Paso Robles City Council
December 16, 2025

PRPD Complaints 4/25-10/26
9/4 Food Cart on corner/East side of Spring St. 34th/Spring St. Telephone 9/8 Vendor Cedarwood/Creston Telephone
9/14 Vendor 19th/Riverside Telephone
9/14 Food truck in parking lot with tables/chairs -- not following ordinance Masonic Temp Telephone 9/21 Other Vendor reporting vendor is selling Tacos in Rite Aid parking lot Rite Aid/Spring St. Telephone 9/27 Vendors selling seafood -- allegedly no permit Barney Schwartz Park Telephone 9/27 2 Food trucks -- only one with permit Walnut/Creston Telephone 9/27 Food truck on private property behind laundry Tanner/Walnut Telephone 9/28 Food truck@ Central Coast Smog/Repair Walnut/Creston Telephone 9/29 Van selling food to construction sites out of vehicle Chardonnay Telephone 9/30 2 Vendors selling corn & fruit Sherwood/Creston Telephone 10/5 3 Vendors reported@ Dragon park, S. River, Cedarwood S. River/Charolais Telephone 10/5 Selling food out of white toyota Sienna Kermit King Telephone 10n Reports of food vendor selling on sidewalk in front of Paleteria/Food 4 Less Food 4 Less Telephone 10/10 Vendor in dirt parking lot Sherwood/Linne Rd. Telephone 10/15 Food truck w/ tables/chairs set up@ Mechanics Bank parking lot. Complaintant says 8th/9th St. Telephone 10/17 RP wants to know if licensed. RP owns ice cream shop@ Food 4 Less Food 4 Less Telephone 10/23 cord through park for unauthorized vendor selling hot dogs on sidewalk he has not gone through process and not following ordinances. via Lobby-- Fruit/Ice cream vendors setting up on corners Q1 - Public Comment
Saylor, Bill

Council Agenda Report
From: Chris Huot, City Manager
Subject: San Luis Obispo Council of Governments Supplemental Funding Overview and Draft Expenditure Plan
CEQA Determination: The City finds that this action is not a project under the California Environmental Quality Act pursuant to State Guidelines Section State CEQA Guidelines, §§ 15060, subd. (c)(2)-(3), 15378.

Date: December 16, 2025
Facts

1. The San Luis Obispo Council of Governments (SLOCOG) is the regional transportation planning agency (RTPA), metropolitan planning organization (MPO), and council of governments for San Luis Obispo County. SLOCOG is responsible for long-range regional transportation planning, funding allocation, and coordination among the County and the seven incorporated cities, including Paso Robles.

2. SLOCOG is evaluating a potential ½-cent transportation sales tax measure for the November 2026 ballot to establish a long-term, locally controlled revenue source for transportation improvements.

3. Under California law, a transportation special tax requires approval by at least two-thirds (66.67%) of all voters casting ballots countywide, meaning the threshold applies to all registered voters who participate in the election across San Luis Obispo County, not by city or subregion.

4. A transportation sales tax measure is expected to generate approximately $35 million annually, totaling over $1 billion over 30 years.

5. SLOCOG has completed extensive regional engagement since June 2025, including more than 70 presentations, four focus groups, and seven workshops (six in-person, one virtual), as well as online surveys, website engagement, and coordination with local jurisdictions.

6. Consultant FM3 Research conducted a statistically valid poll of more than 1,000 likely November 2026 voters, with a ±3.1% margin of error. Polling included English and Spanish online and phone responses.

7. Based on SLOCOG's draft Transportation Expenditure Plan, Paso Robles would receive approximately $2,146,387 in the first year under the Local Road Repairs, Safety, and Improvements category, which comprises 55% of all revenue.

8. Regional Corridor Improvements would receive 40% of revenues, with allocations made across four subregions.

9. An additional 4% of revenues would support senior, disabled, and veterans mobility services, and administration costs would be capped at 1%.

10. SLOCOG has also drafted Implementation Guidelines that include 20 accountability and oversight measures such as Maintenance of Effort, auditing requirements, citizens oversight, prohibitions on supplanting, and performance reviews.

11. SLOCOG is requesting comments from all city and county jurisdictions in December 2025 and January 2026 and anticipates holding a public hearing on the draft plan at its February 4, 2026 Board meeting.

Community Outreach
SLOCOG continues to conduct public outreach, including more than 70 presentations, four focus groups, seven public workshops, and ongoing online engagement. These activities indicate broad public interest in roadway repair, safety, congestion management, and mobility options. SLOCOG has also conducted polling of likely voters and will provide more information during the presentation.

Staff from SLOCOG will make this presentation to the City Council.

Options

1. Take no action;

2. Receive and file and provide feedback and comments to SLOCOG staff.

3. Provide alternative direction to staff.

Analysis and Conclusions
The San Luis Obispo region continues to face a substantial and growing funding gap in maintaining and improving its multimodal transportation system. As identified in SLOCOG’s adopted Regional Transportation Plan, the region currently experiences an estimated $2.4 billion shortfall, with updated estimates for the 2027 Plan indicating this need will exceed $3 billion. This gap affects local roadway maintenance, safety improvements, congestion relief, transit reliability, and bicycle and pedestrian connectivity throughout the county.

SLOCOG previously evaluated placing a transportation sales tax measure on the November 2024 ballot, but ultimately chose not to advance that effort after reviewing public feedback, readiness, and timeliness.

During that process, the Paso Robles City Council formally opposed the 2024 concept, citing concerns related to timing and funding distribution structure. These considerations informed SLOCOG’s expanded public engagement and technical work throughout 2025.

The absence of a dedicated, locally controlled transportation revenue source places San Luis Obispo County at a disadvantage relative to the 25 “self-help” counties in California that have voter-approved transportation sales taxes. These counties leverage their local funding to secure substantially more State and Federal competitive grants for highways, corridors, local streets, and mobility programs. Since the failure of Measure J in 2016, the San Luis Obispo region has likely missed $600–$700 million in combined local revenue and competitive grant awards that could otherwise have been secured and invested in local and regional transportation improvements.

The proposed ½-cent countywide transportation sales tax would generate approximately $35 million annually in regionally controlled transportation revenue. The draft Transportation Expenditure Plan allocates funding across four categories, local streets and road repair, regional corridors, mobility programs for seniors and individuals with disabilities, and administration, and includes extensive accountability provisions designed to ensure transparency and public oversight.

For the City of Paso Robles, a portion of these funds would supplement the City’s existing local road repair and maintenance programs, which are primarily supported by locally approved Measure J-20 and Measure I-24 sales tax measures, allowing for accelerated local road repairs and expanded roadway improvements. The regional corridor funding could potentially support major projects such as the SR 46 East/Union Road grade separation and improvements to the US 101 and SR 46 West and East interchanges, which address key safety and congestion challenges in the region. Additional background,

technical analysis, distribution formulas, and draft expenditure plan details are provided in Attachment 1, the SLOCOG Staff Report presented to the SLOCOG Board on December 10, 2025.

The purpose of this agenda item is for the Paso Robles City Council to review the material, receive the associated background information, and provide feedback on the potential measure, draft Expenditure Plan, and related implementation elements. This item does not request formal action by the City Council, nor does it seek endorsement or approval of any component of the draft measure. Input provided at this meeting will be summarized and transmitted to SLOCOG as part of its regional review and refinement process.

Fiscal Impact
There is no immediate fiscal impact associated with this action.

If the regional measure proceeds and is approved by voters in November 2026, Paso Robles would receive a significant, stable, multi-decade revenue stream to supplement road repair and infrastructure improvements within the City.

These funds could reduce the City’s reliance on the General Fund for transportation expenses and enhance local matching capacity for external grants.

CEQA
The City finds that this action is not a project under the California Environmental Quality Act pursuant to State Guidelines Section State CEQA Guidelines, §§ 15060, subd. (c)(2)-(3), 15378.

Recommendation (Option 2)
Receive and file and provide feedback and comments to SLOCOG staff.

Attachments

1. December 10, 2025 SLOCOG Staff Report

2. Supplemental Funding Draft Expenditure Plan

F-2-1

SAN LUIS OBISPO COUNCIL OF GOVERNMENTS

STAFF REPORT
MEETING DATE: DECEMBER 10, 2025 ITEM F-2
SUBJECT:

STAFF CONTACT:

Supplemental Funding Update: Polling Results, Draft Expenditure Plan, Implementation Guidelines, and Next Steps
James Worthley/Annie Bowsky/Kendall Flint, DKS/Richard Bernard, FM3

SUMMARY
Transportation funding for future infrastructure falls short of our needs within the San Luis Obispo region. A dedicated, local transportation sales tax is an invaluable tool that 25 California county transportation authorities use to deliver timely, cost-efficient transportation improvements to their communities. Adding San Luis Obispo county to the list of California’s self-help counties would help unlock hundreds of millions of dollars in additional transportation funding, guaranteeing, and delivering muchneeded transportation improvements and repairs for our residents and to our communities.

A San Luis Obispo regional, ½ cent sales tax for transportation would:
• Generate $35M annually, escalating each year (topping $1B over 30 years without escalations) • Reclaim $0.8M to $1M, annually, from State funds
• Collect a $3M to $5M one-time windfall from State funds • Qualify the region to receive our fair-share of State and Federal funds (our neighboring Central Coast Counties have seen average annual grants that equal or nearly double collected tax amounts) • Include Investment Guidelines providing safeguards, assurances, and oversight of all funds. • Guarantee 99% of all funds be for transportation-related improvements within the Expenditure Plan Attachments: Draft Polling Results and Draft Transportation Expenditure Plan / Implementation Guidelines

RECOMMENDATIONS
Staff: 1) Receive and Comment
2) Adopt Distribution Formulas
3) Direct Staff to Present Draft Expenditure Plan materials to Member Agencies and Seek Comments / Feedback; and Proceed with Development/Refinement of Draft Materials 4) Direct Staff to Publish a Public Hearing Notice ahead of the February 4, 2026 Board Meeting 5) Direct Staff to Return on February 4, 2026 for SLOCOG Board Review of Comments Received and Determination of Next Steps.
6) Direct Staff to Fund a 2026 Tracking Poll within Existing Contract Services and Budget.

TTAC: Support Staff Recommendation.

CTAC: Support Staff Recommendation.

SSTAC: Support Staff Recommendation.

DISCUSSION
Successful Transportation Measures are built upon input received through presentations, website feedback, focus groups, workshops and stakeholder input. The desired result is an equitable distribution of funding, with “right-fit” investments and flexibility, to address multiple transportation needs throughout the region. Staff worked with its consultant teams (DKS Associates, FM3, and Koble Collaborative), gained input from community groups and organizations, responded to media inquiries and interviews, hosted a website with information and a survey to gain input from the public, Four focus groups were completed in August 2025, 6 in person and 1 virtual Workshops were completed in Fall 2025, Polling was completed in Fall 2025, and SLOCOG has presented at nearly 70 public or community meetings, groups, and workshops across the region since June 1, 2025. With this information gathered, staff worked with its partners and the consultant team to prepare the draft Transportation Expenditure Plan and Implementation Guidelines for Board review.

Attachment 1

F-2-2
Staff continue its efforts to engage with the public and key stakeholders to seek and share information and to refine necessary materials.

Polling Results – Attachment 1 (Attachment 1, developed by FM3, is anticipated to be available for download on 12/8/25)
A statistically-valid poll (phone/text/email) began in October 2025. FM3 conducted an 18-minute survey among 1,000+ randomly selected November 2026 likely voters in San Luis Obispo County. The survey was conducted using dual-mode methodology where the survey is conducted both online and by land and cellular phones. The survey was offered in Spanish and English both online and by phone. A sample size of 1,000+ has a margin of error of ±3.1% (at the 95% confidence level).

Results of this poll will be presented at the SLOCOG meeting.

Prior to the April 1, 2026 Board meeting, the completion of a Tracking Poll is recommended to ascertain voter perspectives on the Draft Expenditure Plan. By shifting funds within the existing Local Roads First contracts, this poll may be completed using currently budgeted resources. $35,000 would complete a 600 person poll; $50,000 would complete a 1,000 person poll. Results of this poll would be provided at the April 1st 2026, SLOCOG Board
meeting
Draft Transportation Expenditure Plan and Implementation Guidelines – Attachment 2 Expenditure Plans provide the allocation and revenue distribution of unescalated revenues (with no presumptions of State/Federal grants). Staff, and its consultants, considered all feedback to date and developed the draft Transportation Expenditure Plan resulting in the following distributions and premises.

1. 55% for Local Road Repairs, Safety and Improvements (Jurisdictions determined) a. Distribute funds by formula to the jurisdictions based on share of population b. Build in flexibility through local control recognizing that each local agency (and its public) may differ in their transportation funding needs and priorities. c. Assure the public has a voice when each local agency determines its priorities. d. Uses may include (as determined by the local agency): Road and bridge repairs, maintenance, rehabilitation, safety, and congestion relief; pedestrian, bicycle, sidewalks, crosswalks, multiuse path, Safe Routes to School, and community enhancements, Signal improvements/synchronization, local transit or trolley services, and other local transportation priorities.

2. 40% for Regional Corridor Improvements (SLOCOG determined) a. Distribute funds by formula guaranteeing regional improvements based on share of population.
b. Assure equitable, guaranteed, distribution by using 4 subregions: North County, North Coast, Central County, and South County
c. Build in flexibility to recognize each subregion’s priority needs may differ from another. d. Assure the public has a voice when SLOCOG determines priorities. e. Uses can include: Improvements to highways, arterials, interchanges, bridges, van/carpool programs, regional trail corridors, safety/congestion relief, and regional transit.

3. 4% for Senior/Disabled/Veterans’ mobility improvements (SLOCOG determined) a. Use a public process in conjunction with current procedures to address and improve mobility of those that are mobility challenged.
b. Assure the public has a voice when SLOCOG determines its priorities.

4. 1% for Administration of the Measure Funds
a. Tasks include: Developing Implementation Plan, Project Prioritization, Annual Audits, Outreach and Communication, Revenue distributions to jurisdictions, Support for Measurerelated Committees and technical assistance.

To distribute funds, staff reviewed various data metrics (including Population, Sales Taxes collected, Road miles, and Employment by city and by subregion) and various combinations with the City Managers in October 2025 and received concurrence for the previously described funding distribution methodology.

Ultimately, the goal is an fair, equitable, and understandable (to the public) distribution of funds.

F-2-3
1-Year Distribution of $35M, as described above:
55% for Local Road Repairs, Safety and Improvements $19,250,000 Arroyo Grande $ 1,256,955
Atascadero $ 2,029,354
Grover Beach $ 865,712
Morro Bay $ 733,207
Paso Robles $ 2,146,387
Pismo Beach $ 550,195
San Luis Obispo $ 3,207,856
Unincorporated $ 8,460,335
40% for Regional Corridor Improvements $14,000,000
North County $ 4,923,893
South County $ 4,001,218
Central County $ 3,085,830
North Coast $ 1,989,059
4% for Senior/Disabled/Veterans’ mobility improvements $1,400,000 1% Administration Costs (Maximum) $350,000
Draft Implementation Guidelines (included within the Transportation Expenditure Plan) include Safeguards and policies for use of Measure funds. These Safeguards were developed and included within the draft Implementation Guidelines to provide public assurances that the funds will be spent as promised, including:

1. Maintenance of Effort: Seeks to protect transportation investments from replacing current levels of general funds spent on transportation with Measure funds leading to diminished transportation benefits.

2. Mitigation Fee Program: Assures the public that new development pays a fair share of necessary improvements attributable to the new development.

3. Circulation Element: Assures the public the jurisdiction has a transportation plan that aligns with their General Plan

4. Capital Improvement Program: Provide the public a clear understanding of where Measure Funds will go in the coming 4-6 years.

5. Pavement Management Plan: Requires road conditions inventory, analysis, and evaluation to show: current status, a multi-year plan for road maintenance, and projected pavement conditions.

6. Expenditure Report: Annually, a city-developed report generated to account for Measure funds (received and expended), impact fees and transportation expenditures to satisfy the Maintenance of Effort requirements. Provides the public with clear understanding of all funds received, and interest gained, as well as expenditures.

7. Time Limits for Use for Regional Projects: Sets a ‘use by’ date to assure Regional funds are not sitting unused for an excessive period of time.

8. No Supplanting of Funds: Assures public that Measure funds will not supplant developer funding.

9. Repercussions: Identifies actions -all the way to withholdings and repayment – if funds were used inappropriately.

10. Regular Status Reports: Provides Board and public updates at public meetings on major projects.

11. Annual Report: A report published to the Board and public on how all Measure funds have been spent and progress in implementing the Plan.

12. Biennial Implementation Plan: Every two years, Measure funds are programmed working with member agencies and stakeholders. Board reviews draft in public hearing and incorporates feedback before adopting.

F-2-4

13. Performance Assessment: Every three years, prepare an evaluation of the efficiency, effectiveness and results of the provisions and requirements of the Expenditure Plan and Ordinance.

14. Ten-Year Comprehensive Program Review: A broad review of the full program along with assessment of changes to local, state, and federal transportation plans and policies; land use; travel and growth; project cost estimates; constraints; and revenue projections.

15. Amendment Process: There would be no provision or allowable amendment to change funding categories or overall allocation formulas without voter approval. Amendments provide an option to make changes within the Plan to account for unanticipated funds or respond to unforeseen circumstances with extensive notifications through public review and hearings.

16. Bonding Authority: Does not immediately enact bonds, but allows consideration of bonding (through a public process) should it make sense to advance projects, Measure funds would be used for repayment of Measure-eligible expenses only.

17. Excess Revenues: If revenues exceed projections, primary and secondary uses would be identified.

18. Financial Audits: Independent financial audits of all revenues and expenditures provide public with transparency and accountability assurances.

19. Program Administration: Under current law, a cap of no more than 1.5% of Measure funds can be used for administrative activities (i.e., Developing Implementation Plan, Project Prioritization, Audits, Outreach and Communication, Revenue Allocation to jurisdictions, Support for (Measure) Committees and technical assistance). The draft Transportation Expenditure Plan caps Administrative costs at 1%.

20. Citizens’ Oversight Committee: Reviews and provides recommendations on financial and programmatic aspects – review audits and reports, presents recommendations, etc.

Provides public assurances that average citizens are also watching. Membership proposed: 12 members.
• One resident representative appointed by each incorporated city (Arroyo Grande, Atascadero, Grover Beach, Morro Bay, Paso Robles, Pismo Beach, San Luis Obispo) and one member from each of San Luis Obispo County’s Supervisorial District’s within the unincorporated areas. (Total of 12) All sections of an Ordinance are to be drafted. Such an Ordinance is the actual local law a regional board adopts to place a measure on the ballot. A few typical components include:
• Title and Authority
• Findings and Purpose
• Tax Imposition (type, rate, duration, etc.)
• Effective Date
• The Investment or Expenditure Plan and Guidelines with Safeguards (Oversight and Accountability) Schedule and Next Steps
The draft expenditure plan, if supported by the SLOCOG Board, would be sent to the seven city councils and Board of Supervisors for review and input (eight meetings). Changes/recommendations from these meetings will be considered for inclusion into a final expenditure plan. The SLOCOG Board would then have the opportunity to review and consider approval of the final expenditure plan - with any final modifications - and direct staff to seek city/county approvals as well (8 more meetings). Following city/county meetings, the SLOCOG Board may then consider its final approval and to send it to the BOS for inclusion on a future ballot – November 2026 would be the first such opportunity.
• Summer and Fall 2025: Engagement Efforts, Focus Groups, Workshops and Polling • November 2025: Drafting of the Expenditure Plan and Guidelines) and Engagement opportunities • December 10, 2025: SLOCOG Board Meeting: Review/Comment on Draft Expenditure Plan; Send / Present Draft to Cities/County for review and input.
• December 2025/January 2026: Cities and County Review/Comment on Draft Expenditure Plan

F-2-5
• February 4, 2026: SLOCOG Board Meeting: Receive/Address Jurisdictions’ comments/adjustments; Review/Approve Final Measure Materials; Introduce Ordinance; Send Final Expenditure Plan to Cities/County for Approvals
• February/March 2026: Cities and County consider Approval of Final Expenditure Plan. • April 1, 2026: SLOCOG Board Meeting: Receive Tracking Poll Results and Consider Adoption of Ordinance along with Measure Materials.

Jurisdiction Council / Board
Action item to:

Review and provide
input into draft plan
SLOCOG 12/10/25
Arroyo Grande 1/13/25
Atascadero 1/13/26
Grover Beach 1/12/26
Morro Bay 1/13/26
Paso Robles 12/16/25
Pismo Beach 12/16/25
SLO City 1/20/26
County BOS 1/27/26

BACKGROUND
Benefits of a Dedicated Transportation Sales Tax
Transportation investments improve the region’s: safety, reliability, mobility, goods movement, and economic vitality; and a sales tax is paid by all users of the transportation system, including tourists. Regions (self-help counties) with more local funding have a competitive advantage: they are better able to build and maintain infrastructure and services, recapture competitive funds (our paid taxes), and have more flexibility to build partnerships and prepare for new technologies and future challenges.

Our jurisdictions require additional funds to repair our roadways, to deliver local and regional safety improvements, to improve transportation overall, and to offer as a match in order to capture our paid taxes through competitive State or Federal funds. Higher matches can leverage or ‘win’ more funds from Sacramento. Without our own dedicated transportation sales tax, we are effectively providing a ‘tax holiday’ to our tourists that come from the 25 counties with their own dedicated transportation sales tax.

The Insufficient Status Quo
The region’s current funding path relies not only on stable state and federal fund sources but also aspires to win competitive state and federal transportation grants. Every two years, SLOCOG programs its formula allotment of state and federal transportation funds.

The 2023 Regional Transportation Plan (RTP) identified a transportation funding shortfall of $2.4B and the initial financial estimates of the 2027 RTP anticipate transportation funding shortfalls topping $3B (Agenda item F-1 October 2025). Similarly, the success of the Major Transportation Projects (Agenda item F-2 October 2025) leans heavily upon the success of a local transportation-specific sales tax measure.

Projects are Cheaper Now than Tomorrow
Regions with a sales tax have a significant advantage over those without. When their new improvements are ‘fully funded’ but run into unexpected project escalations or inflation, these regions can use sales tax revenues to close the gap rather than losing the project (sometimes grant funded) or delaying for several months or years to await additional funding (and incurring further cost escalations). All regions are susceptible to State budget cuts (i.e., the 2024 proposed 50% cut to REAP funding in the State) but measure counties are better equipped to backfill and deliver improvements in spite of the state cuts.

The other four counties on the Central Coast annually generate $25m-$50m through their dedicated transportation sales tax to address the funding needs of their counties and they are successful in leveraging large competitive grants using their sales tax funds. In total, 25 California counties (7 of the 8 in Southern

F-2-6
California, 4 of the 5 on the Central Coast, 8 of the 9 in the Bay Area, 6 of the 8 in the Central Valley and Sacramento), have voter-approved dedicated transportation sales taxes. These 25 counties account for 89% of all Californians. Without a dedicated local sales tax, SLO county is not able to secure its fair share of billions in State and Federal grants.

Ability to Leverage
Comparing one investment category (Active Transportation), In FY 22/23, Santa Cruz COG ‘won’ $115m from Sacramento using their $32M of their 2016 sales tax measure funds. The Santa Cruz region has another $53m remaining in measure funds to use as leverage for more Active Transportation grants and has other categories of funding (Highway Corridors, Rail, and Neighborhood Projects) to also seek grants. In comparison, SLOCOG’s 2023 long range plan projects $184m for Active Transportation in our region between 2023 and 2045. Monterey will spend $600m from their 2016 measure funds on road maintenance and improvements in the coming decades. This is on top of their local jurisdictions’ annual investments and state or federal allotments, and they will use some of it to leverage or ‘win’ State and Federal funds, outpacing our region.

With the failure of Measure J in 2016, the region lost out on over $270M in the last 9 years and this could have easily doubled (or more) by capturing grants and competitive funds from State and Federal grants. The impact of a dedicated transportation sales tax for successful measure counties is evident. Those counties deliver more projects and investments, faster, and at a lower cost.

Shrinking Fuel Tax
Reliant on the fuel tax, locally, we have a funding problem. Most of our jurisdictions have pavement conditions that are too low – costing more to maintain - and do not have a path to reach pavement condition levels that are less costly to maintain. Our primary artery, U.S. 101 has recurring congestion in South County and has seen emerging congestion in North County, and we do not have the funding necessary to address its existing or emerging congestion and safety issues. Gasoline gallons consumed in California hit their peak in 2017 and 2018 topping 15.5B gallons. Discounting the significant drop due to COVID-19, every year sees a decrease in consumption from the prior year. 2023 and 2024 gasoline consumption was 13.6B and 13.4B gallons respectively (Source: CDTFA).

Better Together
Setting aside our own self-interests can be challenging, but a regional approach helps to build the infrastructure for today and the next generation. There is a holistic benefit of a regional measure. City measures collect and spend only within their borders, yet, our residents travel beyond the singular bubbles of each city and community, whether for commuting, shopping, or entertainment. We all do better when everyone does better.

An increase of transportation funding across the region provides benefits (safety, access, mobility, costsavings, etc.) to each person, community, and jurisdiction. With both local needs and regional needs, collaboration and coordination would be a key aspect if both a regional measure and a local measure were on the same ballot.

Presentations are ongoing: Encouraging feedback through the www.localROADSfirst.com website, SLOCOG continues to inform residents through engagement meetings, more presentations are already scheduled in 2026, and staff is open to additional presentation requests. With or without a presentation, the public is invited to share their thoughts, questions, and preferred allocations across transportation improvement areas through the LRF website and survey. Future presentations will now shift to showcase the draft Expenditure Plan. Additionally, staff continue to work with the City Managers, County Executive Officer, Transit Operators and others to gain insights into key aspects, topics, and needs.

Public Workshops were completed: Six in-person workshops, and one virtual workshop, was held in September/October. Staff encouraged attendance through: 3-minute public comments at City Council meetings, articles within County Advisory Committee newsletters, coordination with city managers and city and county staff, a press release, media outreach, and a dedicated SLOCOG eblast.

