Kerman City Council
April 23, 2025

CITY COUNCIL REGULAR MEETING AGENDA
Wednesday, April 23, 2025 at 6:00 PM
Kerman City Hall, 850 S. Madera Avenue, Kerman, CA 93630 LEVINE ACT DISCLOSURE. Pursuant to the Levine Act (Govt Code Section 84308), any party to a permit, license, contract, or other entitlement before the City Council is required to disclose on the record any campaign contribution, including aggregated contributions, of more than $500 made by the party or the party’s agents within the preceding 12 months to any City official. Participants and agents are requested to make this disclosure as well. The disclosure should be made when the agenda item is called and must include the name of the party, participant, or agent, and any other person making the contribution, the name of the recipient, the amount of the contribution, and the date the contribution was made. Council Members are also required to make such disclosures and recuse themselves.

CONFLICT OF INTEREST. City Council Members with a conflict of interest under the Political Reform Act are required to make disclosure of financial interest when the item is called and recuse themselves.

1. OPENING CEREMONIES
A. Call to Order
B. Roll Call
C. Invocation
D. Flag Salute

2. AGENDA APPROVAL/ADDITIONS/DELETIONS
To accommodate members of the public or convenience in the order of presentation, items on the agenda may not be presented or acted upon in the order listed.

3. PRESENTATIONS/CEREMONIAL MATTERS
A. Proclamation celebrating Municipal Clerks Week - May 4 through May 10, 2025 B. Presentation by Fresno County Transportation Authority (FCTA) and Fresno Council of Governments (FCOG) on Measure C3 transportation investment renewal campaign. (Information Only)
C. Presentation by United Security Bank on their “Smart ATM” in Kerman and proposed new bank branch. (Information Only)
1 4. PUBLIC FORUM (for matters not on agenda)
This portion of the meeting is reserved for members of the public to address the Council on items of interest that are not on the Agenda and are within the subject matter jurisdiction of the Council.

Speakers shall be limited to three minutes. It is requested that no comments be made during this period on items on the Agenda. Members of the public wishing to address the Council on items on the Agenda should notify the Mayor when that Agenda item is called, and the Mayor will recognize your discussion at that time. It should be noted that the Council is prohibited by law from taking any action on matters discussed that are not on the Agenda. Speakers are asked to please use the microphone, and provide their name and address.

5. CONSENT CALENDAR
Matters listed under the Consent Calendar are considered routine and will be enacted by one motion and one vote. There will be no separate discussion of these items. If discussion is desired, a member of the audience or a Council Member may request an item be removed from the Consent Calendar and it will be considered separately.

A. SUBJECT: Minutes - April 9, 2025
RECOMMENDATION: Council approve minutes as presented.

B. SUBJECT: Warrants (JA)

1. Nos.31558-31779 $1,539,199.97 ACH $184,628.24.

RECOMMENDATION: Council approve warrants and electronic bank transfers as presented. (Pursuant to Government Code 37208)
C. SUBJECT: Payroll (JA)
3/16/25 to 3/29/25: $250,189.21; Retro Pay & Other: $2,294.75; Overtime: $5,579.67; Holiday: $0.00; Standby: $1,965.82; Comp Time Earned: 40.50 RECOMMENDATION: Council approve payroll as presented.

6. PUBLIC HEARINGS
None.

7. DEPARTMENT REPORTS
A. SUBJECT: Presentation of the City of Kerman 2023/2024 Auditor’s Report and Financial Statements (JA)
RECOMMENDATION: Council accept the City of Kerman 2023/2024 Auditor’s Report and Financial Statements as presented.

8. CITY MANAGER/STAFF COMMUNICATIONS
2 9. MAYOR/COUNCIL REPORTS/ANNOUNCEMENTS/FUTURE AGENDA ITEMS (This portion of the meeting is reserved for the Mayor and Council Members (i) to make brief reports on boards, committees, and other public agencies, and at public events, (ii) to request updates, (iii) to initiate future agenda items at the request of a Council Member, and (iv) to take action on matters initiated under this section of the agenda items. Under this section the Council may take action only on items specifically agendized and which meet other requirements for action.)

10. CLOSED SESSION
None.

11. ADJOURNMENT
NOTICE OF AVAILABILITY OF AGENDA MATERIALS: Any writings or documents provided to a majority of the City Council within 72 hours of the meeting regarding any item on this agenda will be made available for public inspection at the City Clerk’s Office located at 850 S. Madera Ave., Kerman, CA 93630 and on the City website at www.cityofkerman.net.

ADA Compliance and Reasonable Accommodation. The Council has adopted a Reasonable Accommodation Policy, which is available on the City website at www.cityofkerman.net or upon request by emailing the City Clerk at [email protected] or calling (559) 550-1414.

The Policy provides a procedure for receiving and resolving requests for accommodation to participate in this meeting. If you need assistance in order to attend this Council meeting or require auxiliary aids or services, e.g., hearing aids or signing services to make a presentation to the Council, please contact the City Clerk at (559) 550-1414 or email at [email protected] so such aids or services can be arranged. Accommodations should be requested as early as possible as additional time may be required in order to provide the requested accommodation. The meeting room is accessible to persons with physical disabilities.

AGENDA POSTING CERTIFICATION
I, Josie Camacho, City Clerk for the City of Kerman, do hereby declare under penalty of perjury that I caused the above agenda to be posted at City of Kerman Council Chambers at 850 S. Madera Ave., Kerman, CA 93630 and on the City website at www.cityofkerman.net.

Date: April 18, 2025 /s/ Josie Camacho, City Clerk
3 MUNICIPAL CLERK’S WEEK
WHEREAS, the Office of the Municipal Clerk, a time honored and vital part of local government, is one of the oldest positions among public servants; and WHEREAS, The Municipal Clerks Week, May 4 through May 10, 2025 is celebrating its 56th Anniversary; and
WHEREAS, The Municipal Clerks Week was initiated in 1969 by IIMC and endorsed by all of its members throughout the United States, Canada and 15 other countries; and WHEREAS, President Ronald Reagan, who in 1984, signed a proclamation that officially declared Municipal Clerks Week as the first full week of May; and WHEREAS, in 2025, Municipal Clerks Week, May 4th through May 10th is a time for celebration and reflection on the importance of the Clerk's office; and WHEREAS, the Office of the Municipal Clerk provides the professional link between the citizens, the local governing bodies, and agencies of government at other levels; and WHEREAS, Municipal Clerks have pledged to be ever mindful of their neutrality and impartiality, rendering equal service to all; and
WHEREAS, it is important to recognize the accomplishments of the Kerman City Clerk’s Office which serves as a resource to the City Council and staff on functions of local government and community.

NOW, THEREFORE, BE IT PROCLAIMED that the City Council of the City of Kerman hereby proclaims the week of May 4th through May 10th, 2025 as Municipal Clerks Week and call upon our citizens to show their sincere appreciation for the vital services they perform and their exemplary dedication to the community they serve.

I have hereunto set my hand and caused the Official Seal of the City of Kerman to be affixed on this 23rd day of April 2025.
________________________
Maria Pacheco
Mayor
4 Section 3, Item A.

CITY COUNCIL REGULAR MEETING MINUTES
Wednesday, April 09, 2025 at 6:00 PM
Kerman City Hall, 850 S. Madera Avenue, Kerman, CA 93630

1. OPENING CEREMONIES
A. Call to Order - 6:02 p.m.

B. Roll Call - All members present except Mayor Pro Tem Yep C. Invocation - Performed by Mayor Pacheco and Councilmember Herrera D. Flag Salute – Performed

2. AGENDA APPROVAL/ADDITIONS/DELETIONS
Motion made by Councilmember Hall, Seconded by Councilmember Dhaliwal.

Ayes: Hall, Dhaliwal, Herrera, Pacheco
Noes: None
Abstain: None

Absent: Yep
Motion passes 4-0-0-1

3. PRESENTATIONS/CEREMONIAL MATTERS
A. Presentation by Luis Miranda – Presented
Mayor Pro Tem Yep arrived 6:19 p.m.

4. PUBLIC FORUM - None.

5. CONSENT CALENDAR
A. SUBJECT: Minutes - March 26, 2025
RECOMMENDATION: Council approve minutes as presented.

B. SUBJECT: Payroll (JA)
3/2/25 to 3/15/25: $250,463.06; Retro Pay & Other: $0.00; Overtime: $5,451.63; Holiday:
$0.00; Standby: $1,871.86; Comp Time Earned: 33.00
5 Section 5, Item A.

RECOMMENDATION: Council approve payroll as presented.

C. SUBJECT: Contract with Lozano and Smith LLP for Legal Services (JAJ) RECOMMENDATION: Council by motion adopt resolution approving the agreement for legal services with Lozano Smith relating to employment matters and authorize City Manager to execute the agreement. - Res 25-26
Motion made by Councilmember Herrera, Seconded by Councilmember Dhaliwal.

Ayes: Herrera, Dhaliwal, Hall, Yep, Pacheco
Noes: None
Abstain: None

Absent: None
Motion passes 5-0-0-0

6. PUBLIC HEARINGS – None.

7. DEPARTMENT REPORTS
A. SUBJECT: Discussion on Teen Programs provided by the Parks, Recreation, and Community Services Department (TJ)
RECOMMENDATION: Informational
Presented, no action taken.

B. SUBJECT: Prospective Dog Park Locations (TJ)
RECOMMENDATION: Council hear a presentation from staff regarding prospective dog park locations in the City of Kerman, with possible direction to staff.

Public comment from Scott Bishop and Elena Bustamante.

Staff given the directive to come back with a cost analysis for a dog park on 6th Street, including amenities needed, foyer for fencing, ADA compliance requirements, and whether the space can be divided or not.

8. CITY MANAGER/STAFF COMMUNICATIONS

9. MAYOR/COUNCIL REPORTS/ANNOUNCEMENTS/FUTURE AGENDA ITEMS Councilmember Dhaliwal requests a future agenda item addressing a timeline for repairs to lifted sidewalks in his district.
6 Section 5, Item A.

10. CLOSED SESSION - 8:01 p.m.

A. Conference with Labor Negotiators pursuant to Government Code Section 54957.6 Agency Designated Representatives: City Manager
Unrepresented Employees:
 Community Development Director
 Community Services Director
 Finance Director
 Public Works Director
 Police Chief
Reconvene at 9:00 p.m. with no reportable action.

11. ADJOURNMENT - 9:00 p.m.

MINUTES CERTIFICATION
I, Josie Camacho, City Clerk for the City of Kerman, do hereby declare under penalty of perjury that the above minutes are a true depiction of all actions taken at the City Council meeting held on the first date above written at City of Kerman Council Chambers at 850 S. Madera Ave., Kerman, CA 93630.

Date: April 10, 2025 /s/ Josie Camacho, City Clerk
7 Section 5, Item A.

Accounts Payable
User:

Printed:

VSandoval
4/11/2025 3:55 PM
Checks by Date - Summary by Check Date
Check No Vendor No Vendor Name Check Date Check Amount
ACH 10644 US BANK EQUIPMENT FINANCE 03/18/2025 710.78
Total for 3/18/2025: 710.78
31558 12385 BEATRIZ ALEJANDRE 03/20/2025 150.00
31559 11708 ALTEC INDUSTRIES INC 03/20/2025 923.75
31560 12537 AMERITAS GROUP INSURANCE CORP- DENTAL CLAIMS 03/20/2025 573.85 31561 10035 AQUA NATURAL SOLUTIONS 03/20/2025 997.47
31562 BP-ARTI ROSEMARY ARTIAGA 03/20/2025 247.00
31563 10040 AT&T MOBILITY 03/20/2025 2,030.44
31564 12768 BRENDEN BARRA 03/20/2025 92.00
31565 10044 BATTERY SYSTEMS 03/20/2025 279.28
31566 11917 BLAIS & ASSOCIATES LLC 03/20/2025 2,559.00
31567 12348 BRADY INDUSTRIES 03/20/2025 471.39
31568 10617 C A REDING CO INC 03/20/2025 157.90
31569 12213 PATRICK CLARK 03/20/2025 23.00
31570 10104 COMCAST 03/20/2025 503.23
31571 11874 CSG CONSULTANTS INC 03/20/2025 9,374.25
31572 10115 CSJVRMA 03/20/2025 186,086.00
31573 11301 TERESA CUBILLOS 03/20/2025 92.00
31574 10128 DEPARTMENT OF JUSTICE 03/20/2025 420.00
31575 12766 BRANDON ESCALERA 03/20/2025 23.00
31576 12767 JONATHAN FARR 03/20/2025 92.00
31577 11398 FASTSIGNS 03/20/2025 48.36
31578 10157 FERGUSON ENTERPRISES INC 03/20/2025 344.02
31579 10916 FOLSOM LAKE FORD 03/20/2025 112,415.14
31580 10159 FRESNO COUNCIL OF GOVERNMENTS 03/20/2025 300.00 31581 10167 FRESNO MADERA COUNTIES 03/20/2025 500.00
31582 12719 ANDREW GARCIA 03/20/2025 92.00
31583 11779 VERONICA GAYTAN 03/20/2025 25.45
31584 12357 DANZEL GEMPIS 03/20/2025 92.00
31585 12379 GILL CHEVROLET 03/20/2025 690.81
31586 10185 GRAINGER 03/20/2025 102.26
31587 11358 GREAT AMERICA FINANCIAL SERVICES03/20/2025 723.25 31588 11468 GREEN HILLS NURSERY INC 03/20/2025 939.39
31589 12741 LUIS GUTIERREZ 03/20/2025 92.00
31590 12771 ADRIANA HERNANDEZ 03/20/2025 150.00
31591 11595 ISMAEL HERRERA 03/20/2025 247.60
31592 10201 HORIZON 03/20/2025 1,710.47
31593 10485 JP AIR CONDITIONING & HEATING 03/20/2025 494.76 31594 12770 KERMAN GIRLS SOFTBALL LEAGUE 03/20/2025 150.00 31595 11096 LOZANO SMITH LLP 03/20/2025 40.00
31596 10678 MAC'S EQUIPMENT INC 03/20/2025 48.41
31597 10289 P.G.& E. 03/20/2025 5,255.81
31598 11891 PACE SUPPLY 03/20/2025 4,485.65
31599 12026 PRECISION CIVIL ENGINEERING INC 03/20/2025 820.00 31600 12765 PUBLIC SAFETY ALLIANCE 03/20/2025 185.00
AP Checks by Date - Summary by Check Date (4/11/2025 3:55 PM) Page 1 8 Section 5, Item B.

