Norco City Council
January 17, 2024

CITY OF NORCO
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2023
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committed fund balance as of June 30, 2023, was $14.0 million. The unassigned fund balance of $30.3 million represents the amount that is available for future appropriation.

In the general fund, revenues exceeded expenditures by $4.3 million. This excess of revenues over expenditures was as a result of better than anticipated receipt of taxes and investment earnings. The Housing Successor Agency’s Low Moderate-Income Housing Special Revenue Fund’s fund balance increased by $48,585. In FY 2014-2015, the Oversight Board of the Successor Agency to the Norco Community Redevelopment Agency elected to serve as the Housing Successor and has implemented program related to housing rehabilitation grants and loans, first-time homebuyer programs. The fund balance for non-major governmental funds decreased by $0.5 million mainly due to an increase in street and highways expenditures.

Proprietary Funds: Proprietary funds provide the same type of information found in the governmentalwide financial statements, but in more detail. The City’s proprietary funds consist of two major enterprise funds and three internal service funds. The internal service funds are presented as Governmental Activities in the Proprietary Funds financial statements. Individual fund data are presented in the form of combining statements. Operating revenues for Enterprise Funds consist primarily of charges for services.

Unrestricted net position in the water fund at the end of the year was $13.4 million while the sewer fund had an unrestricted net position balance of $21.7 million. During the fiscal year, the net position of the water fund increased by $0.9 million due to total revenues exceeding total expenses largely as a result of the increase in investment earnings. The net position of the sewer fund increased by $1.3 million and is largely due to operating revenues that surpassed operating expenses.

The City also has three internal service funds used to allocate cost of the City’s information systems, equipment services/replacement and risk management activities. The $0.7 million increase in the net position of the internal service funds was due to charges for services less than expenses in benefits and insurance fund.

Fiduciary Funds: The City uses Fiduciary funds to account for resources held for the benefit of other parties outside the City, in which the City is acting as a trustee. The resources of the various community facilities districts are accounted for in fiduciary funds. Private Purpose Trust Fund is used to report the additions and deductions to the net assets of the Successor Agency’s Redevelopment Property Tax Trust Fund (RPTTF) created as a result of the dissolution of the former Norco Redevelopment Agency. In addition, Custodial funds is used to report the additions and deductions to account for various deposits, collections from citizens for solid waste by the City on behalf of Waste Management and for various receipts of assessments and for the payment of debt service and administrative costs for the various community facilities districts.

General Fund Financial and Budgetary Highlights
The general fund is the chief operating fund of the City. On June 30, 2023, total fund balance was $48.8 million which consists of $14.0 million committed by a resolution of the City Council to fund future operations; $2.1 million that is not available for spending due to the long-term nature of associated receivable; $2.4 million restricted related to pension trust contribution and $30.3 million unassigned. As a measure of general fund’s financial condition, it may be useful to compare this fund balance to total expenditures. The total unassigned general fund balance of $30.1 million represents 90.7 percent of total general fund recurring expenditures for the fiscal year. The general fund’s total fund balance increased by $4.5 million during the fiscal year due to total revenues exceeding total expenditures by $4.3 million and an increase of $0.2 million from other financing sources.

In comparing the general fund’s actual revenues and expenditures to final budget, total revenues exceeded budget by $1.7 million while total expenditures were under budget by $14.1 million. The favorable revenue variance was due to more than anticipated receipts from licenses and permit fee and investment earnings. The favorable increase in taxes is related to sales taxes, property taxes, and residual property tax increment. The City sales tax receipt during the fiscal year was boosted by strong

CITY OF NORCO
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2023
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performance in all major industry groups including: autos and transportation; state and county pools; restaurants and hotels; fuel and service stations; general consumer goods; building and construction; food and drugs; and business and industry.

On the expenditure side, there were cost savings between the final budget and actual expenditures.

There were less capital related projects expenditure than expected. Additional cost savings were also realized in general government salaries, public safety, contractual and professional expenditure categories.

Capital Assets and Debt Administration
Capital Assets: City investment in capital assets for its governmental and business-type activities as of June 30, 2023, amounted to $281.3 million (net of accumulated depreciation). Investment in capital assets includes infrastructure assets as well as land, buildings, improvements and equipment. During the year, capital assets net of depreciation increased by $12.0 million for governmental activities and increased $0.9 million for business-type activities.

During FY 2022-23, several capital projects were completed as follows:
 Completion of various improvements at the Ingalls Event Center including the Gold Star/Blue Star Memorial and Moreno Arena Sound System.
 Completion of various park improvements including playground replacements.  Completion of various building improvements including Fire Station 47 flooring, Mobile Storage for Unit for Special Events, and ADA Improvement Project.  Completion of various storm drain improvement projects including Storm Drain Catch Basin Screens, California and Seventh Street, and Pedley Avenue Storm Drains.  Completion of equestrian trail fence replacement projects at various locations throughout the City.  Completion of various street improvements including Hillside to Corona Avenue, Shadow Canyon Circle, Kingman Drive, Oak Ridge, Canyon Ridge, Rim Crest Drive, Vista Ridge, River Road, and various repavement projects throughout the City.
 Acquisition of various trucks, shuttles, golf carts and other equipment.

In addition to the capital projects that were completed during the fiscal year, substantial investment in the amount of $12.8 million was made on water, sewer, storm drain, public facilities, street, and trail projects that were still in progress at the end of the fiscal year.

In FY 2023-24, the City will make significant investments on streets, water, storm drain, sewer, parks and public facilities as follows:
 Facility and information technology improvements $4.5 million  Park improvements $1.4 million
 Recycled water improvements $1.7 million
 Sewer system improvements $7.9 million
 Storm drains $22.6 million
 Street improvements and maintenance $10.9 million
 Trail improvements $895,000
 Water system improvements $7.3 million

CITY OF NORCO
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2023
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Additional information on the City’s capital assets can be found in Note 4 of the basic financial statements and a summary is provided below.

City of Norco
Capital Assets (net of depreciation)
June 30, 2023
Land & land improvements $ 103,204,667 $ 2,193,781 $ 105,398,448 Building and improvements 9,919,872 980,828 10,900,700
Equipment and machinery 7,099,544 237,042 7,336,586
Infrastructure 65,093,345 65,307,653 130,400,998
Intangible 599,196 13,892,182 14,491,378
Construction in progress 9,893,258 2,876,049 12,769,307 Total capital assets, net $ 195,809,882 $ 85,487,535 $ 281,297,417 Total
Governmental
Activities
Business-type
Activities
Long-term debt: At the end of fiscal year 2023, the City’s total long debt outstanding was $47.8 million.

Of this amount, $45.5 million is debt of the sewer and water enterprise funds while $2.3 million represents debt of governmental activities representing leases payable, claims, judgment, and compensated absences. Outstanding long-term debt of the City is summarized below, and additional information can be found in the Note 6 of basic financial statements.

City of Norco
Outstanding Long-Term Debt
June 30, 2023
Leases payable $ 198,719 $ 21,718 $ 220,437
Subscription Liability 255,685 $ 108,052 363,737
WRCRWA lease 5,285,492 5,285,492
Revenue bonds - 40,104,984 40,104,984
Compensated absences 880,499 - 880,499
Claims and judgment 988,454 - 988,454
Total long-term debt $ 2,323,357 $ 45,520,246 $ 47,843,603 Total
Governmental
Activities
Business-type
Activities

CITY OF NORCO
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2023
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Economic Factors and Next Year’s Budgets and Rates
 American Rescue Plan Act (ARPA) was signed into law by President Biden on March 11, 2021.

ARPA provides Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) to all cities in the United States. The purpose of the funding is to help cities respond and recover from the health and economic impacts from the world-wide Coronavirus Pandemic (COVID-19). The City's allocation is $6,364,242 and the eligibility period for obligating these funds is March 3, 2021, through December 31, 2024, as long as the obligations incurred by December 31, 2024 are expended by December 31, 2026. The American Rescue Plan Act Fund was adopted by the City Council on October 20, 2021 in the amount of $3.2 million appropriation and in FY 2022-23 appropriation in the amount of $3.3 from the City's total allocation of $6.4 million. In addition, the City Council approved additional appropriations from ARPA funds under the lost revenue replacement provisions that included COVID-19 related salaries, unemployment, special departmental expenses, public safety contractual services, utility subsidy program, small business grant programs, equipment, and homeless programs and services that provided emergency clean up and environmental observation of work to be performed at the Santa Ana River homeless encampments.

Overall, ARPA funding was fully expensed by the end of the fiscal year June 30, 2023. It is important to note that because the City's allocation of ARPA funds is less than $10 million, the Department of Treasury Regulations allows the City to use all of its allocation as lost revenue replacement. This allows the City Council to appropriate ARPA funds for any legal government purpose except those that are prohibited. The City treated all its allocation as lost revenue replacement.
 Measure R transactions and use tax, a one-cent sales tax that was estimated to generate approximately $5.8 million a year for investment in infrastructure and vital services, was approved by voters on the November 6, 2018 ballot, with over 70% of registered voters participating.

Measure R was approved by over 56% of the voters that voted. Measure R allows Norco to preserve its quality of life, and restore deteriorating streets, trails, parks, facilities and equestrian amenities. Measure R will also prevent future cuts to Norco’s public safety services in order to maintain safe levels of sheriff and fire protection without risking emergency response times. With the approval of Measure R, the sales tax rate in Norco increased by 1%, from 7.75% to 8.75% effective April 1, 2019. It was anticipated a reduction to Measure R revenues following the COVID-19 Pandemic and its recovery efforts. Measure R Fund provided a total revenue of $8.4 million in the fiscal year 2022-2023.
 During FY 2022-23 the City experienced sales tax increases for a 1.1 percent increase in sales tax receipts over FY 2021-22 actual receipts, excluding Measure R Transactions Use Tax. The City continues with economic development practices to diversify the sales tax base and generate additional revenues. It is anticipated that sales tax revenue, which makes up a significant portion of General Fund revenues will continue to slightly increase in FY 2023-24.  In September 2015, the long awaited 130-acre Silverlakes Equestrian and Sports Complex opened for operations in Norco. This complex with over 22 soccer fields, equestrian facilities, concert/event venue and full-service restaurant and bar, operates 48 weeks each year. This facility was attracting over 1.5 million visitors annually to the City prior to the Coronavirus pandemic. In recent years, this has resulted in increase to Transient Occupancy Tax (TOT) revenues as new hotels were built to serve the increased visits to Silverlakes. With the recovery efforts of the pandemic, FY 2022-23 numbers reflect an uptrend in TOT that staff believes will continue in subsequent fiscal years.
 Property tax revenues are based on the assessed value of real property located within the City’s boundary. The assessed value of real property in the City grew by $394.1 million or 10.1 percent during the fiscal year. The growth was mainly from property sales and the application of the 2 percent Proposition 13 inflation adjustment factor. Growth in the City was lower than County-wide growth which historically has been the trend due to the City being built-out. This growth in the assessed value is expected to result in an increase in the City’s property tax revenues in the

CITY OF NORCO
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2023
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coming year. In December 2020, the California State Board of Equalization (BOE) directed County Assessors to apply a 1.036 percent inflation factor (CCPI – California Consumer Price Index) to statewide property values for taxation for FY 2021-2022, falling below the 2 percent cap.

By enacting a 1.036 percent CCPI rather than the 2 percent maximum, taxpayers saved – and conversely state and local governments saw smaller increases in property tax revenues.

Subsequently, the California State Board of Equalization advised county Assessors to use 2 percent as Proposition 13's inflation factor for FY 2022-2023.  A five-year water and sewer rate analysis was completed in early FY 2016-17 resulting in Prop. 218 approved multi-year rate increase which was anticipated to remedy the continued decrease in working capital and restructure the rates to reduce revenue volatility as consumption changes.

In FY 2019-20, the status of the water fund improved due to the implementation of new rates. The resulting increase in revenues allowed for the establishment of operating and rate stabilization reserves for the water fund. Minimum operating reserve balance was also established for the sewer fund. The sewer fund’s operating reserve was funded in FY 2017-18 prior to the planned increase in rates for FY 2019-20. Consequently, none of the approved sewer rate increases were implemented. It is anticipated that the current sewer rates will generate sufficient revenues to fund capital projects and operations. While the financial position of the Sewer Fund is expected to remain strong in the coming years even without any rate increases, Water Fund’s financial position will depend on future rate increases and the ability to generate operating savings by purchasing less expensive imported water. The City plans to produce more water domestically as a result of the recent completion of water production and storage facilities. There was no increase in sewer rates during FY 2022-23; and no increase to water and sewer rates is planned for FY 2023-24.
 Over the last several years, the City’s employer pension contribution requirements have been rising due to lower payroll base and actuarial revisions by California Public Employees Retirement System (CalPERS). It is anticipated that employer pension contribution rates will continue to rise in the near future. Furthermore, when the City contracted out for fire and emergency medical services, the City’s safety pension plan was placed into inactive status by CalPERS and as a result of the lag in actuarial valuation, the City did not make any pension contribution to the safety plan over the initial two years. Even though the plan was fully funded when it was placed into inactive status, due to revisions to actuarial assumptions and changing demographics, the City began contributing to the plan in fiscal year 2016. In FY 2022-23, the City’s pension contribution for the safety plan increased to $767,103 from $712,881 in FY 2021-

22. With the anticipation of future contributions for all pension plans to increase, in FY 2021-22, the City Council approved additional pension contributions through Internal Revenue Code Section 115 Post-Employment Benefits Trust Program to be administered by Public Agency Retirement Services (PARS) and U.S Bank, as Trustee. Ongoing contributions will continue based on contributions previously made to pre-fund the OPEB Trust.  During the FY 2020-21, the building construction plans were submitted for approval for Phase I of the Palomino Ranch Business Park project. City Council had previously approved Palomino Ranch Business Park Project proposed by the CapRock Partners for the development of over two million square feet light industrial project with some retail component which will be built in phases.

Phase I was completed in FY 2022-23. Completion of future phases are dependent on market conditions. When completed, this project will generate significant one-time development impact fees and ongoing property tax and sales tax revenues. The City also estimates that this project will generate over 1,700 permanent jobs.
 During FY 2020-21, the Planning Commission approved Saddle Ranch Phase Project proposed by the CapRock Partners for the development of over 374,170 square-foot industrial/warehouse/ manufacturing/cold storage warehouse and distribution. Saddle Ranch Phase Project was completed in FY 2022-23, this project will also generate significant one-time development impact fees and ongoing property tax and sales tax revenues.
 During FY 2020-21, the Planning Commission approved the development of a six-building (6) industrial complex, totaling 80,078 square-feet located within the Industrial District of the Gateway

CITY OF NORCO
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2023
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Specific Plan. Other significant commercial projects ongoing during the fiscal year include a 109- room Hotel, Coffee Shop and Restaurant on Hamner Ave between 5th Street and Sixth Street.  The City of Norco has partnered with the City of Corona and continues to find grant opportunities for homeless services that provide outreach, clean tons of trash out of the Santa Ana Riverbed, and assist with permanent and transitional housing placement.  During FY 2022-23, the City recognized the 100th Anniversary of the creation of the Norco township and celebrated “A Century Rooted in Rural Living,” which highlights the importance of keeping Norco’s agricultural and animal-keeping identity. To preserve Norco's lifestyle, the City continues to stay informed about the complexities inherent in housing legislation and collaborate with all community stakeholders to meet housing requirements while maintaining Norco's uniqueness. With innovative thinking and solution-based discussions, Norco has balanced housing requirements and continues the protection of large lots.  The City has initiated a community-wide effort to develop its 2050 General Plan, which will create a shared vision for Norco’s future that reflects the community’s values and needs to help envision the future of Norco’s neighborhoods, parks, business corridors, streets, trails, open space and community character.
 The City is investing in the Ingalls Event Center. What was once a park with one neighborhood arena has transformed into a collection of diverse venues that offer character with the opportunity for customization, each one possessing qualities that contribute to memorable events for hundreds to thousands of guests. A new versatile venue (The Barn), upgraded way-finding signage, re-imagined branding, and a new comprehensive website, will make Ingalls Event Center the premier location for all types and sizes of events, from equestrian and agricultural events to weddings, conferences, concerts, and so much more.

Requests for Information
This financial report is designed to provide our citizens, taxpayers, customers, investors, creditors and all those with interest in the City’s finances with an overview of the City’s finances and to demonstrate accountability over the City’s financial assets. Questions concerning any of the information provided in this report or request for additional information should be addressed to the Finance Director, City of Norco, 2870 Clark Avenue, Norco, California 92860, or call (951) 270-5651.

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GOVERNMENT-WIDE FINANCIAL STATEMENTS

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CITY OF NORCO

STATEMENT OF NET POSITION
JUNE 30, 2023
See accompanying Notes to Financial Statements.
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Governmental Business-Type
Activities Activities Total
ASSETS
Cash and Investments 68,874,132 $ 28,826,753 $ 97,700,885 $ Cash and Investments with Fiscal Agents 120,464 15,584 136,048 Receivables, Net:

Accounts 733,608 3,219,752 3,953,360
Interest 213,570 412,447 626,017
Notes 10,554,647 9,094,598 19,649,245
Due from Other Governments 4,043,554 - 4,043,554
Internal Balances (336,852) 336,852 -
Inventories 146,977 - 146,977
Prepaids 42,418 91,324 133,742
Property Held for Resale 5,782,118 - 5,782,118
Lease Receivable 12,799,901 - 12,799,901
Capital Assets not Being Depreciated/Amortized:

Land and Construction in Progress 113,097,924 4,739,945 117,837,869 Capital Assets, Net of Accumulated Depreciation/Amortization 82,711,958 80,747,590 163,459,548 Total Assets 297,425,176 128,844,088 426,269,264

DEFERRED OUTFLOWS OF RESOURCES
Deferred Loss on Debt Refunding - 764,139 764,139
Amounts Related to Other Postemployment Benefits 2,720,754 1,213,815 3,934,569 Amounts Related to Pension Plans 7,857,794 2,053,521 9,911,315 Total Deferred Outflow of Resources 10,578,548 4,031,475 14,610,023

LIABILITIES
Accounts Payable and Accrued Liabilities 9,732,030 3,282,939 13,014,969 Accrued Interest Payable - 426,299 426,299
Retentions Payable 554,043 57,019 611,062
Unearned Revenues 723,743 544,764 1,268,507
Deposits Payable - 434,620 434,620
Noncurrent Liabilities:

Due Within One Year 880,686 1,502,475 2,383,161
Due in More than One Year 1,442,671 44,017,771 45,460,442 Net OPEB Liability 4,814,077 2,147,712 6,961,789
Net Pension Liability 18,668,187 4,792,897 23,461,084
Total Liabilities 36,815,437 57,206,496 94,021,933

DEFERRED INFLOWS OF RESOURCES
Amounts Related to Leases Receivable 12,799,901 - 12,799,901 Amounts Related to Other Postemployment Benefits 732,092 326,609 1,058,701 Amounts Related to Pension Plans 2,279,462 576,598 2,856,060 Total Deferred Inflow of Resources 15,811,455 903,207 16,714,662

NET POSITION
Net Investment in Capital Assets 189,484,053 38,586,712 228,070,765 Restricted for:

Capital Projects 4,935,374 - 4,935,374
Community Development 678,606 - 678,606
Low and Moderate Income Housing 16,640,503 - 16,640,503 Public Safety 682,008 - 682,008
Debt Service 15,578 - 15,578
Pensions 2,358,746 478,067 2,836,813
Unrestricted 40,597,542 35,685,503 76,283,045
Total Net Position 255,376,832 $ 74,765,860 $ 330,142,692 $

CITY OF NORCO

STATEMENT OF ACTIVITIES
YEAR ENDED JUNE 30, 2023
See accompanying Notes to Financial Statements.
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Net (Expense) Revenue and
Program Revenues Changes in Net Position
Operating Capital
Charges for Contributions Contributions Governmental Business-Type Functions/Programs Expenses Services and Grants and Grants Activities Activities Total Governmental Activities:

General Government 11,844,526 $ 2,426,873 $ 115,189 $ - $ (9,302,464) $ - $ (9,302,464) $ Public Safety 9,311,309 1,107,141 237,740 66,187 (7,900,241) - (7,900,241) Streets and Highways 6,061,498 1,412,390 2,277,536 4,644,402 2,272,830 - 2,272,830 Community and Economic
Development 1,693,448 2,227,596 62,307 72,149 668,604 - 668,604 Culture and Leisure 2,579,824 1,345,245 155,000 308,214 (771,365) - (771,365) Total Governmental Activities 31,490,605 8,519,245 2,847,772 5,090,952 (15,032,636) - (15,032,636) Business-Type Activities:

Water 11,821,081 12,424,207 - 170,421 - 773,547 773,547 Sewer 6,335,901 7,387,390 - - - 1,051,489 1,051,489
Total Business-Type Activities 18,156,982 19,811,597 - 170,421 - 1,825,036 1,825,036 Total Primary Government 49,647,587 $ 28,330,842 $ 2,847,772 $ 5,261,373 $ (15,032,636) 1,825,036 (13,207,600) General Revenues:

Taxes:

Property Tax, Levied for General Purpose 6,103,888 - 6,103,888 Transient Occupancy Tax 1,154,480 - 1,154,480
Franchise Tax 2,128,390 - 2,128,390
Public Service Taxes 512,318 - 512,318
Intergovernmental - Sales Tax 19,916,654 - 19,916,654
Motor Vehicle in Lieu Tax - Unrestricted 27,326 - 27,326 Unrestricted Investment Earnings 1,011,976 929,041 1,941,017 Unrestricted Intergovernmental 3,615,015 - 3,615,015
Transfers (285,830) 285,830 -
Total General Revenues and Transfers 34,755,877 643,211 35,399,088 CHANGE IN NET POSITION 2,468,247 19,723,241 22,191,488
Net Position - Beginning of Year 235,653,591 72,297,613 307,951,204 NET POSITION - END OF YEAR $ 74,765,860 255,376,832 $ 330,142,692 $

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FUND FINANCIAL STATEMENTS

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CITY OF NORCO

BALANCE SHEET

GOVERNMENTAL FUNDS
JUNE 30, 2023
See accompanying Notes to Financial Statements.
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Housing
Successor Agency
Low and Moderate Total
Income Housing Nonmajor Total
Special Governmental Governmental
General Revenue Fund Funds Funds
ASSETS
Cash and Investments 48,999,173 $ 4,061,817 $ 9,194,573 $ 62,255,563 $ Cash and Investments with Fiscal Agents - 120,464 - 120,464 Receivables, Net:

Accounts 562,687 - 149,263 711,950
Interest 296,484 33,216 48,129 377,829
Notes 2,034,058 6,705,090 355,450 9,094,598
Due from Other Governments 3,538,946 - 504,608 4,043,554 Prepaids 31,416 - - 31,416
Property Held for Resale - 5,782,118 - 5,782,118
Leases Receivable 12,799,901 - - 12,799,901
Due from Other Funds 282,815 - - 282,815
Total Assets 68,545,480 $ 16,702,705 $ 10,252,023 $ 95,500,208 $

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES

LIABILITIES
Accounts Payable and Accrued Liabilities 5,986,038 $ 62,202 $ 3,554,325 $ 9,602,565 $ Retentions Payable 259,679 - 294,364 554,043
Due to Other Funds 24,011 - 41,145 65,156
Unearned Revenues 625,109 - 98,634 723,743
Total Liabilities 6,894,837 62,202 3,988,468 10,945,507

DEFERRED INFLOWS OF RESOURCES
Unavailable Revenues 12,832,334 - 355,450 13,187,784

FUND BALANCES
Nonspendable 2,065,474 - - 2,065,474
Restricted 2,358,746 16,640,503 5,918,459 24,917,708
Committed 14,025,552 - - 14,025,552
Unassigned 30,368,537 - (10,354) 30,358,183
Total Fund Balances 48,818,309 16,640,503 5,908,105 71,366,917 Total Liabilities, Deferred Inflows
of Resources, and Fund Balances 68,545,480 $ 16,702,705 $ 10,252,023 $ 95,500,208 $

CITY OF NORCO

RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL

FUNDS TO THE STATEMENT OF NET POSITION
JUNE 30, 2023
See accompanying Notes to Financial Statements.
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Fund Balances of Governmental Funds 71,366,917 $
Amounts reported for governmental activities in the Statement of Net Position are different because:

Capital assets used in governmental activities are not current financial resources and, therefore, are not reported in the funds. 193,874,947 Internal service funds are used by management to charge the costs of equipment usage, and certain employee benefits and City-wide insurance coverage. The assets and liabilities of the internal service funds are included in the governmental activities in the Statement of Net Position, excluding $276,231 allocated to business-type activities 5,763,514 Interest receivable on certain long-term loans and certain grants and loans to pay for current-period expenditures and, therefore, are deferred in the governmental funds. In the Statement of Net Position, these receivables are recognized as earned revenues. 387,883
Long-term liabilities are not due and payable in the current period. Therefore, they are not reported in the Governmental Funds' balance sheet Lease Payable (69,744)
Subscription Payable (31,415)
Pension and OPEB related debt applicable to the City governmental activities are not due and payable in the current period and accordingly are not reported as fund liabilities. Deferred outflows of resources and deferred inflows of resources related to pensions and OPEB are only reported in the Statement of Net Position as the changes in these amounts affect only the government-wide statements for governmental activities:

Deferred Outflows of Resources Related to OPEB 2,720,754 Deferred Inflows of Resources Related to OPEB (732,092) Net OPEB Liability (4,814,077)
Deferred Outflows of Resources Related to Pensions 7,857,794 Deferred Inflows of Resources Related to Pensions (2,279,462) Net Pension Liability (18,668,187)
Net Position of Governmental Activities 255,376,832 $

CITY OF NORCO

STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES

GOVERNMENTAL FUNDS
YEAR ENDED JUNE 30, 2023
See accompanying Notes to Financial Statements.
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Housing
Successor Agency
Low and Moderate Total
Income Housing Nonmajor Total
Special Governmental Governmental
General Revenue Fund Funds Funds

REVENUES
Taxes 29,815,730 $ - $ 1,122,864 $ 30,938,594 $
Assessments - - 838,662 838,662
Licenses and Permits 1,998,851 - - 1,998,851
Fines and Forfeitures 772,981 - - 772,981
Development Fees - - 545,416 545,416
Intergovernmental 209,139 - 9,850,120 10,059,259
Charges for Services 3,528,011 - 15,084 3,543,095
Investment Earnings 1,216,319 104,921 153,968 1,475,208 Lease Income 531,248 - - 531,248
Reimbursements 5,905 - 197,928 203,833
Other 68,936 46,793 53,690 169,419
Total Revenues 38,147,120 151,714 12,777,732 51,076,566

EXPENDITURES
Current:

General Government 9,006,301 - 3,458,709 12,465,010
Public Safety 10,656,010 - 378,088 11,034,098
Streets and Highways 625,325 - 9,252,991 9,878,316
Community and Economic Development 1,822,062 103,129 39,420 1,964,611 Culture and Leisure 3,155,076 - 166,386 3,321,462
Debt Service:

Principal 34,255 - 34,255
Interest 575 - 575
Capital Outlay:

Special Assessment 6,417,810 - - 6,417,810
Other 2,179,046 - 6,607 2,185,653
Total Expenditures 33,896,460 103,129 13,302,201 47,301,790 Excess (Deficiency) of Revenues
Over (Under) Expenditures 4,250,660 48,585 (524,469) 3,774,776

OTHER FINANCING SOURCES (USES)
Lease Proceeds 94,280 - - 94,280
Subscription Liability Proceeds 41,134 - - 41,134
Transfers In 259,704 - - 259,704
Transfers Out (193,732) - (50,761) (244,493)
Total Other Financing Sources (Uses) 201,386 - (50,761) 150,625 NET CHANGE IN FUND BALANCES 48,585 4,452,046 (575,230) 3,925,401 Fund Balances - Beginning of Year 44,366,263 16,591,918 6,483,335 67,441,516 FUND BALANCES - END OF YEAR $ 16,640,503 48,818,309 $ 5,908,105 $ 71,366,917 $

CITY OF NORCO

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,

AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE

STATEMENT OF ACTIVITIES
YEAR ENDED JUNE 30, 2023
See accompanying Notes to Financial Statements.
(30)
Net Change in Fund Balance - Total Governmental Funds 3,925,401 $ Amounts reported for governmental activities in the Statement of Activities are different because:

Governmental funds report capital outlays as expenditures. However, in the Statement of Activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. Asset deletions also affect the amounts reported in the Statement of Activities.

Contribution from developers 25,000
Capital Outlays 15,403,349
Depreciation (3,875,338)
Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the governmental funds:

Grant Revenue not Available to Pay for Current-Period Expenditures (259,464) Proceeds from debt issued provided current financial resources to governmental funds, but issuing debt increased long-term liabilities in the Government-Wide Statement of Net Position. Principal payments are expenditures in the Governmental Funds, but reduces the long-term liabilities in the Government-Wide Statement of Net Position.