Four Focus Groups completed: In August, one Focus Group was held in each of the four subregions. For each group, 12 residents were sought and confirmed, along with several backup members should a confirmation fall through. Using registered voter information, the intent was a representative sample across metrics (political registration, age, gender, community) within each subregion using a random-selection

F-2-7
process. These 2-hour meetings were facilitated by Koble Collaborative, Inc.; one page of conclusions is included below; and memorandum is attached ATTACHMENTS - October 1, 2025-F-3.

Self-Help Measures Impacts on the Central Coast
The impact of Self-Help measures in other counties is evident. They deliver more projects and investments, faster, and at a lower cost for their residents and visitors. Additionally, these four Self-help counties have leveraged hundreds of millions of State dollars back to their counties using their transportation measure funds. Each region receives its fair-share of formula funds, but without a significant influx of matching funds, the San Luis Obispo region cannot successfully compete to win back our fair share from Sacramento.

In the San Luis Obispo region, a voter-approved ½% sales tax measure would generate $35m/year (2024) and would be used to leverage state and federal funding grants. Well-over a billion dollars could be leveraged back to the San Luis Obispo region in 30 years using the approach of selfhelp counties. Currently, there are 25 CA self-help counties (transportation-specific sales tax) that encompass 89% of all Californians.

Our neighboring counties and SLOCOG each receive formula funds. Unlike SLOCOG, they collect a transportation-specific sales tax raising and investing $25M to $50M, annually into their transportation systems and they recapture gas tax funds that are reserved only for self-help counties. Moreover, they use these funds to also leverage competitive grants back to their county.

Looking back over the past 10 years, neighboring counties have raised $200M - $450M through their respective transportation-specific tax (San Benito County is much, much smaller in population and revenue generation).

Using solely these tax dollars, they then won (or leveraged) State grants– ranging from $200M to over $750M, in ten years or less. Comparatively, the San Luis Obispo region has lost out on $270M that would have been collected had a transportation measure passed in 2016, and another $330-$430M in likely our share of grant awards. Overall, this is a loss of transportation investment of $600M to $700M in the last nine years. This significant level of investment would have been used to improve Highways and interchanges, transit, mobility, Safe Routes to School, safety, road maintenance and more within our communities and throughout the region.

Using formula funds
(similar to those that all
COGs receive),
SLOCOG has been
successful in securing
grants as well, including
recent awards for:
• Bob Jones, $18M grant
• US 101 southbound
South County (Shell
Beach) improvement:
$61M.

The table, left, identifies
grants won by
neighboring counties
specifically using their
measure funds as the
grant match.

Self-Help Counties have a
competitive advantage: they are
better able to build and maintain
infrastructure and services,
recapture competitive funds (our
paid taxes), and have more
flexibility to build partnerships and
prepare for new technologies.

Draft 11/20/25 pg. 1
San Luis Obispo County Transportation
Expenditure Plan
Introduction
San Luis Obispo County’s transportation system is essential to the safety, mobility, and economic vitality of its residents, businesses, and visitors. Yet existing state and federal revenues are inadequate to maintain local streets and roads, operate reliable transit, and deliver major regional improvements.

This Transportation Expenditure Plan establishes a dedicated local funding source — a voter-approved ½-cent transactions and use tax — projected to generate approximately $35 million per year. All revenues will remain in San Luis Obispo County and may only be used for transportation purposes.

The Plan emphasizes geographic equity, fairness, transparency, and strong taxpayer safeguards while ensuring flexibility to leverage state and federal funds.

Revenue Distribution
Annual revenues shall be allocated as follows:
• 55% Local Road Repairs, Safety, and
Improvements distributed by population
to cities and the County. (Reviewed every
ten years based on census data1).
• 40% Regional Corridor
Improvements distributed by subregion
population within the areas defined as
shown.
• 4% Seniors, Veterans, and Mobility
Challenged Transportation Services,
regionwide.
• 1% Administration
1 Should a new city become incorporated, the percentages would be adjusted to reflect the updated population distribution.

Attachment 2

Draft 11/20/25 pg. 2
Eligible Uses of Funds
Local Road Repairs, Safety, and Improvements (55%)
Funds are distributed by population and may be used for:
• Local road maintenance, rehabilitation, and repair.
• Safe Routes to School and Safe Routes to College programs. • Bicycle and pedestrian improvements (sidewalks, crosswalks, multi-use paths). • Bridge safety and seismic retrofits.
• Local intersection, operational, and traffic safety improvements. • Community enhancements tied to transportation
(streetscape, lighting, landscaping, wayfinding).
• Signal synchronization.
• Piers, walkways and other pedestrian or bike paths in and around waterfront and river areas.
• Transit services including local trolley services may be funded if desired by a Jurisdiction.

Regional Corridor Improvements (40%)
Regional project funds shall be distributed among subregions and may be used for:
• Highway and major corridor congestion relief improvements and including van or carpool lanes or other congestion relief measures.
• Safety and interchange improvements.
• Regional bicycle and pedestrian connectors between communities like the Bob Jones Trail.
• Interagency Transit access and improvements and efficiency programs • Mitigation impacts for proposed improvements.
• Other projects consistent with the adopted Regional Transportation Plan (RTP).

Seniors, Veterans and Mobility Challenged Transportation Services (4%) Project funds shall support expansion and improvements to mobility programs that prioritize services for seniors, veterans, and mobility challenged regionwide.

Administration (1%)
Attachment 2

Draft 11/20/25 pg. 3
SLOCOG shall allocate no more than 1% of annual revenues for administration, planning, reporting, auditing, and program oversight.

Maintenance of Effort (MOE)
The enabling legislation in Public Utilities Code PUC 180001(e) states:

It is the intent of the Legislature that funds generated pursuant to this division be used to supplement and not replace existing local revenues used for transportation purposes.

Each Agency receiving revenues for “Local Projects” shall annually maintain, at a minimum, the same level of local fully discretionary general fund revenues that were expended on average for fiscal years 2023/24, 2024/25 and 2025/26, for transportation purposes. Dedicated funds for transportation such as gas tax revenues are not counted as general fund revenues. Transfers into the general fund will not be counted as general fund revenues. Grant awards and general fund revenues used as matching funds for grant awards will not be counted as general fund revenues.

Unusual one-time general fund allocations that have been expended for transportation purposes may be exempted prior to determining the Agency’s average expenditure for the three fiscal years noted above at the discretion of the SLOCOG Governing Board.

An agency petitioning for an exemption under this provision must supply evidence of the need for special consideration and the petition must be approved by a majority vote of the SLOCOG Governing Board.

The Authority shall not allocate any Net Revenues to any jurisdiction for any fiscal year until that jurisdiction has certified to the Authority that it has included in its budget for that fiscal year an amount of local discretionary funds for streets and roads purposes at least equal to the level of its maintenance of effort requirement. An annual independent audit will be conducted by the Authority to verify that the maintenance of effort requirements are being met by the jurisdiction. Any Net Revenues not allocated pursuant to the maintenance of effort requirement shall be allocated to the remaining eligible jurisdictions according to the formula described in the Ordinance.

Exceptions
Subject to Authority approval, if any local jurisdiction had extraordinary local discretionary fund expenditures during any fiscal year it may determine that year’s minimum expenditure base level of local discretionary funds by:

Attachment 2

Draft 11/20/25 pg. 4
(a) subtracting those extraordinary expenses funding, assessment district contributions, development impact funds, redevelopment agency contributions, or other non-recurring contributions) from its total expenditures; or (b) petitioning the Authority for special consideration. It is possible that a local jurisdiction may need to revise its minimum expenditure base beyond the subtraction of extraordinary expenses. In this instance, the Authority may allow the establishment of a new base for that jurisdiction's Maintenance of Effort requirement.

A local jurisdiction petitioning the Authority under this provision must supply evidence of the need for special consideration and the petition must be approved by a majority vote of the Authority.

Requirements For Eligible Jurisdictions
In order to be eligible to receive Net Revenues, a jurisdiction shall satisfy and continue to satisfy the following requirements.

1. Mitigation Fee Program. Assess traffic impacts of new development and require new development to pay a fair share of necessary transportation improvements attributable to the new development.

2. Circulation Element. Adopt and maintain a Circulation Element as part of the jurisdiction’s General Plan,

3. Capital Improvement Program. Adopt and update a minimum Five-Year Capital Improvement Program (CIP). The CIP shall include all capital transportation projects, including projects funded by Net Revenues, and shall include transportation projects required to demonstrate compliance with pavement management requirements.

4. Pavement Management Plan. Adopt and update a Pavement Management Plan, and issue, using a common format approved by the Authority, regular reporting on the status of road pavement conditions and implementation of the Pavement Management Plan.

5. Expenditure Report. Adopt an Expenditure Report to account for Net Revenues, developer/traffic impact fees, and funds expended by the Eligible Jurisdiction which satisfy the Maintenance of Effort requirements. The Expenditure Report shall be submitted by the end of six (6) months following the end of the jurisdiction’s fiscal year and include the following:
a. All Net Revenue fund balances and interest earned.

Attachment 2

Draft 11/20/25 pg. 5
b. Expenditures identified by type (i.e., capital, operations, administration, etc.), and program or project.

6. Project Final Report. Provide Authority with a Project Final Report within six months following completion of a project funded with Net Revenues.

7. Time Limits for Use of Net Revenues.
a. Agree that Net Revenues for Regional Projects shall be expended or encumbered no later than the end of the fiscal year for which the Net Revenues are programmed. A request for extension of the encumbrance deadline for no more than twenty-four months may be submitted to the Authority no less than ninety days prior to the deadline. The Authority may approve one or more requests for extension of the encumbrance deadline. b. In the event the time limits for use of Net Revenues are not satisfied then any retained Net Revenues that were allocated to an Eligible Jurisdiction and interest earned thereon shall be returned to the Authority and these Net Revenues and interest earned thereon shall be available for allocation to any project within the same source program.

8. No Supplanting of Funds. Agree that Net Revenues shall not be used to supplant developer funding which has been or will be committed for any transportation project.

9. Public Notice of Use of Measure Funds. Member agencies will provide the public with planned use of measure funding as part of its annual or biennial budget process. This includes each City and each Community Advisory Council will receive at a minimum, twice yearly presentations from the jurisdiction to review proposed investments prior to annual allocations.

Determination of Non-Eligibility
A determination of non-eligibility of a jurisdiction shall be made only after a hearing has been conducted and a determination has been made by the Authority’s Board of Directors that the jurisdiction is not an Eligible Jurisdiction as provided hereinabove.

Taxpayer Safeguards

1. A transportation special revenue fund (the “Local Transportation Authority Special Revenue Fund”) shall be established to maintain all Revenues.

Attachment 2

Draft 11/20/25 pg. 6

2. Accounting Receipt, maintenance and expenditure of Net Revenues shall be distinguishable in each jurisdiction’s accounting records from other funding sources, and expenditures of Net Revenues shall be distinguishable by program or project. Interest earned on Net Revenues allocated pursuant to the Ordinance shall be expended only for those purposes for which the Net Revenues were allocated.

3. No Net Revenues shall be used by a jurisdiction for other than transportation purposes authorized by the Ordinance. Any jurisdiction which violates this provision must fully reimburse the Authority for the Net Revenues misspent and shall be deemed ineligible to receive Net Revenues for a period of five (5) years.

4. A Taxpayer Oversight Committee (“Committee”) shall be established to provide an enhanced level of accountability for expenditure of Revenues under the Ordinance. The Committee will help to ensure that all voter mandates are carried out as required. The roles and responsibilities of the Committee, the selection process for Committee members and related administrative procedures shall be carried out as described below.

5. A performance assessment shall be conducted at least once every three years to evaluate the efficiency, effectiveness, economy and program results of the Authority in satisfying the provisions and requirements of the Investment Summary of the Plan, the Plan and the Ordinance. A copy of the performance assessment shall be provided to the Committee.

6. Regular status reports regarding the major projects detailed in the Plan shall be brought before the Authority in public meetings.

7. Annual Report Annually the Authority shall publish a report on how all Revenues have been spent and on progress in implementing projects in the Plan and shall publicly report on the findings and posted on the agency website.

Ten-Year Comprehensive Program Review
At least every ten years the Authority shall conduct a comprehensive review of all projects and programs implemented under the Plan to evaluate the performance of the overall program and may revise the Plan to improve its performance. The review shall include consideration of changes to local, state and federal transportation plans and policies; changes in land use, travel and growth projections; changes in project cost estimates and revenue projections; right-of-way constraints and other project constraints; level of public support for the Plan; and the progress of the Authority and jurisdictions in implementing the Plan. The Authority may amend the Plan based on its comprehensive review, subject to the requirements of Plan Update, Approval Process, and Expenditure Plan Amendments section of this plan.

Attachment 2

Draft 11/20/25 pg. 7
Governing Board and Organizational Structure
The San Luis Obispo Council of Governments (SLOCOG) serves as the designated Local Transportation Authority for San Luis Obispo County and is responsible for administering the Transportation Measure in compliance with Public Utilities Code (PUC) 180000 et seq. Upon voter approval of the Transportation Measure, the Board of Directors of SLOCOG will serve as the Authority Board and will oversee its implementation in accordance with the plans and programs detailed in this and future updates of the Expenditure Plan.

This Expenditure Plan provides for the creation of a Citizens’ Oversight Committee to ensure transparency and accountability. Details regarding the Committee are contained in this plan. The Biannual Implementation Plan will be prepared and updated by SLOCOG staff and approved by both the SLOCOG Policy Board and the Local Transportation Authority.

Per PUC 180000, the Authority’s governing board will include representation as follows:
• Five (5) members of the San Luis Obispo County Board of Supervisors • One (1) member representing each incorporated city within San Luis Obispo County—Arroyo Grande, Atascadero, Grover Beach, Morro Bay, Paso Robles, Pismo Beach, and San Luis Obispo—appointed by their respective city councils.

Alternates to the regular members may participate in accordance with SLOCOG bylaws.

Should another city become incorporated, it will have one seat on the steering committee.

Plan Update, Approval Process, and Expenditure Plan
Amendments
Three primary documents guide plan administration:

1. Expenditure Plan – Approved by voters and amendable once per year, following the process described below.

2. Annual Report – Prepared each year by the Citizens’ Oversight Committee to review expenditures and communicate results to the public.

3. Biennial Implementation Plan – Prepared every two years to outline project expenditures and coordinated with the development schedule of the State Transportation Improvement Program (STIP).

In compliance with state and federal requirements, SLOCOG regularly prepares a Regional Transportation Plan (RTP)that identifies priority projects across all transportation modes, including highways, local roads, public transit, bikeways, and aviation. Should funds Attachment 2

Draft 11/20/25 pg. 8
become available for projects not listed in this Expenditure Plan, they may be drawn from the RTP project list.

SLOCOG will have the option to issue bonds to accelerate project delivery, thereby reducing overall costs by advancing construction timelines.

All updates to the Expenditure Plan will undergo public review and hearings. Candidate projects and priorities may evolve, but the county’s extensive transportation needs will ensure robust use of all available funding, including sales tax revenues. During each update, a balanced approach across transportation modes will be emphasized to ensure efficiency and equity in addressing mobility needs throughout San Luis Obispo County.

Amendment Process
As specified in PUC Section 180207:
• (a) Once per calendar year, the Authority may review and propose amendments to the county’s transportation expenditure plan to incorporate additional revenues, account for unanticipated funds, or respond to unforeseen circumstances.

Amendments adopted late in the year will not preclude additional amendments in the following year.
• (b) The Authority must notify the County Board of Supervisors and each city council, providing copies of proposed amendments for their review. • (c) Amendments become effective 45 days after notification.

Changes to funding categories or overall allocation formulas require voter approval.

Biennial Implementation Plan
At least once every two years, SLOCOG will prepare and adopt a Transportation Measure Implementation Plan. This plan will include a financial component consistent with both the Regional Transportation Improvement Program (RTIP) and the STIP.

Process steps include:
• SLOCOG staff, working with member agencies and stakeholders, will draft and update the Implementation Plan biennially.
• The SLOCOG Policy Board will review the Draft Implementation Plan, hold public hearings, and incorporate feedback.
• Following review, the Policy Board formally adopts the Implementation Plan.

Bonding Authority
The Authority shall have the power to sell or issue, at any time, and from time to time, Attachment 2

Draft 11/20/25 pg. 9
including on or before the collection of the taxes authorized by this Ordinance, bonds, notes or other evidences of indebtedness, including capital appreciation bonds, payable from and secured by the proceeds from the sales taxes authorized by this Ordinance and from the proceeds of the existing Measure (TBD) sales taxes, in order to finance and refinance the transportation projects identified in the Transportation Expenditure Plan.

Bonding indebtedness shall be limited to 35% of net sales measured at the end of the 30- year program. An additional bonds test (ABT) no lower than 1.5x Maximum Annual Debt Service will be measured against revenues for any consecutive 12-month period in the prior 18 months.

Allocation of Excess Revenues
If revenues exceed projections or contingency needs, excess funds will first be used to complete projects listed in this Plan. Secondary priority may be given to additional RTPconsistent projects, following an amendment process.

Independent Financial Audits
If the Transportation Measure is approved by the voters, the San Luis Obispo Council of Governments (SLOCOG) will conduct independent financial audits of all revenues and expenditures associated with the measure in accordance with Public Utilities Code 180000 et seq. These audits will ensure full transparency and accountability in the use of voter-approved sales tax revenues.

The results of the audits will be presented annually to the SLOCOG Policy Board and made available to the public, reinforcing confidence in the administration of the Transportation Measure. Findings will also be shared with the Citizens’ Oversight Committee to support their independent review of expenditures and compliance with the Expenditure Plan.

Administration Program – 1% of Measure Revenues
To effectively manage and implement the Transportation Measure, SLOCOG will cap administration costs at no more than 1% of annual sales tax revenues to administrative activities. This allocation supports the necessary planning, oversight, and program development functions required for successful execution of the measure.

Key administrative responsibilities of SLOCOG include:
• Annual Work Program and Budget
Prepare and adopt an annual work program and budget outlining planned expenditures, oversight activities, and administrative costs. • Allocation Program Requirements and Focused Studies
Develop requirements for each funding program established by the Expenditure Attachment 2

Draft 11/20/25 pg. 10
Plan and undertake specialized studies needed to implement those programs effectively.
• Biennial Implementation Plan
Prepare and update the Transportation Measure Implementation Plan every two years, aligning it with the Regional Transportation Improvement Program (RTIP) and State Transportation Improvement Program (STIP)schedules. • Project Prioritization
Establish and update priority lists for regional capacity-enhancing and rehabilitation projects, in coordination with member jurisdictions and consistent with Expenditure Plan goals.
• Independent Annual Audit
Conduct an independent audit of all Transportation Measure funds to ensure compliance, fiscal integrity, and accountability to the public. • Public Outreach and Communication
Carry out ongoing outreach and public education efforts to keep residents informed about project progress, financial performance, and planned updates. • Bond Issuance for Accelerated Delivery
Issue bonds when appropriate to expedite project delivery, reducing overall project costs by leveraging future revenues for near-term improvements. • Revenue Allocation to Local Jurisdictions
Distribute Transportation Measure proceeds to incorporated cities and the county in accordance with the formulas and criteria established in the Expenditure Plan. • Support for Oversight Committees and Related Technical Assistance Provide staff support to advisory committees and furnish technical assistance to member jurisdictions to ensure consistent, equitable, and effective program implementation.

Citizens’ Oversight Committee
Committee Purpose
• To provide oversight on the implementation of the Transportation Expenditure Plan and advise the SLOCOG Policy Board when the Plan needs to be updated or augmented, ensuring that funds are spent in accordance with the approved Plan. • To inform the public and confirm that revenues and expenditures from the Transportation Measure are spent as promised to San Luis Obispo County voters.

Committee Formation
• The Committee will be formed within six (6) months following voter approval of the Transportation Measure in San Luis Obispo County.
• The Committee shall be a permanent component of the Expenditure Plan and cannot be eliminated by amendment.

Attachment 2

Draft 11/20/25 pg. 11
• Meetings will begin when Transportation Measure revenues are recommended for expenditure, including Implementation Plan updates.

Selection and Duties of Committee Chair and Vice Chair
• The Committee will select a Chair and Vice Chair from among its members, each serving a one-year term.
• Chair Duties: Call meetings, set agendas, and preside over meetings. • Vice Chair Duties: Perform the Chair’s duties in the Chair’s absence.

Committee Meetings
• The Committee will hold at least two formal meetings annually, with additional meetings scheduled as needed.
• All meetings will comply with the Brown Act (open meeting requirements). • Meetings will be conducted in accordance with Robert’s Rules of Order.

Subcommittee Requirements
• The Committee may form subcommittees to address specific tasks or focus areas. • All subcommittees will consist of an odd number of members to ensure clear decision-making.

Committee Membership, Selection, and Quorum
The Committee will reflect the geographic and demographic diversity of San Luis Obispo County and consist of 12 members. Each represented organization will nominate its representative, with final appointments approved by the SLOCOG Policy Board.

Membership Composition:
• One resident representative appointed by each incorporated city (Arroyo Grande, Atascadero, Grover Beach, Morro Bay, Paso Robles, Pismo Beach, San Luis Obispo) and one member from each of San Luis Obispo County’s Supervisorial District’s within the unincorporated areas. (Total of 12)
The SLOCOG Policy Board will review and appoint these members. If any jurisdiction is unable to appoint a representative, SLOCOG may fill the position through an open application process. Should a new City become incorporated, a representative from that jurisdiction shall be appointed by the City.

Quorum
• A quorum will consist of no fewer than seven (7) members.

Attachment 2

Draft 11/20/25 pg. 12
• Actions may be approved by a simple majority of members present, provided the quorum is met.

Term of Membership
• Members serve two-year terms, with a maximum of eight consecutive years of service.
• To establish staggered terms, the initial appointments will be divided so that half serve one-year terms and half serve two-year terms, determined by random selection.
• Proxy voting is not permitted.

Eligibility
• Must be a U.S. citizen, 18 years or older, and a resident of San Luis Obispo County. • Cannot be an elected official of San Luis Obispo County or its cities. • Cannot be an employee of state, county, or city government agencies within San Luis Obispo County (except employees of educational institutions).

Staffing
• SLOCOG staff will provide technical and administrative support, including preparation of agendas, meeting materials, and public communications. • Administrative costs for staffing will be funded through the Transportation Measure’s administrative allocation.
• Expert staff and consultants may be invited to present information or analyses as needed.

Responsibilities
The Committee will review and provide recommendations on financial and programmatic aspects of the Transportation Measure, including:
• Reviewing and commenting on independent financial and performance audits of Measure funds.
• Reviewing periodic reports, studies, and plans related to Measure revenues and expenditures.
• Ensuring that expenditures are consistent with the Expenditure Plan. • Conducting an annual review of sales tax revenue use and publicly reporting findings.
• Presenting recommendations and findings in a formal annual report to the public and SLOCOG Policy Board.

Attachment 2

Draft 11/20/25 pg. 13
• Accessing information from SLOCOG’s independent auditor and requesting additional information as necessary to fulfill oversight responsibilities. • Remaining informed of advancements in transportation planning and finance to ensure oversight remains relevant and effective through the duration of the Measure.

Measure Duration
This Transportation Expenditure Plan shall remain in effect for 30 years as approved by San Luis Obispo County voters.

Attachment 2

Council Agenda Report
From: Ryan Cornell, Administrative Services Director
Catherine Piatti, Finance Manager
Subject: Annual Comprehensive Financial Report for Fiscal Year 2024-25 CEQA Determination: The City finds that this action is not a project under the California Environmental Quality Act pursuant to State Guidelines Section State CEQA Guidelines, §§ 15060, subd. (c)(2)-(3), 15378.

Date: December 16, 2025
Facts

1. State law requires that every general-purpose local government publish, within six months of the close of each fiscal year, a complete set of audited financial statements. This Annual Comprehensive Financial Report (ACFR) has been published to fulfill this requirement.

2. The ACFR is prepared in accordance with generally accepted accounting procedures (GAAP), including compliance with pronouncements issued by the Governmental Accounting Standards Board (GASB).

The report is designed to highlight changes in the City’s financial condition and practices over time and to allow consistency between state, municipal, and other governmental agencies.

3. On March 18, 2024, City Council authorized the City Manager to enter into a contract with Moss, Levy, & Harzheim, LLP, for auditing services. Moss, Levy & Hartzheim, LLP is a Certified Public Accounting firm specializing in audits of cities, school districts, community services district, and other types of governmental entities throughout the State.

4. City management is responsible for the preparation and fair presentation of the financial statements as well as the design, implementation, and maintenance of internal control. Internal controls are the mechanisms, rules, and procedures implemented by the City to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.

5. Moss, Levy & Harzheim, LLP issued an unqualified opinion, meaning that the financial statements and other information reported in the ACFR fairly represent, in all material respects, the financial position of the City as of June 30, 2025 and the financial activities beginning on July 1, 2024 and ending on June 30, 2025.

6. In addition to receiving an unqualified opinion, the auditors did not note any deficiencies within the City’s accounting practices or internal controls, thus informing the community that the City’s financial practices contribute to the City’s commitment to be trustworthy stewards of the community’s tax dollars. Over the past 25 years, the City has excelled in financial reporting, resulting in various awards and audits that have been clear of findings and material misstatements.

7. Hard copies of the ACFR are available for review in the City Library and City Clerk’s Office at 1000 Spring Street, and the Administrative Services Office at 4305 Second Wind Way. A reference copy for the City Council has been placed in the City Council office. An electronic copy of the ACFR is also available on the City’s website.

Options

1. Take no action;

2. Receive and file the Annual Comprehensive Financial Report for fiscal year ending June 30, 2025; or

3. Provide alternative direction to staff or the auditor.

Analysis and Conclusions
State law requires that every general-purpose local government publish an annual report on its financial position and activity, and that the report be audited by an independent firm of certified public accountants. Taken together, the ACFR, the multi-year fiscal forecast, and the budget provide the best overview of the City’s fiscal health and opportunities for future financial stability. Because the ACFR is audited by an independent expert, the report provides additional assurance to the community that the City is being a responsible steward of the community’s tax dollars.

