Madera City Council
April 3, 2024

EXHIBIT A
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD1) 02/26/2020, (RD 2) 05/03/2021, (RD 3) 08/17/2022 Approved Date: 10/05/2020
Prep. Date: 02/24/2023

AUTHORITY, PURPOSE AND SCOPE OF WORK

1. Authority
Pursuant to Part 2 Chapter 2.5 of Division 31 of the Health and Safety Code (commencing with Section 50470) Statutes of 2017 (SB 2, Atkins), which created the Building Homes and Jobs Trust Fund and the Permanent Local Housing Allocation (“PLHA”) Program (“Program”), this Standard Agreement along with all its exhibits (the “Agreement”) is entered under the authority of and in furtherance of the Program.

Pursuant to Health and Safety Code, Section 50470 (b), the California Department of Housing and Community Development (referred to herein as “HCD” or “Department”) has issued a Notice of Funding Availability (the “NOFA”), dated February 26, 2020, to govern administration of the fund and carry out the Program.

2. Purpose
In accordance with the authority cited above, an application was made to the State (the “Application”) for assistance from the Program for the purpose of making funding available to eligible local governments in California for housing related projects and programs that assist in addressing the unmet housing needs of their local communities.

By entering into this Agreement and thereby accepting the award of the PLHA grant funds (the “Grant”), the Contractor (sometimes referred to herein as the “Applicant”) agrees to comply with the terms and conditions of the NOFA, this Agreement, the representations contained in the Application, and the requirements of the authorities cited above.

3. Definitions
Capitalized terms not otherwise defined herein shall have the meaning of the definitions set forth in Health and Safety Code Section 50470 and Section 101 of the Guidelines.

4. Scope of Work
A. The scope of work (“Work”) for this Agreement shall consist of one or more of the following eligible uses:
1) The predevelopment, development, acquisition, rehabilitation, and preservation of multifamily, residential live-work, rental housing that is affordable to extremely low-, very low-, low-, or moderate-income households, including necessary Operating subsidies.

City of Madera
22-PLHA-17672

EXHIBIT A
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD1) 02/26/2020, (RD 2) 05/03/2021, (RD 3) 08/17/2022 Approved Date: 10/05/2020
Prep. Date: 02/24/2023
2) The predevelopment, development, acquisition, rehabilitation, and preservation of Affordable rental and ownership housing, including Accessory dwelling units (ADUs), that meets the needs of a growing workforce earning up to 120 percent of AMI, or 150 percent of AMI in highcost areas. ADUs shall be available for a term of no less than thirty days. 3) Matching portions of funds placed into local or regional housing trust funds.
4) Matching portions of funds available through the Low- and ModerateIncome Housing Asset Fund pursuant to subdivision (d) of HSC Section 34176.
5) Capitalized Reserves for Services connected to the preservation and creation of new Permanent supportive housing.
6) Assisting persons who are experiencing or at risk of homelessness, including, but not limited to, providing rapid rehousing, rental assistance, supportive/case management services that allow people to obtain and retain housing, operating and capital costs for navigation centers and emergency shelters, and the new construction, rehabilitation, and preservation of permanent and transitional housing.
a) This Activity may include subawards to Administrative Entities as defined in HSC Section 50490(a)(1-3) that were awarded California Emergency Solutions and Housing (CESH) program or Homeless Emergency Aid Program (HEAP) funds for rental assistance to continue assistance to these households.
b) Applicants must provide rapid rehousing, rental assistance, navigation centers, emergency shelter, and transitional housing activities in a manner consistent with the Housing First practices described in 25 CCR, Section 8409, subdivision (b)(1)-(6) and in compliance with WIC Section 8255(b)(8). An Applicant allocated funds for the new construction, rehabilitation, and preservation of Permanent supportive housing shall incorporate the core components of Housing First, as provided in WIC Section 8255, subdivision (b).

City of Madera
22-PLHA-17672

EXHIBIT A
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD1) 02/26/2020, (RD 2) 05/03/2021, (RD 3) 08/17/2022 Approved Date: 10/05/2020
Prep. Date: 02/24/2023
7) Accessibility modifications in Lower-income Owner-occupied housing. 8) Efforts to acquire and rehabilitate foreclosed or vacant homes and apartments.
9) Homeownership opportunities, including, but not limited to, down payment assistance.
10) Fiscal incentives made by a county to a city within the county to incentivize approval of one or more Affordable housing Projects, or matching funds invested by a county in an Affordable housing development Project in a city within the county, provided that the city has made an equal or greater investment in the project. The county fiscal incentives shall be in the form of a grant or low-interest loan to an Affordable housing Project. Matching funds investments by both the county and the city also shall be a grant or low interest deferred loan to the Affordable housing Project.

B. A Local government that receives an allocation shall use no more than five percent of the allocation for costs related to the administration of the Activity(ies) for which the allocation was made. Staff and overhead costs directly related to carrying out the eligible activities described in Section 301 are “activity costs” and not subject to the cap on “administrative costs.” A Local government may share any funds available for administrative costs with entities that are administering its allocation.

C. Two or more local governments that receive PLHA allocations may expend those moneys on an eligible jointly funded project as provided in Section 50470 (b)(2)(B)(ii)(IV). An eligible jointly funded project must be an eligible Activity pursuant to Section 301(a) and be located within the boundaries of one of the Local governments.

D. Entitlement Local governments may use the flow of PLHA funds to incentivize private lender loans and to guarantee payments for some or all public agency bond financings for activities consistent with the uses identified in Section 301 “Eligible Activities”. This loan guarantee Activity must be identified and fully explained in the Applicant’s “Plan”.

City of Madera
22-PLHA-17672

EXHIBIT A
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD1) 02/26/2020, (RD 2) 05/03/2021, (RD 3) 08/17/2022 Approved Date: 10/05/2020
Prep. Date: 02/24/2023

5. Department Contract Coordinator
The Department’s Contract Coordinator for this Agreement is the Division of Financial Assistance, Grant Management Section PLHA Manager or their designee. Unless otherwise informed, any notice, report, or other communication required by this Agreement shall be mailed by first class to the Department Contract Coordinator at the following address:

California Department of Housing and Community Development Attention: Permanent Local Housing Allocation (PLHA)
Grant Management Section, Suite 400
2020 West El Camino Avenue, CA 95833
P. O. Box 952050
Sacramento, CA 94252-2050

6. Contractor Contract Coordinator
The Contractor’s contract coordinator for this Agreement is the Authorized Representative listed below. Unless otherwise informed, any notice, report, or other communication required by this Agreement may be mailed by first class mail, or sent through a commercial courier to the Authorized Representative at the following address:

Authorized Representative Name: Arnoldo Rodriguez
Authorized Representative Title: City Manager
Agency Name: City of Madera
Address: 205 West Fourth Street
Madera, CA 93637
Phone No.: (559) 674-5400
Email Address: [email protected]

7. Effective Date, Term of Agreement, and Deadlines
A. This Agreement is effective upon approval by the Department, which is the date executed by all parties (such date, the “Effective Date”).

B. This Agreement shall terminate on June 30, 2030.

City of Madera
22-PLHA-17672

EXHIBIT A
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD1) 02/26/2020, (RD 2) 05/03/2021, (RD 3) 08/17/2022 Approved Date: 10/05/2020
Prep. Date: 02/24/2023
C. Except for predevelopment expenses for construction projects funded by PLHA and costs to develop and prepare the Plan and the PLHA application, no costs incurred more than one year prior to commitment by the Local government may be paid from PLHA funds. Reimbursement of expenses to prepare the Plan and the PLHA application are subject to the cap on administrative fees.

D. Any Grant funds which have not been expended by the expenditure deadline shall be disencumbered and revert to the Department. The expenditure deadline is fifty-eight months from the date of the budget appropriation for each year of funds included in this Agreement.

City of Madera
22-PLHA-17672

EXHIBIT B
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD 1) 02/26/2020, (RD 2) 05/03/2021, (RD 3) 08/17/2022 Approved Date: 10/05/2020
Prep. Date: 02/24/2023

BUDGET DETAIL AND PAYMENT PROVISIONS

1. Budget Detail
The budget detail is contained in Exhibit E in this Agreement.

Contractor will be responsible for maintaining oversight of grant amounts and determining whether an amended PLHA Plan is required due to reallocation of more than ten percent among Activities funded per Section 302(c)(5).

2. Conditions of Disbursement
Prior to receiving any Grant funds, the Contractor shall submit the following for the Department’s approval:

A. Government TIN Form, as applicable.

B. No funding will be disbursed to Contractor unless Contractor and any delegating Local government has an approved Housing Element and is in compliance with the Housing Element Annual Progress Report requirements, pursuant to PLHA Program Guidelines section 302(a) and (b).

C. Contractor shall not be eligible to receive a new allocation if the Contractor has accrued an uncommitted amount of four times the pending allocation if the pending allocation is $125,000 or less; or $500,000 if the pending allocation is greater than $125,000 and less than $500,000; or the amount of the pending allocation if the allocation is $500,000 or more.

3. Performance
A. All funds must be disbursed within fifty-eight months of the budget appropriation.

Funds that are not disbursed within fifty-eight months of the budget appropriation will revert to the Housing Rehabilitation Loan Fund.

City of Madera
22-PLHA-17672

EXHIBIT B
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD 1) 02/26/2020, (RD 2) 05/03/2021, (RD 3) 08/17/2022 Approved Date: 10/05/2020
Prep. Date: 02/24/2023
B. It is mutually agreed that if the Budget Act of the current year and/or any subsequent years covered under this Agreement does not appropriate sufficient funds for the program, this Agreement shall be reduced proportionate to those years already allocated, calculated at the time that the appropriation is reduced or terminated and reduced accordingly. All subsequent years shall be terminated, and the grant agreement shall be of no further force and effect, after amounts due for the period upon the reduced appropriation or termination are returned by the Contractor to the State. In this event, the State and Contractor shall be relieved of any and all obligations under this Agreement. If funding for any fiscal year is reduced or deleted by the Budget Act for purposes of this program, the State shall have the sole discretion to cancel this Agreement without cause, no liability occurring to the State, or amend the Agreement and amount allocated to Contractor.

4. Fiscal Administration
A. The Contractor may request a disbursement of 100 percent of total awarded Grant funds after executing the Standard Agreement. Administrative costs related to the planning and execution of eligible activities shall not exceed five percent of the Grant amount.

B. A separate checking account for the Grant funds is not required. However, the Contractor shall deposit Grant funds in an interest-bearing checking or savings account insured by the federal or state government. All interest earned from the deposit of Grant funds shall be used for eligible Program activities and accounted for in Contractor’s annual report.

C. The Contractor shall make a good faith effort to minimize the number of disbursement requests by anticipating and requesting funds in advance.

D. The Contractor may request that Grant funds awarded for a certain eligible activity be moved to another activity without an amendment to this Agreement.

This request must be made in writing to HCD if the change from one activity to another exceeds ten percent of the grant amount and shall be effective only upon written HCD approval. HCD’s decision to approve or deny any such request shall be final, absent fraud, mistake or arbitrariness per Section 302(c)(5).

City of Madera
22-PLHA-17672

EXHIBIT B
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD 1) 02/26/2020, (RD 2) 05/03/2021, (RD 3) 08/17/2022 Approved Date: 10/05/2020
Prep. Date: 02/24/2023

5. Budget Contingency Clause
A. It is mutually agreed that if the Budget Act of the subsequent years covered under this Agreement does not appropriate sufficient funds for the program this Agreement shall remain in force and effect until the time of notice of reduced or terminated appropriation, The Agreement shall be terminated by the State by providing Contractor written notice of not less than thirty days prior to the effective date of the termination. In the event of termination by the State due to lack of Budget appropriation, the State and Contractor shall be relieved of any and all obligations under this Grant Agreement on the effective date of termination and the Contractor shall return the amount for subsequent year allocations.

B. Subject to Section 5A. above, if funding for any fiscal year is reduced or deleted by the Budget Act for purposes of this program, the State shall have the sole discretion to cancel this Agreement without cause, no liability occurring to the State, or amend the current Grant Agreement and amount allocated to Contractor.

City of Madera
22-PLHA-17672

EXHIBIT D
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD 1) 02/26/2020, (RD 2) 05/03/2021, (RD 3) 08/17/2022 Approved Date: 10/05/2020
Prep. Date: 02/24/2023

PLHA PROGRAM TERMS AND CONDITIONS

1. Effective Date, Commencement of Work
This Agreement is effective upon the date of the Department representative’s signature on page one of the fully executed Standard Agreement, STD 213. Contractor agrees that work under this agreement shall not commence until execution of the STD 213, (the “Effective Date”).

2. Strict Compliance
Contractor will strictly comply with the terms, conditions and requirements of the Permanent Local Housing Allocation (PLHA) Statutes, Guidelines, the Notice of Funding Availability (NOFA), and this Agreement.

3. Contractor’s Application for Funds
A. Contractor has submitted to the Department an Application for a Grant under the Program. The Department is entering into this Agreement based on, and in substantial reliance upon, Contractor’s facts, information, assertions and representations contained in that Application, and in any subsequent modifications or additions thereto approved by the Department. The Application and any approved modifications and additions thereto are hereby incorporated into this Agreement.

B. Contractor warrants that all information, facts, assertions and representations contained in the Application and approved modifications and additions thereto are true, correct, and complete to the best of Contractor’s knowledge. In the event that any part of the Application and any approved modification and addition thereto is untrue, incorrect, incomplete, or misleading in such a manner that would substantially affect the Department's approval, disbursement, or monitoring of the funding and the Grants or activities governed by this Agreement, then the Department may declare a breach hereof and take such action or pursue such remedies as are provided for breach hereof.

City of Madera
22-PLHA-17672

EXHIBIT D
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD 1) 02/26/2020, (RD 2) 05/03/2021, (RD 3) 08/17/2022 Approved Date: 10/05/2020
Prep. Date: 02/24/2023

4. Eligible Activities
Grant funds awarded to the Contractor and expended by either the Contractor or any entity to which Contractor awards funds shall be used for the eligible activities set forth in Exhibit A as required by the PLHA Statutes. The following additional requirements shall apply:

A. Each Contractor shall submit a Plan detailing:
1) The manner in which allocated funds will be used for eligible activities. 2) A description of the way the Local government will prioritize investments that increase the supply of housing for households with incomes at or below sixty percent of AMI. Programs targeted at households at or below sixty percent of AMI will be deemed to meet this requirement. 3) A description of how the Plan is consistent with the programs set forth in the Local government’s Housing Element.
4) Evidence that the Plan was authorized and adopted by resolution by the Local government and that the public had an adequate opportunity to review and comment on its content.
5) The following for each proposed Activity:
a) A description of each proposed Activity, pursuant to Section 301 of the Guidelines and the percentage of funding allocated to it. The description shall specifically include the percentage of funds, if any, directed to Affordable Owner-Occupied Workforce Housing (AOWH).
b) The projected number of households to be served at each income level and a comparison to the unmet share of the Regional Housing Needs Allocation (RHNA) at each income level.
c) A description of major steps/actions and a proposed schedule required for the implementation and completion of the Activity. d) The period of affordability and level of affordability for each Activity. Rental Projects are required to have affordability periods of at least fifty-five years.

City of Madera
22-PLHA-17672

EXHIBIT D
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD 1) 02/26/2020, (RD 2) 05/03/2021, (RD 3) 08/17/2022 Approved Date: 10/05/2020
Prep. Date: 02/24/2023
6) The Plan is required to be for a term of five years. Local governments shall obtain approval of the Department for amendments made to the Plan in each succeeding year of the term of the Plan. Reallocations of more than ten percent of funds among Activities require amendment of the Plan, with approval granted by the governing body at a publicly noticed public meeting.
7) If funds are used for the acquisition, construction, or rehabilitation of forsale housing projects or units within for-sale housing projects, the grantee shall record a deed restriction against the property that will ensure compliance with one of the following requirements if the property is no longer the primary residence of the homeowner due to sale, transfer or lease, unless it is in conflict with the requirements of another public funding source or law:
a) PLHA loan and any interest thereon shall be repaid to the Local government’s PLHA account. The Local government shall reuse the repayments consistent with the Eligible Activities per Section 301 of the Guidelines; or,
b) The initial owner and any subsequent owner shall sell the home at an Affordable housing cost to a qualified Lower-Income or Moderate-Income household; or,
c) The homeowner and the Local government shall share the equity in the unit pursuant to an equity-sharing agreement. The grantee shall reuse the proceeds of the equity-sharing agreement consistent with the Eligible Activities per Section 301 of the Guidelines. 8) If funds are used for the development of an affordable rental housing project, the Local government shall make the PLHA assistance in the form of a loan to the Sponsor of the project. The loan shall be evidenced through a Promissory Note secured by a Deed of Trust.
9) A program income reuse plan describing how repaid loans shall be reused for eligible activities specified in Section 301 of the Guidelines.

City of Madera
22-PLHA-17672

EXHIBIT D
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD 1) 02/26/2020, (RD 2) 05/03/2021, (RD 3) 08/17/2022 Approved Date: 10/05/2020
Prep. Date: 02/24/2023

5. Core Practices
A. A Contractor or Subrecipient must provide eligible activities in a manner consistent with the housing first practices described in California Code of Regulations, title 25, section 8409(b)(1)-(6). A Contractor or Subrecipient allocated funds for eligible activities that provide permanent housing shall incorporate the core components of Housing First as provided in Section 8255(b) of the Welfare and Institutions Code.

6. Monitoring Grant Activities
A. Contractor shall monitor the activities selected and awarded by them to ensure compliance with PLHA requirements. An onsite monitoring visit of Subrecipients and any other service providers shall occur whenever determined necessary by the Contractor, but at least once during the Grant period.

B. The Department will monitor the performance of the Contractor based on a risk assessment and according to the terms of this Agreement. The Department may also monitor any Subrecipients of the Contractor as the Department deems appropriate based on a risk assessment.

C. As requested by the Department, the Contractor shall submit to the Department all PLHA monitoring documentation necessary to ensure that Contractor and its Subrecipients are in continued compliance with PLHA requirements. Such documentation requirements and the submission deadline shall be provided by the Department at the time such information is requested from the Contractor.

7. Reporting/Audits
A. Commencing with the Effective Date of this Agreement and continuing through the Expiration Date, the Contractor shall submit an annual report to the Department by July 31 of each year that reports all activities from the previous fiscal year (7/1–6/30), on forms provided by the Department.

The first report will be due on July 31, 2021 and will report all activities from date of initial fund disbursement through June 30, 2021.

B. The annual report shall contain a detailed report which must include, at a minimum:
1) Identification of the Eligible Activities to which the Contractor committed program funds, and the income levels of households assisted.

City of Madera
22-PLHA-17672

EXHIBIT D
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD 1) 02/26/2020, (RD 2) 05/03/2021, (RD 3) 08/17/2022 Approved Date: 10/05/2020
Prep. Date: 02/24/2023
2) Amounts awarded to Subrecipients with the activity(ies) identified; 3) Identification of the Eligible Activities upon which the Contractor expended program funds, and the income levels of households assisted and the affordability level for any units assisted; and, 4) Close out report for contracts that were fully expended and in which all activities funded were completed during the fiscal year.

C. The Department may request additional information as needed to meet other applicable reporting or audit requirements.

D. The Contractor is responsible for the completion of audits and all costs of preparing audits.

E. The Department reserves the right to perform or cause to be performed a financial audit. At the Department’s request, the Contractor shall provide, at its own expense, a financial audit prepared by a certified public accountant.

F. If a financial audit is required by the Department, the audit shall be performed by an independent certified public accountant. Selection of an independent audit firm shall be consistent with procurement standards contained in 24 CFR 85.36. 1) The Contractor shall notify the Department of the auditor's name and address immediately after the selection has been made. The contract for the audit shall allow access by the Department to the independent auditor's working papers.
2) The Contractor is responsible for the completion of audits and all costs of preparing audits.
3) If there are audit findings, the Contractor must submit a detailed response acceptable to the Department for each audit finding within ninety (90) days from the date of the audit finding report.

8. Retention and Inspection of Records
A. The Contractor is responsible for maintaining records, which fully disclose the activities funded by the Grant. Adequate documentation of each transaction shall be maintained to permit the determination, through an audit if requested by the State, of the accuracy of the records and the allowability of expenditures charged to Grant funds.

City of Madera
22-PLHA-17672

EXHIBIT D
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD 1) 02/26/2020, (RD 2) 05/03/2021, (RD 3) 08/17/2022 Approved Date: 10/05/2020
Prep. Date: 02/24/2023
B. The Contractor agrees that the Department or its designee shall have the right to review, obtain, and copy all records and supporting documentation pertaining to performance of this Agreement. The Contractor agrees to provide the Department or its designee, with any relevant information requested. The Contractor agrees to permit the Department or its designee access to its premises, upon reasonable notice, during normal business hours for the purpose of interviewing employees who might reasonably have information related to such records and inspecting and copying such books, records, accounts, and other material that may be relevant to a matter under investigation for the purpose of determining compliance with the PLHA Statutes, the NOFA, and this Agreement.

C. The Contractor further agrees to retain all records for a period of five years after the end of the term of this Agreement:
1) If any litigation, claim, negotiation, audit, monitoring, inspection or other action has been started before the expiration of the required record retention period, all records must be retained until completion of the action and resolution of all issues, which arise from it.
2) The Contractor also agrees to include in any contract that it enters into in an amount exceeding $10,000, the Department’s right to audit the contractor’s records and interview their employees. The Contractor shall comply with the caveats and be aware of the penalties for violation of fraud and for obstruction of investigation as set forth in California Public Code Section 10115.10.

D. The determination by the Department of the eligibility of any expenditure shall be final. If the eligibility of any expenditure cannot be determined because records or documentation are inadequate, the expenditure may be disallowed, and HCD shall determine the reimbursement method for the amount disallowed.

E. The Contractor shall retain all books and records relevant to this Agreement for a minimum of five years after the end of the term of this Agreement. Records relating to any and all audits or litigation relevant to this Agreement shall be retained for five years after the conclusion or resolution of the matter.

9. Breach and Remedies
A. The following shall each constitute a breach of this Agreement:
1) Contractor’s failure to comply with the terms of this Agreement.

City of Madera
22-PLHA-17672

EXHIBIT D
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD 1) 02/26/2020, (RD 2) 05/03/2021, (RD 3) 08/17/2022 Approved Date: 10/05/2020
Prep. Date: 02/24/2023
2) Use of, or permitting the use of, Grant funds provided under this Agreement for any ineligible costs or for activities not approved under this Agreement.
3) Any failure to comply with the deadlines set forth in this Agreement.

B. In addition to any other remedies that may be available to the Department in law or equity for breach of this Agreement, the Department may:
1) Bar the Contractor from applying for future PLHA and other HCD funds; 2) Revoke any other existing PLHA award(s) to the Contractor; 3) Require the return of any unexpended PLHA funds disbursed under this Agreement;
4) Require repayment of PLHA funds disbursed and expended under this agreement;
5) Require the immediate return to the Department of all funds derived from the use of PLHA funds including, but not limited to recaptured funds and returned funds;
6) Seek, in a court of competent jurisdiction, an order for specific performance of the defaulted obligation or the appointment of a receiver to complete the technical assistance in accordance with the PLHA Program requirements; and,
7) Seek such other remedies as may be available under the relevant agreement or any law.

C. All remedies available to the Department are cumulative and not exclusive.

D. The Department may give written notice to the Contractor to cure the breach or violation within a period of not less than fifteen days.

City of Madera
22-PLHA-17672

EXHIBIT D
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD 1) 02/26/2020, (RD 2) 05/03/2021, (RD 3) 08/17/2022 Approved Date: 10/05/2020
Prep. Date: 02/24/2023

10. Termination
A. The Department may terminate this Agreement at any time for cause by giving a minimum of thirty days’ notice of termination, in writing, to the Contractor. Cause shall consist of, violations of any terms and/or special conditions of this Agreement, the PLHA Statutes, or the NOFA. Upon termination of this Agreement, unless otherwise approved in writing by the Department, any unexpended funds received by the Contractor shall be returned to the Department within thirty days of the notice of termination.

B. This Agreement is subject to any additional restrictions, limitations or conditions, or statute, regulations or any other laws, whether federal or those of the State of California, or of any agency, department, or any political subdivision of the federal or the State of California governments, which may affect the provisions, terms or funding of this Agreement in any manner.

C. The Department has the option to terminate this Agreement under the thirty-day cancellation clause or to amend this Agreement to reflect any reduction of funds.

11. Waivers
No waiver of any breach of this Agreement shall be held to be a waiver of any prior or subsequent breach. The failure of the Department to enforce at any time the provisions of this Agreement, or to require at any time, performance by the Contractor of these provisions, shall in no way be construed to be a waiver of such provisions nor to affect the validity of this Agreement or the right of the Department to enforce these provisions.

12. Relocation
Contractor shall comply with all requirements of applicable California relocation law (Gov. Code, § 7260 et seq. and the regulations promulgated thereunder at Cal. Code Regulations, Title. 25, § 6000 et seq.). Any relocation plan for the Development shall be subject to the review and approval by the State.

City of Madera
22-PLHA-17672

EXHIBIT D
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD 1) 02/26/2020, (RD 2) 05/03/2021, (RD 3) 08/17/2022 Approved Date: 10/05/2020
Prep. Date: 02/24/2023

13. Special Conditions Contractors and Subrecipients
The Contractor agrees to comply with all conditions of this Agreement including the Special Conditions set forth in Exhibit E. These conditions shall be met to the satisfaction of the Department prior to disbursement of funds. The Contractor shall ensure that all Subrecipients are made aware of and agree to comply with all conditions of this Agreement and the applicable State requirements governing the use of Grant funds. The Contractor shall ensure that all Subrecipients are qualified to do business and in good standing with the California Secretary of State and the California Franchise Tax Board. Failure to comply with these conditions may result in cancellation of this Agreement.

14. Compliance with State and Federal Laws, Rules, Guidelines and Regulations The Contractor agrees to comply with all State and Federal laws, rules and regulations that pertain to construction, health and safety, labor, fair employment practices, equal opportunity, and all other matters applicable to the Grant, the Contractor, its Subrecipients, and any other Grant activity.

15. Litigation
A. If any provision of this Agreement, or an underlying obligation, is held invalid by a court of competent jurisdiction, such invalidity, at the sole discretion of the Department, shall not affect any other provisions of this Agreement and the remainder of this Agreement shall remain in full force and effect. Therefore, the provisions of this Agreement are, and shall be, deemed severable.

B. The Contractor shall notify the Department immediately of any claim or action undertaken by or against it, which affects or may affect this Agreement or the Department and shall take such action with respect to the claim or action as is consistent with the terms of this Agreement and the interests of the Department.

City of Madera
22-PLHA-17672

EXHIBIT E
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD 1) 02/26/2020, (RD 2) 05/03/2021, (RD 3) 08/17/2022 Approved Date: 10/05/2020
Prep. Date: 02/24/2023

PROGRAM-SPECIFIC PROVISIONS AND SPECIAL CONDITIONS

1. Program-Specific Provisions
The following are project-specific terms and conditions (referred to as enumerated provision(s) for ease of reference in prior exhibits) and shall inform the references made to project-specific information not contained in those prior exhibits.

Budget Detail:

Contractor has been awarded the following grant activity amounts for 2019: $422,319 Contractor has been awarded the following grant activity amounts for 2020: $656,414 Contractor has been awarded the following grant activity amounts for 2021: $722,364 Estimated five-year allocation may not exceed: $2,533,914 Payees:

A. The authorized Payee(s) is/are as specified below:

Name: City of Madera Total Amount: $1,801,097
Plan:

Funding Allocation Year 2019 2020 2021 2022 2023
Type of Activity
Emergency
Shelter
Operating
Emergency
Shelter
Operating
Emergency
Shelter
Operating
Emergency
Shelter
Operating
Emergency
Shelter
Operating
Percentage of Funds
Allocated for Each Activity 95% 0% 0% 0% 0%
Area Median Income
Level Served 30% 30% 30% 30% 30%
Funding Allocation Year 2019 2020 2021 2022 2023
Type of Activity Predevelopment
, Development,
Acquisition,
Rehabilitation
and/or
Preservation
Predevelopment,
Development,
Acquisition,
Rehabilitation
and/or
Preservation
Predevelopment,
Development,
Acquisition,
Rehabilitation
and/or
Preservation
Predevelopment,
Development,
Acquisition,
Rehabilitation
and/or
Preservation
Predevelopment,
Development,
Acquisition,
Rehabilitation
and/or
Preservation
Percentage of Funds
Allocated for Each Activity
0% 95% 95% 95% 95%
City of Madera
22-PLHA-17672

EXHIBIT E
Permanent Local Housing Allocation (PLHA) Program – Grant NOFA Date: (RD 1) 02/26/2020, (RD 2) 05/03/2021, (RD 3) 08/17/2022 Approved Date: 10/05/2020
Prep. Date: 02/24/2023
Area Median Income
Level Served
80% 80% 80% 80% 80%
Admin 5% 5% 5% 5% 5%
Total 100% 100% 100% 100% 100%

2. Special Conditions
The following Special Conditions are applicable to this Standard Agreement:

None.

REPORT TO CITY COUNCIL
Approved by: Council Meeting of: April 3, 2024
Agenda Number: D-2
________________________________
Joseph Hebert, Parks & Community Services Director
_________________________________
Arnoldo Rodriguez, City Manager
SUBJECT:

Acceptance of Playground Area at Riverview Park & Exercise Equipment Along Vernon McCullough River Trail
RECOMMENDATION:

Staff recommends that the City Council approve Minute Order Approving:

1. Acceptance of the Playground Installation at Riverview Park, located at 1401 Riverview Drive, Madera, CA 93637.

2. Approve Additional Change Order of $7,730

3. Acceptance of the Exercise Equipment along the Vernon McCullough River Trail, specifically in the Westberry Boulevard to Caitlan Drive area.

4. The Recording of Notice of Completion.

SUMMARY:

The playground equipment and safety perimeter fencing installation at Riverview Park were completed on March 27, 2024.

The installation of playground equipment consisted of a play area for kids ages 2-12 years old, including a brand-new lot with swings. In addition, a new safety perimeter fence was installed immediately around the play area.

DISCUSSION:

The installation of the playground equipment at Riverview Park was funded by the Department of Transportation (Caltrans) Clean California Local Grant Program. In 2022, the City was funded $832,350 for the completion of several grant components including the following:
 Litter abatement along the Fresno River and the cross-city Vernon McCullough River Trail.  Installation of 36 trash receptacles along the Vernon McCullough River Trail.  Trail restoration of the Vernon McCullough River Trail.  Playground equipment installation at Riverview Park, as it neighbors the Fresno River.  Exercise equipment installation along a section of the Vernon McCullough River Trail.  Educational and trail signage along the Vernon McCullough River Trail.

Regarding Riverview Park, which spans under one acre and previously offered limited amenities consisting solely of a bench and a trash receptacle, staff promptly initiated efforts towards procuring playground equipment and fulfilling all other grant components following notification of the grant award.

The playground and exercise equipment and installation were procured through a cooperative purchase agreement with Park Associates dba Park Planet, representing the most advantageous purchasing strategy. Not utilizing a cooperative purchase agreement would have substantially extended the procurement process and lead times. The lead time provided when procuring the equipment was 18-20 weeks. The play equipment, exercise equipment, and installation of both at the two different areas totaled $241,279.59.

In November 2023, staff released an Invitation for Bids (IFB) for safety perimeter fencing around the playground lot. The IFB was released on November 6, 2023. No bids were received. The bid was released a second time on November 28, 2023, with two bids received thereafter. During the bid process, there were discrepancies with securing bid documents and being able to finalize a contract with a vendor. The IFB was released a third time, with three bids received on January 19, 2024. Due to the bid received under the $60,000 threshold requiring Council approval, a construction agreement was executed with the approval of the City Manager. The bid for the fence installation totaled $24,900, awarded to Jami Construction as the lowest responsible bidder.

A ribbon-cutting event to commemorate the installation of the play equipment is slated for Thursday, March 28, 2024, at Riverview Park. The City plans to integrate the celebration of the exercise equipment installation with the seal coating currently underway along the Vernon McCullough River Trail, forming a Walk-the-Trail celebration event.

Riverview Park now has the following:
 Custom Round 5 Steel Play System
 8-foot Arch Swing Bays, with full bucket seat and inclusive seat  Two 6-foot benches inside the play area
Vernon McCullough River Trail, specifically in the Westberry Boulevard to Caitlan Drive area, now has the following:
 Five motion-capable exercise equipment machines
On March 19, 2024, a third-party Certified Playground Safety Inspector (CSPI) completed an inspection of Riverview Park. The playground was found to be compliant.

FINANCIAL IMPACT:

The improvements to Riverview Park and the Vernon McCullough Trail were made possible by the $832,350 Clean California Local Grant Program (CCLGP) funds awarded in 2022. Adequate funds were appropriated in the current fiscal year budget to cover expenses associated with completing CCLGP grant application objectives. The cost of CCLGP objectives was budgeted in #41096357.

Staff would like to highlight that during the excavation phase, the playground installer encountered an unexpectedly high quantity of concrete slabs and miscellaneous debris, necessitating additional excavation and disposal efforts. Staff confirmed these findings and observed the extra time needed to clear the site, resulting in additional costs totaling $7,730.

To date, expenses associated with CCLGP are captured in Table 1.

Table 1: CCLGP Award of $832,350 Expenditure Breakdown
Item Description Amount
Play Equipment & Exercise Equipment Cost through Park Associates $241,279.59 Change Order with Park Associates $7,730
Safety Perimeter Fencing at Riverview Park $24,900
Vernon McCullough River Trail Surface Improvements through Seal-Rite $190,116 Change Order with Seal-Rite $62,428.50
36 Trash Receptacles along the Vernon McCullough River Trail $56,140.18 Certified Playground Safety Inspector $900
Third Bench for Riverview Park to Meet Grant Component $1,526.97 Litter Abatement in Fresno River $195,000
IFB 202324-07 Advertisement $1556.10
Total Expenses To Date: $781,577.34
CCLGP Award $832,350
Balance $50,772.66
The $50,772.66 balance of CCLGP funding will be utilized for the following:
 Materials and supplies for the trash receptacles installation  Educational anti-litter signage panels
 Trail markers at the start and end points of the Vernon McCullough River Trail  Grant management administrative costs
Funds must be expended by June 30, 2024.

ALTERNATIVES:

As an alternative, the Council may elect to reject the Notice of Completion with due cause.

Rejection would result in the staff’s inability to record the Notice of Completion until addressing Council concerns and could impact the grant’s performance period through June 30, 2024.

ATTACHMENTS:

1. Notice of Completion

2. Photos of Playground Equipment at Riverview Park

3. Photos of Exercise Equipment at Vernon McCullough River Trail ATTACHMENT 1
Notice of Completion

Recording Requested by:

City of Madera
And When Recorded, Mail to:

City of Madera – City Clerk
205 W. 4th Street
Madera, CA 93637
_________________________________________ Space above this line for Recorder’s Use ______________________________________ Fee Waived per Section 27383 & 27388.1(a)(2)(D) of the Government Code – No Document Tax Due $ -0-

NOTICE OF COMPLETION
_____________________________________________________________________________________________________________________ NOTICE IS HEREBY GIVEN THAT:

1. The undersigned is owner of the interest or estate stated below in the property hereinafter described.

2. The full name of the undersigned is City of Madera.

3. The full address of the undersigned is 205 W. 4th Street, Madera, CA 93637.

4. The nature of the title of the undersigned is: In fee ____________________________________________ (If other than fee, strike “In fee” and insert, for example, “purchaser under contract of purchase” or “lessee”.)

5. The full name and full addresses of all persons, if any, who hold title with the undersigned as joint tenant or as tenants in common are:

Name Address
______________________________________ ___________________________________________

6. A work of improvement on the property hereinafter described was completed on

7. The name of the original contractor, if any, for such work of improvement was:
(If no contractor for work of improvements as a whole, insert “none”.)

8. The full name(s) and address(es) of the transferor(s) of the undersigned is(are):

Name Address
______________________________________ ___________________________________________

9. The property on which said work of improvement was completed is in the City of Madera, County of Madera, State of California, and is described as follows:

10. The street address of said property is
(If no street address has been officially assigned, insert “none”.) (Signature of Owner named in Paragraph 2)
Dated Joseph Hebert
Parks & Community Services Director
________________________________________________

State of California
County of Madera
Joseph Hebert, being duly sworn says: He is the City of Madera Parks & Community Services Director, the corporation that executed the foregoing notice as owner of the aforesaid interest or estate in the property therein described; that he makes this verification on behalf of said corporation; that he has read said notice and knows the contents thereof, and that the facts herein stated are true. (Signature of Officer)
_______________________________________________________ Joseph Hebert
Parks & Community Services Director
State of California
County of Madera
Subscribed and sworn to (or affirmed) before me on the ___________ day of _____________________, 2024 by Joseph Hebert, proved to me on the basis of satisfactory evidence to be the person(s) who appeared before me.
______________________________________________________ (Seal) Alicia Gonzales
City Clerk
The notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached and not the truthfulness, accuracy or validity of that document.

ATTACHMENT 2
Photos of Playground Equipment at Riverview Park

ATTACHMENT 3
Photos of Exercise Equipment at Vernon McCullough River Trail

REPORT TO CITY COUNCIL
Approved by: Council Meeting of: April 3, 2024
_________________________________ Agenda Number: ___________ Joseph Hebert, Parks & Community Services Director
_________________________________
Arnoldo Rodriguez, City Manager
SUBJECT:

Sunrise Rotary Sports Complex Rental for Cinco de PRM: Cars & Comida 3K Run Event Fee Waiver Request
RECOMMENDATION:

Adopt a Resolution waiving the rental fees of Sunrise Rotary Sports Complex related to the Cinco de PRM: Cars & Comida 3K Run hosted by the Project Run Madera on May 4, 2024, at an anticipated fee rental of $525
SUMMARY:

The City received an inquiry from the Project Run Madera requesting waiving rental fees for using Sunrise Rotary Sports Complex on Saturday, May 4, 2024, to host a Cinco de PRM: Cars & Comida 3K Run.

The event is set to take place during the hours of 7 am to 1 pm.

DISCUSSION:

Project Run Madera has submitted a request to the City, seeking the waiver of rental fees for the use of Sunrise Rotary Sports Complex on Saturday, May 4, 2024, to host an event that promotes the health and well-being of the youth in our community.

Scheduled to take place from 7 am to 1 pm, the event is designed not only to raise funds for Project Run Madera’s summer track clinic but also to engage the youth of Madera in healthpromoting activities. The proceeds from this event will directly contribute to efforts to provide a free summer track clinic for students in grades K-12. The clinic will not only promote physical fitness but also provide opportunities for mental and emotional development through structured D-3
athletic activities led by professional athletes and coaches. In the past, Project Run Madera’s track clinic hosted up to 220 athletes and provided breakfast, lunch, shirts, and track bags.

Project Run Madera’s primary initiative includes transforming lives and communities through the power of running. Alisha Brown, its founder, is a former college athlete and track runner from Madera. Project Run Madera is a non-profit organization, founded in 2021, dedicated to supporting student-athletes and individuals, providing them with the running gear, resources, and opportunities they need to excel in the sport.

The rental request specifically includes using four soccer fields and the parking lot for the event.

This event itself has been approved to take place, subject to all other applicable requirementsfor a special event. This includes the provision of acceptable rental insurance and all additional permits.

FINANCIAL IMPACT:

The applicable costs associated with the rental of Rotary Sports Complex Rental as requested are summarized in Table 1.

Table 1: Estimated Financial Impact to the City
Administrative Fee $25
Rental Charges - $12.50 per Hourly Rental Fee x 6 Hours x 4 Fields $300 Deposit - $200 $200
Total $525
ALTERNATIVES:

The Council may elect to reject the fee waiver and require the event organizer to remit any associated fees for the rental of Rotary Sports Complex Rental on the date requested.

ATTACHMENTS:

1. Resolution – Waiving Rental Fees for Rotary Sports Complex Rental related to PRM: Cars & Comida 3K Run, hosted by Project Run Madera on May 4, 2024

2. Request Letter Authored by Alisha Brown, Founder & President, Project Run Madera ATTACHMENT 1
Resolution – Waiving Rental Fees for Sunrise Rotary Sports Complex related to PRM: Cars & Comida 3K Run, hosted by Project Run Madera on May 4, 2024 RESOLUTION NO. 24-______

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MADERA,

CALIFORNIA WAIVING RENTAL FEES FOR SUNRISE ROTARY SPORTS COMPLEX RELATED TO PRM: CARS & COMIDA 3K RUN, HOSTED BY PROJECT RUN MADERA ON MAY 4, 2024
WHEREAS, the City has received a request for waiving of fees for the rental of Sunrise Rotary Sports Complex; and
WHEREAS, the date being requested is Saturday, May 4, 2024, from 7:00 a.m. to 1:00 p.m.; and
WHEREAS, the request is to utilize Sunrise Rotary Sports Complex for a PRM: Cars & Comida 3K Run event; and
WHEREAS, the fees for such an event are calculated based on the 2018-2019 City of Madera Master Fee Schedule; and
WHEREAS, the fees for the event are calculated at $525; and WHEREAS, the event organizers are still subject to providing insurance documentation for City facility rentals that meet City requirements.

NOW, THEREFORE, THE COUNCIL OF THE CITY OF MADERA hereby resolves, finds, determines and orders as follows:

1. The foregoing recitals are true and correct and incorporated herein by reference.

2. The Council finds that the waiver of fees as set forth in this resolution serves a valid public purpose in that the Project Run Madera PRM: Cars & Comida 3K Run event promotes physical, emotional, and mental health, as well as supports athletes, which in turn is beneficial for the community.

3. The City Council does hereby waive the City fees for Rental Fees of Sunrise Rotary Sports Complex on May 4, 2024, for the PRM: Cars & Comida 3K Run event, subject to confirmation of insurance.

4. This resolution is effective immediately upon adoption. * * * * * * * *
ATTACHMENT 2
Request Letter Authored by Alisha Brown, Founder & President, Project Run Madera From: Alisha Brown, Founder & President
Project Run Madera
1470 South A Street,
Madera, CA, 93638
559-474-3772
[email protected]
4 th March, 2024
To: City of Madera Parks & Recreation
ATTN: Joe Hebert
City of Madera
701 E 5th St
Madera, CA 93638
Inquiry: Cinco de PRM: Cars & Comida 3K Run
Dear City of Madera,
We are writing to your agency on behalf of Project Run Madera, in hopes of proposing a collaborative effort aimed at fostering the health and well-being of the youth in our community through our upcoming event, Cinco de PRM: Cars & Comida 3K Run, on May 4th 2024. Our organization, Project Run Madera, is dedicated to promoting physical, mental, and emotional health among the youth of Madera. We believe that this event, along with our summer track clinic, will play a pivotal role in achieving our shared goals.

Our Cinco de PRM: Cars & Comida 3k Run fundraiser event is designed not only to raise funds for our summer track clinic but also to engage the youth of Madera in health-promoting activities. The proceeds from this event will directly contribute to our efforts to provide our free summer track clinic for students in grades K-12. This clinic will not only promote physical fitness but also provide opportunities for mental and emotional development through structured athletic activities led by professional athletes and coaches. In the past our track clinic has hosted up to 220 athletes and we provided them with breakfast, lunch, shirts and track bags.

Project Run Madera’s initiatives extend beyond the realm of physical health. We are committed to addressing the mental and emotional well-being of our youth, thereby reducing their involvement in dangerous street activities. By offering programs such as run clubs and community runs, we aim to create a supportive environment where students can develop healthy habits, build social connections, and find positive outlets for their energy and talents.

We believe that by waiving all city fees associated with our Cinco de PRM: Cars & Comida 3K Run event, we can allocate more resources towards our youth programs and ensure their success. By doing so, the City of Madera will not only support our efforts to improve the health and well-being of our youth but also contribute to the overall vibrancy and safety of our community. We respectfully request that the City of Madera consider waiving all city fees for our upcoming fundraiser event. By doing so, we can maximize the impact of our programs and work together towards creating a healthier and more vibrant future for the youth of Madera.

Thank you for considering our proposal. We look forward to the opportunity to collaborate with the City of Madera on this important initiative.

Sincerely,
Alisha Brown
Founder and President

REPORT TO CITY COUNCIL
Approved by:
_________________________________
Gary Price, Director of Information Technology
_________________________________
Arnoldo Rodriguez, City Manager
SUBJECT:

Procure server and storage area network (SAN) hardware under a State of California government contract with Dell Marketing L.P.

RECOMMENDATION:

Adopt a Resolution approving the City of Madera’s purchase of Information Technology equipment under a contract between the State of California and Dell Marketing L.P. in the amount of $329,011.41 plus shipping costs
SUMMARY:

The City procures various types of Information Technology (IT) hardware in the course of business. Under the City’s procurement regulations, IT purchases are authorized to occur under contracts negotiated by other government agencies in accordance with California Public Contract Code §10299. The California Department of General Services is responsible for the State’s participation in a contract with the National Association of State Procurement Officials (NASPO) that allows government agencies in California to procure computer equipment, peripherals, and related services at contracted pricing. One such agreement is with Dell Marketing L.P. The City is seeking to purchase server and SAN hardware under the Dell Marketing L.P. NASPO agreement.

The recommended procurement will replace aging IT infrastructure and is in compliance with the City’s purchasing regulations.

DISCUSSION:

The City procures various types of technology such as computers/servers, data storage devices, and associated peripherals and accessories to conduct business. At this time, the City’s IT Department seeking to purchase six (6) replacement servers with related components, including switches, transceivers, racks, and hard drives. The IT Department has received a quote through Council Meeting of: April 3, 2024
Agenda Number: D-4
Dell Marketing L.P. under the NASPO contract pricing for the proposed equipment and is recommending procuring the replacement hardware under the NASPO contract.

The Madera Municipal Code related to Purchasing Procedures provides in §2-4.07 (B):

Information technology goods and services. In accordance with Cal. Public Contract Code § 10299, the City, through the Purchasing Agent may, without formal or informal bidding, contract with suppliers who have been awarded contracts by governmental entities for the purchase of goods, information technology, and services under the competitive process in Cal. Public Contract Code §§ 12100 to 12113. Such contracts typically take the form of master agreements, price schedules, or multiple award schedules. The City may make these purchases directly from the vendors or the state may provide assistance to the city in making these acquisitions.

The California Department of General Services is responsible for state-wide participation in NASPO. State of California participating addendum number 7-23-70-55-01 provides for the purchase of computer equipment through a NASPO agreement with Dell Marketing L.P. This agreement is a competitively bid computer equipment contract that is available to state and local government agencies within California due to the referenced participating addendum. Local government agencies such as the City are allowed to procure goods and services under the contract by both the California Public Contract Code and City Municipal Code. While the contract participation is compliant with the City’s Purchasing Procedures and the NASPO program requirements, the dollar amount for this purchase exceeds the City Manager’s purchasing authority. The City Manager may sign agreements to procure goods and services up to $60,000 and the City’s expenditure for this computer equipment will be $329,011.41 plus shipping costs to be determined. For this reason, the item is being brought for Council’s consideration.

The purpose of the proposed equipment is to replace aging data server and storage infrastructure for the City’s IT network. The network is vital for City staff to perform core business functions.

Replacing aging hardware is necessary to keep the City departments up and running and ensure business operations and access to information continue reliably, efficiently, and securely.

FINANCIAL IMPACT:

The requested action will authorize the City’s IT Department to purchase the above-described computer hardware using the NASPO contract at a cost of $329,011.41 for the equipment plus shipping costs to be determined once the purchase is finalized. The adopted FY 2023/24 operating budget includes an appropriation of $400,000 for the purchase of replacement IT networking equipment. To date, approximately $40,000 has been expended for replacement networking switches, providing for adequate remaining funds to support the proposed purchase.

ALTERNATIVES:

Council may direct staff to issue a Request for Proposals (RFP) for IT equipment as opposed to participating in the NASPO program.

ATTACHMENTS:

1. Resolution
a. Exhibit 1: NASPO contract documents
b. Exhibit 2: Equipment Purchase Quote
Resolution No.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MADERA

APPROVING THE PURCHASE OF INFORMATION TECHNOLOGY EQUIPMENT IN THE AMOUNT OF $329,011.41 PLUS SHIPPING UNDER THE DELL MARKETING L.P. NATIONAL ASSOCIATION OF STATE PROCUREMENT

OFFICIALS (NASPO) CONTRACT AND STATE OF CALIFORNIA

PARTICIPATING ADDENDUM
WHEREAS, the City of Madera (City) has a need to procure information technology (IT) equipment; and
WHEREAS, the City’s Purchasing Procedures as codified in Madera Municipal Code Title II, Chapter 4, provide that the City may contract with suppliers who have been awarded contracts by government entities for the purchase of information technology goods and services under the competitive process contained in the California Public Contract Code §§ 12100 and 12113; and WHEREAS, the State of California NASPO agreement and specific participating addendum for the Dell Marketing L.P. contract meets the requirements as set forth in the City’s Municipal Code and the California Public Contract Code for the City to utilize the program for the procurement of IT goods and services; and
WHEREAS, it is in the best interest of the City to utilize the State of California NASPO agreement to procure the necessary computer equipment in support of ongoing City business operations.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MADERA hereby resolves, finds, and orders as follows:

1. The foregoing recitals are true and correct and are incorporated by reference.

2. The contract documents, provided as Exhibit 1 and incorporated herein by reference, are approved for participation.

3. The Director of Information Technology is authorized to sign documents necessary to procure the computer equipment from Dell Marketing L.P. using the NASPO agreement, as listed in Exhibit 2 and incorporated herein by reference.

4. This resolution is effective immediately upon adoption. ********** **********
Exhibit 1: NASPO Contract Documents
Persons with a hearing or speech disability may contact us by dialing 711 or 1.800.627.3529 Assignment of NASPO Master Agreement 23004 Page 1 of 3
ASSIGNMENT OF NASPO MASTER AGREEMENT 23004
This Assignment Agreement is by and among the State of Minnesota, acting through its Commissioner of Administration (State), Dell Inc., One Dell Way, Round Rock, TX 78682 (Original Contractor), and Dell Marketing L.P., One Dell Way, Mailstop RR1-33 Legal, Round Rock, TX 78682 (Assigned Contractor).

WHEREAS, the State has an agreement with the Original Contractor identified as Contract 23004, effective July 14, 2023, through June 30, 2025 (Contract), to provide Computer Equipment, Peripherals & Related Services; and WHEREAS, the Original Contractor wishes to assign all its interests in the Contract to the Assigned Contractor; and WHEREAS, the assignment provision of the Contract provides assignment of the agreement only upon written consent of the State.

NOW, THEREFORE, it is agreed by the parties to amend the Contract as follows:

1. The Assigned Contractor is assigned Contract 23026 to accommodate participating addenda under the Master Agreement.

2. This Assignment Agreement will become effective upon its approval and execution by the parties and approval of the appropriate State officials, pursuant to Minn. Stat. § 16C.05, subd. 2.

3. The State hereby approves the request of the Original Contractor to assign the Assigned Contractor all its interests, rights, and responsibilities, duties, and other provisions set forth in the Contract, which is attached and incorporated as Exhibit A, provided the Original Contractor and the Assigned Contractor agree to all provisions set forth in this Assignment Agreement.

4. Representations and Warranties:
a. The Original Contractor represents and warrants to the State that it is not in default of any of its obligations under the Contract.
b. The Assigned Contractor represents and warrants to the State that: (i) as of the effective date of this Assignment Agreement, the Assigned Contractor will have received sufficient information, right to technology, and key personnel sufficient to properly perform the duties, responsibilities, obligations, and all other provisions assigned to it, and (ii) the Assigned Contractor is ready, willing, and able to perform all of the duties, obligations, and responsibilities of the Contract. c. The representations and warranties set forth in this Section 4 are for the sole benefit of the State and its permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other person or entity (including the Original Contractor and the Assigned Contractor) any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Assignment Agreement.

5. The Assigned Contractor accepts assignment of all of the provisions of the Contract.

6. Any and all amounts due to the Original Contractor by a Participating Entity for goods or services provided by the Original Contractor prior to July 14, 2023, under the Contract will be paid to the Original Contractor by the Participating Entity. Any and all amounts due under the Contract on or after July 14, 2023, will be paid to the Assigned Contractor by the Participating Entity and the Original Contractor.

7. When applicable, payment for remaining work and travel expenses from the Contract will be paid at the rates set in Persons with a hearing or speech disability may contact us by dialing 711 or 1.800.627.3529 Assignment of NASPO Master Agreement 23004 Page 2 of 3
total payments made to the Original Contractor.

8. If applicable, the Assigned Contractor will provide proof of insurance with the coverage and in the amounts called for in the original solicitation document, attached herein.

9. If applicable, the Assigned Contractor will provide a copy of its Affirmative Action Certification as approved by the Minnesota Department of Human Rights.

10. If applicable, the Assigned Contractor will provide a copy of its Equal Pay Certification as approved by the Minnesota Department of Human Rights.

This Assignment Agreement is effective upon the date that the final required signatures are obtained.

IN WITNESS WHEREOF, the parties have caused this Assignment Agreement to be duly executed intending to be bound thereby.

1. ORIGINAL CONTRACTOR
Dell Inc.

The Original Contract Vendor certifies that the appropriate person(s) have executed this document on behalf of the Contract Vendor as required by applicable articles, bylaws, resolutions, or ordinances.

By:

Signature
Printed Name
Title:

Date:

By:

Title:

Date:

3. OFFICE OF STATE PROCUREMENT
In accordance with Minn. Stat. §16C.03, Subd. 3.

By:

Signature
Printed Name
Title:

Date:

2. ASSIGNED CONTRACTOR
Dell Marketing L.P.

The Assigned Contract Vendor certifies that the appropriate person(s) have executed the Contract on behalf of the Contract Vendor as required by applicable articles, bylaws, resolutions, or ordinances.

By:

Signature
Printed Name
Title:

Date:

By:

Title:

Date:

4. COMMISSIONER OF ADMINISTRATION
Or delegated representative.

By:

Signature
Printed Name
Title:

Date:

Persons with a hearing or speech disability may contact us by dialing 711 or 1.800.627.3529 Assignment of NASPO Master Agreement 23004 Page 3 of 3
EXHIBIT A: CONTRACT
Attached and incorporated into Exhibit A is the following document(s):

NASPO Master Agreement 23004.

NASPO ValuePoint Master Agreement No.: 23004
Dell Inc., whose designated business address is One Dell Way, Recitals

1. The State of Minnesota, Department of Administration, Office of State Procurement, on behalf of the State of Minnesota and NASPO ValuePoint Cooperat
Computer Equipment (Desktops, Laptops, Tablets, Servers, and Storage, including related Peripherals & Services);

2. Contractor provided a response to the Solicitation indicating its interest in and ability to provide the goods or services requested in the Solicitation; and

3. Subsequent to an evaluation in accordance with the terms of the Solicitation and negotiation, the Parties desire to enter into a contract; and

4. All authorized governmental entities in any state or participating US Territory are welcome to use the resulting Master Agreement through NASPO ValuePoint with the approval of the State Chief Procurement Official. Upon final award of the overarching Master Agreement, Contractors are able to sign Participating Addendums (PA) at the option of Participating States. Participating States reserve the right to add state specific terms and conditions and modify the scope of the contract in their Participating Addendum as allowed by the Master Agreement.

Accordingly, the Parties agree as follows:

Contract
Term of Contract
Effective date. July 1, 2023, or the date the Lead State obtains all required signatures under Minn. Stat. § 16C.05, subd. 2, whichever is later.

Expiration date. June 30, 2025. This Master Agreement may be extended for up to an additional 36 months, in increments as determined by the Lead State, through a duly executed amendment.

If, in the judgment of the Lead State, a follow-on, competitive procurement will be unavoidably delayed beyond the planned date of execution of the follow-on master agreement, this Master Agreement may be extended for a reasonable period of time, not to exceed six months. This subsection shall not be deemed to limit the authority of a Lead State under its state law otherwise to negotiate contract extensions.