Proceeds from Leases and subscription debt (135,414)
Principal Payments 34,255
OPEB expense reported in the governmental funds includes the insurance premiums paid. In the Statement of Activities, OPEB expense includes the change in the OPEB liability, and related change in OPEB amounts for deferred outflows of resources and deferred inflows of resources. 303,786 Internal service funds are used by management to charge the costs of equipment usage, and certain employee benefits and City-wide insurance coverage to individual funds. The change in net position of the internal service funds reported within the governmental activities, excluding income of $276,231 reported in business-type activities. 473,385 Pension expense reported in the governmental funds includes the annual required contributions. In the Statement of Activities, pension expense includes the change in the net pension liability, and related change in pension amounts for deferred outflows of resources and deferred inflows of resources 3,828,281 Change in Net Position of Governmental Activities 19,723,241 $

CITY OF NORCO

STATEMENT OF NET POSITION

PROPRIETARY FUNDS
JUNE 30, 2023
See accompanying Notes to Financial Statements.
(31)
Governmental
Activities
Business-Type Activities - Enterprise Funds Internal Service Water Sewer Total Funds
ASSETS

CURRENT ASSETS
Cash and Investments 12,016,785 $ 16,809,968 $ 28,826,753 $ 6,618,569 $ Cash and Investments with Fiscal Agents 8,576 7,008 15,584 - Receivables, Net:

Accounts 2,137,810 1,081,942 3,219,752 21,658
Interest 61,939 151,631 213,570 34,618
Notes 166,739 680,644 847,383 -
Prepaids 21,209 21,209 42,418 59,908
Due from Other Funds 38,367 - 38,367 -
Inventories 146,977 - 146,977 -
Total Current Assets 14,598,402 18,752,402 33,350,804 6,734,753

NONCURRENT ASSETS
Notes Receivable 3,147,816 6,559,448 9,707,264 -
Capital Assets not Being Depreciated
Amortized:

Land 1,863,896 - 1,863,896 -
Construction in Progress 1,200,696 1,675,353 2,876,049 - Capital Assets Being Depreciated/Amortized:

Buildings and Improvements 1,239,573 669,306 1,908,879 - Land Improvements 329,885 - 329,885
Utility Plant 9,421,592 24,480,172 33,901,764 -
Wastewater Capacity Rights - 25,605,543 25,605,543 -
Pipelines 48,973,430 32,710,817 81,684,247 -
Fire Hydrants 2,202,973 - 2,202,973 -
Meters 1,827,287 1,741,393 3,568,680 -
Vehicles and Equipment 174,026 432,876 606,902 4,016,630 Right-to-Use Lease Asset 17,466 17,466 34,932 207,453
Right-to-Use Subscription Asset 78,266 78,266 156,532 404,533 Intangible Assets - - - 436,609
Less Accumulated Depreciation/
Amortization (35,651,273) (33,601,474) (69,252,747) (3,130,290) Total Noncurrent Assets 49,884,213 45,310,586 95,194,799 1,934,935 Total Assets 64,482,615 64,062,988 128,545,603 8,669,688

DEFERRED OUTFLOWS OF RESOURCES
Deferred Loss on Debt Refunding 458,554 305,585 764,139 - Amounts from Other Postemployment Benefits 650,778 563,037 1,213,815 - Amounts from Pension Plans 1,091,137 962,384 2,053,521 - Total Deferred Outflows of Resources 2,200,469 1,831,006 4,031,475 -

CITY OF NORCO

STATEMENT OF NET POSITION (CONTINUED)

PROPRIETARY FUNDS
JUNE 30, 2023
See accompanying Notes to Financial Statements.
(32)
Governmental
Activities
Business-Type Activities - Enterprise Funds Internal Service Water Sewer Total Funds

LIABILITIES

CURRENT LIABILITIES
Accounts Payable and Accrued Liabilities 1,622,668 $ 1,660,271 $ 3,282,939 $ 129,465 $ Accrued Interest Payable 214,702 211,597 426,299 -
Retentions Payable - 57,019 57,019 -
Deposits Payable 243,984 190,636 434,620 -
Due to Other Funds 256,026 - 256,026 -
Unearned Revenues 269,716 275,048 544,764 -
Lease Payable 3,859 3,859 7,718 40,521
Subscription Liability 25,953 25,953 51,906 88,445
Compensated Absences - - - 220,126
Loan Obligation - 307,851 307,851 -
Claims and Judgements - - - 445,741
Bonds Payable 559,601 575,399 1,135,000 -
Total Current Liabilities 3,196,509 3,307,633 6,504,142 924,298

NONCURRENT LIABILITIES
Compensated Absences - - - 660,373
Lease payable 7,000 7,000 14,000 88,454
Subscription Liability 28,073 28,073 56,146 135,825
Loan Obligation - 4,977,641 4,977,641
Claims and Judgements - - - 542,713
Bonds Payable 22,453,498 16,516,486 38,969,984 -
Net OPEB Obligation 1,151,480 996,232 2,147,712 -
Net Pension Liability 2,508,305 2,284,592 4,792,897 -
Total Noncurrent Liabilities 26,148,356 24,810,024 50,958,380 1,427,365 Total Liabilities 29,344,865 28,117,657 57,462,522 2,351,663

DEFERRED INFLOWS OF RESOURCES
Amounts from Other Postemployment Benefits 175,109 151,500 326,609 - Amounts from Pension Plans 246,177 330,421 576,598 -
Total Deferred Outflows of Resources 421,286 481,921 903,207 -

NET POSITION
Net Investment in Capital Assets 23,258,074 15,328,638 38,586,712 1,581,690 Restricted for Pension Benefits 242,630 235,437 478,067 - Restricted for Debt Service 8,570 7,008 15,578 -
Unrestricted 13,407,659 21,723,333 35,130,992 4,736,335 Total Net Position 36,916,933 $ 37,294,416 $ 74,211,349 6,318,025 $ Adjustment to Reflect the Consolidation of Internal
Service Fund Activities to Enterprise Funds. 554,511
Net Position of Business-Type Activities 74,765,860 $

CITY OF NORCO

STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION

PROPRIETARY FUNDS
YEAR ENDED JUNE 30, 2023
See accompanying Notes to Financial Statements.
(33)
Governmental
Activities
Business-Type Activities - Enterprise Funds Internal Service Water Sewer Total Funds

OPERATING REVENUES
Sales and Charges for Services 12,304,172 $ 7,387,390 $ 19,691,562 $ 2,704,163 $ Connection Fees 98,161 - 98,161 -
Miscellaneous 21,874 - 21,874 -
Total Operating Revenues 12,424,207 7,387,390 19,811,597 2,704,163

OPERATING EXPENSES
General and Administrative 719,259 658,403 1,377,662 1,930,043 Operations 8,650,465 3,493,615 12,144,080 -
Depreciation and Amortization 1,837,942 1,760,265 3,598,207 389,719 Total Operating Expenses 11,207,666 5,912,283 17,119,949 2,319,762 OPERATING INCOME 1,475,107 1,216,541 2,691,648 384,401

NONOPERATING REVENUES (EXPENSES)
Investment Earnings 348,431 580,610 929,041 104,887
Interest Expense and Fiscal Charges (884,965) (756,430) (1,641,395) (10,541) Amortization of Premium 162,579 165,552 328,131 -
Gain on Disposal of Assets - - 250
Total Nonoperating Revenues
(Expenses) (373,955) (10,268) (384,223) 94,596
INCOME BEFORE TRANSFERS 1,464,839 842,586 2,307,425 478,997 TRANSFERS IN - - - 270,619
CAPITAL CONTRIBUTIONS - 170,421 170,421 -
TRANSFERS OUT (142,915) (142,915) (285,830) -
CHANGE IN NET POSITION 1,321,924 870,092 2,192,016 749,616 Net Position - Beginning of Year 36,046,841 35,972,492 5,568,409 NET POSITION - END OF YEAR $ 37,294,416 36,916,933 $ 6,318,025 $ Adjustment to Reflect the Consolidation of Internal
Service Fund Activities to Enterprise Funds. 276,231
$ 2,468,247

CITY OF NORCO

STATEMENT OF CASH FLOWS

PROPRIETARY FUNDS
YEAR ENDED JUNE 30, 2023
See accompanying Notes to Financial Statements.
(34)
Governmental
Activities
Business-Type Activities - Enterprise Funds Internal Service Water Sewer Total Funds

CASH FLOWS FROM OPERATING ACTIVITIES
Cash Received from Customers 12,559,811 $ 7,554,534 $ 20,114,345 $ - $ Cash Received from Interfund Services Provided - - - 2,724,105 Cash Payments to Suppliers (8,788,747) (2,874,060) (11,662,807) (1,932,931) Cash Payments to Employees for Services (1,585,291) (1,490,976) (3,076,267) (253,345) Net Cash Provided by Operating
Activities 2,185,773 3,189,498 5,375,271 537,829

CASH FLOWS FROM NONCAPITAL FINANCING

ACTIVITIES
Cash Received from Other Funds 121,487 - 121,487 270,619 Cash Paid to Other Funds - (142,915) (142,915) -
Net Cash Provided (Used) by Noncapital
Financing Activities 121,487 (142,915) (21,428) 270,619

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Acquisition and Construction of Capital Assets (1,291,719) (3,374,987) (4,666,706) (485,901) Capital Development Impact Fees 170,421 - 170,421 -
Proceeds from Disposal of Capital Assets - - - 250
Principal Payments - Subscription Liability (24,240) (24,240) (48,480) (180,263) Principal Payments - Lease (3,340) (3,340) (6,680) (39,672) Principal Payments - Capital Lease - (302,110) (302,110) - Principal Payments - Bonds (538,675) (556,325) (1,095,000) - Interest and Fiscal Charges (869,094) (746,520) (1,615,614) (10,541) Net Cash Used by Capital and
Related Financing Activities (2,556,647) (5,007,522) (7,564,169) (716,127)

CASH FLOWS FROM INVESTING ACTIVITIES
Interest Income 305,310 522,441 827,751 79,939
Repayment of Notes Receivable 162,415 430,917 593,332 - Net Cash Provided by Investing
Activities 467,725 953,358 1,421,083 79,939

NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (1,007,581) 218,338 (789,243) 172,260
Cash and Cash Equivalents - Beginning of Year 11,807,023 17,824,557 29,631,580 6,446,309 CASH AND CASH EQUIVALENTS - END OF YEAR $ 16,816,976 12,025,361 $ 28,842,337 $ 6,618,569 $

CASH AND CASH EQUIVALENTS ARE

REPORTED ON THE STATEMENT OF

NET POSITION AS FOLLOWS
Cash and Investments 12,016,785 $ 16,809,968 $ 28,826,753 $ 6,618,569 $ Cash and Investments with Fiscal Agents 8,576 7,008 15,584 - Total Cash and Cash Equivalents 12,025,361 $ 16,816,976 $ 28,842,337 $ 6,618,569 $

CITY OF NORCO

STATEMENT OF CASH FLOWS (CONTINUED)

PROPRIETARY FUNDS
YEAR ENDED JUNE 30, 2023
See accompanying Notes to Financial Statements.
(35)
Governmental
Activities
Business-Type Activities - Enterprise Funds Internal Service Water Sewer Total Funds

RECONCILIATION OF OPERATING INCOME

TO NET CASH PROVIDED BY OPERATING

ACTIVITIES
Operating Income 1,216,541 $ 1,475,107 $ 2,691,648 $ 384,401 $ Adjustments to Reconcile Operating Income
to Net Cash Provided by Operating Activities:

Depreciation and Amortization 1,837,942 1,760,265 3,598,207 389,719 (Increase) Decrease in Assets and
Deferred Outflows:

Accounts Receivable 119,877 182,785 302,662 19,942
Prepaids (21,209) (21,209) (42,418) (29,418)
Inventories (51,641) - (51,641) -
Deferred Outflows:

Amount from Pension Plans (628,873) (519,552) (1,148,425) - Amount from Other Postemployment
Benefits (304,518) (231,330) (535,848) -
Increase (Decrease) in Liabilities and
Deferred Inflows:

Accounts Payable and Accrued Liabilities (72,671) 548,593 475,922 (189,427) Deposits Payable 31,593 539 32,132 -
Unearned Revenues (15,866) (16,180) (32,046) -
Retentions Payable (92,355) (2,666) (95,021) -
Compensated Absences - - - 65,535
Net Pension Obligation 1,008,953 848,262 1,857,215 -
Net OPEB Obligation 580,738 449,479 1,030,217 -
Claims and Judgements - - - (102,923)
Deferred Inflows:

Amount from Pension Plans (1,015,781) (878,495) (1,894,276) - Amount from Other Postemployment
Benefits (406,957) (406,100) (813,057) -
Net Cash Provided by Operating
Activities 2,185,773 $ 3,189,498 $ 5,375,271 $ 537,829 $

SUPPLEMENTAL DISCLOSURES OF NONCASH

INVESTING, CAPITAL, AND FINANCING

ACTIVITIES
Purchase of Capital Assets through
Subscrption Liability $ 54,026 54,026 $ 108,052 $ 404,503 $

CITY OF NORCO

STATEMENT OF FIDUCIARY NET POSITION
JUNE 30, 2023
See accompanying Notes to Financial Statements.
(36)
Successor
Agency
Private-Purpose Custodial
Trust Fund Funds
ASSETS
Cash and Investments 3,256,247 $ 4,049,582 $
Cash and Investments with Fiscal Agents 4,525,981 1,616,645 Receivables, Net:

Accounts 677,222 -
Interest 12,179 15,416
Due from Other Governments - 62,150
Prepaids - 95,485
Total Assets 7,889,892 6,421,015

DEFERRED OUTFLOWS OF RESOURCES
Loss on Debt Refunding 2,473,153 -

LIABILITIES
Accounts Payable - 700,015
Deposits Payable - 767,860
Accrued Interest on Debt 850,611 -
Due to Others 12,263 -
Long-Term Liabilities:

Due Within One Year 3,510,000 -
Due in More than One Year 55,935,225 -
Total Liabilities 60,295,836 1,480,138

NET POSITION
Held in Trust for the Successor Agency and
Other Purposes (49,932,791) -
Restricted for:

Waste Management - 1,465
Debt Service for Special Assessment Debt - 4,939,412
Total Net Position (49,932,791) $ 4,940,877 $

CITY OF NORCO

STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
YEAR ENDED JUNE 30, 2023
See accompanying Notes to Financial Statements.
(37)
Successor
Agency
Private-Purpose Custodial
Trust Fund Funds

ADDITIONS
RPTTF Property Tax Distribution 6,520,209 $ - $
Collections for Others - 10,176,046
Investment Earnings (Loss) (15,207) 17,889
Gain on Land Held for Resale 70,265 -
Total Additions 6,575,267 10,193,935

DEDUCTIONS
Administrative Allowance 250,000 -
Payment for collections to Waste Management - 7,146,615 Administrative Expenses - 145,982
Payments on Special Assessment Debt:

Principal 1,567,312 -
Interest 2,577,162 1,224,316
Total Deductions 2,827,162 10,084,225
CHANGE IN NET POSITION 109,710 3,748,105
Net Position - Beginning of the Year (53,680,896) 4,831,167 NET POSITION - END OF THE YEAR $ 4,940,877 (49,932,791) $

(38)

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(39)

NOTES TO FINANCIAL STATEMENTS

(40)

THIS PAGE INTENTIONALLY LEFT BLANK

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(41)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Description of the Reporting Entity
The City of Norco (the City) was incorporated on December 28, 1964 as a general law city and operates under a Council/City Manager form of government. It is governed by an elected five-member council.

As required by generally accepted accounting principles, these financial statements present the City (the primary government) and its component units. The component units discussed below are included in the City’s reporting entity because of the significance of their operational or financial relationship with the City. These entities are legally separate from each other. However, the City’s elected officials have a continuing full or partial accountability for fiscal matters of the other entities. The financial reporting entity consists of: (1) the City, (2) organizations for which the City is financially accountable, and (3) organizations for which the nature and significance of their relationship with the City are such that exclusions would cause the City’s financial statements to be misleading or incomplete.

An organization is fiscally dependent on the primary government if it is unable to adopt its budget, levy taxes, set rates or charges, or issue bonded debt without approval by the primary government. In a blended presentation, component unit balances and transactions are reported in a manner similar to the balances and transactions of the City. Component units are presented on a blended basis when the component unit’s governing body is substantially the same as the City’s or the component unit provides services almost entirely to the City. The following component unit of the City has been included in the financial reporting entity as a blended component unit. A description of the component unit and the method of incorporating its financial information in the accompanying financial statements is summarized as follows:

Norco Public Financing Authority
The Norco Public Financing Authority (the Authority) is a Joint Exercise of Powers Authority under the Laws of the state of California. The Authority is authorized to issue bonds under the Marks-Roos Local Bond Pooling Act of 1985 (Article 1 through 4, section 6500). The City and the former Norco Community Redevelopment Agency (the former Agency) formed the Authority by execution of the Joint Exercise of Powers Agreement. The purpose of the Authority is to provide financing to the former Agency and the City for various project purposes. The Authority activity is reported in the water and sewer enterprise funds and is presented as a blended component unit since its governing board is substantially the same as the City’s. Separate financial statements were not prepared for the Authority.

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(42)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) B. Government-wide and Fund Financial Statements
The government-wide financial statements include a statement of net position and a statement of activities. These statements present summaries of governmental and business-type activities for the City accompanied by a total column. Fiduciary activities of the City are not included in these statements. Certain eliminations have been made as prescribed by Governmental Accounting Standards Board (GASB) Statement No. 34 in regard 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.

Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support.

The statement of activities demonstrates the degree to which the direct and indirect expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment.

Program revenues include (1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment, and (2) grants and contributions, including special assessment, that are restricted to meet the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenue are reported instead as general revenues. In the statement of activities, internal service fund transactions have been eliminated; however, those transactions between the governmental and business-type activities have not been eliminated.

Separate financial statements are provided for governmental, proprietary, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements.

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(43)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary funds.

Under the economic resources measurement focus, all (both current and long-term) economic resources and obligations of the reporting government are reported in the government-wide financial statements. Accrual basis of accounting refers to when revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of the cash flows. Accordingly, all of the City’s assets, deferred outflows of resources, liabilities, and deferred inflows of resources, including capital assets, as well as infrastructure assets, and long-term liabilities, are included in the accompanying statement of net position. The statement of activities presents changes in net position. The types of transactions reported as program revenues for the City are reported in three categories (1) charges for services, (2) operating grants and contributions, and (3) capital grants and contributions.

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified-accrual basis of accounting. The current financial resources measurement focus means that only current assets, deferred outflows of resources, current liabilities and deferred inflows of resources are generally included on their balance sheets. Under the modified accrual basis of accounting, revenues are recognized in these funds when susceptible to accrual (i.e. when they are both measurable and available). “Measurable” means the amount of the transaction can be determined and “available” means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. For this purpose, the City considers property taxes collected after year-end, as available if they are collected within 60 days of the end of the current fiscal period. Other revenues susceptible to accrual include sales tax, state gasoline tax, utility users tax, investment income, and certain other intergovernmental revenues. Reimbursable grant revenues are considered to be available if they are collected within six months of the end of the current fiscal period. Grant funds earned but not received are recorded as a receivable, and grant funds received before the revenue recognition criteria have been met are reported as unearned revenues. Expenditures in the governmental funds are generally recognized in the accounting period in which the related fund liability is incurred, if measurable, except for unmatured principal and interest on general long-term debt, as well as lease liabilities, SBITA liabilities, compensated absences and claims and judgments, which are recognized when due.

The City reports the following major Governmental Funds:

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

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(44)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued)
The General Fund includes Measure R funds, a one-cent sales tax, for investment in infrastructure and vital services that was approved by voters on the November 6, 2018 ballot. Measure R allows the City to preserve its quality of life, and restore deteriorating streets, trails, parks, facilities and equestrian amenities. Measure R will also prevent additional cuts to the City’s public safety services in order to maintain safe levels of sheriff and fire protection without risking emergency response times.

With the approval of Measure R, the sales tax rate in the City increased by 1%, from

7.75% to 8.75% effective April 1, 2019.

The Housing Successor Agency Low and Moderate Income Housing (LMIH) Special Revenue Fund. This fund accounts for assets received from dissolution of the former Norco Community Redevelopment Agency dedicated to low and moderate income housing activities pursuant to the California Health and Safety Code.

The City reports the following major Proprietary Funds:

The Water Fund is used to account for the provision of water services to the residences and businesses of the City.

The Sewer Fund is used to account for the revenues and expenses in connection with the operation and improvement of the City’s sewer system.

Additionally, the City reports the following fund types:

The Special Revenue Funds are used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes.

The Capital Project Funds are used to account for major capital acquisition and construction separately from their ongoing operating activities, including those financed by special assessments.

The Internal Service Funds are used by the City to account for data processing, fleet management and benefits and insurance services provided to other City departments or agencies on a cost reimbursement basis and to allocate costs of compensated absences and claims and judgments charges to the funds on a pro rata basis.

The Fiduciary Funds are used to account for the receipt of assets, liabilities, special assessments and deposits received from individuals, private organizations or other governments. These resources are held by the City in a fiduciary capacity and remittances are made as distributions to other government, others and for payments for debt for which the City is not obligated. Fiduciary fund balances are not property of the City of Norco.

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(45)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued)
The following are Fiduciary Funds of the City:

The Private Purpose Trust Fund is the Successor Agency to the former Agency. The private purpose trust fund is reported using the “economic resources measurement focus” and the “accrual basis of accounting.”
The Custodial Funds account for assets held by the City as a custodian for bonded assessment districts, collections for on behalf of individuals, private organizations or other governments. The custodial funds use the accrual basis of accounting.

As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are payments-inlieu of taxes and other charges between the City’s water and sewer function and various other functions of the City. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned.

Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues for the Water and Sewer enterprise funds and of the City’s internal service funds are charges to customers for sales and services.

Operating expenses for these same enterprise funds include the cost of sales and services, administration expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.

D. Interfund Receivables and Payables
Activity between funds in the fund financial statements 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” (i.e., the current portion of interfund loans). All other outstanding balances between funds are reported as “advances to/from other funds”.

Any residual balances outstanding between the governmental activities and businesstype activities are reported in the government-wide financial statements as “internal balances.”

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(46)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) E. Property Taxes
The County of Riverside collects property taxes for the City. Tax liens attach annually as of 12:01 A.M. on the first day in March preceding the fiscal year for which the taxes are levied. The tax levy covers the fiscal period July 1 to June 30. All secured personal property taxes and one-half of the taxes on real property are due November 1, the second installment is due February 1. All taxes are delinquent, if unpaid, on December 10 and April 10, respectively. Unsecured personal property taxes become due on the first of March each year and are delinquent, if unpaid, on August 31.

F. Cash and Cash Equivalents
For purpose of the statement of cash flows, the City considered cash and cash equivalents as short term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. The City follows the practice of pooling cash and investments of all funds.

G. Investments
The City reports its investments at fair value in the financial statements. All investment income, including changes in the fair value of investments, is recognized as revenue in the operating statement.

H. Inventories and Prepaids
Inventories of materials and supplies are carried at cost on a first-in, first-out basis. The City uses the consumption method of accounting for inventories. Special reporting treatments are also applied to governmental fund inventories to indicate that they do not represent “available spendable resources,” even though they are a component of net current assets. Such amounts are designated as an unspendable component of fund balance.

Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements.

The City uses the consumption method of accounting for prepaids.

I. Land Held for Resale
Land held for resale is recorded at the lower of cost or net realizable value.

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(47)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) J. Compensated Absences
Vacation pay is payable to employees at the time a vacation is taken or upon termination of employment. Vacation accruals and the maximum number of hours an employee can accrue are based on the employee’s length of service with the City as outlined in the various Memorandum of Understanding and Salary Resolutions.

Sick leave is payable when an employee is unable to work because of illness. Upon termination, regular employees with 10 years continuous service will be paid 50% for any unused sick leave. Managers, mid managers, and confidential employees with five years continuous service are also paid 50% for any unused sick leave.

The total amount of liability for compensated absences is segregated between shortterm and long term with both portions reflected in the government-wide statements. The short-term portion is determined to be the amount due to employees for future absences which is attributable to services already rendered and which is expected to be paid during the next fiscal year.

K. Capital Assets
Capital assets, which include property, plant and equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items) are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than or equal to $5,000 ($50,000 for infrastructure assets) and an estimated useful life of at least two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at acquisition value.

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

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

Buildings 50 Years
Building Improvements 5 to 50 Years
Public Domain Infrastructure 20 to 50 Years
System Infrastructure 10 to 60 Years
Land Improvements 5 to 50 Years
Wastewater Capacity Rights 40 to 50 Years
Vehicles and Equipment 5 to 20 Years
Office and Computer Equipment 5 to 10 Years
Fire Hydrants/Meters 10 to 50 Years
Intangible Assets 5 to 10 Years

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(48)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) K. Capital Assets (Continued)
Right-to-use lease assets are initially measured at the present value of payments expected to be made during the lease term, adjusted for lease payments made at or before the lease commencement date, plus certain initial direct costs. Subsequently, the lease asset is amortized in a systematic and rational manner over the shorter of the lease term or the useful life of the underlying asset.

Subscription-Based Information Technology Arrangements (SBITA) assets are initially measured as the sum of the present value of payments expected to be made during the subscription term, payments associated with the SBITA contract made to the SBITA vendor at the commencement of the subscription term, when applicable, and capitalizable implementation costs, less any SBITA vendor incentives received from the SBITA vendor at the commencement of the SBITA term. SBITA assets are amortized in a systematic and rational manner over the shorter of the subscription term or the useful life of the underlying IT assets.

L. Deferred Outflows/Inflows of Resources
In addition to assets, the statement of net position includes a separate section for deferred outflows of resources. 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. The category of deferred outflow of resources reported in the statement of net position is related to debt refunding, pensions, and other postemployment benefits. The deferred charge on refunding resulted from the difference between the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. Deferred outflows on pension and other postemployment benefits are more fully discussed in Note 5 and 13.

In addition to liabilities, the statement of net position and the governmental funds balance sheet includes a separate section for deferred inflows of resources. Deferred inflows of resources represent an acquisition of net assets or fund balance that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. In the government-wide financial statements, the City’s deferred inflows of resources reported on the statement of net position relate to pension and other postemployment benefits, which are more fully discussed in Note 5 and 13. The statement of net position and the governmental funds balance sheet also report a deferred inflow of resources related to leases. The lease related deferred inflow of resources is recorded in an amount equal to the corresponding lease receivable plus any payments received at or before the start of the lease term that relates to future periods, less any lease incentives paid to, or on behalf of the lessee at or before the commencement of the lease term. The inflow of resources is recognized in a systematic and rational manner over the term of the lease.

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(49)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) L. Deferred Outflows/Inflows of Resources (Continued)
Under the modified accrual basis of accounting, deferred inflows of resources also include revenues not collected within the availability period after the fiscal year-end. The City has reported deferred inflows of resources related to unavailable revenues for property taxes and grants. These amounts are deferred and will be recognized as an inflow of resources in the period that amounts become available.

M. Use of Estimates
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, deferred outflows of resources, liabilities, and deferred inflows of resources and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates.

N. Long-Term Liabilities
In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable bond premium or discount.

In the fund financial statements, 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.

O. Unearned Revenues
In the government-wide financial statements and the fund financial statements, unearned revenues represent cash advances by various grantors that have not been spent; therefore, no revenue has been recognized.

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(50)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) P. Pensions
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City’s California Public Employees’ Retirement System (CalPERS) plans (Plans) and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.

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

R. Net Position
The government wide financial statements, proprietary fund statements and fiduciary fund statements utilize a net position presentation. Net position is classified in the following categories:

Net Investment in Capital Assets – This amount consists of capital assets net of accumulated depreciation and reduced by outstanding debt and capital related payable that is attributed to the acquisition, construction, or improvement of the assets.

Restricted Net Position – This amount is restricted by enabling legislation, such as external creditors, grantors, contributors, or laws or regulations of other governments.

Unrestricted Net Position – This amount is all net position that does not meet the definition of “net investment in capital assets” or “restricted net position.” Sometimes the City will fund outlays for a particular purpose from both restricted and unrestricted resources. In order to calculate the amounts to report as restricted net position and unrestricted net position in the government wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the City’s policy to consider restricted net position to have been depleted before unrestricted net position is applied.

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(51)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) S. Fund Balances
The following fund balance classifications describe the relative strength of the spending constraints placed on the purposes for which resources can be used:

Nonspendable – This category represents amounts that cannot be spent because they are either (a) not in a spendable form (such as inventory) or (b) legally or contractually required to be maintained intact.

Restricted – This category represents amounts constrained to specific purposes by their providers (such as grantors, bondholders and higher levels of government), through constitutional provisions or by enabling legislation.

Committed – This category represents amounts constrained to specific purposes by a government itself, using the highest level of decision-making authority. Committed fund balances encompass the portion of net fund resources, the use of which is constrained by limitations that the government imposes upon itself at its highest level of decision making, normally through the adoption of a resolution by the governing body, and that remain binding unless removed in the same manner. The City Council is considered the highest authority for the City.

Assigned – This category represents amounts a government intends to use for a specific purpose; intent can be expressed by the governing body or by an official or body to which the governing body delegates the authority. Assignment of resources can be done by the highest level of decision making or by a committee or official designated for that purpose. The City Council has established a resolution that authorized the City Manager for that purpose.

Unassigned – Consists of the residual amount for the general fund that is not contained in the other classifications. The general fund is the only fund that reports a positive unassigned fund balance. Any deficit fund balance within the other governmental fund types is reported as unassigned.

The City Council establishes, modifies and/or rescinds fund balance commitments by passage of a resolution.

The City considers that both, restricted and unrestricted amounts to have been spent when an expenditure is incurred for which both types of fund balances is available; the City also considers committed, assigned, and or unassigned amounts to have been used in that order when an expenditure is incurred and any of those classifications apply to the expenditure.

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(52)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) T. Encumbrances
Encumbrances are estimations of costs related to unperformed contracts for goods and services. These commitments are recorded for budgetary control purposes in the general, special revenue, and similar governmental funds. Encumbrances outstanding at year-end represent the estimated amount of the expenditure ultimately to result if unperformed contracts at year-end are completed. They do not constitute expenditures or estimated liabilities. As of June 30, 2023, there were no outstanding encumbrances for governmental funds.

U. Deficit Net Position and Fund Balances
As of June 30, 2023, the following funds had deficit net position or fund balances:

Nonmajor Special Revenue Funds:

Landscape Maintenance District #1 (3,955) $
Landscape Maintenance District #2 (6,399)
Internal Service Fund:

Benefits and Insurance (828,412)
Deficit fund balances are expected to be funded through collection of future revenues or transfers from the general fund.

V. Adoption of New Accounting Standards
GASB Statement No. 96, Subscription-Based Information Technology Arrangements In May 2020, the GASB issued GASB Statement No. 96, Subscription-Based Information Technology Arrangements. This standard defines a subscription-based information technology arrangement (SBITA); establishes that a SBITA results in a rightto-use subscription asset (an intangible asset) and a corresponding subscription liability; provides the capitalization criteria for outlays other than subscription payments, including implementation costs of a SBITA; and requires note disclosures regarding a SBITA.

The City adopted the requirements of the guidance effective July 1, 2022 and has applied the provisions of this standard to the beginning of the period of adoption.

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(53)
NOTE 2 CASH AND INVESTMENTS
Cash and Investments
Cash and investments are reported in the accompanying statement of net position and statement of fiduciary net position as follows:

Statement of Net Position:

Cash and Investments 97,700,885 $
Cash and Investments with Fiscal Agents 136,048
Statement of Fiduciary Net Position:

Cash and Investments 7,305,829
Cash and Investments with Fiscal Agents 6,142,626
Total Cash and Investments 111,285,388 $
Cash and investments as of June 30, 2023 consist of the following:

Cash on Hand 1,622 $
Deposits with Financial Institutions 2,084,601
Investments in Section 115 Trust - PARS 2,836,813
Investments 106,362,352
Total Cash and Investments 111,285,388 $
Investments Authorized by the California Government Code and the City’s Investment Policy
The table below identifies the investment types that are authorized by the City’s investment policy. The table also identifies certain provisions of the City’s investment policy that address interest rate risk, credit risk and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City’s investment policy.