The City's financial statements, internal documents, and controls have been audited by Moss, Levy & Hartzhiem, LLP. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City for the fiscal year ended June 30, 2025 are free of material misstatements. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor’s report is presented as the first component of the financial section of the ACFR.

ACFR Organization
The City’s ACFR is organized into three major sections: Introductory, Financial, and Statistical. The following is a brief summary of the contents of each of these sections:

1. Introductory Section: The letter of transmittal and other information of general interest are presented in this section including the organizational chart, directory of officials as well as the Government Finance Officers Association’s Certificate of Achievement for Excellence in Financial Reporting. The letter of transmittal is an opportunity for management to provide an overview of the City’s activities, prospective information as well as subjective information useful in assessing the City’s economic condition.

2. Financial Section: The financial section includes the report of the independent auditor, management’s discussion and analysis, basic financial statements (including notes), required supplementary information and related notes, combining statements (i.e., non-major funds), and individual fund financial statements and schedules.

3. Statistical Section: The statistical section offers operational, economic, and historical data that provides a context for assessing the City’s economic condition. Such data includes information on financial trends, revenue and debt capacity, demographic, economic, and operating indicators.

Recognition for Excellence in Financial Reporting
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City for its annual comprehensive report for the fiscal year ended June 30, 2024. This was the sixth time the City has received the award from GFOA. Previously, the City was awarded the California Society of Municipal Finance Officers Certificate for Outstanding Financial Reporting for 19 consecutive years. To receive the award, the City published an easily readable and efficiently organized ACFR that satisfied accounting principles generally accepted in the United States of America and all applicable legal requirements.

A Certificate of Achievement for Excellence in Financial Reporting is valid for a period of one year only.

However, staff believes that the current ACFR continues to meet the certificate requirements and will be submitting it to the GFOA to determine its eligibility for another certificate.

The City also received the GFOA’s Distinguished Budget Presentation Award for its Operating and Capital Budget Report for Fiscal Year 2024-25 and 2025-26 on August 12, 2024. To qualify for this award, the City’s budget document had to be judged proficient as a policy document, a financial plan, an operations guide, and a communication device.

Fiscal Impact
None.

CEQA
The City finds that this action is not a project under the California Environmental Quality Act pursuant to State Guidelines Section State CEQA Guidelines, §§ 15060, subd. (c)(2)-(3), 15378.

Recommendation (Option 2)
Receive and file the Annual Comprehensive Financial Report, which includes the Independent Auditor’s Report on the City’s financial statements, for the fiscal year ended, June 30, 2025.

Attachments

1. Annual Comprehensive Financial Report for Fiscal Year Ended June 30, 2025.

City of El Paso de Robles, California
For the Fiscal Year Ended June 30, 2025

ANNUAL COMPREHENSIVE

FINANCIAL REPORT

Annual
Comprehensive
Financial Report For the Fiscal Year Ended June 30, 2025 Prepared by the Department of Administrative Services

Introductory Section

Table of Contents

Letter of Transmittal

Organization of City
Government

Directory of City Officials

GFOA Certificate of
Achievement for Excellence in
Financial Reporting

City of El Paso de Robles
Annual Comprehensive Financial Report
Table of Contents

INTRODUCTORY SECTION
Table of Contents................................................................................................................................................... 1 Letter of Transmittal .............................................................................................................................................. 5 Organization of City Government ........................................................................................................................ 11 Directory of City Officials...................................................................................................................................... 12 Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting ................................................................................................................... 13

FINANCIAL SECTION
Independent Auditor’s Report............................................................................................................................. 15 Management’s Discussion and Analysis............................................................................................................... 18 Basic Financial Statements
Government-Wide Financial Statements
Statement Descriptions ................................................................................................................................. 35 Statement of Net Position ............................................................................................................................. 36 Statement of Activities ................................................................................................................................. 38 Fund Financial Statements
Governmental Funds:

Governmental Funds Descriptions ..........................................................................................................41 Balance Sheet.......................................................................................................................................... 42 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position......................................................................................................................................... 45 Statement of Revenues, Expenditures, and Changes in Fund Balances ................................................. 46 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of Activities......................................................................................... 48 Proprietary Funds:

Proprietary Funds Descriptions ...............................................................................................................51 Statement of Net Position....................................................................................................................... 52 Statement of Revenues, Expenses, and Changes in Net Position........................................................... 56 Statement of Cash Flows......................................................................................................................... 58 Fiduciary Funds:

Fiduciary Funds Descriptions................................................................................................................... 63 Statement of Fiduciary Net Position ....................................................................................................... 64 1

City of El Paso de Robles
Annual Comprehensive Financial Report
Table of Contents
Statement of Changes in Fiduciary Net Position..................................................................................... 65 Notes to the Basic Financial Statements
Note 1 – Summary of Significant Accounting Policies................................................................................... 66 Note 2 – Cash and Investments..................................................................................................................... 74 Note 3 – Capital Assets.................................................................................................................................. 78 Note 4 – Leases Receivable............................................................................................................................ 79 Note 5 – Loans Receivable............................................................................................................................. 81 Note 6 – Interfund Transactions.................................................................................................................... 83 Note 7 – Deferred Outflows and Inflows of Resources................................................................................. 85 Note 8 – Long-Term Debt .............................................................................................................................. 85 Note 9 – Nacimiento Water Project .............................................................................................................. 91 Note 10 – Miscellaneous Employee Defined Benefit Pension Plans.............................................................91 Note 11 – Public Safety Employee Defined Benefit Pension Plan................................................................. 95 Note 12 – Other Post-Employment Benefits................................................................................................. 98 Note 13 – Other Employee Benefits............................................................................................................103 Note 14 – Fund Balances and Deficits.........................................................................................................104 Note 15 – Funds with Expenditures Exceeding Appropriations..................................................................104 Note 16 – Prior Period Adjustments............................................................................................................105 Note 17 – Successor Agency to the Former Redevelopment Agency .........................................................105 Note 18 – Liability, Workers’ Compensation, and Purchased Insurance ....................................................106 Note 19 – Litigation and Contingencies.......................................................................................................108 Note 20 – Subsequent Events......................................................................................................................108 Note 21 – Construction and other Commitments.......................................................................................109 Required Supplementary Information
Budgetary Comparisons
General Fund – Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget to Actual.......................................................................................................................... 113 Supplemental Sales Tax Fund – Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget to Actual.............................................................................................................114 Specific Plans Fund – Schedule of Revenues, Expenditures, and Change in Fund Balance – Budget to Actual.......................................................................................................................... 115 Notes to the Required Supplementary Information.................................................................................... 116

2

City of El Paso de Robles
Annual Comprehensive Financial Report
Table of Contents
Miscellaneous Employee Retirement Fund
Schedule of Changes in the Net Pension Liability and Related Ratios......................................................... 118 Schedule of Pension Contributions – Agent Multiple-Employer Defined Benefit Pension Plan ................. 120 Notes to the Required Supplementary Information.................................................................................... 122 Public Safety Employee Retirement Fund
Schedule of Plan’s Proportionate Share of Net Pension Liability................................................................ 124 Schedule of Pension Contributions – Cost-Sharing Defined Benefit Pension Plan ..................................... 126 Notes to the Required Supplementary Information.................................................................................... 128 Other Postemployment Benefit Plan
Schedule of Changes in the Net Other Post-Employment Benefit (OPEB) Liability and Related Ratios....................................................................................................................................... 130 Notes to the Required Supplementary Information.................................................................................... 132 Combining and Individual Fund Financial Statements and Schedules Major Governmental Funds:

Capital Projects Fund – Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget to Actual .......................................................................................................................................... 135 Nonmajor Governmental Funds:

Nonmajor Governmental Funds Descriptions............................................................................................. 136 Combining Balance Sheet – Nonmajor Governmental Funds..................................................................... 138 Combining Statement of Revenues, Expenditures, and Change in Fund Balances – Nonmajor Governmental Funds.................................................................................................................. 142 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget to Actual – Special Revenue Funds .................................................................................................................. 146 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget to Actual – Capital Projects Funds ................................................................................................................... 159 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget to Actual – Debt Service Funds ........................................................................................................................ 165 Internal Service Funds:

Internal Service Funds Descriptions ............................................................................................................ 167 Combining Statement of Net Position – Internal Service Funds ................................................................. 168 Combining Statement of Revenues, Expenses, and Changes in Net Position – Internal Service Funds ................................................................................................................................. 169 Combining Statement of Cash Flows – Internal Service Funds ................................................................... 170 3

City of El Paso de Robles
Annual Comprehensive Financial Report
Table of Contents
Custodial Funds:

Custodial Funds Descriptions....................................................................................................................... 173 Combining Statement of Fiduciary Net Position – Custodial Funds............................................................ 174 Combining Changes in Fiduciary Net Position – Custodial Funds................................................................ 175

STATISTICAL SECTION
Net Position by Component............................................................................................................................... 178 Changes in Net Position ..................................................................................................................................... 180 Fund Balances of Governmental Funds ............................................................................................................. 184 Changes in Fund Balances of Governmental Funds........................................................................................... 186 Tax Revenue by Source – General Fund............................................................................................................. 189 Assessed Value of Taxable Property .................................................................................................................. 190 Net Taxable Assessed Value History .................................................................................................................. 192 Property Tax Rates – Direct and Overlapping Governments............................................................................. 193 Principal Property Taxpayers ............................................................................................................................. 194 Property Tax Levies and Collections................................................................................................................... 197 Taxable Sales by Category – Adjusted for Economic Data ................................................................................. 198 Sales Tax Rates – Direct and Overlapping Governments...................................................................................201 Ratios of Outstanding Debt by Type ..................................................................................................................202 Ratios of General Bonded Debt Outstanding.....................................................................................................204 Direct and Overlapping Governmental Activities Debt......................................................................................205 Legal Debt Margin Information..........................................................................................................................206 Pledged Revenue Coverage................................................................................................................................208 Principal Employers............................................................................................................................................ 210 Demographics and Economic Statistics..............................................................................................................213 Full-Time Equivalent Government Employees by Fund/Department................................................................214 Operating Indicators by Function/Program.......................................................................................................216 Capital Asset Statistics by Function/Program ....................................................................................................218 4

CITY OF EL PASO DE ROBLES
“The Pass of the Oaks”
October 15, 2025
Honorable Mayor, Members of the City Council, and the Citizens of El Paso de Robles, We are pleased to present the City of El Paso de Robles’ Annual Comprehensive Financial Report (ACFR) for the fiscal year ended June 30, 2025. State law requires that every general-purpose local government publish, within six months of the close of each fiscal year, a complete set of audited financial statements.

This report has been published to fulfill this requirement.

Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal control that it has established for this purpose. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements.

Moss, Levy, and Hartzheim, LLP, have issued an unmodified (“clean”) opinion on the City’s financial statements for the year ended June 30, 2025. The independent auditor’s report is located at the front of the financial section of this report. The management’s discussion and analysis (MD&A) immediately follows the independent auditor’s report and provides a narrative introduction, overview, and analysis of the basic financial statements. The MD&A complements this letter of transmittal and should be read in conjunction with it.

Profile of Government
El Paso de Robles—aptly named “The Pass of the Oaks”—rests midway between San Francisco and Los Angeles in the heart of San Luis Obispo County. Cradled by picturesque rolling hills and some of California’s most celebrated wine regions, Paso Robles lies just 27 miles from pristine Pacific beaches. This vibrant community of more than 31,000 engaged residents offers the rare blend of suburban–rural charm and genuine small-town warmth, making it one of California’s most delightful hidden gems. With over 200 wineries at its doorstep and a lively downtown filled with exceptional restaurants and distinctive boutiques, Paso Robles is rapidly emerging as one of the most desirable—and still relatively affordable— places to live, work, and play.

The City of El Paso de Robles was incorporated in 1889 as a general law City that operates under the Council-Manager form of government. The governing body consists of a five-member City Council. The City is divided into four voting districts, each district is represented by one City Councilmember residing in that district, with the Mayor’s position elected at-large; the voters also elect one City Treasurer at-large.

The Councilmembers and the City Treasurer serve four-year terms, with three members elected every two years. All six elected positions are non-partisan. The City Manager, appointed by the City Council, is the Chief Executive Officer, and is empowered to appoint all non-elected employees, except for the City Attorney.

The City provides a full range of services, including police and fire and emergency medical services; library, parks and recreation services; landfill maintenance and operations; water, wastewater, and stormwater 5

utility services; streets, sidewalks, trails, and traffic safety infrastructure; building inspections; licenses and permits; and private development review, approval, and inspection services.

This ACFR includes the financial activities of the primary government, the City, and its two component units, the El Paso de Robles Public Financing Authority and the El Paso de Robles Infrastructure Financing Authority. A component unit is a legally separate entity for which the primary government is financially accountable and either having substantially the same governing board as the City or providing services entirely to the City. Both Authorities were formed by the City as a conduit for long-term debt financing and have the power to acquire, purchase, construct, finance, lease and/or sell public facilities and appurtenances necessary for the public purposes of the City. The ACFR also includes the operations of the Successor Agency (former Redevelopment Agency) which is reported as a Private-Purpose Trust Fund.

Local Economy
The local economy remains stable, though exhibiting less growth than in recent years. The City’s three largest revenue sources, sales tax, property tax, and transient occupancy tax (TOT), have been relatively flat for over the past five years, and looking ahead to FY 2025–26, total General Fund revenues are forecasted at approximately $51.2 million, representing an increase of one percent.

FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25
Sales Tax $ 12,077,864 $ 13,472,626 $ 13,524,049 $ 13,624,123 $ 13,277,120 Property Tax 11,723,491 12,317,409 13,165,625 14,210,193 14,248,311 TOT 7,132,691 9,803,368 9,824,200 9,946,197 9,705,846
Total $ 30,934,046 $ 35,593,403 $ 36,513,874 $ 37,780,513 $ 37,231,277 Despite the slowing of the economy, local development activity remains healthy. The City issued over 310 residential permits in 2024—with more anticipated in 2025—helping facilitate new housing growth and increase supply and affordability. This has resulted in the City’s population to grow by 0.4%, a gain of 154, between January 1, 2023 and January 1, 2024; the City’s new population is 31,061 and was one of two cities within San Luis Obispo County to see a population increase during the same time period. New commercial and industrial developments are also underway, or recently completed, in the northeast part of the City. New hotel and hospitality projects remain ongoing with three hotel projects currently in the construction phase, with several more in the planning stage. The City’s efforts to increase Science, Technology, Engineering and Mathematics (STEM)-related jobs continue to advance as the City has been completing technical work to advance the City’s spaceport project. The City’s new economic development strategic plan was finalized in the past year, which proposes allocating resources toward establishing best practices for business attraction, retention and expansion programs.

That all being said, City expenditures and capital project costs continue to face upward pressure, further complicated by the potential fiscal impacts of emerging federal tariffs. The Spring 2025 U.S. Economic Outlook from Beacon Economics has increased the likelihood of a national recession within the next twelve months. Given these conditions, City staff remains focused on maximizing the efficient use of available taxpayer resources while continuing to deliver high-quality services to the community. The proposed FY 2025–26 budget balances fiscal prudence with a commitment to operational excellence.

Long-term Financial Planning and Major Initiatives
The 2024-2026 budget reflects the City’s commitment to its new “SMART” goals concept, that is Specific, Measurable, Achievable, Relevant, and Time-Bound. The goals, as outlined throughout the Budget Report, reflect a reformatted structure that streamlines the goals framework and links measurable outcomes. 6

These new goals include overhauled goal categories, as well as specific action items and initiatives that will drive the workplan of staff over the next two fiscal years. The reformatted goals provide the City Council and public with a more comprehensive understanding of what specifically the City seeks to achieve for the next two years. Subsequently, the 2024-2026 budget allocates resources based on the updated set of goals and objectives that the City Council adopted during the spring of 2024. Below is a summary of the SMART goals; see the budget report for further details.

Transportation and Infrastructure
• Complete previously approved street maintenance plan projects funded by Measure E-12 (now Measuer I-24)
• Improve traffic circulation and facilitate development of the Gateway project by completing the design and funding plan for Vine Street Road Realignment and Bridge Construction • Submit Trade Corridor Enhancement Program Cycle 4 Grant Application to fund right of way and construction costs for the State Route 46/Union Road Overcrossing Project • Guide the orderly and timely development of the airport to meet current and future facility needs by completing the Airport Master Plan Update
• Complete annexation of City-owned property at landfill and solicit proposals for the development of a Regional Renewable Energy Park focused on the reduction of greenhouse gas emissions and the destruction of PFAS
• Reduce cost to taxpayers and improve safety within the City by completing the streetlight master plan study to identify lighting deficiency areas; determine feasibility of City ownership of streetlights; and identify optimal fixture types
• Reduce instances of vandalism and to ensure the public can conduct business in a safe and productive environment by implementing safety and security measures at City facilities • Extend the useful life and/or replace City facilities by conducting a facility inventory and implementing an asset management system to complete a comprehensive facilities master plan • Encourage creativity, collaboration and connection among City staff and the public by resolving space needs and creating welcoming, functional workspaces at City Hall/Library, Centennial Park, and Corporation Yard
• Reduce traffic congestion by evaluating and optimizing traffic signal operations citywide with focus on Creston, Niblick, 13th and 24th Streets
• Enhance resident and visitor experience by constructing beautification projects at City gateways at 1st and Spring; 36th and Spring; 24th and Spring; Wing Way; Airport; and the Train Station • Protect City infrastructure and undertake storm event mitigation work by revising and upgrading the Stormwater Drainage Master Plan and addressing risks on South and North River Road • Improve City service capacity and responsiveness by constructing a new Corporation Yard to include Utilities Department offices and Landscape, Facilities, and Fleet Maintenance shops • Mitigate safety concerns and encourage community recreational use on the Salinas Riverwalk Trail by designing and installing new trail lighting in partnership with the REC Foundation • Improve bicycle and pedestrian safety and mobility by advancing design of the Salinas River Trail connection plan to fully connect the Salinas River Trail to the Centennial Trail, Niblick Road, Stoney Creek Trail, Rambouillet Trail, Paso Robles Street and the downtown • Increase pedestrian safety and visibility by implementing the 13th & Railroad Street Pedestrian Crossing Enhancement with Railroad Street Streetscape elements 7

Public Safety Services
• Ensure public safety, protect the environment, enforce illegal conduct, and better manage quality of life issues associated with individuals actively ignoring public health and safety in public spaces by updating the City Municipal Code to align local regulations with judicial, state, and federal rulings • Respond to all emergencies in four minutes or less, 90% of the time by implementing a paramedic squad to enhance distribution of Advanced Life Support services • Reduce ambulance response times by 10% and leverage federal reimbursements to provide equitable prehospital emergency medical services by working collaboratively with SLO County, 7-Cities, and districts
• Seek to meet the State training requirements, address evolving changes in use of force, defensive tactics, fire, rescue, emergency medical response, and strengthen ISO rating by completing the Public Safety Training Center
• Strengthen overall community preparedness, awareness, and resilience and conduct two EOC training drills for city staff to increase EOC position proficiency and update emergency response plans • Ensure life safety and enhance firefighting capabilities by conducting and recording inspections of all public and private fire and life safety systems as required by CCR Title 19 and the California Fire Code • Increase overall proficiency and consistency of department personnel by implementing targeted emergency response training and education programs, resulting in 100% compliance of training mandates and local and state reporting requirements
• Elevate recruitment efforts to attract and retain highly qualified sworn police candidates by retaining a marketing firm to reach prospective new recruits and laterals • Effectively respond to emergencies and mitigate risks across the community by conducting a comprehensive Community Risk Assessment and Standards of Cover Study to determine appropriate allocation of resources, personnel, equipment, and funding Cultural, Recreational, and Open Spaces
• Continue to implement the City Council-approved Library Strategic Plan by establishing a bookmobile service and strengthening services and opportunities for teens through volunteerism, collection development, and programming by hiring a Teen Services Librarian position • Continue to implement the City Council-approved Recreation Services Strategic Plan by augmenting teen services at Centennial Park, re-establishing mobile recreation services, supporting, and providing culturally diverse events, and expanding volunteer opportunities • Enhance the lives of Paso Robles residents and visitors by reviewing and updating the Arts in Public Places ordinance and related process and procedures
Homelessness Response
• Initiate implementation of the City Council-approved Strategic Plan to Address Homelessness by:
o Conducting a financial needs assessment to determine funding needs and potential funding options needed to complete plan objectives and develop a budget that supports priorities of the plan
o Implementing a communication plan to share the Paso Robles Strategic Plan to Address Homelessness with the community
o Working with the County and North County neighboring jurisdictions to establish North County Homelessness Collaborative
o Increasing capacity for low barrier mental health services, detox, and substance abuse services(in collaboration with the County and other service providers) 8

o Developing partnerships with key stakeholders to identify and fill current gaps in housing continuum
Community and Economic Development
• Facilitate development of multiple parcels and create a redundant local transportation route by advancing the Mill Road Annexation Strategy
• Meet 2028 Regional Housing Needs Allocation cycle targets, increase housing supply and affordability by engaging owners of vacant or underutilized properties to educate and assist in facilitating the entitlement of multi-family housing
• Conduct Tourism Impact Study to better understand the fiscal benefits and service demand impacts on the community
• Continue Spaceport Licensing Process including evaluating Spaceport License Project Management vendors
• Implement City Council approved North County Broadband Strategic Plan to increase internet service provider options and service levels to all residents and businesses, including the airport area by completing a City-wide middle mile broadband conceptual plan • Increase affordable housing units by partnering with the Paso Robles Housing Authority and/or the Housing Authority of San Luis Obispo to identify at least three new locations for potential affordable housing projects and pursue funding to purchase property and/or renovate or construct the units Engaged and Response Government
• Maintain General Fund reserves at policy levels of 30% of revenues to mitigate the City from unforeseen fiscal circumstances, economic downturns, and to provide an initial buffer against service impacts
• Engage and empower residents by holding two resident academies to immerse members of the community into city operations, services, and projects
• Develop organizational vision, mission, values statements to clearly communicate core beliefs of the organization that guide operational decisions, customer-centric service, and fiscal stewardship • Undertake collaborative opportunities to advance key projects of the City through engagement with regional, state and federal representatives by updating City's Legislative Platform and issuing an RFP for legislative advocacy resources
• Complete Classification and Compensation Study and prioritize its implementation • Adopt a Compensation Philosophy
• Improve employee recruitment, retention, and recognition by implementing a range of resources, tools, policies, and programs by:
o Developing a Hiring Incentive Policy including the establishment of a list of guidelines and parameters management can implement when a key position becomes vacant, such as, but not limited to, pausing all other recruitments, hiring a recruiting firm, offering hiring incentives, retention incentives, moving allowances, etc. as well when it is appropriate to over hire (e.g., Airport Manager shadowing)
o Expanding employee development opportunities such as updating the City's Education Reimbursement Policy to review allowances/limits, paid time while at school, and/or eligible courses; provide biannual professional employee development such as 365 Evaluations, Strengths-Finder, DISC assessments; and/or reviewing the City's organizational structure with the emphasis of providing support around key positions
• Recognize high performing individuals and teams by establishing a formal, Citywide employee recognition program
9

Relevant Financial Policies
The City has established a comprehensive set of fiscal policies designed to: (1) provide for an acceptable level of services and products effectively; (2) provide for an acceptable level of services and products as the community grows; (3) ensure that the City is living within its means; and (4) provide reserves for unbudgeted needs that might arise from time to time. As such, the City continues to develop and maintain financial management programs (e.g., two-year budgets, ten-year financial forecasts, and five-year capital improvement program forecast) to ensure its long-term ability to pay for the costs necessary to provide the services required by its citizens. Similarly, the City will maintain financial records management information systems capable of tracking revenues and expenditure line-items, by source, by fund, by department, or any other format deemed necessary or desirable. The accounting systems are in conformity with generally accepted accounting principles as specified by the Municipal Finance Officers Association’s “Governmental Accounting, Auditing, and Financial Reporting,” and pronouncements issued by the Governmental Accounting Standards Board. Additionally, the City has established stand-alone investment, purchasing, and debt management policies which are available on the City’s website at www.prcity.com.

Awards and Acknowledgements
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City for its annual comprehensive report for the fiscal year ended June 30, 2024. This was the sixth time the City has received the award from GFOA. Previously, the City was awarded the California Society of Municipal Finance Officers Certificate for Outstanding Financial Reporting for 19 consecutive years. To receive the award, the City published an easily readable and efficiently organized ACFR that satisfied accounting principles generally accepted in the United States of America and all applicable legal requirements.

A Certificate of Achievement for Excellence in Financial Reporting is valid for a period of one year only.

However, we believe that our current ACFR continues to meet the certificate requirements, and we are submitting it to the GFOA to determine its eligibility for another certificate.

The City also received the GFOA’s Distinguished Budget Presentation Award for its Operating and Capital Budget Report for Fiscal Year 2024-25 and 2025-26 on August 12, 2024. To qualify for this award, the City’s budget document had to be judged proficient as a policy document, a financial plan, an operations guide, and a communication device.

The preparation of the ACFR was made possible without the skill, effort, and dedication of the entire staff of the Finance and Administrative Services staff. Special acknowledgment goes to Catherine Piatti, Finance Manager, in the preparation of audit fieldwork and the ACFR. In addition, we would like to thank the Mayor and City Council, and each City department, for their continued commitment to ensuring the City’s financial operations are conducted in a highly responsible manner.

