To and From Other Funds

At June 30, 2024, the Citys Advances To and From Other Funds are as follows:

Advance To Other Funds (Receivable) Advances From Other Funds (Payable) Amount General Fund Landscape & Lighting Assessment District
(LLAD) No. 83-2 Special Revenue Fund 418,803$
General Fund Nonmajor Governmental Funds 102,900
Total 521,703$

The advances were for the City Council approved capital improvements.

161
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
70 Note 5 Interfund Transactions (Continued)

C. Transfers In and Out

The City had the following transfers for the year ended June 30, 2024:

Transfer In Transfer Out Amount
General Fund Nonmajor Governmental Funds 406,727$
Landscape & Lighting Assessment District
(LLAD) No. 83-2 Special Revenue Fund Nonmajor Governmental Funds 31,037 Hercules Debt Service Fund General Fund 563,316
Nonmajor Governmental Funds General Fund 875,609
Nonmajor Governmental Funds Landscape & Lighting Assessment District (LLAD) No. 83-2 Special Revenue Fund 265,060
Nonmajor Governmental Funds Nonmajor Governmental Funds 201,882 Total 2,343,631$

$406,727 transferred to the General Fund from the Nonmajor Special Revenue Funds were for the capital related expenditures and the public safety related expenditures in the amounts of $250,000 and $156,727, respectively.

$31,027 transfers to the Landscape & Lighting Assessment District (LLAD) No. 83-2 Special Revenue Fund from the Nonmajor Governmental Funds was for the Citys general benefit contributions.

$265,060 transferred to the Debt Service Fund from the General Fund was for the debt service payments.

$563,316 transfers to the Hercules Debt Service Fund was for the debt service payments.

$1,342,551 transferred to the Nonmajor Governmental Funds includes:

$235,897 from the General Fund was for the debt service payments. $639,712 from the General Fund was for the capital related projects costs. $265,060 from Landscape & Lighting Assessment District (LLAD) No. 83-2 Special Revenue Fund for the Citys general benefit contributions.
$201,882 from Nonmajor Governmental Funds were for the Citys general benefit contributions and to reimburse the stormwater for the street sweeping services approve by Council through Solid Waste Project Fund Expenditure Plan.
162
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
71 Note 6 Capital Assets

A. Governmental Activities

Summary of changes in governmental activities capital assets for the year ended June 30, 2024 was as follows:

Balance Reclassification/ Balance
July 1, 2023 Additions Retirements Transfers June 30, 2024 Nondepreciable assets:

Land 5,081,587$ -$ -$ -$ 5,081,587$ Construction in progress 1,560,376 1,927,356 - (1,922,480) 1,565,252 Total nondepreciable assets 6,641,963 1,927,356 - (1,922,480) 6,646,839 Depreciable assets:

Land improvements 15,911,314 89,766 - - 16,001,080 Building and improvements 26,792,183 - - - 26,792,183 Machinery and equipment 7,747,692 175,680 (31,142) - 7,892,230 Infrastructure 113,444,645 - - 1,922,480 115,367,125 Subtotal 163,895,834 265,446 (31,142) 1,922,480 166,052,618 Less: accumulated depreciation:

Land improvements (10,239,089) (249,811) - - (10,488,900) Building and improvements (12,089,510) (742,314) 31,142 - (12,800,682) Machinery and equipment (7,680,194) (273,966) - - (7,954,160) Infrastructure (62,582,419) (2,277,320) - - (64,859,739) Subtotal (92,591,212) (3,543,411) 31,142 - (96,103,481) Total depreciable assets, net 71,304,622 (3,277,965) - 1,922,480 69,949,137 Total capital assets, net 77,946,585 (1,350,609) - - 76,595,976 Intangible, being amortized
Right-to-use lease assets 34,778 - (25,421) - 9,357 Right-to-use subscription assets 90,502 - - - 90,502 Total intangible assets, being amortized 125,280 - (25,421) - 99,859 Less: accumulated amortization:

Right-to-use lease assets (20,494) (8,785) 25,421 - (3,858) Right-to-use subscription assets (28,206) (28,205) - - (56,411) Total accumulated amortization (48,700) (36,990) 25,421 - (60,269) Total intangible assets, being amortized, net 76,580 (36,990) - - 39,590 Governmental activities capital assets, net 78,023,165$ (1,387,599)$ -$ -$ 76,635,566$

Depreciation and amortization expenses were charged to functions/programs of governmental activities for the year ended June 30, 2024 as follows:

Depreciation and Amortization Expenses Allocation
General government 492,375$
Public safety 47,291
Public works 2,579,350
Parks and recreation 213,994
Internal service funds 247,391
Total 3,580,401$

163
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
72 Note 6 Capital Assets (Continued)
B. Business-Type Activities

Summary of changes in business-type activities capital assets for the year ended June 30, 2024 was as follows:

Balance Reclassification/ Balance
July 1, 2023 Additions Retirements Transfers June 30, 2024 Nondepreciable assets:

Land 191,700$ -$ -$ -$ 191,700$ Construction in progress 3,264,814 10,417,611 (40,395) - 13,642,030 Total nondepreciable assets 3,456,514 10,417,611 (40,395) - 13,833,730 Depreciable assets:

Building and improvements 38,325,271 - - - 38,325,271 Machinery and equipment 250,345 - - - 250,345 Infrastructure 14,945,319 - - - 14,945,319 Subtotal 53,520,935 - - - 53,520,935 Less: accumulated depreciation:

Building and improvements (11,144,389) (101,399) - - (11,245,788) Machinery and equipment (219,954) (4,559) - - (224,513) Infrastructure (5,233,749) (861,674) - - (6,095,423) Subtotal (16,598,092) (967,632) - - (17,565,724) Total depreciable assets, net 36,922,843 (967,632) - - 35,955,211 Total capital assets, net 40,379,357$ 9,449,979$ (40,395)$ -$ 49,788,941$

Depreciation expense was charged to the Wastewater Fund within business-type activities as follows:

Depreciation Expenses Allocation
Wastewater 967,632$
Total 967,632$
164
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
73 Note 6 Capital Assets (Continued)

C. Fiduciary Fund Financial Statements
Summary of changes in Fiduciary Fund capital assets for the year ended June 30, 2024 was as follows:

Balance Reclassification/ Balance
July 1, 2023 Additions Retirements Transfers June 30, 2024 Nondepreciable assets:

Land 236,986$ -$ -$ -$ 236,986$ Construction in progress 13,853,698 - - - 13,853,698 Total nondepreciable assets 14,090,684 - - - 14,090,684 Depreciable assets:

Land improvements 9,776,751 - - - 9,776,751 Building and improvements 4,967,778 - - - 4,967,778 Machinery and equipment 116,445 - - - 116,445 Infrastructure 6,206,831 - - - 6,206,831 Subtotal 21,067,805 - - - 21,067,805 Less: accumulated depreciation:

Land improvements (5,510,785) (277,401) - - (5,788,186) Building and improvements (3,450,756) (99,437) - - (3,550,193) Machinery and equipment (81,824) (5,810) - - (87,634) Infrastructure (4,238,999) (285,943) - - (4,524,942) Subtotal (13,282,364) (668,591) - - (13,950,955) Total depreciable assets, net 7,785,441 (668,591) - - 7,116,850 Total capital assets, net 21,876,125$ (668,591)$ -$ -$ 21,207,534$

Depreciation expense was charged to the Successor Agency Private Purpose Trust Fund within the Fiduciary Fund Financial Statements as follows:

Depreciation Expenses Allocation
Successor Agency 668,591$
Total 668,591$

165
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
74 Note 7 Long-Term Debt
A. Governmental Activities

Summary of changes in Governmental Activities long-term debt for the year ended June 30, 2024 was as follows:

Balance Balance Due within Due in More
July 1, 2023 Additions Deletions June 30, 2024 One Year Than One Year Publicly Offered:
2009 PFA T axable Lease Revenue Bonds 7,930,000$ -$ (255,000)$ 7,675,000$ 275,000$ 7,400,000$ Less: Discount on issuance (259,441) - 17,297 (242,144) - (242,144) 2020 PFA Lease Revenue Refunding Bonds 5,490,180 - (448,561) 5,041,619 457,061 4,584,558 H.E.L.P. Loan 1,363,521 - (75,933) 1,287,588 76,133 1,211,455 R.D.L.P. Loan 3,750,000 - - 3,750,000 - 3,750,000 Engie Energy Conservation Loan 4,000,642 - (127,479) 3,873,163 130,064 3,743,099 Lease liability 14,526 - (8,880) 5,646 1,838 3,808 Subscription liability 56,936 17,823 (41,626) 33,133 11,560 21,573 Compensated absences 729,432 517,837 (509,658) 737,611 553,207 184,404 T otal 23,075,796$ 535,660$ (1,449,840)$ 22,161,616$ 1,504,863$ 20,656,753$

2009 Public Financing Authority Taxable Lease Revenue Bonds (Bio-Rad Project) The Authority issued taxable lease revenue bonds, series 2009, dated July 29, 2009, totaling $10,080,000. The purpose of the bonds was to finance the acquisition of certain commercial condominium properties, consisting of approximately 96,847 square feet located at 203-295 Linus Pauling Drive within the City from the City, funding a reserve fund for the Bonds and to paying the costs of issuance of the Bonds. The interest rates on the bonds range from 6.00% to 8.40%. The interest is payable semiannually on January 1 and July 1, commencing January 1, 2010.

The bonds are subject to optional special mandatory redemption, and mandatory sinking account redemption provisions. The bonds are payable from and secured by revenues consisting primarily of the base rental payments of the property lease, Principal is due annually beginning on July 1, 2010, in amounts ranging from $165,000 to $845,000. The bonds mature on July 1, 2038. The principal outstanding balance and the unamortized issuance discount at June 30, 2024 are $7,675,000 and $242,144, respectively.

The Bonds constitute limited obligations of the Authority payable solely from Revenues. The Authority has no taxing power. The obligation of the City to make City Advances does not constitute an obligation of the City which the City is obligated to levy or pledge any form of taxation or for which the City has levied or pledged any form of taxation.

Future debt service requirements on the 2009 Public Financing Authority Taxable Lease Revenue bonds are as follows:

Year Ending
June 30, Principal Interest Total
2025 275,000$ 630,296$ 905,296$ 2026 300,000 606,578 906,578 2027 325,000 580,796 905,796 2028 350,000 552,953 902,953 2029 380,000 522,840 902,840 2030-2034 2,420,000 2,062,733 4,482,733 2035-2039 3,625,000 809,550 4,434,550 Total 7,675,000$ 5,765,746$ 13,440,746$ 166
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
75 Note 7 Long-Term Debt (Continued)
A. Governmental Activities (Continued)

2020 Hercules Public Financing Authority Lease Revenue Refunding Bonds The Hercules Public Financing Authority issued Lease Revenue Refunding Bond series 2020, dated August 1, 2020, totaling $5,876,843. The purpose of the bonds was to finance and to refinance the acquisition and or construction of certain real property and public capital improvements of the City. The issuance of the 2020 Lease Revenue Refunding Bond (the 2020 Refunding Bond) resulted in cash flow savings of $947,702 over the life of the Bond. The City has structured the refinancing to achieve nearly all of the cash flow savings in the first three fiscal years: $458,382, $435,857, and $53,463 during years ended 2021, 2022, and 2023, respectively. The principal outstanding balance at June 30, 2024 is $5,041,619.

Future debt service requirements on the 2020 Hercules Public Financing Authority Lease Revenue Refunding Bond are as follows:

Year Ending
June 30, Principal Interest Total
2025 457,061$ 106,369$ 563,430$ 2026 465,032 96,180 561,212 2027 477,396 85,766 563,162 2028 489,075 75,087 564,162 2029 500,055 64,157 564,212 2030-2034 2,653,000 148,998 2,801,998 Total 5,041,619$ 576,557$ 5,618,176$

Housing Enabled by Local Partnerships (H.E.L.P.) Loan (H.E.L.P Loan) In April 2005 the City entered into an agreement with the California Housing Finance Agency (Agency), a public instrumentality and political subdivision of the State of California to develop a 50-unit multifamily rental project that is a component to a mixed-used development, also consisting of 26,825 square feet of ground-floor commercial space. The Agency has authorized the making of a loan in the amount of $1,600,000 known as the Housing Enabled by Local Partnerships (H.E.L.P.) to the City for the purpose of assisting in operating a local housing program. Under the terms of this original agreement the City agreed to reimburse the Agency $1,600,000, 10 years from April 11, 2005 at a 3% simple per annum interest. Interest is to be charged only on funds disbursed. In October 2013, the City and Agency amended the agreement to extend the due date of the loan and accumulated interest until April 2027 and to reduce the interest rate to 1.5% simple interest effective October 31, 2013. The balance at June 30, 2024 is $1,287,588.

The annual debt service requirements to maturity for the H.E.L.P. Loan as of June 30, 2024 are as follows:

Year Ending
June 30, Principal Interest Total
2025 76,133$ 23,867$ 100,000$ 2026 1,211,455 18,733 1,230,188 Total 1,287,588$ 42,600$ 1,330,188$ 167
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
76 Note 7 Long-Term Debt (Continued)
A. Governmental Activities (Continued)

Residential Development Loan Program Loan (R.D.L.P Loan) In February 2007, the City entered into a loan agreement with the California Housing Finance Agency (Agency) in the amount of $3,750,000 ($1,750,000 for predevelopment costs and $2,000,000 for construction costs). The funds will be used to assist with site acquisition, predevelopment, and construction costs for 23 affordable ownership units within a 52-unit condominium project, which is a component to the Sycamore Downtown Street project, a mixed-use, mixed-income development. Under the terms of the original agreement, the City agreed to repay the Agency $3,750,000, four years from February 2007 at 3% simple per annum interest. In October 2013, the City and Agency amended the agreement to extend the due date of the loan and accumulated interest until April 2027 and to reduce the interest rate to 1.5% simple interest effective October 31, 2013. The balance at June 30, 2024 is $3,750,000.

The annual debt service requirements to maturity for the R.D.L.P. Loan as of June 30, 2024 are as follows:

Year Ending
June 30, Principal Interest Total
2025 -$ 100,000$ 100,000$ 2026 - 100,000 100,000 2027 3,750,000 113,572 3,863,572 Total 3,750,000$ 313,572$ 4,063,572$

Engie Construction Loan
On August 14, 2020, the City entered into an equipment finance purchase agreement for the implementation of the Option A Energy Services Contract. Interest rate is 2.71%, 30/360 basis, and payment commencing August 14, 2020 and ending on September 14, 2040. The balance at June 30, 2024 is $3,873,163.

The annual debt service requirements to maturity for the rental payment as of June 30, 2024 are as follows:

Year Ending
June 30, Principal Interest Total
2025 130,064$ 104,963$ 235,027$ 2026 143,641 101,438 245,079 2027 158,064 97,545 255,609 2028 173,379 93,262 266,641 2029 189,633 88,563 278,196 2030-2034 1,228,545 355,951 1,584,496 2035-2039 1,329,729 172,191 1,501,920 2040-2041 520,108 21,069 541,177 Total 3,873,163$ 1,034,982$ 4,908,145$

168
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
77 Note 7 Long-Term Debt (Continued)
A. Governmental Activities (Continued)

Lease Liabilty
The City has entered into leases for the machine uses. The terms of the agreements range from 13 months to 33 months. The calculated interest rate used was 2.38% based on the term of the agreements. Principal and interest payments to maturity at June 30, 2024 are as follows:

Year Ending
June 30, Principal Interest Total
2025 1,838$ 114$ 1,952$ 2026 1,882 70 1,952 2027 1,926 25 1,951 Total 5,646$ 209$ 5,855$

Subscription Liability
The City has entered into subscriptions for information technology arrangements. The terms of the arrangements range from 24 to 36 months with implicit rates used between 2.354% to of 2.876%. Principal and interest to maturity are as follows:

Year Ending
June 30, Principal Interest Total
2025 11,560$ 607$ 12,167$ 2026 11,852 308 12,160 2027 9,721 280 10,001 Total 33,133$ 1,195$ 34,328$

Compensated Absences
There is no fixed payment schedule for earned but unpaid compensated absences.

B. Business-Type Activities

Summary of changes in Business-Type Activities long-term debt for the year ended June 30, 2024 was as follows:

Balance Balance Due within Due in More
July 1, 2023 Additions Deletions June 30, 2024 One Year T han One Year State Water Resources Construction Loan
Construction Loan 21,009,706$ -$ (1,153,672)$ 19,856,034$ 1,173,285$ 18,682,749$ Wastewater Revenue Bonds, Series 2021A 8,095,000 - (365,000) 7,730,000 375,000 7,355,000 Compensated absences 52,166 38,753 (34,873) 56,046 42,035 14,011 T otal 29,156,872$ 38,753$ (1,553,545)$ 27,642,080$ 1,590,320$ 26,051,760$

169
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
78 Note 7 Long-Term Debt (Continued)

B. Business-Type Activities (Continued)
State Water Resources Construction Loan
In June 2016, the City entered into an installment sale agreement with the California State Water Resources Control Board in the amount of $26,500,000. The funds are for construction costs for the Pinole-Hercules Wastewater Pollution Control Plant Improvement Project. The interest rate on the loan is 1.7%. The first principal and interest payment are due August 31, 2019, and is contingent on the total drawdowns at project completion. The loan matures on August 31, 2038. The City has drawn down $25,458,720 of the loan principal including construction loan interest as of June 30, 2024. The balance at June 30, 2024 is $19,856,034.

The annual debt service requirements to maturity for as of June 30, 2024 are as follows:

Year Ending
June 30, Principal Interest Total
2025 1,173,285$ 337,553$ 1,510,838$ 2026 1,193,230 317,606 1,510,836 2027 1,213,515 297,322 1,510,837 2028 1,234,145 276,692 1,510,837 2029 1,255,127 255,712 1,510,839 2030-2034 6,603,033 951,153 7,554,186 2035-2039 7,183,699 370,486 7,554,185 Total 19,856,034$ 2,806,524$ 22,662,558$

Wastewater Revenue Bonds, Series 2021A
In July, 2021, the City issued the Direct Purchase Lease in the amount of $8,450,000. The bonds bear interest at

2.38%. Interest on the bonds is payable semi-annually on February 1 and August 1 in each year, commencing February 1, 2022. Principal payments are due in annual installments ranging from $355,000 to $545,000, commencing August 1, 2022 through August 1, 2040. The principal balance at June 30, 2024 is $7,730,000.

In the event of default, the City shall declare the entire principal amount of the unpaid series 2021 installment payments and accrued inteest thereon to be due and payable immediately in wirting.

The annual debt service requirements to maturity for as of June 30, 2024 are as follows:

Year Ending
June 30, Principal Interest Total
2025 375,000$ 179,512$ 554,512$ 2026 385,000 170,468 555,468 2027 395,000 161,186 556,186 2028 400,000 151,725 551,725 2029 410,000 142,086 552,086 2030-2034 2,200,000 557,515 2,757,515 2035-2039 2,485,000 279,115 2,764,115 2040-2041 1,080,000 25,823 1,105,823 Total 7,730,000$ 1,667,430$ 9,397,430$

170
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
79 Note 7 Long-Term Debt (Continued)
C. Fiduciary Fund Financial Statements

A summary of changes in Fiduciary Fund long-term debt for the year ended June 30, 2024 was as follows:

Balance Balance Due within Due in More
July 1, 2023 Additions Deletions June 30, 2024 One Year Than One Year Publicly Offered:
2022A Tax Allocation 29,510,000$ -$ -$ 29,510,000$ -$ 29,510,000$ Plus: Bond Premium 2,863,743 - (150,065) 2,713,678 - 2,713,678 2022B T ax Allocation - Federally T axable 48,580,000 - - 48,580,000 455,000 48,125,000 Notes Payable 363,257 - - 363,257 - 363,257 Total 81,317,000$ -$ (150,065)$ 81,166,935$ 455,000$ 80,711,935$

2022 Tax Allocation Bonds Series A and B
On May 1, 2022, the Successor Agency to the Hercules Redevelopment Agency issued Tax Allocation Refunding Bonds, Series 2022A and 2022B to currently refund 2005 Tax Allocation Bonds, 2007A and B Housing Tax Allocation Bonds, and 2007 RDA Tax Allocation Bonds. The economic gain on the current refunding was $2,171,280 and the saving in debt service payment is $13,014,042.

The Series A bonds bear interest at 5% and the Series B bonds bear interest rates range from 2.568% to 5.013%.

Principal on the bonds is payable annually on August 1 in each year, commencing August 1, 2022 ranging from $455,000 to $15,000,000. Interest on the bonds is payable semi-annually on February 1 and August 1 in each year, commencing August 1, 2022. The balances at June 30, 2024 for the Series A and B are $29,510,000 and $48,580,000, respectively.

In the event of default, the City shall declare the entire principal amount of the unpaid Series 2022 A and B installment payments and accrued inteest thereon to be due and payable immediately in writing.

The annual debt service requirements to maturity for as of June 30, 2024 are as follows:

2022 Series A
Year Ending
June 30, Principal Interest Total
2025 -$ 1,475,500$ 1,475,500$ 2026 - 1,475,500 1,475,500 2027 - 1,475,500 1,475,500 2028 - 1,475,500 1,475,500 2029 - 1,475,500 1,475,500 2030-2034 - 7,377,500 7,377,500 2035-2039 17,225,000 5,164,875 22,389,875 2040-2043 12,285,000 1,265,875 13,550,875 Total 29,510,000$ 21,185,750$ 50,695,750$ 171
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
80 Note 7 Long-Term Debt (Continued)
C. Fiduciary Fund Financial Statements (Continued)
2022 Series B
Year Ending
June 30, Principal Interest Total
2025 455,000$ 2,152,254$ 2,607,254$ 2026 4,310,000 2,067,790 6,377,790 2027 4,465,000 1,904,991 6,369,991 2028 4,635,000 1,723,327 6,358,327 2029 4,830,000 1,522,466 6,352,466 2030-2034 27,625,000 4,001,099 31,626,099 2035 2,260,000 56,647 2,316,647 Total 48,580,000$ 13,428,574$ 62,008,574$

Notes Payable
In 1987, the Agency entered into Owner Participation Agreements with certain property owners (East Group, Bio Rad Laboratories, and Eden Housing) in the Redevelopment Area. Under the terms of these agreements, the Agency signed notes under which it promised to reimburse the owners by the year 2016 for the amount of incremental assessments levied on their properties, up to the cost of constructing public improvements. Payment on these notes is contingent on the property taxes and special assessments levied on these owners. As of June 30, 2024, the Agencys long-term notes payable for East Group and Bio Rad Laboratories were $147,097 and $216,160, respectively.