Maximum Maximum
Maximum Percentage of Investment in
Authorized Investment Type Maturity Portfolio * One Issuer City Issued Debt 5 Years None None
United States (U.S.) Treasury Securities 5 Years None None State of California Obligations 5 Years None None
California Local Agency Obligations 5 Years None None
U.S. Government Sponsored Agency
Securities 5 Years None None
Banker's Acceptances 180 Days 40% None
Commercial Paper 270 Days 25% None
Negotiable Certificates of Deposit 5 Years 30% None
Non-Negotiable Certificates of Deposit 2 Years 25% None Medium-Term Notes 5 Years 30% None
Money Market Mutual Funds N/A 20% 10%
Mortgage Pass-Through securities 5 Years 20% None
Local Government Investment Pools N/A None None
Supranational Obligations 5 Years 30% None
Local Agency Investment Fund N/A None None
Riverside County Investment Fund N/A None None
* Excluding amounts held by bond trustee that are not subject to California Government Code restrictions.

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(54)
NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Investments Authorized by Debt Agreements
Investment of debt proceeds held by bond trustee are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City’s investment policy. The table below identifies the investment types that are authorized for investments held by bond trustee. The table also identifies certain provisions of these debt agreements that address interest rate risk, credit risk, and concentration of credit risk.

Maximum Maximum
Maximum Percentage Investment in
Authorized Investment Type Maturity Allowed One Issuer
U.S. Treasury Obligations None None None
U.S. Government Sponsored 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
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.

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

Remaining Maturity (in Months)
12 Months 13 to 24 25 to 60
Investment Type Total or Less Months Months
State Investment Pool 70,991,138 $ 70,991,138 $ - $ - $ CAMP 5,024,555 5,024,555
Money Market Mutual Funds 405,576 405,576 - -
US Treasury Bills 2,983,740 2,983,740 - -
US Treasury Notes 2,359,774 - 2,359,774 -
U.S. Government Sponsored
Agency Securities 18,318,895 11,275,995 7,042,900 -
Held by Trustee:

Money Market Mutual Funds 500,578 500,578 - -
U.S. Government Sponsored
Agency Securities 5,778,096 2,033,911 3,744,185 -
Total Investments 106,362,352 $ 93,215,493 $ 13,146,859 $ - $

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(55)
NOTE 2 CASH AND INVESTMENTS (CONTINUED)
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 Standard and Poor’s or by Moody’s Corporation, nationally recognized statistical rating organizations.

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

The state investment pool does not have a rating provided by a nationally organized statistical rating organization.

Minimum Ratings as
Investment Type Total Legal Rating of Year End
State Investment Pool 70,991,138 $ N/A Not Rated
CAMP N/A Not Rated 5,024,555
Money Market Mutual Funds 405,576 A/A1 AAA
US Treasury Bills 2,983,740 N/A Exempt
US Treasury Notes 2,359,774 N/A Exempt
U.S. Government Sponsored Agency
Securities 18,318,895 N/A AA+
Held by Trustee:

Money Market Mutual Funds 500,578 A/A1 AAA
U.S. Government Sponsored Agency
Securities 5,778,096 N/A AA+
Total Investments 106,362,352 $
N/A - Not Applicable
Concentration of Credit Risk
The investment policy of the City contains certain limitations on the amount that can be invested in any one issuer. Investments in any one issuer (other than U.S. Treasury securities, mutual funds, and external investment pools) that represent 5% or more of total City investments are as follows:

Reported
Issuer Investment Type Amount
Federal Home Loan Bank U.S. Government Sponsored 14,805,450 $ Agency Security

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(56)
NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Concentration of Credit Risk (Continued)
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The fair value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits.

As of June 30, 2023, the City’s deposits with financial institutions in excess of Federal Depository Insurance Corporation (FDIC) limit of $250,000 was held in collateralized accounts as required by the California Government Code.

Investment in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the oversight of the Treasurer of the state of California. The fair value of the City’s investment in this pool is reported in the accompanying financial statements at amounts based upon the City’s pro rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis.

Investment in Section 115 Trust - PARS
The City established a trust account with Public Agency Retirement Services (PARS) to hold assets that are legally restricted for use in administering the City’s CalPERS pension plans.

The Section 115 Pension trust’s investments are managed by a third-party portfolio manager under guidelines approved by the City.

Fair Value Measurements
The City categorizes its fair value measurement within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the assets. Level 1 inputs are quoted prices in active markets for identical assets, Level 2 inputs are quoted prices for similar assets in active markets, and Level 3 inputs are significant unobservable inputs.

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(57)
NOTE 2 CASH AND INVESTMENTS (CONTINUED)
Fair Value Measurements (Continued)
Investments in commercial paper and U.S. government sponsored agency securities are valued using quoted prices in an active market for similar assets (Level 2 measurement).

The City has the following recurring fair value measurements as of June 30, 2023:

Level 1 Level 2 Level 3 Total
US Treasury Bills 2,983,740 $ - $ - $ 2,983,740 $
US Treasury Notes 2,359,774 - - 2,359,774
U.S. Government Sponsored
Agency Securities - 18,318,895 - 18,318,895
Held by Trustee:

U.S. Government Sponsored
Agency Securities - 5,778,096 - 5,778,096
Total Investments 5,343,514 $ 24,096,991 $ - $ 29,440,505 $ Investments not Subject to Fair
Value Hierarchy:

Money Market Mutual Funds 405,576 $
State Investment Pool 70,991,138
CAMP 5,024,555
Held by Trustee:

Money Market Mutual Funds 500,578
Total Investment Portfolio 106,362,352 $
NOTE 3 RECEIVABLES
Due from Other Governments
Due from other governments, as of year-end, for the government’s individual major funds, and nonmajor funds in the aggregate are as follows:

Nonmajor
Type of Revenue General Funds Total
Assessments - $ 12,634 $ 12,634 $
Gas Tax - 126,313 126,313
Sales Tax 1,876,049 - 1,876,049
Measure A - 176,131 176,131
Measure R 1,371,597 - 1,371,597
Grants and Contributions - 131,305 131,305
Other 291,300 58,225 349,525
Totals 3,538,946 $ 504,608 $ 4,043,554 $

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(58)
NOTE 4 CAPITAL ASSETS
Capital assets activity for the year ended June 30, 2023 was as follows:

Beginning
Balance Ending
Governmental Activities As Restated* Additions Deletions Balance Capital Assets, Not Being Depreciated:

Land 101,161,035 $ 2,043,632 $ - $ 103,204,667 $
Construction in Progress 4,402,018 13,361,296 9,893,257 (7,870,057) Total Capital Assets, Not Being
Depreciated 105,563,053 15,404,928 113,097,924 (7,870,057) Capital Assets, Being Depreciated and Amortized:

Buildings and Improvements 19,134,145 385,666 19,351,031 (168,780) Improvements Other than Buildings 7,376,790 919,985 - 8,296,775 Vehicles and Equipment 4,589,845 688,066 5,236,034 (41,877) Infrastructure 136,869,665 6,386,290 143,167,955 (88,000) Intangible 436,609 - - 436,609
Total Capital Assets, Being
Depreciated 168,407,054 8,380,007 176,488,404 (298,657) Less Accumulated Depreciation/Amortization for:

Buildings and Improvements (9,111,000) - (488,938) (9,599,938) Improvements Other than Buildings (2,876,753) - (385,309) (3,262,062) Vehicles and Equipment (2,973,875) 68,010 (265,338) (3,171,203) Infrastructure (74,990,493) 88,000 (3,003,337) (77,905,830) Intangible (427,793) - (7,545) (435,338)
Total Accumulated Depreciation/
Amortization (90,379,914) 156,010 (4,150,467) (94,374,371) Total Capital Assets, Being
Depreciated, Net 78,027,140 4,229,540 82,114,033 (142,647) Right-to-Use Lease Assets
Equipment 207,453 94,280 - 301,733
Less Accumulated Amortization:

Equipment (41,491) - (47,383) (88,874)
Total Right-To-Use Lease Assets, Net 165,962 46,897 - 212,859 Right-to-Use Subscription Assets 134,654 317,619 - 452,273 Less Accumulated Amortization
Right-to-Use Subscription Assets - (67,207) (67,207)
Total Right-to-Use Subscription
Assets, Net 134,654 250,412 - 385,066
Total Governmental Activities
Capital Assets, Net 183,890,809 $ 19,931,777 $ (8,012,704) $ 195,809,882 $ * Beginning balances were restated for SBITA assets

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NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(59)
NOTE 4 CAPITAL ASSETS (CONTINUED)
Beginning
Balance Ending
Business-Type Activities As Restated* Additions Deletions Balance Capital Assets, Not Being Depreciated:

Land 1,863,896 $ - $ - $ 1,863,896 $
Construction in Progress 4,711,938 4,670,792 2,876,049 (6,506,681) Total Capital Assets, Not Being
Depreciated 6,575,834 4,670,792 4,739,945 (6,506,681)
Capital Assets, Being Depreciated:

Buildings and Improvements 1,908,879 - - 1,908,879
Land Improvements - 329,885 - 329,885
Utility Plant 31,954,495 1,950,471 33,901,764 (3,202)
Wastewater Capacity Rights 25,605,543 - 25,605,543
Pipelines 77,512,009 4,172,238 81,684,247
Vehicles and Equipment 606,902 - 606,902
Fire Hydrants 2,152,973 50,000 2,202,973
Meters 3,568,680 - - 3,568,680
Total Capital Assets, Being
Depreciated 143,309,481 6,502,594 149,808,873 (3,202)
Less Accumulated Depreciation for:

Buildings and Improvements (873,571) (54,480) (928,051) Utility Plant (7,669,111) 3,202 (724,853) (8,390,762)
Wastewater Capacity Rights (11,143,525) (722,869) (11,866,394) Pipelines (41,191,942) - (1,550,152) (42,742,094)
Vehicles and Equipment (300,669) - (69,191) (369,860)
Fire Hydrants (1,581,805) - (87,998) (1,669,803)
Meters (2,890,133) - (357,219) (3,247,352)
Total Accumulated Depreciation (65,650,756) 3,202 (3,566,762) (69,214,316) Total Capital Assets, Being
Depreciated, Net 77,658,725 2,935,832 - 80,594,557
Right-to-Use Lease Assets
Equipment 34,932 - - 34,932
Less Accumulated Amortization:

Equipment (6,986) (6,986) (13,972)
Total Right-To-Use Lease Assets, Net 27,946 - (6,986) 20,960 Right-to-Use Subscription Assets - 156,532 - 156,532
Less Accumulated Amortization
Right-to-Use Subscription Assets - - (24,459) (24,459)
Total Right-to-Use Subscription
Assets, Net - 132,073 - 132,073
Total Business-Type Activities
Capital Assets, Net 84,262,505 $ 7,731,711 $ $ 85,487,535 (6,506,681) $ * Beginning balances were restated for SBITA assets

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NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(60)
NOTE 4 CAPITAL ASSETS (CONTINUED)
Depreciation and amortization expense was charged to functions of the primary government as follows:

Governmental Activities:

General Government 297,241 $
Public Safety 193,913
Streets and Highways 2,567,355
Culture and Leisure 816,829
Capital Assets Held by the Government's Internal
Service Funds are Charged to the Various
Functions Based on Their Usage of the Assets:

Depreciation and Amortization 389,719
Total Depreciation and Amortization Expense-
Governmental Activities 4,265,057 $
Business-Type Activities:

Water - Depreciation and Amortization Expense 1,837,942 $ Sewer - Depreciation and Amortization Expense 1,760,265 Total Depreciation and Amortization Expense
Business- Type Activities 3,598,207 $
NOTE 5 RETIREMENT PLANS
A. General Information about the Pension Plans
Plan Descriptions
All qualified permanent and probationary employees are eligible to participate in the City’s separate Safety (fire) and Miscellaneous (all other) Employee Pension Plans, costsharing multiple employer defined benefit pension plans administered by the California Public Employees’ Retirement System (CalPERS) in the PERF C Risk Pool. Benefit provisions under the Plans are established by State statute and City resolution.

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 at www.calpers.ca.gov.

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(61)
NOTE 5 RETIREMENT PLANS (CONTINUED)
A. General Information about the Pension Plans (Continued) Benefits Provided
CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to an average three years of full-time employment. Members with five years of total service are eligible to retire at age 50 to 62 with statutorily reduced benefits. For employees hired into a plan with the 2.7% at 55 formula, eligibility for retirement is age 55 with at least five years of service. PEPRA miscellaneous members become eligible for retirement upon attainment of age 62 with at least five years of service. All members are eligible for nonduty disability benefits after five years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.

The Plans’ provisions and benefits in effect at the measurement date of June 30, 2022, and the contribution requirements for the fiscal year ended June 30, 2023, are summarized as follows:

Miscellaneous
Prior to On or After
Hire Date January 1, 2013 January 1, 2013
Benefit Formula 2.7%@55 2%@62
Benefit Vesting Schedule 5 Years of Service 5 Years of Service Benefit Payments Monthly for Life Monthly for Life
Retirement Age 50 - 55 50 - 62
Monthly Benefits, as a % of Eligible Compensation 2.0% to 2.7% 1.0% to 2.5% Required Employee Contribution Rates 8% 6.25%
Required Employer Contribution Rates:

Normal Cost Rate 13.350% 7.470%
Employer Payment of Unfunded Liability 1,3 $ 14,455 67,477 $ Safety
Prior to
Hire Date January 1, 2013
Benefit Formula 2%@50
Benefit Vesting Schedule 5 Years of Service
Benefit Payments Monthly for Life
Retirement Age 50
Monthly Benefits, as a % of Eligible Compensation 2.00% Required Employee Contribution Rates (1) 0.00%
Required Employer Contribution Rates:

Normal Cost Rate (1) 0.00%
Employer Portion of Unfunded Liability 767,103 $
(1) The City has no active safety members and therefore the only required contribution for fiscal year ended June 30, 2023 was the employer portion of the unfunded liability.

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(62)
NOTE 5 RETIREMENT PLANS (CONTINUED)
A. General Information about the Pension Plans (Continued) Contributions
Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers are 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 City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. City contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contributions requirements are classified as plan member contributions. The City currently does not pay for plan member contributions. Employer contributions for the miscellaneous plan and safety plans for fiscal year 2022 were $1,721,181 and $712,881 respectively.

B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
As of June 30, 2023, the City reported net pension liabilities for its proportionate share of the net pension liability of the PERF C Risk Pool as follows:

Proportionate
Share of
Net Pension
Liability
Miscellaneous 14,709,549 $
Safety 8,751,535
Total Net Pension Liability 23,461,084 $
The City’s net pension liability for each Plan is measured as the proportionate share of the net pension liability. The net pension liability of each of the Plans is measured as of June 30, 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 proportionate share 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.

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(63)
NOTE 5 RETIREMENT PLANS (CONTINUED)
B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
The City’s change in proportionate share of the net pension liability for the PERF C Risk Pool, in terms of percentages, as of the measurement dates of June 30, 2021 and 2022 was as follows:

Miscellaneous Safety
Proportion - June 30, 2021 0.16184% 0.09645%
Proportion - June 30, 2022 0.12735% 0.07577%
Change - Increase (Decrease) -0.03449% -0.02068%
For the year ended June 30, 2023, the City recognized pension expense (income) of $(2,319,826) (($1,915,741) for miscellaneous and $(404,085) for safety). At June 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Miscellaneous Safety Total
Deferred Deferred Deferred Deferred Deferred Deferred
Outflows Inflows Outflows Inflows Outflows Inflows
of Resources of Resources of Resources of Resources of Resources of Resources Pension Contributions Subsequent
to Measurement Date 1,926,838 $ - $ 767,103 $ - $ 2,693,941 $ - $ Differences Between Expected
and Actual Experience 295,396 (197,844) 362,194 (95,035) 657,590 (292,879) Change in Assumptions 1,507,301 - 882,420 - 2,389,721 - Change in Employer's Proportion - (1,806,739) 17,075 (65,041) 17,075 (1,871,780) Differences between the Employer's
contributions and the employer's
proportionate share of contribution 76,599 (6,235) - (685,166) 76,599 (691,401) Net Differences Between Projected
and Actual Earnings on Plan
Investments 2,694,399 - 1,381,990 - 4,076,389 -
Total 6,500,533 $ (2,010,818) $ 3,410,782 $ (845,242) $ 9,911,315 $ (2,856,060) $ $1,926,838 and $767,103 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ending June 30, 2024 for the miscellaneous and safety pension plans, respectively. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

Year Ending June 30, Miscellaneous Safety Total
2024 427,955 $ 387,174 $ 815,129 $
2025 331,523 309,742 641,265
2026 155,412 258,487 413,899
2027 1,647,987 843,034 2,491,021
2028 - - -
Thereafter - - -

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(64)
NOTE 5 RETIREMENT PLANS (CONTINUED)
B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
Actuarial Assumptions
The total pension liability for the June 30, 2022 the measurement period was determined by an actuarial valuation as of June 30, 2021, with update procedures used to roll forward the total pension liability to June 30, 2022. The total pension liability was based on the following assumptions:

Miscellaneous Safety
Valuation Date June 30, 2021 June 30, 2021
Measurement Date June 30, 2022 June 30, 2022
Actuarial Cost Method Entry-Age Normal Entry-Age Normal Cost Method Cost Method
Actuarial Assumptions:

Discount Rate 6.90% 6.90%
Inflation 2.30% 2.30%
Salary Increases (1) (1)
Mortality Rate Table (2) (2)
Postretirement Benefit Increase (3) (3)
(1) Varies by entry age and service.
(2) The mortality table was developed based on CalPERS-specific data. The probabilities of mortality are based on the 2021 CalPERS Experience Study for the period 2001-2019.

Pre-retirement and Post-retirement mortality rates include mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries. For more details on this table, please refer to the CalPERS Experience Study and Review of Actuarial Assumptions report from November 2021 that can be found on the CalPERS website
(3) The less of contract COLA or 2.30% until purchasing power allowance floor on purchasing applies, 2.30% thereafter.

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

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

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(65)
NOTE 5 RETIREMENT PLANS (CONTINUED)
B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
The expected real rates of return by asset class are as follows:

Assumed
Asset Real Return
Asset Class (a) Allocation (a) (b)
Global Equity - Cap-weighted 30.00% 4.54%
Global Equity - Non cap-weighted 12.00% 3.84%
Private Equity 13.00% 7.28%
Treasury 5.00% 0.27%
Mortgage-backed securities 5.00% 0.50%
Investment grade corporates 10.00% 1.56%
High yield 5.00% 2.27%
Emegring market debt 5.00% 2.48%
Private debt 5.00% 3.57%
Real Assets 15.00% 3.21%
Liquidity -5.00% -0.59%
Total 100.00%
(a) An expected inflation of 2.3% used for this period. (b) Figures are based on 2021 asset liability management study Discount Rate
The discount rate used to measure the total pension liability was 6.90%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(66)
NOTE 5 RETIREMENT PLANS (CONTINUED)
B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (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 of the PERF C Risk Pool, calculated using the discount rate, 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:

Miscellaneous Safety Total
1% Decrease 5.90% 5.90% 5.90%
Net Pension Liability 21,260,497 $ 12,604,371 $ 33,864,868 $ Current Discount Rate 6.90% 6.90% 6.90%
Net Pension Liability 14,709,549 $ 8,751,535 $ 23,461,084 $ 1% Increase 7.90% 7.90% 7.90%
Net Pension Liability 9,319,745 $ 5,602,713 $ 14,922,458 $ Pension Plans Fiduciary Net Position
Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.

Liquidation of Pension Liabilities
The pension liability for governmental activities is primarily liquidated from the general fund, while the pension liability for business-type activities is liquidated from the enterprise funds.

C. Payable to the Pension Plans
At June 30, 2023, the City had no outstanding amount of contributions to the pension plans required for the year ended June 30, 2023.

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(67)
NOTE 6 LONG-TERM LIABILITIES
Change in Long-Term Liabilities
The following is a schedule of changes in long-term debt of the City for the fiscal year ended June 30, 2023:

Beginning
Balance Additions Deletions Ending Due Within
As Restated* Additions Deletions Balance One Year

GOVERNMENTAL ACTIVITIES
Direct Borrowings:

Leases Payable 168,647 $ 94,280 $ (64,208) $ 198,719 $ 62,847 $ Subscription Liability 134,654 311,012 (189,981) 255,685 98,136 Other Long-Term Liabilities:

Claims and Judgments 1,149,341 233,823 (394,710) 988,454 499,577 Compensated Absences 814,964 203,742 (138,207) 880,499 220,126 Governmental Activities
Long-Term Liabilities 2,267,606 $ 842,857 $ (787,106) $ 2,323,357 $ 880,686 $

BUSINESS-TYPE ACTIVITIES
Direct Borrowings:

Leases payable 28,398 $ - $ (6,680) $ 21,718 $ 7,718 $
Subscription Liability - 156,532 (48,480) 108,052 51,906 Loan Obligation (WRCRWA) 5,587,602 - (302,110) 5,285,492 307,851 Total Direct Borrowings 5,616,000 156,532 (357,270) 5,415,262 367,475 Other Debt:
2019 Revenue Refunding Bonds 35,075,000 - (1,095,000) 33,980,000 1,135,000 Add Premium on Issuance of Bonds 6,453,115 - (328,131) 6,124,984 - Other Debt, Net 41,528,115 - (1,423,131) 40,104,984 1,135,000 Business-Type Activities
Long-Term Liabilities 47,144,115 $ 156,532 $ (1,780,401) $ 45,520,246 $ 1,502,475 $ For governmental activities, claims and judgments and compensated absences are generally liquidated by the Internal Service Funds.
*The City restated the long-term liabilities as of July 1, 2022 to reflect the subscription payable for the governmental and business-type activities.

A. Accrued Employee Benefits and Claims and Judgments Payable The City’s policy relating to compensated absences is described in Note 1.J. Claims and judgments are described in Note 12.

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(68)
NOTE 6 LONG-TERM LIABILITIES (CONTINUED)
B. Direct Borrowings
Loan Obligation - WRCRWA
During 2014, the Western Riverside County Regional Wastewater Authority (WRCRWA) obtained a financing agreement from the State Water Resources Control Board with ultimate drawdowns on this financing of $71,570,889 accruing interest at a rate of 1.9% per annum to finance the expansion of a Wastewater Treatment Plant. The City, as a member of the WRCRWA, agreed to purchase additional wastewater capacity rights for

9.10% of the annual debt service requirement for a period of 20 years beginning in fiscal year 2018-19. As of June 30, 2023, the debt payments to be made by the City for the revolving loan will be as follows:

Loan Obligation - WRCRWA
Fiscal Year Ending June 30, Principal Interest Total
2024 $ 100,425 307,850 $ 408,275 $
2025 94,575 313,700 408,275
2026 88,615 319,660 408,275
2027 82,542 325,733 408,275
2028 76,353 331,922 408,275
2029-2033 284,734 1,756,641 2,041,375
2034-2038 111,390 1,929,985 2,041,375
Total 838,634 5,285,491 6,124,125
The assets acquired are as follows:

Wastewater Capacity Rights (Expansion) 7,812,297 $
Less: Accumulated Amortization (1,756,828)
Total 6,055,469 $
C. Leases Payable
The City leases equipment as well as certain operating and office facilities for various terms under long-term, noncancelable lease agreements. The leases expire at various dates through 2026 and with no renewal option. At June 30, 2023, lease assets and accumulated amortization totaled $336,665 and $102,846 respectively.

Total future minimum lease payments under lease agreements are as follows:

Year Ending June 30 Principal Interest Total
2024 70,565 $ 7,824 $ 78,389 $
2025 73,439 4,949 78,388
2026 76,433 1,957 78,390
Totals 220,437 $ 14,730 $ 235,167 $

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(69)
NOTE 6 LONG-TERM LIABILITIES (CONTINUED)
D. Subscriptions Payable
The City has entered into subscription-based information technology arrangements (SBITA) for the use of software for terms for a period of 24-60 months. The SBITA arrangements expire at various dates through 2027.

As of June 30, 2023, SBITA assets and the related accumulated amortization totaled $608,805 and $91,666, respectively.

The future subscription payments under the SBITA arrangements are as follows:

Year Ending June 30 Principal Interest Total
2024 150,042 $ 11,969 $ 162,011 $
2025 121,343 6,443 127,786
2026 54,208 2,450 56,658
2027 38,144 587 38,731
Totals 363,737 $ 21,449 $ 385,186 $
E. Revenue Bonds
During December 2019, the City issued $37,130,000 Enterprise Revenue Refunding Bonds, Series 2019A, to advance refund the outstanding Enterprise Revenue Refunding Bonds, Issue 2009 and to finance the acquisition and construction of certain improvements to the City’s water system and sewer system. The bonds are dated December 1, 2019 with interest paid at a rate from 3.00% to 5.00% payable semiannually on April 1 and October 1, commencing on April 1, 2020. The balance outstanding on these bonds at June 30, 2023 was $33,980,000.

The bonds are shown in the Water and Sewer Funds and the debt service requirements are as follows:
2019A Revenue Refunding Bonds
Fiscal Year Ending June 30, Principal Interest Total
2024 1,135,000 $ 1,481,650 $ 2,616,650 $
2025 1,180,000 1,435,350 2,615,350
2026 1,225,000 1,387,250 2,612,250
2027 1,275,000 1,330,875 2,605,875
2028 1,340,000 1,265,500 2,605,500
2029-2033 7,760,000 5,227,500 12,987,500
2034-2038 9,745,000 3,236,600 12,981,600
2039-2043 6,040,000 1,251,000 7,291,000
2044-2048 3,595,000 612,500 4,207,500
2049-2050 685,000 13,700 698,700
Total 33,980,000 $ 17,241,925 $ 51,221,925 $

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(70)
NOTE 7 INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS
The composition of interfund balances at June 30, 2023, is as follows:

Due To/From Other Funds
Receivable Fund Payable Fund Amount
General Fund Other Governmental Funds 26,789 $
General Fund Water Enterprise Fund 256,026
Water Enterprise Fund General Fund 24,011
Water Enterprise Fund Other Governmental Funds 14,356
Total $ 321,182
The amounts loaned from the General Fund to the other governmental funds and water enterprise fund are short term loans to fund operations of the various funds. The receivable by the Water Enterprise Fund is amounts due from the General Fund and Nonmajor Funds for accrued water charges.

The composition of interfund balances at June 30, 2023, is as follows:

Interfund Transfers
Transfer In Transfer Out Amount
General Fund Water Enterprise Fund (1) 129,102 $
Sewer Enterprise Fund (1) 129,102
Other Governmental Funds(2) 1,500
Internal Service Fund General Fund (3) 193,732
Internal Service Fund Water Enterprise Fund (3) 13,813
Internal Service Fund Sewer Enterprise Fund (3) 13,813
Internal Service Fund Other Governmental Funds(3) 49,261 Total $ 530,323
(1) To allocate estimated annual costs related to future street repairs. (2) To allocate administrative overhead costs.
(3) To fund equipment costs
NOTE 8 LEASES RECEIVABLE
On or about July 6, 2011, the City (Landlord) and Balboa Management Group, LLC (Tenant), entered into a Ground Lease, Development, and Shared Use Agreement with the purpose of the development, management and operation of the property known as Silverlakes into an Equestrian and Sports Park. This agreement has an original term of 30 years, with options to extend the lease to maximum lease duration of 99 years. The “Annual Minimum Rent” payable for the first five years from and after the Term Commencement Date shall be $396,480. The Annual Minimum Rent shall be paid in 12 equal monthly installments payable in advance on or before the first day of each calendar month.

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(71)
NOTE 8 LEASES RECEIVABLE (CONTINUED)
On August 19, 2015, the City entered into an additional Ground Lease Agreement with Balboa Management Group, LLC to lease the 8-acre property adjacent to the Silverlakes Equestrian and Sports Park to be used as a parking lot for the facility. This agreement has an original term of 30 years with options to extend the lease to maximum lease duration of 99 years. The lease agreement allows for annual rent of $26,000 per year on the commencement date.

In April 2020, the lease agreement was amended to defer the monthly rent payments for six months for the period from April 1, 2020 to September 1, 2020. In February 2021, payments were deferred until September 1, 2021. Due to the ongoing impacts of the Coronavirus pandemic, additional amendments were made were made and the total amount of the unpaid rent will be paid in 24 monthly installments commencing on September 1, 2023.

The carrying value of the land leased to the Tenant is $5,500,000, which is not subject to depreciation.

In addition to the Silverlakes ground leases, the City acting as lessor, leases communication tower spaces to various telecommunication companies under long-term, noncancelable lease agreements. The leases expire at various dates and provide for renewal options ranging from one year to twenty-five years.

During the year ended June 30, 2023, the City recognized $510,167 and $195,901 in lease revenue and interest revenue, respectively, pursuant to these contracts. Certain leases provide for increases in future minimum annual rental payments based on defined increases in the Consumer Price Index, subject to certain minimum increases.

Total future minimum lease payments to be received under lease agreements are as follows:

Year Ending June 30, Principal Interest Total
2024 810,373 $ 189,487 $ 999,860 $
2025 887,109 178,683 1,065,792
2026 622,093 168,170 790,263
2027 600,922 158,969 759,891
2028 627,379 149,117 776,496
2029-2033 3,376,481 583,691 3,960,172
2034-2038 3,385,134 293,003 3,678,137
2039-2043 2,363,821 78,482 2,442,303
2044-2045 126,589 1,291 127,880
Totals 12,799,901 $ 1,800,893 $ 14,600,794 $

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(72)
NOTE 9 NOTES RECEIVABLE
Wastewater Treatment Capacity
During 2014, the City entered into an Agreement for the Assignment of California Department of Corrections and Rehabilitation (CDCR) Wastewater Discharge Rights. The purpose of this agreement was to transfer the Santa Ana Regional Interceptor (SARI) right of 750,000 gallons per day of the Inland Brine Line treatment and pipeline conveyance to the City. The City then sold this excess wastewater treatment capacity to the City of Corona.

The sale is evidenced by a note receivable in the amount of $9,864,651 plus estimated interest accruing at 3% per annum over 20 years. The outstanding balance on this note receivable at June 30, 2023 was $5,894,073, of which $2,034,058 is recorded in the General Fund and $3,860,014 is recorded in the Sewer Enterprise Fund.

