Lindsay City Council
May 12, 2026

PASSED AND ADOPTED by the City Council of the City of Lindsay as follows:

MEETING DATE Click or tap to enter a date.

MOTION

SECOND MOTION
AYES
ABSENT

ABSTAIN
NAYS

CERTIFICATION OF THE FOREGOING RESOLUTION AS FULL, TRUE, PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF LINDSAY AS DETAILED. _____________________________________
Misty Villarreal, Mayor

CERTIFICATE OF ATTESTING OFFICER
The undersigned, Miranda Cordova, City Clerk of the City of Lindsay does hereby attest and certify that the foregoing Resolution is a true, full and correct copy of a resolution duly adopted at a meeting of the City of Lindsay which was duly convened and held on the date stated thereon, and that said document has not been amended, modified, repealed or rescinded since its date of adoption and is in full force and effect as of the date thereof.

ATTEST: _____________________________________
Miranda Cordova, City Clerk
109487837.1
1 ENERGY SERVICES AGREEMENT
This Energy Services Agreement (“Agreement”) is made and entered into as of________, 2026, by and between:

Southland Industries (“Contractor”)
12131 Western Avenue
Garden Grove, CA 92841
and City of Lindsay (“Owner”)
251 E Honolulu St
Lindsay, CA 93247
for the following Project: City of Lindsay – Energy Efficiency Upgrades Capitalized terms used in this document entitled Energy Services Agreement and not defined herein shall have the meanings assigned to them in Attachment B.

As full compensation for performance by the Contractor of the Work in conformance with the Contract Documents, the Owner shall pay the Contractor the price of four million, two-hundred eighty-five thousand, three-hundred eighty-one Dollars ($4,285,381) (“Contract Price”). The Contract Price shall be paid according to the schedule in Attachment A, which shall be subject to increase or decrease as provided in Attachment B. Owner will review, approve, and fund this implementation agreement under CA Public Procurement Government Code section 4217.10 (CGC 4217).

Contractor has prepared, and Owner has reviewed, approved, and accepted the Attachments as set forth below, which are attached hereto and are made part of this Agreement by reference.

Attachment A Price and Payment Schedule
Attachment B Terms and Conditions
Attachment C Scope of Work
Attachment D Schedule of the Work
Attachment E Performance Assurance Plan
Attachment F Owner’s Maintenance Responsibilities
Attachment G Warranty
Attachment H Assumptions, Clarifications, and Exclusions Exhibit C-1a City of Lindsay IGA Map
Exhibit C-3a Lighting Line by Line
Exhibit C-3b Finance Office Ceiling Tile Layout
In witness whereof, the parties hereto have caused this Agreement to be executed as of the day and year first written above.

CONTRACTOR: Southland Industries
BY: _____________________________________
PRINT NAME: Anthony Roner
PRINT TITLE: Vice President
OWNER: City of Linsday
BY: _____________________________________
PRINT NAME: Kuyler Crocker
PRINT TITLE: City Manager
109487837.1
2 ATTACHMENT A

PRICE AND PAYMENT SCHEDULE
Project Implementation Cost: $4,285,381
Note: The project implementation price noted above is for the scope of work described in Attachment C – Scope of Work of this Agreement. Based on the final scope of work approved by the Owner, the Payment Schedule below will be updated for invoicing purposes.

Monthly Progress Payments:

Note: The project described in this Agreement has a duration of fifteen months from contract award. The Date of Commencement is May 1, 2026. The month one progress payment of 20% includes the initial material procurement and a mobilization fee and will be invoiced upon Agreement execution.

Date Installation Period
Month Progress Payment
5/1/2026 1 $857,076
6/1/2026 2 $128,561
7/1/2026 3 $128,561
8/1/2026 4 $171,415
9/1/2026 5 $299,976
10/1/2026 6 $299,976
11/1/2026 7 $428,538
12/1/2026 8 $428,538
1/1/2027 9 $342,830
2/1/2027 10 $299,976
3/1/2027 11 $299,976
4/1/2027 12 $214,269
5/1/2027 13 $171,415
6/1/2027 14 $128,561
7/1/2027 15 $85,713
TOTAL $4,285,381
109487837.1
3 ATTACHMENT B

TERMS AND CONDITIONS
ARTICLE 1

GENERAL PROVISIONS

1.1 RELATIONSHIP OF PARTIES
The Owner and the Contractor agree to proceed with the Project on the basis of mutual trust, good faith, and fair dealing.

1.1.1 The Contractor shall furnish construction administration and management services and use the Contractor's best efforts to perform the Work in an expeditious manner consistent with the Contract Documents. The Owner and Contractor shall endeavor to promote harmony and cooperation among all Project participants.

1.1.2 The Contractor represents that it is an independent contractor and that in its performance of the Work, it shall act as an independent contractor.

1.1.3 Neither Contractor nor any of its agents or employees shall act on behalf of or in the name of Owner except as provided in this Agreement or unless authorized in writing by Owner's Representative.

1.2 EXTENT OF AGREEMENT
This Agreement is solely for the benefit of the parties, represents the entire and integrated agreement between the parties, and supersedes all prior negotiations, representations or agreements, either written or oral. This Agreement and each and every provision are for the exclusive benefit of the Owner and Contractor and not for the benefit of any third party except to the extent expressly provided in this Agreement.

1.3 DEFINITIONS

1.3.1. Agreement means this Agreement, as modified by the parties, and Exhibits and Attachments made part of this Agreement upon its execution.

1.3.2. Baseline refers to the measurements, data, calculations, conditions, energy usage, facility and systems operations, assumptions, practices, and other information in effect at the Premises prior to the date of this Agreement, for the specified period set forth in the M&V Plan. The Baseline is agreed to by the parties and set forth in the M&V Plan.

1.3.3. Baseline Period means the period of time associated with the Baseline, as specified in the M&V Plan.

1.3.4. A Change Order is a written order signed by the Owner and the Contractor after execution of this Agreement, indicating changes in the scope of the Work, the Contract Price, and/or Contract Time, including substitutions proposed by the Contractor and accepted by the Owner.

1.3.5. The Contract Documents consist of this Agreement, all attachments, the drawings, specifications, addenda issued prior to execution of this Agreement, approved submittals, information furnished by the Owner under Paragraph 3.3, other documents listed in this Agreement, and any modifications issued after execution.

1.3.6. The Contract Price is the amount indicated in the Energy Services Agreement and Attachment A of this Agreement.

1.3.7. The Contract Time is the period between the Date of Commencement and Final Completion. See Attachment A and Article 5.
109487837.1
4 1.3.8. The Contractor is Southland Industries and includes the Contractor's Representative.

1.3.9. The Date of Commencement is the date of this Agreement as first written in Attachment A, plus additional time for owner to issue a Notice to Proceed.

1.3.10. The term Day shall mean calendar day unless otherwise specifically defined.

1.3.11. Energy Conservation Measure (ECM) refers to the installation of equipment or systems (including, without limitation, the Equipment), or the modification of equipment, systems, monitoring, use, or behavior, as described in Attachment C, for the purpose of facilitating the reduction or avoidance of utility or non-utility consumption, demand, costs, or expenditures or otherwise improving the facilities or systems addressed under this Agreement.

1.3.12. Energy Costs may include, without limitation, the cost of electricity and fuels, as well as the cost of water, water treatment, sewer, or other utility usage, as applicable.

1.3.13. Equipment is defined as all equipment to be installed at the Premises as identified in Attachment C.

1.3.14. Equipment Start-up is defined as when major pieces of equipment, such as chillers, cooling towers, generators, and/or pumps, are bumped, checked, started, and commissioned using either Southland Industries or factory technicians. Equipment will immediately begin either service or circulation operation. Under no circumstances will equipment be started and then enter a “moth-ball” state unless directed in writing by the Owner. Warranty and service contracts will commence once equipment is started regardless of service, circulation or “moth-ball” status. Start-up notices will be submitted to the Owner for information and documentation.

1.3.15. Final Completion occurs on the date when the Contractor's obligations under this Agreement are complete and accepted by the Owner and final payment becomes due and payable, as established in Article 5. This date shall be confirmed by a Certificate of Final Completion signed by the Owner and the Contractor.

1.3.16. Force Majeure means labor dispute, fire, unusual delay in transportation or delivery, unavoidable casualty, flood, earthquake, pandemic or epidemic, civil disturbance, war, freight embargo, riot, sabotage (by persons other than the Contractor and Subcontractors), material shortage, price escalation or any other similar act or condition, in each case only to the extent the event in question is beyond the control of and without the fault of negligence of the Contractor.

1.3.17. Installation Period refers to the period of time between the commencement of the Work and the date of Final Completion.

1.3.18. Investment Grade Audit (IGA) is defined as the documentation prepared by the contractor that describes the facilities' condition, historical energy consumption, the scope of work of the proposed ECMs, including estimated Installation Costs and Savings.

1.3.19. A Material Supplier is a person or entity retained by the Contractor to provide material and/or equipment for the Work.

1.3.20. Performance Assurance Plan is defined as the description and details of how the Savings will be shown and how the Non-Measured Savings have been calculated, reviewed, and agreed-upon by the Parties. A Performance Assurance Plan is set forth in Attachment E – Performance Assurance, System Maintenance, and Technical Support and agreed to by the Owner and the Contractor upon execution of this Agreement.

1.3.21. Others means other contractors, material suppliers, and persons at the Worksite who are not employed by the Contractor or Subcontractors.
109487837.1
5 1.3.22. Owner means the entity identified as such in the Energy Services Agreement, and includes the Owner's Representative.

1.3.23. The Premises is defined as all buildings, facilities, and/or other improvements at the Worksite wherein the Equipment will be installed as identified in Attachment C.

1.3.24. The Project, as identified in the Energy Services Agreement and Attachment C, consists of the building, facility, and/or other improvements for which the Contractor is to perform Work under this Agreement. It may also include construction by the Owner or Others.

1.3.25. Savings are defined to include all reduced, eliminated, delayed, avoided, defrayed, or reallocated costs, expenditures, use, or consumption including, without limitation, Energy Costs, O&M Costs, capital expenditures, deferred maintenance, upgrades, replacement, or any combination thereof.

Savings may also be derived, as appropriate, from a changed utility rate classification or from increased or enhanced production or revenue that results from one or more of the ECMs.

1.3.26. The Schedule of the Work is identified in Attachment D and is the document that specifies the dates on which the Contractor plans to begin and complete various parts of the Work, including dates on which information and approvals are required from the Owner.

1.3.27. A Subcontractor is a person or entity retained by the Contractor as an independent contractor to provide the labor, materials, equipment, and/or services necessary to complete a specific portion of the Work, or any of the Contractor’s obligations under this Agreement. The term Subcontractor does not include any separate contractors employed by the Owner or any such contractor’s subcontractor.

1.3.28. A Subsubcontractor is a person or entity who has an agreement with a Subcontractor to perform any portion of the Subcontractor's Work.

1.3.29. Total ECM Savings refers to the first-year annual utility savings for the buildings covered by this project as calculated and ascertained using the methodologies set forth in Attachment E.

1.3.30. Work means the design, construction, and services necessary or incidental to fulfill the Contractor's obligations for the Project in conformance with this Agreement and the other Contract Documents. The Work may refer to the whole Project or only a part of the Project if work is also being performed by the Owner or Others.
.1 Changed Work means work that is different from the original scope of work; or work that changes the Contract Price or Contract Time.
.2 Defective Work is any portion of the Work that is not in conformance with the Contract Documents, as more fully described in Paragraphs 2.4 and 2.7.

1.3.42 Worksite means the geographical area at the location of the Project as identified in Attachment C, where the Work is to be performed.

1.4 INVESTMENT GRADE AUDIT
Contractor has prepared an Investment Grade Audit (IGA) that identifies the scope of work to be completed, which has been approved and accepted by Owner. The IGA may be comprised of a combination of presentation materials, meeting documents, reports, and this Agreement as mutually agreed by the Owner and Contractor. It describes some, or possibly all, of the ECMs agreed upon by the parties, but the specific ECMs to be implemented through this Agreement are identified in Attachment C, and the specific Savings, Total ECM Savings, and M&V Plan agreed to by the parties are identified and described in Attachment E.
109487837.1
6 ARTICLE 2

CONTRACTOR'S RESPONSIBILITIES

2.1 GENERAL RESPONSIBILITIES

2.1.1 The Contractor shall provide labor, materials, equipment, and services necessary to complete the Work, of which shall be provided in full accord with and reasonably inferable from the Contract Documents as being necessary to produce the indicated results.

2.1.2 The Contractor shall be responsible for the supervision and coordination of the Work, including the design services, construction means, methods, techniques, sequences and procedures utilized, unless the Contract Documents give other specific instructions. In such case, the Contractor shall not be liable to the Owner for damages resulting from compliance with such instructions.

2.1.3 The Contractor shall perform Work only within locations allowed by the Contract Documents, applicable permits, and applicable local law. Although it is the responsibility of the Contractor to conform the Work to Applicable Laws at all times, to the extent there is a change in one or more Applicable Laws after the date of execution of this Agreement, and such change has the effect of increasing the cost or time of performance of the Work, such change is the subject of a Change Order under the provisions of Article 7 hereof.

2.2 COOPERATION WITH WORK OF OWNER AND OTHERS

2.2.1 The Owner may perform work at the Worksite directly or by Others. Any agreements with Others to perform construction or operations related to the Project shall include provisions pertaining to insurance, indemnification, waiver of subrogation, coordination, interference, clean up and safety which are substantively the same as the corresponding provisions of this Agreement.

2.2.2 In the event that the Owner elects to perform work at the Worksite directly or by Others, the Contractor and the Owner shall coordinate the activities of all forces at the Worksite and agree upon fair and reasonable schedules and operational procedures for Worksite activities. The Owner shall require each separate contractor to cooperate with the Contractor and assist with the coordination of activities and the review of construction schedules and operations. The Contract Price and Contract Time shall be equitably adjusted, as mutually agreed by the parties, for changes made necessary by the coordination of construction activities, and the Schedule of the Work shall be revised accordingly. The Contractor, Owner, and Others shall adhere to the revised construction schedule until it may subsequently be revised.

2.2.3 Before proceeding with any portion of the Work affected by the construction or operations of the Owner or Others, the Contractor shall give the Owner prompt written notification of any defects the Contractor discovers in their work which will prevent the proper execution of the Work. The Contractor's obligations in this Paragraph do not create a responsibility for the work of the Owner or Others, but are for the purpose of facilitating the Work. If the Contractor does not notify the Owner of patent defects interfering with the performance of the Work, the Contractor acknowledges that the work of the Owner or Others is not defective and is acceptable for the proper execution of the Work. Following receipt of written notice from the Contractor of defects, the Owner shall promptly inform the Contractor what action, if any, the Contractor shall take with regard to the defects.

2.3 CONSTRUCTION PERSONNEL AND SUPERVISION

2.3.1 The Contractor shall provide competent supervision for the performance of the Work.

Before commencing the Work, Contractor shall notify Owner in writing of the name and qualifications of its proposed superintendent(s) and project manager so Owner may review the individual's qualifications.

2.3.2 The Contractor shall be responsible to the Owner for acts or omissions of parties or entities performing portions of the Work for or on behalf of the Contractor or any of its Subcontractors. 109487837.1
7 2.3.3 The Contractor shall permit only skilled persons to perform the Work. The Contractor shall enforce safety procedures, strict discipline and good order among persons performing the Work. If the Owner determines that a particular person does not follow safety procedures, or is unfit or unskilled for the assigned work, the Contractor shall immediately reassign the person on receipt of the Owner's written notice to do so.

2.3.4 CONTRACTOR'S REPRESENTATIVE The Contractor's authorized representative is Michael May and/or Simon Perkins. The Contractor's Representative shall possess full authority to receive instructions from the Owner and to act on those instructions. The Contractor shall notify the Owner in writing of a change in the designation of the Contractor's Representative.

2.4 WORKMANSHIP
The Work shall be performed in accordance with the professional standards applicable to projects, buildings, or work of complexity, quality, and scope comparable to the Work and the Project and shall be executed in accordance with the Contract Documents in a workmanlike manner. All materials used in the Work shall be furnished in sufficient quantities to facilitate the proper and expeditious execution of the Work and shall be new except such materials as may be expressly provided in the Contract Documents to be otherwise.

2.5 MATERIALS FURNISHED BY THE OWNER OR OTHERS
In the event the Work includes installation of materials or equipment furnished by the Owner or Others, it shall be the responsibility of the Contractor to examine the items so provided and thereupon handle, store, and install the items, unless otherwise provided in the Contract Documents, with such skill and care as to provide a satisfactory and proper installation. Loss or damage due to acts or omissions of the Contractor shall be the responsibility of the Contractor and may be deducted from any amounts due or to become due to the Contractor. Any defects discovered in such materials or equipment shall be reported at once to the Owner. Following receipt of written notice from the Contractor of defects, the Owner shall promptly inform the Contractor what action, if any, the Contractor shall take with regard to the defects.

2.6 TESTS AND INSPECTIONS

2.6.1 The Contractor shall schedule all required tests, approvals, and inspections of the Work or portions thereof at appropriate times so as not to delay the progress of the Work or other work related to the Project. The Contractor shall give proper notice to all required parties of such tests, approvals, and inspections. If feasible, the Owner and Others may timely observe the tests at the normal place of testing.

The Owner shall bear all expenses associated with tests, inspections, and approvals required by the Contract Documents, except as provided in Subparagraph 2.6.3, and which, unless otherwise agreed to, shall be conducted by an independent testing laboratory or entity retained by the Owner. Unless otherwise required by the Contract Documents, required certificates of testing, approval, or inspection shall be secured by the Contractor and promptly delivered to the Owner.

2.6.2 If the Owner or appropriate authorities determine that tests, inspections or approvals in addition to those required by the Contract Documents will be necessary, the Contractor shall arrange for the procedures and give timely notice to the Owner and Others who may observe the procedures. Costs of the additional tests, inspections, or approvals are at the Owner's expense except as provided in Subparagraph 2.6.3.

2.6.3 If the procedures described in Subparagraphs 2.6.1 and 2.6.2 indicate that portions of the Work fail to comply with the Contract Documents, the Contractor shall be responsible for the costs of correction and retesting.

2.7 WARRANTY

2.7.1 The Contractor warrants that all materials and equipment shall be new unless otherwise specified, of good quality, in conformance with the Contract Documents, and free from defective workmanship and materials. At the Owner's request, the Contractor shall furnish satisfactory evidence of 109487837.1
8 the quality and type of materials and equipment furnished. The Contractor further warrants that the Work shall be free from material defects not intrinsic in the design or materials required in the Contract Documents. The Contractor's warranty does not include remedies for defects or damages caused by normal wear and tear during normal usage, use for a purpose for which the Project was not intended, improper or insufficient maintenance, modifications performed by the Owner or Others, or abuse. The Contractor's warranty pursuant to this Paragraph 2.7 shall commence on the Date of Equipment Start-up and extend for a period of one (1) year following the Date of Equipment Start-up.

2.7.2 With respect to any portion of Work first performed after Equipment Start-up, the Contractor's warranty obligation shall be extended by the period of time between Equipment Start-up and the actual performance of the later Work.

2.7.3 The Contractor shall obtain from its Subcontractors and Material Suppliers any special or extended warranties required by the Contract Documents. All such warranties shall be listed in an attachment to this Agreement. Contractor's liability for such warranties shall be limited to the one-year correction period referred to in Paragraph 2.8. After that period, Contractor shall assign them to the Owner and provide reasonable assistance to the Owner in enforcing the obligations of Subcontractors or Material Suppliers.

2.7.4 THE WARRANTIES SET FORTH HEREIN ARE EXCLUSIVE, AND CONTRACTOR

EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES, WHETHER WRITTEN OR ORAL, EXPRESS,

IMPLIED OR STATUTORY, INCLUDING BUT NOT LIMITED TO, ANY WARRANTIES OF OR RELATING

TO DESIGN, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO

THE EQUIPMENT, MATERIALS, AND SERVICES PROVIDED UNDER, OR IN CONNECTION WITH, THIS AGREEMENT.

2.8 CORRECTION OF WORK WITHIN ONE YEAR

2.8.1 If, prior to Equipment Start-up and within one year after the date of Equipment Start-up of the Work, any Defective Work is found, the Owner shall promptly notify the Contractor in writing. Unless the Owner provides written acceptance of the condition, the Contractor shall promptly correct the Defective Work at its own cost and time and bear the expense of additional services required for correction of any Defective Work for which it is responsible. If within the one-year correction period the Owner discovers and does not promptly notify the Contractor or give the Contractor an opportunity to test and/or correct Defective Work as reasonably requested by the Contractor, the Owner waives the Contractor's obligation to correct that Defective Work as well as the Owner's right to claim a breach of the warranty with respect to that Defective Work.

2.8.2 If the Contractor's correction or removal of Defective Work causes damage to or destroys other completed or partially completed construction, the Contractor shall be responsible for the cost of correcting the destroyed or damaged construction.

2.8.3 The one-year period for correction of Defective Work does not constitute a limitation period with respect to the enforcement of the Contractor's other obligations under the Contract Documents.

2.9 CORRECTION OF COVERED WORK

2.9.1 On request of the Owner, Work that has been covered without a requirement that it be inspected prior to being covered may be uncovered for the Owner's inspection. The Owner shall pay for the costs of uncovering and replacement if the Work proves to be in conformance with the Contract Documents, or if the defective condition was caused by the Owner or Others. If the uncovered Work proves to be defective, the Contractor shall pay the costs of uncovering and replacement.

2.9.2 If contrary to specific requirements in the Contract Documents or contrary to a specific request from the Owner, a portion of the Work is covered, the Owner, by written request, may require the 109487837.1
9 Contractor to uncover the Work for the Owner's observation. In this circumstance, the Work shall be replaced at the Contractor's expense and with no adjustment to the Contract Time.

2.10 SAFETY OF PERSONS AND PROPERTY

2.10.1 SAFETY PRECAUTIONS AND PROGRAMS The Contractor shall have overall responsibility for safety precautions and programs in the performance of the Work. While this Paragraph

2.10 establishes the responsibility for safety between the Owner and Contractor, it does not relieve Subcontractors of their responsibility for the safety of persons or property in the performance of their work, nor for compliance with the provisions of applicable laws and regulations.

2.10.2 The Contractor shall seek to avoid injury, loss or damage to persons or property by taking reasonable steps to protect:

1. Its employees and other persons at the Worksite;

2. Materials and equipment stored at on-site or off-site locations for use in the Work; and

3. Property located at the site and adjacent to Work areas, whether or not the property is part of the Work.

2.10.3 CONTRACTOR'S SAFETY REPRESENTATIVE The Contractor's Worksite Safety Representative is Elliott Alexander, who shall act as the Contractor's authorized safety representative with a duty to prevent accidents in accordance with Subparagraph 2.10.2. If no individual is identified in this Paragraph 2.10, the authorized safety representative shall be the Contractor's Representative. The Contractor shall report immediately in writing to the Owner all recordable accidents and injuries occurring at the Worksite. When the Contractor is required to file an accident report with a public authority, the Contractor shall furnish a copy of the report to the Owner.

2.10.4 The Contractor shall provide the Owner with copies of all notices required of the Contractor by law or regulation. The Contractor's safety program shall comply with the requirements of governmental and quasi-governmental authorities having jurisdiction.

2.10.5 Damage or loss not insured under property insurance which may arise from the Work, to the extent of the negligence attributed to acts or omissions of the Contractor, or anyone for whose acts the Contractor may be liable, shall be promptly remedied by the Contractor.

2.10.6 If the Owner deems any part of the Work or Worksite unsafe, the Owner, without assuming responsibility for the Contractor's safety program, may require the Contractor to stop performance of the Work or take corrective measures satisfactory to the Owner, or both. If the Contractor does not adopt corrective measures, the Owner may perform them and deduct their cost from the Contract Price. The Contractor agrees to make no claim for damages, for an increase in the Contract Price or for a change in the Contract Time based on the Contractor's compliance with the Owner's reasonable request.

2.11 EMERGENCIES

2.11.1 In an emergency, the Contractor shall act in a reasonable manner to prevent personal injury or property damage. Any change in the Contract Price and/or Contract Time resulting from the actions of the Contractor in an emergency situation shall be determined as provided in Article 7.

2.12 HAZARDOUS MATERIALS

2.12.1 A Hazardous Material is any substance or material identified now or in the future as hazardous under any federal, state or local law or regulation, or any other substance or material that may be considered hazardous or otherwise subject to statutory or regulatory requirement governing handling, 109487837.1
10 disposal and/or cleanup. The Contractor shall not be obligated to commence or continue work until any Hazardous Material discovered at the Worksite has been removed, rendered or determined to be harmless by the Owner as certified by an independent testing laboratory and approved by the appropriate government agency.

2.12.2 Owner shall provide to Contractor any information or reports identifying Hazardous Materials relative to any anticipated work areas. Transfer of any such information to the Contractor shall not reduce Owner’s responsibility for Hazardous Material. If after the commencement of the Work Hazardous Material is discovered at the Worksite, the Contractor shall be entitled to immediately stop Work in the affected area. The Contractor shall report the condition to the Owner, the Architect/Engineer, and, if required, the government agency with jurisdiction.

2.12.3 The Contractor shall not be required to perform any Work relating to or in the area of Hazardous Material without written mutual agreement.

2.12.4 The Owner shall be responsible for retaining an independent testing laboratory to determine the nature of the material encountered and whether the material requires corrective measures and/or remedial action. Such measures shall be the sole responsibility of the Owner, and shall be performed in a manner minimizing any adverse effects upon the Work. The Contractor shall resume Work in the area affected by any Hazardous Material only upon written agreement between the parties after the Hazardous Material has been removed or rendered harmless and only after approval, if necessary, of the governmental agency with jurisdiction.

2.12.5 If the Contractor incurs additional costs and/or is delayed due to the presence or remediation of Hazardous Material, the Contractor shall be entitled to an equitable adjustment in the Contract Price and/or the Contract Time.

2.12.6 To the extent not caused by the negligent acts or omissions of the Contractor, its Subcontractors and Sub-subcontractors, and the agents, officers, directors and employees of each of them, the Owner shall defend, indemnify and hold harmless the Contractor, its Subcontractors and Subsubcontractors, and the agents, officers, directors and employees of each of them, from and against any and all direct claims, damages, losses, costs and expenses, including but not limited to attorney's fees, costs and expenses incurred in connection with any dispute resolution process, arising out of or relating to the performance of the Work in any area affected by Hazardous Material. To the fullest extent permitted by law, such indemnification shall apply regardless of the fault, negligence, breach of warranty or contract, or strict liability of the Owner.

2.12.7 MATERIALS BROUGHT TO THE WORKSITE

2.12.7.1 Material Safety Data (MSD) sheets as required by law and pertaining to materials or substances used or consumed in the performance of the Work, whether obtained by the Contractor, Subcontractors, the Owner or Others, shall be maintained at the Worksite by the Contractor and made available to the Owner, Subcontractors and Others.

2.12.7.2 The Contractor shall be responsible for the proper delivery, handling, application, storage, removal and disposal of all materials and substances brought to the Worksite by the Contractor in accordance with the Contract Documents and used or consumed in the performance of the Work.

2.12.7.3 To the extent not caused by the negligent acts or omissions of the Owner, its agents, officers, directors and employees, the Contractor shall defend, indemnify and hold harmless the Owner, its agents, officers, directors and employees, from and against any and all direct claims, damages, losses, costs and expenses, including but not limited to attorney's fees, costs and expenses incurred in connection with any dispute resolution procedure, arising out of or relating to the delivery, handling, application, storage, removal and disposal of all materials and substances brought to the Worksite by the Contractor in accordance with the Contract Documents. 109487837.1
11 To the fullest extent permitted by law, such indemnification shall apply regardless of the fault, negligence, breach of warranty or contract, or strict liability of the Contractor.

2.12.8 The terms of this Paragraph 2.12 shall survive the completion of the Work and/or any termination of this Agreement.

2.13 SHOP DRAWINGS, PRODUCT DATA, AND SAMPLES

2.13.1 Shop Drawings are drawings, diagrams, schedules, and other data specifically prepared for the Work by the Contractor, a Subcontractor, manufacturer, supplier, or distributor to illustrate some portion of the Work.

2.13.2 Product Data are illustrations, standard schedules, performance charts, instructions, brochures, diagrams, and other information furnished by the Contractor to illustrate materials or equipment for some portion of the Work.

2.13.3 Samples are physical examples which illustrate materials, equipment or workmanship and establish standards by which the Work will be judged.

2.14 WORKSITE CONDITIONS

2.14.1 WORKSITE VISIT The Contractor acknowledges that it has visited, or has had the opportunity to visit, the Worksite to visually inspect the general and local conditions which could affect the Work. Owner and Contractor share responsibility to limit access to the Worksite for non-work personnel.

Contractor shall take normal precautions to post signage, provide fencing, and access control. Owner shall provide notification, establish rules for their employees, agents, representatives, students, faculty, or visitors, and facilitate restricted access and alternative routing.

2.14.2 CONCEALED OR UNKNOWN SITE CONDITIONS If the conditions at the Worksite are (a) subsurface or other physical conditions which are materially different from those indicated in the Contract Documents, or (b) unusual or unknown physical conditions which are materially different from conditions ordinarily encountered and generally recognized as inherent in Work provided for in the Contract Documents, the Contractor shall stop Work and give immediate written notice of the condition to the Owner.

The Contractor shall not be required to perform any work relating to the unknown condition without the written mutual agreement of the parties. Any change in the Contract Price and/or the Contract Time as a result of the unknown condition shall be determined as provided in Article 7. The Contractor shall provide the Owner with written notice of any claim as a result of unknown conditions within the time period set forth in Paragraph 7.2.

2.15 PERMITS AND TAXES

2.15.1 Unless otherwise provided in the Contract Documents, Contractor shall give public authorities all notices required by law and shall obtain all necessary permits, licenses, and renewals pertaining to the Work. Owner shall pay all permit fees charged by the issuing authority. Contractor shall provide to Owner copies of all notices, permits, licenses, and renewals required under this Agreement.

2.15.2 Contractor shall pay all applicable taxes legally enacted when bids are received or negotiations concluded for the Work provided by the Contractor.

2.15.3 The Contract Price and/or Contract Time shall be equitably adjusted by Change Order for additional costs resulting from any changes in laws, ordinances, rules, and regulations enacted after the date of this Agreement, including increased taxes.

2.15.4 If, in accordance with the Owner's direction, the Contractor claims an exemption for taxes, the Owner shall defend, indemnify and hold the Contractor harmless from any liability, penalty, interest, 109487837.1
12 fine, tax assessment, attorney’s fees, or other expense or cost incurred by the Contractor as a result of any such action.

2.16 CUTTING, FITTING, AND PATCHING

2.16.1 The Contractor shall perform cutting, fitting, and patching necessary to coordinate the various parts of the Work and to prepare its Work for the work of the Owner or Others.

2.16.2 Cutting, patching or altering the work of the Owner or Others shall be done with the prior written approval of the Owner. Such approval shall not be unreasonably withheld.

2.17 CLEANING UP

2.17.1 The Contractor shall regularly remove debris and waste materials at the Worksite resulting from the Work. Prior to discontinuing Work in an area, the Contractor shall clean the area and remove all rubbish and its construction equipment, tools, machinery, waste, and surplus materials. The Contractor shall minimize and confine dust and debris resulting from construction activities. At the completion of the Work, the Contractor shall remove from the Worksite all construction equipment, tools, surplus materials, waste materials, and debris.

2.17.2 If the Contractor fails to commence compliance with cleanup duties within forty-eight (48) hours after written notification from the Owner of non-compliance, the Owner may implement appropriate cleanup measures without further notice and the cost shall be deducted from any amounts due or to become due the Contractor.

2.18 ACCESS TO WORK The Contractor shall facilitate the access of the Owner and Others to Work in progress.

ARTICLE 3

OWNER'S RESPONSIBILITIES

3.1 INFORMATION AND SERVICES
Any information, records, data, services, or access to be provided by the Owner shall be provided in a timely manner so as not to delay the Work, M&V Services, or any other requirement or obligation of the Contractor under this Agreement.

3.2 FINANCIAL INFORMATION
Prior to commencement of the Work and thereafter at the written request of the Contractor, the Owner shall provide the Contractor with evidence of Project financing. Evidence of such financing shall be a condition precedent to the Contractor's commencing or continuing the Work. The Contractor shall be notified prior to any material change in Project financing.

3.3 WORKSITE INFORMATION
Except to the extent that the Contractor knows of any inaccuracy, the Contractor is entitled to rely on Worksite information furnished by the Owner pursuant to this Paragraph 3.3. To the extent the Owner has obtained, or is required elsewhere in the Contract Documents to obtain, the following Worksite information, the Owner shall provide at the Owner's expense and with reasonable promptness:

1. Information describing the physical characteristics of the site, including surveys, site evaluations, legal descriptions, data or drawings depicting existing conditions, subsurface conditions and environmental studies, reports, and investigations;

2. Tests, inspections and other reports dealing with environmental matters, Hazardous Material and other existing conditions, including structural, mechanical and chemical tests, required by the Contract Documents or by law; and
109487837.1
13 3. Any other information or services requested in writing by the Contractor which are relevant to the Contractor's performance of the Work and under the Owner's control.

The information required by Paragraph 3.3 shall be provided in reasonable detail. Legal descriptions shall include easements, title restrictions, boundaries, and zoning restrictions. Worksite descriptions shall include existing buildings and other construction and all other pertinent site conditions. Adjacent property descriptions shall include structures, streets, sidewalks, alleys, and other features relevant to the Work.

Utility details shall include available services, lines at the Worksite and adjacent thereto, and connection points. The information shall include public and private information, subsurface information, grades, contours, and elevations, drainage data, exact locations and dimensions, and benchmarks that can be used by the Contractor in laying out the Work.

3.4 USAGE, O&M, AND COST RECORDS AND DATA
Owner shall promptly furnish (or cause its suppliers, utilities, vendors, or agents to furnish) to Contractor, upon Contractor’s request and throughout the entire term of the Agreement, all records and complete data concerning usage, operations, maintenance, equipment, equipment lists, Energy Costs, O&M Costs, and Savings and energy-related maintenance for or related to the Premises, including, but not limited to, the following data for the most current thirty-six (36) month period: utility records; occupancy information; descriptions of any changes in the building structure or its heating, cooling, lighting or other systems or energy requirements; descriptions of all energy consuming or saving equipment used in the Premises; bills and records relating to the use, operation, and maintenance of the Premises, the ECM’s, and any other energy consuming equipment or system at or related to the Premises, and a description of all operation and maintenance procedures presently (or previously) utilized at, for, or related to the Premises, if not provided under the IGA. If requested, Contractor shall also provide any prior energy audits of the Premises, and copies of the Owner's financial statements and records related to Energy Costs, O&M Costs, or Savings for said thirty-six (36) month period at the Premises, and shall make agents and employees knowledgeable about the Premises and such records available for consultations and discussions with the Contractor. .

3.5 COOPERATION WITH WORK OF CONTRACTOR
With regard to any work performed at the Worksite by or for the Owner, the Owner, and any other person or entity that uses or occupies the Worksite at the request of or with the permission of the Owner or the Owner’s representatives, shall (a) proceed in a manner which does not hinder, delay or interfere with the work of the Contractor or cause the work of the Contractor to become defective, (b) afford the Contractor reasonable access for introduction and storage of their materials and equipment and performance of their activities, and (c) coordinate with the Contractor's construction and operations.