Representations and Warranties
Under Minn. Stat. §§ 15.061 and 16C.03, subd. 3, and other applicable law the Lead State is empowered to engage such assistance as deemed necessary.

Contractor warrants that it is duly qualified and shall perform its obligations under this Master Agreement in acco
or profession, and in accordance with the specifications set forth in this Master Agreement, to the satisfaction of the Lead State.

Contractor warrants that it possesses the legal authority to enter into this Master Agreement and that it has taken all actions required by its procedures, by-laws, and applicable laws to exercise that authority, and to lawfully authorize its undersigned signatory to execute this Master Agreement, or any part thereof, and to bind Contractor to its terms.

Awarded Band(s)
The solicitation included three product Bands: Band 1, Personal Computing Devices Windows Operating Systems:

Desktops, Laptops, Tablets; and Band 2, Personal Computing Devices Non-Windows Operating Systems: Desktops, Laptops, Tablets; and Band 3, Servers and Storage. The Contractor is awarded the following Band(s):

Band 1, Personal Computer Devices Windows Operating Systems Band 2, Personal Computer Devices - Non-Windows Operating Systems Band 3, Servers and Storage
Configuration Dollar Limits
The following configuration limits apply to the Master Agreement. Participating Entities may define their configuration the configuration limits, as defined in their Participating Addendum. The Participating Entity will determine with the Contractor how to approve these modifications to the Product and Service Schedule.

The dollar limits identified below are based on a SINGLE computer/system configuration. This is NOT a restriction on the purchase of multiple configurations (e.g., an entity could purchase 10 laptops at $15,000 each, for a total purchase price of $150,000).

ITEM CONFIGURATION
Band One $15,000
Band Two $15,000
Band Three $1,000,000
Peripherals $10,000
Services Addressed in the Participating Addendum
Restrictions
The following restrictions apply to the Master Agreement. A Participating Entity may set further restrictions of products in their Participating Addendum. The Participating Entity will determine with the Contractor how to approve these Software
Software is restricted to operating systems and commercial off-the-shelf (COTS) software and is subject to equipment configuration limits.

Any software purchased must be related to the procurement of equipment.

Software must be pre-loaded or provided as an electronic link with the initial purchase of equipment, except for the exceptions allowed under Paragraph 5.a.4.

Software such as middleware which is not always installed on the equipment, but is related to storage and server equipment (Band 3) purchased, is allowed and may be procured after the initial purchase of equipment.

General Services
Services must be related to the procurement of equipment.

Service limits will be addressed by each State.

Wireless phone and internet service is not allowed.

Managed Print Services are not allowed.

Cloud Services
Cloud Services are restricted to Services that function as operating systems and software needed to support or configure hardware purchased under the scope of the contract and is subject to equipment configuration limits.

Any Cloud Service purchased must be related to the procurement of equipment.

Third-Party Products
Third-Party Products can be offered only in the Bands they have been awarded. All third-party products must meet the definition(s) of the Band(s) in which they are being offered.

Products manufactured by another Contractor holding a Minnesota NASPO ValuePoint Master Agreement for Computer Equipment cannot be offered unless approved by the Lead State.

Additional Product/Services
Hardware and software required to solely support wide area network (WAN) operation and management are not allowed.

Lease/Rentals of equipment may be allowed and will be addressed by each State.

Cellular Phone Equipment is not allowed.

EPEAT Bronze requirement may be waived, on a State case-byProcurement Officer. EPEAT Bronze requirement does not currently apply to storage.

Authorized Representative
Master Agreement Administrator. The Master Agreement Administrator designated by NASPO ValuePoint and the State of Minnesota, Department of Administration is Elizabeth Randa, Acquisition Management Specialist.

Elizabeth Randa, Acquisition Management Specialist
Department of Administration
Office of State Procurement
112 Administration Building
50 Sherburne Avenue
St. Paul, MN 55155
E-mail: [email protected]
Phone: 651.201.3122
Authorized Representative is Ashley Salinas, SLED
Contract Program Manager.

Ashley Salinas, SLED Contract Program Manager
Dell Inc.

One Dell Way
Round Rock, TX 78682
[email protected]
Phone: 512.542.1237
If the
immediately notify the Lead State.

Notices
If one party is required to give notice to the other under the Master Agreement, such notice shall be in writing and shall be effective upon receipt. Delivery may be by certified United States mail or by hand, in which case a signed receipt shall be obtained. An email shall constitute sufficient notice, provided the receipt of the transmission is confirmed by the receiving party. Either party must notify the other of a change in address for notification purposes. All notices to the Lead State shall be addressed to the Master Agreement Administrator.

Exhibits
The following Exhibits are attached and incorporated into this Contract. In the event of a conflict between the terms of this Contract and its Exhibits, or between Exhibits, the order of precedence is first the Contract, and then in the following order:

Exhibit A: NASPO ValuePoint Terms and Conditions
Exhibit B: Minnesota Terms and Conditions
Exhibit C: Requirement
Exhibit D: Price Schedule
Exhibit E: Contractor Terms and Conditions
Survival of Terms:

The following clauses survive the expiration or cancellation of this Master Agreement: Indemnification; State Audits; Government Data Practices and Intellectual Property; Publicity and Endorsement; Governing Law, Jurisdiction, and Venue; and Data Disclosure. Any other Contract term that states it shall survive, shall survive.

Entire Agreement
This Contract and any written addenda thereto constitute the entire agreement of the parties to the Master Agreement.

1. Contractor
The Contractor certifies that the appropriate
person(s) have executed the Contract on behalf of
the Contractor as required by applicable articles,
bylaws, resolutions, or ordinances.

2. State Agency
With delegated authority
Print name: Print name:

Signature: Signature:

Title: Date: Title: Date:

3. Commissioner of Administration
As delegated to The Office of State Procurement
Print name:

Signature:

Title: Date:

Exhibit A: NASPO ValuePoint Master Agreement Terms and Conditions Conflict of Terms/Order of Precedence.

Any order placed under this Master Agreement shall consist of the following documents:

Minnesota NASPO ValuePoint Master Agreement, as negotiated, including all exhibits; A Purchase Order issued against a PA (terms and conditions set forth in a Purchase Order will not be deemed to modify, diminish, or otherwise derogate the terms and conditions set forth in a Participating Addendum or Minnesota NASPO ValuePoint Master Agreement).

These documents shall be read to be consistent and complementary. Any conflict among these documents shall be resolved by giving priority to these documents in the order listed above. Contractor terms and conditions that apply to this Master Agreement are only those that are expressly accepted by the Lead State and must be in writing and attached to this Master Agreement as an Exhibit or Attachment.

Contractor terms and conditions may be incorporated if expressly accepted by the Lead State and attached to the Master Agreement as an Exhibit or Attachment, or by written reference (including reference to information contained in a URL or referenced policy). A written reference, including by URL or policy, is incorporated into the s must be explicitly
referenced are not incorporated into the Master Agreement. Any Contractor term or condition incorporated by URL or written reference applies to this Master Agreement only to the extent such term or condition is not prohibited by applicable law. Any change to information contained in a URL or referenced policy will not affect any financial obligation, place any additional materia
ability to use the product or service.
response incorporated therein by reference) will constitute the entire agreement of the parties to the Master response to the RFP, or terms listed or referenced on the Contractor's website not otherwise incorporated into the Master Agreement, in the Contractor quotation/sales order, or in similar documents subsequently provided by the Contractor.

Additional Agreement with NASPO. Upon request by NASPO ValuePoint, awarded Contractor shall enter into a under the terms of the Master Agreement, the terms of which shall be the same or similar (and not less favorable) than the terms set forth in the Master Agreement.

Definitions.

Acceptance is defined by the applicable commercial code, except Acceptance shall not occur before the completion of delivery in accordance with the Order, installation if required, and a reasonable time for inspection of the Product.

Accessory means a product that enhances the user experience but does not extend the functionality of the computer (e.g. mouse pad or monitor stand). For the purposes of this Contract, accessories are considered peripherals.

_____ as a Service (_aaS) refers to any good provided in a subscription-based model that is defined in the mitted only when they
meet the restrictions found in Paragraph 5.c, above.

Band means a category of products. There are three product bands which may be awarded through this Contract. Each product band includes related peripherals and services.

Components are the parts that make up a computer configuration.

Contractor means the person or entity delivering Products or performing services under the terms and conditions set forth in this Master Agreement.

Configuration means the combination of hardware and software components that make up the total functioning system.

Customer (see Purchasing Entity).

Desktop means a personal computer intended for regular use at a single location. A desktop computer typically comes in several units connected together during installation: (1) the processor, 2) display monitor, and 3) input devices usually a keyboard and a mouse. Desktops, including desktop virtualization endpoints such as zero and thin clients, are included in Bands 1 and 2 of this Contract.

Embedded Software means one or more software applications which permanently reside on a computing device.

Energy Star® is a voluntary energy efficiency program sponsored by the U.S. Environmental Protection Agency.

The Energy Star program makes it easy to identify energy efficient computers by labeling products that deliver the same or better performance as comparable models while using less energy and saving money. For additional information on the Energy Star program, including product specifications and a list of qualifying products, visit the Energy Star website at http://www.energystar.gov.

EPEAT is a type-1 ecolabel for identifying and purchasing sustainable IT products. EPEAT-registered products must meet sustainability criteria detailed in voluntary consensus-based standards that are free and publicly available Silver, or Gold based on meeting criteria that address the life cycle of the products. Product life cycle includes material extraction, hazardous substance reduction, end-of-life management, packaging, and corporate sustainability. Only products listed as Active in the online EPEAT Registry are considered to meet the EPEAT criteria.

FOB Destination means that shipping charges are included in the price of the item and the shipped item becomes the legal property and responsibility of the receiver when it reaches its destination unless there is acceptance testing required.

FOB Inside Delivery means that shipping charges are included in the price of the item, and that the shipped item becomes the legal property and responsibility of the receiver when it reaches the inside delivery point, which is beyond the front door or loading dock. FOB Inside Delivery is a special shipping arrangement that may include additional fees payable by the Purchasing Entity. FOB Inside Delivery must be annotated on the Purchasing Entity ordering document.

Intellectual Property means any and all patents, copyrights, service marks, trademarks, trade secrets, trade names, patentable inventions, or other similar proprietary rights, in tangible or intangible form, and all rights, title, and interest therein.

Laptop means a personal computer for mobile use. A laptop includes a display, keyboard, point device such as a touchpad, and speakers in a single unit. A laptop can be used away from an outlet using a rechargeable battery.

Laptops include notebooks, ultrabooks, netbooks, Zero and thin client devices, and computers with mobile operating systems. Laptops are included in Bands 1 and 2 of this Contract.

Lead State means the State centrally administering any resulting Master Agreement(s).

Mandatory Requirement is a requirement that the failure to meet results in the rejection of the resp identify a mandatory requirement. Any objection to a mandatory requirement should be identified by responders in the Question and Answer period.

Manufacturer means a company that, as one of its primary business functions, designs, assembles, owns the trademark/patent for, and markets branded computer equipment.

Master Agreement means the underlying agreement executed by and between the Lead State, acting on behalf of NASPO ValuePoint, and the Contractor.

Middleware
computers) work together. The most basic function of middleware is to enable communication between different pieces of software.

NASPO ValuePoint
limited liability company. NASPO ValuePoint facilitates administration of the NASPO cooperative group contracting consortium of state chief procurement officials for the benefit of state departments, institutions, agencies, and political subdivisions and other eligible entities (i.e., colleges, school districts, counties, cities, some nonprofit organizations, etc.) for all states, the District of Columbia, and territories of the United States. NASPO ValuePoint is identified in the Master Agreement as the recipient of reports and may perform contract administration functions relating to collecting and receiving reports as well as other contract administration functions as assigned by the Lead State.

Option means an item of equipment or a feature that may be chosen as an addition to or replacement for standard equipment and features.

Order or Purchase Order means any purchase order, sales order, contract or other method used by a Purchasing Entity to order the Products.

Participating Addendum means a bilateral agreement executed by a Contractor and a Participating Entity incorporating this Master Agreement and any other additional Participating Entity specific language or other requirements, e.g. ordering procedures specific to the Participating Entity, other terms and conditions.

Participating Entity means a state (as well as the District of Columbia and U.S territories), city, county, district, other political subdivision of a State, or a nonprofit organization under the laws of some states properly authorized to enter into a Participating Addendum, that has executed a Participating Addendum.

Participating State means a state that has executed a Participating Addendum.

Partner means a company, authorized by the Contractor and approved by the Participating Entity, to provide marketing, support, or other authorized contract services on behalf of the Contractor in accordance with the terms subcontractor, fulfillment partner, channel partner, business partner, servicing subcontractor, etc.

Peripherals means any hardware product that can be attached to, added within, or networked with personal computers, servers, or storage. Peripherals extend the functionality of a computer without modifying the core components of the system.

Per Transaction Multiple Unit Discount means a contractual volume discount based on dollars in a single purchase order or combination of purchase orders submitted at one time by a Participating Entity or multiple entities conducting a cooperative purchase.

Premium Savings Package(s) (PSP) are deeply discounted standard configurations available to Purchasing Entities using the Master Agreement. NASPO ValuePoint reserves the right to expand and modify the PSP throughout the life of the contract. For more information see: https://www.naspovaluepoint.org/portfolio/57/.

Product means any equipment, software (including embedded software), documentation, service, or other deliverable supplied or created by the Contractor pursuant to this Master Agreement. The term Products, supplies and services, and products and services are used interchangeably in these terms and conditions.

Purchasing Entity means a state (including the District of Columbia and U.S. territories), city, county, district, other political subdivision of a state, other public entities domestic or foreign, and nonprofit organizations under the laws of some states if authorized by a Participating Addendum, that issues a Purchase Order under the terms of the Master Agreement, or any Participating Addendum thereto, and becomes financially committed to the purchase.

Ruggedized means equipment specifically designed to operate reliably in harsh usage environments and conditions, such as strong vibrations, extreme temperatures, and wet or dusty conditions. Ruggedized equipment may be proposed under the band that most closely fits the equipment being proposed.

Server means computer hardware dedicated to run one or more services or applications (as a host) to serve the needs of the users of other computers on a network. Servers may be either physical or virtual. Servers, including server appliances, are included in Band 3 of this Contract. Server appliances have their hardware and software preconfigured by the manufacturer, and include embedded networking components such as those found in blade chassis systems.

Services are broadly classified as installation or de-installation, maintenance, support, training, migration, and optimization of products offered or supplied under the Master Agreement. These classifications of services may include, but are not limited to: warranty services, maintenance, installation, de-installation, factory integration (software or hardware components), asset management, recycling or disposal, training and certification, preimplementation design, disaster recovery planning and support, service desk or helpdesk, imaging, and any other directly related technical support service required for the effective operation of a product offered or supplied.

Contractors may offer limited professional services related ONLY to the equipment and configuration of the equipment purchased through the resulting contracts.

EACH PARTICIPATING ENTITY WILL DETERMINE RESTRICTIONS AND NEGOTIATE TERMS FOR SERVICES THROUGH THEIR PARTICIPATING ADDENDUM.

Software means, for the purposes of this Contract, commercial operating off the shelf machine-readable object code instructions including microcode, firmware, and operating system software that meet the restrictions specified

in Paragraph 5.a
and modifications of software.

Storage means hardware or a virtual appliance with the ability to store large amounts of data. Storage, including SAN switching necessary for the proper functioning of storage equipment, is included in Band 3 of this Contract Storage Area Network (SAN) is a high-speed special-purpose network (or subnetwork) that interconnects different kinds of data storage devices with associated data servers on behalf of a larger network of users.

Tablet means a mobile computer that provides a touchscreen that acts as the primary means of control. Tablets, including notebooks, ultrabooks, and netbooks with touchscreen capabilities, are included in Bands 1 and 2 of this Contract.

Takeback Program
Thin Client is a lightweight computer that has been optimized for establishing a remote connection with a server-based computing environment.

Third Party Product is a good sold by the Contractor that is manufactured by another company. Third Party Products are intended to enhance or supp
Upgrade means the replacement of existing software, hardware, or hardware component with a newer version.

Warranty
Wide Area Network (WAN) is a data network that serves users across a broad geographic area and often uses transmission devices provided by common carriers.

Term of the Master Agreement.

The initial term of this Master Agreement is for 2 years. This Master Agreement may be extended beyond the review of requirements of Participating Entities, current market conditions, and Contractor performance.

The Master Agreement may be extended for a reasonable period of time if in the judgment of the Lead State a follow-on, competitive procurement will be unavoidably delayed (despite good faith efforts) beyond the planned date of execution of the follow-on master agreement. This subsection shall not be deemed to limit the authority of a Lead State under its state law otherwise to negotiate contract extensions.

Amendments.

The terms of this Master Agreement shall not be waived, altered, modified, supplemented or amended in any manner whatsoever without a written amendment to the Master Agreement executed by the Contractor and Lead State as required by law. Master Agreement amendments will be negotiated by the Lead State with the Contractor whenever necessary to address changes in the terms and conditions, costs, timetable, or increased or decreased scope of work.

Participants and Scope.

Canadian Participation. Subject to the approval of Contractor, any Canadian provincial government or provincially funded entity in Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador,

Nova Scotia, Ontario, Prince Edward Island, Quebec, or Saskatchewan, and territorial government or territorial government funded entity in the Northwest Territories, Nunavut, or Yukon, including municipalities, universities, community colleges, school boards, health authorities, housing authorities, agencies, boards, commissions, and crown corporations, may be eligible to use Contractor's Master Agreement. Canadian Participation. Subject to the approval of the Contractor, any Canadian provincial government or provincially funded entity in Ontario, Quebec, Nova Scotia, New Brunswick, Manitoba, British Columbia, Prince Edward Island, Saskatchewan, Alberta, Northwest Territories, Nunavut, Yukon, and Newfoundland and Labrador, including municipalities, universities, community colleges, school boards, health authorities, housing authorities, agencies, boards, commissions, and crown corporations, may be eligible to use Contractor's Master Agreement.

Contractor may not deliver Products under this Master Agreement until a Participating Addendum acceptable to the Participating Entity and Contractor is executed. The NASPO ValuePoint Master Agreement Terms and Conditions are applicable to any Order by a Participating Entity (and other Purchasing Entities covered by their Participating Addendum), except to the extent altered, modified, supplemented or amended by a Participating Addendum. By way of illustration and not limitation, this authority may apply to unique delivery and invoicing requirements, confidentiality requirements, defaults on Orders, governing law and venue relating to Orders by a Participating Entity, indemnification, and insurance requirements. Statutory or constitutional requirements relating to availability of funds may require specific language in some Participating Addenda in order to comply with applicable law. The expectation is that these alterations, modifications, supplements, or amendments will be addressed in the Participating Addendum or, with the consent of the Purchasing Entity and Contractor, may be included in the ordering document (e.g. purchase order or contract) used by the Purchasing Entity to place the Order.

Use of specific NASPO ValuePoint Master Agreements by state agencies, political subdivisions and other subject to the approval of the respective State Chief Procurement Official. Issues of interpretation and eligibility for participation are solely within the authority of the respective State Chief Procurement Official.

Obligations under this Master Agreement are limited to those Participating Entities who have signed a Participating Addendum and Purchasing Entities within the scope of those Participating Addenda. States or other entities permitted to participate may use an informal competitive process to determine which Master Agreements to participate in through execution of a Participating Addendum. Financial obligations of Participating Entities who are states are limited to the orders placed by the departments or other state agencies and institutions having available funds. Participating Entities who are states incur no financial obligations on behalf of other Purchasing Entities. Contractor shall email a fully executed PDF copy of each Participating Addendum to [email protected] to support documentation of participation and posting in appropriate data bases.

NASPO and NASPO ValuePoint are not parties to the Master Agreement.

Participating Addenda shall not be construed to amend the following provisions in this Master Agreement between the Lead State and Contractor that prescribe NASPO ValuePoint requirements: Term of the Master Agreement; Amendments; Participants and Scope; Administrative Fee; NASPO ValuePoint Summary and Detailed Usage Reports; NASPO ValuePoint Cooperative Program Marketing and Performance Review; Right to Publish; Price and Rate Guarantee Period; and Individual Customers. Any such language shall be void and of no effect.

Participating Entities who are not states may under some circumstances sign their own Participating Addendum, subject to the consent to participation by the Chief Procurement Official of the state where the Participating Entity is located. Coordinate requests for such participation through NASPO ValuePoint. Any permission to participate through execution of a Participating Addendum is not a determination that procurement authority exists in the Participating Entity; they must ensure that they have the requisite procurement authority to execute a Participating Addendum.

right to services. Subject to any specific conditions included in the Master Agreement, or as explicitly permitted in a Participating Addendum, Purchasing Entities may not resell Products (the definition of which includes services that are deliverables). Absent any such condition or explicit permission, this limitation does not prohibit: payments by employees of a Purchasing Entity for Products; sales of Products to the general public as surplus property; and fees associated with inventory transactions with other governmental or nonprofit entities and consistent with a license rights granted for use of intellectual property.

Individual Customers.

Except to the extent modified by a Participating Addendum, each Purchasing Entity shall follow the terms and conditions of the Master Agreement and applicable Participating Addendum and will have the same rights and responsibilities for their purchases as the Lead State has in the Master Agreement, including but not limited to, any indemnity or right to recover any costs as such right is defined in the Master Agreement and applicable Participating Addendum for their purchases. Each Purchasing Entity will be responsible for its own charges, fees, and liabilities. The Contractor will apply the charges and invoice each Purchasing Entity individually.

Independent Contractor.

The Contractor is an independent contractor. Contractor shall have no authorization, express or implied, to bind the Lead State, Participating States, other Participating Entities, or Purchasing Entities to any agreements, settlements, liability or understanding whatsoever, and agrees not to hold itself out as an agent except as expressly set forth herein or as expressly agreed in any Participating Addendum.

Contracting Personnel.

Contractor must provide adequate contracting personnel to assist states with the completing and processing Participating Addenda. It is preferred that each Contractor be able to provide each Participating Entity with a primary contact person for that Participating Entity.

Changes in Contractor Representation.

The Contractor must n
Master Agreement in writing within 10 calendar days of the change. The Lead State reserves the right to approve changes in key personnel, as identified in the Con
The Contractor agrees to propose replacement key personnel having substantially equal or better education, training, and experience as was possessed by the key person proposed and evalua Contractor Verification.

The Contractor is responsible for delivering products or performing services under the terms and conditions set forth in the Master Agreement. The Contractor must ensure partners utilized in the performance of this contract adhere to all the terms and conditions. The term Partner will be utilized in naming the relationship a Contractor has with another company to market and sell under the contract. Participating Entities will have final determination/approval if a Partner may be approved for that state in the role identified by the Contractor.

Contractor Performance Meeting.

An annual performance meeting may be held each year with the NASPO ValuePoint Sourcing Team. Historically performance meetings have been held in Minnesota, but the Lead State may hold the meetings in person or virtually at All contractors that are invited to participate must send their Primary Account Representative, unless an exception is granted in writing by the Lead State. It is possible that not all contractors will be invited to participate in a performance meeting.

Laws and Regulations.

Any and all Products offered and furnished shall comply fully with all applicable Federal, State, and local laws and regulations, including Minn. Stat. § 181.59 prohibiting discrimination and business registration requirements of the Office of the Minnesota Secretary of State. To the extent any purchase is subject to Federal Acquisition Regulations, as may be required by the terms of a federal grant, a Participating Entity and Contractor may include in their Participating Addendum terms that reflect such a requirement.

Price and Rate Guarantee Period.

All minimum discounts and rates must be guaranteed for the initial term of the Master Agreement. Following the initial Master Agreement period, any request for minimum discount or rate adjustment must be for a guarantee period as offered by the Contractor, and must be made at least 30 days prior to the effective date. Requests for minimum discount or rate adjustment must include sufficient documentation supporting the request. Any adjustment or amendment to the Master Agreement shall not be effective unless approved by the Lead State. No retroactive adjustments to minimum discounts or rates will be allowed.

Premium Savings Package Program.

The Lead State reserves the right to create a Premium Savings Package Program (PSP) as outlined in the Definitions, Paragraph 2.ee of Exhibit A. Participation by Contractor is voluntary. The details and commitments of the PSP will be detailed as a part of any request for Contractor to participate.

Services.

Participating Entities must explicitly allow services in their Participating Addenda for the approved services to be allowed under that Participating Addendum. The Participating Addendum by each Participating Entity will address service agreement terms and related travel.

Ordering.

Master Agreement and purchase order numbers shall be clearly shown on all acknowledgments, packing slips, invoices, and on all correspondence.

Purchasing Entities may define entity or project-specific requirements and informally compete the requirement am
requirements are aggregated or other firm commitments may be made to achieve reductions in pricing. This procedure may be modified in Participating Addend
Purchasing Entity may in its sole discretion determine which Master Agreement Contractors should be solicited for a quote. The Purchasing Entity may select the quote that it considers most advantageous, cost and other factors considered.

Each Purchasing Entity will identify and utilize its own appropriate purchasing procedure and documentation. res regarding the
ordering of supplies or services contemplated by this Master Agreement.

Contractor shall not begin work without a valid Purchase Order or other appropriate commitment document under the law of the Purchasing Entity.

Orders may be placed consistent with the terms of this Master Agreement during the term of the Master Agreement.

All Orders pursuant to this Master Agreement, at a minimum, shall include:

The service description or supplies being delivered;

The place and requested time of delivery;
A billing address;
The name, phone number, and address of the Purchasing Entity representative; proposal;
A ceiling amount of the order for services being ordered; The Master Agreement identifier; and
Statement of Work, when applicable.

All communications concerning administration of Orders placed shall be furnished solely to the authorized ng office, or to such other individual identified in writing in the Order.

Orders must be placed pursuant to this Master Agreement prior to the termination date thereof, but may have a delivery date or performance period up to 120 days past the then-current termination date of this Master Agreement. Contractor is reminded that financial obligations of Purchasing Entities payable after the current applicable fiscal year are contingent upon agency funds for that purpose being appropriated, budgeted, and otherwise made available.

Notwithstanding the expiration, cancellation or termination of this Master Agreement, Contractor agrees to perform in accordance with the terms of any Orders then outstanding at the time of such expiration or termination.

Contractor shall not honor any Orders placed after the expiration, cancellation or termination of this Master Agreement, or otherwise inconsistent with its terms. Orders from any separate indefinite quantity, task orders, or other form of indefinite delivery order arrangement priced against this Master Agreement may not be placed after the expiration or termination of this Master Agreement, notwithstanding the term of any such indefinite delivery order agreement.

Trade-In.

Any trade-in programs offered during the life of the Master Agreement must be approved by the Lead State.

Participating Entities must explicitly allow trade-in programs in their Participating Addenda for the approved programs to be allowed under that Participating Addendum. Trade-in value shall not decrease the discounts offered through the Master Agreement.

Shipping and Delivery.

The prices are the delivered price to any Purchasing Entity for standard 3-5 day shipping. If an order is requested with expedited shipping, the Contractor must provide a firm quote. All deliveries shall be FOB Destination, freight pre-paid, with all transportation and handling charges paid by the Contractor. Responsibility and liability for loss or damage shall remain the warranty obligations. Any order for less than the specified amount is to be shipped with the freight prepaid and added as a separate item on the invoice. Any portion of an Order to be shipped without transportation charges that is back ordered shall be shipped without charge.

Specific delivery instructions, including FOB Inside Delivery, will be noted on the order form or Purchase Order.

Any damage to the building interior, scratched walls, damage to the freight elevator, etc., will be the responsibility of the Contractor. If damage does occur, it is the responsibility of the Contractor to promptly notify the Purchasing Entity placing the Order.
crating charges. Cases shall be of durable construction, good condition, properly labeled and suitable in every Order number and other information sufficient for the Purchasing Entity to properly identify the shipment as outlined in the Participating Addendum of the Purchasing Entity.

Inspection and Acceptance.

Where the Master Agreement, a Participating Addendum, or an Order does not otherwise specify a process for inspection and Acceptance, this section governs. This section is not intended to limit rights and remedies under the applicable commercial code.

Acceptance. Purchasing Entity shall determine whether all Products and Services delivered meet the Contractor's published specifications. No payment shall be made for any Products or Services until the Purchasing Entity has accepted the Products or Services. The Purchasing Entity will make every effort to notify the Contractor within thirty (30) calendar days following delivery of non-acceptance of a Product or completion of Service. In the event that the Contractor has not been notified within 30 calendar days from delivery of Product or completion of Service, the Product and Services will be deemed accepted on the 31st day after delivery of Product or completion of Services. Failure to reject upon receipt, however, does not relieve the Contractor of liability for latent or hidden material defects. Acceptance of such goods may be revoked in accordance with the provisions of the applicable commercial code, and the Contractor is liable for any resulting expense incurred by the Purchasing Entity related to the preparation and shipping of Product rejected and returned, or for which Acceptance is revoked. The warranty period shall begin upon Acceptance. If the parties agree to acceptance testing, the terms of subsection (c), below, apply.

Acceptance Testing. The Purchasing Entity and the Contractor shall determine if Acceptance Testing is applicable and required for the purchase.
standard of performance prior to Acceptance by the Purchasing Entity.

The Acceptance Testing period shall be thirty (30) calendar days starting from the day after the Product is delivered or, if installed, the day after the Product is installed and Contractor certifies that the Product is ready for Acceptance Testing. If the Product does not meet the standard of performance during the initial period of Acceptance Testing, Purchasing Entity may, at its discretion, continue Acceptance Testing on a day-to-day basis until the standard of performance is met. Upon rejection, the Contractor will have fifteen (15) calendar days to cure the standard of performance issue(s). If after the cure period, the Product still has not met the standard of performance, the Purchasing Entity may, at its option: (a) declare Contractor to be in breach and terminate the Order; (b) demand replacement Product from Contractor at no additional cost to Purchasing Entity; or, (c) continue the cure period for an additional time period agreed upon by the Purchasing Entity and the Contractor.

No Product shall be deemed Accepted and no charges shall be paid until the standard of performance is met. Products that do not meet specifications may be rejected. Failure to reject upon receipt, however, does not relieve the Contractor of liability for material (nonconformity that substantially impairs value) latent or hidden defects subsequently revealed when goods are put to use. Acceptance of such goods may be revoked in accordance with the provisions of the applicable commercial code, and the Contractor is liable for any resulting expense incurred by the Purchasing Entity related to the preparation and shipping of Product rejected and returned, or for which Acceptance is revoked. The warranty period shall begin upon Acceptance.

If any services do not conform to contract requirements, the Purchasing Entity may require the Contractor to perform the services again in conformity with contract requirements, at no increase in Order amount. When defects cannot be corrected by re-performance, the Purchasing Entity may require the Contractor to take necessary action to ensure that future performance conforms to contract requirements; and reduce the contract price to reflect the reduced value of services performed.

Title of Product.

Definitions. For purposes of this section, the following terms are defined as follows:
obligations to Purchasing Entity.

Contractor-branded hardware products.
s all patents, copyrights, trademarks, trade secrets, and other intellectual property rights of a party.

Upon Acceptance by the Purchasing Entity, Contractor shall convey to Purchasing Entity title to the Equipment free and clear of all liens, encumbrances, or other security interests. rights to use the software delivered by Contractor are governed by the terms of the applicable end-user license agreement. Unless different a Participating
Addendum or the issuance of an Order and shall meet or exceed the terms set forth in this Master Agreement.

Unless expressly otherwise agreed, microcode, firmware or operating system software required to enable the Equipment with which it is shipped to perform its basic or enhanced functions, is licensed for use solely on such Equipment.

Contractor grants Purchasing Entity a non-exclusive, non-transferable, irrevocable license to use (without the and
governmental purposes, only and solely in accordance with the applicable service specification and subject to this Master Agreement. The grant of this license is s
. Such license shall be perpetual
unless granted pursuant to the purchase of a subscription, in which case the license shall be for the term of the subscription. Purchasing Entity may authorize its service providers to use the Deliverables, but solely on Purchasing Purchasing Entity business or governmental purposes, and Purchasing Entity shall This section shall not affect a Purchasing
ed by Contractor or its licensors, licenses
sale of used products to employees or former employees.

Contractor reserves for itself all Proprietary Rights that it has not expressly granted to Purchasing Entity herein.

The license granted in this clause 20(c) does not apply to: (i) Equipment; (ii) Contractor-branded generally available software; or (ii) items licensed or otherwise provided under a separate agreement. Contractor is not limited in developing, using, or marketing services or products that are similar to the Deliverables or Professional Services ty obligations to Purchasing
Entity, in using the Deliverables or performing similar Professional Services for any other projects. Notwithstanding s subject to
Purchasing Entity approval.

Any and all licensing, maintenance, cloud services, or order specific agreements referenced within the terms and conditions of this Master Agreement are agreed to only to the extent that the terms do not conflict with the terms of the Participating Addendum or the terms of the Master Agreement as incorporated into the Participating event of a conflict in the terms and conditions, the conflict shall be resolved as detailed in the Order of Precedence defined herein. Notwithstanding the foregoing, licensing, maintenance, cloud services agreements, or order specific agreements may be further negotiated by the Contractor or, if applicable, the Licensor, and the potential Purchasing Entity, provided the contractual documents are duly executed in writing.

If (i) Contractor is or becomes aware of any infringement claim made against a third-party branded product offered by Contractor through this Master Agreement, (ii) the third-party branded product is determined to infringe upon the intellectual property rights of another third party, and (iii) such infringement is not remedied by the third party so that the product is no longer infringing, Contractor shall immediately cease offering the product under this Master Agreement and notify the Lead State, NASPO, Participating Entities, and purchasers of the product.

Warranty.

The Contractor must ensure warranty service and maintenance for all equipment, including third party products provided. The Contractor must facilitate the Manufacturer or Publisher warranty and maintenance of third party products furnished through the Master Agreement. The Contractor shall provide the warranty service and maintenance for equipment and all peripherals on the Master Agreement.

System Failure or Damage.

In the event of system failure or damage caused by the Contractor or its Product, the Contractor shall use reasonable efforts to restore or assist in restoring the system to operational capacity. The Contractor shall be responsible under this provision to the extent a 'system' is defined at the time of the Order; otherwise the rights of the Purchasing Entity shall be governed by the Warranty.

Payment.

Payment after Acceptance is normally made within 30 days following the date the entire order is delivered or the date a correct invoice is received, whichever is later. After 45 days the Contractor may assess overdue account charges up to a maximum rate of one percent per month on the outstanding balance, unless a different late payment amount is specified in a Participating Addendum, Order, or otherwise prescribed by applicable law.

Payments will be remitted by mail or electronically. Payments may be made via a State or political subdivision Prices are exclusive of taxes, duties, and fees, unless otherwise quoted. If a withholding tax is required by law, the tax will be added and identified on the applicable invoice. All applicable taxes, duties, and fees must be identified on the quote.

Leasing or Alternative Financing Methods.

Lease purchase and term leases are allowable only for Purchasing Entities whose rules and regulations permit leasing of software. Individual Purchasing Entities may enter into a lease agreement for the products covered in this Master Agreement, if they have the legal authority to enter into these types of agreements without going through a competitive process and if the applicable PAs permit leasing. No lease agreements will be reviewed or evaluated as part of the RFP evaluation process.

Contract Provisions for Orders Utilizing Federal Funds.

Pursuant to Appendix II to 2 Code of Federal Regulations (CFR) Part 200, Contract Provisions for Non-Federal Entity Contracts Under Federal Awards, Orders funded with federal funds may have additional contractual requirements or certifications that must be satisfied at the time the Order is placed or upon delivery. These federal requirements may be

proposed by Participating Entities in Participating Addenda and Purchasing Entities for incorporation in Orders placed under this Master Agreement.

Self Audit.

The Contractor must conduct at a minimum a quarterly self-audit, unless approved by the Lead State. The audit will sample a minimum of one tenth of one percent (.001) of orders with a maximum of 100 audits per quarter conducted.

For example: Up to 1,000 sales = 1 audit; 10,000 sales = 10 audits; Up to 100,000 sales = 100 audits. This will be a random sample of orders and invoices and must include documentation of pricing. Summary findings must be reported to Lead State with actions to correct documented findings.

Assignment/Subcontracts.

Contractor shall not assign, sell or otherwise transfer all or any part of this Master Agreement without prior written consent from the Lead State, such consent not to be unreasonably withheld.

The Lead State, or Participating Entity, shall not assign, delegate or otherwise transfer all or any part of this Master Agreement without prior written consent from Contractor, except for assignment or delegation to a Participating Entity State agency or eligible Purchasing Entity. The Lead State reserves the right to assign any rights or duties, including written assignment of contract administration duties to NASPO ValuePoint and other third parties.

Insurance.

Contractor shall, during the term of this Master Agreement, maintain in full force and effect, the insurance described in this section. Contractor shall acquire such insurance from an insurance carrier or carriers legally authorized to conduct business in the Lead State and in -, Class VII or better, in the most recently
option, result in termination of its Participating Addendum.

Coverage shall be written on an occurrence basis. The minimum acceptable limits shall be as indicated below:

Commercial General Liability covering premises operations, independent contractors, products and completed operations, blanket contractual liability, personal injury (including death), advertising liability, and property damage, with a limit of not less than $1 million per occurrence/$2 million general aggregate; Contractor must comply with any applicable State Workers Compensation or Employers Liability Insurance requirements.

Contractor shall pay premiums on all insurance policies. Contractor will use reasonable efforts to give thirty (30) days prior written notice to State prior to cancellation or non-renewal of any of the policies providing such coverage; provided, however that Contractor shall not be obligated to provide such notice if, concurrently with such cancellation or non-renewal, Contractor obtains coverage from different insurer(s) meeting the requirements described herein.

Prior to commencement of performance, Contractor shall provide to the Participating Entity a certificate of the Lead State that (1) names the Participating Entity as an additional insured, (2) provides that written notice of liability insurance policy shall be primary, with any liability insurance of any Participating Entity as secondary and

pt the
endorsement is provided to the applicable state.

During the term of this Master Agreement, Contractor shall upon request provide to the Lead State and Participating Entities evidence of coverage that meets the requirements of this Section and the applicable Participating Addendum. Failure to provide evidence of coverage, within thirty (30) calendar days of receipt of request
termination or the termination of any Participating Addendum.

Participating Addendum, or any Purchase Order.

Administrative Fees.

The Contractor shall pay to NASPO ValuePoint, or its assignee, a NASPO ValuePoint Administrative Fee of onequarter of one percent (0.25% or 0.0025) no later than sixty (60) days following the end of each calendar quarter.

The NASPO ValuePoint Administrative Fee shall be submitted quarterly and is based on all sales of products and services under the Master Agreement (less any charges for taxes or shipping). The NASPO ValuePoint Administrative Fee is not negotiable.

The NASPO ValuePoint Administrative Fee in this section shall be based on the gross amount of all sales (less any charges for taxes or shipping) at the adjusted prices (if any) in Participating Addenda.

Additionally, some states may require an additional fee be paid directly to the state only on purchases made by Purchasing Entities within that state. For all such requests, the fee level, payment method and schedule for such reports and payments will be incorporated into the Participating Addendum that is made a part of the Master Agreement. The Purchasing Entity may allow the Contractor to adjust the Master Agreement pricing to account for these additional fees for purchases made by Purchasing Entities within the jurisdiction of the Participating Entity. All such agreements shall not affect the NASPO ValuePoint Administrative Fee percentage or the prices paid by the Purchasing Entities outside the jurisdiction of the state requesting the additional fee.

NASPO ValuePoint Reports
Sales Data Reporting. In accordance with this section, Contractor shall report to NASPO ValuePoint all Orders under this Master Agreement for which Contractor has invoiced the ordering entity or individual, including Orders invoiced to Participating Entity or Purchasing Entity employees for personal use if such use is permitted by this Master Agreement and the
Sales Data is a material requirement of this Master Agreement. Reporting requirements, including those related to the format, contents, frequency, or delivery of reports, may be updated by NASPO ValuePoint with reasonable notice to Contractor and without amendment to this Master Agreement. NASPO ValuePoint shall have exclusive ownership of any media on which reports are submitted and shall have a perpetual, irrevocable, non-exclusive, royalty free, and transferable right to display, modify, copy, and otherwise use reports, data, and information provided under this section.

Summary Sales Data.
shall, using the reporting tool or template provided by NASPO ValuePoint, report Summary Sales Data to NASPO ValuePoint for each calendar quarter no later than thirty (30) days following the end of the quarter. If Contractor has no reportable Sales Data for the quarter, Contractor shall submit a zero-sales report. the Solicitation or by NASPO ValuePoint, including customer information, Order information, and line-item details.

Contractor shall, using the reporting tool or template provided by NASPO ValuePoint, report Detailed Sales Data to NASPO ValuePoint for each calendar quarter no later than thirty (30) days following the end of the quarter. Detailed Sales Data shall be reported in the format provided in the Solicitation or provided by NASPO ValuePoint. The total sales volume of reported Detailed Sales Data shall be consistent with the total sales volume of reported Summary Sales Data.

Sales Data Crosswalks. Reserved.

Executive Summary. Contractor shall, upon request by NASPO ValuePoint, provide NASPO ValuePoint with an executive summary that includes but is not limited to a list of states with an active Participating Addendum, states with which Contractor is in negotiations, and any Participating Addendum roll-out or implementation activities and issues. NASPO ValuePoint and Contractor will determine the format and content of the executive summary.

NASPO ValuePoint Cooperative Program Marketing, Training, and Performance Review.

Contractor agrees to work cooperatively with NASPO ValuePoint personnel. Contractor agrees to present plans force
regarding the Master Agreement contract, including the competitive nature of NASPO ValuePoint procurements, the Master agreement and participating addendum process, and the manner in which qualifying entities can participate in the Master Agreement.

Contractor agrees, as Participating Addendums become executed, if requested by ValuePoint personnel to provide plans to launch the program within the Participating Entity. Plans will include time frames to launch the agreement and confirmation that the Con
as available in the Participating Entity.

Contractor agrees, absent anything to the contrary outlined in a Participating Addendum, to consider customer proposed terms and conditions, as deemed important to the customer, for possible inclusion into the customer agreement. Contractor will ensure that their sales force is aware of this contracting option.

Contractor agrees to participate in an annual contract performance review at a location selected by the Lead State and NASPO ValuePoint, which may include a discussion of marketing action plans, target strategies, marketing materials, as well as Contractor reporting and timeliness of payment of administration fees.

Contractor acknowledges that the NASPO ValuePoint logos may not be used by Contractor in sales and marketing until a logo use agreement is executed with NASPO ValuePoint.

The Lead State expects to evaluate the utilization of the Master Agreement at the annual performance review.

Lead State may, in its discretion, cancel the Master Agreement pursuant to Paragraph 42 of Exhibit A, or not exercise an option to renew, when Contractor utilization does not warrant further administration of the Master Agreement.

The Lead State may exercise its right to not renew the Master Agreement if contractor fails to record or report revenue for three consecutive quarters, upon 60-calendar day written notice to the Contractor. Cancellation based on nonuse or under-utilization will not occur sooner than two years after award of the Master Agreement. This subsection does not limit the discretionary right of either the Lead State or Contractor to cancel the Master Agreement pursuant to Paragraph 42 of Exhibit A or to terminate for default pursuant to Paragraph 44 of Exhibit A.

Contractor agrees to notify the Lead State and NASPO ValuePoint of any contractual most-favored-customer provisions in any Cooperative Purchasing Agreements that may affect the promotion of this Master Agreements or whose terms provide for adjustments to future rates or pricing based on rates, pricing in, or Orders from this master agreement. Upon request of the Lead State or NASPO ValuePoint, Contractor shall provide a copy of any such provisions. For the purposes of this paragraph, Cooperative Purchasing Agreement shall mean a cooperative

purchasing program facilitating public procurement solicitations and agreements using a lead agency model. This does not include contracts with any federal agency or any federal contract.

Right to Publish.

Throughout the duration of this Master Agreement, Contractor must secure from the Lead State prior approval for the public release of information that pertains to the potential work or activities covered by the Master Agreement. This limitation does not preclude publication about the award of the Master Agreement or marketing activities consistent with any proposed and accepted marketing plan. The Contractor shall not make any representations of NASPO Val
Agreement without prior written consent. Failure to adhere to this requirement may result in termination of the Master Agreement for cause.

Records Administration and Audit.

The Contractor shall maintain books, records, documents, and other evidence pertaining to this Master Agreement and Orders placed by Purchasing Entities under it to the extent and in such detail as shall adequately reflect performance and administration of payments and fees. Contractor shall permit the Lead State, a Participating Entity, a Purchasing Entity, the federal government (including its grant awarding entities and the U.S. Comptroller General), and any other duly authorized agent of a governmental agency, to audit, inspect, examine, copy and transcribe Contractor's books, documents, papers and records directly pertinent to this Master Agreement or orders placed by a Purchasing Entity under it for the purpose of making audits, examinations, excerpts, and transcriptions.

This right shall survive for a period of six (6) years following termination of this Agreement or final payment for any order placed by a Purchasing Entity against this Agreement, whichever is later, or such longer period as is required hereunder.

Without limiting any other remedy available to any governmental entity, the Contractor shall reimburse the applicable Lead State, Participating Entity, or Purchasing Entity for any overpayments inconsistent with the terms of records.

The rights and obligations herein exist in addition to any quality assurance obligation in the Master Agreement requiring the Contractor to self-audit contract obligations and that permits the Lead State to review compliance with those obligations.

Indemnification
arising from Contracto
and actions arising from breach of contract or warranty. urchasing
Entities, along with their officers and employees.

The indemnification obligations of this section do not apply in the event the claim or cause of action is the result of to bar any legal remedies the Contractor
Intellectual Property Indemnification.

In the event of any such claim by any third party against the Indemnified Party that Products, Software, Services or Deliverables prepared, produced, or branded by Contractor and delivered pursuant to this Master Agreement infringe or misappropriate that third party's U.S. patent, copyright, trade secret, or other intellectual property rights ("Indemnified Claims"), the Indemnified Party shall promptly notify the Contractor. The and hold harmless the Indemnified Party against any loss, cost, expense, or liability (including legal fees) arising out of such a claim, whether or not such claim is successful against the Indemnified Party.

If Contractor receives prompt notice of such a claim that in the Contractor's opinion is likely to result in an adverse ruling, the Contractor shall at its option (1) obtain a right for the Indemnified Party to continue using such Products, Deliverables, or Software or allow Contractor to continue performing the Services; (2) modify such Products, Software, Services, or Deliverables to make them non-infringing without materially affecting their utility or functionality; (3) replace such Products, Software, Services, or Deliverables with a non-infringing equivalent; or (4) refund any pre-paid fees for the allegedly infringing Services that have not been performed or provide a reasonable depreciated or pro rata refund for the allegedly infringing Product, Deliverables, or Software.

Notwithstanding the foregoing, Contractor shall have no obligation under this Section for any claim resulting or arising from (1) modifications of the Products, Software, Services, or Deliverables that were not performed by, on behalf of, or at the direction of Contractor; (2) the combination, operation, or use of the Products, Software, Services, or Deliverables in connection with a third-party product, software or service (the combination of which causes the claimed infringement); or (3) Contractor's compliance with written specifications or directions, including the incorporation of any software or other materials or processes provided by or requested by Indemnified Party. Contractor's duty to indemnify and defend under this Section is contingent upon: (a) Contractor receiving prompt written notice of the third-party claim or action for which Contractor must indemnify Indemnified Party, (b) Contractor having the right to solely control the defense and resolution of such claim or action, unless the law requires approval for a third party to defend the Indemnified Party and such approval is not received, and (c) cooperation with Contractor in defending and resolving such claim or action. This Section states exclusive remedies for any third-party intellectual property claim or action and nothing in this Master Agreement or elsewhere will obligate Contractor to provide any greater indemnity to Indemnified Party.

Limitations of Liability
The Parties agree that neither Contractor nor the indemnified party shall be liable to each other, regardless of the form of action, for consequential, incidental, indirect, or special damages except any claim related to bodily injury or death; an unauthorized release or breach of not public data as set forth more fully in Minn. Ch. 13; or a claim or demand based on patent, copyright, or other intellectual property infringement. 2 times the amount paid by Purchasing Entity to Contractor during the 12 months preceding the date of the dispute concerning any products and services, or $5,000,000, whichever is greater. This limit on liability does not apply to claims for bodily injury or death or for intellectual property infringement.
extend to any combination of the Product with any other product, system or method, unless the Product, system or method is:
specified by the Contractor to work with the Product; or

reasonably required, in order to use the Product in its intended manner, and the infringement could not have been avoided by substituting another reasonably available product, system or method capable of performing the same function; or
It would be reasonably expected to use the Product in combination with such product, system or method.

License of Pre-Existing Intellectual Property.

Intentionally deleted.

Assignment of Antitrust Rights.

Contractor irrevocably assigns to a Participating Entity who is a state any claim for relief or cause of action which the Contractor now has or which may accrue to the Contractor in the future by reason of any violation of state or federal antitrust laws (15 U.S.C. § 1- ons), as now in effect and as may be amended from time to time, in connection with any goods or services provided in that state for the purpose of carrying out the Contractor's obligations under this Master Agreement or Participating Addendum, including, at the Participating Entity's option, the right to control any such litigation on such claim for relief or cause of action.

Debarment.

The Contractor certifies that neither it nor its principals are presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participation in this transaction (contract) by any governmental department or agency. This certification represents a recurring certification made at the time any Order is placed under this Master Agreement. If the Contractor cannot certify this statement, attach a written explanation for review by the Lead State.

Governing Law and Venue.

The construction and effect of the Master Agreement after award shall be governed by the law of the state serving as Lead State. The construction and effect of any Participating Addendum or Order against the Master Venue for any claim, dispute or action concerning the terms of the Master Agreement shall be in the state serving as Lead State. Venue for any claim, dispute, or action concerning any Order placed against the Master Agreement or the effect of a Participating Addendum shall be in the If a claim is brought in a federal forum, then it must be brought and adjudicated solely and exclusively within the United States District Court for (in decreasing order of priority): the Lead State for claims relating to contract performance or administration if the Lead State is a party; a Participating State if a named party; the state where the Participating Entity or Purchasing Entity is located if either is a named party.

Confidentiality, Non-Disclosure, and Injunctive Relief.

Confidentiality. Contractor acknowledges that it and its employees or agents may, in the course of providing a Product under this Master Agreement, be exposed to or acquire information that is confidential to Purchasing Entity ients.

Any and all information of any form that is marked as confidential is or would by its nature be deemed confidential obtained by the other party or its employees or agents (the in the performance of this Master Agreement, including, but not necessarily limited to (1) any information of the originating party

Any reports or other documents or items (including software) that result from the use of the Confidential Information by the receiving party shall be treated in the same manner as the Confidential Information.

Confidential Information does not include information that (1) is or becomes (other than by disclosure by the receiving party) publicly known; (2) is furnished by the originating party to others without restrictions similar to those imposed by this Master Agreement; (3) is rightfully in the possession without the obligation of nondisclosure prior to the time of its disclosure under this Master Agreement; (4) is obtained from a source other than the originating party without the obligation of confidentiality, (5) is disclosed with the written consent of the originating party or; (6) is independently developed by employees, agents or subcontractors of the receiving party who can be shown to have had no access to the Confidential Information.

Non-Disclosure. The receiving party shall hold Confidential Information in confidence, using at least the industry standard of confidentiality, and shall not copy, reproduce, sell, assign, license, market, transfer or otherwise dispose of, give, or disclose Confidential Information to third parties or use Confidential Information for any purposes whatsoever other than what is necessary to the performance of Orders placed under this Master Agreement.

Each party shall advise each of its employees and agents of their obligations to keep Confidential Information confidential. Contractor shall use commercially reasonable efforts to assist Purchasing Entity in identifying and preventing any unauthorized use or disclosure of any Confidential Information.

Without limiting the generality of the foregoing, the receiving party shall advise the originating party, and the applicable Participating Entity, and the Lead State if the originating party is a Purchasing Entity, and the Lead State if the originating party is a Participating Entity, immediately if the receiving party learns or has reason to believe that any person who has had access to Confidential Information has violated or intends to violate the terms of this Master Agreement, and the receiving party shall at its expense cooperate with advise the originating party in seeking injunctive or other equitable relief in the name of either party against any such person.

Except as directed by the originating party, the receiving party will not at any time during or after the term of this Master Agreement disclose, directly or indirectly, any Confidential Information to any person, except in accordance with this Master Agreement, and that upon termination of this Master Agreement or at the request, the receiving party shall turn over to the originating party all documents, papers, and other matter in possession that embody Confidential Information.

Notwithstanding the foregoing, Contractor may keep one copy of such Confidential Information necessary for quality assurance, audits and evidence of the performance of this Master Agreement, and Purchasing Entity may retain Confidential Information to the extent and for the duration required by applicable law.

Injunctive Relief. Each party acknowledges that breach of this section, including disclosure of any Confidential Information, will cause irreparable injury to originating party that is inadequately compensable in damages. Accordingly, the originating party may seek and obtain injunctive relief against the breach or threatened breach of the foregoing undertakings, in addition to any other legal remedies that may be available. Contractor acknowledges and agrees that the covenants contained herein are necessary for the protection of the legitimate business interests of Purchasing Entity and are reasonable in scope and content.

Purchasing Entity Law. These provisions shall be applicable only to extent they are not in conflict with the applicable public disclosure laws of any Purchasing Entity.

The rights granted Purchasing Entities and Contractor obligations under this section shall also extend to the data relating to Orders under this Master Agreement that identify the entity/customer, Order dates, line item

descriptions and volumes, and prices/rates. This provision does not apply to disclosure to the Lead State, a Participating State, or any governmental entity exercising an audit, inspection, or examination pursuant to Paragraph 33 of Exhibit A. To the extent permitted by law, Contractor shall notify the Lead State of the identity of any entity seeking access to the Confidential Information described in this subsection.

Public Information.

This Master Agreement and all related documents are subject to disclosure pursuant to the Lead State information laws.

Cancellation.

Unless otherwise set forth in this Master Agreement, this Master Agreement may be canceled by either party upon 60 days written notice prior to the effective date of the cancellation. Further, any Participating Entity may cancel its participation upon 30 days written notice, unless otherwise stated in the Participating Addendum. Cancellation may be in whole or in part. Any cancellation under this provision shall not affect the rights and obligations attending orders outstanding at the time of cancellation, including any right of a Purchasing Entity to indemnification by the Contractor, rights of payment for Products delivered and accepted, rights attending any warranty or default in performance in association with any Order, and requirements for records administration and audit. Cancellation of the Master Agreement due to Contractor default may be immediate as set forth in Paragraph 44 of Exhibit A.

Force Majeure.

Neither party to this Master Agreement shall be held responsible for delay or default caused by fire, riot, unusually severe weather, other acts of God, or war which are beyond t terminate this Master Agreement after determining such delay or default will reasonably prevent successful performance of the Master Agreement.

Defaults and Remedies.

The occurrence of any of the following events shall be an event of default under this Master Agreement:

Nonperformance of contractual requirements; or
A material breach of this Master Agreement; or
Any certification, representation or warranty by Contractor in response to the RFP or in this Master Agreement that proves to be untrue or materially misleading; or Institution of proceedings under any bankruptcy, insolvency, court-ordered reorganization or similar law, by or against Contractor, or the appointment of a receiver or similar officer for Contractor or any of its property, which is not vacated or fully stayed within thirty (30) calendar days after the institution or occurrence thereof; or
Any default specified in another section of this Master Agreement.

Upon the occurrence of an event of default, except for material breach, the Lead State shall issue a written notice of default, identifying the nature of the default, and providing a period of 30 calendar days in which Contractor shall have an opportunity to cure the default. The Lead State shall not be required to provide advance written notice or a cure period and may immediately terminate this Master Agreement in whole or in part if the Lead State, in its sole discretion, determines that it is reasonably necessary to preserve public safety or prevent including liquidated damages to the extent provided for under this Master Agreement. The Lead State may immediately terminate this Master Agreement upon material breach of the Master Agreement by Contractor.