D. Non-City Obligations

The following District Bonds are not general obligations of the City nor any other political subdivision and the full faith and credit of the City is not pledged for repayment thereof since these debts do not constitute an obligation of the City and the City is not obligated to make payment beyond the available bond reserves, these bonds have not been reflected in the long-term debt in the accompanying financial statements.

Original Balance
Issuance June 30, 2024
3,006,859$ 2,289,540$ Refunding Reassessment District 2005-1 (John Muir Parkway) 172
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
81 Note 8 Retirement Plans
Summary of deferred outflows of resources related to pension, net pension liabilities, and deferred inflows of resources related to pension for both governmental activities and business-type activities for the year ended June 30, 2024 are as follows:

Governmental Business-Type
Activities Activities Total
Deferred outflows of resources:

Pension contributions made after measurement date:

CalPERS Miscellaneous 789,428$ 101,808$ 891,236$ CalPERS Safety 1,262,313 - 1,262,313 Total pension contribution made after measurement date 2,051,741 101,808 2,153,549 Change of assumptions:

CalPERS Miscellaneous 510,847 65,881 576,728 CalPERS Safety 685,349 - 685,349 Total difference due to change in assumption 1,196,196 65,881 1,262,077 Difference between projected and actual investment earnings:

CalPERS Miscellaneous 1,369,959 176,676 1,546,635 CalPERS Safety 1,607,052 - 1,607,052 Total difference between projected and actual investment earnings: 2,977,011 176,676 3,153,687 Adjustment due to difference in proportions
CalPERS Safety 156,385 - 156,385 Total adjustment due to difference in proportions 156,385 - 156,385 Difference between expected and actual experience
CalPERS Miscellaneous 432,247 55,745 487,992 CalPERS Safety 862,167 - 862,167 Total difference between expected and actual experience 1,294,414 55,745 1,350,159 Total deferred outflows of resources
CalPERS Miscellaneous 3,102,481 400,110 3,502,591 CalPERS Safety 4,573,266 - 4,573,266 Total deferred outflows of resources 7,675,747$ 400,110$ 8,075,857$ Net pension liabilities:

CalPERS Miscellaneous 8,461,277$ 1,091,205$ 9,552,482$ CalPERS Safety 11,743,165 - 11,743,165 Total net pension liabilities 20,204,442$ 1,091,205$ 21,295,647$

173
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
82 Note 8 Retirement Plans (Continued)

Governmental Business-Type
Activities Activities Total
Deferred inflows of resources:

Adjustment due to difference in proportions
CalPERS Miscellaneous 185,649$ 23,942$ 209,591$ Total adjustment due to difference in proportions 185,649 23,942 209,591 Difference between expected and actual experience:

CalPERS Miscellaneous 67,053 8,647 75,700 CalPERS Safety 73,811 - 73,811 Total difference between projected and actual investment earnings: 140,864 8,647 149,511 Employer contributions in excess of proportionate share of contribution
CalPERS Miscellaneous 411,127 53,021 464,148 CalPERS Safety 801,563 - 801,563 Total employer contributions in excess of proportionate share of contribution 1,212,690 53,021 1,265,711 Total deferred inflows of resources
CalPERS Miscellaneous 663,829 85,610 749,439 CalPERS Safety 875,374 - 875,374 Total deferred inflows of resources 1,539,203$ 85,610$ 1,624,813$ Pension expenses (credits):

CalPERS Miscellaneous 1,160,161$ 94,161$ 1,254,322$ CalPERS Safety 1,614,819 - 1,614,819 Total net pension expenses 2,774,980$ 94,161$ 2,869,141$

A. General Information About the Pension Plans
Plan Description
The City contributes to CalPERS, a cost-sharing multiple-employer defined benefit pension plan, for its qualified permanent and probationary miscellaneous and safety employees. California Public Employees Retirement System (CalPERS) provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. 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. Copies of CalPERS annual financial report may be obtained from its website at https://www.calpers.ca.gov/ under Forms and Publications.

Employees Covered by Benefit Terms
At valuation date of June 30, 2022, the following employees were covered by the benefit terms:

Miscellaneous Miscellaneous S afety Safety Safety
Classic PEPRA Classic Tier 2 PEPRA
Active employees 25 22 8 1 18 Transferred employees 50 14 4 1 9 Separated employees 91 15 4 1 6 Retired employees and beneficiaries 94 1 39 - - Total 260 52 55 3 33 174
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
83 Note 8 Retirement Plans (Continued)

A. General Information About the Pension Plans (Continued)

Benefits Provided

CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for nonduty disability benefits after 10 years of service.

The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost-of-living adjustments for each plan are applied as specified by the Public Employees Retirement Law.

The Plans provisions and benefits in effect at June 30, 2023, are summarized below:

Miscellaneous Miscellaneous S afety Safety S afety
Classic PEPRA Classic Tier 2 PEPRA
Benefit formula 2.0% @ 55 2.0% @ 62 3.0% @ 50 3.0% @ 55 2.7% @ 57 Benefit vesting schedule 5 years service 5 years service 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life monthly for life monthly for life Retirement age 50-63 52 - 67 50 55 57
M onthly benefits, as a % of
eligible compensation 1.426 - 2.148% 1.0 - 2.5% 3.0% 3.0% 2.7% Required employee contribution rate 7.00% 6.75% 9.00% 9.00% 13.00% Required employer contribution rate 10.320% 7.470% 23.750% 21.840% 12.780% A participant is eligible for non-industrial disability retirement if he or she 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% of final compensation, multiplied by service. Industrial disability benefits are not offered to miscellaneous employees.

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 7.15% 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.

Upon the death of a retiree, a one-time lump sum payment of $500 will be made to the retiree's designated survivor(s), or to the retiree's estate.

Benefit terms provide for annual cost-of-living adjustments to each employees 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%.
175
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
84 Note 8 Retirement Plans (Continued)

A. General Information About the Pension Plans (Continued)

Contributions

Section 20814(c) of the California Public Employees Retirement Law 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. Funding contributions for both Plans are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. In addition, effective October 21, 2018, employees pay an additional 3% applied to the Employer CalPERS Contribution Rate.

For the year ended June 30, 2024, the contributions recognized as part of pension expense for each Plan were as follows:

Miscellaneous Safety CalPERS Total
Contributions - employer 891,236$ 1,262,313$ 2,153,549$

B. Pension Liabilities, Pension Expenses, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pension

Actuarial Methods and Assumptions Used to Determined Total Pension Liability

For the measurement period ended June 30, 2023 (the measurement date), the total pension liability was determined by rolling forward the June 30, 2022 total pension liability. The June 30, 2023 total pension liabilities were based on the following actuarial methods and assumptions:

Actuarial Cost M ethod Entry Age Normal in accordance with the requirements of GASB 68 Actuarial Assumptions:

Discount Rate
Inflation
Salary Increases
M ortality Rate Table1
Post Retirement Benefit Increase

6.90%

2.30%
Varies by Entry Age and Service
Derived using CalPERS M embership Data for all Funds.

The lesser of contract COLA or 2.30% until Purchasing Power Protection Allowance floor on purchasing power applies, 2.30% thereafter.

1The mortality table used was developed based on CalPERS-specific data. The probabilities of mortality are based on the 2021 CalPERS Experience Study and Review of Actuarial Assumptions . Mortality rates incorporate full generational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries. For more details on this table, please refer to the 2021 experience study report from November 2021 that can be found on the CalPERS website. 176
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
85 Note 8 Retirement Plans (Continued)
B. Pension Liabilities, Pension Expenses, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pension (Continued)

Change of Assumptions

There were no changes of assumptions in 2023.

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 long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations. Using historical returns of all of the funds asset classes, expected compound (geometric) returns were calculated over the next 20 years using a building-block approach. The expected rate of return was then adjusted to account for assumed administrative expenses of 10 Basis points. The expected real rates of return by asset class are as follows:

Asset Class
1 Assumed Asset
Allocation Real Return
1,2
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%
M ortgage-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%
100.00%
2 Figures are based on the 2021 Asset Liability M anagement study. 1 An expected inflation of 2.30% used for this period.

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 Plans 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.

177
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
86 Note 8 Retirement Plans (Continued)
B. Pension Liabilities, Pension Expenses, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pension (Continued)

Sensitivity of the Citys Proportionate Share of Net Pension Liability to Changes in the Discount Rate

The following presents the Citys proportionate share of the net pension liability of the Plan as of the measurement date, calculated using the discount rate of 6.90%, as well as what the Citys proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1 percentage-point lower (5.90%) or 1 percentage- point higher (7.90%) than the current rate:

Discount Rate - 1% Current Discount Discount Rate + 1%
(5.90%) Rate (6.90%) (7.90%)
Miscellaneous 14,383,976$ 9,552,482$ 5,575,748$ Safety 17,917,293$ 11,743,165$ 6,695,376$ Plan's Net Pension Liability

Pension Plan Fiduciary Net Position

Detail information about the plans fiduciary net position is available in the separately issued CalPERS financial report and can be obtained from CalPERS website under Forms and Publications.

Proportionate Share of Net Pension Liability and Pension Expense

The following table shows the plans proportionate share of the risk pool collective net pension liability over the measurement period:

Plan Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability/(Asset)
Miscellaneous
Balance at: 6/30/22 (Valuation date) 33,376,042$ 24,408,035$ 8,968,007$ Balance at: 6/30/23 (Measurement date) 35,723,812 26,171,330 9,552,482 Net changes during 2022-2023 2,347,770$ 1,763,295$ 584,475$ Safety
Balance at: 6/30/22 (Valuation date) 43,442,114$ 32,654,928$ 10,787,186$ Balance at: 6/30/23 (Measurement date) 45,006,766 33,263,601 11,743,165 Net changes during 2022-2023 1,564,652$ 608,673$ 955,979$

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.

(1) In determining a cost-sharing plans 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 pools fiduciary net position (FNP) subtracted from its total pension liability (TPL) determines the net pension liability (NPL) at the valuation date.

178
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
87 Note 8 Retirement Plans (Continued)
B. Pension Liabilities, Pension Expenses, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pension (Continued)

Proportionate Share of Net Pension Liability and Pension Expense (Continued)

(2) Using standard actuarial roll forward methods, the risk pool TPL is then computed at the measurement date (June 30, 2023). 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 pools FNP at the measurement date denotes the aggregate risk pools 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 (2022-23).

(3) The individual plans TPL, FNP and NPL are also calculated at the valuation date. TPL is allocated based on the rate plans share of the actuarial accrued liability. FNP is allocated based on the rate plans share of the market value assets.

(4) Two ratios are created by dividing the plans individual TPL and FNP as of the valuation date from (3) by the amounts in step (1), the risk pools total TPL and FNP, respectively.

(5) The plans 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 plans 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 plans NPL at the Measurement Date is the difference between the TPL and FNP calculated in (5).

Deferred outflows of resources, deferred inflows of resources, and pension expense are allocated based on the Citys share of contribution during the measurement period.

The Citys proportionate share of the net pension liability was as follows:

Miscellaneous Safety
Proportion - June 30, 2022 0.07764% 0.09339%
Proportion - June 30, 2023 0.07657% 0.09413%
Change - Increase/(Decrease) -0.00107% 0.00074%

For the year ended June 30, 2024, the City recognized pension expense of $1,254,322 and $1,614,819, for the Miscellaneous and Safety plans, respectively.

179
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
88 Note 8 Retirement Plans (Continued)
B. Pension Liabilities, Pension Expenses, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pension (Continued)

Deferred Outflows and Deferred Inflows of Resources Related to Pensions

At June 30, 2024, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred Outflows Deferred Inflows
of Resources of Resources
Contributions made after the measurement date 891,236$ -$ Change of assumptions 576,728 -
Difference between expected and actual
experience 487,992 (75,700)
Net difference between projected and actual
earnings on pension plan investments 1,546,635 - Employer contributions in excess/(under)
proportionate share of contributions - (464,148) Adjustments due to difference in proportions - (209,591) Total 3,502,591$ (749,439)$
Deferred Outflows Deferred Inflows
of Resources of Resources
Contributions made after the measurement date 1,262,313$ -$ Change of assumptions 685,349 -
Difference between expected and actual
experience 862,167 (73,811)
Net difference between projected and actual
earnings on pension plan investments 1,607,052 - Employer contributions in excess/(under)
proportionate share of contributions - (801,563) Adjustments due to difference in proportions 156,385 - Total 4,573,266$ (875,374)$
Deferred Outflows Deferred Inflows
of Resources of Resources
Contribution made after the measurement date 2,153,549$ -$ Change of assumptions 1,262,077 -
Difference between expected and actual
experience 1,350,159 (149,511)
Net difference between projected and actual
earnings on pension plan investments 3,153,687 - Employer contributions in excess/(under)
proportionate share of contributions - (1,265,711) Adjustments due to difference in proportions 156,385 (209,591) Total 8,075,857$ (1,624,813)$
Miscellaneous Plan
Safety Plan
CalPERS Aggregate Total

180
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
89 Note 8 Retirement Plans (Continued)
B. Pension Liabilities, Pension Expenses, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pension (Continued)

Deferred Outflows and Deferred Inflows of Resources Related to Pensions (Continued)

The amortization period differs depending on the source of the gain or loss. The difference between projected and actual earnings is amortized over 5-years straight line. All other amounts are amortized straight-line over the average expected remaining service lives of all members that are provided with benefits (active, inactive and retired) as of the beginning of the measurement period.

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 risk pool. The EARSL for risk pool for the 2022-23 measurement period is 3.8 years, which was obtained by dividing the total service years of 600,538 (the sum of remaining service lifetimes of the active employees) by 160,073 (the total number of participants:
active, inactive, and retired).

$891,236 and $1,262,313 reported as deferred outflows of resources related to pensions for miscellaneous plan and safety plan, respectively, resulting from the Citys contributions made subsequent to the measurement date. Both will be recognized as a reduction of the collective net pension liability in the year ending June 30, 2025. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

Measurement Period
Ending June 30 M iscellaneous Plan Safety Plan Total
2024 361,789$ 581,610$ 943,399$ 2025 335,383 529,666 865,049 2026 1,120,363 1,279,448 2,399,811 2027 44,381 44,855 89,236 2028 - - - Thereafter - - - Total 1,861,916$ 2,435,579$ 4,297,495$ Deferred Outflows/(Inflows) of Resources
C. Payable to the CalPERS Pension Plans

At June 30, 2024, the City had no outstanding amounts owed to the CalPERS pension plans for contributions for the year ended June 30, 2024.

D. Liquidating Net Pension Liability

Pension liabilities are liquidated principally by all the funds.

181
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
90 Note 9 Deferred Compensation Plan
A. 457 Plan
The City offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The Plan is available to full-time employees. The Internal Revenue Service regulations allow an employer to designate a 457(b) Deferred Compensation Plan as an alternative to social security. The plan permits employees to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency. All amounts of compensation deferred under the plan, all property and rights purchased with those amounts, and all income attributable to those amounts, property, or rights are (until paid or made available to the employee or other beneficiary) held in trust by Mission Square, the Citys third-party administrator, for the exclusive benefit of the plan participants and their beneficiaries as prescribed by Internal Revenue Code Section 457(g). Accordingly, these assets have been excluded from the Citys Annual Comprehensive Financial Report.

In the year 2021, The City evaluated the requirements of GASB Statement No. 84, Fiduciary Activities and GASB Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans and determined that plan didnt meet the criteria to be reported as a fiduciary activity, as required by the above mentioned GASB Statements. Moreover, the plan is classified as other employee benefits for financial reporting purposes.

As of June 30, 2024, the amount held by the Trustee for the City employees is $10,653,333.

B. 401A Plan
The City contributes 4% of total gross salary to the plan for senior managers.

C. PARS
Part-time employees who do not participate in the Public Employees Retirement System are covered through the Citys participation in Public Alternative Retirement System (PARS). Employees contribute 6.2% and the City contributes 1.3%.

182
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
91 Note 10 Other Postemployment Benefits
The City provides Retiree Healthcare Plan (PEHMCA) and Retiree Cash Benefit Plan (SOMAR Plan). Summary of deferred outflows of resources related to other postemployment benefit (OPEB), net OPEB liabilities, and deferred inflows of resources related to OPEB for both governmental activities and business-type activities for the year ended June 30, 2024 are as follows:

Governmental Business-Type
Activities Activities Total
Deferred outflows of resources:

Difference between expected and actual experience
PEHM CA 5,443$ 281$ 5,724$ SOMAR 321,131 16,610 337,741 Total difference between expected and actual experience 326,574 16,891 343,465 Changes of assumptions
PEHM CA 294,515 15,234 309,749 SOMAR 242,034 12,519 254,553 Total difference due to change in assumptions 294,515 15,234 309,749 Difference between projected and actual investment earnings:

PEHM CA 69,520 3,596 73,116 Total difference between projected and actual investment 69,520 3,596 73,116 Total deferred outflows of resources
PEHM CA 369,478 19,111 388,589 SOMAR 563,165 29,129 592,294 Total deferred outflows of resources 932,643$ 48,240$ 980,883$ Net OPEB liabilities (assets):

PEHM CA (257,824)$ (13,336)$ (271,160)$ SOMAR 1,811,583 93,703 1,905,286 Total net OPEB liabilities (assets) 1,553,759$ 80,367$ 1,634,126$ Deferred inflows of resources:

Difference between expected and actual experience
PEHM CA 1,277,355$ 66,070$ 1,343,425$ SOMAR 243,854 12,614 256,468 Total difference between expected and actual experience 1,521,209 78,684 1,599,893 Changes of assumptions
PEHM CA 154,494 7,991 162,485 SOMAR 332,852 17,216 350,068 Total changes of assumptions 487,346 25,207 512,553 Total deferred inflows of resources
PEHM CA 1,431,849 74,061 1,505,910 SOMAR 576,706 29,830 606,536 Total deferred inflows of resources 2,008,555$ 103,891$ 2,112,446$ OPEB expenses (credits):

PEHMCA 67,216$ (5,052)$ 62,164$ SOMAR 163,462 (2,291) 163,462 Total OPEB expenses 230,678$ (7,343)$ 225,626$

183
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
92 Note 10 Other Postemployment Benefits (Continued)
A. Retiree Healthcare Plan (PEHMCA)
Plan Descriptions and Administration

The City Retiree Healthcare Plan (PEHMCA) is a single-employer benefit healthcare plan administered by the City. The Plan provides healthcare benefits to eligible retirees and their dependents. The Plan does not issue a financial report.

The City has prefunded a portion of its OPEB benefits in a Public Agency Retirement Services (PARS) trust. The PARS Trust is a tax qualified irrevocable trusts, organized under Internal Revenue Code (IRC) Section 115, established to pre-fund OPEB as described in GASB Statement 75. PARS issues annual audited financial statements for each participating agency of the Trust. PARS is considered an agency agent multiple -employer plan, required to provide financial statements and required supplementary information (Schedule of Changes in Fiduciary Net Position by Plan) that are prepared in accordance with GASB statement 75.

These reports may be obtained by writing the plan at the following address: PARS 4350 Von Karman Ave., Suite 100, Newport Beach, CA 92660 -2043.

Employees become eligible to retire and receive City-paid healthcare benefits upon attainment of age 50 and 5 years of service. The City contribution towards retiree health benefits is determined under the "Equal Contribution Method" under PEHMCA under which the City's nominal contribution to PEMHCA is the same for active employees and retirees ($149/month for 2023 and 2024).

Members of the Hercules Police Officers' Association and Executive Management retirees may receive supplement benefits under a sick-leave conversion plan called "Supplemental Optional Monies Allowance for Retirees" Plan.

In order to be eligible, the employee must have served the City for at least ten consecutive years prior to retirement and be at least age 50 when they separate from service, or retire with a disability retirement and have at least 20 years of service with the City.

Contributions

The contributions are based on pay-go for premiums and contributions to the PARS OPEB trust. The pay-go amount is the actual amount of retiree premiums. Total contributions (pay-go and trust contributions) for the year ended June 30, 2024 were $87,069 including the implied rate subsidy.

Employees Covered by Benefit Terms

At June 30, 2024, valuation date, the following employees were covered by the benefit terms:

Active Employees Eligible for Future Benefits 60
Retirees Currently Receiving Benefits 18
78 184
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
93 Note 10 Other Postemployment Benefits (Continued)
A. Retiree Healthcare Plan (PEHMCA) (Continued)

Actuarial Assumptions

The net OPEB liability of the Plan was determined using an actuarial valuation as of June 30, 2024 using the following actuarial assumptions:

Actuarial Assumptions:

Cost Method Entry age actuarial cost method
Discount Rate 5.15%
Inflation 2.50%
Aggregate payroll increases 2.75%
Expected long-term investment rate of return1 5.15%
Mortality, Termination, and Disability 2021 CalPERS M ortality Healthcare Trend Rate 4%
1The mortality assumptions are based on the 2021 CalPERS Mortality for Miscellaneous and Schools Employees table created by CalPERS for the miscellaneous participant type and the 2021 CalPERS Mortality for Safety Employees for the safety participant type . CalPERS periodically studies mortality for participating agencies and establishes mortality tables that are modified versions of commonly used tables.

This table incorporates mortality projection as deemed appropriate based on CalPERS analysis.

Changes of Assumptions
There were no changes of assumptions in 2024.

Discount Rate
The discount rate used to measure the total Plans OPEB liability was 5.15%. The projection of cash flows used to determine the discount rate assumed that City contributions will be made at rates equal to the actuarially determined contribution rates. Based on those assumptions, the City plan's fiduciary net position was projected to be available to make all projected OPEB payments for current active and inactive employees. Therefore, the long-term expected rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability.