Respectfully submitted,
Chris Huot Ryan Cornell
City Manager Administrative Services Director
10

CITY OF EL PASO DE ROBLES
Organization of City Government
As of June 30, 2025
Voters of the City of Paso Robles
City Council
Boards, Committees &
Commissions City Manager
City Manager's
Office
City Clerk
Civic
Engagement
Economic
Development
Administrative
Services
Finance
Human
Resources/Risk
Management
Information
Technology
Police
Detective/
Investigations
Patrol &
Response
Dispatch &
Records
Fire and
Emergency
Services
Community Risk
Reduction
Emergency
Response
Public Works
Airport
Capital Projects
Streets &
Stormwater
Facility, Fleet &
Landscape
Community
Services
Homeless
Library
Parks & Trails
Recreation
Community
Development
Building
Engineering
Planning
Utilities
Solid Waste
Utility Billing
Wastewater
Water
City Attorney
City Treasurer
11

CITY OF EL PASO DE ROBLES
Directory of City Officials
As of June 30, 2025

ELECTED OFFICIALS
Mayor...................................................................................................................................................John Hamon Jr.

District 1 Councilmember...............................................................................................................................Kris Beal District 2 Councilmember........................................................................................................................Chris Bausch District 3 Mayor Pro Tem...................................................................................................................... Steve Gregory District 4 Councilmember..........................................................................................................................Fred Strong City Treasurer...........................................................................................................................................Ryan Cornell

EXECUTIVE MANAGEMENT
City Manager............................................................................................................................................... Chris Huot Assistant City Manager...................................................................................................................................[Vacant] City Attorney.......................................................................................................................................... Elizabeth Hull Administrative Services Director .............................................................................................................Ryan Cornell Community Development Director ....................................................................................................... Warren Frace Community Services Director.............................................................................................................. Angelica Fortin Fire Chief....................................................................................................................................... Jonathan Stornetta Police Chief .............................................................................................................................................Damian Nord Public Works Director............................................................................................................................Freda Berman Utilities Director..............................................................................................................................Christopher Alakel 12

Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of El Paso De Robles
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2024
Executive Director/CEO
13

THIS PAGE IS INTENTIONALLY LEFT BLANK
14

Financial Section
Independent Auditor’s Report
Management’s Discussion &
Analysis
Basic Financial Statements
Required Supplementary
Information
Combining Statements
Individual Fund Financial
Statements and Schedules

INDEPENDENT AUDITORS’ REPORT
The Honorable Mayor and City Council
City of El Paso de Robles, California
Opinions
We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of El Paso de Robles, California as of and for the fiscal year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the City of El Paso de Robles, California’s basic financial statements as listed in the table of contents.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of El Paso de Robles, California, as of June 30, 2025, and the respective changes in financial position and, where applicable, cash flows thereof for the fiscal year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City of El Paso de Robles, California, and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

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

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City of El Paso de Robles, California’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with generally accepted auditing standards, we:
 Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. 15 2400 Professional Parkway, Suite 205 Santa Maria, CA 93455 Tel 805.925.2579 Fax 805.925.2147 mlhcpas.com BEVERLY HILLS ∙ CULVER CITY ∙ SANTA MARIA

 Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City of El Paso de Robles’ internal control. Accordingly, no such opinion is expressed.  Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.  Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City of El Paso de Robles’ ability to continue as a going concern for a reasonable period of time.

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

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, the budgetary comparison schedules, the note to the required supplementary information, the Schedule of Changes in the Net Other Post-Employment Benefit (OPEB) Liability and Related Ratios, the Schedule of Changes in the Net Pension Liability and Related Ratios, the schedules of pension contributions, and the Schedule of Plan’s Proportionate Share of Net Pension Liability be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of El Paso de Robles’ basic financial statements. The combining and individual nonmajor fund financial statements and schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements.

Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

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

In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. 16

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated October 27, 2025, on our consideration of the City of El Paso de Robles’ internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

Santa Maria, California
October 27, 2025
17

City of El Paso de Robles
MANAGEMENT’S DISCUSSION AND ANALYSIS
The management’s discussion and analysis (MD&A) of the City of El Paso de Robles (City) provides a narrative overview and analysis of the City’s financial statements for the fiscal year (FY) ended June 30, 2025, focusing on why amounts changed from the prior year. City management encourages readers to consider the information presented here, in conjunction with the accompanying transmittal letter located in the introductory section, the basic financial statements, and the accompanying notes to those basic financial statements to enhance their understanding of the City’s financial performance.

OVERVIEW OF THE FINANCIAL STATEMENTS
The discussion and analysis provided here are intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements are comprised of three components: (1) government-wide financial statements; (2) fund financial statements; and (3) notes to the basic financial statements. This report also includes supplementary information intended to furnish additional details to support the basic financial statements themselves.

Government-Wide Financial Statements
The Government-Wide Financial Statements are designed to provide readers with a broad overview of the City’s finances, in a manner similar to a private-sector business. The government-wide financial statements include the governmental activities and the business-type activities separately. These statements include all assets of the City (including infrastructure) as well as all liabilities (including long-term debt). Additionally, certain eliminations have occurred as prescribed by the GASB statement regarding inter-fund activity, payables, and receivables.

The Statement of Net Position presents financial information on all of the City’s assets, liabilities, and deferred outflows/inflows of resources, with the difference reported as net position. Over time, increases or decreases in the City’s net position is one indicator of whether its financial health is improving or deteriorating.

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

Both government-wide statements distinguish the City’s functions that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include general government, public safety, street maintenance, health and welfare, culture and recreation, urban redevelopment and housing, and economic development and assistance. Most of the City’s basic services are reported in this category. The business-type activities of the City include the maintenance and operations of the City’s water, wastewater, airport, and landfill systems, as well as transit and parking operations.

The government-wide financial statements can be found on pages 35-39 of this report.

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

Governmental Funds – Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide 18

City of El Paso de Robles
MANAGEMENT’S DISCUSSION AND ANALYSIS
financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in assessing a government’s near-term financing requirements.

Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

The City maintains 24 individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General Fund, the Supplemental Sales Tax Fund, the Specific Plans Fund, and Capital Projects Fund, which are considered to be major funds. Data from the other governmental funds are combined into a single aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements in the combining and individual fund statements and schedules section of this report.

The basic governmental fund financial statements can be found on pages 41-49 of this report.

Proprietary Funds – The City maintains two different types of proprietary funds. Enterprise funds report the same functions presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for its water, wastewater, airport, solid waste, transit, and parking operations. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City’s various functions. The City uses internal service funds to allocate fleet maintenance and replacement, information technology maintenance and replacement, and risk management functions. Because these services benefit governmental and business-type functions, they have been allocated amongst governmental activities and business-type activities in the government-wide financial statements.

Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the water, wastewater, airport, solid waste, transit, and parking operations which are all considered to be major funds of the City. Conversely, the internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds are provided in the form of combining statements in the combining and individual fund statements and schedules section of this report.

The basic proprietary fund financial statements can be found on pages 51-61 of this report.

Fiduciary Funds – Fiduciary funds are used to account for resources for which the City acts as a trustee or custodian.

Resources held in fiduciary funds are not available to support the City’s own programs and therefore are not reported in the government-wide financial statements. The accounting used for fiduciary funds is much like that used for proprietary funds.

The City maintains three different types of fiduciary funds. The Private-Purpose Trust Fund is used to report resources held in trust for the Successor Agency of the City of El Paso de Robles (the former and dissolved Redevelopment Agency). The Pension Trust Fund is used to report resources related to the City’s prefunding of outstanding pension obligations. The custodial funds report resources, not in a trust, which are held by the City for other parties outside of City’s reporting entity. One custodial fund, the War Memorial Hospital Scholarship, accounts 19

City of El Paso de Robles
MANAGEMENT’S DISCUSSION AND ANALYSIS
for money held towards scholarships for graduated local high school students who undertake courses in the medical field; scholarships are awarded by the Paso Robles Joint Unified School District. The second custodial fund, Business Improvement Area, accounts for money collected for and to be used by the Downtown Mainstreet Association to provide various improvements in the downtown area. The third and final custodial fund of the City is the Community Facilities District (CFD) No. 2022-1N, Improvement Area 4. This fund is accounts for special taxes authorized to be levied for the purpose of paying the costs of the design, construction, acquisition of public improvements within the Olsen-South Chandler Ranch Specific Plan, or to pay other obligations of the City and the Community Facilities District related to such improvements, and paying principal of and interest on bonds with respect to the Improvement Area, the proceeds of which are being used to finance all or a portion of the improvements.

The fiduciary fund financial statements can be found on pages 63-65 of this report.

Notes to the Basic Financial Statements
The notes provide additional information that is necessary to acquire a full understanding of the data provided in the financial statements. The City uses notes to (1) present information in greater detail than is possible within the financial statements themselves, (2) explain the nature of amounts reported in the financial statements and how those amounts were determined, and (3) report certain information that does not meet the requirements for inclusion in the financial statements (such as certain contingencies). The notes to the financial statements can be found on pages 66-109 of this report.

Other Information
In addition to the basic financial statements and accompanying notes, this report also presents required supplementary information. The City presents budgetary comparison schedules for the General Fund, Supplemental Sales Tax Fund, and the Specific Plan Fund; and the City’s progress in funding its obligations to provide pension and OPEB benefits to its employees. Required supplementary information can be found immediately after the notes to the financial statements on pages 111-132.

The combining statements referred to earlier in connection with nonmajor governmental funds, internal service funds and custodial funds are presented immediately following the required supplementary information on budgetary comparisons. Combining and individual fund statements and schedules can be found on pages 133-175 of this report.

FINANCIAL SUMMARY AND DETAILED ANALYSIS
As noted earlier, net position over time may serve as a useful indicator of a government’s financial position. In the case of the City, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $472.6 million, an increase of $39.0 million from the previous year.

Governmental Activities Business-Type Activities Total
2023-24 2024-25 2023-24 2024-25 2023-24 2024-25
ASSETS
Current assets $134,811,923 $132,891,315 $42,769,137 $53,866,845 $177,581,060 $186,758,160 Noncurrent receivables 10,962,357 10,000,511 14,524,665 15,394,170 25,487,022 25,394,681 Noncurrent capital assets 232,334,980 246,712,894 142,047,737 146,726,522 374,382,717 393,439,416 Total assets 378,109,260 389,604,720 199,341,539 215,987,537 577,450,799 605,592,257

DEFERRED OUTFLOWS OF

RESOURCES
Deferred outflows of resources 17,232,867 21,396,985 2,443,276 2,505,202 19,676,143 23,902,187 Total deferred outflows of
resources 17,232,867 21,396,985 2,443,276 2,505,202 19,676,143 23,902,187 20

City of El Paso de Robles
MANAGEMENT’S DISCUSSION AND ANALYSIS
Governmental Activities Business-Type Activities Total
2023-24 2024-25 2023-24 2024-25 2023-24 2024-25

LIABILITIES
Current liabilities $ 16,796,632 $ 13,931,900 $ 7,210,082 $ 5,960,089 $ 24,006,714 $ 19,891,989 Noncurrent liabilities 62,563,408 57,761,114 55,349,986 57,335,869 117,913,394 115,096,983 Total liabilities 79,360,040 71,693,014 62,560,068 63,295,958 141,920,108 134,988,972

DEFERRED INFLOWS OF

RESOURCES
Deferred inflows of resources 8,363,307 7,863,470 13,373,394 14,028,095 21,736,701 21,921,565 Total deferred inflows of
resources 8,363,307 7,863,470 13,373,394 14,028,095 21,736,701 21,921,565

NET POSITION
Net investment in capital assets 222,967,391 238,975,452 92,888,464 101,007,743 315,855,855 339,983,195 Restricted 40,530,502 40,604,025 2,647,831 2,993,914 43,178,333 43,597,939 Unrestricted 44,120,887 51,865,744 30,315,058 37,167,029 74,435,945 89,032,773 Total net position $307,618,780 $331,445,221 $125,851,353 $141,168,686 $433,470,133 $472,613,907 By far the largest portion of the City’s net position, $340.0 million, reflects its investment in capital assets (e.g., land, buildings, machinery, equipment, vehicles, and infrastructure), net of accumulated depreciation/amortization and less any related outstanding debt that was used to acquire those assets. The City uses these capital assets to provide a variety of services to its citizens. Accordingly, these assets are not available for future spending. Although the City’s investment in capital assets is reported net of related debt, it should be noted that the resources used to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. An additional portion of the City’s net position, $43.6 million, represents resources that are subject to external restrictions on how they may be used, with the remaining unrestricted net position totaling $89.0 million.

Governmental Activities
• In total, current assets decreased by $1.9 million when comparing FY 2024-25 to FY 2023-24. Specifically, accounts receivable decreased by $1.6 million during the year because of a capital grant receivable that was recorded on June 30, 2024, related to the City’s Paso Fiber Connect project, which was received during the current fiscal year.
0 50 100 150 200 250 300 350 400
Net investment in capital assets
Restricted
Unrestricted

MILLIONS
City of Paso Robles Net Position
June 30, 2024 and 2025
FYE 2024 FYE 2025
21

City of El Paso de Robles
MANAGEMENT’S DISCUSSION AND ANALYSIS
• Noncurrent capital assets increased by $14.4 million when comparing FY 2024-25 to FY 2023-24. This is because the City continues to make investments in replacing, repairing, and rehabilitating the City’s aging infrastructure. For the current fiscal year, projects include, but are not limited to, the Paso Fiber Connect ($1.7 million), Pickleball Courts at Sherwood Park ($1.5 million), Fire and Emergency Services Training Tower adjacent to Fire Station No. 3 ($746 thousand), Creston Road/South River/Rolling Hills Road Improvements ($4.8 million), and Golden Hill Road Rehabilitation ($2.6 million).

Additionally, there was a capital asset transfer made during the year, moving landfill-related capital assets to business-type activities. During the fiscal year, the City changed its sanitation operations to be funded primarily with tipping fees received at the City’s municipal landfill, thus meeting the requirements to be considered a business-type activities. This resulted in a transfer of $2.3 million of land and approximately $525 thousand of machinery and equipment.
• Current liabilities decreased by $2.9 million and noncurrent liabilities decreased by $4.8 million, resulting in an overall decrease of $7.7 million in total liabilities. The decrease in current liabilities can be mainly attributed to the City’s ability to recognize American Rescue Plan Act funds received in 2021 because funds were expended during the current fiscal year. Additionally, there was a vendor payment for a final subdivision map that occurred in the previous fiscal year that cleared in the current year. • Noncurrent liabilities decreased by $4.8 million because of a liability transfer from governmental activities to business-type activities. As previously mentioned, accounting for sanitation operations were changed to business-type activities. As such, the City’s recorded liability for landfill closure, post-closure, and corrective action decreased governmental activities total liability.

Business-type Activities
• The City’s business-type activities’ net position on June 30, 2025, was $141.2 million, an increase of $15.2 million when compared to the previous fiscal year. The main reason for this increase is twofold: first, as previously mentioned, the City established a new Solid Waste enterprise fund, contributing to an increase in net position of $2.7 million; and secondly, both the water and wastewater funds had operating incomes of $6.2 million and $4.6 million, respectively. See proprietary financial statements for additional detail.

The City’s overall net position increased by $39.0 million from the previous fiscal year. The reasons for the overall increase are discussed in the following sections for governmental activities and business-type activities.

Governmental Activities Business-Type Activities Total
2023-24 2024-25 2023-24 2024-25 2023-24 2024-25

REVENUES
Program revenues:

Charges for services $8,218,308 $9,808,032 $33,033,644 $41,377,421 $41,251,952 $51,185,453 Operating grants & c
contributions 1,072,754 1,126,087 919,148 885,500 1,991,902 2,011,587 Capital grants & contributions 6,554,131 7,265,950 3,965,388 916,634 10,519,519 8,182,584 General revenues:

Property taxes 16,888,628 16,976,980 89,898 113,692 16,978,526 17,090,672 Sales & use taxes 33,899,432 33,231,399 - - 33,899,432 33,231,399 Transient occupancy taxes 9,946,197 9,705,846 - - 9,946,197 9,705,846 Other taxes 6,112,116 5,643,609 - - 6,112,116 5,643,609 22

City of El Paso de Robles
MANAGEMENT’S DISCUSSION AND ANALYSIS
Governmental Activities Business-Type Activities Total
2023-24 2024-25 2023-24 2024-25 2023-24 2024-25
Use of money & property $ 6,873,039 $ 7,003,763 $ 2,060,950 $ 2,725,569 $ 8,933,989 $ 9,729,332 Other revenues 800,279 174,437 44,395 93,853 844,674 268,290 Total revenues 90,364,884 90,936,103 40,113,423 46,112,641 130,478,307 137,048,772

EXPENSES
Governmental activities:

General government 9,981,790 10,652,789 - - 9,981,790 10,652,789 Public safety 27,936,473 30,049,973 - - 27,936,473 30,049,973 Highways and streets 12,416,189 13,164,961 - - 12,416,189 13,164,961 Sanitation 1,065,977 - - - 1,065,977 -
Health and welfare 15,512 - - - 15,512 -
Culture-recreation 10,342,825 10,544,711 - - 10,342,825 10,544,711 Urban redevelopment and
t housing 246,065 328,154 - - 246,065 328,154
Economic development and
t assistance 679,788 665,373 - - 679,788 665,373
Interest on long-term debt 324,439 541,170 - - 324,439 541,170 Business-type activities:

Water operations - - 14,613,298 15,623,330 14,613,298 15,623,330 Wastewater operations - - 10,883,990 11,072,143 10,883,990 11,072,143 Airport operations - - 1,540,919 1,940,942 1,540,919 1,940,942 Sanitation operations - - - 3,228,895 - 3,228,895
Transit operations - - 33,136 33,136 33,136 33,136
Parking operations - - 248,020 165,485 248,020 165,485
Total expenses 63,009,058 65,947,131 27,319,363 32,063,931 90,328,421 98,011,062 Change in net position before
t transfers 27,355,826 24,988,972 12,794,060 14,048,738 40,149,886 39,037,710 Transfers 927,564 (1,162,531) (927,564) 1,162,531 - -
Change in net position 28,283,390 23,826,441 11,866,496 15,211,269 40,149,886 39,037,710 Net position – July 1, restated 279,335,390 307,618,780 114,090,921 125,957,417 393,426,311 433,576,197 Net position – June 30 $307,618,780 $331,445,221 $125,957,417 $141,168,686 $433,576,197 $472,613,907 Governmental Activities
Governmental activities increased the City’s net position by $23.8 million from the prior fiscal year for an ending balance on June 30, 2025 of $331.4 million. Although the City grew its net position, revenues have been and continue to rebalance after the effects of COVID-19 which resulted in overall revenues decreasing by $541 thousand from one year to the next. Out of the three largest revenue sources for the City, only property taxes realized a year over year increase of $88 thousand, or 0.52%. It should also be noted that the sanitation operations are now being accounted for in business-type activities, resulting in both revenues and expenditures decreasing from one year to the next.

Total expenses for governmental activities increased by $2.9 million, or 4.7%, from one year to the next. Public safety continues to be the largest city expenditure at $30.0million, a 7.57% increase when compared to the previous fiscal year. The next largest expenditure relates to highways and streets maintenance at $13.2 million, an increase of 6% when compared to the previous fiscal year. It should also be noted that most highway and street expenditures are considered capital assets and expended (i.e., depreciated) over the useful life of the asset, so the actual cash expended on road rehabilitation far exceeds the $13.2 million figure. Increases in these functions would not have been feasible if it weren’t for the City’s two supplemental sales tax measures, Measures I-24 and J-20. These two 23

City of El Paso de Robles
MANAGEMENT’S DISCUSSION AND ANALYSIS
tax measures generated an additional $20.0 million in general revenues in the current year which were directly invested in police, fire, and road maintenance services, as stated on the ballot measures.

As shown in the chart below, revenues generated by the City’s programs are not sufficient to cover the costs. The City relies on property taxes, sales taxes, investment income, and other general revenues to cover the costs associated with the various programs.

Business-Type Activities
For the City’s business-type activities, the results for the current fiscal year were positive in that overall net position increased by $15.2 million to reach an ending balance of $141.2 million. The total increase in net position for water and wastewater business-type activities was $7.0 million, or 13.7% from the prior fiscal year, and $4.5 million, or

9.7% from the prior fiscal year, respectively. The growth, in large part, is attributable to the utility rate increase enacted by City Council approximately five years ago. As a result, revenues from water charges for services increased $4.3 million over the previous year’s amount, and revenues from wastewater charges for services increased $1.4 million. There are no further utility rate increases planned at this time. As such, staff plans to update its Master Plan (i.e., an infrastructure planning document) and conduct a user fee study to ensure that charges are keeping pace with planned expenditures.

Additionally, during the fiscal year, the City changed its sanitation operations to be funded primarily with tipping fees received at the City’s municipal landfill, thus meeting the requirements to be considered a business-type activities. This resulted in an increase in net position for business-type activities of $2.7 million.

DETAILED ANALYSIS OF GOVERNMENTAL FUNDS
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The City reports four major funds individually in the governmental fund financial statements, the General Fund, the Supplemental Sales Tax Fund, Specific Plans Fund, and the Capital Projects Fund.

General Fund
The General Fund is the chief operating fund of the City. At the end of the current fiscal year, unassigned fund balance of the General Fund was $16.0 million, while total fund balance decreased to $23.2 million. As a measure of the General Fund’s liquidity, it may be useful to compare both unassigned fund balance and total fund balance $-
$5
$10
$15
$20
$25
$30
$35
General Government Public Safety Highways and Streets Culture-Recreation All Other Functions

MILLIONS
Expenses and Program Revenues - Governmental Activities Expenses Program Revenues
24

City of El Paso de Robles
MANAGEMENT’S DISCUSSION AND ANALYSIS
to total General Fund expenditures. Unassigned fund balance represents 31.7% of total general fund expenditures, while total fund balance represents 46.1% of that same amount.

The overall fund balance of the City’s General Fund decreased by $2.4 million during the current fiscal year. The City prioritizes fiscal health by, in part, adopting comprehensive fiscal policies, including a rainy-day reserve requirement. Amounts that exceed the reserve policy level can be utilized for one-time capital projects. And because the City’s General Fund reserves have exceeded minimal levels, in the current fiscal year, the City’s General Fund contributed a one-time allocation of $9.4 million to the Capital Projects Fund to fund a variety of capital projects including, but are not limited to, the Road Maintenance Program, Americans with Disabilities Act Curb Ramps and Sidewalk Program, downtown parking lot renovations, Mill Road parallel route and annexation, drainage improvements at a variety of locations, the South Vine Street Bridge, the Library/City Hall remodel, and various facility repairs and improvements.

For the current fiscal year, General Fund revenues totaled $56.0 million, whereas last year General Fund revenues totaled $58.7 million, representing a $2.7 million decline, or 4.6%. As has been previously mentioned, City tax revenues have not grown at the same pace coming out of the COVID-19 pandemic and sales tax and transient occupancy taxes realized year-over-year declines. Additionally, the City’s landfill tipping fee revenue was historically included as part of the General Fund operations which have now been moved to a standalone propriety fund.

Supplemental Sales Tax Fund
The Supplemental Sales Tax Fund accounts for and reports the financial resources used by the voter-approved Measure J-20, a one-cent supplemental sales tax approved by voters in 2020, and Measure I-24, a one-half cent supplemental sales tax approved by voters in 2024. These funds have been committed for fire, emergency, and police services, as well as street repair and maintenance as approved by City Council via Resolution No. 20-118.

These allocations remain in effect until amended or replaced by a future resolution. The fund balance grew by $6.0 million to $26.6 million during the fiscal year. This is mainly because many of the capital projects funded with these supplemental taxes take many years to complete. At the beginning of the fiscal year, of the $20.6 million total fund balance, only $4 million remained unappropriated.
$- $2 $4 $6 $8 $10 $12 $14 $16 $18 $20
Nonspendable
Assigned
Unassigned

MILLIONS
General Fund
Components of Fund Balance
June 30, 2024 and 2025
FYE 2024 FYE 2025
25

City of El Paso de Robles
MANAGEMENT’S DISCUSSION AND ANALYSIS
Specific Plans Fund
This Special Revenue Fund accounts for collection from the payment of development impact fees as identified in the Borkey, Union/46, Chandler Ranch, and Olsen Beechwood specific plans for public facilities and infrastructure.

The fund currently shows a fund deficit at the end of the fiscal year. As soon as development begins in these specific sites, development revenue will begin to be collected, and fund balance will begin to increase.

Capital Projects Funds
The Capital Projects Fund accounts for large capital and infrastructure projects that typically take multiple years to construct and complete and/or have several different funding sources. The Capital Projects Fund balance decreased to $26.9 million, a decrease of $3.0 million. This decrease indicates more capital projects being completed than in previous years. The entire fund balance in the Capital Projects Fund is allocated, or appropriated, for a specific project or purpose.

DETAILED ANALYSIS OF ENTERPRISE FUNDS
The City reports all its enterprise funds as major funds in the proprietary fund financial statements. They include the Water Fund, the Wastewater Fund, the Airport Fund, the newly established Solid Waste Fund, the Transit Fund, and the Parking Fund. The enterprise funds provide the same type of information found in the business-type activities portion of the government-wide financial statements, but in more detail. Unrestricted net position at the end of the fiscal year for the enterprise were as follows:
$-
$1.0
$2.0
$3.0
$4.0
$5.0
Police Services Fire and Emergency Services Road Maintenance

MILLIONS
Supplemental Sales Tax Fund Expenditures
For the Fiscal Year Ending June 30, 2024 and 2025
FYE 2024 FYE 2025
$- $4 $8 $12 $16 $20
Water Fund
Wastewater Fund
Airport Fund
All Other Enterprise Funds

MILLIONS
Enterprise Funds
Unrestricted Net Position
June 30, 2024 and 2025
FYE 2024 FYE 2025
26

City of El Paso de Robles
MANAGEMENT’S DISCUSSION AND ANALYSIS
Key Factors are as follows:
• For the fiscal year ending June 30, 2025, the Water Fund’s change in net position was $7.0 million, representing a 13.7% increase when compared to prior year. Similarly, the Wastewater Fund’s change in net position was $4.5 million, representing a 9.7% increase from the prior fiscal year. As previously mentioned, the growth, in large part, is attributable to the utility rate increase enacted by City Council approximately five years ago while operating expenses have been stable over the past two fiscal years. The Water Fund’s expenses for current fiscal year were $15.9 million, representing an increase of $698 thousand, or 4.6%. The Wastewater Fund’s expenses for the current year were $10.3 million, representing a decrease of $173 thousand, or 1.6%.
• The Airport fund realized an operating loss this year of $601 thousand, but an overall increase to net position of $118 thousand. Over the past two fiscal years, the City has intentionally expanded airport services. A full-time employee is scheduled to work 2,080 hours per year including vacation and sick leave.