Check No Vendor No Vendor Name Check Date Check Amount
31601 12053 R & L MUSIC ENT 03/20/2025 225.00
31602 12524 R&S ERECTION TRI-COUNTY INC 03/20/2025 6,095.00 31603 12627 JOSE RUIZ 03/20/2025 115.00
31604 12772 MARY SALAZAR 03/20/2025 150.00
31605 12475 SAN JOAQUIN PEST CONTROL 03/20/2025 105.00
31606 12503 SCHAAD FAMILY ALMONDS 03/20/2025 90.00
31607 10337 SLUMBERGER LUMBER 03/20/2025 329.80
31608 12368 SPECIALTY HOSE EXPRESS LLC 03/20/2025 29.00 31609 11460 SUPERIOR POOL PRODUCTS LLC 03/20/2025 500.70 31610 12581 TATES TSHIRT DESIGNS AND PRINTS, LLC03/20/2025 438.08 31611 10357 TAYLOR MADE IRRIGATION 03/20/2025 124.79
31612 10754 THE HOME DEPOT PRO-SUPPLY WORKS03/20/2025 97.10 31613 10377 US POST OFFICE 03/20/2025 5,000.00
31614 12628 FRANCISCO VASQUEZ 03/20/2025 92.00
31615 12290 VERIZON 03/20/2025 103.87
31616 11676 WORTHINGTON DIRECT HOLDINGS LLC03/20/2025 5,677.36 31617 12267 IRENE ZAMORA 03/20/2025 150.00
31618 12773 DOMINGO ZAPATA 03/20/2025 18.59
Total for 3/20/2025: 354,389.23
ACH 10147 EMPLOYMENT DEVELOPMENT DEPARTMENT 03/21/2025 8,742.60 ACH 10517 FEDERAL TAXES PAYROLL 03/21/2025 56,049.44
ACH 10518 KERMAN POLICE OFFICERS ASSN 03/21/2025 908.25 ACH 10519 KERMAN MUNICIPAL EMPLOYEES ASSN03/21/2025 255.00 ACH 10520 ICMA-RC 03/21/2025 4,495.08
ACH 10522 CALPERS 03/21/2025 42,837.77
Total for 3/21/2025: 113,288.14
31619 11749 2THRIVE MEDIA LLC 03/26/2025 463.81
31620 12476 RUTH BELMONTE 03/26/2025 221.00
31621 10054 BLUE SHIELD OF CALIFORNIA 03/26/2025 61,831.62 31622 10056 BOGIE'S PUMP SYSTEMS 03/26/2025 846.48
31623 10617 C A REDING CO INC 03/26/2025 166.04
31624 12358 CAL VALLEY CONSTRUCTION INC 03/26/2025 83,912.84 31625 12498 CALIFORNIA ASSOCIATION OF CODE ENFORCEMENT OFFICER 03/26/2025 299.00 31626 12725 CALIFORNIA LANDSCAPE SUPPLY 03/26/2025 368.08 31627 10078 CALIFORNIA STATE DISBURSEMENT 03/26/2025 161.53 31628 11633 FAVIOLA CARDENAS 03/26/2025 20.00
31629 12778 BLANCA CHAVEZ 03/26/2025 150.00
31630 10096 CHILDS AND COMPANY INC 03/26/2025 165.19
31631 10452 CITY OF FRESNO WMD 03/26/2025 223.00
31632 12361 COASTAL MOUNTAIN ELECTRIC 03/26/2025 21,204.07 31633 10103 COLONIAL LIFE 03/26/2025 781.31
31634 11498 COMCAST CABLE COMMUNICATIONS MANAGEMENT LLC 03/26/2025 741.25 31635 10107 CONSOLIDATED ELECTRICAL DISTRIBUTORS INC 03/26/2025 174.74 31636 10114 CROWN SHORT LOAD CONCRETE 03/26/2025 714.88 31637 11382 DATA TICKET INC 03/26/2025 26.64
31638 10128 DEPARTMENT OF JUSTICE 03/26/2025 35.00
31639 10154 FASTENAL COMPANY 03/26/2025 952.06
31640 10157 FERGUSON ENTERPRISES INC 03/26/2025 220.15
31641 11550 FRESNO COUNTY SHERIFFS OFFICE - CIVIL UNIT 03/26/2025 274.00 31642 12776 YOLANDA GONZALEZ 03/26/2025 2,819.81
31643 11358 GREAT AMERICA FINANCIAL SERVICES03/26/2025 425.04 31644 11468 GREEN HILLS NURSERY INC 03/26/2025 888.47
31645 12777 HEALTHY ACADIA 03/26/2025 490.00
AP Checks by Date - Summary by Check Date (4/11/2025 3:55 PM) Page 2 9 Section 5, Item B.

Check No Vendor No Vendor Name Check Date Check Amount
31646 10201 HORIZON 03/26/2025 992.97
31647 10230 KENT M KAWAGOE PHD 03/26/2025 700.00
31648 12779 PATTY LOPEZ 03/26/2025 50.00
31649 10272 MUTUAL OF OMAHA 03/26/2025 3,316.42
31650 10282 OFFICE DEPOT 03/26/2025 782.37
31651 10289 P.G.& E. 03/26/2025 17,684.85
31652 12026 PRECISION CIVIL ENGINEERING INC 03/26/2025 23,267.54 31653 11549 R J BERRY JR INC 03/26/2025 252,458.98
31654 11352 RMA GEOSCIENCE INC 03/26/2025 1,368.50
31655 11764 YOLANDA ROMERO 03/26/2025 150.00
31656 11041 ROSENBALM ROCKERY 03/26/2025 880.44
31657 12503 SCHAAD FAMILY ALMONDS 03/26/2025 20.00
31658 10333 SECRETARY OF STATE 03/26/2025 40.00
31659 10862 SIGNMAX 03/26/2025 237.83
31660 12368 SPECIALTY HOSE EXPRESS LLC 03/26/2025 37.66 31661 12581 TATES TSHIRT DESIGNS AND PRINTS, LLC03/26/2025 283.34 31662 10754 THE HOME DEPOT PRO-SUPPLY WORKS03/26/2025 280.13 31663 12178 VALLEY ANIMAL CENTER SPAY & NEUTER CLINIC 03/26/2025 165.00 31664 10406 WEST HILLS OIL INC 03/26/2025 6,971.46
Total for 3/26/2025: 488,263.50
31665 UB*01914 ERIK BARRERA 04/01/2025 78.85
31666 UB*01913 YACKELIN BONILLA 04/01/2025 81.59
31667 UB*01911 TIIA BULLEN 04/01/2025 26.86
31668 UB*01931 EBANY DELLAMAGGIORE 04/01/2025 200.00
31669 UB*01922 AMBER & CHRIS DIDWAY 04/01/2025 9.36
31670 BP-JOSE1 JOSEPH CROWN CONSTRUCTION 04/01/2025 86.33 31671 UB*01924 KARINA LOPEZ IBARRA 04/01/2025 190.41
31672 UB*01930 JIMMY MALDONADO 04/01/2025 27.59
31673 UB*01923 ALBANIA MARTINEZ 04/01/2025 13.44
31674 UB*01926 JOSE MANUEL MENDEZ 04/01/2025 75.57
31675 UB*01915 RITA MENDOZA 04/01/2025 143.15
31676 UB*01918 CINDY PERRY 04/01/2025 200.00
31677 UB*01919 BERTA REAGIN 04/01/2025 88.53
31678 UB*01916 MAXINE SANDOVAL CHAVEZ 04/01/2025 132.68 31679 UB*01920 PEDRO VERA 04/01/2025 189.30
Total for 4/1/2025: 1,543.66
31680 12537 AMERITAS GROUP INSURANCE CORP- DENTAL CLAIMS 04/02/2025 3,131.11 31681 12359 PATRICIA ARAMBULA 04/02/2025 150.00
31682 12727 BURKE, WILLIAMS & SORENSEN, LLP 04/02/2025 2,204.00 31683 11633 FAVIOLA CARDENAS 04/02/2025 84.00
31684 10096 CHILDS AND COMPANY INC 04/02/2025 107.28
31685 10452 CITY OF FRESNO WMD 04/02/2025 87.00
31686 12749 D'PIMENTEL ARK CONSTRUCTION INC04/02/2025 950.00 31687 12780 ERNEST & VIRGINIA MARTINEZ 04/02/2025 690.36 31688 10169 FRESNO PET CEMETERY 04/02/2025 196.70
31689 10170 FRESNO POLICE DEPARTMENT 04/02/2025 623.00
31690 11140 FRESNO TRUCK CENTER 04/02/2025 48.29
31691 11358 GREAT AMERICA FINANCIAL SERVICES04/02/2025 125.86 31692 11468 GREEN HILLS NURSERY INC 04/02/2025 1,974.86 31693 10219 JENSEN & PILEGARD INC 04/02/2025 100.43
31694 10250 LIEBERT CASSIDY WHITMORE 04/02/2025 4,344.00 31695 10282 OFFICE DEPOT 04/02/2025 121.03
31696 11833 ORKIN 04/02/2025 278.00
AP Checks by Date - Summary by Check Date (4/11/2025 3:55 PM) Page 3 10 Section 5, Item B.

Check No Vendor No Vendor Name Check Date Check Amount
31697 10301 PETTY CASH 04/02/2025 158.48
31698 10331 SEBASTIAN 04/02/2025 328.08
31699 10015 THE ADVANCE GROUP INC 04/02/2025 781.79
31700 10371 TJ LAW & ASSOCIATES INVESTIGATIONS04/02/2025 800.00 31701 11776 WECO INDUSTRIES LLC 04/02/2025 106.80
31702 12553 GARLAND/DBS INC 04/02/2025 321,788.13
Total for 4/2/2025: 339,179.20
31703 UB*01932 LORENA DIAZ 04/03/2025 25.03
Total for 4/3/2025: 25.03
ACH 10147 EMPLOYMENT DEVELOPMENT DEPARTMENT 04/04/2025 9,157.91 ACH 10517 FEDERAL TAXES PAYROLL 04/04/2025 57,718.20
ACH 10518 KERMAN POLICE OFFICERS ASSN 04/04/2025 908.25 ACH 10519 KERMAN MUNICIPAL EMPLOYEES ASSN04/04/2025 255.00 ACH 10520 ICMA-RC 04/04/2025 2,589.96
Total for 4/4/2025: 70,629.32
31704 UB*01885 LORENA BARRERA 04/09/2025 10.99
31705 UB*01935 ETHEL CAIN 04/09/2025 11.53
31706 UB*01934 CHARANJIT KAUR 04/09/2025 8.11
31707 UB*01936 STEPHANIE RAYMUNDO 04/09/2025 10.99
31708 UB*00807 GLENN RUDLOPH 04/09/2025 374.07
31709 UB*01933 BILL TOLMACHOFF 04/09/2025 10.56
31710 11387 LUISA AGUIRRE 04/09/2025 504.00
31711 10021 ALERT O LITE 04/09/2025 359.21
31712 12538 AMERITAS GROUP INSURANCE CORP- DENTAL FEES 04/09/2025 461.50 31713 12257 AMERITAS LIFE INSURANCE CORP- VISION FEES 04/09/2025 888.27 31714 12782 JOSE ARAMBULA 04/09/2025 1,000.00
31715 11355 BADGER METER 04/09/2025 432.89
31716 10061 BSK ASSOCIATES 04/09/2025 484.70
31717 10617 C A REDING CO INC 04/09/2025 468.00
31718 10064 CAL VALLEY PRINTING 04/09/2025 143.97
31719 10067 CALIFORNIA BUILDING STANDARDS 04/09/2025 132.30 31720 12725 CALIFORNIA LANDSCAPE SUPPLY 04/09/2025 1,251.89 31721 10078 CALIFORNIA STATE DISBURSEMENT 04/09/2025 161.53 31722 10102 CODE PUBLISHING COMPANY 04/09/2025 47.00
31723 10104 COMCAST 04/09/2025 307.28
31724 10106 CON EDISON CLEAN ENERGY 04/09/2025 22,676.68 31725 10109 AUDITOR CONTROLLER/TREASURER-TAX COLLECTOR COUNTY OF FRESNO 04/09/2025 22.00 31726 10114 CROWN SHORT LOAD CONCRETE 04/09/2025 1,478.79 31727 10126 DEPARTMENT OF CONSERVATION 04/09/2025 441.06 31728 10133 DEPARTMENT OF TRANSPORTATION 04/09/2025 4,225.70 31729 12521 EDIS 04/09/2025 21,691.03
31730 12781 EVIDENCE MANAGEMENT FOR LAW ENFORCEMENT LLC 04/09/2025 305.00 31731 10151 EWING IRRIGATION PRODUCTS 04/09/2025 146.60 31732 11398 FASTSIGNS 04/09/2025 390.28
31733 11550 FRESNO COUNTY SHERIFFS OFFICE - CIVIL UNIT 04/09/2025 80.63 31734 10162 FRESNO COUNTY TREASURER 04/09/2025 25,711.44 31735 10177 GAMETIME 04/09/2025 2,224.74
31736 12379 GILL CHEVROLET 04/09/2025 24.45
31737 11358 GREAT AMERICA FINANCIAL SERVICES04/09/2025 409.06 31738 11468 GREEN HILLS NURSERY INC 04/09/2025 1,972.51 AP Checks by Date - Summary by Check Date (4/11/2025 3:55 PM) Page 4 11 Section 5, Item B.

Check No Vendor No Vendor Name Check Date Check Amount
31739 10201 HORIZON 04/09/2025 1,865.21
31740 11795 FABIOLA INOCENCIO 04/09/2025 450.00
31741 10212 INTERNATIONAL ASSOCIATION FOR 04/09/2025 65.00 31742 11761 JOHN JANSONS 04/09/2025 1,048.62
31743 10219 JENSEN & PILEGARD INC 04/09/2025 1,191.11
31744 11923 JOE A GONSALVES & SON 04/09/2025 1,250.00
31745 10226 JORGENSEN & CO 04/09/2025 196.80
31746 10233 KERMAN CHAMBER OF COMMERCE 04/09/2025 600.00 31747 10239 KERWEST INC 04/09/2025 1,058.75
31748 10678 MAC'S EQUIPMENT INC 04/09/2025 27,166.28
31749 11416 MAINTENANCE SUPERINTENDENTS ASSOCIATION 04/09/2025 260.00 31750 10260 METRO UNIFORM & ACCESSORIES 04/09/2025 439.09 31751 11965 MISSION UNIFORM SERVICE 04/09/2025 2,408.28 31752 10265 MONTOY LAW CORPORATION 04/09/2025 7,812.00
31753 10281 NORTH CENTRAL FIRE PROT DIST 04/09/2025 597.50 31754 10282 OFFICE DEPOT 04/09/2025 196.35
31755 10286 O'REILLY AUTOMOTIVE INC 04/09/2025 1,555.48 31756 11674 JAYNIE ORTIZ 04/09/2025 150.00
31757 10289 P.G.& E. 04/09/2025 35,640.40
31758 12342 MARIA PACHECO 04/09/2025 284.68
31759 12026 PRECISION CIVIL ENGINEERING INC 04/09/2025 1,651.25 31760 11714 ROD CARSEY 04/09/2025 345.12
31761 11823 KRYSTAL ROMERO 04/09/2025 150.00
31762 11506 SCA OF CA LLC 04/09/2025 11,795.73
31763 10337 SLUMBERGER LUMBER 04/09/2025 1,556.32
31764 12368 SPECIALTY HOSE EXPRESS LLC 04/09/2025 108.66 31765 11907 SPRINGBROOK HOLDING COMPANY LLC04/09/2025 1,714.00 31766 10360 TERRY JOHNSON TRUCKING 04/09/2025 832.70
31767 10015 THE ADVANCE GROUP INC 04/09/2025 1,146.61
31768 10754 THE HOME DEPOT PRO-SUPPLY WORKS04/09/2025 280.13 31769 10168 UNITY IT 04/09/2025 7,486.57
31770 12178 VALLEY ANIMAL CENTER SPAY & NEUTER CLINIC 04/09/2025 438.59 31771 10391 VALLEY FARM SUPPLY STORES 04/09/2025 2,081.10 31772 11370 VALLEY LUBE EQUIPMENT 04/09/2025 3,434.53
31773 12290 VERIZON 04/09/2025 1,553.90
31774 10401 WALLYS TIRE AND WHEEL 04/09/2025 264.69
31775 10406 WEST HILLS OIL INC 04/09/2025 7,050.57
31776 12344 WHITE CAP LP 04/09/2025 611.58
31777 10413 YAMABE & HORN ENGINEERING INC 04/09/2025 138,842.83 31778 12267 IRENE ZAMORA 04/09/2025 150.00
31779 10419 ZIM INDUSTRIES INC 04/09/2025 1,200.16
Total for 4/9/2025: 355,799.35
Report Total (234 checks): 1,723,828.21
AP Checks by Date - Summary by Check Date (4/11/2025 3:55 PM) Page 5 12 Section 5, Item B.