If Contractor is afforded an opportunity to cure and fails to cure the default within the period specified in the written notice of default, Contractor shall be in breach of its obligations under this Master Agreement and the Lead State shall have the right to exercise any or all of the following remedies:

Exercise any remedy provided by law; and
Terminate this Master Agreement and any related contracts or portions thereof; and Impose liquidated damages as provided in this Master Agreement; and Suspend Contractor from being able to respond to future bid solicitations; and Withhold payment until the default is remedied.

Unless otherwise specified in the Participating Addendum, in the event of a default under a Participating Addendum, a Participating Entity shall provide a written notice of default as described in this section and shall have all of the rights and remedies under this paragraph regarding its participation in the Master Agreement, in addition to those set forth in its Participating Addendum. Unless otherwise specified in a Purchase Order, a Purchasing Entity shall provide written notice of default as described in this section and have all of the rights and remedies under this paragraph and any applicable Participating Addendum with respect to an Order placed by the Purchasing Entity.

Nothing in these Master Agreement Terms and Conditions shall be construed to limit the rights and remedies available to a Purchasing Entity under the applicable commercial code.

Waiver of Breach.

Failure of the Lead State, Participating Entity, or Purchasing Entity to declare a default or enforce any rights and remedies shall not operate as a waiver under this Master Agreement or Participating Addendum. Any waiver by the Lead State, Participating Entity, or Purchasing Entity must be in writing. Waiver by the Lead State or Participating Entity of any default, right or remedy under this Master Agreement or Participating Addendum, or by Purchasing Entity with respect to any Purchase Order, or breach of any terms or requirements of this Master Agreement, a Participating Addendum, or Purchase Order shall not be construed or operate as a waiver of any subsequent default or breach of such term or requirement, or of any other term or requirement under this Master Agreement, Participating Addendum, or Purchase Order.

Notices.

If one party is required to give notice to the other under the Master Agreement, such notice shall be in writing and shall be effective upon receipt. Delivery may be by certified United States mail or by hand, in which case a signed receipt shall be obtained. A facsimile or electronic transmission shall constitute sufficient notice, provided the receipt of the transmission is confirmed by the receiving party. Either party must notify the other of a change in address for notification purposes. All notices to the Lead State shall be addressed as follows:

Elizabeth Randa, Acquisition Management Specialist
112 Administration Bldg.
50 Sherburne Avenue
St. Paul, MN 55155
[email protected]
No Waiver of Sovereign Immunity.

In no event shall this Master Agreement, any Participating Addendum or any contract or any Purchase Order issued thereunder, or any act of the Lead State, a Participating Entity, or a Purchasing Entity be a waiver of any form of defense

or immunity, whether sovereign immunity, governmental immunity, immunity based on the Eleventh Amendment to the Constitution of the United States or otherwise, from any claim or from the jurisdiction of any court.

This section applies to a claim brought against the Participating Entities who are states only to the extent Congress has section is also not a waiver by the state of any form of immunity, including but not limited to sovereign immunity and immunity based on the Eleventh Amendment to the Constitution of the United States.

Exhibit B: Minnesota Terms and Conditions
Change Requests.

The Lead State reserves the right to request, during the term of the Master Agreement, changes to the products offered within the Band(s). Products introduced during the term of the Master Agreement shall go through a formal review process. The process for updating the products offered within a Band is outlined in Paragraph 2 of Exhibit B. The Contractor shall evaluate and recommend products for which agencies have an expressed need. The Lead State shall require the Contractor to provide a summary of its research of those products being recommended for inclusion in the Master Agreement as well as defining how adding the product will enhance the Master Agreement. The Lead State may request that products, other than those recommended, are added to the Master Agreement.

In the event that the Lead State desires to add new products and services that are not included in the original Master Agreement, the Lead State requires that independent manufacturers and resellers cooperate with the already should be demonstrated to the Lead State. The Master Agreement shall be modified via supplement or amendment. The Lead State will negotiate the inclusion of the products and services with the Contractor. No products or services will be added to the Master Agreement without
Product and Service Schedule (PSS).

Creating the Product and Service Schedule (PSS). Contractor will use the attached sample PSS to create and maintain a complete listing of all products and services offered under the Master Agreement. The PSS must conform to the contracted minimum discounts. Contractor may create and maintain a separate PSS for a Participating Entity based on the requirements and restrictions of the Participating Entity.

Contractors are encouraged to provide remote learning bundles for K-12 Education. These bundles can be included in the response to the PSS.

Maintaining the PSS.

In General. Throughout the term of the Master Agreement, on a quarterly basis, Contractor may update the PSS to make model changes, add new products or services, or remove obsolete or discontinued products or services. Any updates to the PSS must conform to the Master Agreement requirements, including the scope of the Master Agreement and contracted minimum discounts.

Process. Contractor must provide notification to the Lead State of any changes to their PSS using the attached Action Request Form (ARF).
a)
manufactured products, or remove discontinued or obsolete products or services, and Contractor does not b)
PSS. If the proposed third-party manufacturer holds a NASPO Master Agreement for Computer Equipment, Contractor must obtain written authorization from that manufacturer. Contractor must have the Lead c) Contractor must maintain a historic record of all past PSSs on their dedicated NASPO ValuePoint website.

d) Pursuant to the audit provisions of the Master Agreement, upon the request of NASPO ValuePoint, the Lead State, or a Participating Entity, Contractor must provide an historic version of any Baseline Price List.

Purchase Orders.

There will be no minimum order requirements or charges to process an individual purchase order. The Participating Addendum number and the PO number must appear on all documents (e.g., invoices, packing slips, etc.). The Ordering Risk of Loss or Damage.

The Purchasing Entity is relieved of all risks of loss or damage to the goods or equipment during periods of transportation, and installation by the Contractor and in the possession of the Contractor or their authorized agent.

Payment Card Industry Data Security Standard and Cardholder Information Security.

Contractor assures all of its Network Components, Applications, Servers, and Subcontractors (if any) comply with the ecurity appliances;
rvers.
or telephone number.

Subcontractors (if any) must be responsible for the security of all Cardholder Data in its possession; and will only use Cardholder Data for assisting cardholders in completing a transaction, providing fraud control services, or for other uses specifically required by law. Contractor must have a business continuity program which conforms to PCIDSS to protect Cardholder Data in the event of a major disruption in its operations or in the event of any other disaster or system failure which may occur to operations; will continue to safeguard Cardholder Data in the event this Agreement terminates or expires; and ensure that a representative or agent of the payment card industry and a representative or agent of the Purchasing Entity shall be provided with full cooperation and access to conduct a thorough security review to validate compliance with PCIDSS.

Foreign Outsourcing of Work.

Upon request, the Contractor is required to provide information regarding the location of where services, data storage, and location of data processing under the Master Agreement will be performed.

State Audits (Minn. Stat. § 16C.05, subd. 5).

The books, records, documents, and accounting procedures and practices of the Contractor or other party, that are relevant to the Master Agreement or transaction are subject to examination by the contracting agency and either the tate Auditor as appropriate for a minimum of six years after the end of the Master Agreement or transaction. The Lead State reserves the right to authorize delegate(s) to audit this Master Agreement and transactions.

Certification of Nondiscrimination (in accordance with Minn. Stat. § 16C.053).

If the value of this Contract, including all extensions, is $50,000 or more, Contractor certifies it does not engage in and has no present plans to engage in discrimination against Israel, or against persons or entities doing business in Israel, when making decisions related to the operation of the contractor's business. For purposes of this section, "discrimination" includes but is not limited to engaging in refusals to deal, terminating business activities, or other actions that are intended to limit commercial relations with Israel, or persons or entities doing business in Israel, when such actions are taken in a manner that in any way discriminates on the basis of nationality or national origin and is not based on a valid business reason.

Human Rights/Affirmative Action.

The Lead State requires affirmative action compliance by its Contractors in accordance with Minn. Stat. § 363A.36 and Minn. R. 5000.3400 to 5000.3600.

Covered Contracts and Contractors. If the Contract exceeds $100,000 and the Contractor employed more than 40 full-time employees on a single working day during the previous 12 months in Minnesota or in the state where it has its principal place of business, then the Contractor must comply with the requirements of Minn. Stat. § 363A.36 and Minn. R. 5000.3400-5000.3600.

Minn. R. 5000.3400-5000.3600 implement Minn. Stat. § 363A.36. These rules include, but are not limited to, criteria for contents, approval, and implementation of affirmative action plans; procedures for issuing certificates of sanctions, and notice and hearing; annual compliance reports; procedures for compliance review; and contract consequences for noncompliance. The specific criteria for approval or rejection of an affirmative action plan are contained in various provisions of Minn. R. 5000.3400 5000.3600 including, but not limited to, parts 5000.3420- 5000.3500 and parts 5000.3552 5000.3559.

Disabled Workers. Minn. R. 5000.3550 provides the Contractor must comply with the following affirmative action requirements for disabled workers.

AFFIRMATIVE ACTION FOR DISABLED WORKERS
(a) The Contractor must not discriminate against any employee or applicant for employment because of physical or mental disability in regard to any position for which the employee or applicant for employment is qualified. The Contractor agrees to take affirmative action to employ, advance in employment, and otherwise treat qualified disabled persons without discrimination based upon their physical or mental disability in all employment practices such as the following: employment, upgrading, demotion or transfer, recruitment, advertising, layoff or termination, rates of pay or other forms of compensation, and selection for training, including apprenticeship. (b) The Contractor agrees to comply with the rules and relevant orders of the Minnesota Department of Human Rights issued pursuant to the Minnesota Human Rights Act. (c)
noncompliance may be taken in accordance with Minn. Stat. § 363A.36 and the rules and relevant orders of the Minnesota Department of Human Rights issued pursuant to the Minnesota Human Rights Act.
(d) The Contractor agrees to post in conspicuous places, available to employees and applicants for employment, notices in a form to be prescribed by the commissioner of the Minnesota Department of Human
action to employ and advance in employment qualified disabled employees and applicants for employment, and the rights of applicants and employees. (e) The Contractor must notify each labor union or representative of workers with which it has a collective bargaining agreement or other contract understanding, that the Contractor is bound by the terms of Minn. Stat. § 363A.36 of the Minnesota Human Rights Act and is committed to take affirmative action to employ and advance in employment physically and mentally disabled persons. failure to implement its affirmative action plan or make a good faith effort to do so include, but are not limited to, suspension or revocation of a certificate of compliance by

the commissioner, refusal by the commissioner to approve subsequent plans, and termination of all or part of the Contract by the commissioner or the State.

Certification. The Contractor hereby certifies that it is in compliance with the requirements of Minn. Stat. § 363A.36, subd. 1 and Minn. R. 5000.3400-5000.3600 and is aware of the consequences for noncompliance. It is agreed between the parties that Minn. Stat. 363.36 and Minn. R. 5000.3400 to 5000.3600 are incorporated into any contract between these parties based upon this specification or any modification of it. A copy of Minn. Stat. § 363A.36 and Minn. R. 5000.3400 to 5000.3600 are available upon request from the contracting agency.

Equal Pay Certification.

If required by Minn. Stat. §363A.44, the Contractor must have a current Equal Pay Certificate prior to Contract execution. If Contractor's Equal Pay Certificate expires during the term of this Contract, Contractor must promptly reapply for an Equal Pay Certificate with the Minnesota Department of Human Rights and notify the State's Authorized Representative once the Contractor has received the renewed Equal Pay Certificate. If Contractor claims to be exempt, the Lead State may require Contractor to verify its exempt status.

Americans with Disabilities Act (ADA).

Products provided under the Master Agreement must comply with the requirements of the Americans with Disabilities Agreement must state when a product is not in compliance. If any descriptive marketing materials are silent as to these requirements, the Contractor agrees that the customer can assume the product meets or exceeds the ADA requirements.

Nonvisual Access Standards.

Pursuant to Minn. Stat. § 16C.145, the Contractor shall comply with the following nonvisual technology access standards:

That the effective interactive control and use of the technology, including the operating system applications programs, prompts, and format of the data presented, are readily achievable by nonvisual means; That the nonvisual access technology must be compatible with information technology used by other individuals with whom the blind or visually impaired individual must interact; That nonvisual access technology must be integrated into networks used to share communications among employees, program participants, and the public; and
That the nonvisual access technology must have the capability of providing equivalent access by nonvisual means to telecommunications or other interconnected network services used by persons who are not blind or visually impaired.

These standards do not require the installation of software or peripheral devices used for nonvisual access when the information technology is being used by individuals who are not blind or visually impaired.

Accessibility Standards.

Contractor acknowledges and is fully aware that the Lead State (Executive branch state agencies) has developed IT Accessibility Standard effective September 1, 2010. The standard entails, in part, the Web Content Accessibility Guidelines (WCAG) and Section 508 which can be viewed at: https://mn.gov/mnit/government/policies/accessibility/. The Standards apply to web sites, software applications, electronic reports and output documentation, training delivered in electronic formats (including, but not limited to, documents, videos, and webinars), among others. As upgrades are made to the software, products, or subscriptions available through this Contract, the Contractor agrees to

develop functionality which supports accessibility. If any issues arise due to nonconformance with the above-mentioned accessibility Standards, the Contractor agrees to provide alternative solutions upon request at no additional charge to the State.

When updates or upgrades are made to the products or services available through this Contract, the Contractor agrees documentation, upon request, must be provided to the Lead State in advance of the change, occurring within an agreed upon timeframe sufficient for the state to review the changes and either approve them or request a remediation plan from the Contractor. Contractor warrants that its Products comply with the above-mentioned accessibility Standards and agrees to indemnify, defend, and hold harmless the Lead State against any claims related to non-compliance of -mentioned accessibility Standards. If agreed-upon updates fail to improve the contract cancellation or for the Lead State to consider the Contractor in default.

Conflict Minerals.

Contractor agrees to provide information upon request regarding adherence to the Conflict Minerals section of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Section 1502).

See: http://beta.congress.gov/111/bills/hr4173/111hr4173enr.pdf#page=838 http://www.sec.gov/news/press/2012/2012-163.htm
Hazardous Substances.

To the extent that the goods to be supplied by the Contractor contain or may create hazardous substances, harmful physical agents or infectious agents as set forth in applicable state and federal laws and regulations, the Contractor must provide Material Safety Data Sheets regarding those substances. A copy must be included with each delivery.

Copyrighted Material Waiver.

The Lead State reserves the right to use, reproduce and publish proposals in any manner necessary for State agencies and local units of government to access the responses, including but not limited to photocopying, State Intranet/Internet postings, broadcast faxing, and direct mailing. In the event that the response contains copyrighted or trademarked ma
publish the information, regardless of whether the responder is the manufacturer or reseller of the products listed in the materials. By signing its response, the responder certifies that it has obtained all necessary approvals for the reproduction and distribution of the contents of its response and agrees to indemnify, protect, save and hold the Lead State, its representatives and employees harmless from any and all claims arising from the violation of this section and agrees to pay all legal fees incurred by the Lead State in the defense of any such action.

Publicity.
the quality or effectiveness of the
Assistant Director or designee of Office of State Procurement. Representations include any publicity, including but not limited to advertisements, notices, press releases, reports, signs, and similar public notices.

Performance While Dispute is Pending.

Notwithstanding the existence of a dispute, the parties shall continue without delay to carry out all of their responsibilities under the Master Agreement that are not affected by the dispute. If a party fails to continue without delay to perform its responsibilities under the Master Agreement, in the accomplishment of all undisputed work, any additional cost incurred by the other parties as a result of such failure to proceed shall be borne by the responsible party.

Organizational Conflicts of Interest.

An organizational conflict of interest exists when, because of existing or planned activities or because of relationships with other persons:
the Contractor is unable or potentially unable to render impartial assistance or advice to the State; the Contrac
the Contractor has an unfair competitive advantage.

The Contractor agrees that if an organizational conflict of interest is discovered after award, an immediate and full disclos
State Procurement that shall include a description of the action the Contractor has taken or proposes to take to avoid or mitigate such conflicts. If an organizational conflict of interest is determined to exist, the Lead State may, at its discretion, cancel the Master Agreement. In the event the Contractor was aware of an organizational conflict of interest prior to the award of the Master Agreement and did not disclose the conflict to the Master Agreement Administrator, the Lead State may terminate the Master Agreement for default. The provisions of this clause shall be included in all Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion Certification regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion Lower Tier Covered Transactions. Instructions for certification:

By signing and submitting this proposal, the prospective lower tier participant [responder] is providing the certification set out below.

The certification in this clause is a material representation of fact upon which reliance was placed when this transaction was entered into. If it is later determined that the prospective lower tier participant knowingly rendered an erroneous certification, in addition to other remedies available to the federal government, the department or agency with which this transaction originated may pursue available remedies, including suspension and debarment.

The prospective lower tier participant shall provide immediate written notice to the person to whom this proposal [response] is submitted if at any time the prospective lower tier participant learns that its certification was erroneous when submitted or had become erroneous by reason of changed circumstances.

The terms covered transaction, debarred, suspended, ineligible lower tier covered transaction, participant, person, primary covered transaction, principal, proposal, and voluntarily excluded, as used in this clause, have the meaning set out in the Definitions and Coverages section of rules implementing Executive Order 12549. You may contact the person to which this proposal is submitted for assistance in obtaining a copy of those regulations.

The prospective lower tier participant agrees by submitting this response that, should the proposed covered transaction be entered into, it shall not knowingly enter into any lower tier covered transaction [subcontract equal to or exceeding $25,000] with a person who is proposed for debarment under 48 CFR part 9, subpart 9.4, debarred, suspended, declared ineligible, or voluntarily excluded from participation in this covered transaction, unless authorized by the department or agency with which this transaction originated.

The prospective lower tier participant further agrees by submitting this proposal that it will include this Lower Tier
covered transactions and in all solicitations for
lower tier covered transactions.

A participant in a covered transaction may rely upon a certification of a prospective participant in a lower tier covered transaction that it is not proposed for debarment under 48 CFR part 9, subpart 9.4, debarred, suspended, ineligible, or voluntarily excluded from covered transactions, unless it knows that the certification is erroneous. A participant may decide the method and frequency by which it determines the eligibility of its principals. Each participant may, but is not required to, check the list of parties excluded from federal procurement and nonprocurement programs.

Nothing contained in the foregoing shall be construed to require establishment of a system of records in order to render in good faith the certification required by this clause. The knowledge and information of a participant is not required to exceed that which is normally possessed by a prudent person in the ordinary course of business dealings.

Except for transactions authorized under paragraph 5 of these instructions, if a participant in a covered transaction knowingly enters into a lower tier covered transaction with a person who is proposed for debarment under 48 CFR part 9, subpart 9.4, suspended, debarred, ineligible, or voluntarily excluded from participation in this transaction, in addition to other remedies available to the Federal government, the department or agency with which this transaction originated may pursue available remedies, including suspension and debarment.

Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion Lower Tier Covered Transactions.

The prospective lower tier participant certifies, by submission of this proposal, that neither it nor its principals is presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participation in this transaction by any Federal department or agency.

Where the prospective lower tier participant is unable to certify to any of the statements in this certification, such prospective participant shall attach an explanation to this proposal.

Government Data Practices.

The Contractor and the Lead State must comply with the Minnesota Government Data Practices Act, Minn. Stat. Ch. 13, (and where applicable, if the Lead State contracting party is part of the judicial branch, with the Rules of Public Access to Records of the Judicial Branch promulgated by the Minnesota Supreme Court as the same may be amended from time to time) as it applies to all data provided by the Lead State to the Contractor and all data provided to the Lead State by the Contractor. In addition, the Minnesota Government Data Practices Act applies to all data created, collected, received, stored, used, maintained, or disseminated by the Contractor in accordance with the Master Agreement that is private, nonpublic, protected nonpublic, or confidential as defined by the Minnesota Government Data Practices Act, Ch. 13 (and where applicable, that is not accessible to the public under the Rules of Public Access to Records of the Judicial Branch).

In the event the Contractor receives a request to release the data referred to in this article, the Contractor must immediately notify the Lead State. The Lead State will give the Contractor instructions concerning the release of the data to the requesting party before the data is released. The civil remedies of Minn. Stat. § 13.08, apply to the release of the data by either the Contractor or the Lead State.

The Contractor agrees to indemnify, save, and hold the Lead State, its agent and employees, harmless from all claims arising out of, resulting from, or in any manner attributable to any violation of any provision of the Minnesota

Government Data Practices Act (and where applicable, the Rules of Public Access to Records of the Judicial Branch), including legal fees and disbursements paid or incurred to enforce this provision of the Master Agreement. In the event that the Contractor subcontracts any or all of the work to be performed under the Master Agreement, the Contractor shall retain responsibility under the terms of this article for such work.

Survivability.

Certain rights and duties of the Lead State and Contractor will survive the expiration or cancellation of the RFP and resulting Master Agreement. These rights and duties include but are not limited to paragraphs: Indemnification; Limitations of Liability; State Audits; Government Data Practices; Governing Law and Venue; Publicity; and Administrative Fees.

Severability.

If any provision of the Master Agreement, including items incorporated by reference, is found to be illegal, unenforceable, or void, then both the Lead State and the Contractor shall be relieved of all obligations arising under such provisions. If the remainder of the Master Agreement is capable of performance it shall not be affected by such declaration or finding and shall be fully performed.

Exhibit C: Requirements
Contractor Verification.

Contractor must be a manufacturer of a Product in - product that is manufactured by another company does not meet this requirement. If the Contractor ceases production, sells or assigns their manufacturing to another vendor, or otherwise no longer manufactures a product during the life of Warranty and Maintenance.

Contractor must ensure warranty service and maintenance for all equipment, including third party products provided.

The Contractor must facilitate the Manufacturer or Publisher warranty and maintenance of third party products furnished through the Master Agreement. The Contractor shall provide the warranty service and maintenance for equipment and all peripherals on the Master Agreement.

Website.

Master Agreement website must offer twenty-four (24) hours per day, seven (7) days per week availability, except for (i.e., public) on-line catalog and ordering systems. No other items or pricing may be shown on the website without written approval from the Lead State
Mandatory Specifications:

Designated Baseline Price List(s) (e.g., MSRP, List, or Education) Product and Service Schedule (PSS)
Product specifications, pricing, and configuration aids for the major product categories proposed that can be used to obtain an on-line quote,
Service options and service agreements available on the contract. Please refer to Paragraph 5.

Contact information for order placement, service concerns (warranty and maintenance), problem reporting, and billing concerns
Sales representatives for participating entities
Links to environmental certification, including but not limited to take-back/recycling programs, EPEAT, Energy Star, etc.

Desirable Specifications:

Purchase order tracking
Information on accessibility and accessible products
Signed Master Agreement
Online ordering capability with the ability to remember multiple ship to locations (if applicable to product) List of approved partners, if applicable
Within 30 calendar days of the notice of intent to award a Master Agreement, Contractor must provide a sample URL of the Master Agreement webpage to the Lead State for review and approval. The Lead State will review and determine acceptability of the website format and data. If the information is determined to be unacceptable or incorrect, the Contractor will have 15 calendar days to provide revisions to the Lead State. After the Lead State approves the website, Contractor may not make material changes to the website without notifying the Lead State through the ARF process and receiving written approval of the changes.

Environmental Certifications.

Contractor must include environmental or supply chain responsibility certifications and registrations for products sold through this Contract on their website. Contractor must provide these certifications and registrations for specific products to Participating Entities upon request.

EPEAT Registration.

Contractor agrees that applicable products offered that have EPEAT Standards provided under the Master Agreement must have achieved a minimum EPEAT Bronze registration. This requirement does not apply to Band 3.

Contractor may propose the addition of a product that has not yet achieved a minimum EPEAT Bronze registration. The Lead State, in its sole discretion may require Contractor to provide the following documentation to support the addition of the proposed product:
cation process is
underway; or
CAB stating that the relevant product has been registered with the CAB and that verification is underway.

The Lead State reserves the right to reject the inclusion of such product, or if approved, require Contractor to remove the product at a later date if the product does not achieve a minimum EPEAT Bronze registration. The Contractor must remove any products that subsequently exit the verification process without achieving EPEAT Bronze or greater from the Master Agreement.

Third-Party Products.

Some products offered may be manufactured by a third party. Contractor, however, must provide or facilitate the warranty service and maintenance for all Third-Party Products on the Master Agreement either directly or pass-through from the manufacturer. Contractor may not offer products manufactured by another Contractor holding a Minnesota NASPO ValuePoint Master Agreement for Computer Equipment without approval from the Lead State. Warranty for third-party products must be provided by the Contractor. Warranty documents for products manufactured by a third party are preferred to be delivered to the Participating Entity with the products. Contractor can only offer Third-Party Products in a Band they have been awarded.

Thirdtal sales under this Master Agreement. The Lead State may limit the sale of Third-Party Products through the Master Agreement during the life of the Master Agreement should Third-Party Product sales be determined to consistently exceed one third of the total sales under this Master Agreement. Such limitation may take the form of any action the Lead State so chooses, up to and including non-renewal or cancellation of the Master Agreement.

Partner Utilization.

If utilizing partners, the Contractor is responsible for the partners providing products and services, as well as warranty service and maintenance for equipment the partner provides. Participating Entities have the option of utilizing partners.

Contractor must provide a Participating Entity a copy of its plan for partner utilization upon request. Contractor must make available a list of approved partners for each Participating Entity. Participating Entities must approve specific Partners as outlined within the relevant Participating Addendum, and only partners approved by the Participating Entity may be deployed. The Participating Entity will define the process to add and remove partners in their Participating Addendum.
2019 National Defense Authorization Act, Section 889(f)(3).

Under the 2019 National Defense Authorization Act, Section 889(f)(3), the US military is prohibited from purchasing video surveillance and telecommunications equipment from certain Chinese-owned technology firms. While US state are

not subject to this act, there is increasing concern for the security of state data. Contractor certifies for the term of this Master Agreement that it is not subject to laws, rules, or policies potentially requiring disclosure of, or provision of access to, customer data to foreign governments or entities controlled by foreign governments, and that Contractor's Products do not contain, include, or utilize components or services supplied by any entity subject to the same.

Contractor also certifies that its Products do not contain, include, or utilize any covered technology prohibited under Section 889 of the National Defense Authorization Act, as amended.

Exhibit D: Pricing Schedule
Attached and incorporated into this Master Agreement as Exhibit D is the Price Schedule.

Exhibit D: Price Schedule
NASPO ValuePoint Computer Equipment (2023-2028)

CONTROL SET
Master Agreement: 23004
Contractor Name: Dell Marketing, LP
Awarded Bands:
x Band 1: Personal Computing Devices (Windows)
x Band 2: Personal Computing Devices (Non-Windows)
x Band 3: Servers and Storage
Band Category Code Category Description Discount off
Baseline List
1 1B Band 1 - Minimum Discount 18.0%
1 1T Band 1 - Third Party Product Minimum Discount 5.5% 2 2B Band 2 - Minimum Discount 18.0%
2 2T Band 2 - Third Party Product Minimum Discount 5.5% 3 3B Band 3 - Minimum Discount 18.0%
3 3T Band 3 - Third Party Product Minimum Discount 5.5% S-1 Standalone Services 4.0%
S-2 Warranty Services 4.0%
S-3 Training and Other Professional Services 4.0%
Exhibit D: Price Schedule Discount Structure
Master Agreement: 23004
Contractor Name: Dell Marketing, LP
Baseline Price List: Posted on Contractor's dedicated NASPO ValuePoint website Band 1: Personal Computer Equipment (Windows OS)
Band Category Code Category Description Discount off
Baseline List
1 1B Band 1 - Minimum Discount 18.0%
1 1B-1 Desktops - Alienware, Inspiron, Vostro, XPS 0.5% 1 1B-2 Notebooks - Alienware, Inspiron, Vostro, XPS 2.5% 1 1B-3 Projectors/Monitors/Other Electronics 2.5%
1 1B-4 Displays 2.5%
1 1B-5 Imaging 2.5%
1 1B-6 Dell Branded - Printer accessories, parts, and toner 1.5% 1 1B-7 Spare Parts related to Band 1 0.5%
1 1B-8 Customer Kits 15.0%
1 1B-9 Ready to Ship configurations 4.0%
1 1T Band 1 - Third Party Product Minimum Discount 5.5% 1 1T-1 Selected Third Party - Software and Peripherals 0.5% Band 2: Personal Computer Equipment (Non-Windows OS)
Band Category Code Category Description Discount off
Baseline List
2 2B Band 2 - Minimum Discount 18.0%
2 2B-1 Commercial Chromebooks 15.0%
2 2B-2 Consumer Chromebooks 15.0%
2 2B-3 Projectors/Monitors/Other Electronics 2.5%
2 2B-4 Displays 2.5%
2 2B-5 Imaging 2.5%
2 2B-6 Dell Branded - Printer accessories, parts, and toner 1.5% 2 2B-7 Spare Parts related to Band 2 0.5%
2 2B-8 Customer Kits 15.0%
2 2B-9 Ready to Ship configurations 4.0%
2 2T Band 2 - Third Party Product Minimum Discount 5.5% 2 2T-1 Selected Third Party - Software and Peripherals (Non-discountable) 0.5% Band 3: Servers and Storage
Band Category Code Category Description Discount off
Baseline List
3 3B Band 3 - Minimum Discount 18.0%
3 3B-1 Spare Parts related to Band 3 0.5%
3 3B-2 Customer Kits 15.0%
3 3T Band 3 - Third Party Product Minimum Discount 5.5% 3 3T-1 Selected Third Party - Software and Peripherals 0.5% Exhibit D: Price Schedule Volume-Based Discounts
Master Agreement: 23004
Contractor Name: Dell Marketing, LP
Bands 1 & 2

1. Per Transaction Multiple Unit Discount(s)
Min $ Single Transaction Max $ Single Transaction Per Transaction Multiple Unit Discount
$100,000.00 $199,999.99 1.0%
$200,000.00 $399,999.99 2.0%
$400,000.00 $599,999.99 4.0%
$600,000.00 $999,999.99 6.0%
$1,000,000.00 No Maximum 8.0%

2. Cumulative Discount(s)
Threshold Discount Level
Up to 2B 0.0%
$2B to $4B 1.0%
$4B to $6B 2.0%
$6B to $8B 3.0%
$8B to $10B 4.0%
Greater than $10B 5.0%

3. Other Discount(s)
Band 3

1. Per Transaction Multiple Unit Discount(s)
Min $ Single Transaction Max $ Single Transaction Per Transaction Multiple Unit Discount
$250,000.00 $499,999.99 1.0%
$500,000.00 $999,999.99 2.0%
$1,000,000.00 $1,499,999.99 4.0%
$1,500,000.00 $1,999,999.99 6.0%
$2,000,000.00 No Maximum 8.0%
none
Contractor provides a contractual volume discount program as follows based on dollars in a single purchase order or combination of purchase orders submitted at one time by a Purchasing Entity, or multiple entities conducting a cooperative purchase.

Contractor provides a cumulative volume discount as follows based on dollars resulting from the cumulative purchases by all purchases made by Purchasing Entities for the duration of the Master Agreement.

Note: Cumulative Discount does not apply to Category Exceptions, 3rd party products, services, and special promotional offers
Note: Per Transaction Multiple Unit Discount does not apply to Category Exceptions, 3rd party products, services, and special promotional offers
Note: Per Transaction Multiple Unit Discount does not apply to Category Exceptions, 3rd party products, services, and special promotional offers.

Contractor provides a contractual volume discount program as follows based on dollars in a single purchase order or combination of purchase orders submitted at one time by a Purchasing Entity, or multiple entities conducting a cooperative purchase.

Exhibit D: Price Schedule Volume-Based Discounts

2. Cumulative Discount(s)
Column1 Discount Level
Up to 2B 0.0%
$2B to $4B 1.0%
$4B to $6B 2.0%
$6B to $8B 3.0%
$8B to $10B 4.0%
Greater than $10B 5.0%

3. Other Discount(s)
Additional discount(s) available.

Contractor provides a cumulative volume discount as follows based on dollars resulting from the cumulative purchases by all purchases made by Purchasing Entities for the duration of the Master Agreement. none
Note: Cumulative Discount does not apply to Category Exceptions, 3rd party products, services, and special promotional offers.

Exhibit D: Price Schedule Services
Master Agreement: 23004
Contractor Name: Dell Marketing, LP
Travel for Services will be negotiated with each Participating Entity in the Participating Addendum.

All Awarded Bands
Category Code Description of Service Percent Discount
S-1 Standalone Services 4.0%
S-2 Warranty Services 4.0%
S-3 Training and Other Professional Services 4.0%
Each Purchasing Entity will determine if and how services will be offered in the Participating Exhibit D: Price Schedule Lease Rates
Master Agreement: 23004
Contractor Name: Dell Marketing, LP
All Awarded Bands
Optional: Lease Rates
Dell Financial Services (DFS’) payment solutions offer flexible end-of term options designed to suit each entity’s unique needs. Payment terms are generally from 24 through 60 months and are tailored to match the essential useful life of the equipment to the payment term. Payments can be billed monthly, quarterly, semi-annually or annually.

DFS payment solution rates are adjusted quarterly in accordance with a formula based on fluctuations in treasury notes. Our rates are a function of several factors including estimates of future residual values, prevailing interest rates, borrowing costs, general and administrative expenses, and solution structure. Once a payment schedule has commenced, the rate remains constant for the term of the schedule.

Exhibit D: Price Schedule Prompt Payment Discount
Master Agreement: 23004
Contractor Name: Dell Marketing, LP
in 30
in 15, Net 30
in 10, Net 30
X Net 30
All Awarded Bands
Other (specify):

Exhibit E: Contractor Terms and Conditions
Attached by reference as Exhibit E are the following Contractor document(s):

Software Licenses.
applicable end-user license agreement. Unless different terms have been agreed between the parties, the terms posted on www.dell.com/eula
upon request. Unless expressly otherwise agreed, microcode, firmware or operating system software required to enable the Equipment with which it is shipped to perform its basic or enhanced functions, is licensed for use solely on such Equipment.

Dell Return Policy. Customer may return Products to Supplier pursuant to the return policy at www.dell.com/returnspolicy. Equipment Warranty. Unless provided otherwise in a Schedule, additional terms governing the limited warranties for Equipment are found at https://www.dell.com/learn/us/en/uscorp1/terms-of-sale-commercialand-public-sector-warranties?c=us&l=en&s=corp or in the applicable documentation or Product Notice for the specific Equipment.

Product- and Service-Specific Terms. Scope and details of Services and Product-specific terms are specified in the applicable standard service description that is attached to or referred in a Schedule or Quote, or is made available through the then-current Supplier website for product- or service-specific terms, currently located at www.dell.com/offeringspecificterms
of the date of the applicable Quote, shall be deemed incorporated into the Order. Scope and details of customized Professional Services not covered by such a standard description shall be documented in a mutually These Contractor terms and conditions are being provided for informational purposes only. They are intended to be negotiated by Contractor and a Participating Entity as part of a Participating Addendum, or by Contractor and a Purchasing Entity as part of an Order, and shall apply only as agreed to in writing by the parties. Unless such terms are expressly accepted in writing, terms in the following document(s) that derogate the application to a Purchasing Entity of a corresponding term in this Master Agreement or applicable Participating Addendum shall be deemed void.

SPA Reseller (July 2023) Page 1 of 9

SPECIAL PURPOSE ADDENDUM
TO THE RESELLER TERMS Dell Marketing L.P. (Dell) And (Reseller) One Dell Way
Round Rock, TX 78682
Reseller Tax ID No.:

Reseller Contract
Manager:

Telephone:

Email:

Reseller Sales Contact:

Telephone:

Email:

Reseller Reporting
Contact:

Telephone:

Email:

Purchase Path: Direct purchase from Dell
Purchase from Dell distributor
Both

1. INTRODUCTION; DEFINITIONS

1.1. This Special Purpose Addendum (Addendum) to the Reseller Terms is made by and between Dell and Reseller (each a Party, and collectively, the Parties). “Reseller Terms” means the (a) APEX Reseller Agreement located at www.dell.com/Partner-APEX-Reseller-Agreement and the applicable APEX service offering description, which apply to Reseller’s purchases of APEX outcome-based services from Dell for resale to End-Users, or (b) Dell’s Reseller Terms of Sale located at www.dell.com/resellerterms, together with all updates made to (a) or (b) respectively. Reseller’s purchases and resale of APEX custom services are outside the scope of this Addendum and require a separate agreement mutually signed between Reseller and Dell.

1.2. Customer means the contracting entity with whom Dell has executed a Dell-Held Contract.

1.3. Dell-Held Contract means the following agreement(s) made by and between Dell and SPA Reseller (July 2023) Page 2 of 9
Customer, together with all representations and certifications required by Customer in connection with those agreement(s):

The contract name is: California NASPO Participating Addendum No. 7-23-70-55-01 under the Master Agreement No. 23026 NASPO ValuePoint Cooperative Purchasing Program. A hyperlink or copy of the Dell-Held Contract(s) will be provided to the Reseller.

1.4. End-Users means entities that are eligible to purchase products and services under the Dell-Held Contract.

1.5. Unless otherwise defined herein, capitalized terms used herein have the meanings ascribed thereto in the Reseller Terms. For purposes of this Addendum, the term “Agreement” as used in the Reseller Terms means the Reseller Terms as modified and supplemented by this Addendum (while such Addendum is in effect).

2. APPOINTMENT

2.1. Appointment. Subject to the terms and conditions of this Addendum and Reseller’s compliance therewith, Dell appoints Reseller to resell products and services to End-Users under the Dell-Held Contract. Reseller acknowledges that this appointment to resell under the Dell-Held Contract may not be exclusive. Reseller shall not claim to represent Dell as the exclusive seller of products and services in any state or region, or for any specific customer, under the Dell-Held Contract. Reseller shall not make any claim which might be interpreted as an offer of favorable pricing resulting from a preferred or exclusive position with regard to its authorization under the Dell-Held Contract. Reseller may only sell products and/or services listed on the Dell-Held Contract.

2.2. Reseller shall not sell, and acknowledges it is not permitted to sell, its own products or services to Customer or End-Users under the Dell-Held Contract, including (but not limited to) Reseller’s installation and/or deployment of products that were purchased under the Dell-Held Contract.

2.3. Approval by Customer. Reseller acknowledges that its ability to sell to End-Users under a Dell-Held Contract is dependent upon the Customer’s acceptance and authorization. Reseller will follow the Customer’s reseller application and authorization process. Reseller shall not quote or sell any products or services under any Dell-Held Contract before the Customer grants authorization and, if applicable, publicly posts Reseller’s name as an authorized reseller on that Dell-Held Contract.

3. TERMS AND CONDITIONS OF SALE

3.1 Direct purchase path. Subject to section 3.2 below, Reseller’s purchases of products and services from Dell hereunder are subject to and governed by the Reseller Terms, this Addendum, and the Dell quote.

3.2 Distribution purchase path. Reseller may purchase products and services only from a Dell distributor that Dell has authorized for distribution under the Dell-Held Contract. If Reseller purchases products or services from a Dell distributor, all references and terms related to the purchase price, payments, cancellation or termination rights or similar financial terms in the Reseller Terms (a) will not apply and (b) will be separately agreed between Reseller and the Dell distributor.

3.3 Reseller’s purchase and resale to End-Users shall be subject to and governed by the Dell SPA Reseller (July 2023) Page 3 of 9
Technologies Partner Program Agreement which may be found at https://partner.dell.com/enus/partner/terms-and-conditions.htm, the Reseller Terms, the applicable Dell service terms (e.g., Dell Service Description, Dell Offer Specifications, APEX Service Offering Description), the applicable Dell-Held Contracts, and, if Reseller purchases directly from Dell, the Dell quote. The Reseller Terms, the applicable Dell service terms, and the Dell Technologies Partner Program Agreement are incorporated herein by reference in their entirety. In the event of conflicting terms, the following order of precedence shall apply, but only to the extent of such conflict: first, the terms and conditions of the applicable Dell-Held Contract; second, the applicable Dell service terms; third, this Addendum; fourth, the Reseller Terms; fifth, the Dell quote (if applicable); and sixth, the Dell Technologies Partner Program Agreement.

4. SPECIAL PURPOSE PROVISIONS. 4.1. Compliance. Reseller shall familiarize itself (and ensure its personnel familiarize themselves) with all terms and conditions of the Dell-Held Contract. Reseller shall perform in accordance with and conform to all terms and conditions in the Dell-Held Contracts.

4.2. Reporting. Reseller shall provide all reports and information that (a) are necessary for Reseller to comply or (b) Dell deems necessary for Dell to comply with the reporting requirements of the Dell-Held Contracts. Reseller shall submit all required reports in a timely manner, but in no event later than Dell’s requested deadline, so as to allow Dell adequate time to prepare its own reports and meet its obligations under the Dell-Held Contracts. Should the reporting requirements of the Dell-Held Contracts change during the term of this Addendum, Dell will inform Reseller in writing, and Reseller shall respond acknowledging such change. Reseller agrees and understands that accurate and timely reporting is a primary criterion of Dell’s compliance with the Dell-Held Contracts, and Reseller’s failure to comply with any reporting requirement (including timeliness and accuracy requirements) established by Dell shall be a material breach of the Addendum. Reseller shall comply with the following requirements as well as any other that Dell may establish:

4.2.1. For each Dell-Held Contract, Reseller will be provided with a Dell contract code (“Contract Code”) for each applicable purchase path (Reseller’s direct purchases from Dell or Reseller’s purchases from a Dell distributor) for each Dell-Held Contract. On every request for Dell quotes and every purchase order to Dell, Reseller must use the correct Contract Code linked to Reseller’s direct purchases under the applicable Dell-Held Contract. On every request for quotes from a distributor and every purchase order to a distributor, Reseller must use the correct Contract Code linked to Reseller’s distribution path purchases under the applicable Dell-Held Contract. The Contract Code enforces pricing and other terms and conditions of the Dell-Held Contract. It also helps Dell to pay the appropriate administrative fees and rebates owed in the Dell-Held Contract. Failure to use the correct Contract Code on all quotes and orders shall constitute a material breach of the Addendum and, notwithstanding anything to the contrary herein, Dell shall have the right to terminate this Addendum immediately upon written notice to Reseller.

4.2.2. Reseller shall provide, on a monthly basis, detailed sales reports on all products and services that Reseller purchased from Dell and distributors and resold to End-Users during the previous month under the Dell-Held Contract whether or not the Reseller had any sales during the previous month under the Dell-Held Contract. Reseller shall provide its report no later than Dell’s requested deadline. Failure to provide detailed sales reports by Dell’s requested deadline shall constitute a material breach of the Addendum and, notwithstanding anything to the contrary herein, Dell shall have the right to terminate this Addendum immediately upon written notice to Reseller.

SPA Reseller (July 2023) Page 4 of 9

4.2.3. Each report shall include the following: (a) name and location of the End-User, (b) price, including unit price and/or rate per unit of measure, and the total price charged to EndUser; (c) quantity, (d) total price charged to the End-User, (e) Dell-Held Contract required pricing to End User (if none stated, then the Dell-Held Contract ceiling rate), (f) any difference between the price in (d) and (e), and (g) any other data required by Dell or the Dell-Held Contract.

4.2.4. Reseller shall provide its reports in a format specified by Dell (such as but not limited to .xls).

4.2.5. Unless otherwise instructed by Dell, Reseller shall electronically transmit its reports to Dell. The specific method of electronic transmission will be specified by Dell.

4.2.6. Changes in contact information is the responsibility of reseller to notify Dell in a timely manner to the [email protected] mailbox. Missed reporting activities as a result of wrong contact information is the responsibility of the Reseller and not an acceptable reason to not report. Failure to provide changes in contact information which results in breach of paragraph 4.2.1 shall constitute a material breach of the Addendum and, notwithstanding anything to the contrary herein, Dell shall have the right to terminate this Addendum immediately upon written notice to Reseller.

4.3. Fees. Unless otherwise required by the Customer or the Dell-Held Contract, the fees payable under the Dell-Held Contract are Dell’s responsibility and Reseller will not be responsible for payment of such fees either to Dell or to the Customer.

4.4. Records Retention. Reseller agrees to provide requested data, retain purchase and sales records, and make such records available to Dell as requested and to Customer or End-Users as required by the Dell-Held Contracts or as by the state law governing the transaction in question.

4.5. Pricing. Reseller is free to set its resale pricing of products and services to End-Users, provided that such prices conform to the Dell-Held Contract (including any minimum discount or maximum price limitations set forth in the Dell-Held Contract by Customer). Dell may require Reseller to issue payments to Dell or to End-Users for any overcharges that do not conform to the Dell-Held Contact. Overcharges to the Customer that do not conform to the Dell-Held Contract shall constitute a material breach of the Addendum and, notwithstanding anything to the contrary herein, Dell shall have the right to terminate this Addendum immediately upon written notice to Reseller.

4.6. Certification. Reseller shall sign or provide all representations and certifications required by Dell in a timely manner.

4.7. Training & Security and Background Checks. Reseller shall ensure that all personnel who will interact with third parties (including but not limited to End-Users and Customer) in connection with a Dell-Held Contract complete all training required by Dell, including but not limited to, sales training, compliance training, and refresher courses. In addition, Reseller shall perform security and background checks of its personnel in the same manner and to the same extent that Dell is obligated to perform security and background checks of Dell personnel as required by the Dell-held Contract, Customer and End-Users.

4.8. Minimum Revenue. Reseller shall generate a minimum of $ K Dell revenue annually, as determined by Dell in its sole discretion (the “Dell Revenue Obligation”). If Reseller fails to meet the Dell Revenue Obligation, then Dell shall have the right to terminate this Addendum immediately upon written notice to Reseller.

SPA Reseller (July 2023) Page 5 of 9

4.9. Shipping and Handling (if applicable).

4.9.1. Reseller to End-Users: If and to the extent required by the Dell-Held Contract, and as reflected in Dell’s quotation, Reseller will provide End-Users free standard ground shipping and shall also provide any associated logistics services such as (but not limited to) inside delivery to one location without charge. Reseller is not permitted to purchase products for the purpose of stocking inventory for resale to End-Users.

4.9.2. Dell to Reseller (for direct purchases from Dell): If and to the extent required by the Dell-Held Contract, and as reflected in Dell’s quotation to Reseller, and regardless of the End-User’s specified ship-to location, Dell will provide, at no charge to Reseller, standard 3-5 day ground shipping. Dell will also provide any associated logistics services such as (but not limited to) inside delivery to one location without charge using Dell’s selected carrier. If Dell’s carrier is used, Dell will bear the risk of loss of, or any damage to, the Products during shipping from Dell. Nothing under this Section shall alter when title to the Products transfers. Any additional required logistics are available at an additional logistics fee and must be specified by Reseller at the time of order.

4.9.3. Value Added Logistics (VALS): Any additional VALS, i.e. date/time specific delivery, de-palletization, inside delivery to multiple locations, set up, etc. must be added at the time the order is placed and must be paid to Dell by Reseller.

4.10. Return Policy. Subject to subsections (a) through (c) below, and provided that the reason for return or service cancelation or termination is not due to Reseller’s error, Reseller may return products and may cancel or terminate services purchased hereunder, but only to the extent that the intended End-User is entitled to return such products or cancel or terminate such services under the Dell-Held Contracts, and, in those cases, subject to the same terms, conditions and restrictions, including, without limitation, the product return period or service cancelation or termination period and any notice requirements, set forth in the applicable Dell-Held Contract.

Reseller is solely responsible for ensuring that (a) it accurately translates the End-User’s requirements into an accurate request for quote/proposal to Dell; (b) Dell’s quotation in response thereto accurately and completely reflects the End-User’s requirements; and (c) any resultant purchase order to Dell is compliant with the End-User's requirements. Reseller shall have no recourse to Dell (nor product return or service cancelation or termination rights) for any errors on the part of Reseller. Reseller will inform each End-User in writing of the Dell product return policy and service cancelation or termination policy at or prior to the time Reseller issues a quote for such products and/or services to the End-User.

4.11. Indemnity. Reseller shall defend and indemnify Dell against any claim or action from Customer, any End-User, or any other third party resulting from or relating to any breach, alleged breach, or compliance failure by Reseller of this Addendum, the Reseller Terms, or the Dell-Held Contracts.

5. TERM AND TERMINATION

5.1. Term. Unless earlier terminated as provided herein, the Term of this Addendum begins on the date of Dell’s signature below (Effective Date) and ends on the earlier of the dates checked below:

Coterminous with the Dell-Held Contract
Addendum End Date: ______

5.2. Termination.

SPA Reseller (July 2023) Page 6 of 9

5.2.1. Should applicable Dell-Held Contracts be suspended or terminated during the term of this Addendum, Dell’s authorization for Reseller to resell to End-Users will automatically be terminated on the same date as the termination of the Dell-Held Contract.

5.2.2. This Addendum will terminate automatically if Reseller voluntarily withdraws, or is suspended or terminated, from the Dell Technologies Partner Program for any reason.

5.2.3. Thirty Day No Cause Termination. Either Party may terminate this Addendum in such Party’s sole discretion, with or without cause, upon at least thirty (30) days prior written notice to the other Party.

5.2.4. Termination for Cause. Either Party may at its option, and upon written notice to the other Party, immediately terminate this Addendum if:

5.2.4.1. a material violation or breach of this Addendum or the Reseller Terms by the other Party is not remedied within ten (10) days after the breaching Party’s receipt of written notice of the violation or breach

5.2.4.2. the other Party admits in writing its inability to pay its debts generally as they become due, files a petition for bankruptcy or executes an assignment for the benefit of creditors or similar document; (iii) a receiver, trustee in bankruptcy or similar officer is appointed for the other Party’s property; or (iv) a majority interest of the equity or assets of the other Party is transferred to an unrelated third party or this Addendum is assigned by Reseller without Dell’s prior written consent. In addition, Dell may immediately terminate this Addendum if Dell determines, in Dell’s sole discretion, that Reseller engaged in unethical conduct or that continuing the Addendum will cause Dell to be in breach of any Dell-Held Contract or otherwise jeopardize that or any other contract Dell has with the Customer or an End-User.

5.3. Effect of Termination. Upon any termination of this Addendum, the provisions of this Addendum shall continue to apply to all orders accepted by Dell prior to the Effective Date of such termination. Termination of this Addendum shall not relieve Reseller of any obligation to make payments that are owed to Dell. Termination shall not exclude other remedies for failure of a Party to perform its obligations. Upon termination of this Addendum, the rights and obligations of the Parties that are executory shall survive any termination or expiration of this Addendum. Dell may notify relevant distributors, Customers, and End-Users of the Addendum termination.

6. NOTICE
Any notice given under this Addendum must be in writing (for which email shall suffice) and will be effective when delivered to the other Party at the address set forth below for that Party. Notice addresses may only be changed in writing by the Parties by following the notice provisions of this Section. The Parties hereby appoint liaisons for notice and communication purposes under this Addendum as identified below:

DELL MARKETING L.P. RESELLER
Attn. Contracts Manager
Dell Legal Department
One Dell Way
Round Rock, Texas 78682
[email protected]
Provide notices under this Addendum to the
Contract Manager listed on page 1.

SPA Reseller (July 2023) Page 7 of 9

7. MISCELLANEOUS

7.1. Entire Addendum. This Addendum (including the attachments hereto and the Reseller Terms) constitutes the entire integrated agreement between the Parties with respect to the subject matter hereof and supersedes all prior written or oral understandings or agreements between the Parties relating to the same. The terms of this Addendum will control and supersede the preprinted terms on Reseller’s order or order acknowledgment.

7.2. Modification by Writing Only. No modification of this Addendum, including any attachments hereto, will be binding on either Party unless and until the modification is set forth in a writing specifically referencing this Addendum and signed by an authorized representative for each Party. Notwithstanding the foregoing, the Parties agree the Reseller Terms of Sale located at www.dell.com/resellerterms, APEX Reseller Agreement located at www.dell.com/PartnerAPEX-Reseller-Agreement, and the Dell Technologies Partner Program Agreement terms and conditions may be modified by Dell unilaterally from time to time, and the attachments hereto may be modified by Dell unilaterally to comply with Dell’s obligations or covenants to the Customer or End-Users.

7.3. Counterparts: This Addendum may be executed in counterparts (including by means of facsimile or pdf signature pages), any one of which need not contain the signature of more than one Party, but all such counterparts taken together shall constitute one and the same agreement.

7.4. Debarment Certification: Reseller certifies, and shall certify on an annual basis hereafter, that Reseller has not been subject to a federal, state or local government suspension or debarment from the contracting process within the past five (5) years. Reseller agrees to notify Dell within ten (10) business days of any such debarment action that occurs during the term of this Addendum.
[Remainder of page intentionally left blank; signature page to follow] SPA Reseller (July 2023) Page 8 of 9
This Addendum has been executed on behalf of the Parties by their duly authorized representatives, to be effective as of the Effective Date.

AGREED:

DELL MARKETING L.P. RESELLER: ___________________________________ By By Name Name
Title Title
Date Date
Ashley Salinas
Contract Program Manager
March 20, 2024
SPA Reseller (July 2023) Page 9 of 9
ATTACHMENT 1

1. DELL-HELD CONTRACT(S): California NASPO Participating Addendum No. 7-23-70-55-01 under the Master Agreement No. 23026 NASPO ValuePoint Cooperative Purchasing Program

2. AUTHORIZED END-USERS & EXCLUSIONS:

Link to the California NASPO ValuePoint contract 2023-2025:
https://s3-us-west-2.amazonaws.com/naspovaluepoint/1706100617_PA%207-23-70-55-01.pdf Link to the Dell NASPO 23026 contract website:
https://www.dell.com/en-us/lp/dt/naspo-computer?hve=learn+more

Exhibit 2: Equipment Purchase Quote
Quotation
Number ABTQ16506
Date Mar 21, 2024 1235 Activity Dr.