Silverlakes Property Construction
During 2011, the City entered into a Funding, Construction and Acquisition Agreement with Balboa Management Group, LLC for the construction and acquisition of the Silverlakes Property. Under this agreement the City agreed to finance the actual construction costs of the facilities up to a maximum of $6,000,000. The note bears interest at a rate of 5.9% per annum, or such lower rate which is equal to the actual effective rate of the Norco Financing Authority Enterprise Revenue Funding Bonds issue of 2009, until paid in full and shall be due in full no later than August 1, 2039. The outstanding balance on this note receivable at June 30, 2023 was $6,694,633, of which $3,314,555 is recorded in the Water Enterprise Fund and $3,380,078 is recorded in the Sewer Enterprise Fund.

First Time Home Buyer Loans
First time home buyer loans are available to qualifying low to moderate-income residents with a maximum loan amount of $80,000. Loans are due in 30 years or upon sale of property. Deferred loans are available to qualifying residents with a maximum loan amount of $40,000, up to $60,000 with executive approval. A 0% loan is available for seniors and the disabled and is not payable until sale or refinancing of the property. The 3% loan is available to qualified households without an age restriction and is due in 15 years or upon sale or refinancing of the property. At June 30, 2023, the outstanding balance on these loans receivable, net of a $81,930 allowance, was $2,307,104.

Developer Loan
On May 22, 2008, the former Agency entered into a Loan Agreement with a Developer to provide a loan of $5,100,000 to provide a portion of the funds to finance the rehabilitation and conversion of 86 units of low-and very-low income housing units in Heritage Park Senior Citizen Apartment Complex. The financial assistance is in the form of a residual receipts loan which is to be repaid over a 57 year affordability covenant period. The Loan is secured by a Second Deed of Trust against the property. The loan payments are 50% of the residual receipts with simple interest at 1%. The complex will remain as a low/moderate income senior housing complex over the entire term of the loan. At June 30, 2023, the outstanding balance on this loan receivable was $4,397,986.

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(73)
NOTE 9 NOTES RECEIVABLE (CONTINUED)
SERAF Loan Receivable
On May 10, 2010, the former Agency was required to make a State mandated payment to the Supplemental Education Revenue Augmentation Fund (SERAF). Due to a lack of funding at the time, the former Agency was allowed to borrow the amount needed from its Low and Moderate Income Housing Fund. In fiscal year 2023, this loan was paid off.

Sewer Connection Fee Program Loans Receivable
The former Agency administered several loan programs to its low to moderate-income residents. Balances under the Sewer Connection Fee Program are forgiven after 15 years with the loan amount equal to the actual cost. Due to the nature of this program and the probability of forgiveness of these loans, they are not reflected on the statements as receivables.

Cal Homes Program
Loans were available to qualifying low and very low-income residents through the Cal Homes program to assist with the cost of rehabilitating owner-occupied residences. Loans carried interest rates of either 0% (for eligible senior citizens) or 3% (for nonsenior citizens).

Loans are due up to 30 years after origination or in the event the property is sold or refinanced. The balance outstanding at June 30, 2023, was $355,450.

NOTE 10 FUND BALANCE
The City has established fund balance accounts to report the amounts in the following funds which represent nonspendable and spendable resources:

Housing
Successor
Agency
LMIH Nonmajor Total
General Special Governmental Governmental
Fund Revenue Fund Funds Funds
Nonspendable:

Long-Term Receivables 2,034,058 $ - $ - $ 2,034,058 $
Prepaids 31,416 - - 31,416
Restricted by:

Granting Agencies, Developers,
and Assessment Districts - - 5,918,459 5,918,459
Low and Moderate
Income Housing - 16,640,503 - 16,640,503
Pension Benefits 2,358,746 - - 2,358,746
Committed for:

Measure R Projects 14,025,552 - - 14,025,552
Unassigned 30,368,537 - (10,354) 30,358,183
Total Fund Balances 48,818,309 $ 16,640,503 $ 5,908,105 $ 71,366,917 $

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(74)
NOTE 10 FUND BALANCE (CONTINUED)
The general fund balance includes the balances related to the special asset fund which was committed by the adoption of a resolution by City Council. The components of fund balance related to the special asset fund include nonspendable fund balance of $2,065,474. The general fund balance also includes balances related to the Measure R, which includes committed fund balance of $14,025,552 and unassigned fund balance of $30,368,537.

City Council has also established a stabilization arrangement for the general fund balance through the adoption of a resolution. This arrangement requires that the City maintain reserves for unforeseen emergencies in the amount of 25% of the estimated general fund expenditures included in the budget. These reserves can be utilized by the City at the discretion of the City Council. At June 30, 2023, the fund balance reserved for this stabilization arrangement totaled $4,756,218 which is included in unassigned fund balance of the general fund in the accompanying financial statements.

NOTE 11 ASSESSMENT BONDS
Included within the City are certain community facilities districts which were financed by bonds issued pursuant to the Improvement Bond Act of 1915 under proceedings conducted under the provisions of the Municipal Improvement Act of 1913.

As of June 30, 2023, the future assessments liability of property owners for amounts payable to bondholders for these Districts are as follows:

Principal Interest Total
Community Facilities District 97-1
2018 Special Tax Refunding Bond 2,990,000 $ 392,946 $ 3,382,946 $ Community Facilities District 2001-1
2017 Special Tax Refunding Bond 21,245,000 6,631,875 27,876,875 Community Facilities District
2002-1 2013 Refinanced Norco 50 812,933 168,176 981,109 Totals 25,047,933 $ 7,192,997 $ 32,240,930 $
Since the City is not liable for special assessment district act or community facility district defaults, no liability has been recognized on the City’s books and accordingly, none of the outstanding principal on the bonds is presented in the financial statements. For all completed projects, the City collects the assessments and remits the collections to pay the bondholders. Therefore, subsequent assessment collections and remittances are accounted for in a custodial fund.

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(75)
NOTE 12 RISK MANAGEMENT
The City is exposed to various risks of losses related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters.

The City is a member of the Public Entity Risk Management Authority (PERMA), a public entity risk pool currently operating as a common risk management and insurance program for 22 California Cities, 7 special districts and 3 transit agencies. The City pays an annual premium to the pool for its general liability and workers’ compensation insurance coverage.

For its general liability insurance, the City, through PERMA, has a self-insured retention amount of $125,000 per occurrence. Claims above the $125,000 up to $1,000,000 are shared by the pool. Claims above $1,000,000 up to $50,000,000 are covered by excess insurance purchased through the pool.

For workers’ compensation, the self-insurance retention is $250,000 per claim, with a maximum limit of $5,000,000. The City retains a risk of loss due to the fact that actual losses may exceed estimated claims or overage amounts.

Claims, expenditures and liabilities are reported when it is probable that a loss has occurred and the amount of that loss can be reasonably estimated. These losses include an estimate of claims that have been incurred but not reported. At June 30, 2023, the amount of these liabilities was $988,454. The amount represents an estimate of $941,385 for reported claims through June 30, 2023, and $47,069 estimate of incurred but not reported claims. This liability is the City’s best estimate based on available information.

Changes in the reported liability since July 1, 2021 resulted from the following:

Current
Year Claims
Beginning and Changes Claim Ending
Fiscal Year Liability in Estimates Payments Liability
2022 560,814 $ 908,206 $ 319,679 $ 1,149,341 $
2023 1,149,341 233,823 394,710 988,454
There was no significant reduction in insurance coverage by major categories of risk and no settlements which exceeded the insurance coverage for the past three fiscal years.

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(76)
NOTE 13 OTHER POSTEMPLOYMENT BENEFITS
A. General Information about the OPEB Plan
Plan Description
The City provides postemployment health care benefits for eligible City retirees and their beneficiaries through CalPERS, an agent multiple-employer postemployment health care plan. Retirees from the City enrolled in the Public Employees Medical Insurance Program through CalPERS are eligible for these benefits. The plan does not issue a publicly available financial report. These health insurance benefits are authorized through City resolutions/Memorandums of Understanding defining health care benefits and contribution levels and through the contractual agreement between the City and CalPERS. The City contributed up to $1,250 of the current monthly required premium costs of active and nonvested retired employees hired prior to 2004 for fiscal year 2022.

Effective July 1, 2022 the contribution was increased to $1,500 from $1,250. Additional contributions are made into a prefunded trust account as funds become available.

Employees Covered
As of the June 30, 2022 measurement date, the following current and former employees were covered by the benefit terms under the plan:

Inactive Employees or Beneficiaries Currently
Receiving Benefits 88
Inactive Employees or Beneficiaries Entitled to
But Not Yet Receiving Benefits 10
Active Employees 73
Total 171
Contributions
Benefit provisions and contribution requirements are established and may be amended through agreements and memorandums of understanding between the City, its management employees, and unions representing the City’s employees. The plan does not require employee contributions. Administrative costs of this plan are financed by the general fund.

The annual contribution is based on the actuarially determined contribution. For the measurement period ended June 30, 2022, the City contributed $1,486,702 which included $400,000 payment to the trust, $126,000 estimated implied subsidy and $960,702 for premiums. For fiscal year 2023, the City contributed $1,139,727 which included $147,000 estimated implied subsidy and $992,727 for premiums.

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(77)
NOTE 13 OTHER POSTEMPLOYMENT BENEFITS (CONTINUED)
B. Net OPEB Liability
The City’s net OPEB liability was measured as of June 30, 2022 and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation dated June 30, 2022 updated with roll forward procedures to June 30 2022. A summary of the principal assumptions and methods used to determine the total OPEB liability is shown below.

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:

Valuation Date June 30, 2021
Measurement Date June 30, 2022
Actuarial Cost Method Entry-Age Normal Cost Method
Contribution Policy City is effectively contributing full ADC Actuarial Assumptions:

Discount Rate 5.25%
Inflation 2.50%
Projected Salary Increase 2.75% per annum, in aggregate Expected Long-Term Investment Rate
of Return 5.25%
Medical Trend Non-Medicare - 6.50% for 2023, decreasing to an ultimate rate of 3.75% in 2076
Medicare (Non-Kiaser) - 5.65% for 2023,
decreasing to an ultimate rate of 3.75% in 2076
Medicare (Kiaser) - 4.60% for 2023,
decreasing to an ultimate rate of 3.75% in 2076
Cap Increases Premium caps - medical trend
Dollar caps - 0%
Mortality, Retirement, Disability, Termination CalPERS 2000-2019 Experience Study Mortality Improvement Mortality projected fully generational with Scale MP-2021
Healthcare Participation for Future Retirees No state vesting schedule - 100% if currently covered, 90% if currently waived State vesting
schedule - 80% with 10 years of service, 95%
with 15 years of service, 100% with 20 years
of service
The actuarial assumptions used in the June 30, 2022 valuation were based on a standard set of assumptions the actuary has used for similar valuations, modified as appropriate for the City.

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(78)
NOTE 13 OTHER POSTEMPLOYMENT BENEFITS (CONTINUED)
B. Net OPEB Liability (Continued)
Long-Term Expected Rate of Return
The long-term expected rate of return was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of OPEB plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighing the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the OPEB plan’s target asset allocation as of June 30, 2022 are summarized in the following table:

New Long-Term
Strategic Expected Real
Asset Class Allocation Rate of Return
CERBT:

Global Equity 23.00% 4.56%
Fixed Income 51.00 1.56%
TIPS 9.00 -0.08%
Commodities 3.00 1.22%
REITs 14.00 4.06%
Total 100.00%
Discount Rate
The discount rate used to measure the total OPEB liability was 5.25%. The projection of cash flows used to determine the discount rate assumed that City’s contributions will be made at rates equal to the actuarially determined contribution rates. Based on those assumptions, the fiduciary net position was projected to be available to make all projected OPEB payments for current active and inactive employees and beneficiaries.

Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability.

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(79)
NOTE 13 OTHER POSTEMPLOYMENT BENEFITS (CONTINUED)
C. Changes in the Net OPEB Liability
The changes in the net OPEB liability are as follows:

Increase (Decrease)
Total Plan Net
OPEB Fiduciary OPEB
Liability Net Position Liability (Asset)
Balance at June 30, 2022
(June 30, 2021 Measurement Date) 17,024,023 $ 13,692,193 $ 3,331,830 $ Changes in the Year:

Service Cost 452,469 - 452,469
Interest on the Total OPEB Liability 1,058,399 - 1,058,399 Differences Between Actual and
Expected Experience - - -
Changes in Assumptions 2,036,770 - 2,036,770
Changes in Benefit Terms - - -
Contribution - Employer - 1,486,702 (1,486,702)
Net Investment Income - (1,563,069) 1,563,069
Benefit Payments (1,084,205) (1,084,205) -
Administrative Expenses - (5,954) 5,954
Net Changes 2,463,433 (1,166,526) 3,629,959
Balance at June 30, 2023
(June 30, 2022 Measurement Date) 19,487,456 $ 12,525,667 $ 6,961,789 $ Change of Assumptions
The discount rate was updated based on the City moving assets from CERBT Asset Strategy 1 to Strategy 3 in September 2021 which reduced the rate to 5.25%.

Change of Benefit Terms
There were no changes of benefit terms.

The liability for governmental activities is primarily liquidated from the general fund while the liability for business-type activities is liquidated from the enterprise funds.

Sensitivity of the Net OPEB Liability to Changes in the Discount Rate The following presents the net OPEB liability of the City, as well as what the City’s net OPEB liability would be if it were calculated using a discount rate that is one percentage point lower (4.25%) or one percentage point higher (5.25%) than the current discount rate:
1% Decrease Discount Rate 1% Increase
(4.25%) (5.25%) (6.25%)
Net OPEB Liability 9,431,142 $ 6,961,789 $ 4,925,019 $

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(80)
NOTE 13 OTHER POSTEMPLOYMENT BENEFITS (CONTINUED)
C. Changes in the Net OPEB Liability (Continued)
Sensitivity of the Net OPEB Liability to Changes in Health-Care Cost Trend Rates The following presents the net OPEB liability of the City, as well as what the City’s net OPEB liability would be if it were calculated using healthcare cost trend rates that are one percentage point lower or one percentage point higher than the current healthcare cost trend rates:

Current
Healthcare Cost
1% Decrease Trend Rates 1% Increase
Net OPEB Liability 4,753,916 $ 6,961,789 $ 9,565,067 $
D. OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB For the year ended June 30, 2023, the City recognized OPEB expense of $517,254. At June 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

Deferred Deferred
Outflows Inflows
of Resources of Resources
OPEB Contributions Subsequent to Measurement
Date 1,139,727 $ - $
Differences Between Actual and Expected
Experience - (938,320)
Change in Assumptions 2,031,367 (120,381)
Differences Between Projected and Actual Earnings 763,475 - Total 3,934,569 $ (1,058,701) $

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(81)
NOTE 13 OTHER POSTEMPLOYMENT BENEFITS (CONTINUED)
D. OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB (Continued)
$1,139,727 reported as deferred outflows of resources related to 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 and deferred inflows of resources related to OPEB will be recognized as OPEB expense as follows:

Year Ending June 30, Amount
2024 135,957 $
2025 338,264
2026 338,774
2027 883,210
2028 39,936
Thereafter -
E. Payable to the OPEB Plan
At June 30, 2023, the City had no outstanding amount of contributions to the OPEB plan required for the year ended June 30, 2023.

NOTE 14 SUCCESSOR AGENCY – PRIVATE-PURPOSE TRUST FUND
On December 29, 2011, the California Supreme Court upheld Assembly Bill X1 26, (the Bill) that provides for the dissolution of all redevelopment agencies in the state of California. On September 22, 2013, as part of the fiscal year 2015-2016 state budget package, the legislature passed and the Governor signed SB 107, which made technical and substantive amendments to the existing Bill.

On January 11, 2012, the City Council met and created the Successor Agency to the former Norco Community Redevelopment Agency in accordance with the Bill as part of the City of Norco Resolution Number 2012-01. Subject to the control of a newly established oversight board, remaining assets can only be used to pay enforceable obligations in existence at the date of dissolution (including the completion of any unfinished projects that were subject to legally enforceable, contractual commitments).

In accordance with the timeline set forth in the Bill (as modified by the California Supreme Court on December 29, 2011) all redevelopment agencies in the state of California were dissolved and ceased to operate as a legal entity on February 1, 2012. After the date of dissolution, January 31, 2012, the assets, liabilities, and activities of the dissolved redevelopment agency are reported in a fiduciary fund (private-purpose trust fund) in the financial statements of the City of Norco.

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(82)
NOTE 14 SUCCESSOR AGENCY – PRIVATE-PURPOSE TRUST FUND (CONTINUED) Successor Agency Capital Assets
The Successor agency capital assets at June 30, 2023, consist of:

Buildings and Improvements 60,862 $
Improvements Other than Buildings 507,000
Capital Assets Being Depreciated, Gross 567,862
Accumulated Depreciation (567,862)
Capital Assets Being Depreciated, Net - $
Successor Agency Long-Term Debt
Beginning Ending Due Within
Balance Additions Deletions Balance One Year
Other Debt:

Bonds Payable:
2009 TARB (School
District Pass-Through) 8,780,000 $ - $ (370,000) $ 8,410,000 $ 395,000 $ 2017A RDA Bond
(2005 and 2010 Refunds) 11,985,000 - (2,090,000) 9,895,000 2,175,000 2017B RDA Bond 21,095,000 - (325,000) 20,770,000 335,000 (2005 and 2010 Refunds)
2014 Refunding TAB 12,135,000 - - 12,135,000 -
2014 TARB (School
District Pass-Through) 7,250,000 - (575,000) 6,675,000 605,000 Payable 61,245,000 - (3,360,000) 57,885,000 3,510,000
Plus (Less) Deferred Amounts:

Premium 1,990,930 - (358,077) 1,632,853 -
Discounts (79,232) - 6,604 (72,628) -
Total Long-Term Debt 63,156,698 $ - $ (3,711,473) $ 59,445,225 $ 3,510,000 $ The following amount is classified as a deferred outflow of resources.

Beginning Ending
Balance Additions Deletions Balance
Deferred Losses on Refundings 2,737,797 $ - $ (264,644) $ 2,473,153 $ Future debt service requirements are as follows:

Fiscal Year Ending June 30, Principal Interest Total
2024 3,510,000 $ 2,551,833 $ 6,061,833 $
2025 3,655,000 2,397,526 6,052,526
2026 3,825,000 2,236,165 6,061,165
2027 4,425,000 2,066,678 6,491,678
2028 4,600,000 1,893,416 6,493,416
2029-2033 27,335,000 6,110,214 33,445,214
2034-2036 10,535,000 676,156 11,211,156
Total 57,885,000 $ 17,931,988 $ 75,816,988 $

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(83)
NOTE 14 SUCCESSOR AGENCY – PRIVATE-PURPOSE TRUST FUND (CONTINUED) Successor Agency Long-Term Debt (Continued)
In April 2009, the former Agency issued Norco Redevelopment Project Area No. 1 Tax Allocation Bonds (School District Pass Through), Issue of 2009 in an aggregate principal amount of $12,200,000. The bonds are dated April 30, 2009 with interest paid at a rate from

3.25% to 7.00% payable semiannually on March 1 and September 1, commencing on September 1, 2009. The bonds are limited obligations of the former Agency’s payable solely from Pledged Tax Revenues otherwise required by the Pass Through Agreement to be passed through to the Corona Norco Unified School District.

In August 2014, the Successor Agency issued Norco Redevelopment Project Area No. 1 Tax Allocation Refunding Bonds, Issue of 2014, in the aggregate principal of $20,525,000.

The bonds pay interest at a rate from 2.0% to 5.0% payable semiannually on March 1 and September 1, commencing on March 1, 2015. The bonds were issued to refinance the former Agency’s previously issued Norco Redevelopment Project Area No. One, 2001 Tax Allocation Refunding Bonds with an outstanding principal balance of $22,465,000.

In August 2014, the Successor Agency issued Norco Redevelopment Project Area No. 1 Tax Allocation Refunding Bonds (School District Pass Through), Issue of 2014, in the aggregate principal of $10,970,000. The bonds pay interest at a rate from 2.0% to 5.0% payable semiannually on March 1 and September 1, commencing on March 1, 2015. The bonds were issued to refinance the former Agency’s previously issued Norco Redevelopment Project Area No. One, 2001 Tax Allocation Refunding Bonds (School District Pass Through) with an outstanding principal balance of $3,605,000 and the Norco Redevelopment Area Project No. One, Tax Allocation Refunding Bonds (School District Pass Through), Issue of 2004 with an outstanding principal balance of $8,870,000.

In December 2017, the Successor Agency issued Norco Redevelopment Project Area No. 1 Tax Allocation Refunding Bonds, Issue of 2017A, in the aggregate principal amount of $17,880,000. These bonds were issued to advance refund the Norco Redevelopment Project Area No. 1 Refunding Tax Allocation Bonds, Issue of 2005 and a portion of the Norco Redevelopment Project Area No. 1 Refunding Tax Allocation Bonds, Issue of 2010.

Additionally, in December 2017, the Successor Agency issued Norco Redevelopment Project Area No. 1 Tax Allocation Refunding Bonds, Issue of 2017B, in the aggregate principal amount of $22,665,000. These bonds were used to advance refund the remaining portion of the Norco Redevelopment Project Area No. 1 Refunding Tax Allocation Bonds, Issue of 2010. The bonds pay interest at rates from 1.90% to 4.0% payable semiannually on March 1 and September 1.

Successor Agency Deficit Net Position
At June 30, 2023, deficit net position was reported for the Successor Agency PrivatePurpose Trust Fund in the amount of $(49,932,791). The deficit is expected to be eliminated with future payments from the County of Riverside Redevelopment Property Tax Fund to the Successor Agency for its long-term debt.

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(84)
NOTE 15 RISKS AND UNCERTAINTIES
Grants
Amounts received or receivable from granting agencies are subject to audits and adjustments by those granting agencies. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount of expenditures that may be disallowed by the grantor cannot be determined at this time, although the management of the City expects such-amounts, if any, to be immaterial to the financial statements taken as a whole.

Successor Agency
Deductions (expenses) incurred by the Successor Agency for the year ended June 30, 2023 (and subsequent years in which the Successor Agency is in operation), are subject to review by various State agencies and the County in which the Successor Agency resides. If any expenses incurred by the Successor Agency are disallowed by the State agencies or County, the City, acting as the Successor Agency, could be liable for the repayment of the disallowed costs from either its own funds or by the State withholding remittances normally paid to the City.

NOTE 16 JOINT VENTURES
Western Riverside County Regional Wastewater Authority
The City serves as a voting member of Western Riverside County Regional Wastewater Authority (WRCRWA). WRCRWA was formed in 1992 pursuant to the provisions of Article 1, Chapter 5, Division 7, Title 1 of the Government Code of the State of California relating to the joint exercise of powers common to public agencies, for the purpose of constructing, maintaining, operating, and managing facilities for the collection, transmission, treatment and disposal of wastewater, the reclamation of wastewater, and the use of reclaimed wastewater for any beneficial purpose.

WRCRWA is composed of five member agencies: City of Norco, Jurupa Community Services District, Western Municipal Water District, Home Gardens Sanitary District, and the City of Corona. The member agencies support the operating costs and capital costs through fixed and variable rates established by WRCRWA’s Board of Directors. The governing body of WRCRWA is a Board of Directors, which consists of ten individuals, two appointed by each member. Members are deemed to have an ownership interest in the WRCRWA and new members may only be admitted upon unanimous consent of the existing members.

Upon withdrawal from the WRCRWA, any member is entitled to receive its proportionate share of the WRCRWA assets or the equivalent value thereof and is responsible for discharge of its proportionate share of the WRCRWA’s liabilities. Assets purchased from WRCRWA as wastewater capacity rights which is further disclosed in Note 4. The District’s participation in WRCRWA is accounted for as a joint venture without equity interest.

CITY OF NORCO

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
(85)
NOTE 16 JOINT VENTURES (CONTINUED)
Western Riverside County Regional Wastewater Authority (Continued) WRCRWA owns and operates a 14.0 Million Gallons per Day (MGD) tertiary wastewater treatment plant. The plant’s existing capacity owned by its member agencies are shown as follows:

Current
Member Agencies MGD
City of Norco 2.70
Jurupa Community Services District 6.00
City of Corona 2.37
Western Municipal Water District 1.93
Home Gardens Sanitary District 1.00
Total 14.00
Audited financial information for WRCRWA can be obtained at Western Riverside County Regional Wastewater Authority, 14634 River Road, Eastvale, CA 92880.

Chino Basin Desalter Authority
The Chino Basin Desalter Authority (the CDA) was formed in September 2001, as a Joint Powers Authority to acquire all assets and liabilities from Santa Ana Watershed Project Authority Project #14. The purchase was consummated in February 2002. The CDA is comprised of the cities of Chino, Chino Hills, Ontario, Norco, the Jurupa Community Services District, the Santa Ana River Water Company, and Inland Empire Utilities Agency.

In August of 2008, Western Municipal Water District was added as an additional member of the CDA. The City serves as a voting member without an equity interest.

Financial data is available at the CDA’s main office located at 3350 E Philadelphia St, Suite 170 , Ontario, CA 91761.

Chino Basin Watermaster
Pursuant to the City’s membership with the Chino Basin Watermaster, the City has been allocated a portion of water in storage. At June 30, 2023, the City is entitled to approximately 3,007-acre feet of water in storage with the Chino Basin Watermaster. The City accounts for the rights to use this water in storage on the lower of cost or net realizable value. Since there has been no explicit cost to this right of use, there is no asset recorded in the accompanying financial statements.

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REQUIRED SUPPLEMENTARY INFORMATION

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CITY OF NORCO

SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY CalPERS MISCELLANEOUS PENSION PLAN
LAST TEN FISCAL YEARS *
See accompanying Note to Required Supplementary Information. (89)
Miscellaneous
Fiscal Year Ended 2023 2022 2021 2020 2019 2018 2017 2016 2015 Measurement Period June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014 Plan's Proportion of the Net Pension Liability 0.127347% 0.161840% 0.122557% 0.124400% 0.125637% 0.125779% 0.128940% 0.136334% 0.124419%Plan's Proportionate Share of the Net Pension Liability 14,709,549 $ 8,752,780 $ 13,334,676 $ 12,746,874 $ 12,106,728 $ 12,473,869 $ 11,157,305 $ 9,357,835 $ 7,741,911 $ Plan's Covered Payroll 4,611,224 $ 4,313,788 $ 3,956,651 $ 3,747,924 $ 3,568,437 $ 3,448,615 $ 3,019,524 $ 2,785,104 $ 2,627,277 $ Plan's Proportionate Share of the Net Pension Liability as a Percentage of Covered Payroll 318.99% 202.90% 337.02% 340.10% 339.27% 361.71% 369.51% 336.00% 294.67%Plan's Proportionate Share of the Fiduciary Net Position as a Percentage of the Plan's Total Pension Liability 69.39% 80.61% 69.47% 75.26% 75.26% 73.31% 74.06% 78.40% 79.28%Plan's Proportionate Share of Aggregate Employer Contributions 1,729,725 $ 1,431,557 $ 1,355,637 $ 1,219,000 $ 1,063,573 $ 1,009,239 $ 914,689 $ 866,330 $ 706,377 $ Notes to Schedule:

Benefit Changes:

There were no changes in benefits.

Changes in Assumptions:

From fiscal year June 30, 2015 to June 30, 2016:

GASB 68, paragraph 68 states that the long-term expected rate of return should be determined net of pension plan investment expense but but without reduction for pension plan administrative expense. The discount rate of 7.50% used for the June 30, 2014 measurement date was net of administrative expenses. The discount rate of 7.65% used for the June 30, 2015 measurement date is without reduction of pension plan administrative expense.

From fiscal year June 30, 2016 to June 30, 2017:

There were no changes in assumptions.

From fiscal year June 30, 2017 to June 30, 2018:

In fiscal year 2017-2018, the financial reporting discount rate was reduced from 7.65% to 7.15%.

From fiscal year June 30, 2018 to June 30, 2022:

There were no changes in assumptions.

From fiscal year June 30, 2019 to June 30, 2022:

The discount rate and long-term rate of return decreased from 7.15% to 6.9% and the inflation rate decreased from 2.50% to 2.30% * Fiscal year 2015 was the first year of implementation and therefore nine years are shown.

CITY OF NORCO

SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY CalPERS SAFETY PENSION PLAN
LAST TEN FISCAL YEARS *
See accompanying Note to Required Supplementary Information. (90)
Safety
Fiscal Year Ended 2023 2022 2021 2020 2019 2018 2017 2016 2015 Measurement Period June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014Plan's Proportion of the Net Pension Liability 0.075766% 0.096450% 0.073840% 0.073210% 0.073212% 0.070751% 0.069627% 0.065974% 0.056770%Plan's Proportionate Share of the Net Pension Liability 8, $ 5,216,274 751,535 $ 8,034,135 $ 7,501,999 $ 7,054,917 $ 7,016,572 $ 6,024,914 $ 4,528,386 $ 3,532,516 $ Plan's Covered Payroll - $ - $ - $ - $ - $ - $ - $ - $ - $ Plan's Proportionate Share of the Net Pension Liability as a Percentage of Covered Payroll n/a n/a n/a n/a n/a n/a n/a n/a n/aPlan's Proportionate Share of the Fiduciary Net Position as a Percentage of the Plan's Total Pension Liability 68.63% 80.34% 69.54% 75.26% 75.26% 73.31% 74.06% 78.40% 79.28%Plan's Proportionate Share of Aggregate Employer Contributions 1,277,448 $ 1,138,700 $ 949,263 $ 796,010 $ 750,439 $ 586,952 $ 570,356 $ 568,237 $ 481,850 $ Notes to Schedule:

Benefit Changes:

There were no changes in benefits.

Changes in Assumptions:

From fiscal year June 30, 2015 to June 30, 2016:

GASB 68, paragraph 68 states that the long-term expected rate of return should be determined net of pension plan investment expense butwithout reduction for pension plan administrative expense. The discount rate of 7.50% used for the June 30, 2014 measurement date wasnet of administrative expenses. The discount rate of 7.65% used for the June 30, 2015 measurement date is without reduction of pension plan administrative expense.

From fiscal year June 30, 2016 to June 30, 2017:

There were no changes in assumptions.

From fiscal year June 30, 2017 to June 30, 2018:

In fiscal year 2017-2018, the financial reporting discount rate was reduced from 7.65% to 7.15%.

From fiscal year June 30, 2018 to June 30, 2022:

There were no significant changes in assumptions.

From fiscal year June 30, 2022 to June 30, 2023:

The discount rate and long-term rate of return decreased from 7.15% to 6.9% and the inflation rate decreased from 2.50% to 2.30% * Fiscal year 2015 was the first year of implementation and therefore only nine years are shown.