A full-time equivalent (FTE) is calculated by dividing total labor hours into 2,080. For the current fiscal year there were 6.64 FTE positions deployed at the airport, an increase of 3.48 when compared to the previous fiscal year; in Fiscal Year 2022-23, FTE’s were 2.41. The airport fund has planned two additional positions in the upcoming years, which operating expenses are planned to stabilize thereafter. • The Solid Waste Fund is a new enterprise fund for the City during the current fiscal year. As previously mentioned, the City changed its sanitation operations to be funded primarily with tipping fees received at the City’s municipal landfill, thus meeting the requirements to be considered an enterprise fund. The fund received a capital asset transfer of $2.6 million, and a liability transfer (i.e., landfill closure, post-closure and corrective action) of $4.9 million during the year.
• The Parking Fund was established to account for the activity associated with the paid downtown parking program, with the intent that the cost to operate the program be fully funded through parking revenues and fines. Knowing that it would take a few years for the program to be revenue neutral, an interfund loan (from the General Fund) was established to cover any initial shortfalls. As of June 30, 2025, the loan balance was $679,939. Unfortunately, in May 2024, the City Council adopted Ordinance No. 1039, repealing the downtown parking program, therefore halting any new incoming revenues. In the next fiscal year, parking operations will wind down, and the general fund loan will be written off.

SIGNIFICANT CAPITAL ASSET ACTIVITY
The City’s investment in capital assets for its governmental and business-type activities as of June 30, 2025, amounts to $393.4 million (net of accumulated depreciation/amortization). This investment in capital assets includes land, buildings, machinery, equipment, vehicles, parks, roads, bridges, and the right to use other entities’ assets (intangibles) as well as utility infrastructure. The total increase in capital assets for the current year was 5.1%.

Governmental Activities Business-Type Activities Total
2023-24 2024-25 2023-24 2024-25 2023-24 2024-25

NET CAPITAL ASSETS
Land $ 20,997,495 $ 18,692,901 $ 8,562,314 $ 10,866,908 $ 29,559,809 $ 29,559,809 Construction in progress 37,213,807 42,027,919 16,662,920 19,977,005 53,876,727 62,004,924 Building & improvements 40,262,424 38,834,174 1,491,763 1,435,879 41,754,187 40,270,053 Equipment 9,562,987 15,187,286 3,225,603 3,354,976 12,788,590 18,542,262 Infrastructure 124,037,701 131,382,161 112,105,137 111,091,754 236,142,838 242,473,915 Intangible assets
Leased building & improvements 213,516 471,360 - - 213,516 471,360 Subscription-based software 47,050 117,093 - - 47,050 117,093 Net capital assets $ 232,334,980 $ 246,712,894 $ 142,047,737 $ 146,726,522 $ 374,382,717 $ 393,439,416 27

City of El Paso de Robles
MANAGEMENT’S DISCUSSION AND ANALYSIS
The major capital asset events during the current fiscal year included the following:
• Various street infrastructure replacement and rehabilitation - $13.3 million • City-wide fiber optic network - $1.7 million
• Pickleball courts at Sherwood Park - $1.5 million
• Fire and Emergency Services Training Tower - $746 thousand • Various water line replacements - $2.8 million
• Automated meter reading - $1.8 million
• Various sewer line replacements - $1.6 million
• Airport pavement maintenance plan - $397 thousand
Additional information on capital assets can be found in Note 3 – Capital Assets in the notes to the basic financial statements.

SIGNIFICANT LONG-TERM FINANCING ACTIVITY
At the end of the fiscal year, the City had total long-term financing liabilities of $53.6 million, composed of general obligation bonds, revenue bonds, loans payable, lease liabilities, and subscription-based information technology liabilities. During the current year, long-term financing liabilities decreased by $5.1 million. Debt outstanding as of June 30, 2025, with a comparison to prior year and the net change are as follows:

Governmental Activities Business-Type Activities Total
2023-24 2024-25 2023-24 2024-25 2023-24 2024-25

LONG-TERM FINANCING
Financed purchases $ 71,858 $ - $ 12,320 $ - $ 84,178 $ - Leases payable 227,285 508,529 - - 227,285 508,529
Subscriptions payable 42,401 100,181 - - 42,401 100,181 Bonds payable 7,623,991 5,816,871 8,978,339 8,116,712 16,602,330 13,933,583 Premium on refunding bond - - 197,997 173,247 197,997 173,247 Loans payable 1,597,737 1,442,313 39,970,618 37,428,820 41,568,355 38,871,133 Total long-term financing $ 9,563,272 $ 7,867,894 $ 49,159,274 $ 45,718,779 $ 58,722,546 $ 53,586,673 The City’s debt management continues to be healthy as the City’s overall financing debt continues to decrease as the City is paying down its debts and not borrowing additional. The financed purchases of various equipment and machinery that the City incurred ten years ago have now been fully paid for. The new additional debt the City has incurred during the year is related to extensions of already existing leased building and improvements and subscription-based information technology agreements.

In the upcoming fiscal year, the City anticipates issuance of a general revenue bond of approximately $16.8 million to fund the construction of South Vine Street bridge and realignment of South Vine Street with Theatre Drive. In anticipation of issuance, on June 17, 2025, Standard and Poor’s Global Rating Agency (S&P) assigned a “AA+” rating to the City for this anticipated bond issuance. At the same time, S&P affirmed its “AAA” long-term rating and underlying rating on the City’s outstanding general obligation debt with City economic outlook at “stable.” Per S&P, the City’s rating reflects strong financial management policies, favorable economic metrics, affordable long-term liability profile, and healthy available reserve position. While the City’s incomes trail those of similarly rated peers, S&P viewed the City’s well-integrated fiscal management framework and healthy financial position as key credit strengths that underpin the rating.

S&P’s credit fundamentals supporting the rating also include the following credit factors:
• The City’s growing economy in the northern portion of San Luis Obispo County along California’s Central Coast, an established tourist destination with a growing number of resorts and recreational amenities. In 28

City of El Paso de Robles
MANAGEMENT’S DISCUSSION AND ANALYSIS
addition, management reports ongoing economic and population growth, supported by the availability of developable land, relatively affordable housing, and the expansion of remote work options. • Maintenance of a healthy financial reserve and liquidity position supported by a diverse revenue portfolio and expanding economy. The City has several additional reserves that could be used for general operations through council action, such as its Supplemental Sales Tax Fund, Capital Projects Fund, and Section 115 Trust and capital replacement reserve.
• The City’s favorable debt and long-term liability profile, which we do not expect to worsen over the next few years, as the City has no additional debt plans.
• Prudent and comprehensive financial management policies and practices, including forward-looking budget assumptions, use of four-year financial forecasting, maintenance of a formal, comprehensive four-year capital plan, and a frequently updated economic development strategic plan that acts as a guiding tool for the City’s broader development mission. It also has policies governing reserves, investments, and debt, and is taking steps to mitigate cyber risk.

Additional information on the City’s long-term debt can be found in Note 8 – Long-Term Debt on pages 85-90 of this report.

CURRENTLY KNOWN FACTS, DECISIONS, OR CONDITIONS
The City’s Operating and Capital Budget for FY 2025-26 was updated by the City Council on June 17, 2025. Overall, the proposed changes to the FY 2025–26 budget were modest and reflect a local economy that remains stable, though exhibiting less growth than in recent years. As mentioned, the City’s three largest revenue sources—sales tax, property tax, and transient occupancy tax—are projected to remain relatively flat with total General Fund revenues forecasted to be approximately $51.2 million, representing an increase of one percent. At the same time, expenditures and capital project costs continue to face upward pressure, further complicated by the potential fiscal impacts of emerging federal tariffs. Additionally, the Spring 2025 U.S. Economic Outlook from Beacon Economics has increased the likelihood of a national recession within the next 12 months. Given these conditions, City staff remain focused on maximizing the efficient use of available taxpayer resources while continuing to deliver highquality services to the community.

With the passage of Measure I-24 in November 2024—extending the voter-approved Measure E-12 ½-cent sales tax—the City is continuing its commitment to accelerating local road repairs and improving street conditions throughout the community. In support of this priority, a new Road Maintenance Plan must be developed and approved, identifying a list of street segments targeted for repair and rehabilitation.

Staffing and Labor Overview
Funding for all currently and previously authorized positions were included in the adopted budget for FY 2025-26.

As such, ten new positions were authorized: three firefighters and three fire engineers (to deploy the “Paramedic Squad”); one community action team police officer; one airport technician; and two water maintenance specialists.

As a result, the budget will increase the City’s full-time equivalent (FTE) count to 314.44.

The City Council ratified labor agreements with all three labor groups in 2023 for a three-year period, expiring in December 2025. One of the objectives of the agreements was to ensure the City remained fiscally competitive for the recruitment and retention of all positions. Since then, the City has authorized 35 additional FTE positions, representing a 12.5% increase to the City's overall staffing complement.

Additionally, the City contracted with an outside firm to conduct a Classification and Compensation Study in 2023.

A classification and compensation system—which defines the types of jobs in an organization and how much those types of jobs will pay—is the framework organizations set up to make sure job classifications and employees’ 29

City of El Paso de Robles
MANAGEMENT’S DISCUSSION AND ANALYSIS
compensation is fair, strategic, and competitive within a given market. Because the labor agreements expire on December 31, 2025, city management and labor groups are expected to begin negotiations on new labor agreements toward fall 2025. As such, staff will be bringing forward recommendations from the study to make adjustments to the structure of the City’s classification system, as well as compensation adjustments for selected positions based on a detailed market analysis and fiscal capacity in the upcoming year.

Updated General Fund Reserves/One-Time Funding Availability The City Council prioritizes fiscal health by “living within our means” and has adopted comprehensive fiscal policies, including a rainy-day reserve requirement, to help mitigate unforeseen events and provide an initial buffer against significant or sudden revenue declines. The City’s Fiscal Policy states “the City shall maintain unrestricted reserves of no less than 30% of the 10-year revenue trend.” The unrestricted reserves of the General Fund as of June 30, 2025 was $16.0 million, exceeding minimum reserves by approximately $3.0 million.

The City also maintains a Section 115 trust, which was established to prefund the City’s pension costs. This trust is controlled by the City, and the funds can only be used to pay CalPERS for pension-related costs. These funds are separate and distinct from the City’s General Fund rainy-day fund. The Section 115 trust serves as an additional source of pension contribution funds during challenging economic or budgetary periods. As of June 30, 2025, the balance of the City’s Section 115 trust is $11.7 million. Staff is not proposing to utilize any of these funds as part of this budget cycle. However, if economic conditions deteriorate or other budgetary constraints emerge, this funding can be used to temporarily offset the City’s ongoing pension payments to CalPERS.

Capital Improvements
Road Repair and Maintenance
As stated above, with the passage of Measure I-24 in November 2024, the City is continuing its commitment to accelerating local road repairs and improving street conditions throughout the community. In support of this priority, a new Road Maintenance Plan will be developed and reviewed by City Council in the upcoming year. In the meantime, staff continues to focus on completing the previously approved street maintenance projects. The following road segments are planned to be repaired and rehabilitated, either designed or constructed, in the upcoming year, as follows:
• Riverside, from 17th to 24th Streets
• Sherwood, Sierra Bonita, Turtle Creek neighborhoods
• Sunset, Fairview, and Panorama neighborhood
• Melody Drive (east neighborhood)
• 13th Street and Niblick Bridge Deck Resurfacing
• Creston Road (Phase 2)
• Arciero Court/Mesa Road-area
• Dallons/Tractor-area
South Vine Street Bridge and Road Realignment
The Paso Robles Gateway Annexation project is located northwest of the intersection of Highway 101 and Highway 46 West and includes the development of two hotels with 325 rooms, three commercial centers with approximately 75,600 square feet of space, a 30,000 square-foot conference center, 17 workforce residential units, and up to 80 resort residential units or a third hotel with 100 rooms. On August 2, 2016, City Council approved a Settlement Agreement with the Gateway developers which, among other things, requires the realignment of South Vine Street with Theatre Drive. This involves not only the construction of a new road, but also the construction of a bridge in 30

City of El Paso de Robles
MANAGEMENT’S DISCUSSION AND ANALYSIS
order to connect to Highway 46 West. The project is currently out-to-bid, with City Council award anticipated in Winter 2025, with construction beginning shortly thereafter.

Sherwood Park Sports Fields
On May 20, 2025, City Council received a report on sports field capacity throughout the City, with emphasis on those involving youth sports. At that meeting, City Council directed staff to implement short-term strategies to alleviate the immediate need for sports field capacity. Based on feedback from user groups and in alignment with long-term planning efforts, staff have identified the following short-term recommendations to enhance the City’s recreational infrastructure. Implementing these short-term solutions will more immediately address critical capacity and maintenance issues, while allowing adequate time to develop and implement long-term strategies effectively:
• Install Sports Field Lighting at Sherwood Park: Adding lights to the two existing soccer fields and two baseball fields at Sherwood Park would significantly increase field availability—potentially adding up to

56.25 additional hours of use per week. This project is eligible for funding through development impact fees. While a detailed cost estimate is still required, preliminary estimates place the total project cost between $1 million and $1.5 million.
• Renovate Sports Field Turf at Sherwood Park: The condition of the soccer fields and outfields at Sherwood Park has deteriorated due to extensive gopher activity and outdated infrastructure. While minor turf repairs are planned for June, including a volunteer-led field day, substantial improvements are necessary to restore playability. A full renovation would involve turf replacement and a complete overhaul of the irrigation system. As this project does not expand field capacity, it is not eligible for funding through development impact fees. Preliminary costs are estimated at $1 million to $1.5 million, excluding needed renovations to associated park amenities such as dugouts, the concession stand, scoring booth, basketball and tennis courts, and the parking lot.

North River Bike and Pedestrian Trail
In 2018, the City Council adopted the 2018 Bicycle and Pedestrian Master Plan (BPMP). BPMP’s is the guiding policy document that establishes local priorities for bicycle and pedestrian improvements. This project constructsthe next segment of the City pedestrian and bike ring pathway, located along the scenic Salinas River, beginning at the 13th Street Bridge and ending at River Oaks Drive, just north of the highway 46 bridge. The project will also provide a safer connection to the downtown area for residents who live north of Highway 46 East and separate non-motorists from traffic. Preliminary design, environmental documents, etc. has been funded, in part, by a SLOCOG grant, with an additional $2.0 million anticipated for construction. The City has already set aside $1 million towards the City's matching requirement.

City Hall Remodel
The City Hall/Library building was opened in 1995 and is comprised of approximately 28,680 gross square feet including an 18,000 square foot library on the ground floor and 10,000 square foot City Hall on the second floor.

Although adjustments have been made to cubicle configuration and storage areas, the City Hall offices have not been remodeled in nearly 29 years.

A combination of growth in staffing, changes in service delivery models, and the need to implement modern security elements have proven a need for more staff workspace, an additional meeting area, and upgraded facility security.

Optimizing the currently unused space and standardizing what is currently being used to maximize capacity is 31

City of El Paso de Robles
MANAGEMENT’S DISCUSSION AND ANALYSIS
desired. The remodeling scope includes new office cubicles and chairs that standardize space allocations and increase the number of workspaces; one additional conference area in a public access area; security upgrades including electronic keying, public counter with secure gate, and creation of a safe room; new wallcoverings and paint; new carpet and resilient flooring. On August 20, 2024, City Council approved a design contract to Ten Over Studio Inc. Design is wrapping up and construction/remodel is scheduled to occur between the Thanksgiving and Christmas holidays.

REQUESTS FOR INFORMATION
This financial report is designed to a general overview of the City’s finances and to show the City’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional information, please contact the Office of Administrative Services at 1000 Spring Street, Paso Robles, CA 93446 or by phone at (805)237-3999 or by email at [email protected]. 32

Basic Financial Statements

33

34

STATEMENT OF NET POSITION AND STATEMENT OF ACTIVITIES
The Statement of Net Position and the Statement of Activities are required by the Governmental Accounting Standards Board Statement No. 34 (GASB 34). Their purpose is to summarize the entire City’s financial activities and financial position. They are prepared on the same basis as is used by most businesses, which means they include all the City’s assets and deferred outflows of resources and all its liabilities and deferred inflows of resources, as well as all its revenues and expenses. This is known as the full accrual basis of accounting – the effect of all the City’s transactions is considered, regardless of whether or when cash changes hands.

The Statement of Net Position reports the difference between the City’s total assets and deferred outflows of resources and the City’s total liabilities and deferred inflows of resources, including all the City’s capital assets and all its long-term debt. The Statement of Net Position presents similar information to the old balance sheet format but presents it in a way that focuses the reader on the composition of the City’s net position, by subtracting total liabilities and deferred inflows of resources from total assets and deferred outflows of resources.

The Statement of Net Position summarizes the financial position of the City’s governmental activities in a single column, and the financial position of all City business-type activities in a single column; these columns are followed by a total column that presents the financial position of the entire City.

The City’s governmental activities include the activities of its General Fund, along with all its Special Revenue, Capital Projects, and Debt Service Funds. The City’s business-type activities include all its Enterprise Fund activities.

The Statement of Activities reports increases and decreases in the City’s net position. It is also prepared on the full accrual basis of accounting, which means it includes all the City’s revenues and all its expenses, regardless of when the cash changes hands. This differs from the “modified accrual” basis of accounting used in the governmental funds financial statements, which reflect only current assets, current liabilities, available revenues, and measurable expenditures.

The Statement of Activities presents the City’s expenses first, listed by program, and follows these with the expenses of its business-type activities. Program revenues – that is, revenues which are generated directly by these programs – are then deducted from program expenses to arrive at the net expense of each governmental and business-type program.

The City’s general revenues are then listed in the governmental activities or business-type activities column, as appropriate, and the change in net position is computed and reconciled with the Statement of Net Position.

35

City of El Paso de Robles

STATEMENT OF NET POSITION
June 30, 2025
ASSETS
Current assets:

Ca Cash and investments $ 120,030,193 $ 49,523,609 $ 169,553,802 Ac Accounts receivable 9,515,240 3,869,666 13,384,906
Int Interest receivable 1,748,353 622,774 2,371,127
Pre Prepaid items 931,427 9,940 941,367
DeDeposits 2,620 468 3,088
InvInventory - 503,870 503,870
Int Internal balances 663,482 (663,482) -
Total current assets 132,891,315 53,866,845 186,758,160 Noncurrent assets:

Le Leases receivable 3,328,578 14,474,764 17,803,342
Lo Loans receivable 6,671,933 919,406 7,591,339
Capital assets:

Nond Nondepreciable capital assets 60,720,820 30,843,913 91,564,733 Net d Net depreciable capital assets 185,403,621 115,882,609 301,286,230 Net ri Net right-to-use leased capital assets 471,360 - 471,360 Net intangible right-to-use asset 117,093 - 117,093
Total noncurrent assets 256,713,405 162,120,692 418,834,097 Total assets 389,604,720 215,987,537 605,592,257

DEFERRED OUTFLOWS OF RESOURCES
Deferred loss on refunding bonds 130,452 - 130,452
Deferred other post-employment benefits (OPEB) 596,071 165,831 761,902 Deferred pensions outflows 20,670,462 2,339,371 23,009,833 Total deferred outflows of resources 21,396,985 2,505,202 23,902,187

LIABILITIES
Current liabilities:

Ac Accounts payable 5,502,908 1,301,926 6,804,834
Ac Accrued payroll expenses 995,455 168,358 1,163,813
Int Interest payable 459,936 597,344 1,057,280
Cu Customer deposits - 248,455 248,455
Un Unearned revenue 3,792,814 30,567 3,823,381
Co Compensated absences due within one year 836,532 111,636 948,168 Le Leases due within one year 275,324 - 275,324
Su Subscriptions due within one year 38,283 - 38,283
De Debt due within one year 2,030,648 3,501,803 5,532,451 Total current liabilities 13,931,900 5,960,089 19,891,989 Noncurrent liabilities:

Co Compensated absences 2,509,594 334,909 2,844,503
La Landfill closure, post-closure costs - 5,148,592 5,148,592 Le Leases payable 233,205 - 233,205
Subscription liability 61,898 - 61,898
Ne Net OPEB liability 2,815,239 783,204 3,598,443
Ne Net pension liability 46,912,642 8,852,188 55,764,830 De Debt due after one year 5,228,536 42,216,976 47,445,512 Total noncurrent liabilities 57,761,114 57,335,869 115,096,983 Total liabilities 71,693,014 63,295,958 134,988,972
Continued
Governmental
Activities
Business-Type
Activities Total
The notes to financial statements are an integral part of this statement. 36

City of El Paso de Robles
STATEMENT OF NET POSITION (continued)
June 30, 2025

DEFERRED INFLOWS OF RESOURCES
Deferred leases $ 3,092,563 $ 12,883,299 $ 15,975,862
Deferred OPEB 3,986,398 1,109,023 5,095,421
Deferred pensions inflows 814,509 35,773 850,282
Total deferred inflows of resources 7,863,470 14,028,095 21,921,565

NET POSITION
Net investment in capital assets 238,975,452 101,007,743 339,983,195 Restricted for:

Landfill closure, postclosure, and corrective action - 307,941 307,941 Debt service 3,005,372 2,685,973 5,691,345
Disability access and compliance 143,552 - 143,552
Health and welfare 1,655,126 - 1,655,126
Highways and streets maintenance 11,980,615 - 11,980,615 Infrastructure and facilities expansion 23,317,118 - 23,317,118 Public, education, government access 502,242 - 502,242
Unrestricted 51,865,744 37,167,029 89,032,773
Total net position $ 331,445,221 $ 141,168,686 $ 472,613,907 Concluded
$ 629,524,444
629,494,444
-30,000
Governmental
Activities
Business-Type
Activities Total
The notes to financial statements are an integral part of this statement. 37

City of El Paso de Robles

STATEMENT OF ACTIVITIES
For the Fiscal Year Ended June 30, 2025
Function/Programs Expenses
Governmental Activities:

General government $ 10,652,789 $ 1,288,952 $ 45,436
Public safety 30,049,973 4,217,755 1,044,375
Highways and streets 13,164,961 1,417,413 3,000
Health and welfare - - 14,534
Culture-recreation 10,544,711 2,883,912 17,531
Urban redevelopment and housing 328,154 - -
Economic development and assistance 665,373 - 1,211
Interest expense on long-term debt 541,170 - -
Total governmental activities 65,947,131 9,808,032 1,126,087 Business-Type Activities:

Water operations 15,623,330 22,053,415 -
Wastewater operations 11,072,143 14,912,365 -
Airport operations 1,940,942 1,313,413 -
Santitation operations 3,228,895 3,070,872 -
Transit operations 33,136 - 885,500
Parking operations 165,485 27,356 -
Total business-type activities 32,063,931 41,377,421 885,500 Total primary government $ 98,011,062 $ 51,185,453 $ 2,011,587 General Revenues:

Taxes:

Property taxes
Sales and use taxes
Transient occupancy taxes
Other taxes
Use of money and property
Other revenues
Transfers Transfers
Total general revenues and transfers
Change in net position
Net position - beginning of fiscal year
Prior period adjustments
Net position - beginning of fiscal year, restated
Net position - end of fiscal year
Program Revenues
Charges for Services
Operating Grants and
Contributions
The notes to financial statements are an integral part of this statement. 38

$ 1,682,422 $ (7,635,979) $ - $ (7,635,979)
194,663 (24,593,180) - (24,593,180)
2,446,703 (9,297,845) - (9,297,845)
210,707 225,241 - 225,241
2,731,455 (4,911,813) - (4,911,813)
- (328,154) - (328,154)
- (664,162) - (664,162)
- (541,170) - (541,170)
7,265,950 (47,747,062) (47,747,062)
370,756 - 6,800,841 6,800,841
373,949 - 4,214,171 4,214,171
171,929 - (455,600) (455,600)
- - (158,023) (158,023)
- - 852,364 852,364
- - (138,129) (138,129)
916,634 - 11,115,624 11,115,624
$ 8,182,584 (47,747,062) 11,115,624 (36,631,438)
16,976,980 113,692 17,090,672
33,231,399 - 33,231,399
9,705,846 - 9,705,846
5,643,609 - 5,643,609
7,003,763 2,725,569 9,729,332
174,437 93,853 268,290
(1,162,531) 1,162,531 -
71,573,503 4,095,645 75,669,148
23,826,441 15,211,269 39,037,710
307,391,986 125,851,353 433,243,339
226,794 106,064 332,858
307,618,780 125,957,417 433,576,197
$ 331,445,221 $ 141,168,686 $ 472,613,907
331,445,221 141,168,686 472,613,907
- - -
Net (Expense) Revenue and Changes in Net Position
Capital Grants and
Contributions
Governmental
Activities
Business-Type
Activities Total
39

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40

GOVERNMENTAL FUNDS FINANCIAL STATEMENTS

GASB Statement No. 34 revises the format of the Governmental Funds Financial Statements so that only individual major funds are presented, while nonmajor funds are combined in a single column. Major funds are defined generally as having significant activities or balances in the current fiscal year.

The governmental funds described below were determined to be major funds of the City this fiscal year. Individual nonmajor funds may be found in the Combining Statements Section.

General Fund
The General Fund is the primary operating fund of a city. It accounts for all financial resources that are not legally required to be placed in another fund.

Supplemental Sales Tax Fund
This fund accounts for and reports the financial resources generated by the voter-approved Measure J-20, a one-cent supplemental sales tax approved by voters in 2020, and Measure I-24, a one half-cent supplemental tax approved by voters in 2024. By Resolution 20-118, the City Council dedicated these revenues to fire, emergency, and police services, as well as street repair and maintenance. These allocations will remain in effect until amended or replaced by future resolutions.