3.6 MECHANICS AND CONSTRUCTION LIEN INFORMATION
Within seven (7) days after receiving the Contractor's written request, the Owner shall provide the Contractor with the information necessary to give notice of or enforce mechanics lien rights and, where applicable, stop notices. This information shall include the Owner's interest in the real property on which the Project is located and the record legal title.

3.7 OWNER'S REPRESENTATIVE
The Owner's authorized representative is Kuyler Crocker. The representative shall be fully acquainted with the Project, and shall have authority to bind the Owner in all matters requiring the Owner's approval, authorization, or written notice. If the Owner changes its representative or the representative's authority as listed above, the Owner shall immediately notify the Contractor in writing.

3.8 OWNER'S CUTTING AND PATCHING
Cutting, patching, or altering the Work by the Owner or Others shall be done with the prior written approval of the Contractor, which approval shall not be unreasonably withheld.

3.9 OWNER'S RIGHT TO CLEAN UP
In case of a dispute between the Contractor and Others with regard to respective responsibilities for cleaning up at the Worksite, the Owner may implement appropriate cleanup measures and allocate the cost among those responsible.
109487837.1
14 3.10 COST OF CORRECTING DAMAGED OR DESTROYED WORK
With regard to damage or loss attributable to the acts or omissions of the Owner or Others and not to the Contractor, the Owner may either (a) promptly remedy the damage or loss or (b) accept the damage or loss. If the Contractor incurs additional costs and/or is delayed due to such loss or damage, the Contractor shall be entitled to an equitable adjustment in the Contract Price and/or Contract Time.

3.11 CONFIDENTIALITY
Unless otherwise required by law, the Owner agrees that the Owner or the Owner’s employees and agents will not, without prior written permission from Contractor, disclose any manuals, data, engineered approaches and drawings, technical information, or proposal information and related documents relative to this Agreement to any organization or individual, and will treat information provided as confidential and proprietary to Contractor. The Owner shall also treat as confidential information all of the Contractor's estimating systems, measurement and verification tools, systems, and calculations, historical and parameter cost data, and other technical information or documents, that may be disclosed to the Owner in connection with the performance of this Agreement. Materials used by the Contractor or its Subcontractors or agents at the Worksite or the Premises including, but not limited to, testing, measuring, or monitoring equipment, software, programs, models, associated media, and documents remain the exclusive property of the Contractor or a third-party. The Owner agrees not to use such materials without prior written permission from the Contractor and agrees to allow the Contractor to retrieve all such materials during, or following, the term of this Agreement. The Owner acknowledges that any software furnished in connection with the Work or the M&V Services is proprietary and subject to any licensing agreement associated with the software. This clause will not apply to any documents that are considered to be public records under the Public Records Act, which would legally require Owner to provide such documents to the public if requested.

ARTICLE 4

SUBCONTRACTS

4.1 SUBCONTRACTORS
The Work not performed by the Contractor with its own forces shall be performed by Subcontractors. The Contractor may, at its exclusive option, subcontract some or all of the Work, the Contractor’s maintenance responsibilities, or the M&V Services. For purposes of this Agreement, no contractual relationship shall exist between the Owner and any Subcontractor.

4.2 AWARD OF SUBCONTRACTS AND OTHER CONTRACTS FOR PORTIONS OF THE WORK Upon request, the Contractor shall provide the Owner with a written list of the proposed subcontractors and significant material suppliers. To the extent there is a substitution of a subcontractor or material supplier at the request of the Owner and the substitution results in an increase in the Contract Price and/or Contract Time, an appropriate Change Order shall be issued as provided in Article 7.

ARTICLE 5

CONTRACT TIME

5.1 PERFORMANCE OF THE WORK

5.1.1 TIME Equipment Start-up of the Work shall be achieved in four hundred (400) days from the Date of Commencement. Unless otherwise specified in the Certificate of Equipment Start-up, the Contractor shall achieve Final Completion within sixty (60) days after the date of Equipment Start-up, subject to adjustments as provided for in the Contract Documents.

5.1.2 Time limits stated above are of the essence of this Agreement.

5.1.3 Unless instructed by the Owner in writing, the Contractor shall not knowingly commence the Work before the effective date of insurance that is required to be provided by the Contractor and Owner. 109487837.1
15 5.2 SCHEDULE OF THE WORK

5.2.1 Before submitting the first application for payment, the Contractor shall have submitted to the Owner a Schedule of the Work, attached as Attachment D, that shall show the dates on which the Contractor plans to commence and complete various parts of the Work, including dates on which information and approvals are required from the Owner. On the Owner's written approval of the Schedule of the Work, the Contractor shall comply with it unless directed by the Owner to do otherwise. The Contractor shall update the Schedule of the Work on a monthly basis or at appropriate intervals as required by the conditions of the Work and the Project.

5.3 DELAYS, ACCELERATION, AND EXTENSIONS OF TIME

5.3.1 If the Contractor is delayed at any time in the commencement or progress of the Work by any cause beyond the control of the Contractor, the Contractor shall be entitled to an equitable adjustment of the Contract Time, Contract Price, as appropriate, to fully and fairly compensate the Contractor for the delay.. In addition, if the Contractor incurs additional costs or performs additional work as a result of such delay, the Contractor shall be entitled to an equitable adjustment of the Contract Time, Contract Price, as appropriate, to fully and fairly compensate the Contractor for the additional costs and any additional work.

Examples of causes beyond the control of the Contractor include, but are not limited to, the following:

1. Failure or inability of the Owner to make available any or all of the Worksite in accordance with the requirements of the Schedule.

2. Failure or inability of the Owner or the Contractor to obtain necessary zoning changes, variances, code changes, permits or approvals from any governmental authority, or failure to obtain any street or alley vacations required for the performance of the Work, except to the extent due to the fault or neglect of the Contractor.

3. Delays resulting from the acts or omissions of Others, except to the extent these Others perform their work properly and in accordance with the Contractor's schedules.

4. Delays resulting from Force Majeure.

5. Differing, unusual or concealed site conditions that could not reasonably have been anticipated by the Contractor in preparing the Schedule, including, without limitation, archaeological finds, and excluding soil conditions (including rock or other geological conditions), underground foundations, abandoned utility lines and water conditions.

6. Delays resulting from the existence or discovery of Hazardous Materials on the Worksite not brought to the site by the Contractor.

7. Delays resulting from changes in Applicable Laws occurring after the date of execution of this Agreement.

8. Delays occurring due to the acts or omissions of the Owner and those within the control of the Owner, including, but not limited to, Others.

9. Delays resulting from adverse weather conditions not reasonably anticipated.

10. Delays authorized by the Owner pending dispute resolution and suspension by the Owner under Paragraph 14.1.

The Contractor shall process any requests for equitable adjustments in accordance with the provisions of Article 7.
109487837.1
16 5.3.2 NOTICE OF DELAYS In the event delays to the Work are encountered for any reason, the Contractor shall provide prompt written notice to the Owner of the cause of such delays after Contractor first recognizes the delay. The Owner and Contractor agree to undertake reasonable steps to mitigate the effect of such delays.

5.4 NOTICE OF DELAY CLAIMS
If the Contractor requests an equitable adjustment of Contract Time and/or an equitable adjustment of the Contract Price as a result of a delay described in Subparagraph 5.3.1, the Contractor shall give the Owner written notice of the claim in accordance with Paragraph 7.2. If the Contractor causes delay in the completion of the Work, the Owner shall be entitled to recover its additional costs subject to Paragraph

13.2. The Owner shall process any such claim against the Contractor in accordance with Article 7.

5.5 ACCELERATION
If the Contractor’s Work is accelerated or compressed at any time by any cause beyond the control of the Contractor, the Contractor shall be entitled to an equitable adjustment of the Contract Time. In addition, if the Contractor incurs additional costs or performs additional work as a result of such acceleration or compression, the Contractor shall be entitled to an equitable adjustment in Contract Price to fully and fairly compensate the Contractor for the additional costs and any additional work. The Contractor shall give the Owner written notice of any acceleration or compression and of any claim in accordance with the provisions of Article 7.

ARTICLE 6
Not Used
ARTICLE 7

CHANGES
Changes in the Work that are within the general scope of this Agreement shall be accomplished, without invalidating this Agreement by Change Order.

7.1 CHANGE ORDER

7.1.1 The Contractor shall be entitled to a Change Order for changes in the Work or the timing or sequencing of the Work or any emergencies that may arise during the Work that impacts Contract Price, Contract Time. All such changes in the Work that affect Contract Time, Scope of Work, Contract Price, shall be formalized in a Change Order. Any such requests for a change in the Contract Price, the Contract Time, shall be processed in accordance with this Article 7.

7.1.2 The Owner and the Contractor shall negotiate in good faith an appropriate adjustment to the Contract Price, the Contract Time, Scope of Work, that fully and fairly compensates the Contractor for any such change and shall conclude these negotiations as expeditiously as possible. Acceptance of the Change Order and any adjustment shall not be unreasonably withheld.

7.1.3 Contractor shall have no obligation to proceed with any work pursuant to a Change Order until the Contractor and Owner mutually agree to an appropriate adjustment to the Contract Price and/or the Contract Time and the Contractor receives a written proceed order from the Owner.

7.2 CLAIMS FOR ADDITIONAL COST OR TIME

7.2.1 Except as provided in Subparagraph 5.3.2 and Paragraph 5.4 for any claim for an increase in the Contract Price and/or the Contract Time, the Contractor shall give the Owner written notice of the claim within fourteen (14) days after the occurrence giving rise to the claim or within fourteen (14) days after the Contractor first recognizes the condition giving rise to the claim, whichever is later. Except in an emergency, notice shall be given before proceeding with the Work. Any change in the Contract Price and/or the Contract Time resulting from such claim shall be authorized by Change Order. 109487837.1
17 7.2.2 Notwithstanding anything herein to the contrary, Contractor shall be entitled to an equitable adjustment to the Contract Price for any increased costs on products, materials, and equipment supplied hereunder due to changes in law or taxes, government action, or Trade Restrictions. “Trade Restrictions” is defined as any tariff/duty, quota, tariff-rate quota, or cost associated with the products, materials, or equipment issued or imposed during the Project. However, should Owner determine that the increased costs cause the project to no longer be financially feasible for Owner, it shall have the right to cancel the Contract.

ARTICLE 8

PAYMENT

8.1 SCHEDULE OF PAYMENTS
The schedule of payments shall be as defined in Attachment A. Contractor shall prepare and submit invoices for payment at the times and in the amounts stipulated by Attachment A. Owner shall make all payments to the Contractor within 30 days of invoice submission.

8.2. LIEN WAIVERS AND LIENS

8.2.1 PARTIAL LIEN WAIVERS AND AFFIDAVITS If required by the Owner, as a prerequisite for payment, the Contractor shall provide partial lien and claim waivers in the amount of the application for payment and affidavits from its Subcontractors, and Material Suppliers for the completed Work. Such waivers shall be conditional upon payment. In no event shall the Contractor be required to sign an unconditional waiver of lien or claim, either partial or final, prior to receiving payment or in an amount in excess of what it has been paid.

8.2.2 RESPONSIBILITY FOR LIENS If Owner has made payments in the time required by this Article 8, the Contractor shall, within thirty (30) days after filing, cause the removal of any liens filed against the premises or public improvement fund by any party or parties performing labor or services or supplying materials in connection with the Work. If the Contractor fails to take such action on a lien, the Owner may cause the lien to be removed at the Contractor's expense, including bond costs and reasonable attorney's fees. This Clause shall not apply if there is a dispute pursuant to Article 17 relating to the subject matter of the lien.

8.3 ACCEPTANCE OF WORK
Either the Owner's payment of progress payments nor its partial or full use or occupancy of the Project constitutes acceptance of Work not complying with the Contract Documents.

8.4 PAYMENT DELAY
If for any reason not the fault of the Contractor the Contractor does not receive a payment from the Owner or the Owner’s agent within seven (7) days after the time such payment is due, as defined in Subparagraph

8.1, then the Contractor, upon giving seven (7) days' written notice to the Owner, and without prejudice to and in addition to any other legal remedies, may stop Work until payment of the full amount owing to the Contractor has been received, including interest at ten percent (10%) per year from the date payment was due in accordance with Paragraph 8.8. The Contract Price, Contract Time, Scope of Work shall be equitably adjusted by a Change Order to fully and fairly compensate the Contractor for any additional costs and delays resulting from shutdown, delay and start-up.

8.5 EQUIPMENT START-UP

8.5.1 The Contractor shall notify the Owner when it considers Equipment Start-up of the Work or a designated portion to have been achieved. The Owner shall promptly conduct an inspection to determine whether the Work or designated portion can be occupied or utilized for its intended use by the Owner without excessive interference in completing any remaining unfinished Work by the Contractor. If the Owner determines that the Work or designated portion has not reached Equipment Start-up, the Owner shall promptly compile a list of items to be completed or corrected so the Owner may occupy or utilize the 109487837.1
18 Work or designated portion for its intended use. The Contractor shall promptly complete all items on the list.

8.5.2 When Equipment Start-up of the Work or a designated portion is achieved, the Contractor shall prepare a Certificate of Equipment Start-up that shall establish the date of Equipment Start-up, and the respective responsibilities of the Owner and Contractor for interim items such as security, maintenance, utilities, insurance and damage to the Work, and insurance. The certificate shall also list the items to be completed or corrected, and establish the time for their completion or correction. The Certificate of Equipment Start-up shall be submitted by the Contractor to the Owner for written acceptance of responsibilities assigned in the Certificate.

8.5.3 Unless otherwise provided in the Certificate of Equipment Start-up, warranties required by the Contract Documents shall commence on the date of Equipment Start-up of the Work or a designated portion.

8.6 PARTIAL OCCUPANCY OR USE
The Owner may occupy or use completed or partially completed portions of the Work when (a) the portion of the Work is designated in a Certificate of Equipment Start-up, (b) appropriate insurer(s) consent to the occupancy or use, and (c) appropriate public authorities authorize the occupancy or use. Such partial occupancy or use shall constitute Equipment Start-up of that portion of the Work.

8.7 FINAL COMPLETION AND FINAL PAYMENT

8.7.1 Upon notification from the Contractor that the Work is complete and ready for final inspection and acceptance, the Owner shall promptly conduct an inspection to determine if the Work has been completed and is acceptable under the Contract Documents.

8.7.2 When Final Completion has been achieved, the Contractor shall prepare for the Owner's acceptance a final application for payment stating that to the best of the Contractor's knowledge, and based on the Owner's inspections, the Work has reached Final Completion in accordance with the Contract Documents. The Contractor shall also prepare a Certificate of Final Completion to be signed by the Owner and the Contractor. The Owner shall have thirty (30) days after receiving the Certificate of Final Completion to either sign and return the Certificate of Final Completion or to provide written notice to the Contractor, along with a written explanation of the reasons for the Owner’s refusal to agree to, sign, and return the Certificate of Final Completion. If the Owner fails to provide such written notice and explanation to the Contractor within thirty (30) days of receipt of the Certificate of Final Completion, the Certificate of Final Completion will be deemed have been accepted and agreed to by the Owner and Final Completion will be deemed to have been achieved.

8.7.3 Final payment of the balance of the Contract Price shall be made to the Contractor within thirty (30) days after all conditions in Paragraph 6.2 are satisfied.

8.7.4 The following items shall be provided by the Contractor to the Owner within thirty (30) days of Equipment Start-up:

1. An affidavit declaring any indebtedness connected with the Work, e.g. payrolls or invoices for materials or equipment, to have been paid, satisfied or to be paid with the proceeds of final payment, so as not to encumber the Owner's property;

2. As-built drawings, manuals, copies of warranties and all other close-out documents required by the Contract Documents;

3. Release of any liens, conditioned on final payment being received;

4. Consent of any surety; and
109487837.1
19 5. Any outstanding known and unreported accidents or injuries experienced by the Contractor or its Subcontractors at the Worksite.

8.7.5 Claims not reserved in writing with the making of final payment shall be waived except for claims relating to liens or similar encumbrances, warranties, Defective Work and latent defects.

8.7.6 ACCEPTANCE OF FINAL PAYMENT Unless the Contractor provides written identification of unsettled claims with an application for final payment, acceptance of final payment constitutes a waiver of such claims.

8.8 LATE PAYMENT
Payments due but unpaid shall bear interest from the date payment is due at the rate of ten percent (10%) per year.

ARTICLE 9
Not Used
ARTICLE 10

UPGRADING OR ALTERING THE EQUIPMENT

10.1 Contractor shall at all times have the right, subject to Owner's prior written approval, which approval shall not be unreasonably withheld, to change the Equipment, revise any procedures for the operation or maintenance of the Equipment or implement other actions at or related to the Premises designed to achieve Savings, provided that:
(i) such modifications or additions to, or replacement of the Equipment, and any operational changes, or new procedures are necessary to enable the Owner to achieve (or increase the likelihood of achieving) the Total ECM Savings at the Premises and;
(ii) any cost incurred relative to such modifications, additions or replacement of the Equipment, or operational changes or new procedures shall be the responsibility of the Contractor.

10.2 All modifications, additions or replacements of the Equipment or revisions to operating or other procedures shall be described in a supplemental Schedule(s) to be provided to the Owner for approval, which shall not be unreasonably withheld, provided that any replacement of the Equipment shall have equal or better potential to reduce Energy Costs or O&M Costs or achieve Savings at the Premises than the Equipment being replaced or modified.

ARTICLE 11

ENERGY PERFORMANCE CHANGES

11.1 ENERGY PERFORMANCE CHANGE DEFINED
An Energy Performance Change shall include any change in or to the Premises, whether structural, operational or otherwise in nature which reasonably could be expected, in the judgment of the Owner or as identified by the Contractor, to increase or decrease annual energy, utility, or fuel consumption, Energy Costs, O&M Costs, or Savings in accordance with the provisions and procedures set forth in Attachment E. Actions or conditions which may result in an Energy Performance Change include but are not limited to the following:

1. Manner of use of the Premises by the Owner or others;

2. Hours of operation for the Premises or for any equipment or energy-using systems operating at the Premises;

3. Occupancy of the Premises;
109487837.1
20 4. Structure of the Premises;

5. Types and quantities of equipment or systems used or operated at or in connection with the Premises

6. Modification, renovation, or construction at the Premises;

7. The Owner's failure to provide maintenance of and repairs to the Equipment;

8. Any control system alarms or failures related to or affecting any systems that contribute to energy use or maintenance; or

9. Any other conditions other than climate affecting Energy Costs or operations and maintenance (O&M) Costs at the Premises.

11.2 REPORTED ENERGY PERFORMANCE CHANGES; NOTICE BY OWNER The Owner shall use its best efforts to deliver to the Contractor a written notice describing all actual or proposed Energy Performance Changes in the Premises or in the operations of the Premises at least 10 days before any actual or proposed Energy Performance Change is implemented or as soon as is practicable after an emergency or other unplanned event. Notice to the Contractor of Energy Performance Changes which result because of a bona fide emergency or other situation which precludes advance notification shall be deemed sufficient if given by the Owner within 4 hours after having actual knowledge that the event constituting the Energy Performance Change occurred or was discovered by the Agency to have occurred.

ARTICLE 12

CASUALTY OR CONDEMNATION OF PREMISES
Any construction or restoration of the Premises following or necessitated by fire, flood, or other casualty, or any condemnation affecting any portion of the Premises, shall be deemed an Energy Performance Change, and the provisions of Article 11 and Attachment E shall be applicable.

ARTICLE 13

INDEMNITY, INSURANCE, WAIVERS, BONDS, AND LIMITATION OF LIABILITY

13.1 INDEMNITY

13.1.1 The Contractor shall defend, indemnify and hold the Owner, the Owner's officers, directors, members, consultants, agents and employees, and Others harmless from all claims for bodily injury and property damage, other than to the Work itself and other property insured under Subparagraph 13.4.1, caused by the performance of the Work, but only to the extent of the negligent acts or omissions of the Contractor, Subcontractors or anyone employed directly or indirectly by any of them or by anyone for whose acts any of them may be liable and provided that claims concerning design services arise out of professional errors and omissions. The Contractor shall not be required to defend, indemnify or hold harmless the Owner or Others for any negligent acts, omissions of the Owner or Others.

13.1.2 The Owner shall defend, indemnify and hold harmless the Contractor, its officers, directors, members, consultants, agents, and employees, Subcontractors or anyone employed directly or indirectly by any of them or anyone for whose acts any of them may be liable from all claims for bodily injury and property damage, other than property insured under Subparagraph 13.4.1, caused by the performance of work by Owner or Others, to the extent of the negligence attributed to such acts or omissions by Owner or Others.
109487837.1
21 13.2 LIMITATION OF LIABILITY AND DAMAGES WAIVER
In no event shall Contractor be liable for any special, incidental, indirect, speculative, remote, consequential, punitive, or exemplary damages, whether arising out of or as a result of breach of contract, warranty, tort (including negligence), strict liability, mold, moisture or indoor air quality, or otherwise arising from, relating to, or connected with this agreement and the work, services, equipment, materials, or any goods provided under or in connection with this agreement. Such damages, include, but are not limited to, the owner's loss of use of the project, any rental expenses incurred, loss of income, profit or financing related to the project, as well as the loss of business, loss of financing, principal office overhead and expenses, loss of profits not related to this project, or loss of reputation. The provisions of this paragraph shall also apply to the termination of this agreement and shall survive such termination.

13.3 INSURANCE

13.3.1 Contractor shall purchase from and maintain in a company of companies lawfully authorized to do business in the jurisdiction in which the Project is located such insurance as will protect Contractor from claims set forth below which may arise out of or result from operations under this Agreement and/or for which Contractor may be legally liable, whether such operations be by Contractor or by its Subcontractors or by anyone directly or indirectly employed by any of them, or by anyone for whose acts may be liable.

13.3.2 The insurance required shall be written for not less than limits of liability specified in the Contract Documents. Coverage’s, whether written on an occurrence or claims-made basis, shall be maintained without interruption from date of commencement of the Work until date of final payment and termination of any coverage required to be maintained after final payment.

13.4 PROPERTY INSURANCE

13.4.1 Before the start of Work, the Owner shall obtain and maintain Builder's Risk or all risk upon the entire Project for the full cost of replacement at the time of loss. This insurance shall also name the Contractor, Subcontractors, Subsubcontractors, and Material Suppliers as named insureds. This insurance shall be written as a builder's risk "all risk" or equivalent form to cover all risks of physical loss except those specifically excluded by the policy, and shall insure at least against the perils of fire, lightning, explosion, windstorm, and hail, smoke, aircraft (except aircraft, including helicopter, operated by or on behalf of Contractor) and vehicles, riot and civil commotion, theft, vandalism, malicious mischief, debris removal, flood, earthquake, earth movement, water damage, wind, testing if applicable, collapse however caused, and damage resulting from defective design, workmanship or material. The Owner shall be solely responsible for any deductible amounts or coinsurance penalties. This policy shall provide for a waiver of subrogation in favor of the Contractor, Subcontractors, Subsubcontractors, and Material Suppliers. This insurance shall remain in effect until final payment has been made or until no person or entity other than the Owner has an insurable interest in the property to be covered by this insurance, whichever is sooner.

Partial occupancy or use of the Work shall not commence until the Owner has secured the consent of the insurance company or companies providing the coverage required in this Subparagraph 13.4.1. Prior to commencement of the Work, the Owner shall provide a copy of the property policy or policies obtained in compliance with this Subparagraph 13.4.1.

13.4.2 If the Owner does not intend to purchase the property insurance required by this Agreement, including all of the coverages and deductibles described herein, the Owner shall give written notice to the Contractor before the Work is commenced. The Contractor may then provide insurance to protect its interests and the interests of the Subcontractors and Sub subcontractors, including the coverage of deductibles. The cost of this insurance shall be charged to the Owner in a Change Order. The Owner shall be responsible for all of Contractor's costs reasonably attributed to the Owner's failure or neglect in purchasing or maintaining the coverage described above.

13.4.3 Owner and Contractor waive all rights against each other and their respective employees, agents, contractors, subcontractors and sub subcontractors for damages caused by risks covered by the property insurance except such rights as they may have to the proceeds of the insurance and such rights 109487837.1
22 as the Contractor may have for the failure of the Owner to obtain and maintain property insurance in compliance with Subparagraph 13.4.1.

13.4.4 To the extent of the limits of Contractor's Commercial General Liability Insurance, the Contractor shall indemnify and hold harmless the Owner against any and all liability, claims, demands, damages, losses and expenses, including attorney's fees for any damage or alleged damage to any of Owner's existing adjacent property caused by the performance of the Work, to the extent of the negligent acts or omissions of the Contractor, Subcontractor or anyone employed directly or indirectly by any of them or by anyone for whose acts any of them may be liable.

13.5 OWNER'S INSURANCE

13.5.1 BUSINESS INCOME INSURANCE The Owner may procure and maintain insurance against loss of use of the Owner's property caused by fire or other casualty loss.

13.5.2 OWNER'S LIABILITY INSURANCE The Owner shall obtain and maintain its own liability insurance for protection against claims arising out of the performance of this Agreement, including, without limitation, loss of use and claims, losses, and expenses arising out of the Owner's errors or omissions.

13.6 ROYALTIES, PATENTS, AND COPYRIGHTS
The Contractor shall pay all royalties and license fees which may be due on the inclusion of any patented or copyrighted materials, methods, or systems selected by the Contractor and incorporated in the Work.

The Contractor shall defend, indemnify, and hold the Owner harmless from all suits or claims for infringement of any patent rights or copyrights arising out of such selection. The Owner agrees to defend, indemnify, and hold the Contractor harmless from any suits or claims of infringement of any patent rights or copyrights arising out of any patented or copyrighted materials, methods, or systems specified by the Owner.

13.7 BONDS

13.7.1 In the event that the governing law requires Contractor to procure a performance bond and/or a payment bond, Contractor needs only to provide a bond for the minimum amount required by the law in effect as of the date of the Agreement. The costs of procuring the required bond or bonds are included in the Contract Price identified in Attachment A.

ARTICLE 14

SUSPENSION, NOTICE TO CURE, AND TERMINATION OF THE AGREEMENT

14.1 SUSPENSION BY OWNER FOR CONVENIENCE

14.1.1 OWNER SUSPENSION Should the Owner order the Contractor in writing to suspend, delay, or interrupt the performance of the Work for such period of time as may be determined to be appropriate for the convenience of the Owner and not due to any act or omission of the Contractor or any person or entity for whose acts or omissions the Contractor may be liable, then the Contractor shall immediately suspend, delay or interrupt that portion of the Work as ordered by the Owner. The Contract Price and the Contract Time shall be equitably adjusted by Change Order for the cost and delay resulting from any such suspension.

14.1.2 Any action taken by the Owner that is permitted by any other provision of the Contract Documents and that results in a suspension of part or all of the Work does not constitute a suspension of Work under this Paragraph 14.1.

14.2 NOTICE TO CURE A DEFAULT
If the Contractor persistently refuses or fails to supply enough properly skilled workers, proper materials, and/or equipment, to maintain the approved Schedule of the Work in accordance with Article 5, , disregards laws, ordinances, rules, regulations or orders of any public authority having jurisdiction, or is otherwise 109487837.1
23 guilty of a material breach of a provision of this Agreement, the Contractor may be deemed in default and the Owner may provide the Contractor with a notice to cure the default.

14.3 OWNER'S RIGHT TO TERMINATE FOR DEFAULT

14.3.1 TERMINATION BY OWNER FOR DEFAULT If, within thirty (30) business days of receipt of a notice to cure pursuant to Paragraph 14.2, the Contractor fails to commence and satisfactorily continue correction of the default set forth in the notice to cure, the Owner may notify the Contractor that it intends to terminate this Agreement for default absent appropriate corrective action within thirty (30) additional business days. After the expiration of the additional thirty (30) business day period, the Owner may terminate this Agreement by written notice absent appropriate corrective action. If the actual reasonable costs of completing the Work, exceed the unpaid Contract Price, the Contractor shall be liable to the Owner for such excess costs. If the actual reasonable costs of completing the Work are less than the unpaid Contract Price, the Owner shall pay the difference to the Contractor. In the event the Owner exercises its rights under this Paragraph 14.3, upon the request of the Contractor the Owner shall furnish to the Contractor a detailed accounting of the cost incurred by the Owner in completing the Work. This shall constitute Owner’s sole remedy against Contractor in the event of a termination by Owner for default.

14.3.3 If the Contractor files a petition under the Bankruptcy Code, this Agreement shall terminate if the Contractor or the Contractor's trustee rejects the Agreement or, if there has been a default, the Contractor is unable to give adequate assurance that the Contractor will perform as required by this Agreement or otherwise is unable to comply with the requirements for assuming this Agreement under the applicable provisions of the Bankruptcy Code.

14.4 CONTRACTOR'S RIGHT TO TERMINATE

14.4.1 Upon seven (7) days' written notice to the Owner, the Contractor may terminate this Agreement if the Work has been stopped for a thirty (30) day period through no fault of the Contractor for any of the following reasons:

1. Under court order or order of other governmental authorities having jurisdiction;

2. As a result of the declaration of a national emergency or other governmental act during which, through no act or fault of the Contractor, materials are not available; or

3. Suspension by Owner for convenience pursuant to Paragraph 14.1

14.4.2 In addition, upon seven (7) days' written notice to the Owner, the Contractor may terminate the Agreement if the Owner:

1. Fails to furnish reasonable evidence that sufficient funds are available and committed for Paragraph 3.2, or

2. Assigns this Agreement over the Contractor's reasonable objection, or

3. Fails to pay the Contractor in accordance with this Agreement and the Contractor has complied with the notice provisions of Paragraph 8.5, or

4. Otherwise materially breaches this Agreement.

14.4.3 Upon termination by the Contractor in accordance with Paragraph 14.5, the Contractor shall be entitled to recover from the Owner payment for all Work executed and for any proven loss, cost or expense in connection with the Work, including all demobilization costs plus reasonable overhead and profit on Work not performed.

14.5 OBLIGATIONS ARISING BEFORE TERMINATION
109487837.1
24 Even after termination pursuant to Article 14, the provisions of this Agreement still apply to any Work performed, payments made, events occurring, costs charged or incurred or obligations arising before the termination date.

ARTICLE 15

ADDITIONAL REPRESENTATIONS OF THE PARTIES

15.1 Owner hereby warrants, represents, and promises that:
(i) It has provided or shall provide timely to Contractor, all records relating to any energy, fuel, water, or other utility use, operation, maintenance, occupancy, use, prior audits, Energy Costs, or O&M Costs of, for, or related to Premises requested by Contractor and the information set forth therein is, and all information in other records to be subsequently provided pursuant to this Agreement will be true and accurate in all material respects; and
(ii) It has not entered into any leases, contracts, or contracts with other persons or entities regarding the leasing of energy efficiency equipment or the provision of energy management services for the Premises or with regard to servicing any of the energy-related equipment located in the Premises.

Owner shall provide Contractor with copies of any predecessor, successor or additional leases of energy efficiency equipment and contracts for management or servicing of preexisting equipment at Premises which may be executed from time to time hereafter within thirty (30) days after execution thereof.

15.2 Contractor hereby warrants, represents, and promises that:
(i) Before commencing performance of this Agreement:
(a) It is or shall become licensed or otherwise permitted to do business in this state. (b) It shall have provided proof and documentation of required insurance pursuant to terms and conditions of the Contractor contract it shall make available, upon reasonable request, all documents relating to its performance under this Agreement, including all contracts and subcontracts entered into;
(ii) It shall use qualified subcontractors and delegees to perform the work so subcontracted or delegated pursuant to the terms hereof;
(iii) That it is financially solvent, able to pay its debts as they mature and possessed of sufficient working capital to complete the Work and perform its obligations under this Agreement.

ARTICLE 16
OWNER’S COMPLIANCE AND FACILITIES MAINTENANCE CHECKLIST

16.1 The parties acknowledge and agree that Contractor has entered into this Agreement in reliance upon the reasonable expectation of earning compensation based upon performance of the Work and achieving the Total ECM Savings, as set forth in Attachments A and E.

16.2 The parties further acknowledge and agree that the Total ECM Savings would not likely be obtained unless the procedures and methods for the use, operation and maintenance of the Equipment, ECMs, and Premises set forth or described in this Agreement are strictly implemented and followed by the Owner on a regular and continuous basis.

16.3 Owner agrees that it shall adhere to, follow and implement the maintenance, use, and methods of operation set forth and describe in this Agreement.
109487837.1
25 16.4 Owner agrees that Contractor shall have the right once a month, with prior notice, to inspect Premises to determine if Owner is complying with Attachment F (Owner Maintenance Responsibilities).

Owner shall make the Premises available to Contractor and shall have the right to witness each inspection.

ARTICLE 17

DISPUTE RESOLUTION

17.1 WORK CONTINUANCE AND PAYMENT
Unless otherwise agreed in writing, the Contractor shall continue the Work and maintain the Schedule of the Work during any dispute resolution proceedings. If the Contractor continues to perform, the Owner shall continue to make payments in accordance with this Agreement.

17.2 INITIAL DISPUTE RESOLUTION
If a dispute arises out of or relates to this Agreement or its breach, the parties shall endeavor to settle the dispute first through direct discussions between the parties' representatives, who shall have the authority to settle the dispute. If the parties' representatives are not able to promptly settle the dispute, the senior executives of the parties, who shall have the authority to settle the dispute, shall meet within twenty-one (21) days after the dispute first arises. If the dispute is not settled within seven (7) days from the referral of the dispute to the senior executives, the parties shall submit the dispute to mediation in accordance with Paragraph 17.3.

17.3 MEDIATION
If the dispute cannot be settled pursuant to Paragraph 17.2, the parties shall endeavor to settle the dispute by mediation under the current Construction Industry Mediation Rules of the American Arbitration Association before recourse to any other dispute resolution procedures. Once one party files a request for mediation with the other party and with the American Arbitration Association, the parties agree to conclude such mediation within sixty (60) days of filing of the request. Either party may terminate the mediation at any time after the first session, but the decision to terminate shall be delivered in person by the party's representative to the other party's representative and the mediator.

17.5 MULTIPARTY PROCEEDING
All parties necessary to resolve a claim shall be parties to the same dispute resolution proceeding.

Appropriate provisions shall be included in all other contracts relating to the Work to provide for the consolidation of such dispute resolution procedures.

17.7 LIEN RIGHTS
Nothing in this Article 17 shall limit any rights or remedies not expressly waived by the Contractor that the Contractor may have under lien laws.
109487837.1
26 ARTICLE 18

MISCELLANEOUS PROVISIONS

18.1 ASSIGNMENT
Neither the Owner nor the Contractor shall assign their interest in this Agreement without the written consent of the other, except as to the assignment of proceeds. The terms and conditions of this Agreement shall be binding upon both parties, their partners, successors, assigns, and legal representatives. Neither party to this Agreement shall assign the Agreement as a whole without written consent of the other, except that the Owner may assign the Agreement to a wholly owned subsidiary of Owner when Owner has fully indemnified Contractor or to an institutional lender providing construction financing for the Project as long as the assignment is no less favorable to the Contractor than this Agreement. In the event of such assignment, the Contractor shall execute any consents reasonably required. In such an event, the wholly-owned subsidiary or lender shall assume the Owner's rights and obligations under the Contract Documents. If either party attempts to make such an assignment, that party shall nevertheless remain legally responsible for all obligations under this Agreement, unless otherwise agreed by the other party.