CITY OF KERMAN

PAYROLL REPORT

RETRO PAY GROSS COMP TIME
Salary & OTHER Hours Amount Hours Amount Hours Amount SALARY EARNED Grand Total $ 250,189.21 $ 2,294.75 105.00 $ 5,579.67 0.00 $ - 64.00 $ 1,965.82 $ 260,029.45 40.50 OVERTIME HOLIDAY at 1/2 TIME STANDBY
PAY PERIOD: March 16, 2025 - March 29, 2025

13 Section 5, Item C.

STAFF REPORT
MEETING DATE: April 23, 2025
PRESENTER: Josefina Alvarez, Finance Director
SUBJECT: Presentation of the City of Kerman 2023/2024 Auditor’s Report and Financial Statements (JA)
RECOMMENDATION: Council accept the City of Kerman 2023/2024 Auditor’s Report and Financial Statements as presented.

EXECUTIVE SUMMARY: The City’s independent auditor, Bryant L. Jolley, CPA has completed and submitted the audited financial statements for the year ended June 30, 2024. The purpose of the audit is to determine that the financial statements are free of material misstatement and are fairly presented in accordance with the Generally Accepted Accounting Principles (GAAP) in the United States. A copy of the audited financial statements was enclosed with your agenda. Ryan P. Jolley will present the audited financial statements to the City Council.

Staff is pleased to report that the audited financial statements did not contain any negative notes or audit findings raised by the auditors. Below are some highlights, additional information can be found on page 4 through 12 of the audited financial statements.

Government-wide the City’s net position increased by $8,027,773 over Fiscal Year ending June 30, 2023.

Government Wide (Government and Proprietary Funds) Statement of Revenues, Expenses and Changes in Net Position
2023 2024
Operating Revenues $ 28,940,036 $ 27,581,200
Operating Expenses 17,839,060 19,553,427
Increase in Net Position 11,100,976 8,027,773
Net Position, Beginning of Year 64,021,080 75,122,056
Net Position, End of Year $ 75,122,056 $ 83,149,829
Government-wide operating revenues for 2024 decreased by $1,358,836 and operating expenses increased by $1,714,367 for a change in Net Position of $8,027,773 for Fiscal Year ending 2024 (page 5).

Governemnt-wide cash and investments is $33,986,001, which is an increase of $1,878,802 compared to June 30, 2023 (page 22).
14 Section 7, Item A.

The General Fund has a Reserve Balance of $15,575,174 as of June 30, 2024. This is an increase of $1,673,395 or 10.74%.

The chart below illustrates the General Fund Growth Reserves for five fiscal years.

The City Council adopted a reserve policy by resolution on September 17, 2014, for the purpose of establishing a target and minimum level of unreserved fund balance in the General Fund to protect against unanticipated circumstances and events resulting in revenue shortfalls or unexpected expenditures.

Reserve Category Purpose Minimum Reserve
Emergency Reserve Cover an emergency,
unanticipated expense or cash
flow needs
22% of operating
expenditures or $2,334,845
Revenue Stability Reserve Cover any unanticipated drop in sales or property tax revenues
13% of operating
expenditures or $1,400,907
Major Asset Repair and
Replacement Reserve
Cover any repairs and
replacement of major facilities
and equipment
13% for repairs and 9% for
replacement of operating
expenditures or $1,400,907
Undesignated Reserve Cover any discretionary
expenditures approved by the
Council
Any amount remaining after
meeting minimum reserves
or $10,438,515
The Change in Fund Net Position for the Proprietary Funds increased a net of $1,080,584 (before transfers) with water at $837,492, sewer at $40,705, disposal at $359,427 and storm drain at (minus) -$157,040 and $771,479 (with transfers) with water at $830,167, sewer at (minus) -$147,593, disposal at $268,658 and storm drain at (minus) -$179,753 (page 11). 2,234,316.00
1,749,550.00
1,785,768.00
3,705,542.00
1,673,395.00
-
500,000.00
1,000,000.00
1,500,000.00
2,000,000.00
2,500,000.00
3,000,000.00
3,500,000.00
4,000,000.00
2020 2021 2022 2023 2024

GENERAL FUND GROWTH/DECREASE
FOR 5 FISCAL YEARS
15 Section 7, Item A.

FISCAL IMPACT:

The presentation of the City of Kerman 2023/2024 Audited Financial Statements does not have a financial impact on the City, but it does report the results from operations in the Fiscal Year 2023/2024, with an increase of $1,673,395 or 10.74% of General Fund Reserves.

ATTACHMENTS:

A. Auditor’s Report and Financial Statements
B. Management Report
16 Section 7, Item A.

Attachment 'A'

CITY OF KERMAN
INDEPENDENT AUDITOR’S

REPORT AND

FINANCIAL STATEMENTS
JUNE 30, 2024
17 Section 7, Item A.

TABLE OF CONTENTS
Page
INDEPENDENT AUDITOR’S REPORT 1 – 3
BASIC FINANCIAL STATEMENTS:

Government-Wide Financial Statements
Statement of Net Position 4
Statement of Activities 5
Fund Financial Statements
Balance Sheet – Governmental Funds 6
Reconciliation of Total Governmental Fund Balance to
Net Position of Governmental Activities 7
Statement of Revenue, Expenditures and Changes in
Fund Balance – Governmental Funds 8
Reconciliation of Statement of Revenue, Expenditures
and Changes in Fund Balance of Governmental Funds
to the Statement of Activities 9
Statement of Net Position – Proprietary Funds 10
Statement of Revenue, Expenses and Changes in Fund Net
Position - Proprietary Funds 11
Statement of Cash Flows – Proprietary Funds 12
Statement of Fiduciary Net Position 13
Statement of Changes to Fiduciary Net Position 14
Notes to Basic Financial Statements 15 – 43
18 Section 7, Item A.

TABLE OF CONTENTS (Continued)
Page
Required Supplementary Information
Budgetary Comparison Schedule – General Fund 44
Budgetary Comparison Schedule – Street Maintenance and Construction Fund 45 Budgetary Comparison Schedule – Gas Tax Fund 46
Schedule of the City’s Proportionate Share of Net Pension Liability 47 Schedule of Contributions 48
Supplemental Only Information
Combining Balance Sheet – Nonmajor Governmental Funds 49 – 51 Combining Statement of Revenue, Expenditures and
Changes in Fund Balance – Nonmajor Governmental Funds 52 – 54 INDEPENDENT AUDITOR’S 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 55 – 56 19 Section 7, Item A.

BRYANT L. JOLLEY
CERTIFIED PUBLIC ACCOUNTANTS Bryant L. Jolley, C.P.A.

Ryan P. Jolley C.P.A.

Darryl L. Smith C.P.A.

Luis A. Perez C.P.A.

Lan T. Kimoto

INDEPENDENT AUDITOR’S REPORT
To the Honorable Mayor and City Council
City of Kerman, 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 the City of Kerman (the “City”), California as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the 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 Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

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 City’s 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.

Auditor’s 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 auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards 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. 20 Section 7, Item A.
2 In performing an audit in accordance with generally accepted auditing standards 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 City’s internal control. Accordingly, no such opinion is expressed.  Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
 Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s 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
Management has omitted management’s discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinions on the basic financial statements are not affected by this missing information.

Accounting principles generally accepted in the United States of America require that the budgetary comparison information on pages 44-46, the schedule of the City’s proportionate share of net pension liability on page 47, and the schedule of contributions on pages 48 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 management’s 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.

Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The 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 21 Section 7, Item A.
3 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 Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated April 2, 2025 on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s 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 City’s internal control over financial reporting and compliance.

April 2, 2025
22 Section 7, Item A.

See accompanying notes. 4

CITY OF KERMAN

STATEMENT OF NET POSITION
JUNE 30, 2024
Governmental Business-Type
Activities Activities Total
ASSETS
Cash and investments 21,398,241 $ 11,895,476 $ 33,293,717 $ Accounts receivable, net 23,760 532,072 555,832
Taxes receivable 1,269,563 - 1,269,563
Due from other governments 2,033,589 - 2,033,589
Interest receivable 199,072 - 199,072
Lease receivable 560,909 - 560,909
Internal balances (171,371) 171,371 -
Capital assets, net of allowance
for depreciation 17,388,256 40,289,487 57,677,743
Total assets 29,987,175 65,658,257 95,645,432
DEFERRED OUTFLOWS OF RESOURCES 654,349 2,570,633 3,224,982 Total deferred outflows of resources 654,349 2,570,633 3,224,982

LIABILITIES
Accounts payable and accrued expense 1,853,135 941,339 2,794,474 Accrued interest payable 16,378 15,881 32,259
Deposits payable 12,200 139,440 151,640
Unearned revenues 3,378 - 3,378
Long-term liabilities
Due within one year 177,000 420,567 597,567
Due in more than one year 2,659,000 2,356,974 5,015,974 Compensated absences 502,874 144,984 647,858
Net pension liability 1,157,755 4,548,284 5,706,039
Total liabilities 5,176,940 9,772,249 14,949,189
DEFERRED INFLOWS OF RESOURCES 51,676 719,720 771,396
Total deferred inflows of resources 51,676 719,720 771,396

NET POSITION
Net investment in capital assets 37,453,487 14,610,715 52,064,202 Restricted for specific projects and programs 8,435,576 - 8,435,576 Restricted for capital improvements - 3,502,298 3,502,298 Unrestricted 7,299,895 11,847,858 19,147,753
Total net position $ 25,412,908 57,736,921 $ 83,149,829 $ 23 Section 7, Item A.

See accompanying notes. 5
CITY OF KERMANSTATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2024 Operating Capital
Charges for Grants and Grants and Governmental Business-Type Expense Services Contributions Contributions Activities Activities Total Primary Government
Governmental activities
General government 2,685,304 $ - $ 127,901 $ - $ (2,557,403) $ - $ (2,557,403) $ Public works 3,408,937 - 5,104,970 476,919 2,172,952 - 2,172,952 Community development 768,936 773,991 6,983 313,610 325,648 - 325,648 Social services 924,639 43,176 232,678 - (648,785) - (648,785) Public safety 4,445,833 280,131 279,174 - (3,886,528) - (3,886,528) Debt Service
Interest and fiscal charges - 66,511 - - (66,511) - (66,511) Total governmental activities 1,097,298 12,300,161 5,751,706 790,529 (4,660,628) - (4,660,628) Business-type activities
Water 2,442,491 3,081,307 - 77,448 - 716,264 716,264
Sewer 2,422,788 2,117,118 - 196,654 - (109,016) (109,016) Disposal 2,062,138 2,239,359 80,000 - - 257,221 257,221 Storm Drain 325,849 92,828 - 64,050 - (168,971) (168,971) Total business-type activities 7,530,612 7,253,266 80,000 338,152 - 695,498 695,498 Total primary government $ 19,553,427 8,627,910 $ 5,831,706 $ 1,128,681 $ (4,660,628) 695,498 (3,965,130) General Revenue
Property taxes - 3,671,701 3,671,701
Special assessments - 380,457 380,457
Sales taxes - 5,759,619 5,759,619
Franchise and other taxes - 189,465 189,465
Business licenses - 117,084 117,084
Rents 3,229 421,168 424,397
Interest income/(unrealized gain on investments) 303,338 598,169 901,507 Other 50,186 208,398 258,584
Transfers 309,105 (309,105) -
Total general revenue and transfers 11,655,166 47,648 11,702,814 Change in Net Position 743,146 6,994,538 7,737,684
Net Position
Beginning of year, previously presented 24,669,762 50,452,294 75,122,056 Error correction - 290,089 290,089
Beginning of year, restated 50,742,383 - 50,742,383
End of year $ 25,412,908 57,736,921 $ 83,149,829 $
Functions/Programs
Net Revenue/(Expense) and
Program Revenue Changes in Net Position
24 Section 7, Item A.

See accompanying notes. 6
CITY OF KERMAN BALANCE SHEET – GOVERNMENTAL FUNDS JUNE 30, 2024 Formerly Formerly Formerly
Street Nonmajor Fund Nonmajor Fund Nonmajor Fund Other Total Maintenance and State Local Gas Governmental Governmental General Construction Grants Transportation Tax Funds Funds ASSETS
Cash and investments 13,386,679 $ $ - 3,456,676 $ 1,158,317 $ 1,294,470 $ $ 21,398,241 2,102,099 $ Accounts receivable 19,785 - - - - - 19,785
Taxes receivable 1,269,563 - - - - - 1,269,563
Lease receivable 560,909 - - - - - 560,909
Prepaids 55,007 - 55,007 -
Due from other governments 104,824 685,856 233,770 818,046 39,505 2,033,589 151,588 Interest receivable 199,072 - - - - - 199,072
Due from other funds - 1,321,770 - - - - 1,321,770
Total assets 3,690,446 16,917,609 685,856 1,976,363 1,333,975 2,253,687 26,857,936

LIABILITIES
Accounts payable and accrued expense 810,147 $ 112,822 34,666 $ 353,959 $ 466,038 $ 1,811,588 33,956 Due to other funds - - 490,006 - - 23,002 513,008
Deposits and other liabilities 12,200 - - - - - 12,200
Unearned revenues - 3,378 - - - - 3,378
Total liabilities 34,666 825,725 602,828 353,959 466,038 56,958 2,340,174

DEFERRED INFLOWS OF RESOURCES
Deferred right to use lease revenue - 516,710 - - - - 516,710 Total deferred inflows of resources - 516,710 - - - - 516,710

FUND BALANCE
Restricted
Circulation improvements - 3,655,780 - 1,622,404 867,937 7,205,528 1,059,407 Development activities - - 83,028 - - 1,147,020 1,230,048 Committed
Unfunded liability 100,000 - - - - - 100,000
Emergency reserve 2,334,845 - - - - - 2,334,845
Revenue stability reserve 1,400,907 - - - - - 1,400,907 Major asset repair and replacement reserve 1,400,907 - - - - - 1,400,907 Unassigned - 10,338,515 - - - (9,698) 10,328,817
Total fund balance 15,575,174 3,655,780 83,028 1,622,404 867,937 2,196,729 24,001,052 Total liabilities, deferred inflows of resources and fund balance 16,917,609 $ 3,690,446 $ 685,856 $ 1,976,363 $ 1,333,975 $ 2,253,687 $ 26,857,936 $ Capital Project Funds Special Revenue Fund
25 Section 7, Item A.

See accompanying notes. 7

CITY OF KERMAN

RECONCILIATION OF TOTAL GOVERNMENTAL FUND BALANCE TO NET POSITION

OF GOVERNMENTAL ACTIVITIES
JUNE 30, 2024
Total governmental fund balance 24,001,052 $
Amounts reported for governmental activities in the Statement of Net Position are different because:

Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds 38,807,046 Net pension liability applicable to governmental activities are not due and payable in the current period and accordingly is not reported in the funds (4,548,284)
Deferred outflows of resources related to net pension liability, represent an consumption of net position or fund balance that applies to a future period(s) and so will not be recognized as an outflow of resources (expense) until that time 2,570,633 Deferred inflows of resources related to net pension liability and lease income, represent an acquisition of net position or fund balance that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time (203,010) Governmental long-term liabilities are not due and payable in the current period and, therefore, are not reported in the funds (2,836,000) Compensated absences are not due and payable in the current period and therefore are not reported in the funds (502,874) Interest on long-term debt is reported as an expenditure of the Governmental Funds when paid because it requires the use of current financial resources. However, accrued interest must be recorded when incurred (16,378) Internal service funds are used by management to charge the costs of fleet maintenance and computer services to individual funds. The assets and liabilities of the internal service fund are included in governmental activities in the Statement of Net Position. 464,736 Net position of governmental activities $ 57,736,921
26 Section 7, Item A.