Suite B
Vista, CA 92081
Expires Apr 7, 2024
Terms NET 30
Prepared For Ship To Account Executive
City of Madera City of Madera Barb Adkison
Ari Adams Ari Adams 405-246-8011
[email protected] 205 W. 4th St [email protected] Madera,CA 93637
Qty Part No. Description Unit Price Ext. Price
California NASPO Participating Addendum No. 7-23-70-55-01 under the Master Agreement No. 23026 NASPO ValuePoint Cooperative Purchasing Program 4 210-APHW Dell EMC S5212F-ON Switch, 12x 25GbE SFP28, 3x 100GbE QSFP28 ports, IO to PSU air, 2x PSU
4 343-BBRX VLT Tech Sheet Document
4 343-BBLP Dell EMC S52XX-ON Series User Guide
4 634-BRXD OS10 Enterprise, S5212F-ON
4 770-BDGQ Dell NW Dual Tray, 4-post, S5212F-ON
4 818-3530 Dell Hardware Limited Warranty 1 Year
4 818-3543 ProSupport:Next Business Day Onsite Service After Problem Diagnosis, 1 Year 4 818-3544 ProSupport:Next Business Day Onsite Service After Problem Diagnosis, 2 Years Extended 4 818-3562 ProSupport:7x24 HW/SW Technical Support and Assistance, 3 Years 4 975-3461 Dell Limited Hardware Warranty Extended Year(s) 4 825-8624 Certified Deployment Partner T2
4 848-8544 3 Years ProSupport OS10 Enterprise Software Support-Maintenance 8 407-BDCX Dell Networking Transceiver, SFP+ 10GBASE-T 30m, Gen3.5 4 470-ABOU Dell Networking Cable, 100GbE QSFP28 to QSFP28, Passive Copper Direct Attach Cable, 0.5 Meter
32 470-BBCX Dell Networking, Cable, SFP28 to SFP28, 25GbE,Passive Copper Twinax Direct Attach Cable,3 Meter
8 470-ACMF Dell Networking Cable, OM4 LC/LC Fiber Cable, (Optics required), 3 Meter 4 450-AAFH Power Cord, 125V, 15A, 10 Feet, NEMA 5-15/C13 4 450-AAFH Power Cord, 125V, 15A, 10 Feet, NEMA 5-15/C13 SubTotal $22,916.96
6 210-BEQQ PowerEdge R660 Server
6 461-AAIG Trusted Platform Module 2.0 V3
6 321-BHRW 2.5" Chassis with up to 10 Hard Drives (SAS/SATA), 2CPU, PERC11 6 338-CPBV Intel Xeon Gold 6526Y 2.8G, 16C/32T, 20GT/s, 37.5M Cache, Turbo, HT (195W) DDR5-5200 6 338-CPBV Intel Xeon Gold 6526Y 2.8G, 16C/32T, 20GT/s, 37.5M Cache, Turbo, HT (195W) DDR5-5200 6 379-BDCO Additional Processor Selected
6 379-BFFD No HBM
6 412-ABCK Performance Heatsink for 2 CPU configuration (CPU less than 250W) 6 370-AAIP Performance Optimized
6 370-BBRX 5600MT/s RDIMMs
6 780-BCDS Unconfigured RAID
6 405-AAZB PERC H755 SAS Front
6 750-ADRI Front PERC Mechanical Parts, rear load
6 750-AABF Power Saving Dell Active Power Controller
6 800-BBDM UEFI BIOS Boot Mode with GPT Partition
6 387-BBEY No Energy Star
6 384-BCUJ 4 Very High Performance Fans for 2 CPU
6 450-AKLF Dual, Redundant(1+1), Hot-Plug Power Supply,1100W MM(100-240Vac) Titanium 6 330-BBYX Riser Config 1, Low Profile, 3x16 LP Slots (Gen4) 6 329-BKBR Motherboard MLK supports ONLY CPUs below 250W. Cannot upgrade to CPUs 250W and above 6 528-COYT Secured Component Verification
6 528-CTID iDRAC9, Datacenter 16G
6 528-CTZH OpenManage Enterprise Advanced Plus
6 540-BCOC Broadcom 57414 Dual Port 10/25GbE SFP28, OCP NIC 3.0 6 540-BDKD Broadcom 5720 Dual Port 1GbE LOM
6 325-BEVE Standard Bezel
Created on 03/21/24 12:05:28 1 of 3
Qty Part No. Description Unit Price Ext. Price
6 350-BCKC Dell Luggage Tag
6 403-BCRZ BOSS-N1 controller card + with 2 M.2 960GB (RAID 1) 6 470-AFMG BOSS Cables and Bracket for R660
6 350-BBXM No Quick Sync
6 379-BCSF iDRAC,Factory Generated Password
6 379-BCQX iDRAC Service Module (ISM), NOT Installed
6 379-BCQY iDRAC Group Manager, Disabled
6 634-BYJS Windows Server 2022 Datacenter,16CORE,FI,No MED,UnLTD VMs,NO CALs, Multi Language 6 528-CSCT Windows Server 2022 Datacenter,16CORE,DF Recovery Image, Multi Lang, (Downgrade not included)
6 528-CSCS Windows Server 2022 Datacenter,No Media,WS2019 DC Downgrade DF Media, Multi Language 6 634-BYLR Windows Server 2022 Datacenter,No Media, WS2019 DC Downgrade w/DVD Media,Multi Lang 6 634-BYLS Windows Server 2022 Datacenter,16CORE,Media Kit, Multi Lang, (Downgrade not included) 6 770-BDMT Cable Management Arm
6 770-BECD ReadyRails Sliding Rails Without Cable Management Arm or Strain Relief Bar 6 631-AACK No Systems Documentation, No OpenManage DVD Kit 6 340-DBXZ PowerEdge R660 Shipping
6 340-DBYC PowerEdge R660 Shipping Material, 10x2.5", 8x2.5" Smart Flow or 16xEDSFF 6 343-BBTS R660 Dell label (BIS) for 2.5" Chassis
6 343-BBUB PowerEdge R660 CE, CCC Marking
6 887-1067 ProSupport 7x24 Technical Support and Assistance 3 Years 6 887-1075 ProSupport Next Business Day On-Site Service After Problem Diagnosis 3 Years 6 887-1076 Dell Hardware Limited Warranty Plus On-Site Service 72 370-BBRY 32GB RDIMM, 5600MT/s, Dual Rank
6 400-AXTV 480GB SSD SATA Read Intensive 6Gbps 512 2.5in Hot-plug AG Drive, 1 DWPD 12 450-AALV Power Cord - C13, 3M, 125V, 15A
6 540-BDGV Broadcom 57414 Dual Port 10/25GbE SFP28 Adapter, PCIe Low Profile, V2 6 634-BYJQ Windows Server 2022/2019 Datacenter Edition,Add License,16CORE,NO MEDIA/KEY SubTotal $116,301.24
1 210-AXXJ PowerStore 500T Customer Rack
1 370-AFXQ 192GB Appliance DIMM 96GB Per Node
1 528-BTZK PowerStore Base SW
1 406-BBOO 25GBE OPTICAL 4 PORT CARD PAIR
1 450-BBGJ LOW LINE POWER SUPPLY RT PAIR L9
1 343-BBMR BASE UNIT CONFIG KIT
1 876-3336 Dell Hardware Limited Warranty
1 886-3375 ProSupport 4-Hour 7x24 Onsite Service 3 Years 1 886-3489 ProSupport 4-Hour 7x24 Technical Support and Assistance 3 Years 1 825-8624 Certified Deployment Partner T2
10 400-BGGI P1 25X2.5 NVME SED SSD 1.92TB
4 407-BCGF 10GBE OPTICAL SFP PAIR
1 450-AIOH C19 PWRCORD PAIR NEMA5-15 125V 10A 2Metr
10 891-5147 ProSupport 4-Hour 7x24 Onsite Low Capacity SSD Add On 3 Years SubTotal $33,101.40
2 210-ASKK Unity XT 380 DPE 25 x 2.5 Dell FLD RCK
2 400-BGCM D4 SYSPACK 4X3.2TB FLASH SSD 25X2.5
2 406-BBNC Unity CNA 4x10GbE OPT SFPs
2 343-BBMP Unity 380 DPE Install Kit
2 379-BDOI Pair of C13/C14 cables (Highline Power) or C19/C20 cables (480/680 Lowline Power) included with DPE
2 876-5068 Dell Hardware Limited Warranty
2 890-5197 ProSupport 4-Hour 7x24 Onsite Service 3 Years 2 890-5270 ProSupport 4-Hour 7x24 Technical Support and Assistance 3 Years 2 825-8624 Certified Deployment Partner T2
2 826-9746 ProSupport, Software Support Maintenance 3 Years 16 400-BFXQ D4 3.2TB SAS FLASH 25X2.5 SSD
2 565-BBIG UNITY 2X4 PORT IO 25GBE TWINAX
24 891-3390 ProSupport 4-Hour 7x24 Onsite Medium Capacity SSD Add On 3 Years SubTotal $110,429.30
2 210-ASLH Unity XT 3U 15x3.5 DAE FLD RCK
2 876-4863 Dell Hardware Limited Warranty
Created on 03/21/24 12:05:28 2 of 3
Qty Part No. Description Unit Price Ext. Price
2 890-5187 ProSupport 4-Hour 7x24 Onsite Service 3 Years 2 890-5260 ProSupport 4-Hour 7x24 Technical Support and Assistance 3 Years 2 825-8624 Certified Deployment Partner T2
30 400-BFVV D4 6TB NLSAS 15X3.5 DRIVE
2 470-AEBH Unity 2x2M DAE SAS CBL
2 450-AILB C13 Power Cord Pair NEMA5-15P plugs 2Mtr
30 891-3378 ProSupport 4-Hour 7x24 Onsite Hard Disk Drive Add On 3 Years SubTotal $27,300.80
8 470-AAYQ 3M LC-LC Optical Cable Multimode (Kit) $12.34 $98.72 SubTotal: $310,148.42
*Tax: $18,862.99
*Shipping: $0.00 *Taxes and shipping are an estimate and may differ from the final invoice. Price reflects a cash discount. To use an alternative payment method, contact your account executive. Total: $329,011.41 Any order based on the above quotation, statement of work, or proposal is subject to Abtech's Terms and Conditions of Sale ("Terms") effective the date of execution of order and are incorporated by reference as if fully set herein as a full and binding part of the order. Terms are available at: http://www.abtechtechnologies.com/s/Abtech-terms-and-conditions.pdf and may be sent by mail or fax upon request. Client agrees to have read and intends to be bound by Abtech's Terms by executing an order with Abtech. Client agrees that the order is executed when (a) both parties physically or digitally sign an agreement; (b) both parties (or optionally Client only at Abtech's discretion) electronically sign via a purchasing portal or website an order; or (c) Abtech accepts a transactional document (eg. purchase order, purchase requisition, etc.) that explicitly reference the quotation, Service Order, proposal, Agreement, or Addendum and terms and conditions thereof. Abtech limits acceptance to the Terms and objects to any additional or different terms in the Purchase order or other forms of acceptance. Some products and services, including but not limited to maintenance, StorTrust, hosting, and managed services have an additional Master Service Agreement ("MSA") and service specific Addendum which are in addition to Abtech's Terms and are likewise incorporated by reference as if fully set herein as a full and binding part of the order. By purchasing and using the StorTrust S3 Cloud Archive, Client unconditionally agrees to the StorTrust S3 Cloud Archive Agreement located at https://www.abtechtechnologies.com/s/StorTrust-Cloud-Archive-Agreement.pdf Created on 03/21/24 12:05:28 3 of 3

REPORT TO CITY COUNCIL
Approved by:
_________________________________
Council Meeting of: April 3, 2024
Agenda Number: D-5
Will Tackett, Community Development Director
_________________________________
Arnoldo Rodriguez, City Manager
SUBJECT:

Amendment No. 4 to Professional Services Agreement with Provost and Pritchard Consulting Group RECOMMENDATION:

Adopt a Resolution Approving Amendment No. 4 to Agreement for Professional Planning Services with Provost & Pritchard Consulting Group
SUMMARY:

On December 6, 2023, Council passed Resolution No. 23-204 approving a Master Agreement between the Madera County Transportation Commission and the City of Madera for the Regional Early Action Planning (REAP) 1.0 grants program. This resolution authorized staff to apply, receive, perform, and utilize the suballocated REAP funds in the amount of $125,399 for eligible activities and projects that will assist in the preparation and adoption of planning documents, process improvements and ordinance text amendments which demonstrate a nexus to increasing housing, accelerating production and/or facilitate compliance to implement the Sixth Cycle of the Regional Housing Needs Allocation (RHNA). The Agreement was executed by MCTC on January 25, 2024. Available funds are required to be expended by June 30, 2024.

The City is currently in the process of preparing its 6th Cycle Housing Element update. For regulatory compliance purposes, several implementing actions will need to occur prior to January 31, 2025. State Housing Element law requires all local governments to plan for the housing needs of their residents by ensuring adequate opportunities for housing development exist within the city and by adopting policies and programs which remove constraints to housing production and assist in development of housing; affirmatively further fair housing (AFFH) by addressing exclusion, segregation, and access to opportunity; address environmental justice issues; provide equal housing opportunities for residents; and protect and improve housing stock. Mandatory implementing actions will at minimum also require amendments to the General Plan and the Zoning Regulations of the City Municipal Code in compliance with statutory density requirements to meet the RHNA needs as well as rezoning select sites within the City to preserve land availability and capacity for the development of units at affordable to market rates.

The goals and objectives for use of the REAP 1.0 Grant funding parallel those required by State law for purposes of Housing Element implementation. While the 6th Cycle Housing Element update is not yet complete, given the short timeframes required to expend available REAP 1.0 funding (June 30, 2024) and to complete mandatory implementing actions for purposes of the Housing Element and RHNA, staff is requesting Council approve Amendment No. 4 to the Agreement for Professional Planning Services with Provost & Pritchard Consulting Group to begin providing immediate assistance in preparation of General or operative Plan and Zoning Regulations amendments which are eligible for reimbursement pursuant to the REAP 1.0 Grant funding program and which will contribute to the City’s ability to complete mandatory implementation actions within statutory time frames for purposes of 6th Cycle Housing Element update compliance.

DISCUSSION:

On March 7, 2024, City of Madera staff received an update from MCTC pertaining to the availability of REAP 1.0 funding. Due to State budget considerations, staff were advised that it is unlikely that the Valleywide REAP program will receive the remaining $4.3 million still available to the Valley in time to spend those remaining funds by the early fall deadline. For the Madera region, there is $168,100 now available for member agency projects (program previously anticipated $303,166 to the Valley). The resultant effect is a reduction in funding available to be suballocated to the City of Madera through this program; available funding would be reduced from the original $125,300 to $69,532.

Staff’s application for the REAP funds included retaining contracted consultant services to work in collaboration with City staff to: (1) Provide an overall review and assessment of local ordinances and regulations (with consideration to State housing legislation(; (2) Assist with the identifying critical challenges and potential constraints to housing production (with specific focus and emphasis on those which may stem from local processes reliant upon ordinance regulations or existing policies and practices); (3) Assist in identification and prioritization of specific tasks which may be feasibly accomplished to facilitate local housing production and process that will best, and most immediately, address near-term housing needs, goals, and objectives; and, (4) Subsequently prepare respective documentation outlining near-or long-term program strategies, draft ordinance amendments, department policies, and educational, information, or procedural guidance documents for implementation.

While the reduced funding will not be sufficient to complete the full scope of the City’s application proposal, staff is presently aware of many critical challenges and potential constraints to housing production (nullifying the need for additional evaluation and/or assessment) and implementing policies and procedural efforts intended to accompany changes to the zoning regulations can be managed by staff at a later date. Preparation of a “Variety Pack” of text amendments to the Zoning Regulations of the City Municipal Code which would provide the legal mechanism to implement more streamlined and integrated approaches to the processing of Housing Development Project applications and incentivize Infill Housing Development and/or certain housing types is feasible with consideration to both time and funding availability.

FINANCIAL IMPACT:

A portion of the Addendum No. 4 fee increase ($69,532) will be eligible for reimbursement assuming funding is expended prior to June 30, 2024. The remaining balance of funding for the fee increase ($80,468) is proposed to come from unexpended funds budgeted for contracted services in the Planning Department 2023/24 fiscal year operating budget; funds that would be proposed to be carried over into the 24/25 fiscal year. The amendment to the P&P Professional Services Agreement will therefore not result in a new fiscal impact to the City’s General Fund.

ALTERNATIVES:

As an alternative to staff’s recommendation, the Council may:

1. Authorize a lesser budget increase to the Professional Services Agreement with (P&P) Consulting Group.

2. Direct staff to solicit additional proposals for the intended contracted consultation services. Such action will represent a delay of approximately three to four months due to the advertisement period, review of proposals, and selecting a consultant (this would result in a loss of the $69,532 suballocation available for reimbursement through the REAP 1.0 Grant program).

ATTACHMENTS:

1. Council Resolution
Exhibit A: Amendment No. 4 to the Professional Services Agreement Between Provost and Pritchard Consulting Group and the City of Madera for Planning Services ATTACHMENT 1
Resolution Approving Amendment No. 4 to Agreement for
Professional Planning Services with Provost & Pritchard Consulting Group; including,
Exhibit “A”: Amendment No. 4 to the Professional Services Agreement Between Provost and Pritchard
Consulting Group and the City of Madera for
Planning Services
RESOLUTION NO. ____________

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MADERA APPROVING AMENDMENT NO. 4 TO AGREEMENT FOR PROFESSIONAL PLANNING SERVICES

WITH PROVOST & PRITCHARD CONSULTING GROUP
WHEREAS, the City of Madera (City) is an eligible recipient of Regional Early Action Planning (REAP) 1.0 Grant program funding through suballocation by the Madera County Transportation Commission (MCTC); and
WHEREAS, through passage of City of Madera Council (Council) Resolution No. 23-204, the Council approved a Master Agreement between the MCTC and the City to apply, receive, perform, and utilize the suballocated REAP funds in the amount of $125,399 for eligible activities and projects that will assist in the preparation and adoption of planning documents, process improvements and ordinance text amendments which demonstrate a nexus to increasing housing, accelerating production and/or facilitate compliance to implement the Sixth Cycle of the Regional Housing Needs Allocation (RHNA); and WHEREAS, MCTC has provided notice to the City that available funding to be suballocated to the City through the REAP 1.0 Grant program has been reduced to $69,532; and WHEREAS, the City is in need of land use planning and environmental review services in connection with its efforts to assure compliance with applicable State regulations pertaining to the 6th Cycle Housing Element update and implementation actions; and WHEREAS, Provost & Pritchard Consulting Group has been identified as a firm having the professional competence, experience, and qualifications to provide professional planning and environmental services; and
WHEREAS, the City Council (Council) adopted Resolution No. 20-46 entering into an agreement with Provost & Pritchard Consulting Group to provide professional planning and environmental review services; and
WHEREAS, on January 6, 2021, the Council approved amendment No. 1 under Resolution No. 21- 05; and
WHEREAS, on April 21, 2021, the Council approved amendment No. 2 under Resolution No. 21- 54; and
WHEREAS, on June 15, 2022, the Council approved amendment No. 3 under Resolution No. 22- 86; and
WHEREAS, it has been determined that additional planning and environmental services assistance is warranted; and
WHEREAS, City staff is requesting an increase to the contract amount to include additional planning and environmental services and to be assigned for professional services pertaining to activities eligible for reimbursement through REAP 1.0 Grant program funding or for 6th Cycle Housing Element update implementation; and
WHEREAS, the City has prepared an amendment to the Professional Services Agreement with Provost & Pritchard Group (“Amendment No. 4”) which is in the best interests of both parties; and WHEREAS, Amendment No. 4 increases the not-to-exceed compensation of the Professional Services Agreement by $150,000; and
WHEREAS, funds for $150,000 in Amendment No. 4 are available in the City of Madera Planning Department fiscal year 2023/2024 operating budget for contracted services; and WHEREAS, an amendment to the City General Fund is necessary to secure Amendment No. 4.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MADERA hereby finds, orders and resolves as follows:

1. The recitals listed above are true and correct.

2. The City Council approves Amendment No. 4 to the Professional Services Agreement with Provost & Pritchard Consulting Group to increase the not-to-exceed compensation fee by $150,000, a copy of which is attached hereto and incorporated by reference.

3. The Resolution is effective immediately upon adoption. * * * * * * * * * * *
Attachments:

Exhibit A: Amendment No. 4 to Professional Services Agreement

EXHIBIT A
Amendment No. 4 to the Professional Services Agreement Between Provost and Pritchard Consulting Group and the City of Madera for Planning Services
AMENDMENT NO. 4 TO PROFESSIONAL SERVICES AGREEMENT BETWEEN PROVOST &

PRITCHARD CONSULTING GROUP AND THE CITY OF MADERA FOR PLANNING SERVICES This Amendment No. 4 to the Agreement titled “Professional Services Agreement” dated April 2, 2020, is made and entered into on April 3, 2024, between the City of Madera, (“City”) and Provost & Pritchard Consulting Group, (“Firm”).

R E C I T A L S
WHEREAS, on April 2, 2020, City and the Firm entered into an Agreement for professional planning services; and
WHEREAS, on January 6, 2021, City and the Firm entered into Amendment No. 1 to the Agreement; and
WHEREAS, on April 21, 2021, City and the Firm entered into Amendment No. 2 to the Agreement; and
WHEREAS, on June 15, 2022, City and the Firm entered into Amendment No. 3 to the Agreement; and
WHEREAS, during the performance of the Agreement, the Parties have determined that additional planning and environmental review services are needed; and WHEREAS, City and Firm wish to amend the Agreement to increase the Agreement’s compensation fee for additional work in accordance with Amendment No. 4 to Agreement.

A G R E E M E N T
Based on the foregoing recitals, the Parties hereto mutually agree as follows:

SECTION 1. Section 4 of the Agreement titled “Compensation” provides the compensation to be paid for services under the Agreement. The parties agree that the Agreement is amended to provide that the compensation to be paid for the professional planning services as provided Section 2 of the Agreement titled “Services” in accordance with the Scope of work identified in “Exhibit A” of the Agreement, except as amended by this Amendment No. 4, shall be increased $150,000 for a total not-to -exceed fee of $600,000.

SECTION 2. Except as amended by this Amendment No. 4, all other terms and conditions of the Agreement, Amendment No. 1, Amendment No. 2 and Amendment No. 3 remain in full force and effect.

SECTION 3. This Amendment No. 4 to Professional Services Agreement shall be effective upon full execution by both parties.
(SIGNATURES ON NEXT PAGE)

CITY OF MADERA
A municipal corporation of
the State of California
By: _________________________________
Santos Garcia, Mayor
Date: _______________________________
ATTEST:

By: _________________________________
Alicia Gonzales, City Clerk
Date: _______________________________

PROVOST AND PRITCHARD CONSULTING
GROUP
By: _________________________________
Heather Bashian, RCE 73075
Director of Operations
Date: _______________________________
APPROVED AS TO FORM:

By: _________________________________
Shannon Chaffin, City Attorney
Date: _______________________________

REPORT TO CITY COUNCIL
Late Distribution Notice
DATE: March 29, 2024
TO: Mayor and City Councilmembers
FROM: Arnoldo Rodriguez, City Manager
SUBJECT: April 3, 2024 City Council Meeting
Late Distribution Report for Item E-1
Additional time is needed by the external auditors to complete their final review of the City’s Annual Comprehensive Financial Report for Item E-1: Acceptance of the Annual Comprehensive Financial Report (ACFR). The report will be distributed as soon as it is available, which is expected to be April 1, 2024. Thank you for your understanding.

REPORT TO CITY COUNCIL
Approved by: Council Meeting of: April 3, 2024
___________________________________ Agenda Number: _______ Michael Lima, Director of Financial Services
___________________________________
Arnoldo Rodriguez, City Manager
SUBJECT:

Audited Comprehensive Financial Statements for the Fiscal Year ended June 30, 2023 RECOMMENDATION:

Accept Audited Comprehensive Financial Report (ACFR) for Fiscal Year 2022/2023 DISCUSSION:

The City of Madera's (City) Financial Statements for the Fiscal Year ended on June 30, 2023 have been prepared. Under State law, a local agency (in this case, the City) must prepare financial statements and have them audited by an independent accounting firm. The City has chosen to present their financial statements in the form of an ACFR. An ACFR contains additional financial information and context beyond what the basic financial statements present. The City’s Fiscal Year 2022/23 ACFR was audited by The Pun Group Accountants and Advisors (The Pun Group).

It should be noted that The PUN Group was retained by the City through an RFP process.

Single Audit
In accordance with the Single Audit Act of 1984 and the provisions of the U.S. Office of Management and Budget (0MB) Circular A-133, the City is required to have an independent firm audit their grant expenditures whenever $750,000 in Federal grants are received for any Fiscal Year. The audit must follow Generally Accepted Auditing Standards as set forth by the American Institute of Certified Public Accountants and comply with the standards for financial audits set forth in the U.S. General Accounting Office's Governments Auditing Standards (1994). The audit completed for Fiscal Year ended June 30, 2023 complies with all the provisions and standards previously stated and the City's Financial Statements have been found to be in conformity with Generally Accepted Accounting Principles. The auditors were completing the single audit as of the time that this staff report was being written. However, it was submitted on March 30, 2024.

E-1
Audit Results
The Pun Group issued an Unmodified Opinion, otherwise known as a “clean opinion”, for the City’s Fiscal Year 2022/23 financial statements. Andrew Roth, Partner at The Pun Group, will present the Financial Statements and discuss their results.

A copy of the Fiscal Year 2022/23 ACFR will be posted on the City's website.

FINANCIAL IMPACT:

The ACFR is a report that shows the City’s financial results for the fiscal year ending June 30, 2023.

In itself, the report does not have any financial impact. However, the production of the ACFR does satisfy legal requirements to produce financial statements. If those requirements are not fulfilled, the City could be subject to legal action. Additionally, the City’s bonds require annual production of audited financial statements as a condition of bond issuance. Thus, by not issuing audited financial statements, the City would risk default on their outstanding bonds, which could result in the immediate repayment of all outstanding principal on those bonds.

The Pun Group will be paid $54,600 for their work on the Fiscal Year 2022/23 ACFR. This amount is in addition to any City staff time incurred in the preparation of the ACFR.

ALTERNATIVES:

Continue to delay acceptance of the City's Fiscal Year 2022/23 ACFR and jeopardize the city's financial credibility.

ATTACHMENTS:

1. City of Madera Annual Comprehensive Financial Report for the Year Ended June 30, 2023

DEPARTMENT OF FINANCE
MADERA CITY HALL • 205 W. 4TH STREET • MADERA, CA 93637 • MADERA.GOV

ANNUAL COMPREHENSIVE
FOR THE YEAR ENDED JUNE 30, 2023

FINANCIAL REPORT
City of Madera
Madera, California
Annual Comprehensive Financial Report
For the Year Ended June 30, 2023
Prepared by
Finance Department
City of Madera
Annual Comprehensive Financial Report
For the Year Ended June 30, 2023
Table of Contents
i
Page
INTRODUCTORY SECTION (Unaudited)
Table of Contents ........................................................................................................................................................ i Letter of Transmittal ................................................................................................................................................... v Principal Officials ................................................................................................................................................... viii Organization Chart .................................................................................................................................................... ix

FINANCIAL SECTION
Independent Auditors’ Report ................................................................................................................................ 1 Management’s Discussion and Analysis (Unaudited) ........................................................................................... 5 Basic Financial Statements:

Government-Wide Financial Statements:

Statement of Net Position ............................................................................................................................ 24 Statement of Activities ................................................................................................................................ 26 Fund Financial Statements:

Governmental Funds Financial Statements:

Balance Sheet ........................................................................................................................................ 32 Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position ...................................................................... 35 Statement of Revenues, Expenditures, and, Changes in Fund Balances .............................................. 36 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities and Changes in Net Position ..................................................................... 38 Proprietary Funds Financial Statements:

Statement of Net Position ..................................................................................................................... 40 Statement of Revenues, Expenses and, Changes in Net Position ......................................................... 42 Statement of Cash Flows ...................................................................................................................... 44 Fiduciary Funds Financial Statements:

Statement of Fiduciary Net Position ..................................................................................................... 49 Statement of Changes in Fiduciary Net Position .................................................................................. 50 Notes to the Basic Financial Statements ........................................................................................................ 57 City of Madera
Annual Comprehensive Financial Report
For the Year Ended June 30, 2023
Table of Contents (Continued)
ii
Page
FINANCIAL SECTION (Continued)
Required Supplementary Information (Unaudited):

Budgetary Information ..................................................................................................................................... 131 Budgetary Comparison Schedules:

General Fund ............................................................................................................................................. 132 General Development Impact Fee Special Revenue Fund ........................................................................ 133 Measure “T” Special Revenue Fund ......................................................................................................... 134 Schedule of Changes in the Net Pension Liability and Related Ratios ............................................................ 135 Schedule of the City’s Proportionate Share of the Net Pension Liability and Related Ratios ......................... 136 Schedules of Contributions - Pensions ............................................................................................................ 138 Schedule of Changes in Total OPEB Liability and Related Ratios ................................................................. 141 Supplementary Information:

Non-Major Governmental Funds:

Combining Balance Sheet ......................................................................................................................... 146 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ................................................................................................................................. 150 Budgetary Comparison Schedules:

Special Gas Tax Special Revenue Fund ............................................................................................. 154 Business Improvement District Special Revenue Fund ...................................................................... 155 Parking Development Special Revenue Fund ..................................................................................... 156 Parking District Special Revenue Fund .............................................................................................. 157 Federal Aid Urban Special Revenue Fund .......................................................................................... 158 Street Construction Special Revenue Fund ......................................................................................... 159 Landscape Assessment Special Revenue Fund ................................................................................... 160 Supplemental Law Enforcement Special Revenue Fund .................................................................... 161 Intermodal Building Special Revenue Fund ....................................................................................... 162 Economic Development Special Revenue Fund ................................................................................. 163 Residential Rehab Special Revenue Fund .......................................................................................... 164 Low and Moderate Income Housing Special Revenue Fund .............................................................. 165 Community Facilities District Special Revenue Fund ........................................................................ 166 Non-Major Enterprise Funds:

Combining Statement of Net Position ....................................................................................................... 168 Combining Statement of Revenues, Expenses, and Changes in Net Position ........................................... 169 Combining Statement of Cash Flows ........................................................................................................ 170 City of Madera
Annual Comprehensive Financial Report
For the Year Ended June 30, 2023
Table of Contents (Continued)
iii
Page
FINANCIAL SECTION (Continued)
Supplementary Information (Continued):

Internal Service Funds:

Combining Statement of Net Position ....................................................................................................... 174 Combining Statement of Revenues, Expenses, and Changes in Net Position ........................................... 175 Combining Statement of Cash Flows ........................................................................................................ 176 Custodial Funds:

Combining Statement of Fiduciary Net Position ....................................................................................... 180 Combining Statement of Changes in Fiduciary Net Position .................................................................... 181 STATISTICAL SECTION (Unaudited)
Table of Contents ................................................................................................................................................... 185 Financial Trends:

Net Position by Component – Last Ten Fiscal Years ...................................................................................... 186 Changes in Net Position – Last Ten Fiscal Years ............................................................................................ 188 Fund Balances of Governmental Funds – Last Ten Fiscal Years .................................................................... 192 Changes in Fund Balances of Governmental Funds – Last Ten Fiscal Years ................................................. 194 Revenue Capacity:

Governmental Activities Tax Revenues by Source – Last Ten Fiscal Years .................................................. 197 Assessed Value of Taxable Property – Last Ten Fiscal Years......................................................................... 198 Property Tax Levies and Collections – Last Ten Fiscal Years ........................................................................ 200 Direct and Overlapping Property Tax Rates – Last Ten Fiscal Years ............................................................. 201 Top Ten Principal Property Taxpayers – Fiscal Year 2022 and Ten Years Prior ............................................ 202 Debt Capacity:

Ratios of Outstanding Debt by Type – Last Ten Fiscal Years ......................................................................... 203 Ratios of General Bonded Debt Outstanding – Last Ten Fiscal Years ............................................................ 204 Direct and Overlapping Governmental Activities Debt ................................................................................... 205 Legal Debt Margin Information – Last Ten Fiscal Years ................................................................................ 206 Pledged Revenue Coverage – Last Ten Fiscal Years ...................................................................................... 208 Demographic and Economic Information:

Demographic and Economic Statistics – Last Ten Fiscal Years ..................................................................... 210 Principal Employers – Fiscal Year 2022 and Ten Years Prior ........................................................................ 211

Operating Information:

Full - Time Equivalent City Government Employees by Function/Program – Last Ten Fiscal Years ............ 213 Operating Indicators by Function Program – Last Ten Fiscal Years ............................................................... 214 Capital Asset Statistics by Function/Program – Last Ten Fiscal Years ........................................................... 216 iv
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March 29, 2024
Honorable Mayor and Members of the City Council,
City of Madera, California
Financial Services Department
It is with pleasure that I present to you the City of Madera Annual Comprehensive Financial Report (ACFR) for Fiscal Year 2022/2023.

State law requires local governments to prepare a complete set of audited financial statements. This report is published to fulfill that requirement for the fiscal year ending June 30, 2023. This ACFR was prepared by the City of Madera's (City) Finance Department, which assumes responsibility for both the accuracy of the presented data and the completeness and fairness of the presentation, including disclosures.

The accompanying financial statements of the City have been prepared in conformity with generally accepted accounting principles (GAAP) in the United States of America as prescribed by the Governmental Account Standards Board (GASB).

GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The MD&A offers a more detailed discussion about the economic condition of the City, fund balance analysis and other management goals and achievements. The City's MD&A can be found immediately following the report of the independent auditors.

The City's financial statements have been audited by The Pun Group LLP. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City for the fiscal year ended June 30, 2023, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was reasonable basis for the rendering of an unmodified opinion that the City of Madera's financial statements for Fiscal Year 2022/2023 are fairly presented in conformity with GAAP. The independent auditor’s report is presented as the first component of this ACFR’s financial section.

The independent audit of the City’s financial statements was part of a broader, federally mandated "Single Audit" designed to meet the special needs of federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the emphasis on internal controls and legal requirements involving the administration of federal awards. These reports are presented in a separately issued report: the Single Audit and Independent Auditors' Reports.

Government Profile
The City was incorporated on March 27, 1907, as a general law city. The City Council is comprised of six members who are elected by district, plus a Mayor who is elected at large. The Council Members and the Mayor are elected to alternating four-year terms staggered every two years. The City Council is responsible for making policy, passing ordinances, adopting the budget, appointing committees, and hiring the City Manager, the City Attorney, and the City Clerk. The City Manager is responsible for carrying out the ordinances and policies of the City Council and overseeing operations. All other department heads are appointed by the City Manager.

Madera City Hall, 205 W 4th Street, Madera, CA 93637
PHONE: (559) 661-5400 • www.madera.gov
v
Madera is located in the center of California and is the county seat of Madera County. The City is part of the Madera/Chowchilla Metropolitan Area, which includes City of Madera, City of Chowchilla, and developed areas of Madera County. The City has an approximate population of 66,000 and its boundaries encompass 16.0 square miles.

Madera is also within close proximity to cherished natural attractions such as Yosemite National Park, the Sierra Nevada Mountains, and the Pacific Ocean coastline.

The City provides a full range of services that include public safety, public works, recreational and community services, community development and general administrative services. The City also operates a municipal golf course, water, and wastewater utilities, as well as a general aviation airport.

Component units are legally separate entities for which the nature and significance of their relations with the City are such that exclusion would cause the financial statements to be misleading or incomplete. Accordingly, the Housing Authority of the City of Madera is reported as a component unit in the City's financial statements.

Local economy and City finances
The Madera economy showed signs of continued growth during Fiscal Year 2022/23. Continued development in both the residential and the commercial sectors resulted in a record property assessed valuation of $4.1 billion: up $300 million from Fiscal Year 2021/22. Partially offsetting this growth was the closure of the Madera Community Hospital in January 2023. While there were various attempts at reopening the hospital, it remains closed as of the date of this transmittal letter. In spite of this significant closure, the City’s finances reflected the growth that was shown throughout the Madera economy. Among the financial highlights that the City experienced in Fiscal Year 2022/23 were:
• Mirroring the growth in assessed valuation, the City received a record amount of property tax revenue.

Property tax revenue was $13.8 million: $1.4 million (11.3%) above the property tax received in Fiscal Year 2021/22. Management believes that property tax revenue will continue to grow with the addition of several new developments within Madera. However, management also believes that the property tax growth rate will decline from Fiscal Year 2022/23 levels.
• Sales tax revenues were down $0.1 million (0.5%) from Fiscal Year 2021/22’s total of $19.4 million. A slowdown in the retail economy was the primary cause for the stagnation in sales tax revenues. While several new businesses, including Smart & Final and In-N-Out, are opening in Fiscal Year 2023/24, management believes that sales tax revenue will continue to be flat due to conditions in the overall retail and wholesale economy.
• The City’s total Net Position ended the fiscal year at a record $351.8 million: up 6.1% from Fiscal Year 2021/22’s total Net Position of $331.6 million. It is particularly noteworthy that both Governmental and Business Type activities had positive Net Positions at the end of the fiscal year. • The City recorded $167.6 million of Cash and Investments in Fiscal Year 2022/23. That figure was up by $17.7 million (11.8%) over Fiscal Year 2021/22’s figure of $149.9 million. While the growth in cash is impressive, it must be noted that $20.1 million of cash is associated with the American Rescue Plan Act (ARPA) monies received from the Federal Government for future Water Fund and Sewer Fund capital work.

Overall, the financial outcomes were in line with the budgeted amounts. Actual sales tax and property tax revenues came in higher than budgeted projected as of June 30, 2023. While some industry sectors were impacted, Madera was not as severely impacted in comparison to other communities.

Agriculture has been the mainstay of the local economy. Government also represents a growing part of the economy.

Major employers in the City include Madera Unified School District, County of Madera, City of Madera, and the State of California. Major retail employers include Walmart, Lowe’s, and Home Depot. The City of Madera's unemployment rate has increased over the fiscal year: going from 6.0% in June 2022 to 7.7% in June 2023.

The City maintains extensive budgetary controls. The objective of these controls is to ensure compliance with legal provisions embodied in the annual appropriated budget adopted by the City Council. For the 2022/23 Fiscal Year, activities for the general, special revenue, debt service, enterprise, and capital project were included in the annual appropriated budget.

Madera City Hall, 205 W 4th Street, Madera, CA 93637
PHONE: (559) 661-5400 • www.madera.gov
vi
The level of budgetary control, i.e. the level where the expenditures cannot legally exceed the appropriated amount, is maintained at the fund level for all funds, and then at the department level for those funds which contain multiple departments. The City also maintains an encumbrance accounting system as a method of maintaining budgetary control. Outstanding encumbrances at year-end are evaluated and, if deemed necessary by the City Manager, are carried forward as part of the following year's budget.

Long-term financial planning
The City maintains a five-year Capital Improvement Plan, which is updated annually. This plan includes major ongoing maintenance and rehabilitation costs to existing capital assets (land, land improvements, infrastructure, and equipment), as well as the costs of new facilities and improvements.

Budget policies require that budgets be balanced, and ongoing costs shall not exceed current revenues plus available fund balance that exceeds reserve fund requirements. The City is continuously monitoring economic conditions and will adjust the budget as necessary as economic conditions change.

The City maintains a General Fund Economic Stabilization Reserve at a level of at least 30% of the General Fund operating expenditures in order to protect essential service programs and funding requirements during periods of economic downturn or other unforeseen major costs not covered by the Stabilization Reserve. The balance in the reserve was $12.7 million as of the end of Fiscal Year 2022/23. In addition, separate reserve funds have been established in the Measure K Fund for economic stabilization for the Fire and Police Departments. Every year $130,000 is added to each of the reserves until they reach the level of 30% of expenditures. Currently, each Economic Stabilization Fund had a $780,000 balance at the end of Fiscal Year 2022/23. Additionally, the Fire Department has established a fire vehicle replacement reserve. The intent was to add $200,000 each year when the reserve was established. The funding amount was increased to $490,000 in Fiscal Year 2022/23. The fund was used for the purchase of a new fire apparatus in Fiscal Year 2021/22. It had a balance of $738,540 as of the end of the 2022/23 fiscal year.

To finance Madera’s current and future growth, the City has in place a variety of user and developer fees to pay for streets, parks, sewer lines, water lines and wells. The City reviews these fees periodically to ensure that the fee structure is in line with the cost of construction. In addition, the City recently adopted updated fees for Water, Sewer, and Solid Waste services to keep up with the rising cost of providing these services.

Cash Management
The City of Madera's investment policy prioritizes safety, liquidity and then yield on the City's investment. The highest priority of cash management and investments is to ensure adequate funds are available to meet the City of Madera's obligations and all investments are in safe instruments. Yield, while important, is considered the third priority after safety and liquidity. The City invests in various governmental and corporate bonds, certificates of deposit, money market accounts, and the Local Agency Investment Fund (LAIF) operated by the State of California for the benefit of local governments. Bond proceeds, debt service monies, and debt service reserves are invested according to the bond covenants of each bond issue.

Acknowledgments
I would like to extend my thanks to the City Council for their interest in and suggestions for the financial reporting of the City. The preparation of the ACFR could not have been accomplished without the efforts and dedication of the staff of the City of Madera, Department of Finance. I extend my appreciation to my staff and other personnel from various departments, agencies and authorities who assisted in the preparation of this report.

Respectfully submitted,
Michael Lima
Director of Financial Services
Madera City Hall, 205 W 4th Street, Madera, CA 93637
PHONE: (559) 661-5400 • www.madera.gov
Respectfully submitted,
vii
City Council Members
Santos Garcia, Mayor
Cece Gallegos, Councilmember (D1)





Jose Rodriguez, Councilmember (D2)
Steve Montes, Councilmember (D3)
Anita ¬vans, Councilmember (D4)






Elsa Mejia, Mayor Pro Tem (D5)
Artemio Villegas, ªóùòçíðñéñæéö
(D6)
Executive Management
Arnoldo Rodriguez, City Manager
Hilda Cantu Montoy, City Attorney (contracted)
Alicia Gonzales, City Clerk
Department Directors
Michael Lima, Director of Financial Services
Will Tackett, Director of Community Services
Gary Conte, Planning Manager
Dino Lawson, Police Chief
Ismael Hernandez, Director of Public Works
Joseph Hebert, Director of Parks & Community Services
Rafael Magallan, Chief Building Official
Keith Helmuth, City Engineer
Wendy Silva, Director of Human Resources
Vacant, Information Services Manager
viii
Organizational Chart
Residents
City
Council
Successor
Agency City Clerk City Manager
City
Attorney
(Contract)
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Community
Development
Human
Resources
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Fire
(Cal-Fire) Finance
Engineering
Building
Planning
Code
Enforcement Grants
City of Madera
Public Works
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200 E. Sandpointe Avenue, Suite 600
Santa Ana, California 92707
INDEPENDENT AUDITORS’ REPORT
To the Honorable Mayor and Members
of the City Council of the City of Madera
Madera, 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 Madera, California (the “City”), as of and for the year ended June 30, 2023, and the related notes to the basic financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

In our opinion, based on our audit and the report of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the aggregate discretely presented component unit, each major fund, and the aggregate remaining fund information, of the City, as of June 30, 2023, 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.

We did not audit the financial statements of the Housing Authority of the City of Madera (the “Authority”), which represent 100% of the assets, net position, and revenues, respectively, as of June 30, 2023, and the respective changes in financial position, the year then ended. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for the Authority, is based solely on the report of the other auditors.

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

Emphasis of Matter
Implementation of New GASB Pronouncements
As discussed in Note 1 to the basic financial statements, the City implemented Governmental Accounting Standards Board (“GASB”) Statement No. 96, Subscription Based Information Technology Arrangements during the year. Our opinion is not modified with respect to this matter.

To the Honorable Mayor and Members
of the City Council of the City of Madera
Madera, California

2 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.

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

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

In performing an audit in accordance with auditing standards generally accepted in the United States of America and Government Auditing Standards, we:
 Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.  Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the 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.

To the Honorable Mayor and Members
of the City Council of the City of Madera
Madera, California

3 Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis, Budgetary Comparison Schedules, Schedule of Changes in Net Pension Liability and Related Ratios, Schedule of the City’s Proportionate Share of the Net Pension Liability and Related Ratios, Schedules of Contributions, and Schedule of Changes in Total OPEB Liability and Related Ratios, as listed in the accompanying table of contents, be presented to supplement the basic financial statements. Such 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. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The Combining and Individual Fund Financial Statements and Budgetary Comparison Schedules 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 GAAS. In our opinion, the Combining and Individual Fund Financial Statements and Budgetary Comparison Schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Information
Management is responsible for the other information included in the annual report. The other information comprises the Introductory and Statistical Sections but does not include the basic financial statements and our auditors’ report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon.

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

To the Honorable Mayor and Members
of the City Council of the City of Madera
Madera, California

4 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 28, 2024, on our consideration of 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 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.

Santa Ana, California
March 28, 2024
City of Madera
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2023
5 This narrative overview of the City of Madera's financial performance provides an analysis of the City's financial activities for the fiscal year ended June 30, 2023. Please read it in conjunction with the accompanying basic financial statements and the accompanying notes to those financial statements.

Financial Highlights
 The City's government-wide total assets and deferred outflows of resources exceeded total liabilities and deferred inflows of resources at the close of the fiscal year by $351.8 million. Of this amount, $59.8 million is in unrestricted net position and available to meet the City's ongoing commitments to citizens and creditors.

In addition, the City’s restricted net position totals $52.9 million and is dedicated to specific purposes. Lastly, net position of $239.2million is the City’s net investment in capital assets.  The City’s total net position increased by $20.3 million or 6.1% during fiscal year 2022-23 to $351.8 million from $331.5 million.
 At the close of the current fiscal year, the City’s governmental funds reported combined fund balances of $94.1 million, an increase of $12.9 million or 15.9% in comparison with the prior year. Approximately $11.5 million or 12.2% of this amount is available for spending at the City’s discretion (unassigned fund balance).  The City's General Fund, Measure K Sales Tax, Code Enforcement, Insurance Reserve, Community Development and LEA Tire Grants, ended the year with a fund balance of $53.2 million, which represents a net increase of approximately $14.6 million from the previous year. The General Fund unassigned balance of $12.5 million is available for carryover to fund future general fund expenditures.  Net Pension Liability increased by $23.2 million or 70.5% during fiscal year 2022-23 to $56.1 million from $32.9 million. Deferred outflows of resources related to pensions increased by $10.7 million or 116.5% and deferred inflows of resources related to pensions decreased by $15.5 million or 93.9%. The Net Pension Liability is based on an Actuarial Valuation and there was a decrease in the discount rate of 6.90% from the prior year.

During this year, the rates for water and sewer services increased with the approval of the Rate Study that was completed and approved on April 6, 2022. Prior to this year, incremental rate increases over the subsequent five years were approved by Council during the second quarter of calendar year 2015. Those rate increases took effect in fiscal year 2015-16 and were increased between 9-10% during each of the five years covered in the rate schedule, except for fiscal year 2018-19 when Council considered a revised water rate analysis and adjusted the increase to 6%. Prop 218 hearings were held, and all but the new drainage fee rates were adopted on July 20, 2022. The new rates went into effect in the current fiscal year.

Overview of the Financial Statements
This annual report consists of a series of financial statements. These statements include all activities of the City of Madera, using the integrated approach as prescribed by GASB Statement No. 34. The Statement of Net Position and Statement of Activities provide information about the activities of the City as a whole and present a longer-term view of the City's finances. Fund financial statements tell how these services are financed in the short term as well as what remains for future spending. Fund financial statements also report the City's operations in more detail than the government-wide statements by providing information about the City's most significant funds. The remaining statements provide financial information about activities for which the City acts solely as a trustee or agent for the benefit of those outside the Government.

City of Madera
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2023
6 Reporting the City as a Whole
Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the City's finances. These statements include all assets and liabilities of the City using the accrual basis of accounting, which is like the accounting method used by most private sector companies. All the current year's revenues and expenses are considered regardless of when cash is received or paid out.

The statement of net position presents information on all the City's assets, deferred outflows, liabilities, and deferred inflows of resources, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as one indicator of whether the City's financial position is improving or deteriorating.

The statement of activities presents information showing how the City's net position changed in the most recent fiscal year. All changes of net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported on this statement for some items that will result in cash flows in future fiscal periods (e.g., earned but unused vacation leave).

The government-wide financial statements of the City are divided as follows:

Governmental Activities: Most of the City's basic services are included here such as public safety, transportation (street and roads), community development, culture and recreation and general government.

These services are primarily financed by property and sales taxes and federal and state grants.

Business-type Activities: The City charges fees to customers to cover the costs of services provided. The City's utilities, water, sewer, community sanitation (refuse and street cleaning), golf course, and airport, as well as public transit services are included here.

Fund financial statements. The fund financial statements provide more detailed information about the City's most significant funds, not the City as a whole. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. Some funds are required to be established by State Law or by bond covenants. Management establishes other funds to control and manage money for a particular purpose or to show the City is meeting legal responsibilities for using certain taxes, grants, and other money. All the funds of the City can be classified into three categories: governmental, proprietary, and fiduciary funds.

Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike government-wide financial statements, governmental fund financial statements focus on the near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. These funds are reported using an accounting method called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. Such information is useful in evaluating a government’s near-term financing requirement.

Because the focus of the governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for the governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide reconciliations between governmental funds and governmental activities. This reconciliation explains the relationship (or differences) between the fund statements and the government- wide statements.

City of Madera
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2023
7 The City of Madera maintains nineteen individual governmental funds. Information is presented separately in the governmental funds balance sheet and in the governmental funds statement of revenues, expenditures, and changes in fund balances for the General Fund, General Development Impact Fee Fund, and Solar Energy Lease – Capital Projects Fund all of which are major funds. Data from the other sixteen funds are combined into a single aggregated presentation.

Individual fund data for each of these non-major governmental funds is provided in the form of combining statements elsewhere in this report.

The City adopts an annual appropriated budget for the General Fund. A budgetary comparison statement has been provided for the General Fund to demonstrate compliance with this budget.

Proprietary funds. The City has two different types of proprietary funds, enterprise funds and internal service funds.

Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City utilizes enterprise funds to account for those activities that are supported primarily by user charges to external users, and includes community sanitation, sewer disposal, water utilities and transit services.

Internal service funds are used to account for activities that are supported by user charges primarily to the City's other programs and activities and include fleet management, facility maintenance, and computer replacement. Because all these services predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements.

Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for Water, Sewer, Solid Waste, and Drainage Operations funds since they are all major funds. Individual fund data for each of these non-major enterprise funds is provided in the form of combining statements elsewhere in this report. All the internal service funds are combined into a single, aggregated presentation in the fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report.

Fiduciary funds. Fiduciary funds are used to account for resources held for the benefits of parties outside the City.

Fiduciary funds are not reflected in the government-wide financial statements because the City cannot use these funds to finance its operations.

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

Required Supplementary Information. In addition to the basic financial statements and accompanying notes, this report includes certain required supplementary information concerning the City’s progress in funding its obligation to provide pension benefits and other post-employment benefits to its employees, and budgetary comparison schedules.

Individual Fund Statements. Individual fund statements in connection with non-major governmental and enterprise funds are presented immediately after the required supplementary information in this report.

City of Madera
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2023
8 Government-wide Financial Analysis
Below is a table showing the City's net position for the fiscal year ended June 30, 2023, with comparative data for the fiscal year ended June 30, 2022.

As of June 30, 2023, the City's government-wide total assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $351.8 million. Governmental activities finished the year with a positive net position balance of $240.0 million, an increase of $18.0 million, or 8.1% compared to 2022. Business-type activities finished the year with a positive balance of $111.8 million, an increase of $2.3 million or 2.1% compared to 2022. Net position, as noted earlier, may serve over time as a useful indicator of the City's financial position. Of the total net position, $239.2 million or 68.0% is the City's net investment in capital assets (e.g., land, buildings and improvements, machinery and equipment and the road network) less any related debt used to acquire those assets that is still outstanding.

The City's net investment in capital assets decreased by $3.7 million, restricted net position increased by $6.0 million and unrestricted net position increased by $18.0 million, accounting for the increase in total net position of $20.3 million. The decrease in net investment in capital assets is primarily due to additions to capital assets of $5.2 million offset by depreciation expense of $12.4 million, a decrease in capital-related debt of $3.7 million. The decrease to restricted net position represents the change in resources that are subject to external restrictions on their use. Net position restricted for public works and transportation increased by $4.0 million, capital projects increased by $0.9 million, community development increased by $.8 million, and debt service increased by $0.8 million compared to the prior year. The increase to unrestricted net position is due to a change in resources available to fund City programs for citizens and debt obligations to creditors.

Restricted net position represents $52.9 million or 15.4% of the total net position. Restricted net position represents those resources that are subject to external restrictions on how they may be used. These restrictions are established by bond covenants or restrictions on the use of funds are set forth by state or federal regulations. 2023 2022 2023 2022 2023 2022
Assets:

Current and other assets $ 132,792,004 $ 120,798,297 $ 63,141,475 $ 55,314,094 $ 195,933,479 $ 176,112,391 Capital Assets 193,451,488 198,074,866 101,019,583 103,407,985 294,471,071 301,482,851 Total assets 326,243,492 318,873,163 164,161,058 158,722,079 490,404,550 477,595,242 Deferred outflows of resources 17,456,880 8,453,503 3,399,723 1,491,624 20,856,603 9,945,127 Liabilities:

Current and other liabilities 31,531,008 34,282,489 9,791,906 7,955,385 41,322,914 42,237,874 Noncurrent liabilities 70,689,431 53,924,073 44,668,508 41,496,907 115,357,939 95,420,980 Total liabilities 102,220,439 88,206,562 54,460,414 49,452,292 156,680,853 137,658,854 Deferred inflows of resources 1,435,081 15,845,063 1,322,894 2,478,068 2,757,975 18,323,131 Net position:

Net investment in capital assets 173,636,768 177,369,996 65,561,102 65,475,770 239,197,870 242,845,766 Restricted 50,277,926 44,524,605 2,579,539 1,794,447 52,857,465 46,319,052 Unrestricted 16,130,158 1,380,440 43,636,832 41,013,126 59,766,990 42,393,566 Total net position $ 240,044,852 $ 223,275,041 $ 111,777,473 $ 108,283,343 $ 351,822,325 $ 331,558,384 City of Madera's Net Position
Governmental
Activities
Business-Type
Activities Total
City of Madera
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2023
9 Unrestricted net position represents those resources which may be used to meet the City's ongoing commitments to citizens and creditors. Government-wide unrestricted net position represents $59.8 million or 17.0% of the total net position, which is an increase of $17.4 million or 41.0% from the previous year. Governmental activities account for $16.1 million of the total unrestricted net position and improved by $16.0 million or 1,600.0% compared to last year.

Business-type activities account for $43.6 million of the total unrestricted net position and increased by $2.6 million or 6.3% compared to last year.

The following table indicates the changes in net position for governmental and business-type activities:
2023 2022 2023 2022 2023 2022
Revenues:

Program revenues:

Charges for services $ 8,391,024 $ 7,314,577 $ 36,233,172 $ 34,452,844 $ 44,624,196 $ 41,767,421 Operating grants and contributions 12,319,312 9,780,314 - - 12,319,312 9,780,314 Capital grants and contributions 1,857,783 2,400,126 1,060,762 1,163,082 2,918,545 3,563,208 Total program revenues 22,568,119 19,495,017 37,293,934 35,615,926 59,862,053 55,110,943 General revenues:

Property taxes 13,505,386 12,134,288 258,727 247,624 13,764,113 12,381,912 Sales and use taxes 19,291,534 19,440,017 - - 19,291,534 19,440,017 Franchise taxes 841,540 763,276 - - 841,540 763,276
Other taxes 2,281,598 2,462,689 - - 2,281,598 2,462,689 Total taxes 35,920,058 34,800,270 258,727 247,624 36,178,785 35,047,894 Investment earnings 959,461 (1,475,300) 679,254 (913,654) 1,638,715 (2,388,954) Gain (loss) on sale of capital assets - - 52,605 - 52,605 - Miscellaneous 980,194 934,376 1,035,824 680,464 2,016,018 1,614,840 Total general revenues and transfers 37,859,713 34,259,346 2,026,410 14,434 39,886,123 34,273,780 Total revenues 60,427,832 53,754,363 39,320,344 35,630,360 99,748,176 89,384,723 Expenses:

General government 8,709,508 9,503,665 - - 8,709,508 9,503,665 Public safety 19,843,489 21,670,917 - - 19,843,489 21,670,917 Social services (12,583) 1,061,114 - - (12,583) 1,061,114 Public ways and facilities 3,690,712 5,320,754 - - 3,690,712 5,320,754 Community development 4,195,329 5,136,917 - - 4,195,329 5,136,917 Culture and recreation 4,670,551 3,158,176 - - 4,670,551 3,158,176 Interest on long-term debt 643,406 671,356 - - 643,406 671,356 Water - - 9,595,209 7,317,498 9,595,209 7,317,498
Sewer - - 12,320,078 8,737,728 12,320,078 8,737,728
Solid waste - - 9,379,389 6,146,265 9,379,389 6,146,265 Drainage operations - - 1,241,082 929,265 1,241,082 929,265 Local transit - - 3,904,438 3,104,405 3,904,438 3,104,405 Golf course - - 75,993 85,044 75,993 85,044
Airport - - 1,227,634 883,402 1,227,634 883,402
Total expenses 41,740,412 46,522,899 37,743,823 27,203,607 79,484,235 73,726,506 Change in net position 18,687,420 7,231,464 1,576,521 8,426,753 20,263,941 15,658,217 Transfers (1,917,609) 521,130 1,917,609 (521,130) - -
Change in net position after transfers 16,769,811 7,752,594 3,494,130 7,905,623 20,263,941 15,658,217 Increase (decrease) in net position 16,769,811 7,752,594 3,494,130 7,905,623 20,263,941 15,658,217 Net position, beginning of year 223,275,041 215,522,447 108,283,343 100,377,720 331,558,384 315,900,167 Net position, end of year $ 240,044,852 $ 223,275,041 $ 111,777,473 $ 108,283,343 $ 351,822,325 $ 331,558,384 Governmental Activities Business Type Activities Total
Statement of Activities
For the Year Ended June 30, 2023
City of Madera
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2023
10 Governmental activities. Governmental activities account for $240.0 million or 68.2% of the total government-wide net position. This is an increase of $18.0 million or 8.1% compared to June 30, 2022.