CITY OF NORCO

SCHEDULE OF CONTRIBUTIONS
CalPERS MISCELLANEOUS PENSION PLAN
LAST TEN FISCAL YEARS *
See accompanying Note to Required Supplementary Information. (91)
Miscellaneous
Fiscal Year Ended 2023 2022 2021 2020 2019 2018 2017 2016 2015 Contractually Required Contribution (Actuarially Determined) 1,926,838 $ 1,721,181 $ 1,571,215 $ 1,414,690 $ 1,259,910 $ 1,113,674 $ 1,024,502 $ 909,938 $ 629,318 $ Contributions in Relation to the Actuarially Determined Contributions (1,926,838) (1,721,181) (1,571,215) (1,414,690) (1,259,910) (1,113,674) (1,024,502) (909,938) (629,318) Contribution Deficiency (Excess) - $ - $ - $ - $ - $ - $ - $ - $ - $ Covered Payroll 5,423,648 $ 4,611,224 $ 4,313,788 $ 3,956,651 $ 3,747,924 $ 3,568,437 $ 3,448,615 $ 3,019,524 $ 2,785,104 $ Contributions as a Percentage of Covered Payroll 35.53% 37.33% 36.42% 35.75% 33.62% 31.21% 29.71% 30.14% 22.60%Notes to Schedule:Valuation Date 6/30/2020 6/30/2019 6/30/2018 6/30/2017 6/30/2016 6/30/2015 6/30/2014 6/30/2013 6/30/2012Methods and Assumptions Used to Determine Contribution Rates:

Actuarial Cost Method Entry Age Entry Age Entry Age Entry Age Entry Age Entry Age Entry Age Entry Age Entry AgeAmortization Method (1) (1) (1) (1) (1) (1) (1) (1) (1)Asset Valuation Method Fair Value Fair Value Fair Value Fair Value Fair Value Fair Value Fair Value Fair Value 15 Year Smoothed
Inflation 2.300% 2.500% 2.500% 2.625% 2.75% 2.75% 2.75% 2.75% 2.75%Salary Increases (2) (2) (2) (2) (2) (2) (2) (2) (2)Investment Rate of Return 6.90%(3) 7.15% (3) 7.15% (3) 7.25% (3) 7.375% (3) 7.50% (3) 7.50% (3) 7.50% (3) 7.50% (3)Retirement Age (4) (4) (4) (4) (4) (4) (4) (4) (4)Mortality (5) (5) (5) (5) (5) (5) (5) (5) (5) (1) Level percentage of payroll, direct rate smoothing(2) Depending on age, service, and type of employment(3) Net of administrative expenses(4) 50 for all plans with the exception of 52 for Miscellaneous PEPRA 2%@62**(5) Mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study adopted by the CalPERS Board.
* Fiscal year 2015 was the first year of implementation and therefore only nine years are shown.

CITY OF NORCO

SCHEDULE OF CONTRIBUTIONS
CalPERS SAFETY PENSION PLAN
LAST TEN FISCAL YEARS *
See accompanying Note to Required Supplementary Information. (92)
Safety
Fiscal Year Ended 2023 2022 2021 2020 2019 2018 2017 2016 2015 Contractually Required Contribution (Actuarially Determined) 767,103 $ 712,881 $ 691,954 $ 626,617 $ 442,868 $ 352,670 $ 286,893 $ 50,202 $ - $ Contributions in Relation to the Actuarially Determined Contributions (767,103) (712,881) (691,954) (626,617) (442,868) (352,670) (286,893) (50,202) - Contribution Deficiency (Excess) - $ - $ - $ - $ - $ - $ - $ - $ - $ Covered Payroll - $ - $ - $ - $ - $ - $ - $ - $ - $
Contributions as a Percentage of Covered Payroll n/a n/a n/a n/a n/a n/a n/a n/a n/aNotes to Schedule:Valuation Date 6/30/2020 6/30/2019 6/30/2018 6/30/2017 6/30/2016 6/30/2015 6/30/2014 6/30/2013 6/30/2012Methods and Assumptions Used to Determine Contribution Rates:

Actuarial Cost Method Entry Age Entry Age Entry Age Entry Age Entry Age Entry Age Entry Age Entry Age Entry AgeAmortization Method (1) (1) (1) (1) (1) (1) (1) (1) (1)Asset Valuation Method Fair Value Fair Value Fair Value Fair Value Fair Value Fair Value Fair Value Fair Value 15 Year Smoothed
Inflation 2.300% 2.500% 2.500% 2.625% 2.75% 2.75% 2.75% 2.75% 2.75%Salary Increases (2) (2) (2) (2) (2) (2) (2) (2) (2)Investment Rate of Return 6.90%(3) 7.15% (3) 7.15% (3) 7.25% (3) 7.375% (3) 7.50% (3) 7.50% (3) 7.50% (3) 7.50% (3)Retirement Age (4) (4) (4) (4) (4) (4) (4) (4) (4)Mortality (5) (5) (5) (5) (5) (5) (5) (5) (5) (1) Level percentage of payroll, direct rate smoothing(2) Depending on age, service, and type of employment(3) Net of administrative expenses(4) 50 for all plans with the exception of 52 for Miscellaneous PEPRA 2%@62**(5) Mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study adopted by the CalPERS Board.
* Fiscal year 2015 was the first year of implementation and therefore only nine years are shown.

CITY OF NORCO

SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY AND RELATED RATIOS LAST TEN FISCAL YEARS *
See accompanying Note to Required Supplementary Information. (93)
Fiscal Year End 6/30/2023 6/30/2022 6/30/2021 6/30/2020 6/30/2019 6/30/2018 Measurement Date 6/30/2022 6/30/2021 6/30/2020 6/30/2019 6/30/2018 6/30/2017Total OPEB Liability:

Service Cost $ 391,160 452,469 $ 386,463 $ 370,509 $ 359,717 $ 349,240 $ Interest on Total OPEB Liability 1,058,399 1,151,089 1,142,355 1,232,375 1,194,701 1,160,164 Actual Versus Expected Experience - (1,324,810) - (1,820,659) - - Assumption Changes 2,036,770 675,366 (335,762) (93,065) - - Benefit Payments (1,084,205) (1,061,595) (1,075,132) (1,002,349) (1,011,788) (1,004,657) Net Change in Total OPEB Liability 2,463,433 (168,790) 117,924 (1,313,189) 542,630 504,747 Total OPEB Liability - Beginning of Year 17,024,023 17,192,813 17,074,889 18,388,078 17,845,448 17,340,701 Total OPEB Liability - End of Year (a) 19,487,456 17,024,023 17,192,813 17,074,889 18,388,078 17,845,448 Plan Fiduciary Net Position:

Contributions - Employer 1,486,702 1,364,011 1,377,588 1,304,406 1,411,788 1,404,657 Net Investment Income (loss) (1,563,069) 2,890,404 346,958 564,067 632,351 723,361 Benefit Payments (1,084,205) (1,061,595) (1,075,132) (1,002,349) (1,011,788) (1,004,657) Administrative Expenses (5,954) (6,395) (7,278) (3,990) (14,830) (3,693) Net Change in Plan Fiduciary Net Position (1,166,526) 3,186,425 642,136 862,134 1,017,521 1,119,668 Plan Fiduciary Net Position - Beginning of Year 13,692,193 10,505,768 9,863,632 9,001,498 7,983,977 6,864,309 Plan Fiduciary Net Position - End of Year (b) 12,525,667 13,692,193 10,505,768 9,863,632 9,001,498 7,983,977 Net OPEB Liability - Ending (a)-(b) 6,961,789 $ 3,331,830 $ 6,687,045 $ 7,211,257 $ 9,386,580 $ 9,861,471 $ Plan Fiduciary Net Position as a Percentage of the Total OPEB Liability 64.28% 80.43% 61.11% 57.77% 48.95% 44.74%Covered Payroll $ 4,101,592 4,419,396 $ 4,242,679 $ 4,035,704 $ 3,836,205 $ 3,610,147 $ Net OPEB Liability as Percentage of Covered Payroll 157.5% 81.2% 157.6% 178.7% 244.7% 273.2%Notes to Schedule:

Benefit Changes:

There were no changes in benefits.

Changes in Assumptions:

There were no changes in assumptions for the measurement periods ended June 30, 2017, 2018 and 2020.For the measurement period ended June 30, 2019, the mortality improvement scale was updated to Scale MP-2019For the measurement period ended June 30, 2020 and 2021, the mortality improvement scale was updated to Scale MP-2021 * Fiscal year 2018 was the first year of implementation and therefore only six years are shown.

CITY OF NORCO

SCHEDULE OF CONTRIBUTIONS

OPEB PLAN
LAST TEN FISCAL YEARS *
See accompanying Note to Required Supplementary Information. (94)
Fiscal Year End 6/30/2023 6/30/2022 6/30/2021 6/30/2020 6/30/2019 6/30/2018 Actuarially Determined Contribution 937,000 $ 827,000 $ 803,000 $ 1,050,000 $ 1,019,000 $ 1,201,000 $ Contributions In Relation to the Actuarially Determined Contributions (1,139,727) (1,486,702) (1,364,011) (1,377,588) (1,304,406) (1,411,788)Contribution Deficiency (Excess) (202,727) $ (659,702) $ (561,011) $ (327,588) $ (285,406) $ (210,788) $ Covered Payroll $ 4,419,396 6,036,456 $ 4,101,592 $ 4,242,679 $ 4,035,704 $ 3,836,205 $ Contributions as a Percentage of Covered Payroll 18.88% 33.64% 33.26% 32.47% 32.32% 36.80%Notes to Schedule:

Valuation Date 6/30/2021 6/30/2021 6/30/2019 6/30/2019 6/30/2017 6/30/2017Methods and Assumptions Used to Determine Contribution Rates:

Actuarial Cost Method Entry Age (1) Entry Age (1) Entry Age (1) Entry Age (1) Entry Age (1) Entry Age (1)Amortization Method (1) (1) (1) (1) (1) (1)Discount Rate 5.25% 6.25% 6.75% 6.75% 6.75% 6.75%Inflation 2.50% 2.50% 2.75% 2.75% 2.75% 3.00%Salary Increases 2.75% 2.75% 3.00% 3.00% 3.00% 3.00%Medical Trend (4) (4) (3) (3) (2) (2)Mortality (6) (6) (5) (5) (5) (5)Mortality Improvement (9) (9) (8) (8) (7) (7) (1) Level percentage of pay(2) Medicare - 7.50% for 2019, decreasing to an ultimate rate of 4.0% in 2076 Non-Medicare - 6.5% for 2019 decreasing to an ultimate rate of 4.0% in 2076 (3) Medicare - 6.3% for 2021, decreasing to an ultimate rate of 4.0% in 2076 Non-Medicare - 7.25% for 2021, decreasing to an ultimate rate of 4.0% in 2076 (4) Medicare - 5.65% for 2023, decreasing to an ultimate rate of 3.75% in 2076 Non-Medicare - 6.5% for 2019 and 2020, decreasing to an ultimate rate of 4.0% in 2076 (5) CalPERS 1997-2015 experience study(6) CalPERS 2000-2019 experience study(7) Postretirement mortality projected fully generational with Scale MP-17(8) Mortality projected fully generational with Scale MP-2019(9) Mortality projected fully generational with Scale MP-2021* Fiscal year 2018 was the first year of implementation and therefore only six years are shown.

CITY OF NORCO
BUDGETARY COMPARISON SCHEDULE – GENERAL FUND
YEAR ENDED JUNE 30, 2023
See accompanying Note to Required Supplementary Information. (95)
Budgeted Amounts Actual Variance with
Original Final Amounts Final Budget

REVENUES
Taxes 28,426,364 $ 29,832,227 $ 29,815,730 $ (16,497) $ Licenses and Permits 4,450,511 1,645,263 1,998,851 353,588 Fines and Forfeitures 520,664 507,626 772,981 265,355
Intergovernmental 26,040 51,040 209,139 158,099
Charges for Services 3,385,958 3,402,167 3,528,011 125,844 Investment Earnings 186,414 186,414 1,216,319 1,029,905 Lease Income 687,804 711,804 531,248 (180,556)
Reimbursements 20,000 20,000 5,905 (14,095)
Other 118,009 79,564 68,936 (10,628)
Total Revenues 37,821,764 36,436,105 38,147,120 1,711,015

EXPENDITURES
Current:

General Government 7,891,963 8,845,950 9,006,301 (160,351) Public Safety 13,941,131 11,478,451 10,656,010 822,441
Streets and Highways 689,642 691,662 625,325 66,337
Community and Economic
Development 2,234,689 3,575,345 1,822,062 1,753,283
Culture and Leisure 3,464,643 3,663,561 3,155,076 508,485 Debt Service:

Principal - - 34,255 (34,255)
Interest - - 575 (575)
Capital Outlay 16,177,129 19,493,336 8,596,856 10,896,480 Total Expenditures 44,399,197 47,748,305 33,896,460 13,851,845 Excess (Deficiency) of Revenues
Over (Under) Expenditures (6,577,433) (11,312,200) 4,250,660 15,562,860

OTHER FINANCING SOURCES (USES)
Lease Proceeds - - 94,280 94,280
Subscription Liability Proceeds - - 41,134 41,134
Transfers In 259,705 259,705 259,704 (1)
Transfers Out - - (193,732) (193,732)
Total Other Financing Sources
(Uses) 259,705 259,705 201,386 (58,319)
NET CHANGE IN FUND BALANCE (11,052,495) (6,317,728) 4,452,046 15,504,541 Fund Balance - Beginning of Year 44,366,263 44,366,263 44,366,263 - FUND BALANCE - END OF YEAR $ 33,313,768 38,048,535 $ 48,818,309 $ 15,504,541 $

CITY OF NORCO

NOTE TO REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2023
(96)
NOTE 1 GENERAL BUDGET POLICIES
Annual budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America for all governmental funds except for the Major Housing Successor Agency Low and Moderate Income Housing Special Revenue Fund, the Nonmajor CalHome Grant Special Revenue Fund and the Nonmajor Facility Improvement Capital Projects Fund. The legal level of budgetary control is the fund level.

Each City department is required to submit requests for annual appropriation to the City manager that are used as the starting point for developing a proposed budget. The City manager presents a proposed budget to Council for review through staff and council budget workshops. At the completion of the budget workshops, the City council is required to have one public hearing to further review the proposed budget. At the conclusion of the public hearings, the budget is required to be adopted by a majority vote of the City council no later than June 30, which is the close of the City’s fiscal year. The Council made several supplemental budgetary appropriations throughout the year, these supplemental appropriations were immaterial. The appropriated budget is prepared by fund and department. Within each department, the budget is further detailed by expenditure type (e.g., salaries and benefits). At fiscal year-end, all operating budget appropriations lapsed.

(97)

COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES

(98)

THIS PAGE INTENTIONALLY LEFT BLANK

(99)

COMBINING NONMAJOR GOVERNMENTAL FUNDS

(100)

THIS PAGE INTENTIONALLY LEFT BLANK

CITY OF NORCO

NONMAJOR GOVERNMENTAL FUNDS

FUND DESCRIPTIONS
JUNE 30, 2023
(101)
Special Revenue Funds
Special Revenue Funds are used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes.

Miscellaneous Grants – To account for the receipt and expenditure of miscellaneous grants not accounted for in a separate fund.

Community Development Block Grant – To account for federal grants under the Department of Housing and Urban Development (HUD) Community Development Block Grant (CDBG) Program.

Gas Tax – To account for the repair and maintenance of streets and traffic signals of the City.

Financing is through the State Highway Users Tax Sections 2105, 2106, 2107, and 2107.5 of the Streets and Highways Code.

SB1 Road Maintenance Rehabilitation – To account for road maintenance and rehabilitation of local street and road systems. Financing is through transportation taxes allocated under the Road Repair and Accountability Act of 2017.

Measure A – To account for the construction, reconstruction, alteration, and maintenance of the streets of the City. Financing is through the Riverside County Transportation Commission half-cent sales tax.

National Pollutant Discharge Elimination System (NPDES) – To account for the proceeds of the charge used to maintain and operate the City’s storm drains and flood control channels into the Santa Ana River. This service area assessment is exempt from the requirements of Proposition 218.

Air Quality Improvement Trust – To account for the receipt of AB 2766 funds to implement programs that reduce air pollution from motor vehicles. Local Governments receive forty percent of the motor vehicle registration fee surcharge of $4 per vehicle collected by the Department of Motor Vehicles.

Supplemental Law Enforcement Block Grant – To account for grant funds used for front line law enforcement services.

Landscape Maintenance District #1 – To account for the cost of operation, maintenance, and servicing of the improvements for the Beazer Homes in Norco. Funding is provided by assessments charged to the homeowners/developers in the area.

Landscape Maintenance District #2 – To account for the cost of operation, maintenance, and servicing of the improvements for the Norco Estates/Western Pacific Homes in Norco. Funding is provided by assessments charged to the homeowners/developers in the area.

Landscape Maintenance District #3 – To account for the cost of operation, maintenance, and servicing of the improvements for the Centex Homes in Norco. Funding is provided by assessments charged to the homeowners/developers in the area.

CITY OF NORCO

NONMAJOR GOVERNMENTAL FUNDS

FUND DESCRIPTIONS
JUNE 30, 2023
(102)
Landscape Maintenance District #4 – To account for the cost of operation, maintenance, and servicing of the improvements for the Norco Ridge Ranch Homes in Norco. Funding is provided by assessments charged to the homeowners/developers in the area.

Landscape Maintenance District #5 – To account for the cost of operation, maintenance, and servicing of the improvements for the K. B. Homes in Norco. Funding is provided by assessments charged to the homeowners/developers in the area.

CalHome Grant – To account for the receipt and expenditure of the CalHome grant program.

American Rescue Plan Act (ARPA) – To account for the receipt and expenditure of the American Rescue Plan Act of 2021 program.

CITY OF NORCO

NONMAJOR GOVERNMENTAL FUNDS

FUND DESCRIPTIONS
JUNE 30, 2023
(103)
Capital Projects Funds
Capital Project Funds are used to account for major capital acquisition and construction separately from their ongoing operating activities, including those financed by special assessments.

Storm Drain – To account for the construction of channels and storm drains to mitigate the storm water run-off impacts caused by new development. Financing is through an impact fee imposed on all new development in the City.

General Government Improvement – To account for the construction of general government facilities such as a new government center, additional library facilities, and other general capital needs.

Financing is through an impact fee imposed on all new development in the City.

Fire Improvement – To account for the construction of fire stations and the purchase of fire equipment.

Financing is through an impact fee imposed on all new development in the City.

Trails Improvement – To account for the acquisition, improvement, and development of equestrian pedestrian trails. Financing is through an impact fee imposed on all new development in the City.

Park Improvement – To account for the acquisition, improvement, and development of park and open space land and recreational facilities. Financing is through an impact fee imposed on all new development in the City.

Public Meeting – To account for the construction of additional community center space.

Street Improvement – To account for the cost of street improvements including widening and reconstruction, traffic signals, street landscaping, intersection improvements, and freeway interchange improvements. Financing is through an impact fee imposed on all new development in the City.

Animal Control – To account for the expansion of the animal control facilities and will increase the number of response and investigator vehicles.

Facility Improvement – To account for resources that are to be used for the replacement or major capital improvements of City facilities such as libraries and community centers.

CITY OF NORCO

COMBINING BALANCE SHEET

NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2023
(104)
ASSETS
Cash and Investments
Receivables, Net:

Accounts
Interest
Notes
Due from Other Governments
Total Assets

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts Payable and Accrued Liabilities
Retentions Payable
Due to Other Funds
Unearned Revenues
Total Liabilities
Deferred Inflows of Resources:

Unavailable Revenues
Fund Balances (Deficits):

Restricted
Unassigned
Total Fund Balances (Deficits)
Total Liabilities, Deferred Inflows
of Resources, and Fund Balances
Special Revenue Funds
Community SB1 Road
Miscellaneous Development Maintenance
Grants Block Grant Gas Tax Rehabilitation Measure A
$ - - $ 25,115 $ 667,659 $ 841,619 $
- 79,833 - - -
- - 494 3,511 5,212
- - - - -
934 76,976 126,313 53,395 176,131
$ 934 156,809 $ 151,922 $ 724,565 $ 1,022,962 $
$ - 11,166 $ 58,643 $ 1,421 $ 481,687 $
- 7,207 - - 50,903
934 13,953 - - -
- 98,634 - - -
934 130,960 58,643 1,421 532,590
- - - - -
- 25,849 93,279 723,144 490,372
- - - - -
- 25,849 93,279 723,144 490,372
$ 934 156,809 $ 151,922 $ 724,565 $ 1,022,962 $

CITY OF NORCO

COMBINING BALANCE SHEET (CONTINUED)

NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2023
(105)
ASSETS
Cash and Investments
Receivables, Net:

Accounts
Interest
Notes
Due from Other Governments
Total Assets

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts Payable and Accrued Liabilities
Retentions Payable
Due to Other Funds
Unearned Revenues
Total Liabilities
Deferred Inflows of Resources:

Unavailable Revenues
Fund Balances (Deficits):

Restricted
Unassigned
Total Fund Balances (Deficits)
Total Liabilities, Deferred Inflows
of Resources, and Fund Balances
Special Revenue Funds
Supplemental
Air Quality Law Landscape Landscape
Improvement Enforcement Maintenance Maintenance
NPDES Trust Block Grant District #1 District #2
$ 131,431 - $ - $ - $ - $
- - - - 10,009
713 - - - (55)
- - - - -
8,308 49,917 - 741 2,397
$ 140,452 49,917 $ - $ 741 $ 12,351 $
$ - 29,702 $ - $ 1,792 $ 9,642 $
- - - - -
- 3,245 - 2,904 9,108
- - - - -
- 32,947 - 4,696 18,750
- - - - -
140,452 16,970 - - -
- - - (3,955) (6,399)
140,452 16,970 - (3,955) (6,399)
$ 140,452 49,917 $ - $ 741 $ 12,351 $

CITY OF NORCO

COMBINING BALANCE SHEET (CONTINUED)

NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2023
(106)
ASSETS
Cash and Investments
Receivables, Net:

Accounts
Interest
Notes
Due from Other Governments
Total Assets

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts Payable and Accrued Liabilities
Retentions Payable
Due to Other Funds
Unearned Revenues
Total Liabilities
Deferred Inflows of Resources:

Unavailable Revenues
Fund Balances (Deficits):

Restricted
Unassigned
Total Fund Balances (Deficits)
Total Liabilities, Deferred Inflows
of Resources, and Fund Balances
Special Revenue Funds
Landscape Landscape Landscape American
Maintenance Maintenance Maintenance CalHome Rescue Plan District #3 District #4 District #5 Grant Act
$ 337,031 8,924 $ 107,018 $ 123,764 $ 267,062 $
57 1,684 - - -
1,756 - 658 658 -
- - - 355,450 -
8,247 598 651 - -
$ 347,091 11,206 $ 108,327 $ 479,872 $ 267,062 $
$ 30,098 5,293 $ 3,041 $ - $ 267,062 $
- - - - -
6,653 3,647 701 - -
- - - - -
36,751 8,940 3,742 - 267,062
- - - 355,450 -
310,340 2,266 104,585 124,422 -
- - - - -
310,340 2,266 104,585 124,422 -
$ 347,091 11,206 $ 108,327 $ 479,872 $ 267,062 $

CITY OF NORCO

COMBINING BALANCE SHEET (CONTINUED)

NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2023
(107)
ASSETS
Cash and Investments
Receivables, Net:

Accounts
Interest
Notes
Due from Other Governments
Total Assets

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts Payable and Accrued Liabilities
Retentions Payable
Due to Other Funds
Unearned Revenues
Total Liabilities
Deferred Inflows of Resources:

Unavailable Revenues
Fund Balances (Deficits):

Restricted
Unassigned
Total Fund Balances (Deficits)
Total Liabilities, Deferred Inflows
of Resources, and Fund Balances
Special
Revenue Funds Capital Projects Funds
General
Total Special Government Fire Trails
Revenue Funds Storm Drain Improvement Improvement Improvement $ 2,319,797 2,509,623 $ 542,553 $ 678,277 $ 230,503 $
32,680 91,583 - - -
12,454 12,947 2,963 3,731 1,262
- 355,450 - - -
- 504,608 - - -
$ 2,364,931 3,474,211 $ 545,516 $ 682,008 $ 231,765 $
$ 1,215,200 899,547 $ - $ - $ - $
164,510 58,110 9,547 - -
- 41,145 - - -
- 98,634 - - -
1,379,710 1,097,436 9,547 - -
- 355,450 - - -
985,221 2,031,679 535,969 682,008 231,765
- (10,354) - - -
985,221 2,021,325 535,969 682,008 231,765
$ 2,364,931 3,474,211 $ 545,516 $ 682,008 $ 231,765 $

CITY OF NORCO

COMBINING BALANCE SHEET (CONTINUED)

NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2023
(108)
ASSETS
Cash and Investments
Receivables, Net:

Accounts
Interest
Notes
Due from Other Governments
Total Assets

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts Payable and Accrued Liabilities
Retentions Payable
Due to Other Funds
Unearned Revenues
Total Liabilities
Deferred Inflows of Resources:

Unavailable Revenues
Fund Balances (Deficits):

Restricted
Unassigned
Total Fund Balances (Deficits)
Total Liabilities, Deferred Inflows
of Resources, and Fund Balances
Capital Projects Funds
Park Public Street Animal
Improvement Meeting Improvement Control
$ 185,542 910,459 $ 1,641,260 $ 49,501 $
- - 25,000 -
933 4,773 8,778 274
- - - -
- - - -
$ 186,475 915,232 $ 1,675,038 $ 49,775 $
$ - - $ 1,431,907 $ 7,671 $
- - 62,197 -
- - - -
- - - -
- - 1,494,104 7,671
- - - -
186,475 915,232 180,934 42,104
- - - -
186,475 915,232 180,934 42,104
$ 186,475 915,232 $ 1,675,038 $ 49,775 $

CITY OF NORCO

COMBINING BALANCE SHEET (CONTINUED)

NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2023
(109)
ASSETS
Cash and Investments
Receivables, Net:

Accounts
Interest
Notes
Due from Other Governments
Total Assets

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts Payable and Accrued Liabilities
Retentions Payable
Due to Other Funds
Unearned Revenues
Total Liabilities
Deferred Inflows of Resources:

Unavailable Revenues
Fund Balances (Deficits):

Restricted
Unassigned
Total Fund Balances (Deficits)
Total Liabilities, Deferred Inflows
of Resources, and Fund Balances
Capital Projects Funds
Total
Nonmajor
Facility Total Capital Governmental
Improvement Projects Funds Funds
$ 6,684,950 127,058 $ 9,194,573 $
57,680 - 149,263
35,182 14 48,129
- - 355,450
- - 504,608
$ 6,777,812 127,072 $ 10,252,023 $
$ 2,654,778 - $ 3,554,325 $
236,254 - 294,364
- - 41,145
- - 98,634
2,891,032 - 3,988,468
- - 355,450
3,886,780 127,072 5,918,459
- - (10,354)
3,886,780 127,072 5,908,105
$ 6,777,812 127,072 $ 10,252,023 $

CITY OF NORCO

COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCES

NONMAJOR GOVERNMENTAL FUNDS
YEAR ENDED JUNE 30, 2023
(110)

REVENUES
Taxes
Assessments
Development Fees
Intergovernmental
Charges for Services
Investment Earnings (Loss)
Reimbursements
Other
Total Revenues

EXPENDITURES
Current:

General Government
Public Safety
Streets and Highways
Community and Economic Development
Culture and Leisure
Capital Outlay:

Other
Total Expenditures
Excess (Deficiency) of Revenues
Over (Under) Expenditures

OTHER FINANCING SOURCES (USES)
Transfers Out
Total Other Financing Sources (Uses)

NET CHANGE IN FUND BALANCES
Fund Balances (Deficits) - Beginning of Year

FUND BALANCES (DEFICITS) - END

OF YEAR
Special Revenue Funds
Community SB1 Road
Miscellaneous Development Maintenance
Grant Block Grant Gas Tax Rehabilitation Measure A
$ - - $ - $ - $ 1,002,380 $
- - - - -
- - - - -
12,934 255,345 684,467 588,667 -
- - - - -
- - 2,477 2,022 18,010
- - - - -
- - - - -
12,934 255,345 686,944 590,689 1,020,390
- 63,246 - - -
- - - - -
- - 792,668 95,791 1,134,229
934 38,486 - - -
12,000 153,613 - - -
- - - - -
12,934 255,345 792,668 95,791 1,134,229
- - (105,724) 494,898 (113,839)
- - - - -
- - - - -
- - (105,724) 494,898 (113,839)
- 25,849 199,003 228,246 604,211
$ - 25,849 $ 93,279 $ 723,144 $ 490,372 $

CITY OF NORCO

COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCES (CONTINUED)

NONMAJOR GOVERNMENTAL FUNDS
YEAR ENDED JUNE 30, 2023
(111)

REVENUES
Taxes
Assessments
Development Fees
Intergovernmental
Charges for Services
Investment Earnings (Loss)
Reimbursements
Other
Total Revenues

EXPENDITURES
Current:

General Government
Public Safety
Streets and Highways
Community and Economic Development
Culture and Leisure
Capital Outlay:

Other
Total Expenditures
Excess (Deficiency) of Revenues
Over (Under) Expenditures

OTHER FINANCING SOURCES (USES)
Transfers Out
Total Other Financing Sources (Uses)

NET CHANGE IN FUND BALANCES
Fund Balances (Deficits) - Beginning of Year

FUND BALANCES (DEFICITS) - END

OF YEAR
Special Revenue Funds
Supplemental
Air Quality Law Landscape Landscape
Improvement Enforcement Maintenance Maintenance
NPDES Trust Block Grant District #1 District #2
$ - 120,484 $ - $ - $ - $
- - - 11,808 172,977
- - - - -
32,158 - 165,271 - -
- - - - -
2,657 - - - (726)
- - - - -
- - - - -
34,815 120,484 165,271 11,808 172,251
- - - - -
- - 165,271 - -
- 150,907 - 16,498 177,894
- - - - -
- - - - -
- - - - -
- 150,907 165,271 16,498 177,894
34,815 (30,423) - (4,690) (5,643)
(50,761) - - - -
(50,761) - - - -
(15,946) (30,423) - (4,690) (5,643)
156,398 47,393 - 735 (756)
$ 140,452 16,970 $ - $ (3,955) $ (6,399) $