18.2 GOVERNING LAW
This Agreement shall be governed by the laws of the State of the location of the Project.

18.3 SEVERABILITY
The partial or complete invalidity of any one or more provisions of this Agreement shall not affect the validity or continuing force and effect of any other provision.

18.4 NO WAIVER OF PERFORMANCE
The failure of either party to insist, in any one or more instances, on the performance of any of the terms, covenants or conditions of this Agreement, or to exercise any of its rights, shall not be construed as a waiver or relinquishment of such term, covenant, condition or right with respect to further performance or any other term, covenant, condition or right.

18.5 TITLES AND GROUPINGS
The titles given to the articles of this Agreement are for ease of reference only and shall not be relied upon or cited for any other purpose. The grouping of the articles in this Agreement and of the Owner's specifications under the various headings is solely for the purpose of convenient organization, and in no event shall the grouping of provisions, the use of paragraphs, or the use of headings be construed to limit or alter the meaning of any provisions.

18.6 JOINT DRAFTING
The parties expressly agree that this Agreement was jointly drafted, and that both had the opportunity to negotiate its terms and to obtain the assistance of counsel in reviewing its terms prior to execution.

Therefore, this Agreement shall be construed neither against nor in favor of either party, but shall be construed in a neutral manner.

18.7 RIGHTS AND REMEDIES
The parties' rights, liabilities, responsibilities, and remedies with respect to this Agreement, whether in contract, tort, negligence, or otherwise, shall be exclusively those expressly set forth in this Agreement.

18.8 WRITTEN NOTICE
Written notice shall be deemed to have been duly served on the date of delivery if delivered in person, on the day after deposit if delivery by overnight courier, or two (2) days after deposit if delivery be placing in the United States mail, first class and certified, return receipt requested with postage prepaid. All notices shall be addressed to the appropriate Authorized Representative as follows:

If to the Owner: Kuyler Crocker, City Manager, [email protected], 559-562-7102 If to the Contractor: Anthony Roner, Vice President, [email protected], 760-994- 7255
109487837.1
27 With a copy to: Michael May, Account Executive, [email protected], 661- 331-0700

18.9 WHOLE AGREEMENT
This Agreement, the Attachments and Exhibits hereto, and the Contract Documents shall constitute the entire agreement between the parties, and no inducements, considerations, promises or other references shall be implied in this Agreement that are not expressly addressed herein. Any request for proposals, proposals, drafts, or other documents submitted or exchanged by the parties prior to the execution of this Agreement are expressly excluded from and are not a part of this Agreement. 109487837.1
28 ATTACHMENT C

SCOPE OF WORK
Attachment C-1 (HVAC Scope of Work)
A summary of the intended mechanical scope in each building is provided below followed by a detailed scope of Work for each building. Refer to Exhibits C-1a for a site plan with replacement quantities noted.

For all systems shown below, the replacement HVAC systems will be of similar configurations, cooling capacity, and heating capacity unless otherwise noted. All units to be specified as Carrier or Contractor Approved Equal and is subject to change.

HVAC Scope of Work Summary:

Table C.1.1 HVAC Scope of Work Summary
Building Location Existing
Model
Existing Model New Make New Model
City Hall West Outdoor Armstrong SCU12E36A-2 Carrier 26SCA536W003 City Hall West Attic Armstrong No nameplate Carrier FT5AN City Hall West Outdoor Ruud No nameplate Carrier 26SCA536W003 City Hall West Attic Ruud No nameplate Carrier FT5AN
City Hall Rear Parking
Lot, Rooftop
Trane TSC060E3ELA1 Carrier 48FEGA06A2A5-0A0A0
City Services Rooftop Lennox GCS16R-651-125 Carrier 48FEGA06A2A3-0A0A0 City Services Rooftop Day & Night 584ANW018040ABAB Carrier 48NLUB240403 Police & Fire Data Room Thermalzone MSC424A13230CB Carrier 37MARAQ24AA3 Police & Fire Rooftop Thermalzone MSC424A13230EB Carrier 45MAHAQ24XA3 Police & Fire Rooftop Rheem RRNA-B060CK10E Carrier 48NLUB600905 Museum Outdoor Thermalzone MS212A13240CA Carrier 26SCA536W003 Museum Outdoor Westinghouse S1090A1S Carrier 45MAHAQ24XA3 Museum Basement Westinghouse AC030A2M1 Carrier FT5AN
Museum Indoor Thermalzone MS212A13240EA Carrier 45MAHAQ24XA3 Senior Center Rooftop Unknown Unknown Champion 3000 DD
Senior Center Rooftop Payne PY3GNAA48090NA Carrier 48NLUB480903 Senior Center Rooftop Ruud No nameplate Carrier 48NLUB480903 Senior Center Rooftop Ruud No nameplate Carrier 48NLUB480903 Library Rooftop Bryant 581BPV120180AK-- Carrier 48FEDM12A3A5-0A0A0 Library Rooftop Bryant 579FPV180230AKCD Carrier 48FEDM16A2A5-0A0A0 Library Rooftop Bryant 574ANW02404-B-- Carrier 48NLUB240403 WWTP Outdoor Ameristar M4HP4030A1000AB Carrier 27SCA530A003 WWTP Indoor Ameristar M4AH4032A1000AA Carrier FJ5ANXB30L00

1. City Hall – The scope includes the removal and replacement of qty. two (2) gas-fired split systems and qty. (1) gas-fired rooftop package unit.

2. City Services – The scope includes removal and replacement of qty. two (2) gas-fired rooftop packaged units.
109487837.1
29 3. Police/Fire Department - The scope includes removal and replacement of qty. one (1) gas-fired rooftop packaged unit and qty. (1) ductless split system heat pump.

4. Lindsay Museum – The scope includes removal and replacement of qty. (1) heat pump split system located in the room in the back and qty. (1) cooling only split system and qty. (1) gas furnace located in the basement. The gas furnace and cooling only split in the basement will be replaced with a combination cooling and heating unit.

5. Senior Center - The scope includes removal and replacement of qty. one (1) evaporative cooler and qty. (3) gas-fired rooftop packaged units.

6. Wastewater Treatment Plant – The scope includes removal and replacement of qty. (1) heat pump split system and complete abandonment of the existing underground line set, which has been reported by Lindsay Facilities to be leaking refrigerant. A new aboveground line set will be installed.

7. Library - The scope includes removal and replacement of qty. (3) gas-fired rooftop package units.

Contractor Areas Impacted:

Contractor shall provide the necessary certifications, coordination, materials, equipment, machinery, tools, apparatus, and other means of construction including, supervision, site safety, testing and inspection, superintendence, overhead, expenses, and labor and expenses necessary to complete the HVAC Project, including the Work outlined below:

Detailed HVAC Scope of Work:

DX Split Outdoor and Gas-Fired Indoor Unit Demolition and Installation Scope:

A. Secure existing electrical connections.

B. Secure existing low voltage wiring and controls.

C. Isolate existing gas connections.

D. Demolish and replace qty. (1) new electrical disconnect.

E. Perform recovery of refrigerant for proper disposal or recycling.

F. Demolish and remove necessary ductwork connections, lineset, gas piping, and flue connections, outdoor and indoor unit.

G. Furnish and install matching capacity Split DX/Gas Furnace Systems.

H. Provide rigging services if necessary.

I. Furnish and install new lineset, electrical, ductwork connections, gas piping, and drain line connections as necessary.

J. Re-use existing concrete pad for outdoor unit.

K. Evacuate system. Charge with new refrigerant as required.

L. Low voltage and controls to be completed by controls subcontractor. See controls scope of work for clarification.

M. Perform start-up procedures, verify proper operation, and support the commissioning agent.

DX Split Outdoor and Heat Pump Indoor Unit Demolition and Installation Scope:

A. Secure existing electrical connections.

B. Secure existing low voltage wiring and controls.

C. Isolate existing gas connections.

D. Demolish and replace qty. (1) new electrical disconnect.

E. Perform recovery of refrigerant for proper disposal or recycling.

F. Demolish and remove necessary ductwork connections, line set, outdoor and indoor unit. 109487837.1
30 G. Furnish and install equivalent tonnage Heat Pump Systems.

H. Provide rigging services if necessary.

I. Furnish and install lineset, electrical, ductwork connections, and drain line connections as necessary.

J. Re-use existing concrete pad for outdoor unit.

K. Evacuate system. Charge with new refrigerant as required.

L. Low voltage and controls to be completed by controls subcontractor.

M. Perform start-up procedures, verify proper operation, and support commissioning agent.

Rooftop Unit (RTU) Gas-Fired Packaged Unit Demolition and Installation Scope:

A. Secure existing electrical connections.

B. Secure existing low voltage wiring and controls.

C. Isolate existing gas connections.

D. Demolish and replace qty. (1) new electrical disconnect.

E. Perform recovery of refrigerant for proper disposal or recycling.

F. Disconnect ductwork, electrical wiring, controls wiring, condensate & gas piping.

G. Rig, remove, and demolish one (1) existing Gas-fired Packaged Rooftop Unit.

H. Furnish & install one (1) new equivalent Gas-fired Packaged Rooftop Unit.

I. Furnish & install one (1) new curb adaptor to the existing opening (if applicable).

J. Furnish & install one (1) economizer (if applicable).

K. Furnish & install one (1) powered exhaust (if applicable).

L. Evacuate system. Charge with new refrigerant as required.

M. Low voltage and controls to be completed by subcontractor. See the controls scope of work for clarification.

N. Perform start-up procedures, verify proper operation, and support commissioning agent.

Evaporative Cooler Demolition and Installation Scope:

A. Secure existing electrical connections.

B. Secure existing electrical connections.

C. Secure existing low voltage wiring.

D. Isolate incoming domestic water line and drain line.

E. Demolish and replace qty. (1) new disconnect.

F. Rig, remove, and demolish one (1) existing Evaporative Cooler.

G. Furnish & install one (1) new equivalent Evaporative Cooler.

H. Furnish & install one (1) new curb adaptor to the existing opening, if necessary.

I. Furnish & install ductwork, new water supply, outlet drain, and electrical as required.

J. Perform start-up procedures, verify proper operation, and support the commissioning agent. 109487837.1
31 Attachment C-2 (Controls Scope of Work)
The following controls scope is intended to unify the status, communication, and operation of HVAC units throughout several buildings owned by the City of Lindsay in conjunction with HVAC replacements. The Energy Management Control System (EMCS) will be web-based and installed to monitor and control the various mechanical equipment in each building via web-based browser.

Table C.2.1 Controls Scope of Work
Building Make Model Existing
Controls
Pelican
Gateway
Pelican
Repeater
Pelican
RTU
Controller
Pelican TC
Thermostat
City Hall
Qty. 5
Armstrong SCU12E36A2
Pelican
GW900
Qty. 1
Quantity will be
"as required"
X
Armstrong N / A Thermostat
Ruud N / A X
Ruud N / A Thermostat
Wabban BB36-
24WADU
X
Wabban BB36-
24AH2ADU
Thermostat
Trane N / A X
Trane P0V0C000M5
0SAAA
Thermostat
Trane TSC060E3EL
A1
Thermostat X X
Services
Qty. 2
Lennox GCS16R651-125Thermostat Pelican
GW900
Qty. 1
Quantity will be
"as required"
X X
Day & Night 584ANW0180
40 Thermostat X X
Police &
Fire
Qty. 3
Thermalzone MSC424A132
30CB
Thermostat Pelican
GW900
Qty. 1
Quantity will be
"as required"
X
Thermalzone MSC424A132
30EB
Rheem RGEDTZT09
0ACG15
Thermostat X X
Rheem RRNAB060CK10EThermostat X X
Wellness
Qty. 4
Trane YSJ180A4S0
L02K
Thermostat Pelican
GW900
Qty. 1
Quantity will be
"as required"
X X
Trane YSJ180A4S0
L02K
Thermostat X X
Trane YSJ180A4S0
L02K
Thermostat X X
Trane YSJ180A4S0
L02K
Thermostat X X
Museum
Qty. 2
Fan Coil Unit Fan Coil Unit Thermostat Pelican
GW900
Qty. 1
Quantity will be
"as required"
X
Westinghouse S1090A1S
Westinghouse AC030A2M1
Thermalzone MS212A1324
0EA
Thermostat X
Thermalzone MS212A1324
0CA
Senior
Center
Qty. 4
Payne PY3GNAA48
090NA
Thermostat Pelican
GW900
Qty. 1
Quantity will be
"as required"
X X
Rheem RGEA14036
AJD06
Thermostat X X
Ruud N / A Thermostat X X
Ruud N / A Thermostat X X
WWTP
Qty. 1
Ameristar M4HP4030A1
00 Quantity will be
"as required"
X
109487837.1
32 Building Make Model Existing
Controls
Pelican
Gateway
Pelican
Repeater
Pelican
RTU
Controller
Pelican TC
Thermostat
Ameristar M4AH4032A1
00 Thermostat Pelican
GW900
Qty. 1
Controls Scope of Work Summary for all buildings:

A. Demo and safely decommission existing components associated with the equipment listed in the equipment overview.

B. Furnish and install new Pelican controls for equipment identified in the equipment overview, including the following system components as outlined in Table C.2.1:

1. Pelican Gateway

2. Pelican Repeater

3. Pelican Pearl Controller

4. Pelican TC Touch Screen Thermostat
C. Integrate the control system with Pelican web-based monitoring platform.

D. Provide services to develop and customize system graphics for the web interface.

E. Provide system Commissioning.

F. Provide new controls submittals and as-built documentation, including network architecture diagrams, points lists, and sequence of operations.

G. Develop new control sequences including, scheduling, temperature and pressure resets, and night setbacks. All sequences shall be reviewed and approved by Southland Energy.

H. Provide startup services for the control system.

I. Install new control wiring in conduit where exposed, including mechanical rooms, electrical rooms, and exterior locations. Plenum-rated open-air control cabling will be installed in accessible concealed spaces where permitted.

J. Existing control wiring may be reused where feasible and appropriate.

K. Existing control enclosures may be reused where feasible and appropriate.

L. Existing end devices shall remain unless specifically identified for replacement in this scope. 109487837.1
33 Attachment C-3 (Lighting Scope of Work)
A summary of the recommended lighting scope for each building is included below. A detailed lighting scope of Work for each building, by space, is provided in:
• Exhibit C-3a – Lighting Room by Room Descriptions
• Exhibit C-3b - Ceiling Tile Layout
Lighting Scope of Work Summary:

Table C.3.1 Lighting Scope of Work
# Building Replace Retrofit Remove Relamp Do
Nothing
Total Existing
LEDs
1 City Hall 33 63 12 10 17 135 96
2 City Services 11 30 0 0 6 47 33
3 Corporation Yard 27 21 0 0 19 67 28
4 Lindsay Museum 7 3 0 0 72 82 73
5 Police/Fire Station 58 24 0 0 18 100 42
6 Senior Center 21 61 0 0 6 88 59
7 Water Treatment Plant
(WTP)
11 6 0 0 5 22 6
8 Wastewater Treatment
Plant (WWTP)
35 12 0 0 2 49 4
*Note - Quantities include both interior and exterior fixtures. Refer to Exhibit C-3a for specification of lighting scope in each room include the lighting fixture retrofit/replacement and associated controls (where applicable).

Lighting Scope of Work Summary:

1. City Hall – The existing compact fluorescent, linear fluorescent, HID, incandescent, and tubular LED (TLED) lighting fixtures serving City Hall will be upgraded with high-efficiency LED technologies. The scope includes upgrading 118 existing building interior and exterior fixtures with LED solutions including troffer and light bar retrofit kits, new troffer, drum and wall pack fixture replacements, and new lamps. The solution in the open office area includes removal of existing fixtures and a reconfiguration of the layout. The acoustic grid ceiling tiles in this area will be replaced in coordination with the LED lighting upgrade as noted in Exhibit C-3b. New troffers and troffer retrofit kits will be supplied with integral occupancy/daylighting sensors. Office spaces will receive wireless wall pods that raise/lower light levels, while other spaces such as hallways, restrooms and storage areas will receive wall switch replacement occupancy sensors. All new canopy, floodlight and wall pack fixtures will include integral photocells.

2. City Services Building – The existing linear fluorescent, HID, and TLED lighting fixtures serving the City Services Building will be upgraded with high-efficiency LED technologies. The scope includes an upgrade of 41 existing building interior and exterior lighting fixtures with LED solutions, including troffer and light bar retrofit kits, and new troffer, wraparound, and wall pack fixture replacements. New troffers and troffer retrofit kits will be supplied with integral occupancy/daylighting sensors. Office spaces will receive wireless raise/lower wall pods, while other spaces, such as hallways, restrooms, and storage areas, will receive wall switch replacement occupancy sensors. All new wall pack fixtures will include integral photocells.

3. Corporation Yard – The existing linear fluorescent lighting fixtures serving the Corporation Yard will be upgraded with high-efficiency LED technologies. The scope includes an upgrade of 48 109487837.1
34 existing building interior and exterior lighting fixtures with LED solutions, including troffer and light bar retrofit kits, and new troffer, wraparound, drum, floodlight, and wall pack fixture replacements.

New troffers and troffer retrofit kits will be supplied with integral occupancy/daylighting sensors.

Office spaces, conference rooms, and locker rooms will receive wireless raise/lower wall pods, while other spaces, such as hallways, restrooms, parking garage, and storage areas, will receive wall switch replacement occupancy sensors. All new floodlight and wall pack fixtures will include integral photocells.

4. Lindsay Museum - The existing compact fluorescent, linear fluorescent, and HID lighting fixtures serving the Lindsay Museum will be upgraded with high-efficiency LED technologies. The scope includes an upgrade of 10 existing building interior and exterior lighting fixtures with LED solutions including TLED lamps and driver retrofits, and new wraparound, drum and wall pack fixture replacements. Offices, restrooms and storage areas will receive wall switch replacement occupancy sensors. All new wall pack fixtures will include integral photocells.

5. Police/Fire Station - The existing linear fluorescent, HID, incandescent, and TLED lighting fixtures serving the Police/Fire Station will be upgraded with high-efficiency LED technologies. The scope includes an upgrade of 82 existing building interior and exterior lighting fixtures with LED solutions, including troffer and light bar retrofit kits, and new wraparound, high bay, vanity, drum, canopy, floodlight, and wall pack fixture replacements. New troffers, high bays, and troffer retrofit kits will be supplied with integral occupancy/daylighting sensors. Offices and parking garage will receive wireless raise/lower wall pods, ceiling-mounted occupancy sensors will be installed in hallways, open offices, and restrooms, while other spaces, such as smaller restrooms and storage areas, will receive wall switch replacement occupancy sensors. All new canopy, floodlight, and wall pack fixtures will include integral photocells.

6. Senior Center – The existing compact fluorescent, linear fluorescent, HID, and TLED exterior lighting fixtures serving the Senior Center will be upgraded with high-efficiency LED technologies.

The scope includes an upgrade of 82 building interior and exterior lighting fixtures with LED solutions, including troffer retrofit kits, and new wraparound, exit signs, and wall pack fixture replacements. Troffer retrofit kits will be supplied with integral occupancy/daylighting sensors.

Office spaces, activity room, and kitchen will receive wireless raise/lower wall pods while hallways will receive ceiling-mounted occupancy sensors. All new wall pack fixtures will include integral photocells.

7. Water Treatment Plant (WTP) – The existing compact fluorescent, linear fluorescent, and HID lighting fixtures serving the WTP will be upgraded with high-efficiency LED technologies. The scope includes an upgrade of 17 building interior and exterior lighting fixtures with LED solutions, including light bar retrofit kits, new wraparound, vanity, floodlight, and pole-mounted area light fixture replacements, and new lamps. Offices, restrooms, and storage areas will receive wall switch replacement occupancy sensors. All new floodlight fixtures will include integral photocells.

8. Wastewater Treatment Plant (WWTP) – The existing linear fluorescent, and HID lighting fixtures serving the WWTP will be upgraded with high efficiency LED technologies to latest high efficiency LEDs The lighting scope includes an upgrade of 47 existing interior and exterior lighting fixtures with LED solutions including troffer and light bar retrofit kits, new troffer, vapor tight, drum, floodlight, pole mounted area light, and wall pack fixture replacements, and new lamps.. New troffers and troffer retrofit kits will be supplied with integral occupancy/daylighting sensors. Office spaces, hallways, and restrooms will receive wireless raise/lower wall pods, while other spaces, such as mechanical rooms and storage areas, will receive wall switch replacement occupancy sensors. All new floodlight, and wall pack fixtures will include integral photocells. 109487837.1
35 Attachment C-4 (Solar PV Scope of Work)
ECM 4: Install 75kW shade structure at the Wellness Center and 28kW roof array on the Police Department
This scope includes the installation of two new photovoltaic systems for the City of Lindsay: (1) a carportmounted 75 kWDC shade structure array, and (2) a rooftop lot-mounted 28 kWDC array. The combined 103 kWDC of new PV systems will be designed to offset on-site electrical usage associated with the identified City of Lindsay facilities. Table 2 below lists the identified building(s) and meter(s) intended to receive the benefit of the power produced by the new systems.

The development process for this nominal 103-kWDC portfolio included the identification of City of Linsday electric meters that the PV systems will serve. It is estimated that the proposed systems will meaningfully reduce the electrical consumption of the associated accounts while providing a reasonable safety factor to ensure that the majority of energy produced is utilized on-site.

Detailed Scope of Work

1. General Construction Scope of Work
a. Provide stamped and permit ready structural design drawing plan set including drawings, and calculation packages for:
i. The shade structures, purlin, and module attachment. ii. The rooftop racking and roof attachment details for the Police facility. b. For the 75kW shade structure array, furnish and install all structural steel components, purlins, and attachment hardware as specified by the Engineer of Record. All mounting section components will be fabricated from G-90 galvanized steel coil unless otherwise noted.
c. Furnish and install module mounting hardware, consisting of clips, washers, and fasteners for the purpose of module installation. Furnish and install module mounting hardware, consisting of clips, washers, and fasteners for the purpose of module installation. All items are fabricated from G-90 galvanized steel coil or mechanically galvanized components.
d. Modules to be mounted in portrait orientation.
e. Design to utilize UL 2703 certified module hardware for inter-module bonding and grounding.
f. Furnish and install approximately 75 kWDC of PV modules and inverters for the shade structure array and 28 kWDC of PV modules and inverters for the Police rooftop array (final quantities to be confirmed in design).
g. For the 28 kW Police rooftop system, furnish and install all rooftop mounting hardware, flashed attachments, rails (as applicable), and racking in accordance with the stamped structural design and roof type.
h. Deliver all supplied materials to site and stage as required for installation.

2. Electrical Scope of Work
a. Provide permit ready stamped electrical drawings for both PV systems. b. Furnish and install all electrical conduit, wiring, and equipment. c. Installation of all inter-module and DC wiring.

3. Monitoring & DAS Integration
a. Provide and install new DAS for proposed PV system.
b. Integrate existing 23kW rooftop PV system at the Wellness Center into.

4. Supporting Documentation
a. Contractor shall create and submit documentation required for utility interconnection. b. Contractor shall create and submit documentation required for federal investment tax credit (ITC). Contractor assumes no liability for amount of ITC and/or changes to federal law that changes the ITC amount received by the Owner.
c. Owner shall promptly review and sign documents required for procurement of utility interconnection agreement and federal ITC.
109487837.1
36 Table C.4.1: PV System Accounts
Location Address Service
Account #
Meter # Old Rate
/NEM
Updated Rate/
NEM
Wellness
Center
740 Sequoia
Ave
8002975386 259000-068943 TOU-GS-2-D TOU-GS-2-E
Police
Department
185 N Gale
Hill Ave
8003994404 254000-027377 TOU-GS-1-D TOU-GS-1-D
Police
Department
185 N Gale
Hill Ave
8003994868 223000-020875 TOU-GS-1-D TOU-GS-1-D
109487837.1
37 Figure C.4.1 Police/Fire Department Rooftop Solar
Figure C.4.2 Wellness Center PV Layout
109487837.1
38 Attachment C-5 (Well #15 Pump Drive & Enclosure Upgrade) Background:

Water Treatment operators have been experiencing periodic shut downs of the Pump Drive serving the Well #15 Pump (see location on Figure C.5.1). The periodic shutdowns have been attributed to excessive thermal loading due to the environment as well as reduced airflow by environmental dust and debris.

Solution:

Attachment C-5 is the scope of work to replace the Pump Drive & Enclosure and upgrade to an adequately sealed enclosure and drive with supplemental attached air conditioning to isolate from environmental elements such as wind-driven rain or wind-driven dust or debris. The existing Well #15 Pump and Motor are to remain. All and any existing controls, status, and low voltage wiring that were previously terminated to the existing drive shall be reconnected and reused in the new drive. ABB is the preferred manufacturer or approved equal by the subcontractor.

Contractor Areas Impacted:

Contractor shall provide necessary certifications, coordination, materials, equipment, machinery, tools, apparatus, and other means of construction including, supervision, site safety, testing and inspection, superintendence, overhead, expenses, and labor and expenses necessary to complete the Project, including the Work outlined below:

Detailed Scope of Work:

Variable Frequency Drive Unit Demolition and Installation Scope.

A. Secure and disconnect existing electrical connections to the main power source, switchgear, etc.

B. Secure and disconnect existing outboard electrical connections to Well Pump #15 motor.

C. Secure and disconnect existing low voltage wiring and controls.

D. Demolish and replace qty. (1) 200 HP Variable Frequency Drive Cabinet/Enclosure. o New drive and enclosure shall be of weather and debris-proof construction. o New drive and enclosure shall include manufacturer-implemented air conditioning. o New drive and enclosure shall be designed for the performance of the existing 200 HP Well Pump Motor.
o New drive and enclosure shall have an integrated bypass.

E. Provide transport rigging and disposal of the existing drive from the site.

F. Provide transport and rigging of new drive to site.

G. Furnish and install anchors.

H. Furnish, rework, and reconnect the existing electrical feeder to the cabinet.

I. Furnish, rework, and reconnect existing low voltage wiring and controls.

J. Perform start-up procedures, verify proper operation, and support the commissioning agent.

Figure C.5.1
109487837.1
39 Attachment C-6 (Window Replacement Scope of Work)
Southland will replace select existing exterior window assemblies at City Hall, City Services, and the Police/Fire Department facilities. The existing windows are contributing to reduced thermal performance, air infiltration, and occupant discomfort.

This scope includes the replacement of approximately ninety-three (93) total window units across the identified facilities, as detailed in the table C.6.1 below:

Table C.6.1 Window Replacement Scope
Building Total Windows Approximate
Window Area (sf)
City Services 13 168
City Hall 63 995
Public Safety 17 312
Total 93 1,475
The proposed scope includes the removal of existing window units and the installation of new energyefficient retrofit window systems with insulated glazing. This measure is intended to:
• Improve thermal performance of the building envelope. • Reduce air infiltration.
• Lower heating and cooling loads.
• Improve occupant comfort in perimeter spaces.

Detailed Scope of Work:

For each window included in the final scope, Southland will:
• Provide temporary protection of adjacent interior finishes and furnishings. • Relocate furniture as needed to access the work location. • Remove existing window assemblies.
• Dispose of removed materials in accordance with applicable regulations. • Install new energy-efficient retrofit window systems with insulating glaze. • Provide new perimeter sealant and weatherproofing.
• Restore interior trim distributed by installation.
• Clean interior glazing surfaces.
• Move furniture back to its original location.

All work will be performed in accordance with applicable codes, manufacturer installation requirements, and industry best practices.

Note: Given the age of buildings in this scope, it is possible that hazardous materials may be disturbed.

Southland will coordinate testing and removal with Owner provided resources for testing and abatement.

Abatement work to comply with Article 2.12 of this Agreement. 109487837.1
40 Attachment C-7 (Roofing Scope of Work)
A summary of the intended roofing scope in each building is provided below, followed by a detailed scope of Work for each building. Refer to Exhibit C-6 for preliminary drawings supporting the descriptions below.

These drawings will be used for permitting as required.

Roofing Scope of Work Summary (Flat Roof):

1. Senior Center – The roofing scope of Work at City Hall includes a tear-off of the existing roof down to the existing insulation and installation of a new roofing system.

2. Remove and dispose of the existing roof system.

3. Remove and save the tile ridge cap on top of the parapet walls. Leave the rest of the tile roofing in place.

4. Install one layer of 1/4” Secrurock coverboard. (mechanically attached)

5. Install 60 mil TPO Single Ply roof system. (mechanically attached)

6. Install 60 mil TPO Single Ply roof system on the walls and base flashings. (adhered)

7. Install new TPO pipe boots, corners, drain flashings, and other accessories.

8. Reinstall the tile ridge cap as needed.

9. Install a new 24-gauge Coping Cap on top of the short parapet walls that do not have tile.

10. Manufacturer’s 20-Year warranty included.

General Conditions:
• New boots/gaskets around all roof penetrations.
• New roof and flashing of all mechanical curbs and duct penetrations. • Trash/recycle removal.
• Lifting of materials, etc.
• Reuse existing roofing insulation.
• Repair underlayment if damaged, reuse existing where no damage is present As-Built Drawings.
• Masking and protection of all surfaces, such as sidewalks, subject to debris, etc. • Coordination, lifting, and moving of all systems (e.g. electrical) needed to complete Work.

Systems to be returned to the original location in a permanent fashion at completion of Work. • All work is assumed to be on regular time as defined by the local unions. • The preliminary Schedule of the Work is included in Attachment D. The Customer and Contractor mutually agree to facilitate completion of the Work while minimizing any disruption to building operations.

Senior Center Roofing Scope of Work – The roofing scope of Work at Senior Center includes a tear off and reroof of approximately 4,400 square feet (as depicted in the images below) of existing built-up roof and full replacement of the associated flashing.

Area of Work:

The Senior Center roofing scope of Work includes the following:
• Material Removal:
o Carefully remove and dispose of the existing roof system. o Remove and save the tile ridge cap on parapet walls. Remining tile roofing to stay in place. • Inspection and Assessment:
o Conduct a thorough assessment of the substrate to identify any structural issues or areas requiring special attention.
o Make minor repairs as needed, including plywood replacement if required. • Provide and install a new cover board.
109487837.1
41 • Membrane Installation:
o Provide and install a new single-ply roofing membrane system in accordance with the manufacturer's guidelines and specifications for the application. o Install new pipe boots, corners, drain flashing, and related roof accessories. o Reinstall tile ridge cap.

Figure C.7.1 Roofing Scope of Work
109487837.1
42 Figure C.7.2 Existing Roof Tiles
109487837.1
43 ATTACHMENT D

SCHEDULE OF THE WORK
Below is a preliminary construction schedule. This schedule will be finalized at the start of the construction phase. Date of Commencement and the issuing of the Notice to Proceed are assumed to be on the same day.

Figure D.1.1 Preliminary Construction Schedule
109487837
.1
44 109487837.1
45 ATTACHMENT E

PERFORMANCE ASSURANCE PLAN
PLAN OVERVIEW:

The purpose of the Performance Assurance process is to ensure the performance of each installed Energy Conservation Measure (ECM), ensure it meets the design intent, and can deliver the proposed reduction in energy use. The tasks outlined in this plan will be used to verify and document the utility savings for this project. The first-year annual utility savings (Total ECM Savings) for the buildings covered by this project are identified below. The Performance Assurance Plan will be completed during the commissioning and closeout phase of the project, after all equipment has been installed. This plan includes one Performance Assurance Report that documents the savings associated with the project.

PLAN SCOPE:

The work summarized below is being performed under an agreement covering HVAC, controls, interior and exterior lighting upgrades, solar photovoltaic upgrades, and window replacements at the buildings identified. The table below identifies the ECMs implemented at each building/location.

Building/Location HVAC Controls Lighting Solar Window
Replacement
City Hall ● ● ● ●
City Services ● ● ● ●
Police/Fire Department ● ● ● ● ●
Lindsay Museum ● ● ●
Corporation Yard ● ●
Senior Center ● ● ●
Wellness Center ● ●
Water Treatment Plant ● ●
Wastewater Treatment
Plant ● ● ●
Well 15
Library ●
PERFORMANCE ASSURANCE OF TOTAL ECM SAVINGS:

Contractor will use industry standard protocol to document the savings associated with the ECMs installed. This will include Option A of the International Performance Measurement and Verification Protocol (IPMVP) and Federal Energy Management Program (FEMP) protocol. Once Contractor completes the Performance Assurance Report documenting Total ECM Savings, and Owner has provided the Final Completion Certificate, Owner and Contractor mutually agree that the Total ECM Savings have been achieved.

RATES, REBATES, AND INCENTIVES:

It is understood and agreed that any energy or utility-related rates, grants, rebates, incentives, credits, or refunds are the result of an agreement between Owner and a third-party. Contractor will use best efforts to secure these funds, but assumes no responsibility for the final values and duration to obtain these funds. Contractor is not responsible for the rules and regulations in connection with, any such grants, rates, rebates, incentives, credits, or refunds, or alternative purchasing arrangements.

TERMINATION OF SAVINGS PERFORMANCE ASSURANCE:
109487837.1
46 Contractor’s obligations under this Agreement, and with respect to the Performance Assurance Plan, are contingent upon Owner’s performance of its obligations under this Agreement. As a result, Owner understands and agrees that if it (i) fails to make any payment to Contractor required under this Agreement, (ii) fails to fulfill any of its responsibilities and obligations necessary to enable Contractor to complete the Work and provide the Performance Assurance Services, or (iii) otherwise cancels, terminates, or materially breaches this Agreement, Contractor’s responsibilities and obligations with respect to the Total ECM Savings shall terminate and Contractor shall have no liability hereunder.

TOTAL ECM SAVINGS:

The total savings for each ECM are listed in the table below:

ECM
Performance
Assurance
Option
Electric
Savings
(kWh)
Gas
Savings
(therms)
Cost
Savings
($)
HVAC A 29,021 91 $4,910
Controls A 41,614 521 $10,970
Lighting A 77,804 - $14,960
Solar A 168,916 - $23,340
Window Replacement A 3,826 106 $2,750
Total ECM Savings 321,180 718 $56,930
Note: Drive replacement and Roof Upgrades do not generate appreciable savings and therefore are not included in the Performance Assurance Plan.

BASELINE UTILITY RATES
The baseline utility rates for each facility are listed in the tables below:

Building/Location
Blended
Electric
Rate
($/kWh)
Natural
Gas
($/therm)
City Hall $0.2661 $1.53
City Services $0.2742 $1.33
Police/Fire Department $0.3046 $2.05
Lindsay Museum - -
Corporation Yard $0.2294 -
Senior Center - -
Wellness Center $0.2913 -
Water Treatment Plant $0.1711 -
Wastewater Treatment Plant $0.1672 -
Well 15 $0.1995 -
Library - -

ANNUAL ESCALATION RATES
The following escalation rates will be applied to the baseline utility rates and used to calculate the savings during the performance period.
109487837.1
47 Utility Escalation Rate (%) Construction
Period
Escalation Rate (%)
Performance Period
Electric Use (kWh) 5% 5%
Natural Gas (therms) 5% 5%

PERFORMANCE ASSURANCE PLAN
In the following sections a description of the methodology will be presented for each ECM, along with a list of tasks that will be conducted during the different project periods.