See accompanying notes.
8 CITY OF KERMAN STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE – GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2024 Formerly Formerly Formerly Formerly
Street Major Fund Nonmajor Fund Nonmajor Fund Nonmajor Fund Other Total Maintenance and Street Projects State Local Gas Governmental Governmental General Construction & Development Grants Transportation Tax Funds Funds Revenue
Taxes 9,135,520 $ - $ - $ - $ - $ - $ 817,999 $ 9,953,519 $ Licenses, permits and impact fees 935,220 - - - - - 167,305 1,102,525 Intergovernmental 556,088 158,636 - 3,661,916 968,380 459,010 660,380 6,464,410Charges for services 240,764 - - - - - 2,084 242,848Fines and forfeitures 46,727 - - - - - - 46,727Rents 87,372 - - - - - 240,510 327,882Investment earning, net of unrealized gain/(loss) 465,427 - - - 35,314 30,655 61,406 592,802Other - 137,574 - - 1,000 - 17,651 156,225 Total revenue 158,636 11,604,692 - 3,661,916 1,004,694 489,665 1,967,335 18,886,938 Expenditures
Current
General government 1,458,732 - - - - - - 1,458,732
Public works 1,249,444 - - 243,656 226,439 138,689 872,660 2,730,888Community development 590,126 - - - - - 50,549 640,675Social services 777,468 - - - - - 71,877 849,345Public safety 4,386,219 - - - - - - 4,386,219 Capital outlay 977,391 157,147 - 3,140,160 1,148,964 468,942 937,084 6,829,688Debt Service Principal - - - - - - 173,000 173,000
Interest and fiscal charges - - - - - - 67,510 67,510
Total expenditures 157,147 9,439,380 - 3,383,816 1,375,403 607,631 2,172,680 17,136,057 Revenue over/(under) expenditures 2,165,312 1,489 - 278,100 (370,709) (117,966) (205,345) 1,750,881 Other Financing Sources/(Uses)
Lease revenues 98,650 - - 98,650 -
Transfers in/(out) - net (590,567) - (1,489) (195,072) (62,784) 15,995 (75,686) (909,603) (1,489) (491,917) - (195,072) (62,784) 15,995 (75,686) (810,953) Change in Fund Balance - 1,673,395 - 83,028 (433,493) (101,971) (281,031) 939,928Fund Balance Beginning of year, as previously stated 13,901,779 3,655,780 70,814 - - - 5,142,662 22,771,035Error correction - - - - 290,089 - - 290,089Change within financial reporting entity (major to nonmajor) - - (70,814) - - - 70,814 -Change within financial reporting entity (nonmajor to major) - - - 1,765,808 - 969,908 - (2,735,716) Beginning of year, restated 3,655,780 13,901,779 - - 2,055,897 969,908 2,477,760 23,061,124 End of year $ 15,575,174 3,655,780 $ - $ 83,028 $ 1,622,404 $ 867,937 $ 2,196,729 $ 24,001,052 $ Capital Project Funds Special Revenue Fund
27 Section 7, Item A.

See accompanying notes. 9

CITY OF KERMAN

RECONCILIATION OF STATEMENT OF REVENUE, EXPENDITURES, AND CHANGES IN

FUND BALANCE OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2024
Net change in fund balance - total governmental funds 939,928 $ Amounts reported for governmental activities in the Statement of Activities are different because:

Governmental funds report capital outlays as expenditures. However, in the Statement of Activities the cost of those assets is capitalized and allocated over their estimated lives and reported as depreciation expense Capital outlay expenditures are therefore added back to fund balances 6,696,761 Depreciation expense not reported in governmental funds (918,084) 5,778,677
Repayment of long-term debt is an expenditure in governmental funds, but the repayment reduces long-term liabilities in the statement of net position. Proceeds of long-term debt produces the opposite effect 173,000 Pension expenses reported in the Statement of Activities do not require the use of current financial resources an, therefore are not reported as expenditures in the Governmental Funds (15,579)
Internal service funds are used by management to charge the costs of fleet maintenance and computer services to individual funds. The net revenue (loss) of certain activities of internal service funds is reported with governmental activities 135,862
In the Statement of Activities interest is accrued on long-term debt, whereas, in governmental funds interest expenditure is reported when due 999
Compensated absence costs in the Statement of Activities does not require the use of current financial resources and, therefore, is not reported as expenditures in Governmental Funds (18,349) Change in net position of governmental activities 6,994,538 $ 28 Section 7, Item A.

See accompanying notes. 10
CITY OF KERMAN STATEMENT OF NET POSITION – PROPRIETARY FUNDS JUNE 30, 2024 Governmental
Total Activities
Proprietary Internal
Water Sewer Disposal Storm Drain Funds Service Fund
ASSETSCurrent assets
Cash and investments 8,002,099 $ 2,901,770 $ 856,959 $ 134,648 $ 11,895,476 $ - $ Accounts receivable, net 129,259 196,707 187,681 18,425 532,072 3,975 Total current assets 3,031,029 8,198,806 1,044,640 153,073 12,427,548 3,975 Non-current assets
Property, plant and equipment,
net of allowance for depreciation 8,317,411 8,054,053 6,018 1,010,774 17,388,256 1,482,441 Total assets 11,348,440 16,252,859 1,050,658 1,163,847 29,815,804 1,486,416 DEFERRED OUTFLOWS OF RESOURCES 249,291 291,216 88,687 25,155 654,349 - LIABILITIESCurrent liabilities
Accounts payable and accrued expenses 711,018 66,219 148,688 15,414 941,339 41,547Accrued interest payable - 15,881 - - 15,881 -Deposits 139,440 - - - 139,440 -Current portion of long-term debt - 420,567 - - 420,567 - Total current liabilities 82,100 1,271,025 148,688 15,414 1,517,227 850,309 Non-current liabilities
Long-term debt 239,432 2,117,542 - - 2,356,974 -Compensated absences 65,406 56,166 23,412 - 144,984 -Net pension liability 441,077 515,255 156,916 44,507 1,157,755 - Total noncurrent liabilities 2,614,785 820,093 180,328 44,507 3,659,713 - Total liabilities 2,696,885 2,091,118 329,016 59,921 5,176,940 850,309 DEFERRED INFLOWS OF RESOURCES 19,687 22,998 7,004 1,987 51,676 -

NET POSITION
Net investment in capital assets 7,394,054 6,199,869 6,018 1,010,774 14,610,715 1,482,441Restricted for capital improvements 2,414,890 917,550 - 169,858 - 3,502,298 Unrestricted/(deficit) 1,763,740 4,621,015 797,307 (53,538) 7,128,524 (846,334) Total net position $ 8,881,159 14,429,959 $ 803,325 $ 1,127,094 $ 25,241,537 636,107 $ Adjustments to reflect the consolidation of internal service funds activities related to enterprise funds 171,371 Net position of business-type activities $ 25,412,908
Business-Type Activities - Enterprise Funds
29 Section 7, Item A.

See accompanying notes. 11
CITY OF KERMAN STATEMENT OF REVENUE, EXPENSES, AND CHANGES IN FUND NET POSITION – PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2024 Governmental
Total Activities
Proprietary Internal
Water Sewer Disposal Storm Drain Funds Service Fund
Operating Revenue
Charges for services $ 2,115,516 2,872,236 $ 2,239,359 $ 92,828 $ 7,319,939 $ - $ Other revenues 67,709 109,694 81,819 4,866 264,088 3,019 Total operating income 2,183,225 2,981,930 2,321,178 97,694 7,584,027 3,019 Operating Expense
Contractual services and utilities 754,246 548,547 1,748,118 6,289 3,057,200 83,381Personnel 881,318 724,521 254,702 80,762 1,941,303 231,498Supplies and materials 449,975 514,163 57,245 223,003 1,244,386 514,624Depreciation 600,459 343,554 933 15,290 960,236 305,402 Total operating expense 2,387,690 2,429,093 2,060,998 325,344 7,203,125 1,134,905 Operating income/(loss) (204,465) 552,837 260,180 (227,650) 380,902 (1,131,886) Nonoperating Revenue/(Expense)
Intergovernmental - - 80,000 - 80,000 -
Development impact fees 77,448 196,654 - 64,050 338,152 -Interest income 207,207 70,324 19,247 6,560 303,338 20,707Interest expense (21,808) - - - (21,808) - Total nonoperating revenue/(expense) 245,170 284,655 99,247 70,610 699,682 20,707 Net income/(loss) before transfers 837,492 40,705 359,427 (157,040) 1,080,584 (1,111,179) Operating Transfers In/(Out) (188,298) (7,325) (90,769) (22,713) (309,105) 1,218,708 Change in Net Position (147,593) 830,167 268,658 (179,753) 771,479 107,529 Net Position
Beginning of year 9,028,752 13,599,792 534,667 1,306,847 24,470,058 528,578End of year $ 8,881,159 14,429,959 $ 803,325 $ 1,127,094 $ 25,241,537 $ 636,107 $ Adjustments to reflect the consolidation of internal service fund activities related to enterprise funds $ (28,333) Change in net position of business-type activities (Page 5) $ 743,146 Business-Type Activities - Enterprise Funds
30 Section 7, Item A.

See accompanying notes. 12
CITY OF KERMANSTATEMENT OF CASH FLOW - PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2024 Governmental
Total Activities
Business-Type Internal
Water Sewer Disposal Storm Drain Funds Service Fund
Operating Activities
Receipts from customers and users 2,996,891 $ 2,235,852 $ 2,321,622 $ 96,485 $ 7,650,850 $ 135,643 $ Payments for contractual services and utilities (321,871) (544,278) (1,740,569) (129,197) (2,735,915) (89,121) Payments to employees (816,954) (657,879) (229,363) (70,041) (1,774,237) (231,498) Payment to suppliers (449,975) (514,163) (57,245) (223,003) (1,244,386) (514,624) Net cash provided by (used) in operating activities 519,532 1,408,091 294,445 (325,756) 1,896,312 (699,600) Non-capital Financial Activities
Payments from other governments - - 80,000 - 80,000 -
Payments (to)/from developers 77,448 196,654 - 64,050 338,152 - Transfers (to)/from other funds (7,325) (188,298) (90,769) (22,713) (309,105) 1,482,172 Net cash provided by (used) in
noncapital financing activities 8,356 70,123 (10,769) 41,337 109,047 1,482,172 Capital and Related Financing Activities
Purchase of property, plant and equipment (1,539,125) (135,541) (1,206) (357) (1,676,229) (803,279) Principal paid on long-term debt (165,000) (253,037) - - (418,037) - Interest paid on long-term debt - (23,706) - - (23,706) - Net cash provided by (used) in capital
and related financing activities (1,704,125) (412,284) (1,206) (357) (2,117,972) (803,279) Investing Activities
Interest received 70,324 207,207 19,247 6,560 303,338 20,707 Net cash provided by (used) in
investing activities 70,324 207,207 19,247 6,560 303,338 20,707 Net Increase (Decrease) in Cash 185,928 (18,704) 301,717 (278,216) 190,725 - Cash
Beginning of year 2,715,842 8,020,803 555,242 412,864 11,704,751 - End of year $ 2,901,770 8,002,099 $ 856,959 $ 134,648 $ 11,895,476 $ - $ Cash Flows from Operating Activities
Operating income (loss) 552,837 $ (204,465) $ 260,180 $ (227,650) $ 380,902 $ (1,131,886) $ Adjustments to reconcile operating income (loss)
to net cash provided (used) by operating activities:

Depreciation 343,554 600,459 933 15,290 960,236 305,402 (Increase) Decrease in Accounts Receivable 8,141 52,627 444 (1,209) 60,003 132,624 (Increase) Decrease in Deferred Outflows of Resources (95,858) (93,027) (37,736) (14,279) (240,900) - Increase (Decrease) in Accounts Payable
and Accrued Liabilities 432,375 4,269 7,549 (122,908) 321,285 (5,740) Increase (Decrease) in Deposits 6,820 - - - 6,820 -
Increase (Decrease) in Deferred Inflows of Resources (6,793) (4,142) (765) 329 (11,371) - Increase (Decrease) in Net Pension Liability 158,860 156,003 63,964 24,671 403,498 - Increase (Decrease) in Compensated Absences 7,808 8,155 (124) - 15,839 - Net Cash Provided by (Used) in Operating Activities $ 519,532 1,408,091 $ 294,445 $ (325,756) $ 1,896,312 $ (699,600) $ Business-Type Activities - Enterprise Funds
31 Section 7, Item A.
13 CITY OF KERMAN

STATEMENT OF FIDUCIARY NET POSITION
JUNE 30, 2024
Custodial
Funds
ASSETS
Cash and investments $ 692,284
Total assets 692,284

LIABILITIES
Accounts payable 27,722
Total liabilities 27,722

NET POSITION
Restricted for
Individuals, organizations, and other governments 664,562 Total Net Position 664,562 $
32 Section 7, Item A.
14 CITY OF KERMAN

STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
JUNE 30, 2024
Additions
Fees 115,361 $
Deposits 15,263
Special events 8,260
Total additions 138,884
Deductions
Payments to other entities 2,741
Total deductions 2,741
Change In Net Position 136,143
Net Position
Beginning of year 528,419
End of year 664,562 $
33 Section 7, Item A.
15 CITY OF KERMAN

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2024
Note 1 – Summary of Significant Accounting Policies
The financial statements of the City of Kerman (the City) have been prepared in conformity with Accounting Principles Generally Accepted in the United States of America (GAAP) as applicable to governmental entities. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles.

These financial statements present the government and its component units, entities for which the City is considered to be financially accountable. Blended component units, although legally separate entities are, in substance, part of the government’s operations and data from these units are combined with data of the primary government. Each blended component unit has a June 30 fiscal year end. There are no discretely presented component units included in these financial statements. The following sections further describe the significant accounting policies of the City.

Reporting Entity
The City was incorporated as a general law city in 1946. The City operates under a Council-Manager form of government. The City's major operations include public safety; highways and streets; water, sewer, and refuse collection; parks and recreation; building inspection; public improvements; planning and zoning, and general administrative services.

Also included in this report is the Kerman Public Financing Authority (KPFA). The KPFA was established in 2007 through a Joint Exercise of Powers Agreement between the City and the Agency. The formation of the joint powers authority was approved by the City Council who is also designated as the Board of Directors for the KPFA. The City Manager is appointed Secretary with the City staff providing all support services. The purpose of the KPFA is solely to provide funds from the sale of revenue bonds to finance or refinance the costs of various projects for the City. The City set up the KPFA to act as a financing/lending type institution only. The KPFA/City legislative meetings are held concurrently. No separate annual financial statements are prepared for the KPFA.

Basis of Presentation – Fund Accounting
Government-Wide Financial Statements - The Government-Wide Financial Statements (the Statement of Net Position and the Statement of Activities) report information of all of the nonfiduciary activities of the primary government and its component units. Eliminations have been made to minimize the double counting of internal activities. These statements distinguish between the governmental and business-type activities of the City. Governmental activities, which normally are supported by taxes and inter-governmental revenues, are reported separately from business-type activities, which rely significantly on fees charged to external parties.