Specific Plans Fund
This Special Revenue fund accounts for collection from the payment of development impact fees as identified in the Borkey, Union/46, Chandler Ranch and Olsen Beechwood specific plans for public facilities and infrastructure.

Capital Projects Fund
This fund accounts for the City’s Capital Improvement Program (CIP) which was established to account for large capital and infrastructure projects that typically take multiple fiscal years to complete. 41

City of El Paso de Robles

BALANCE SHEET
Governmental Funds
June 30, 2025
ASSETS AND DEFERRED OUTFLOWS OF RESOURCES 103 101
Assets:

Cash and investments $ 20,886,870 $ 22,964,385 $ 527,321 $ 28,881,596 Accounts receivable 4,584,221 3,718,220 - 826,293
Leases receivable 3,328,578 - - -
Interest receivable 1,970,265 152,138 3,559 -
Loans receivable 3,599,356 - - -
Deposits 2,620 - - -
Prepaid items 248,030 - - -
Advances receivable 2,634,356 - - -
Total assets 37,254,296 26,834,743 530,880 29,707,889
Deferred outflows of resources:

Deferred interest expense - - 1,189,493 -
Total deferred outflows of resources - - 1,189,493 -
Total assets and deferred outflows of resources $ 37,254,296 $ 26,834,743 $ 1,720,373 $ 29,707,889 Liabilities:

Accounts payable $ 2,363,912 $ 88,612 $ - $ 2,784,354
Accrued payroll expenses 812,463 153,751 - -
Interest payable - - 1,189,493 -
Unearned revenue 2,495,859 - - -
Advances payable - - 1,817,652 -
Total liabilities 5,672,234 242,363 3,007,145 2,784,354 Deferred inflows of resources:

Deferred leases 3,092,563 - - -
Unavailable revenue 5,251,941 - - -
Total deferred inflows of resources 8,344,504 - - -
Fund balances (deficits):

Nonspendable 3,118,401 - - -
Restricted - - - -
Committed - 26,562,380 - -
Assigned 4,133,334 - - 26,923,535
Unassigned 15,985,823 30,000 (1,286,772) -
Total fund balances (deficits) 23,237,558 26,592,380 (1,286,772) 26,923,535 Total liabilities, deferred inflows of resources,
and fund balances (deficits) $ 37,254,296 $ 26,834,743 $ 1,720,373 $ 29,707,889

LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND

FUND BALANCES (DEFICITS)
General Fund
Specific Plans
Fund
Supplemental
Sales Tax Fund
Capital Projects
Fund
The notes to financial statements are an integral part of this statement. 42

$ 38,277,867 $ 111,538,039
363,900 9,492,634
- 3,328,578
857,597 2,983,559
3,072,577 6,671,933
- 2,620
14,352 262,382
- 2,634,356
42,586,293 136,914,101
101,705 1,291,198
101,705 1,291,198
$ 42,687,998 $ 138,205,299
$ 143,106 $ 5,379,984
3,992 970,206
101,705 1,291,198
1,296,955 3,792,814
153,222 1,970,874
1,698,980 13,405,076
- 3,092,563
3,670,433 8,922,374
3,670,433 12,014,937
- 3,118,401
37,393,528 37,393,528
- 26,562,380
78,279 31,135,148
(153,222) 14,575,829
37,318,585 112,785,286
$ 42,687,998 $ 138,205,299
Total
Governmental
Funds
Nonmajor
Governmental
Funds
43

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44

City of El Paso de Robles

RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS

TO THE STATEMENT OF NET POSITION
June 30, 2025
Total fund balances - governmental funds $ 112,785,286
Amounts reported for governmental activities in the Statement of Net Position are different because:

Capital assets at historical cost $ 401,630,951
Accumulated depreciation/amortization (154,918,057)
Net capital assets 246,712,894
7,661,176
(459,936)
Compensated absences 3,346,126
Subscription payable 100,181
Leases payable 508,529
General obligation bonds 5,816,871
Loans payable 1,442,313
Net OPEB liability 2,815,239
Net pension liability 46,912,642
Total long-term liabilities (60,941,901)
130,452
16,465,626
9,091,624
Total net position - governmental activities $ 331,445,221 Internal service funds are used to charge activities involved with rendering services to departments within the City.

Assets and liabilities of the internal service funds not mentioned above are:

Capital assets are not current financial resources and, therefore, are not reported in the governmental funds. In the Statement of Net Position, all assets, including capital and right-to-use leased assets, and accumulated depreciation and amortization are reported.

Certain revenues in the governmental receivables are unavailable because they cannot be used to meet current financial obligations. In the Statement of Net Position, revenues are recognized when earned.

Interest expense on long-term debt is recognized in the period in which it matures and is paid in governmental funds.

However, in the Statement of Net Position, it is recognized in the period that it is incurred.

Long-term liabilities are applicable to future periods and, therefore, are not reported in governmental funds. In the Statement of Net Position, all liabilities, including long-term liabilities, are reported. Long-term liabilities relating to governmental activities consist of:

The deferred loss on refunding of bonds is applicable to future periods and, therefore, is not reported in governmental funds. In the Statement of Net Position, the deferred loss on refunding of bonds is reported.

Deferred outflows and inflows of resources relating to pensions and other post-employment benefits are applicable to future periods and, therefore, are not reported in governmental funds. In the Statement of Net Position, deferred outflows and inflows of resources related to pensions and other post-employment benefits are reported. The difference between deferred outflows of resources of $ 21,266,533 and deferred inflows of $ 4,800,907 is:

The notes to financial statements are an integral part of this statement. 45

City of El Paso de Robles

STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES Governmental Funds
For the Fiscal Year Ended June 30, 2025
REVENUES 103 101
Taxes $ 45,600,179 $ 15,062,615 $ - $ -
Licenses and permits 1,330,241 - - -
Fines and forfeitures 271,964 - - -
Use of money and property 3,680,921 1,200,658 27,297 -
Intergovernmental revenues 1,111,553 - - 2,640,952
Charges for current services 3,853,282 - - -
Other revenues 174,437 - - -
Total revenues 56,022,577 16,263,273 27,297 2,640,952

EXPENDITURES
Current:

GeGeneral government 9,421,200 - - 158,562
PuPublic safety 25,613,655 6,714,772 - -
HigHighways and streets 6,050,757 202,878 - 1,192,015
CuCulture-recreation 7,741,326 - - 58,534
Ur Urban redevelopment and housing 272,707 - - -
Ec Economic development and assistance 659,497 - - -
Capital outlay 485,810 1,339,251 - 19,112,743
Debt service:

IntInterest 50,046 - - -
PriPrincipal 155,423 - - -
Ag Agent fees - - - -
Total expenditures 50,450,421 8,256,901 - 20,521,854
5,572,156 8,006,372 27,297 (17,880,902)

OTHER FINANCING SOURCES (USES)
Transfers in 1,447,897 - - 14,869,060
Transfers out (9,389,697) (2,006,447) - -
Total other financing sources (uses) (7,941,800) (2,006,447) - 14,869,060 Net change in fund balances (2,369,644) 5,999,925 27,297 (3,011,842) Fund balances (deficits) - July 1 25,607,202 20,592,455 (1,314,069) 29,935,377 Fund balances (deficits) - June 30 $ 23,237,558 $ 26,592,380 $ (1,286,772) $ 26,923,535 Capital Projects
Fund
Excess (deficiency) of revenues over (under)
expenditures
General Fund
Supplemental
Sales Tax Fund
Specific Plans
Fund
The notes to financial statements are an integral part of this statement. 46

$ 4,895,040 $ 65,557,834
- 1,330,241
- 271,964
2,191,024 7,099,900
3,182,048 6,934,553
4,352,545 8,205,827
- 174,437
14,620,657 89,574,756
1,199,555 10,779,317
9,514 32,337,941
219,850 7,665,500
2,024,429 9,824,289
55,500 328,207
- 659,497
248,041 21,185,845
653,430 703,476
1,597,320 1,752,743
1,780 1,780
6,009,419 85,238,595
8,611,238 4,336,161
- 16,316,957
(8,354,662) (19,750,806)
(8,354,662) (3,433,849)
256,576 902,312
37,062,009 111,882,974
$ 37,318,585 $ 112,785,286
Nonmajor
Governmental
Funds
Total
Governmental
Funds
47

City of El Paso de Robles

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES For the Fiscal Year Ended June 30, 2025
Total net change in fund balances - governmental funds $ 902,312 Amounts reported for governmental activities in the Statement of Activities are different because:

Capital outlay 25,734,623
Depreciation (8,466,368)
Amortization (316,918)
Total 16,951,337
(96,137)
19,516
1,317,739
(65,231)
(190,814)
2,271,318
Continued
In governmental funds, compensated absences are measured by the amount of financial resources used (essentially the amount paid). In the Statement of Activities, these items are measured by the amounts earned during the fiscal year. This fiscal year, compensated absences earned exceeded the amounts used by:

In governmental funds, capital outlays are reported as expenditures. However, in the Statement of Activities, the cost of those assets and right-to-use leased assets are allocated over their estimated useful lives as depreciation or amortization expense. This is the amount by which capital outlay and capital contributions exceed depreciation/amortization expense during the current fiscal period.

In governmental funds, loan receivables and accrued interest are unavailable because they cannot be used to meet current financial obligations. In the Statement of Activities, revenues are recognized when earned. This amount is the net change in loan proceeds and accrued interest and the repayments made in the fiscal year.

In governmental funds, interest on long-term debt is recognized in the period that it becomes due. In the Statement of Activities, it is recognized in the period that it is incurred. Unmatured interest owed at the end of the period, less matured interest paid during the period but owing from the prior period was:

In governmental funds, proceeds and repayments of long-term debt are reported as other financing sources and uses, respectively. In the Statement of Activities, proceeds and repayments of long-term debt are reported as increases and decreases in liabilities, respectively. This is the net amount of repayments of debt made and incurred in the period.

In governmental funds, the impacts of premiums, discounts, and losses on refunding of debt are reported at the issuance of debt. In the Statement of Activities, those amounts are amortized over the life of the debt. This amount represents the amortization of a loss on refunding.

In the Statement of Activities, a transfer of landfill-related capital assets and closure, post-closure and corrective action liability was made from governmental activities to business-type activity. In government funds, capital outlayes are reported as expenditures and landfill closure and post-closure costs are not reported as expenditures because it does not require the use of current resources. This amount is the net difference made in the current period.

The notes to financial statements are an integral part of this statement. 48

City of El Paso de Robles

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES (continued) For the Fiscal Year Ended June 30, 2025
$ 805,043
1,583,981
239,662
87,715
Change in net position - governmental activities $ 23,826,441 Concluded
23,826,441
-
In governmental funds, other post-employment benefit costs are recognized when employer contributions are made. In the Statement of Activities, other post-employment benefit costs are recognized when incurred. This amount is the net change in net OPEB liability and deferred inflows of resources.

In governmental funds, pension costs are recognized when employer contributions are made. In the Statement of Activities, pension costs are recognized when incurred. This amount is the net change in net pension liability, deferred outflows of resources and deferred inflows of resources.

In governmental funds, lease expenses are recognized when payments are made. In the Statement of Activities, payments are reported as decreases in leases payable. This is the net amount of repayments of debt made and incurred in the period.

Internal service funds are used to charge the cost of activities involved in rendering services to departments within the City. This amount is the net revenue of the internal service funds is reported with governmental activities.

The notes to financial statements are an integral part of this statement. 49

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50

PROPRIETARY FUNDS FINANCIAL STATEMENTS
The City maintains two different types of Proprietary Funds: Enterprise Funds and Internal Service Funds. Enterprise Funds are used when the City charges customers for the services it provides, whether to outside customers or to other units of the City. An internal service fund is used to report any activity that provides goods or services to other funds, departments, or agencies of the primary government. Both Enterprise and Internal Service Funds are generally reported as proprietary funds. Proprietary fund statements, like the government-wide statements, provide short-term and long-term financial information about the activities the City operates like businesses, such as utility services which are operated in a manner similar to a private business enterprise. The intent of the City is that the cost of providing goods and services be financed primarily through user charges.

The concept of major funds established by GASB Statement No. 34 extends to proprietary funds. The City has identified the funds below as major proprietary funds in the current fiscal year. GASB Statement No. 34 does not provide for the disclosure of budget versus actual comparisons regarding proprietary funds.

For the Proprietary Fund Financial Statements, the internal service funds are combined in a single column. Individual internal service funds may be found in the Individual Fund Financial Statements and Schedules.

Water Fund
The fund is used to manage the operation and maintenance of the City's water system, including connections, treatment, production, transmission, and distribution. It also supports the City's participation in the Nacimiento Water Project and efforts to comply with sustainability requirements for the Paso Robles Groundwater Basin.

Wastewater Fund
This fund supports the operation and maintenance of the City's sewer collection, connection, and treatment systems, including tertiary treatment and distribution of recycled water.

Airport Fund
This fund is used to support the operation and maintenance of the City’s airport, including capital improvements such as runways, terminals, and lighting, as well as ensuring compliance with Federal Aviation Administration regulations.

Solid Waste Fund
This fund supports the management and administration of the City’s landfill operations, including compliance with environmental regulations such as California Senate Bill 1383, which mandates organic waste diversion and methane reduction. It also serves as the State Financial Assurance Mechanism, requiring landfill operators to reserve funds—or establish alternative financial provisions—for closure, post-closure care, and corrective action maintenance.

Transit Fund
This fund supports public transportation by funding capital improvements for bus, rail, and other transit services; enhancing accessibility for seniors and individuals with disabilities; and promoting alternative modes of transportation.

Parking Fund
This fund is used to account for the operation and maintenance of the City’s Downtown Parking program. On May 21, 2024, City Council adopted Ordinance No. 1139, which amended portions of the Paso Robles Municipal Code, terminating the Downtown Parking Program. Operations are currently being phased out, with the fund expected to close in fiscal year 2025-26.
51

City of El Paso de Robles

STATEMENT OF NET POSITION
Proprietary Funds
June 30, 2025
Water Wastewater Airport Solid Waste
ASSETS
Current assets:

Ca Cash and investments $ 19,887,942 $ 13,820,059 $ 1,888,003 $ 5,406,602 Ac Accounts receivable 2,220,659 1,465,463 56,915 110,420 Int Interest receivable 178,216 334,373 13,786 36,151
Pre Prepaid items 1,432 1,432 - 3,643
DeDeposits 218 - - -
InvInventory 503,870 - - -
0 Total current assets 22,792,337 15,621,327 1,958,704 5,556,816 0 Noncurrent assets:

Le Leases receivable - - 14,474,764 -
Lo Loans receivable 339,949 579,457 - -
Capital assets:

NoNoNondepreciable capital assets 8,823,492 10,753,918 8,961,909 2,304,594 Ne Net depreciable capital assets 36,536,534 67,932,023 8,088,846 278,663 Ne Ne Net intangible right-to-use assets - - - -
0 Total noncurrent assets 45,699,975 79,265,398 31,525,519 2,583,257 Total assets 68,492,312 94,886,725 33,484,223 8,140,073

DEFERRED OUTFLOWS OF RESOURCES
Deferred other post-employment benefits (OPEB) 72,763 68,800 16,381 2,438 Deferred pensions outflows 1,149,150 866,947 150,000 66,102 Total deferred outflows of resources 1,221,913 935,747 166,381 68,540

LIABILITIES
Current liabilities:

Ac Accounts payable 680,119 228,816 266,922 101,828
Ac Accrued payroll expenses 71,348 67,647 17,135 4,273
Ad Advances payable - - - -
Int Interest payable 37,526 539,439 3,922 -
Cu Customer deposits 248,455 - - -
Un Unearned revenue - - 30,567 -
Co Compensated absences due within one year 52,150 45,072 5,011 2,525 Su Subscriptions due within one year - - - -
De Debt due within one year 521,169 2,980,634 - -
Total current liabilities 1,610,767 3,861,608 323,557 108,626 Noncurrent liabilities:

Co Compensated absences 156,451 135,215 15,033 7,576
Su Subscription liability - - - -
La Landfill closure, post-closure, corrective action - - - 5,148,592 Ne Net OPEB liability 343,651 324,939 77,367 11,515
Ne Net pension liability 4,348,389 3,280,532 567,599 250,129 De Debt due after one year 4,745,543 37,212,453 258,980 - Total noncurrent liabilities 9,594,034 40,953,139 918,979 5,417,812 Total liabilities 11,204,801 44,814,747 1,242,536 5,526,438 Enterprise Funds
The notes to financial statements are an integral part of this statement. 52

Transit Parking Total
207 238
$ 6,231,303 $ - $ 47,233,909 $ 10,781,854
- 4,478 3,857,935 34,337
42,717 - 605,243 73,523
- - 6,507 672,478
- 250 468 -
- - 503,870 -
6,274,020 4,728 52,207,932 11,562,192
- - 14,474,764 -
- - 919,406 -
- - 30,843,913 281,935
681,748 - 113,517,814 10,559,414
- - - 117,094
681,748 - 159,755,897 10,958,443
6,955,768 4,728 211,963,829 22,520,635
- - 160,382 22,628
- - 2,232,199 433,049
- - 2,392,581 455,677
- 2,245 1,279,930 144,921
- - 160,403 33,204
- 663,482 663,482 -
- 16,457 597,344 -
- - 248,455 -
- - 30,567 -
- - 104,758 15,412
- - - 38,283
- - 3,501,803 -
- 682,184 6,586,742 231,820
- - 314,275 95,950
- - - 61,898
- - 5,148,592 -
- - 757,472 106,875
- - 8,446,649 1,638,662
- - 42,216,976 -
- - 56,883,964 1,903,385
- 682,184 63,470,706 2,135,205
Continued
Total Internal
Service Funds
Enterprise Funds
53

City of El Paso de Robles
STATEMENT OF NET POSITION (continued)
Proprietary Funds
June 30, 2025
Water Wastewater Airport Solid Waste

DEFERRED INFLOWS OF RESOURCES
Deferred leases $ - $ - $ 12,883,299 $ -
Deferred OPEB 486,613 460,117 109,552 16,305
Deferred pensions inflows 17,572 13,257 2,294 1,011
Total deferred inflows of resources 504,185 473,374 12,995,145 17,316

NET POSITION
Net investment in capital assets 40,093,314 38,492,854 16,791,775 2,583,257 Restricted for debt service - 2,685,973 - -
Restricted for closure, postclosure, corrective action - - - 307,941 Unrestricted 17,911,925 9,355,524 2,621,148 (226,339)
Total net position $ 58,005,239 $ 50,534,351 $ 19,412,923 $ 2,664,859 Net position of business-type activities
Adjustment to report the cumulative internal balance for the net effect of the activity between the internal service funds and the enterprise funds over time
Enterprise Funds
The notes to financial statements are an integral part of this statement. 54

Transit Parking Total
$ - $ - $ 12,883,299 $ -
- - 1,072,587 151,334
- - 34,134 6,621
- - 13,990,020 157,955
681,748 - 98,642,948 10,858,262
- - 2,685,973 -
- - 307,941 -
6,274,020 (677,456) 35,258,822 9,824,890
$ 6,955,768 $ (677,456) 136,895,684 $ 20,683,152
4,273,002
$ 141,168,686
Concluded
Total Internal
Service Funds
Enterprise Funds
55

City of El Paso de Robles

STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION Proprietary Funds
For the Fiscal Year Ended June 30, 2025
Water Wastewater Airport Solid Waste

OPERATING REVENUES
Charges for current services $ 22,053,415 $ 14,912,365 $ 218,928 $ 3,070,872 Rents and leases - - 1,094,485 -
Operating grants and contributions - - - -
Other revenues 45,654 8,400 - -
Total operating revenues 22,099,069 14,920,765 1,313,413 3,070,872

OPERATING EXPENSES
Salaries and benefits 3,341,369 3,229,029 782,249 419,392 Maintenance and operations 10,422,495 3,185,375 683,960 2,801,075 Depreciation and amortization 2,121,337 3,896,945 447,830 5,003 Total operating expenses 15,885,201 10,311,349 1,914,039 3,225,470 Operating income (loss) 6,213,868 4,609,416 (600,626) (154,598)

NONOPERATING REVENUES (EXPENSES)
Taxes - - 113,692 -
Investment income (loss) 945,708 684,103 493,361 273,743 Gain/(loss) on disposal of capital asset - - - -
Interest expense (157,347) (802,791) (11,404) -
788,361 (118,688) 595,649 273,743
7,002,229 4,490,728 (4,977) 119,145
Capital grants and contributions 370,756 373,949 171,929 (2,271,318) Transfers in - - - 4,959,059
Transfers out (404,100) (380,200) (48,900) (142,027)
Change in net position 6,968,885 4,484,477 118,052 2,664,859 Net position - July 1 51,036,354 46,049,874 19,188,807 - Prior period adjustments - - 106,064 -
Net position, restated - July 1 51,036,354 46,049,874 19,294,871 - Net position - June 30 $ 58,005,239 $ 50,534,351 $ 19,412,923 $ 2,664,859 - - -
-
Change in net position of business-type activities
Adjustment for the net effect of the current year activity between the internal service funds and the enterprise
funds
Income (loss) before capital grants and
contributions and transfers
Total nonoperating revenues (expenses)
Enterprise Funds
The notes to financial statements are an integral part of this statement. 56

Transit Parking Total
$ - $ 27,356 $ 40,282,936 $ 8,185,370
- - 1,094,485 -
885,500 - 885,500 -
- 39,799 93,853 234,660
885,500 67,155 42,356,774 8,420,030
- - 7,772,039 1,659,898
- 14,120 17,107,025 3,913,734
33,136 38,559 6,542,810 1,592,922
33,136 52,679 31,421,874 7,166,554
852,364 14,476 10,934,900 1,253,476
- - 113,692 -
328,654 - 2,725,569 594,776
- (77,118) (77,118) 109,925
- (35,688) (1,007,230) 710
328,654 (112,806) 1,754,913 705,411
1,181,018 (98,330) 12,689,813 1,958,887
- - (1,354,684) 288,000
- - 4,959,059 -
(549,983) - (1,525,210) -
631,035 (98,330) 14,768,978 2,246,887
6,324,733 (579,126) 122,020,642 18,436,265
- - 106,064 -
6,324,733 (579,126) 122,126,706 18,436,265
$ 6,955,768 $ (677,456) $ 136,895,684 $ 20,683,152
- -
442,291
$ 15,211,269
Total Internal
Service Funds
Enterprise Funds
57

City of El Paso de Robles

STATEMENT OF CASH FLOWS
Proprietary Funds
For the Fiscal Year Ended June 30, 2025
Water Wastewater Airport Solid Waste

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers and other agencies $ 21,957,040 $ 14,855,866 $ 928,543 $ 2,960,452 Payments to employees (3,221,569) (3,178,521) (574,932) (194,598) Payments to suppliers (11,615,458) (3,512,266) (613,446) (2,413,876) Net cash provided (used) by operating activities 7,120,013 8,165,079 (259,835) 351,978

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Transfers out to other funds (404,100) (380,200) (48,900) (142,027) Transfers from other funds - - - 4,959,059
Tax revenue received - - 113,692 -
(404,100) (380,200) 64,792 4,817,032
Grant revenues received - 373,949 171,929 -
Purchase of capital assets (4,690,701) (1,947,479) (1,411,305) - Lease payments made - - - -
Debt payments made (506,627) (2,859,305) (37,493) -
Interest payments made (160,956) (767,994) (11,972) -
Net proceeds from interfund advances - - - -
Proceeds from sale of capital assets - - - -
(5,358,284) (5,200,829) (1,288,841) -

CASH FLOWS FROM INVESTING ACTIVITIES
Net investment income received 912,651 627,965 497,016 237,592 Net cash provided by investing activities 912,651 627,965 497,016 237,592 2,270,280 3,212,015 (986,868) 5,406,602
Cash and cash equivalents - beginning of fiscal year 17,617,662 10,608,044 2,874,871 - Cash and cash equivalents - end of fiscal year $ 19,887,942 $ 13,820,059 $ 1,888,003 $ 5,406,602 19,887,942 13,820,059 1,888,003 5,406,602
- - - -
Net cash provided (used) by capital and related
financing activities
Net increase (decrease) in cash and cash
equivalents
Net cash provided (used) by noncapital financing
activities

CASH FLOWS FROM CAPITAL AND RELATED FINANCING

ACTIVITIES
Enterprise Funds
The notes to financial statements are an integral part of this statement. 58

Transit Parking Total
$ 885,500 $ 71,233 $ 41,658,634 $ 8,531,877
- (3,977) (7,173,597) (1,543,160)
- (82,001) (18,237,047) (3,937,474)
885,500 (14,745) 16,247,990 3,051,243
(549,983) - (1,525,210) -
- - 4,959,059 -
- - 113,692 -
(549,983) - 3,547,541 -
- - 545,878 -
- - (8,049,485) (3,200,387)
- - - (66,120)
- - (3,403,425) (84,178)
- (26,542) (967,464) (1,696)
- 40,044 40,044 -
- - - 109,925
- 13,502 (11,834,452) (3,242,456)
319,705 4 2,594,933 584,311
319,705 4 2,594,933 584,311
655,222 (1,239) 10,556,012 393,098
5,576,081 1,239 36,677,897 10,388,756
$ 6,231,303 $ - $ 47,233,909 $ 10,781,854
6,231,303 - 47,233,909 Continued
- - -
Total Internal
Service Funds
Enterprise Funds
59

City of El Paso de Robles
STATEMENT OF CASH FLOWS (continued)
Proprietary Funds
For the Fiscal Year Ended June 30, 2025
Water Wastewater Airport Solid Waste
Operating income (loss) $ 6,213,868 $ 4,609,416 $ (600,626) $ (154,598) Adjustments to reconcile operating activities:

Depreciation and amortization expense 2,121,337 3,896,945 447,830 5,003 Accounts receivable (154,373) (64,899) (13,826) (110,420) Prepaid items 289 289 - (3,643)
Inventory (54,673) - - -
Leases receivable - - (763,441) -
Deferred outflows of resources for pensions 54,170 93,851 (40,633) (66,102) Deferred outflows of resources for OPEB (50,327) (44,441) (13,365) (2,438) Accounts payable (1,138,579) (327,180) 70,514 101,828
Accrued payroll expenses 12,342 6,706 8,350 4,273
Customer deposits 12,344 - - -
Unearned revenue - - 3,729 -
Compensated absences 36,973 4,323 (3,789) 10,101
Landfill closure, post-closure costs - - - 5,148,592
Net OPEB liability (85,542) (141,057) 19,677 11,515
Net pension liability 34,886 66,732 175,556 250,129
Deferred inflows of resources for leases - - 388,668 -
Deferred inflows of resources for pensions (21,001) (17,542) (1,212) 1,011 Deferred inflows of resources for OPEB 138,299 81,936 62,733 16,305 Net cash provided (used) by operating activities $ 7,120,013 $ 8,165,079 $ (259,835) $ 5,211,556 7,120,013 8,165,079 (259,835)
Non-cash activity: - -
Contributed capital asset $ 370,756 $ - $ - $ 2,588,260 Amortization of premium on refunding bonds $ - $ 24,750 $ - $ - Transfer of landfill closure, postclosure liability $ - $ - $ - $ (4,859,578) Changes in assets, deferred outflows of resources,
liabilities, and deferred inflows of resources:

Reconciliation of operating income (loss) to net cash
provided (used) by operating activities:

Enterprise Funds
The notes to financial statements are an integral part of this statement. 60

Transit Parking Total
$ 852,364 $ 14,476 $ 10,934,900 $ 1,253,476
33,136 38,559 6,542,810 1,592,922
- 4,078 (339,440) 111,847
- - (3,065) (41,387)
- - (54,673) -
- - (763,441) -
- - 41,286 (18,452)
- - (110,571) (15,349)
- (67,881) (1,361,298) 17,647
- - 31,671 6,406
- - 12,344 -
- - 3,729 -
- (3,977) 43,631 6,913
5,148,592 -
- - (195,407) (41,329)
- - 527,303 154,145
- - 388,668 -
- - (38,744) (6,654)
- - 299,273 31,058
$ 885,500 $ (14,745) $ 21,107,568 $ 3,051,243
885,500 (14,745) 3,051,243
- - -
$ - $ - $ 2,959,016 $ 288,000
$ - $ - $ 24,750 $ -
$ - $ - $ (4,859,578) $ -
Total Internal
Service Funds
Enterprise Funds
61

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62

FIDUCIARY FUNDS

Fiduciary Funds Financial Statements are reported using the economic resources measurement focus and the full accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. These funds are used to account for assets held by the City for individuals, private organizations, other governmental units, and/or other funds, and therefore, they cannot be used to support the government's own programs.