Total governmental revenues for the year were $60.4 million, which is $6.6 million or 12.3% more than in 2022.  Operating grants and contributions increased by $2.5 million or 26.0% from the previous year.  Capital grants and contributions decreased by $0.5 million or 22.6% from the previous year due to a decrease in developer contributions.
 Taxes, including property, sales, franchise, and other taxes account for approximately $35.9 million or

59.4% of the City's governmental activities revenue. Total tax revenue increased $1.1 million or 3.2% from the previous year.
 Investment earnings increased by $2.4 million or 165.0% from the previous year. The decrease was primarily due to rising interest rates lowering the market value of investments made at lower rates.

Total governmental expenses for the year were $41.7 million, which is $4.8 million or 10.3% less than in 2022.  General governmental expenses decreased by $.8 million or 8.4% from the previous year.  Public safety expenses decreased by $1.8 million or 8.4% from the previous year.  Public ways and facilities expenses decreased by $1.6 million or 30.6% from the previous year.  Community development expenses decreased by $0.9 million or 18.3% from the previous year.  Culture and recreation expenses increased by $1.5 million or 47.9% from the previous year.

City of Madera
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2023
11 Revenues by Source - Governmental Activities
Expenditures and Program Revenues - Governmental Activities (Dollars in Thousands)
City of Madera
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2023
12 Governmental program revenues that include charges for services and grants specific to certain programs account for $22.6 million or 37.4% of the total governmental activity revenue. The amounts necessary to fully fund the governmental activity programs are made up of "general" revenues such as taxes, interest, and grants and contributions.

Business-type Activities. Business-type activities account for $111.8 million or 31.8% of the total government-wide net position. This is an increase of $3.5 million from the prior year. Net investment in capital assets accounts for $65.6 million or 58.7% of the total net position and is an increase of $0.1 million from 2022. Restricted net position accounts for $2.6 million, or 2.3% of total net position. This represents an increase of $0.8 million from 2022. Unrestricted net position of $43.6 million, or 39.0% of total net position, represents an increase of $2.6 million from 2022.

Total business-type revenue for the year was $39.3 million, which is $3.7 million or 10.4% more than in 2022.

Charges for services increased by $1.7 million or 5.2% from the prior year. Additional water meters were installed where there were previously no meters. The result of adding meters to customers where no meter was originally installed typically increases charges for services.

Capital grants and contributions decreased by $0.1 million or 8.8% from the prior year.

Revenues by Source - Business-Type Activities
City of Madera
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2023
13 Expenses and Program Revenues-Business-Type Activities (Dollars in Thousands)
Included in charges for services are user fees relating to the water, sewer, solid waste, drainage, transit, golf course, and airport operations. Operating transit grant funds which are the primary revenue for the transit fund are included in charges for services.

Total business-type expenses for the year were $37.7 million, which is $10.5 million or 38.7% more than in 2022.

Water expenses increased by $2.3 million or 31.1% compared to the prior year, primarily due to salary and operational cost increases.

Sewer expenses increased by $3.6 million or 41.0% compared to the prior year, primarily sue to a sewer line break during the December 2022 to January 2023 severe weather. .

Solid Waste expenses increased by $3.2 million or 52.6% compared to the prior year, primarily due to increases in implementing a new third-party contract and the effects of Senate Bill 1383.

Financial Analysis of the City's Funds
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.

Governmental funds. Fund balance is defined in five categories: non-spendable, restricted, committed, assigned and unassigned. Non-spendable fund balances cannot be spent because they are not in spendable form. Restricted fund balances have limitations imposed externally by creditors, granters, contributors, or laws and regulations of other governments. Committed fund balances have self-imposed limitations set in place prior to the end of the period.

City of Madera
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2023
14 Assigned fund balances are constrained by the City’s intent to be used for a specific purpose but are neither restricted nor committed. Unassigned fund balances are the amounts that have not been assigned to other funds or restricted, committed or assigned to a specific purpose.

The City's Governmental Funds all ended the year with positive fund balances. The ending fund balance for all funds amounted to $94.1 million, $12.9 million or 15.9% more than the previous year.

Of the total fund balance, $10.4 million or 11% is unassigned which, within the limitations of the fund's purpose, is available for spending at the City's discretion. The remainder of the fund balance is either non-spendable, restricted, committed, or assigned to indicate that it is not in spendable form, legally required to be maintained intact, restricted for a particular purpose, committed for a particular purpose, or assigned for a particular purpose. The details of the remainder are as follows:

Total
Nonspendable
Prepaid items $ 72,092
Inventories 82,881
Total nonspendable 154,973
Restricted
12,751,924
98,941
136,363
18,354,410
519,667
2,365,453
368,640
Community development
Park development
Parking improvements
Public works and transportation
Special assessment project
Insurance stabilization reserve
Public protection
Capital projects and improvements 18,047,981
Total restricted 52,643,379
Committed
General Fund stabilization reserve 12,731,891
General plan update 50,000
Solar street light repair Installation 50,000
Measure K - Fire Protection Stabilization 780,000
Measure K - Police Protection Stabilization 780,000
Measure K - Fire Vehicle Replacement 738,540
Total committed 15,130,431
Assigned
Golf course capital 20,000
Debt service 1,106,145
OPEB liability 97,339
Insurance reserve 950,134
Health insurance premiums 1,357,000
Future annual stipend payments 650,000
Measure K - Fire Protection 7,293,910
Measure K - Police 3,422,960
Measure K - Sales Tax Refund Reserve 900,000
Total assigned 15,797,488
Unassigned 10,363,939
Total fund balances $ 94,090,210
City of Madera
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2023
15 General Fund
The General Fund is the chief operating fund of the City. As of June 30, 2023, the total fund balance (including all categories) of the general fund was $45.7 million, up $9.0 million from June 30, 2022. The total fund balance of $43.9 million includes non-spendable balances of $0.1 million, restricted balances of $2.4 million, committed balances of $15.1 million, assigned balances of $15.8 million, and an unassigned balance of $12.3 million.

The assigned fund balance decreased $0.8 million when compared to June 30, 2022, primarily due to the $1.9 million increase in Measure K fund balance, which was offset by reductions of $0.5 million to the health insurance premiums reserve, a $0.2 million decrease in reserves for future annual employee stipend payments, a $2.4 million transfer of insurance premium reserve to the restricted fund, and a $.3 million increase in debt service.

The unassigned fund balance increased $2.4 million when compared to June 30, 2022. The $12.3 million unassigned portion represents the amount carried over to offset the impact of any revenue shortfall that may occur in the next year due to economic uncertainty, adjustments to budgets approved by council during the next fiscal year, and to augment the maintenance of the water and sewer infrastructure as necessary. As a measurement of the General Fund’s liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total General Fund expenditures.

Unassigned fund balance represents approximately 35.5% of total General Fund expenditures, while total fund balance represents approximately 250.1% of total General Fund expenditures.

Other Major Funds
The General Development Impact Fee Special Revenue Fund, a major fund, had a $1.1 million increase in fund balance during fiscal year 2022-23. The ending fund balance of $18.0 million is restricted to use for capital projects and improvements.

Proprietary Funds. As indicated in the description of proprietary funds, there are two types of funds, enterprise, and internal service funds. The City’s proprietary funds provide the same type of information found in the governmentwide financial statements, but in more detail.

The City's enterprise funds, and internal service funds ended the year with total net position as follows:

Revenue was up slightly in the City’s enterprise funds in fiscal year 2022-23. Water revenue was down 9.9%, primarily because of the extremely wet year the city experienced during the winter of 2022-2023, Sewer revenue was up 44.4%, Solid Waste was up 44.4% and Drainage Operations went down 1.2%. Operating expenses were higher in the Water, Sewer, Solid Waste, and Drainage Operations funds for fiscal year 2022-23 primarily due to salary and benefit increases as well as fees incurred for third-party contracts. The City Council recently adopted new rates for the Water, Sewer and Solid Waste services which went into effect in fiscal year 2022-23.

Water Fund $ 47,621,002
Sewer Fund 25,736,002
Solid waste Fund (1,073,391)
Drainage Operations Fund 18,825,922
Local Transit Fund 7,498,544
Golf Course Fund 1,289,580
Airport Fund 11,879,814
Fleet Maintenance Fund 5,967,157
Facilities Maintenance Fund (165,585)
Technology Fund 184,902
City of Madera
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2023
16 General Fund Budgetary Highlights
The general fund ended fiscal year 2022-23 $12.3 million under budget. This variance was primarily the result of less revenue of $.4 million offset by $12.7 million less in expenditures than projected.  Actual expenditures for General Government came in $5.0 million under budget due to spending 4.6 million less on economic development as well as spending less than budgeted in City Clerk’s office and for the City Attorney.
 Actual expenditures for Public Safety came in at $2.5 million under budget due to savings in contracted services and personnel costs.
 Actual expenditures for Public Ways and Facilities were $0.6 million under budget due to savings in supplies and materials, contracted services, and personnel costs.  Actual expenditures for Community Development came in at $0.6 million under budget due to savings in contracted services and personnel costs.
 Actual expenditures for Culture and Recreation came in at $0.4 million under budget due to savings in personnel costs, recreational programs, contracted services, and conference/training.  Actual expenditures for Capital Outlay were $4 million under budget due to projects that were carried over to next fiscal year or delayed due to the wet weather during the current fiscal year.

Capital Assets and Debt Administration
Capital Assets. The City's investment in capital assets for its governmental and business-type activities as of June 30, 2023, amounts to $294 million (net of depreciation), a decrease of $7.2 million compared to 2022. This decrease is primarily due to the additions to capital assets of $5.2 million offset by the depreciation expense of $12.4 million.

Major capital asset additions this year include the following:
 Road network improvements - $2.6 million
o Developer donations (sidewalk, pavement, pipelines, and others) - $1.0 million o Various streets and bridge improvement projects - $1.3 million o Various park improvement projects - $0.3 million
 Equipment, property, and software purchases - $1.0 million  Airport apron and taxiway drainage upgrade – $0.8 million During the year, the City made improvements to various streets, bridges, parks, sewer mains, and received developer- donated infrastructure. Capital projects designed and/or constructed by the City include:
 Park improvements: India Park and Olive Knox Park
 Street improvements: 5th Street, C Street, E Street, Lincoln Avenue, Dellavalle Avenue, Austin Street, Gateway Drive, Olive Avenue, Asterial Street, Knox Street, Raymond Road, Cleveland Avenue, Schnoor Avenue, Sunset Avenue, and Riverside Drive
 Traffic signal improvements and installations: Granada Drive, Howard Road, Industrial Avenue, Olive Avenue, Pine Street, Yosemite Avenue, Q Street, Cleveland Avenue, D Street, South Street, Lake Street, and Sherwood Way
 Water storage tank installation: Avenue 17 and Lake Street City of Madera
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2023
17 Developer constructed infrastructure was constructed in conjunction with the partial list of projects shown below:
 Iveywood I Subdivision
 Dutch Bros Coffee Shop
 EZ-Trip Gas Station
 Sealed Air Solar Farm
 Madera County Hall of Justice
Detailed information on the City's capital assets can be found in Note 8 of the Notes to the Basic Financial Statements.

Long-term Debt. The City's long-term debt as of June 30, 2023, was $57.3 million with governmental activities accounting for $22.1 million or 38.6%, and business-type activities accounting for $35.2 million or 61.4%. The total debt decreased by $3.5 million or 6.1% during the current fiscal year. The reason for the decrease was due to the principal payments made during the current year.

General obligation debts are direct obligations of the City and are backed by the full faith and credit of the City requiring voter approval and may have a tax rate set to cover repayment. State statutes limit the amount of general obligation debt to 15% of the City's total assessed valuation. The City of Madera's debt limit is $619.5 million. Detailed information on the City's long-term debt activity can be found in Note 9 of the Notes to the Basic Financial Statements.

Economic Factors and Next Year's Budgets and Rates
The national GDP began the fiscal year at 2.7 % and steadily declined to end the fiscal year of 2023 at 2.1%. Economic growth started higher than the previous fiscal year and decreased compared to each quarter throughout the year. It did however begin the fiscal year higher than the end of the prior fiscal year. At the state level, California GDP continues to be the highest of all the states and slightly increased over the full fiscal year. Because the Central Valley relies heavily on an agriculture-based economy, profits are not as lucrative and challenges such as weather (drought), labor availability, and government subsidies all play into the bottom line. 2023 2022 2023 2022 2023 2022
Land $ 12,669,536 $ 12,614,951 $ 9,725,315 $ 9,725,315 $ 22,394,851 $ 22,340,266 Construction in progress 24,764,506 23,851,579 2,944,282 1,762,601 27,708,788 25,614,180 Buildings and improvements 32,969,138 25,042,669 65,621,819 69,924,082 98,590,957 94,966,751 Equipment 18,311,532 18,222,525 9,882,783 5,672,034 28,194,315 23,894,559 Infrastructure 313,519,091 319,937,316 103,222,925 102,308,222 416,742,016 422,245,538 Subscription assets 312,821 - - - 312,821 -
Less: accumulated depreciation/amortization (209,095,136) (201,594,174) (90,377,541) (85,984,269) (299,472,677) (287,578,443) Total $ 193,451,488 $ 198,074,866 $ 101,019,583 $ 103,407,985 $ 294,471,071 $ 301,482,851 Capital Assets
Governmental Activities Business T ype Activities Total 2023 2022 2023 2022 2023 2022
Capital leases $ 17,834,000 $ 18,644,000 $ - $ - $ 17,834,000 $ 18,644,000 Loans payable 299,800 414,200 5,882,800 6,605,081 6,182,600 7,019,281 Bonds payable 3,988,528 4,163,695 29,314,348 31,044,894 33,302,876 35,208,589 Total $ 22,122,328 $ 23,221,895 $ 35,197,148 $ 37,649,975 $ 57,319,476 $ 60,871,870 Long-Term Debt
Governmental Activities Business Type Activities Total
City of Madera
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2023
18 In the last year, the County of Madera added approximately 306 jobs. In July 2022, the unemployment rate in the County was 5.6%, and rose to 7.7% by the end of June of 2023. During the year, the unemployment rate was its highest at 8.7% in March of 2023 and its lowest in September 2022 at 5.2%, according to the State of California Employment Development Department. The effects of inflation and higher interest rates contributed to the fluctuating rates throughout the past year. At the state level, unemployment averaged 4.2%.

The City of Madera has seen a mild increase in certain sectors in consumer spending, especially those sectors related to transportation, travel, fuel, and restaurants, while there has been a decrease in sales tax revenue for auto sales. This trend is reflected in overall sales tax revenue growth compared to last fiscal year. Sales tax figures for the next fiscal year are projected conservatively due to inflationary pressures and a slowing economy.

The expectation in fiscal year 2022-23 was that new home starts would decline as interest rates continued to rise.

However, the number of residential homes permitted surprisingly increased, with 247 permits issued. This was an increase of 42.8% as compared to the last fiscal year, where only 173 permits were issued. Although Madera has yet to see a large decline in home values seen in other areas, prices could begin to soften based on the recent rise in home mortgage interest rates.

The City has undertaken a number of measures to combat the effects of economic downturns. Voters approved Measure K in November of 2016 which added a half-cent sales tax to expand public safety services. Measure K sales tax brought in $7 million in additional sales tax revenue for fiscal year 2021-22. Measure K revenue has allowed the City to expand its public safety services and purchase much needed fire apparatus and equipment. The funding has allowed the city to establish economic stabilization reserves and an equipment replacement reserve to ensure reliable delivery of services in the future. The City has also purchased the property adjoining the police department, thereby allowing for the expansion of police operations.

In December 2019 the City entered into a lease purchase agreement to finance energy improvements and upgrades.

The projects include HVAC upgrades, LED lighting, solar streetlights, EV charging stations and PV solar. The City has continued to benefit from the upgrades with substantial savings in energy costs. Due to disruptions in the supply chain, the projects are scheduled to be fully completed early in 2024.

Economic development activity continues to remain stable and is seen through the addition of commercial, industrial, and residential buildings. The industrial vacancy rate continues to remain under 1%. In response, the City began a joint venture with a local company to develop Freedom Industrial Park, a 100-acre industrial site. The first tenant of the complex has moved in and employs about 100 individuals.

The City is actively reaching out to the business community to fill a future, second building that has already been approved for the site. The grounds will be “plug and play” ready, with full infrastructure and rail access. The intersection at Avenue 17 and State Route (SR) 99 remains a primary focus of the City’s economic development efforts. The site currently includes Love’s Madera Travel Center and more than $10 million in infrastructure improvements. It is expected that the improvements will spur additional development around the interchange. Another development just to the north of Madera is Matilda Torres High School. The school requires sewer and water infrastructure expansion, which has generated interest in development of properties in the immediate vicinity.

Water is and will remain a key element in the regional economy. The City is taking an active role in regional groundwater management efforts and is planning the next stages of improvements to address long-term water service for current residents and future development. The City received over $23 million in American Rescue Plan Act (ARPA) funds that have been 100% allocated to fund Water and Sewer Infrastructure projects by the City Council. Additionally, potential projects identified by City staff include the replacement of manual water meters, installation of new water meters, recoating of the water tower and the design of water main upgrades throughout the City. These additional projects have planned funding from revenue in the Water Utility Fund.

City of Madera
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2023
19 A new water storage tank, pump station and associated transmission mains are included in the Capital Improvement Program with the initial engineering efforts taking place in fiscal year 2022-23 and continuing into fiscal year 2023-

24. The tank represents a critical component of infrastructure necessary to counter continual drought conditions in the valley. Construction funding for the tank project will require the use of ARPA funds the City received in FY 2022-23.

The economic outlook for the year ahead remains cautiously optimistic. While the effects of inflation and higher interest rates have impaired economic growth in some industries, other industries have experienced growth including transportation, travel, fuel, restaurants, and on-line sales. Efforts to reduce inflation could have a significant impact on growth and the City’s future revenues. The City will continue with a prudent, conservative financial planning model as it makes budget decisions for the future.

Requests for Information
This financial report is designed to provide our citizens, taxpayers, customers, investors, and creditors with a general overview of the City of Madera's finances and to demonstrate the City's accountability for the money it receives. If you have any questions about this report or need additional financial information, contact the Director of Financial Services, City of Madera, 205 W. 4th Street, Madera, CA 93637.
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BASIC FINANCIAL STATEMENTS
21 This page intentionally left blank.
22 GOVERNMENT-WIDE FINANCIAL STATEMENTS
23 Component Unit
Housing
Authority of the
Governmental Business-Type City of Madera
Activities Activities Total September 30, 2022
ASSETS
Current assets:

Cash and investments 107,560,751 $ 54,903,937 $ 162,464,688 $ 9,145,512 $ Accounts receivable, net 708,939 5,141,195 5,850,134 66,851 Intergovernmental receivable 10,210,885 1,442,081 11,652,966 - Lease receivable - due within one year 22,570 36,784 59,354 - Notes receivable - due within one year - - - 41,368
Prepaid items 129,767 46,591 176,358 114,528
Inventories 82,881 - 82,881 -
Due from Fiduciary Funds 614,305 - 614,305 -
Internal balances 1,830,814 (1,830,814) - -
Total current assets 121,160,912 59,739,774 180,900,686 9,368,259 Noncurrent assets:

Restricted cash and investments 2,517,025 2,579,539 5,096,564 1,661,561 Lease receivable - due in more than one year 440,490 822,162 1,262,652 - Notes receivable - due in more than one year 8,003,577 - 8,003,577 2,864,337 Land held for resale 670,000 - 670,000 -
Capital assets:

Non-depreciable 37,434,042 12,669,597 50,103,639 675,827 Depreciable/amortizable, net 156,017,446 88,349,986 244,367,432 5,101,403 Total capital assets, net 193,451,488 101,019,583 294,471,071 5,777,230 Total noncurrent assets 205,082,580 104,421,284 309,503,864 10,303,128 Total assets 326,243,492 164,161,058 490,404,550 19,671,387

DEFERRED OUTFLOWS OF RESOURCES
Related to other post employment benefits 889,909 195,234 1,085,143 - Related to pensions 16,566,971 3,204,489 19,771,460 1,408,283 Total deferred outflows of resources 17,456,880 3,399,723 20,856,603 1,408,283 June 30, 2023
Statement of Net Position
City of Madera
Primary Government
See accompanying Notes to the Basic Financial Statements. 24 Component Unit
Housing
Authority of the
Governmental Business-Type City of Madera
Activities Activities Total September 30, 2022

LIABILITIES
Current liabilities:

Accounts payable 6,704,247 4,689,465 11,393,712 78,958
Accrued payroll 1,352,728 2,558 1,355,286 19,132
Deposits 627,873 394,626 1,022,499 204,337
Interest payable 107,801 1,832,193 1,939,994 -
Unearned revenue 20,177,569 173,828 20,351,397 74,654
Compensated absences - due within one year 1,360,147 363,316 1,723,463 65,584 Long-term debt - due within one year 1,200,643 2,335,920 3,536,563 135,986 Total current liabilities 31,531,008 9,791,906 41,322,914 578,651 Noncurrent liabilities:

Other non-current liabilities - - - 580,392
Total OPEB liability 3,742,428 821,042 4,563,470 -
Aggregate net pension liability 45,235,059 10,909,961 56,145,020 4,031,725 Compensated absences - due in more than one year 580,842 76,277 657,119 65,584 Long-term debt - due in more than one year 21,131,102 32,861,228 53,992,330 2,640,476 Total noncurrent liabilities 70,689,431 44,668,508 115,357,939 7,318,177 Total liabilities 54,460,414 102,220,439 156,680,853 7,896,828

DEFERRED INFLOWS OF RESOURCES
Related to service concession arrangement - 16,670 16,670 - Gain on refunding of debt - 261,333 261,333 -
Related to leases 444,536 845,189 1,289,725 -
Related to other post employment benefits 154,229 33,836 188,065 - Related to pensions 836,316 165,866 1,002,182 603,664
Total deferred inflows of resources 1,435,081 1,322,894 2,757,975 603,664

NET POSITION
Net investment in capital assets 173,636,768 65,561,102 239,197,870 3,000,768 Restricted:

Community development 12,751,924 - 12,751,924 -
Park development 98,941 - 98,941 -
Parking improvements 136,363 - 136,363 -
Public works and transportation 18,354,410 - 18,354,410 - Special assessment project 519,667 - 519,667 -
Law enforcement 368,640 - 368,640 -
Capital projects and improvements 18,047,981 - 18,047,981 - Housing services - - - 88,031
Debt service - 2,579,539 2,579,539 -
Total restricted 50,277,926 2,579,539 52,857,465 88,031 Unrestricted 16,130,158 43,636,832 59,766,990 9,490,379 Total net position $ 240,044,852 $ 111,777,473 $ 351,822,325 $ 12,579,178 Primary Government
City of Madera
Statement of Net Position (Continued)
June 30, 2023
See accompanying Notes to the Basic Financial Statements. 25 Operating Capital
Charges for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions Total Primary government:

Governmental activities:

General government $ 141,171 8,709,508 $ 665,637 $ - $ 806,808 $ Public protection 19,843,489 1,097,776 557,041 - 1,654,817 Social services (12,583) - - - -
Public ways and facilities 3,690,712 2,860,111 10,295,159 1,857,783 15,013,053 Community development 3,468,500 4,195,329 399,658 - 3,868,158 Culture and recreation 4,670,551 823,466 401,817 - 1,225,283 Interest on long-term debt 643,406 - - - -
Total governmental activities 41,740,412 8,391,024 12,319,312 1,857,783 22,568,119 Business-type activities:

Water 12,047,849 9,595,209 - 130,260 12,178,109
Sewer 11,696,850 12,320,078 - 38,100 11,734,950
Solid waste 9,379,389 8,178,710 - 109,442 8,288,152
Drainage operations 1,241,082 882,656 - 196,180 1,078,836 Local transit 2,994,770 3,904,438 - 586,780 3,581,550
Golf course 75,993 84,107 - - 84,107
Airport 1,227,634 348,230 - - 348,230
Total business-type activities 37,743,823 36,233,172 - 1,060,762 37,293,934 Total primary government $ 44,624,196 79,484,235 $ 12,319,312 $ 2,918,545 $ 59,862,053 $ Component unit:

Housing Authority of the City of Madera 9,134,196 $ 2,094,356 $ 7,703,656 $ - $ 9,798,012 $ Total component unit $ 2,094,356 9,134,196 $ 7,703,656 $ - $ 9,798,012 $

City of Madera
Statement of Activities
For the Year Ended June 30, 2023
Program Revenues
See accompanying Notes to the Basic Financial Statements. 26 Component Unit
Housing
Authority of the
Governmental Business-type City of Madera
Functions/Programs Activities Activities Total September 30, 2022 Primary government:

Governmental activities:

General government $ - (7,902,700) $ (7,902,700) $ - $
Public protection (18,188,672) - (18,188,672) -
Social services 12,583 - 12,583 -
Public ways and facilities 11,322,341 - 11,322,341 -
Community development - (327,171) (327,171) -
Culture and recreation (3,445,268) - (3,445,268) -
Interest on long-term debt (643,406) - (643,406) -
Total governmental activities (19,172,293) - (19,172,293) - Business-type activities:

Water 2,582,900 - 2,582,900 -
Sewer (585,128) - (585,128) -
Solid waste - (1,091,237) (1,091,237) -
Drainage operations - (162,246) (162,246) -
Local transit (322,888) - (322,888) -
Golf course - 8,114 8,114 -
Airport - (879,404) (879,404) -
Total business-type activities - (449,889) (449,889) -
Total primary government (449,889) (19,172,293) (19,622,182) - Component unit:

Housing Authority of the City of Madera - - - 663,816
Total component unit - - - 663,816
General Revenues and Transfers:

General revenues:

Taxes:

Property taxes 13,505,386 258,727 13,764,113 -
Sales and use taxes 19,291,534 - 19,291,534 -
Franchise taxes 841,540 - 841,540 -
Other taxes 2,281,598 - 2,281,598 -
Total taxes 35,920,058 258,727 36,178,785 -
Investment income 959,461 679,254 1,638,715 153,796
Gain on sale of capital assets - 52,605 52,605 -
Miscellaneous revenue 980,194 1,035,824 2,016,018 151,763 Transfers 1,917,609 (1,917,609) - -
Total general revenues and transfers 3,944,019 35,942,104 39,886,123 305,559 Change in net position 3,494,130 16,769,811 20,263,941 969,375 Net Position:

Beginning of year, as restated 108,283,343 223,275,041 331,558,384 11,609,803 End of year $ 111,777,473 240,044,852 $ 351,822,325 $ 12,579,178 $ For the Year Ended June 30, 2023
Statement of Activities (Continued)
City of Madera
Net (Expense) Revenue
and Changes in Net Position
See accompanying Notes to the Basic Financial Statements. 27 This page intentionally left blank.
28 FUND FINANCIAL STATEMENTS
29 This page intentionally left blank.
30 Governmental Funds Financial Statements
General Fund - This fund accounts for all revenues and expenditures used to finance the traditional services associated with a municipal government which are not accounted for in the other funds. In Madera, these services include general government, public protection, social services, public ways and facilities, community development, and culture and recreation.

General Development Impact Fee Fund - This fund accounts for and reports the proceeds of the AB1600 development impact fee monies that are restricted or committed to expenditures for the intended purposes.

Measure "T" Sales Tax Fund - This fund is used to account for the receipt of gasoline tax revenue paid to the City as a subvention from the State of California. These funds support maintenance activities and finance street construction projects as provided by State law.

American Rescue Plan Act Fund - This fund is used to account for the grant revenues and expenditures received through the American Rescue Plan Act.
31 General
Development Measure "T"
General Impact Sales Tax
Fund Fee Fund Fund
ASSETS
Cash and investments $ 36,869,010 $ 21,014,797 $ 14,321,143 Restricted cash and investments - - -
Accounts receivable, net 635,405 6,754 -
Intergovernmental receivable 5,122,668 139 1,667,785
Lease receivable 447,018 - -
Notes receivable - - -
Prepaid items 58,961 - -
Inventories 82,881 - -
Due from other funds 5,806,505 - -
Due from Fiduciary Funds - - -
Advances to other funds 12,240 - -
Land held for resale - - -
Total assets $ 49,034,688 $ 21,021,690 $ 15,988,928

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts payable $ 1,122,455 $ 2,345,910 $ 10,753
Accrued payroll 1,352,624 - -
Due to other funds - - -
Deposits payable - 627,799 -
Unearned revenues 214 - -
Total liabilities 2,475,293 2,973,709 10,753

Deferred inflows of resources:

Unavailable revenue 403,737 - 1,667,785
Related to leases 428,574 - -
Total deferred inflows of resources 832,311 - 1,667,785

Fund Balances:

Nonspendable 141,842 - -
Restricted 2,365,453 18,047,981 14,310,390
Committed 15,130,431 - -
Assigned 15,797,488 - -
Unassigned (deficit) 12,291,870 - -
Total fund balances 45,727,084 18,047,981 14,310,390
Total liabilities, deferred inflows of
resources, and fund balances $ 49,034,688 $ 21,021,690 $ 15,988,928 Major Funds
City of Madera
Balance Sheet
Governmental Funds
June 30, 2023
See accompanying Notes to the Basic Financial Statements. 32 Major Funds
American Non-major Total
Rescue Plan Governmental Governmental
Act Fund Funds Funds
ASSETS
Cash and investments $ 20,063,504 $ 9,560,900 $ 101,829,354 Restricted cash and investments - 2,517,025 2,517,025
Accounts receivable, net - 52,403 694,562
Intergovernmental receivable - 3,420,293 10,210,885
Lease receivable - 16,042 463,060
Notes receivable - 8,003,577 8,003,577
Prepaid items - 13,131 72,092
Inventories - - 82,881
Due from other funds - - 5,806,505
Due from Fiduciary Funds - 614,305 614,305
Advances to other funds - - 12,240
Land held for resale - 670,000 670,000
Total assets $ 20,063,504 $ 24,867,676 $ 130,976,486

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts payable $ - $ 2,993,807 $ 6,472,925
Accrued payroll - 13 1,352,637
Due to other funds - 3,987,931 3,987,931
Deposits payable - 74 627,873
Unearned revenues 20,063,504 113,851 20,177,569
Total liabilities 20,063,504 7,095,676 32,618,935

Deferred inflows of resources:

Unavailable revenue - 1,751,283 3,822,805
Related to leases - 15,962 444,536
Total deferred inflows of resources - 1,767,245 4,267,341

Fund Balances:

Nonspendable - 13,131 154,973
Restricted - 17,919,555 52,643,379
Committed - - 15,130,431
Assigned - - 15,797,488
Unassigned (deficit) - (1,927,931) 10,363,939
Total fund balances - 16,004,755 94,090,210
Total liabilities, deferred inflows of
resources, and fund balances $ 20,063,504 $ 24,867,676 $ 130,976,486 City of Madera
Balance Sheet (Continued)
Governmental Funds
June 30, 2023
See accompanying Notes to the Basic Financial Statements. 33 This page intentionally left blank.
34 Total Fund Balances - Total Governmental Funds $ 94,090,210 Unavailable revenues reported on the Governmental Fund Financial Statements resulting from activities in which revenues were earned but were not available are reclassified as revenues in the Government-Wide Financial Statements. 3,822,805 Capital Assets used in the governmental activities were not financial resources and therefore were not reported in the Governmental Funds Balance Sheet.

Government-Wide Statement of Net Position 193,451,488
Less: capital assets reported in Internal Service Funds (3,977,234) Total capital assets 189,474,254
Long-term liabilities are not due and payable in the current period and therefore were not reported in the Governmental Funds Balance Sheet.

Amount reported in Government-Wide Statement of Net Position Compensated absences - due within one year (1,360,147)
Compensated absences - due in more than one year (580,842) Long-term debt - due within one year (1,200,643)
Long-term debt - due in more than one year (21,131,102) Less: amount reported in Internal Service Funds:

Long-term debt - due within one year 94,498
Long-term debt - due in more than one year 96,792
Compensated absences - due within one year 141,992
Compensated absences - due in more than one year 59,899 Total long-term liabilities (23,879,553)
Interest payable on long-term debt did not require current financial resources. Therefore, interest payable was not reported as a liability in the governmental funds. (107,801) Aggregate net pension liability and total OPEB liability used in the governmental activities were not financial resources and therefore were not reported in the Governmental Funds Balance Sheet.

Net pension liability (45,235,059)
Total OPEB liability (3,742,428)
Less: amount reported in Internal Service Funds:

Net pension liability 4,010,475
Total OPEB liability 343,692
Total pension and OPEB (44,623,320)
Deferred outflows of resources related to OPEB and pensions are not available for current period and, therefore, are deferred in the governmental funds or not recorded in the governmental funds.

Amount reported in Government-Wide Statement of Net Position Deferred outflows of resources related to OPEB 889,909
Deferred outflows of resources related to pensions 16,566,971 Less: amount reported in Internal Service Funds:

Deferred outflows of resources related to OPEB (81,727) Deferred outflows of resources related to pensions (1,177,962) Total deferred outflows of resources 16,197,191
Deferred inflows of resources related to OPEB and pensions are not available for current period and, therefore, are deferred in the governmental funds or not recorded in the governmental funds.

Amount reported in Government-Wide Statement of Net Position Deferred inflows of resources related to OPEB (154,229) Deferred inflows of resources related to pensions (836,316) Less: amount reported in Internal Service Funds:

Deferred inflows of resources related to OPEB 14,164
Deferred inflows of resources related to pensions 60,973 Total deferred inflows of resources (915,408)
Internal service funds are used by management to charge the cost of fleet management, risk management, information technology, and building maintenance to individual funds. The assets and liabilities of the internal service funds are included in the governmental activities in the statement of net position. 5,986,474 Net Position of Governmental Activities $ 240,044,852
Amounts reported for Governmental Activities in the Statement of Net Position were different because:

City of Madera
Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position
June 30, 2023
See accompanying Notes to the Basic Financial Statements. 35 General
Development Measure "T"
General Impact Sales Tax
Fund Fee Fund Fund
REVENUES:

Property taxes 4,879,850 $ - $ - $
Sales and use taxes 19,291,534 - -
Other taxes 2,027,689 - -
Investment income (loss) 341,518 288,682 277,586
Franchise fees 841,540 - -
Licenses and permits 1,502,455 - -
Fines and forfeitures 465,127 - -
Intergovernmental 9,222,604 - 2,312,989
Charges for services 1,941,861 3,582,404 -
Miscellaneous 789,839 - -
Total revenues 3,871,086 41,304,017 2,590,575

EXPENDITURES:

Current:

General government 3,766,122 - -
Public protection 21,390,902 - -
Social services 181,934 - -
Public ways and facilities 2,025,586 1,223,881 2,578
Community development 5,031,074 - -
Culture and recreation 4,164,682 522,558 -
Capital outlay 624,105 674,490 218,651
Debt service:

Principal - 264,909 -
Interest and fiscal charges 173,244 - -
Total expenditures 2,420,929 37,622,558 221,229

REVENUES OVER (UNDER) EXPENDITURES 3,681,459 1,450,157 2,369,346 OTHER FINANCING SOURCES (USES):

Proceeds from sale of property 33,429 - -
Inception of subscription liability 23,636 - -
Transfers in 3,794,772 - -
Transfers out (382,358) (397,771) (897,474)
Total other financing sources (uses) 3,469,479 (397,771) (897,474) NET CHANGE IN FUND BALANCES 7,150,938 1,052,386 1,471,872 FUND BALANCES:

Beginning of year 38,576,146 16,995,595 12,838,518
End of year $ 45,727,084 $ 18,047,981 $ 14,310,390
Major Funds
For the Year Ended June 30, 2023
Governmental Funds
Statement of Revenues, Expenditures, and Changes in Fund Balances City of Madera
See accompanying Notes to the Basic Financial Statements. 36 Major Funds
American Non-major Total
Rescue Plan Governmental Governmental
Act Funds Funds
REVENUES:

Property taxes $ 894,132 - $ 5,773,982 $
Sales and use taxes - - 19,291,534
Other taxes 443,140 - 2,470,829
Investment income (loss) - 144,897 1,052,683
Franchise fees - - 841,540
Licenses and permits - - 1,502,455
Fines and forfeitures - 3,845 468,972
Intergovernmental 2,521,023 5,939,253 19,995,869
Charges for services - 64,570 5,588,835
Miscellaneous 623,006 - 1,412,845
Total revenues 8,112,843 2,521,023 58,399,544

EXPENDITURES:

Current:

General government - 108,653 3,874,775
Public protection 227,051 - 21,617,953
Social services - - 181,934
Public ways and facilities - 548,945 3,800,990
Community development - 147,329 5,178,403
Culture and recreation - - 4,687,240
Capital outlay 1,104,007 - 2,621,253
Debt service:

Principal 810,000 - 1,074,909
Interest and fiscal charges - 505,220 678,464
Total expenditures - 3,451,205 43,715,921

REVENUES OVER (UNDER) EXPENDITURES 2,521,023 4,661,638 14,683,623 OTHER FINANCING SOURCES (USES):

Proceeds from sale of property - - 33,429
Inception of subscription liability - - 23,636
Transfers in - 509,546 4,304,318
Transfers out (2,521,023) (1,908,224) (6,106,850)
Total other financing sources (uses) (2,521,023) (1,398,678) (1,745,467) NET CHANGE IN FUND BALANCES - 3,262,960 12,938,156
FUND BALANCES:

Beginning of year 12,741,795 - 81,152,054
End of year $ 16,004,755 - $ $ 94,090,210
City of Madera
Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Governmental Funds
For the Year Ended June 30, 2023
See accompanying Notes to the Basic Financial Statements. 37 Net Changes in Fund Balances - Total Governmental Funds $ 12,938,156 Governmental funds reported capital outlay as expenditures. However, in the Government-Wide Statement of Activities, the cost of those assets was allocated over their estimated useful lives as depreciation and amortization expenses. This is the amount of capital assets recorded in the current period (net of $375,645 added in internal service funds) ($457,618 of the governmental fund capital outlay balance were for repairs and maintenance expenditures). 2,163,634 In the Government-Wide Statement of Activities, donated assets are reported as a capital contribution. 673,005 Depreciation and amortization expense on capital assets was reported in the Government-Wide Statement of Activities and Changes in Net Position, but they did not require the use of current financial resources. Therefore, depreciation and amortization expense, net of internal service funds of $678,937, was not reported as expenditures in the Governmental Funds. (7,352,553)
The net effect of various miscellaneous transactions involving capital assets (i.e. sales, trade-ins, and donations) decreased net position. (41,381)
Issuance of long-term liabilities provides current financial resources to governmental funds, but the issuance increased longterm liabilities in the Government-Wide Statement of Net Position.

Subscription liability (23,636)
Repayment of long-term liabilities was an expenditures in governmental funds, but the repayment reduced long-term liabilities in the Government-Wide Statement of Net Position.

Principal payment of long-term debt, net of internal services funds of $97,405. 1,074,909 Amortization of bond premium 30,167
Interest expense on long-term debt was reported in the Government-Wide Statement of Activities, but it did not require the use of current financial resources. This amount represented the changes in accrued interest from prior year. 4,891 Compensated absences expenses reported in the Government-Wide Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures in the governmental funds. (net of $19,228 deducted in internal service funds). (90,744)
Revenues in the Government-Wide Statement of Activities that do not provide current financial resources and are not reported as revenue in the governmental funds. 1,355,283 Certain pension expenses reported in the Government-Wide Statement of Activities do not require the use of current financial resources and therefore, are not reported as expenditures in governmental funds.

Changes in pension related deferred outflows of resources 8,003,521 Changes in net pension liabilities (15,389,948)
Changes in pension related deferred inflows of resources 13,998,678 Certain OPEB expenses reported in the Government-Wide Statement of Activities do not require the use of current financial resources and therefore, are not reported as expenditures in governmental funds.

Changes in OPEB related deferred outflows of resources 214,494 Changes in total OPEB liabilities (255,567)
Changes in OPEB related deferred inflows of resources (44,165) The internal service funds are used by management to charge the costs of fleet maintenance, facilities maintenance, and technology to individual funds. The net revenue of certain activities of internal service funds is reported with governmental activities. (488,933)
Change in Net Position of Governmental Activities $ 16,769,811 Amounts reported for Governmental Activities in the Statement of Net Position were different because:

City of Madera
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities and Changes in Net Position For the Year Ended June 30, 2023
See accompanying Notes to the Basic Financial Statements. 38 Proprietary Funds Financial Statements
Water Fund - This fund is used to account for the activities of the City's water pumping, treatment and distribution operations.

Sewer Fund - This fund is used to account for the activities of the City's sewer collection and treatment operations.

Solid Waste Fund - This fund is used to account for the activities of the City's solid waste operations.

Drainage Operations Fund - This fund is used to account for the activities of the City's drainage operations.

Internal Service Funds - These funds are used to provide goods and services by one department or agency to other departments or agencies of the City on a cost reimbursement basis. 39 Drainage
Water Sewer Solid Waste Operations
Fund Fund Fund Fund
ASSETS
Current assets:

Cash and investments 38,174,131 $ 13,532,216 $ 1,064,518 $ 1,041,059 $ Accounts receivable, net 1,363,686 2,509,354 1,125,117 90,925 Intergovernmental receivable 100 941 - -
Lease receivable - due within one year - - - -
Prepaid items 23,828 3,274 - 9,410
Total current assets 40,707,413 14,900,117 2,189,635 1,141,394 Noncurrent assets:

Restricted cash and investments 234,434 2,345,105 - -
Lease receivable - due in more than one year - - - -
Capital assets:

Non-depreciable 788,024 3,283,609 - 4,039,808
Depreciable, net 21,668,626 35,498,082 - 14,222,692
Total capital assets 22,456,650 38,781,691 - 18,262,500 Total noncurrent assets 22,691,084 41,126,796 - 18,262,500 Total assets 63,398,497 56,026,913 2,189,635 19,403,894

DEFERRED OUTFLOWS OF RESOURCES
Related to OPEB 99,887 68,105 18,162 4,540
Related to pensions 1,164,401 1,087,929 359,298 212,347 Total deferred outflows of resources 1,156,034 1,264,288 377,460 216,887

LIABILITIES
Current liabilities:

Accounts payable 1,531,970 546,203 2,158,734 7,957
Accrued payroll 130 90 12 7
Due to other funds - - - -
Interest payable 83,192 309,727 - -
Deposits payable - 1,818,128 - -
Unearned revenue 83,995 - 89,633 200
Compensated absences - due within one year 112,647 168,932 31,017 21,435 Long-term debt - due within one year 1,637,000 537,120 - - Total current liabilities 4,223,467 2,605,667 2,279,396 29,599 Noncurrent liabilities:

Advances from other funds - - - -
Total OPEB liability 286,410 420,068 76,376 19,094
Aggregate net pension liability 3,703,950 3,964,307 1,223,260 722,954 Compensated absences - due in more than one year 16,602 - 39,709 11,434 Long term debt - due in more than one year 8,322,228 24,539,000 - - Total noncurrent liabilities 12,723,205 28,529,360 1,339,345 753,482 Total liabilities 16,946,672 31,135,027 3,618,741 783,081

DEFERRED INFLOWS OF RESOURCES
Related to service concession arrangement - - - -
Gain on refunding of debt 17,530 243,803 - -
Related to leases - - - -
Related to OPEB 17,311 11,803 3,148 787
Related to pensions 56,312 60,270 18,597 10,991
Total deferred inflows of resources 311,918 95,111 21,745 11,778

NET POSITION
Net investment in capital assets 13,579,772 12,361,888 - 18,262,500 Restricted:

Debt service 234,434 2,345,105 - -
Unrestricted (deficit) 33,806,796 11,029,009 (1,073,391) 563,422 Total net position $ 47,621,002 $ 25,736,002 $ (1,073,391) $ 18,825,922 Major Funds
City of Madera
Statement of Net Position
Proprietary Funds
June 30, 2023
See accompanying Notes to the Basic Financial Statements. 40 Governmental
Activities
Non-major Internal
Funds Total Service Funds
ASSETS
Current assets:

Cash and investments 1,092,013 $ $ 54,903,937 $ 5,731,397 Accounts receivable, net 5,141,195 52,113 14,377
Intergovernmental receivable 1,441,040 1,442,081 -
Lease receivable - due within one year 36,784 36,784 -
Prepaid items 10,079 46,591 57,675
Total current assets 2,632,029 61,570,588 5,803,449
Noncurrent assets:

Restricted cash and investments - 2,579,539 -
Lease receivable - due in more than one year 822,162 822,162 - Capital assets:

Non-depreciable 4,558,156 12,669,597 3,026
Depreciable, net 16,960,586 88,349,986 3,974,208
Total capital assets 21,518,742 101,019,583 3,977,234
Total noncurrent assets 22,340,904 104,421,284 3,977,234 Total assets 24,972,933 165,991,872 9,780,683

DEFERRED OUTFLOWS OF RESOURCES
Related to OPEB 4,540 195,234 81,727
Related to pensions 380,514 3,204,489 1,177,962
Total deferred outflows of resources 3,399,723 385,054 1,259,689

LIABILITIES
Current liabilities:

Accounts payable 444,601 4,689,465 231,322
Accrued payroll 2,319 2,558 91
Due to other funds 1,818,574 1,818,574 -
Interest payable 1,707 394,626 -
Deposits payable 1,832,193 14,065 -
Unearned revenue - 173,828 -
Compensated absences - due within one year 363,316 29,285 141,992 Long-term debt - due within one year 2,335,920 161,800 94,498 Total current liabilities 2,472,351 11,610,480 467,903
Noncurrent liabilities:

Advances from other funds 12,240 12,240 -
Total OPEB liability 821,042 19,094 343,692
Aggregate net pension liability 10,909,961 1,295,490 4,010,475 Compensated absences - due in more than one year 8,532 76,277 59,899 Long term debt - due in more than one year 32,861,228 - 96,792 Total noncurrent liabilities 1,335,356 44,680,748 4,510,858 Total liabilities 56,291,228 3,807,707 4,978,761

DEFERRED INFLOWS OF RESOURCES
Related to service concession arrangement 16,670 16,670 - Gain on refunding of debt - 261,333 -
Related to leases 845,189 845,189 -
Related to OPEB 787 33,836 14,164
Related to pensions 19,696 165,866 60,973
Total deferred inflows of resources 1,322,894 882,342 75,137

NET POSITION
Net investment in capital assets 65,561,102 21,356,942 3,785,944 Restricted:

Debt service 2,579,539 - -
Unrestricted (deficit) (689,004) 43,636,832 2,200,530
Total net position $ 20,667,938 $ 111,777,473 $ 5,986,474 City of Madera
Statement of Net Position (Continued)
Proprietary Funds
June 30, 2023
See accompanying Notes to the Basic Financial Statements. 41 Drainage
Water Sewer Solid Waste Operations
Fund Fund Fund Fund
OPERATING REVENUES:

Charges for services 12,047,849 $ 11,696,850 $ 8,178,710 $ 882,656 $ Miscellaneous revenue 252,528 8,198 636,982 182
Total operating revenues 11,705,048 12,300,377 8,815,692 882,838 OPERATING EXPENSES:

Salaries and benefits 3,133,737 3,326,191 746,121 580,694 General and administrative 2,367,466 2,134,404 8,560,695 219,346 Supplies and miscellaneous 549,958 444,495 62,104 60,311 Parts and supplies 21,347 2,249,649 - -
Utilities 2,360,492 470,960 10,469 31,937
Depreciation 907,175 2,451,263 - 348,794
Total operating expenses 11,076,962 9,340,175 9,379,389 1,241,082 OPERATING INCOME (LOSS) 628,086 2,960,202 (563,697) (358,244) NONOPERATING REVENUES (EXPENSES):

Investment income 450,765 132,388 34,770 13,508
Property taxes - 162,645 - -
Gain on sale of capital assets 11,552 41,053 - -
Interest expense (255,034) (1,243,116) - -
Total nonoperating revenues (expenses) 207,283 (907,030) 34,770 13,508

INCOME (LOSS) BEFORE CAPITAL
CONTRIBUTIONS AND TRANSFERS 3,167,485 (278,944) (528,927) (344,736)

CAPITAL CONTRIBUTIONS AND TRANSFERS
Capital contributions 130,260 38,100 - 196,180
Capital grants - - 109,442 -
Transfers in 310,733 2,464,056 50,000 -
Transfers out (300,579) (154,041) (610,897) (61,091)
Total capital contributions and transfers 140,414 2,348,115 (451,455) 135,089 Changes in net position 3,307,899 2,069,171 (980,382) (209,647) NET POSITION (DEFICIT):

Beginning of year 44,313,103 23,666,831 (93,009) 19,035,569 End of year $ 47,621,002 $ 25,736,002 $ (1,073,391) $ 18,825,922 Major Funds
City of Madera
Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds
For the Year Ended June 30, 2023
See accompanying Notes to the Basic Financial Statements. 42 Governmental
Activities
Non-major Internal
Funds Total Service Funds
OPERATING REVENUES:

Charges for services $ 3,427,107 $ 36,233,172 $ 5,479,219 Miscellaneous revenue 137,934 1,035,824 28,843
Total operating revenues 3,565,041 37,268,996 5,508,062 OPERATING EXPENSES:

Salaries and benefits 1,367,144 9,153,887 3,334,219
General and administrative 2,275,994 15,557,905 903,975 Supplies and miscellaneous 485,092 1,601,960 329,501
Parts and supplies 322,965 2,593,961 157,958
Utilities 18,331 2,892,189 476,185
Depreciation 725,995 4,433,227 678,937
Total operating expenses 5,195,521 36,233,129 5,880,775 OPERATING INCOME (LOSS) (1,630,480) 1,035,867 (372,713) NONOPERATING REVENUES (EXPENSES):

Investment income 47,823 679,254 -
Property taxes 96,082 258,727 -
Gain on sale of capital assets - 52,605 -
Interest expense (12,544) (1,510,694) (1,143)
Total nonoperating revenues (expenses) 131,361 (520,108) (1,143)

INCOME (LOSS) BEFORE CAPITAL
CONTRIBUTIONS AND TRANSFERS (1,499,119) 515,759 (373,856)

CAPITAL CONTRIBUTIONS AND TRANSFERS
Capital contributions 13,819 378,359 -
Capital grants 572,961 682,403 -
Transfers in 298,804 3,123,593 57,000
Transfers out (79,376) (1,205,984) (172,077)
Total capital contributions and transfers 806,208 2,978,371 (115,077) Changes in net position (692,911) 3,494,130 (488,933)
NET POSITION (DEFICIT):

Beginning of year 21,360,849 108,283,343 6,475,407
End of year $ 20,667,938 $ 111,777,473 $ 5,986,474
For the Year Ended June 30, 2023
City of Madera
Statement of Revenues, Expenses, and Changes in Net Position (Continued) Proprietary Funds
See accompanying Notes to the Basic Financial Statements. 43 Drainage
Water Sewer Solid Waste Operations
Fund Fund Fund Fund
CASH FLOWS FROM OPERATING ACTIVITIES:

Cash received from customers 11 $ 11 ,902,550 $ 7 ,329,461 $ 867 ,897,075 $ ,758 Cash payments to suppliers for goods and services (5,365,043) (5,781,991) (6,492,897) (326,203) Cash payments to employees for services (2,373,069) (2,323,589) (747,791) (488,283) Other operating revenues and expenses 8 252,528 ,198 182 636,982 Net cash provided by (used in) operating activities 3,232,079 4,416,966 1,293,369 53,454 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:

Property taxes 162 - - ,645 -
Due to other funds - - - -
Advances from other funds - - - -
Transfers from other funds 310 2 ,733 50 ,464,056 - ,000 Transfers to other funds (300,579) (154,041) (610,897) (61,091) Net cash provided by (used in) noncapital financing activities 2,472,660 10,154 (560,897) (61,091)

CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:

Capital grants - - 109 - ,442
Acquisition of capital assets (99,582) (216,016) - -
Principal payment of long-term debt (539,479) (1,852,307) - - Interest paid on debt (242,384) (1,018,041) - -
Net cash provided by (used in) capital and related financing activities (881,445) (3,086,364) 109,442 - CASH FLOWS FROM INVESTING ACTIVITIES:

Interest from investments 132,388 450,765 34,770 13,508 Net cash provided by investing activities 132,388 450,765 34,770 13,508 Net change in cash and cash equivalents 3,996,440 2,750,763 5,871 876,684 CASH AND CASH EQUIVALENTS:

Beginning of year 13,126,558 34,412,125 187,834 1,035,188 End of year $ 15,877,321 38,408,565 $ 1,064,518 $ 1,041,059 $

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

Cash and investments $ 38,174,131 $ 13,532,216 $ 1,064,518 $ 1,041,059 Restricted cash and investments 234,434 2,345,105 - -
Total cash and cash equivalents $ 15,877,321 38,408,565 $ 1,064,518 $ 1,041,059 $

RECONCILIATION OF OPERATING INCOME (LOSS) TO NET
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:

Operating income (loss) $ 628 2,960,202 $ ,086 $ (563,697) $ (358,244) Adjustments to reconcile operating (loss) to net
cash provided by (used in) operating activities:

Depreciation 2 907,175 - ,451,263 348 ,794
Changes in operating assets and liabilities, and
deferred outflows and inflows of resources:

Accounts receivable, net (383,670) (363,631) (281,635) (14,898) Intergovernmental receivable (100) (326) - - Lease receivable - - - - Prepaid items 5,165 3,038 38 (274) Deferred outflows - OPEB related (26,510) (18,075) (4,821) (1,205) Deferred outflows - pension related (626,844) (728,814) (96,173) (102,693) Accounts payable (70,945) (485,521) 2,140,333 (14,335)
Accrued payroll (52,937) (49,884) (17,678) (10,286)
Deposits payable - 246,071 - -
Unearned revenue (7,600) (3,432) - -
Compensated absences (20,505) (4,821) 9,123 67
Aggregate net pension liability 2 1,829,402 226 ,172,482 277 ,383 ,177 Total OPEB liability 21 31,586 5 ,536 ,743 1,436
Deferred inflows - lease related - - - - Deferred inflows - OPEB related 5,458 3,722 993 248 Deferred inflows - pension related (378,982) (393,544) (125,240) (72,333) Total adjustments 1,456,764 2,603,993 1,857,066 411,698 Net cash provided by (used in) operating activities $ 3 4,416,966 $ 1 ,232,079 $ 53 ,293,369 $ ,454 NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES:

Contributed property, plant and equipment $ 130,260 $ 38,100 $ - $ 196,180 Total noncash capital and related financing activities $ 38,100 130,260 $ - $ 196,180 $ Major Funds
City of Madera
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2023
See accompanying Notes to the Basic Financial Statements. 44 Governmental
Activities
Non-major Internal
Funds Total Service Funds
CASH FLOWS FROM OPERATING ACTIVITIES:

Cash received from customers $ 34 2,550,388 $ 5 ,547,232 $ ,470,819 Cash payments to suppliers for goods and services (2,832,535) (20,798,669) (1,835,447) Cash payments to employees for services (791,680) (6,724,412) (2,250,683) Other operating revenues and expenses 1 137,934 28 ,035,824 ,843 Net cash provided by (used in) operating activities (935,893) 8,059,975 1,413,532 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:

Property taxes 258 96,082 - ,727
Due to other funds 1 1,011,813 - ,011,813
Advances from other funds (24,480) (24,480) -
Transfers from other funds 3 298,804 57 ,123,593 ,000
Transfers to other funds (79,376) (1,205,984) (172,077) Net cash provided by (used in) noncapital financing activities 3,163,669 1,302,843 (115,077)

CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:

Capital grants 682 572,961 - ,403
Acquisition of capital assets (1,009,568) (1,325,166) (324,159) Principal payment of long-term debt (631,976) (3,023,762) (97,405) Interest paid on debt (14,461) (1,274,886) (1,143)
Net cash provided by (used in) capital and related financing activities (1,083,044) (4,941,411) (422,707) CASH FLOWS FROM INVESTING ACTIVITIES:

Interest from investments 679,254 47,823 -
Net cash provided by investing activities 47,823 679,254 - Net change in cash and cash equivalents (668,271) 6,961,487 875,748 CASH AND CASH EQUIVALENTS:

Beginning of year 1,760,284 4,855,649 50,521,989
End of year $ 1,092,013 $ 5,731,397 57,483,476 $

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

Cash and investments $ 1,092,013 $ 54,903,937 $ 5,731,397 Restricted cash and investments 2,579,539 - -
Total cash and cash equivalents $ 1,092,013 $ 5,731,397 57,483,476 $

RECONCILIATION OF OPERATING INCOME (LOSS) TO NET
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:

Operating income (loss) $ (1,630,480) $ 1,035,867 $ (372,713) Adjustments to reconcile operating (loss) to net
cash provided by (used in) operating activities:

Depreciation 4 725,995 678 ,433,227 ,937
Changes in operating assets and liabilities, and
deferred outflows and inflows of resources:

Accounts receivable, net (12,251) (1,056,085) (8,400)
Intergovernmental receivable (857,089) (857,515) - Lease receivable 52 52,768 - ,768 Prepaid items (362) 7,605 71,652 Deferred outflows - OPEB related (1,205) (51,816) (21,692) Deferred outflows - pension related (301,759) (1,856,283) (763,670) Accounts payable 1 270,209 ,839,741 (39,480)
Accrued payroll (16,397) (147,182) (45,571)
Deposits payable (100) - 245,971
Unearned revenue - (11,032) -
Compensated absences (7,516) (23,652) (5,832)
Aggregate net pension liability 5 1,015,447 2 ,520,891 ,293,019 Total OPEB liability 1,436 25 61,737 ,843
Deferred inflows - lease related (60,047) (60,047) - Deferred inflows - OPEB related 10 248 4 ,669 ,466 Deferred inflows - pension related (114,790) (1,084,889) (403,027) Total adjustments 7,024,108 694,587 1,786,245
Net cash provided by (used in) operating activities $ (935,893) $ 1 8,059,975 $ ,413,532 NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES:

Contributed property, plant and equipment $ 13,819 $ 378,359 $ - Total noncash capital and related financing activities $ 378,359 13,819 $ - $ Statement of Cash Flows (Continued)
City of Madera
Proprietary Funds
For the Year Ended June 30, 2023
See accompanying Notes to the Basic Financial Statements. 45 This page intentionally left blank.
46 Fiduciary Funds Financial Statements
Custodial Funds - These funds are used to report fiduciary activities that are not required to be reported in pension (and other employee benefit) trust funds, investment trust funds, or private purpose trust funds. This includes the Madera General Deposit Custodial Fund and Community Facilities Districts Custodial Fund.