The expected long-term rate of return on OPEB plan investments of 5.15%, gross of expenses, was determined by Highmark Capital Management using a building-block method in which best-estimate ranges of expected future real rates of return, net of inflation, are developed for each major asset class. These ranges are combined to produce the 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. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

Asset Class New Strategic Allocation
Long-Term Expected
Real Rate of Return
All Domestic Equities 30.00% 7.25%
All Fixed Income 65.00% 4.25%
Short-Term Gov't Fixed 5.00% 3.00%
100.00%
185
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
94 Note 10 Other Postemployment Benefits (Continued)
A. Retiree Healthcare Plan (PEHMCA) (Continued)

Changes in the Net OPEB Liability (Asset)

This table shows the changes in the total OPEB liability, the plan fiduciary net position, and the net OPEB liability (asset) of the PEHMCA Plan as of June 30, 2024:

Total OPEB Plan Fiduciary Net OPEB
Liability Net Position Liability (Asset)
Balance at June 30, 2023 2,441,852$ 2,668,316$ (226,464)$ Changes Recognized for the M easurement Period:

Service Cost 135,652 - 135,652 Interest on the total OPEB liability 127,006 236,200 (109,194) Contributions from the employer - 87,069 (87,069) Expected investment income - - - Investment (gains)/losses - - - Administrative expenses - (15,915) 15,915 Changes in assumptions - - - Benefit payments (87,069) (87,069) - Net Changes during July 1, 2023 to June 30, 2024 175,589 220,285 (44,696) Balance at June 30, 2024 (M easurement Date) 2,617,441$ 2,888,601$ (271,160)$

Sensitivity of the Net OPEB Liability (Asset) to Changes in the Discount Rate

The following presents the net OPEB liability (asset) of the Plan, as well as what the Citys net OPEB liability (asset) would be if it were calculated using a discount rate 1% lower or 1% higher than the current discount rate:

Discount Rate - 1% Current Discount Discount Rate + 1%
(4.15%) Rate (5.15%) (6.15%)
80,258$ (271,160)$ (563,201)$ Net OPEB Liability (Asset)

The following presents the net OPEB liability (asset) of the Plan, as well as what the Plans net OPEB liability (asset) would be if it were calculated using healthcare cost trend rates that 1% lower or 1% higher than the current healthcare cost trend rate:

Healthcare Cost Healthcare Cost Healthcare Cost
Trend Rates Trend Rates Trend Rates
3% 4% 5%
(658,559)$ (271,160)$ 219,426$ Net OPEB Liability (Asset)

OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Relate to OPEB

For the year ended June 30, 2024, the City recognized OPEB expense of $62,164 for the Plan. OPEB expense represents the change in the net OPEB liability during the measurement period, adjusted for actual contributions and the deferred recognition of changes in investment gain/loss, and actuarial assumptions or method. At June 30, 2024, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:
186
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
95 Note 10 Other Postemployment Benefits (Continued)
A. Retiree Healthcare Plan (PEHMCA) (Continued)

OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Relate to OPEB (Continued)

Deferred Outflows Deferred Inflows
of Resources of Resources
Difference between expected and actual experience 5,724$ (1,343,425)$ Changes of assumptions 309,749 (162,485) Net difference between projected and actual earning on
OPEB plan investments 73,116 - Total 388,589$ (1,505,910)$

Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows:

Measurement
Period Deferred Outflows/
Ending June 30 (Inflows) of Resources
2025 (142,296)$
2026 (104,229)
2027 (200,172)
2028 (201,627)
2029 (181,791)
Thereafter (287,206)
Tota
l (1,117,321)$

Liquidating PEHMCA OPEB Liability

OPEB liabilities are liquidated principally by the General Fund and the Wastewater Enterprise Fund.

B. Retiree Cash Benefit Plan (SOMAR Plan)

Plan Description

The City SOMAR Plan is a single-employer benefit healthcare plan administered by the City. The Plan provides healthcare benefits to eligible retirees and their dependents. The Plan does not issue a financial report.

The SOMAR Plan benefit percentage is based on the lesser of actual years of service, or an equivalent based on sick-leave hours divided by 48, with a minimum percentage of 50% after 10 years and a maximum percentage of 100% after 20 years. The percentage is applied to a stated dollar amount prior to age 65 and the Kaiser Senior Advantage retiree only premium after age 65, offset by the PEMHCA Plan minimum, described above. The monthly dollar amounts under the SOMAR Plan are $388/per month for 2023 and 2024 (Police), $292/per month for 2023 and 2024 (Executive Management), and are contractually indexed each year by 3%. 187
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
96 Note 10 Other Postemployment Benefits (Continued)

B. Retiree Cash Benefit Plan (SOMAR Plan) (Continued)
Plan Description (Continued)

The City provide an optional monetary allowance with an annual three (3%) adjustment each year to Public Safety and Executive employees who retire as regulated by the Public Employees Retirement System. To be eligible for the optional monies, an employee must retire as follows:

1. Service Retirement: Employees who have served the City for at least ten (10) consecutive years immediately prior to retirement and are at least fifty (50) years old when they separate service from the City.

2. Disability Retirement: Employees who retire with a disability retirement are not required to be a certain age, but must have at least twenty (20) years of service with the City.

Employees must have the minimum amount of sick leave on the books, as outlined in the chart below. If an employee has below the amount of sick leave required for their years of service, then they will only be eligible for the percentage paid equivalent to the amount of sick leave they do have on the books.

Years of Service
Sick Leave
Balance
% of Optional
Money
Available
10 480 50
11 528 55
12 576 60
13 624 65
14 672 70
15 720 75
16 768 80
17 846 85
18 864 90
19 912 95
20-24 960 100
25 No Minimum
amount required 100

Employees must retire within one hundred twenty (120) days. In addition, employees who separate service but do not retire as a PERS annuitant, shall not be eligible under for SOMAR benefits.

The City will pay a portion of the optional money to a retiree until the retiree reaches age sixty five (65), upon which they are required to enroll in Medicare. At that time, the optional money will drop to an amount equivalent to the Kaiser Supplemental to Medicare rate through PERS.

The SOMAR benefit is expected to last into perpetuity. Payment are made on a bi-annual basis. 188
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
97 Note 10 Other Postemployment Benefits (Continued)

B. Retiree Cash Benefit Plan (SOMAR Plan) (Continued)

Employees Covered by Benefit Terms

At the June 30, 2024 measurement date, the following employees were covered by the benefit terms:

Executives Police Total
Participating active employees 10 24 34 Inactive employees receiving benefits 3 11 14 Total 13 35 48

Benefits Provided

The SOMAR plans provisions and benefits in effect at June 30, 2024, are summarized below:

Executives Police
Duration of benefits Lifetime Lifetime
Required service 50% at 10 years
grading to 100% at
20 years
50% at 10 years
grading to 100% at
20 years
Minimum age Retirement Retirement
Amount $292 per month pre-
65; based on Kaiser
premium post-65
$388 per month pre-
65; based on Kaiser
premium post-65

Contributions

For the year ended June 30, 2024, the contributions recognized as part of OPEB expense for the SOMAR plan were as follows:

SOMAR Plan
Contributions - employer 48,879$

Actuarial Assumptions

The net OPEB liability of the SOMAR Plan was determined using an actuarial valuation as of June 30, 2023 using the following actuarial assumptions.

Cost method
Discount Rate 3.93%
Inflation 2.50%
Aggregate payroll increases 2.75%
Mortalit
y 1, retirement, and turnover 2021 CalPERS tables
Entry age normal

1The mortality assumptions are based on the 2021 CalPERS Mortality for Miscellaneous and Schools Employees table created by CalPERS for the miscellaneous participant type and the 2021 CalPERS Mortality for Safety Employees for the safety participant type . CalPERS periodically studies mortality for participating agencies and establishes mortality tables that are modified versions of commonly used tables.

This table incorporates mortality projection as deemed appropriate based on CalPERS analysis. 189
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
98 Note 10 Other Postemployment Benefits (Continued)
B. Retiree Cash Benefit Plan (SOMAR Plan) (Continued)

Changes of Assumptions

The interest assumption changed from 3.65% to 3.93%. Assumed rates of retirement, termination, and mortality have been updated to align with those currently being used by the statewide pension systems.

Changes in the Net OPEB Liability

This table shows the changes in the total OPEB liability, the plan fiduciary net position, and the net OPEB liability of the SOMAR plan as of June 30, 2024:

Total OPEB Plan Fiduciary Net OPEB
Liability Net Position Liability
Balance at June 30, 2023 1,882,973$ -$ 1,882,973$ Changes Recognized for the Measurement Period:

Service cost 93,662 - 93,662 Interest on the total pension liability 69,546 - 69,546 Changes of benefit terms - - - Difference between expected and actual experience - - - Changes of assumptions (92,016) - (92,016) Contributions from the employer as benefit payments - 48,879 (48,879) Net investment income - - - Administrative expenses - - - Benefit payments (48,879) (48,879) - Net changes during July 1, 2023 to June 30, 2024 22,313 - 22,313 Balance at June 30, 2024 (measurement date) 1,905,286$ -$ 1,905,286$ SOMAR Plan

Discount Rate
The discount rate used to measure the total OPEB liability for the SOMAR plan was 3.93% based on the Bond Buyer 20 Bond Index.

Changes of Assumption

The discount rate change from 3.65% to 3.93% in 2024.

Sensitivity of the Net OPEB Liability to Changes in the Discount Rate

The following presents the net OPEB liability of the SOMAR Plan, as well as what the SOMAR Plans net OPEB liability (asset) would be if it were calculated using a discount rate 1% lower or 1% higher than the current discount rate:

Discount Rate - 1% Current Discount Discount Rate + 1%
(2.93%) Rate (3.93%) (4.93%)
2,259,719$ 1,905,286$ 1,629,997$ SOMAR Plan's Total OPEB Liability
190
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
99 Note 10 Other Postemployment Benefits (Continued)
B. Retiree Cash Benefit Plan (SOMAR Plan) (Continued)

OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Relate to OPEB

For the year ended June 30, 2024, the City recognized OPEB expense of $163,462 for the SOMAR plan. OPEB expense represents the change in the net OPEB liability during the measurement period, adjusted for actual contributions and the deferred recognition of changes in investment gain/loss, and actuarial assumptions or method.

At June 30, 2024, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources for the SOMAR plan:

Deferred Outflows Deferred Inflows
of Resources of Resources
Difference between expected and actual experience 337,741$ (256,468)$ Changes of assumptions 254,553 (350,068)
Total 592,294$ (606,536)$
SOMAR Plan

Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows:

Measurement S OMAR Plan
Period Deferred Outflows/
Ending June 30 (Inflows) of Resources
2025 254$
2026 254
2027 254
2028 254
2029 254
Thereafter (15,512)
Total (14,242)$

Liquidating SOMAR OPEB Liability

OPEB liabilities are liquidated principally by the General Fund and the Wastewater Enterprise Fund.

Payable to the OPEB Plan

At June 30, 2024, the City had no outstanding amounts owed to the SOMAR OPEB plan for contributions for the year ended June 30, 2024.

Note 11 Risk Management

General Liability Insurance
Coverage is maintained with the Municipal Pooling Authority (MPA) with coverage limits of $1,000,000 with self- insured retention of $10,000 and $1,000,001 to $29,000,000 covered by California Affiliated Risk Management Authority (CARMA).
191
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
100
Note 11 Risk Management (Continued)

Workers Compensation
The City has coverage limits for the following without a deductible:

MPA $0 to $500,000
PRISM $500,000 to $50,000,000
Liberty Insurance Corporation Statutory excess of $50,000,000

At June 30, 2024, the Citys estimated claims liabilities were as follows:

General liabilities 183,083$
Workers' compensation 312,363
Total 495,446$

The Citys claims liability of $495,446 are considered to be current and reported under the general fund. Changes in the claims liabilities for the fiscal years ended June 30, 2024, 2023 and 2022 are as follows:

Claims and
Beginning Changes in Claims Ending
Fiscal Year Balance Estimates Payments Balance
2021-2022 576,344$ 343,845$ (686,235)$ 233,954$ 2022-2023 233,954 482,177 (317,758) 398,373 2023-2024 398,373 600,431 (503,358) 495,446

Miscellaneous Coverages
The MPA provides additional coverage for the following risks incurred by the City:

Coverage
Type Deductibles Limits
Auto - Physical Damage:

Police Vehicles 3,000$ 250,000$ All Other Vehicles 2,000 250,000 All Risk Fire & Property 25,000 1,000,000,000 Cyber Liability 50,000 3,000,000 Pollution Liability 250,000 25,000,000 Crime Coverage 2,500 5,000,000 Boiler and M achinery 10,000 100% of primary $25,000,000; 100% of $75,000,000 excess of
$25,000,000

The MPA is governed by a board consisting of representatives from member municipalities. The board controls the operations of the MPA, including selection of management and approval of operating budgets, independent of any influence by member municipalities beyond their representation on the board. 192
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
101
Note 11 Risk Management (Continued)
The Citys deposits with the MPA are in accordance with formulas established by the MPA. Actual surpluses or losses are shared according to a formula developed from overall loss costs and spread to member entities on a percentage basis after a retrospective rating. Audited financial statements can be obtained from the Municipal Pooling Authority, 1911 San Miguel Drive, #200, Walnut Creek, California 94596.

Note 12 Commitments and Contingencies

A. Lawsuits

The City is presently involved in certain matters of litigation that have arisen in the normal course of conducting City business. City management believes, based upon consultation with the City Attorney, that these cases, in the aggregate, will not have a material adverse effect on the Citys Annual Financial Statements. Additionally, City management believes that the Citys insurance programs are sufficient to cover any potential losses should an unfavorable outcome materialize.

B. Commitments

At June 30, 2024, the outstanding commitments are in the amount of $5,078,545. Details are as follows:

Governmental Funds:

General Fund 626,898$
Landscape & Lighting Assessment District (LLAD) No. 83-2 Special Revenue Fund 65,292 Other Governmental Funds 974,257
Proprietary Funds:

Wastewater Enterprise Fund 3,275,687
Internal Service Funds 131,980
Fidiciary Funds:

Successor Agency Private Purpose Trust Fund 4,431
Total 5,078,545$

Note 13 Joint Powers Agreements

The City is a member of the joint powers agencies described below. Each of these agencies is governed by a board, which controls their operation, including selection of management and approval of operating budgets, independent of influence by member municipalities beyond their representation on the board.

A. West Contra Costa Transportation Advisory Committee (WCCTAC)

WCCTAC was established in 1990 to develop regional strategies and meet regional requirements established by Measure C and to cooperatively address West Contra Costa County transportation issues.

The Citys payments to WCCTAC are in accordance with a formula under which each member Agency pays a proportionate share of the expenditures based on the number of voting members representing each agency. Audited financial statements can be obtained from the WCCTAC, One Alvarado Square, San Pablo, California 94806, The City has one voting member on the WCCTAC and pays 10% of annual expenditures. 193
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
102
Note 13 Joint Powers Agreements (Continued)

B. West Contra Costa Integrated Waste Management Authority (WCCIWMA)

WCCIWMA was established in 1991 to coordinate landfill use reduction in the West Contra Costa County Area as mandated by the state of California. The City is represented by one Director. Funding for WCCIWMA is provided for through a surcharge collected from the ratepayers within WCCIWMA's jurisdiction. Audited financial statements can be obtained from the WCCIWMA, One Alvarado Square, San Pablo, California 94806.

C. Pinole/Hercules Wastewater Treatment Plant

On January 23, 2001, the cities of Pinole and Hercules entered into a joint powers agreement for the operation and ownership of the Pinole/Hercules Wastewater Treatment Plant (Plant). The City retains responsibility for the operation and maintenance of its wastewater collection system. The City of Hercules has an undivided fifty percent (50%) ownership interest in the Plant. The City of Pinole has the right and responsibility to manage and operate the Plant. Also, the City of Pinole maintains the records and accounts for all the transactions.

Note 14 Stewardship, Compliance, and Accountability

A. Deficit Fund Balances/Net Position

At June 30, 2024, the following funds had a deficit fund balance/net position:

Nonmajor Special Revenue Funds:

Victoria by the bay LLAD No. 2002-01 (683,075)$
Baywood LLAD No. 2004-1 (44,199)
Stormwater (196,021)
Bart Park and Ride (265)
Internal Service Funds:

Facilities Maintenance (10,178)
Fiduciary Funds:

Successor Agency Private Purpose Trust Fund (43,822,382)$

Victoria by the bay LLAD No. 2002-01 Special Revenue Fund negative fund balance of $683,075 will be financed through future assessments.

Baywood Landscape & Lighting Assessment District (LLAD) No. 2004-1 Special Revenue Fund negative fund balance of $44,199 will be financed through future assessments.

The Stormwater Special Revenue Fund negative fund balance of $196,021 will be financed through future assessments.

The Bart Park and Ride Special Revenue Fund negative fund balance of $265 will be eliminated with future revenue.

The Facilities Maintenance Internal Service Fund negative net position of $10,178 will be eliminated from future user charges.

Private Purpose Trust Fund negative net position of $43,822,382 will be financed through future Redevelopment Property Tax Trust Fund.
194
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
103
Note 14 Stewardship, Compliance, and Accountability (Continued) B. Expenditures in Excess of Appropriations
The following funds had expenditures in excess of appropriations:

Excess of
Expenditures over
Fund Appropriations Expenditures Appropriations
Major Governmental Funds:

General Fund
Public safety 8,475,617$ 9,154,124$ 678,507$ Parks and recreation 2,507,834 2,677,208 169,374 Principal - 114,945 114,945 Hercules Debt Service Fund 1,472,096 1,474,946 2,850 Nonmajor Governmental Funds:

Victoria By the Bay LLAD No. 2002-1
Special Revenue Fund 631,467 766,390 134,923 Bayside LLAD No. 2005-1
Special Revenue Fund 136,780 161,595 24,815 Bart Park and Ride Special Revenue Fund 182,000 358,411 176,411 Road Rehabilitation Maintenance
Special Revenue Fund 145,587 249,696 104,109 City Capital Projects Fund 2,361,868 2,730,442 368,574 Development Impact Fees Capital Projects Fund 39,766 40,595 829

195
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
104
Note 15 Fund Balance Classification
The Governmental Funds fund balance classification at June 30, 2024 is follows:

Landscape &
Lighting Assessment Hercules Nonmajor
General District Debt Service Governmental
Fund (LLAD) No. 83-2 Fund Funds Total
Nonspendable :

Prepaid items 8,591$ -$ -$ -$ 8,591$ Loan receivable 1,313,328 - - - 1,313,328 Total Nonspe ndable 1,321,919 - - - 1,321,919 Restricted for:

Pension Section 115 trust 2,391,824 - - - 2,391,824 Debt S ervice - - 2,171,770 - 2,171,770 State Gas T ax - - - 528,981 528,981 Measure "C" Street - - - 765,578 765,578 C.O.P.S. Program (AB 3229) - - - 62,716 62,716 Landscape & Lighting Assessment District No. 83-2 - 431,507 - - 431,507 Hercules Village LLAD No. 2002-2 - - - 127,454 127,454 Bayside LLAD No. 2005-1 - - - 119,854 119,854 Arterial - - - 504,650 504,650 Development Services - - - 1,521,341 1,521,341 AB 939 JPA - - - 897,113 897,113 Regional Water Quality - - - 54,906 54,906 Asset Forfeiture - - - 180,472 180,472 Road Maintenance and Rehab Program (SB1) - - - 981,761 981,761 Development Impact Fees - - - 2,110,936 2,110,936 Total Restricted 2,391,824 431,507 2,171,770 7,855,762 12,850,863 Committed to:

Capital reserve 5,384,421 - - - 5,384,421 CalHFA loan repayment 2,500,000 - - - 2,500,000 Capital projects - - - 324,295 324,295 Total Committed 7,884,421 - - 324,295 8,208,716 Assigned:

Assigned by City Manager:

Capital Projects 3,788,932 - - - 3,788,932 Earthquake Insurance Deductible 500,000 - - - 500,000 Reusable Bags 13,930 - - - 13,930 PEG Fees 70,000 - - - 70,000 Economic uncertainty 4,222,158 - - - 4,222,158 Total Assigned 8,595,020 - - - 8,595,020 Unassigned (deficit) 14,754,596 - - (923,560) 13,831,036 Total Unassigned 14,754,596 - - (923,560) 13,831,036 Total Fund Balances 34,947,780$ 431,507$ 2,171,770$ 7,256,497$ 44,807,554$ Major Funds

196
City of Hercules
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
105
Note 16 Net Investment in Capital Assets
The net investment in capital assets for the governmental activities and business-type activities is calculated as follows:

Governmental Business-Type
Activities Activities Total
Total capital assets, net 76,635,566$ 49,788,941$ 126,424,507$ Unspent capital bond proceeds - 2,888 2,888 Capital related debt (16,386,417) (27,586,034) (43,972,451) Retention payable (80,215) (569,264) (649,479) Capital assets related accounts payable (279,723) (752,060) (1,031,783) Net investment in capital assets 59,889,211$ 20,884,471$ 80,773,682$

197
106
198
107

REQUIRED SUPPLEMENTARY INFORMATION
(UNAUDITED)
199
108
200
City of Hercules
Required Supplementary Information (Unaudited)
For the Year Ended June 30, 2024

109

BUDGETARY PRINCIPLES
The City follows these procedures in establishing the budgetary data reflected in the financial statements:

1. In June, the City Manager submits to the City Council a proposed operating budget for the following fiscal year.

This budget includes proposed expenditures, by fund and department, and the revenues expected to finance them.

2. Public hearings are conducted to obtain taxpayer comments.

3. The budget is legally enacted through passage of a resolution before July 1.

4. The City Manager is authorized to transfer budgeted amounts between objects within the same department; however, any revisions, which alter total expenditures of any fund, must be approved by the City Council.

5. Formal budgetary integration is employed as a management control device. Special Revenue Fund budgets are adopted on a basis consistent with accounting principles generally accepted in the United States (US GAAP) and are consistent with the basis used for financial reporting. Accordingly, actual revenues and expenditures can be compared with related budget amounts without any reconciliation. The General Fund budget is adopted on the budgetary basis, which is not consistent with accounting principles generally accepted in the United States of America. Commitments for material and services, such as purchase orders and contracts, are recorded during the year as encumbrances to assist in controlling expenditures. Appropriations, which are encumbered at year-end lapse, then are added to the following years budgeted appropriations. However, encumbrances at year-end are reported as reservations of fund balance.

6. Under Article XIII B of the California Constitution (the Gann Spending Limitation Initiative), the City is restricted as to the amount of annual appropriations from the proceeds of taxes, and if proceeds of taxes exceed allowed appropriations, the excess must either be refunded to the State Controller, returned to the taxpayers through revised tax rates or revised fees schedules, or an excess in one year may be offset against a deficit in the following year.

For the fiscal year ended June 30, 2024, based on the calculations by City Management, proceeds of taxes did not exceed the appropriations limit.