Performance Assurance Plan by ECM

ECM ECM
Description
IPMVP
Option Summary of Plan
1 HVAC A
Key Parameters
Equipment Efficiency
Equipment Power
Hours of Operation
Baseline
The baseline was determined through interviews
with facility staff, reviews of facility drawings, and
information gathered during site visits. Savings
models were developed based on data collected
and calibrated to baseline utility use.

Post-Installation
Contractor will review as-built information to
confirm quantity and type of equipment installed
meets or exceeds efficiency requirements as
proposed. Savings models will be updated to
reflect as-built efficiencies and quantities installed. 2 Controls A
Key Parameters
Equipment power
Equipment efficiency
Heating and cooling setpoints
Hours of Operation
Baseline
The baseline was determined through interviews
with facility staff, reviews of facility drawings, and
information gathered during site visits. Savings
models were developed based on data collected
and calibrated to baseline utility use.

Post-Installation
Contractor will commission controls equipment to
implement time of day scheduling and optimize
space temperature setpoints. Revised schedules
and setpoints will be documented in the final
commissioning report.
3 Lighting A
Key Parameters Fixture power
Hours of operation
Baseline
A detailed room by room survey of existing fixtures
was conducted to determine types and quantities
of fixtures. Wattages of existing fixtures are based
on manufacturer ratings. Hours of operation are
determined based on facility schedules and
interviews with facilities staff.

Post-Installation
Contractor will review as-built information to
confirm types and quantities of fixtures retrofit.

Wattages for new fixtures will be based on
manufacturer ratings. Hours of operation will be
the same as baseline. Savings will be calculated
based on the results of the as-built quantities of
retrofit fixtures.
109487837.1
48 ECM ECM
Description
IPMVP
Option Summary of Plan
4 Solar A
Key Parameters Array capacity
Solar irradiance
Baseline Areas of proposed solar locations are investigated to confirm proposed array sizes.

Post-Installation
Contractor will review as-built information to
confirm new arrays match proposed capacity.

Commission new solar arrays to confirm operation
of equipment meets design intent. Savings to be
calculated based on as-built array capacity.
5 Window
Replacement
Key Parameters Window area
Window U-Value
Baseline
The baseline was determined through on-site
inspections and reviews of available building
drawings to determine types and sizes of windows
existing.

Post-Installation
Contractor will review as-built information to
confirm installed windows meet U-Values
proposed and quantity of windows retrofit matches
proposed. Savings will be updated based on final
as-built quantity of windows retrofit and as-built UValue.

PERFORMANCE ASSURANCE REPORT
A Performance Assurance Report will be generated and submitted within 45 days of Final Acceptance.

This report will include a status update on the ECMs that were evaluated during installation. Any deviations from the original savings calculations known after installation is complete will be discussed in the report. Once submitted, and accepted by the Customer, the Performance Assurance Report will complete Contractor’s savings obligations to the Customer. 109487837.1
49 ATTACHMENT F
OWNER’S MAINTENANCE RESPONSIBILITIES

MAINTENANCE
The Owner is responsible for all required maintenance of the installed equipment. Contractor will ensure that the scheduling and setpoints required to meet energy savings through previously described performance assurance activities. Contractor will gather and analyze trend logs for the performance period to determine that the EMCS is operating as intended. Minor adjustments to programming will be made at this time to restore operation if scheduling and setpoints do not match the agreed to Owner standards of operation.

TRAINING AND TECHNICAL SUPPORT
Contractor’s training plan will ensure that Owner personnel can operate, maintain, troubleshoot, and repair the systems installed or modified as part of the implemented ECMs. For the Controls and Solar ECMs, four (4) hours of training will be provided, specifically tailored to meet the needs of the Owner regarding operation of the building Controls and Solar monitoring systems. The training, at a minimum, will cover the following topics:
• Navigational overview of the front end for each system • Modifying and adjusting equipment scheduling and temperature setpoints • Setting up and reviewing remote monitoring and alarming functions • Reviewing and reporting of solar production
Final training topics will be determined collaboratively with the Owner. 109487837.1
50 ATTACHMENT G

WARRANTY
SUMMARY: Contractor will be responsible for managing warranty activity for one year as outlined in Exhibit B (Terms and Conditions), Articles 2.7 (Warranty) and 2.8 (Correction of Work Within One Year). Contractor will deliver to Owner, in PDF format, the manufacturer warranties for all equipment and components installed. At the Final Completion of the Work, Owner will manage warranty activity and follow the process outlined in Exhibit B, Articles 2.7 and 2.8. In some instances, warranty periods on equipment may extend beyond the one-year period as outlined in the table below. An initial ECM warranty summary is provided below, and will be finalized based on equipment approved by Owner:

Equipment Warranty Period Expected
Service Life
Reference for
Expected Life
Packaged Rooftop AC Unit

CONTRACTOR
One (1) year parts and site labor
Manufacturer
Five (5) year compressor only
15 years

ASHRAE HVAC
Applications
Handbook
Split System

CONTRACTOR
One (1) year parts and site labor
Manufacturer
Five (5) year compressor only
15 years

ASHRAE HVAC
Applications
Handbook
Building Controls

CONTRACTOR
One (1) year parts and site labor
Manufacturer
Five (5) year parts only
15 years

ASHRAE HVAC
Applications
Handbook
LED screw-in Lamps, LED
T8 Lamps, Luminaires and
Retrofit Kits

CONTRACTOR
One (1) year parts and site labor
Manufacturer
Two (2) year exit signs
Three (3) year screw-in lamps
Five (5) year material only
25,000-100,000
hours
Manufacturer’s
Specification Sheets
Lighting Controls –
Lithonia

CONTRACTOR
One (1) year parts and site labor
Manufacturer
Five (5) year material only
15 years

ASHRAE HVAC
Applications
Handbook
Solar Inverters

CONTRACTOR
One (1) year parts and site labor
Manufacturer
Ten (10) year material only
20 years Manufacturer
Data/Warranty
Solar Panels

CONTRACTOR
One (1) year parts and site labor
Manufacturer
Ten (10) year equipment only
25 years Manufacturer
Data/Warranty
109487837.1
51 Equipment Warranty Period Expected
Service Life
Reference for
Expected Life
Pump Drive Enclosure

CONTRACTOR
One (1) year parts and site labor
Manufacturer
Two (2) year material only
20 years
Manufacturer's
Specification Sheets
Roofing

CONTRACTOR
One (1) year parts and site labor
Manufacturer
Twenty (20) year material only
20 years Manufacturer’s
Data/Warranty
109487837.1
52 ATTACHMENT H

ASSUMPTIONS, CLARIFICATIONS, AND EXCLUSIONS
General Assumptions/Clarifications and Exclusions:

1. Pricing is valid for ninety (90) days from the date of submittal unless otherwise noted.

2. Prices as detailed are representative of the project as presented; if items are added and/or removed, Southland reserves the right to modify final pricing accordingly.

3. Pricing is based solely on the scope of work expressly described in this proposal. Any work not specifically identified is excluded.

4. Pricing assumes compliance with applicable prevailing wage requirements.

5. Permit requirements, plan review fees, and inspection fees are assumed to be paid by the City unless otherwise noted. This proposal does not include discretionary permitting, CEQA studies, environmental reports, or entitlement processes.

6. All work will be performed in accordance with applicable federal, state and local codes and regulations, including California Building Standards Code (Title 24) and generally accepted industry best practices.

7. This project is being delivered on a design-build basis. Design documentation, drawings, and equipment submittals will be provided to the extent required to support permitting, installation, and commissioning of the work described. Additional design services, detailed engineering analyses, or shop drawings beyond what is required for the described scope are not included unless specifically identified.

8. The proposal is based on all existing electrical, mechanical, and structural systems to remain are in serviceable condition. Repairs to existing non-code compliant conditions are not included.

9. The scope and pricing are based on conditions observed and information available at the time of assessment. Concealed, unforeseen, or unknown site conditions are excluded from the base scope of work and may result in an adjustment in accordance with the Energy Services Agreement.

10. The City shall provide reasonable access to work areas, including equipment access, staging areas, and on-site parking for construction personnel.

11. All work is assumed to be performed during normal working hours unless otherwise noted.

Temporary system shutdowns may be required and will be coordinated with the City to minimize disruption.

12. Standard workers’ compensation and general liability insurance for Southland personnel are included in accordance with the Energy Services Agreement.

13. The project schedule assumes reasonable review durations by the City consistent with similar municipal projects. Extended review durations may result in schedule adjustments as permitted under the Energy Services Agreement.

14. Unless specifically stated in the scope of work, systems maintenance is not included in this proposal, but we can assist the City in obtaining proposals for this work.

15. Commissioning will be completed by the Southland project team. Third-party commissioning is excluded unless specifically identified.

16. Structural modifications, seismic upgrades, architectural enhancements, and any work required to bring facilities into ADA compliance are excluded unless explicitly stated.

17. Temporary power, water, and utilities required for construction activities shall be provided by the City unless otherwise noted.

18. Significant material or equipment price increases beyond Southland’s control may result in an equitable adjustment to the contract amount, subject to the terms of the Energy Services Agreement.
109487837.1
53 19. Warranty for labor and materials is one (1) year from substantial completion unless otherwise stated. Extended equipment warranties shall be one year from startup or eighteen months from ship date, whichever occurs first, unless stated otherwise in the above ECM descriptions.

HVAC Specific Assumptions and Clarifications:

1. HVAC work is based on like-for-like replacement of existing rooftop units and split system unless otherwise specifically identified in the scope of work.

2. Existing ductwork, refrigerant piping, electrical connections, controls wiring, curbs, and supports will be reused to the greatest extent possible unless replacement is explicitly identified.

3. Repairs or modifications to existing HVAC system components beyond the point of disconnect/reconnect are excluded unless specifically noted. This includes, but is not limited to, ductwork, piping, fittings, valves, and insulation not scheduled for replacement.

4. HVAC scope related to fire/life safety systems is limited to disconnecting and reconnecting existing devices directly associated with replaced HVAC equipment, where required.

5. Airside testing and balancing will be limited to verifying proper operation and airflow through newly installed HVAC equipment. Testing and balancing of existing systems, ductwork, or diffusers is excluded.

6. HVAC replacements may require temporary shutdowns of systems during installation.

Shutdowns will be coordinated with the City to minimize operational impacts.

Controls Specific Assumptions and Clarifications:

1. Controls scope is limited to HVAC equipment and systems explicitly identified in this ECM. Equipment not included in the controls scope will not be monitored or controlled by the Pelican system unless specifically noted. Lighting will not be controlled by the Pelican controls system.

2. Standard Pelican functionality is included, including equipment scheduling, basic graphics, trend collection, and alarm notifications consistent with Pelican system capabilities. Custom graphics, advanced analytics, or expanded reporting beyond standard configuration are excluded unless specifically identified.

3. The City shall provide required internet connectivity, network access, and power at each controls location. Network configuration, firewalls, cybersecurity services, and IT support are excluded from this scope.

4. Integration with third-party systems, including but not limited to fire alarm systems, security systems, utility metering platforms, or other building systems, is excluded unless explicitly identified.

5. Standard user access setup and basic system orientation are included. Ongoing system administration, advanced user training, or long-term monitoring services are excluded unless specifically identified.

Lighting Specific Assumptions and Clarifications:

1. Lighting work is based on replacement of existing fixtures and controls on a like-for-like basis unless otherwise specifically identified in the scope of work.

2. Existing lighting circuits, branch wiring, breakers, grounding, and switching are assumed to be in serviceable condition. Corrections to improper wiring, grounding and electrical deficiencies are excluded unless explicitly identified.

3. Provision or installation of emergency lighting, battery backup fixtures, or battery backup drivers beyond what is specifically identified in the scope of work is excluded.

4. Correction of improper fixture mounting, replacement of damaged fixtures, ceiling tiles, or ceiling grid, including conditions not visible from the floor or located above ceilings, is excluded.

5. Relocation of existing fixtures, modification of mounting locations, or replacement of lamp holders is excluded unless specifically identified.
109487837.1
54 6. Moving furniture, cubicles, equipment, or personal items to access lighting fixtures is excluded and shall be provided by the City as required.

7. Detailed lighting design layouts and comprehensive light level modeling are not included.

Representative pre- and post-installation light level measurements may be performed where appropriate.

8. Lighting system replacements will require temporary shutdowns of lighting systems during installation. Shutdowns will be coordinated with the City to minimize operational impacts.

9. Lighting upgrades are intended to meet applicable Title 24 requirements for equipment efficiency and controls without requiring a full lighting system redesign unless otherwise noted.

Solar PV Specific Assumptions and Clarifications:

1. We are unaware of any underground unknowns, such as large boulders, and as such have not included costs for their removal should they be discovered and require removal.

2. Upgraded Concrete footings and foundations for the shade structure are currently not included.

Once the Geotech survey is completed we will know if the ground is suitable for a standard footing and base. If it is not, it may require upgraded larger footings and deeper concrete bases.

3. Parking lot repairs, re-striping, curb removal, sidewalk repairs, and any storm drain relocation are excluded unless explicitly state in the Scope of work.

4. Repair, replacement, or warranty of existing roof is excluded. Any roof remediation, reinforcement or structural upgrades required to support the rooftop PV system are excluded.

5. Upgrade of any existing electrical systems, utility transformer upgrades, EIR, interconnection cost, 4x rated enclosures, and/or equipment re-listing requirements or UL testing are excluded.

6. Utility system upgrades may be requested by SCE as a part of the interconnection application review and approval process. The project includes $25,000 for SCE upgrades identified during the interconnection review process. Should the utility require additional interconnect costs or costs of ownership we will work with the City to help negotiate with the utility. Any required upgrades or delays in utility approvals may result in additional costs and schedule extensions.

Well Pump #15 Drive Enclosure Specific Assumptions and Clarifications:

1. Existing electrical connections, controls wiring, and concrete pad will be reused to the greatest extent possible unless replacement is explicitly identified.

2. Repairs or modifications to existing Well Pump Drive enclosure components beyond the point of disconnect/reconnect are excluded unless specifically noted

3. Drive scope related to controls or low voltage communication is limited to disconnecting and reconnecting existing devices directly associated with replaced drive, where required.

4. Functional testing will be limited to verifying proper operation and parameters of newly installed drive. This excludes any pre-existing condition of the incoming electrical, communications and condition of the existing pump motor.

5. Pre-existing controls schedules, or speed parameters shall be defined by City of Lindsay Water Treatment Personnel at least six weeks prior to the scheduled data of installation for the new drive enclosure.

Window Replacement Specific Assumptions and Clarifications:

1. Scope includes minor patch and touch-up of finishes directly adjacent to window openings only; broader interior or exterior repainting or façade restoration is excluded.

2. Repair of concealed conditions immediately surrounding window openings discovered during removal, including localized water damage, rot, or deterioration, are excluded.

3. Minor patching and touch-up of finishes directly impacted by window removal is included. Full repainting or façade restoration beyond the immediate opening is excluded unless specifically noted.

4. Testing and abatement of hazardous materials disturbed by the window installation shall be performed by the City.
109487837.1
55 Roof Replacement Assumptions and Clarifications:

1. Roof replacement work assumes buildings will be unoccupied during construction.

2. Existing roof hatch, exterior lighting, conduits, curbs, and rooftop penetrations are assumed to be in serviceable condition and will be reused; repair or replacement of these components is excluded unless specifically identified.

3. Modifications to primary or secondary roof drainage systems, including roof drains, leaders, and underground storm piping, are excluded unless specifically identified.

4. Relocation or modification of rooftop mechanical, electrical, or plumbing equipment beyond temporary disconnect and reset required for roofing work is excluded.

5. Scope assumes existing roof substrates are suitable for installation of the new roofing system; significant leveling, taper redesign, or additional substrate correction beyond standard preparation is excluded.

6. Temporary weather protection beyond standard industry practice during normal installation sequencing is excluded.

7. Minor patching and touch-up of finishes directly impacted by the roof replacement removal is excluded.

8. Replacement of mansard tile is excluded.

Project Schedule Assumptions and Clarifications:

1. Contractor will make every effort to adhere to the Preliminary Construction Schedule included in Appendix C. The goal is to be complete with equipment start-up by the end of May 2027, with an additional period following this to complete items such as, punch list items, inspections, commissioning, M&V, Cx, and closeout.

2. The current schedule is contingent upon us receiving the contract by May 2026, receiving the required authority having jurisdiction (AHJ) approvals in a timely manner, and releasing long lead equipment at the 30% design phase.

3. Contractor explicitly excludes responsibility for delays outside of our control, such as AHJ delays, strikes, supply shortages, etc.
109487837.1
1 EXHIBIT C-1A

CITY OF LINDSAY IGA MAP
109487837.1
1 EXHIBIT C-3A

LIGHTING LINE BY LINE
109487837
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2 109487837
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3 109487837
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4 109487837.1
5 EXHIBIT C-3B

FINANCE OFFICE CEILING TILE LAYOUT
Southland Industries ©2025 All rights reserved.

City of Lindsay
Energy &
Infrastructure
Improvement Project
May 12
th, 2026
Southland Industries ©2025 All rights reserved. 2
Project Overview
Comprehensive facility improvement project
addressing deferred maintenance, capital
improvements, and energy efficiency upgrades
across multiple City Buildings. The Project will:
• Generate $3M in lifetime energy savings.
• Reduce greenhouse gas emissions by
approximately 625 metric tons over the lifetime
of the project.
• Bundle necessary infrastructure improvements
(window and roof repair) with energy measures
to improve overall building performance.

Southland Industries ©2025 All rights reserved. 3
Scope of Work Summary - ECM Summary
ECM # ECM Name ECM Description
Replace 23 aging rooftop, packaged, and split-system HVAC units across seven municipal buildings. Includes added scope at Senior Center, Museum, and Wastewater Treatment Plant.
1 HVAC Replacements
Install Pelican building controls on all new and selected existing HVAC equipment across 8 municipal buildings. 2 Controls
Upgrade interior and exterior lighting from fluorescent, TLED, and HID fixtures to highefficiency LED across municipal buildings. Includes replacement of all ceiling tiles in the open finance office in City Hall and Council Chambers.
3 LED Lighting
Install two photovoltaic systems 76 kW shade structure at the Wellness Center and 30 kW rooftop system at the Police Department. Confirmed federal ITC estimate. Included cost to bring existing system onto new monitoring system. 4 Solar PV
Replace the pump drive and enclosure on Well Pump 15, serving as the City of Lindsay’s primary backup water source from April to October. Add a drive bypass for reliability and redundancy.

Well Pump Drive
Replacement 5
Upgrade existing single-pane windows at City Hall, City Services, and Police Department. 6 Window Replacement
Replace existing low-slope modified asphalt roof with a granulated cap sheet at the senior center, where we are replacing 4 of 5 existing pieces of equipment on the roof.

Includes partial plywood replacement for damaged plywood. 7 Senior Center Roofing
Southland Industries ©2025 All rights reserved. 4
Map of
Project
Scope
Southland Industries ©2025 All rights reserved. 5
ECM Matrix
WWTP WTP Well 15 Senior
Center
Wellness
Center
Corporation
Yard Library LindsayMuseum
Police
Department
City
Services City Hall
      
HVAC
Replacement
Controls       
LED Lighting        
Solar  
 Well Pump
Drive
Replacement
   Window
Replacement

Roof
Replacement
= energy efficiency measure
= capital improvement measure
Southland Industries ©2025 All rights reserved. 6
Project Financials
Option 1:

Optimized Project
Current Project Price $4,285,381
Estimated Incentives $554,020
Net Project Budget $3,731,356
Annual Utility Savings $56,930
Estimated Annual O&M Savings $20,540
Total Lifetime 23-Year Savings $3,025,214
Option 1:

Optimized Project ECM
HVAC Replacement 
Controls 
LED Lighting 
PV: Police Rooftop 
PV: Wellness Center- Carport

PV: Wellness Center- Shade
Structure
Well 15 Drive Replacement 
Window Replacement 
Senior Center Roofing 
Total $4,285,381
Southland Industries ©2025 All rights reserved. 7
Construction Schedule – 90%
Q1-26 Q2-26 Q3-26 Q4-26 Q1-27 Q2-27 Q3-27 Q4-27
Task Name Finish J F M A M J J A S O N D J F M A M J J A S O N D MCSP
90% Workshop Mar 24th
4217 Public Hearing Notice Mar 9th
Draft Contract Delivery Mar 12th
City Council Presentation Mar 24th
City Review & Approval Mar/Apr-26
Contract Award May-26
Construction 15 mos
Construction Kick Off May
Incentive Applications Jun- 26
Design Jun- 26
Construction July- 26
Commissioning May- 27
Post Install & M&V Jun- 27
Closeout & Training July- 27
Final Acceptance Aug- 27
Southland Industries ©2025 All rights reserved. 8
Implementation Performance
Next Steps
Oct-March
Southland
conducted
site visits to
develop an
energy
project for
the City
June 2026-
August 2027
Planning,
installation,
project
management
of turnkey,
design-build
project
August 2027
Energy saving,
measurement
verification,
operations
and maintenance,
including training
of staff, submit
incentive
application
Notice to
Proceed
Contract Approvals
Review
City Council
Presentation
IGA
Development
April 14th
Southland
presents the
project
scope, costs,
savings, and
financing
structure to
City Council
March/April April May 2026
Finalize project
agreements,
scope
documentation,
and
commercial
terms between
the City and
Southland
Obtain
required City
and internal
approvals to
proceed with
project
implementation
City issues
formal
authorization
for Southland
to begin project
implementation
April/May
City Obtains
financing for
project funding
Financing
Southland Industries ©2025 All rights reserved.

Thank you
Michael May
Senior Account Executive
Southland Industries
[email protected]
Maria Osborne
Project Developer
Southland Industries
[email protected]
Southland Industries ©2025 All rights reserved. 10
Supporting Slides
Southland Industries ©2025 All rights reserved. 11
ECMs 1&2: HVAC & Controls
# of Units
connected to
control system
# of Units to be
Replaced Building Total Tons
City Hall 23 5 5
City Services 10 2 2
Police & Fire 16.5 3 3
Wellness Center - - 4
Museum 8 3 3
Senior Center 15 4 4
Library 27 3 0
WWTP 6 2 2
Total 89 23 24
• Southland will replace 23 aging HVAC units across 8 municipal buildings. • These units will be place on the Pelican Control system and can be monitored and adjusted from a single front end.
• Newer HVAC units at the Wellness Center will not but replaced but will be added to the citywide control system.

Total Systems Replaced: 15
Southland Industries ©2025 All rights reserved. 12
ECM 3: LED Lighting
• 600+ fixtures across 10 buildings were audited
• Over 50% are already LED
• ~10% are TLED — we will replace
• The remaining 40% are other LED (fixtures, screw-in,
plug-in lamps)
• New ceiling tiles in the finance office and city council chamber
Open finance office ceiling plan Open finance office
Southland Industries ©2025 All rights reserved. 13
ECM 4: Solar PV
Existing System:
• The existing system at the Wellness Center is not reporting production • Inspection of the system indicated that all components are functioning properly • System will be connected to a new monitoring system so it is visible in the same dashboard as the new systems New Systems:
• The Police/Fire Department is a prime location for new solar array. • Roof is new within the last two years, and flat and free of obstructions • A second system will installed at the Wellness Center which has a high enough usage to support a much larger system. • The system at the Wellness Center is a 75kW new shade structure in the field south of the building. Programing can be conducted in the shade beneath the structure.

New Wellness Center System
New Police Department System
Southland Industries ©2025 All rights reserved. 14
ECM 5: Well 15
• Pump control failures originate from the Schneider
electrical enclosure (NEMA 3R)
• Modifying the enclosure would void the NEMA 3R
rating
• City staff currently must clean the enclosure, clear
ducting, and replace fans 1-2 times per year
• A window unit and makeshift plywood lean-to were
added on site in an attempt to improve cooling
• Root causes:
• Insufficient cooling
• Dust/debris infiltration due to limited filtration/sealing Solution:
• Replace with a NEMA 4 enclosure – fully sealed, no
dust or debris ingress
• New drive will include a bypass so if the drive fails the pump and well can stay operational
Southland Industries ©2025 All rights reserved. 15
ECM 6: Window Replacement
• Replace 93 existing windows with high-performance insulated glazing systems to improve thermal performance and occupant comfort
• New glazing to utilize LoE-270 low-emissivity coating to reduce solar heat gain while maintaining natural daylight
• Window assemblies to be selected for durability, energy efficiency, and compatibility with existing building openings
• Installation to include proper sealing, flashing, and weatherproofing to ensure long-term performance and water intrusion protection
LoĒ2-272 Glass Specs: Window Area (sf) Window
Count Building
City Services 13 168
City Hall 63 995
Public Safety 17 312
Total 93 1,475
Southland Industries ©2025 All rights reserved. 16
ECM 7: Roofing
• Full tear-off and replacement of the roof on the Lindsay Senior Center. • Replacement will address deferred maintenance and reduce ongoing repair needs. • New roofing systems will help protect building interiors and infrastructure from water intrusion. • Completing this work as part of the overall project minimizes disruption and construction mobilization costs.

Southland Industries ©2025 All rights reserved. 17
ECM Summary Table – Option 1: Recommended Project
Lifetime Savings Average Useful
Life ECM Description Project Price Est. Incentives ECM #  1 HVAC Replacements $888,665 20 $738,500
 2 Controls Upgrades $459,346 15 $464,020
 3 LED Lighting and Controls $690,336 25 $674,090
 4 Solar PV (Police Roof, Wellness Shade Structure) $1,426,986 $554,020 25 $986,460  5 Well 15 Pump Drive Replacement $263,744 15 $93,790
 6 Window Replacement $372,015 30 $159,507
 7 Roofing $184,289 30 - Total $4,285,381 $554,020 23 $3,116,367

STAFF REPORT
TO: Lindsay City Council
MEETING DATE: May 12, 2026
DEPARTMENT: Finance
FROM: Soledad Ruiz-Nunez
Agenda Title: Acceptance of the City of Lindsay FY 2023–24 Annual Financial Audit, Single Audit, and Auditor Communication Letter

ACTION & RECOMMENDATION
Staff recommends that the City Council:

1. Receive and file the City of Lindsay’s audited Financial Statements for the fiscal year ending June 30, 2024.

2. Receive and file the Single Audit Report for FY 2023–24.

3. Receive and file the Audit Communication Letter (Required Communications with Governance).

BACKGROUND | ANALYSIS
The City is required to complete an Audit of its Finances Annually and a Single Audit if the City spends Federal Funds over the threshold. The Single Audit threshold for Fiscal Year 2023-2024 was $750,000.

The Director of Finance and City Auditors changed abruptly and therefore the City fell behind in completing the Audits in a timely basis the last couple of years. In July the City hired a new Director of Finance, and in August the City signed a contract with Price Paige & Company as the new City Auditors.

The Auditors from Price Paige & Company Audit Areas of Emphasis for Fiscal Year 2023-2024:
• Opening balances
• Cash and investments
• Revenues and receivables
• Expenses and accounts payable
• Capital Assets
• Net pension liability and Post-Employment Benefit Liability • Single Audit compliance with major Federal programs
THE SINGLE AUDIT INCLUDES THE FINANCIAL STATEMENT FINDINGS FOR FISCAL YEAR 2023-2024:

Finding 2024-001 – Inadequate Segregation of Duties, Safeguarding of Assets, Monitoring, and Access Controls (Material Weakness)
Condition: During our audit, we identified multiple deficiencies in the design and implementation of internal controls over cash receipts, disbursements, payroll allocations, monitoring controls, and system access. The more significant matters noted included the following:
• Personnel with access to unused checks and physical checks also had the ability to add or modify vendors in the master vendor file.
• Changes to the master vendor file were not subject to documented independent review or periodic monitoring.
• Deposits and cash maintained in the safe, as well as unused prenumbered checks, were accessible through an unsecured key available to finance department personnel.

Item #: 15.1
Action Items
• The daily cash receipting process did not include clearly identifiable documentation evidencing independent verification or double counting of cash receipts, and compensating controls were not clearly documented where staffing limitations prevented full segregation of duties. • Payroll allocations among funds and functions were not supported by documented authorizations, time studies, or other support for the basis used.
• Management did not receive meaningful budget-to-actual information for departments to monitor activity and identify unusual or inconsistent results.
• User access rights within the City’s CentralSquare system appeared overly broad, with numerous users having system administrator-level access.

Finding 2024-002 – Inadequate Controls Over Year-End Closing and Financial Reporting (Material Weakness) Condition: During the audit, we proposed numerous adjustments indicating the City’s year-end closing process and financial reporting controls were not sufficient to timely detect and correct misstatements in the accounting records and draft financial statements. In total, 17 audit adjustments were proposed, with aggregate gross debits and credits of approximately $4.780 million. The adjustments affected multiple significant balances and disclosures, including revenues, deferred inflows, deferred revenues, receivables, capital assets, leases, SBITAs, debt-related balances, investments, OPEB, and opening balances. The more significant adjustments included the following:
• Approximately $2,232,000 related to prior period revenue recognition and deferred revenue balances. • Approximately $741,000 to restate opening balances related to a lease previously recorded in the Sewer Fund.
• Approximately $542,000 related to capital assets, infrastructure, and related prior period/contribution corrections.
• Approximately $253,000 in combined lease receivable and deferred inflow adjustments. • Approximately $241,000 to adjust opening fund balance related to Prop 68 grant activity. • Approximately $194,000 to correct a double-posted utility billing entry affecting receivables and revenues. • Approximately $166,000 related to a prior period adjustment for workers’ compensation. •

ATTACHMENTS

1. Audit Communication Letter

2. Single Audit Report for the Year Ended June 30, 2024

3. Financial Statements for the Year Ended June 30, 2024 Reviewed/Approved: ______
April 30, 2026
To the Honorable Mayor and
Members of the City Council
City of Lindsay, 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 Lindsay, California (the City) 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, if applicable, Government Auditing Standards and the Uniform Guidance), as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our engagement letter previously provided to you. 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 the City are described in Note 1 to the financial statements. As described in Note 1 to the financial statements. GASB Statement No. 100, Accounting Changes and Error Corrections was implemented during 2024. As a result of implementing this statement, the city reported a restatement of beginning balances, as further described in Note

14. We noted no transactions entered into by the 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’s estimate of the net pension liability and related deferrals is based on actuarial valuations.

We evaluated the methods, assumptions, and data used to develop the liability and related deferrals in determining that it is reasonable in relation to the financial statements taken as a whole.

Other postemployment benefit obligations are determined using terms of various healthcare plans offered, together with relevant actuarial assumptions and healthcare cost trend rates, projected annual rates and discount rates. We evaluated the key factors and assumptions used to develop the other postretirement benefit obligation in determining that it is reasonable in relation to the financial statements taken as a whole.

Management’s estimate of depreciation is based on historic costs. We evaluated the methods, assumptions, and data used to develop the allowance for doubtful accounts in determining that it is reasonable in relation to the financial statements taken as a whole.

Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users.

The most sensitive disclosures affecting the financial statements were:

The disclosure of Restatement of Beginning Fund Balance/Net Position in Note 14 to the financial statements; the City identified errors and/or adjustments affecting beginning balances of certain funds and government-wide accounts.

The disclosure of Financial Condition of Certain Enterprise Funds in Note 15 to the financial statements provides information regarding the City’s funds which have liabilities that exceed their assets resulting in a deficit fund balance.

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

Difficulties Encountered in Performing the Audit
During the audit, we encountered difficulties related to the completeness and accuracy of the City’s year-end close process and supporting financial statement balances and activity. Several account balances and related supporting schedules were not fully reconciled, complete, or ready for audit at the time they were provided, which resulted in additional audit procedures, follow-up requests, and various audit adjustments necessary to properly present the financial statements. These matters included adjustments and corrections related to financial statement balances, activity, classifications, and related reporting matters, as further described in Findings 2024-001 and 2024-002.

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. The attached “Uncorrected Audit Differences” schedule summarizes uncorrected misstatements of the financial statements.

Management has determined that their effects are immaterial, both individually and in the aggregate, to the financial statements taken as a whole. The uncorrected misstatements or the matters underlying them could potentially cause future period financial statements to be materially misstated, even though, in our judgment, such uncorrected misstatements are immaterial to the financial statements under audit. Management has corrected all such misstatements.

In addition, the adjustments noted in the “Corrected Material Audit Adjustments” attachment represent the material misstatements detected as a result of audit procedures that were corrected by management.

Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, 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 our audit.

Management Representations
We have requested certain representations from management that are included in the management representation letter.

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 the City’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.

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

In our audit engagement letter previously provided to you, we communicated the following significant risks of material misstatement (significant risks) as part of our audit planning:
 Management override of controls
 Improper revenue recognition due to fraud
During the course of the audit, we identified an additional significant risk:
 Utility billing revenues are inaccurate or improperly cutoff due to manual postings between utility billing and general ledger software
This risk was addressed within our audit procedures and we have no findings to report related to this risk.

Other Matters
We applied certain limited procedures to the Requited Supplementary Information as listed in the table of contents, 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 the combining and individual nonmajor fund schedules and other 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 and is not intended to be, and should not be, used by anyone other than these specified parties.