RDA Successor Agency Private Purpose Trust Fund - This fund is used to account for monies received from the Madera County Auditor Controller for the repayment of the enforceable obligations of the former Madera Community Development Agency. These funds are restricted for the sole purpose of payment of items on an approved Recognized Payment Obligation Schedule (ROPS).
47 This page intentionally left blank.
48 RDA
Successor Agency
Custodial Private Purpose
Funds Trust Fund
ASSETS
Cash and investments $ 2,842,474 $ 6,095,628
Accounts receivable, net 1,658 57,687
Prepaid items 925 3,286
Restricted cash and investments with fiscal agent 48,600 420 Land held for resale - 278,207
Capital asset, not being depreciated - 16,701
Capital asset, being depreciated, net - 1,493,748
Total assets 2,893,657 7,945,677

LIABILITIES
Accounts payable 16,259 118
Interest payable - 457,737
Due to City 614,305 -
Long-term debt - due within one year - 1,515,000
Long-term debt - due in more than one year 32,059,973 - Total liabilities 630,564 34,032,828

NET POSITION (DEFICIT)
Restricted for:

Individuals, organizations, and other governments 2,263,093 - Held in trust for dissolution of RDA (26,087,151) -
Total net position (deficit) $ 2,263,093 $ (26,087,151) City of Madera
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2023
See accompanying Notes to the Basic Financial Statements. 49 RDA
Successor Agency
Custodial Private Purpose
Funds Trust Fund
ADDITIONS:

Special assessments for other governments $ 184,968 $ - Investment income 131,969 95,272
RDA property tax trust fund distribution - 3,049,122
Other payments received - 27,181
Total additions 316,937 3,171,575
DEDUCTIONS:

Administration 9,780 7,385
Project payments - 14,075
Payments on conduit bonds - principal 88,740 -
Payments on conduit bonds - interest 80,916 -
Depreciation - 34,738
Interest expense - 1,154,077
Total deductions 179,436 1,210,275
Change in net position 137,501 1,961,300
NET POSITION (DEFICIT):

Beginning of year 2,125,592 (28,048,451)
End of year $ 2,263,093 $ (26,087,151)
City of Madera
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the Year Ended June 30, 2023
See accompanying Notes to the Basic Financial Statements. 50 51

NOTES TO THE BASIC FINANCIAL STATEMENTS
52 This page intentionally left blank.

City of Madera
Index of Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
53 Note 1 – Summary of Significant Accounting Policies ............................................................................................... 57 A. Financial Reporting Entity .......................................................................................................................... 57 B. Basis of Presentation, Accounting and Measurement Focus ....................................................................... 58 C. Deferred Outflows and Inflows of Resources ............................................................................................. 62 D. Cash, Cash Equivalents and Investments .................................................................................................... 62 E. Restricted Assets ......................................................................................................................................... 63 F. Receivables .................................................................................................................................................. 64 G. Interfund Transactions ................................................................................................................................. 64 H. Inventory...................................................................................................................................................... 64 I. Prepaid Items ............................................................................................................................................... 64 J. Leases .......................................................................................................................................................... 64 K. Subscription-Based Information Technology Arrangements (SBITAs) ..................................................... 65 L. Land Held for Resale ................................................................................................................................... 66 M. Capital Assets .............................................................................................................................................. 66 N. Long-Term Debt .......................................................................................................................................... 67 O. Compensated Absences ............................................................................................................................... 67 P. Pension Plans ............................................................................................................................................... 68 Q. Other Postemployment Benefits (OPEB) .................................................................................................... 68 R. Fund Balances ............................................................................................................................................. 69 S. Net Position ................................................................................................................................................. 69 T. Property Taxes ............................................................................................................................................. 70 U. Use of Accounting Estimates ...................................................................................................................... 70 V. Implementation of New GASB Pronouncements for the Year Ended June 30, 2023 ................................. 70 W. Upcoming Government Accounting Standards Implementations ............................................................... 72 Note 2 – Cash and Investments – City ......................................................................................................................... 72 A. Summary...................................................................................................................................................... 72 B. Demand Deposits ......................................................................................................................................... 73 C. Investments Authorized by the California Government
Code and the City’s Investment Policy ................................................................................................. 74 D. Investments Authorized by Debt Agreements ............................................................................................. 75 E. Fair Value Measurement ............................................................................................................................. 75 F. Risk Disclosure ............................................................................................................................................ 76 G. Investment in State Investment Pool ........................................................................................................... 78 Note 3 – Cash and Investments – Component Unit .................................................................................................... 78 A. Summary...................................................................................................................................................... 78 B. Demand Deposits ......................................................................................................................................... 79 C. Investments Authorized by the California Government
Code and the Housing Authority’s Investment Policy .......................................................................... 79 D. Risk Disclosure ............................................................................................................................................ 79 E. Investment in State Investment Pool ........................................................................................................... 81 Note 4 – Notes Receivables ........................................................................................................................................... 82 A. Governmental Activities .............................................................................................................................. 82 B. Component Unit .......................................................................................................................................... 83 City of Madera
Index of Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023
54 Note 5 – Lease Receivable............................................................................................................................................. 84 A. Governmental Activities .............................................................................................................................. 84 B. Business-Type Activities ............................................................................................................................. 85 Note 6 – Interfund Receivables, Payables, and Transfers ......................................................................................... 86 A. Due To / From Other Funds ........................................................................................................................ 86 B. Transfers ...................................................................................................................................................... 86 C. Long-Term Absences .................................................................................................................................. 87 Note 7 – Due to Fiduciary Funds ................................................................................................................................. 87 Note 8 – Capital Assets ................................................................................................................................................. 88 A. Governmental Activities .............................................................................................................................. 88 B. Business-Type Activities ............................................................................................................................. 89 C. Fiduciary Fund Financial Statements .......................................................................................................... 90 D. Component Unit .......................................................................................................................................... 90 Note 9 – Long-Term Liabilities .................................................................................................................................... 91 A. Governmental Activities .............................................................................................................................. 91 B. Business-Type Activities ............................................................................................................................. 94 C. Fiduciary Fund Financial Statements .......................................................................................................... 96 D. Component Unit .......................................................................................................................................... 98 Note 10 – Special Assessment Debt with No City Commitment ............................................................................... 99 Note 11 – Compensated Absences ................................................................................................................................ 99 A. Governmental Activities .............................................................................................................................. 99 B. Business-Type Activities ........................................................................................................................... 100 C. Component Unit ........................................................................................................................................ 100 Note 12 – Risk Management....................................................................................................................................... 100 Note 13 – Pension Plans .............................................................................................................................................. 102 A. Summary.................................................................................................................................................... 102 B. City Miscellaneous Plan ............................................................................................................................ 103 C. City Safety Plan ......................................................................................................................................... 108 D. Component Unit Miscellaneous Plan ........................................................................................................ 113 Note 14 – Other Postemployment Benefits ............................................................................................................... 119 A. Summary.................................................................................................................................................... 119 B. General Information about OPEB ............................................................................................................. 119 C. Total OPEB Liability, OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB ........................................................................................................ 120 City of Madera
Index of Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023
55 Note 15 – Deferred Compensation Plan .................................................................................................................... 122 A. City ............................................................................................................................................................ 122 B. Component Unit ........................................................................................................................................ 123 Note 16 – Service Concession Agreement ................................................................................................................. 123 Note 17 – Other Required Disclosures ...................................................................................................................... 123 A. Deficit Fund Balances/Net Position .......................................................................................................... 123 B. Expenditures Exceeding Appropriations................................................................................................... 123 Note 18 – Fund Balance Classification ...................................................................................................................... 124 Note 19 – Net Investment in Capital Assets .............................................................................................................. 125 Note 20 – Prior Period Adjustments ......................................................................................................................... 125 A. Government-Wide Financial Statements .................................................................................................. 125 Note 21 – Commitments and Contingencies ............................................................................................................. 125 A. Litigation ................................................................................................................................................... 125 B. Contingent Liabilities ................................................................................................................................ 126 C. Federal and State Grants ........................................................................................................................... 126 D. Contractual Commitments ........................................................................................................................ 126 E. Encumbrances ........................................................................................................................................... 127 56 This page intentionally left blank.

City of Madera
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
57 Note 1 – Summary of Significant Accounting Policies
The basic financial statements of the City of Madera, California (the “City”) have been prepared in conformity with Accounting Principles Generally Accepted in the United States of America (“U.S. GAAP”) as applied to governmental agencies. The Governmental Accounting Standards Board (“GASB”) is the accepted standard setting body for establishing governmental accounting and financial reporting standards in the United States. The more significant of the City’s accounting policies are described below.

A. Financial Reporting Entity
The City was incorporated in 1907 under the general laws of the State of California. The City operates under a Council-Manager form of government and provides the following services: public protection, health and social services, public ways and facilities, community development (planning, building and zoning), culture-recreation, public utilities (water, sewer, solid waste, and drainage operations), airport services, local transportation, golf course, and general administrative services.

Blended Component Units
The financial reporting entity consists of the primary government, the City, and its component units. Component units are legally separate entities for which the elected officials of the primary government are financially accountable. In addition, component units can be other organizations for which the primary government is accountable and their exclusion would cause the reporting entity’s financial statements to be misleading or incomplete.

Blended component units, although legally separate entities, are, in substance part of the government’s operation.

As a result, data from these units are combined with data of the primary government. Discretely presented component units, on the other hand, are reported in a separate column in the combined financial statements to emphasize that they are legally separate from the government.

Although the following are legally separate from the City, they have been “blended” as though they are part of the City because the component unit’s governing body is substantially the same as the City’s and there is a financial benefit or burden relationship between the City and the component unit; management of the City has operational responsibilities for the component units; and/or the component units provide services entirely, or almost entirely, to the City or otherwise exclusively, or almost exclusively, benefits the City, even though it does not provide services directly to it.

Madera Public Financing Authority (Financing Authority) The Madera Public Financing Authority (“Financing Authority”) was created in 1989. The Financing Authority is a joint exercise of joint powers. The City Council serves as directors of the Financing Authority. The purpose of the Financing Authority is to act as a financing/lending type of entity only. No separate annual financial statements are prepared for the Financing Authority. Since the City Council previously served as the government board for this component unit, the City’s component unit was considered to be a blended component unit.

Blended component units, although legally separate entities, are in substance, part of the City’s operations and financial information was reported with the primary government.

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
58 Note 1 – Summary of Significant Accounting Policies (Continued) A. Financial Reporting Entity (Continued)
Discretely Presented Component Units
A discretely presented component unit is reported in a separate column in the government-wide financial statements to emphasize that it is legally separate from the City.

Housing Authority of the City of Madera (Housing Authority) The Housing Authority of the City of Madera (“Housing Authority”) is a governmental entity authorized in accordance with state law to engage in the development, acquisition, leasing, and administration of low-rent housing programs. The Housing Authority is governed by a Board of Commissioners, which is comprised of members of the City Council. Management of the Housing Authority is appointed and held accountable to the Governing Board. The Housing Authority has a September 30 year end in order to align with other Housing Authorities in California. The Housing Authority’s September 30 fiscal year-end audited financial statements are included in the City’s basic financial statements as a discretely presented component unit. Complete financial statements for the Housing Authority may be obtained from the administrative offices located at 205 North G St, Madera, CA 93637.

The Housing Authority and the City have different fiscal years, which can result in timing differences in transactions between the Housing Authority and the City as noted in the basic financial statements.

B. Basis of Presentation, Accounting and Measurement Focus The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for by providing a separate set of self-balancing accounts that comprise its assets, deferred outflows of resources, liabilities, deferred inflows of resources, fund equity, revenues and expenditures or expenses, as appropriate. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance-related legal and contractual provisions. The minimum number of funds is maintained in accordance with legal and managerial requirements.

Government-Wide Financial Statements
The City’s Government-Wide Financial Statements include a Statement of Net Position and a Statement of Activities and Changes in Net Position. These statements present summaries of governmental and business-type activities for the City accompanied by a total column. Fiduciary activities of the City are not included in these statements.

These financial statements are presented on an “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all of the City’s assets 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 liability is incurred.

Under the accrual basis of accounting, revenues, expenses, gains, losses, assets, deferred outflows of resources, liabilities, and deferred inflows of resources resulting from exchange and exchange-like transactions are recognized when the exchange takes place.

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
59 Note 1 – Summary of Significant Accounting Policies (Continued) B. Basis of Presentation, Accounting and Measurement Focus (Continued) Government-Wide Financial Statements (Continued)
Revenues, expenses, gains, losses, assets, deferred outflows of resources, liabilities and deferred inflows of resources resulting from non-exchange transactions are recognized in accordance with the requirements of U.S.

GAAP. Program revenues include charges for services, special assessments, and payments made by parties outside of the reporting government's citizenry if that money is restricted to a particular program. Program revenues are netted with program expenses in the statement of activities to present the net cost of each program.

Program revenues for the City are classified in three categories:
 Charges for services
 Operating grants and contributions
 Capital grants and contributions
Certain eliminations have been made in regards to interfund activities, payables and receivables. All internal balances in the Statement of Net Position have been eliminated 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 and Changes in Net Position, internal service fund transactions have been eliminated; however, those transactions between governmental and businesstype 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. 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 met the applicable criteria.

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 Sheet. The Statement of Revenues, Expenditures, and Changes in Fund Balances presents 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. Measurable means that the amounts can be estimated, or otherwise determined. Available means that the amounts were collected during the reporting period or soon enough thereafter to be available to finance the expenditures accrued for the reporting period. The City uses an availability period of 60 days for all revenues except grants, which use a six-month availability period.

Sales taxes, property taxes, franchise taxes, gas taxes, motor vehicle in-lieu, transient occupancy taxes, grants and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period to the extent normally collected within the availability period.

Other revenue items are considered to be measurable and available when cash is received by the government.

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
60 Note 1 – Summary of Significant Accounting Policies (Continued) B. Basis of Presentation, Accounting and Measurement Focus (Continued) Governmental Fund Financial Statements (Continued)
Revenue recognition is subject to the measurable and available criteria for the governmental funds in the fund financial statements. Exchange transactions are recognized as revenues in the period in which they are earned (i.e., the related goods or services are provided). Locally imposed derived tax revenues are recognized as revenues in the period in which the underlying exchange transaction upon which they are based takes place.

Imposed non-exchange transactions are recognized as revenues in the period for which they were imposed. If the period of use is not specified, they are recognized as revenues when an enforceable legal claim to the revenues arises or when they are received, whichever occurs first. Government-mandated and voluntary non-exchange transactions have been recognized as revenues when all applicable eligibility requirements have been met.

The Reconciliation of the Fund Financial Statements to the Government-Wide Financial Statements is provided to explain the differences created by the integrated approach of GASB Statement No. 34.

The City reports the following major governmental funds:

General Fund – This is the primary operating fund of the City. It accounts for all the general revenues of the City not specifically levied or collected for by other City funds and for expenditures related to the rendering of general services by the City.

General Development Impact Fee Fund – This fund accounts for and reports the proceeds of the AB1600 development impact fee monies that are restricted or committed to expenditures for the intended purposes.

Measure “T” Sales Tax Fund – This fund is used to account for the receipt of sales tax revenue paid to the City as a subvention from the State of California. These funds support maintenance activities and finance street construction projects as provided by State law.

American Rescue Plan Act Fund – This fund used to account for the grant revenues received and expenditures incurred through the American Rescue Plan Act.

Discretely Presented Component Unit Financial Statements The activities of the Authority closely resemble those of ongoing businesses in which the purpose is to conserve and add to basic resources while meeting operating expenses from current revenues. The Authority which provides services on a continuous basis, has its activities are substantially financed by revenues derived from user charges and contributions from the member agencies. The Authority utilizes the accrual basis of accounting.

Revenues are recognized when earned and expenses are recognized as they are incurred.

Proprietary Fund Financial Statements
Proprietary Fund Financial Statements include a Statement of Net Position, a Statement of Revenues, Expenses, and Changes in Fund Net Position, and a Statement of Cash Flows for each major Proprietary Fund and an aggregate total column for all non-major Proprietary funds.

A separate column representing internal service funds is also presented in these statements. However, internal service balances and activities have been combined with the governmental activities in the Government-Wide Financial Statements. The City’s internal service funds include funds which provide services directly to other City funds. These areas of service include fleet operations, facilities maintenance, and technology.

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
61 Note 1 – Summary of Significant Accounting Policies (Continued) B. Basis of Presentation, Accounting and Measurement Focus (Continued) Proprietary Fund Financial Statements (Continued)
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 Fund Net Position presents increases (revenues) and decreases (expenses) in total Net Position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. In these funds, receivables have been recorded as revenue and provisions have been made for uncollectible amounts.

Operating revenues in the proprietary funds are those revenues that are generated from the primary operations of the fund. All other revenues are reported as 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 following major proprietary funds:

Water Fund – This fund is used to account for the provision of water services to the residential, commercial and industrial segments of the City. All activities necessary to provide such services are accounted for in this fund, including, but not limited to, administration, operations, maintenance, financing and related debt service, and billing and collection.

Sewer Fund – This fund is used to account for the provision of sewer treatment to residential, commercial and industrial segments of the City. All activities necessary to provide such services are accounted for in this fund, including, but not limited to, administration, operations, maintenance, financing and related debt service, and billing and collection.

Solid Waste Fund – This fund is used to account for City’s activities related to solid waste removal and street cleaning activities.

Drainage Operations Fund – This fund is used to account for the City’s activities related to drainage operations.

Internal service fund balances and activities have been combined with governmental activities in the GovernmentWide Financial Statements, and are comprised of the following funds:

Fleet Operations Fund - This fund is used to account for the accumulation and allocation of costs associated with the maintenance of the City fleet of vehicles.

Facilities Maintenance Fund - This fund is used to account for the accumulation and allocation of costs associated with the maintenance of the City Hall building and other City buildings.

Technology Fund - This fund is used to account for the costs associated with automation maintenance of the City's various computers, servers and interdepartmental electronic communications.

Fiduciary Fund Financial Statements
Fiduciary fund financial statements include a Statement of Net Position and a Statement of Changes in Fiduciary Net Position. The City’s fiduciary funds represent custodial funds and private purpose trust funds. Both custodial funds and the private purpose trust funds are accounted for on the full accrual basis of accounting.

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
62 Note 1 – Summary of Significant Accounting Policies (Continued) B. Basis of Presentation, Accounting and Measurement Focus (Continued) Fiduciary Fund Financial Statements (Continued)
Fiduciary fund types are accounted for according to the nature of the fund. Custodial funds are used to report fiduciary activities that are not required to be reported in pension (and other employee benefit) trust funds, investment trust funds, or private-purpose trust funds. Such funds include and General Deposits Fund. They are also used to account for various assessment districts for which the City acts as an agent for debt service activity, as the City is prohibited from levying additional taxes for these districts. Such funds include Community Facilities Districts.

The City’s private purpose trust fund is a fiduciary fund type used by the City to report assets, liabilities and activities of the Successor Agency to the Redevelopment Agency (“Successor Agency”) for the City of Madera.

Its results of operations are presented on the Statement of Changes of Fiduciary Net Position.

Successor Agency of the Redevelopment Agency for the City of Madera The Redevelopment Obligation Retirement Fund was created to serve as a custodian for the assets and to wind down the affairs of the RDA on February 1, 2012, pursuant to Assembly Bill x1 26. Its purpose is to expeditiously wind down the affairs of the dissolved Redevelopment Agency (“RDA”). The Successor Agency is a separate public entity from the City, subject to the direction of an oversight board. The City Council serves as the governing board of the Successor Agency. In general, the Successor Agency’s assets can only be used to pay enforceable obligations in existence at the date of dissolution (including the completion of any unfinished projects that were subject to legally enforceable contractual commitments).

In future fiscal years, the Successor Agency will only be allocated revenue in the amount that is necessary to pay the estimated annual installment payments on enforceable obligations of the former RDA until all enforceable obligations of the former RDA have been paid in full and all assets have been liquidated. Based upon the nature of the Successor Agency’s custodial role, the Successor Agency has been included in the accompanying basic financial statements as a private purpose trust fund. On March 6, 2015, the California Department of Finance (Finance) approved the City’s revised Long-Range Property Management Plan (“LRPMP”), with the assets deemed for governmental use and future development.

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

Deferred Outflows of Resources represent a consumption of net assets that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/ expenditure) until then.

Deferred Inflows of Resources represent an acquisition of net assets that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time.

D. Cash, Cash Equivalents and Investments
The City pools its available cash for investment purposes. The City considers pooled cash and investment amounts, with original maturities of three months or less, to be cash equivalents.

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
63 Note 1 – Summary of Significant Accounting Policies (Continued) D. Cash, Cash Equivalents and Investments (Continued)
Investments are reported in the accompanying financial statements at fair value, except for certain investment contracts that are reported at cost because they are not transferable and they have terms that are not affected by changes in market interest rates. Changes in fair value that occur during a fiscal year are recognized as investment income reported for that fiscal year, and may result in negative investment income in the accompanying financial statements. Investment income includes interest earnings, changes in fair value, and any gains or losses realized upon the liquidation, maturity, or sale of investments.

Investment income earned by the pooled investments is allocated to the various funds based on each fund's average cash and investment balance, except for investment income associated with funds not legally required to receive pooled investment income which has been assigned to and recorded as revenue of the general fund, as provided by California Government Code Section 53647.

For purposes of the statement of cash flows, amounts reported as cash and cash equivalents, include amounts on deposit in the City pool and any short-term, highly liquid investments that are both readily convertible to known amounts of cash or so near their maturity that they present insignificant risk of changes in value because of changes in interest rates.

Certain disclosure requirements, if applicable, for deposits and investment risks in the following areas:
 Interest rate risk
 Credit risk
- Overall
- Custodial credit risk
- Concentration of credit risk
 Foreign currency risk
U.S. GAAP establishes a framework for measuring fair value, and establishes disclosures about fair value measurement. Investments, unless otherwise specified, recorded at fair value in the Statements of Net Position, are categorized based upon the level of judgment associated with the inputs used to measure their fair value.

In addition, other disclosures are specified including use of certain methods to present deposits and investments, highly sensitive investments, credit quality at year-end and other disclosures.

Levels of inputs are as follows:

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

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

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

E. Restricted Assets
Amounts reported as restricted assets have been restricted by bond indentures or are to be used for specified purposes based on contract provisions, such as bonded debt service.

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
64 Note 1 – Summary of Significant Accounting Policies (Continued) F. Receivables
Customer or trade receivables are reported as “accounts receivable” and are shown net of an allowance for uncollectible accounts based on historical and management estimates.

Noncurrent portions of long-term receivables (e.g., “notes receivable”) due to governmental fund types are reported in their respective balance sheets despite their spending measurement focus. Recognition of governmental fund type revenues represented by noncurrent receivables are deferred until they become current receivables. Noncurrent portions of long-term notes receivable are offset by restricted fund balance in the special revenue funds.

G. Interfund Transactions
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either “due to/from other funds” or “advances to/from other funds” (i.e., the current portion of interfund loans). Any residual balances outstanding between the governmental activities and businesstype activities are reported in the Governmental-Wide Financial Statements as “internal balances.” H. Inventory
Inventories are valued at cost using the first-in/first-out (FIFO) method and consist of expendable supplies and vehicle repair parts. The cost of such inventories is recorded as expenditure/expenses when consumed rather than when purchased. Inventory reported in governmental funds is offset with nonspendable fund balance to show that inventories do not constitute available spendable resources, even though they are a component of fund balance.

I. Prepaid Items
Prepaid items are reported in the governmental funds under the consumption method and are reported as a nonspendable component of fund balance to indicate that they are not spendable for appropriation and are not expendable financial resources.

J. Leases
The City is a lessor for leases of special purpose facilities, office and commercial space, and land. The City recognizes leases receivable and deferred inflows of resources in the financial Statements.

At the commencement of a lease, the City initially measures the lease receivable at the present value of payments expected to be received during the lease term. Subsequently, the lease receivable is reduced by the principal portion of lease payments received. The deferred inflows of resources are initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date.

Subsequently, the deferred inflows of resources are recognized as revenue over the life of the lease term in a systematic and rational method.

Key estimates and judgments include how the City determines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) lease term, and (3) lease receipts.  The City uses its estimated incremental borrowing rate as the discount rate for leases.  The lease term includes the noncancellable period of the lease. Lease receipts included in the measurement of the lease receivable is composed of fixed payments from the lessee.

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
65 Note 1 – Summary of Significant Accounting Policies (Continued) J. Leases (Continued)
The City monitors changes in circumstances that would require a remeasurement of its lease and will remeasure the lease receivable and deferred inflows of resources if certain changes occur that are expected to significantly affect the amount of the lease receivable.

K. Subscription-Based Information Technology Arrangements (SBITAs) The City has a policy to recognize a SBITA liability and a right‐to‐use subscription asset (SBITA asset) in our financial statements with an initial, individual value of $50,000 or more with a subscription term greater than one year.

At the commencement of a subscription, when the subscription asset is placed into service, the SBITA liability is measured at the present value of payments expected to be made during the subscription term. Future subscription payments are discounted using the City's incremental borrowing rate and the City recognizes amortization of the discount on the subscription liability as interest expense in subsequent financial reporting periods.

SBITA assets are measured as the sum of the initial subscription liability, payments made to the SBITA vendor before the commencement of the lease term, and capitalizable implementation costs less any incentives received from the SBITA vendor at or before the commencement of the subscription term. Subscription assets are amortized using the straight-line method over the subscription term.

Key estimates and judgments related to SBITAs include how the City determines (1) the discount rate it uses to discount the expected subscription payments to present value, (2) subscription term, and (3) subscription payments.
- The City uses the interest rate charged by the SBITA vendor as the discount rate. When the interest rate charged by the SBITA vendor is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate for SBITAs.
- The subscription term includes the period during which the City has a noncancelable right to use the underlying IT asset. The subscription term also includes periods covered by an option to extend if it is reasonably certain to be exercised.
- Subscription payments included in the measurement of the subscription liability are composed of fixed payments and purchase option years that the City is reasonably certain to exercise. The City monitors changes in circumstances that would require a remeasurement of a subscription and will remeasure any subscription asset and liability if certain changes occur that are expected to significantly affect the amount of the subscription liability.

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

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
66 Note 1 – Summary of Significant Accounting Policies (Continued) L. Land Held for Resale
Land held for resale represents land, structures, and related improvements that were acquired for resale as part of the City’s redevelopment and grant activities. Land held for resale is accounted for is recorded at lower of cost or net realizable value in accordance with accounting principles generally accepted in the United States of America.

Land held for resale, which is not available for current expenditure, is reported in the governmental funds balance sheet as restricted fund balance when proceeds from the sale must be used for restricted purposes or as nonspendable fund balance when such proceeds are not restricted.

M. Capital Assets
Capital assets, which include property, plant, equipment and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated assets are valued at the fair value of the assets on the date on which they were contributed. Donated works of art and similar items, and capital assets received in a service concession arrangement are reported at acquisition value rather than fair value.

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. The City utilizes a capitalization threshold of $5,000 - $25,000 depending on asset type.

Depreciation is charged to operations using the straight-line method over the estimated useful lives of the assets as follows:

Asset Type Years
Buildings 25-35
Improvements 5-50
Equipment 4-15
Infrastructure 10-50
For all infrastructure systems, the City elected to use the Basic Approach as defined by GASB Statement No. 34 for infrastructure reporting. The City defines infrastructure as the basic physical assets that allow the City to function. The assets include the streets, water purification and distribution system, sewer collection and treatment system, parks and recreation, lands and improvement system, storm water conveyance system, and buildings combined with the site amenities such as parking and landscaped areas used by the City in the conduct of its business. Each major infrastructure system can be divided into subsystems. For example, the street system can be subdivided into pavement, curb and gutters, sidewalks, medians, streetlights, traffic control devices (signs, signals and pavement markings), landscaping and land. These subsystems were not delineated in the basic financial statements. The appropriate operating department maintains information regarding the subsystems.

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
67 Note 1 – Summary of Significant Accounting Policies (Continued) N. Long-Term Debt
Government-Wide Financial Statements and Proprietary Fund Financial Statements Long-term debt and other financial obligations are reported as liabilities in the appropriate funds. Bond premiums and discounts are deferred and amortized over the life of the bonds using straight line method. Bonds payable are reported net of the applicable premium or discount. Issuance costs are expensed when incurred. Gains or losses on bond refunding are reported as either deferred outflows of resources or deferred inflows of resources and amortized over the term of the related debt.

Governmental Fund Financial Statements
The governmental fund financial statements do not present long-term debt but are shown in the Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Position. Governmental fund types recognize bond premiums and discounts during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Debt issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

O. Compensated Absences
The City’s policy permits employees to accumulate earned but unused vacation benefits, which are eligible for payment upon separation from government service. The liability for such leave is reported as incurred in the government-wide and proprietary fund financial statements. A liability for those amounts is recorded in the governmental funds only if the liability has matured as a result of employee resignations or retirements. The liability for compensated absences includes salary-related benefits, where applicable.

Government-Wide Financial Statements
For governmental and business-type activities, compensated absences are recorded as expenses when earned.

Fund Financial Statements
For governmental funds, compensated absences are recorded as expenditures in the year paid. The General Fund is typically used to liquidate compensated absences. In proprietary funds, compensated absences are expensed to the various funds in the period they are earned, and such fund’s share of the unpaid liability is recorded as a longterm liability of the fund.

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
68 Note 1 – Summary of Significant Accounting Policies (Continued) P. Pension Plans
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the plans and additions to/deductions from the plans’ fiduciary net position have been determined on the same basis as they are reported by the plans (Note 13). For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with benefit terms. Investments are reported at fair value.

The General Fund and Internal Service Funds are typically used to liquidate the pension liability related to the City's governmental activities while the pension liability for Business-type activities is liquidated from the respective Enterprise Funds.

The following timeframes are used for pension reporting:

Valuation date June 30, 2021
Measurement date June 30, 2022
Measurement period July 1, 2021 to June 30, 2022
Gains and losses related to changes in total pension liability and fiduciary net position are recognized in pension expense systematically over time. The first amortized amounts are recognized in pension expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to pensions and are to be recognized in future pension expense. The amortization period differs depending on the source of the gain or loss. The difference between projected and actual earnings is amortized straight-line over 5 years. All other amounts are amortized straight-line over the average expected remaining service lives of all members that are provided with benefits (active, inactive, and retired) as of the beginning of the measurement period.

Q. Other Postemployment Benefits (OPEB)
For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the OPEB plan, the assets of which are held in an irrevocable trust, and additions to/deductions from the OPEB plan’s fiduciary net position have been determined by an independent actuary (Note 14). For this purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value. The General Fund and Internal Service Funds are typically used to liquidate the OPEB liability related to the City's governmental activities while the OPEB liability for Business-type activities is liquidated from the respective Enterprise Funds.

Generally accepted accounting principles require that the reported results must pertain to liability and fiduciary net position information within certain defined timeframes. For this report, the following timeframes are used:

Valuation date June 30, 2022
Measurement date June 30, 2022
Measurement period July 1, 2021 to June 30, 2022
City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
69 Note 1 – Summary of Significant Accounting Policies (Continued) R. Fund Balances
As prescribed by U.S. GAAP, governmental funds report fund balance in classifications based primarily on the extent to which the City is bound to honor constraints on the specific purposes for which amounts in the funds can be spent. As of June 30, 2023, fund balances for governmental funds are made up of the following:
 Nonspendable Fund Balance – includes amounts that are: (a) not in a spendable form, or (b) legally or contractually required to be maintained intact. The “not in spendable form” criterion includes items that are not expected to be converted to cash, for example: deposits and prepaid items.  Restricted Fund Balance – includes amounts that are restricted for specific purposes stipulated by external resources providers, constitutionally or through enabling legislation. Restrictions may effectively be changed or lifted with the consent of resource providers.  Committed Fund Balance – includes amounts that have been limited to specific purposes or through adoption of a resolution or an ordinance by the City Council, the highest level of decision-making authority of the City, and resources that have been specifically committed for use in satisfying contractual obligations, as in agreements with third-parties. The City has determined that both a resolution and an ordinance are equally binding. These commitments may be changed or lifted, but only by the same formal action that was used to impose the constraint originally. City Council action to commit fund balance must occur within the fiscal reporting period while the amount committed may be subsequently determined.  Assigned Fund Balance – includes amounts that are intended to be used by the City for specific purposes.

Intent is expressed by (a) the City Council or (b) a body or official to which the City Council has delegated the authority to assign amounts to be used for a specific purpose. This policy delegates to the Finance Director the authority to assign unassigned fund balance amounts where the City’s intent is for those amounts to be used for specific purposes. This delegation of authority is for the sole purpose of reporting these amounts in the annual financial statements.  Unassigned Fund Balance – includes amounts within the General Fund, the residual resources, either positive or negative in excess of what can be properly classified in one of the other four fund balance categories. Unassigned amounts are technically available for any purpose. Other governmental funds may only report a negative unassigned balance that was created after classification of fund balance in the nonspendable, restricted or committed categories.

When expenditures are incurred for purposes where only unrestricted fund balances are available, the City uses the unrestricted resources in the following order: committed, assigned, and unassigned.

S. Net Position
The financial statements utilize a net position presentation. Net position is classified as follows:
 Net Investment in Capital Assets – This category of net position consists of capital assets, net of accumulated depreciation and amortization and reduced by any debt outstanding and any deferred outflows/inflows of resources related to such borrowings that are attributable to the acquisition, construction or improvement of those assets. If there are significant unspent related debt proceeds at yearend, the portion of the debt attributable to the unspent proceeds is not included in the calculation of net investment in capital assets. Rather, that portion of the debt is offset by unspent proceeds.

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
70 Note 1 – Summary of Significant Accounting Policies (Continued) S. Net Position (Continued)
 Restricted Net Position – This category presents restricted assets reduced by liabilities and deferred inflows of resources related to those assets. Those assets are restricted due to external restrictions imposed by creditors (such as through bond covenants), grantors or laws and regulations of other governments and restrictions imposed through constitutional provisions or enabling legislation.  Unrestricted – This category represents net position of the City that is not restricted for any project or other purpose.

When both restricted and unrestricted resources are available for use, the City’s policy is to use restricted resources first, then unrestricted resources that are needed.

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

Under California law, property taxes are assessed and collected by the counties at up to 1% of assessed value, plus other increases approved by the voters. The County of Madera, bills and collects the property taxes and remits them to the City at various times throughout the year. Property taxes are attached as an enforceable lien on property as of January 1. Taxes are levied on July 1 and are due in two installments. The first installment is due on November 1, and is payable through December 10 without penalty. The second installment is due February 1, and is payable through April 10 without penalty.

U. Use of Accounting Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions, in some cases when applicable, that affect the amounts in the financial statements and the accompanying notes. Actual results could differ from the estimates.

V. Implementation of New GASB Pronouncements for the Year Ended June 30, 2023 The requirements of the following accounting standards are effective for the purpose of implementation, if applicable to the City, for the year ended June 30, 2023. The financial statements included herein apply the requirements and provisions of these statements, including necessary retroactive adjustments to financial statement classifications and presentations.

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
71 Note 1 – Summary of Significant Accounting Policies (Continued) V. Implementation of New GASB Pronouncements for the Year Ended June 30, 2023 (Continued) GASB Statement No. 91
In May 2019, GASB issued Statement No. 91, Conduit Debt Obligations. The primary objectives of this Statement are to provide a single method of reporting conduit debt obligations by issuers and eliminate diversity in practice associated with (1) commitments extended by issuers, (2) arrangements associated with conduit debt obligations, and (3) related note disclosures. This Statement achieves those objectives by clarifying the existing definition of a conduit debt obligation; establishing that a conduit debt obligation is not a liability of the issuer; establishing standards for accounting and financial reporting of additional commitments and voluntary commitments extended by issuers and arrangements associated with conduit debt obligations; and improving required note disclosures. Implementation of this Statement did not have a significant effect on City's financial statements for the fiscal year ended June 30, 2023.

GASB Statement No. 94
In March 2020, GASB issued Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements. The primary objective of this Statement is to improve financial reporting by addressing issues related to public-private and public-public partnership arrangements (PPPs). As used in this Statement, a PPP is an arrangement in which a government (the transferor) contracts with an operator (a governmental or nongovernmental entity) to provide public services by conveying control of the right to operate or use a nonfinancial asset, such as infrastructure or other capital asset (the underlying PPP asset), for a period of time in an exchange or exchange-like transaction. Implementation of this statement did not have a significant effect on City's financial statements for the fiscal year ended June 30, 2023.

GASB Statement No. 96
In May 2020, GASB issued Statement No. 96, Subscription-Based Information Technology Arrangements. This Statement provides guidance on the accounting and financial reporting for subscription-based information technology arrangements (SBITAs) for government end users (governments). This Statement (1) defines a SBITA; (2) establishes that a SBITA results in a right-to-use subscription asset—an intangible asset—and a corresponding subscription liability; (3) provides the capitalization criteria for outlays other than subscription payments, including implementation costs of a SBITA; and (4) requires note disclosures regarding a SBITA. Implementation of this Statement had a moderate effect on City's financial statements for the fiscal year ended June 30, 2023.

GASB Statement No. 99
In April 2023, GASB issued Statement No. 99, Omnibus 2023. The objectives of this Statement are to enhance comparability in accounting and financial reporting and to improve the consistency of authoritative literature by addressing (1) practice issues that have been identified during implementation and application of certain GASB Statements and (2) accounting and financial reporting for financial guarantees. Implementation of this Statement did not have a significant effect on City's financial statements for the fiscal year ended June 30, 2023.

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
72 Note 1 – Summary of Significant Accounting Policies (Continued) W. Upcoming Government Accounting Standards Implementations The City is currently analyzing its accounting practices to determine the potential impact on the financial statements for the following GASB statements:

GASB Statement No. 100
In June 2023, GASB issued Statement No. 100, Accounting Changes and Error Corrections – an Amendment of GASB Statement No. 62. The primary objective of this Statement is to enhance accounting and financial reporting requirements for accounting changes and error corrections to provide more understandable, reliable, relevant, consistent, and comparable information for making decisions or assessing accountability. Application of this statement is effective for the Authority’s fiscal year ending June 30, 2024.

GASB Statement No. 101
In June 2023, GASB issued Statement No. 101, Compensated Absences. The objective of this Statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated absences. That objective is achieved by aligning the recognition and measurement guidance under a unified model and by amending certain previously required disclosures. Application of this statement is effective for the Authority’s fiscal year ending June 30, 2025.

GASB Statement No. 102
In December 2023, GASB issued Statement No. 102, Certain Risk Disclosures. The objective of this Statement is to provide users of government financial statements with essential information about risks related to a government’s vulnerabilities due to certain concentrations or constraints. That objective is achieved by requiring governments to assess whether a concentration or constraint makes the primary government reporting unit or other reporting units that report a liability for revenue debt vulnerable to the risk of a substantial impact. The statement also requires a government to assess whether an event or events associated with a concentration or constraint that could cause the substantial impact have occurred, have begun to occur, or are more likely than not to begin to occur within 12 months of the date the financial statements are issued. Application of this statement is effective for the City’s fiscal year ending June 30, 2025. Earlier application is encouraged.

Note 2 – Cash and Investments - City
A. Summary
Cash and investments are presented in the accompanying financial statements for the City at June 30, 2023 as follows:

Fiduciary Funds
Governmental Business-Type Statement of
Activities Activities Total Net Position Total
Cash and investments $ 107,560,751 $ 54,903,937 $ 162,464,688 $ 8,938,102 $ 171,402,790 Restricted cash and investments 2,517,025 2,579,539 5,096,564 49,020 5,145,584 Total cash and investments $ 110,077,776 $ 57,483,476 $ 167,561,252 $ 8,987,122 $ 176,548,374 Government-Wide Statement of Net Position
City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
73 Note 2 – Cash and Investments – City (Continued)
A. Summary (Continued)
Cash and investments for the City at June 30, 2023, consisted of the following:

Cash:

Cash on hand 7,351 $
Deposits with financial institution 22,170,612
Total cash 22,177,963
Investments:

Investments 149,224,827
Investments held by bond trustee 5,145,584
Total investments 154,370,411
Total cash and investments $ 176,548,374
As part of the City's investment guidelines, the City continually seeks ways to increase investment income while not risking investment principal. One way the City accomplishes this is by “sweeping”, on a nightly basis, any excess cash held in its non-interest-bearing checking account to an interest-bearing money market account with the same bank.

B. Demand Deposits
The carrying amounts of the City’s demand deposits were $22,250,846 at June 30, 2023. Bank balances were $22,974,002 at that date, the total amount of which was collateralized or insured with securities held by the pledging financial institutions in the City’s name as discussed below.

The California Government Code requires California banks and savings and loan associations to secure the City’s cash deposits by pledging securities as collateral. This Code states that collateral pledged in this manner shall have the effect of perfecting a security interest in such collateral superior to those of a general creditor.

Thus, collateral for cash deposits is considered to be held in the City's name.

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

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
74 Note 2 – Cash and Investments – City (Continued)
C. Investments Authorized by the California Government Code and the City’s Investment Policy The table below identifies the investment types that are authorized for the City by the California Government Code and the City's investment policy. The table also identifies certain provisions of the California Government Code (or the City's investment policy, if more restrictive) that address interest rate risk and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustees that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City's investment policy.

Maximum Maximum
Maximum Percentage Investment in
Authorized Investment Types Maturity of Portfolio One Issuer* Local Agency Bonds, Notes, Warrants 5 years None None
Registered State Bonds, Notes, Warrants 5 years None None U.S. Treasury Obligations 5 years None None
U.S. Agency Securities 5 years None None
Banker's Acceptances 180 days 40% 30%
Commercial Paper 270 days 25% 10%
Negotiable Certificates of Deposit 5 years 30% None
Repurchase Agreements 1 year None None
Reverse Repurchase Agreements 92 days 20% of base None
Medium-Term Corporate Notes 5 years 30% None
Mutual Funds N/A 20% 10%
Money Market Mutual Funds N/A 20% 10%
Mortgage Pass-Through Securities 5 years 20% None
County Pooled Investment Funds N/A None None
Local Agency Investment Fund N/A None None
Joint Powers Authority Pools N/A None None
* Based on state law requirements or City investment policy requirements, whichever is more restrictive.

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
75 Note 2 – Cash and Investments – City (Continued)
D. Investments Authorized by Debt Agreements
Investment of debt proceeds held by fiscal agents 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 fiscal agents. The table also identifies certain provisions of these debt agreements that address interest rate risk and concentration of credit risk.

Maximum Maximum
Maximum Percentage Investment in
Authorized Investment Types Maturity Allowed One Issuer U.S. Treasury Obligations None None None
U.S. Agency Securities None None None
Banker's Acceptances 180 days None None
Commercial Paper 270 days None None
Money Market Mutual Funds N/A None None
Investment Contracts 30 years None None
E. Fair Value Measurement
As of June 30, 2023, the City’s investments had the following recurring fair value measurements:

Investments measured by fair value level: June 30, 2023 Level 2 Negotiable Certificates of Deposit $ 10,978,689 $ 10,978,689 Municipal bonds 1,807,550 1,807,550
U.S. Treasury Obligations 19,094,412 19,094,412
U.S. Government Securities:

Federal Home Loan Bank 14,104,140 14,104,140
Federal Farm Credit Bank 6,011,378 6,011,378
Federal Home Loan Mortgage Corporation 908,280 908,280
Federal National Mortgage Association 6,192,120 6,192,120 Federal Agricultural Mortgage Corporation 1,437,860 1,437,860 U.S. Corporate Bonds 8,494,690 8,494,690
Total investments by fair value level 69,029,119 $ 69,029,119 Investments not subject to the fair value hierarchy:

Local Agency Investment Fund 76,678,501
Money market mutual funds 5,923,791
Certificates of deposit 2,739,000
Total investments not subject to the fair value hierarchy 85,341,292 Total investments $ 154,370,411
Debt and equity securities classified in Level 2 are valued using the following approaches:
• U.S. Treasuries, U.S. Agencies, and Commercial Paper: quoted prices for identical securities in markets that are not active;
• Medium term notes: quoted prices for similar securities in active markets; and • Asset-backed securities: recent appraisals of the asset value.

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
76 Note 2 – Cash and Investments – City (Continued)
F. Risk Disclosure
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rate 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. For purposes of the schedule shown on the next page, any callable securities are assumed to be held to maturity.

Investment Type Total 1 year or less 1 - 2 Years 2 - 3 Years 3 - 4 Years 5+ Years Local Agency Investment Fund $ 76,678,501 $ 76,678,501 $ - $ - $ - $ - Money market mutual funds 778,207 778,207 - - - -
Municipal bonds 1,807,550 911,690 - 895,860 - -
Certificates of deposit 2,739,000 2,488,000 - - 251,000 - Negotiable certificates of deposit 10,978,689 1,904,412 3,720,994 4,472,894 880,389 - U.S. Treasury Obligations 19,094,412 5,003,318 5,855,190 5,795,760 2,440,144 - U.S. Government Securities:

Federal Home Loan Bank 14,104,140 7,835,690 - 5,377,480 890,970 - Federal Farm Credit Bank 6,011,378 988,100 5,023,278 - - - Federal Home Loan Mortgage Corporation 908,280 - 908,280 - - - Federal National Mortgage Association 6,192,120 4,375,990 - 1,816,130 - - Federal Agricultural Mortgage Corporation 1,437,860 488,860 949,000 - - - U.S. corporate bonds 8,494,690 1,985,970 3,712,690 1,868,400 927,630 - Held by bond trustee:

Money market mutual funds 5,145,584 5,145,584 - - - -
Total investments $ 154,370,411 $ 95,460,952 $ 32,384,522 $ 20,238,944 $ 3,594,849 $ 2,691,144 Investment Maturities
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. However, some issuers do not seek a credit rating. For instance, the California Local Agency Investment Fund (LAIF) has not sought or received a credit rating. In these cases, the purchaser is solely responsible for performing their own due diligence before purchasing an investment or participating in an external investment pool. Certificates of deposit of $250,000 or less are fully insured by the Federal Deposit Insurance Corporation (FDIC), and therefore, do not seek a credit rating.

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
77 Note 2 – Cash and Investments – City (Continued)
F. Risk Disclosure (Continued)
Disclosures Relating to Credit Risk (Continued)
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 year-end for each investment type.

Minimum Ratings
Legal at Year-End
Investment Type Total Rating AA or AAA Not Rated
Local Agency Investment Fund $ 76,678,501 N/A $ 76,678,501 - $ Money market mutual funds 778,207 A-1 778,207 -
Municipal bonds 1,807,550 AA+ 1,807,550 -
Certificates of deposit 2,739,000 AA+ 2,739,000 -
Negotiable certificates of deposit 10,978,689 AA+ 10,978,689 - U.S. Treasury Obligations 19,094,412 AA+ 14,091,094 5,003,318 U.S. Government Securities:

Federal Home Loan Bank AA 14,104,140 14,104,140 -
Federal Farm Credit Bank 6,011,378 AA 6,011,378 -
Federal Home Loan Mortgage Corporation 908,280 AA 908,280 - Federal National Mortgage Association 6,192,120 AA- 6,192,120 - Federal Agricultural Mortgage Corporation 1,437,860 AA- 1,437,860 - U.S. corporate bonds 8,494,690 AA 8,494,690 -
Held by bond trustee:

Money market mutual funds 5,145,584 AA+ - 5,145,584
Total investments $ 53,047,112 154,370,411 $ 101,323,299 $ Disclosure Relating to Concentration of Credit Risk
The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated in the Government Code. GASB Statement No. 40 requires disclosure by amount and issuer, of investments in any one issuer that represent 5% or more of total investments. At June 30, 2023, the following investments in one issuer (other than U.S. Treasury securities, mutual funds, and external investment pools) that represents 5% or more of the City's total investments.

Reported Percentage
Issuer Amount of Portfolio
Federal Home Loan Bank $ 14,104,140 9.14%
Investment Type
U.S. Government Securities
Disclosures Relating to 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.

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
78 Note 2 – Cash and Investments – City (Continued)
F. Risk Disclosure (Continued)
Disclosures Relating to Custodial Credit Risk (Continued) 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 governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies.

California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. At June 30, 2023, the City’s deposits (bank balances) were collateralized under California Law.

G. Investment in State Investment Pool
The City is a participant in LAIF which is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The City’s investments in LAIF at June 30, 2023 included a portion of pool funds invested in Structure Notes and Asset-Backed Securities:

Structured Notes are debt securities (other than asset-backed securities) whose cash-flow characteristics (coupon rate, redemption amount, or stated maturity) depend upon one or more indices and/or that have embedded forwards or options.

Asset-Backed Securities, the bulk of which are mortgage-backed securities, entitle their purchasers to receive a share of the cash flows from pool of assets such as principal and interest repayments from a pool of mortgages (such as Collateralized Mortgage Obligations) or credit card receivables.

As of June 30, 2023, the City had $72,576,879 invested in LAIF, which had invested 2.78% of the pool investment funds in Structured Notes and Asset-Back Securities. LAIF determines fair value on its investment portfolio based on market quotations for those securities where market quotations are readily available and based on amortized cost or best estimate for those securities where market value is not readily available. The City valued its investments in LAIF as of June 30, 2023, by multiplying its account balance with LAIF times a fair value factor determined by LAIF. This fair value factor was determined by dividing all LAIF participants’ total aggregate amortized cost by total aggregate fair value. The fair value of the City’s position in the pool is the same as the value of the pool shares. The credit quality rating of LAIF is unrated as of June 30, 2023.

Note 3 – Cash and Investments – Component Unit
A. Summary
Cash and investments are presented in the accompanying financial statements for the Component Unit at September 30, 2022 as follows:

Component
Unit
Cash and investments 9,145,512 $
Restricted cash and investments 1,661,561
Total cash and investments $ 10,807,073
City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
79 Note 3 – Cash and Investments – Component Unit (Continued) A. Summary (Continued)
Cash and investments for the Component Unit at September 30, 2022, consisted of the following:

Cash:

Cash on hand 100 $
Deposits with financial institution 4,075,484
Total cash 4,075,584
Investments:

Investments 6,731,489
Total investments 6,731,489
Total cash and investments $ 10,807,073
B. Demand Deposits
The carrying amounts of the Component Unit’s demand deposits were $4,075,484 at September 30, 2022. Bank balances were $4,075,484 at that date, the total amount of which was collateralized or insured with securities held by the pledging financial institutions in the Component Unit’s name as discussed below.

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

The market value of pledged securities must equal at least 110% of the Component Unit's cash deposits.

California law also allows institutions to secure Component Unit’s deposits by pledging first trust deed mortgage notes having a value of 150% of the Component Unit’s total cash deposits. The Component Unit may waive collateral requirements for cash deposits, which are fully insured up to $250,000 by the Federal Deposit Insurance Corporation (“FDIC”). The Component Unit, however, has not waived the collateralization requirements.

C. Investments Authorized by the California Government Code and the Housing Authority’s Investment Policy
The Housing Authority’s investment policy only authorizes investment in the Local Agency Investment Fund (LAIF) administered by the State of California. The Housing Authority’s investment policy does not contain any specific provisions intended to limit its exposure to interest rate risk, credit risk, and concentration of credit risk.

D. Risk Disclosure
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rate 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 Component Unit 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.

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
80 Note 3 – Cash and Investments – Component Unit (Continued) D. Risk Disclosure (Continued)
Information about the sensitivity of the fair values of the Component Unit’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 Component Unit’s investments by maturity. For purposes of the schedule shown on the next page, any callable securities are assumed to be held to maturity.

Investment
Maturities
Investment Type Total 1 year or less
Local Agency Investment Fund 6,731,489 $ 6,731,489 $
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. However, some issuers do not seek a credit rating. For instance, the California Local Agency Investment Fund (LAIF) has not sought or received a credit rating. In these cases, the purchaser is solely responsible for performing their own due diligence before purchasing an investment or participating in an external investment pool. Certificates of deposit of $250,000 or less are fully insured by the Federal Deposit Insurance Corporation (FDIC), and therefore, do not seek a credit rating.

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

Minimum
Legal
Investment Type Total Rating Not Rated
Local Agency Investment Fund 6,731,489 $ N/A 6,731,489 $ Disclosure Relating to Concentration of Credit Risk
The investment policy of the Component Unit contains no limitations on the amount that can be invested in any one issuer beyond that stipulated in the Government Code. GASB Statement No. 40 requires disclosure by amount and issuer, of investments in any one issuer that represent 5% or more of total investments. At September 30, 2022, the had no investments in one issuer (other than U.S. Treasury securities, mutual funds, and external investment pools) that represents 5% or more of the Component Unit's total investments.

Disclosures Relating to 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.

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
81 Note 3 – Cash and Investments – Component Unit (Continued) D. Risk Disclosure (Continued)
Disclosures Relating to Custodial Credit Risk
The California Government Code and the Component Unit’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 governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure Component Unit deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. At September 30, 2022, the Component Unit’s deposits (bank balances) were collateralized under California Law.

E. Investment in State Investment Pool
The Component Unit is a participant in LAIF which is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The Component Unit’s investments in LAIF at June 30, 2023 included a portion of pool funds invested in Structure Notes and Asset-Backed Securities:

Structured Notes are debt securities (other than asset-backed securities) whose cash-flow characteristics (coupon rate, redemption amount, or stated maturity) depend upon one or more indices and/or that have embedded forwards or options.

Asset-Backed Securities, the bulk of which are mortgage-backed securities, entitle their purchasers to receive a share of the cash flows from pool of assets such as principal and interest repayments from a pool of mortgages (such as Collateralized Mortgage Obligations) or credit card receivables.