CITY OF NORCO

COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCES (CONTINUED)

NONMAJOR GOVERNMENTAL FUNDS
YEAR ENDED JUNE 30, 2023
(112)

REVENUES
Taxes
Assessments
Development Fees
Intergovernmental
Charges for Services
Investment Earnings (Loss)
Reimbursements
Other
Total Revenues

EXPENDITURES
Current:

General Government
Public Safety
Streets and Highways
Community and Economic Development
Culture and Leisure
Capital Outlay:

Other
Total Expenditures
Excess (Deficiency) of Revenues
Over (Under) Expenditures

OTHER FINANCING SOURCES (USES)
Transfers Out
Total Other Financing Sources (Uses)

NET CHANGE IN FUND BALANCES
Fund Balances (Deficits) - Beginning of Year

FUND BALANCES (DEFICITS) - END

OF YEAR
Special Revenue Funds
Landscape Landscape Landscape American
Maintenance Maintenance Maintenance CalHome Rescue Plan District #3 District #4 District #5 Grant Act
$ - - $ - $ - $ - $
489,400 99,381 65,096 - -
- - - - -
- - - 59,215 3,380,220
- - - - -
5,151 45 2,855 698 -
- - - - -
6,400 - - - -
500,951 99,426 67,951 59,913 3,380,220
- - - - 3,373,613
- - - - -
521,692 106,382 114,883 - -
- - - - -
- - - - -
- - - - 6,607
521,692 106,382 114,883 - 3,380,220
(20,741) (6,956) (46,932) 59,913 -
- - - - -
- - - - -
(20,741) (6,956) (46,932) 59,913 -
331,081 9,222 151,517 64,509 -
$ 310,340 2,266 $ 104,585 $ 124,422 $ - $

CITY OF NORCO

COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCES (CONTINUED)

NONMAJOR GOVERNMENTAL FUNDS
YEAR ENDED JUNE 30, 2023
(113)

REVENUES
Taxes
Assessments
Development Fees
Intergovernmental
Charges for Services
Investment Earnings (Loss)
Reimbursements
Other
Total Revenues

EXPENDITURES
Current:

General Government
Public Safety
Streets and Highways
Community and Economic Development
Culture and Leisure
Capital Outlay:

Other
Total Expenditures
Excess (Deficiency) of Revenues
Over (Under) Expenditures

OTHER FINANCING SOURCES (USES)
Transfers Out
Total Other Financing Sources (Uses)

NET CHANGE IN FUND BALANCES
Fund Balances (Deficits) - Beginning of Year

FUND BALANCES (DEFICITS) - END

OF YEAR
Special
Revenue Funds Capital Projects Funds
General
Total Special Government Fire Trails
Revenue Funds Storm Drain Improvement Improvement Improvement $ - 1,122,864 $ - $ - $ - $
- 838,662 - - -
- - 29,460 60,592 27,844
4,671,843 5,178,277 - - -
15,084 - - - -
31,571 33,189 10,965 14,792 3,680
197,928 - - - -
- 6,400 - - -
4,916,426 7,179,392 40,425 75,384 31,524
- 3,436,859 21,850 - -
- 165,271 - 205,146 -
3,785,067 3,110,944 - - 5,945
- 39,420 - - -
- 165,613 - - -
- 6,607 - - -
3,785,067 6,924,714 21,850 205,146 5,945
1,131,359 254,678 18,575 (129,762) 25,579
- (50,761) - - -
- (50,761) - - -
1,131,359 203,917 18,575 (129,762) 25,579
(146,138) 1,817,408 517,394 811,770 206,186
$ 985,221 2,021,325 $ 535,969 $ 682,008 $ 231,765 $

CITY OF NORCO

COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCES (CONTINUED)

NONMAJOR GOVERNMENTAL FUNDS
YEAR ENDED JUNE 30, 2023
(114)

REVENUES
Taxes
Assessments
Development Fees
Intergovernmental
Charges for Services
Investment Earnings (Loss)
Reimbursements
Other
Total Revenues

EXPENDITURES
Current:

General Government
Public Safety
Streets and Highways
Community and Economic Development
Culture and Leisure
Capital Outlay:

Other
Total Expenditures
Excess (Deficiency) of Revenues
Over (Under) Expenditures

OTHER FINANCING SOURCES (USES)
Transfers Out
Total Other Financing Sources (Uses)

NET CHANGE IN FUND BALANCES
Fund Balances (Deficits) - Beginning of Year

FUND BALANCES (DEFICITS) - END

OF YEAR
Capital Projects Funds
Park Public Street Animal
Improvement Meeting Improvement Control
$ - - $ - $ - $
- - - -
64,336 243,878 113,711 5,595
- - - -
- - - -
1,892 10,946 46,178 755
- - - -
- - 47,290 -
66,228 254,824 207,179 6,350
- - - -
- - - 7,671
- - 2,351,035 -
- - - -
- 773 - -
- - - -
- 773 2,351,035 7,671
66,228 254,051 (2,143,856) (1,321)
- - - -
- - - -
66,228 254,051 (2,143,856) (1,321)
120,247 661,181 2,324,790 43,425
$ 186,475 915,232 $ 180,934 $ 42,104 $

CITY OF NORCO

COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCES (CONTINUED)

NONMAJOR GOVERNMENTAL FUNDS
YEAR ENDED JUNE 30, 2023
(115)

REVENUES
Taxes
Assessments
Development Fees
Intergovernmental
Charges for Services
Investment Earnings (Loss)
Reimbursements
Other
Total Revenues

EXPENDITURES
Current:

General Government
Public Safety
Streets and Highways
Community and Economic Development
Culture and Leisure
Capital Outlay:

Other
Total Expenditures
Excess (Deficiency) of Revenues
Over (Under) Expenditures

OTHER FINANCING SOURCES (USES)
Transfers Out
Total Other Financing Sources (Uses)

NET CHANGE IN FUND BALANCES
Fund Balances (Deficits) - Beginning of Year

FUND BALANCES (DEFICITS) - END

OF YEAR
Capital Projects Funds
Total
Nonmajor
Facility Total Capital Governmental
Improvement Projects Funds Funds
$ - - $ 1,122,864 $
- - 838,662
545,416 - 545,416
4,671,843 - 9,850,120
15,084 - 15,084
120,779 - 153,968
197,928 - 197,928
47,290 - 53,690
5,598,340 - 12,777,732
21,850 - 3,458,709
212,817 - 378,088
6,142,047 - 9,252,991
- - 39,420
773 - 166,386
- - 6,607
6,377,487 - 13,302,201
(779,147) - (524,469)
- - (50,761)
- - (50,761)
(779,147) - (575,230)
4,665,927 127,072 6,483,335
$ 3,886,780 127,072 $ 5,908,105 $

(116)

THIS PAGE INTENTIONALLY LEFT BLANK

CITY OF NORCO

NONMAJOR SCHEDULES OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCE

BUDGET AND ACTUAL
YEAR ENDED JUNE 30, 2023
(117)
The budgetary comparison statement is presented as required supplementary information for the General Fund as provided for by GASB Statement No. 34. The City did not adopt a budget for the Housing Successor Agency Low- and Moderate-Income Housing Special Revenue Fund.

The schedules for the remaining funds are presented to aid in additional analysis and are not a required part of the financial statements.

The City did not adopt a budget for the CalHome Grant Special Revenue Fund and Facility Improvement Capital Projects Fund.

CITY OF NORCO

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL

MISCELLANEOUS GRANTS SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2023
(118)
Budget Amounts Actual Variance with
Original Final Amounts Final Budget

REVENUES
Intergovernmental 493,634 $ 2,364,892 $ 255,345 $ (2,109,547) $ Charges for Services - 3,000 - (3,000)
Total Revenues 493,634 2,367,892 255,345 (2,112,547)

EXPENDITURES
Current:

General Government 96,000 96,000 63,246 32,754
Public Safety 9,700 9,523 - 9,523
Community and Economic
Development 102,500 102,500 38,486 64,014
Culture and Leisure 285,434 2,159,869 153,613 2,006,256 Total Expenditures 397,634 2,367,892 255,345 2,112,547
NET CHANGE IN FUND BALANCE - 96,000 - -
Fund Balance - Beginning of Year 25,849 25,849 25,849 - FUND BALANCE - END OF YEAR $ 25,849 121,849 $ 25,849 $ - $

CITY OF NORCO

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL

COMMUNITY DEVELOPMENT BLOCK GRANT SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2023
(119)
Budget Amounts Actual Variance with
Original Final Amounts Final Budget

REVENUES
Intergovernmental 87,000 $ 230,089 $ 12,934 $ (217,155) $ Total Revenues 87,000 230,089 12,934 (217,155)

EXPENDITURES
Community and Economic
Development 75,000 218,089 934 217,155
Culture and Leisure 12,000 12,000 12,000 -
Total Expenditures 87,000 230,089 12,934 217,155

NET CHANGE IN FUND BALANCE - - - -
Fund Balance - Beginning of Year - - - -
FUND BALANCE - END OF YEAR $ - - $ - $ - $

CITY OF NORCO

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL

GAS TAX SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2023
(120)
Budget Amounts Actual Variance with
Original Final Amounts Final Budget

REVENUES
Intergovernmental 753,448 $ 692,462 $ 684,467 $ (7,995) $ Investment Earnings (Loss) 200 200 2,477 2,277
Total Revenues 753,648 692,662 686,944 (5,718)

EXPENDITURES
Current:

Streets and Highways 962,686 965,848 792,668 173,180
Total Expenditures 962,686 965,848 792,668 173,180
NET CHANGE IN FUND BALANCE (273,186) (209,038) (105,724) 167,462 Fund Balance - Beginning of Year 199,003 199,003 199,003 - FUND BALANCE (DEFICIT) - END OF YEAR $ (74,183) (10,035) $ 93,279 $ 167,462 $

CITY OF NORCO

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL
SB1 ROAD MAINTENANCE REHABILITATION SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 2023
(121)
Budget Amounts Actual Variance with
Original Final Amounts Final Budget

REVENUES
Intergovernmental 599,286 $ 578,187 $ 588,667 $ 10,480 $ Investment Earnings (Loss) 1,122 1,122 2,022 900
Total Revenues 600,408 579,309 590,689 11,380

EXPENDITURES
Current:

Streets and Highways 700,000 1,360,276 95,791 1,264,485 Total Expenditures 700,000 1,360,276 95,791 1,264,485
NET CHANGE IN FUND BALANCE (780,967) (99,592) 494,898 1,275,865 Fund Balance - Beginning of Year 228,246 228,246 228,246 - FUND BALANCE (DEFICIT) - END OF YEAR $ (552,721) 128,654 $ 723,144 $ 1,275,865 $

CITY OF NORCO

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL

MEASURE A SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2023
(122)
Budget Amounts Actual Variance with
Original Final Amounts Final Budget

REVENUES
Taxes 931,000 $ 931,000 $ 1,002,380 $ 71,380 $
Investment Earnings (Loss) 7,205 7,205 18,010 10,805
Total Revenues 938,205 938,205 1,020,390 82,185

EXPENDITURES
Current:

Streets and Highways 1,650,000 1,650,000 1,134,229 515,771 Total Expenditures 1,650,000 1,650,000 1,134,229 515,771 NET CHANGE IN FUND BALANCE (711,795) (711,795) (113,839) 597,956 Fund Balance - Beginning of Year 604,211 604,211 604,211 - FUND BALANCE (DEFICIT) - END OF YEAR $ (107,584) (107,584) $ 490,372 $ 597,956 $

CITY OF NORCO

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL

NPDES SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2023
(123)
Budget Amounts Actual Variance with
Original Final Amounts Final Budget

REVENUES
Taxes 133,000 $ 133,000 $ 120,484 $ (12,516) $
Total Revenues 133,000 133,000 120,484 (12,516)

EXPENDITURES
Current:

Streets and Highways 180,656 182,237 150,907 31,330
Total Expenditures 180,656 182,237 150,907 31,330
NET CHANGE IN FUND BALANCE (49,237) (47,656) (30,423) 18,814 Fund Balance - Beginning of Year 47,393 47,393 47,393 - FUND BALANCE (DEFICIT) - END OF YEAR $ (1,844) (263) $ 16,970 $ 18,814 $

CITY OF NORCO

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL

AIR QUALITY IMPROVEMENT TRUST SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2023
(124)
Budget Amounts Actual Variance with
Original Final Amounts Final Budget

REVENUES
Intergovernmental 51,500 $ 51,500 $ 32,158 $ (19,342) $ Investment Earnings - - 2,657 2,657
Total Revenues 51,500 51,500 34,815 (16,685)

EXPENDITURES
Current:

General Government 50,000 50,000 - 50,000
Total Expenditures 50,000 50,000 - 50,000
Excess (Deficiency) of
Revenues Over (Under)
Expenditures 1,500 1,500 34,815 33,315

OTHER FINANCING USES
Transfers Out (1,500) (1,500) (50,761) (49,261)
NET CHANGE IN FUND BALANCE - - (15,946) (15,946)
Fund Balance - Beginning of Year 156,398 156,398 156,398 - FUND BALANCE - END OF YEAR $ 156,398 156,398 $ 140,452 $ (15,946) $

CITY OF NORCO

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL

SUPPLEMENTAL LAW ENFORCEMENT BLOCK GRANT SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 2023
(125)
Budget Amounts Actual Variance with
Original Final Amounts Final Budget

REVENUES
Intergovernmental 100,000 $ 165,271 $ 165,271 $ - $
Total Revenues 100,000 165,271 165,271 -

EXPENDITURES
Current:

Public Safety 100,000 165,271 165,271 -
Total Expenditures 100,000 165,271 165,271 -

NET CHANGE IN FUND BALANCE - - - -
Fund Balance - Beginning of Year - - - -
FUND BALANCE - END OF YEAR $ - - $ - $ - $

CITY OF NORCO

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL
LANDSCAPE MAINTENANCE DISTRICT #1 SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2023
(126)
Budget Amounts Actual Variance with
Original Final Amounts Final Budget

REVENUES
Assessments 11,667 $ 11,667 $ 11,808 $ 141 $
Total Revenues 11,667 11,667 11,808 141

EXPENDITURES
Current:

Streets and Highways 25,326 25,326 16,498 8,828
Total Expenditures 25,326 25,326 16,498 8,828
NET CHANGE IN FUND BALANCE (13,659) (13,659) (4,690) 8,969 Fund Balance - Beginning of Year 735 735 735 -
FUND BALANCE (DEFICIT) - END OF YEAR $ (12,924) (12,924) $ (3,955) $ 8,969 $

CITY OF NORCO

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL
LANDSCAPE MAINTENANCE DISTRICT #2 SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2023
(127)
Budget Amounts Actual Variance with
Original Final Amounts Final Budget

REVENUES
Assessments 174,963 $ 174,963 $ 172,977 $ (1,986) $
Investment Loss - - (726) (726)
Total Revenues 174,963 174,963 172,251 (2,712)

EXPENDITURES
Current:

Streets and Highways 186,790 186,790 177,894 8,896
Total Expenditures 186,790 186,790 177,894 8,896
NET CHANGE IN FUND BALANCE (11,827) (11,827) (5,643) 6,184 Fund Balance (Deficit) - Beginning
of Year (756) (756) (756) -

FUND BALANCE (DEFICIT) - END
OF YEAR $ (12,583) (12,583) $ (6,399) $ 6,184 $

CITY OF NORCO

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL
LANDSCAPE MAINTENANCE DISTRICT #3 SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2023
(128)
Budget Amounts Actual Variance with
Original Final Amounts Final Budget

REVENUES
Assessments 98,120 $ 98,120 $ 99,381 $ 1,261 $
Investment Earnings (Loss) - - 45 45
Total Revenues 98,120 98,120 99,426 1,306

EXPENDITURES
Current:

Streets and Highways 127,606 127,606 106,382 21,224
Total Expenditures 127,606 127,606 106,382 21,224
NET CHANGE IN FUND BALANCE (29,486) (29,486) (6,956) 22,530 Fund Balance - Beginning of Year 9,222 9,222 9,222 -
FUND BALANCE (DEFICIT) - END OF YEAR $ (20,264) (20,264) $ 2,266 $ 22,530 $

CITY OF NORCO

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL
LANDSCAPE MAINTENANCE DISTRICT #4 SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2023
(129)
Budget Amounts Actual Variance with
Original Final Amounts Final Budget

REVENUES
Assessments 494,209 $ 494,209 $ 489,400 $ (4,809) $
Investment Earnings - - 5,151 5,151
Other - - 6,400 6,400
Total Revenues 494,209 494,209 500,951 6,742

EXPENDITURES
Current:

Streets and Highways 549,567 549,567 521,692 27,875
Total Expenditures 549,567 549,567 521,692 27,875
NET CHANGE IN FUND BALANCE (55,358) (55,358) (20,741) 34,617 Fund Balance - Beginning of Year 331,081 331,081 331,081 - FUND BALANCE - END OF YEAR $ 275,723 275,723 $ 310,340 $ 34,617 $

CITY OF NORCO

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL
LANDSCAPE MAINTENANCE DISTRICT #5 SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2023
(130)
Budget Amounts Actual Variance with
Original Final Amounts Final Budget

REVENUES
Assessments 65,096 $ 65,096 $ 65,096 $ - $
Investment Earnings - - 2,855 2,855
Total Revenues 65,096 65,096 67,951 2,855

EXPENDITURES
Current:

Streets and Highways 139,057 139,057 114,883 24,174
Total Expenditures 139,057 139,057 114,883 24,174
NET CHANGE IN FUND BALANCE (73,961) (73,961) (46,932) 27,029 Fund Balance - Beginning of Year 151,517 151,517 151,517 - FUND BALANCE - END OF YEAR $ 77,556 77,556 $ 104,585 $ 27,029 $

CITY OF NORCO

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL

AMERICAN RESCUE PLAN ACT SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2023
(131)
Budget Amounts Actual Variance with
Original Final Amounts Final Budget

REVENUES
Intergovernmental 3,182,121 $ 3,380,221 $ 3,380,220 $ (1) $ Interest Income 17,500.00 17,500.00 - (17,500)
Total Revenues 3,199,621 3,397,721 3,380,220 (17,501)

EXPENDITURES
Current:

General Government 1,135,000 3,397,721 3,373,613 24,108 Capital Outlay
Other - - 6,607 (6,607)
Total Expenditures 1,135,000 3,397,721 3,380,220 17,501 Excess (Deficiency) of
Revenues Over (Under)
Expenditures 2,064,621 - - -
NET CHANGE IN FUND BALANCE - 2,064,621 - -
Fund Balance - Beginning of Year - - - -
FUND BALANCE - END OF YEAR $ - 2,064,621 $ - $ - $

CITY OF NORCO

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL

STORM DRAIN CAPITAL PROJECTS FUND
YEAR ENDED JUNE 30, 2023
(132)
Budget Amounts Actual Variance with
Original Final Amounts Final Budget

REVENUES
Development Fees 351,315 $ 351,315 $ - $ (351,315) $
Intergovernmental 13,052,483 13,052,483 4,671,843 (8,380,640) Charges for Services - - 15,084 15,084
Investment Earnings (Loss) 148 148 31,571 31,423
Reimbursements - - 197,928 197,928
Total Revenues 13,403,946 13,403,946 4,916,426 (8,487,520)

EXPENDITURES
Current:

Streets and Highways 13,102,484 18,633,082 3,785,067 14,848,015 Total Expenditures 13,102,484 18,633,082 3,785,067 14,848,015 NET CHANGE IN FUND BALANCE (5,229,136) 301,462 1,131,359 6,360,495 Fund Balance (Deficit) - Beginning of Year (146,138) (146,138) (146,138) - FUND BALANCE (DEFICIT) - END OF YEAR $ (5,375,274) 155,324 $ 985,221 $ 6,360,495 $

CITY OF NORCO

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL

GENERAL GOVERNMENT IMPROVEMENT CAPITAL PROJECTS FUND
YEAR ENDED JUNE 30, 2023
(133)
Budget Amounts Actual Variance with
Original Final Amounts Final Budget

REVENUES
Development Fees 115,527 $ 115,527 $ 29,460 $ (86,067) $ Investment Earnings 1,978 1,978 10,965 8,987
Total Revenues 117,505 117,505 40,425 (77,080)

EXPENDITURES
Current:

General Government 209,000 208,609 21,850 186,759
Total Expenditures 209,000 208,609 21,850 186,759
NET CHANGE IN FUND BALANCE (91,104) (91,495) 18,575 109,679 Fund Balance - Beginning of Year 517,394 517,394 517,394 - FUND BALANCE - END OF YEAR $ 426,290 425,899 $ 535,969 $ 109,679 $

CITY OF NORCO

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL

FIRE IMPROVEMENT CAPITAL PROJECTS FUND
YEAR ENDED JUNE 30, 2023
(134)
Budget Amounts Actual Variance with
Original Final Amounts Final Budget

REVENUES
Development Fees 900,897 $ 900,897 $ 60,592 $ (840,305) $ Investment Earnings 3,709 3,709 14,792 11,083
Total Revenues 904,606 904,606 75,384 (829,222)

EXPENDITURES
Current:

Public Safety 135,157 280,278 205,146 75,132
Total Expenditures 135,157 280,278 205,146 75,132
NET CHANGE IN FUND BALANCE 624,328 769,449 (129,762) (754,090) Fund Balance - Beginning of Year 811,770 811,770 811,770 - FUND BALANCE - END OF YEAR $ 1,436,098 1,581,219 $ 682,008 $ (754,090) $

CITY OF NORCO

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL

TRAILS IMPROVEMENT CAPITAL PROJECTS FUND
YEAR ENDED JUNE 30, 2023
(135)
Budget Amounts Actual Variance with
Original Final Amounts Final Budget

REVENUES
Development Fees 170,336 $ 170,336 $ 27,844 $ (142,492) $ Investment Earnings (Loss) 1,056 1,056 3,680 2,624
Total Revenues 171,392 171,392 31,524 (139,868)

EXPENDITURES
Current: .

Streets and Highways 50,000 50,000 5,945 44,055
Total Expenditures 50,000 50,000 5,945 44,055
NET CHANGE IN FUND BALANCE 121,392 121,392 25,579 (95,813) Fund Balance - Beginning of Year 206,186 206,186 206,186 - FUND BALANCE - END OF YEAR $ 327,578 327,578 $ 231,765 $ (95,813) $

CITY OF NORCO

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL

PARK IMPROVEMENT CAPITAL PROJECTS FUND
YEAR ENDED JUNE 30, 2023
(136)
Budget Amounts Actual Variance with
Original Final Amounts Final Budget

REVENUES
Development Fees 7,761,714 $ 7,761,714 $ 243,878 $ (7,517,836) $ Investment Earnings 3,311 3,311 10,946 7,635
Total Revenues 7,765,025 7,765,025 254,824 (7,510,201)

EXPENDITURES
Current:

Culture and Leisure 59,987 59,987 773 59,214
Total Expenditures 59,987 59,987 773 59,214
Excess (Deficiency) of
Revenues Over (Under)
Expenditures 7,705,038 7,705,038 254,051 (7,450,987)

OTHER FINANCING USES
Transfers In 40,000 40,000 - (40,000)
Total Other Financing Uses 40,000 40,000 - (40,000)
NET CHANGE IN FUND BALANCE 7,745,038 7,745,038 254,051 (7,490,987) Fund Balance - Beginning of Year 661,181 661,181 661,181 - FUND BALANCE - END OF YEAR $ 8,406,219 8,406,219 $ 915,232 $ (7,490,987) $

CITY OF NORCO

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL

PUBLIC MEETING CAPITAL PROJECTS FUND
YEAR ENDED JUNE 30, 2023
(137)
Budget Amounts Actual Variance with
Original Final Amounts Final Budget

REVENUES
Development Fees 2,103,786 $ 2,103,786 $ 64,336 $ (2,039,450) $ Investment Earnings 598 598 1,892 1,294
Total Revenues 2,104,384 2,104,384 66,228 (2,038,156)
NET CHANGE IN FUND BALANCE 2,104,384 2,104,384 66,228 (2,038,156) Fund Balance - Beginning of Year 120,247 120,247 120,247 - FUND BALANCE - END OF YEAR $ 2,224,631 2,224,631 $ 186,475 $ (2,038,156) $

CITY OF NORCO

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL

STREET IMPROVEMENT CAPITAL PROJECTS FUND
YEAR ENDED JUNE 30, 2023
(138)
Budget Amounts Actual Variance with
Original Final Amounts Final Budget

REVENUES
Development Fees 3,938,707 $ 3,938,707 $ 113,711 $ (3,824,996) $ Intergovernmental - - - -
Investment Earnings (Loss) 8,615 8,615 46,178 37,563
Other Revenue - - 47,290 47,290
Total Revenues 3,947,322 3,947,322 207,179 (3,740,143)

EXPENDITURES
Current:

Streets and Highways 4,744,875 5,147,875 2,351,035 2,796,840 Total Expenditures 4,744,875 5,147,875 2,351,035 2,796,840 NET CHANGE IN FUND BALANCE (1,200,553) (797,553) (2,143,856) (943,303) Fund Balance - Beginning of Year 2,324,790 2,324,790 2,324,790 - FUND BALANCE - END OF YEAR $ 1,124,237 1,527,237 $ 180,934 $ (943,303) $

CITY OF NORCO

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL

ANIMAL CONTROL CAPITAL PROJECTS FUND
YEAR ENDED JUNE 30, 2023
(139)
Budget Amounts Actual Variance with
Original Final Amounts Final Budget

REVENUES
Development Fees 18,415 $ 18,415 $ 5,595 $ (12,820) $
Investment Earnings (Loss) 212 212 755 543
Total Revenues 18,627 18,627 6,350 (12,277)

EXPENDITURES
Current:

Public Safety 33,800 35,000 7,671 27,329
Total Expenditures 33,800 35,000 7,671 27,329
NET CHANGE IN FUND BALANCE (16,373) (15,173) (1,321) 15,052 Fund Balance - Beginning of Year 43,425 43,425 43,425 - FUND BALANCE - END OF YEAR $ 27,052 28,252 $ 42,104 $ 15,052 $

(140)

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(141)

INTERNAL SERVICE FUNDS

(142)

THIS PAGE INTENTIONALLY LEFT BLANK

CITY OF NORCO

INTERNAL SERVICE FUNDS DESCRIPTIONS
JUNE 30, 2023
(143)
Internal Service Funds are used to account for the financing of goods or services provided by one department or agency to other departments or agencies of the government and to other government units, on a cost reimbursement basis.

Fleet Management Fund – This fund is used to account for the acquisition, rental, maintenance and operation of the City’s fleet of vehicles and the rolling stock.

Benefits and Insurance Fund – This fund is used to account for the accumulation and allocation of costs associated with providing certain employee benefits and City-wide insurance coverage.

Information Management Fund – This fund is used to account for the accumulation and allocation of costs associated with electronic data processing.

CITY OF NORCO

COMBINING STATEMENT OF NET POSITION

INTERNAL SERVICE FUNDS
JUNE 30, 2023
(144)
Fleet Benefits and Information
Management Insurance Management Total
ASSETS
Current Assets:

Cash and Investments 4,426,728 $ 1,036,920 $ 1,154,921 $ 6,618,569 $ Receivables, Net:

Accounts 5,620 - 16,038 21,658
Interest 24,414 3,621 6,583 34,618
Prepaids - - 59,908 59,908
Total Current Assets 4,456,762 1,040,541 1,237,450 6,734,753 Noncurrent Assets:

Capital Assets:

Vehicles and Equipment 3,870,487 - 146,143 4,016,630
Less Accumulated Depreciation - (2,437,866) (115,538) (2,553,404) Right-to-Use Lease Equipment - - 207,453 207,453
Less: Accumulated Amortization - - (82,981) (82,981)
Subscription Asset - - 404,533 404,533
Less: Accumulated Amortization - - (58,566) (58,566)
Intangibles - - 436,609 436,609
Less Accumulated Amortization - - (435,339) (435,339)
Total Noncurrent Assets/
Capital Assets 1,432,621 - 502,314 1,934,935
Total Assets 5,889,383 1,040,541 1,739,764 8,669,688

LIABILITIES
Current Liabilities:

Accounts Payable and Accrued
Liabilities 66,789 - 62,676 129,465
Compensated Absences - 220,126 - 220,126
Lease Payable - - 40,521 40,521
Subscription Liability 88,445 88,445
Claims and Judgements - 445,741 - 445,741
Total Current Liabilities 66,789 665,867 191,642 924,298 Noncurrent Liabilities:

Compensated Absences - 660,373 - 660,373
Lease Payable - - 88,454 88,454
Subscription Liability 135,825 135,825
Claims and Judgements - 542,713 - 542,713
Total Noncurrent Liabilities - 1,203,086 224,279 1,427,365 Total Liabilities 66,789 1,868,953 415,921 2,351,663

NET POSITION
Net Investment in Capital Assets 1,432,621 - 149,069 1,581,690 Unrestricted 4,389,973 1,174,774 (828,412) 4,736,335
Total Net Position 5,822,594 $ $ 1,323,843 (828,412) $ 6,318,025 $

CITY OF NORCO

COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION

INTERNAL SERVICE FUNDS
YEAR ENDED JUNE 30, 2023
(145)
Fleet Benefits and Information
Management Insurance Management Total

OPERATING REVENUES
Sales and Charges for Services 975,514 $ 737,349 $ 991,300 $ 2,704,163 $ Total Operating Revenues 975,514 737,349 991,300 2,704,163

OPERATING EXPENSES
General and Administrative 450,693 827,638 651,712 1,930,043 Depreciation 269,398 - 120,321 389,719
Total Operating Expenses 720,091 827,638 772,033 2,319,762 OPERATING INCOME (LOSS) 255,423 219,267 (90,289) 384,401

NONOPERATING REVENUES
Investment Earnings 73,278 13,381 18,228 104,887
Interest and Fiscal Charges - - (10,541) (10,541)
Gain on Disposal of Assets - - 250 250
Total Nonoperating Revenues 73,278 13,381 7,937 94,596
INCOME (LOSS) BEFORE TRANSFERS (76,908) 328,701 227,204 478,997 TRANSFERS IN 270,619 - - 270,619
CHANGE IN NET POSITION 599,320 227,204 (76,908) 749,616 Net Position - Beginning of Year 5,223,274 1,096,639 (751,504) 5,568,409 NET POSITION - END OF YEAR $ 5,822,594 $ 1,323,843 (828,412) $ 6,318,025 $

CITY OF NORCO

COMBINING STATEMENT OF CASH FLOWS

INTERNAL SERVICE FUNDS
YEAR ENDED JUNE 30, 2023
(146)
Fleet Benefits and Information
Management Insurance Management Total

CASH FLOWS FROM OPERATING ACTIVITIES
Cash Received from Interfund
Services Provided 975,514 $ 737,349 $ 1,011,242 $ 2,724,105 $ Cash Payments to Suppliers (503,739) (1,032,368) (396,824) (1,932,931) Cash Payments to Employees
for Services - - (253,345) (253,345)
Net Cash Provided (Used) by
Operating Activities 471,775 (295,019) 361,073 537,829

CASH FLOWS FROM NONCAPITAL FINANCING

ACTIVITIES
Transfer from Other Funds 270,619 - - 270,619
Net Cash Provided by Noncapital
Financing Activities 270,619 - - 270,619

CASH FLOWS FROM CAPITAL AND

RELATED FINANCING ACTIVITIES
Acquisition and Construction of
Capital Assets (485,901) - - (485,901)
Proceeds from Disposal of Capital Assets - - 250 250
Principal Payments - Subscription Liability (180,263) (180,263) Principal Payments - Lease - - (39,672) (39,672)
Interest and Fiscal Charges - - (10,541) (10,541)
Net Cash Used by Capital and
Related Financing Activities (485,901) - (230,226) (716,127)

CASH FLOWS FROM INVESTING ACTIVITIES
Interest Income 55,206 11,506 13,227 79,939
Net Cash Provided by Investing Activities 55,206 11,506 13,227 79,939

NET INCREASE (DECREASE) IN CASH AND
INVESTMENTS (283,513) 311,699 144,074 172,260
Cash and Investments - Beginning of Year 4,115,029 1,320,433 1,010,847 6,446,309 CASH AND INVESTMENTS - END OF YEAR $ 1,036,920 4,426,728 $ 1,154,921 $ 6,618,569 $

CITY OF NORCO

COMBINING STATEMENT OF CASH FLOWS

INTERNAL SERVICE FUNDS (CONTINUED)
YEAR ENDED JUNE 30, 2023
(147)
Fleet Benefits and Information
Management Insurance Management Total

RECONCILIATION OF OPERATING INCOME
(LOSS) TO NET CASH PROVIDED (USED)

BY OPERATING ACTIVITIES
Operating Income (Loss) 255,423 $ (90,289) $ 219,267 $ 384,401 $ Adjustments to Reconcile Operating Income (Loss)
to Net Cash Provided (Used) by Operating Activities:

Depreciation and Amortization 269,398 - 120,321 389,719 Unrealized loss on investments
(Increase) Decrease in Assets:

Accounts Receivable - - 19,942 19,942
Prepaids - - (29,418) (29,418)
Increase (Decrease) in Liabilities:

Accounts Payable and Accrued Liabilities (53,046) (167,342) 30,961 (189,427) Compensated Absences - 65,535 - 65,535
Claims and Judgements - (102,923) - (102,923)
Net Cash Provided (Used) by
Operating Activities 471,775 $ (295,019) $ 361,073 $ 537,829 $

SUPPLEMENTAL DISCLOSURES OF NONCASH

INVESTING, CAPITAL, AND FINANCING

ACTIVITIES
Purchase of Capital Assets through Subsription Liability - $ - $ 404,503 $ 404,503 $

(148)

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(149)

FIDUCIARY FUNDS

CITY OF NORCO

CUSTODIAL FUNDS DESCRIPTIONS
JUNE 30, 2023
(150)
General Trust – To account for various deposits, etc. with the City from different groups.