7. Budget revenue amounts represent the original budget modified by adjustments authorized during the year.

Budgeted expenditure amounts represent original appropriations adjusted for supplemental appropriations during the year, which were contingent upon new or additional revenue sources and re-appropriated amounts for prior year encumbrances. The City Manager must approve adjustments to departmental budgets; however, management may amend the budgeted amounts within departmental expenditure classifications, with approval of the Finance Director.

8. Certain appropriations carryover and are re-budgeted for the subsequent year.

9. Budget appropriations for the various governmental funds become effective July 1. The City Council may amend the budget during the fiscal year. The legal level of budgetary control has been established at the fund level. During the fiscal year ended June 30, 2024, there was no adopted budget for the Regional Water Quality Special Revenue Fund.
201
General Fund
Variance with
Original Final Actuals Final Budget
REVENUES:

Taxes and assessments 12,726,633$ 12,726,633$ 12,992,128$ 265,495$ Licenses and permits 418,565 418,565 445,620 27,055 Fines and forfeitures 38,760 38,760 34,409 (4,351) Use of money and property 292,320 292,320 1,623,561 1,331,241 Intergovernmental 2,561,220 2,608,820 2,666,458 57,638 Charges for services 2,038,325 2,038,325 2,412,068 373,743 Other revenues 265,431 265,431 154,757 (110,674) Total revenues 18,341,254 18,388,854 20,329,001 1,940,147 EXPENDITURES:

Current:

General government 4,918,974 5,144,507 4,768,426 376,081 Public safety 8,475,617 8,475,617 9,154,124 (678,507) Streets and public works 520,623 1,028,107 571,231 456,876 Parks and recreation 2,499,925 2,507,834 2,677,208 (169,374) Community development 970,875 1,023,948 811,819 212,129 Capital outlay 460,300 57,900 21,984 35,916 Debt services:

Principal - - 114,945 (114,945) Interest and fiscal agent fee 200,000 200,000 124,801 75,199 Total expenditures 18,046,314 18,437,913 18,244,538 193,375

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 294,940 (49,059) 2,084,463 2,133,522

OTHER FINANCING SOURCES (USES)
Inception of subscription liability - - 17,823 17,823 Transfers in 156,727 156,727 406,727 250,000 Transfers (out) (799,212) (1,192,613) (1,438,925) (246,312) Total financing sources (uses) (642,485) (1,035,886) (1,014,375) 21,511 NET CHANGES IN FUND BALANCE (347,545)$ (1,084,945)$ 1,070,088 2,155,033$ FUND BALANCE:

Beginning of year 33,877,692
End of year 34,947,780$
City of Hercules
Required Supplementary Information (Unaudited)
Budgetary Comparison Schedule
For the Year Ended June 30, 2024
Budgeted Amounts
110
202
Landscape & Lighting Assessment District (LLAD) No. 83-2 Speical Revenue Fund Original Final Variance with
Budget Budget Actuals Final Budget
REVENUES:

Taxes and assessments 2,276,506$ 2,276,506$ 2,218,229$ (58,277)$ Use of money and property - - 57,927 57,927 Total revenues 2,276,506 2,276,506 2,276,156 (350) EXPENDITURES:

Current:

Streets and public works 1,675,188 1,679,944 1,600,464 79,480 Capital outlay 160,000 191,415 116,319 75,096 Total expenditures 1,835,188 1,871,359 1,716,783 154,576

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 441,318 405,147 559,373 154,226

OTHER FINANCING SOURCES (USES)
Transfers in 25,334 25,334 31,037 5,703 Transfers (out) (319,186) (319,186) (265,060) 54,126 Total financing sources (uses) (293,852) (293,852) (234,023) 59,829 NET CHANGE IN FUND BALANCE 147,466$ 111,295$ 325,350 214,055$ FUND BALANCE:

Beginning of year 106,157
End of year 431,507$
City of Hercules
Required Supplementary Information (Unaudited)
Budgetary Comparison Schedule (Continued)
For the Year Ended June 30, 2024
111
203
Measurement Date: June 30, 2023 June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 City's Proportion of the Net Pension Liability 0.08% 0.08% 0.83% 0.19% 0.17% City's Proportionate Share of the Net Pension Liability 9,552,482$ 8,968,007$ 4,514,222$ 7,840,808$ 7,154,193$ City's Covered Payroll 4,009,532$ 3,590,446$ 2,848,532$ 3,376,629$ 3,411,264$ City's Proportionate Share of the Net Pension Liability as a Percentage of Covered Payroll 238% 250% 158% 232% 210% Plan's Fiduciary Net Position as a Percentage of the
Plan's Total Pension Liability 73.26% 73.13% 85.66% 73.63% 75.07% Measurement Date: June 30, 2023 June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 City's Proportion of the Net Pension Liability 0.09% 0.09% 0.10% 0.09% 0.16% City's Proportionate Share of the Net Pension Liability 11,743,165$ 10,787,186$ 5,378,400$ 9,924,963$ 9,847,764$ City's Covered Payroll 3,536,469$ 3,339,846$ 2,805,237$ 2,702,843$ 2,668,574$ City's Proportionate Share of the Net Pension Liability as a Percentage of Covered Payrol
l 332.06% 322.98% 191.73% 367.20% 369.03%
Plan's Fiduciary Net Position as a Percentage of the
Plan's Total Pension Liability 73.91% 75.17% 86.21% 73.17% 70.82% Miscellaneous Plans
Safety Plans
City of Hercules
Required Supplementary Information (Unaudited)
Schedule of the City's Proportionate Share of the Plan's Net Pension Liability and Related Ratios For the Year Ended June 30, 2024
Last Ten Fiscal Years
California Public Employees' Retirement System (CalPERS) 112
204
Measurement Date: June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014 City's Proportion of the Net Pension Liability 0.16% 0.17% 0.17% 0.18% 0.19% City's Proportionate Share of the Net Pension Liability 6,686,045$ 6,891,269$ 6,031,627$ 4,815,777$ 4,699,656$ City's Covered Payroll 3,369,924$ 3,369,924$ 2,697,183$ 2,655,670$ 3,241,378$ City's Proportionate Share of the Net Pension Liability as a Percentage of Covered Payroll 198% 204% 224% 181% 145% Plan's Fiduciary Net Position as a Percentage of the
Plan's Total Pension Liability 77.69% 75.39% 75.87% 78.32% 78.10% Measurement Date: June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014 City's Proportion of the Net Pension Liability 0.14% 0.16% 0.16% 0.18% 0.18% City's Proportionate Share of the Net Pension Liability 9,268,866$ 9,323,198$ 8,509,821$ 7,337,854$ 6,858,740$ City's Covered Payroll 2,436,633$ 2,591,015$ 2,220,165$ 2,118,549$ 1,942,665$ City's Proportionate Share of the Net Pension Liability as a Percentage of Covered Payrol
l 380.40% 359.83% 383.30% 346.36% 353.06%
Plan's Fiduciary Net Position as a Percentage of the
Plan's Total Pension Liability 73.39% 71.74% 72.69% 71.64% 72.43% Miscellaneous Plans
Safety Plans
City of Hercules
Required Supplementary Information (Unaudited)
Schedule of the Cit
y's Proportionate Share of the Plan's Net Pension Liability and Related Ratios (Continued) For the Year Ended June 30, 2024
Last Ten Fiscal Years
California Public Employees' Retirement System (CalPERS) 113
205
Fiscal Year: 2023-24 2022-23 2021-22 2020-21 2019-20
Actuarially Determined Contribution1 891,236$ 862,807$ 961,252$ 224,145$ 774,757$ Contribution in Relation to the Actuarially Determined
Contribution1 (891,236) (862,807) (961,252) (224,145) (774,757) Contribution Deficiency (Excess) -$ -$ -$ -$ -$ City's Covered Payroll2 4,009,531$ 4,009,532$ 3,590,446$ 3,477,928$ 3,376,629$ Contributions as a Percentage of Covered Payroll 22.23% 21.52% 26.77% 6.44% 22.94% Fiscal Year: 2023-24 2022-23 2021-22 2020-21 2019-20
Actuarially Determined Contribution2 1,262,313$ 1,240,453$ 1,127,304$ 443,902$ 1,384,112$ Contribution in Relation to the Actuarially Determined
Contribution2 (1,262,313) (1,240,453) (1,127,304) (443,902) (1,384,112) Contribution Deficiency (Excess) -$ -$ -$ -$ -$ Cit
y's Covered Payroll3 3,536,468$ 3,536,469$ 3,339,846$ 2,783,928$ 2,702,843$ Contributions as a Percentage of Covered Payroll 35.69% 36.13% 33.75% 15.95% 51.21% Notes to the Schedule:

Methods and assumptions used to determine contribution rates:

Actuarial cost method Entry Age Normal
Amortization method Level percentage of payroll
Asset valuation method Fair Value of Assets.

Inflation 2.50%
Salary increases Varies by entry age and service
Payroll Growth 2.80%
Investment rate of return 7.00% Net of pension plan investment and administrative expenses; includes Inflation.

Retirement age
Mortality
2 Employers are assumed to make contributions equal to the actuarially determined contributions. How ever, some employers may choose to make additional contributions tow ards their unfunded liability. Employer contributions for such plans exceed the actuarially determined contributions.

The probabilities of retirement are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015.

The probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015. Mortality rates include 15 years of projected mortality improvement using 90% of Scale MP-2016 published by the Society of Actuaries. 3 Includes one years payroll growth using 2.80% payroll growth assumption for fiscal year ended June 30, 2022 and 2023; 2.75% payroll growth assumption for fiscal years ended June 30, 2018-21;3.00% payroll growth assumption for fiscal years ended June 30, 2014-17.

The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2022-23 were derived from the June 30, 2020 funding valuation report.

City of Hercules
Required Supplementary Information (Unaudited)
Schedule of the City's Contributions to the Pension Plan For the Year Ended June 30, 2024
California Public Employees' Retirement System (CalPERS) Last Ten Fiscal Years 1
Miscellaneous Plans
Safety Plans
1As prescribed in GASB 68, paragraph 46, the information presented in the Schedule of Plan Contributions should also be presented as of the employers most recent fiscal year-end. The employer is responsible for determining this information as prescribed by the standard as this data is not available to CalPERS. 114
206
Fiscal Year: 2018-19 2017-18 2016-17 2015-16 2014-15
Actuarially Determined Contribution1 770,639$ 659,810$ 558,315$ 529,212$ 353,148$ Contribution in Relation to the Actuarially Determined
Contribution1 (770,639) (659,810) (558,315) (529,212) (353,148) Contribution Deficiency (Excess) -$ -$ -$ -$ -$ City's Covered Payroll2 3,411,264$ 3,369,924$ 3,154,200$ 2,697,183$ 3,241,378$ Contributions as a Percentage of Covered Payroll 22.59% 19.58% 17.70% 19.62% 10.89% Fiscal Year: 2018-19 2017-18 2016-17 2015-16 2014-15
Actuarially Determined Contribution2 1,080,225$ 1,033,755$ 1,203,357$ 1,024,115$ 798,844$ Contribution in Relation to the Actuarially Determined
Contribution2 (1,080,225) (1,033,755) (1,203,357) (1,024,115) (798,844) Contribution Deficiency (Excess) -$ -$ -$ -$ -$ Cit
y's Covered Payroll3 2,668,574$ 2,436,633$ 2,591,015$ 2,220,165$ 1,942,665$ Contributions as a Percentage of Covered Payroll 40.48% 42.43% 46.44% 46.13% 41.12% City of Hercules
Required Supplementary Information (Unaudited)
Schedule of the City's Contributions to the Pension Plan (Continued) For the Year Ended June 30, 2024
Last Ten Fiscal Years
California Public Employees' Retirement System (CalPERS) Miscellaneous Plans
Safety Plans
115
207
Measurement period, year ending: 6/30/2024 6/30/2023 6/30/2022 6/30/2021 Total OPEB liability
Service cost 135,652$ 138,804$ 135,089$ 167,563$ Interest 127,006 131,816 124,870 139,104 Differences between expected and actual experience - (595,870) - (311,195) Changes of assumptions - 331,830 - 65,097 Benefit payments, including refunds of member contributions (87,069) (109,733) (144,124) (123,619) Net change in total OPEB liability 175,589 (103,153) 115,835 (63,050) Total OPEB liability - beginning 2,441,852 2,545,005 2,429,170 2,492,220 Total OPEB liability - ending (a) 2,617,441$ 2,441,852$ 2,545,005$ 2,429,170$ OPEB fiduciary net position
Contributions - employer 87,069$ 109,733$ 144,124$ 22,016$ Net investment income (loss) 236,200 124,112 (330,465) 359,682 Benefit payments, including refunds of member contributions (87,069) (109,733) (144,124) (123,619) Administrative expense (15,915) (15,045) (16,734) (16,223) Net change in plan fiduciary net position 220,285 109,067 (347,199) 241,856 Plan fiduciary net position - beginning 2,668,316 2,559,249 2,906,448 2,664,592 Plan fiduciary net position - ending (b) 2,888,601 2,668,316 2,559,249 2,906,448 Plan net OPEB liability (asset) - ending (a) - (b) (271,160)$ (226,464)$ (14,244)$ (477,278)$ Plan fiduciary net position as a percentage of
the total OPEB liability (asset) 110.36% 109.27% 100.56% 119.65% Covered payroll 11,866,577$ 11,548,980$ 11,239,883$ 10,939,059$ -2.29% -1.96% -0.13% -4.36%
1 Historical information is presented only for periods for which GASB 75 is applicable. 2 Effective for the year ended June 30, 2020, PEHMCA Plan is valued separately.

Plan net OPEB liability (asset) as a percentage of covered payroll Last Ten Fiscal Years1
City of Hercules
Required Supplementary Information (Unaudited)
Schedule of Changes in Net OPEB Liability and Related Ratios - PEHMCA Plan For the Year Ended June 30, 2024
116
208
Measurement period, year ending: 6/30/20202 6/30/2019 6/30/2018 Total OPEB liability
Service cost 175,142$ 127,197$ 99,270$ Interest 188,135 180,251 179,763
Differences between expected and actual experience (1,203,506) 40,091 437,919 Changes of assumptions (293,525) - - Benefit payments, including refunds of member contributions (115,990) (166,793) (105,034) Net change in total OPEB liability (1,249,744) 180,746 611,918 Total OPEB liability - beginning 3,741,964 3,561,218 2,949,300 Total OPEB liability - ending (a) 2,492,220$ 3,741,964$ 3,561,218$ OPEB fiduciary net position
Contributions - employer 215,990$ 361,275$ 205,034$ Net investment income (loss) 123,227 155,134 123,771 Benefit payments, including refunds of member contributions (115,990) (166,793) (105,034) Administrative expense (13,381) - - Net change in plan fiduciary net position 209,846 349,616 223,771 Plan fiduciary net position - beginning 2,454,746 2,105,130 1,881,359 Plan fiduciary net position - ending (b) 2,664,592 2,454,746 2,105,130 Plan net OPEB liability (asset) - ending (a) - (b) (172,372)$ 1,287,218$ 1,456,088$ Plan fiduciary net position as a percentage of
the total OPEB liability (asset) 106.92% 65.60% 59.11%
Covered payroll 10,646,286$ 10,336,200$ 10,035,146$ Plan net OPEB liability (asset) as a percentage of covered payroll -1.62% 12.45% 14.51% 1 Historical information is presented only for periods for which GASB 75 is applicable. 2 Effective for the year ended June 30, 2020, PEHMCA Plan is valued separately.

Last Ten Fiscal Years1
City of Hercules
Required Supplementary Information (Unaudited)
Schedule of Changes in Net OPEB Liability and Related Ratios - PEHMCA Plan (Continued) For the Year Ended June 30, 2024
117
209
118
210
Measurement period, year ending: 6/30/2024 6/30/2023 6/30/2022 6/30/2021 6/30/2020 2 Total OPEB liability
Service cost 93,662$ 67,118$ 95,420$ 141,956$ 98,801$ Interest 69,546 47,903 35,501 42,108 49,689 Differences between expected and actual experience - 411,971 - (398,956) - Changes of assumptions (92,016) 57,838 (363,788) 11,351 366,382 Benefit payments, including refunds of member contributions (48,879) (42,990) (43,718) (43,536) (40,738) Net change in total OPEB liability 22,313 541,840 (276,585) (247,077) 474,134 Total OPEB liability - beginning 1,882,973 1,341,133 1,617,718 1,864,795 1,390,661 Total OPEB liability - ending (a) 1,905,286$ 1,882,973$ 1,341,133$ 1,617,718$ 1,864,795$ Fiduciary net position
Contributions - employer 48,879$ 43,718$ 43,718$ 43,536$ 40,738$ Net investment income - - - - - Benefit payments, including refunds of member contributions (48,879) (43,718) (43,718) (43,536) (40,738) Administrative expense - - - - Net change in plan fiduciary net position - - - - - Plan fiduciary net position - beginning - - - - - Plan fiduciary net position - ending (b) - - - - - Plan net OPEB liability - ending (a) - (b) 1,905,286$ 1,882,973$ 1,341,133$ 1,617,718$ 1,864,795$ Plan fiduciary net position as a percentage 0.00% 0.00% 0.00% 0.00% 0.00% of the total OPEB liability
Covered payroll -$ -$ -$ -$ -$

0.00% 0.00% 0.00% 0.00% 0.00%
of covered payroll
1 Historical information is presented only for periods for which GASB 75 is applicable. 2 SOMAR Plan is now valued separately from PEHMCA Plan effective June 30, 2020.

Plan net OPEB liability (asset) as a percentage
Last Ten Fiscal Years1
City of Hercules
Required Supplementary Information (Unaudited)
Schedule of Changes in Net OPEB Liability and Related Ratios - SOMAR Plan For the Year Ended June 30, 2024
119
211
Fiscal Year: 2023-24 2022-23 2021-22 2020-21 2019-20
Actuarially Determined Contribution 87,069$ 109,733$ 144,124$ 22,016$ 215,990$ Contribution in Relation to the Actuarially
Determined Contribution2 (87,069) (109,733) (144,124) (22,016) (215,990) Contribution Deficiency (Excess) -$ -$ -$ -$ -$ City's Covered Payroll 11,866,577$ 11,548,980$ 11,239,883$ 10,939,059$ 10,646,286$ Contributions as a Percentage of Covered Payroll 0.73% 0.95% 1.28% 0.20% 2.03% PEHMCA Plan
1 Historical information is presented only for measurement periods for which GASB No. 75 is applicable.

City of Hercules
Required Supplementary Information (Unaudited)
Schedule of the City's Contributions to the OPEB Plan
For the Year Ended June 30, 2024
Last Ten Fiscal Years1
120
212
Fiscal Year: 2018-19 2017-181
Actuarially Determined Contribution 361,275$ 205,034$ Contribution in Relation to the Actuarially
Determined Contribution2 (361,275) (205,034)
Contribution Deficiency (Excess) -$ -$ City's Covered Payroll 10,336,200$ 10,035,146$
Contributions as a Percentage of Covered Payroll 3.50% 2.04% Last Ten Fiscal Years1
PEHMCA Plan
1 Historical information is presented only for measurement periods for which GASB No. 75 is applicable.

City of Hercules
Required Supplementary Information (Unaudited)
Schedule of the City's Contributions to the OPEB Plan (Continued) For the Year Ended June 30, 2024
121
213
Fiscal Year: 2023-24 2022-23 2021-22 2020-21 2019-202
Actuarially Determined Contribution 48,879$ 43,718$ 43,536$ 43,536$ 40,738$ Contribution in Relation to the Actuarially
Determined Contribution (48,879) (43,718) (43,536) (43,536) (40,738) Contribution Deficiency (Excess) -$ -$ -$ -$ -$ City's Covered-Employee Payroll -$ -$ -$ -$ -$ Contributions as a Percentage of Covered Payroll 0.00% 0.00% 0.00% 0.00% 0.00% 2 SOMAR Plan is now valued separately from PEHMCA Plan effective June 30, 2020. 1 Historical information is presented only for measurement periods for which GASB No. 75 is applicable.

City of Hercules
Last Ten Fiscal Years1
SOMAR Plan
For the Year Ended June 30, 2024
Schedule of the City's Contributions to the OPEB Plan
Required Supplementary Information (Unaudited)
122
214

SUPPLEMENTARY INFORMATION
123
215
124
216
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Use of money and property 907,159$ 907,159$ 1,014,960$ 107,801$ Total revenues 907,159 907,159 1,014,960 107,801 EXPENDITURES:

Debt services:

Principal 703,561 703,561 703,561 - Interest and fiscal agent fee 768,535 768,535 771,385 (2,850) Total expenditures 1,472,096 1,472,096 1,474,946 (2,850)

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (564,937) (564,937) (459,986) 104,951

OTHER FINANCING SOURCES
Transfers in 563,316 563,316 563,316 - Total financing sources 563,316 563,316 563,316 - NET CHANGE IN FUND BALANCE (1,621)$ (1,621)$ 103,330 104,951$ FUND BALANCE:

Beginning of year 2,068,440
End of year 2,171,770$
City of Hercules
Schedule of Revenues, Expenditures and Change in Fund Balance - Budget and Actual Hercules Debt Service Fund
For the Year Ended June 30, 2024
125
217
126
218

NONMAJOR GOVERNMENTAL FUNDS
127
219
128
220
C.O.P.S. Program (AB 3229) Fund -This fund accounts for the California statewide sales and use tax allocated by the State for local public safety services.

AB939 JPA Fund - To account for waste haulers fee (also known as AB 939 fee) to comply with the recycling and diversion programs required by the State legislation (AB 939).

Regional Water Quality Fund -To account for the Regional Water Quality fees created by State legislature in 1967. The Board protects water quality by setting statewide policy, coordinating and supporting the Regional Water Board efforts, and reviewing petitions that contest Regional Board actions.

Asset Forfeiture - This fund accounts for police unclaimed funds. Revenue is collected from seized money and asset forfeiture.

Bart Park and Ride Fund -This fund accounts for the revenues and expenditures associated with the BART owned, but jointly operated, Hercules Transit Center, and which used to be part of the Facilities Maintenance Fund.

Hercules Village LLAD No. 2002-2 -This fund accounts for special assessments on property within district boundaries for the restricted purpose of providing landscaping and lighting services within the specified districts.

Bayside LLAD No. 2005-1 -This fund accounts for special assessments on property within district boundaries for the restricted purpose of providing landscaping and lighting services within the specified districts.

Arterial Roadways Fund - This fund accounts for special assessments on property within district boundaries for the restricted purpose of providing landscaping and lighting services within the specified districts.