Very truly yours,
Client: CITY OF LINDSAY
Engagement: 06-30-2024 AuditCurrent Period: 06/30/2024Workpaper: Attachment: Uncorrected Audit Differences (PDF) Account Description Misstatement Workpaper Reference Debit Credit Net Income Effect
PJE01
Known Misstatement O100
To correct the understatement of SBITA liability and related right-of-use asset.101-160190 Subscription-based Information Technology Arrangements 145,940.00 0.00 101-200190
SUBSCRIPTION-BASED INFORMATION TECHNOLOGY ARRANGMENT LIABILITY - LT (PPC) 0.00 145,940.00 Total 145,940.00 145,940.00 0.00 PJE02
Known Misstatement O100
To correct improperly capitalized amounts related to SBITA activity. 101-4110-064000 CAPITAL OUTLAY - EQUIPMNT 33,447.00 0.00 101-160190 Subscription-based Information Technology
Arrangements 0.00 33,447.00
Total 33,447.00 33,447.00 (33,447.00) GRAND TOTAL 179,387.00 179,387.00 (33,447.00) Client: CITY OF LINDSAY
Engagement: 06-30-2024 AuditCurrent Period: 06/30/2024Workpaper: Attachment: Corrected Material Audit Adjustments (PDF)Account Description Workpaper Reference Debit Credit Net Income Effect
AJE01 N200To adjust opening fund balance460-490030 FUND BALANCE 240,888.00 0.00 460-369300 GRANT FUNDS RECEIVED (PROP 68) Kacu Park 0.00 240,888.00 Total 240,888.00 240,888.00 240,888.00 AJE04 M110To amortize DIORs related to the 2015 Bond refunding. 660-200211 DEFERRED INFLOW 74,446.00 0.00 660-047001 DEBT INTEREST EXPENSE 0.00 74,446.00 Total 74,446.00 74,446.00 74,446.00 AJE07 K150To correct CJE07 (CAJ6).552-160170 INFRASTRUCTURE 183,893.00 0.00 553-160170 INFRASTRUCTURE 149,840.00 0.00 306-064002 CAP OULTLAY/IMPROVEMENT 24,810.79 0.00 552-390200 Capital Contributions (received) 0.00 24,810.79 552-390200 Capital Contributions (received) 0.00 183,465.69 600-4552-064000 CAPITAL OUTLAY - EQUIPMNT 183,465.69 0.00 552-490031 PRIOR PERIOD ADJUSTMENT (PPC CREATED) 0.00 183,893.00 553-490031 Prior Period Adjustment (PPC Created) 0.00 149,840.00 Total 542,009.48 542,009.48 0.00 AJE09 K145To post prior period adjustment for revenue recognition.. 306-200208 DEFERRED REVENUES 1,941,815.08 0.00 306-490031 Restatement (Prior period adjustment - PPC Created) 0.00 2,231,587.11 306-300107 AMERICAN RESCUE PLAN ACT 289,772.03 0.00 Total 2,231,587.11 2,231,587.11 (289,772.03)AJE10 K155To post PPA for workers compensation liability. 101-200510 WORK COMP PREMIUM 80,877.30 0.00 101-490031 FUND BALANCE - RESTATEMENT (PPC CREATED) 0.00 166,151.00 101-4110-015006 WORKER'S COMPENSATION 85,273.70 0.00 Total 166,151.00 166,151.00 (85,273.70) Client: CITY OF LINDSAY
Engagement: 06-30-2024 AuditCurrent Period: 06/30/2024Workpaper: Attachment: Corrected Material Audit Adjustments (PDF)Account Description Workpaper Reference Debit Credit Net Income Effect
AJE12 D603To adjust the Omni Wellness lease receivable for the CY400-345050 LEASE/RENT RECEIPTS 104,704.41 0.00 400-150170 LEASE RECEIVABLE 0.00 69,078.76 400-360110 EARNED BANK INTEREST 0.00 35,625.65 400-292100 DEFERRED INFLOW-LEASE 72,911.40 0.00 400-345050 LEASE/RENT RECEIPTS 0.00 72,911.40 Total 177,615.81 177,615.81 3,832.64 AJE15 RE501To correct double posted entry from UB system. 101-309090 UTILITY USER TAX 0.00 4,498.78 101-120122 A/R - UTILITY 4,498.78 0.00 200-312030 STREET IMPROVEMNT PROGRAM 15,472.28 0.00 200-120122 A/R - UTILITY 0.00 15,472.28 552-120122 A/R - UTILITY 0.00 109,697.48 552-348010 WATER SERVICE CHARGES 109,697.48 0.00 552-348010 WATER SERVICE CHARGES 0.00 3,391.82 552-120151 PAGE/MOORE TRACT A/R 3,391.82 0.00 553-348050 SEWER SERVICE CHARGES 0.00 41,959.13 553-120122 A/R - UTILITY 41,959.13 0.00 554-120122 A/R - UTILITY 0.00 17,506.78 554-348110 SPECIAL REFUSE PICKUP 17,506.78 0.00 841-343010 STREET,SIDEWALK,CURB REPR 0.00 1,145.80 841-120124 ADVANCES-CURB & GUTTER 1,145.80 0.00 Total 193,672.07 193,672.07 (91,681.01)AJE16To restate opening balances related to the lease liability in the Sewer fund (Brower Lease)556-160190 RIGHTTO USE LEASED ASSETS 0.00 704,343.00 556-160191 ACCUM AMORIT-ROU ASSETS 37,152.00 0.00 556-220202 LEASE LIABILITY 685,541.00 0.00 556-490031 Restatement - Prior Period (PPC Created) 0.00 18,350.00 556-4556-34001 AMORTIZATION 0.00 18,576.08 556-160191 ACCUM AMORIT-ROU ASSETS 18,576.08 0.00 Total 741,269.08 741,269.08 18,576.08 City of Lindsay | CA
Single Audit Report
For the Year Ended June 30, 2024
CITY OF LINDSAY |FOR THE YEAR ENDED JUNE 30, 2024
Single Audit Report

TABLE OF CONTENTS
PAGE
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 ................................................................ 1 Independent Auditor’s Report on Compliance for Each Major Program and on Internal Control Over Compliance Required by the Uniform Guidance ..................................................................... 3 Schedule of Expenditures of Federal Awards ....................................................................................................................... 6 Notes to the Schedule of Expenditures of Federal Awards .................................................................................................. 7 Schedule of Findings and Questioned Costs ........................................................................................................................ 8 Summary Schedule of Prior Audit Findings ........................................................................................................................ 12 Corrective Action Plan ........................................................................................................................................................ 16 1 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
Members of the City Council
City of Lindsay, 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 the City of Lindsay, California (the City), as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements and have issued our report thereon dated April 30, 2026.

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 and therefore, material weaknesses or significant deficiencies may exist that were not identified. We identified certain deficiencies in internal control, described in the accompanying schedule of findings and questioned costs as items 2024- 001 and 2024-002 that we consider to be material weaknesses. 2 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.

City of Lindsay, California’s Response to Findings
Government Auditing Standards requires the auditor to perform limited procedures on the City’s response to the findings identified in our audit and described in the accompanying schedule of findings and questioned costs. The City’s response was not subjected to the other auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on the response.

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.

Clovis, California
April 30, 2026
3 INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE

FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL

OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE
To the Honorable Mayor and
Members of the City Council
City of Lindsay, California
Report on Compliance for Each Major Federal Program
Opinion on Each Major Federal Program
We have audited City of Lindsay, California’s (the City) compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on each of the City’s major federal programs for the year ended June 30, 2024. The City’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs.

In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2024.

Basis for Opinion on Each Major Federal Program
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).

Our responsibilities under those standards and the Uniform Guidance are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report.

We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with 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 opinion on compliance for each major federal program. Our audit does not provide a legal determination of the City’s compliance with the compliance requirements referred to above.

Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to the City’s federal programs. 4 Auditor’s Responsibilities for the Audit of Compliance Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City’s compliance based on our audit. 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, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the City’s compliance with the requirements of each major federal program as a whole.

In performing an audit in accordance with generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance, we:
 Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material noncompliance, 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 City’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances.  Obtain an understanding of the City’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control over compliance. Accordingly, no such opinion is expressed.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit.

Report on Internal Control over Compliance
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

Our consideration of internal control over compliance was for the limited purpose described in the Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance.

Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified.

Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed.

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.
5 Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance 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, as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise City’s basic financial statements. We issued our report thereon dated April 30, 2026, which contained unmodified opinions on those financial statements. Our audit was performed for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the 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 schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole.

Clovis, California
April 30, 2026
CITY OF LINDSAY | FOR THE YEAR ENDED JUNE 30, 2024
Schedule of Expenditures of Federal Awards
The accompanying notes are an integral part of this statement. 6 Assistance Pass-Through
Listing Grantor's Federal Passed Through
Number Number Expenditures to Subrecipients
U.S. DEPARTMENT OF HOMELAND SECURITY
Pass-through State of CA - California Office of Emergency Services:

FEMA Emergency Management Performance Grants 97.042 FEMA-4482-PW-01588 (0) 27,989 $ - $ Total U.S. Department of Homeland Security - 27,989
U.S. DEPARTMENT OF THE TREASURY
Pass-through State - Coronavirus Fiscal Recovery Funds:

Coronavirus State and Local Fiscal Recovery Funds
COVID-19 American Rescue Plan Act 21.027 N/A - 2,614,920 Total U.S. Department of the Treasury - 2,614,920
TOTAL EXPENDITURES OF FEDERAL AWARDS $ - 2,642,909 $
Federal Grantor/Pass-Through Grantor/Program Title
CITY OF LINDSAY | FOR THE YEAR ENDED JUNE 30, 2024
Notes to the Schedule of Expenditures of Federal Awards 7 NOTE 1 – GENERAL
The accompanying Schedule of Expenditures of Federal Awards (SEFA) presents the activity of all federal award programs of the City of Lindsay (the City). Federal awards received directly from federal agencies, as well as federal awards passed through other government agencies are included in the schedule. The information in this SEFA is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).

NOTE 2 – BASIS OF ACCOUNTING
The accompanying SEFA is presented using the modified accrual basis of accounting, which is described in Note 1 of the City’s basic financial statements.

NOTE 3 – RELATIONSHIP TO BASIC FINANCIAL STATEMENTS
Federal award expenditures agree or can be reconciled with the amounts reported in the City’s basic financial statements.

NOTE 4 – INDIRECT COST RATE
The City has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance.

CITY OF LINDSAY | FOR THE YEAR ENDED JUNE 30, 2024
Schedule of Findings and Questioned Costs
8 SECTION I – SUMMARY OF AUDITOR’S RESULTS

FINANCIAL STATEMENTS
Type of auditor's report issued:

Internal control over financial reporting:

Material weaknesses identified? X Yes No
Significant deficiencies identified -
not considered to be material weaknesses? Yes X None reported Noncompliance material to financial statements noted? Yes X No

FEDERAL AWARDS
Internal control over major programs:

Material weaknesses identified? Yes X No
Significant deficiencies identified -
not considered to be material weaknesses? Yes X None reported Type of auditor's report issued on compliance for
major programs:

Any audit findings disclosed that are required
to be reported in accordance with
2 CFR 200.516(a)? Yes X No
IDENTIFICATION OF MAJOR PROGRAMS:

Assistance Listing Number(s)

21.027
Dollar threshold used to distinguish
between Type A and Type B programs:

Auditee qualified as low-risk auditee? Yes X No
$750,000
Unmodified
Unmodified
Name of Federal Program or Cluster
Coronavirus State and Local Fiscal Recovery
Funds
CITY OF LINDSAY | FOR THE YEAR ENDED JUNE 30, 2024
Schedule of Findings and Questioned Costs
(Continued)
9 SECTION II – FINANCIAL STATEMENT FINDINGS
Finding 2024-001 – Inadequate Segregation of Duties, Safeguarding of Assets, Monitoring, and Access Controls (Material Weakness)
Condition: During our audit, we identified multiple deficiencies in the design and implementation of internal controls over cash receipts, disbursements, payroll allocations, monitoring controls, and system access. The more significant matters noted included the following:
 Personnel with access to unused checks and physical checks also had the ability to add or modify vendors in the master vendor file.
 Changes to the master vendor file were not subject to documented independent review or periodic monitoring.  Deposits and cash maintained in the safe, as well as unused prenumbered checks, were accessible through an unsecured key available to finance department personnel.  The daily cash receipting process did not include clearly identifiable documentation evidencing independent verification or double counting of cash receipts, and compensating controls were not clearly documented where staffing limitations prevented full segregation of duties.  Payroll allocations among funds and functions were not supported by documented authorizations, time studies, or other support for the basis used.
 Management did not receive meaningful budget-to-actual information for departments to monitor activity and identify unusual or inconsistent results.
 User access rights within the City’s CentralSquare system appeared overly broad, with numerous users having system administrator-level access.

Criteria: A properly designed system of internal control should provide for adequate segregation of incompatible duties, safeguarding of cash and other assets, restriction of system access based on job responsibilities, documented review of key changes and transactions, and meaningful monitoring controls over financial activity. Where staffing limitations prevent ideal segregation of duties, management should implement effective compensating controls, including documented supervisory review and oversight.

Cause: These deficiencies appear to result from limited staffing, insufficiently designed review and monitoring procedures, and a lack of formalized compensating controls in areas where full segregation of duties is not feasible.

Effect: The absence of adequate segregation of duties, safeguarding controls, monitoring procedures, and access restrictions increases the risk that unauthorized or fictitious vendors could be created, improper disbursements could be processed, cash receipts or deposits could be lost or misappropriated, payroll costs could be allocated improperly, and errors or irregularities could occur and not be prevented, or detected and corrected, on a timely basis. Because these deficiencies affect multiple transaction cycles and core control activities, they collectively represent a material weakness in internal control.

Recommendation: The City should strengthen internal controls by segregating incompatible duties considering practicality and implementing documented compensating controls where staffing limitations exist. At a minimum, the City should restrict access to checks, deposits, and vendor master file maintenance; require documented independent review of vendor changes and cash receipting activity; improve physical safeguarding over cash and unused checks; document the basis for payroll allocations; provide meaningful budget-to-actual reports to department management; and review and reduce excessive system access within CentralSquare.

Management’s Response: See Corrective Action Plan.

CITY OF LINDSAY | FOR THE YEAR ENDED JUNE 30, 2024
Schedule of Findings and Questioned Costs
(Continued)
10 SECTION II – FINANCIAL STATEMENT FINDINGS (Continued) Finding 2024-002 – Inadequate Controls Over Year-End Closing and Financial Reporting (Material Weakness) Condition: During the audit, we proposed numerous adjustments indicating the City’s year-end closing process and financial reporting controls were not sufficient to timely detect and correct misstatements in the accounting records and draft financial statements. In total, 17 audit adjustments were proposed, with aggregate gross debits and credits of approximately $4.780 million. The adjustments affected multiple significant balances and disclosures, including revenues, deferred inflows, deferred revenues, receivables, capital assets, leases, SBITAs, debt-related balances, investments, OPEB, and opening balances.

The more significant adjustments included the following:
 approximately $2,232,000 related to prior period revenue recognition and deferred revenue balances.  approximately $741,000 to restate opening balances related to a lease previously recorded in the Sewer Fund.  approximately $542,000 related to capital assets, infrastructure, and related prior period/contribution corrections.
 approximately $253,000 in combined lease receivable and deferred inflow adjustments.  approximately $241,000 to adjust opening fund balance related to Prop 68 grant activity.  approximately $194,000 to correct a double-posted utility billing entry affecting receivables and revenues; and  approximately $166,000 related to a prior period adjustment for workers’ compensation.

Criteria: Management is responsible for establishing and maintaining internal control over financial reporting sufficient to provide reasonable assurance that transactions are properly recorded, balances are accurately rolled forward, complex accounting areas are evaluated, and financial statements are prepared in accordance with generally accepted accounting principles. Controls should include an effective year-end closing process, preparation and review of account analyses, review of significant journal entries, and oversight over complex accounting areas such as capital assets, leases, SBITAs, debt-related balances, actuarial amounts, and revenue recognition.

Cause: The City’s review controls over the year-end close and financial reporting process were not sufficient in certain areas to identify and resolve misstatements prior to the audit. Based on the adjustments identified, this appears to be related to limited internal review capacity, reliance on manual processes, and the technical complexity of certain accounting matters.

Effect: As a result, material misstatements occurred in the accounting records were not detected and corrected on a timely basis by the City. The number, nature, and magnitude of the adjustments required indicate that the City’s controls over year-end closing and financial reporting were not operating at a level sufficient to prevent, or detect and correct, material misstatements across multiple significant account balances and disclosures. Collectively, these matters represent a material weakness in internal control over financial reporting.

Recommendation: The City should strengthen its year-end closing and financial reporting controls by implementing a more formalized closing process that includes documented reconciliations, rollforwards, account analyses, and supervisory review of significant balances and proposed entries. Particular emphasis should be placed on review of opening balances and prior period adjustments, revenue recognition and deferred balances, capital asset activity, lease and SBITA accounting, utility billing to general ledger reconciliations, debt-related accounts, actuarial entries, and other complex GAAP areas.

Management’s Response: See Corrective Action Plan.

CITY OF LINDSAY | FOR THE YEAR ENDED JUNE 30, 2024
Schedule of Findings and Questioned Costs
(Continued)
11 SECTION III – FEDERAL AWARD FINDINGS
None reported.

CITY OF LINDSAY | FOR THE YEAR ENDED JUNE 30, 2024
Summary Schedule of Prior Audit Findings
12 FINANCIAL STATEMENT FINDINGS
Finding 2023-001 – Internal Controls Over Financial Reporting/Accounting Close and Accuracy in Financial Reporting:

Due to limited staffing levels and the financial difficulties faced by the City during our audit period ended June 30, 2023, internal controls were either lacking, were not designed properly, and mitigating controls were not sufficient to effectively identify misstatements due from error.

In addition, the City did not have in place during our audit period a systematic method for ensuring that timely and complete year end closing procedures were in operation before presenting the trial balance to auditors, resulting in a number of journal entries being presented to correct or to reclassify balances in financial statements that should normally be captured through the closing process. Those adjustments have been reported and posted by the City.

Effect: Delays in processing transactions timely and closing accounting periods can create accounting errors that could go undetected and may lead the financial statements to be materially misstated and create further delays in the release of audited financial statements, as well as all for possible irregularities including fraud to exit and continue without notice.

Recommendation: We understand that the City has established year-end closing procedures subsequent to the period of our audit. However, we recommend that the City review those year-end closing procedures to ensure that it adequately addresses and includes an evaluation of the areas that have caused the accounting errors above and the need for correcting journal entries after the year end closing. These procedures should include timely review and approval by management of account reconciliations, sub-ledger transactions, cutoff review for account balances at a fund and overall governmentwide level, and revenue and expenditures/expense review. Revenue and expenditures/expenses should be compared to the prior year or prior year trends and to the budget.

Status: Not implemented, see finding 2024-001.

Finding 2023-002 – Deficit Unassigned Fund Balance in General Fund:

During the review of the trial balance, we noted that the general fund had a deficit unassigned fund balance of $1,355,375 at June 30, 2023.

Effect: A material deficit amount in unassigned fund balance is an indication that the City has had significant deficit spending in its general operations. The general fund is the operating fund of the City. The City will not have working capital to operate if it continues to have operating deficits.

Recommendation: We recommend that the City develop a management action plan to eliminate or reduce the deficit unassigned fund balances and deficit spending.

Status: Not repeated. The prior-year finding was reported as a material weakness over financial reporting. Based on current-year audit procedures, the auditor did not identify a deficiency, or combination of deficiencies, that rises to the level of a material weakness. Accordingly, the finding is not repeated in the current year.

CITY OF LINDSAY | FOR THE YEAR ENDED JUNE 30, 2024
Summary Schedule of Prior Audit Findings
(Continued)
13 FINANCIAL STATEMENT FINDINGS (Continued)
Finding 2023-003 – California State Auditor Identified High Risk Issues:

During our review of the City’s control environment, we noted that California State Auditor issued an audit report on August 26, 2021, to discuss the City’s financial and operational risks. The City was identified as high risk because of its financial problems and management practices. The issues are as follows.

Lindsay’s Actions Raise Doubt About the Financial Stability of Its General Fund.  In improving its financial condition, the City violated State Law, exposing it to litigation  Lindsay has not ensured that its Street Improvement Program complies With State Law  Lindsay has found new sources of revenue in recent years, but these have not adequately improved its financial condition
 The City reduced some liabilities and expenditures, which partially improved its finances, but other financial problems remain
Lindsay Must Increase Its Efforts to Address Deficits in Its Enterprise Funds.  Deficits and inappropriate loan forgiveness led to negative balances in the City’s Enterprise Funds, limiting its ability to effectively operate its utilities
 Lindsay has not ensured that its service fees and utility rates sufficiently cover its costs Lindsay Must Improve Its Management Practices to Effectively Plan for Its Financial and Operational Needs.  The City’s lack of a long-term financial plan is hindering its efforts to achieve financial sustainability  Lindsay needs to address its rising employee retirement costs  Lindsay has not adequately planned for Public Safety training and equipment needs Effect: Without proper financial and operational practices, the City’s current practices could lead to misappropriation of funds and other fiscal irregularities.

Recommendation: We recommend that the City develop a management action plan to address the issues stated by the California State Auditor.

Status: Not repeated. The prior-year finding was reported as a material weakness over financial reporting. Based on current-year audit procedures, the auditor did not identify a deficiency, or combination of deficiencies, that rises to the level of a material weakness. Accordingly, the finding is not repeated in the current year.

CITY OF LINDSAY | FOR THE YEAR ENDED JUNE 30, 2024
Summary Schedule of Prior Audit Findings
(Continued)
14 FINANCIAL STATEMENT FINDINGS (Continued)
Finding 2023-004 – Lack of Fraud Prevention and Detection Policy (Code of Conduct):

During our audit, we noted that the City lacked formal policies and guidelines regarding fraud prevention and detection policy.

Effect: Without formal fraud prevention and detection policy, it could lead to misappropriation of funds and other fiscal irregularities.

Recommendation: We recommend that the City establish a more formal training program for all employees regarding fraud. New employees should be trained at the time of hiring about the entity’s code of conduct (and fraud policies). This training should explicitly cover expectations of all employees regarding (1) their duty to communicate certain matters; (2) a list of the types of matters, including actual or suspected fraud, to be communicated along with specific examples; and (3) information on how to communicate those matters. In addition to the training at the time of hiring, employees should receive refresher training periodically thereafter.

Status: Not repeated. The prior-year finding was reported as a material weakness over financial reporting. Based on current-year audit procedures, the auditor did not identify a deficiency, or combination of deficiencies, that rises to the level of a material weakness. Accordingly, the finding is not repeated in the current year.

Finding 2023-005 – Segregation of Duties For Cash Receipts at the Park and Recreation Department:

During our review of the City cash receipts process at the park and recreation department, we noted that the cash receipts were given to the department head only. The department head prepares and brings the deposits to the Finance department without proper documentation.

Effect: Without proper internal controls over cash receipts processes, there is an increased risk that collected cash is not handled properly, and there is an increased risk of misappropriation of funds.

Recommendation: We recommend that the City ensure there are sufficient controls to monitor cash receipts processing at the park and recreation department.

Status: Not implemented, see finding 2024-001.

Finding 2023-006 – Lack of Control Over Cash Receipts at all Cash Collection Locations:

During our review of the City cash receipts process, we noted that all locations issue paper receipts that are not logged properly per rules regarding the use of sequential paper receipts. In addition, building department and parks receipts are not reconciled with the City’s general ledger in any way.

Effect: Without proper internal controls over cash receipts processes, there is an increased risk that collected cash is not handled properly, and there is an increased risk of misappropriation of funds.

Recommendation: We recommend that the City implement procedures for the accounting department to obtain reports directly from each program and reconcile the amounts from these reports to the revenues posted in the City’s general ledger.

Status: Not implemented, see finding 2024-001.

CITY OF LINDSAY | FOR THE YEAR ENDED JUNE 30, 2024
Summary Schedule of Prior Audit Findings
(Continued)
15 FINANCIAL STATEMENT FINDINGS (Continued)
Finding 2023-007 – Adherence to Investment Policy:

During the audit, we noted that the City’s investment in negotiable certificates of deposit exceeded the maximum allowed percentage of portfolio set by the investment policy.

Effect: The purpose of the adoption of an established investment policy is to set forth the overall investment philosophy of the City as decided by its governing board. The policy should be guiding rule and it should be followed without exception.

Recommendation: We recommend that the Finance Department take steps to ensure the investment policy is to be followed as it is stated. An investment policy is a very effective means of protecting the assets of the City, and we suggest that a procedure be implemented to be certain that it is carried out.

Status: Corrected.

Finding 2023-008 – Inadequate Budgetary Controls:

Throughout the 2022-23 fiscal year, it does not appear that City management and City Council were provided meaningful financial information that included budget to actual reports generated from the general ledger accounting system. Also, it does not appear that mid-year budget reviews were completed during the fiscal year to determine what budget amendments may have been needed, if any.

Effect: The budget serves as a control mechanism over expenditures and is a vital tool for management to properly track and monitor the City’s financial progress compared to expectations established in a formal budget document. “Budget to Actual” comparisons should be reviewed by all management personnel and presented to City Council at least monthly to ensure financial targets are being met and to quickly identify where significant variances may occur.

Recommendation: We recommend the management continue with its detailed budget presentation and ensure continuous monitoring of the “Budget to Actuals” throughout the year, along with presentation to City Council at least monthly.

Status: Not implemented, see finding 2024-001.

FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
None reported.

CITY OF LINDSAY | FOR THE YEAR ENDED JUNE 30, 2024
Corrective Action Plan
16 City of Lindsay | CA
Financial Statements
For the Year Ended June 30, 2024
CITY OF LINDSAY | FOR THE YEAR ENDED JUNE 30, 2024
Financial Statements

TABLE OF CONTENTS
PAGE
Independent Auditor’s Report ............................................................................................................................................ 1 Basic Financial Statements:

Government-Wide Financial Statements:

Statement of Net Position ............................................................................................................................................ 6 Statement of Activities ................................................................................................................................................. 7 Financial Statements:

Governmental Funds:

Balance Sheet ......................................................................................................................................................... 9 Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Position ................................................................................................... 10 Statement of Revenues, Expenditures, and Changes in
Fund Balances .................................................................................................................................................... 11 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Government-Wide Statement of Activities ............................................ 12 Proprietary Funds:

Statement of Net Position .................................................................................................................................... 13 Statement of Revenues, Expenses and Changes in Net Position ......................................................................... 14 Statement of Cash Flows ...................................................................................................................................... 15 Fiduciary Funds:

Statement of Fiduciary Net Position .................................................................................................................... 16 Statement of Changes in Fiduciary Net Position .................................................................................................. 17 Notes to the Basic Financial Statements ............................................................................................................................ 19 CITY OF LINDSAY | FOR THE YEAR ENDED JUNE 30, 2024
Financial Statements
TABLE OF CONTENTS (Continued)
PAGE
Required Supplementary Information:

Pension Plans:

Schedule of the City’s Proportionate Share of the Net Pension Liability .................................................................... 61 Schedule of Pension Contributions ............................................................................................................................. 62 Schedule of Changes in Net OPEB Liability and Related Ratios ................................................................................... 63 Budgetary Comparison Schedules:

General Fund ............................................................................................................................................................... 64 Street Improvement Special Revenue Fund ................................................................................................................ 65 Local Transportation Special Revenue Fund ............................................................................................................... 66 Notes to the Budgetary Comparison Schedules .......................................................................................................... 67 Combining and Individual Fund Statements and Schedules:

Nonmajor Governmental Funds:

Combining Balance Sheet ............................................................................................................................................ 70 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ................................................... 71 1 INDEPENDENT AUDITOR’S REPORT
To the Honorable Mayor and
Members of the City Council
City of Lindsay, 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 Lindsay, California (the City), as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the 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.
2 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.

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
Accounting principles generally accepted in the United States of America require that the Schedule of the City’s Proportionate Share of the Net Pension Liability, Schedule of Pension Contributions, Schedule of Changes in the Net OPEB Liability and Related Ratios on pages 61 through 63, and budgetary comparison information on pages 64–67, 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.

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

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated April 30, 2026, 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.

Clovis, California
April 30, 2026
4 BASIC FINANCIAL STATEMENTS
5 GOVERNMENT-WIDE FINANCIAL STATEMENTS
CITY OF LINDSAY | JUNE 30, 2024
Statement of Net Position
The notes to the basic financial statements are an integral part of this statement. 6 Governmental Business-Type
Activities Activities Total
ASSETS
Current assets:

Cash and investments 11,650,646 $ 1,696,495 $ 13,347,141 $ Accounts receivable 358,203 529,678 887,881
Loans and notes receivable 49,737 - 49,737
Intergovernmental receivable 1,102,637 17,584 1,120,221 Interest receivable 55,775 6,854 62,629
Leases receivable - 902,855 902,855
Total current assets 13,216,998 $ 3,153,466 $ 16,370,464 $ Noncurrent assets:

Restricted cash and investments 816,681 - 816,681
Internal balances (3,510,955) 3,510,955 -
Capital assets:

Capital assets, net of accumulated depreciation 32,142,585 24,615,801 56,758,386 Total noncurrent assets 29,448,311 28,126,756 57,575,067 Total assets 42,665,309 31,280,222 73,945,531

DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows from pensions 3,893,457 1,080,920 4,974,377 Deferred outflows from OPEB 147,590 63,019 210,609
Total deferred outflows of resources 4,041,047 1,143,939 5,184,986

LIABILITIES
Current liabilities:

Accounts payable 443,054 254,562 697,616
Accrued wages 181,479 36,743 218,222
Accrued interest 13,853 137,718 151,571
Unearned revenues 400,925 - 400,925
Deposits payable 450 13,380 13,830
Subscription Liabilities 46,014 - 46,014
Compensated absences - current 147,751 39,531 187,282
Bonds and other long-term debt - current 478,521 328,741 807,262 Total current liabilities 1,712,047 810,675 2,522,722
Noncurrent liabilities:

Subscription Liabilities 141,464 - 141,464
Compensated absences 147,751 31,073 178,824
Bonds and other long-term debt 5,304,663 9,648,694 14,953,357 OPEB 1,056,644 451,165 1,507,809
Net pension liability 9,523,779 2,822,204 12,345,983
Total noncurrent liabilities 16,174,301 12,953,136 29,127,437 Total liabilities 17,886,348 13,763,811 31,650,159

DEFERRED INFLOWS OF RESOURCES
Leases - 836,949 836,949
OPEB related 689,621 294,453 984,074
Pension related 344,644 176,762 521,406
Total deferred inflows of resources 1,034,265 1,308,164 2,342,429

NET POSITION
Net investment in capital assets 30,789,041 14,638,366 45,427,407 Restricted for:

Streets and roads 8,184,594 - 8,184,594
Parks and recreation 138,195 - 138,195
Community development 83,237 - 83,237
Transit 7,459 - 7,459
Unrestricted (11,416,784) 2,713,820 (8,702,964)
Total net position 27,785,742 $ 17,352,186 $ 45,137,928 $ Primary Government
CITY OF LINDSAY | FOR THE YEAR ENDED JUNE 30, 2024
Statement of Activities
The notes to the basic financial statements are an integral part of this statement. 7 Net (Expense) Revenue
Program Revenues and Changes in Net Position
Operating Capital
Charges Grants and Grants and Governmental Business-Type Functions/Programs Expenses for Services Contributions Contributions Total Activities Activities Total Primary Government:Governmental activities:

General government 508,942 $ 542,578 $ 173,105 $ 143,891 $ 859,574 $ 350,632 $ - $ 350,632 $ Public safety 7,012,665 6,015 - 1,615,460 1,621,475 (5,391,190) - (5,391,190) Parks and recreation 339,923 103,713 - - 103,713 (236,210) - (236,210) Public works 1,006,273 186,718 - - 186,718 (819,555) - (819,555) Streets and roads 1,227,421 - 1,574,915 1,033,262 2,608,177 1,380,756 - 1,380,756 Community development 567,627 - - - - (567,627) - (567,627) Interest and fiscal charges 145,212 - - - - (145,212) - (145,212) Total governmental activities 10,808,063 839,024 1,748,020 2,792,613 5,379,657 (5,428,406) - (5,428,406) Business-Type activities:

Water 1,988,772 1,717,554 - 2,797 1,720,351 - (268,421) (268,421) Sewer 1,840,682 1,562,222 - 6,215 1,568,437 - (272,245) (272,245) Refuse 965,566 958,667 - - 958,667 - (6,899) (6,899)
Wellness Center 1,287,818 574,314 271,038 - 845,352 - (442,466) (442,466) Total business-type activities 6,082,838 4,812,757 271,038 9,012 5,092,807 - (990,031) (990,031) Total primary government 16,890,901 $ 5,651,781 $ 2,019,058 $ 2,801,625 $ 10,472,464 $ (5,428,406) (990,031) (6,418,437) General revenues and transfers:

Taxes:

Property taxes 408,607 - 408,607
Sales taxes 1,551,145 - 1,551,145
Measure O taxes 1,704,543 - 1,704,543Utility users' taxes 968,607 - 968,607 Other taxes 2,143,071 - 2,143,071
Use of money and property 519,193 147,375 666,568Miscellaneous 388,349 (9,505) 378,844Capital contributions (208,276) 208,276 -Transfers 833,411 (833,411) - Total general revenues and transfers 8,308,650 (487,265) 7,821,385 Change in net position 2,880,244 (1,477,296) 1,402,948Net position - beginning, as previously presented 27,017,228 18,569,224 45,586,452Restatement - error correction (2,111,730) 260,258 (1,851,472) Net position - beginning, as restated 24,905,498 18,829,482 43,734,980Net position - ending 27,785,742 $ 17,352,186 $ 45,137,928 $ 8 FUND FINANCIAL STATEMENTS
CITY OF LINDSAY | JUNE 30, 2024
Governmental Funds
Balance Sheet
The notes to the basic financial statements are an integral part of this statement. 9 Street Local Nonmajor
General Improvement Transportation Governmental
Fund Fund Fund Funds Total
ASSETS
Cash and investments 5,352,623 $ 855,645 $ 4,121,984 $ 1,320,394 $ 11,650,646 $ Restricted cash and investments 816,681 - - 816,681
Receivables:

Accounts and taxes 231,407 127,037 - (241) 358,203
Interest 17,417 10,468 20,493 7,397 55,775
Intergovernmental 871,780 3,772 139,847 87,238 1,102,637 Due from other funds 1,056,773 - - 1,056,773
Advances to other funds - 1,557,120 - 125,000 1,682,120 Loans and notes receivable - - - 49,737 49,737
Total assets 8,346,681 $ 2,554,042 $ 4,282,324 $ 1,589,525 $ 16,772,572 $

LIABILITIES
Accounts payable 389,693 $ - $ 51 $ 53,310 $ 443,054 $
Accrued wages 177,357 - 1,870 2,252 181,479
Unearned revenues 400,925 - - - 400,925
Deposits payable 450 - - - 450
Due to other funds - - - 53,743 53,743
Advances from other funds 6,196,105 - - - 6,196,105
Total liabilities 7,164,530 - 1,921 109,305 7,275,756

FUND BALANCES (DEFICITS)
Restricted
Streets and roads - 2,554,041 4,280,403 1,350,150 8,184,594 Parks and recreation - - - 138,195 138,195
Community development - - - 83,237 83,237
Transit - - - 7,459 7,459
Assigned - subsequent year budget deficit 1,692,877 - - - 1,692,877 Unassigned (510,726) - - (98,821) (609,547)
Total fund balances (deficits) 1,182,151 2,554,041 4,280,403 1,480,220 9,496,815 Total liabilities and fund balances (deficits) 8,346,681 $ 2,554,041 $ 4,282,324 $ 1,589,525 $ 16,772,571 $ Special Revenue Funds
CITY OF LINDSAY | FOR THE YEAR ENDED JUNE 30, 2024
Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Position The notes to the basic financial statements are an integral part of this statement. 10 Amounts reported for governmental activities in the Statement of Net Position are different because:

Total fund balances of governmental funds 9,496,815 $
Capital assets used in Governmental Activities are not current resources and therefore, are not reported in the Governmental Funds Balance Sheet.

Capital assets 63,304,780
Less: accumulated depreciation (31,162,195)
Long-term liabilities are not due in the current period and, therefore are not reported in the governmental funds.

Compensated absences (295,502)
Subscription payable (187,478)
Revenue bonds payable (525,000)
COPS (838,090)
Settlement payable (4,097,336)
Finance purchases (327,976)
Net pension liability (9,523,779)
Interest payable (13,853)
OPEB liability (1,056,644)
In governmental funds, bond discounts are recognized as other financing sources in the period they are incurred. In the government-wide statements bond discounts are amortized over the life of the debt. 5,218 Deferred outflows and inflows of resources relating to OPEB: In governmental funds deferred outflows and inflows of resources relating to OPEB are not reported because they are applicable to future periods. In the statement of net position deferred outflows and inflows of resources relating to OPEB are reported.

Deferred outflows of resources relating to OPEB 147,590 Deferred inflows of resources relating to OPEB (689,621) Deferred outflows and inflows of resources relating to pensions: In governmental funds deferred outflows and inflows of resources relating to pensions are not reported because they are applicable to future periods. In the statement of net position deferred outflows and inflows of resources relating to pensions are reported.