Waste Management – To account for collections from citizens for solid waste by the City on behalf of Waste Management, Inc. and payments made by the City to Waste Management, Inc.

Community Facilities District 97-1 – To account for receipts of assessments from Norco Hills residences and for the payment of debt service and administrative costs for the community facilities district. The bonds were issued in 2000 for the construction of various infrastructure assets.

Community Facilities District 2001-1 – To account for receipts of assessments from Norco Ridge Ranch homes and for the payment of debt service and administrative costs for the community facilities district. The bonds were issued in 2002 for the acquisition of certain public facilities and the payment of certain environmental fees.

Community Facilities District 2002-1 – To account for receipts of assessments from KB Homes residences and for the payment of debt service and administrative costs for the community facilities district. The bonds were issued in 2003 for the construction of trail improvements and a traffic signal at 6th Street and California.

CITY OF NORCO

COMBINING STATEMENT OF FIDUCIARY NET POSITION

ALL CUSTODIAL FUNDS
JUNE 30, 2023
(151)
Community Community Community Total
General Waste Facilities Facilities Facilities Custodial Trust Management District 97-1 District 2001-1 District 2002-1 Funds ASSETS
Cash and Investments 804,225 $ - $ 581,310 $ 2,482,385 $ 181,662 $ 4,049,582 $ Cash and Investments with
Fiscal Agents - - 219,033 1,397,612 - 1,616,645
Receivables, Net:

Accounts - 677,222 - - - 677,222
Interest - - 2,798 11,686 932 15,416
Due from Other Governments 156 - 7,509 53,095 1,390 62,150 Total Assets 804,381 $ 677,222 $ 810,650 $ 3,944,778 $ 183,984 $ 6,421,015 $

LIABILITIES
Accounts payable 103,487 $ 596,528 $ - $ - $ - $ 700,015 $ Deposits Payable 700,894 66,966 - - - 767,860
Due to Others - 12,263 - - - 12,263
Total Liabilities 804,381 675,757 - - - 1,480,138

NET POSITION
Restricted for:

Waste Management - 1,465 - - - 1,465
Debt service for special
assessment debt - - 810,650 3,944,778 183,984 4,939,412 Total Net Position - $ 1,465 $ 810,650 $ 3,944,778 $ 183,984 $ 4,940,877 $

CITY OF NORCO

COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION

ALL CUSTODIAL FUNDS
YEAR ENDED JUNE 30, 2023
(152)
Community Community Community Total
General Waste Facilities Facilities Facilities Custodial Trust Management District 97-1 District 2001-1 District 2002-1 Funds

ADDITIONS
Collections for Others - $ 7,147,683 $ 472,747 $ 2,431,023 $ 124,593 $ 10,176,046 $ Investment Earnings - - 8,083 7,078 2,728 17,889
Total Additions - 7,147,683 480,830 2,438,101 127,321 10,193,935

DEDUCTIONS
Payment for collections to
Waste Management - 7,146,615 - - - 7,146,615
Administration Expenses - - 43,133 84,958 17,891 145,982 Payments on Special Assessment
Debt:

Principal - - 325,000 1,170,000 72,312 1,567,312
Interest - - 99,619 1,091,500 33,197 1,224,316
Total Deductions - 7,146,615 467,752 2,346,458 123,400 10,084,225 CHANGE IN NET POSITION 1,068 - 13,078 91,643 3,921 109,710 Net Position - Beginning of the Year - 397 797,572 3,853,135 180,063 4,831,167 NET POSITION - END OF THE YEAR $ 1,465 - $ 810,650 $ 3,944,778 $ 183,984 $ 4,940,877 $

(154)

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CITY OF NORCO, CALIFORNIA

DESCRIPTION OF STATISTICAL SECTION CONTENTS
JUNE 30, 2023
(155)
This part of the City of Norco’s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City’s overall financial health.

Contents Pages
Financial Trends 156
These tables contain trend information to help the reader understand how the City’s financial performance and well-being have changed over time.

Revenue Capacity 166
These schedules contain information to help the reader assess the City’s most significant local revenue source, the property tax.

Debt Capacity 170
These schedules present information to help the reader assess the affordability of the City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future.

Demographic and Economic Information 178
These schedules offer demographic and economic indicators to help the reader understand the environment within which the City’s financial activities take place.

Operating Information 182
These schedules contain service and infrastructure data to help the reader understand how the information in the City’s financial report relates to the services the City provides and the activities it performs.

CITY OF NORCO

NET POSITION BY COMPONENT

LAST TEN FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING)
(156)
2014 2015 2016 2017 2018
Governmental activities
Invested in capital assets, net of related debt 175,021,256 $ 173,699,189 $ 176,622,650 $ 174,442,174 $ 174,890,993 $ Restricted 14,063,524 30,816,790 30,724,769 31,091,357 30,074,012 Unrestricted 4,748,301 248,067 2,515,519 3,194,792 (1,296,563) Total governmental activities net position $ 204,764,046 193,833,081 $ 209,862,938 $ 208,728,323 $ 203,668,442 $ Business-type activities
Invested in capital assets, net of related debt 32,343,900 $ 34,845,725 $ 32,641,357 $ 31,655,305 $ 32,636,095 $ Restricted 1,439,385 1,450,167 1,503,178 1,712,000 1,476,331 Unrestricted 13,165,677 14,549,779 20,575,188 24,802,130 22,717,620 Total business-type activities net position $ 50,845,671 46,948,962 $ 54,719,723 $ 58,169,435 $ 56,830,046 $ Primary Government
Net Investment in capital assets 207,365,156 $ 208,544,914 $ 209,264,007 $ 206,097,479 $ 207,527,088 $ Restricted 15,502,909 32,266,957 32,227,947 32,803,357 31,550,343 Unrestricted 17,913,978 14,797,846 23,090,707 27,996,922 21,421,057 Total primary government net position $ 255,609,717 240,782,043 $ 264,582,661 $ 266,897,758 $ 260,498,488 $ Source: City's financial statements
Fiscal Year

CITY OF NORCO

NET POSITION BY COMPONENT (CONTINUED)

LAST TEN FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING)
(157)
2019 2020 2021 2022 2023
$ 177,143,786 176,345,781 $ 176,797,895 $ 182,078,689 $ 189,484,053 $ 22,301,118 29,152,904 21,842,280 25,833,667 25,295,237
13,797,616 3,061,188 20,048,961 27,741,235 40,597,542
$ 213,242,520 208,559,873 $ 218,689,136 $ 235,653,591 $ 255,376,832 $ $ 32,451,604 38,385,618 $ 33,381,504 $ 36,596,095 $ 38,586,712 $ 137,489 2,483,441 26,475 1,830,956 493,645
31,586,101 20,722,463 34,373,885 33,870,562 35,685,503
$ 64,175,194 61,591,522 $ 67,781,864 $ 72,297,613 $ 74,765,860 $ $ 209,595,390 214,731,399 $ 210,179,399 $ 218,674,784 $ 228,070,765 $ 22,438,607 31,636,345 21,868,755 27,664,623 25,788,882
45,383,717 23,783,651 54,422,846 61,611,797 76,283,045
$ 277,417,714 270,151,395 $ 286,471,000 $ 307,951,204 $ 330,142,692 $ Fiscal Year

CITY OF NORCO

CHANGES IN NET POSITION

LAST TEN FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING)
(158)
2014 2015 2016 2017 2018
Expenses
Governmental activities:

General government 3,804,607 $ 3,970,788 $ 4,546,424 $ 5,060,194 $ 5,164,710 $ Public safety 8,508,710 8,943,161 9,570,143 9,698,034 10,585,952 Public works 3,628,672 3,769,407 4,655,515 4,631,223 4,934,050 Community development 800,996 756,389 1,276,946 1,487,998 1,624,009 Culture & leisure 2,252,157 2,252,339 2,449,518 2,640,415 2,573,716 Loss on sale of land held for resale - - - 26,630 -
Total governmental activities expenses 18,995,142 19,692,084 22,498,546 23,544,494 24,882,437 Business-type activities:

Water 9,592,836 9,138,304 9,673,588 9,209,912 11,075,924 Sewer 5,131,713 5,700,595 6,315,558 5,915,756 6,786,370 Total business-type activities expenses 14,724,549 14,838,899 15,989,146 15,125,668 17,862,294 Total primary government expenses 33,719,691 $ 34,530,983 $ 38,487,692 $ 38,670,162 $ 42,744,731 $ Program Revenues
Governmental activities:

Charges for services:

General government 2,121,089 $ 1,989,162 $ 2,069,324 $ 2,127,348 $ 2,302,669 $ Public safety 766,645 812,963 855,169 891,368 927,629
Streets & highways 855,941 878,190 938,429 927,983 929,602 Community & economic development 641,982 758,593 940,048 1,146,162 1,094,604 Culture & leisure 772,172 734,141 756,341 721,995 756,965 Operating grants and contributions 1,866,913 1,832,271 1,596,119 1,438,753 1,804,315 Capital grants and contributions 5,068,039 1,402,527 5,064,800 1,417,227 2,040,545 Total governmental activities program revenues 12,092,781 8,407,847 12,220,230 8,670,836 9,856,329 Business-type activities:

Charges for services:

Water 9,808,472 8,960,772 8,353,699 11,102,037 12,144,054 Sewer 5,546,893 5,857,823 6,296,636 7,065,681 7,491,015 Capital grants and contributions 825,000 - 4,350,067 - - Total business-type activities program revenues 16,180,365 14,818,595 19,000,402 18,167,718 19,635,069 Total program government program revenues 28,273,146 $ 23,226,442 $ 31,220,632 $ 26,838,554 $ 29,491,398 $ Net(Expense)/Revenue
Governmental activities (6,902,361) $ (11,284,237) $ (10,278,316) $ (14,873,658) $ (15,026,108) $ Business-type activities 1,455,816 (20,304) 3,011,256 3,042,050 1,772,775 $ (11,304,541) (5,446,545) $ (7,267,060) $ (11,831,608) $ (13,253,333) $ Source: City's financial statements
Fiscal Year

CITY OF NORCO

CHANGES IN NET POSITION (CONTINUED)

LAST TEN FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING)
(159)
2019 2020 2021 2022 2023
$ 5,752,506 5,260,115 $ 6,590,791 $ 9,639,441 $ 11,844,526 $ 11,653,805 10,850,324 11,842,671 10,991,835 9,311,309
5,934,482 5,669,159 5,167,004 8,627,523 6,061,498
1,546,406 1,602,171 2,110,070 1,974,201 1,693,448
3,236,433 2,726,047 3,000,679 2,637,799 2,579,824
- - - - -
28,123,632 26,107,816 28,711,215 33,870,799 31,490,605
12,699,537 10,688,780 11,325,678 12,368,339 11,821,081
7,134,484 7,222,648 6,397,952 7,740,315 6,335,901
19,834,021 17,911,428 17,723,630 20,108,654 18,156,982
$ 47,957,653 44,019,244 $ 46,434,845 $ 53,979,453 $ 49,647,587 $ $ 2,417,671 2,396,727 $ 2,180,587 $ 2,082,234 $ 2,426,873 $ 1,005,055 1,011,589 1,088,710 1,130,231 1,107,141
1,148,038 1,231,104 933,850 983,499 1,412,390
1,217,777 1,309,354 1,520,456 3,003,618 2,227,596
529,898 759,020 230,472 1,294,904 1,345,245
2,113,841 2,251,013 2,407,654 3,124,093 2,847,772
2,007,911 4,457,879 147,472 6,297,305 5,090,952
10,440,191 13,416,686 8,509,201 17,915,884 16,457,969
13,282,918 12,974,480 13,660,048 13,746,965 12,424,207
8,324,845 8,824,907 7,469,592 9,769,632 7,387,390
122,408 - 12,599 1,931,129 170,421
21,730,171 21,799,387 21,142,239 25,447,726 19,982,018
$ 32,170,362 35,216,073 $ 29,651,440 $ 43,363,610 $ 36,439,987 $ $ (17,683,441) (12,691,130) $ (20,202,014) $ (15,954,915) $ (15,032,636) $ 1,896,150 3,887,959 3,418,609 5,339,072 1,825,036
$ (15,787,291) (8,803,171) $ (16,783,405) $ (10,615,843) $ (13,207,600) $ Fiscal Year

CITY OF NORCO

CHANGES IN NET POSITION (CONTINUED)

LAST TEN FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING)
(160)
General Revenues and Other Changes in
Net Position
Governmental activities: 2014 2015 2016 2017 2018
Taxes:

Property tax, levied for general purpose 1,588,228 $ 1,739,484 $ 1,656,163 $ 4,062,986 $ 4,364,143 $ Transient occupancy tax 295,641 427,260 519,548 561,766 586,369 Franchise tax 1,056,967 1,221,453 1,334,588 1,400,636 1,561,383 Sales tax in lieu 1,381,708 1,409,297 1,213,148 - -
Motor vehicle in lieu tax 2,040,184 2,138,532 2,258,119 12,124 14,246 Intergovernmental - Sales tax 4,308,901 4,603,115 5,613,795 6,837,653 7,188,921 Public service taxes 331,386 361,320 360,712 363,347 401,258 Gain/(Loss) on sale of capital assets - 190 110 - -
Unrestricted investment earnings(losses) 30,844 35,902 69,619 100,009 252,510 Contributions from other agency - 53,809 - - -
Intergovernmental 16,688 140,930 124,047 125,420 125,937 Special Item - Transfer of Assets to Housing
Successor Agency - 17,767,484 - - -
Special Item - Sale of Donated Item - 3,086,508 - - -
Transfers 271,876 276,652 276,568 275,102 258,204
Total governmental activities 11,322,423 33,261,936 13,426,417 13,739,043 14,752,971 Business-type activities:

Unrestricted investment earnings(losses) 74,856 148,249 619,897 682,764 797,610 Special Item - Sale of Donated Item - 6,778,143 - - -
Transfers (271,876) (276,652) (276,568) (275,102) (258,204) Total business-type activities (197,020) 6,649,740 343,329 407,662 539,406 Total primary government 11,125,403 $ 39,911,676 $ 13,769,746 $ 14,146,705 $ 15,292,377 $ Change in Net Position
Governmental activities 4,420,062 $ 21,977,699 $ 3,148,102 $ (1,134,615) $ (273,137) $ Business-type activities 1,258,796 6,629,436 3,354,585 3,449,712 2,312,181 Total primary government 5,678,858 $ 28,607,135 $ 6,502,687 $ 2,315,097 $ 2,039,044 $ Source: City's financial statements
Fiscal Year

CITY OF NORCO

CHANGES IN NET POSITION (CONTINUED)

LAST TEN FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING)
(161)
(Continued)
2019 2020 2021 2022 2023
$ 5,071,222 4,703,051 $ 5,157,673 $ 5,408,797 $ 6,103,888 $ 615,989 609,036 741,248 1,057,978 1,154,480
1,751,200 1,674,490 1,863,816 2,025,163 2,128,390
- - - - -
21,419 12,990 20,216 31,265 27,326
13,173,182 9,359,520 16,460,577 20,376,348 19,916,654
413,789 399,734 518,358 604,599 512,318
- - - -
564,198 445,846 38,841 (553,147) 1,011,976
- - - -
496,885 119,690 589,697 3,003,453 3,615,015
- - - -
- - - -
258,204 258,204 258,204 266,905 285,830
22,366,088 17,582,561 25,648,630 32,221,361 34,755,877
945,726 1,131,721 162,751 (115,150) 929,041
- - -
(258,204) (258,204) (258,204) (266,905) (285,830)
687,522 873,517 (95,453) (382,055) 643,211
$ 23,053,610 18,456,078 $ 25,553,177 $ 31,839,306 $ 35,399,088 $ $ 6,411,173 4,891,431 $ 5,446,616 $ 16,266,446 $ 19,723,241 $ 6,026,594 4,761,476 3,323,156 4,957,017 2,468,247
$ 12,437,767 9,652,907 $ 8,769,772 $ 21,223,463 $ 22,191,488 $ Fiscal Year

CITY OF NORCO

FUND BALANCES

GOVERNMENTAL FUNDS

LAST TEN FISCAL YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
(162)
2014 2015 2016 2017 2018
General Fund
Nonspendable - $ 2,883,058 $ 3,746,499 $ 3,634,919 $ 3,404,066 $ Restricted 3,923,015 1,725,254 229,659 528,820 671,779
Committed - - - - -
Unassigned 2,238,434 7,841,852 10,083,161 11,250,211 11,718,584 Total general fund 6,161,449 12,450,164 14,059,319 15,413,950 15,794,429 Housing Successor Agency
Restricted 17 - 17 ,799,129 17 ,648,086 ,461,190 17,303,845 Total housing successor agency - 17,799,129 17,648,086 17,461,190 17,303,845 All Other Governmental Funds
Nonspendable: 3,750 - 6,000 - -
Restricted:

Public Safety - - - - -
Streets and Highways 3,902,507 4,886,148 4,137,649 4,009,389 2,818,550 Community and Economic Development 111,247 95,441 138,391 147,822 133,742 Culture and Leisure - - - - -
Committed:

Emergencies 498,231 - - - -
Assigned:

General Government 1,510,554 - - - -
Public Safety 562,135 591,096 608,091 661,499 680,053
Streets and Highways 2,939,221 3,041,586 3,579,381 3,875,674 3,813,411 Culture and Leisure 1,166,786 767,184 632,122 622,612 757,526 Unassigned:

Public Safety - - - (1,314) -
Streets and Highways (15,004) (357,529) (17,873) (26,054) (47,420) Community and Economic Development - - - - (55,288)
Total all other governmental funds 10,679,427 9,023,926 9,083,761 9,289,628 8,100,574 Total all governmental funds 16,840,876 $ 39,273,219 $ 40,791,166 $ 42,164,768 $ 41,198,848 $ Source: City's financial statements
Fiscal Year

CITY OF NORCO

FUND BALANCES (CONTINUED)

GOVERNMENTAL FUNDS

LAST TEN FISCAL YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
(163)
2019 2020 2021 2022 2023
$ 2,459,280 2,591,357 $ 2,325,075 $ 2,183,784 $ 2,065,474 $ 124,578 133,326 115,657 2,111,067 2,358,746
4,614,689 7,527,137 9,925,562 12,607,576 14,025,552
17,455,468 9,877,022 19,949,630 27,463,836 30,368,537
24,654,015 20,128,842 32,315,924 44,366,263 48,818,309
17,060,012 17,172,128 16,778,372 16,591,918 16,640,503
17,060,012 17,172,128 16,778,372 16,591,918 16,640,503
2,500 - 2,500 3,000 -
730,431 757,999 693,301 811,770 682,008
3,674,845 4,640,824 3,845,515 4,619,778 3,674,845
1,270,883 142,050 216,641 243,756 290,723
290,723 823,111 683,284 951,925 1,270,883
- - - - -
- - - - -
- - - - -
- - - - -
- - - - -
- - - - -
(35,528) (222,280) (38,811) (146,894) (10,354)
(374,396) (5,428) - - -
5,559,458 6,136,276 5,402,430 6,483,335 5,908,105
$ 47,273,485 43,437,246 $ 54,496,726 $ 67,441,516 $ 71,366,917 $ Fiscal Year

CITY OF NORCO

CHANGES IN FUND BALANCES

GOVERNMENTAL FUNDS

LAST TEN FISCAL YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
(164)
2014 2015 2016 2017 2018
Revenues
Taxes 11,606,683 $ 12,536,053 $ 13,599,492 $ 13,923,344 $ 14,861,023 $ Assessments 769,133 801,315 776,231 736,112 703,369
Licenses and permits 518,126 556,985 670,979 789,382 750,245 Fines and forfeitures 408,066 439,590 430,596 346,048 499,446 Development fees 23,571 270,977 250,418 846,664 178,282 Intergovernmental 6,185,123 1,910,287 2,238,833 1,262,117 2,883,189 Charges for services 2,889,825 2,641,613 2,962,066 3,098,643 2,976,824 Investment earnings (losses) and lease income 526,069 539,448 680,581 800,900 1,042,306 Reimbursements 115,286 13,281 127,277 - 71,432
Other 51,368 196,275 153,021 220,160 263,294
Total revenues 23,093,250 19,905,824 21,889,494 22,023,370 24,229,410 Expenditures
Current:

General government 3,719,499 3,828,322 4,396,554 4,839,346 5,155,987 Public safety 8,314,657 8,807,419 9,339,313 9,559,983 10,526,624 Streets and highways 4,305,486 2,628,850 4,438,203 3,071,423 5,442,522 Community and economic development 830,309 790,798 1,251,035 1,408,931 1,633,480 Culture and leisure 2,217,201 2,548,736 1,871,207 2,018,557 2,649,142 Debt Service
Principal - - - - -
Interest - - - - -
Capital outlay
Speciap Assessment - - 805,000 26,630 45,779
Other - - - - -
Total expenditures 19,387,152 18,604,125 22,101,312 20,924,870 25,453,534 Excess(deficiency) of revenues
over(under) expenditures 3,706,098 1,301,699 (211,818) 1,098,500 (1,224,124) Other Financing Sources (Uses)
Lease Proceeds - - - - -
Subscription Liability Proceeds - - - - -
Proceeds from the sale of property - - - - -
Transfers in 871,061 355,571 380,571 479,281 890,498
Transfers out (742,269) (78,919) (104,003) (204,179) (632,294) Bond/Loan Proceeds - - - - -
Total other financing sources (uses) 128,792 276,652 276,568 275,102 258,204 Special Item
Transfer of assets to successor housing agency - 17,767,484 - - - Sale of donated assets - 3,086,508 - - -
20,853,992 - - - -
Net change in fund balances 3,834,890 $ 22,432,343 $ 64,750 $ 1,373,602 $ (965,920) $ Debt service as a percentage
of noncapital expenditures 0.00% 0.00% 0.00% 0.00% 0.00% Source: City's financial statements
Fiscal Year

CITY OF NORCO

CHANGES IN FUND BALANCES (CONTINUED)

GOVERNMENTAL FUNDS

LAST TEN FISCAL YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
(165)
2019 2020 2021 2022 2023
$ 21,847,687 17,592,048 $ 25,769,374 $ 30,612,573 $ 30,938,594 $ 751,608 698,499 779,905 788,192 838,662
795,991 946,402 1,279,186 2,608,829 1,998,851
513,918 497,029 727,315 593,357 772,981
493,303 2,014,321 62,717 5,657,076 545,416
3,971,705 3,132,740 2,849,251 5,068,404 10,059,259
3,074,413 3,311,339 2,771,734 4,003,280 3,543,095
1,354,353 1,429,531 409,776 (309,021) 2,006,456
196,165 10,504 11,263 4,956 203,833
203,238 362,391 123,299 685,096 169,419
33,202,381 29,994,804 34,783,820 49,712,742 51,076,566
6,052,709 5,464,926 6,593,217 10,666,317 12,465,010
11,706,532 11,037,921 11,440,255 10,097,288 11,034,098
6,466,151 7,957,631 4,248,556 6,665,225 9,878,316
1,570,339 1,641,538 2,072,422 1,858,797 1,964,611
2,500,633 2,431,862 2,435,751 3,247,813 3,321,462
- - - - 34,255
- - - - 575
1,755,564 - 1,454,185 5,193,726 6,417,810
- - - 3,700 2,185,653
30,051,928 28,533,878 28,244,386 37,732,866 47,301,790
3,150,453 1,460,926 6,539,434 11,979,876 3,774,776
- - - - 94,280
- - - - 41,134
10,600 - 802,585 - -
377,520 432,466 258,204 286,283 259,705
(79,316) (174,262) - (19,378) (244,494)
- 519,268 - - -
308,804 777,472 1,060,789 266,905 150,625
- - - - -
- - - - -
- - - - -
$ 3,459,257 2,238,398 $ 7,600,223 $ 12,246,781 $ 3,925,401 $

0.00% 0.00% 0.00% 0.00% 0.00%
Fiscal Year

CITY OF NORCO

ASSESSED VALUE AND ACTUAL VALUE OF TAXABLE PROPERTY

LAST TEN FISCAL YEARS
(IN THOUSANDS)
(166)
Fiscal Total
Year Total Taxable Direct
Ended Secured Unsecured Assessed Tax
June 30, Property Property Value Rate
2014 2,552,367 $ 67,135 2,619,502 1.00000%
2015 2,683,938 63,072 2,747,010 1.00000%
2016 2,837,928 63,889 2,901,817 1.00000%
2017 2,944,477 70,594 3,015,071 1.00000%
2018 3,077,573 72,189 3,149,762 1.00000%
2019 3,267,723 81,622 3,349,345 1.00000%
2020 3,447,467 78,050 3,525,517 1.00000%
2021 3,619,573 83,988 3,703,561 1.00000%
2022 3,829,904 85,129 3,915,033 1.00000%
2023 4,201,767 107,416 4,309,183 1.00000%
Source: Riverside County Office of Auditor-Controller

CITY OF NORCO

DIRECT AND OVERLAPPING PROPERTY TAX RATES

LAST TEN FISCAL YEARS
(RATE PER $100 OF ASSESSED VALUE)
(167)
City Direct Rates Overlapping Rates
Corona/Norco
Unified Metro
Fiscal Basic Total School Water
Year Rate Direct District District
2014 1.00000% 1.00000% 0.06844% 0.00350%
2015 1.00000% 1.00000% 0.06473% 0.00350%
2016 1.00000% 1.00000% 0.08540% 0.00350%
2017 1.00000% 1.00000% 0.09416% 0.00350%
2018 1.00000% 1.00000% 0.08313% 0.00350%
2019 1.00000% 1.00000% 0.09034% 0.00350%
2020 1.00000% 1.00000% 0.09387% 0.00350%
2021 1.00000% 1.00000% 0.09818% 0.00350%
2022 1.00000% 1.00000% 0.09914% 0.00350%
2023 1.00000% 1.00000% 0.09925% 0.00350%
Source: Riverside County Office of Auditor-Controller

CITY OF NORCO

PRINCIPAL PROPERTY TAX PAYERS

CURRENT YEAR AND NINE YEARS AGO
(168)
Percentage Percentage
of Total City of Total City
Taxable Taxable Taxable Taxable
Assessed Assessed Assessed Assessed
Value Rank Value Value Rank Value
Saddle Ranch APG LLC 114,000,000 $ 1 2.64%
CRPF IV Elwood 44,440,663 2 1.03%
LDK Norco* 34,273,708 3 0.79%
LBA Or Core-Co XII 31,000,000 4 0.72%
Parkridge Realty Partners 28,250,000 5 0.66%
Norco Corona Associates* 20,965,913 6 0.49% 17,773,787 1 0.68% Life Storage LP 18,778,663 7 0.44%
Yihua International Investment 17,230,950 8 0.40% 14,849,134 2 0.57% Target Corporation* 17,222,537 9 0.40%
CRP LDF Saddle Ranch II LLC 16,320,000 10 0.38%
Dayton Hudson Corp 13,021,030 3 0.50%
H/H Properties 12,694,027 4 0.48%
Rbe Norco Hidden Valley LLC 12,624,647 5 0.48%
Grayburn Prop Inc 9,877,000 6 0.38%
WinCo Food LLC 9,619,389 7 0.37%
1900 Prop 8 9,518,176 0.36%
Rexco Norco 8,612,334 9 0.33%
140 Hidden Valley Parkway 8,230,000 10 0.31%
$ 7.95% 116,819,524 342,482,434 $ 4.46%
* Pending Appeals on Parcels
Source: HDL 22-23 Property data - Preliminary Property Tax Reports Top ten property taxpayers
2023 2014

CITY OF NORCO

PROPERTY TAX LEVIES AND COLLECTIONS

LAST TEN FISCAL YEARS
(169)
Fiscal Collected within the
Year Taxes Levied Fiscal Year of the Levy Collections Total Collections to Date Ended for the Percentage in Subsequent Percentage
June 30, Fiscal Year Amount of Levy Years Amount of Levy 2014 1,178,361 1,127,309 95.7% 51,578 1,178,887 100.0%
2015 1,237,395 1,192,560 96.4% 46,470 1,239,030 100.1%
2016 1,290,343 1,245,895 96.6% 37,237 1,283,132 99.4%
2017 1,332,220 1,298,564 97.5% 34,062 1,332,626 100.0%
2018 1,378,552 1,346,180 97.7% 32,572 1,378,752 100.0%
2019 1,455,419 1,426,216 98.0% 42,058 1,468,274 100.9%
2020 1,539,793 1,490,634 96.8% 35,406 1,526,040 99.1%
2021 1,566,020 1,528,417 97.6% 42,088 1,570,505 100.3%
2022 1,626,690 1,593,434 98.0% 58,253 1,651,687 101.5%
2023 1,717,650 1,556,760 90.6% 103,010 1,659,770 96.6%
Source: Riverside County Office of Auditor-Controller
Note: The amounts collected in the subsequent years column reflects a combination of collections from multiple prior fiscal years and cannot be separated readily for the purpose of this schedule. Also, the taxes collected during the different fiscal years includes supplemental taxes that may not have been picked up in the original levy. For these reasons, the collection percentage for the various fiscal years is exceeding the amount levied by more than 100%.