Stormwater Fund- To account for activities associated with the operation and maintenance of stormwater facilities for drainage and disposal of stormwater, and operations related to the provision of services.

Development Services Fund -To account for the collection and expenditure of fees imposed as a condition of new development within the City, in compliance with California Government Code Section 66006 (AB 1600).

Baywood LLAD No. 2004-1 -This fund accounts for special assessments on property within district boundaries for the restricted purpose of providing landscaping and lighting services within the specified districts.

Road Rehabilitation Maintenance Fund -This fund accounts for the State Legislature passed SB1 which increases the funding for street projects. Revenue is restricted for street-related construction and/or maintenance projects starting from 2017.

Victoria by the bay LLAD No. 2002-1 -This fund accounts for special assessments on property within district boundaries for the restricted purpose of providing landscaping and lighting services within the specified districts.

NONMAJOR GOVERNMENTAL FUNDS
Nonmajor Special Revenue Funds:

Special Revenue Funds are used to account for revenue sources that are restricted for specific purposes (other than those resources to be expended solely for the construction of major capital facilities).

State Gas Tax Fund - This fund accounts for Gas Tax revenue received from the State of California to cover costs of street maintenance and improvements.

Measure C Street Fund - This fund accounts for Cit
y's portion of sales tax dedicated to transportation programs. 129
221
City Capital Projects Fund -This fund accounts for the financial resources utilized in acquiring or constructing capital assets for the City.

Development Impact Fees Fund -This fund accounts for the fees collected from new developments, which will be used to construct public infrastructure.

Nonmajor Capital Projects Funds:

Capital Projects Funds are used to account for resources used for the acquisition and construction of capital facilities by the City, except those financed by Proprietary Funds.

NONMAJOR GOVERNMENTAL FUNDS (Continued)
130
222
Victoria by
C.O.P.S. the ba y
State Gas Measure C Program LLAD
Tax Street (AB 3229) No. 2002-1
ASSETS
Cash and investments 486,081$ 780,122$ 62,715$ -$ Accounts receivable 62,005 - 94,664 - Total assets 548,086$ 780,122$ 157,379$ -$

LIABILITIES
Accounts payable 15,318 10,000 - 69,060 Retention payable - - - - Accrued wages 3,787 4,544 - 999 Deposit payable - - - - Due to other funds - - - 613,016 Advances from other funds - - - - Total liabilities 19,105 14,544 - 683,075

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - - 94,663 - Total deferred inflows of resources - - 94,663 -

FUND BALANCES
Restricted 528,981 765,578 62,716 - Committed - - - - Unassigned (deficit) - - - (683,075) Total fund balances (deficit) 528,981 765,578 62,716 (683,075) Total liabilities, deferred inflows
of resources and fund balances 548,086$ 780,122$ 157,379$ -$ (Continued)
Special Revenue Funds
City of Hercules
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2024
131
223
Hercules
Village Baywoo d Bayside
LLAD LLAD LLAD Arterial
No. 2002-2 No. 2004-1 No. 2005-1 Roadways
ASSETS
Cash and investments 147,206$ 68,254$ 135,431$ 539,825$ Accounts receivable - - - - Total assets 147,206$ 68,254$ 135,431$ 539,825$

LIABILITIES
Accounts payable 19,186 8,838 14,963 34,686 Retention payable - - - - Accrued wages 566 715 614 489 Deposit payable - - - - Due to other funds - - - - Advances from other funds - 102,900 - - Total liabilities 19,752 112,453 15,577 35,175

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - - - - Total deferred inflows of resources - - - -

FUND BALANCES
Restricted 127,454 - 119,854 504,650 Committed - - - - Unassigned (deficit) - (44,199) - - Total fund balances (deficit) 127,454 (44,199) 119,854 504,650 Total liabilities, deferred inflows
of resources and fund balances 147,206$ 68,254$ 135,431$ 539,825$ (Continued)
Special Revenue Funds
City of Hercules
Combining Balance Sheet (Continued)
Nonmajor Governmental Funds
June 30, 2024
132
224
Regional
Development AB939 Wate r
Stormwater Services JPA Quality
ASSETS
Cash and investments -$ 1,369,096$ 867,446$ 54,906$ Accounts receivable 96,588 167,245 43,766 - Total assets 96,588$ 1,536,341$ 911,212$ 54,906$

LIABILITIES
Accounts payable 7,140 - 13,818 - Retention payable - - - - Accrued wages 3,282 - 281 - Deposit payable - - - - Due to other funds 282,187 - - - Advances from other funds - - - - Total liabilities 292,609 - 14,099 -

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - 15,000 - - Total deferred inflows of resources - 15,000 - -

FUND BALANCES
Restricted - 1,521,341 897,113 54,906 Committed - - - - Unassigned (deficit) (196,021) - - - Total fund balances (deficit) (196,021) 1,521,341 897,113 54,906 Total liabilities, deferred inflows
of resources and fund balances 96,588$ 1,536,341$ 911,212$ 54,906$ (Continued)
Special Revenue Funds
City of Hercules
Combining Balance Sheet (Continued)
Nonmajor Governmental Funds
June 30, 2024
133
225
Capital Projects
Funds
Road
Asset Bart Rehabilitation City Capital
Forfeiture Park and Ride Maintenance Projects Fund
ASSETS
Cash and investments 228,020$ 549$ 1,053,703$ -$ Accounts receivable - - 54,740 1,426,062 Total assets 228,020$ 549$ 1,108,443$ 1,426,062$

LIABILITIES
Accounts payable 8,750 814 46,467 136,473 Retention payable - - 80,215 - Accrued wages - - - - Deposit payable 38,798 - - - Due to other funds - - - 582,344 Advances from other funds - - - - Total liabilities 47,548 814 126,682 718,817

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - - - 382,950 Total deferred inflows of resources - - - 382,950

FUND BALANCES
Restricted 180,472 981,761 -
Committed - - - 324,295 Unassigned (deficit) - (265) - - Total fund balances (deficit) 180,472 (265) 981,761 324,295 Total liabilities, deferred inflows
of resources and fund balances 228,020$ 549$ 1,108,443$ 1,426,062$ (Continued)
Special Revenue Funds
City of Hercules
Combining Balance Sheet (Continued)
Nonmajor Governmental Funds
June 30, 2024
134
226
Capital Projects
Funds
Development
Impact
Fees Total
ASSETS
Cash and investments 2,110,936$ 7,904,290$
Accounts receivable - 1,945,070
Total assets 2,110,936$ 9,849,360$

LIABILITIES
Accounts payable - 385,513
Retention payable - 80,215
Accrued wages - 15,277
Deposit payable - 38,798
Due to other funds - 1,477,547
Advances from other funds - 102,900 Total liabilities - 2,100,250

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - 492,613
Total deferred inflows of resources - 492,613

FUND BALANCES
Restricted 2,110,936 7,855,762
Committed - 324,295
Unassigned (deficit) - (923,560) Total fund balances (deficit) 2,110,936 7,256,497 Total liabilities, deferred inflows
of resources and fund balances 2,110,936$ 9,849,360$ (Concluded)
City of Hercules
Combining Balance Sheet (Continued)
Nonmajor Governmental Funds
June 30, 2024
135
227
Victoria by
C.O.P.S. the ba y
State Gas Measure C Program LLAD
Tax Street (AB 3229) No. 2002-1
REVENUES:

Taxes and assessments -$ -$ -$ 508,538$ Licenses and permits - - - - Use of money and property 24,711 29,866 - - Intergovernmental 721,198 1,043,772 186,160 - Charges for services - - - - Other revenues - - - - Total revenues 745,909 1,073,638 186,160 508,538 EXPENDITURES:

Current:

Public safety - - - - Streets and public works 455,357 327,285 - 766,390 Community development - - - - Capital outlay 148,105 117,346 - - Debt services:

Principal - - - - Interest and fiscal agent fee - - - - Total expenditures 603,462 444,631 - 766,390

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 142,447 629,007 186,160 (257,852)

OTHER FINANCING SOURCES (USES)
Transfers in - - - 10,248 Transfers (out) (50,342) - (156,727) (28,016) Total financing sources (uses) (50,342) - (156,727) (17,768) NET CHANGES IN FUND BALANCES 92,105 629,007 29,433 (275,620) FUND BALANCES (DEFICIT):

Beginning of year 436,876 136,571 33,283 (407,455) End of year 528,981$ 765,578$ 62,716$ (683,075)$ (Continued)
Special Revenue Funds
City of Hercules
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds
For the Year Ended June 30, 2024
136
228
Hercules
Village Baywoo d Bayside
LLAD LLAD LLAD Arterial
No. 2002-2 No. 2004-1 No. 2005-1 Roadways
REVENUES:

Taxes and assessments 174,570$ 166,246$ 159,093$ -$ Licenses and permits - - - - Use of money and property 7,835 3,171 7,432 28,325 Intergovernmental - - - - Charges for services - - - - Other revenues - - - - Total revenues 182,405 169,417 166,525 28,325 EXPENDITURES:

Current:

Public safety - - - - Streets and public works 207,421 141,066 161,595 308,731 Community development - - - - Capital outlay - - - - Debt services:

Principal - - - - Interest and fiscal agent fee - - - - Total expenditures 207,421 141,066 161,595 308,731

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (25,016) 28,351 4,930 (280,406)

OTHER FINANCING SOURCES (USES)
Transfers in 4,062 2,665 2,330 322,637 Transfers (out) (7,725) (2,781) (19,055) - Total financing sources (uses) (3,663) (116) (16,725) 322,637 NET CHANGES IN FUND BALANCES (28,679) 28,235 (11,795) 42,231 FUND BALANCES (DEFICIT):

Beginning of year 156,133 (72,434) 131,649 462,419 End of year 127,454$ (44,199)$ 119,854$ 504,650$ (Continued)
Special Revenue Funds
City of Hercules
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Nonmajor Governmental Funds
For the Year Ended June 30, 2024
137
229
Regional
Development AB939 Wate r
Stormwater Services JPA Quality
REVENUES:

Taxes and assessments 221,305$ 119,542$ -$ -$ Licenses and permits - - 176,206 - Use of money and property - 65,306 44,590 2,718 Intergovernmental - 135,000 - - Charges for services - - - - Other revenues - - 36,622 - Total revenues 221,305 319,848 257,418 2,718 EXPENDITURES:

Current:

Public safety - - - - Streets and public works 398,040 - 1,790 - Community development - - - - Capital outlay - - 11,197 - Debt services:

Principal - - - - Interest and fiscal agent fee - - - - Total expenditures 398,040 - 12,987 -

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (176,735) 319,848 244,431 2,718

OTHER FINANCING SOURCES (USES)
Transfers in 125,000 - - - Transfers (out) - - (125,000) - Total financing sources (uses) 125,000 - (125,000) - NET CHANGES IN FUND BALANCES (51,735) 319,848 119,431 2,718 FUND BALANCES (DEFICIT):

Beginning of year (144,286) 1,201,493 777,682 52,188 End of year (196,021)$ 1,521,341$ 897,113$ 54,906$ (Continued)
Special Revenue Funds
City of Hercules
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Nonmajor Governmental Funds
For the Year Ended June 30, 2024
138
230
Capital Projects
Funds
Road
Asset Bart Rehabilitation City Capital
Forfeiture Park and Ride Maintenance Projects Fund
REVENUES:

Taxes and assessments -$ -$ -$ 58,161$ Licenses and permits - - - - Use of money and property 10,019 5,381 45,065 14,796 Intergovernmental 1,133 - 664,869 1,667,220 Charges for services - - - - Other revenues - 32,317 - - Total revenues 11,152 37,698 709,934 1,740,177 EXPENDITURES:

Current:

Public safety 29,977 - - - Streets and public works - 258,411 249,696 54,908 Community development - - - 473,609 Capital outlay 21,066 100,000 - 1,966,029 Debt services:

Principal - - - 127,479 Interest and fiscal agent fee - - - 108,417 Total expenditures 51,043 358,411 249,696 2,730,442

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (39,891) (320,713) 460,238 (990,265)

OTHER FINANCING SOURCES (USES)
Transfers in - - - 875,609 Transfers (out) - - - (250,000) Total financing sources (uses) - - - 625,609 NET CHANGES IN FUND BALANCES (39,891) (320,713) 460,238 (364,656) FUND BALANCES (DEFICIT):

Beginning of year 220,363 320,448 521,523 688,951 End of year 180,472$ (265)$ 981,761$ 324,295$ (Continued)
City of Hercules
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Nonmajor Governmental Funds
For the Year Ended June 30, 2024
Special Revenue Funds
139
231
Capital Projects
Funds
Development
Impact
Fees Total
REVENUES:

Taxes and assessments -$ 1,407,455$ Licenses and permits - 176,206
Use of money and property 100,156 389,371
Intergovernmental - 4,419,352
Charges for services 338,918 338,918
Other revenues - 68,939
Total revenues 439,074 6,800,241
EXPENDITURES:

Current:

Public safety - 29,977
Streets and public works 829 3,331,519 Community development - 473,609
Capital outlay 39,766 2,403,509
Debt services:

Principal - 127,479
Interest and fiscal agent fee - 108,417 Total expenditures 40,595 6,474,510

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 398,479 325,731

OTHER FINANCING SOURCES (USES)
Transfers in - 1,342,551
Transfers (out) - (639,646)
Total financing sources (uses) - 702,905 NET CHANGES IN FUND BALANCES 398,479 1,028,636 FUND BALANCES (DEFICIT):

Beginning of year 1,712,457 6,227,861
End of year 2,110,936$ 7,256,497$
(Concluded)
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) City of Hercules
For the Year Ended June 30, 2024
Nonmajor Governmental Funds
140
232
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Use of money and property -$ -$ 24,711$ 24,711$ Intergovernmental 1,392,993 1,392,993 721,198 (671,795) Total revenues 1,392,993 1,392,993 745,909 (647,084) EXPENDITURES:

Current:

Streets and public works 482,688 493,452 455,357 38,095 Capital outlay 724,496 905,749 148,105 757,644 Total expenditures 1,207,184 1,399,201 603,462 795,739

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 185,809 (6,208) 142,447 148,655

OTHER FINANCING (USES)
Transfers (out) (50,342) (50,342) (50,342) - Total financing (uses) (50,342) (50,342) (50,342) - NET CHANGE IN FUND BALANCE 135,467$ (56,550)$ 92,105 148,655$ FUND BALANCE:

Beginning of year 436,876
End of year 528,981$
City of Hercules
Schedule of Revenues, Expenditures and Change in Fund Balance - Budget and Actual State Gas Tax Special Revenue Fund
For the Year Ended June 30, 2024
141
233
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Use of money and property -$ -$ 29,866$ 29,866$ Intergovernmental 450,000 450,000 1,043,772 593,772 Total revenues 450,000 450,000 1,073,638 623,638 EXPENDITURES:

Current:

Streets and public works 323,315 323,315 327,285 (3,970) Capital outlay 206,650 206,650 117,346 89,304 Total expenditures 529,965 529,965 444,631 85,334 NET CHANGE IN FUND BALANCE (79,965)$ (79,965)$ 629,007 708,972$ FUND BALANCE:

Beginning of year 136,571
End of year 765,578$
City of Hercules
Schedule of Revenues, Expenditures and Change in Fund Balance - Budget and Actual Measure C Special Revenue Fund
For the Year Ended June 30, 2024
142
234
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Intergovernmental 150,000$ 150,000$ 186,160$ 36,160$ Total revenues 150,000 150,000 186,160 36,160

OTHER FINANCING (USES)
Transfers (out) (156,727) (156,727) (156,727) - Total financing (uses) (156,727) (156,727) (156,727) - NET CHANGE IN FUND BALANCE (6,727)$ (6,727)$ 29,433 36,160$ FUND BALANCE:

Beginning of year 33,283
End of year 62,716$
City of Hercules
Schedule of Revenues, Expenditures and Change in Fund Balance - Budget and Actual C.O.P.S. Program (AB 3299) Special Revenue Fund
For the Year Ended June 30, 2024
143
235
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Taxes and assessments 510,332$ 510,332$ 508,538$ (1,794)$ Total revenues 510,332 510,332 508,538 (1,794) EXPENDITURES:

Current:

Streets and public works 601,894 631,467 766,390 (134,923) Total expenditures 601,894 631,467 766,390 (134,923)

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (91,562) (121,135) (257,852) (136,717)

OTHER FINANCING SOURCES (USES)
Transfer in 10,248 10,248 10,248 - Transfers (out) (28,016) (28,016) (28,016) - Total financing (uses) (17,768) (17,768) (17,768) - NET CHANGE IN FUND BALANCE (109,330)$ (138,903)$ (275,620) (136,717)$ FUND BALANCE (DEFICIT):

Beginning of year (407,455)
End of year (683,075)$
City of Hercules
Schedule of Revenues, Expenditures and Change in Fund Balance - Budget and Actual Victoria By the Bay LLAD No. 2002-1 Special Revenue Fund For the Year Ended June 30, 2024
144
236
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Taxes and assessments 174,920$ 174,920$ 174,570$ (350)$ Use of money and property - - 7,835 7,835 Total revenues 174,920 174,920 182,405 7,485 EXPENDITURES:

Current:

Streets and public works 220,435 233,759 207,421 26,338 Total expenditures 220,435 233,759 207,421 26,338

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (45,515) (58,839) (25,016) 33,823

OTHER FINANCING SOURCES (USES)
Transfers in 4,062 4,062 4,062 - Transfers (out) (7,725) (7,725) (7,725) - Total financing sources (uses) (3,663) (3,663) (3,663) - NET CHANGE IN FUND BALANCE (49,178)$ (62,502)$ (28,679) 33,823$ FUND BALANCE:

Beginning of year 156,133
End of year 127,454$
City of Hercules
Schedule of Revenues, Expenditures and Change in Fund Balance - Budget and Actual Hercules Village LLAD No. 2002-2 Special Revenue Fund
For the Year Ended June 30, 2024
145
237
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Taxes and assessments 170,565$ 170,565$ 166,246$ (4,319)$ Use of money and property - - 3,171 3,171 Total revenues 170,565 170,565 169,417 (1,148) EXPENDITURES:

Current:

Streets and public works 170,394 171,218 141,066 30,152 Total expenditures 170,394 171,218 141,066 30,152

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 171 (653) 28,351 29,004

OTHER FINANCING SOURCES (USES)
Transfers in 2,665 2,665 2,665 - Transfers (out) (2,781) (2,781) (2,781) - Total financing sources (uses) (116) (116) (116) - NET CHANGE IN FUND BALANCE 55$ (769)$ 28,235 29,004$ FUND BALANCE (DEFICIT):

Beginning of year (72,434)
End of year (44,199)$
City of Hercules
Schedule of Revenues, Expenditures and Change in Fund Balance - Budget and Actual Baywood LLAD No. 2004-1 Special Revenue Fund
For the Year Ended June 30, 2024
146
238
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Taxes and assessments 158,335$ 158,335$ 159,093$ 758$ Use of money and property - - 7,432 7,432 Total revenues 158,335 158,335 166,525 8,190 EXPENDITURES:

Current:

Streets and public works 131,030 136,780 161,595 (24,815) Total expenditures 131,030 136,780 161,595 (24,815)

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 27,305 21,555 4,930 (16,625)

OTHER FINANCING SOURCES (USES)
Transfers in 2,330 2,330 2,330 - Transfers (out) (19,055) (19,055) (19,055) - Total financing sources (uses) (16,725) (16,725) (16,725) - NET CHANGE IN FUND BALANCE 10,580$ 4,830$ (11,795) (16,625)$ FUND BALANCE:

Beginning of year 131,649
End of year 119,854$
City of Hercules
Schedule of Revenues, Expenditures and Change in Fund Balance - Budget and Actual Bayside LLAD No. 2005-1 Special Revenue Fund
For the Year Ended June 30, 2024
147
239
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Use of money and property -$ -$ 28,325$ 28,325$ Total revenues - - 28,325 28,325 EXPENDITURES:

Current:

Streets and public works 327,980 328,804 308,731 20,073 Total expenditures 327,980 328,804 308,731 20,073

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (327,980) (328,804) (280,406) 48,398

OTHER FINANCING SOURCES
Transfers in 322,637 322,637 322,637 - Total financing sources 322,637 322,637 322,637 - NET CHANGE IN FUND BALANCE (5,343)$ (6,167)$ 42,231 48,398$ FUND BALANCE:

Beginning of year 462,419
End of year 504,650$
City of Hercules
Schedule of Revenues, Expenditures and Change in Fund Balance - Budget and Actual Arterial Roadways Special Revenue Fund
For the Year Ended June 30, 2024
148
240
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Taxes and assessments 256,000$ 256,000$ 221,305$ (34,695)$ Total revenues 256,000 256,000 221,305 (34,695) EXPENDITURES:

Current:

Streets and public works 434,832 448,167 398,040 50,127 Total expenditures 434,832 448,167 398,040 50,127

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (178,832) (192,167) (176,735) 15,432

OTHER FINANCING SOURCES
Transfers in 125,000 125,000 125,000 - Total financing sources 125,000 125,000 125,000 - NET CHANGE IN FUND BALANCE (53,832)$ (67,167)$ (51,735) 15,432$ FUND BALANCE (DEFICIT):

Beginning of year (144,286)
End of year (196,021)$
City of Hercules
Schedule of Revenues, Expenditures and Change in Fund Balance - Budget and Actual Stormwater Special Revenue Fund
For the Year Ended June 30, 2024
149
241
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Taxes and assessments 300,000$ 300,000$ 119,542$ (180,458)$ Use of money and property - - 65,306 65,306 Intergovernmental - - 135,000 135,000 Total revenues 300,000 300,000 319,848 19,848 EXPENDITURES:

Current:

Streets and public works - 8,726 - 8,726 Total expenditures - 8,726 - 8,726 NET CHANGES IN FUND BALANCE 300,000$ 291,274$ 319,848 28,574$ FUND BALANCE:

Beginning of year 1,201,493
End of year 1,521,341$
City of Hercules
Schedule of Revenues, Expenditures and Change in Fund Balance - Budget and Actual Development Services Special Revenue Fund
For the Year Ended June 30, 2024
150
242
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Licenses and permits 176,000$ 176,000$ 176,206$ 206$ Use of money and property 4,000 4,000 44,590 40,590 Other revenues - - 36,622 36,622 Total revenues 180,000 180,000 257,418 77,418 EXPENDITURES:

Current:

Streets and public works 2,744 9,608 1,790 7,818 Capital outlay 109,818 109,818 11,197 98,621 Total expenditures 112,562 119,426 12,987 106,439