The Statement of Activities presents a comparison between direct expenses and program revenues for each segment of the business-type activities of the City and for each function of the City’s governmental activities.

Direct expenses are those that are specifically associated with a program or function and are clearly identifiable to a particular function. Program revenues include 1) charges paid by the recipients of goods or services offered by the programs and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues. 34 Section 7, Item A.
16 CITY OF KERMAN

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2024
Note 1 – Summary of Significant Accounting Policies (Continued) Net position is restricted when constraints placed on them are either externally imposed or are imposed by constitutional provisions or enabling legislation. Internally imposed designations of resources are not presented as restricted net position. When both restricted and unrestricted resources are available for use, generally, it is the City’s policy to use restricted resources first, then unrestricted resources as they are needed.

Governmental Fund Financial Statements - The Governmental Fund Financial Statements provide information about the City’s funds, including fiduciary funds and the blended component unit. Separate statements for each fund category - governmental, proprietary and fiduciary - are presented. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column.

All remaining governmental funds are separately aggregated and reported as non-major funds.

Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Non-operating revenues, such as subsidies and investment earnings, result from non-exchange transactions or ancillary activities.

The City reports the following major governmental funds:

General Fund – The General Fund is the general operating fund of the City. It is used for all financial resources except those required legally, or by sound financial management to be accounted for in another fund.

Generally, the General Fund is used to account for those traditional governmental services of the City, such as police, community services, planning and general administrative services.

Street Maintenance & Construction – The Street Maintenance and Construction Fund accounts for all capital street and improvement projects.

State Grant Fund – The State Grant Fund accounts for all grants received from the State of California.

Local Transportation Fund – Accounts for the construction and maintenance of street network system of the City. Financing is provided by allocations from the County Local Transportation Funds created by the Transportation Development Act.

Gas Tax Fund – State Grant Fund – State Grant Fund – The funds are used to account for receipts and expenditures of monies apportioned to the City under the Streets and Highway Case Section 2105, 2106, 2107, 2107.5 of the State of California.

The City reports the following major enterprise funds:

Water Fund – The Water Fund accounts for the operation and maintenance of the City’s water treatment and water transmission and distribution systems.

Sewer Fund – The Sewer Fund accounts for the operation and maintenance of the City’s sewer system.

Disposal Fund – The Disposal Fund accounts for the operation and maintenance of the City’s sanitation system.

Storm Drain Fund – The Storm Drain Fund accounts for the operation and maintenance of the City’s storm drain system. 35
Section 7, Item A.
17 CITY OF KERMAN

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2024
Note 1 – Summary of Significant Accounting Policies (Continued) The City reports the following additional fund types:

Internal Service Fund – The Internal Service Fund accounts for fleet management and computer services provided to other departments or agencies of the government, on a cost reimbursement basis.

Fiduciary Funds – The Fiduciary Funds account for assets held by the City as an agent for various local governments or other entities. These funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations.

Basis of Accounting
The Government-Wide and Proprietary Fund Financial Statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the City gives (or receives) value without directly receiving (or giving) equal value in exchange, include property and sales taxes, grants, entitlements and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenues from sales tax are recognized when the underlying transactions take place. Revenues from grants and donations are recognized in the fiscal year in which all eligible requirements have been satisfied.

Governmental Funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available.

Property and sales taxes, interest, certain state and federal grants and charges for services are accrued when their receipt occurs within sixty days after the end of the accounting period so as to be both measurable and available. Expenditures are generally recorded when a liability is incurred, as under accrual accounting.

However, debt service expenditures, as well as expenditures related to compensated absences, claims and judgments are recorded only when payment is due. General capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term debt and capital leases are reported as other financing sources.

Proprietary Funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a Proprietary Fund’s principal ongoing operations. Revenues and expenses not meeting this definition are reported as non-operating.

Financial Statement Amounts
Cash and Cash Equivalents – Cash and cash equivalents represent the City's cash bank accounts including, but not limited to, certificates of deposit, money market funds and cash management pools for reporting purposes in the Statement of Cash Flows. Additionally, investments with maturities of three months or less when purchased are included as cash equivalents in the Statement of Cash Flows.

The City maintains a cash and investment pool that is available for use by all funds. Interest earnings as a result of this pooling are distributed to the appropriate funds based on quarterly ending cash balances in each fund.
36 Section 7, Item A.
18 CITY OF KERMAN

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2024
Note 1 – Summary of Significant Accounting Policies (Continued) Investments of the pool include only those investments authorized by the California Government Code such as, United States Treasury securities, agencies guaranteed by the United States Government, registered state warrants, and other investments. Investments primarily consist of deposits in money market accounts and certificates of deposit. Investments are stated at fair value.

Accounts Receivable – Billed, but unpaid, services provided to individuals or non-governmental entities are recorded as accounts receivable. The Proprietary Funds include a year end accrual for services through the end of the fiscal year which have not yet been billed. Accounts receivable are reported net of an allowance for uncollectible.

Fresno County is responsible for the assessment, collection and apportionment of property taxes for all taxing jurisdictions. Property taxes are levied in equal installments on November 1 and February 1. They become delinquent on December 10 and April 10, respectively. The lien date is January 1 of each year. Property taxes are accounted for in the General Fund. Property tax revenues are recognized when they become measurable and available to finance current liabilities. The City considers property taxes as available if they are collected within 60 days after year end. Property tax on the unsecured roll are due on the January 1 lien date and become delinquent if unpaid on August 31. However, unsecured property taxes are not susceptible to year end accrual.

The City is permitted by Article XIIIA of the State of California Constitution (known as Proposition 13) to levy a maximum tax of $1.00 per $100 of full cash value.

Interfund Receivables/Payables – Items classified as interfund receivable/payable represent short-term lending/borrowing transactions between funds. This classification also includes the current portion of an advance to or from another fund.

Advances To/From Other Funds – This classification represents non-current portions of any long-term lending/borrowing transactions between funds. This amount will be equally offset by a reserve of fund balance which indicates that it does not represent available financial resources and therefore, is not available for appropriation. The current portion of any interfund long-term loan (advance) is included as an interfund receivable/payable.

Capital Assets – Capital outlays are recorded as expenditures of the General, Special Revenue, and Capital Projects Funds and as assets in the Government-Wide Financial Statements to the extent the City’s capitalization threshold is met.

Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type activities column in the Government-Wide Financial Statements. Capital assets are defined by the government as assets with an initial individual cost of more than $10,000 for roadways and $5,000 for all other assets, and an estimated useful life of at least three years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation.
37 Section 7, Item A.
19 CITY OF KERMAN

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2024
Note 1 – Summary of Significant Accounting Policies (Continued) 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. Betterments and major improvements which significantly increase values, change capacities or extend useful lives are capitalized. Upon sale or retirement of fixed assets, the cost and related accumulated depreciation are removed from the respective accounts and any resulting gain or loss is included in the results of operations.

Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities are included as part of the capitalized value of the assets constructed.

Property, plant, and equipment of the primary government, as well as the component units, are depreciated using the straight line method over the following estimated useful lives:

Years
Infrastructure 50
Buildings 20 - 40
Improvements 30 - 50
Equipment 5 - 10
Leases - Lessor: The City recognizes a lease receivable and a deferred inflow of resources in the governmentwide and governmental fund financial statements.

At the commencement of a lease, the City initially measures the lease receivable 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 inflow of resources is 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 inflow of resources is recognized as revenue over the life of the lease term.

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 interest rate charged to the lessees as the discount rate. When the interest rate charged to the lessees is not provided, the City generally uses the implied rate of return as the discount rate for leases. When the implied rate of return has not been determined, the City uses its estimated incremental borrowing rate which it has determined is the prime rate at the inception of the lease.  The lease term includes the non-cancellable period of the lease. Lease receipts included in the measurement of the lease receivable are 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. 38 Section 7, Item A.
20 CITY OF KERMAN

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2024
Note 1 – Summary of Significant Accounting Policies (Continued) Compensated Absences – It is the City's policy to permit all employees to accumulate earned but unused vacation, sick pay and compensatory time benefits within limits outlined in Memorandums of Understanding (MOU).

Vested or accumulated vacation and sick leave along with any compensation time that is expected to be paid with expendable available financial resources is reported as an expenditure in the fund financial statements of the Governmental Fund that will pay for it. Amounts not expected to be liquidated with expendable available financial resources are reported in the Government-Wide Financial Statements.

Vested leave of Proprietary Funds are recorded as an expense and liability as the benefits accrue.

Pension – For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City’s California Public Employee Retirement System (CalPERS) plan and additions to/deduction from the Plan’s fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.

Long-Term Obligations – In the Government-Wide Financial Statements and in the Proprietary Fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or Proprietary Fund Type Statement of Net Position. Debt principal payments of both government and business-type activities are reported as decreases in the balance of the liability on the Statement of Net Position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount.

In the fund financial statements, however, debt principal payments of Governmental Funds are recognized as expenditures when paid. Governmental Fund types recognize bond premiums and discounts during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

Non-Current Governmental Assets/Liabilities – GASB Statement No. 34 eliminates the presentation of account groups, but provides for these records to be maintained and incorporates the information into the Governmental Activities column in the Government-Wide Statement of Net Position. 39 Section 7, Item A.
21 CITY OF KERMAN

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2024
Note 1 – Summary of Significant Accounting Policies (Continued) Net Position – The government-wide and business-type activities financial statements utilize a net position presentation. Net position are categorized as net investment in capital assets, restricted and unrestricted.  Net Investment in Capital Assets - This category groups all capital assets, including infrastructure, into one component of net position. Accumulated depreciation and the outstanding balances of debt that are attributable to the acquisition, construction or improvement of these assets reduce the balance in this category.
 Restricted Net Position - This category presents external restrictions on net position imposed by creditors, grantors, contributors, laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabling legislation.  Unrestricted Net Position - This category represents net position of the City not restricted for any project or other purpose.

Fund Balance – In the fund financial statements, governmental fund balance is made up of the following components:
 Nonspendable fund balance typically includes inventories, prepaid items, and other items that must be maintained intact pursuant to legal or contractual requirements, such as endowments.  Restricted fund balance category includes amounts that can be spent only for specific purposes imposed by creditors, grantors, contributors, or laws or regulations of other governments or through enabling legislations.
 Committed fund balance classification includes amounts that can be used only for the specific purposes determined by a formal action of the City Council. The City Council has the authority to establish, modify, or rescind a fund balance commitment.
 Assigned fund balance are amounts designated by the City Council for specific purposes and do not meet the criteria to be classified as restricted or committed.  Unassigned fund balance is the residual classification that includes all spendable amounts in the General Fund not contained in other classifications.

When expenditures are incurred for purposes for which both restricted and unrestricted (committed, assigned, or unassigned) fund balances are available, the City’s policy is to apply restricted first. When expenditures are incurred for purposes for which committed, assigned, or unassigned fund balances are available, the City’s policy is to apply committed fund balance first, then assigned fund balance, and finally unassigned fund balance.
40 Section 7, Item A.
22 CITY OF KERMAN

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2024
Note 1 – Summary of Significant Accounting Policies (Continued) Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates.

Note 2 – Stewardship, Compliance and Accountability
California law authorizes the City to invest in obligations of the United States Treasury, agencies and instrumentalities, certificates of deposit or time deposits in banks and savings and loan associations which are insured by the Federal Deposit Insurance Corporation.

In accordance with applicable sections of the California Government Code and the Kerman Municipal Code, the City prepares and legally adopts an annual balanced budget on a basis consistent with accounting principles generally accepted in the United States of America. Annual appropriated budgets are adopted for the General Fund, specific Special Revenue Funds, and specific Capital Projects Funds. Budget plans are adopted for Proprietary Funds. A proposed budget is presented to the City Council during June of each year for review.

The Council holds public hearings and may add to, subtract from, or change appropriations within the revenues and reserves estimated as available. Expenditures may not legally exceed budgeted appropriations at the fund level. Supplementary appropriations which alter the total expenditures of any fund, or expenditures in excess of total budgeted fund appropriations, must be approved by the City Council.

All annual appropriations lapse at fiscal year end to the extent they have not been expended or encumbered.

Note 3 – Cash and Investments
The City pools all of its cash and investments except those funds required to be held by outside fiscal agents under the provisions of bond indentures. Interest income earned on pooled cash is allocated to the various funds on average cash balances. Interest income from cash investments held with fiscal agents is credited directly to the related funds.

Cash and investments as of June 30, 2024 are classified in the accompanying financial statements as follows:

Statement of Net Position:

Cash and Investments 33,293,717 $
Fiduciary Funds:

Cash and Investments 692,284
Total Cash and Investments $ 33,986,001
41 Section 7, Item A.
23 CITY OF KERMAN

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2024
Note 3 – Cash and Investments (Continued)
Cash and investments as of June 30, 2024 consist of the following:

Cash on Hand 1,250 $
Deposits with Financial Institutions 5,866,616
Local Agency Investment Fund 17,636,545
Money Market Funds 3,646,348
Certificates of Deposit 6,835,242
Total Cash and Investments $ 33,986,001
Fair Value Measurements
The framework for measuring fair value provides a fair value hierarchy that categorizes the inputs to valuation techniques used to measure fair value into three levels. The fair value hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described as follows:

Level 1: Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets that a government can access at the measurement date.

Level 2: Inputs to valuation methodology include inputs – other than quoted prices included within Level 1 – that are observable for an asset or liability, either directly or indirectly.

Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The asset’s or liability’s fair value measurement level within a fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

Investments Authorized by the California Government Code and the City’s Investment Policy The table below identifies the investment types that are authorized for the City by the California Government Code (or the City’s investment policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the City’s investment policy, where more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. The City’s investment policy does not contain any specific provisions intended to limit the City’s exposure to 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. 42 Section 7, Item A.
24 CITY OF KERMAN

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2024
Note 3 – Cash and Investments (Continued)
Maximum Maximum
Maximum Percentage Investment
Maturity of Portfolio In One Issuer
Local Agency Bonds 5 years None None
U.S. Treasury Obligations 5 years None None
U.S. Agency Securities 5 years None None
Banker's Acceptances 180 days 40% 30%
Commercial Paper 270 days 25% 10%
Negotiable Certificates of Deposit 5 years 30% None
Repurchase Agreements 1 year None None
Reverse Repurchase Agreements 92 days 20% None
Medium-Term Notes 5 years 30% None
Mutual Funds N/A 20% 10%
Money Market Mutual Funds N/A 20% 10%
Mortgage Pass-Through Securities 5 years 20% None
County Pooled Investment Funds N/A None None
Local Agency Investment Fund (LAIF) N/A None None
JPA Pools (other investment pools) N/A None None
Authorized Investment Type
Investments Authorized by Debt Agreements
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 the bond trustee. The table also identifies certain provisions of these debt agreements that address interest rate risk, credit risk, and concentration of credit risk.