Deferred outflows of resources relating to pensions 3,893,457 Deferred inflows of resources relating to pensions (344,644) Net position of governmental activities 27,785,742 $
CITY OF LINDSAY | FOR THE YEAR ENDED JUNE 30, 2024
Governmental Funds
Statement of Revenues, Expenditures, and Changes in Fund Balances The notes to the basic financial statements are an integral part of this statement. 11 Street Local Nonmajor Total
Improvement Transportation Governmental Governmental
General Fund Fund Funds Funds

REVENUES
Property taxes 408,606 $ - $ - $ - $ 408,606 $
Sales taxes 1,551,145 - - - 1,551,145
Measure O taxes 1,704,543 - - - 1,704,543
Utility users' taxes 968,607 - - - 968,607
Other taxes 2,067,000 - - 76,071 2,143,071
Street improvement program - 975,951 - - 975,951
Intergovernmental 1,932,456 - 933,348 939,765 3,805,569 Fines and forfeitures 41,862 - - - 41,862
Licenses and permits 710,291 - - 5,850 716,141
Use of money and property 294,504 89,800 95,084 34,703 514,091 Charges for services 81,021 - - - 81,021
Other, donations, and reimbursements 381,746 - - 919 382,665 Total revenues 10,141,781 1,065,751 1,028,432 1,057,308 13,293,272

EXPENDITURES
Current:

General government 1,250,337 - - 96,142 1,346,479
Public Safety 6,144,475 - - - 6,144,475
Parks and Recreation 286,551 - - - 286,551
Public works 918,195 - - - 918,195
Streets and roads 522,784 - 153,820 349,414 1,026,018
Community development 327,187 - - - 327,187
Capital outlay 2,485,105 35,000 34,129 45,483 2,599,717 Debt service:

Principle retirement 366,097 49,861 93,663 - 509,621
Interest and fiscal charges 86,066 11,276 26,097 - 123,439 Total expenditures 12,386,797 96,137 307,709 491,039 13,281,682 Excess (deficiency) of revenues over
(under) expenditures (2,245,016) 969,614 720,723 566,269 11,590

OTHER FINANCING SOURCES (USES)
Proceeds from disposal of capital assets 10,788 - - - 10,788 Transfers in 2,374,017 - - - 2,374,017
Transfers out - (493,937) (656,056) (390,613) (1,540,606) Total other financing sources (uses) 2,384,805 (493,937) (656,056) (390,613) 844,199 Net change in fund balances 139,789 475,677 64,667 175,656 855,789 Fund balances (deficits) - beginning (1,355,376) 2,078,364 4,215,736 1,304,564 6,243,288 Restatement - error correction 2,397,738 - - - 2,397,738 Fund balances (deficits) - beginning, restated 1,042,362 2,078,364 4,215,736 1,304,564 8,641,026 Fund balances (deficits) - ending 1,182,151 $ 2,554,041 $ 4,280,403 $ 1,480,220 $ 9,496,815 $ Special Revenue Funds
CITY OF LINDSAY | FOR THE YEAR ENDED JUNE 30, 2024
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities The notes to the basic financial statements are an integral part of this statement. 12 Reconciliation of the change in fund balances – total governmental funds to the change in net position of governmental activities:

Net change in fund balances – total governmental funds 855,789 $ Capital outlay 3,913,918
Capital contribution (208,276)
Book value of disposals (32,318)
Depreciation /amortization (1,448,327)
2,224,997
537,203
25,291
2,429
(92,260)
39,041
(3,481)
(467,877)
(240,888)
Change in net position of governmental activities 2,880,244 $ Amortization of bond discounts is not an expense of the governmental funds but under the full accrual method is a component of interest expense.

In governmental funds pension costs are recognized when employer contributions are made. In the statement of activities, pension costs are recognized on the accrual basis. This fiscal year, the difference between accrual-basis pension costs and actual employer contributions was:

Some revenues reported in the statement of activities are not considered available to finance current expenditures and therefore are not reported as revenues in the governmental funds.

Governmental funds report capital outlays as expenditures. However in the statement of activities the cost of these assets is allocated over their estimated useful lives and reported as depreciation/amortization expense. The amount by which capital outlay exceeded depreciation/amortization in the current period as follows:

In governmental funds, repayments of long-term debt are reported as expenditures.

In the governmental-wide statements repayments of long-term debt are reported as reductions of liabilities.

In governmental funds proceeds from subscription liabilities are reported as other financing sources. In the government-wide statements, proceeds from subscription liabilities are reported as additions to long-term debt.

Interest is not accrued in the governmental funds. However, it is to be accrued in the statement of activities. This is the net change.

Other postemployment benefits reported in the governmental funds included cash payments made into the trust fund and payments on behalf of retirees. In the statement of activities, OPEB expense included the change in the net OPEB liability and related change in OPEB liability and related change in OPEB amounts for deferred outflows of resources and deferred inflows of resources.

In the statement of activities compensated absences are measured by the amounts earned during the fiscal year. In governmental funds however expenditures for these items are measured by the amount of financial resources used (essentially the amounts paid). This fiscal year the difference between compensated absences paid and compensated absences earned was:

CITY OF LINDSAY | JUNE 30, 2024
Proprietary Funds
Statement of Net Position
The notes to the basic financial statements are an integral part of this statement. 13 Enterprise Funds
Total
Water Sewer Refuse Wellness Enterprise
Fund Fund Fund Center Fund Funds
ASSETS
Current assets:

Cash and investments - $ 1,424,154 $ 272,341 $ - $ 1,696,495 $ Receivables:

Accounts and taxes 134,694 297,858 36,252 60,874 529,678 Interest 15 6,369 468 2 6,854
Intergovernmental 451 2,604 14,529 - 17,584
Leases - - - 902,855 902,855
Total current assets 135,160 1,730,985 323,590 963,731 3,153,466 Noncurrent assets:

Advances to other funds 1,770,597 2,341,466 401,922 - 4,513,985 Capital assets, net of accumulated depreciation 8,706,619 8,438,251 4,765 7,466,166 24,615,801 Total noncurrent assets 10,477,216 10,779,717 406,687 7,466,166 29,129,786 Total assets 10,612,376 12,510,702 730,277 8,429,897 32,283,252

DEFERRED OUTFLOWS OF RESOURCES
OPEB related 23,241 17,643 6,005 16,130 63,019
Pension related 494,468 199,973 157,284 229,195 1,080,920 Total deferred outflows of resources 517,709 217,616 163,289 245,325 1,143,939

LIABILITIES
Current liabilities:

Accounts payable 153,116 54,346 15,200 31,900 254,562
Accrued wages 11,517 10,825 3,914 10,487 36,743
Accrued interest 24,063 79,100 - 34,555 137,718
Deposits payable 12,980 - - 400 13,380
Due to other funds 476,736 - - 526,294 1,003,030
Compensated absences - current 16,386 10,839 2,181 10,125 39,531 Bonds and other long-term debt - current 65,450 205,376 - 57,915 328,741 Total current liabilities 760,248 360,486 21,295 671,676 1,813,705 Noncurrent liabilities:

Compensated absences 14,535 9,344 - 7,194 31,073
Bonds and other long-term debt 1,302,678 6,675,137 - 1,670,879 9,648,694 Other post employment benefits (OPEB) liability 166,389 126,309 42,991 115,476 451,165 Net pension liability 1,291,023 522,114 410,659 598,408 2,822,204 Total noncurrent liabilities 2,774,625 7,332,904 453,650 2,391,957 12,953,136 Total liabilities 3,534,873 7,693,390 474,945 3,063,633 14,766,841

DEFERRED INFLOWS OF RESOURCES
Leases - - - 836,949 836,949
OPEB related 108,594 82,436 28,058 75,365 294,453
Pension related 88,256 28,128 24,608 35,770 176,762
Total deferred inflows of resources 196,850 110,564 52,666 948,084 1,308,164

NET POSITION
Net investment in capital assets 7,338,491 1,557,738 4,765 5,737,372 14,638,366 Unrestricted 59,871 3,366,626 361,190 (1,073,867) 2,713,820 Total net position 7,398,362 $ 4,924,364 $ 365,955 $ 4,663,505 $ 17,352,186 $ CITY OF LINDSAY | FOR THE YEAR ENDED JUNE 30, 2024
Proprietary Funds
Statement of Revenues, Expenses and Changes in Net Position The notes to the basic financial statements are an integral part of this statement. 14 Enterprise Funds
Total
Water Sewer Refuse Wellness Enterprise
Fund Fund Fund Center Fund Funds
Operating revenues:

Charges for services 1,699,528 $ 1,562,222 $ 958,667 $ 337,070 $ 4,557,487 $ Intergovernmental - 6,215 - 285,000 291,215
Other operating revenues 31,389 - 920 202,291 234,600
Total operating revenues 1,730,917 1,568,437 959,587 824,361 5,083,302 Operating expenses:

Salaries and benefits 475,544 523,622 242,100 443,871 1,685,137 Maintenance and operations 1,106,432 699,873 721,921 574,461 3,102,687 Amortization and Depreciation 360,311 448,886 1,545 193,996 1,004,738 Total operating expenses 1,942,287 1,672,381 965,566 1,212,328 5,792,562 Operating income (loss) (211,370) (103,944) (5,979) (387,967) (709,260) Nonoperating revenues (expenses):

Investment income (loss) 69 69,449 10,319 49,538 129,375 Interest expense (46,485) (150,301) - (75,490) (272,276) Total nonoperating revenues (expenses) (46,416) (80,852) 10,319 (25,952) (142,901) Income (loss) before transfers and capital contributions (257,786) (184,796) 4,340 (413,919) (852,161) Transfers and capital contributions
Capital contributions 208,276 - - - 208,276
Transfer out (806,373) (13,519) (13,519) - (833,411)
Total transfers and capital contributions (598,097) (13,519) (13,519) - (625,135) Changes in net position (855,883) (198,315) (9,179) (413,919) (1,477,296) Net position (deficit) - beginning, as previously presented 7,972,047 5,025,425 412,355 5,159,397 18,569,224 Error correction 282,198 97,254 (37,221) (81,973) 260,258 Net position (deficit) - beginning, as restated 8,254,245 5,122,679 375,134 5,077,424 18,829,482 Net position (deficit) - ending 7,398,362 $ 4,924,364 $ 365,955 $ 4,663,505 $ 17,352,186 $ CITY OF LINDSAY | FOR THE YEAR ENDED JUNE 30, 2024
Proprietary Funds
Statement of Cash Flows
The notes to the basic financial statements are an integral part of this statement. 15 Enterprise Funds
Total
Water Sewer Refuse Wellness Enterprise
Fund Fund Fund Center Fund Funds

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 1,806,776 $ 1,412,278 $ 956,337 $ 838,401 $ 5,013,792 $ Payments to suppliers (697,165) (1,300,577) (716,962) (567,573) (3,282,277) Payments to employees (516,926) (453,535) (224,271) (410,507) (1,605,239) Net cash provided by (used for) operating activities (10,727) 261,578 15,104 (139,679) 126,276

CASH FLOWS FROM NON-CAPITAL AND RELATED FINANCING ACTIVITIES Interfund borrowing - 68,100 - - 68,100
(Loans) repayments to/from other funds 476,736 - - 404,883 881,619 Transfer out (806,373) (13,519) (13,519) - (833,411)
Net cash provided by (used for) non-capital and related financing activities (261,537) (13,519) (13,519) 404,883 116,308

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Principal payments on lease liabilities - - - (10,145) (10,145) Cash received from grants 53,339 2,195 (2,026) - 53,508 Principal payments on long-term debt (63,389) (198,792) - (55,554) (317,735) Interest paid (150,301) (46,485) - (76,571) (273,357)
Acquisition and construction of capital assets (321,816) - - (172,471) (494,287) Net cash provided by (used for) capital and related financing activities (429,495) (295,754) (2,026) (314,741) (1,042,016)

CASH FLOWS FROM INVESTING ACTIVITIES
Interest on investments 69,396 64 10,781 49,537 129,778 Net cash provided by (used for) investing activities 69,396 64 10,781 49,537 129,778 Increase (decrease) in cash and cash equivalents (701,695) 21,701 10,340 - (669,654) Cash and cash equivalents - beginning 1,402,453 701,695 262,001 - 2,366,149 Cash and cash equivalents - ending $ 1,424,154 - $ 272,341 $ - $ 1,696,495 $ Reconciliation of operating income (loss) to net cash provided by (used for) operating activities:

Operating income (loss) $ (103,944) (211,370) $ (5,979) $ (387,967) $ (709,260) $ Adjustments to reconcile operating income (loss) to net cash provided by operating activities:

Depreciation and amortization 360,311 448,886 1,545 193,996 1,004,738 Changes in operating assets, liabilities and deferred outflows/inflows of resources:
(Increase) decrease in accounts receivable 72,859 (156,159) (3,250) 14,340 (72,210) (Increase) decrease in deferred outflow of resources - OPEB related (164,324) (109,277) (31,741) (87,843) (393,185) Increase (decrease) in accounts payable (194,145) 2,708 4,959 6,888 (179,590) Increase (decrease) in accrued wages 4,296 4,280 1,086 1,778 11,440 Increase (decrease) in deposits payable 3,000 - - (300) 2,700 Increase (decrease) in OPEB (25,911) - - - (25,911)
Increase (decrease) in net pension liability 150,724 - - - 150,724 Increase (decrease) in compensated absences (6,167) (3,352) (6,570) (6,570) (22,659) Increase (decrease) in deferred inflows of resources - OPEB related - (1,588) (13,515) (16,290) (31,393) Increase (decrease) in deferred inflows of resources - Pension related 180,024 - 68,569 142,289 390,882 Net cash provided by (used for) operating activities $ (10,727) 261,578 $ 15,104 $ (139,679) $ 126,276 $ CITY OF LINDSAY | JUNE 30, 2024
Fiduciary Funds
Statement of Net Position
The notes to the basic financial statements are an integral part of this statement. 16 Private-Purpose Custodial
Trust Fund Fund
ASSETS
Cash and investments 845,625 $ - $
Restricted cash and investments 183
Receivables:

Interest 94 -
Loans and Notes Receivable 802,161 10,363,203
Total assets 1,648,063 10,363,203

LIABILITIES
Accounts payable - 2,047
Accrued wages - 2,202
Accrued interest 147,857 -
Due to the City - 147,935
Noncurrent liabilities:

Due within one year 9,015,000 -
Due in more than one year 535,000 -
Total liabilities 9,697,857 152,184

NET POSITION
Restricted for individuals, organizations and other
governments (8,049,794) $ 10,211,019 $
CITY OF LINDSAY | FOR THE YEAR ENDED JUNE 30, 2024
Fiduciary Funds
Statement of Changes in Net Position
The notes to the basic financial statements are an integral part of this statement. 17 Private-Purpose Custodial
Trust Fund Fund

ADDITIONS
Property taxes 903,956 $ - $
Use of money and property - 30,100
Other 5,297 1,154
Total additions 909,253 31,254

DEDUCTIONS
Administrative expenses 8,664 1,720
Interest expense 282,535 -
Program income disbursement to HCD - 347,309
Total deductions 291,199 349,029
Changes in fiduciary net position 618,054 (317,775)
Fiduciary net position (deficit) - beginning (8,667,848) 10,528,794 Fiduciary net position (deficit) - ending (8,049,794) $ 10,211,019 $ 18 NOTES TO THE BASIC FINANCIAL STATEMENTS
CITY OF LINDSAY | JUNE 30, 2024
Notes to the Basic Financial Statements
19 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The basic financial statements of the City of Lindsay, California (City) have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to governmental agencies. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The more significant of the City’s accounting policies are described below.

A. Financial Reporting Entity
The City of Lindsay incorporated in 1910, as a general law city of the State of California, and reclassified to a Charter City January 8, 1996, filed with the State of California in April 1996. Lindsay is located in the middle of the state in the Central San Joaquin Valley. The Central Valley is considered to be a national and world leader in the agricultural industry, with dairy, citrus, and deciduous crops the primary commodity around the Lindsay area. The City of Lindsay currently occupies an incorporated area of 2.41 square miles with an urban development boundary of 3.9 square miles and serves a population of 13,493 (2021) – an increase of 14.66% since 2010.

B. Basis of Accounting and Measurement Focus
The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity with its own self-balancing set of accounts that comprise its assets, deferred outflows of resources, liabilities, deferred inflows of resources, fund equity, revenues and expenditures or expenses. These funds are established for the purpose of carrying out specific activities or certain objectives in accordance with specific regulations, restrictions or limitations.

Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled.

Government-Wide Financial Statements
The City’s Government-Wide Financial Statements include a Statement of Net Position and a Statement of Activities.

These statements present summaries of Governmental and Business-Type Activities for the City accompanied by a total column. The government-wide financial statements exclude fiduciary funds, as they are not available for City use.

These financial statements are presented on an “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all of the City’s assets, deferred inflows/outflows of resources, and liabilities, including capital assets, as well as infrastructure assets, and long-term liabilities, are included in the accompanying Statement of Net Position. The Statement of Activities presents changes in net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liabilities are incurred.

Certain types of transactions reported as program revenues for the City are reported in three categories:
 Charges for services
 Operating grants and contributions
 Capital grants and contributions
CITY OF LINDSAY | JUNE 30, 2024
Notes to the Basic Financial Statements
20 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) B. Basis of Accounting and Measurement Focus (Continued) Government-Wide Financial Statements (Continued)
Certain eliminations have been made in regards to interfund activities, payables, and receivables. All internal balances in the Statement of Net Position have been eliminated except those representing balances between the governmental activities and the business-type activities, which are presented as internal balances and eliminated in the total primary government column. In the Statement of Activities, internal fund transactions have been eliminated; however, those transactions between governmental and business-type activities have not been eliminated. The following interfund activities have been eliminated:
 Due to/from other funds
 Advances to/from other funds
 Transfers in/out
Governmental Fund Financial Statements
Governmental fund financial statements include a Balance Sheet and a Statement of Revenues, Expenditures, and Changes in Fund Balances for all major governmental funds and non-major funds aggregated. An accompanying schedule is presented to reconcile and explain the differences in net position as presented in these statements to the net position presented in the government-wide financial statements. The City has presented all major funds that meet specific qualifications.

All governmental funds are accounted for on a spending or “current financial resources” measurement focus and the modified accrual basis of accounting. Accordingly, only current assets and current liabilities are included on the balance sheets. The Statement of Revenues, Expenditures, and Changes in Fund Balances present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expenditures of the current period.

The City reports the following funds as major governmental funds of the City.

General Fund is the City’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund.

Street Improvement Fund accounts for utility fund charges for street improvement program purposes.

Local Transportation Fund accounts for Transportation Development Act funds for the development and support of public transportation needs.

Revenues are recorded when received in cash, except that revenues subject to accrual (generally those received 60 days after fiscal year-end) are recognized when due. The primary revenue sources that have been treated as susceptible to accrual by the City are property taxes, taxpayer-assessed tax revenues (sales taxes, transient occupancy taxes, franchise taxes, etc.), grant revenues and earnings on investments. Expenditures are recorded in the accounting period in which the related fund liability is incurred.

The Reconciliation of the Fund Financial Statements to the Government-Wide Financial Statements is provided.

CITY OF LINDSAY | JUNE 30, 2024
Notes to the Basic Financial Statements
21 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) B. Basis of Accounting and Measurement Focus (Continued) Proprietary Fund Financial Statements
Proprietary fund financial statements include a Statement of Net Position, a Statement of Revenues, Expenses, and Change in Net Position, and a Statement of Cash Flows for all proprietary funds.

Proprietary funds are accounted for using the “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all assets and liabilities (whether current or noncurrent) are included on the Statement of Net Position. The Statement of Revenues, Expenses, and Changes in Net Position present increases (revenues) and decreases (expenses) in total net position.

Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which a liability is incurred.

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

The City reports the Water, Sewer, Refuse, and Wellness Center Funds as major enterprise funds of the City.

Water Fund accounts for the activities of the water distribution system.

Sewer Fund accounts for the activities of the sewage pumping stations, treatment plant, and laboratory.

Refuse Fund accounts for the activities of the refuse collection and recycling.

Wellness Center Fund accounts for the activities of the Wellness Center and Aquatic Center.

Fiduciary Fund Financial Statements
Fiduciary fund financial statements consist of a Statement of Fiduciary Net Position and a Statement of Changes in Fiduciary Net Position. The City has one private-purpose trust fund and one custodial fund. The private-purpose trust fund accounts for resources of all other trust arrangements in which principal and income benefit individuals, private organizations, or other governments (i.e. unclaimed property/escheat property). Custodial funds account for fiduciary activities not required to be accounted for in a trust fund. Fiduciary funds are accounted for using the accrual basis of accounting. The City reports the following fiduciary funds:

Private-Purpose Trust Fund accounts for assets held by the City in a trustee capacity or as an agent on behalf of others. Trust funds account for assets held by the City under the terms of a formal trust agreement. The funds accounts for the activities of the Redevelopment Agency Successor Agency.

Custodial Fund accounts for loans and loan repayments collected by the City on behalf of the State of California Department of Housing and Community Development (HCD). Loan repayments collected are distributed to HCD per the City’s settlement agreement with HCD.

CITY OF LINDSAY | JUNE 30, 2024
Notes to the Basic Financial Statements
22 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Assets, Deferred Outflows, Liabilities, Deferred Inflows, Net Position, or Equity Cash, Cash Equivalents, and Investments
The City pools cash and investments of all funds, except amounts held by fiscal agents. The Council invests on behalf of most funds of the City in accordance with the California State Government Code and the City’s investment policy.

Investments are reported in the accompanying balance sheet at fair value. Short-term investments are reported at cost, which approximates fair value. Securities traded on a national or international exchange are valued at the last reported sales price at current exchange rates. Cash deposits are reported at carrying amount which reasonably estimates fair value. Managed funds not listed on an established market are reported at the estimated fair value as determined by the respective fund managers based on quoted sales prices of the underlying securities.

Participant’s equity in an investment pool is determined by the dollar amount of participant deposits, adjusted for withdrawals and distributed investment income. Investment income is determined on an amortized cost basis. Amortized premiums and accreted discounts, accrued interest, and realized gains and losses, net of expenses, are apportioned to pool participants annually. During the fiscal year ended June 30, 2023, the City had not entered into any legally binding guarantees to support the participant equity in the investment pool.

The City pools cash resources from all funds in order to facilitate the management of cash. The balance in the pooled cash account is available to meet current operating requirements. Cash in excess of current requirements is invested in various interest-bearing accounts and other investments for varying terms.

In accordance with GASB Statement No. 40, Deposit and Investment Disclosures (Amendment of GASB No.3), certain disclosure requirements for Deposits and Investment Risks were made in the following areas:
 Interest Rate Risk
 Credit Risk
 Overall
 Custodial Credit Risk
 Concentrations of Credit Risk
In addition, other disclosures are specified including use of certain methods to present deposits and investments, highly sensitive investments, credit quality at fiscal year-end, and other disclosures.

CITY OF LINDSAY | JUNE 30, 2024
Notes to the Basic Financial Statements
23 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Assets, Deferred Outflows, Liabilities, Deferred Inflows, Net Position, or Equity (Continued) Cash, Cash Equivalents, and Investments (Continued)
In accordance with GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, highly liquid market investments with maturities of one year or less at time of purchase are stated at amortized cost. All other investments are stated at fair value. The City categorizes the fair value measurements of its investments based on the hierarchy established by generally accepted accounting principles. The fair value hierarchy, which has three levels, is based on the valuation inputs used to measure an asset’s fair value: Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. The City does not have any investments that are measured using Level 3 inputs.

The City participates in an investment pool managed by the State of California entitled Local Agency Investment Fund (LAIF) which has invested a portion of the pooled funds in Structured Notes and Asset- Backed Securities. LAIF’s investments are subject to credit risk with the full faith and credit of the State of California collateralizing these investments. In addition, these Structured Notes and Asset-Backed Securities are subject to market risk as to the change in interest rates.

Cash equivalents are considered amounts in demand deposits and short-term investments with a maturity date within three months of the date acquired by the City and are presented as “Cash and Investments” in the accompanying Basic Financial Statements.

For the purposes of the accompanying statement of cash flows, the City considers all pooled cash and investments (consisting of cash and investments and restricted cash and investments) held by the City as cash and cash equivalents because the pool is used essentially as a demand deposit account from the standpoint of the funds. The City also considers all non-pooled cash and investments (consisting of cash with fiscal agent and restricted cash and investments held by fiscal agent) as cash and cash equivalents because investments meet the criteria for cash equivalents defined above.

Interfund Receivables and Payables
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year is referred to as interfund receivables/interfund payables (i.e., the current portion of interfund loans) or advances to/from other funds (the noncurrent portion of interfund loans). All other outstanding balances between funds are reported as interfund receivables or interfund payables.

Lease Receivable
The City’s lease receivable is measured at the present value of lease payments expected to be received during the lease term. Under the lease agreement, the City may receive variable lease payments that are dependent upon the lessee’s revenue. The variable payments are recorded as an inflow of resources in the period the payment is received.

A deferred inflow of resources is recorded for the lease. The deferred inflow of resources is recorded at the initiation of the lease in an amount equal to the initial recording of the lease receivable. The deferred inflow of resources is amortized on a straight-line basis over the term of the lease.

CITY OF LINDSAY | JUNE 30, 2024
Notes to the Basic Financial Statements
24 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Assets, Deferred Outflows, Liabilities, Deferred Inflows, Net Position, or Equity (Continued) Prepaids
Any payments to vendors that reflect costs applicable to future accounting periods are recorded as prepaid items in both government-wide and fund financial statements.

Capital Assets
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 columns in the government-wide financial statements. The City defines capital assets as assets with an initial, individual cost of more than $15,000 (amount not rounded) and an estimated useful life in excess of three years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed.

Donated capital assets are recorded at acquisition value at the date of donation. 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.

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 is included as part of the capitalized value of the assets constructed.

Property, plant, equipment, and infrastructure of the City are depreciated using the straight-line method over the following estimated useful lives:

Assets Year
Buildings and improvements 50
Public domain infrastructure 50
System infrastructure 30
Vehicles 5
Office equipment 5
Computer equipment 5
Right of Use Assets
The City has recorded right of use lease assets as a result of implementing Governmental Accounting Standards Board Statement (GASB) Statement Number 87 “Leases” and GASB Statement Number 96 “Subscription-Based Information Technology Arrangements” (SBITAs). The right of use assets are initially measured at an amount equal to the initial measurement of the related lease or subscription liability plus any lease or subscription payments made prior to the lease or subscription term, less lease or subscription incentives, and plus ancillary charges necessary to place the lease or subscription asset into service. The right of use assets are amortized on a straight-line basis over the life of the related lease or subscription asset.

CITY OF LINDSAY | JUNE 30, 2024
Notes to the Basic Financial Statements
25 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Assets, Deferred Outflows, Liabilities, Deferred Inflows, Net Position, or Equity (Continued) Encumbrances
Encumbrance accounting is used in all budgeted funds to reserve portions of applicable appropriations for which commitments have been made. Encumbrances are recorded for purchase orders, contracts, and other commitments when they are written. Encumbrances are liquidated when the commitments are paid. All encumbrances are liquidated at June 30.

Pensions
For purposes of measuring the net pension liability, deferred outflows and inflows of resources related to pensions, and pension expense, information about the fiduciary net position and additions to/deductions from the fiduciary net position have been determined on the same basis as they are reported by the CalPERS’ Financial Office. For this purpose, benefit payments (including refunds of employee contributions) are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value.

Other Postemployment Benefits (OPEB)
For purposes of measuring the total OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, generally accepted accounting principles require that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used: June 30, 2024, Valuation Date, June 30, 2023, Measurement Date, July 1, 2023, through June 30, 2024 Measurement Period. Investments are reported at fair value.

Property Taxes
Tulare County is responsible for the assessment, collection, and apportionment of property taxes for all taxing jurisdictions. Secured property taxes attach as an enforceable lien on property as of January 1. Taxes are payable in two installments on November 1 and March 1. Unsecured personal property taxes do not constitute a lien against real property unless the taxes become delinquent. Payment must be made in one installment, which is delinquent if not paid by August 31 of the fiscal year. Significant penalties are imposed by the county for late payments. Property taxes are accounted for in the General Fund and the Private-Purpose Trust Fund (formally the City’s Redevelopment Agency).

Property tax revenues are recognized when they become measurable and available to finance current liabilities.

The City is permitted by Article XIIIA of the State of California Constitution (Proposition 13) to levy a maximum tax of 1% of assessed value, plus other increases as approved by the voters.

Unearned Revenue
Unearned revenue arises when assets are received before revenue recognition criteria have been satisfied. Grants and entitlements from federal and state projects and programs received before eligibility requirements are met are recorded as unearned revenue.

CITY OF LINDSAY | JUNE 30, 2024
Notes to the Basic Financial Statements
26 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Assets, Deferred Outflows, Liabilities, Deferred Inflows, Net Position, or Equity (Continued) Deferred Outflows/Inflows of Resources
In addition to assets, the statement of net position and balance sheet of governmental funds will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period and so will not be recognized as an outflow of resources (expense/ expenditure) until then. The City has three types of items that qualify for reporting in this category. The first item is the deferred gain on debt refunding which is reported in the fiduciary funds statement of net position. A deferred gain on debt refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt.

The second item is the deferred assets of the City’s pension plans investments as determined by California Public Employees’ Retirement System (CalPERS) in accordance with GASB Statement No. 68, which is reported in the government-wide statement of net position and the proprietary fund statement of net position. The third item is the deferred inflows/outflows associated with the City’s OPEB plan in accordance with GASB Statement No. 75, which is reported in the government-wide statement of net position. Please see the accompanying Notes 9 and 11 to the financial statements for more details on these amounts.

In addition to liabilities, the statement of net position and balance sheet of governmental funds will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period and so will not be recognized as an inflow of resources (revenue) until that time. The City has several items that meet the criterion for this category – unavailable revenue, leases, and pension and OPEB deferrals.

Under the modified accrual basis of accounting, it is not enough that revenue has been earned if it is to be recognized as revenue of the current period. Revenue must also be susceptible to accrual; it must be both measurable and available to finance expenditures of the current fiscal period. If assets are recognized in connection with a transaction, but those assets are not yet available to finance expenditures of the current fiscal period, then the assets must be offset by a corresponding deferred inflow of resources. This type of deferred inflow is unique to governmental funds, since it is tied to the modified accrual basis of accounting, which is used only in connection with governmental funds.

Compensated Absences
Accumulated vested unpaid employee vacation and compensatory time-off benefits are recognized as liabilities of the City. Governmental funds recognize the current portion of the liabilities at fiscal year-end, while the non-current portion of these liabilities is recognized in the general long-term debt account group. Proprietary funds record the full liability as the vested benefits to the employees accrue.

Sick leave benefits are accumulated without limit for each employee. The employees do not gain a vested right to accumulated sick leave. Accumulated employee sick leave benefits are not recognized as liabilities of the City since payment of such benefits is not probable. Therefore, sick leave benefits are recorded as expenditures in the period that the sick leave is taken.

CITY OF LINDSAY | JUNE 30, 2024
Notes to the Basic Financial Statements
27 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Assets, Deferred Outflows, Liabilities, Deferred Inflows, Net Position, or Equity (Continued) Long-Term Debt
Government-Wide Financial Statements – Long-term debt and other long-term obligations are reported as liabilities in the appropriate activities.

Bond premiums and discounts are amortized over the life of the bonds using the straight-line method. Bonds payable is reported net of the applicable bond premium or discount. Bond issuance costs, except any portion related to prepaid insurance costs, are recognized as an expense in the period incurred.

Fund Financial Statements – The governmental fund financial statements do not present long-term debt. As such, longterm debt is shown in the Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Position.

Bond premiums and discounts are recognized during the current period as other financing sources or uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Bond proceeds are reported as other financing sources.

Proprietary Fund and Fiduciary Fund Financial Statements use the same principles as those used in the Government-Wide Financial Statements.

Self-Insurance
The City is a member of Public Risk Innovation, Solutions, and Management (PRISM), a member-directed risk-sharing pool of public agencies that provides risk coverage programs and risk management services. The City participates in PRISM for workers’ compensation and liability coverage. See Note 10 for additional information on this coverage.

Net Position
GASB Statement No. 63 requires that the difference between assets added to the deferred outflows of resources and liabilities added to the deferred inflows of resources be reported as net position. Net position is classified as either net investment in capital assets, restricted, or unrestricted.

In the government-wide financial statements, proprietary fund financial statements, and fiduciary fund financial statements, net position is reported in three categories: net investment in capital assets, restricted, and unrestricted. Net position that is net investment in capital assets consists of capital assets, net of accumulated depreciation, and reduced by the outstanding principal of related debt. Restricted net position represents the portion of net position that has external constraints placed on it by parties outside of the City, such as creditors, grantors, contributors, or laws and regulations of other governments, or through constitutional provisions or enabling legislation. Unrestricted net position consists of net position that does not meet the definition of net investment in capital assets or restricted net position.

CITY OF LINDSAY | JUNE 30, 2024
Notes to the Basic Financial Statements
28 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Assets, Deferred Outflows, Liabilities, Deferred Inflows, Net Position, or Equity (Continued) Fund Balance
In the fund financial statements, governmental funds report fund balance as nonspendable, restricted, committed, assigned, or unassigned based primarily on the extent to which the City is bound to honor constraints on how specific amounts can be spent.

Nonspendable - Amounts that are not in spendable form (such as inventory) or are required either legally or contractually to be maintained intact.

Restricted - Amounts with constraints placed on their use that are either (a) externally imposed by creditors, grantors, contributors, or laws or regulations of other governments or (b) imposed by law through constitutional or enabling legislation.

Committed - Amounts constrained to specific purposes by the City itself, using the City’s highest level of decisionmaking authority (the City Council). To be reported as committed, amounts cannot be used for any other purpose unless the City takes the same highest level action to remove or change the constraint. The underlying action that imposed the limitation needs to occur no later than the close of the reporting period.

Assigned - Amounts the City intends to use for a specific purpose. Intent can be expressed by the City at either the highest level of decision-making authority or by an official or body to which the City delegates the authority. This is also the classification for residual funds in the City’s special revenue funds.

Unassigned - The residual classification for the City’s General Fund that includes amounts not contained in the other classifications. In other funds, the unassigned classification is used only if expenditures incurred for specific purposes exceed the amounts restricted, committed, or assigned to those purposes.

The City establishes and modifies or rescinds fund balance commitments by passage of an ordinance or policy. This is typically done through adoption and amendment of the budget. A fund balance commitment is further indicated in the budget as a designation or commitment of the fund, such as approved construction contracts. Assigned fund balance is established by the City through adoption or amendment of the budget or future year budget plan as intended for a specific purpose.

When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, followed by the unrestricted committed, assigned, and unassigned resources as they are needed.

The City believes that sound financial management principles require that sufficient funds be retained by the City to provide a stable financial base at all times. To retain this stable financial base, the City needs to maintain unrestricted fund balance in its funds sufficient to fund cash flows of the City and to provide financial reserves for unanticipated expenditures and/or revenue shortfalls of an emergency nature. Committed, assigned, and unassigned fund balances are considered unrestricted.

The City strives to achieve and maintain unrestricted fund balance in the General Fund sufficient to cover approximately 6 months of working capital at the close of each fiscal year, which exceeds the recommended level (approximately 60 days working capital) promulgated by the Government Finance Officers Association (GFOA).

CITY OF LINDSAY | JUNE 30, 2024
Notes to the Basic Financial Statements
29 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Assets, Deferred Outflows, Liabilities, Deferred Inflows, Net Position, or Equity (Continued) Use of Estimates
The preparation of the Basic Financial Statements in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. In addition, estimates affect the reported amounts of revenues and expenses. Actual results could differ from these estimates and assumptions.