As of September 30, 2022, the Component Unit had $6,731,487 invested in LAIF, which had invested 2.05% of the pool investment funds in Structured Notes and Asset-Back Securities. LAIF determines fair value on its investment portfolio based on market quotations for those securities where market quotations are readily available and based on amortized cost or best estimate for those securities where market value is not readily available. The Component Unit valued its investments in LAIF as of September 30, 2022, by multiplying its account balance with LAIF times a fair value factor determined by LAIF. This fair value factor was determined by dividing all LAIF participants’ total aggregate amortized cost by total aggregate fair value. The fair value of the Component Unit’s position in the pool is the same as the value of the pool shares. The credit quality rating of LAIF is unrated as of September 30, 2022.

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
82 Note 4 – Notes Receivables
A. Governmental Activities
At June 30, 2023, notes receivable for government activities consisted of the following:

Allowance for Financial
Notes Receivable Doubtful Accounts Statement
Balance Balance Balance
June 30, 2023 June 30, 2023 June 30, 2023
City:

Residential Rehab Special Revenue Fund:

Madera Pacific Associates Loan 2,962,234 $ - $ 2,962,234 $ 100 Stadium Rd., LP Loan 5,034,343 - 5,034,343
Forgivable Loans 12,739,642 (12,739,642) -
Total Residential Rehab Special Revenue Fund 20,736,219 (12,739,642) 7,996,577 Low and Moderate Income Housing Fund 7,000 - 7,000
Total City $ (12,739,642) 20,743,219 $ 8,003,577 $
Residential Rehab Special Revenue Fund
The City was awarded a $3 million-dollar federal grant from the HOME Investment Program (HOME) administered through the State of California. The proceeds of this grant were used to provide a $3 million loan to Madera Pacific Associates (MPA) for multi-family rental housing projects serving low and very low-income individuals through subordinate loans with terms up to 55 years. MPA is required to repay the loan through the net cash flow payments it receives from project operations. The loan balance at June 30, 2023 is $2,962,234, which is recorded as a note receivable in the Residential Rehab special revenue fund.

The City was awarded a $5 million-dollar federal grant from the HOME Investment Program (HOME) administered through the State of California. The proceeds of this grant were used to provide a $5 million loan to 100 Stadium Rd., L.P. for multi-family rental housing projects serving low and very low-income individuals through subordinate loans with terms up to 55 years. 100 Stadium Rd., L.P. is required to repay the loan through the net cash flow payments it receives from project operations. The loan balance at June 30, 2023 is $5,034,343, which is recorded as a note receivable in the Residential Rehab special revenue fund.

Forgivable Loans
The City administers the first time homebuyer, housing rehabilitation, and small business loan programs funded with various grants (i.e. CDBG, HOME, CalHome, NSP, etc.). Under these programs, individuals with incomes below certain levels are eligible to receive low interest loans. These loans are secured by deeds of trust on the properties. Deferred payment loans receivable under these forgivable loans are not required to be paid back unless the participating homeowner sells, transfers title to the property, or discontinues residence in the dwelling at which time the full amount of the deferred loan is due. These deferred payment loans are “nonperforming loans” and are not recorded as loans receivable in the financial statements.

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
83 Note 4 – Notes Receivables (Continued)
A. Governmental Activities (Continued)
Loans and related items as of June 30, 2023 are summarized as follows:

Outstanding
Loan Balance
Loan Type June 30, 2023 Due
First-time homebuyer 5,431,572 $ 30 years
Housing rehabilitation 1,506,296 30 years
Small business 740,162 10 years
Total $ 7,678,030
Low and Moderate Income Housing Asset Special Revenue Fund The Low and Moderate Income Housing Asset special revenue fund reports $7,000 of notes receivable. These were loans funded from the former Redevelopment Agency to developers for construction of affordable housing or rehabilitation within the boundaries of the Redevelopment Project Area. These low interest-bearing loans are secured by deeds of trust. Maturities vary according to terms and disposition of property.

B. Component Unit
Allowance for Financial
Notes Receivable Doubtful Accounts Statement
Balance Balance Balance
September 30, 2022 September 30, 2022 September 30, 2022 Component Unit:

Housing Authority for the City of Madera:

MORES Yosemite Manor, LP Loan $ 2,506,201 $ - $ 2,506,201 MORES Corporation Loans 399,504 - 399,504
Total Component Unit $ 2,905,705 $ - $ 2,905,705
The Housing Authority has a note receivable of $2,506,201, due from MORES Yosemite Manor, L.P., secured by first deed on land and building subject to note. Interest bearing on the outstanding principal balance at the rate of

4.21%, compounded annually. The term of the note commenced May 14, 2008 and expires on December 31, 2063. The note is due and payable from residual receipts per the loan agreement. As of September 30, 2022, the outstanding interest receivable amounted to $1,598,461. Management has established an allowance of $1,598,461 as of September 30, 2022, due to the uncertainty of collectability.

The Housing Authority has a promissory note made from March 2010 to May 2014 amounting to $440,872, due from Madera Opportunities for Resident Enrichment Services, Inc. (MORES), a California non-profit corporation. The promissory note is subject to various interest rates, payment start dates, and due dates. The note is secured by first and second deeds of trusts on buildings subject to the notes. The notes are due and payable from rental receipts per the loan agreements.

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
84 Note 5 – Lease Receivable
A. Governmental Activities
Certain portions of the City’s property is leased to others. Such property includes special purpose facilities, office and commercial space, and land. Lease receivable consists of agreements with other for the right-to-use of the underlying assets at various locations owned by the City. The terms of the arrangements range from 2 to 99 years.

The calculated interest rates used vary depending on the length of the lease. For the fiscal year ended June 30, 2023, the City recognized $47,685 in lease revenue and $8,847 in interest revenue.

A summary of changes in lease receivable for the fiscal year ended June 30, 2023 is as follows:

Balance Balance Due within Due in More
July 1, 2022 Additions Deletions June 30, 2023 One Year Than One Year Leases receivable $ 510,745 $ (47,685) - $ $ 463,060 $ 22,570 $ 440,490 Classification
As of June 30, 2023, the required payments for these leases, including interest, are:

Year Ending
June 30, Principal Interest Total
2024 22,570 $ 8,516 $ 31,086 $
2025 20,187 8,210 28,397
2026 14,572 7,926 22,498
2027 15,421 7,640 23,061
2028 16,301 7,336 23,637
2029-2033 95,835 31,514 127,349
2034-2038 122,993 21,092 144,085
2039-2042 155,181 7,838 163,019
Total $ 463,060 $ 100,072 $ 563,132
As of June 30, 2023, the amounts reported as deferred inflows of resources will be recognized as lease revenue as follows:

Year Ending Amortization
June 30, Schedule
2024 31,006 $
2025 27,814
2026 21,429
2027 21,429
2028 21,429
2029-2033 107,144
2034-2038 107,144
2039-2042 107,141
Total $ 444,536
City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
85 Note 5 – Lease Receivable (Continued)
B. Business-Type Activities
Certain portions of the City’s property is leased to others. Such property includes special purpose facilities, office and commercial space, and land. Lease receivable consists of agreements with other for the right-to-use of the underlying assets at various locations owned by the City. The terms of the arrangements range from 2 to 99 years.

The calculated interest rates used vary depending on the length of the lease. For the fiscal year ended June 30, 2023, the City recognized $52,768 in lease revenue and $16,920 in interest revenue.

A summary of changes in lease receivable for the fiscal year ended June 30, 2023 is as follows:

Balance Balance Due within Due in More
July 1, 2022 Additions Deletions June 30, 2023 One Year Than One Year Leases receivable $ 911,714 $ (52,768) - $ $ 858,946 $ 36,784 $ 822,162 Classification
As of June 30, 2023, the required payments for these leases, including interest, are:

Year Ending
June 30, Principal Interest Total
2024 36,784 $ 16,238 $ 53,022 $
2025 37,459 15,563 53,022
2026 38,146 14,876 53,022
2027 38,846 14,176 53,022
2028 39,559 13,462 53,021
2029-2033 198,232 56,258 254,490
2034-2038 163,924 38,738 202,662
2039-2043 150,335 23,714 174,049
2044-2048 132,530 8,521 141,051
2049-2050 23,131 278 23,409
Total $ 858,946 $ 201,824 $ 1,060,770
As of June 30, 2023, the amounts reported as deferred inflows of resources will be recognized as lease revenue as follows:

Year Ending Amortization
June 30, Schedule
2024 43,419 $
2025 43,419
2026 43,419
2027 43,419
2028 43,419
2029-2033 207,212
2034-2038 160,116
2039-2043 134,554
2044-2048 108,394
2049-2050 17,818
Total $ 845,189
City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
86 Note 6 – Interfund Receivables, Payables, and Transfers A. Due To / From Other Funds
Amounts due to and due from other funds at June 30, 2023, were as follows:

Receivable Fund Payable Fund Amount Purpose
General Fund Federal Aid Urban Special Revenue Fund $ 36,181 Overdrawn Cash General Fund Street Construction Special Revenue Fund 378,236 Overdrawn Cash General Fund Intermodal Building Special Revenue Fund 38,560 Overdrawn Cash General Fund Low and Moderate Income Housing Special Revenue Fund 343,470 Overdrawn Cash General Fund Solar Energy Lease Capital Projects Fund 3,191,484 Overdrawn Cash General Fund Local Transit Enterprise Fund 1,255,040 Overdrawn Cash General Fund Golf Course Enterprise Fund 563,534 Overdrawn Cash Total $ 5,806,505
B. Transfers
Interfund transfers during the year ended June 30, 2023, consisted of the following:

Transfers In Transfers Out Amount Purpose
General Fund Community Facilities District Special Revenue Fund $ 316,440 Administrative cost General Fund Parking District Operations Special Revenue Fund Administrative cost 7,709 General Fund Measure "T" Sales Tax Special Revenue Fund 897,474 Capital projects General Fund Solid Waste Disposal Enterprise Fund 390,000 Capital projects General Fund Special Gas Tax Special Revenue Fund 1,060,684 Capital projects General Fund Street Construction Special Revenue Fund 512,000 Capital projects General Fund Airport Enterprise Fund 3,545 Cost recovery General Fund Drainage Operations Enterprise Fund 8,577 Cost recovery General Fund General Development Impact Fee Special Revenue Fund 128,771 Cost recovery General Fund Intermodal Facility Special Revenue Fund 254 Cost recovery General Fund Internal Service Funds 34,200 Cost recovery General Fund Local Transit Fund 4,704 Cost recovery
General Fund Parking District Operations Special Revenue Fund 317 Cost recovery General Fund Sewer Enterprise Fund 46,782 Cost recovery General Fund Solid Waste Disposal Enterprise Fund 219,765 Cost recovery General Fund Water Enterprise Fund 103,316 Cost recovery General Fund Drainage Operations Enterprise Fund 45,000 Engineering costs General Fund American Rescue Plan Act Fund Capital projects 234 General Fund General Development Impact Fee Special Revenue Fund 15,000 Engineering costs Subtotal 3,794,772
Solar Energy Lease Capital Projects Fund Airport Enterprise Fund 14,127 Debt service Solar Energy Lease Capital Projects Fund Drainage Operations Enterprise Fund 7,514 Debt service Solar Energy Lease Capital Projects Fund General Fund 83,554 Debt service Solar Energy Lease Capital Projects Fund Intermodal Facility Special Revenue Fund 4,072 Debt service Solar Energy Lease Capital Projects Fund Internal Service Funds 87,877 Debt service Solar Energy Lease Capital Projects Fund Landscape Assessment Special Revenue Fund 1,421 Debt service Solar Energy Lease Capital Projects Fund Parking District Operations Special Revenue Fund 1,004 Debt service Solar Energy Lease Capital Projects Fund Sewer Enterprise Fund 107,259 Debt service Solar Energy Lease Capital Projects Fund Solid Waste Disposal Enterprise Fund 1,132 Debt service Solar Energy Lease Capital Projects Fund Water Enterprise Fund 197,263 Debt service Subtotal 505,223
Golf Course Enterprise Fund General Fund 298,804 Capital projects Internal Service Funds Local Transit Fund 57,000 Cost recovery Water Fund American Rescue Plan Act Fund 310,733 Capital projects Sewer Fund American Rescue Plan Act Fund 2,210,056 Capital projects Sewer Fund General Development Impact Fee Special Revenue Fund 254,000 Debt service Subtotal 2,464,056
Solid Waste Enterprise Fund Internal Service Funds 50,000 Capital projects Streets and Roads Special Revenue Fund Special Gas Tax Special Revenue Fund 4,323 Capital projects Total $ 7,484,911
City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
87 Note 6 – Interfund Receivables, Payables, and Transfers (Continued) C. Long-Term Advances
At June 30, 2023, the balances of long-term advances were as follows:

Advances To Advances From Amount
General Fund Golf Course Enterprise Fund $ 12,240
General Fund Advance to the Golf Course Fund
On January 1, 2014, the General Fund entered into loan agreement with the Golf Course Fund in the amount of $1,710,000. The loan is to be repaid over 20 years at 0.0% interest rate per year. This loan is for funding facility construction. At June 30, 2023, the outstanding balance of the agreement was $12,240.

The annual requirements to amortize the loan are as follows:

Year Ending
June 30, Principal Interest Total
2024 $ 12,240 $ - $ 12,240
Note 7 – Due from Fiduciary Funds
Due from fiduciary funds as of June 30, 2023, was as follows:

Receivable Fund Payable Fund Amount Purpose
General Deposit Custodial Fund General Fund $ 614,305 Reimbursement City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
88 Note 8 – Capital Assets
A. Governmental Activities
The summary of changes in governmental activities capital assets for the year ended June 30, 2023, is as follows:

Balance
July 1, 2022, Balance
as restated Additions Deletions Transfers June 30, 2023 Capital assets, not being depreciated
Land $ 12,614,951 $ 259,585 $ (205,000) - $ $ 12,669,536 Construction in progress 23,851,579 1,912,873 (999,946) - 24,764,506 Total capital assets, not being depreciated 36,466,530 2,172,458 (1,204,946) - 37,434,042 Capital assets, being depreciated
Building and improvements 25,042,669 - 7,926,469 - 32,969,138 Infrastructure 319,937,316 672,973 (7,091,198) - 313,519,091 Equipment 18,222,525 342,727 (623,395) 369,675 18,311,532 Total capital assets, being depreciated 363,202,510 1,015,700 (623,395) 1,204,946 364,799,761 Accumulated depreciation:

Building and improvements (10,236,124) (720,725) - (10,956,849) - Infrastructure (181,397,917) (6,275,342) - (187,673,259) - Equipment (9,960,133) (998,354) 530,528 (10,427,959) -
Subtotal (201,594,174) (7,994,421) 530,528 (209,058,067) - Total capital assets, being depreciated, net 161,608,336 (6,978,721) (92,867) 1,204,946 155,741,694 Subscription assets, being amortized 288,695 24,126 - - 312,821 Less acumulated amortization (37,069) - - - (37,069)
Total subscription assets, being amortized, net 288,695 (12,943) - - 275,752 Total capital assets, net $ (4,819,206) 198,363,561 $ (92,867) $ - $ 193,451,488 $ Depreciation and amortization expense were charged to the functions/programs of the governmental activities as follows:

General government $ 5,075,855
Public protection 467,942
Social services 11,981
Public ways and facilities 1,136,038
Culture and recreation 660,737
Internal service funds 678,937
Total depreciation/amortization expense $ 8,031,490
City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
89 Note 8 – Capital Assets (Continued)
B. Business-Type Activities
The summary of changes in business-type activities capital assets for the year ended June 30, 2023, is as follows:

Balance Balance
July 1, 2022 Additions Deletions Transfers June 30, 2023 Capital assets, not being depreciated
Land $ 9,725,315 $ - $ - $ 9,725,315 - $
Construction in progress 1,762,601 1,181,681 - 2,944,282 - Total capital assets, not being depreciated 11,487,916 1,181,681 - 12,669,597 - Capital assets, being depreciated
Building and improvements 65,594,837 26,982 - 65,621,819 - Infrastructure 102,868,765 354,160 - 103,222,925 -
Equipment 9,440,737 482,002 (39,956) 9,882,783 -
Total capital assets, being depreciated 177,904,339 863,144 (39,956) 178,727,527 - Accumulated depreciation:

Building and improvements (38,962,953) (2,049,384) - (41,012,337) - Infrastructure (44,049,076) (2,099,564) - (46,148,640) - Equipment (2,972,241) (284,279) 39,956 (3,216,564) -
Total accumulated depreciation (85,984,270) (4,433,227) 39,956 (90,377,541) - Total capital assets, being depreciated, net 91,920,069 (3,570,083) - 88,349,986 - Total capital assets, net $ 103,407,985 $ (2,388,402) $ - $ 101,019,583 - $ Depreciation expense was charged to the functions/programs of the business-type activities as follows:

Water $ 907,175
Sewer 2,451,263
Drainage operations 348,794
Local transit 428,319
Airport 297,676
Total depreciation expense $ 4,433,227
City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
90 Note 8 – Capital Assets (Continued)
C. Fiduciary Fund Financial Statements
The summary of changes in capital assets for fiduciary funds for the year ended June 30, 2023, is as follows:

Balance Balance
July 1, 2022 Additions Deletions June 30, 2023
Capital assets, not being depreciated
Land $ 16,701 $ - $ 16,701 - $
Total capital assets, not being depreciated 16,701 - 16,701 - Capital assets, being depreciated
Building and improvements 2,359,125 - 2,359,125 -
Total capital assets, being depreciated 2,359,125 - 2,359,125 - Accumulated depreciation:

Building and improvements (830,639) (34,738) (865,377) - Total accumulated depreciation (830,639) (34,738) (865,377) - Total capital assets, being depreciated, net 1,528,486 (34,738) 1,493,748 - Total capital assets, net $ (34,738) 1,545,187 $ - $ 1,510,449 $ Depreciation expense for fiduciary fund financial statements for the year ended June 30, 2023 was $34,738.

D. Component Unit
The summary of changes in capital assets for the component unit for the twelve month period ended September 30, 2022, is as follows:

Balance
October 1, 2021, Balance
as restated Additions Deletions September 30, 2022
Capital assets, not being depreciated
Land 675,827 $ - $ - $ 675,827 $
Total capital assets, not being depreciated 675,827 - - 675,827 Capital assets, being depreciated
Building and improvements 30,696,469 92,931 30,789,400 - Equipment 816,628 143,323 (76,571) 883,380
Total capital assets, being depreciated 31,513,097 236,254 (76,571) 31,672,780 Less: accumulated depreciation (25,863,789) (707,588) (26,571,377) - Total capital assets, being depreciated, net 5,649,308 (471,334) (76,571) 5,101,403 Total capital assets, net $ (471,334) 6,325,135 $ (76,571) $ 5,777,230 $ Depreciation expense for the component unit for the twelve month period ended September 30, 2022 was $707,588.

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
91 Note 9 – Long-Term Liabilities
A. Governmental Activities
A summary of changes in the long-term liabilities of the governmental activities for the year ended June 30, 2023, is as follows:

Balance
July 1, 2022, Debt Debt Balance Due within Due in More
as restated Issued Retired June 30, 2023 One Year Than One Year Governmental Activities:

Direct borrowings:

Subscription liability $ 288,695 $ 23,636 $ (102,914) $ 209,417 $ 100,243 $ 109,174 Finance purchase agreement 18,644,000 (810,000) - 17,834,000 833,000 17,001,000 Loans payable 414,200 (114,400) - 299,800 117,400 182,400 Public borrowings:

Lease revenue bonds:

Series 2019, New Fire Station 3,615,000 (145,000) - 3,470,000 150,000 3,320,000 plus: bond premium 548,695 (30,167) - 518,528 518,528 - Total lease revenue bonds 4,163,695 (175,167) - 3,988,528 150,000 3,838,528 Total $ 23,510,590 $ 23,636 $ (1,202,481) $ 22,331,745 $ 1,200,643 $ 21,131,102 Classification
2019 Solar Energy Finance Purchase (Direct Borrowing)
On December 30, 2019, the City entered into an equipment finance purchase agreement in a direct placement transaction with Bank of America for an energy improvement and upgrade project (2019 Solar Equipment Finance Purchase) in the amount of $19,432,000. The energy project improvements include HVAC upgrade, LED lighting, solar streetlights, EV charging stations and PV solar.

The finance purchase transaction closed on December 30, 2019. The interest was capitalized for the first two years, with interest only payments beginning June 1, 2020 through June 1, 2021 and principal and interest due in semi-annual payments, payable June 1st and December 1st thereafter through December 1st, 2039, with an interest rate of 2.77%. At June 30, 2023, the outstanding balance was $17,834,000.

The annual debt service requirements at June 30, 2023 are as follows:

Year Ending
June 30, Principal Interest Total
2024 833,000 $ 482,465 $ 1,315,465 $
2025 856,000 459,072 1,315,072
2026 880,000 435,029 1,315,029
2027 905,000 410,306 1,315,306
2028 930,000 384,891 1,314,891
2029-2033 5,060,000 1,517,434 6,577,434
2034-2038 5,811,000 765,697 6,576,697
2039-2040 2,559,000 71,369 2,630,369
Total $ 4,526,263 17,834,000 $ 22,360,263 $
City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
92 Note 9 – Long-Term Liabilities (Continued)
A. Governmental Activities (Continued)
2019 Solar Energy Lease Purchase (Direct Borrowing) (Continued) The City entered into finance purchase agreement whereby the City acquired certain capital assets and financed them to the City with the option to purchase. Unspent finance purchase proceeds are included in restricted cash and investments. The leased assets are included in capital assets and are summarized by major asset class below:

Unspent finance purchase proceeds $ 2,517,025
Construction in progress 18,220,272
Total $ 20,737,297
2019 Refunding of the Police Facility (Police Facility Commercial Loan) (Private Borrowing) In December 2005, the City entered into an agreement with La Salle Bank (and subsequently sold to Capital One Public Funding, LLC) to finance a portion of the construction cost for the police facility. The entire purchase price of the police station was $5,200,000. The financed portion of the police station was $1,500,000 and was payable over a period of twenty years.

On January 1, 2018, the agreements was refunded and the Financing Authority paid the City an advance rental for the use and right to the possession of the Police and Golf Course facilities for a total of $2,553,000. The lease was then assigned to Zions Bank/California Bank & Trust on the same day and named the Police Facility Commercial Loan. The bonds are due in annual installments of $50,900 to $61,600 beginning May 2018 with interest rate fixed 2.760% per annum payable semi-annually through December 25th, 2026. Total principal and interest remaining on the agreement is payable through 2026. At June 30, 2023, the outstanding balance was $299,800.

The annual debt service requirements at June 30, 2023 are as follows:

Year Ending
June 30, Principal Interest Total
2024 117,400 $ 7,470 $ 124,870 $
2025 120,800 4,206 125,006
2026 61,600 850 62,450
Total $ 299,800 $ 12,526 $ 312,326
2019 Lease Revenue Bonds (Fire Station) (Public Offering) The Madera Public Financing Authority issued the Lease Revenue Bonds 2019 on June 1, 2019 for $4,005.000.

The proceeds of the bonds will be used to finance the construction of a fire station. The City entered into a Facilities Lease Agreement with the Madera Public Financing Authority to make rental payments. The Bonds are due in annual installments of $230,000 to $307,000 through February 1, 2039 with interest payable semiannually on February 1 and August 1 of each year with interest rate from 3.00% to 5.00%. At June 30, 2023 the outstanding balance was $3,470,000.

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
93 Note 9 – Long-Term Liabilities (Continued)
A. Governmental Activities (Continued)
The annual debt service requirements at June 30, 2023 are as follows:

Year Ending
June 30, Principal Interest Total
2024 150,000 $ 155,350 $ 305,350 $
2025 155,000 147,850 302,850
2026 165,000 140,100 305,100
2027 175,000 131,850 306,850
2028 180,000 123,100 303,100
2029-2033 1,050,000 472,700 1,522,700
2034-2038 1,300,000 219,000 1,519,000
2039 295,000 11,800 306,800
Total $ 1,401,750 3,470,000 $ 4,871,750 $
Subscription Liability
The City has entered into subscription-based information technology arrangements (SBITAs) for services related to cloud-based software applications, data storage and management services. Under the terms of these arrangements, the City does not take possession of the software at any time and the vendor provides ongoing services for the software's operation. The subscription periods vary, with initial non-cancellable terms ranging from 2 to 4 years. The calculated interest rate used was 2.40%.

As of June 30, 2023, the capitalized right-to-use assets related to SBITAs were $312,821 and the total subscription liability was $209,417, of which $100,243 is reported as a current liability representing the amount due within the next fiscal year.

Principal and interest payments to maturity are as follows:

Year Ending
June 30, Principal Interest Total
2024 100,243 $ 4,477 $ 104,720 $
2025 102,830 2,044 104,874
2026 6,344 141 6,485
Total $ 209,417 $ 6,662 $ 216,079
City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
94 Note 9 – Long-Term Liabilities (Continued)
B. Business-Type Activities
A summary of changes in the long-term liabilities of the business-type activities for the year ended June 30, 2023, is as follows:

Balance Debt Debt Balance Due within Due in More
July 1, 2022 Issued Retired June 30, 2023 One Year Than One Year Business-Type Activities:

Direct borrowings:

Loans payable:

BBVA loan $ 6,100,000 $ (379,000) - $ $ 5,721,000 $ 387,000 $ 5,334,000 Airport Hanger loan 27,181 (27,181) - - - -
Golf Course commercial loan 477,900 (316,100) - 161,800 161,800 - Total loans payable 6,605,081 (722,281) - 5,882,800 548,800 5,334,000 Public borrowings:

Bonds payable:

Water and Wastewater Refunding Revenue
Bonds, Series 2015 23,230,000 (1,295,000) - 21,935,000 1,340,000 20,595,000 2019 Water Revenue Refunding Bonds 7,814,894 (435,546) - 7,379,348 447,120 6,932,228 Total bonds payable 31,044,894 (1,730,546) - 29,314,348 1,787,120 27,527,228 Total $ 37,649,975 $ (2,452,827) - $ $ 35,197,148 $ 2,335,920 $ 32,861,228 Classification
Airport Hanger Loan (Private Borrowing)
Loan payable to the Department of Transportation, Division of Aeronautics for the purchase of fourteen airplane hangars; annual installments of $14,131 to $27,180, including interest at 4.7829%. At June 30, 2023, the total principal and interest remaining on the Department of Transportation, Division of Aeronautics loan was paid off.

BBVA Compass Loan (Taxable) (Refinance CIEDB Loan)
In January 2021, the City refinanced the CIEDB Loan for the purpose of saving on annual debt service costs. The loan, in the amount of $6,472,000, is for 15 years with an effective interest rate of 2.41%. The loan is a taxable loan. Annual installment payments range from $502,989 to $522,626 through 2036. The average fiscal year savings is $24,655, with a total savings of $369,829. On June 30, 2023, the outstanding balance was $5,721,000.

The annual debt service requirements at June 30, 2023 are as follows:

Year Ending
June 30, Principal Interest Total
2024 $ 387,000 $ 133,213 $ 520,213
2025 395,000 123,790 518,790
2026 404,000 114,162 518,162
2027 412,000 104,329 516,329
2028 421,000 94,291 515,291
2029-2033 2,241,000 313,288 2,554,288
2034-2036 1,461,000 53,297 1,514,297
Total $ 5,721,000 $ 936,370 $ 6,657,370
City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
95 Note 9 – Long-Term Liabilities (Continued)
B. Business-Type Activities (Continued)
2018 Refunding of the 1993 Variable Rate Demand Bonds (Golf Course Commercial Loan) (Private Placement) In May 1993, the Financing Authority issued Variable Rate Demand Bonds in the aggregate principal of $5,280,000. The proceeds were used to redeem $4,835,000 of its December 8, 1989 Lease Revenue Bonds, Series A, and $262,450 for additional Golf Course construction.

On January 1, 2018, the Bonds were refunded and the Financing Authority paid the City an advance rental for the use and right to the possession of the Golf Course and Police facilities for a total of $2,553,000. The lease was then assigned to Zions Bank/California Bank & Trust on the same day and named the Golf Course Commercial Loan. The loan is due in annual installments of $138,100 ($10,600 first year) to $161,800 beginning May 2018 with interest rate fixed 3.190% per annum payable semi-annually. At June 30, 2023, the outstanding balance was $161,800.

The annual debt service requirements at June 30, 2023 are as follows:

Year Ending
June 30, Principal Interest Total
2024 $ 161,800 $ 2,581 $ 164,381
Total $ 161,800 $ 2,581 $ 164,381
Water and Wastewater Refunding Revenue Bonds, Series 2015 (Public Offering) Water and Wastewater Refunding Revenue Bonds, Series 2015 were issued by the Financing Authority in December 2015 for $30,140,000. Proceeds from the bonds were used to refund $30,440,000 of its Water and Wastewater Refunding Revenue Bonds, Series 2016. The bonds are due in annual installments of $70,000 to $2,080,000 through March 1, 2036, with interest payable semiannually on September 1 and March 1 of each year at 3.700%. At June 30, 2023, the outstanding balance of the Water and Wastewater Revenue Bonds was $21,935,000.

The Financing Authority has pledged a portion of future water and wastewater revenue to repay the 2015 Water and Wastewater Revenue Bonds. For the year ended June 30, 2023, total principal and interest paid was $2,154,510, and net revenues were $7,692,524. Total principal and interest remaining on the agreement is $28,027,420 payable through 2036.

The annual debt service requirements at June 30, 2023 are as follows:

Year Ending
June 30, Principal Interest Total
2024 1,340,000 $ 811,595 $ 2,151,595 $
2025 1,395,000 762,015 2,157,015
2026 1,450,000 710,400 2,160,400
2027 1,505,000 656,750 2,161,750
2028 1,555,000 601,065 2,156,065
2029-2033 8,675,000 2,099,935 10,774,935
2034-2036 6,015,000 450,660 6,465,660
Total $ 6,092,420 21,935,000 $ 28,027,420 $
City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
96 Note 9 – Long-Term Liabilities (Continued)
B. Business-Type Activities (Continued)
Water Refunding Revenue Bonds, Series 2019 (Public Offering) Water Refunding Bonds, Series 2019 were issued by the Financing Authority in December 2019 for $9,016,903.

The City used the proceeds to refund the outstanding principal of the Water Revenue Bonds, Series 2010 in the amount of $9,530,000. The bonds are due semi-annual installments of $204,890 to $312,774 with interest rate fixed at 2.64% per annum payable semi-annually through 2037. At June 30, 2023 the outstanding principal and interest balance was $8,872,316. The aggregate debt service payments of the new debt are $2,587,313 less than the old debt. The issuance of the new debt and refunding of the old debt resulted in an economic gain (the difference between the net present value of the old debt and new debt service payments) of approximately $2,053,508.

The Financing Authority has pledged a portion of future water and wastewater revenue to repay the 2019 Water Revenue Bonds. For the year ended June 30, 2023, total principal and interest paid was $638,985, and net revenues were $4,318,142.

The annual debt service requirements at June 30, 2023 are as follows:

Year Ending
June 30, Principal Interest Total
2024 447,120 $ 191,863 $ 638,983 $
2025 457,908 179,988 637,896
2026 467,850 167,834 635,684
2027 480,334 155,400 635,734
2028 487,160 142,675 629,835
2029-2033 2,651,697 510,999 3,162,696
2034-2037 2,387,279 144,209 2,531,488
Total $ 1,492,968 7,379,348 $ 8,872,316 $
C. Fiduciary Fund Financial Statements
A summary of changes in the long-term liabilities of the fiduciary fund financial statements for the year ended June 30, 2023, is as follows:

Balance Debt Debt Balance Due within Due in More
July 1, 2022 Issued Retired June 30, 2023 One Year Than One Year Fiduciary Activities:

Public borrowings:

Tax allocation bonds:

Series 2018A 29,475,000 $ - $ (770,000) $ 28,705,000 $ 1,005,000 $ 27,700,000 $ Series 2018B 2,105,000 - (670,000) 1,435,000 510,000 925,000 Add: unamortized bond premiums 3,663,971 - (228,998) 3,434,973 - 3,434,973 Total tax allocation bonds 35,243,971 (1,668,998) - 33,574,973 1,515,000 32,059,973 Total $ 35,243,971 $ (1,668,998) - $ $ 33,574,973 $ 1,515,000 $ 32,059,973 Classification
City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
97 Note 9 – Long-Term Liabilities (Continued)
C. Fiduciary Fund Financial Statements (Continued)
Tax Allocation Refunding Bonds, Series 2018A and 2018B (Public Offering) On July 17, 2018, the Successor Agency to the Former Madera Redevelopment Agency issued $31,445,000 of Tax Allocation Refunding Bonds, Series 2018A and $4,065,000 of Tax Allocation Refunding Bonds, Series 2018B (collectively the “2018 TARBs”) to (a) refund four outstanding series of bonds payable (the 1998 Tax Allocation Redevelopment Project Bonds, the 2003 Tax Allocation Refunding and Redevelopment Project Bonds, the Madera Redevelopment Agency Subordinate Tax Allocation Bonds, Series 2008A, and the Madera Redevelopment Agency Housing Set-Aside Subordinate Tax Allocation Bonds, Series 2008B) from tax increment revenue generated in the Madera Redevelopment Project Area (the “Project Area”), (b) fund a reserve account, and (c) pay the costs of issuance of the bonds. The 2018 TARBs are payable from and secured by a pledge of tax revenues to be derived from the Project Area.

The 2018 TARBs consist of serial bonds maturing from 2019 through 2038 in annual installments of $390,000 to $2,405,000. Interest is due and payable semi-annually on March 1 and September 1 of each year at rates ranging from 3.0% to 5.0% commencing March 1, 2019. Annual principal on the bonds is due on September 1 of each year through 2038. The bonds are subject to federal arbitrage requirements. The aggregate debt service payments of the new debt are $11,314,301 less than the old debt. The issuance of the new debt and refunding of the old debt resulted in an economic gain (the difference between the net present value of the old debt and new debt service payments) of approximately $8,659,587.

A reserve account is required to be maintained in the amount of the lesser of (i) 10% of the original aggregate principal amount of the 2018 TARBs, or (ii) 125% of the average annual debt service with respect to the 2018 TARBs, or (iii) the maximum annual debt service with respect to the 2018 TARBs. As of June 30, 2023, the reserve requirement was met through the City’s purchase of a surety policy in-lieu of the cash reserve requirement. The total principal and interest outstanding at June 30, 2023 is $41,615,044.

The annual debt service requirements for the 2018 TARBs outstanding at June 30, 2023 are as follows:

Year Ending
June 30, Principal Interest Total
2024 1,005,000 $ 1,298,650 $ 2,303,650 $
2025 1,045,000 1,247,400 2,292,400
2026 1,230,000 1,190,525 2,420,525
2027 1,705,000 1,125,675 2,830,675
2028 1,765,000 1,047,450 2,812,450
2029-2033 10,160,000 3,986,725 14,146,725
2034-2038 11,405,000 1,501,000 12,906,000
2039 390,000 6,338 396,338
Total $ 28,705,000 $ 11,403,763 $ 40,108,763
Tax Allocation Refunding Bonds, Series 2018A
Year Ending
June 30, Principal Interest Total
2024 510,000 $ 40,895 $ 550,895 $
2025 525,000 23,296 548,296
2026 400,000 7,120 407,120
Total $ 71,311 1,435,000 $ 1,506,311 $
Tax Allocation Refunding Bonds, Series 2018B
City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
98 Note 9 – Long-Term Liabilities (Continued)
D. Component Unit
A summary of changes in the long-term liabilities of the component unit for the twelve month period ended September 30, 2022, is as follows:

Balance Debt Debt Balance Due within Due in More
October 1, 2021 Issued Retired September 30, 2022 One Year Than One Year Component Unit:

Direct borrowings:

Loans payable:

Farmers' Home Administration loan 219,019 $ $ - $ (17,694) $ 201,325 $ 18,605 $ 182,720 Citizen Business Bank loan 2,687,812 (112,675) - 2,575,137 117,381 2,457,756 Total loans payable 2,906,831 (130,369) - 2,776,462 135,986 2,640,476 Total $ 2,906,831 $ (130,369) - $ $ 2,776,462 $ 135,986 $ 2,640,476 Classification
Farmers' Home Administration loan
Notes payable to Farmers' Home Administration, 1.00% due in monthly installments of $1,653, including interest, first trust deeds on land and building subject to note.

Citizen Business Bank loan
Note payable to Citizen Business Bank, 4.75% due in monthly installments of $19,852, including interest, secured by assets subject to note.

The total annual debt service requirements for the Component Unit long-term liabilities outstanding at September 30, 2022 are as follows:

Year Ending
June 30, Principal Interest Total
2024 $ 135,986 $ 121,443 $ 257,429
2025 146,910 115,510 262,420
2026 148,769 109,292 258,061
2027 155,282 102,777 258,059
2028 162,106 95,955 258,061
2029-2033 1,989,684 33,812 2,023,496
2034-2037 37,725 442 38,167
Total $ 2,776,462 $ 579,231 $ 3,355,693
City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
99 Note 10 – Special Assessment Debt with No City Commitment The City issued special tax and assessment bonds on behalf of property owners, pursuant to the Improvement Bond Act of 1915 and the Mello-Roos Community Facilities Act of 1982, to finance the acquisition and construction of certain infrastructure improvements within the assessment districts and community facilities districts.

The City acts solely as an agent for those paying special tax and assessments and remits the amounts collected to the bondholders of these fixed-rate Improvement Bond Act of 1915 and Mello-Roos Community Facilities Act of 1982 issues. The City is acting as an custodian and is in no way liable for the special assessment debt and, accordingly, the debt is not recorded in these financial statements.

On January 1, 2018, the City of Madera, on behalf of the City of Madera Community Facilities District No. 2006-1, issued the City of Madera Community Facilities District No. 2006-1 Special Tax Refunding Bonds Series 2018 to refund the CFD 2006-1 Series Special Tax Bond for the purpose of creating annual debt savings. Total debt service payments were reduced by $88,740. The amount of principal outstanding as of June 30, 2023 is $2,068,320 The bonds are not a general obligation of the City but are limited obligations, payable solely from special tax and assessments.

The City has no obligation beyond the balances in the designated custodial funds for any delinquent assessment district bond payments. If delinquencies occur beyond the amounts held in the reserve funds created from bond proceeds, the City has no duty to pay the delinquency out of the available funds of the City. Neither the faith and credit nor the taxing power of the City, or the State of California, or any political subdivision thereof is pledged to the payment of these bonds.

Noncommittal debt amounts issued and outstanding at June 30, 2023 are as follows:

Outstanding
Original Balance
Amount June 30, 2023
CFD 2006-1, Series Special Tax Bonds Refunding Bonds Series 2019 2,452,228 $ 2,068,320 $ Note 11 – Compensated Absences
A. Governmental Activities
A summary of changes in the compensated absences balances for the governmental activities for the year ended June 30, 2023 is as follows:

Balance Balance Due within Due in More
July 1, 2022 Additions Deletions June 30, 2023 One Year Than One Year Compensated absences $ 1,856,077 $ 1,445,059 $ (1,360,147) $ 1,940,989 $ 1,360,147 $ 580,842 Classification
Compensated absences in the governmental activities are obligations of the following funds:

Governmental Funds $ 1,739,098
Fleet Maintenance 44,009
Facilities Maintenance 119,357
Technology 38,525
Total $ 1,940,989
City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
100
Note 11 – Compensated Absences (Continued)
B. Business-Type Activities
A summary of changes in the compensated absences balances for the business-type activities for the year ended June 30, 2023 is as follows:

Balance Balance Due within Due in More
July 1, 2022 Additions Deletions June 30, 2023 One Year Than One Year Compensated absences $ 463,245 $ 357,131 $ (380,783) $ 439,593 $ 363,316 $ 76,277 Classification
Compensated absences in the business-type activities are obligations of the following funds:

Water Fund $ 185,534
Sewer Fund 112,647
Solid Waste Fund 70,726
Drainage Operations Fund 32,869
Local Transit Fund 26,944
Airport Fund 10,873
Total $ 439,593
C. Component Unit
A summary of changes in the compensated absences balances for the component unit for the twelve month period ended September 30, 2022 is as follows:

Balance
October 1, 2021, Balance Due within Due in More
as restated Additions Deletions September 30, 2022 One Year Than One Year Compensated absences 36,379 $ 94,789 $ - $ 131,168 $ 65,584 $ 65,584 $ Classification
All compensated absences liabilities in the component unit belong to the Housing Authority of the City of Madera.

Note 12 – Risk Management
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters for which the City obtains insurance coverage.

The City is a member of the Central San Joaquin Valley Risk Management Authority (CSJVRMA), a public entity risk pool for workers’ compensation and general liability insurance. The CSJVRMA is a consortium of fifty-three cities located in California’s San Joaquin Valley. It was established under the provisions of California Government Code Section 6500 et. seq. CSJVRMA is governed by a Board of Directors, consisting of one member appointed by each member city. The day-to-day business operations are handled by a management group employed by CSJVRMA.

The relationship between the City and CSJVRMA is such that the CSJVRMA is not considered a component unit of the City for financial reporting purposes.

General Liability Insurance coverage is addressed via retention maintained by the City and participation in CSJVRMA. The City maintains a self-insured retention level of $100,000 and participates in the CSJVRMA risk pool for coverage up to $1,000,000. CSJVRMA participates in an excess pool, which provides coverage from $1,000,000 to $29,000,000.

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
101
Note 12 – Risk Management (Continued)
Workers’ Compensation coverage is also addressed via a retention maintained by the City and participation in CSJVRMA. The City maintains a self-insured retention level of $100,000 and participates in the CSJVRMA risk pool for additional coverage up to $250,000. CSJVRMA also participates in an excess pool which provides workers’ compensation coverage from $250,000 to $500,000 and purchases excess insurance of approximately $500,000 to the statutory limit.

Public entity risk pools are formally organized and separated entities established under the Joint Exercise of Powers Act of the State of California. As separate legal entities, those entities exercise full powers and authorities within the scope of the related Joint Powers Agreements including the preparation of annual budgets, accountability for all funds, the power to make and execute contracts and the right to sue and be sued. Each risk pool is governed by a board consisting of representatives from member municipalities. Each board controls the operations of the respective risk pool, including selection of management and approval of operating budgets, independent of any influences by member municipalities beyond their representation of that board. Obligations and liabilities of these risk pools are not the City's responsibility.

CSJVRMA is currently operating as a common risk management and insurance program for 53 member cities. The program's general objectives are to formulate, develop, and administer, on the behalf of the member cities, a program of insurance, to obtain lower cost for that coverage, and to develop a comprehensive loss control program. A member may withdraw from CSJVRMA only by giving six-month notice. Cities applying for membership in CSJVRMA may do so on approval of a two-thirds vote of the board of CSJVRMA.

The financial information of the CSJVRMA for fiscal year ended June 30, 2023, is as follows:

Total assets $ 153,984,502
Total liabilities $ 120,022,096
Net position $ 33,962,406
Operating revenues $ 73,024,624
Operating expenses $ 71,300,255
Nonoperating revenues (expenses) $ 64,143
Change in net position $ 1,788,512
City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
102
Note 13 – Pension Plans
A. Summary
Governmental Business-Type Component
Activities Activities Total Unit
Deferred outflows of resources:

Pension contribution made after measurement date:

CalPERS Miscellaneous $ 2,703,821 $ 1,363,432 $ 4,067,253 $ 21,980 CalPERS Safety 3,202,253 3,202,253 - -
Total pension contribution made after measurement date 5,906,074 1,363,432 7,269,506 21,980 Change in assumption:

CalPERS Miscellaneous 1,335,436 673,408 2,008,844 413,134 CalPERS Safety 2,379,547 2,379,547 - -
Total change in assumption 3,714,983 673,408 4,388,391 413,134 Projected earnings on pension plan investments in excess of actual earnings:

CalPERS Miscellaneous 2,315,559 1,167,649 3,483,208 738,505 Total projected earnings on pension plan investments in excess of actual earnings 2,315,559 1,167,649 3,483,208 738,505 Difference between expected and actual experience:

CalPERS Miscellaneous - - - 80,965
CalPERS Safety 720,426 - 720,426 -
Total difference between expected and actual experience 720,426 - 720,426 80,965 Adjustment due to difference in proportions:

CalPERS Miscellaneous - - - 4,088
CalPERS Safety 183,234 - 183,234 -
Total adjustment due to difference in proportions 183,234 - 183,234 4,088 Employer contributions in excess of proportionate share of contribution:

CalPERS Miscellaneous - - - 149,611
CalPERS Safety 3,726,695 3,726,695 - -
Total employer contributions in excess of proportionate share of contribution 3,726,695 3,726,695 - 149,611 Total deferred outflows of resources
CalPERS Miscellaneous 6,354,816 3,204,489 9,559,305 1,408,283 CalPERS Safety 10,212,155 10,212,155 - -
Total deferred outflows of resources $ 16,566,971 $ 3,204,489 $ 19,771,460 $ 1,408,283 Net pension liability:

CalPERS Miscellaneous $ 10,909,961 21,635,534 $ 32,545,495 $ 4,031,725 $ CalPERS Safety - 23,599,525 23,599,525 -
Total net pension liability $ 10,909,961 45,235,059 $ 56,145,020 $ 4,031,725 $ Deferred inflows of resources:

Adjustment due to difference in proportions:

CalPERS Miscellaneous $ - - $ - $ 494,153 $
Total adjustment due to difference in proportions - - - 494,153 Employer contributions in excess of proportionate share of contribution:

CalPERS Miscellaneous - - - 55,284
CalPERS Safety 507,386 - 507,386 -
Total employer contributions in excess of proportionate share of contribution 507,386 - 507,386 55,284 Changes in actual vs. expected experience
CalPERS Miscellaneous 328,930 165,866 494,796 54,227
Total difference between expected and actual experience 328,930 165,866 494,796 54,227 Total deferred inflows of resources
CalPERS Miscellaneous 328,930 165,866 494,796 603,664
CalPERS Safety 507,386 - 507,386 -
Total deferred inflows of resources $ 165,866 836,316 $ 1,002,182 $ 603,664 $ Pension expenses (income):

CalPERS Miscellaneous $ 1,190,343 2,360,567 $ 3,550,910 $ (742,558) $ CalPERS Safety - 414,758 414,758 -
Total net pension expenses (income) $ 2,775,325 $ 1,190,343 $ 3,965,668 $ (742,558) City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
103
Note 13 – Pension Plans (Continued)
B. City Miscellaneous Plan
Plan Description
Substantially all City employees working the equivalent of 1,000 hours per fiscal year are eligible to participate in the Miscellaneous Plan Agent multiple-employer defined benefit plan or the Safety Plan Cost-sharing multipleemployer defined benefit administered by California Public Employees Retirement System (CalPERS), which acts as a common investment and administrative agent for its participating member employers. Benefit Provisions under the Plans are established by State statutes within the Public Employee’s Retirement Law. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website. Copies of the CalPERS annual financial report may be obtained from the CalPERS Executive Office – 400 P Street, Sacramento, CA 95814.

Employees Covered
At June 30, 2022, the measurement date, the following employees were covered by the benefit terms for the Plan:

Active employees 173
Non-contributing members not drawing retirement 267
Retired employees and beneficiaries 265
Total 705
Benefits Provided
CalPERS provide retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Classic CalPERS member becomes eligible for service retirement upon attainment of age 50; full formula at age 55 with at least 5 years of credited service. Public Employees’ Pension Reform Act (“PEPRA”) miscellaneous members become eligible for service retirement upon attainment of age 52; full formula at 62 with at least 5 years of service. The service retirement benefit is a monthly allowance equal to the product of the benefit factor, years of service, and final compensation. The final compensation is the monthly average of the member's highest 36 full-time equivalent monthly pay.

Following are the benefit provisions for each plan:

Prior to January 1, 2011 thru On or After
Hire Date January 1, 2011 January 1, 2013 January 1, 2013 Benefit formula 2.5% @ 55 2% @ 60 2% @ 62
Benefit vesting schedule 5 years service 5 years service 5 years service Benefit payments Monthly for life Monthly for life Monthly for life Retirement age 50 - 55 50 - 63 52 - 67
Monthly benefits, as a % of eligible compensation 2.000% to 2.500% 1.092% to 2.418% 1.000% to 2.500% Required employee contribution rates 8.00% 7.000% 6.900% Required employer contribution rates 9.830% 9.830% 9.830% Final Annual Compensation 1 year 3 years 3 years
City Miscellaneous Plan
City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
104
Note 13 – Pension Plans (Continued)
B. City Miscellaneous Plan (Continued)
Contributions
Section 20814(c) of the California Public Employees’ Retirement Law (“PERL”) requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS’ annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. For the year ended June 30, 2023, the employer contributions made for the Miscellaneous Plan was $4,067,253.

Net Pension Liability
The City’s net pension liability is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of the Plan is measured as of June 30, 2022, using an annual actuarial valuation as of June 30, 2021 rolled forward to June 30, 2022 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is described as follows.

Actuarial Assumptions
The total pension liabilities in the June 30, 2021 actuarial valuations were determined using the following actuarial assumptions:

Actuarial Cost Method
Actuarial Assumptions:

Discount Rate
Inflation
Payroll Growth
Salary Increases
Investment Rate of Return
Mortality Rate Table
Post Retirement Benefit Increase

7.00%
Derived using CalPERS’ Membership Data for all Funds. The mortality table used was developed based on CalPERS’ specific data. The table includes 20 years of mortality improvements using Society of Actuaries Scale BB.

Contract COLA up to 2% until Purchasing Power Protection Allowance Floor on Purchasing Power applies, 2% thereafter
Entry Age Normal in accordance with the requirement of GASB Statement No. 68

6.90%

2.30%
Varies by Entry Age and Service

2.80%
The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2021 valuation were based on the results of December 2021 actuarial experience study for the period 2000 to 2019. Further details of the Experiences Study can be found on the CalPERS website.

Change in Assumptions
The discount rate lowered from 7.15% in 2022 to 6.90% in 2023. The inflation rate lowered from 2.50% in 2022 to 2.30% in 2023. The payroll growth increased from 2.75% in 2022 to 2.80% in 2023. The investment rate of return lowered from 7.25% in 2022 to 7.00% in 2023. In the prior year, the actuarial report did not have any changes in assumptions.

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
105
Note 13 – Pension Plans (Continued)
B. City Miscellaneous Plan (Continued)
Discount Rate
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 pension fund cash flows. Such cash flows were developed assuming that both members and employers will make their required contributions on time and as scheduled in all future years. 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 (11-60 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 rounded down to the nearest one quarter of one percent.

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

Assumed Asset
Asset Class Allocation Real Return1,2
Global equity - cap-weighted 30.00% 4.45%
Global equity - non-cap-weighted 12.00% 3.84%
Private equity 13.00% 7.28%
Treasury 5.00% 0.27%
Mortgage-backed securities 5.00% 0.50%
Investment grade corporates 10.00% 1.56%
High yield 5.00% 2.27%
Emerging market debt 5.00% 2.48%
Private debt 5.00% 3.57%
Real assets 15.00% 3.21%
Liquidity -5.00% -0.59%
1 An expected inflation of 2.30% used for this period
2 Figures are based on the 2021 Asset Liability Management study.

The discount rate used to measure the total pension liability was 6.90% for the plan. To determine whether the municipal bond rate should be used in the calculation of a discount rate for each plan, CalPERS stress tested plans that would most likely result in a discount rate that would be different from the actuarially assumed discount rate.

Based on the testing, none of the tested plans run out of assets. Therefore, the current 6.90% discount rate is adequate and the use of the municipal bond rate calculation is not necessary. The long term expected discount rate of 6.90% is applied to all plans in the Public Employees Retirement Fund (PERF). The stress test results are presented in a detailed report called “GASB Crossover Testing Report” that can be obtained from the CalPERS website under the GASB 68 Section.

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
106
Note 13 – Pension Plans (Continued)
B. City Miscellaneous Plan (Continued)
Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the City’s net pension liability, calculated using the discount rate, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate:

Discount Rate - 1% Current Discount Discount Rate + 1%
(5.90%) Rate (6.90%) (7.90%)
$ 46,010,739 $ 32,545,495 $ 21,437,509
Plan's Aggregate Net Pension Liability/(Asset)
Changes in the Net Pension Liability
The following table shows the changes in net pension liability recognized over the measurement period:

Total Pension
Liability
Plan Fiduciary Net
Position
Net Pension
Liability
Balance at June 30, 2021 (Valuation Date) 97,597,059 $ 78,350,446 $ 19,246,613 $ Changes in the year:

Service cost 1,715,940 - 1,715,940
Interest on the total pension liabilities 6,797,912 - 6,797,912 Changes in assumptions 3,348,073 - 3,348,073
Differences between expected and actual experience (550,819) - (550,819) Benefit payments, including refunds of members contributions (5,463,626) (5,463,626) - Contributions - employer - 3,270,441 (3,270,441)
Contributions - employee - 719,807 (719,807)
Net investment income - (5,929,216) 5,929,216
Administrative expenses - (48,808) 48,808
Net changes 5,847,480 (7,451,402) 13,298,882
Balance at June 30, 2022 (Measurement Date) 103,444,539 $ 70,899,044 $ 32,545,495 $ Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions For the year ended June 30, 2023, the City recognized pension income in the amount of $3,550,910 for the miscellaneous plans.

The amortization period differs depending on the source of the gain or loss. The difference between projected and actual earnings is amortized over 5-years straight line. All other amounts are amortized straight-line over the average expected remaining service lives of all members that are provided with benefits (active, inactive and retired) as of the beginning of the measurement period.

The Expected Average Remaining Service Lifetime (“EARSL”) is calculated by dividing the total future service years by the total number of plan participants (active, inactive, and retired) in the risk pool. The EARSL for the Miscellaneous Plan for the 2021-22 measurement period is 2.5 years, which was obtained by dividing the total service years of 1,699 (the sum of remaining service lifetimes of the active employees) by 680 (the total number of participants: active, inactive, and retired).

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
107
Note 13 – Pension Plans (Continued)
B. City Miscellaneous Plan (Continued)
Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued) At June 30, 2022 the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred outflows Deferred inflows
of Resources of Resources
Pension contributions made subsequent
to measurement date $ 4,067,253 $ -
Difference between projected and actual
earning on pension plan investments 3,483,208 -
Changes in assumptions 2,008,844 -
Differences between expected
and actual experience - (494,796)
Total $ 9,559,305 $ (494,796)
For the City Miscellaneous Plan, $4,067,253 was reported as deferred outflows of resources related to pensions resulting from City’s contributions subsequent to the measurement date and will be recognized as a reduction of the net pension liability in the year ended June 30, 2024. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

Year Ended June 30,
2024 1,496,239 $
2025 1,034,737
2026 210,925
2027 2,255,355
2028 -
Thereafter -
$ 4,997,256
Deferred Outflows/(Inflows)
of Resources
Pension Plan Fiduciary Net Position
Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.

Payable to the Pension Plan
The City reported a payable of $0 for the outstanding amount of contributions to the Miscellaneous pension plan required for the year ended June 30, 2023.

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
108
Note 13 – Pension Plans (Continued)
C. City Safety Plan
Employees Covered
At June 30, 2022, the measurement date, the following employees were covered by the benefit terms the Plan:

Active employees 58
Non-contributing members not drawing retirement 45
Retired employees and beneficiaries 122
Total 225
Benefits Provided
CalPERS provide retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Classic and PEPRA Safety CalPERS member becomes eligible for service retirement upon attainment of age 50 with at least 5 years of credited service. The service retirement benefit is a monthly allowance equal to the product of the benefit factor, years of service, and final compensation. The final compensation is the monthly average of the member's highest 36 full-time equivalent monthly pay.