Maximum Maximum
Maximum Percentage Investment
Maturity of Portfolio In One Issuer
U.S. Treasury Obligations None None None
U.S. Agency Securities None None None
Banker's Acceptances 180 days None None
Commercial Paper 270 days None None
Money Market Mutual Funds N/A None None
Investment Contracts None None None
Certificates of Deposits 1 year None None
Repurchase Agreements 30 days None None
Local Agency Investment Fund (LAIF) N/A None None
Municipal Bonds None None None
Authorized Investment Type
43 Section 7, Item A.
25 CITY OF KERMAN

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2024
Note 3 – Cash and Investments (Continued)
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, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the City of Kerman manages its exposure to interest rate risk is through the purchase of 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. 12 Months 13 to 24 25 to 60
Fair Value or Less Months Months
Local Agency Investment Fund 17,636,545 $ 17,636,545 $ - $ - $ Certificates of deposit 6,835,242 3,678,433 3,156,809 - Money Market Funds 3,646,348 3,646,348 - -
Total $ 24,961,326 28,118,135 $ 3,156,809 $ - $
Investment Type
Remaining Maturity (in months)
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.

Minimum Rating as of Year End
Legal Not
Rating Rated
Local Agency Investment Fund 17,636,545 $ N/A 17,636,545 $ Certificates of deposit 6,835,242 N/A 6,835,242
Money Market Funds 3,646,348 N/A 3,646,348
Total $ 28,118,135 28,118,135 $
Investment Type
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. There were no investments in any one issuer, other than U.S. Treasury securities, mutual funds, and external investment pools that represent 5% or more of total City-wide investments as of June 30, 2024.
44 Section 7, Item A.
26 CITY OF KERMAN

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2024
Note 3 – Cash and Investments (Continued)
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 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, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit).

The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits.

The custodial risk for investments is the risk that, in the event of the failure of the counterparty 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 investments. With respect to investments, custodial credit risk generally applies only to direct investments in marketable securities. Custodial credit risk does not apply to a local government’s indirect investment in securities through the use of mutual funds or government investment pools.

Note 4 – Receivables
The following is a summary of receivables at June 30, 2024 for the City’s individual enterprise funds, including the applicable allowances for uncollectible accounts are as follows:

Water Sewer Disposal Storm Drain Internal Service
Enterprise Funds
Accounts $ 159,779 223,545 $ 207,579 $ 19,999 $ 3,975 $ Gross receivables 223,545 159,779 207,579 19,999 3,975
Less: Allowance for
uncollectible accounts (26,838) (30,520) (19,898) (1,574) - $ 129,259 196,707 $ 187,681 $ 18,425 $ 3,975 $
45 Section 7, Item A.
27 CITY OF KERMAN

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2024
Note 4 – Receivables (continued)
Lease receivables
The following is a summary of lease receivables at June 30, 2024:

General Fund
Land Leases:

Valley Health 87,956 $
Generations Dairy 11,640
Tower Leases:

Verizon 407,753
AT&T 53,560
$ 560,909
Valley Heath Team Inc. Land Lease – The City entered into an agreement to lease out a certain property from June 1, 2011 through August 31, 2026 at a monthly rate of $3,312.24. Payment is due the first of the month at .9% interest.

Generations Dairy Land Lease – The City agreed to lease out 39 acres of land from 5/1/21 to 12/31/25 for an annual payment ranging from $11,199 to $12,789 at .9% interest rate.

Verizon Tower Lease – The City entered into an agreement to lease out a cell tower from December 1, 2007 through December 1, 2036 for an annual payment ranging from $25,412 to $39,590. Payment is due December 1 each year at .9% interest.

AT&T Tower Lease – The City entered into an agreement to lease out a cell tower from December 1, 2007 through December 1, 2036 to for a monthly payment of $1,600. Payment is due December 1 each year at .9% interest.

The annual payment receipt schedule for principal and interest on all lease receivable at June 30, 2024 were as follows:

For the year ended June 30, Principal Interest Total
2025 95,011 $ 4,602 $ 99,613 $
2026 85,806 3,830 89,636
2027 48,164 3,169 51,333
2028 27,480 2,863 30,343
2029 28,643 2,610 31253
2030-2034 162,023 8,881 170,904
2035-2037 113,782 1,563 115,345
Total 560,909 $ $ 27,518 $ 588,427
46 Section 7, Item A.
28 CITY OF KERMAN

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2024
Note 4 – Receivables (continued)
The related deferred inflows of resources on the right of use on lease revenue will be amortized on a straightline basis over the term of the agreement as follows:

For the year ended June 30, Principal
2025 91,951 $
2026 85,253
2027 48,541
2028 30,628
2029 30,628
2030-2034 153,139
2035-2037 76,572
Total 516,713 $
During the year ended June 30, 2024, the City recognized $98,650 in lease revenue and $5,366 in related interest income.
47 Section 7, Item A.
29 CITY OF KERMAN

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2024
Note 5 – Capital Assets – Capital asset activities for the year ended June 30, 2024 were as follows:

Balance Balance
July 1, 2023 Additions Retirements June 30, 2024
Governmental Activities
Capital assets, not being depreciated
Land 2,523,592 $ 2,947,190 $ - $ 5,470,782 $
Construction in progress 3,679,401 4,259,717 (738,187) 7,200,931 Total capital assets, not being depreciated 6,626,591 6,783,309 (738,187) 12,671,713 Capital assets, being depreciated
Buildings and improvements 12,509,104 26,660 12,535,764 Infrastructure 22,944,405 738,187 - 23,682,592
Machinery and equipment 846,789 3,887,038 (220,630) 4,513,197 Total capital assets, being depreciated 1,611,636 39,340,547 (220,630) 40,731,553 Less accumulated depreciation for
Buildings and improvements (3,552,833) (326,845) - (3,879,678) Infrastructure (5,928,949) (538,923) - (6,467,872)
Machinery and equipment (357,718) (2,629,141) 220,630 (2,766,229) Total accumulated depreciation (1,223,486) (12,110,923) 220,630 (13,113,779) Total capital assets, being depreciated, net 388,150 27,229,624 - 27,617,774 Governmental activities capital assets, net $ 34,012,933 7,014,741 $ (738,187) $ 40,289,487 $ Business-Type Activities
Capital assets, not being depreciated
Land 3,383,589 $ - $ - $ 3,383,589 $
Construction in progress 1,417,892 3,914,513 - 5,332,405 Total capital assets, not being depreciated 1,417,892 7,298,102 - 8,715,994 Capital assets, being depreciated
Buildings and improvements 23,155,297 88,366 - 23,243,663 Machinery and equipment 169,971 1,990,208 - 2,160,179
Total capital assets, being depreciated 258,337 25,145,505 - 25,403,842 Less: accumulated depreciation (960,236) (15,771,344) - (16,731,580) Total capital assets, being depreciated, net (701,899) 9,374,161 - 8,672,262 Business-type activities capital assets, net $ 715,993 16,672,263 $ - $ 17,388,256 $ 48 Section 7, Item A.
30 CITY OF KERMAN

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2024
Note 5 – Capital Assets (Continued)
Depreciation expense was charged to the following functions in the Statement of Activities:

Governmental Functions:

General Government 116,322 $
Public Works and Community Development 544,893
Social Services 214,854
Public Safety 42,015
Capital assets held by the government's internal service funds are charged to the various functions based on their usage of the asset 305,402 $ 1,223,486
Business-Type Functions:

Water 343,554 $
Sewer 600,459
Disposal 933
Storm Drain 15,290
$ 960,236
49 Section 7, Item A.
31 CITY OF KERMAN

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2024
Note 6 – Long-Term Debt
The City generally incurs long-term debt to finance projects or purchase assets which will have useful lives equal to or greater than the related debt.

Long-term debt payable at June 30, 2024 was comprised of the following individual issues:

Balance Balance Current
July 1, 2023 Additions Retirements June 30, 2024 Portion Governmental Activity Long Term Debt
Direct Borrowings:

Kerman Public Finance Authority Bonds
2020 Lease Revenue Bonds $ 3,009,000 - $ (173,000) $ 2,836,000 $ 177,000 $ Total Governmental Activity Debt $ 3,009,000 - $ (173,000) $ 2,836,000 $ 177,000 $ Business-Type Activity Long Term Debt
Direct Borrowings:

Notes Payable
California Dept. of Water Resources 824,999 $ - $ (165,000) $ 659,999 $ 165,000 $ California Dept. of Water Resources 2,370,579 - (253,037) 2,117,542 255,567 Total Business-Type Activity Debt $ 3,195,578 - $ (418,037) $ 2,777,541 $ 420,567 $ Compensated Absences
Government Activities $ 18,349 484,525 $ - $ 502,874 $
Business-Type Activities $ 15,839 129,145 $ - $ 144,984 $ Net Pension Liability
Government Activities $ 4,348,354 199,930 $ - $ 4,548,284 $ Business-Type Activities $ 754,257 403,498 $ - $ 1,157,755 $ Kerman Public Financing Authority Bonds - The KPFA was established in 2007 through a Joint Exercise of Powers Agreement between the City and the Agency. The formation of the joint powers authority was approved by the City Council who is also designated as the Board of Directors for the KPFA.

The purpose of the KPFA is solely to provide funds from the sale of revenue bonds to finance or refinance the costs of acquiring, constructing, or improving and equipping capital improvements (projects) for the City and the Agency. The City set up the KPFA to act as a financing/lending type institution only.

In September 2020, the KPFA issued the 2020 Lease Revenue Refunding Bonds in the amount of $3,041,000.

The 2020 Lease Revenue principal payments are made each October 1 beginning in 2023 through 2038.

Interest is to be paid semi-annually on April 1 and October 1 through 2038. The interest rates range from 3.5% to 4.75%.
50 Section 7, Item A.
32 CITY OF KERMAN

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2024
Note 6 – Long-Term Debt (Continued)
California Department of Water Resources Construction Loan – The City entered into a contract with the State of California, Department of Water Resources in 2003. The contract provides for a 20 year loan at a zero percent interest rate. Terms of the note call for semi-annual principal payments of $82,500 beginning January 1, 2008 and will mature on January 1, 2028. The outstanding balance on the note at June 30, 2024 was $659,999.

California Department of Water Resources Wastewater Upgrade Loan – The City entered into a revolving loan agreement with the State of California, Department of Water Resources in September 2009. The agreement provides for a loan of up to $4,957,479 for sewer system upgrades. Construction period interest of of $38,241 was combined with the loan amount for a final total loan of $4,995,720. Terms of the loan call for annual payments of $276,743 including interest at 1.00%, which begins September 2012 and will mature in September 2031. The outstanding balance on the note at June 30, 2024 was $2,117,542.

The annual requirement to amortize the principal and interest on all long-term debt at June 30, 2024 were as follows:

Years ending June 30, Principal Interest Principal Interest 2025 177,000 $ 63,467 $ 420,567 $ 21,175 $
2026 180,000 59,344 423,123 18,620
2027 183,000 55,151 425,704 16,039
2028 186,000 50,889 428,310 13,432
2029 189,000 46,558 265,944 10,798
2030-2034 1,021,000 163,953 813,893 16,332
2035-2038 900,000 42,159 - -
$ 481,521 2,836,000 $ 2,777,541 $ 96,396 $
Governmental Activities Business-Type Activities
51 Section 7, Item A.
33 CITY OF KERMAN

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2024
Note 7 – Fund Balance
Fund Balance and Retained Earnings Deficits - The following is a summary of deficit fund balances and retained earnings as of June 30, 2024:

Special Revenue Funds
Park Development (9,698) $
These deficits are expected to be relieved from future revenues or transfers from other funds.

Note 8 – Interfund Receivables, Payables and Transfers
Interfund receivables and payables consist of short-term loans resulting from regular transactions. These loans are expected to be repaid as soon as the borrowing fund has cash.

Individual fund interfund receivables and payables balances as of June 30, 2024 are as follows:

Due From Due To
General Fund 1,321,770 $ - $
Internal Service Fund - 808,762
Senior Center Fund - 13,304
Park Development - 9,698
State Grants - 490,006
$ 1,321,770 1,321,770 $
52 Section 7, Item A.
34 CITY OF KERMAN

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2024
Note 8 – Interfund Receivables, Payables and Transfers (Continued) Interfund Transfers
In general, the City uses interfund transfers to (1) move revenues from the funds that collect them to the funds’ that statute or budget requires to expend them, (2) use unrestricted revenues collected in the General Fund to help finance various programs and capital projects accounted for in other funds in accordance with budgetary authorization, and (3) move cash to debt service funds from the funds responsible for payment as debt service payments become due. In general, the effect of the interfund activity has been eliminated from the governmentwide financial statements.

Transfers In Transfers Out
Major Governmental Funds:

General Fund - $ 590,567 $
Street Maintenance and Construction - 1,489
State Grants - 195,072
Local Transportation - 62,784
Gas Tax 15,995 -
Proprietary Funds:

Water - 7,325
Sewer - 188,298
Disposal - 90,769
Storm Drain - 22,713
Internal Service 1,218,708 -
Nonmajor Governmental Funds:

Measure C - 60,339
Senior Center 6,418 -
Maintenance District - 21,765
$ 1,241,121 1,241,121 $
53 Section 7, Item A.
35 CITY OF KERMAN

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2024
Note 9 – Risk Management
The City participates with other public entities in a joint venture under a joint powers agreement which establishes the Central San Joaquin Valley Risk Management Authority (CSJVRMA). The relationship between the City and CSJVRMA is such that CSJVRMA is not a component unit of the City for financial reporting purposes.

The CSJVRMA is a consortium of 55 cities in San Joaquin Valley, California. It was established under the provisions of California Government Code Section 6500, et. seq. The CSJVRMA is governed by a Board of Directors, which meets three to four times each year, consisting of one member appointed by each member city. The day-to-day business is handled by a management group employed by the CSJVRMA. The financial statements of CSJVRMA can be obtained at 1831 K Street, Sacramento, CA 95814.

Each member government pays a primary deposit to cover estimated losses for a fiscal year (claims year). Six months after the close of a fiscal year, outstanding claims are valued. A retrospective deposit computation is then made for each open claims year. Costs are spread to members as follows: the first $25,000 of each occurrence is charged directly to the member. Each member maintains a $1,000,000 self-insured retention (SIR) amount covered by the Authority pooled investments. The Authority purchases excess liability coverage through the California Affiliated Risk Management Authority for the amount in excess of $1,000,000.

The City maintains a self-insured retention level of $50,000 for workers’ compensation insurance. Coverage between $50,000 and $500,000 is provided through the risk pool. CSJVRMA participates in an excess pool which provides workers’ compensation coverage from $5,000,000 to $200,000,000. Each program year is retrospectively adjusted three years after the end of the program year and annually thereafter.

The City also purchases various property coverage programs. Deductibles and limits per property type can be obtained from the City Manager or directly from the Authority.

The latest audited financial information and the most current information available for CSJVRMA for fiscal year ended June 30, 2024 is as follows:

Total assets 179,635,612 $
Total liabilities 144,400,470
Net position $ 35,235,142
Total revenues $ 95,596,916
Total expenses 94,324,180
Increase/(decrease) in net position $ 1,272,736
Contingent Liabilities

The City participates in a number of Federal and State assisted grant programs which are subject to financial and compliance audits. Audits for these programs and the respective findings are to be determined at a future date, and the City expects the amount, if any, of the expenditures which may be disallowed by the granting agency to be immaterial.

The City is a defendant in various lawsuits and claims. The City attorney anticipates that actual or potential claims against the City, not covered by insurance, would not materially affect the financial position of the City. 54 Section 7, Item A.
36 CITY OF KERMAN

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2024
Note 10 – Deferred Outflows and Deferred Inflows of Resources In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial element, deferred outflows of resources, represents a consumption of net position or fund balance that applies to future period(s) and thus, will not be recognized as an outflow of resources (expense/expenditure) until then. The City reports the $3,224,982 in deferred outflows related to net pension liability in the Statement of Net Position. See Note 11 for more details.