New Accounting Pronouncements
Governmental Accounting Standard Board Statement No. 100 In fiscal year 2023-24, the City implemented Governmental Accounting Standards Board (GASB) Statement No. 100, Accounting Changes and Error Corrections—an amendment of GASB Statement No. 62. GASB 100 enhances accounting and financial reporting requirements for accounting changes and error corrections, including clarification of the reporting of changes in accounting principles, changes in accounting estimates, changes to or within the financial reporting entity, and error corrections. As a result of implementing this statement, the City reported a restatement of beginning balances, as further described in Note 14.

Future Accounting Pronouncements
The City will implement the following GASB pronouncements in future fiscal years:

The provisions of Statement No. 101 “Compensated Absences” are effective for fiscal years beginning after December 15, 2023.

The provisions of Statement No. 102 “Certain Risk Disclosures” are effective for fiscal years beginning after June 15, 2024.

CITY OF LINDSAY | JUNE 30, 2024
Notes to the Basic Financial Statements
30 NOTE 2 – STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. Budgetary Control and Accounting
The City Council is required to adopt an annual budget resolution by July 1st of each fiscal year for the General Fund, special revenue, capital projects, debt service, and enterprise funds. These budgets are adopted and presented for reporting purposes on a basis consistent with generally accepted accounting principles.

The appropriated budget is prepared by fund, function, and department. The legal level of budgetary control (i.e. the level at which expenditures may not legally exceed appropriations) is the department level. The City Council made several supplemental budgetary appropriations throughout the fiscal year.

Budgeted appropriations for various governmental funds become effective each July 1. The City Council may amend the budget during the fiscal year. Appropriations generally lapse at the end of the fiscal year to the extent they have not been expended or encumbered.

B. Deficit Fund Balances/Net Position
The Special Assessment Districts special revenue fund has a deficit fund balance of $8,564 which is expected to be alleviated through future revenues.

The State parks special revenue fund has a deficit fund balance of $53,743 that should be alleviated as reimbursements are received from the State.

Private purpose trust fund has a deficit net position of $8,049,794 which is primarily attributable to enforceable obligations outstanding following the dissolution of the former Redevelopment Agency, which exceed the assets presently held by the Successor Agency. Under the redevelopment dissolution process, the Successor Agency is responsible for payment of these obligations, while related funding is provided over time from distributions of the Redevelopment Property Tax Trust Fund. Accordingly, management expects the deficit net position to be addressed through future receipt of such distributions and the ongoing retirement of outstanding debt and other enforceable obligations.

CITY OF LINDSAY | JUNE 30, 2024
Notes to the Basic Financial Statements
31 NOTE 3 – CASH AND INVESTMENTS
Cash and investments at June 30, 2024 are classified in the accompanying financial statements as follows:

Governmental Business-Type Fiduciary
Activities Activities Funds Total
Cash and investments 11,650,646 $ 1,696,495 $ 845,625 $ 14,192,766 $ Restricted cash and investments - 816,681 183 816,864
Total cash and investments $ 12,467,327 1,696,495 $ 845,808 $ 15,009,630 $ Government-Wide
Statement of Net Position
Cash and investments consist of the following as of June 30, 2024:

Cash on hand 1,100 $
Deposits with financial institutions 4,454,670
Investments 10,553,860
Total cash and investments $ 15,009,630
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. 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.

A. Investments Authorized by the California Government Code and the City’s Investment Policy Maximum Maximum
Maximum Percentage of Investment In
Maturity Portfolio One Issuer
U.S. Treasury Obligations 5 years Unlimited None
U.S. Government Agency Issues 5 years Unlimited None
Certificates of Deposits 5 years 30% 30%
State of California Local Agency
Investment Fund (State Pool) N/A Unlimited 7,500,000 $
Rated Debt Security of State of
California or California Local Agency N/A 25% 25%
Authorized Investment Type
The investment policy allows for the above investments which have equal safety and liquidity as all other allowed investments. Maturity depends on the cash needs of the City.

CITY OF LINDSAY | JUNE 30, 2024
Notes to the Basic Financial Statements
32 NOTE 3 – CASH AND INVESTMENTS (Continued)
B. Investments Authorized by Debt Agreements
Investment of debt proceeds held by bond trustees are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City’s investment policy. The table below identifies the Investment types that are authorized for investments held by bond trustees. 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 of Investment In
Maturity Portfolio One Issuer
U.S. Treasury Obligations None None None
U.S. Government Sponsored
Enterprise Securities None None None
Bankers Acceptances 180 days 40% 10%
Commercial Paper 270 days 25% 10%
Money Market Funds N/A None None
Investment Contracts 30 years None None
Tulare County Pooled Fund N/A 10% None
State of California Local Agency
Investment Fund (State Pool) N/A Unlimited None
Authorized Investment Type
C. 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 manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.

Information about the sensitivity of the fair values of the City’s investments (including investments held by bond trustee) to market interest rate fluctuations is provided by the following table that shows the distribution of the City’s investments by maturity:
12 Months More than
Total or Less 13 to 24 Months 25 to 60 Months 60 Months Local Agency Investment Fund 4,638,977 $ 4,638,977 $ - $ - $ - $ U.S. Treasury Securities 3,727,680 3,727,680 - - -
Money Market Funds 204,992 204,992 - - -
Certificates of Deposits 1,350,185 1,982,211 539,791 92,235 - Total $ 10,553,860 9,921,834 $ 539,791 $ 92,235 $ - $
Investment Type
Remaining Maturity (in Months)
CITY OF LINDSAY | JUNE 30, 2024
Notes to the Basic Financial Statements
33 NOTE 3 – CASH AND INVESTMENTS (Continued)
D. Investments with Fair Values Highly Sensitive to Interest Rate Fluctuations The City has no investments (including investments held by bond trustees) that are highly sensitive to interest rate fluctuations (to a greater degree than already indicated in the information provided above).

E. Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment.

This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the California Government Code, the City’s investment policy, or debt agreements, and the actual rating as of fiscal year end for each investment type.

Total AAA AAAm Not Rated
Local Agency Investment Fund 4,638,977 $ - $ - $ 4,638,977 $ U.S. Treasury Securities 3,727,680 - - 3,727,680
Money Market Funds 204,992 - - 204,992
Certificates of Deposits - 1,350,185 - 1,350,185
Total $ 9,921,834 - $ - $ 9,921,834 $
Investment Type
F. Concentration of Credit Risk
The investment policy of the City contains limitations on the amount that can be invested in any one issuer. There are 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 investments. Since the City pooled all of its investments, there were no investments in any one issuer that represented 5% or more of total investments by reporting unit.

G. Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g. broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the 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 government unit). The fair 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 the City’s deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits.

As of June 30, 2024, all of the City’s deposits with financial institutions were covered by federal depository insurance limits or were held in collateralized accounts.

CITY OF LINDSAY | JUNE 30, 2024
Notes to the Basic Financial Statements
34 NOTE 3 – CASH AND INVESTMENTS (Continued)
H. Investment in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the oversight of the Treasurer of the State of California. The fair value of the City’s investment in this pool is reported in the accompanying financial statements at amounts based upon the City’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis.

I. Fair Value Measurements
The City categorizes its fair value measurements within the fair value hierarchy established by accounting principles generally accepted in the United States of America. These principles recognize a three-tiered fair value hierarchy, as follows:
 Level 1: Investments reflect prices quoted in active markets;  Level 2: Investments reflect prices that are based on a similar observable asset either directly or indirectly, which may include inputs in markets that are not considered active; and,  Level 3: Investments reflect prices based upon unobservable sources.

The City has the following recurring fair value measurements as of June 30, 2024:

Quoted Prices Significant
Active Markets Other Significant
for Identical Observable Unobservable Not
Totals Assets (Level 1) Inputs (Level 2) Inputs (Level 3) Applicable Local Agency Investment Fund 4,638,977 $ - $ - $ - $ 4,638,977 $ U.S. Treasury Securities 3,727,680 3,727,680 - - -
Money Market Funds 204,992 - - - 204,992
Certificates of Deposits - 1,350,185 1,350,185 - -
Total $ 3,727,680 9,921,834 $ 1,350,185 $ - $ 4,843,969 $ Investments by Fair Value
CITY OF LINDSAY | JUNE 30, 2024
Notes to the Basic Financial Statements
35 NOTE 4 – INTERFUND TRANSACTIONS
The following represents the interfund activity of the City for the fiscal year ended June 30, 2024:

A. Due To/ From Other Funds
Current interfund balances arise in the normal course of business and to assist funds with negative cash balance at the fiscal year end. They are expected to be repaid shortly after the end of the fiscal year.

The City allocates negative interest to funds that have a negative cash balance.

Due
Fund From To
Major governmental fund:

General fund 1,056,773 $ - $
Major enterprise fund:

Water fund - 476,736
Wellness center fund - 526,294
Nonmajor governmental fund:

State park special revenue fund - 53,743
Total 1,056,773 $ 1,056,773 $
B. Transfers
With council approval, resources may be transferred from one City fund to another. The purpose of the majority of transfers is to reimburse a fund that has made expenditures on behalf of another fund.

Fund Transfers in Transfers out
Major governmental fund:

General fund 2,374,017 $ - $
Street improvement fund - 493,937
Local transportation fund - 656,056
Major enterprise fund:

Water fund - 806,373
Sewer fund - 13,519
Refuse fund - 13,519
Nonmajor governmental fund:

Gas tax - 326,500
State park special revenue fund - 64,113
Total 2,374,017 $ 2,374,017 $
CITY OF LINDSAY | JUNE 30, 2024
Notes to the Basic Financial Statements
36 NOTE 4 – INTERFUND TRANSACTIONS (Continued)
C. Advances To/ From Other Funds
As of June 30, 2024, the City had the following advances to/from other funds.

Advance to Advance from
Fund other funds other funds
Major governmental fund:

General fund - $ 6,196,105 $
Street improvement fund 1,557,120 -
Local transportation fund - -
Major enterprise fund:

Water fund 1,770,597 -
Sewer fund 2,341,466 -
Refuse fund 401,922 -
Nonmajor governmental fund:

Park improvements fund 90,000 -
Curb and Gutter fund 35,000 -
Total 6,196,105 $ 6,196,105 $
On August 26, 2021, the State Auditor issued Report 2020-804 regarding the City of Lindsay as part of the high-risk local government agency audit program. The report recommended that, by February 2022, the City address the $6.3 million transferred to its general fund, re-establish the loans to its restricted funds, and develop and implement a plan to fully repay those funds.

In response to the State Auditor’s report, and in accordance with the City of Lindsay’s Corrective Action Plan, City staff prepared a Formal Repayment Plan for consideration by the Lindsay City Council. This plan recorded the advances to and from funds previously vacated at their originally vacated amounts. While the total amount remained unchanged, the amortization terms and schedules were modified to allow the City to make annual payments based on priority beginning in fiscal year 2022-2023.

The City Council adopted Resolution 22-09 to formalize the advances and repayment schedules for funds borrowed prior to 2017.

The advances bear no interest and are expected to be repaid in the following priority: 1) Water Fund 2) Sewer Fund 3) Street Improvement Fund 4) Refuse Fund 5) Wastewater Capital Reserve Fund (included with Sewer Fund in the financial statements) 6) Storm Drain Fund (included with Sewer Fund in the financial statements) 7) Parks Fund and 8) Curb and Gutter Fund.

The City repaid $68,100 in Fiscal Year 2023-2024.

CITY OF LINDSAY | JUNE 30, 2024
Notes to the Basic Financial Statements
37 NOTE 5 – LOANS AND NOTES RECEIVABLE
A. Notes Receivable
At June 30, 2024, the City’s loans and notes receivable consisted of the following:

Non-Major Governmental Funds Fiduciary Funds
Community Curb and
Development Gutter Private-Purpose Custodial
Fund Fund Trust Fund Fund Total
Individuals 7% unsecured notes with
annual principal and interest
payments - $ 1,375 $ - $ - $ 1,375 $
Non-interest and below market rate
secured notes with deferred
payments of monthly principal and
interest. Collateralized by trust deeds
on improved property. 48,362 - 802,161 10,363,203 11,213,726 Total 48,362 $ 1,375 $ 802,161 $ 10,363,203 $ 11,215,101 $ B. Loans Assigned to State of California Department of Housing and Community Development The City previously used Housing and Community Development Block Grant funds to provide housing rehabilitation loans and HOME Investment Partnerships Program (HOME) grant funds to provide first- time homebuyer assistance loans and housing rehabilitation loans to eligible applicants. Rehabilitation loans are used to improve, rehabilitate, or replace residences. All loans were made to low and moderate income persons or landlords benefiting these same persons. As part of a settlement agreement with the State of California Department of Housing and Community Development (HCD), the outstanding balances of these loans were assigned to HCD, and the City is responsible for collecting and distributing loan repayments to HCD.

The City accounts for these loans are in the custodial fund. This fund’s primary assets consist of notes receivable from participants, which originated from U.S. Department of Housing and Urban Development (HUD) funds.

C. Related Party Transactions
The City has entered into various loan agreements with City employees and relatives of City employees, under its FirstTime Homebuyer and Micro–Loan Programs. The various loan types provided included Deferred Payment Loans (DPL), Deferred No Interest Loans (DNIL), No Interest Loans (NIL), and Below Market Interest Rate Loans (BMIR). All of the loan types mentioned are allowed under the programs. However, some of the loans were not compliant with the programs requirements, the loans are now assigned to HCD.

CITY OF LINDSAY | JUNE 30, 2024
Notes to the Basic Financial Statements
38 NOTE 6 – CAPITAL ASSETS
The City has reported all capital assets including infrastructure in the government-wide Statement of Net Position. The City elected to use the basic approach as defined by GASB Statement No. 34 for all infrastructure reporting, whereby depreciation expense and accumulated depreciation have been recorded.

A summary of changes in capital assets for the City’s governmental activities for the fiscal year ended June 30, 2024 is as follows:

Balance at Restatement Restated Balance Balance at
July 1, 2023 Adjustments at July 1, 2023 Additions Retirements Transfers June 30, 2024 Governmental Activities
Capital assets not being depreciated:

Land 2,909,259 $ - $ 2,909,259 $ - $ - $ - $ 2,909,259 $ Construction in progress (1,614,035) 4,150,539 2,536,504 1,607,750 - (585,478) 3,558,776 Total capital assets not being depreciated (1,614,035) 7,059,798 5,445,763 1,607,750 - (585,478) 6,468,035 Capital assets being depreciated/amortized:

Subscription-based information technology
arrangements 276,295 - 276,295 - - - 276,295
Buildings 4,118,468 - 4,118,468 - - - 4,118,468
Infrastructure 43,629,962 980,489 44,610,451 253,200 - - 44,863,651 Machinery and equipment - 5,197,881 5,197,881 2,052,968 (49,720) 377,202 7,578,331 Total capital assets being depreciated/amortized 53,222,606 980,489 54,203,095 2,306,168 (49,720) 377,202 56,836,745 Less accumulated depreciation/amortization for:

Subscription-based information technology
arrangements (55,259) - (55,259) (55,259) - - (110,518) Buildings (1,728,753) - (1,728,753) (74,316) - - (1,803,069) Infrastructure (24,017,010) (19,610) (24,036,620) (891,448) - - (24,928,068) Machinery and equipment - (3,910,638) (3,910,638) (427,304) 17,402 - (4,320,540) Total accumulated depreciation/amortization (19,610) (29,711,660) (29,731,270) (1,448,327) 17,402 - (31,162,195) Total capital assets being depreciated/amortized, net 23,510,946 960,879 24,471,825 857,841 (32,318) 377,202 25,674,550 Governmental activities
capital assets, net $ 30,570,744 (653,156) $ 29,917,588 $ 2,465,591 $ (32,318) $ (208,276) $ 32,142,585 $ Depreciation/amortization was charged to functions/programs of the primary government as follows:

Amount
General government 804,109 $
Public safety 332,902
Parks and recreation 54,757
Public works 49,260
Community development 207,299
Total - governmental activities $ 1,448,327
Governmental Activities
CITY OF LINDSAY | JUNE 30, 2024
Notes to the Basic Financial Statements
39 NOTE 6 – CAPITAL ASSETS (Continued)
A summary of changes in capital assets for the City’s business-type activities for the fiscal year ended June 30, 2024 is as follows:

Balance at Restatement Balance at Balance at
July 1, 2023 Adjustments July 1, 2023 Additions Retirements Transfers June 30, 2024 Business-type activities:

Capital assets not being depreciated:

Land 452,670 $ - $ 452,670 $ - $ - $ - $ 452,670 $
Construction in progress - 35,751 35,751 - - - 35,751
Total capital assets not being depreciated - 488,421 488,421 - - - 488,421 Capital assets being depreciated/amortized:

Right to use assets-machinery and equipment 704,343 (704,343) - - - - - Buildings 20,660,752 - 20,660,752 - - - 20,660,752
Infrastructure 24,058,132 633,547 24,691,679 240,016 - 208,276 25,139,971 Machinery and equipment - 684,627 684,627 254,271 - - 938,898 Total capital assets being depreciated/amortized 46,107,854 (70,796) 46,037,058 494,287 - 208,276 46,739,621 Less accumulated depreciation/amortization for:

Right to use assets-machinery and equipment (37,152) 37,152 - - - - - Buildings (8,647,147) - (8,647,147) (413,208) - - (9,060,355) Infrastructure (12,551,721) - (12,551,721) (499,921) - - (13,051,642) Machinery and equipment (408,635) - (408,635) (91,609) - - (500,244) Total accumulated depreciation/amortization 37,152 (21,644,655) (21,607,503) (1,004,738) - - (22,612,241) Total capital assets being depreciated/amortized, net
(33,644) 24,463,199 24,429,555 (510,451) - 208,276 24,127,380 Business-type activities
capital assets, net $ 24,951,620 (33,644) $ 24,917,976 $ (510,451) $ - $ 208,276 $ 24,615,801 $ Depreciation/amortization was charged to functions/programs of the primary government as follows:

Amount
Water 360,311 $
Sewer 448,886
Refuse 1,545
Wellness Center 193,996
Total $ 1,004,738
Business-type Activities
CITY OF LINDSAY | JUNE 30, 2024
Notes to the Basic Financial Statements
40 NOTE 7 – LONG-TERM DEBT
A schedule of changes in long-term debt for the fiscal year ended June 30, 2024, is shown below.

Balance at Balance at Due Within
July 1, 2023 Additions Reductions June 30, 2024 One Year Governmental Activities
Direct borrowings and direct placements:
2008 USDA RD Roads (COP) 626,760 $ - $ (93,663) $ 533,097 $ 97,643 $ 2010 USDA RD Library (COP) 328,294 - (23,301) 304,993 24,233 Finance purchase - 401,570 (73,594) 327,976 76,810
Total direct borrowings and direct placements - 1,356,624 (190,558) 1,166,066 198,686 Other debt:
2012 Taxable Lease Revenue Refunding Bonds 680,000 - (155,000) 525,000 165,000 Bond discount (8,699) - 3,481 (5,218) -
Compensated absences 334,543 193,414 (232,455) 295,502 147,751 Subscription liabilities 212,769 - (25,291) 187,478 46,014 TCTA settlement 537,327 - (52,424) 484,903 52,424
Caltrans settlement 149,588 - (49,861) 99,727 49,861
HCD settlement - 3,602,066 (89,360) 3,512,706 89,360
Total other debt 193,414 5,507,594 (600,910) 5,100,098 550,410 Total governmental long-term debt 193,414 6,864,218 (791,468) 6,266,164 749,096 Business-type activities:

Direct borrowings and direct placements:
2007 USDA Wellness Center (COP) 1,784,348 - (55,554) 1,728,794 57,915 1999 USDA RD Wastewater Expansion Bonds 4,172,307 - (187,870) 3,984,437 193,976 2000 USDA RD Water Line Project Bonds 1,431,517 - (63,389) 1,368,128 65,450 2004 USDA RD Wastewater Project Bonds - 336,017 (10,922) 325,095 11,400 Total direct borrowings and direct placements - 7,724,189 (317,735) 7,406,454 328,741 Other debt:

Compensated absences 93,263 51,855 (74,514) 70,604 39,531 Lindsay Olive Growers Pond Closure - 2,570,981 - 2,570,981 - Total other debt 51,855 2,664,244 (74,514) 2,641,585 39,531 Total business-type long-term debt 10,388,433 51,855 (392,249) 10,048,039 368,272 Total long-term debt $ 17,252,651 245,269 $ (1,183,717) $ 16,314,203 $ 1,117,368 $ CITY OF LINDSAY | JUNE 30, 2024
Notes to the Basic Financial Statements
41 NOTE 7 – LONG-TERM DEBT (Continued)
A. Governmental Activities
Revenue Bond Payable
On November 1, 2012, the City entered into a refunding bond with US Bank National Association for refunding of the City’s $1,500,000 Mid Valley Services, Inc., promissory note dated November 19, 2009. The annual principal payments are due annually beginning on January 1, 2014. Interest ranging from 4.0% to 6.4% on the bonds is payable on January 1st and July 1st of each fiscal year, commencing on July 1, 2013. As of June 30, 2023, the balance due was $680,000. These bonds were reclassified from business-type activities to governmental activities due to the transfer of assets and liabilities held in the McDermont Sports Complex Fund. Upon and during the continuance of an event of default, the principal of and interest accrued on all loans may be declared to be due and payable immediately.

The annual service debt service requirements for the 2012 Taxable Lease Revenue Refunding Bonds are as follows:

For the Year
Ending June 30, Principal Interest Total
2025 165,000 $ 27,656 $ 192,656 $
2026 175,000 17,031 192,031
2027 5,781 185,000 190,781
Total $ 50,468 525,000 $ 575,468 $
Certificates of Participation (COP)
On October 1, 2008, the City entered into a COP with the United States Department of Agriculture Rural Development Agency (USDA RD) for Tulare Road in the amount of $1,600,000. The COP has annual principal and interest approximately $120,000 a year at 4.5% through 2029. Upon and during the continuance of an event of default, the principal of and interest accrued on all loans may be declared to be due and payable immediately.

The annual debt service requirements for the 2008 USDA RD Roads COP are as follows:

For the Year
Ending June 30, Principal Interest Total
2025 97,643 $ 11,995 $ 109,638 $
2026 101,793 9,798 111,591
2027 106,119 7,507 113,626
2028 110,630 5,120 115,750
2029 2,631 116,912 119,543
Total $ 37,051 533,097 $ 570,148 $
CITY OF LINDSAY | JUNE 30, 2024
Notes to the Basic Financial Statements
42 NOTE 7 – LONG-TERM DEBT (Continued)
A. Governmental Activities (Continued)
Certificates of Participation (COP) (Continued)
On May 12, 2010, the City entered into a COP with the USDA RD for the construction of the Library Project in the amount of $750,000. The COP has annual principal and interest payments of approximately $37,000 a year at 4.125% through 2036. Upon and during the continuance of an event of default, the principal of and interest accrued on all loans may be declared to be due and payable immediately.

The annual debt service requirements for the 2010 USDA RD Library COP are as follows:

For the Year
Ending June 30, Principal Interest Total
2025 24,233 $ 12,580 $ 36,813 $
2026 25,202 11,582 36,784
2027 26,210 10,542 36,752
2028 27,259 9,450 36,709
2029 28,349 29,508 57,857
2030-2034 159,690 2,582 162,272
2035 580 14,050 14,630
Total $ 76,824 304,993 $ 381,817 $
Finance Purchase Agreement – Fire Truck
On January 25, 2018, the City entered into a master purchase agreement with PNC Equipment Finance for purchase of a fire truck. The total amount financed by the bank was approximately $725,819 with interest rate of 4.37%. The payments will be made over a 10-year period. Upon and during the continuance of an event of default, the principal of and interest accrued on all leases may be declared to be due and payable immediately.

For the Year
Ending June 30, Principal Interest Total
2025 76,810 $ 14,332 $ 91,142 $
2026 80,167 10,976 91,143
2027 83,670 7,473 91,143
2028 3,816 84,113 87,929
Total $ 36,597 324,760 $ 361,357 $
CITY OF LINDSAY | JUNE 30, 2024
Notes to the Basic Financial Statements
43 NOTE 7 – LONG-TERM DEBT (Continued)
A. Governmental Activities (Continued)
TCTA Settlement Liability
On April 24, 2012, the City reached a settlement with the Tulare County Transportation Authority (TCTA) in the total amount of $1,048,443 for repayment of improper spending of for Measure R funds. Pursuant to the settlement, the City agreed to a 21-year repayment plan. The agreement was later revised in 2019 to remove required interest payments, and require 80 installment payments of $13,105 to be made on a quarterly basis. As of June 30, 2023, the balance of the TCTA settlement liability was $537,327.

The annual payment requirements for the agreement are as follows:

For the Year
Ending June 30, Principal Interest Total
2025 52,424 $ - $ 52,424 $
2026 52,424 - 52,424
2027 52,424 - 52,424
2028 52,424 - 52,424
2029 52,424 - 52,424
2030-2034 - 222,783 222,783
Total $ - 484,903 $ 484,903 $
Caltrans Settlement Liability
Caltrans provides state funding for construction projects. The City did multiple projects in the 2000’s. Caltrans alleged the City did not properly spent Downtown project and the Safe Routes to School project, and it demanded repayment of approximately $1,000,000. On October 7, 2019, the City reached a settlement with the California Department of Transportation (Caltrans) in the total amount of $349,032 for repayment of improperly spent funds. Pursuant to the settlement, the City agreed to a 7-year repayment plan based on the apportionment of fuel tax revenues from the State to the City, with annual payments calculated to approximately 10 percent of those fuel tax apportionments.

The annual payment requirements for the agreement are as follows:

For the Year
Ending June 30, Principal Interest Total
2025 49,861 $ 4,238 $ 54,099 $
2026 2,083 49,866 51,949
Total $ 6,321 99,727 $ 106,048 $
CITY OF LINDSAY | JUNE 30, 2024
Notes to the Basic Financial Statements
44 NOTE 7 – LONG-TERM DEBT (Continued)
A. Governmental Activities (Continued)
HCD Settlement Liability
In September 2020, the City entered into a settlement agreement with the California Department of Housing and Community Development (HCD) related to historical compliance matters involving HCD-administered housing programs.

The matters giving rise to the settlement primarily involved prior use of program funds for non-program purposes, as well as other historical program administration issues identified through monitoring and audit activities. Under the terms of the agreement, the City is required to repay $3,790,786, together with interest at 9%, through an initial payment and annual installments. If the City remains in compliance with the agreement and timely makes the required payments until the outstanding balance is reduced to $1,100,000, the remaining balance and related accrued interest will be forgiven.

The agreement also requires the remittance of certain program funds and income, assignment of related loans receivable, return of specified program-funded assets, and temporarily restricts the City from participating in HCD programs.

The annual payment requirements for the agreement as of June 30, 2024 are as follows:

For the Year
Ending June 30, Principal Interest Total
2025 89,360 $ - $ 89,360 $
2026 89,360 - 89,360
2027 89,360 - 89,360
2028 89,360 - 89,360
2029 89,360 - 89,360
2030-2034 446,800 - 446,800
2035-2039 446,800 - 446,800
2040-2044 446,800 - 446,800
2045-2049 446,800 - 446,800
2050-2054 446,800 - 446,800
2055-2059 446,800 - 446,800
2060-2064 - 385,106 385,106
Total $ 3,512,706 - $ 3,512,706 $
CITY OF LINDSAY | JUNE 30, 2024
Notes to the Basic Financial Statements
45 NOTE 7 – LONG-TERM DEBT (Continued)
A. Governmental Activities (Continued)
Subscription Liabilities
On July 1, 2022, the City entered into a 60 month subscription for the use of Central Square. An initial subscription liability was recorded in the amount of $235,194. As of June 30, 2024, the value of the subscription liability is $159,589. The City is required to make annual payments in the amount of $54,076. The subscription has an interest rate of 7.50%. The value of the right of use asset as of June 30, 2024 of $235,194 with accumulated amortization of $94,078 is included with SBITAs on the governmental activities capital assets.

On July 1, 2022, the City entered into a 60 month subscription for the use of Municode. An initial subscription liability was recorded in the amount of $41,101. As of June 30, 2024, the value of the subscription liability is $27,889. The City is required to make annual payments in the amount of $9,450. The subscription has an interest rate of 7.50%. The value of the right of use asset as of June 30, 2024 of $41,101 with accumulated amortization of $16,440 is included with SBITAs on the governmental activities capital assets.

The future minimum lease obligations and the net present value of these minimum payments as of June 30, 2024, were as follows:

For the Year
Ending June 30, Principal Interest Total
2025 49,465 $ 14,061 $ 63,526 $
2026 53,175 10,351 63,526
2027 57,163 6,363 63,526
2028 - 27,675 27,675
Total $ 30,775 187,478 $ 218,253 $
B. Business-Type Activities
Certification of Participation (COP)
On June 20, 2007, the City entered into a COP with USDA RD for the Wellness Center in the amount of $1,130,689. The total amount of the COP will be $3,000,000 if totally drawn. The Wellness Center Fund has annual principal and interest payments of approximately $129,000 a year at 4.25% through 2044. Upon and during the continuance of an event of default, the principal of and interest accrued on all loans may be declared to be due and payable immediately. As of June 30, 2023, the balance of the COP was $1,784,348.

The annual debt service requirements for the 2007 USDA RD Wellness Center COP are as follows:

For the Year
Ending June 30, Principal Interest Total
2025 57,915 $ 74,161 $ 132,076 $
2026 60,376 71,647 132,023
2027 62,942 69,026 131,968
2028 65,618 66,294 131,912
2029 68,406 63,446 131,852
2030-2034 388,192 270,089 658,281
2035-2039 477,999 178,375 656,374
2040-2044 65,360 547,346 612,706
Total $ 858,398 1,728,794 $ 2,587,192 $
CITY OF LINDSAY | JUNE 30, 2024
Notes to the Basic Financial Statements
46 NOTE 7 – LONG-TERM DEBT (Continued)
B. Business-Type Activities (Continued)
Revenue Bonds Payable
On November 5, 1999, the City entered into a revenue bond with the USDA RD for the Wastewater Treatment Plant Project for $7,000,000. The annual principal and interest payments of $323,470 at 3.25% are through November 27, 2039.

Upon and during the continuance of an event of default, the principal of and interest accrued on all loans may be declared to be due and payable immediately. As of June 30, 2023, the balance due was $4,172,307.

The annual debt service requirements for the 1999 USDA RD Wastewater revenue bond are as follows:

For the Year
Ending June 30, Principal Interest Total
2025 193,976 $ 129,494 $ 323,470 $
2026 200,280 123,190 323,470
2027 206,789 116,681 323,470
2028 213,510 109,960 323,470
2029 220,449 103,021 323,470
2030-2034 1,214,485 402,865 1,617,350
2035-2039 1,425,091 192,260 1,617,351
2040 18,462 309,857 328,319
Total $ 3,984,437 1,195,933 $ 5,180,370 $
On December 11, 2000, the City entered into a revenue bond with the USDA RD for the Water Line Project for $2,440,000.

The annual principal and interest payments of $109,874 at 3.25% are through December 11, 2040. Upon and during the continuance of an event of default, the principal of and interest accrued on all loans may be declared to be due and payable immediately. As of June 30, 2023, the balance due was $1,431,517.

The annual debt service requirements for 2000 USDA RD Water Line Project bond are as follows:

For the Year
Ending June 30, Principal Interest Total
2025 65,450 $ 44,424 $ 109,874 $
2026 67,577 42,297 109,874
2027 69,773 40,101 109,874
2028 72,040 37,834 109,874
2029 74,382 35,492 109,874
2030-2034 409,779 139,591 549,370
2035-2039 480,841 68,529 549,370
2040-2041 4,823 128,286 133,109
Total $ 1,368,128 413,091 $ 1,781,219 $
CITY OF LINDSAY | JUNE 30, 2024
Notes to the Basic Financial Statements
47 NOTE 7 – LONG-TERM DEBT (Continued)
B. Business-Type Activities (Continued)
Revenue Bonds Payable (Continued)
On June 22, 2004, the City entered into a revenue bond with the USDA RD for the Wastewater Project for $480,000. The annual principal and interest payments of $25,623 at 4.375% are through June 28, 2043. Upon and during the continuance of an event of default, the principal of and interest accrued on all loans may be declared to be due and payable immediately. As of June 30, 2023, the balance due was $336,017.

The annual debt service requirements for 2004 USDA RD Wastewater Project are as follows:

For the Year
Ending June 30, Principal Interest Total
2025 11,400 $ 14,223 $ 25,623 $
2026 11,899 13,724 25,623
2027 12,419 13,204 25,623
2028 12,963 12,660 25,623
2029 13,530 12,093 25,623
2030-2034 77,064 51,051 128,115
2035-2039 95,461 32,654 128,115
2040-2043 9,957 90,359 100,316
Total $ 159,566 325,095 $ 484,661 $
Remediation Liability
The City’s Sewer Fund is responsible for the contamination of two water basins at the City’s sewer plant. The preliminary cost of the clean-up referred to as the Lindsay Olive Growers (LOG) Pond Closure liability is estimated at $2,570,981. This amount has been accrued as of June 30, 2023. On April 17, 2024, City met with the State to come up with a plan to address the mandated Clean-up Order. There is roughly $300,000 available from the state to update the estimate and closure plan. Staff is working on the Scope of work to submit to the State to receive the grant.

NOTE 8 – COMPENSATED LEAVES PAYABLE
Employees accrue vacation, annual leave, earned time off, and holiday leave up to certain maximums, based on the employee’s bargaining unit. The City accrues the liability for compensated leave as it is earned by employees. The amount of compensated leave payable outstanding was $366,106 as of June 30, 2024.

The amount due within one year of $147,751 for Governmental Activities and $39,531 for Business-Type Activities represents the estimated amount for anticipated retirees. The City typically uses the General Fund to liquidate the liability for compensated absences for governmental funds.

CITY OF LINDSAY | JUNE 30, 2024
Notes to the Basic Financial Statements
48 NOTE 9 – CITY EMPLOYEES’ RETIREMENT PLAN
A. General Information
Plan Description
All qualified permanent and probationary employees are eligible to participate in the Public Agency Cost Sharing MultipleEmployer Plan (Plan) administered by the California Public Employees’ Retirement System (CalPERS). The Plan consists of individual rate plans (benefit tiers) within a safety risk pool (police and fire) and a miscellaneous risk pool (all other). Plan assets may be used to pay benefits for any employer rate plan of the safety and miscellaneous pools. Accordingly, rate plans within the safety or miscellaneous pools are not separate plans under GASB Statement No. 68. Individual employers may sponsor more than one rate plan in the miscellaneous or safety risk pools. The City sponsors four rate plans (two miscellaneous and two safety). Benefit provisions under the Plan are established by State Statute and City resolution.

CalPERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.

Benefits Provided
CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit.

The cost-of-living adjustments for the Plan are applied as specified by the Public Employees’ Retirement Law.