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 67,438 60,574 244,431 183,857

OTHER FINANCING (USES)
Transfers (out) (125,000) (125,000) (125,000) - Total financing (uses) (125,000) (125,000) (125,000) - NET CHANGE IN FUND BALANCE (57,562)$ (64,426)$ 119,431 183,857$ FUND BALANCE:

Beginning of year 777,682
End of year 897,113$
City of Hercules
Schedule of Revenues, Expenditures and Change in Fund Balance - Budget and Actual AB939 JPA Special Revenue Fund
For the Year Ended June 30, 2024
151
243
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Use of money and property -$ -$ 10,019$ 10,019$ Intergovernmental - - 1,133 1,133 Total revenues - - 11,152 11,152 EXPENDITURES:

Current:

Public safety - 57,918 29,977 27,941 Capital outlay - 13,717 21,066 (7,349) Total expenditures - 71,635 51,043 20,592 NET CHANGE IN FUND BALANCE -$ (71,635)$ (39,891) 31,744$ FUND BALANCE:

Beginning of year 220,363
End of year 180,472$
City of Hercules
Schedule of Revenues, Expenditures and Change in Fund Balance - Budget and Actual Asset Forfeiture Special Revenue Fund
For the Year Ended June 30, 2024
152
244
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Use of money and property -$ -$ 5,381$ 5,381$ Other revenue 182,000 182,000 32,317 (149,683) Total revenues 182,000 182,000 37,698 (144,302) EXPENDITURES:

Current:

Streets and public works 82,000 82,000 258,411 (176,411) Capital outlay 100,000 100,000 100,000 - Total expenditures 182,000 182,000 358,411 (176,411) NET CHANGE IN FUND BALANCE -$ -$ (320,713) (320,713)$ FUND BALANCE (DEFICIT):

Beginning of year 320,448
End of year (265)$
City of Hercules
Schedule of Revenues, Expenditures and Change in Fund Balance - Budget and Actual Bart Park and Ride Special Revenue Fund
For the Year Ended June 30, 2024
153
245
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Use of money and property -$ -$ 45,065$ 45,065$ Intergovernmental - - 664,869 664,869 Total revenues - - 709,934 709,934 EXPENDITURES:

Current:

Streets and public works - 145,587 249,696 (104,109) Total expenditures - 145,587 249,696 (104,109) NET CHANGE IN FUND BALANCE -$ (145,587)$ 460,238 605,825$ FUND BALANCE:

Beginning of year 521,523
End of year 981,761$
City of Hercules
Schedule of Revenues, Expenditures and Change in Fund Balance - Budget and Actual Road Rehabilitation Maintenance Special Revenue Fund
For the Year Ended June 30, 2024
154
246
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Taxes and assessments 50,000$ 50,000$ 58,161$ 8,161$ Use of money and property - - 14,796 14,796 Intergovernmental 802,506 860,506 1,667,220 806,714 Total revenues 852,506 910,506 1,740,177 829,671 EXPENDITURES:

Current:

Street and public works - - 54,908 (54,908) Community development - - 473,609 (473,609) Capital outlay 1,299,506 2,125,972 1,966,029 159,943 Debt services:

Principal 127,479 127,479 127,479 - Interest and fiscal agent fee 108,417 108,417 108,417 - Total expenditures 1,535,402 2,361,868 2,730,442 (368,574)

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (682,896) (1,451,362) (990,265) 461,097

OTHER FINANCING SOURCES
Transfers in 685,896 629,297 875,609 246,312 Transfers out - - (250,000) (250,000) Total financing sources 685,896 629,297 625,609 (3,688) NET CHANGE IN FUND BALANCE 3,000$ (822,065)$ (364,656) 457,409$ FUND BALANCE:

Beginning of year 688,951
End of year 324,295$
City of Hercules
Schedule of Revenues, Expenditures and Change in Fund Balance - Budget and Actual City Capital Projects Fund
For the Year Ended June 30, 2024
155
247
Original Final Variance with
Budget Budget Actual Final Budget
REVENUES:

Use of money and property -$ -$ 100,156$ 100,156$ Charges for services 34,950 34,950 338,918 303,968 Total revenues 34,950 34,950 439,074 404,124 EXPENDITURES:

Current:

Streets and public works - - 829 (829) Capital outlay - 39,766 39,766 - Total expenditures - 39,766 40,595 (829) NET CHANGE IN FUND BALANCE 34,950$ (4,816)$ 398,479 403,295$ FUND BALANCE:

Beginning of year 1,712,457
End of year 2,110,936$
City of Hercules
Schedule of Revenues, Expenditures and Change in Fund Balance - Budget and Actual Development Impact Fees Capital Projects Fund
For the Year Ended June 30, 2024
156
248

INTERNAL SERVICE FUNDS
Vehicle Replacement Fund This fund accounts for the purchase of automotive for various City departments.

Technolgy Services Fund This fund is used to account for maintenance and operations of the information technology for various City departments.

Internal Service Funds are used to finance and account for special activities and services performed by a designated department for other departments in the city on a cost reimbursement basis.

Facilities Maintenance This fund accounts for the repair and maintenance of City facilities and for provision of custodial and maintenance services related thereto.
157
249
158
250
Vehicle Technolog y Facilities
Replacement Services Maintenance Total
ASSETS
Current assets:

Cash and investments 314,637$ 1,255,955$ 307,067$ 1,877,659$ Total current assets 314,637 1,255,955 307,067 1,877,659 Noncurrent assets:

Net OPEB asset - PEHMCA - 8,890 4,445 13,335 Capital assets:

Depreciable and amortizable, net 621,091 244,152 - 865,243 Total noncurrent assets 621,091 253,042 4,445 878,578 Total assets 935,728 1,508,997 311,512 2,756,237

DEFERRED OUTFLOWS OF RESOURCES
Pensions-related deferred outflows of resources - 185,846 119,654 305,500 OPEB-related deferred inflows of resources (PEHMCA) - 12,741 6,370 19,111 OPEB-related deferred outflows of resources (SOMAR) - 19,419 9,710 29,129 Total deferred outflows of resources - 218,006 135,734 353,740

LIABILITIES
Current liabilities:

Accounts payable - 20,243 21,887 42,130 Salaries and benefits payable - 6,695 4,016 10,711 Compensated absences, due in one year - 26,217 10,295 36,512 Subscription liability, due in one year - 11,494 - 11,494 Total current liabilities - 64,649 36,198 100,847 Noncurrent liabilities:

Compensated absences - 8,739 3,431 12,170 Subscription liability - 12,454 - 12,454 Net pension liability - 506,851 326,328 833,179 Net OPEB liability - SOMAR - 62,469 31,234 93,703 Total noncurrent liabilities - 590,513 360,993 951,506 Total liabilities - 655,162 397,191 1,052,353

DEFERRED INFLOWS OF RESOURCES
Pensions-related deferred outflows of resources - 39,765 25,602 65,367 OPEB-related deferred outflows of resources (PEHMCA) - 49,374 24,687 74,061 OPEB-related deferred outflows of resources (SOMAR) - 19,886 9,944 29,830 Total deferred inflows of resources - 109,025 60,233 169,258

NET POSITION
Net investment in capital assets 621,091 220,204 - 841,295 Unrestricted (deficit) 314,637 742,612 (10,178) 1,047,071 Total net position 935,728$ 962,816$ (10,178)$ 1,888,366$ City of Hercules
Combining Statement of Net Position
Internal Service Funds
June 30, 2024
159
251
Vehicle Technolog y Facilities
Replacement Services Maintenance Total
OPERATING REVENUES:

Charges for services 153,000$ 1,013,843$ 938,955$ 2,105,798$ Other operating revenues 21,693 6,065 - 27,758 Total operating revenues 174,693 1,019,908 938,955 2,133,556 OPERATING EXPENSES:

Salaries and benefits - 411,866 245,407 657,273 Services and supplies - 636,496 936,396 1,572,892 Depreciation and amortization 177,436 69,955 - 247,391 Total operating expenses 177,436 1,118,317 1,181,803 2,477,556 OPERATING INCOME (LOSS) (2,743) (98,409) (242,848) (344,000)

NONOPERATING (EXPENSES)
Interest (expenses) - (798) - (798) INCOME (LOSS) BEFORE TRANSFERS (2,743) (99,207) (242,848) (344,798) TRANSFERS:

Transfers in - 261,696 - 261,696 Transfers (out) - - (261,696) (261,696) Total transfers - 261,696 (261,696) - CHANGES IN NET POSITION (2,743) 162,489 (504,544) (344,798) NET POSITION (DEFICIT):

Beginning of year 938,471 800,327 494,366 2,233,164 End of year 935,728$ 962,816$ (10,178)$ 1,888,366$ City of Hercules
Combining Statement of Revenues, Expenses, and Changes in Net Position Internal Service Funds
For the Year Ended June 30, 2024
160
252
Vehicle Technolog y Facilities
Replacement Services Maintenance Total
CASH FLOWS FROM OPERATING ACTIVITIES:

Cash receipts from internal services provided 174,693$ 1,019,908$ 938,955$ 2,133,556$ Cash paid to suppliers for goods and services - (622,996) (947,616) (1,570,612) Cash paid to employees for services - (404,680) (194,775) (599,455) Net cash provided by (used in) operating activities 174,693 (7,768) (203,436) (36,511)

CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES:

Cash received from (paid to) other funds - 261,696 (261,696) - Net cash provided (used in) noncapital
financing activities - 261,696 (261,696) -

CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES:

Payments related to the acquisition of capital assets (175,680) - - (175,680) Principal repayments related to capital purposes - (11,494) - (11,494) Interest repayments related to capital purposes - (798) - (798) Net cash (used in) capital and related
financing activitie
s (175,680) (12,292) - (187,972) NET CHANGES IN CASH AND CASH EQUIVALENTS (987) 241,636 (465,132) (224,483) CASH AND CASH EQUIVALENTS:

Beginning of year 315,624 1,014,319 772,199 2,102,142 End of year 314,637$ 1,255,955$ 307,067$ 1,877,659$

RECONCILIATION OF OPERATING INCOME (LOSS)

TO NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES:

Operating income (loss) (2,743)$ (98,409)$ (242,848)$ (344,000)$ Adjustments to reconcile operating income (loss)
to net cash provided by (used in) operating activities:

Depreciation 177,436 69,955 - 247,391 (Increase) Decrease in Assets and Deferred Outflow
s
Pensions-related deferred outflows - 12,917 (14,247) (1,330) OPEB-related deferred outflows - 14,146 7,074 21,220 Increase (Decrease) in Liabilities and Deferred Inflows Accounts Payable - 13,500 (11,220) 2,280 Salaries and benefits payable - 2,045 2,402 4,447 Net pension liability - 18,862 67,542 86,404 Net OPEB liability - (4,781) (2,391) (7,172) Pensions-related deferred inflows - (21,234) (6,747) (27,981) OPEB-related deferred inflows - (14,261) (7,129) (21,390) Compensated absences - (508) 4,128 3,620 Total adjustments 177,436 90,641 39,412 307,489 Net cash provided by (used in) operating activities 174,693$ (7,768)$ (203,436)$ (36,511)$ City of Hercules
Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended June 30, 2024
161
253
162
254

FIDUCIARY-CUSTODIAL FUNDS
Taylor Woodrow Fund This fund is to be use for the benefit of the qualified buyers or affordable unit owners.

Reassessment District 05-01 Fund This fund account for the collection of assessment and the disbursement to Reassessment District 2005-1 (John Muir Parkway) district bond holders for debt without City commitment. 163
255
164
256
Taylor
Reassessment Woodrow
District Maintenance
05-01 LMOD Total
ASSETS
Cash and investments 357,158$ 74,567$ 431,725$ Cash and investments with fiscal agents 55,798 - 55,798 Total assets 412,956 74,567 487,523

NET POSITION
Restricted for individuals, organization, and other government 412,956 74,567 487,523 Total net position 412,956$ 74,567$ 487,523$ City of Hercules
Combining Statement of Fiduciary Net Position
Fiduciary Funds - Custodial Funds
June 30, 2024
165
257
Taylor
Reassessment Woodrow
District Maintenance
05-01 LMOD Total
ADDITIONS:

Taxes and assessments 228,616$ -$ 228,616$ Investment income 17,664 3,692 21,356 Total additions 246,280 3,692 249,972 DEDUCTIONS:

Administration 6,885 - 6,885 Interest and fiscal agent fee 55,695 - 55,695 Principal payment to refunding escrow 164,943 - 164,943 Total deduction
s 227,523 - 227,523
CHANGES IN FIDUCIARY NET POSITION 18,757 3,692 22,449 NET POSITION:

Beginning of year 394,199 70,875 465,074 End of year 412,956$ 74,567$ 487,523$ City of Hercules
Combining Statement of Changes in Fiduciary Net Position Fiduciary Funds - Custodial Funds
For the Year Ended June 30, 2024
166
258

STATISTICAL SECTION
167
259
168
260
Debt Capacity (pages 188-194)
These schedules present information to help the reader assess the affordability of the Citys current levels of outstanding debt and the Citys ability to issue additional debt in the future.

Demographic and Economic Information (pages 195)
These schedules offer demographic and economic indicators to help the reader understand the environment with which the Citys financial activities take place.

Operating Information (pages 196-203)
These schedules contain service and infrastructure data to help the reader understand how the information in the Citys financial report relates to the services the government provides and the activities it performs.

City of Hercules
Description of Statistical Section Contents
This part of the City of Hercules' annual comprehensive financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City's overall financial health.

Financial Trends (pages 170-179)
These schedules contain trend information to help the reader understand how the Citys financial performance and well-being have changed over time.

Revenue Capacity (pages 180-187)
These schedules contain information to help the reader assess the Citys most significant local revenue sources, transient occupancy tax (TOT) and property taxes.
169
261
2015 2016 2017 2018 2019
Governmental activities
Net investment in capital assets 65,597,425$ 67,814,198$ 73,286,966$ 76,304,118$ 76,082,830$ Restricted 21,070,727 7,026,074 18,239,035 21,086,055 21,495,653 Unrestricted 16,564,422 34,482,114 27,146,535 24,579,483 26,259,010 Total governmental activities net position 103,232,574$ 109,322,386$ 118,672,536$ 121,969,656$ 123,837,493$ Business-type activities
Net investment in capital assets 9,942,508$ 11,637,225$ 9,503,346$ 10,572,862$ 9,384,765$ Restricted - - - - 7,582,403 Unrestricted 22,931,509 22,643,219 27,529,908 29,000,343 23,910,447 Total business-type activities net position 32,874,017$ 34,280,444$ 37,033,254$ 39,573,205$ 40,877,615$ Primary government
Net investment in capital assets 75,539,933$ 79,451,423$ 82,790,312$ 86,876,980$ 85,467,595$ Restricted 21,070,727 7,026,074 18,239,035 21,086,055 29,078,056 Unrestricted 39,495,931 57,125,333 54,676,443 53,579,826 50,169,457 Total primary government net position 136,106,591$ 143,602,830$ 155,705,790$ 161,542,861$ 164,715,108$ Source: City Finance Department
For the Fiscal Year Ended June 30, 2024
City of Hercules
Net Position by Component
Last Ten Fiscal Years
(Accrual Basis of Accounting)
170
262
2020 2021 2022 2023 2024
Governmental activities
Net investment in capital assets 73,639,890$ 69,628,982$ 60,257,709$ 60,790,322$ 59,889,211$ Restricted 20,047,707 20,047,707 7,183,715 10,730,230 13,368,313 Unrestricted 23,471,208 24,205,660 10,532,917 11,624,496 11,155,874 Total governmental activities net position 117,158,805$ 113,882,349$ 77,974,341$ 83,145,048$ 84,413,398$ Business-type activities
Net investment in capital assets 11,587,259$ 7,230,469$ 15,704,349$ 19,602,539$ 20,884,471$ Restricted 7,674,002 7,679,725 - - - Unrestricted 23,244,232 29,474,812 18,566,052 15,798,815 15,998,566 Total business-type activities net position 42,505,493$ 44,385,006$ 34,270,401$ 35,401,354$ 36,883,037$ Primary government
Net investment in capital assets 85,227,149$ 76,859,451$ 75,962,058$ 80,392,861$ 80,773,682$ Restricted 27,721,709 27,727,432 7,183,715 10,730,230 13,368,313 Unrestricted 46,715,440 53,680,472 29,098,969 27,423,311 27,154,440 Total primary government net position 159,664,298$ 158,267,355$ 112,244,742$ 118,546,402$ 121,296,435$ Source: City Finance Department
For the Fiscal Year Ended June 30, 2024
City of Hercules
Net Position by Component (Continued)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
171
263
2015 2016 2017 2018 2019
Expenses
Governmental Activities:

General Government 3,133,995$ 3,706,717$ 4,025,706$ 4,105,705$ 5,094,236$ Public Safety 5,094,319 5,299,440 5,365,068 7,034,658 7,055,390 Public Works 4,880,174 4,667,439 5,035,767 6,894,640 6,727,710 Parks and Recreation 2,074,783 2,216,525 3,050,786 2,657,763 2,564,008 Community Development 742,529 400,754 640,428 491,562 630,341 Interest on Long-Term Debt 1,277,353 1,301,053 1,220,791 1,141,982 1,256,456 Total Governmental Activities 17,203,153 17,591,928 19,338,546 22,326,310 23,328,141 Business-Type Activities:

Sewer 2,834,835 3,854,974 3,092,380 3,750,261 5,343,759 Total Business-Type Activities Expenses 2,834,835 3,854,974 3,092,380 3,750,261 5,343,759 Total Primary Government Expenses 20,037,988$ 21,446,902$ 22,430,926$ 26,076,571$ 28,671,900$ Program Revenues
Governmental Activities:

General Government 361,223$ 128,430$ 113,875$ 3,866,023$ 1,816,337$ Public Safety 523,708 543,761 1,171,960 524,703 882,823 Public Works 6,150,061 12,784,856 12,014,579 5,218,076 4,433,560 Parks and Recreation 1,604,294 1,538,554 1,715,375 1,696,769 1,731,066 Community Development 890,867 364,191 823,972 1,534,666 1,658,265 Total Government Activities Program Revenues 9,530,153 15,359,792 15,839,761 12,840,237 10,522,051 Business-Type Activities:

Sewer 6,028,122 5,595,044 5,797,766 6,145,215 6,003,202 Total Business-Type Activities Program Revenue 6,028,122 5,595,044 5,797,766 6,145,215 6,003,202 Total Primary Government Program Revenues 15,558,275$ 20,954,836$ 21,637,527$ 18,985,452$ 16,525,253$ Net (Expense)/Revenue
Governmental Activities (7,673,000) (2,232,136) (3,498,785) (9,486,073) (12,806,090) Business-Type Activities 3,193,287 1,740,070 2,705,386 2,394,954 659,443 Total Primary Government Net Expense (4,479,713)$ (492,066)$ (793,399)$ (7,091,119)$ (12,146,647)$ Source: City Finance Department
For the Fiscal Year Ended June 30, 2024
City of Hercules
Changes in Net Position
Last Ten Fiscal Years
(Accrual Basis of Accounting)
172
264
2020 2021 2022 2023 2024
Expenses
Governmental Activities:

General Government 4,634,707$ 4,435,331$ 4,768,150$ 4,929,390$ 5,378,751$ Public Safety 8,844,059 9,273,713 6,581,205 7,556,734 10,027,823 Public Works 8,447,150 7,715,011 8,560,194 8,220,052 8,736,149 Parks and Recreation 2,786,635 2,104,559 2,312,529 2,503,805 2,955,545 Community Development 595,927 918,476 1,253,855 483,875 1,297,680 Interest on Long-Term Debt 1,159,848 959,355 1,007,813 905,708 1,022,790 Total Governmental Activities 26,468,326 25,406,445 24,483,746 24,599,564 29,418,738 Business-Type Activities:

Sewer 4,593,120 3,894,420 5,221,938 5,086,004 5,262,133 Total Business-Type Activities Expenses 4,593,120 3,894,420 5,221,938 5,086,004 5,262,133 Total Primary Government Expenses 31,061,446$ 29,300,865$ 29,705,684$ 29,685,568$ 34,680,871$ Program Revenues
Governmental Activities:

General Government 719,485$ 1,343,812$ 1,030,250$ 816,793$ 767,385$ Public Safety 743,462 540,238 3,539,598 3,781,755 541,352 Public Works 5,546,868 4,196,125 5,827,479 5,575,763 8,436,772 Parks and Recreation 1,030,758 396,289 1,034,873 1,423,942 1,649,166 Community Development 517,920 552,090 8,329,364 389,324 316,243 Total Government Activities Program Revenues 8,558,493 7,028,554 19,761,564 11,987,577 11,710,918 Business-Type Activities:

Sewer 5,719,257 5,769,396 5,852,278 5,922,758 5,891,836 Total Business-Type Activities Program Revenue 5,719,257 5,769,396 5,852,278 5,922,758 5,891,836 Total Primary Government Program Revenues 14,277,750$ 12,797,950$ 25,613,842$ 17,910,335$ 17,602,754$ Net (Expense)/Revenue
Governmental Activities (17,909,833) (18,377,891) (4,722,182) (12,611,987) (17,707,820) Business-Type Activities 1,126,137 1,874,976 630,340 836,754 629,703 Total Primary Government Net Expense (16,783,696)$ (16,502,915)$ (4,091,842)$ (11,775,233)$ (17,078,117)$ Source: City Finance Department
For the Fiscal Year Ended June 30, 2024
City of Hercules
Changes in Net Position (Continued)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
173
265
2015 2016 2017 2018 2019
General Revenues and Other Changes in Net Position
Governmental Activities:

Taxes:

Secured and unsecured property taxes 1,173,026$ 1,233,207$ 1,286,788$ 1,376,354$ 1,378,493$ Sales Taxes and use taxes 2,693,075 3,211,109 3,324,807 3,206,095 3,988,702 Franchise Tax 1,011,888 960,124 878,574 862,946 852,751 Other Taxes 3,511,023 3,628,145 3,712,519 3,906,865 4,506,706 Unrestricted Motor Vehicle Taxes In-Lieu 1,554,491 1,645,846 1,799,014 1,911,327 1,990,306 Use of Money and properties 1,055,791 1,133,587 1,114,795 1,334,955 1,588,558 Miscellaneous 476,033 1,029,258 448,688 1,189,560 368,411 Special items - - - - - Extraordinary item - RDA Dissolution - - - - - Transfers (92,736) (10,452) - - - Total Government Activities 11,382,591 12,830,824 12,565,185 13,788,102 14,673,927 Business-Type Activities:

Use of Money and properties 23,484 24,058 47,424 200,280 482,095 Miscellaneous - - - - 162,872 Special items - - - - - Transfers 92,736 10,452 - - - Total Business-Type Activities 116,220 34,510 47,424 200,280 644,967 Total Primary Government 11,498,811$ 12,865,334$ 12,612,609$ 13,988,382$ 15,318,894$ Change in Net Position
Governmental Activities 3,709,591$ 10,598,688$ 12,565,185$ 13,788,102$ 14,673,927$ Business-Type Activities 3,309,507 1,774,580 47,424 200,280 644,967 Total Primary Government 7,019,098$ 12,373,268$ 12,612,609$ 13,988,382$ 15,318,894$ Source: City Finance Department
For the Fiscal Year Ended June 30, 2024
City of Hercules
Changes in Net Position (Continued)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
174
266
2020 2021 2022 2023 2024
General Revenues and Other Changes in Net Position
Governmental Activities:

Taxes:

Secured and unsecured property taxes 1,415,995$ 1,451,716$ 1,514,791$ 1,638,449$ 1,653,626$ Sales Taxes and use taxes 4,212,285 4,775,496 6,263,066 6,192,500 5,753,278 Franchise Tax 948,503 862,104 970,054 988,108 972,391
Other Taxes 4,402,327 4,293,889 5,343,970 4,646,410 4,963,727 Unrestricted Motor Vehicle Taxes In-Lieu 2,128,054 2,239,058 2,341,444 2,456,900 2,556,520 Use of Money and properties 1,748,131 1,456,269 773,519 1,860,327 3,076,628 Miscellaneous - - - - - Special items (3,624,150) - (39,586,347) - - Extraordinary item - RDA Dissolution - - - - - Transfers - - - - - Total Government Activities 11,231,145 15,078,532 (22,379,503) 17,782,694 18,976,170 Business-Type Activities:

Use of Money and properties 501,741 4,537 (157,318) 294,199 851,980 Miscellaneous - - - - - Special items - - (10,587,627) - - Transfers - - - - - Total Business-Type Activities 501,741 4,537 (10,744,945) 294,199 851,980 Total Primary Government 11,732,886$ 15,083,069$ (33,124,448)$ 18,076,893$ 19,828,150$ Change in Net Position
Governmental Activities (6,678,688)$ (3,299,359)$ (27,101,685)$ 5,170,707$ 1,268,350$ Business-Type Activities 1,627,878 1,879,513 (10,114,605) 1,130,953 1,481,683 Total Primary Government (5,050,810)$ (1,419,846)$ (37,216,290)$ 6,301,660$ 2,750,033$ Source: City Finance Department
For the Fiscal Year Ended June 30, 2024
City of Hercules
Changes in Net Position (Continued)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
175
267
2015 2016 2017 2018 2019
General Fund
Nonspendable 27,806,063$ 28,643,374$ 30,092,172$ 27,799,824$ 29,402,817$ Restricted - - - - - Commited - - - - - Assigned 1,363,528 2,171,733 2,176,150 2,321,483 5,937,646 Unassigned 7,969,320 8,291,363 9,426,610 14,194,525 10,027,085 Total General Fund 37,138,911$ 39,106,470$ 41,694,932$ 44,315,832$ 45,367,548$ All Other Governmental Funds
Nonspendable 11,013$ 6,714,263$ 11,013$ 11,013$ 11,013$ Restricted 21,070,727 12,443,589 20,587,964 20,556,143 21,446,237 Committed - - - - - Assigned 35,395 1,314,160 - - - Unassigned (deficit) (2,770,225) (7,036,753) (4,048,580) (1,473,498) (226,591) Total all other governmental funds 18,346,910$ 13,435,259$ 16,550,397$ 19,093,658$ 21,230,659$ Source: Finance Department
For the Fiscal Year Ended June 30, 2024
City of Hercules
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
176
268
2020 2021 2022 2023 2024
General Fund
Nonspendable 29,769,663$ 30,034,997$ 10,806$ 9,975$ 1,321,919$ Restricted - - 2,054,252 2,141,823 2,391,824 Commited - - - - 7,884,421 Assigned 6,205,655 5,915,247 6,022,247 6,022,247 8,595,020 Unassigned 8,398,945 10,008,178 22,926,831 25,703,647 14,754,596 Total General Fund 44,374,263$ 45,958,422$ 31,014,136$ 33,877,692$ 34,947,780$ All Other Governmental Funds
Nonspendable -$ -$ -$ -$ -$ Restricted 19,621,155 19,549,409 7,026,830 8,337,682 10,459,039 Committed 428,552 1,391,188 1,998,781 688,951 324,295 Assigned - - - - - Unassigned (deficit) (98,458) (162,793) (734,289) (624,175) (923,560) Total all other governmental funds 19,951,249$ 20,777,804$ 8,291,322$ 8,402,458$ 9,859,774$ Source: Finance Department
For the Fiscal Year Ended June 30, 2024
City of Hercules
Fund Balances of Governmental Funds (Continued)
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
177
269
2015 2016 2017 2018 2019
Revenues
Taxes and Assessments 8,389,012$ 9,032,585$ 9,202,688$ 9,352,260$ 10,726,652$ Licenses and permits 480,645 344,374 496,355 1,081,912 844,806 Fines and forfeitures 62,069 60,434 47,824 48,579 50,058 Use of money and property 1,082,244 1,183,964 1,192,976 1,443,270 1,728,361 Intergovernmental 6,194,872 5,677,447 14,911,152 7,650,796 4,455,255 Charges For Services 5,079,255 4,660,592 5,157,696 5,684,127 7,964,546 Other Revenues 476,033 1,029,258 448,688 1,204,989 92,602 Total Revenues 21,764,130 21,988,654 31,457,379 26,465,933 25,862,280 Expenditures
Current:

General government 2,635,701 2,952,966 3,153,498 3,492,082 4,542,651 Public Safety 5,158,435 5,589,583 6,022,005 6,295,019 6,776,245 Streets and Public Works 3,104,609 2,772,877 3,469,283 4,300,078 4,357,212 Parks And Recreation 1,827,391 1,961,669 1,883,159 2,101,369 2,128,110 Community Development 743,110 399,215 640,625 468,011 616,899 Lease expense - - - - - Capital outlay 4,994,173 8,504,827 9,079,227 2,757,245 2,261,555 Debt service:

Principal 604,474 626,149 653,144 580,473 613,153
Interest And Fiscal Agent Fees 1,189,346 1,164,163 1,136,588 1,307,495 1,285,738 Total Expenditures 20,257,239 23,971,449 26,037,529 21,301,772 22,581,563 Excess (deficiency) of revenues over
(under) expenditures 1,506,891 (1,982,795) 5,419,850 5,164,161 3,280,717 Other Financing Sources (Uses)
Issuance of Debt - - - - - Proceeds from loan - - - - - Proceeds from refunding bond - - - - - Payment to refunded bond escrow agent - - - - - Inception of Subscrition Liability - - - - - Transfers in 1,482,134 11,787,077 2,705,171 1,408,803 2,511,094 Transfers (out) (1,574,870) (11,803,454) (2,705,171) (1,408,803) (2,603,094) Sale of capital assets - - - - - Contributed Capital - - - - - Special Item - - - - - Total other financing sources (uses) (92,736) (16,377) - - (92,000) Special/Extraordinary Item - - - - - Net Change in fund balances 1,414,155$ (1,999,172)$ 5,419,850$ 5,164,161$ 3,188,717$ Debt service as a percentage of
noncapital expenditures 12% 12% 11% 10% 9%
Source: City Finance Department
For the Fiscal Year Ended June 30, 2024
City of Hercules
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
178
270
2020 2021 2022 2023 2024
Revenues
Taxes and Assessments 10,727,692$ 14,098,060$ 16,889,724$ 16,705,743$ 16,617,812$ Licenses and permits 796,397 952,294 707,300 647,374 621,826 Fines and forfeitures 62,582 36,586 48,663 46,057 34,409 Use of money and property 1,702,755 1,456,271 783,885 1,871,556 3,085,819 Intergovernmental 4,073,720 4,589,299 15,618,709 8,052,573 7,085,810 Charges For Services 5,282,444 1,150,164 2,319,388 2,339,112 2,750,986 Other Revenues 67,355 239,610 279,797 203,170 223,696
Total Revenues 22,712,945 22,522,284 36,647,466 29,865,585 30,420,358 Expenditures
Current:

General government 4,070,428 3,854,043 4,081,705 4,538,391 4,768,426 Public Safety 7,634,971 7,774,932 7,879,451 8,499,781 9,184,101 Streets and Public Works 4,080,345 4,638,912 4,514,842 5,486,683 5,503,214 Parks And Recreation 2,165,547 1,434,988 1,910,716 2,408,849 2,677,208 Community Development 557,672 792,456 1,061,135 537,341 1,285,428 Lease expense - - - - - Capital outlay 3,434,295 4,163,726 2,862,062 2,962,714 2,541,812 Debt service:

Principal 646,201 469,113 1,198,248 1,549,333 945,985
Interest And Fiscal Agent Fees 1,239,573 1,224,118 983,728 916,671 1,004,603 Total Expenditures 23,829,032 24,352,288 24,491,887 26,899,763 27,910,777 Excess (deficiency) of revenues over
(under) expenditures (1,116,087) (1,830,004) 12,155,579 2,965,822 2,509,581 Other Financing Sources (Uses)
Issuance of Debt - - - 8,870 - Proceeds from loan - 4,209,354 - - - Proceeds from refunding bond - 5,876,843 - - - Payment to refunded bond escrow agent - (5,705,000) - - - Inception of Subscrition Liability - - - - 17,823 Transfers in 1,730,899 1,405,555 5,723,857 6,928,066 2,343,631 Transfers (out) (1,730,899) (964,912) (5,728,857) (6,928,066) (2,343,631) Sale of capital assets - - - - - Contributed Capital 655,467 - - - - Special Item (1,812,075) (604,025) (39,586,347) - - Total other financing sources (uses) (1,156,608) 4,217,815 (39,591,347) 8,870 17,823 Special/Extraordinary Item - - - - - Net Change in fund balances (2,272,695)$ 2,387,811$ (27,435,768)$ 2,974,692$ 2,527,404$ Debt service as a percentage of
noncapital expenditures 9% 8% 10% 10% 8%
Source: City Finance Department
For the Fiscal Year Ended June 30, 2024
City of Hercules
Changes in Fund Balances of Governmental Funds (Continued) Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
179
271
Fiscal Year Less: Taxable
Ended Residential Commercial Industrial Other Unsecured Tax-Exempt Assessed June 30, 2024 Property Property Property Property Property Property Value 2015 2,567,234,136 71,672,395 175,156,171 28,510,114 56,578,518 75,454,264 2,823,697,070 2016 2,762,167,273 78,083,558 178,580,502 39,547,425 54,269,399 77,407,676 3,035,240,481 2017 2,984,511,909 79,706,704 192,358,822 58,775,769 58,945,949 94,538,055 3,279,761,098 2018 3,171,302,525 86,604,265 199,079,514 88,645,176 56,327,147 96,165,729 3,505,792,898 2019 3,322,501,416 85,620,650 196,779,448 91,306,290 56,782,463 97,967,035 3,655,023,232 2020 3,549,607,367 90,938,555 199,145,259 83,462,351 59,062,998 108,788,587 3,873,427,943 2021 3,785,286,659 88,476,522 204,766,171 82,829,255 58,291,816 111,756,157 4,107,894,266 2022 3,945,445,134 115,669,026 209,565,059 81,365,903 57,802,705 131,601,392 4,278,246,435 2023 4,125,334,599 125,232,941 234,134,858 80,249,088 67,088,160 132,094,636 4,499,945,010 2024 4,273,873,157 137,069,942 247,257,157 83,941,490 70,491,928 137,165,124 4,675,468,550 * Includes State Unitary value of $109,236 Assessed Value of Property in 2023.

City of Hercules
Assessed and Estimated Actual Value of Taxable Propert
y
Last Ten Fiscal Years
Source: County Assessor data, MuniServices, LLC / Avenu Insights & Analytics ( 1. ) Total tax rate is the city share of the 1% Proposition 13 tax for TRA 4-001.

Based on these calculations a multiplier value was extrapolated and applied to current assessed values. ( 2. ) Estimated Actual Value is derived from a series of calculations comparing median assessed values from 1940 to current median sale prices. 180
272
Factor of
Fiscal Year Taxable
Ended Total Tax Estimated Actual Assessed
June 30, 2024 Rate (1) Taxable Value (2) Value (2)
2015 5.4221% 2,823,697,070 1.000000
2016 5.4221% 3,035,240,481 1.000000
2017 5.4221% 3,279,761,098 1.000000
2018 5.4221% 3,505,792,898 1.000000
2019 5.4221% 6,047,063,713 1.654453
2020 5.4221% 6,578,416,066 1.698345
2021 5.4221% 6,420,511,696 1.562969
2022 5.4221% 7,751,990,119 1.811955
2023 5.4221% 8,735,158,394 1.941170
2024 5.4221% 9,260,921,468 1.980747
* Includes State Unitary value of $109,236 Assessed Value of Property in 2023.

City of Hercules
Assessed and Estimated Actual Value of Taxable Property (Continued) Last Ten Fiscal Years
Source: County Assessor data, MuniServices, LLC / Avenu Insights & Analytics ( 1. ) Total tax rate is the city share of the 1% Proposition 13 tax for TRA 4-001. ( 2. ) Estimated Actual Value is derived from a series of calculations comparing median assessed values from 1940 to current median sale prices.

Based on these calculations a multiplier value was extrapolated and applied to current assessed values. 181
273
Category 2015 2016 2017 2018 2019
Residential 2,567,234,136$ 2,762,167,273$ 2,984,511,909$ 3,171,302,525$ 3,322,501,416$ Industrial 175,156,171 178,580,502 192,358,822 199,079,514 196,779,448 Commercial 71,672,395 78,083,558 79,706,704 86,604,265 85,620,650 Vacant 16,167,550 27,684,893 31,332,357 61,123,014 62,680,104 Institution 496,945 506,873 15,803,658 16,119,728 16,442,120 Recreation 9,411,388 9,461,565 9,716,963 9,502,881 10,179,175 Social 840,196 856,982 870,050 826,000 842,520
Miscellaneous 792,700 808,536 820,864 837,279 854,023
Rural 212,358 216,599 219,900 224,297 228,781
Unitary 11,977 11,977 11,977 11,977 79,567
Professional 577,000 - - - -
Gross Secured Value 2,842,572,816 3,058,378,758 3,315,353,204 3,545,631,480 3,696,207,804 Unsecured 56,578,518 54,269,399 58,945,949 56,327,147 56,782,463 Exemptions 75,454,264 77,407,676 94,538,055 96,165,729 97,967,035 2,823,697,070$ 3,035,240,481$ 3,279,761,098$ 3,505,792,898$ 3,655,023,232$ Source: County Assessor data, MuniServices, LLC / Avenu Insights & Analytics Use code categories are based on Contra Costa County Assessor's data For the Fiscal Year Ended June 30, 2024
City of Hercules
Assessed Value of Property by Use Code
Last Ten Fiscal Years
182
274
Category 2020 2021 2022 2023 2024
Residential 3,549,607,367$ 3,785,286,659$ 3,945,445,134$ 4,125,334,599$ 4,273,873,157$ Industrial 199,145,259 204,766,171 209,565,059 234,134,858 247,257,157 Commercial 90,938,555 88,476,522 115,669,026 125,232,941 137,069,942 Vacant 53,134,753 51,585,587 52,389,446 50,702,734 51,531,451 Institution 16,770,959 17,106,375 17,283,594 17,629,262 17,981,845 Recreation 11,038,616 11,570,506 9,100,314 9,244,452 8,738,210 Social 1,334,000 1,360,679 1,374,774 1,402,269 1,430,313 Miscellaneous 871,101 888,520 897,723 915,841 3,900,237 Rural 233,355 238,021 240,485 245,294 250,198
Unitary 79,567 79,567 79,567 109,236 109,236
Professional - - - - - Gross Secured Value 3,923,153,532 4,161,358,607 4,352,045,122 4,564,951,486 4,742,141,746 Unsecured 59,062,998 58,291,816 57,802,705 67,088,160 70,491,928 Exemptions 108,788,587 111,756,157 131,601,392 132,094,636 137,165,124 3,873,427,943$ 4,107,894,266$ 4,278,246,435$ 4,499,945,010$ 4,675,468,550$ Source: County Assessor data, MuniServices, LLC / Avenu Insights & Analytics Use code categories are based on Contra Costa County Assessor's data For the Fiscal Year Ended June 30, 2024
City of Hercules
Assessed Value of Property by Use Code (Continued)
Last Ten Fiscal Years
183
275
2022-23 2023-24
Basic City and County Levy
City of Hercules 0.054221 0.054221
County of Contra Costa 0.945779 0.945779

1.000000 1.000000
Override Assessments
Bart 0.014000 0.013400
East Bay Reg Pk Bd 0.005800 0.005700
West CC Unified Bd 98 0.001300 0.000000
West Contra Costa Unified 0.217500 0.075400
WCCUSD 2012 Bond 0.037600 0.171000
Community College 0.016200 0.014600

0.292400 0.280100
Total Tax Rate 1.292400 1.280100
Rates are not adjusted for Education Revenue Augmentation Fund Tax Rate Area 4-001 is represented for this reports
*2019-20 is the city's first ACFR Statistical publication, therefore, nine year ago data is unavailable.

Source: County Auditor Controller data, Avenu Insights & Analytics Total 1% Breakout
Total Override Rate
City of Hercules
Direct and Overlapping Property Tax Rates
Last Two Fiscal Years
184
276
2023-24 2013-14
Percentage Percentage
($) of Total City of Total City
Taxable Assessed Assessed Assessed
Taxpayer Value Value Value Value
Bio-Rad Laboratories Inc 193,543,726.00$ 4.14% 152,838,098.00$ 5.41% Hercules Block Q&R Dev Partner 79,125,982 1.69% 0.0000% WCV Aventine Hercules LLC 66,623,915 1.42% 0.00%
Hercules Land Partners LP 27,476,502 0.59% 0.00%
Trestle Hercules LLC 25,269,097 0.54% 0.00%
Mary Terrace LLC 23,106,839 0.49% 0.00%
HD Development Of Maryland 19,487,152 0.42% 17,591,939 0.62% Hercules Real E Invest LLC 16,000,000 0.34% 0.00%
Tulloch John Brian Tre 13,289,846 0.28% 8,764,739 0.31% Hercules SPE MW LLC 13,085,032 0.28% 0.00%
Vacaville Mobile Home Park LLC 11,205,241 0.24% 0.00%
Santa Clara Vly Housing Group 10,000,000 0.21% 7,680,000 0.27% CS Creekside Hercules LLC 8,581,171 0.18% 7,282,914 0.26% Dathe Robert P & Carlotta R 8,125,180 0.17% 6,895,911 0.24% Hercules Sycamore Hills LLC 7,969,790 0.17% 6,764,031 0.24% La Costalot LLC 7,947,655 0.17% 5,656,000 0.20%
GTY Pacific Leasing LLC 7,610,730 0.16% 0.00%
Hercules Real Est Ltd Ptnship 7,464,120 0.16% 5,030,000 0.18% Alcatraz475 LP 6,714,063 0.14% 0.00%
1560 Sycamore LLC 6,567,590 0.14% 4,053,000 0.14%
North First Street Properties 6,503,473 0.14% 2,956,430 0.10% Arrow Investment Partners LLC 5,899,836 0.13% 3,430,000 0.12% Madison MRH-1 Franklin LLC 5,500,000 0.12% 0.00%
Multiple O Holdings LLC 5,385,424 0.12% 4,570,657 0.16% Adalan Properties LLC 4,997,935 0.11% 4,241,795 0.15%
Rago Dev Corp - 0.00% 11,100,000 0.39% Mechanics Bank of Richmond - 0.00% 10,032,408 0.36% Orinda Investors LP - 0.00% 7,014,793 0.25% Three Trees Holdings I LLC - 0.00% 6,900,000 0.24% Trestle Stockton LLC - 0.00% 4,056,331 0.14% Creekside Shopping Center LLC - 0.00% 3,840,000 0.14% Orb Partnership - 0.00% 3,559,614 0.13% Hercules Bayfront LLC - 0.00% 3,424,716 0.12% Bay To Bay Properties - 0.00% 3,391,000 0.12% Convenience Retailers LLC - 0.00% 2,459,032 0.09% Mega Investment LLC - 0.00% 2,416,000 0.09% Total Top 25 Taxpayers 587,480,299$ 12.57% 295,949,408$ 10.48% Total Taxable Value 4,675,468,550$ 100.00% 2,823,697,070$ 100.00% Source: County Assessor data, MuniServices, LLC / Avenu Insights & Analytics * FY21-22 was the most recent data available
City of Hercules
Principal Property Taxpayers
Last Fiscal Year and Nine Years Ago
185
277
Percent
of Total
Current Percent Total Tax
Fiscal Total Tax of Levy Tax Collections
Year Tax Levy (a) Collections Collected Collections to Tax Levy 2014 1,238,594$ 1,238,594$ 100% 1,238,594$ 100% 2015 878,899 878,899 100% 878,899 100%
2016 1,044,373 1,044,373 100% 1,044,373 100%
2017 1,110,223 1,110,223 100% 1,110,223 100%
2018 1,168,687 1,168,687 100% 1,168,687 100%
2019 1,233,140 1,233,140 100% 1,233,140 100%
2020 1,296,155 1,296,155 100% 1,296,155 100%
2021 1,342,265 1,342,265 100% 1,342,265 100%
2022 1,378,587 1,378,587 100% 1,378,587 100%
2023 1,446,942 1,446,942 100% 1,446,942 100%
2024 1,638,449 1,638,449 100% 1,638,449 100%
Source: City of Hercules Records
City of Hercules
Property Tax Levies and Collections
Last Ten Fiscal Years
186
278
Taxpayer Business Type Taxpayer Business Type
Big Lots Department Stores Admiralty Diesel Services Heavy Industry Bio Rad Laboratories Chemical Products Authorized Dealer for Snap-On Tools Auto Parts/Repair Burger King Restaurants Restaurants Big Lots Department Stores Cabalen Filipino Cuisine Restaurants Bio Rad Laboratories Chemical Products City Mechanical Incorporated Bldg.Matls-Whsle Burger King Restaurants Restaurants Domino's Pizza Restaurants Cigarette City Miscellaneous Retail Dragon Terrace Restaurant Restaurants Claws and Craws Restaurants Home Depot Bldg.Matls-Retail Conservation Mechanical System Bldg.Matls-Whsle Jack In The Box Restaurants Restaurants Dragon Terrace Restaurant Restaurants Kinder's Food Markets Extreme Pizza Restaurants
L & L Hawaiian Barbecue Restaurants Home Depot Bldg.Matls-Retail Leila By The Bay Restaurants Jack In The Box Restaurants Restaurants Lucky Food Centers Food Markets Kinder's Food Markets
Mazatlan Taqueria and Grill Restaurants Lucky Food Centers Food Markets McDonald's Restaurants Restaurants Mazatlan Taqueria and Grill Restaurants Mountain Mike's Pizza Restaurants McDonald's Restaurants Restaurants Rite Aid Drug Stores Drug Stores Mountain Mike's Pizza Restaurants Round Table Pizza Restaurants Rite Aid Drug Stores Drug Stores Safeway Service Stations Service Stations Round Table Pizza Restaurants Safeway Stores Food Markets Shell Service Stations Service Stations Shell Service Stations Service Stations Starbucks Coffee Food Markets Taco Bell Restaurants Taco Bell Restaurants
The Powder Keg Pub Restaurants The Powder Keg Pub Restaurants Union 76 Service Stations Service Stations Union 76 Service Stations Service Stations Willow Food & Liquor Food Markets Willow Food & Liquor Food Markets Source: MuniServices, LLC / Avenu Insights & Analytics Top Sales Tax Producers listed in alphabetical order. 2023-24 2014-15
City of Hercules
Principal Sales Tax Producers
Current Year and Nine Years Ago
187
279
Loans &
Fiscal Revenue Lease, SBITA
Year Bonds Purchases Total
2015 16,405,000 6,432,404 22,837,404
2016 16,025,000 6,186,255 22,211,255
2017 15,625,000 5,933,111 21,558,111
2018 15,205,000 6,172,638 21,377,638
2019 14,760,000 6,004,485 20,764,485
2020 14,290,000 5,828,284 20,118,284
2021 14,261,843 9,768,525 24,030,368
2022 13,765,105 9,512,473 23,277,578
2023 13,160,739 9,185,625 22,346,364
2024 12,474,475 8,949,530 21,424,005
NOTE: Debt amounts exclude any premiums, discounts, or other amortization amounts.