In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represent an acquisition of net position or fund balance that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City reports two items related to deferred inflows, totaling $771,396:
 $254,686 in deferred inflows of resources related to net pension liability, see Note 11 for more details.  $516,710 in deferred inflows of resources related to right of use capital lease revenue in the Balance Sheet of the General Fund, see Note 4 for more details.

Note 11 – Pension Plan
Plan Description - The City contributes to the California Public Employees' Retirement System (PERS), an agent multiple-employer public employee defined benefit pension plan. PERS provides retirement and disability benefits, annual cost-of-living adjustments and death benefits to plan members and beneficiaries.

PERS 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 PERS' annual financial report may be obtained from their Executive Office - 400 P Street - Sacramento, CA 95814.

Funding Policy – Active plan members in the Plan are required to contribute 7% of their covered salary for both miscellaneous and public safety members. The City contributes 4% of the employee portion.

The City is required to contribute the actuarially determined remaining amounts necessary to fund the benefits for its members. The actuarial methods and assumptions used are those adopted by the CalPERS Board of Administration. The required employer contribution rates for the fiscal year ended June 30, 2024 Miscellaneous Classic, PEPRA Miscellaneous, Safety Classic, and PEPRA Safety were 10.10%, 7.68%,

16.45%, and 10.850%, respectively. The contribution requirements of plan members is established by State statute and the employer contribution is established and may be amended by PERS. 55 Section 7, Item A.
37 CITY OF KERMAN

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2024
Note 11 – Pension Plan (Continued)
The Plans’ provisions and benefits in effect at June 30, 2024, are summarized as follows:

Miscellaneous Classic PEPRA Miscellaneous
Hire Date
Prior to
January 1, 2013
On or after
January 1, 2013
Benefit Formula 2.0% at 60;
maximum 2% COLA

2.0% at 62;
maximum 2% COLA
Benefit Vesting Schedule 5 years service 5 years service Benefit Payments monthly for life monthly for life
Retirement Age 60 60
Monthly Benefits, as a % of Eligible Compensation 2.00% 2.00% Required Employee Contribution Rates 7.00% 7.75%
Required Employer Contribution Rates 10.10% 7.68%
Safety Classic PEPRA Safety
Hire Date
Prior to
January 1, 2013
On or after
January 1, 2013
Benefit Formula 2.0% at 55;
maximum 2% COLA

2.0% at 57;
maximum 2% COLA
Benefit Vesting Schedule 5 years service 5 years service Benefit Payments monthly for life monthly for life
Retirement Age 55 55
Monthly Benefits, as a % of Eligible Compensation 2.00% 2.00% Required Employee Contribution Rates 7.00% 11.00%
Required Employer Contribution Rates 16.45% 10.85%
Employees hired July 1, 2012 and thereafter pay the full 7% employee contribution per adopted Memoranda of Understanding if the employee is considered a “Classic” employee under PEPRA.

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 July 1 following the 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 District is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. 56 Section 7, Item A.
38 CITY OF KERMAN

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2024
Note 11 – Pension Plan (Continued)
For the year ended June 30, 2024, the contributions recognized $777,837 as part of the pension expense.

Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions As of June 30, 2024, the City reported net pension liabilities for its proportionate shares of the net pension liability of each Plan as follows:

Miscellaneous Plan
Safety Police Plan
Total Net Pension Liability
Proportionate Share of Net
Pension Liability
$ 3,614,718
2,091,321
$ 5,706,039
The City’s net pension liability for each Plan is measured as the proportionate share of the net pension liability. The net pension liability of each of the Plans is measured as of June 30, 2023, and the total pension liability for each Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2022 rolled forward to June 30, 2023 using standard update procedures. The City’s proportion of the net pension liability was based on a projection of the City’s long-term share of contributions to the pension plans relative to the projected contributions of all participating employers, actuarially determined. The City’s proportionate share of the net pension liability for each Plan as of June 30, 2023 and 2024 was as follows:

Miscellaneous Safety
Proportion – June 30, 2023 0.06964% 0.02684%
Proportion – June 30, 2024 0.07229% 0.02798%
Change – Increase/(Decrease) 0.00265% 0.00114%
57 Section 7, Item A.
39 CITY OF KERMAN

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2024
Note 11 – Pension Plan (Continued)
For the year ended June 30, 2024, the City recognized pension expense of $1,391,204. At June 30, 2024, the City reported deferred outflows of resources and deferred inflows of resources related to pension from the following sources:

Deferred Outflows of
Resources
Deferred Inflows of
Resources
Pension contributions subsequent to
measurement date 1,224,399 $ - $
Difference between expected and actual experience 338,200 (41,790) Difference in projected and actual contributions 34,392 (212,896) Change in employer's proportion 416,248 -
Changes in assumptions 340,289 -
Net differences between projected and
actual earnings on pension plan investments - 871,454
Total 3,224,982 $ (254,686) $
() () () ()
$1,224,399 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2025. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

Year Ended
June 30
2025 614,975 $
2026 406,544
2027 699,596
2028 24,782
Thereafter -
58 Section 7, Item A.
40 CITY OF KERMAN

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2024
Note 11 – Pension Plan (Continued)
Actuarial Methods and Assumptions – The collective total pension liability for the June 30, 2023 measurement period was determined by an actuarial valuation as of June 30, 2022, with update procedures used to roll forward the total pension liability to June 30, 2023. The collective total pension liability was based on the following assumptions:

Valuation Date June 30, 2022
Measurement Date June 30, 2023
Actuarial Cost Method Entry-Age Normal Cost Method in
accordance with the requirements of
GASB Statement No. 68
Actuarial Assumptions:

Discount Rate 6.90%
Inflation 2.30%
Payroll Growth 2.30%
Salary Increases Varies by Entry Age and Service
Mortality Rate Table Derived using CalPERS' Membership
Date for all Funds
1 Post Retirement Benefit Increase Contract COLA up to 2.3% until Purchasing Power Protection
Allowance Floor on Purchasing Power
applies
1 The mortality table used was developed based on CalPERS-specific data. The table includes 15 years of mortality improvements using Society of Actuaries Scale 90% of scale MP 2016. For more details on this table, please refer to the December 2017 experience study report (based on CalPERS demographic data from 1997 to 2015) that can be found on the CalPERS website.

All other actuarial assumptions used in the June 30, 2017 valuation was based on the results of a December 2017 experience study report (based on CalPERS demographic data from 1997 to 2015), including updates to salary increase, mortality and retirement rates. The Experience Study can be obtained at CalPERS’ website.

Change of assumptions – No changes in assumptions.

Discount rate – The discount rate used to measure the total pension liability for PERF C was 6.90%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members.

Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability. 59 Section 7, Item A.
41 CITY OF KERMAN

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2024
Note 11 – Pension Plan (Continued)
Long-term Expected Rate of Return
In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. Projected returns for all asset classes are estimated and, combined with risk estimates, are used to project compound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long-term projected portfolio return.

The long-term expected real rates of return by asset class can be found in CalPERS’ Comprehensive Annual Financial Report for the fiscal year ended June 30, 2023.

The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected rate of returns, net of pension plan investment expense and inflation) are developed for each major asset class.

The table below reflects long-term expected real rates of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation.

These geometric rates of return are net of administrative expenses.

Asset Class
Assumed Asset
Allocation
Real Return
Years 1-10
1,
2 Global equity - cap-weighted 30% 4.50%
Global equity - noncap-weighted 12% 3.84%
Private equity 13% 7.28%
Treasury 5% 0.27%
Mortgage-backed securities 5% 0.50%
Investment grade corporates 10% 1.56%
High yield 5% 2.27%
Emerging market debt 5% 2.48%
Private debt 5% 3.57%
Real assets 15% 3.21%
Leverage -5% -0.59%
1 An expected inflation of 2.30% used for this period
2 Figures are based on the 2022-22 Asset Liability Management Study 60 Section 7, Item A.
42 CITY OF KERMAN

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2024
Note 11 – Pension Plan (Continued)
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate - The following presents the City’s proportionate share of the net pension liability for each Plan, calculating using the discount rate of each Plan, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower (5.90%) or 1-percentage point higher (7.90%) than the current rate:
1% Decrease
(5.90%)
Current
Discount Rate
(6.90%)
1% Increase
(7.90%)
Net Pension Liability:

Miscellaneous Plan 5,753,011 $ 3,614,718 $ 1,854,719 $
Safety Police Plan 3,340,103 $ 2,091,321 $ 1,070,352 $
Pension Plan Fiduciary Net Position – Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.

Payable to the Pension Plan – At June 30, 2024, the City has no outstanding amount of contributions to the pension plan required for the year ended June 30, 2024.

Note 12 – Subsequent Events
The City evaluated subsequent events for recognition and disclosure through April 2, 2025, the date which these financial statements were available to be issued. Management concluded that no material subsequent events have occurred since June 30, 2024 that required recognition or disclosure in such financial statements.

Note 13 – Restatement of Net Position/Fund Balance
Error Correction
The City had the following restatements to the beginning fund balance/net position during the fiscal year:

Local Tranportation Governmental
Fund Activities
Fund balance/net position, previously stated 1,765,808 $ 50,452,294 $ Understatement of due from other government 157,162 157,162 Overstatement of accounts payable 132,927 132,927
Fund balance/net position, restated $ 50,742,383 2,055,897 $ 61 Section 7, Item A.
43 CITY OF KERMAN

NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2024
Note 13 – Restatement of Net Position/Fund Balance (continued) Fund Reclassifications – Major and Nonmajor Funds
During the fiscal year ended 2024, the City conducted an annual review of its fund structure. As part of this review and in compliance with GASB Statement No. 100, Accounting Changes and Error Corrections, the City identified necessary reclassifications to enhance transparency, improve financial reporting accuracy, and ensure consistency with updated accounting standards. As a result, the following funds were reclassified:

Fund Name Reason for Reclassification
Street Projects &
Development Fund
Major Nonmajor The decrease in overall activity caused the fund to no longer meet the criteria for a major fund,
resulting in its reclassification as nonmajor.

State Grant Fund Nonmajor Major The increase in activity in the current year met the criteria for a major fund designation
Local Transportation Fund Nonmajor Major The increase in activity in the current year met the criteria for a major fund designation
Gas Tax Fund Nonmajor Major The increase in activity in the current year met the criteria for a major fund designation
Previous
Classification
New
Classification
These reclassifications have been applied retrospectively to prior-period financial statements for comparability. The following table summarizes the impact of these reclassifications on beginning fund balances and net position:

Other
Street Projects Local Gas Governmental Government-Wide
& Development Transportation Tax Funds Activities
Beginning of year, as previously stated 70,814 $ - $ - $ 5,142,662 $ 50,452,294 $ Error correction - 290,089 - - 290,089
Change within financial reporting entity
(major to nonmajor) (70,814) - - 70,814 -
Change within financial reporting entity
(nonmajor to major) 1,765,808 - 969,908 (2,735,716) -
Beginning of year, restated $ 2,055,897 - $ 969,908 $ 2,477,760 $ 50,742,383 $ Fund Financial Statements
62 Section 7, Item A.

REQUIRED SUPPLEMENTARY INFORMATION
63 Section 7, Item A.
44 CITY OF KERMAN

BUDGETARY COMPARISON SCHEDULE

GENERAL FUND
YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Budgeted Amounts Actual Positive/
Original Final Amounts (Negative)
Revenue
Taxes 8,342,926 $ 8,342,925.89 9,135,520 $ 792,594 $
Licenses, permits and impact fees 889,959 889,959 935,220 45,261 Intergovernmental 516,591 516,591 556,088 39,497
Charges for services 267,988 267,988 240,764 (27,224)
Fines and forfeitures 46,732 46,732 46,727 (5)
Rents 162,162 162,162 87,372 (74,790)
Investment earning, net of unrealized gain/(loss) 170,783 170,783 465,427 294,644 Other 91,225 91,225 137,574 46,349
Total revenue 10,488,365 10,488,365 11,604,692 1,116,327 Expenditures
Current
General government 1,324,548 1,324,548 1,458,732 (134,184) Public works 1,661,829 1,661,829 1,249,444 412,385
Community development 632,265 632,265 590,126 42,139
Social services 828,021 828,021 777,468 50,553
Public safety 5,153,307 5,153,307 4,386,219 767,088
Capital outlay 1,101,430 1,101,430 977,391 124,039
Total expenditures 10,701,399 10,701,399 9,439,380 1,262,019 Revenue over (under) expenditures (213,034) (213,034) 2,165,312 2,378,346 Other Financing Sources
Lease revenues - - 98,650 98,650
Transfers in (out) - net (1,103,274) (1,103,274) (590,567) 512,707 Net Change in Fund Balance $ (1,316,308) (1,316,308) $ 1,673,395 $ 2,891,053 Fund Balance
Beginning of year 13,901,779
End of year $ 15,575,174
64 Section 7, Item A.
45 CITY OF KERMAN

BUDGETARY COMPARISON SCHEDULE

STREET MAINTENANCE AND CONSTRUCTION CAPITAL PROJECT FUND YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Budgeted Amounts Actual Positive/
Original Final Amounts (Negative)
Revenue
Intergovernmental $ 1,162,887 1,162,887 $ 158,636 $ (1,004,251) $ Total revenue 1,162,887 1,162,887 158,636 (1,004,251)
Expenditures
Capital outlay 1,170,087 1,170,087 157,147 1,012,940
Total expenditures 1,170,087 1,170,087 157,147 1,012,940 Revenue over expenditures (7,200) (7,200) 1,489 8,689
Other Financing Sources/(Uses)
Transfers in/(out) - net - - (1,489) (1,489)
Change in Fund Balance $ (7,200) (7,200) $ - $ 7,200
Fund Balance
Beginning of year 3,655,780
End of year $ 3,655,780
65 Section 7, Item A.
46 CITY OF KERMAN