Following are the benefit provisions for each plan:

Prior to January 1, 2011 thru On or After
Hire Date January 1, 2011 January 1, 2013 January 1, 2013 Benefit formula 3% @ 50 3% @ 55 2.7% @ 57
Benefit vesting schedule 5 years service 5 years service 5 years service Benefit payments Monthly for life Monthly for life Monthly for life Retirement age 50 50 - 55 50 - 57
Monthly benefits, as a % of eligible compensation 3.000% 2.400% to 3.000% 2.000% to 2.700% Required employee contribution rates 9.00% 9.000% 13.000% Required employer contribution rates 23.750% 20.640% 12.780% Final Annual Compensation 1 year 1 year 1 year
Safety
Contributions
Section 20814(c) of the California Public Employees’ Retirement Law (PERL) requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through the CalPERS’ annual actuarial valuation process. For public agency cost-sharing plans covered by the Safety risk pools, the Plan’s actuarially determined rate is based on the estimated amount necessary to pay the Plan’s allocated share of the risk pool’s costs of benefits earned by employees during the year, and any unfunded accrued liability. The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees.

For the year ended June 30, 2023, employer contributions made for the Safety Cost-sharing Plan was $3,202,253.

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
109
Note 13 – Pension Plans (Continued)
C. City Safety Plan (Continued)
Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions The City’s net pension liability for each Plan is measured as the proportionate share of the net pension liability.

The net pension liability of the Plans is measured as of June 30, 2022, and the total pension liability for each Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2021 rolled forward to June 30, 2022 using standard update procedures. The City’s proportion of the net pension liability was based on a projection of the City’s long-term share of contributions to the pension plans relative to the projected contributions of all participating employers, actuarially determined.

As of June 30, 2023, the City reported net pension liability for its proportionate shares of the net pension liability of the Safety Plan as follows:

Plan Total Pension Plan Fiduciary Net Plan Net Pension
Liability Position Liability/(Asset)
Balance at: 6/30/21 (Valuation date) 72,217,372 $ 58,522,823 $ 13,694,549 Balance at: 6/30/22 (Measurement date) 77,276,594 53,677,069 23,599,525 Net Changes during 2021-2022 5,059,222 (4,845,754) 9,904,976 Increase (Decrease)
The following is the approach established by the plan actuary to allocate the net pension liability and pension expense to the individual employers within the risk pool. (1) In determining a cost-sharing plan’s proportionate share, total amounts of liabilities and assets are first calculated for the risk pool as a whole on the valuation date (June 30, 2021). The risk pool’s fiduciary net position (“FNP”) subtracted from its total pension liability (“TPL”) determines the net pension liability (“NPL”) at the valuation date.
(2) Using standard actuarial roll forward methods, the risk pool TPL is then computed at the measurement date (June 30, 2022). Risk pool FNP at the measurement date is then subtracted from this number to compute the NPL for the risk pool at the measurement date. For purposes of FNP in this step and any later reference thereto, the risk pool’s FNP at the measurement date denotes the aggregate risk pool’s FNP at June 30, 2022 less the sum of all additional side fund (or unfunded liability) contributions made by all employers during the measurement period (2021-22).
(3) The individual plan’s TPL, FNP and NPL are also calculated at the valuation date. (4) Two ratios are created by dividing the plan’s individual TPL and FNP as of the valuation date from (3) by the amounts in step (1), the risk pool’s total TPL and FNP, respectively. (5) The plan’s TPL as of the Measurement Date is equal to the risk pool TPL generated in (2) multiplied by the TPL ratio generated in (4). The plan’s FNP as of the Measurement Date is equal to the FNP generated in (2) multiplied by the FNP ratio generated in (4) plus any additional side fund (or unfunded liability) contributions made by the employer on behalf of the plan during the measurement period. (6) The plan’s NPL at the Measurement Date is the difference between the TPL and FNP calculated in (5).

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
110
Note 13 – Pension Plans (Continued)
C. City Safety Plan (Continued)
Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
The City’s proportionate share of the net pension liability for the Safety Plan as of June 30, 2021 and 2022 was as follows:

Proportion June 30, 2021 0.39022%
Proportion June 30, 2022 0.34344%
Change - Increase (Decrease) -0.04678%
For the year ended June 30, 2023, the City recognized pension income in the amount of $414,758 for the Safety Plan.

The amortization period differs depending on the source of the gain or loss. The difference between projected and actual earnings is amortized over 5-years straight line. All other amounts are amortized straight-line over the average expected remaining service lives of all members that are provided with benefits (active, inactive and retired) as of the beginning of the measurement period.

The EARSL for PERF C for the measurement date ending June 30, 2022 is 3.7 years, which was obtained by dividing the total service years of 574,665 (the sum of remaining service lifetimes of the active employees) by 153,587 (the total number of participants: active, inactive, and retired) in PERF C. Inactive employees and retirees have remaining service lifetimes equal to 0. Total future service is based on the members’ probability of decrementing due to an event other than receiving a cash refund.

At June 30, 2022, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred outflows Deferred inflows
of Resources of Resources
Pension contributions made subsequent
to measurement date $ 3,202,253 $ -
Difference between projected and actual earning on
pension plan investments 3,726,695 -
Adjustment due to differences in proportions 183,234 -
Changes in assumptions 2,379,547 -
Difference between actual and expected experience 720,428 - Difference between employer's actual contributions
and proportionate share of contributions - (507,386)
Total $ 10,212,157 $ (507,386)
For the City Safety Plan, $3,202,253 was reported as deferred outflows of resources related to pensions resulting from City’s contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2024.

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
111
Note 13 – Pension Plans (Continued)
C. City Safety Plan (Continued)
Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

Year Ended June 30,
Deferred Outflows/
(Inflows) of Resources
2024 1,929,682 $
2025 1,495,387
2026 804,117
2027 2,273,332
2028 -
Thereafter -
$ 6,502,518
Actuarial Methods and Assumptions Used to Determine Total Pension Liability For the measurement period ended June 30, 2022 (the measurement date), the total pension liability was determined by rolling forward the June 30, 2021 total pension liability. Both the June 30, 2022 and the June 30, 2021 total pension liabilities were based on the following actuarial methods and assumptions:

Actuarial Cost Method
Actuarial Assumptions:

Discount Rate
Inflation
Payroll Growth
Salary Increases
Investment Rate of Return
Mortality Rate Table
Post Retirement Benefit
Increase
Contract COLA up to 2% until Purchasing Power Protection Allowance Floor on Purchasing Power applies, 2% thereafter
Entry Age Normal in accordance with the requirement of GASB Statement No. 68

6.90%

2.75%
Varies by Entry Age and Service

7.00%
Derived using CalPERS’ Membership Data for all Funds. The mortality table used was developed based on CalPERS’ specific data. The table includes 20 years of mortality improvements using Society of Actuaries Scale BB.

2.50%
The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2021 valuation were based on the results of December 2021 actuarial experience study for the period 2000 to 2019. Further details of the Experiences Study can be found on the CalPERS website.

Discount Rate
The discount rate used to measure the total pension liability was 6.90%. To determine whether the municipal bond rate should be used in the calculation of a discount rate for each plan, CalPERS stress tested plans that would most likely result in a discount rate that would be different from the actuarially assumed discount rate.

Based on the testing, none of the tested plans run out of assets. Therefore, the current 6.90% discount rate is adequate and the use of the municipal bond rate calculation is not necessary. The long term expected discount rate of 6.90% is applied to all plans in the Public Employees Retirement Fund. The stress test results are presented in a detailed report called “GASB Crossover Testing Report” that can be obtained at CalPERS’ website under the GASB 68 section.

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
112
Note 13 – Pension Plans (Continued)
C. City Safety Plan (Continued)
Discount Rate (Continued)
The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. In determining the long-term expected rate of return, staff took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Such cash flows were developed assuming that both members and employers will make their required contributions on time and as scheduled in all future years. 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 (11-60 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 rounded down to the nearest one quarter of one percent.

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

Assumed Asset
Asset Class Allocation Real Return1,2
Global equity - cap-weighted 30.00% 4.45%
Global equity - non-cap-weighted 12.00% 3.84%
Private equity 13.00% 7.28%
Treasury 5.00% 0.27%
Mortgage-backed securities 5.00% 0.50%
Investment grade corporates 10.00% 1.56%
High yield 5.00% 2.27%
Emerging market debt 5.00% 2.48%
Private debt 5.00% 3.57%
Real assets 15.00% 3.21%
Liquidity -5.00% -0.59%
1 An expected inflation of 2.30% used for this period
2 Figures are based on the 2021 Asset Liability Management study.

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
113
Note 13 – Pension Plans (Continued)
C. City Safety Plan (Continued)
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate The following presents the City’s proportionate share of the net pension liability for the City Safety Plan, calculated using the discount rate for the City Safety 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 one percentage point lower or one percentage point higher than the current rate:

Discount Rate - 1% Current Discount Discount Rate + 1%
(5.90%) Rate (6.90%) (7.90%)
$ 34,271,302 $ 23,599,525 $ 14,877,759
Plan's Aggregate Net Pension Liability/(Asset)
Pension Plan Fiduciary Net Position
Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.

Payable to the Pension Plan
At June 30, 2023, the City reported a payable of $0 for the outstanding amount of contributions to the Safety pension plan required for the year ended June 30, 2023.

D. Component Unit Miscellaneous Plan
Plan Description
All qualified permanent and probationary employees are eligible to participate in the Public Agency Cost Sharing Multiple-Employer 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 Madera Housing Authority (Housing Authority) sponsors three miscellaneous rate plans.

Benefit provisions under the Plan are established by State statute and Housing Authority 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.

Employees Covered
At June 30, 2022, the measurement date, the following employees were covered by the benefit terms the Plan:

Active employees 21
Transferred and terminated employees 52
Retired employees and beneficiaries 32
Total 105
City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
114
Note 13 – Pension Plans (Continued)
D. Component Unit Miscellaneous Plan (Continued)
Benefits Provided
CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full - time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for nonduty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for the Plan are applied as specified by the Public Employees’ Retirement Law.

Following are the benefit provisions for each plan:

Prior to January 1, 2011 thru On or After
Hire Date January 1, 2011 January 1, 2013 January 1, 2013 Benefit formula 2.5% @ 55 2% @ 60 2% @ 62
Benefit vesting schedule 5 years service 5 years service 5 years service Benefit payments Monthly for life Monthly for life Monthly for life Retirement age 50 - 55 50 - 63 52 - 67
Monthly benefits, as a % of eligible compensation 2.000% to 2.500% 1.092% to 2.418% 1.000% to 2.500% Required employee contribution rates 8.00% 7.000% 6.250% Required employer contribution rates 12.200% 8.650% 7.590% Final Annual Compensation 1 year 1 year 1 year
Miscellaneous - Component Unit
Contributions
Section 20814(c) of the California Public Employees’ Retirement Law (PERL) requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through the CalPERS’ annual actuarial valuation process. For public agency cost-sharing plans covered by the Miscellaneous risk pools, the Plan’s actuarially determined rate is based on the estimated amount necessary to pay the Plan’s allocated share of the risk pool’s costs of benefits earned by employees during the year, and any unfunded accrued liability. The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees.

For the fiscal year ended September 30, 2022, employer contributions made for the Housing Authority Miscellaneous Cost- sharing Plan was $331,109.

Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions The Authority’s net pension liability for each Plan is measured as the proportionate share of the net pension liability. The net pension liability of the Plans is measured as of June 30, 2022, and the total pension liability for each Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2021 rolled forward to June 30, 2022 using standard update procedures. The Authority’s proportion of the net pension liability was based on a projection of the Authority’s long-term share of contributions to the pension plans relative to the projected contributions of all participating employers, actuarially determined.

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
115
Note 13 – Pension Plans (Continued)
D. Component Unit Miscellaneous Plan (Continued)
Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
As of September 30, 2022, the Authority reported net pension liability for its proportionate shares of the net pension liability of the Housing Authority Miscellaneous Plan as follows:

Plan Total Pension Plan Fiduciary Net Plan Net Pension
Liability Position Liability/(Asset)
Balance at: 6/30/21 (Valuation date) 11,439,712 $ 8,922,694 $ 2,517,018 $ Balance at: 6/30/22 (Measurement date) 11,831,764 7,800,039 4,031,725 Net Changes during 2021-2022 392,052 (1,122,655) 1,514,707 Increase (Decrease)
The following is the approach established by the plan actuary to allocate the net pension liability and pension expense to the individual employers within the risk pool. (1) In determining a cost-sharing plan’s proportionate share, total amounts of liabilities and assets are first calculated for the risk pool as a whole on the valuation date (June 30, 2021). The risk pool’s fiduciary net position (“FNP”) subtracted from its total pension liability (“TPL”) determines the net pension liability (“NPL”) at the valuation date.
(2) Using standard actuarial roll forward methods, the risk pool TPL is then computed at the measurement date (June 30, 2022). Risk pool FNP at the measurement date is then subtracted from this number to compute the NPL for the risk pool at the measurement date. For purposes of FNP in this step and any later reference thereto, the risk pool’s FNP at the measurement date denotes the aggregate risk pool’s FNP at June 30, 2022 less the sum of all additional side fund (or unfunded liability) contributions made by all employers during the measurement period (2021-22).
(3) The individual plan’s TPL, FNP and NPL are also calculated at the valuation date. (4) Two ratios are created by dividing the plan’s individual TPL and FNP as of the valuation date from (3) by the amounts in step (1), the risk pool’s total TPL and FNP, respectively. (5) The plan’s TPL as of the Measurement Date is equal to the risk pool TPL generated in (2) multiplied by the TPL ratio generated in (4). The plan’s FNP as of the Measurement Date is equal to the FNP generated in (2) multiplied by the FNP ratio generated in (4) plus any additional side fund (or unfunded liability) contributions made by the employer on behalf of the plan during the measurement period. (6) The plan’s NPL at the Measurement Date is the difference between the TPL and FNP calculated in (5).

The Authority’s proportionate share of the net pension liability for the Housing Authority Miscellaneous Plan as of June 30, 2021 and 2022 was as follows:

Proportion June 30, 2021 0.13260%
Proportion June 30, 2022 0.08616%
Change - Increase (Decrease) -0.04644%
For the twelve months ended September 30, 2022, the Authority recognized pension income in the amount of $742,558 for the Housing Authority Miscellaneous Plan.

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
116
Note 13 – Pension Plans (Continued)
D. Component Unit Miscellaneous Plan (Continued)
Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
The amortization period differs depending on the source of the gain or loss. The difference between projected and actual earnings is amortized over 5-years straight line. All other amounts are amortized straight-line over the average expected remaining service lives of all members that are provided with benefits (active, inactive and retired) as of the beginning of the measurement period.

The EARSL for PERF C for the measurement date ending June 30, 2022 is 3.7 years, which was obtained by dividing the total service years of 574,665 (the sum of remaining service lifetimes of the active employees) by 153,587 (the total number of participants: active, inactive, and retired) in PERF C. Inactive employees and retirees have remaining service lifetimes equal to 0. Total future service is based on the members’ probability of decrementing due to an event other than receiving a cash refund.

At September 30, 2022, the Authority reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred outflows Deferred inflows
of Resources of Resources
Pension contributions made subsequent
to measurement date $ 21,980 $ -
Difference between projected and actual earning on
pension plan investments 738,505 -
Adjustment due to differences in proportions 4,088 (494,153) Changes in assumptions 413,134 -
Difference between actual and expected experience 80,965 (54,227) Difference between employer's actual contributions
and proportionate share of contributions 149,611 (55,284) Total $ (603,664) 1,408,283 $
For the Housing Authority Miscellaneous Plan, $21,980 was reported as deferred outflows of resources related to pensions resulting from Authority’s contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended September 30, 2023.

Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

Year Ended June 30,
Deferred Outflows/
(Inflows) of Resources
2023 79,838 $
2024 60,648
2025 26,967
2026 615,186
2027 -
Thereafter -
$ 782,639
City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
117
Note 13 – Pension Plans (Continued)
D. Component Unit Miscellaneous Plan (Continued)
Actuarial Methods and Assumptions Used to Determine Total Pension Liability For the measurement period ended June 30, 2022 (the measurement date), the total pension liability was determined by rolling forward the June 30, 2021 total pension liability. Both the June 30, 2021 and the June 30, 2022 total pension liabilities were based on the following actuarial methods and assumptions:

Actuarial Cost Method
Actuarial Assumptions:

Discount Rate
Inflation
Payroll Growth
Salary Increases
Investment Rate of Return
Mortality Rate Table
Post Retirement Benefit Increase

7.65%
Derived using CalPERS’ Membership Data for all Funds. The mortality table used was developed based on CalPERS’ specific data. The table includes 20 years of mortality improvements using Society of Actuaries Scale BB.

Contract COLA up to 2.75% until Purchasing Power Protection Allowance Floor on Purchasing Power applies, 2.75% thereafter
Entry Age Normal in accordance with the requirement of GASB Statement No. 68

6.90%

2.50%
Varies by Entry Age and Service

2.75%
The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2021 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.

Discount Rate
The discount rate used to measure the total pension liability was 6.90%. To determine whether the municipal bond rate should be used in the calculation of a discount rate for each plan, CalPERS stress tested plans that would most likely result in a discount rate that would be different from the actuarially assumed discount rate. Based on the testing, none of the tested plans run out of assets. Therefore, the current 6.90% discount rate is adequate and the use of the municipal bond rate calculation is not necessary. The long term expected discount rate of 6.90% is applied to all plans in the Public Employees Retirement Fund. The stress test results are presented in a detailed report called “GASB Crossover Testing Report” that can be obtained at CalPERS’ website under the GASB 68 section.

The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. In determining the long-term expected rate of return, staff took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Such cash flows were developed assuming that both members and employers will make their required contributions on time and as scheduled in all future years. 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 (11-60 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 rounded down to the nearest one quarter of one percent.

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
118
Note 13 – Pension Plans (Continued)
D. Component Unit Miscellaneous Plan (Continued)
Discount Rate (Continued)
The table below reflects long-term expected real rate of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation. These geometric rates of return are net of administrative expenses.

Assumed Asset
Asset Class Allocation Real Return1,2
Global equity - cap-weighted 30.00% 4.45%
Global equity - non-cap-weighted 12.00% 3.84%
Private equity 13.00% 7.28%
Treasury 5.00% 0.27%
Mortgage-backed securities 5.00% 0.50%
Investment grade corporates 10.00% 1.56%
High yield 5.00% 2.27%
Emerging market debt 5.00% 2.48%
Private debt 5.00% 3.57%
Real assets 15.00% 3.21%
Liquidity -5.00% -0.59%
1 An expected inflation of 2.30% used for this period
2 Figures are based on the 2021 Asset Liability Management study.

Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate The following presents the Authority’s proportionate share of the net pension liability for the Housing Authority Miscellaneous Plan, calculated using the discount rate for the Housing Authority Miscellaneous 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 one percentage point lower or one percentage point higher than the current rate:

Discount Rate - 1% Current Discount Discount Rate + 1%
(5.90%) Rate (6.90%) (7.90%)
$ 5,644,607 $ 4,031,725 $ 2,704,722
Plan's Aggregate Net Pension Liability/(Asset)
Pension Plan Fiduciary Net Position
Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.

Payable to the Pension Plan
At September 30, 2022, the Housing Authority reported a payable of $0 for the outstanding amount of contributions to the pension plan required for the fiscal year ended September 30, 2022.

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
119
Note 14 – Other Postemployment Benefits
A. Summary
Governmental Business-Type
Activities Activities Total
Deferred outflows of resources:

Employer contributions made
subsequent to the measurement date 112,407 $ $ 24,659 $ 137,066 Difference between expected and actual experience 412,607 90,520 503,127 Changes in assumptions 364,895 80,055 444,950
Total deferred outflows of resources $ 889,909 $ 195,234 $ 1,085,143 Total OPEB liability:

Total OPEB liability $ 3,742,428 $ 821,042 $ 4,563,470
Total OPEB liability $ 3,742,428 $ 821,042 $ 4,563,470
Deferred inflows of resources:

Changes in assumptions $ 154,229 $ 33,836 $ 188,065
Total deferred inflows of resources $ 154,229 $ 33,836 $ 188,065 OPEB Expense $ 236,239 $ 51,828 $ 288,067
B. General Information about OPEB
Plan Description
The City administers a single employer defined benefit (implicit subsidy) healthcare plan. No assets have been accumulated in a trust for the payment of benefits that meets the criteria in paragraph 4 of Governmental Accounting Standards Board Statement No. 75.

Employees from groups other than Management who have attained age 50 and completed at least five years of PERS service or who become eligible for medical disability benefits under PERS, are eligible to retire and participate in the City's healthcare plans by paying COBRA premiums based on 102% of the premiums applicable to active employees. Spouses and eligible dependent children of retirees may also be covered at the retiree's expense. Eligibility for this benefit ends at age 65 or when the individual becomes eligible for Medicare.

Management employees, who meet the requirements, may retire and receive City-paid medical insurance for the retiree only. This is a grandfathered benefit and is no longer offered prospectively to new Management employees, nor is it provided to any employee who did not meet required criteria as of December 31, 2018. Once the retiree attains age 65, a Medicare Supplement benefit is payable by the City for the retiree only, for the retiree's further lifetime. Employees from Management who do not have the grandfathered benefit are eligible to retire and participate in the City's healthcare plans by paying COBRA premiums based on 102% of the premiums applicable to active employees.

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
120
Note 14 – Other Postemployment Benefits (Continued)
B. General Information about OPEB (Continued)
Covered Employees
Membership in the plan consisted of the following at June 30, 2022, the date of the latest actuarial valuation:

Active employees 229
Transferred and terminated employees -
Retired employees and beneficiaries 12
Total 241
Contributions
The obligation of the City to contribute to the plan is established and may be amended by the City Council. The City Council has established a policy of paying the premiums of the actuarially determined contribution (ADC) on a pay as you go basis. For the fiscal year ended June 30, 2023, the City’s average contribution rate was 2.41% of covered-employee payroll. Employees are not required to contribute to the plan.

C. Total OPEB Liability, OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB Total OPEB Liability
The City’s total OPEB liability was measured as of June 30, 2022. The total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation as of June 30, 2022. The total OPEB liability at June 30, 2023 was $4,563,470.

Actuarial Assumptions
The total OPEB liability in the June 30, 2022 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified:

Actuarial Assumptions:

Discount Rate
Inflation
Aggregate payroll increases
Expected long-term investment rate of return
Mortality, Termination, and Disability
Mortality Improvement Scale
Healthcare Trend Rate

3.69%

2.50%

3.00%
n/a
CalPERS 2021 Experience Study
Modified projected fully generational with Scale MP-2014

6.50 percent for 2022, 6.00 percent for 2023, 5.50 percent for 2024,

5.25c prcent for 2025-2029, 5.00 percent for 2030-2039, 4.75 percent for 2040-2049, 4.50 percent for 2050-2069, and 4.00 percent for 2070 and later years; Medicare ages: 4.50 percent for all years for 2022-2029 and

4.00 percent for 2030 and later years.

The actuarial assumptions used in the June 30, 2022 valuation were based on the results of an actuarial experience study for the period July 1, 2021 through June 30, 2022.

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
121
Note 14 – Other Postemployment Benefits (Continued)
C. Total OPEB Liability, OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB (Continued)
Discount Rate
The discount rate used to measure the total OPEB liability was 3.69% percent. This discount rate is the mid-point, rounded to five basis points, of the range of 3-20 year municipal bond rate indices; S&P Municipal bond 20 Year High Grade Rate Index, Bond Buyer 20-Bond GO Index, and Fidelity GO AA 20 Year Bond Index.

Change in the Total OPEB Liability
Total OPEB
Liability
Balance at June 30, 2021 (Measurement Date) $ 4,220,323 Changes Recognized for the Measurement Period:

Service Cost 266,779
Interest on the total OPEB liability 84,763
Changes of benefit terms (179,263)
Difference between expected and actual experience 416,211 Changes of assumptions (99,963)
Benefit payments (145,380)
Net Changes during July 1, 2021 to June 30, 2022 343,147 Balance at June 30, 2022 (Measurement Date) $ 4,563,470 Sensitivity of the Total OPEB Liability to Changes in the Discount Rate The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower (2.69 percent) or 1-percentage- point higher (4.69 percent) than the current discount rate:

Discount Rate - 1% Current Discount Discount Rate + 1%
(2.69%) Rate (3.69%) (4.69%)
$ 5,078,911 $ 4,563,470 $ 4,101,151
Plan's Total OPEB Liability
Sensitivity of the Total OPEB Liability to Changes in the Health Care Cost Trend Rates The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-percentage-point lower or 1-percentage-point higher than the current healthcare cost trend rates:

Healthcare Cost
-1% Trend Rates 1%
$ 3,951,465 $ 4,563,470 $ 5,299,570
Plan's Total OPEB Liability
City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
122
Note 14 – Other Postemployment Benefits (Continued)
C. Total OPEB Liability, OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB (Continued)
OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB For the fiscal year ended June 30, 2023, the City recognized OPEB expense of $288,067. At June 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

Deferred outflows Deferred inflows
of Resources of Resources
Employer contributions made
subsequent to the measurement date 137,066 $ $ -
Difference between expected and actual experience 503,127 - Changes of assumptions 444,950 (188,065)
Total $ 1,085,143 $ (188,065)
The difference between projected OPEB plan investment earnings and actual earnings is amortized over a five year period. The remaining gains and losses are amortized over the expected average remaining service life. The expected average remaining service life is 9.8 years, which was determined as of June 30, 2021, the beginning of the measurement period, for employees covered by the OPEB plan benefit terms as of the valuation date.

For the OPEB plan, $137,066 was reported as deferred outflows of resources related to OPEB resulting from the City’s contributions subsequent to the measurement date will be recognized as a reduction of the net OPEB liability in the year ended June 30 2024. Other amounts reported as deferred outflows of resources related to OPEB will be recognized as future OPEB expense as follows:

Measurement Period Deferred Outflows/
Ended June 30 (Inflows) of Resources
2023 $ 115,788
2024 115,788
2025 115,788
2026 133,459
2027 109,476
Thereafter 169,713
$ 760,012
Note 15 – Deferred Compensation Plan
A. City
The City offers its employees a deferred compensation plan in accordance with Internal Revenue Code Section 457. The plan was amended so that the assets of the plan are held in trust for the exclusive benefit of the participants and their beneficiaries. The employer is not required to contribute to the deferred compensation plan but is required for full time non-management, non-sworn employees. Since the plan assets are administered by an outside party and not subject to the claims of the City’s general creditors, their assets and related liabilities are not on the City’s financial statements in accordance with Governmental Accounting Standards Board (GASB) Statement No. 97, “Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans – An Amendment of GASB Statements No. 14 and No. 84, and a Supersession of GASB Statement No. 32.”
City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
123
Note 15 – Deferred Compensation Plan (Continued)
B. Component Unit
The Housing Authority offers all of its full-time employees a deferred compensation plan (the Plan) created in accordance with Internal Revenue Code Section 457. The Plan permits employees to defer a portion of their current salary until future years. Participating employees may begin to receive the balance of their deferred compensation account upon termination, retirement, death, or emergency. Employees may also borrow against their deferred compensation account while employed (up to 50% of the current balance) under the deferred compensation loan program. Employees direct the investment of Plan assets into certificates of deposits and various mutual funds. The Housing Authority has insignificant administrative duties.

Note 16 – Service Concession Agreement
On June 21,2023, the City approved an amendment to the Madera Municipal Golf Course Operation and Management Lease Agreement (Agreement) with Sierra Golf Management Inc. dba Sierra Golf Management, Inc. (SGM), extending the term to five years after the current lease agreements expiration on June 30,2023, and making various economic modifications. The Agreement would be for 5 years and includes, at City discretion, one option to extend the term an additional five years. This would mean the agreement would expire on June 30, 2028, with the five-year extension available through June 30, 2033. The Agreement would increase the base rent to the present value of $65,000 annually to lease the golf course and clubhouse facilities. SGM will remit $2.75 per round of golf to the City in years one through four. The remittance will increase to $3.00 per round in year five. SGM, the Clubhouse Tenant, currently Sugar Pine Smokehouse (SPS), and the City will each contribute $25,000 annually to a capital improvement fund. Thus, the grand contribution for capital improvements annually shall be $75,000. City will hold SGM capital funds of $50k per year until capital projects are completed. SGM is required to operate and maintain the golf course in accordance with the Agreement.

Note 17 – Other Required Disclosures
A. Deficit Fund Balances/Net Position
At June 30, 2023, the following funds had a fund balances (deficit) or unrestricted net position (deficit), which will be eliminated by the City as follows:

Fund Fund Type Deficit Plan to eliminate deficit
Federal Aid Urban Fund Special Revenue Fund 1,242,142 $ Federal grant reimbursement Solar Energy Lease Fund Capital Projects Fund Interfund cost allocation 674,459 B. Expenditures Exceeding Appropriations
For the year ended June 30, 2023, expenditures exceeded appropriations in the following funds by function:

Excess Expenditures
Fund Function over Appropriations
General Fund General government: City manager $ 93,401
General Fund Debt service: Principal 5,509
General Development Impact Fee Special Revenue Fund Public ways and facilities 1,209,506 General Development Impact Fee Special Revenue Fund Culture and recreation 522,558 Measure "T" Sales Tax Special Revenue Fund Public ways and facilities 778 Intermodal Building Special Revenue Fund General government 934 Intermodal Building Special Revenue Fund Public ways and facilities 8,886 Economic Development Special Revenue Fund Community development 198 City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
124
Note 18 – Fund Balance Classification
The City classifies fund balances, as shown on the Balance Sheet – Governmental Funds, as follows as of June 30, 2023:

General
Development Measure "T" American Non-major
General Impact Sales Tax Rescue Plan Governmental
Fund Fee Fund Fund Act Fund Funds Total
Nonspendable
Prepaid items $ 58,961 $ - $ - $ - $ 13,131 $ 72,092
Inventories 82,881 - - - - 82,881
Total nonspendable 141,842 - - - 13,131 154,973
Restricted
- - - 12,751,924 - 12,751,924
- - - - 98,941 98,941
- - - 136,363 - 136,363
- 14,310,390 - - 4,044,020 18,354,410
- - - 519,667 - 519,667
2,365,453 - - - 2,365,453 -
- - - 368,640 - 368,640
Community development
Park development
Parking improvements
Public works and transportation
Special assessment project
Insurance stabilization reserve
Public protection
Capital projects and improvements 18,047,981 - - - 18,047,981 - Total restricted 2,365,453 18,047,981 14,310,390 - 17,919,555 52,643,379 Committed
General Fund stabilization reserve 12,731,891 - - - 12,731,891 - General plan update 50,000 - - - - 50,000
Solar street light repair Installation 50,000 - - - - 50,000 Measure K - Fire Protection Stabilization 780,000 - - - 780,000 - Measure K - Police Protection Stabilization 780,000 - - - 780,000 - Measure K - Fire Protection Vehicle Replacement 738,540 - - - 738,540 - Total committed 15,130,431 - - - 15,130,431 -
Assigned
Golf course capital 20,000 - - - - 20,000
Debt service 1,106,145 - - - 1,106,145 -
OPEB liability 97,339 - - - - 97,339
Insurance claims reserve 950,134 - - - 950,134 -
Health insurance premiums 1,357,000 - - - 1,357,000 -
Future annual stipend payments 650,000 - - - 650,000 -
Measure K - Fire Protection 7,293,910 - - - 7,293,910 - Measure K - Police 3,422,960 - - - 3,422,960 -
Measure K - Sales Tax Refund Reserve 900,000 - - - 900,000 - Total assigned 15,797,488 - - - 15,797,488 -
Unassigned (deficit) 12,291,870 - - (1,927,931) - 10,363,939 Total fund balances $ 45,727,084 $ 18,047,981 $ 14,310,390 $ 16,004,755 - $ $ 94,090,210 City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
125
Note 19 – Net Investment in Capital Assets
Net Investment in Capital Assets at June 30, 2023, consisted of the following:

Governmental Business-type
Activities Activities Total
Total capital assets, net $ 193,451,488 $ 101,019,583 $ 294,471,071 Less related debt:

Subscription liability (209,417) - (209,417)
Finance purchase agreement (17,834,000) - (17,834,000)
Loans payable (299,800) (5,882,800) (6,182,600)
Lease revenue bonds (3,988,528) - (3,988,528)
Bonds payable - (29,314,348) (29,314,348)
Unspent bond proceeds 2,517,025 - 2,517,025
Gain on refunding of debt - (261,333) (261,333)
Net investment in capital assets $ 173,636,768 $ 65,561,102 $ 239,197,870 Note 20 ‒ Prior Period Adjustments
A. Government-Wide Financial Statements
The beginning net position at October 1, 2021 of the Governmental-Wide Financial Statements was restated as follows:

Component Unit
Housing
Authority of the
City of Madera
September 30, 2022
Net position, as previously reported, at October 1, 2021 12,284,478 $ To correct various errors in financial statements (674,675) Net position at October 1, 2021, as restated 11,609,803 $ Note 21 – Commitments and Contingencies
A. Litigation
The City is currently a party to various claims and legal proceedings. Although the outcome of these lawsuits is not presently determinable, it is management’s opinion that the ultimate liabilities, if any, resulting from such claims and proceedings will not materially affect the financial position of the City.

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
126
Note 21 – Commitments and Contingencies (Continued)
B. Contingent Liabilities
On March 1, 1993, the City issued Certificates of Participation in the aggregate of $10,250,000 for the benefit of Madera Community Hospital (Hospital), a California nonprofit public benefit corporation. The Hospital is not included in the City’s reporting entity. The City is obligated to make the principal payments only from and to the extent that it receives revenue from the Hospital. In December of 2022, the Hospital closed and filed for bankruptcy protection on March 10, 2023. As of this report, the Hospital's bankruptcy status is still uncertain.

They are not secured by any pledge of taxes or other revenues of the City. In addition, the purchase payments are insured by the Office of Statewide Health Planning and Development of the State of California. As of June 30, 2023, the City has not recorded revenues from the Hospital.

C. Federal and State Grants
The City participates in various federal grant programs, the principal of which are subject to program compliance audits pursuant to the Single Audit act as amended. Accordingly, the City’s compliance with applicable grant requirements will be established at a future date. The amount of expenditures which may be disallowed by the granting agencies cannot be determined at this time, although the City anticipates such amounts, if any, will be immaterial.

D. Contractual Commitments
The City has active construction projects as of June 30, 2023. At year-end, the City’s major contractual commitments are as follows:

Contract Remaining
Amount Spent-to-Date Commitment
Engineering Design Services for Intermodal Facility $ 285,961 $ 71,024 $ 214,937 Engineering Design Services for Sidewalk Improvements 402,344 337,693 64,651 Engineering Design Services for Westberry Bridge 1,015,144 728,091 287,053 Manual Water Meter Replacements 310,048 176,720 133,328 Northwest Water Storage Tank 392,430 154,894 237,536
Olive Ave Widening from Gateway To Knox 380,553 253,270 127,284 Sewer Main Video Inspection 536,000 505,296 30,704
Sewer System Condition Assessment/Rehab 320,320 205,690 114,630 Sewer Trunk Main Rehab at Ave 13 518,399 252,889 265,510 Solar and Energy Efficiency Equipment 18,848,862 18,194,324 654,538 Water System Condition Assessment/Rehab 295,000 255,754 39,246 Total $ 23,305,061 $ 21,135,645 $ 2,169,416
In addition, the City has various contracts with developers for the cost of public improvements made through construction of new developments within the City. The agreements are for the reimbursement of reasonable costs for the construction of public improvements within the planned developments. The City agrees to reimburse developers for the City’s proportionate share of the costs of improvements as determined by the City Engineer.

The City will not reimburse any expenses beyond the actual and reasonable costs of installing the improvements.

City of Madera
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
127
Note 21 – Commitments and Contingencies (Continued)
E. Encumbrances
The City uses an encumbrance system as an extension of normal budgetary accounting for all funds. Under this system, purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of applicable appropriations. Encumbrances outstanding at year-end are recorded as restricted, committed or assigned fund balance, depending on the classification of the resources to be used to liquidate the encumbrance, since they do not constitute expenditures or liabilities. Outstanding encumbrances at year-end are automatically re-appropriated for the following year. Unencumbered and unexpended appropriations lapse at year-end. Encumbrances for operating expenditures outstanding as of June 30, 2023 amounted to $991,280.
128
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129

REQUIRED SUPPLEMENTARY INFORMATION
(Unaudited)
130
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City of Madera
Required Supplementary Information (Unaudited)
Budgetary Information
For the Year Ended June 30, 2023
131
Budgetary Information
The City adheres to the following general procedures in establishing its annual budget, which is reflected in the accompanying schedules:
 Budgets are legally adopted and formal budgetary integration is employed as a management control device during the year for the General and Special Revenue Funds. Budgets presented in this report for comparison to actual amounts are presented in accordance with accounting principles generally accepted in the United States of America. From the effective date of the budget, the amounts stated therein as proposed expenditures become appropriations to the various City departments. During the year ended June 30, 2023, the City did not prepare a budget for the American Rescue Plan Act Special Revenue Fund.  Reported budget amounts represent the original legally adopted budget as amended. Individual amendments were not material in relation to the original adopted budget amounts. The City Council may amend the budget to increase appropriations only by a duly adopted minute resolution during a regular meeting, providing that sufficient monies are available and that expenditures of proceeds of taxes will not be increased beyond the constitutional appropriation limit as imposed by Article XIIIB of the State Constitution. Management can transfer, without City Council approval, budgeted amounts provided they do not increase or decrease total fund appropriations adopted by the City Council.  Unexpended budgeted amounts lapse at the end of the budget year. Spending control for the fund is established by the amount of expenditures budgeted for the fund, but management control is exercised at the budgetary line item levels.
 Expenditures may not legally exceed overall budgeted appropriations.  The budgets of the City’s capital projects are primarily “long-term” budgets which emphasize major programs and capital outlay plans extending over a number of fiscal periods. Therefore, no budget-toactual schedules are presented for Capital Projects Funds.

City of Madera
Required Supplementary Information (Unaudited)
Budgetary Comparison Schedules – General Fund
For the Year Ended June 30, 2023
132
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Property taxes $ 4,335,119 $ 4,335,119 $ 4,879,850 $ 544,731 Sales and use taxes 18,939,052 18,939,052 19,291,534 352,482 Other taxes 1,862,413 1,862,413 2,027,689 165,276
Investment income 477,085 477,085 341,518 (135,567)
Franchise fees 800,000 800,000 841,540 41,540
Licenses and permits 1,196,820 1,196,820 1,502,455 305,635 Fines and forfeitures 439,998 439,998 465,127 25,129
Intergovernmental 11,838,790 11,838,790 9,222,604 (2,616,186) Charges for services 1,442,330 1,442,330 1,941,861 499,531 Miscellaneous 399,075 399,075 789,839 390,764
Total revenues 41,730,682 41,730,682 41,304,017 (426,665) EXPENDITURES:

Current:

General government
City clerk 574,839 574,839 400,519 174,320
City manager 1,354,364 1,359,000 1,452,401 (93,401)
Finance 505,733 505,733 430,594 75,139
City attorney 394,834 394,834 234,588 160,246
Human resources 640,342 696,216 634,169 62,047
Economic development 248,694 5,248,694 613,851 4,634,843 Public safety
Police 16,857,079 17,205,497 16,758,044 447,453
Fire 6,548,354 6,655,688 4,632,858 2,022,830
Social services 217,802 250,302 181,934 68,368
Public ways and facilities
Development and engineering 2,177,616 2,177,616 2,025,586 152,030 Community development
Parks and community services 5,331,086 5,594,547 5,031,074 563,473 Culture and recreation 4,563,603 4,571,978 4,164,682 407,296 Capital outlay 4,392,098 4,652,063 624,105 4,027,958
Debt service:

Principal 259,400 259,400 264,909 (5,509)
Interest and fiscal charges 173,248 173,248 173,244 4
Total expenditures 44,239,092 50,319,655 37,622,558 12,697,097 REVENUES OVER (UNDER) EXPENDITURES (2,508,410) (8,588,973) 3,681,459 12,270,432 OTHER FINANCING SOURCES (USES):

Proceeds from sale of property - - 33,429 33,429
Inception of subscription liability - - 23,636 23,636
Transfers in 5,633,216 5,633,216 3,794,772 (1,838,444)
Transfers out (2,066,036) (2,066,036) (382,358) 1,683,678 Total other financing sources (uses) 3,567,180 3,567,180 3,469,479 (97,701) Net change in fund balance $ 1,058,770 $ (5,021,793) 7,150,938 $ 12,172,731 FUND BALANCE:

Beginning of year 38,576,146
End of year $ 45,727,084
Budgeted Amounts
City of Madera
Required Supplementary Information (Unaudited)
Budgetary Comparison Schedules – General Development Impact Fee Special Revenue Fund For the Year Ended June 30, 2023
133
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Investment income 149,025 $ 149,025 $ 288,682 $ 139,657 $ Charges for services 3,078,081 3,078,081 3,582,404 504,323 Total revenues 3,227,106 3,227,106 3,871,086 643,980
EXPENDITURES:

Current:

Public ways and facilities 6,550 14,375 1,223,881 (1,209,506) Culture and recreation - - 522,558 (522,558)
Capital outlay 2,340,627 2,342,752 674,490 1,668,262
Total expenditures 2,347,177 2,357,127 2,420,929 (63,802) REVENUES OVER (UNDER) EXPENDITURES 879,929 869,979 1,450,157 580,178 OTHER FINANCING SOURCES (USES):

Transfers out (397,771) (397,771) (397,771) -
Total other financing sources (uses) (397,771) (397,771) (397,771) - Net change in fund balance $ 482,158 $ 472,208 1,052,386 $ 580,178 FUND BALANCE:

Beginning of year 16,995,595
End of year $ 18,047,981
Budgeted Amounts
City of Madera
Required Supplementary Information (Unaudited) (Continued) Budgetary Comparison Schedules – Measure “T” Sales Tax Special Revenue Fund For the Year Ended June 30, 2023
134
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Investment income (loss) 38,548 $ $ 38,548 $ 277,586 $ 239,038 Intergovernmental 3,209,972 3,209,972 2,312,989 (896,983) Total revenues 3,248,520 3,248,520 2,590,575 (657,945)
EXPENDITURES:

Current:

Public ways and facilities 1,800 1,800 2,578 (778)
Capital outlay 2,878,386 2,953,393 218,651 2,734,742
Total expenditures 2,880,186 2,955,193 221,229 2,733,964 REVENUES OVER (UNDER) EXPENDITURES 368,334 293,327 2,369,346 2,076,019 OTHER FINANCING SOURCES (USES):

Transfers out (897,474) (897,474) (897,474) -
Total other financing sources (uses) (897,474) (897,474) (897,474) - Net change in fund balance $ (529,140) $ (604,147) 1,471,872 $ 2,076,019 FUND BALANCE:

Beginning of year 12,838,518
End of year $ 14,310,390
Budgeted Amounts
City of Madera
Required Supplementary Information (Unaudited) (Continued) Schedule of Changes in the Net Pension Liability and Related Ratios For the Year Ended June 30, 2023
135
Measurement period, year ended 6/30/2022 6/30/2021 6/30/2020 6/30/2019 6/30/2018 6/30/2017 6/30/2016 6/30/2015 6/30/2014 1 Total pension liability
Service cost 1,715,940 $ 1,606,099 $ 1,719,344 $ 1,915,335 $ 2,074,876 $ 1,857,394 $ 1,556,770 $ 1,515,655 $ 1,562,632 $ Interest on total pension liability 6,797,912 6,643,295 6,484,056 6,295,654 5,940,862 5,651,202 5,352,560 5,085,808 4,865,000 Differences between expected and actual
experience (550,819) (711,985) (758,426) 1,363,296 1,082,691 1,184,077 337,609 (269,941) - Changes in assumptions 3,348,073 - - - (647,285) 4,531,204 - (1,189,492) - Changes in benefit terms - - - - - - - - -
Benefit payments, including refunds of employee
contributions (5,463,626) (5,525,027) (4,890,282) (4,548,873) (4,125,431) (3,877,650) (3,532,833) (3,412,481) (3,247,986) Net change in total pension liability 2,012,382 5,847,480 2,554,692 5,025,412 4,325,713 9,346,227 3,714,106 1,729,549 3,179,646 Total pension liability - beginning 95,584,677 97,597,059 93,029,985 88,004,573 83,678,860 74,332,633 70,618,527 68,888,978 65,709,332 Total pension liability - ending (a) $ 97,597,059 103,444,539 $ 95,584,677 $ 93,029,985 $ 88,004,573 $ 83,678,860 $ 74,332,633 $ 70,618,527 $ 68,888,978 $ Plan fiduciary net position
Contributions - employer 3,270,441 3,088,563 2,776,816 2,610,704 2,395,891 $ 2,329,046 $ 1,948,033 $ 1,603,067 $ 1,465,153 Contributions - employee 719,807 724,414 736,497 798,675 858,755 829,670 775,135 705,875 787,068 Investment income (net of administrative expenses) (5,929,216) 14,821,011 3,166,226 3,967,331 4,851,004 5,795,462 282,173 1,164,130 7,962,241 Benefit payments (5,463,626) (5,525,027) (4,890,282) (4,548,873) (4,125,431) (3,877,650) (3,532,833) (3,412,481) (3,247,986) Plan to plan resources - - - 132 (140) (1,724) 394 - -
Other (48,808) (65,237) (89,670) (43,264) (258,000) (76,926) (32,095) (59,277) (55,556) Net change in plan fiduciary net position (7,451,402) 13,043,724 1,699,587 2,784,705 3,722,079 4,997,878 (559,193) 1,314 6,910,920 Plan fiduciary net position - beginning 78,350,446 65,306,722 63,607,135 60,822,430 57,100,351 52,102,473 52,661,666 52,660,352 45,749,432 Plan fiduciary net position - ending (b) $ 70,899,044 $ 78,350,446 $ 65,306,722 $ 63,607,135 $ 60,822,430 $ 57,100,351 $ 52,102,473 $ 52,661,666 $ 52,660,352 Net pension liability - ending (a)-(b) $ 32,545,495 $ 19,246,613 $ 30,277,955 $ 29,422,850 $ 27,182,143 $ 26,578,509 $ 22,230,160 $ 17,956,861 $ 16,228,626 Plan fiduciary net position as a percentage
of the total pension liability 68.54% 80.28% 68.32% 68.37% 69.11% 68.24% 70.09% 74.57% 76.44% Covered payroll $ 9,829,365 $ 9,543,073 $ 10,054,641 $ 11,058,515 $ 12,035,942 $ 10,240,349 $ 9,298,593 $ 8,909,327 $ 8,873,549 Net pension liability as a percentage of
covered payroll 331.10% 201.68% 301.13% 266.07% 225.84% 259.55% 239.07% 201.55% 182.89% Notes to Schedule:
1 Historical information is presented only for measurement periods for which GASB 68 is applicable.

Miscellaneous Plan
Benefit changes: The figures above do not include any liability impact that may have resulted from plan changes which occurred after June 30, 2014. This applies for voluntary benefit changes as well as any offers of Two Years of Additional Service Credit (a.k.a. Golden Handshakes).

City of Madera
Required Supplementary Information (Unaudited) (Continued) Schedule of the City’s Proportionate Share of the Net Pension Liability and Related Ratios For the Year Ended June 30, 2023
136
Measurement period, year ended 6/30/2022 6/30/2021 6/30/2020 6/30/2019 6/30/2018 6/30/2017 6/30/2016 6/30/2015 6/30/2014 1 Plan's proportion of the net pension liability 0.343440% 0.390215% 0.318266% 0.317253% 0.319144% 0.314800% 0.324000% 0.340000% 0.337500% Plan's proportionate share of the net pension liability 23, $ 599,525 $ 13,694,549 $ 21,203,994 $ 19,804,633 $ 18,725,928 $ 18,807,385 $ 16,778,473 $ 14,009,122 $ 12,759,288 Plan's covered payroll $ 5,148,829 $ 4,998,863 $ 4,853,265 $ 4,711,908 $ 4,574,668 $ 4,428,574 $ 4,211,168 $ 3,797,547 $ 3,916,737 Plan's proportionate share of the net pension liability as a percentage of covered payroll 458.35% 273.95% 436.90% 420.31% 409.34% 424.68% 398.43% 368.90% 325.76% Plan's fiduciary net position $ 53,677,069 $ 58,522,823 $ 48,543,855 $ 48,056,036 $ 44,837,253 $ 41,761,897 $ 37,574,019 $ 38,216,008 $ 37,919,898 Plan's fiduciary net position as a percentage of the
total pension liability 69.46% 81.04% 69.60% 70.82% 44.92% 44.75% 46.68% 53.15% 57.52% Plan's proportionate share of aggregate
employer contributions $ 3,055,010 $ 2,879,830 $ 2,464,699 $ 2,197,168 $ 1,942,249 $ 1,806,992 $ 1,650,502 $ 1,388,656 $ 1,405,797 1 Information only presented from the implementation year Safety Plan
City of Madera
Required Supplementary Information (Unaudited) (Continued) Schedule of the City’s Proportionate Share of the Net Pension Liability and Related Ratios For the Year Ended June 30, 2023
137
Measurement period, year ended 6/30/2022 6/30/2021 6/30/2020 6/30/2019 6/30/2018 6/30/2017 6/30/2016 6/30/2015 1 Plan's proportion of the net pension liability 0.086162% 0.132600% 0.084600% 0.084400% 0.082100% 0.082800% 0.088100% 0.078600% Plan's proportionate share of the net pension liability 4,031,725 $ $ 2,517,018 $ 3,389,295 $ 3,179,336 $ 3,235,424 $ 2,875,227 $ 2,416,697 $ 1,966,014 Plan's covered payroll $ 941,461 $ 1,191,513 $ 1,280,623 $ 1,270,009 $ 1,140,725 $ 1,043,730 $ 982,585 $ 1,108,052 Plan's proportionate share of the net pension liability as a percentage of covered payroll 428.24% 211.25% 264.66% 250.34% 283.63% 275.48% 245.95% 177.43% Plan's fiduciary net position $ 7,800,039 $ 8,922,694 $ 7,134,083 $ 6,579,986 $ 5,930,422 $ 6,264,351 $ 6,281,657 $ 5,399,644 Plan's fiduciary net position as a percentage of the
total pension liability 51.69% 28.21% 47.51% 48.32% 54.56% 45.90% 38.47% 36.41% Plan's proportionate share of aggregate
employer contributions $ 331,109 $ 336,461 $ 302,136 $ 268,409 $ 238,140 $ 257,128 $ 203,184 $ 239,779 1 Information only presented from the implementation year.

Component Unit - Miscellaneous Plan
City of Madera
Required Supplementary Information (Unaudited) (Continued) Schedule of Contributions - Pension
For the Year Ended June 30, 2023
138
Fiscal Year: 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-141 Contractually determined
contribution (actuarially determined) 4,067,253 $ 3,270,441 $ 3,088,563 $ 2,776,816 $ 2,610,704 $ 2,395,891 $ 2,329,046 $ 1,948,033 $ 1,603,067 $ 1,465,153 $ Contributions in relation to the
actuarially determined contributions (4,067,253) (3,270,441) (3,088,563) (2,776,816) (2,610,313) (2,395,891) (2,329,046) (1,948,033) (1,603,067) (1,397,058) Contribution deficiency (excess) $ - - $ - $ - $ - $ - $ - $ - $ - $ - $ Covered payroll 10,124,246 $ 9,829,365 $ 9,543,073 $ 10,054,641 $ 11,058,515 $ 12,035,942 $ 10,240,349 $ 9,298,593 $ 8,909,327 $ 8,873,549 $ Contributions as a percentage of
covered payroll 40.17% 33.27% 32.36% 27.62% 23.60% 19.91% 22.74% 20.95% 17.99% 15.74% Notes to Schedule
Methods and assumptions used to determine contribution rates:

Actuarial cost method
Amortization method/period
Asset valuation method
Inflation
Salary increases
Payroll growth
Investment rate of return
Retirement age
Mortality

2.30%
1 Information only presented from the implementation year Varies by entry age and service

2.750%

6.90% net of pension plan investment and administrative expenses.

The probabilities of retirement are based on the 2021 CalPERS Experience Study for the period from 1997 and 2015.

The probabilities of mortality are based on the the 2021 experience study report. The mortality table was developed based on CalPERS-specific data. The rates incorporate Generational Mortality to capture ongoing mortality improvement using 80% of Scale MP 2020 published by the Society of Actuaries.

Miscellaneous Plan
The actuarial methods and assumption used to set the actuarially determined contributions for Fiscal Year 2023 were derived from the June 30, 2021 funding valuation report.

Entry Age Normal
For details, see June 30, 2021 Funding Valuation Report Actuarial Value of Assets. For details, see June 30, 2021 Funding Valuation Report.

City of Madera
Required Supplementary Information (Unaudited) (Continued) Schedule of Contributions – Pension (Continued)
For the Year Ended June 30, 2023
139
Fiscal Year: 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-141 Contractually determined
contribution (actuarially determined) 3,202,253 $ 3,055,010$ $ 2,879,830 $ 2,464,699 2,197,168$ 1,942,249$ 1,806,992$ $ 1,650,502 $ 1,388,656 1,405,797$ Contributions in relation to the
actuarially determined contributions (3,202,253) (3,055,010) (2,879,830) (2,464,699) (2,197,168) (1,942,249) (1,806,992) (1,650,502) (1,388,656) (1,405,797) Contribution deficiency (excess) $ - -$ -$ -$ -$ -$ -$ -$ -$ -$ Covered payroll 5,303,294$ 5,148,829$ $ 4,998,863 $ 4,853,265 4,711,908$ 4,574,668$ 4,428,574$ $ 4,211,168 $ 3,797,547 3,916,737$ Contributions as a percentage of
covered payroll 60.38% 59.33% 57.61% 50.78% 46.63% 42.46% 40.80% 39.19% 36.57% 35.89% Notes to Schedule
Methods and assumptions used to determine contribution rates:

Actuarial cost method
Amortization method/period
Asset valuation method
Inflation
Salary increases
Payroll growth
Investment rate of return
Retirement age
Mortality

2.30%
1 Information only presented from the implementation year Varies by entry age and service

2.750%

6.90% net of pension plan investment and administrative expenses.

The probabilities of retirement are based on the 2021 CalPERS Experience Study for the period from 1997 and 2015.

The probabilities of mortality are based on the the 2021 experience study report. The mortality table was developed based on CalPERS-specific data. The rates incorporate Generational Mortality to capture ongoing mortality improvement using 80% of Scale MP 2020 published by the Society of Actuaries.

Safety Plan
The actuarial methods and assumption used to set the actuarially determined contributions for Fiscal Year 2023 were derived from the June 30, 2021 funding valuation report.

Entry Age Normal
For details, see June 30, 2021 Funding Valuation Report Actuarial Value of Assets. For details, see June 30, 2021 Funding Valuation Report.

City of Madera
Required Supplementary Information (Unaudited) (Continued) Schedule of Contributions – Pension (Continued)
For the Year Ended June 30, 2023
140
Fiscal Year: 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-151 Contractually determined
contribution (actuarially determined) 331,109 $ 336,461$ 302,136$ 268,409$ 238,140$ 257,128$ 203,184$ $ 239,779 Contributions in relation to the
actuarially determined contributions (331,109) (336,461) (302,136) (268,409) (238,140) (257,128) (203,184) (239,779) Contribution deficiency (excess) $ - -$ -$ -$ -$ -$ -$ -$ Covered payroll $ 941,461 $ 1,191,513 1,280,623$ 1,270,009$ 1,140,725$ $ 1,043,730 $ 982,585 $ 1,108,052 Contributions as a percentage of
covered payroll 35.17% 28.24% 23.59% 21.13% 20.88% 24.64% 20.68% 21.64% Notes to Schedule
Methods and assumptions used to determine contribution rates:

Actuarial cost method
Amortization method/period
Asset valuation method
Inflation
Salary increases
Payroll growth
Investment rate of return
Retirement age
Mortality
1 Information only presented from the implementation year Component Unit - Miscellaneous Plan
The actuarial methods and assumption used to set the actuarially determined contributions for Fiscal Year 2022 were derived from the June 30, 2020 funding valuation report.

Entry Age Normal
For details, see June 30, 2020 Funding Valuation Report Actuarial Value of Assets. For details, see June 30, 2020 Funding Valuation Report.