Sources: City of Hercules
State of California, Department of Finance (population) U.S. Department of commerce, Bureau of the Census (income) (a) Demographic Statistics for personal income and population data.

Governmental Activities
City of Hercules
Ratio of Outstanding Debt by Type
Last Ten Fiscal Years
0 20,000,000
40,000,000
60,000,000
2014 2015 2016 2017 2018 2019 2020 2021 2022
Total Governmental Activities Total Business-Type Activities 188
280
Loans & Percentage Debt
Fiscal Revenue Lease of Personal Per
Year Bonds Purchases Total Total Income (a) Capita (a)
2015 11,070,000 - 11,070,000 33,907,404 3.57% 1,355 2016 10,830,000 - 10,830,000 33,041,255 3.51% 1,306 2017 10,585,000 - 10,585,000 32,143,111 3.26% 1,244 2018 10,335,000 6,786,667 17,121,667 38,499,305 3.53% 1,483 2019 10,075,000 15,165,494 25,240,494 46,004,979 3.99% 1,754 2020 9,810,000 22,305,600 32,115,600 52,233,884 4.47% 2,046 2021 9,250,000 24,356,298 33,606,298 56,883,876 4.45% 2,199 2022 8,450,000 23,259,518 31,709,518 54,055,882 3.65% 2,072 2023 8,095,000 21,009,706 29,104,706 50,528,711 2.90% 1,921 2024 7,730,000 19,856,034 27,586,034 27,586,034 1.43% 1,058 NOTE: Debt amounts exclude any premiums, discounts, or other amortization amounts.

City of Hercules
Ratio of Outstanding Debt by Type (Continued)
Last Ten Fiscal Years
Business-Type Activities
189
281
190
282
2023-24 Assessed Valuation: $4,531,306,410 Total Debt City's Share of
OVERLAPPING TAX AND ASSESSMENT DEBT: 6/30/24 % Applicable (a) Debt 6/30/24 Bay Area Rapid Transit District 2,445,575$ 0.466% 11,396,380$ Contra Costa Community College District 618,770 1.760% 10,890,352 John Swett Unified School District 69,003,280 7.179% 4,953,745 West Contra Costa Unified School District 1,107,363,504 10.781% 119,384,859 West Contra Costa Healthcare Parcel Tax Obligations 41,605,000 10.647% 4,429,684 East Bay Regional Park District 144,520 0.732% 1,057,886 California Statewide Communities development Authority Assessment Districts 3,821,521 100.000% 3,821,521 City of Hercules 1915 Act Bonds 2,289,541 100.000% 2,289,541 TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT 158,223,968$
DIRECT AND OVERLAPPING GENERAL FUND DEBT:

Contra Costa County General Fund Obligations 171,495,000$ 1.754% 3,008,023$ Contra Costa County Pension Obligation Bonds - 0.000% - West Contra Costa Unified School District Certificates of Participation 3,205,000 10.781% 345,531 City of Hercules General Fund Obligations 12,716,619 100.000% 12,716,619 TOTAL GROSS DIRECT AND OVERLAPPING GENERAL FUND DEBT 16,070,172$ Less: Contra Costa County obligations supported from revenue funds 745,886 TOTAL NET DIRECT AND OVERLAPPING GENERAL FUND DEBT 15,324,286$ OVERLAPPING TAX INCREMENT DEBT (Successor Agency): $78,090,000 100% 78,090,000$ TOTAL DIRECT DEBT 12,716,619
TOTAL GROSS OVERLAPPING DEBT 239,667,251$
TOTAL NET OVERLAPPING DEBT 238,921,365$
GROSS COMBINED TOTAL DEBT 252,383,870$ (b)
NET COMBINED TOTAL DEBT 251,637,984$
(b) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease obligations.

Ratios to 2023-24 Assessed Valuation:

Total Overlapping Tax and Assessment Debt
..................................................... 3.36% Total Direct Debt ($14,041,843)
........................................................................ 0.27% Gross Combined Total Debt
................................................................................ 5.36% Net Combined Total Debt
.................................................................................... 5.35% Ratios to Redevelopment Successor Agency Incremental Valuation $1,836,916,438 Total Overlapping Tax Increment Debt
............................................................... 4.25% Source: Avenue Insights & Analytics
California Municipal Statistics, Inc.
(a) The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value. Applicable percentages were estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the city divided by the district's total taxable assessed value.

City of Hercules
Computation of Direct and Overlapping Debt
June 30, 2024
191
283
2015 2016 2017 2018 2019
Assessed Valuation 2,823,697,070$ 3,035,240,481$ 3,279,761,098$ 3,505,792,898$ 3,655,023,232$ Conversion Percentage 25% 25% 25% 25% 25%
Adjusted Assessed Valuation 705,924,268$ 758,810,120$ 819,940,275$ 876,448,225$ 913,755,808$ Debt Limit Percentage 15% 15% 15% 15% 15%
Debt Limit 105,888,640$ 113,821,518$ 122,991,041$ 131,467,234$ 137,063,371$ Total net debt applicable to limit:

General Obligation Bonds - - - - - Legal Debt Margin 105,888,640$ 113,821,518$ 122,991,041$ 131,467,234$ 137,063,371$ Total debt applicable to the limit
as a percentage of debt limit 1
Source: City Finance Department
County Tax Assessor's Office
1 Section 43605 of the California Government Code for General Obligation Bonds.

The Government Code of the State of California provides for a legal debt limit of 15% of gross assessed valuation. However, this provision was enacted when assessed valuation was based upon 25% of market value. Effective with the 1981-82 fiscal year, each parcel is now assessed at 100% of market value (as of the most recent change in ownership for that parcel). The computations shown above reflect a conversion of assessed valuation data for each fiscal year from the current full valuation perspective to the 25% level that was in effect at the time that the legal debt margin was enacted by the State of California for local governments located within the state.

City of Hercules
Legal Debt Margin Information
Last Ten Fiscal Years
For the Fiscal Year Ended June 30, 2024
192
284
2020 2021 2022 2023 2024
Assessed Valuation 3,873,427,943$ 4,107,894,266$ 4,278,246,435$ 4,499,945,010$ 4,675,468,550$ Conversion Percentage 25% 25% 25% 25% 25%
Adjusted Assessed Valuation 968,356,986$ 1,026,973,567$ 1,069,561,609$ 1,124,986,253$ 1,168,867,138$ Debt Limit Percentage 15% 15% 15% 15% 15%
Debt Limit 145,253,548$ 154,046,035$ 160,434,241$ 168,747,938$ 175,330,071$ Total net debt applicable to limit:

General Obligation Bonds - - - - - Legal Debt Margin 145,253,548$ 154,046,035$ 160,434,241$ 168,747,938$ 175,330,071$ Total debt applicable to the limit
as a percentage of debt limit 1
Source: City Finance Department
County Tax Assessor's Office
1 Section 43605 of the California Government Code for General Obligation Bonds.

For the Fiscal Year Ended June 30, 2024
City of Hercules
Legal Debt Margin Information (Continued)
Last Ten Fiscal Years
193
285
Debt Service Requirements
Revenues Not Net Revenue
Fiscal Gross Available for Operating Available for
Year Revenue (a) Debt Service (b) Expenses (c) Debt Service Principal Interest Total Coverage 2015 6,144,342 372,165 1,773,138 3,999,039 240,000 493,013 733,013 5.46 2016 5,629,550 - 2,733,393 2,896,157 245,000 487,856 732,856 3.95 2017 5,845,188 155,367 1,868,853 3,820,968 250,000 481,975 731,975 5.22 2018 6,345,495 510,645 2,380,221 3,454,629 260,000 474,950 734,950 4.70 2019 6,648,269 299,022 3,968,987 2,380,260 265,000 467,075 732,075 3.25 2020 6,220,998 - 3,367,478 2,853,520 275,000 458,631 733,631 3.89 2021 5,769,396 - 2,692,326 3,077,070 1,391,780 735,166 2,126,946 1.45 2022 5,852,278 - 3,493,308 2,358,970 1,096,780 515,729 1,612,509 1.46 2023 5,922,758 - 3,473,988 2,448,770 1,451,141 611,583 2,062,724 1.19 2024 5,891,836 - 3,709,347 2,182,489 1,528,672 544,758 2,073,431 1.05 NOTE:
(b) Sewer Connection Fees and Sewer Facilities Fees
(c) Includes all Sewer operating expenses, less depreciation and interest Source: City of Hercules Annual Financial Statements
City of Hercules
Wastewater Fund Debt Coverage
Last Ten Fiscal Years
(a) Includes all Sewer Service Charges operating revenues, non-operating interest revenue, other non-operating revenue

0.00 1.00

2.00 3.00

4.00 5.00

6.00 7.00

8.00 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Cover

194
286
Total Per Capita Public County City
Fiscal Personal Personal Median School Unemployment Unemployment County Year Population (1)
Income Income (2)
Age Enrollment (3) Rate (%) (4) Rate (%) (4)
Population
2015 25,021 950,247,538 37,978 37.4 30,596 6.2% 4.1% 1,113,759 2016 25,299 942,311,853 37,247 37.6 30,973 5.0% 3.3% 1,128,574 2017 25,833 985,089,789 38,133 37.7 31,267 4.5% 4.0% 1,139,746 2018 25,964 1,089,501,368 41,962 37.8 31,649 3.8% 3.5% 1,147,879 2019 26,224 1,153,383,968 43,982 40.3 31,760 2.6% 2.3% 1,155,879 2020 25,530 1,167,844,320 45,744 40.2 32,143 13.6% 13.7% 1,153,561 2021 25,864 1,277,053,622 49,376 41.2 31,027 8.9% 8.8% 1,153,854 2022 26,091 1,479,733,584 56,714 41.7 30,071 2.7% 2.5% 1,156,555 2023 26,297 1,739,577,055 66,151 42.7 29,672 3.7% 3.4% 1,147,653 2024 26,063 1,928,864,510 74,008 42.6 29,528 3.9% 3.5% 1,146,626 Source: MuniServices, LLC / Avenu Insights & Analytics
The California Department of Finance demographics estimates now incorporate 2010 Census counts as the benchmark. (1) Population Projections are provided by the California Department of Finance Projections. (2) Income Data is provided by the U.S. Census Bureau and is adjusted for inflation. (3) Student Enrollment reflects the total number of students enrolled in the West Contra Costa School District only. Any other school districts within the City are not accounted for in this statistic. (4) Unemployment Data is provided by the EDD's Bureau of Labor Statistics Department.

City of Hercules
Demographic and Economic Statistics
Last Ten Fiscal Years
195
287
Percentage Percentage
Number of of Total City Number of of Total City
Business Name Employees Employment Employees Employment Bio-Rad Laboratories Inc 2,263 16.4% 2,406 17.3%
West Contra Costa Unified School District 297 2.15% 234 1.68% Home Depot 167 1.21% 79 0.57%
Safeway 158 1.14% 0 0.00%
Pacific Bio Labs Inc 130 0.94% 94 0.68%
Contra Costa County Social Services 87 0.63% 104 0.75%
Lucky Supermarkets 60 0.43% 100 0.72%
City of Hercules 61 0.44% 52 0.37%
Benda Tool & Model Works Inc 47 0.34% 32 0.23%
Big Lots 29 0.21% 0 0.00%
Kinder's Meats & Deli BBQ & Catering 0 0.00% 40 0.29%
A & B Die Casting 0 0.00% 24 0.17%
Total Top 10 Employers 3,299 23.91% 3,165 22.77%
Total City Labor Force (1) 13,800 13,900
Source: MuniServices, LLC \ Avenu Insights & Analytics
Results based on direct correspondence with city's local businesses. (1) Total City Labor Force provided by EDD Labor Force Data. *2019-20 is the city's first ACFR Statistical publication, therefore, nine year ago data is unavailable.
2023-24 2019-20
City of Hercules
Principal Employers
Current Fiscal Year and Four Year
Ago
196
288
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Function
General Government 10.00 10.00 10.00 10.00 10.00 11.00 11.00 11.00 12.00 13.00 Public Safety 24.00 24.00 24.00 26.00 26.00 28.00 29.00 28.00 30.00 30.00 Public Works (a) 11.00 11.00 11.00 11.00 11.00 11.00 11.00 11.00 11.00 11.00 Community Development 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 3.00 Parks and Recreation (b) 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 Total 51.00 51.00 51.00 53.00 53.00 56.00 57.00 56.00 59.00 61.00 NOTE:
(a) Public Works includes Wastewater and Solid Waste
(b) Parks and Recreation includes Library, Recreation and Park Source: City of Hercules Operating Budget
For the Fiscal Year Ended June 30, 2024
City of Hercules
Full-Time Equivalent City Government Employees by Function Last Ten Fiscal Years
0 10
20 30
40 50
60 70FTE's
General Government Public Safety Public Works (a)
Community Development Parks and Recreation (b)
197
289
2015 2016 2017 2018 2019
General Information
Area in square miles 18.20 18.20 18.20 18.20 18.20 Number of registered voters - - - 18,738 - Number of Hospitals - - - - - Education:

Student enrollment 3,007 2,928 2,799 2,823 2,823 Elementary schools 1,277 1,240 1,228 1,211 1,243 Junior high schools 724 673 636 632 584 High schools 1,006 1,015 935 980 996 Teachers (full & part time) 143 144 148 127 134 Function/Program
Police:

Police calls for Service 1,843 7,707 13,142 16,245 16,918 Law violations:

Part I and Part II crimes 96 571 957 867 831 Physical arrests (adult and juvenile) 45 245 403 449 495 Traffic violations 85 518 793 1,074 1,383 Sewer
Sewer service connections 8,235 8,265 8,271 8 8,327 Source: City of Hercules
For the Fiscal Year Ended June 30,
City of Hercules
Operating Indicators by Function/Progra
m
Last Ten Fiscal Years
198
290
2020 2021 2022 2023 2024
General Information
Area in square miles 18.20 18.20 18.20 18.20 18.20 Number of registered voters 14,804 - 14,213 - - Number of Hospitals - - - - - Education:

Student enrollment 2,825 2,797 2,753 2,539 2,595 Elementary schools 1,296 1,327 1,305 1,215 1,262 Junior high schools 594 603 596 590 593 High schools 935 867 852 734 740 Teachers (full & part time) 127 125 124 124 113 Function/Program
Police:

Police calls for Service 29,935 16,192 26,071 25,196 24,223 Law violations:

Part I and Part II crimes 1,162 1,689 1,445 1,266 1,060 Physical arrests (adult and juvenile) 398 508 528 624 480 Traffic violations 975 607 902 524 987 Sewer
Sewer service connections 8,326 84,010 8,410 8,410 8,410 Source: City of Hercules
For the Fiscal Year Ended June 30,
City of Hercules
Operating Indicators by Function/Program (Continued)
Last Ten Fiscal Years
199
291
2015 2016 2017 2018 2019
Planning & Building:

Number of Building Permits issued 631 622 782 778 753
Recreation and Parks:

Youth & Teens:

Number of youth programs 11 12 12 10 38 Number of youth attendees 723 519 250 637 550 Aquatics:

Number of aquatics programs 4 4 4 4 4 Number of aquatics attendees 1,396 2,266 1,739 1,390 1,686 Recreation Classes:

Number of recreation programs 7 6 7 7 7 Number of recreation attendees 2,366 709 441 914 817 Preschool/GradeSchool Programs:

Number of preschool/gradeschool programs 12 9 11 11 11 Number of preschool/gradeschool attendees 3,358 2,900 2,949 3,510 3,319 Seniors:

Number of senior programs 14 14 14 14 14 Number of senior attendees 10,415 10,707 11,445 10,573 12,577 Number of meals served 8,791 8,787 9,811 8,880 7,259 Finance:

Number of Business Licenses issued 664 734 665 819 995 Source: City of Hercules
For the Fiscal Year Ended June 30,
City of Hercules
Operating Indicators by Function/Program (Continued)
Last Ten Fiscal Years
200
292
2020 2021 2022 2023 2024
Planning & Building:

Number of Building Permits issued 389 675 1,016 1,013 830 Recreation and Parks:

Youth & Teens:

Number of youth programs 8 - 10 13 - Number of youth attendees 112 - 243 178 - Aquatics:

Number of aquatics programs 2 4 9 308 328 Number of aquatics attendees 533 1,098 1,943 2,128 2,390 Recreation Classes:

Number of recreation programs 4 3 16 24 397 Number of recreation attendees 124 16 500 398 3,746 Preschool/GradeSchool Programs:

Number of preschool/gradeschool programs 8 - 11 9 9 Number of preschool/gradeschool attendees 869 - 2,510 2,482 3,755 Seniors:

Number of senior programs 14 - 14 21 25 Number of senior attendees 2,778 - 5,984 15,655 21,045 Number of meals served 3,399 8,212 5,124 6,662 8,858 Finance:

Number of Business Licenses issued 971 1,103 1,184 1,147 1,157 Source: City of Hercules
For the Fiscal Year Ended June 30,
City of Hercules
Operating Indicators by Function/Program (Continued)
Last Ten Fiscal Years
201
293
2015 2016 2017 2018 2019
Function/Program
Police:

Police stations 1 1 1 1 1
Public works:

Miles of streets 58 58 58 58 58
Miles of bike lanes 7 7 7 7 7
Street and parking lot fixtures 1,466 1,466 1,466 1,466 1,494 Traffic Signals 14 14 14 14 14
Wastewater
Miles of sanitary sewers 62 62 62 62 62
Recreation and Parks:

City parks 11 11 11 11 11
City parks acreage 98 98 98 98 98
Playgrounds 7 7 7 7 7
City trails/Bike paths 1 1 2 2 2
Community Swim Center 1 1 1 1 1
Community centers 2 2 2 2 2
Performing arts centers
Teen Center 1 1 1 1 1
Swimming pools (a) 2 2 2 2 2
Tennis courts (b) 8 8 8 8 8
Baseball/softball diamonds 2 2 2 2 2
Soccer/football fields (c) 1 1 1 1 1
Library:

City Libraries 1 1 1 1 1
Source: City of Hercules
For the Fiscal Year Ended June 30, 2023
City of Hercules
Capital Asset Statistics by Function/Progra
m
Last Ten Fiscal Years
202
294
2020 2021 2022 2023 2024
Function/Program
Police:

Police stations 1 1 1 1 1
Public works:

Miles of streets 58 58 58 58 58
Miles of bike lanes 7 7 7 7 7
Street and parking lot fixtures 1,494 1,494 1,494 1,494 1,494 Traffic Signals 14 14 14 14 14
Wastewater
Miles of sanitary sewers 62 62 62 62 62
Recreation and Parks:

City parks 11 11 13 13 13
City parks acreage 98 98 99 99 99
Playgrounds 7 7 8 8 8
City trails/Bike paths 2 2 2 2 2
Community Swim Center 1 1 1 4 4
Community centers 2 2 4 1 1
Performing arts centers
Teen Center 1 1 1 1 1
Swimming pools (a) 2 2 2 3 3
Tennis courts (b) 8 8 8 2 2
Baseball/softball diamonds 2 2 2 1 1
Soccer/football fields (c) 1 1 1 1 1
Library:

City Libraries 1 1 1 1 1
Source: City of Hercules
For the Fiscal Year Ended June 30, 2023
City of Hercules
Capital Asset Statistics by Function/Program (Continued) Last Ten Fiscal Years
203
295
204
296

REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND

OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN

ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Independent Auditors Report
To the Honorable Mayor and Members of City Council
of the City of Hercules
Hercules, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards) , the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Hercules, California (the City), as of and for the year ended June 30, 2024, and the related notes to the financial statements which collectively comprise the Citys basic financial statements, and have issued our report thereon dated December 19, 2024.

Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Citys internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Citys internal control. Accordingly, we do not express an opinion on the effectiveness of the Citys internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements, on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the Citys financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies.

Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified. 297
To the Honorable Mayor and the Members of the City Council of the City of Hercules
Hercules, California

Page 2 ends

Hercules City CouncilJanuary 14, 2025

Hercules City Council
January 14, 2025