For the Fiduciary Fund Financial Statements, the custodial funds are combined in a single column. Individual custodial funds may be found in the Individual Fund Financial Statements and Schedules.

Private-Purpose Trust Fund
This fund is to account for the financial activities of the Successor Agency to the Former Redevelopment Agency of the City.

Pension Trust Fund
This fund accounts for the City's Section 115 pension trust, which is designated to pre-fund the City's pension liabilities and may only be used to offset CalPERS pension expenses.

Custodial Funds
These funds are used to account for assets held by the City for individuals, private organizations, other governmental units, and/or other funds, and therefore, they cannot be used to support the government's own programs. 63

City of El Paso de Robles

STATEMENT OF FIDUCIARY NET POSITION
June 30, 2025
ASSETS 403
Ca Cash and cash equivalents $ 4,820,005 $ - $ 367,386
Investments held in mutual funds - 11,740,395 -
Interest receivable 636,698 - 2,355
Loans receivable 3,020,000 - -
Total assets 8,476,703 11,740,395 369,741

LIABILITIES
Accounts payable 8,900 - 18,530
Unearned revenue 1,115,910 - -
Interest payable 250,909 - -
Bonds payable 8,134,247 - -
Total liabilities 9,509,966 - 18,530

NET POSITION
Restricted in trust for:

Individuals, organizations, and other governments - - 572,969 (1,033,263) - -
Pension benefits - 11,740,395 -
Total net position $ (1,033,263) $ 11,740,395 $ 572,969 Pension Trust Fund
Total Custodial
Funds
Successor Agency to the former
Redevelopment Agency
Private-Purpose
Trust Fund
The notes to financial statements are an integral part of this statement. 64

City of El Paso de Robles

STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
For the Fiscal Year Ended June 30, 2025

ADDITIONS
Property taxes $ 2,054,926 $ - $ -
Use of money and property 232,706 1,248,961 16,434
Assessments - - 461,784
Total additions 2,287,632 1,248,961 478,218

DELETIONS
Administration 14,400 - -
Interest and fiscal agent fees 505,226 - -
Beneficiary payments - - 18,483
Total deletions 519,626 - 18,483
Change in net position 1,768,006 1,248,961 459,735
Net position - July 1 (2,801,269) 10,491,434 113,234
Net position - June 30 $ (1,033,263) $ 11,740,395 $ 572,969 - -
-
-
Pension Trust Fund
Total Custodial
Funds
Private-Purpose
Trust Fund
The notes to financial statements are an integral part of this statement. 65

City of El Paso de Robles
Notes to the Basic Financial Statements
June 30, 2025
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The basic financial statements of the City of El Paso de Robles (the “City”) have been prepared in conformity with accounting principles generally accepted in the United States as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant accounting policies for the City are described below:

A. Reporting Entity
The accompanying annual comprehensive financial report includes the financial activities of the City and its component unit, El Paso de Robles Public Financing Authority and the El Paso de Robles Infrastructure Financing Authority. The financial activities of the foregoing entity have been aggregated and merged (termed “blended”) with those of the City in the accompanying financial statements, as it meets the criteria for inclusion as set forth in the GASB Statement No. 14, as amended by GASB Statements No. 39, No. 61, and No. 80.

The City was incorporated in 1889 and operates under the State of California City Council-Manager form of government.

The governing body consists of a five-member City Council: the Mayor, elected at large by voters of the City; and four councilmembers elected by district elections. The City also elects one City Treasurer at large; the City Clerk is an appointed position. The City is a “full-service” municipality providing public safety (e.g., police and fire and emergency services), library, recreation, planning, zoning, streets and road maintenance, public improvements, water, sewer, airport operations, and general administrative services.

The City Council members, in separate sessions, serve as the governing board of the El Paso de Robles Public Financing Authority and the El Paso de Robles Infrastructure Financing Authority and, as such, this entity is presented as a blended component unit. These Authorities were formed by the City as a conduit for long-term debt financing and are governed by the City Council. These Authorities exist and act as separate public entities and have the power to acquire, purchase, construct, finance, lease, and/or sell public facilities and appurtenances necessary or convenient for the public purposes of the City; they have no assets of its own. All capital assets acquired by the City under the Authority are included in the financial statements.

B. Basis of Presentation
The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, deferred outflows of resources, liabilities, deferred inflows of resources, fund balance or net position, revenues, and expenditures or expenses, as appropriate. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which the governmental resources are to be spent and the means by which spending activities are controlled.

Government-Wide Financial Statements: The 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.

Fund Financial Statements: The Fund Financial Statements provide information about the City’s funds, including fiduciary funds and the blended component unit. Separate statements for each fund category (governmental, proprietary, and fiduciary) are presented. The emphasis of the Fund Financial Statements is on major individual funds, each of which is displayed in a separate column. All remaining governmental and enterprise funds are aggregated and reported as nonmajor funds.

Proprietary funds operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Nonoperating revenues, such as subsidies and investment earnings, result from non-exchange transactions or ancillary activities. Operating expenses for proprietary funds include the cost of sales and services, administrative expenses, depreciation, and amortization on capital assets. All expenses not meeting this definition are reported as nonoperating expenses.
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City of El Paso de Robles
Notes to the Basic Financial Statements
June 30, 2025
C. Major Funds
The City reported the following major governmental funds in the accompanying financial statements:

General Fund – The general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund.

Supplemental Sales Tax Fund – Accounts for and reports the financial resources generated by the voter-approved Measure J-20, a one-cent supplemental sales tax approved by voters in 2020, and Measure I-24, a one-half cent supplemental sales tax approved by voters in 2024. The City Council approved Resolution 20-118, committing these revenues to Fire/Emergency and Police services and Streets Repair and Maintenance. These commitments remain in effect until replaced by future Resolutions.

Specific Plans Fund – Accounts for development impact fees assessed and collected for certain permits constructed within the Borkey, Union/46, Chandler Ranch, and Olsen Beechwood specific plans. Funds are to be used for public facilities and infrastructure in those specific areas.

Capital Projects Fund – Accounts for and reports the financial resources that are restricted, committed or assigned to expenditures for major capital outlays including the acquisition or construction of capital equipment, facilities, and infrastructure.

The City reported all enterprise funds as major proprietary funds in the accompanying financial statements:

Water Fund – Accounts for the operation and maintenance of the City’s water production, transmission, and distribution system which is necessary to provide water service to the residents of the City.

Wastewater Fund – Accounts for the operation and maintenance of the City’s sewer collection, treatment, and recycled water system which is necessary to provide sewer services to the residents of the City.

Airport Fund – Accounts for the operation and maintenance activities of the City’s airport.

Solid Waste Fund – Accounts for the operation and maintenance of the City’s landfill, including closure, post-closure and corrective action activities.

Transit Fund – Accounts for the operations and maintenance for the City’s transit system, including both demand response and fixed routes services as well as funding contributions to the Regional Transit Authority.

Parking Fund – Accounts for the operations and maintenance activities for the City’s parking program. On May 21, 2024, City Council adopted Ordinance No. 1139, which amended portions of the Paso Robles Municipal Code related to parking management. As a result of said action, the parking program operations were terminated and the fund is winding down operations.

The City reports the following internal service funds as proprietary funds:

Information Technology Fund – Accounts for the maintenance and replacement of business equipment used by City departments.

Fleet and Equipment Fund – Accounts for the operations, maintenance, and replacement of the City’s fleet of vehicles and related equipment.

Risk Management Fund – Accounts for liability, property, and workers’ compensation insurance. 67

City of El Paso de Robles
Notes to the Basic Financial Statements
June 30, 2025
The City also reports the following fiduciary funds:

Private-Purpose Trust Fund – The Successor Agency to the Former Redevelopment Agency is a private-purpose trust fund to account for the financial activities of the dissolved Redevelopment Agency (RDA). Private-purpose trust funds are used to report all trust arrangements (other than pension and investment trust funds) “under which principal and income benefit individuals, private organizations, or other governments.” Pension Trust Fund – The Section 115 Pension Trust was established to prefund the City’s outstanding pension obligation and can only be used to offset California Public Employees’ Retirement System pension costs. Contributions from the City to the pension trust and the earning on those contributions are irrevocable.

Custodial Funds – 1) Accounts for funds to provide scholarships to graduated local high school students who undertake courses in the medical field; scholarships are awarded by the Paso Robles Joint Unified School District; 2) accounts for funds collected for the Business Improvement Area to be used by the Downtown Mainstreet Association to provide various improvements in the downtown core; and 3) accounts for funds collected from the Community Facilities District No. 2022-1N, Improvement Area No. 4 to be used for development infrastructure and related debt obligations.

D. Basis of Accounting and Measurement Focus
The Government-Wide, Proprietary, and Fiduciary Funds Financial Statements are reported using the economic resources measurement focus and the full accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. These statements are presented on an economic resources measurement focus and the accrual basis of accounting. Accordingly, all of the City’s assets, deferred outflows of resources, liabilities, and deferred inflows of resources are included in the accompanying Statement of Net Position. This includes capital assets, infrastructure assets, and long-term liabilities. The Statement of Activities presents changes in net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. 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.

Certain eliminations have been made as prescribed by GASB Statement No. 34 in regard to inter-fund 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 business-type activities, which are presented as internal balances and eliminated in the total primary government column. In the Statement of Activities, those transactions between governmental and business-type activities have not been eliminated.

Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The City considers all revenues reported in the governmental funds to be available if the revenues are collected within sixty (60) days after the fiscal year end. Expenditures are recorded when the related fund liability is incurred, except for the principal and interest on longterm debt, claims and judgments, and compensated absences, which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental funds and proceeds of long-term debt and acquisitions under financed purchases are reported as other financing sources.

Non-exchange transactions, in which the City gives or receives value without directly receiving or giving equal value in exchange, include property taxes, grants, entitlements, and donations. On an accrual basis of accounting, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from grants, entitlements, and donations are recognized in the fiscal year in which all eligibility requirements have been satisfied.

Other revenues susceptible to accrual include other taxes, intergovernmental revenues, interest, and charges for services.

Grant revenues are recognized in the fiscal year in which all eligibility requirements are met. Under the terms of grant agreements, the City may fund certain programs with a combination of cost-reimbursement grants, categorical block 68

City of El Paso de Robles
Notes to the Basic Financial Statements
June 30, 2025
grants, and general revenues. Thus, both restricted and unrestricted net position may be available to finance program expenditures. The City’s policy is to first apply restricted grant resources to such programs, followed by general revenues if necessary. Certain indirect costs are included in program expenses reported for individual functions and activities.

E. Budgeting and Budgetary Accounting
The City has four primary priorities in budget development: long-term well-being and economic strength of the community; long-term fiscal stability of the City; nature and scope of the services the City provides; and overall well-being of the organization and its employees, given that the City is a service-based organization that relies heavily on its human capital to provide services to the community. The City must find the path that best promotes all four working together.

The operating budget is prepared in the context of a ten-year financial plan with operating expenditures and revenues being balanced over the term of the ten-year financial plan. The City typically adopts a two-year budget, except in special situations (as in the case of the COVID-19 pandemic) which may call for a one-year budget. The intent is that the ten-year financial plan be updated every two years, during the mid-cycle of the biennial budget. The process for updating the twoyear budget is generally described as follows: Administrative Services prepares base budget schedules consisting of maintenance and operations, personnel services, operating capital, revenue estimating forms and forms for submitting budgetary requests for new and/or expanded services, as well as requests for operating capital not already provided for on various pre-authorized replacement schedules. These schedules are distributed to all executive managers for affirmation and/or completion. Upon affirmation and return of new request forms, Administrative Services compiles and publishes the draft budget. Executive managers meet to review the draft budget and prepare specific recommendations to balance the budget should resources not cover budgetary requests. The draft budget and executive manager recommendations are then reviewed by the City Council and then formally adopted in June. The budget preparation, review, and approval process take place in the context of and with the objective of addressing the goals established by the City Council during a goal setting workshop held just prior to the process noted above.

This approved budget covers substantially all City expenditures including re-budgeted items. All appropriated amounts are as originally adopted or as amended by the City Council and lapse at fiscal year-end. The City Manager is authorized to transfer budget amounts between objects within the same fund. Transfers of appropriations between funds may be made only by the City Council. Total departmental expenditures in excess of the total departmental budgeted amounts are discouraged and executive managers are held accountable accordingly. Formal budgetary integration is employed as a management control tool during the fiscal year for all funds including enterprise funds. All budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America. Furthermore, it is City policy to prepare periodic financial reports for review by the City Council.

F. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund Balance Cash and Investments – In accordance with GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, highly liquid market investments with maturities of one year or less at time of purchase are stated at amortized cost. All other investments are stated at fair value. Market valuation data provided by Zions Bancorporation is used as fair value for those securities for which market quotations are readily available. The City’s investments with fiscal agents required by bond indentures are stated at cost, which approximates fair value.

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

For purposes of the Statement of Cash Flows, the City considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. All cash and investments of the proprietary fund types are pooled with the City’s pooled cash and investments.
69

City of El Paso de Robles
Notes to the Basic Financial Statements
June 30, 2025
Inventories and Prepaid Items – Inventories are valued at cost using the first-in/first-out (FIFO) method and consist of consumable supplies and vehicle repair parts. The cost of such inventories is recorded as expenditures/expenses when consumed rather than when purchased.

Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both the government-wide and fund financial statements. The cost of prepaid items is recorded as expenditures/expenses when consumed rather than when purchased.

Leases Receivable – Leases receivable are recognized at the commencement of the lease term, with certain exceptions for leases of assets held as investments, certain regulated leases, short‐term leases, leases below the capitalization threshold of $5,000, and leases that transfer ownership of the underlying asset. A lessor does not derecognize the assets underlying the lease. The lease receivable is measured at the present value of lease payments expected to be received during the lease term. The present value of the future lease payments to be received are discounted based on the interest rate the City charges the lessee or Consumer Price Index (CPI) rate. The City uses the interest rate identified in the contract as the discount rate. If no interest rate is specified, the City uses its implicit rate as the discount rate. The lease term includes the noncancelable period of the lease and extensions the City is reasonably certain to exercise. The City monitors changes in circumstances that are expected to significantly affect the amount of a lease receivable that may require a remeasurement of its lease.

Capital Assets – Capital assets are tangible and intangible assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type activities column in the government-wide financial statements. Capital assets, except for infrastructure assets, are defined by the City as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of two years. For infrastructure assets the same estimated minimum useful life is used (in excess of two years), but only those infrastructure projects that cost more than $50,000 are reported as capital assets.

As the City constructs, develops, or acquires capital assets each period, including infrastructure assets, they are capitalized and reported at historical cost (except for intangible right-to-use lease equipment and subscription assets, the measurement of which is discussed in further detail below). The reported value excludes normal maintenance and repairs, which are amounts spent in relation to capital assets that do not increase the asset’s capacity or efficiency or increase its estimated useful life. Donated capital assets are recorded at acquisition value at the date of donation. Acquisition value is the price that would be paid to acquire an asset with equivalent service potential on the date of the donation. Intangible assets follow the same capitalization policies as tangible capital assets and are reported with tangible assets in the appropriate capital asset class.

Land, development in progress, and construction in progress are not depreciated. The other tangible and intangible property, plant, equipment, and infrastructure of the primary government are depreciated/amortized using the straightline method over the following estimated useful lives:

Capital Asset Class
Estimated Useful
Lives (years)
Infrastructure 15 - 75
Buildings 15 - 50
Improvements 5 - 50
Machinery, equipment, and vehicles 5 - 25
Right-to-use lease equipment and subscription assets are amortized over the life of the associated contract.

Compensated Absences – Employees are paid 100% of their accumulated vacation pay and compensatory time when they terminate their employment with the City. As a result, the City accounts for the cost of annual vacation, compensatory time, and fringe benefits as earned in accordance with the GASB Statement No. 101, Compensated Absences, in that, 70

City of El Paso de Robles
Notes to the Basic Financial Statements
June 30, 2025
accumulated unpaid vacation leave and compensatory time is accrued when incurred in the proprietary Government-Wide Financial Statements. Employees may accumulate sick leave without limitation but accumulated sick pay, under no circumstances, is paid to employees at any time. Employees retiring from the City may convert their unused sick leave to service credit. As such, it is assumed that sick leave is more likely than not to be settled through conversion to defined benefit post-employment benefits and is not included in a liability for compensated absences.

Receivables and Payables – Activity between funds that is representative of lending/borrowing arrangements outstanding at fiscal year-end are referred to as “due to/due from other funds.” In some cases, “due to/due from other funds” represents the short-term transfer of cash resources at fiscal year-end to eliminate negative cash balances that are temporary in nature. Cash resources have been loaned from one fund to another to provide resources to prepare a “specific plan,” a planning/development tool, until fees generated from the specific plan area repay the loan.

Proprietary fund receivables are shown net of any allowance for uncollectible accounts. Utility customers are billed monthly, and the value of services provided have been included in the accompanying financial statements.

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) Miscellaneous and Safety 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.

Other Post-Employment Benefits – For purposes of measuring the net other post-employment benefits (OPEB) liability, deferred outflows and inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the City’s plan, the assets of which are held by Mission Square Retirement, and additions to/deductions from the OPEB plan’s fiduciary net position have been determined by an independent actuary. For this purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value.

Deferred Outflows and Inflows of Resources – Pursuant to GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, and GASB Statement No. 65, Items Previously Reported as Assets and Liabilities, the City recognizes deferred outflows and inflows of resources.

In addition to assets, the City will sometimes report a separate section for deferred outflows of resources. A deferred outflow of resources is defined as a consumption of net assets or fund balance that applies to future periods. The Statement of Net Position has three items which qualify for reporting in this category: loss on refunding bonds, pensions, and other post-employment benefits (OPEB). The Governmental Funds Balance Sheet has one item which qualifies for reporting in this category, deferred interest expense.

In addition to liabilities, the City will sometimes report a separate section for deferred inflows of resources. A deferred inflow of resources is defined as an acquisition of net assets or fund balance by the City that applies to future periods. The Statement of Net Position has three items which qualify for reporting in this category: leases, pensions, and other postemployment benefits (OPEB). The Governmental Funds Balance Sheet has two items which qualifies for reporting in this category: leases and unavailable revenue.

Fund Balances and Net Position – Fund balance is the difference between the assets added to deferred outflows of resources and liabilities added to deferred inflows of resources reported in governmental funds. In compliance with GASB Statement No. 54, the City has established the following fund balance classifications:
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City of El Paso de Robles
Notes to the Basic Financial Statements
June 30, 2025
Nonspendable – The nonspendable fund balance classification includes amounts that cannot be spent because they are either (a) not in a spendable form or (b) legally or contractually required to be maintained intact.

Restricted – The restricted fund balance classification includes amounts with constraints placed on the use of resources (other than nonspendable items) that are either (a) externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments or (b) imposed by law through constitutional provisions or enabling legislation.

Committed – The committed fund balance represents amounts that can be used only for the specific purposes determined by the adoption of a resolution committing fund balance for a specified purpose by the City Council prior to the end of the fiscal year. Once adopted, the limitation imposed by the resolution remains in place until the resources have been spent for the specified purpose or the Council adopts another resolution to remove or revise the limitation.

Assigned – The assigned fund balance classification includes amounts that are constrained by the City’s intent to be used for specific purposes, but that are neither restricted nor committed. Such intent is to be established by (a) the City Council itself or (b) the City Manager to whom the City Council has delegated the authority to assign amounts to be used for specific purposes.

Unassigned – The unassigned fund balance classification includes amounts that do not fall into one of the above four categories. The General Fund is the only fund that should report this category of fund balance other than other governmental funds that report a negative fund balance if there is an over-spending for specific purposes for which amounts have been restricted, committed, or assigned.

GASB Statement No. 63 requires that the difference between assets added to the deferred outflows of resources and liabilities added to the deferred inflows of resources be reported as net position. Net position is classified in the following categories:

Net Investment in Capital Assets – Net position that is the net investment in capital assets consists of capital assets, net of accumulated depreciation and amortization, and reduced by outstanding debt directly attributed to the acquisition, construction, or improvement of the assets.

Restricted – The restricted net position is the portion of net position that has external constraints placed on it by external creditors, grantors, contributors, laws, or regulations of other governments, or through constitutional provisions or enabling legislations.

Unrestricted – The unrestricted net position classification is the amount remaining that does not fall into one of the above two categories.

When an expense is incurred for purposes for which both restricted and unrestricted fund balances are available, the City’s policy is to spend restricted fund balance first followed by committed, then assigned, and if applicable, unassigned.

To address unanticipated emergency and contingency needs, and to secure the continued financial well-being of the City, the City Council has established fiscal policies where unrestricted General Fund reserves shall be maintained at no less than 30% of the actual 10-year revenue trend. For the Water and Wastewater Funds, reserves shall be maintained at 25% of operating expenditures, plus $1.0 million.
72

City of El Paso de Robles
Notes to the Basic Financial Statements
June 30, 2025
G. Property Taxes
Property taxes are assessed, collected, and allocated by the County of San Luis Obispo throughout the fiscal year according to the following property tax calendar:

Secured Taxes Unsecured Taxes
Lien Date January 1 January 1
Levy Date July 1 July 1
Due Date – Secured Taxes 1st Installment, November 1
2nd Installment, February 1 June 30
Collection Date 1st Installment, December 10
2nd Installment, March 10 August 31
Under California law, property taxes are assessed and collected by counties up to 1 percent of assessed value, plus other increases approved by the voters. Under Proposition 13, adopted by the voters in a statewide ballot in 1978, assessed valuation is increased annually by a cost-of-living index not to exceed 2% except for those properties that changed ownership during the twelve-month period since the lien date. In these cases, the property is re-assessed at current value.

The property taxes go into a pool and are then allocated to the cities based on a complex formula prescribed by the state statute. Accordingly, the City recognizes property tax revenues when it becomes both measurable and available to finance expenditures of the current period.

Beginning with fiscal year 1993-94, the County of San Luis Obispo, for those taxing agencies desirous of participating on a volunteer basis, converted the property tax collection and distribution system to the “Teeter Plan.” The City chose to participate in the “Teeter Plan” wherein the City receives 100% of the property tax levy during the fiscal year without deduction for property tax payment delinquencies. Accordingly, the County of San Luis Obispo keeps all property tax penalties collected.

H. Use of Estimates
The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America, as prescribed by GASB and the American Institute of Certified Public Accountants, require management to make assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses/expenditures during the reporting period. Actual results could differ from those estimates.

I. New Governmental Accounting Standards and Board Pronouncements Governmental Accounting Standards Board Statement No. 102 For the fiscal year ended June 30, 2025, the City implemented GASB Statement No. 102, Certain Risk Disclosures. State and local governments face a variety of risks that could negatively affect the level of service they provide or their ability to meet obligations as they come due. Although governments are required to disclose information about their exposure to some of those risks, essential information about other risks that are prevalent among state and local governments is not routinely disclosed because it is not explicitly required. The objective of this Statement is to provide users of government financial statements with essential information about risks related to a government’s vulnerabilities due to certain concentrations or constraints. This Statement requires a government to assess whether a concentration or constraint makes the primary government reporting unit or other reporting units that report a liability for revenue debt vulnerable to the risk of a substantial impact. Additionally, this Statement requires a government to assess whether an event or events associated with a concentration or constraint that could cause the substantial impact have occurred, have begun to occur, or are more likely than not to begin to occur within 12 months of the date the financial statements are issued.