CITY OF NORCO

RATIOS OF OUTSTANDING DEBT BY TYPE

LAST TEN FISCAL YEARS
(DOLLARS IN THOUSANDS, EXCEPT PER CAPITA)
(170)
Business-Type Activities
Term Term
Fiscal Loan Loan
Year Payable Bonds Payable
2014 8 $ - $ 291 $ 35,485 $ - $ - $ 839
2015 - - 199 34,801 - - 986
2016 - - 102 34,093 - - 3,533
2017 - - - 33,354 - - 5,585
2018 - - - 32,585 - - 6,542
2019 - - - 31,777 - - 6,446
2020 - - - 44,239 - - 6,175
2021 - - - 42,901 - - 5,884
2022 169 - - 41,258 28 - 5,588
2023 199 256 - 40,105 22 108 5,285
Note: Details regarding the City's outstanding debt can be found in the notes to the City's financial statements. **data not available
1 U.S. Department of Commerce, Bureau of Economic Analysis for Riverside County Leases
Payable
Leases
Payable
Governmental Activities
Subscription
Liability
Subscription
Liability

CITY OF NORCO

RATIOS OF OUTSTANDING DEBT BY TYPE (CONTINUED)

LAST TEN FISCAL YEARS
(DOLLARS IN THOUSANDS, EXCEPT PER CAPITA)
(171)
Total Percentage Percentage
Primary of Personal of Assessed Per
Government Capita Valuation Capita
1 5% 1.40% 1,378 36,623
5% 1.31% 1,330 35,986
10% 1.30% 1,403 37,728
** 1.29% 1,435 38,939
** 1.24% 1,459 39,127
** 1.14% 1,436 38,223
** 1.43% 1,829 50,414
** 1.32% 1,834 48,785
** 1.20% 1,804 47,043
** 1.07% 1,836 45,975

CITY OF NORCO

RATIOS OF GENERAL BONDED DEBT OUTSTANDING

LAST TEN FISCAL YEARS
(DOLLARS IN THOUSANDS, EXCEPT PER CAPITA)
(172)
Net Percentage of
General Debt General Actual Taxable
Fiscal Obligation Service Bonded Value of Per
Year Bonds(1) Reserve Debt Property Capita(2)
2014 - $ - $ - $ 0.00% - $
2015 - - - 0.00% -
2016 - - - 0.00% -
2017 - - - 0.00% -
2018 - - - 0.00% -
2019 - - - 0.00% -
2020 - - - 0.00% -
2021 - - - 0.00% -
2022 - - - 0.00% -
2023 - - - 0.00% -
(1) The City has no general obligation bonded debt for last ten fiscal years. (2) See population data in schedule of "Demographic and Economics Statistics".

Note: Details regarding the City's outstanding debt can be found in the notes to the City's financial statements.

CITY OF NORCO

DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
JUNE 30, 2023
(173)
2022-23 Assessed Valuation: 4,309,183,446 $
Direct and Overlapping Tax and Assessment Debt: % Applicable (1) Debt Metropolitan Water District 0.119 % 22,866 $
Riverside City Community College District 3.099 9,026,594 Alvord Unified School District 0.002 5,354
Corona-Norco Unified School District 9.344 45,226,074
City of Norco 100.000 -
City of Norco Community Facilities District No. 97-1 100.000 2,990,000 City of Norco Community Facilities District No. 2001-1 100.000 21,245,000 City of Norco Community Facilities District No. 2002-1 100.000 812,938 Lease Payable 100.000 198,719
Subscription Liability 100.000 255,685
Total Direct and Overlapping Tax and Assessment Debt 79,783,230 $ Overlapping General Fund Debt:

Riverside County General Fund Obligations 1.190 % 8,172,644 $ Riverside County Pension Obligations 1.190 8,907,626
Riverside Community College District Certificates of Participation 3.099 760,805 Western Municipal Water District Certificates of Participation 3.701 150,818 Corona-Norco Unified School District Certificates of Participation 9.344 1,814,755 Total Overlapping General Fund Debt $ 19,806,648
Overlapping Tax Increment Debt (Successor Agencies): 0.069 - 99.984 % 57,891,646 $ Total Direct Debt $ -
Total Overlapping Debt $ 157,481,524
Combined Total Debt $ (2) 157,481,524
(1) The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value. Applicable percentages were estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the city divided by the district's total taxable assessed value.
(2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease obligations.

Qualified Zone Academy Bonds are included based on principal due at maturity.

Ratios to 2022-23 Assessed Valuation:

Total Direct and Overlapping Tax and Assessment Debt 1.84% Total Direct Debt 0.00%
Combined Total Debt 3.64%
Ratios to Redevelopment Incremental Valuation ($2,566,611,392):

Total Overlapping Tax Increment Debt 2.26%
Source: Avenu Insights & Analytics
California Municipal Statistics, Inc.

CITY OF NORCO

LEGAL DEBT MARGIN INFORMATION

LAST TEN FISCAL YEARS
(DOLLARS IN THOUSANDS)
(174)
2014 2015 2016 2017 2018
Debt limit 412,052 $ 412,052 $ 452,261 $ 452,261 $ 472,464 $ Total net debt applicable to limit - - - - -
Legal debt margin 412,052 $ 412,052 $ 452,261 $ 452,261 $ 472,464 $ Total net debt applicable to the limit
as a percentage of debt limit 0.00% 0.00% 0.00% 0.00% 0.00% Source: City Finance Department
(1) The City has no general obligation bonded debt for last ten fiscal years.

Fiscal Year
(1)

CITY OF NORCO

LEGAL DEBT MARGIN INFORMATION (CONTINUED)

LAST TEN FISCAL YEARS
(DOLLARS IN THOUSANDS)
(175)
2019 2020 2021 2022 2023
$ 528,828 502,402 $ 555,534 $ 587,255 $ 646,378 $
- - - - -
$ 528,828 502,402 $ 555,534 $ 587,255 $ 646,378 $

0.00% 0.00% 0.00% 0.00% 0.00%
Assessed value 4,309,183 $
Debt limit (15% of assessed value) 646,378
Debt applicable to limit:

General obligation bonds -
Less: Amount set aside for
repayment of general obligation debt -
Total net debt applicable to limit -
Legal debt margin 646,378 $
Fiscal Year

CITY OF NORCO

PLEDGED-REVENUE COVERAGE

LAST TEN FISCAL YEARS
(DOLLARS IN THOUSANDS)
(176)
Utility Less: Net
Fiscal Service Operating Available
Year Charges Expenses(1) Revenue Principal Interest Coverage 2014 15,355 $ 10,492 $ 4,863 $ 670 $ 1,945 $ 1.86
2015 14,819 10,459 4,360 700 1,917 1.67
2016 14,650 11,474 3,176 725 1,889 1.21
2017 18,168 10,389 7,779 755 1,858 2.98
2018 19,635 12,974 6,661 785 1,822 2.56
2019 21,799 12,770 9,029 825 1,782 3.46
2020 21,172 13,996 7,176 870 1,740 2.75
2021 21,130 12,957 8,173 1,010 1,605 3.13
2022 23,517 15,633 7,884 1,045 1,569 3.02
2023 19,812 13,522 6,290 1,095 1,526 2.40
Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. (1) Operating expenses do not include depreciation, or amortization expenses.

Utility Revenue Bonds
Debt Service
(2) The City is not liable for Special Assessment District or Community Facility District defaults; collections and remittances are accounted in an agency fund.
(3) The Bonds are limited obligation of the Successor Agency. (4) The Dept. of Finance approves the Recognized Obligation Payment Schedule, and the city receives payments from County of Riverside beginning fiscal year 2012.

CITY OF NORCO

PLEDGED-REVENUE COVERAGE (CONTINUED)

LAST TEN FISCAL YEARS
(DOLLARS IN THOUSANDS)
(177)
Special Redevelopment
Assessment Property
Collections Principal Interest Coverage Tax Principal Interest Coverage $ 1,386 3,161 $ 2,011 $ 0.93 7,001 (4) $ 4,823 2,335 $ 0.98 1,134 3,307 1,977 1.06 6,781 (4) 3,537 2,205 1.18
1,213 3,370 1,932 1.07 7,251 (4) 4,222 2,535 1.07
1,319 3,220 1,882 1.01 7,243 (4) 4,130 2,915 1.03
1,419 3,344 1,371 1.20 6,999 (4) 3,701 2,880 1.06
2,345 3,014 1,447 0.79 6,770 (4) 3,169 2,950 1.11
1,286 2,883 1,388 1.08 6,044 (4) 3,040 2,990 1.00
1,370 3,009 1,342 1.11 6,644 (4) 2,725 3,460 1.07
1,464 3,019 1,288 1.10 6,668 (4) 2,791 3,230 1.11
1,567 3,028 1,224 1.08 6,520 (4) 1,881 3,360 1.24
Special Assessment Bonds(2) Successor Agency Bonds (3)
Debt Service Debt Service

CITY OF NORCO

DEMOGRAPHIC AND ECONOMIC STATISTICS

LAST TEN CALENDAR YEARS
(178)
Personal Per Capita
Estimated Income Personal School Unemployment
Year Population(1) (in thousands)(2) Income(3) Enrollment(4) Rate(5) 2014 26,582 711,000 85,142 53,816 7
2015 27,063 767,453 88,051 53,618 6
2016 26,896 823,340 87,067 53,354 5
2017 27,143 ** ** 53,157 5
2018 26,809 ** ** 53,294 4
2019 26,610 ** ** 53,002 4
2020 27,564 ** ** 52,557 4
2021 26,604 ** ** 51,318 5
2022 26,077 ** ** 50,889 4
2023 25,042 ** ** 50,790 5
Sources:
(1) State Department of Finance, Demographic Research Unit (2) Estimated based on "Per Capita Personal Income".
(3) U.S. Department of Commerce, Bureau of Economic Analysis for Riverside County (4) Enrollment data for Corona Norco Unified School District obtained from the California State Department of Education. (5) State Employment Development Department, Labor Market Information Division. ** data not available

CITY OF NORCO

PRINCIPAL EMPLOYERS

CURRENT YEAR AND NINE YEARS AGO
(179)
2023 2014
Percentage Percentage
of Total City of Total City
Employer Employees Rank Employment(1) Employees Rank Employment(1) Naval Surface Warfare Center (NSWC) ‐ Corona* 1,895               15.16% 1,300 1 2 9.49% Corona‐Norco Uni fied School District 1,214               9.71% 4,632 2 1 33.81% California Rehabilitation Center (CRC) ‐ CDCR 1,173               9.38% 1,147 3 3 8.37% Norco College (RCCD) 467                  3.74% 391 4 4 2.85% Target Stores** 179                  1.43% 186 5 5 1.36% Quick Crete Products (QCP) 157                  1.26% 145 6 6 1.06% Winco Foods** 120                  0.96% 145 7 7 1.06%
E‐Z Up Instant Shelters 114                  0.91% 110 8 8 0.80% Stater Bros. Markets** 108                  0.86% 9
Hemborg Ford, Inc. 108                  0.86% 100 10 9 0.73% Keller Williams Realty 10 98 0.72%
Total 5,535 44.28% 8,254 60.25%
Total City Labor Force (1) 12,500
Source:  MuniServices / Avenu Insights & Analytics
Source: 2014 based on previously published ACFR
Results based on direct correspondence with city’s local businesses. * Business has not responded to Avenu's inquires, previous year count applied. ** Includes full & part time employees.
(1) Total Ci ty Labor Force provided by EDD Labor Force Data.

CITY OF NORCO

FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES

BY FUNCTION/PROGRAM

LAST TEN FISCAL YEARS
(180)
2014 2015 2016 2017 2018
Function/Program
General government
Administration 1 1 1 2 2
City Clerk 2 2 2 2 2
Finance 10 10 11 12 12
Human Resources 1 1 1 1 1
Public Safety
Police (Civilian) 1 1 1 1 1
Code Enforcement 1 1 1 1 1
Animal Services 3 3 3 2 3
Infrastructure
Facilities & Maintenance 0 0 0 0 0
Public Works 15 14 13 12 15
Culture and leisure
Community Services 8 8 8 10 10
Community development
Planning 2 2 2 2 2
Engineering 1 2 2 3 3
Building 2 2 3 3 3
Total 47 47 48 51 55
Source: City's annual adopted budgets
Full-time Equivalent Employees as of June 30

CITY OF NORCO

FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES

BY FUNCTION/PROGRAM (CONTINUED)

LAST TEN FISCAL YEARS
(181)
2019 2020 2021 2022 2023
23236
22333
12 12 10 11 12
11111
11111
11222
33444
0 0 0 0 13
15 15 18 18 18
10 10 14 14 9
22234
33344
33333
56 55 63 67 80
Full-time Equivalent Employees as of June 30

CITY OF NORCO

OPERATING INDICATORS BY FUNCTION/PROGRAM

LAST TEN FISCAL YEARS
(182)
2014 2015 2016 2017 2018
Function/Program
Police
UCR Crime index total 628 709 752 850 707
Traffic collisions 528 556 603 674 608
Traffic violations 1,388 2,436 1,869 2,031 2,175
Fire
Total number of responses 1,996 2,287 2,419 2,443 2,515 Fires extinguished 64 53 57 62 75
Water
Number of service connections 7,451 7,471 7,475 7,481 7,485 Average daily consumption (in mil. of gallons) 8 8 5 6 6 Max. daily (groundwater wells) capacity (in mil. of gallons) 8 8 8 5 5 Max. daily import capacity (in mil. of gallons) 12 12 12 12 12 Storage capacity (in mil. of gallons) 11 11 11 11 11
Sewer
Number of sewer connections 6,866 6,897 6,913 6,954 6,972 Average daily treatment (in mil. of gallons) 2 2 2 2 2
Max. daily capacity of treatment plans (in mil. of gallons) 2 2 2 3 2 Source: Various City's departments
Fiscal Year

CITY OF NORCO

OPERATING INDICATORS BY FUNCTION/PROGRAM (CONTINUED)

LAST TEN FISCAL YEARS
(183)
2019 2020 2021 2022 2023
682 732 631 715 757
502 618 482 558 516
2,770 2,384 2,721 3,168 2,977
2,602 2,520 2,799 3,025 2,930
67 67 109 87 58
7,650 7,468 7,476 7,471 7,488
6 6 6 6 6
5 5 5 5 6
12 12 9 9 9
11 11 14 14 14
6,970 6,969 6,963 6,963 6,963
2 2 2 2 2
3 3 3 3 3
Fiscal Year

CITY OF NORCO

CAPITAL ASSETS BY FUNCTION/PROGRAM

LAST TEN FISCAL YEARS
(184)
2014 2015 2016 2017 2018
Function/Program
Parks 15 15 15 15 15
Park Acreage 168 168 168 168 168
Open Space Acreage 835 835 835 835 835
Tennis court 1 1 1 1 1
Community center 1 1 1 1 1
Public playgrounds/Tot lots 9 9 9 9 9
Water
Water mains (miles) 102 103 103 103 117
Fire hydrants 1,282 1,297 1,363 1,400 1,415
Sewer
Sanitary sewers (miles) 92 92 92 97 105
Treatment plant 1 1 1 1 1
Source: Various City's departments
Fiscal Year

CITY OF NORCO

CAPITAL ASSETS BY FUNCTION/PROGRAM (CONTINUED)

LAST TEN FISCAL YEARS
(185)
2019 2020 2021 2022 2023
15 15 15 15 15
168 168 168 168 168
835 835 835 835 835
1 1 1 1 1
1 1 1 1 1
9 9 9 9 9
117 114 122 122 122
1,393 1,443 1,394 1,406 1,406
104 104 107 109 109
1 1 1 1 1
Fiscal Year

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Honorable Mayor and Members
City Council
City of Norco
Norco, California
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of City of Norco (City) as of and for the year ended June 30, 2023, and have issued our report thereon dated November 30, 2023. We have previously communicated to you information about our responsibilities under auditing standards generally accepted in the United States of America, Government Auditing Standards, and Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), as well as certain information related to the planned scope and timing of our audit in our audit agreement dated May 15, 2023. Professional standards also require that we communicate to you the following information related to our audit. related to our audit.

Significant audit findings or issues
Qualitative aspects of accounting practices
Accounting policies
Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by City of Norco are described in Note 1 to the financial statements.

As described in Note 1, the City changed accounting policies related to subscription-based information technology arrangements (SBITA) by adopting Statement of Governmental Accounting Standards Board (GASB Statement) No. 96, Subscription-Based Information Technology Arrangements, effective July 1, 2022. Accordingly, the cumulative effect of the accounting change did not result in a change of the beginning balance of net position for the current fiscal year.

We noted no transactions entered into by the entity during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period.

Accounting estimates
Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimate(s) affecting the financial statements was (were):
 The annual required contributions, pension expense, net pension liability, and corresponding deferred outflows of resources and deferred inflows of resources for the City’s cost sharing employer defined benefit pension plans are based on actuarial valuations provided by California Public Employee Retirement System actuaries and for the City’s single employer defined benefit pension plan are based on an actuarial valuation provided by a third-party actuary.

Honorable Mayor and Members
City Council
City of Norco

 The other postemployment benefits (OPEB) expense and total OPEB liability, and corresponding deferred outflows of resources and deferred inflows of resources for the City’s OPEB plan are based on an actuarial valuation provided by a third-party actuary.

We evaluated the key factors and assumptions used to develop these estimated in determining that they reasonable in relation to the financial statements taken as a whole.

Financial statement disclosures
Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the financial statements were Note 5 for the City’s pension plans and Note 13 for the City’s other post-employment benefits.

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

Significant unusual transactions
We identified no significant unusual transactions.

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

Uncorrected misstatements
Professional standards require us to accumulate all misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management.

Management did not identify, and we did not notify them of any uncorrected financial statement misstatements.

Corrected misstatements
Management did not identify, and we did not notify them of any financial statement misstatements detected as a result of audit procedures.

Disagreements with management
For purposes of this communication, a disagreement with management is a disagreement on a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditors’ report. No such disagreements arose during our audit.

Circumstances that affect the form and content of the auditors’ report As previously communicated to you, the report was modified to include a change in accounting principle paragraph to highlight the change related to the adoption of the new accounting guidance for SBITA.

Management representations
We have requested certain representations from management that are included in the management representation letter dated November 30, 2023.

Honorable Mayor and Members
City Council
City of Norco

Management consultations with other independent accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the entity’s financial statements or a determination of the type of auditors’ opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants.

Significant issues discussed with management prior to engagement We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to engagement as the entity’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our engagement.

Required supplementary information
With respect to the required supplementary information (RSI) accompanying the financial statements, we made certain inquiries of management about the methods of preparing the RSI, including whether the RSI has been measured and presented in accordance with prescribed guidelines, whether the methods of measurement and preparation have been changed from the prior period and the reasons for any such changes, and whether there were any significant assumptions or interpretations underlying the measurement or presentation of the RSI. We compared the RSI for consistency with management’s responses to the foregoing inquiries, the basic financial statements, and other knowledge obtained during the audit of the basic financial statements. Because these limited procedures do not provide sufficient evidence, we did not express an opinion or provide any assurance on the RSI.

Supplementary information in relation to the financial statements as a whole With respect to the combining and individual nonmajor fund financial statements (collectively, the supplementary information) accompanying the financial statements, on which we were engaged to report in relation to the financial statements as a whole, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period or the reasons for such changes, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves. We have issued our report thereon dated November 30, 2023.

Honorable Mayor and Members
City Council
City of Norco

Other information included in annual reports
Other information (financial or nonfinancial information other than the financial statements and our auditors’ report thereon) is being included in your annual report and is comprised of introductory and statistical sections. Our responsibility for other information included in your annual report does not extend beyond the financial information identified in our opinion on the financial statements. We have no responsibility for determining whether such other information is properly stated and do not have an obligation to perform any procedures to corroborate other information contained in your annual report.

We are required by professional standards to read the other information included in your annual report and consider whether a material inconsistency exists between the other information and the financial statements because the credibility of the financial statements and our auditors’ report thereon may be undermined by material inconsistencies between the audited financial statements and other information.

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. Our auditors’ report on the financial statements includes a separate section, “Other Information,” which states we do not express an opinion or any form of assurance on the other information included in the annual report. We did not identify any material inconsistencies between the other information and the audited financial statements. * * *
This communication is intended solely for the information and use of the honorable mayor and members of the City Council and management of the City of Norco and is not intended to be, and should not be, used by anyone other than these specified parties.

CliftonLarsonAllen LLP
Irvine, California
November 30, 2023

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INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER

FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS

BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED

IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Honorable Mayor and Members
City Council
City of Norco
Norco, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, business-type activities, each major fund, and the aggregate remaining fund information of the City of Norco (the City), as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise City’s basic financial statements, and have issued our report thereon November 30, 2023.

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

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

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

Honorable Mayor and Members
City Council
City of Norco
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether City of Norco’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

CliftonLarsonAllen LLP
Irvine, California
November 30, 2023

CITY OF NORCO, CALIFORNIA
APPROPRIATIONS LIMIT WORKSHEET NO. 6
INDEPENDENT ACCOUNTANTS’ REPORT

ON AGREED-UPON PROCEDURES APPLIED TO
APPROPRIATIONS LIMIT WORKSHEET NO. 6
YEAR ENDED JUNE 30, 2023

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(1)
INDEPENDENT ACCOUNTANTS’ REPORT

ON APPLYING AGREED-UPON PROCEDURES
Honorable Mayor and Members
of the City Council
City of Norco
Norco, California
We have performed the procedures enumerated below on the accompanying Appropriations Limit Worksheet No. 6 of the City of Norco, California, (the City) for the year ended June 30, 2023. The City’s management is responsible for the Appropriations Limit Worksheet No. 6.

The City and the League of California Cities (as presented in the League publication entitled Article XIIIB Appropriations Limit Uniform Guidelines) have agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of meeting the requirements of Section 1.5 of Article XIII-B of the California Constitution. This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes.

The procedures and associated findings are as follows:

1. We obtained the completed Appropriations Limit Worksheet No. 6 for the year ended June 30, 2023, and compared the limit and annual adjustment factors included in that worksheet to the limit and annual adjustment factors that were adopted by resolution of the City Council. We also compared the population and inflation options included in the aforementioned worksheet to those that were selected by a recorded vote of the City Council.

No exceptions were noted as a result of performing this procedure.

2. For the Appropriations Limit Worksheet No. 6, we added last year’s limit to the total adjustments and compared the resulting amount to this year’s limit. We also recalculated the adjustment factors, and the adjustment for inflation and population, and compared the results to the amounts on Worksheet No. 6.

No exceptions were noted as a result of performing this procedure.

Honorable Mayor and Members of the City Council
City of Norco
(2)

3. We compared the prior year appropriations limit presented in the accompanying Appropriations Limit Worksheet No. 6 to the prior year appropriations limit adopted by the City Council for the prior year.

No exceptions were noted as a result of performing this procedure.

We were engaged by the City to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the American Institute of Certified Public Accountants. We were not engaged to and did not conduct an examination or review engagement, the objective of which would be the expression of an opinion or conclusion, respectively, on the accompanying Appropriations Limit Worksheet No. 6. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.

We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement.

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

CliftonLarsonAllen LLP
Irvine, California
August 24, 2023

CITY OF NORCO
APPROPRIATIONS LIMIT WORKSHEET NO. 6
YEAR ENDED JUNE 30, 2023
See accompanying Notes to Appropriations Limit Worksheet No. 6. (3)
Appropriations Limit for Fiscal Year Ended June 30, 2022 (see Note 2) $ 48,887,251 Adjustments Factors for the Fiscal Year Ended June 30, 2023 (see Note 2):

Inflation Population
Factor Factor Combined
(Note 3) (Note 4) Factor

1.0755000 0.9876000 1.0621638 x 0.0621638
Adjustment for Inflation and Population 3,039,017
Other Adjustments (Note 5) -
Total Adjustments 3,039,017
Appropriations Limit for Fiscal Year Ended June 30, 2023 $ 51,926,268

CITY OF NORCO
NOTES TO APPROPRIATIONS LIMIT WORKSHEET NO. 6
JUNE 30, 2023
(4)
NOTE 1 PURPOSE OF AGREED UPON PROCEDURES
Under Article XIIIB of the California Constitution (the Gann Spending Limitation Initiative), California governmental agencies are restricted as to the amount of annual appropriations from the proceeds of taxes. Effective for years beginning on or after July 1, 1990, under Section 1.5 of Article XIIIB, the annual calculation of the appropriations limit is subject to agreed-upon procedures in connection with the annual audit.

NOTE 2 METHOD OF CALCULATION
Under Section 10.5 of Article XIIIB, for fiscal years beginning on or after July 1, 1990, the appropriations limit is required to be calculated based on the limit for the fiscal year 1986-87, adjusted for the inflation and population factors discussed at Notes 3 and 4 below.

NOTE 3 INFLATION FACTORS
A California governmental agency may adjust its appropriations limit by either the annual percentage change in the fourth quarter per capita personal income from the preceding year (which percentages are supplied by the State Department of Finance), or the percentage change in the local assessment roll from the preceding year due to the change of local nonresidential construction. The factor adopted by the City of Norco for the fiscal year 2022- 2023 represents the annual percentage change for per capita personal income from the preceding year.

NOTE 4 POPULATION FACTORS
A California governmental agency may adjust its appropriations limit by either the annual percentage change of the jurisdiction’s own population, or the annual percentage change in population in the county where the jurisdiction is located. The factor adopted by the City of Norco for fiscal year 2022-2023 represents the annual percentage change in population for the City of Norco.

NOTE 5 OTHER ADJUSTMENTS
A California government agency may be required to adjust its appropriations limit when certain events occur, such as the transfer of responsibility for municipal services to, or from, another government agency or private entity. The City of Norco had no such adjustments for the year ended June 30, 2023.

CITY OF NORCO, CALIFORNIA

SINGLE AUDIT OF FEDERALLY ASSISTED

GRANT PROGRAMS
JUNE 30, 2023

CITY OF NORCO
JUNE 30, 2023

TABLE OF CONTENTS
Page
Number
Independent Auditors’ Report on Internal Control over
Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed
in Accordance with Government Auditing Standards 1 - 2
Independent Auditors’ Report on Compliance for Each Major Federal Program, Report on Internal Control over Compliance, and Report on the Schedule of Expenditures of Federal Awards Required by the Uniform Guidance 3 - 6
Schedule of Expenditures of Federal Awards and Schedule of Findings and Questioned Costs:

Schedule of Expenditures of Federal Awards 7
Notes to Schedule of Expenditures of Federal Awards 8
Schedule of Findings and Questioned Costs 9 - 11
Summary Schedule of Prior Audit Findings 12

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1 INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER

FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS

BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN

ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Honorable Mayor and
Members of the City Council
of the City of Norco
Norco, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Norco (the City), as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated November 30, 2023.

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

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

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

Honorable Mayor and
Members of the City Council
of the City of Norco
2 Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

CliftonLarsonAllen LLP
Irvine, California
November 30, 2023

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3 INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE FOR THE MAJOR

FEDERAL PROGRAM, REPORT ON INTERNAL CONTROL OVER COMPLIANCE, AND

REPORT ON THE SCHEDULE OF EXPENDITURES OF FEDERAL

AWARDS REQUIRED BY THE UNIFORM GUIDANCE
Honorable Mayor and
Members of the City Council
of the City of Norco
Norco, California
Report on Compliance for Each Major Federal Program
Opinion on the Major Federal Program
We have audited the City of Norco’s (the City) compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on the City’s major federal program for the year ended June 30, 2023. The City’s major federal program is identified in the summary of auditors’ results section of the accompanying schedule of findings and questioned costs.

In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on its major federal program for the year ended June 30, 2023.

Basis for Opinion on the Major Federal Program
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America (GAAS); the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditors’ Responsibilities for the Audit of Compliance section of our report.

We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for the major federal program. Our audit does not provide a legal determination of the City’s compliance with the requirements referred to above.

Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to the City’s federal programs.

Honorable Mayor and
Members of the City Council
of the City of Norco
Norco, California
4 Auditor’s Responsibilities for the Audit of Compliance Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the City’s compliance with the requirements of each major federal program as a whole.

In performing an audit in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance, we:
 exercise professional judgment and maintain professional skepticism throughout the audit.  identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the City’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances.
 obtain an understanding of the City’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control over compliance. Accordingly, no such opinion is expressed.

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

Other Matters
The results of our auditing procedures disclosed instances of noncompliance, which are required to be reported in accordance with the Uniform Guidance and which are described in the accompanying schedule of findings and questioned costs as item 2023-001. Our opinion on each major federal program is not modified with respect to this matter.

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