BUDGETARY COMPARISON SCHEDULE

GAS TAX FUND
YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Budgeted Amounts Actual Positive/
Original Final Amounts (Negative)
Revenue
Intergovermental 468,565 $ 468,565 $ 459,010 $ (9,555) $ Interest 13,300 13,300 30,655 17,355
Total revenue 481,865 481,865 489,665 7,800
Expenditures
Public works 88,040 88,040 138,689 (50,649)
Capital outlay 334,678 334,678 468,942 (134,264)
Debt Service
Principal 4,972 4,972 - 4,972
Total expenditures 427,690 427,690 607,631 (179,941)
Revenue over expenditures 54,175 54,175 (117,966) (172,141) Other Financing Sources/(Uses)
Transfers in/(out) - net 15,054 15,054 15,995 941
Change in Fund Balance $ 69,229 69,229 $ (101,971) $ (171,200) Fund Balance
Beginning of year 969,908
End of year $ 867,937
66 Section 7, Item A.
47 CITY OF KERMAN SCHEDULE OF THE CITY’S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY LAST TEN YEARS* YEAR ENDED JUNE 30, 2024 Proportion of the net
pension liability
Proportionate share of
the net pension liability
Covered - employee
payroll
Proportionate share of the net
pension liability as percentage of
covered-employee payroll Plan's fiduciary net position
Plan's fiduciary net position as a
percentage of the Total Pension
Liability
2014 0.01281% 797,321 $ 1,144,549 $ 69.66% 4,290,975 $ 81.42%2015 0.01575% 648,972 $ 1,241,193 $ 52.29% 3,869,632 $ 85.62%2016 0.01854% 959,979 $ 1,457,400 $ 65.87% 3,916,861 $ 80.32%2017 0.01899% 1,134,650 $ 1,411,999 $ 80.36% 4,136,749 $ 78.48%2018 0.01968% 1,154,435 $ 1,645,891 $ 70.14% 4,431,768 $ 79.33%2019 0.02088% 1,303,386 $ 1,585,991 $ 82.18% 4,934,602 $ 79.11%2020 0.02259% 1,504,784 $ 1,628,209 $ 92.42% 5,238,533 $ 77.68%2021 0.01971% 691,756 $ 1,558,752 $ 44.38% 6,678,594 $ 90.61%2022 0.02684% 1,844,146 $ 1,726,380 $ 106.82% 6,626,406 $ 78.23%2023 0.02798% 2,091,321 $ 1,649,092 $ 126.82% 7,011,773 $ 77.03% Proportion of the net
pension liability
Proportionate share of
the net pension liability
Covered - employee
payroll
Proportionate share of the net
pension liability as percentage of
covered-employee payroll Plan's fiduciary net position
Plan's fiduciary net position as a
percentage of the Total Pension
Liability
2014 0.02196% 1,366,654 $ 2,046,348 $ 66.79% 6,686,104 $ 83.03%2015 0.04266% 1,170,147 $ 1,858,214 $ 62.97% 7,331,180 $ 86.23%2016 0.04971% 1,726,827 $ 2,065,491 $ 83.60% 7,344,945 $ 80.96%2017 0.05351% 2,109,314 $ 2,138,981 $ 98.61% 8,344,687 $ 79.82%2018 0.05485% 2,067,174 $ 2,009,964 $ 102.85% 8,856,335 $ 81.08%2019 0.05836% 2,337,202 $ 2,297,565 $ 101.73% 9,508,983 $ 80.27%2020 0.06208% 2,618,410 $ 2,571,344 $ 101.83% 10,082,879 $ 79.38% 2021 0.06029% 1,144,848 $ 2,360,679 $ 48.50% 12,469,009 $ 91.59% 2022 0.06964% 3,258,465 $ 2,326,594 $ 140.05% 11,524,805 $ 104.34% 2023 0.07229% 3,614,718 $ 3,175,067 $ 113.85% 12,195,713 $ 77.14% Safety Plan
Miscellaneous Plan
67 Section 7, Item A.
48 CITY OF KERMANSCHEDULE OF CONTRIBUTIONS LAST TEN YEARS* YEAR ENDED JUNE 30, 2024 Contractually required
contribution (actuarially
determined)
Contributions in relation
to the actuarially
determined
contributions
Contributions
deficiency (excess) Covered-employee payroll
Contributions as a percentage of coveredemployee payroll 2015 182,432 $ (182,432) $ - $ 1,144,549 $ 15.94%2016 179,871 $ (179,871) $ - $ 1,241,193 $ 14.49%2017 194,771 $ (194,771) $ - $ 1,457,400 $ 13.36%2018 182,432 $ (182,432) $ - $ 1,411,999 $ 12.92%2019 248,979 $ (248,979) $ - $ 1,645,891 $ 15.13%2020 275,389 $ (275,389) $ - $ 1,585,991 $ 17.36%2021 318,886 $ (318,886) $ - $ 1,628,209 $ 19.59%2022 334,035 $ (334,035) $ - $ 1,558,752 $ 21.43%2023 326,093 $ (326,093) $ - $ 1,726,380 $ 18.89%2024 544,409 $ (544,409) $ - $ 1,649,092 $ 33.01% Contractually required
contribution (actuarially
determined)
Contributions in relation
to the actuarially
determined
contributions
Contributions
deficiency (excess) Covered-employee payroll
Contributions as a
percentage of coveredemployee payroll
2015 139,800 $ (139,800) $ - $ 2,046,348 $ 6.83%2016 170,449 $ (170,449) $ - $ 1,858,214 $ 9.17%2017 198,655 $ (198,655) $ - $ 2,065,491 $ 9.62%2018 233,708 $ (233,708) $ - $ 2,138,981 $ 10.93%2019 266,848 $ (266,848) $ - $ 2,009,964 $ 13.28%2020 329,826 $ (329,826) $ - $ 2,297,565 $ 14.36%2021 365,112 $ (365,112) $ - $ 2,571,344 $ 14.20%2022 398,314 $ (398,314) $ - $ 2,360,679 $ 16.87%2023 451,744 $ (451,744) $ - $ 2,326,594 $ 19.42%2024 679,990 $ (679,990) $ - $ 3,175,067 $ 21.42% Miscellaneous
Safety Plan
68 Section 7, Item A.

SUPPLEMENTAL ONLY INFORMATION
69 Section 7, Item A.
49 CITY OF KERMAN COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS JUNE 30, 2024 Senior Maintenance SB1 Road Park
Measure C Center District Maintenance Grants
ASSETS
Cash and investments 621,587 $ - $ 204,529 $ 339,164 $ - $ Due from other governments 14,194 43,639 17,501 76,254 - Total assets $ 14,194 665,226 $ 222,030 $ 415,418 $ - $ LIABILITIES AND FUND BALANCELiabilities
Accounts payable and accrued expense 10,777 $ 890 $ 11,829 $ 10,460 $ - $ Due to other funds 13,304 - - - -
Total liabilities 14,194 10,777 11,829 10,460 -
Fund Balance
Restricted
Circulation improvements 654,449 - - 404,958 -
Development activities - - 210,201 - -
Unassigned - - - - -
Total fund balance 654,449 - 210,201 404,958 -
Total liabilities and fund balance 665,226 $ 14,194 $ 222,030 $ 415,418 $ - $ Special Revenue Funds
70 Section 7, Item A.
50 CITY OF KERMAN
COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS (CONTINUED) JUNE 30, 2024 Jobs/Housing Public Building Fire Park
Mitigation Facility Facility Development
ASSETS
Cash and investments 69,377 $ 20,283 $ 732,781 $ - $
Due from other governments - - - -
Total assets $ 20,283 69,377 $ 732,781 $ - $
LIABILITIES AND FUND BALANCELiabilities
Accounts payable and accrued expense - $ - $ - $ - $ Due to other funds - - - 9,698 Total liabilities - - - 9,698
Fund Balance
Restricted
Circulation improvements - - - -Development activities 69,377 20,283 732,781 - Unassigned - - - (9,698)
Total fund balance 69,377 20,283 732,781 (9,698)
Total liabilities and fund balance 69,377 $ 20,283 $ 732,781 $ - $ Capital Projects Funds
71 Section 7, Item A.
51 CITY OF KERMAN
COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS (CONTINUED) JUNE 30, 2024 Capital Project Fund Debt Service Fund Total
Formerly Major Kerman Public Non-major
Street Projects Financing Governmental
& Development Authority Funds
ASSETS
Cash and investments 114,378 $ - $ 2,102,099 $
Due from other governments - - 151,588
Total assets $ - 114,378 $ 2,253,687 $
LIABILITIES AND FUND BALANCELiabilities
Accounts payable and accrued expense - $ - $ 33,956 $
Due to other funds - - 23,002
Total liabilities - - 56,958
Fund Balance
Restricted
Circulation improvements - - 1,059,407Development activities 114,378 - 1,147,020 Unassigned - - (9,698)
Total fund balance 114,378 - 2,196,729
Total liabilities and fund balance 114,378 $ - $ 2,253,687 $ 72 Section 7, Item A.
52 CITY OF KERMAN COMBINING STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE NON-MAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2024 Senior Maintenance SB1 Road Park
Measure C Center District Maintenance Grants
Revenue
Taxes - $ - $ 380,457 $ 437,542 $ - $
Developer impact fees - - - - -
Intergovernmental 637,248 23,132 - - -
Charges for services - 2,084 - - -
Rents - - - - -
Interest - 15,125 3,532 12,341 -
Other - - 17,651 - -
Total revenue 652,373 25,216 401,640 449,883 -
Expenditures
Public works 496,682 - 352,728 - -
Community development - - - - -
Social services - 31,634 - - 230
Capital outlay 9,586 - 637 926,861 -
Debt service
Principal - - - - -
Interest and fiscal charges - - - - -
Total expenditures 506,268 31,634 353,365 926,861 230
Revenue over (under) expenditures 146,105 (6,418) 48,275 (476,978) (230) Other financing sources/(uses)
Operating transfers in/(out) - net 6,418 (60,339) (21,765) - - (60,339) 6,418 (21,765) - -
Change in Fund Balance - 85,766 26,510 (476,978) (230)
Fund Balance
Beginning of year, as previously stated 568,683 - 183,691 881,936 230 Change within financial reporting entity (major to nonmajor) - - - - - Change within financial reporting entity (nonmajor to major) - - - - - Beginning of year, as restated 568,683 - 183,691 881,936 230 End of year 654,449 $ - $ 210,201 $ 404,958 $ - $
Special Revenue Funds
73 Section 7, Item A.
53 CITY OF KERMAN COMBINING STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE NON-MAJOR GOVERNMENTAL FUNDS (CONTINUED) YEAR ENDED JUNE 30, 2024 Jobs/Housing Public Building Fire Park
Mitigation Facility Facility Development
Revenue
Taxes $ - - $ - $ - $
Developer impact fees - 38,340 19,926 44,936
Intergovernmental - - - -
Rents - - - -
Interest 713 1,750 18,413 6,821
Other - - - -
Total revenue 39,053 1,750 38,339 51,757
Expenditures
Public works - - - -
Community development - 50,549 - -
Social services - - - 40,013
Capital outlay - - - -
Debt service
Principal - - - -
Interest and fiscal charges - - - -
Total expenditures 50,549 - - 40,013
Revenue over (under) expenditures 1,750 (11,496) 38,339 11,744 Other financing sources/(uses)
Operating transfers in/(out) - net - - - -
- - - -
Change in Fund Balance (11,496) 1,750 38,339 11,744
Fund Balance
Beginning of year, as previously stated 67,627 31,779 694,442 (21,442) Change within financial reporting entity (major to nonmajor) - - - - Change within financial reporting entity (nonmajor to major) - - - - Beginning of year, as restated 67,627 31,779 694,442 (21,442) End of year 69,377 $ 20,283 $ 732,781 $ (9,698) $
Capital Projects Funds
74 Section 7, Item A.
54 CITY OF KERMAN COMBINING STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE NON-MAJOR GOVERNMENTAL FUNDS (CONTINUED) YEAR ENDED JUNE 30, 2024 Formerly Formerly Formerly Debt Service Fund Total
Fomerly Major Nonmajor Fund Nonmajor Fund Nonmajor Fund Kerman Public Non-major Streets Projects State Local Gas Financing Governmental& Development Grants Transportation Tax Authority Funds Revenue
Taxes - $ - $ - $ - $ - $ 817,999 $
Developer impact fees 64,103 - - - - 167,305
Intergovernmental - - - - - 660,380
Charges for services - - - - - 2,084
Rents - - - - 240,510 240,510
Interest - 2,711 - - - 61,406
Other - - - - - 17,651
Total revenue - 66,814 - - 240,510 1,967,335
Expenditures
Public works 23,250 - - - - 872,660
Community development - - - - - 50,549
Social services - - - - - 71,877
Capital outlay - - - - - 937,084
Debt service
Principal - - - - 173,000 173,000
Interest and fiscal charges - - - - 67,510 67,510
Total expenditures - 23,250 - - 240,510 2,172,680
Revenue over (under) expenditures 43,564 - - - - (205,345) Other financing sources/(uses)
Operating transfers in/(out) - net - - - - - (75,686)
- - - - - (75,686)
Change in Fund Balance - 43,564 - - - (281,031)
Fund Balance
Beginning of year, as previously stated - - 1,765,808 969,908 - 5,142,662 Change within financial reporting entity (major to nonmajor) - 70,814 - - - 70,814 Change within financial reporting entity (nonmajor to major) - - (1,765,808) (969,908) - (2,735,716) Beginning of year, as restated 70,814 - 1,765,808 969,908 - 5,213,476 End of year 114,378 $ - $ - $ - $ - $ 2,196,729 $
Capital Project Funds
75 Section 7, Item A.

BRYANT L. JOLLEY
CERTIFIED PUBLIC ACCOUNTANTS Bryant L. Jolley, C.P.A.

Ryan P. Jolley C.P.A.

Darryl L. Smith C.P.A.

Luis A. Perez C.P.A.

Lan T. Kimoto
INDEPENDENT AUDITOR’S 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 To the Honorable Mayor and City Council
City of Kerman, 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, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of City of Kerman (the “City”), California, as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated April 2, 2025.

Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their 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 entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified.

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. 76 Section 7, Item A.
56 Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

April 2, 2025
77 Section 7, Item A.

CITY OF KERMAN

MANAGEMENT REPORT
FOR THE YEAR ENDED JUNE 30, 2024
Attachment 'B'
78 Section 7, Item A.
2 TABLE OF

CONTENTS
Page
Required Communications 1 - 3
79 Section 7, Item A.

BRYANT L. JOLLEY
CERTIFIED PUBLIC ACCOUNTANTS Bryant L. Jolley C.P.A.

Ryan P. Jolley C.P.A.

Darryl L. Smith C.P.A.

Luis A. Perez C.P.A.

Lan T. Kimoto
901 “N” STREET, SUITE 104 FIREBAUGH, CALIFORNIA 93622 PHONE 559.659.3045 FAX 559.659.0615 To the Honorable Mayor and City Council
City of Kerman, California
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Kerman for the year ended June 30, 2024. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards and Government Auditing Standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated October 18, 2024. Professional standards also require that we communicate to you the following information related to our audit.

Significant Audit Matters
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by City are described in Note 1 to the financial statements.

The City adopted GASB Statement No. 100, Accounting Changes and Error Corrections, and the application of other existing policies was not changed during 2024. We noted no transactions entered into by City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period.

Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the City’s financial statements were:
 Management has determined the economic useful lives of fixed assets based on past history of similar types of assets, future plans as to their use, and other factors that impact their economic value to the City. We evaluated the key factors and assumptions used by management in computing depreciation expense and believe that it is reasonable in relation to the financial statements taken as a whole.
 Management’s estimate of the allowance for doubtful accounts is based on an evaluation of collectability primarily focused on past due accounts. We evaluated the key factors and assumptions used to develop the allowance for doubtful accounts in determining that it is reasonable in relation to the financial statements as a whole. 80 Section 7, Item A.
2  Management’s estimate of the net pension liability and related deferrals is based on actuarial valuations which include significant assumptions regarding discount rate, inflation, payroll growth, projected salary increases and investment rate of return. We evaluated the key factors and assumptions used to develop the liability and related deferrals in determining that it is reasonable in relation to the financial statements taken as a whole.

The financial statement disclosures are neutral, consistent, and clear.

Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our audit.

Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements. In addition, none of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate, to each opinion unit’s financial statements taken as a whole.

Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter that could be significant to the financial statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of the audit.

Management Representations
We have requested certain representations from management that are included in the management representation letter dated April 2, 2025.

Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to City of Kerman’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants.
81 Section 7, Item A.
3 Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as City of Kerman’s auditors.

However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention.

Other Matters
We applied certain limited procedures to the Budgetary Comparison Schedules, Proportionate Share of Net Pension Liability, and Schedule of Contributions which are required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements.

We did not audit the RSI and do not express an opinion or provide any assurance on the RSI.

We were engaged to report on supplementary information, as listed in the table of contents, which accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves.

Restriction on Use
This information is intended solely for the information and use of the City Council and management of City of Kerman and is not intended to be, and should not be, used by anyone other than these specified parties.

April 2, 2025
82 Section 7, Item A.