The rate plan provisions and benefits in effect at June 30, 2024 are summarized as follows:
1st Tier PEPRA
Prior to Prior to
Hire date January 1, 2013 January 1, 2013
Benefit formula 2.7% @ 55 2% @ 62
Benefit vesting schedule 5 years service 5 years service Benefit payments monthly for life monthly for life
Retirement age 50 - 63 52 - 67
Monthly benefits, as a % of annual salary 1.426% to 2.418% 1.0% to 2.5% Required employee contribution rates 8.00% 7.75%
Required employer contribution rates 15.950% 7.680%
Miscellaneous
1st Tier PEPRA
Prior to Prior to
Hire Date January 1, 2013 January 1, 2013
Benefit formula 3% @ 55 2.7% @ 57
Benefit vesting schedule 5 years service 5 years service Benefit payments monthly for life monthly for life
Retirement age 50 - 55 50 - 57
Monthly benefits, as a % of annual salary 2.0% to 2.7% 2.0% to 2.7% Required employee contribution rates 9.00% 13.75%
Required employer contribution rates 24.150% 13.540%
Safety
CITY OF LINDSAY | JUNE 30, 2024
Notes to the Basic Financial Statements
49 NOTE 9 – CITY EMPLOYEES’ RETIREMENT PLAN (Continued) A. General Information (Continued)
Beginning in fiscal year 2016, CalPERS collects employer contributions for the Plan as a percentage of payroll for the normal cost portion as noted in the rates above and as a dollar amount for contributions toward the unfunded liability.

The dollar amounts are billed on a monthly basis. The City required a contribution of $794,921 for the unfunded liability for the fiscal year ended June 30, 2024.

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 notice of a change in the rate. Funding contributions for the 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 unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of the employees.

The City’s contributions to the plan recognized as pension expense for the year ended June 30, 2024 were $1,308,846.

B. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions As of June 30, 2024 the City reported a net pension liability for its proportionate share of the net pension liability of the Plan of $12,345,983.

The City’s net pension liability for the Plan is measured as the proportionate share of the net pension liability. The net pension liability of the Plan is measured as of June 30, 2023, and the total pension liability for the 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 plan relative to the projected contributions of all participating employers, actuarially determined. The City’s proportionate share of the net pension liability for the Plan as of June 30, 2022, and 2023 was as follows:

Proportion - June 30, 2022 0.0987%
Proportion - June 30, 2023 0.0990%
Change - Increase (Decrease) 0.0003%
For the year ended June 30, 2024 the City recognized pension expense of $1,889,881 At June 30, 2024 the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

CITY OF LINDSAY | JUNE 30, 2024
Notes to the Basic Financial Statements
50 NOTE 9 – CITY EMPLOYEES’ RETIREMENT PLAN (Continued) B. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions (Continued) Deferred Outflows Deferred Inflows
of Resources of Resources
Changes of assumptions 733,884 $ - $
Differences between expected and actual experience 758,261 88,475 Net differences between projected and actual
earnings on plan investments 1,855,792 -
Differences between employer's contributions and the
employer's proportionate share of contributions 57,516 322,612 Change in employer's proportion 198,643 110,319
Pension contributions made subsequent to
measurement date 1,370,281 -
Total 4,974,377 $ 521,406 $
$1,370,281 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, 2024. Other amounts reported as deferred outflow of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

Year Ended
June 30,
2025 905,696 $
2026 650,917
2027 1,473,434
2028 52,643
2029 -
Thereafter -
CITY OF LINDSAY | JUNE 30, 2024
Notes to the Basic Financial Statements
51 NOTE 9 – CITY EMPLOYEES’ RETIREMENT PLAN (Continued) C. Actuarial Assumptions
The total pension liabilities in the June 30, 2022 actuarial valuations were determined using the following actuarial assumptions:

Valuation Date June 30, 2022
Measurement Date June 30, 2023
Actuarial Cost Method Entry- Age Normal Cost Method
Actuarial Assumptions:

Discount Rate 6.90%
Inflation 2.30%
Payroll Growth 2.80%
Projected Salary Increase Varies by Entry Age and Service Investment Rate of Return 6.90%
Mortality Derived using CalPERS' Membership Data for all Funds(2) (1) Net of pension plan investment expenses, including inflation (2) The mortality table was developed based on CalPERS specific data.

The table includes 15 years of mortality improvements using Society of Actuaries Scale 80% of scale MP 2020.

The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2022 valuation were based on the results of December 2017 actuarial experience study for the period 1997 to 2015. Further details of the Experiences Study can be found on the CalPERS website.

Change of Assumptions
There were no assumption changes in 2023. Effective with the June 30, 2021 valuation date (2022 measurement date), the accounting discount rate was reduced from 7.15% to 6.90%. 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, combined with risk estimates, and 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. In addition, demographic assumptions and the inflation rate assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. The accounting discount rate was 7.15% for measurement dates June 30, 2017 through June 30, 2021, 7.65% for measurement dates June 30, 2015 through June 30, 2016, and 7.50% for measurement date June 30, 2014.

D. Discount Rate
The discount rate used to measure the total pension liability was 6.90%. The projection of cash flows used to determine the discount rate assumes 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.

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

CITY OF LINDSAY | JUNE 30, 2024
Notes to the Basic Financial Statements
52 NOTE 9 – CITY EMPLOYEES’ RETIREMENT PLAN (Continued) D. Discount Rate (Continued)
In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected PERF cash flows. Using historical returns of all the funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses.

The expected real rates of return by asset class are as follows:

Assumed Asset
Allocation
Real Return
Years 1-10(a,b)
Global Equity - Cap-weighted 30.0% 4.54%
Global Equity - Non-Cap-weighted 12.0% 3.84%
Private Equity 13.0% 7.28%
Treasury 5.0% 0.27%
Mortgage-backed Securities 5.0% 0.50%
Investment Grade Corporates 10.0% 1.56%
High Yield 5.0% 2.27%
Emerging Market Debt 5.0% 2.48%
Private Debt 5.0% 3.57%
Real Assets 15.0% 3.21%
Leverage -5.00% -0.59%
Total 100.0%
(a) An expected inflation of 2.30% used for this period (b) Figures are based on the 2021-22 Asset Liability Management study Asset Class (a)
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, calculated using the discount rate for each Plan, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate:

Discount Rate - 1% Current Discount Rate Discount Rate +1%

5.90% 6.90% 8.9%
$ 12,345,983 18,141,547 $ 7,591,008 $
E. Pension Plan Fiduciary Net Position
Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.

CITY OF LINDSAY | JUNE 30, 2024
Notes to the Basic Financial Statements
53 NOTE 10 – RISK MANAGEMENT
Effective July 1, 2023, the City transitioned its risk management coverage from CSJVRMA to PRISM for general liability and workers’ compensation coverage. Management has indicated that coverage under PRISM is substantially the same as coverage previously maintained through CSJVRMA. PRISM is not considered a component unit of the City for financial reporting purposes. There were no significant reductions in insurance coverage during the year, and settlements did not exceed insurance coverage in any of the past three fiscal years.

NOTE 11 – POST-RETIREMENT HEALTH CARE DEFINED BENEFIT PLAN A. Plan Description
The City administers the City’s retired employees’ healthcare plan, a single employer defined benefit health care plan. The plan provides continuation of medical, dental, and vision coverage to qualifying retiring employees. City resolutions and agreements assign the authority to establish and amend benefit provisions to the City. A separate OPEB trust account has not been established by the City for the plan.

B. Employees Covered
As of the June 30, 2024 actuarial valuation, the following current and former employees were covered by the benefit terms under the Plan:

Active employees 51
Inactive employees 3
Total 54
C. Contribution
The contribution requirements of plan members and the City are established and may be amended by the City. The required contribution is based on a projected pay-as-you-go financing requirements, with additional amounts to prefund benefits determined annually by the City Council. For the fiscal year ended June 30, 2024, the City contributed $57,700 (including implicit subsidy) and zero to prefund benefits. Plan members receiving benefits contributed no amounts to the total premiums. The General Fund has typically been used to liquidate OPEB liabilities for governmental funds.

D. Total OPEB Liability
The City’s total OPEB liability was measured as of June 30, 2024 and the total OPEB liability used to calculate the total OPEB liability was determined by actuarial valuation dated June 30, 2023. The total OPEB liability in the June 30, 2023 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified:

Valuation Date June 30, 2023
Measurement Date June 30, 2023 to June 30, 2024
Actuarial Assumptions:

Actuarial cost method Entry Age, Level Percent of Pay
Discount Rate 3.93%
Inflation rate 2.50%
Payroll increase 2.75%
Healthcare trend rates 4.00%
Expected rate of return on asset N/A
Mortality Rate CalPERS 2021 Experience Study
CITY OF LINDSAY | JUNE 30, 2024
Notes to the Basic Financial Statements
54 NOTE 11 – POST-RETIREMENT HEALTH CARE DEFINED BENEFIT PLAN (Continued) D. Total OPEB Liability (Continued)
Discount Rate
The discount rate estimates investment earnings for assets earmarked to cover retiree health benefit liabilities. The discount rate depends on the nature of underlying assets for funded plans. The rate used for a funded plan is the real rate of return expected for plan assets plus long term inflation assumption. For an unfunded plan, the discount rate is based on an index of 20-year General Obligation municipal bonds. For partially funded plans, the discount rate is a blend of the funded and unfunded rates.

Changes in Total OPEB Liability as of June 30, 2024
Balance at June 30, 2023 1,386,419 $
Service cost 173,487
Interest 52,717
Assumption changes (47,114)
Actuarial vs. expected experience -
Benefit payments (57,700)
Net change during fiscal year 2023-24 121,390
Balance at June 30, 2024 1,507,809 $
Sensitivity to the total OPEB Liability to Changes in the Discount Rate and Healthcare Trend Rate The following presents the total OPEB liability of the City if it were calculated using discount rate and health care cost trend rates that are one percentage point lower or one percentage point higher than the current rate, for the measurement period ending June 30, 2024:
1% Decrease Discount Rate 1% Increase
(2.93%) (3.93%) (4.93%)
Total OPEB liability $ 1,674,653 1,507,809 $ 1,358,857 $ Health Care
1% Decrease Trend Rate 1% Increase
(3%) (4%) (5%)
Total OPEB liability $ 1,264,607 1,507,808 $ 1,802,578 $ CITY OF LINDSAY | JUNE 30, 2024
Notes to the Basic Financial Statements
55 NOTE 11 – POST-RETIREMENT HEALTH CARE DEFINED BENEFIT PLAN (Continued) D. Total OPEB Liability (Continued)
Recognition of Deferred Outflows and Deferred Inflows of Resources and OPEB Expense For the fiscal year ended June 30, 2024, the City recognized OPEB expense of $189,355. The City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

Deferred Deferred
Outflows Inflows
of Resources of Resources
Changes in assumption 107,264 $ 793,360 $
Differences between expected and
actual experience 103,345 190,714
Total 210,609 $ 984,074 $
Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB and will be recognized as pension expense as follows:

Recognized Net
Deferred
For the Outflows
Fiscal Year (Inflows) of
Ended June 30, Resources
2025 (36,849) $
2026 (36,849)
2027 (36,849)
2028 (36,851)
2029 (67,017)
Thereafter (559,052)
Total (773,467) $
NOTE 12 – COMMITMENTS AND CONTINGENCIES
A. State and Federal Allowances, Awards, and Grants
The City participates in Federal and State grant programs. These programs were audited in accordance with the provisions of the Uniform Guidance in 2 CFR 200 Subpart Single Audit and applicable State requirements. No cost disallowance is expected as a result of these audits; however, these programs are subject to further examination by the grantors.

Expenditures which may be disallowed, if any, by the granting agencies, cannot be determined at this time. The City expects such amounts, if any, to be immaterial.

B. Litigation
The City is involved in various claims and legal actions arising in the ordinary course of business. City management, based upon consultation with the City Attorney, believes the ultimate disposition of the remaining matters will not have a material adverse effect on the City’s financial position. City management further believes that the City’s insurance programs provide coverage for potential losses, where applicable, arising from such matters.

CITY OF LINDSAY | JUNE 30, 2024
Notes to the Basic Financial Statements
56 NOTE 13 – SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY On December 29, 2011, the California Supreme Court upheld Assembly Bill X1 26 (the Bill) that provides for the dissolution of all redevelopment agencies in the State of California. This action impacted the City that previously had reported a redevelopment agency blended component unit.

The Bill provides that upon dissolution of a redevelopment agency, either the county or another unit of local government will agree to serve as the “successor agency” to hold the assets until they are distributed to other units of state and local government. On January 10, 2012, the Lindsay City Council adopted a resolution affirming that the City would serve as the successor agency to the former Lindsay Redevelopment Agency (the Agency).

After enactment of the law, which occurred on June 28, 2011, redevelopment agencies in the State of California cannot enter into new projects, obligations, or commitments. Subject to the control of a newly established oversight board, remaining assets can only be used to pay enforceable obligations in existence at the date of dissolution (including the completion of any unfinished projects that were subject to legally enforceable contractual commitments).

In future fiscal years, successor agencies are only to be allocated tax increment revenue in the amount that is necessary to pay the estimated annual installment payments on enforceable obligations of the former redevelopment agency until all enforceable obligations of the prior redevelopment agency have been paid in full.

The Bill directs the State Controller of the State of California to review the propriety of any transfers of assets between redevelopment agencies and other public bodies that occurred after January 1, 2011. If the public body that received such transfers is not contractually committed to a third party for the expenditure or encumbrance of those assets, the State Controller is required to order the available assets to be transferred to the public body designated as the successor agency by the Bill.

Management believes, in consultation with legal counsel, that the obligations of the former redevelopment agency due to the City are valid enforceable obligations payable by the successor agency trust under the requirements of the Bill. The City’s position on this issue is not a position of settled law and there is considerable legal uncertainty regarding this issue.

It is reasonably possible that a legal determination may be made at a later date by an appropriate judicial authority that would resolve this issue unfavorably to the City.

In accordance with the timeline set forth in the Bill (as modified by the California Supreme Court on December 29, 2011) all redevelopment agencies in the State of California were dissolved and ceased to operate as legal entities as of February 1, 2012.

After the date of dissolution, as allowed under Section 341716(a) of the Bill, the City elected to transfer the housing assets and functions previously performed by the Agency. The remaining assets, liabilities, and activities of the dissolved Agency are reported in the Successor Agency fiduciary fund (private- purpose trust fund) in the financial statements of the City.

CITY OF LINDSAY | JUNE 30, 2024
Notes to the Basic Financial Statements
57 NOTE 13 – SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY (Continued) A. Successor Agency Long-Term Debt
In accordance with the provisions of the Bill and the court case, the obligations of the former redevelopment agency became vested with the funds established for the successor agency upon the date of dissolution, February 1, 2012. Tax increment revenue is pledged to fund the debts of the Successor Agency Trust subject to the reapportionment of such revenues as provided by the Bill.

Successor Agency long-term debt activity for the fiscal year ended June 30, 2023 was as follows:

Balance at Balance at Due Within
July 1, 2023 Additions Reductions June 30, 2024 One Year Tax Allocation Bonds:
2015 Tax Lease Revenue $ 10,060,000 - $ (510,000) $ 9,550,000 $ 535,000 $ B. Tax Allocation Bonds Payable
On June 1, 2015, the Successor Agency refunded the 2005, 2007, and 2008 tax allocation bonds in the amounts of $3,925,000, $6,895,000, and $3,270,000, respectively, with the refunding issue of 2015 in the amount of $13,000,000. The bonds have principal payments each August 1 through 2037 and accrue interest at 3.0% – 5.0%, which is payable semiannually. The bonds are payable solely from pledged tax revenues allocated and paid to the Successor Agency from properties in the project area. Upon and during the continuance of an event of default, the principal of and interest accrued on all loans may be declared to be due and payable immediately. As of June 30,2023, the balance on the bonds was $10,060,000.

The annual debt service requirements for 2015 Tax Allocation Refunding Bond are as follows:

For the Year
Ending June 30, Principal Interest Total
2025 535,000 $ 341,481 $ 876,481 $
2026 565,000 319,631 884,631
2027 585,000 302,016 887,016
2028 595,000 283,207 878,207
2029 615,000 263,544 878,544
2030-2034 4,180,000 419,907 4,599,907
2035-2039 42,417 2,475,000 2,517,417
Total $ 9,550,000 1,972,203 $ 11,522,203 $
CITY OF LINDSAY | JUNE 30, 2024
Notes to the Basic Financial Statements
58 NOTE 14 – RESTATEMENT OF BEGINNING FUND BALANCE/NET POSITION During the current fiscal year, the City identified errors and/or adjustments affecting beginning balances of certain funds and government-wide accounts. Accordingly, beginning fund balance and net position, as applicable, have been restated to properly reflect these amounts as of July 1, 2023. The following table summarizes the restatements recorded, including the affected funds, the amount of each restatement, and the nature of the related adjustment.

GovernmentWide Governmental
Funds
GovernmentWide Proprietary Funds
Governmental
Activities General
Business-Type
Activities Water Sewer Refuse Wellness Center
$ (1,355,376) 27,017,228 $ 18,569,224 $ 7,972,047 $ 5,025,425 $ 412,355 $ 5,159,397 $ Error Correction:

Overstatement of ROU assets - - (667,191) - (667,191) - - Overstatement of capital assets (1,614,035) - - - - - - Understatement of capital assets 960,879 - 633,547 483,707 149,840 - - Overstatement of accounts payable 166,151 166,151 - - - - - Understatement of unearned revenues (2,016,366) (2,016,366) - - - - - Overstatement of unavailable revenues - 4,247,953 - - - - - Overstatement of lease liability - - 685,541 - 685,541 - - Understatement of net pension liability 391,641 - (391,639) (201,509) (70,936) (37,221) (81,973) Total error correction (2,111,730) 2,397,738 260,258 282,198 97,254 (37,221) (81,973) $ 1,042,362 24,905,498 $ 18,829,482 $ 8,254,245 $ 5,122,679 $ 375,134 $ 5,077,424 $ Fund balance/net position, June 30, 2023, as
previously reported
Fund balance/net position, July 1, 2023, as restated
NOTE 15 – FINANCIAL CONDITION OF CERTAIN ENTERPRISE FUNDS At June 30, 2024, the Water and Wellness Funds continued to experience negative operating trends and liquidity constraints. The Water Fund reported unrestricted net position of approximately $60,000, while the Wellness Fund reported a deficit unrestricted net position of approximately $1.1 million. The Wellness Fund’s deficit unrestricted net position, together with the Water Fund’s limited unrestricted net position, indicates reduced financial flexibility within those operations.

The Water and Wellness Funds also reported negative cash balances at year-end of approximately $476,000 and $526,000, respectively. During fiscal year 2024, the Water Fund reported a total loss of approximately $856,000, and the Wellness Fund reported a total loss of approximately $415,000. Both funds also reported operating losses for the year. In addition, the Water Fund reported transfers out during the year, which further reduced available cash resources.

These conditions indicate ongoing financial pressure in the Water and Wellness Funds and the need for continued monitoring of rates, expenditures, transfers, and cash flows.

CITY OF LINDSAY | JUNE 30, 2024
Notes to the Basic Financial Statements
59 NOTE 16 - SUBSEQUENT EVENTS
On August 29th, 2024, the city resolved litigation with SQM North America Corporation related to contamination of Well

11. Total gross settlement of $9.5 million and net proceeds to the city of $6,550,533 after attorney fees and case costs.

The proceeds were received after year-end and, accordingly, are not reflected in the accompanying June 30, 2024 financial statements.

Subsequent to June 30, 2024, the City finalized the settlement of a litigation matter arising in the normal course of business. The matter was settled on November 18, 2025. Based on the related insurance coverage, the settlement did not result in a material net liability to the City. Accordingly, no amount related to this matter has been recognized in the accompanying financial statements as of June 30, 2024.
60 REQUIRED SUPPLEMENTARY INFORMATION
CITY OF LINDSAY | FOR THE YEAR ENDED JUNE 30, 2024
Pension Plans
Schedule of the City’s Proportionate Share of the Net Pension Liability Last 10 Years*
61 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

0.1197% 0.0991% 0.0986% 0.0924% 0.0917% 0.0904% 0.0895% 0.1099% 0.0987% 0.0990% $ 6,814,684 6,216,207 $ 8,258,639 $ 9,168,480 $ 8,840,660 $ 9,262,536 $ 9,743,120 $ 5,942,171 $ 11,402,986 $ 12,345,983 $ $ 2,799,950 2,769,950 $ 2,689,271 $ 2,907,772 $ 2,572,760 $ 2,507,765 $ 2,464,840 $ 2,629,158 $ 2,959,722 $ 3,363,394 $ 224.42% 243.39% 307.10% 315.31% 343.63% 369.35% 395.28% 226.01% 385.27% 367.07%

79.82% 75.57% 71.79% 71.08% 73.68% 73.40% 72.51% 84.16% 71.39% 70.99%

NOTES TO THE SCHEDULE
Changes of Assumptions - None
Changes in Benefit Terms - In 2022, SB 1168 increased the standard retiree lump sum death benefit from $500 to $2,000 for any death occurring on or after July 1, 2023. The impact from this change is deemed to be immaterial and is included in Differences Between Expected and Actual Experience Proportionate share of the net pension liability as
percentage of covered payroll
Plan fiduciary net position as a percentage of the total pension liability
Proportion of the net pension liability
Proportionate share of the net pension liability
Covered payroll
CITY OF LINDSAY | FOR THE YEAR ENDED JUNE 30, 2024
Pension Plans
Schedule of Pension Contributions
Last 10 Years*
62 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
$ 726,038 700,907 $ 1,207,603 $ 1,021,760 $ 1,140,688 $ 922,615 $ 1,029,558 $ 1,158,700 $ 1,308,846 $ 1,370,281 $ 700,907 726,038 1,207,603 1,021,760 1,140,688 922,615 1,029,558 1,158,700 1,308,846 1,370,281 $ - - $ - $ - $ - $ - $ - $ - $ - $ - $
$ 2,689,271 2,799,950 $ 2,907,772 $ 2,572,760 $ 2,507,765 $ 2,464,840 $ 2,629,158 $ 2,959,722 $ 3,363,394 $ 3,686,434 $

25.03% 27.00% 41.53% 39.71% 45.49% 37.43% 39.16% 39.15% 38.91% 37.17% Contribution deficiency (excess)
Covered payroll
Contributions as a percentage of covered payroll
Actuarily required contribution (actuarially
contributions
CITY OF LINDSAY | FOR THE YEAR ENDED JUNE 30, 2024
Pension Plans
Schedule of Changes in Net OPEB Liability and Related Ratios Last 10 Years*
63 Measurement Period 2018 2019 2020 2021 2022 2023 2024

TOTAL OPEB LIABILITY
Service Cost 79,370 $ 76,602 $ 99,506 $ 102,491 $ 161,511 $ 127,240 $ 173,487 $ Interest on the Total OPEB Liability 52,405 58,378 42,590 43,900 47,888 71,935 52,717 Difference Between Expected and Actual Experience 1,127 (2,879) 73,023 98,985 - (216,645) - Changes of Assumptions (52,488) 72,921 175,866 (14,499) (322,425) (534,555) (47,114) Benefit Payments (31,041) (37,872) (40,536) (28,027) (49,617) (60,003) (57,700) Net Change in Total OPEB Liability 49,373 167,150 350,449 202,850 (162,643) (612,028) 121,390 Total OPEB Liability - Beginning 1,391,268 1,440,641 1,607,791 1,958,240 2,161,090 1,998,447 1,386,419 Total OPEB Liability - Ending 1,440,641 $ 1,607,791 $ 1,958,240 $ 2,161,090 $ 1,998,447 $ 1,386,419 $ 1,507,809 $ Plan Fiduciary Net Position as a percentage of the
total OPEB liability N/A N/A N/A N/A N/A N/A N/A
Covered payroll 2,560,757 $ 2,637,580 $ 2,912,375 $ 2,897,502 $ 3,272,675 $ 3,390,984 $ 3,519,948 $ Net OPEB liability as a percentage of covered payroll 56.26% 60.96% 67.24% 74.58% 61.06% 40.89% 42.84% *Fiscal year 2018 was the first year of implementation. Additional years will be presented when available.

CITY OF LINDSAY | FOR THE YEAR ENDED JUNE 30, 2024
Budgetary Comparison Schedules
General Fund
The Notes to the Budgetary Comparison Schedules are an integral part of this statement. 64 Budgeted Amounts Variance with
Original Final Actual Final Budget

REVENUES
Property taxes 455,000 $ 455,000 $ 408,606 $ (46,394) $ Sales taxes 1,630,000 1,630,000 1,551,145 (78,855)
Measure O taxes 1,735,000 1,735,000 1,704,543 (30,457)
Utility users' taxes 1,123,625 1,123,625 968,607 (155,018) Other taxes 2,094,100 2,094,100 2,067,000 (27,100)
Intergovernmental 160,000 160,000 1,932,456 1,772,456
Fines and forfeitures 27,000 27,000 41,862 14,862
Licenses and permits 564,500 564,500 710,291 145,791
Use of money and property 30,000 30,000 294,504 264,504 Charges for services 33,250 33,250 81,021 47,771
Other, donations, and reimbursements 305,979 305,979 381,746 75,767 Total revenues 8,158,454 8,158,454 10,141,781 1,983,327

EXPENDITURES
Current:

General government 1,245,962 1,245,962 1,250,337 (4,375) Public Safety 4,155,527 4,155,527 6,144,475 (1,988,948) Parks and Recreation 375,896 375,896 286,551 89,345
Public works 833,886 833,886 918,195 (84,309)
Streets and roads 296,296 296,296 522,784 (226,488)
Community development 357,275 357,275 327,187 30,088
Capital outlay 370,310 370,310 2,485,105 (2,114,795)
Debt service:

Principle retirement 267,361 267,361 366,097 (98,736)
Interest and fiscal charges 68,553 68,553 86,066 (17,513) Total expenditures 7,971,066 7,971,066 12,386,797 (4,415,731) Excess (deficiency) of revenues over
(under) expenditures 187,388 187,388 (2,245,016) 6,399,058

OTHER FINANCING SOURCES (USES)
Proceeds from SBITA
Proceeds from disposal of capital assets 5,000 5,000 10,788 5,788 Transfers in 4,058,491 4,058,491 2,374,017 1,684,474
Transfers out (2,082,214) (2,082,214) - 2,082,214
Total other financing sources (uses) 1,981,277 1,981,277 2,384,805 3,772,476 Net change in fund balances 2,168,665 $ 2,168,665 $ 139,789 10,171,534 $ Fund balances (deficits) - beginning (1,355,376)
Error correction 2,397,738
Fund balances (deficits) - beginning, restated 1,042,362 Fund balances (deficits) - ending 1,182,151 $
CITY OF LINDSAY | FOR THE YEAR ENDED JUNE 30, 2024
Budgetary Comparison Schedules
Street Improvement Special Revenue Fund
The Notes to the Budgetary Comparison Schedules are an integral part of this statement. 65 Budgeted Amounts Variance with
Original Final Actual Final Budget

REVENUES
Street improvement program 950,000 $ 950,000 $ 975,951 $ 25,951 $ Use of money and property - - 89,800 89,800
Total revenues 950,000 950,000 1,065,751 115,751

EXPENDITURES
Capital outlay - - 35,000 (35,000)
Debt service:

Principle retirement 49,861 49,861 49,861 -
Interest and fiscal charges - - 11,276 (11,276)
Total expenditures 49,861 49,861 96,137 (46,276)
Excess (deficiency) of revenues over
(under) expenditures 900,139 900,139 969,614 69,475

OTHER FINANCING SOURCES (USES)
Transfers out (484,291) (484,291) (493,937) (9,646)
Total other financing sources (uses) (484,291) (484,291) (493,937) (9,646) Net change in fund balances 415,848 $ 415,848 $ 475,677 59,829 $ Fund balances (deficits) - beginning 2,078,364
Fund balances (deficits) - ending 2,554,041 $
CITY OF LINDSAY | FOR THE YEAR ENDED JUNE 30, 2024
Budgetary Comparison Schedules
Local Transportation Special Revenue Fund
The Notes to the Budgetary Comparison Schedules are an integral part of this statement. 66 Budgeted Amounts Variance with
Original Final Actual Final Budget

REVENUES
Intergovernmental 1,073,640 $ 1,073,640 $ 933,348 $ (140,292) $ Use of money and property - - 95,084 95,084
Total revenues 1,073,640 1,073,640 1,028,432 (45,208)

EXPENDITURES
Current:

Streets and roads 10,785 10,785 153,820 (143,035)
Capital outlay - - 34,129 (34,129)
Debt service:

Principle retirement 93,663 93,663 93,663 -
Interest and fiscal charges 28,204 28,204 26,097 2,107
Total expenditures 132,652 132,652 307,709 (175,057)
Excess (deficiency) of revenues over
(under) expenditures 940,988 940,988 720,723 (220,265)

OTHER FINANCING SOURCES (USES)
Transfers out (3,471,991) (3,471,991) (656,056) 2,815,935 Total other financing sources (uses) (3,471,991) (3,471,991) (656,056) 2,815,935 Net change in fund balances (2,531,003) $ (2,531,003) $ 64,667 2,595,670 $ Fund balances (deficits) - beginning 4,215,736
Fund balances (deficits) - ending 4,280,403 $
CITY OF LINDSAY | FOR THE YEAR ENDED JUNE 30, 2024
Notes to the Budgetary Comparison Schedules
67 NOTE 1 – BUDGETARY DATA
The appropriated budget is prepared by fund, department, and account. The City of Lindsay, California’s (the City) department heads may make transfers of appropriations within a department. The City Manager is authorized to make budget transfers between departments within funds. All revisions must be reported to the City Council. Transfer of appropriations between funds requires the approval of the City Council. The legal level of budgetary control (i.e., the level at which expenditures may not legally exceed appropriations) is the department level.

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

The actual results of operations compared to the appropriations adopted by the City Council for budgeted major governmental funds are included in the fund financial statements. The comparisons of actual results with budget for nonmajor funds are presented as supplemental information in the combining schedules.

The budget is reported on the same basis as the fund types and on a basis consistent with accounting principles generally accepted in the United States of America. Additional appropriations or other changes during the fiscal year may be submitted by the department for Council review and approval.

NOTE 2 – EXCESS OF EXPENDITURES OVER APPROPRIATIONS
The City incurred expenditures in excess of appropriations in the following amounts for the year ended June 30, 2024:

Final
Budget Expenditures Excess
General fund:

Current:

General government 1,245,962 $ 1,250,337 $ (4,375) $
Public Safety 4,155,527 6,144,475 (1,988,948)
Public works 833,886 918,195 (84,309)
Streets and roads 296,296 522,784 (226,488)
Capital outlay 370,310 2,485,105 (2,114,795)
Debt service:

Principle retirement 267,361 366,097 (98,736)
Interest and fiscal charges 68,553 86,066 (17,513)
Street Improvement Fund:

Debt service:

Interest and fiscal charges - 11,276 (11,276)
Local Transportation Fund:

Current:

Streets and roads 10,785 153,820 (143,035)
Capital outlay - 34,129 (34,129)
68 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES 69 NONMAJOR GOVERNMENTAL FUNDS

SPECIAL REVENUE FUNDS
Special Revenue Funds are used to account for specific revenues that are legally restricted to expenditure for particular purposes.

Special Assessment Districts Fund accounts for the activities of the special assessment housing districts in the City.

Property owners in these districts pay additional property tax to fund special landscaping and other services in the district.

Community Development Fund accounts for all financial transactions having to do with CHFA-HELP LHBP mortgage assistance loans.

Gas Tax Fund accounts for transportation funding from the State’s gas tax. It includes funds for construction, maintenance, engineering, congestion relief, and road rehabilitation. The City uses Gas Tax funds on streets and transportation projects.

Park Improvement Fund accounts for monies received from developers restricted for park improvements.

Transit Fund accounts for revenues from bus fare token. The City does not operate the bus system in Lindsay, but does sell bus fare tokens. Transit Funds are used in conjunction with transit projects.

State Parks Fund accounts for state grant revenues restricted for parks.

CAPITAL PROJECTS FUND
Curb and Gutter Fund is part of the Sewer Fund. It accounts for funds for some street and sidewalk repairs.

CITY OF LINDSAY | JUNE 30, 2024
Nonmajor Governmental Funds Combining Balance Sheet
70 Capital
Projects Fund
Special
Assessment Community Park State Curb and
Districts Development Gas Tax Improvement Transit Parks Gutter Total ASSETSCash and Investments 10,298 $ 34,875 $ 1,205,233 $ 48,193 $ 7,459 $ - $ 14,336 $ 1,320,394 $ Receivables:

Accounts and taxes - - - - - - (241) (241)
Interest - - 7,377 2 - - 18 7,397
Intergovernmental 186 - 87,052 - - - - 87,238
Advances to other funds - - - 90,000 - - 35,000 125,000 Loans and notes receivable - 48,362 - - - - 1,375 49,737 Total assets 10,484 $ 83,237 $ 1,299,662 $ 138,195 $ 7,459 $ - $ 50,488 $ 1,589,525 $ LIABILITIESAccounts payable 19,048 $ - $ 34,262 $ - $ - $ - $ - $ 53,310 $ Accrued wages - - 2,252 - - - - 2,252
Due to other funds - - - - - 53,743 - 53,743
Total liabilities 19,048 - 36,514 - - 53,743 - 109,305
FUND BALANCES (DEFICITS)Restricted
Streets and roads - - 1,299,662 - - - 50,488 1,350,150
Parks and recreation - - - 138,195 - - - 138,195
Community development - 83,237 - - - - - 83,237
Transit - - - - 7,459 - - 7,459
Unassigned (8,564) - (36,514) - - (53,743) - (98,821)
Total fund balances (deficits) (8,564) 83,237 1,263,148 138,195 7,459 (53,743) 50,488 1,480,220 Total liabilities, and fund balances (deficits) 10,484 $ 83,237 $ 1,299,662 $ 138,195 $ 7,459 $ - $ 50,488 $ 1,589,525 $ Special Revenue Funds
CITY OF LINDSAY | JUNE 30, 2024
Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances 71 Capital
Projects Fund
Special
Assessment Community Park State Curb and
Districts Development Gas Tax Improvement Transit Parks Gutter Total REVENUESOther taxes 76,071 $ - $ - $ - $ - $ - $ - $ 76,071 $ Intergovernmental - - 675,696 - - 264,069 - 939,765Licenses and permits - - - 5,850 - - - 5,850Use of money and property - 4 34,230 7 - - 462 34,703Other, donations, and reimbursements - - - - 2 - 917 919 Total revenues 76,071 4 709,926 5,857 2 264,069 1,379 1,057,308 EXPENDITURESCurrent:

General government 96,142 - - - - - - 96,142Streets and Roads - - 349,414 - - - - 349,414 Capital Outlay - - 45,483 - - - - 45,483
Total expenditures 96,142 - 394,897 - - - - 491,039
Excess (deficiency) of revenues over (under) expenditures (20,071) 4 315,029 5,857 2 264,069 1,379 566,269OTHER FINANCING SOURCES (USES)Transfers out - - (326,500) - - (64,113) - (390,613) Total other financing sources (uses) - - (326,500) - - (64,113) - (390,613) Net change in fund balances (20,071) 4 (11,471) 5,857 2 199,956 1,379 175,656Fund balances (deficits) - beginning 11,507 83,233 1,274,619 132,338 7,457 (253,699) 49,109 1,304,564 Fund balances (deficits) - ending (8,564) $ 83,237 $ 1,263,148 $ 138,195 $ 7,459 $ (53,743) $ 50,488 $ 1,480,220 $ Special Revenue Funds