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City of El Paso de Robles
Notes to the Basic Financial Statements
June 30, 2025
J. Future Governmental Accounting Standards Board Pronouncements GASB
Statement
No. Title Effective Date
103 Financial Reporting Model
Improvements Fiscal years beginning after June 15, 2025 104 Disclosure of Certain Capital Assets Fiscal years beginning after June 15, 2025 NOTE 2 – CASH AND INVESTMENTS
The composition of cash and investments as of June 30, 2025, is as follows:

Cash in bank and on hand $ 1,538,280
Cash and investments held with fiscal agent 2,558,599
Cash and investments held by pension trust 11,740,396
Investments 170,644,313
Total $ 186,481,588
Cash and investments are classified in the financial statements as shown below, based on whether or not their use is restricted under the terms of the City’s debt instruments or agency’s agreements:

Cash and investments, statement of net position $ 169,553,802 Cash and investments, statement of fiduciary net position 16,927,786 Total $ 186,481,588
A. Investment Policy
Cash balances from all funds are combined and invested pursuant to the City Council’s adopted Investment Policy and State Government Code Section 53647. Authorized investments include U.S. Treasury Obligations, U.S. Agency Notes, U.S.

Agency Mortgaged Backed Securities, Banker’s Acceptances, Commercial Paper, Corporate Notes, Certificates of Deposit, Municipal Bonds issued by the State of California, Municipal Bonds issued by California Local Agency, Municipal Bonds issued by Other 49 States, Negotiable Certificates of Deposit, Money Market Funds, Local Government Investment Pools, Asset-Backed Securities, Supranationals, LAIF, and the California Asset Management Program. The earnings from these investments are allocated monthly to each fund based upon the closing balance of each fund at month end. Funds held by outside fiscal agents under the provisions of bond indentures that are maintained separately, and interest income earned on said funds, are credited directly to the bond fund or reported as if the interest were credited directly to said funds.

At no time during the fiscal year did the City borrow funds through the use of reverse purchase agreements.

The table below identifies the investment types that are specifically authorized by the City’s Investment Policy and identifies certain provisions of the City’s Investment Policy that address interest rate risk and concentration of credit risk per GASB Statement No. 40. It does not address investments of debt proceeds held by bond trustees that are governed by the provisions of the debt agreement between the City and the trustee nor does it address investments held by the Section 115 Trust as those provisions are governed by the post-employment benefits trust agreement. Any investment type not listed is either prohibited by California Government Code, prohibited by the City’s Investment Policy, or not specifically addressed by the City’s Investment Policy.

Investment Types Authorized by Law & Policy
Maximum
Maturity
Maximum
Percent of
Portfolio
Maximum in
One Issuer
U.S. Treasury Obligations 7 years None None
U.S. Agency Notes 7 years None None
U.S. Agency Mortgaged Backed Securities 5 years None None 74

City of El Paso de Robles
Notes to the Basic Financial Statements
June 30, 2025
Investment Types Authorized by Law & Policy
Maximum
Maturity
Maximum
Percent of
Portfolio
Maximum in
One Issuer
Banker’s Acceptances 180 days 40% 5%
Commercial Paper 270 days 25% 5%
Corporate Notes 5 years 30% 5%
Certificates of Deposit (CD’s) 5 years 30% 5%
Municipal Bonds Issued by State of California 5 years 25% 5% Municipal Bonds Issued by California Local Agency 5 years 25% 5% Municipal Bonds Issued by Other 49 States 5 years 25% 5% Negotiable Certificates of Deposit 5 years 30% 5%
Money Market Funds 5 years 20% 5%
Local Government Investment Pools 5 years None 5%
Asset-Backed Securities 5 years 20% 5%
Supranationals 5 years 30% 5%
Local Agency Investment Fund (LAIF) None None $75 million California Asset Management Program (CAMP) None None $75 million Note: Only 15% of the aggregate total of 60% may be invested between 5 and 7 years.

B. Collateral and Categorization Requirements
The California Government Code requires California banks and savings and loan associations to secure the City’s cash deposits by pledging securities as collateral. This code states that collateral pledged in this manner shall have the effect of perfecting a security interest in such collateral superior to those of a general creditor. This collateral for cash deposits is considered to be held in the City’s name. The fair value of the pledged securities must equal at least 110% of the City’s deposits. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of a City’s total deposits. The collateral for certificates of deposit is generally held in safekeeping by the Federal Home Loan Bank in San Francisco as the third-party trustee. The securities are physically held in an undivided pool for all California public agency depositors. The State Public Administrative Office for public agencies and the Federal Home Loan Bank maintain detailed records of the security pool that are coordinated and updated weekly. The City Treasurer, at their discretion, may waive the collateralization requirement for deposits that are insured up to $250,000 by the Federal Deposit Insurance Corporation (FDIC).

C. Disclosures Relating to Interest Risk
Per GASB Statement No. 40, 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, there is a greater sensitivity of its fair value to changes in market interest rates. One of the ways 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 cash flow and liquidity needed for operations.

Information about the sensitivity of the fair values of the City’s investments to market interest rate fluctuations is provided by the following table that shows the distribution of the City’s investments by maturity. For purposes of the table shown below, any callable securities are assumed to be held to maturity and all investments are shown at fair value.

Remaining Maturity (in months)
Investments Total
12 Months or
Less 13 to 24 Months 25 to 60 Months
More Than 60
Months
U.S. Agency Notes $ 847,210 $ 847,210 $ - $ - $ -
U.S. Treasuries 94,136,788 15,416,466 12,099,896 66,620,426 - Collateralized Mortgage
Obligations 589,924 - 589,924 - -
Corporate Notes 24,839,896 1,038,150 4,510,684 19,291,062 - Certificates of Deposit 811,117 - 811,117 - -
LAIF 4,521,253 4,521,253 - - -
CAMP 44,888,528 44,888,528 - - -
75

City of El Paso de Robles
Notes to the Basic Financial Statements
June 30, 2025
Remaining Maturity (in months)
Investments Total
12 Months or
Less 13 to 24 Months 25 to 60 Months
More Than 60
Months
Money Market Funds $ 9,597 $ 9,597 $ - $ - $ -
Held in Pension Trust: 0 0 0 0
Money Market Funds 22,248 22,248 - - -
Mutual Funds 11,718,148 11,718,148 - - -
Held by Bond Trustee: 0 0 0 0
Money Market Funds 2,558,599 2,558,599 - - -
Total Investments $ 184,943,308 $ 81,020,199 $ 18,011,621 $ 85,911,488 $ - D. Investments with Fair Values Highly Sensitive to Interest Rate Fluctuations The City investments did not include any investments that are highly sensitive to interest rate fluctuations (to a degree other than already indicated in the information provided above).

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

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

Rating as of Fiscal Year-End
Investments Total
Minimum
Legal Rating
Exempt from
Disclosure AAA AA A Not Rated
U.S. Agency Notes $ 847,210 N/A $ - $ - $ 847,210 $ - $ - U.S. Treasuries 94,136,788 N/A - - 94,136,788 - -
Collateralized Mortgage
Obligations 589,924 AA - - 589,924 - -
Corporate Notes 24,839,896 A - 437,166 6,876,896 17,525,834 - Certificates of Deposit 811,117 A - - - - 811,117
LAIF 4,521,253 N/A - - - - 4,521,253
CAMP 44,888,528 N/A - - - - 44,888,528
Money Market Funds 9,597 N/A - - - - 9,597
Held in Pension Trust: 00 0 0
Money Market Funds 22,248 N/A 22,248 - - - -
Mutual Funds 11,718,148 N/A 11,718,148 - - - -
Held by Bond Trustee: 00 00 0
Money Market Funds 2,558,599 N/A 2,558,599 - - - -
Total Investments $184,943,308 $ 14,298,995 $ 437,166 $102,450,818 $ 17,525,834 $ 50,230,495 F. Concentrations of Credit Risk
The Investment Policy of the City contains limitations that are, in some cases, more restrictive than those stipulated by the California Government Code. In some cases, the Investment Policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. There were no investments in any one issuer (other than U.S. Treasury securities and external investment pools) that represent 5% in the current year.

G. Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that 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., brokerdealer) 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 76

City of El Paso de Robles
Notes to the Basic Financial Statements
June 30, 2025
financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits.

H. Marking Investments to Fair Value
GASB Statement No. 31 requires that the City’s investments be carried at fair value instead of cost. The City must adjust the book value of its investments to reflect their fair value at each fiscal year-end, and it must include the effects of these adjustments in income for that fiscal year.

GASB Statement No. 31 applies to all the City’s investments, even if they are held to maturity and redeemed at full face value. Since typically the City holds all investments until maturity or until fair value equals or exceeds cost, the fair value adjustments required by GASB Statement No. 31 result in accounting gains or losses (called “recognized” or “unrealized” gains or losses) which do not reflect actual sales of the investments (called “realized” gains or losses). Thus, recognized gains or losses on an investment purchased at par will now reflect changes in value at each succeeding fiscal year-end, but these recognized gains or losses will net to zero if the investment is held to maturity. By following GASB Statement No. 31, the City is reporting the amount of available resources that would actually have been available if it had been required to liquidate all its investments at fiscal year-end. The fair value is provided by Zions Bancorporation, the City’s safekeeping custodial institution.

GASB Statement No. 72 addresses accounting and financial reporting issues related to fair value measurements. The definition of fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. GASB Statement No. 72 also provides guidance for applying fair value to certain investments and disclosures related to all fair value measurements.

The City categorizes its fair value measurements 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 asset and has the following three tiers:
• Level 1: Investments reflect prices quoted in active markets. • Level 2: Investments reflect prices that are based on a similar observable asset either directly or indirectly, which may include inputs in the markets that are not considered active. • Level 3: Investments reflect prices based upon unobservable sources.

The City had the following recurring fair value measurements as of June 30, 2025:

Investments by Fair Value Total
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable
Inputs (Level 3)
U.S. Agency Notes $ 847,210 $ - $ 847,210 $ -
U.S. Treasuries 94,136,788 - 94,136,788 -
Collateralized Mortgage Obligations 589,924 - 589,924 - Corporate Notes 24,839,896 - 24,839,896 -
Certificate of Deposit 811,117 811,117
Mutual Funds 11,718,148 - 11,718,148 -
Total investments measured at fair value 132,943,083 $ - $ 132,943,083 $ - Investments measured at amortized cost
LAIF 4,521,253
CAMP 44,888,528
Money Market Funds 2,590,444
Total Investments $ 184,943,308
77

City of El Paso de Robles
Notes to the Basic Financial Statements
June 30, 2025
I. Investment in State Investment Pool
The City is a voluntary participant in LAIF which is regulated by the California Government Code under the oversight of the California State Treasury. Each governmental agency may invest up to $75,000,000 for each account in the fund.

Investments in LAIF are highly liquid, as deposits can be converted to cash within twenty-four hours without loss of interest or principal. The full faith and credit of the State of California secure investments in LAIF.

NOTE 3 – CAPITAL ASSETS
A. Governmental Activities
Capital asset activity for the City’s governmental activities for the fiscal year ended June 30, 2025, is as follows:

Balance
July 1, 2024 Additions Deletions Transfers
Balance
June 30, 2025
Nondepreciable capital assets
Land $ 20,997,495 $ - $ - $ (2,304,594) $ 18,692,901
Construction in progress 37,213,807 18,844,427 - (14,030,315) 42,027,919 Total nondepreciable capital assets 58,211,302 18,844,427 - (16,334,909) 60,720,820 Depreciable capital assets
Building and improvements 69,994,094 - - (304,432) 69,689,662 Equipment 20,089,509 2,737,791 1,036,685 4,524,641 26,315,256 Infrastructure 230,636,020 3,507,600 - 9,062,678 243,206,298 Intangible assets 0 0 0
Subscription assets 175,897 123,900 - - 299,797
Leased buildings and improvements 878,213 520,905 - - 1,399,118 Total depreciable capital assets 321,773,733 6,890,196 1,036,685 13,282,887 340,910,131 Accumulated depreciation
Building and improvements 29,731,670 1,593,556 - (469,738) 30,855,488 Equipment 10,526,522 1,646,994 1,035,146 (10,400) 11,127,970 Infrastructure 106,598,319 5,225,818 - - 111,824,137
Intangible assets 0 0 0
Subscription assets 128,847 53,857 - - 182,704
Leased buildings and improvements 664,697 263,061 - - 927,758 Total accumulated depreciation 147,650,055 8,783,286 1,035,146 (480,138) 154,918,057 Total net depreciable capital assets 174,123,678 (1,893,090) 1,539 13,763,025 185,992,074 Total net capital assets $ 232,334,980 $ 16,951,337 $ 1,539 $ (2,571,884) $ 246,712,894 B. Business-Type Activities
Capital asset activity for the City’s business-type activities for the fiscal year ended June 30, 2025, is as follows:

Balance
July 1, 2024 Additions Deletions Transfers
Balance
June 30, 2025
Nondepreciable capital assets
Land $ 8,562,314 $ - $ - $ 2,304,594 $ 10,866,908
Construction in progress 16,662,920 6,477,595 - (3,163,510) 19,977,005 Total nondepreciable capital assets 25,225,234 6,477,595 - (858,916) 30,843,913 Depreciable capital assets
Building and improvements 2,488,110 - - - 2,488,110
Equipment 8,073,817 672,545 405,616 63,245 8,403,991
Infrastructure 200,682,026 1,943,980 - 3,316,140 205,942,146 Total depreciable capital assets 211,243,953 2,616,525 405,616 3,379,385 216,834,247 Accumulated depreciation
Building and improvements 996,347 55,884 - - 1,052,231
Equipment 4,848,214 580,714 328,498 (51,415) 5,049,015
Infrastructure 88,576,889 6,273,503 - - 94,850,392
Total accumulated depreciation 94,421,450 6,910,101 328,498 (51,415) 100,951,638 Net depreciable capital assets 116,822,503 (4,293,576) 77,118 3,430,800 115,882,609

Net capital assets $ 142,047,737 $ 2,184,019 $ 77,118 $ 2,571,884 $ 146,726,522 78

City of El Paso de Robles
Notes to the Basic Financial Statements
June 30, 2025
C. Depreciation Expense
Depreciation expense is charged to functions and programs based on their usage of related assets. The amounts allocated to each function or program are presented below:

Function/Program
Governmental
Activities
Business-Type
Activities Total
General government $ 723,732 $ - $ 723,732
Public safety 1,318,584 - 1,318,584
Highways and streets 5,439,841 - 5,439,841
Culture-recreation 980,888 - 980,888
Economic development and assistance 3,323 3,323
Water - 2,338,026 2,338,026
Wastewater - 4,016,562 4,016,562
Airport - 478,814 478,814
Solid Waste - 5,003 5,003
Transit - 33,137 33,137
Parking - 38,559 38,559
Total $ 8,466,368 $ 6,910,101 $ 15,376,469
D. Amortization Expense
Amortization expense is charged to functions and programs based on their usage of related assets. The amounts allocated to each function or program are presented below:

Function/Program
Total
Governmental
Activities
General government $ 123,042
Public safety 24,780
Culture-recreation 169,096
Total $ 316,918
NOTE 4 – LEASES RECEIVABLE
On December 9, 1999, the City entered into a 55-year lease with Depot Associates for the use of property and improvements located on Pine Street, between 7th and 8th Streets, also known as the “Historic Paso Robles Train Station Depot”. An initial lease receivable was recorded on July 1, 2021, in the amount of $544,819, and as of June 30, 2025, the value of the lease receivable is $523,620. The lessee is required to make monthly fixed payments of $1,567 and carries an interest rate of

2.5830%. The value of the deferred inflow of resources as of June 30, 2025, was $503,832; the City recognized lease revenue of $10,247 during the fiscal year.

On September 22, 2017, the City entered into a 60-month lease with New Cingular Wireless PCS, LLC (now Octagon Towers, LLC), to install a cellular tower on the City-owned landfill located at 9000 East Highway 46. The initial lease receivable was recorded on July 1, 2021, in the amount of $1,184,137, and as of June 30, 2025, the value of the lease receivable is $1,018,893.

The lessee is required to make monthly fixed payments of $4,400 and carries an interest rate of 1.0590%. The value of the deferred inflow of resources as of June 30, 2025, was $949,266; the City recognized lease revenue of $58,718 during the fiscal year. The lessee has four extension options, each for 60 months, with a lease escalation of 15% per extension.

On March 1, 2020, the City entered into an 8-year lease with the California Department of Air Resources, for the use of building and improvements located at 235 Santa Fe Avenue. An initial lease receivable was recorded on July 1, 2021, in the amount of $9,059, and as of June 30, 2025, the value of the lease receivable is $4,660. The lessee is required to make monthly fixed payments of $100 and carries an interest rate of 1.4510%. The value of the deferred inflow of resources as of June 30, 2025, was $4,530; the City recognized lease revenue of $1,132 during the fiscal year.

On November 3, 2020, the City purchased the leasehold agreement entered into by Greater California Financial, Inc. for the use of a building located at 4301 Second Wind Way. The original lease was for 10 years, expiring on May 31, 2027. The City recorded an initial lease receivable on July 1, 2021, in the amount of $1,675,450, and as of June 30, 2025, the value of the lease receivable is $1,017,697. The lessee is required to make monthly fixed payments of $14,164 and carries an interest rate of 79

City of El Paso de Robles
Notes to the Basic Financial Statements
June 30, 2025

1.2170%. The value of the deferred inflow of resources as of June 30, 2025, was $923,846; the City recognized lease revenue of $187,901 during the fiscal year. The lessee has one extension option for 36 months.

On August 24, 2021, the City entered into a 59-month lease with G3 Enterprises, Inc. for the use of a building located at 4309 Second Wind Way. An initial lease receivable was recorded on July 1, 2021, in the amount of $2,723,386 and as of June 30, 2025, the value of the lease receivable is $653,133. The lessee is required to make monthly fixed payments of $45,612 on average over the term of the lease; the lease has an interest rate of 0.9010%. The value of the deferred inflow of resources as of June 30, 2025, was $590,067; the City recognized lease revenue of $544,677 during the fiscal year.

On February 21, 2024, the City entered into a 24-month lease with Earthtones Gifts and Gallery/Center for Healing for use of the other part of the building located at 800 Pine Street. An initial lease receivable was recorded in the amount of $113,164 and as of June 30, 2025, the value of the lease receivable is $89,059. The lessee is required to make monthly fixed payments of $1,690 per month and carries an interest rate of 2.58%. The value of deferred inflows of resources as of June 30, 2025, was $99,605; the City recognized lease revenue of $6,779 during the fiscal year. The lessee has two extension options, each for 24 months, with a lease escalation of 15% per extension.

On December 17, 2024, the City entered into a 24-month lease with U.S. Representative Jimmy Panneta for use of a regional office building located at 800 Pine Street. An initial lease receivable was recorded in the amount of $28,556 and as of June 30, 2025, the value of the lease receivable is $21,516. The lessee is required to make monthly fixed payments of $1,222 and carries an interest rate of 2.801%. The value of deferred inflows of resources as of June 30, 2025, was $21,417; the City recognized lease revenue of $7,139 during the fiscal year. The lessee cannot extend the term of the lease beyond January 2, 2027, which is the end of the constitutional term of the Congress to which the lessee was elected.

The City leases its facilities to private and corporate companies and aircraft users for office space, airport hangar and land leases at and around the City’s municipal airport. The lease terms vary from 2 to 85 years, including the non-cancellable periods of the lease and extensions the City is reasonably certain to exercise and vary with each contract. Agreements typically allow for Consumer Price Index (CPI) annual increases to the lease payments. Where applicable, the actual CPI as of the measurement date was applied throughout the term of the lease. During the fiscal year, the City recognized $451,414 in lease revenue and $386,662 in interest income related to these agreements. On June 30, 2025, the City recorded $14.5 million in lease receivable for these arrangements. Also, the City has a deferred inflow of resources associated with these leases that will be recognized as revenue over the lease terms. As of June 30, 2025, the balance of deferred inflows of resources was $12.9 million.

A summary of lease receivable for year ended June 30, 2025, is as follows:

Fund
Balance
July 1, 2024 Additions Deletions
Balance
June 30, 2025
General Fund $ 4,138,350 $ 28,556 $ 838,328 $ 3,328,578 Airport Fund 13,605,259 946,146 76,641 14,474,764
Total leases receivable $ 17,743,609 $ 974,702 $ 914,969 $ 17,803,342

Future minimum rental receipts on the leases mentioned above are as follows:

Fiscal Year Ending
June 30 Principal Interest Total
2026 $ 966,572 $ 426,965 $ 1,393,537
2027 440,546 418,362 858,908
2028 411,766 412,753 824,519
2029 441,494 406,404 847,898
2030 412,331 398,819 811,150
2031-2035 1,032,332 1,886,931 2,919,263
2036-2040 1,421,207 1,754,887 3,176,094
2041-2045 1,381,988 1,603,766 2,985,754
2046-2050 1,440,022 1,429,770 2,869,792
2051-2055 399,076 1,308,367 1,707,443
80

City of El Paso de Robles
Notes to the Basic Financial Statements
June 30, 2025
Fiscal Year Ending
June 30 Principal Interest Total
2056-2060 $ 602,687 $ 1,237,187 $ 1,839,874
2061-2065 231,181 1,168,174 1,399,355
2066-2070 402,879 1,106,354 1,509,233
2071-2075 80,908 1,055,807 1,136,715
2076-2080 70,283 1,048,855 1,119,138
2081-2085 324,105 1,024,454 1,348,559
2086-2090 662,930 962,082 1,625,012
2091-2095 1,108,720 849,417 1,958,137
2096-2100 1,688,571 670,982 2,359,553
2101-2105 2,435,841 407,419 2,843,260
2106-2108 1,847,903 73,659 1,921,562
Total $ 17,803,342 $ 19,651,414 $ 37,454,756
Regulated Leases Excluded by GASB Statement No. 87: A significant portion of the City’s revenue comes from regulated leases of which the City is the lessor. Regulated leases as defined by the Department of Transportation and the Federal Aviation Administration and outlined in GASB Statement No. 87 paragraphs 42 and 43 are specially excluded.

The City leases buildings, land, and hangars to various businesses and individuals with month-to-month arrangements or under long-term leases with terms from 1 to 55 years for aeronautical-related purposes. Rental revenues from regulated leases excluded by GASB Statement No. 87, including month-to-month leases, were $419,929 for the fiscal year ended June 30, 2025.

Future minimum rental receipts on regulated leases excluded by GASB Statement No. 87 are as follows:

Fiscal Year Ending
June 30 Amount
2026 $ 538,902
2027 559,960
2028 552,277
2029 554,266
2030 515,788
2031-2035 2,614,553
2036-2040 2,178,194
2041-2045 1,921,495
2046-2050 1,637,956
2051-2055 1,605,969
2056-2060 1,605,969
2061-2064 1,294,149
Total $ 15,579,478
NOTE 5 – LOANS RECEIVABLE
The Community Development Block Grant (CDBG) Fund and Cal Home Loan Program Fund include various loans to individuals that qualify under the programs’ guidelines that include items such as refurbishing a home for a quadriplegic person, or blighted homes within the RDA project area that the owner is unable to address due to personal financial issues. The total amount outstanding for CDBG loans as of June 30, 2025, was $709,690 and Cal Home loan was $78,900.

On January 31, 2013, the City entered into a fee deferral agreement with Oak Park 1, LP, to construct 39 new low-income residential units as part of Phase I of the Oak Park Housing Project. Commencing on the date of the note, and continuing throughout the term of the note, the outstanding principal balance of deferred fees accrues at a compounded interest rate of

3.75% per year. A portion of the residual receipts received from the rental income shall be made to the City but is due and payable in full upon the 30th anniversary of this note. The total amount outstanding as of June 30, 2025, was $776,351.

On February 7, 2014, the City entered into a fee deferral agreement with Oak Park 2, LP, to construct 41 new low-income residential units as part of Phase II of the Oak Park Housing Project. Commencing on the date of the note, and continuing throughout the term of the note, the outstanding principal balance of deferred fees accrues at a simple interest rate of 3.75% 81

City of El Paso de Robles
Notes to the Basic Financial Statements
June 30, 2025
per year. A portion of the residual receipts received from the rental income shall be made to the City but is due and payable in full upon the 30th anniversary of this note. The total amount outstanding as of June 30, 2025, was $679,218.

On November 15, 2017, the City entered into a fee deferral agreement with Oak Park 3, LP, to construct 33 new low-income residential units as part of Phase III of the Oak Park Housing Project. Commencing on the date of the note, and continuing throughout the term of the note, the outstanding principal balance of deferred fees accrues at a simple interest rate of 3.75% per year. A portion of the residual receipts received from the rental income shall be made to the City but is due and payable in full upon the 30th anniversary of this note. The total amount outstanding as of June 30, 2025, was $792,114.

On November 16, 2018, the City entered into a fee deferral agreement with Oak Park 4, LP, to construct 57 new low-income residential units as part of Phase IV of the Oak Park Housing Project. Commencing on the date of the note, and continuing throughout the term of the note, the outstanding principal balance of deferred fees accrues at a simple interest rate of 3.75% per year. A portion of the residual receipts received from the rental income shall be made to the City but is due and payable in full upon the 30th anniversary of this note. The total amount outstanding as of June 30, 2025, was $1,391,768.

On July 1, 2019, the City entered into an agreement with Kaldera Collective LLC, to construct tenant improvements at 1345 Park Street, Paso Robles, CA for a business center providing coworking space, training, seminars, individualized mentoring, pitch contests, and other resources that lead to business attraction, expansion, incubation, accelerations, and development.

Due to the impact of the COVID-19 pandemic, the agreement was amended on March 16, 2021 to defer certain repayments.

The total amount of the loan was $399,500, of which $99,500 was forgiven after the fourth year of operation. The remaining loan accrues at an interest rate of 1% per year, maturing on March 1, 2032. The total amount outstanding as of June 30, 2025, was $194,631.

On June 7, 2022, the City Council established a Lateral Police Officer Hiring Incentive Program (“Program”), for the purposes of attracting well qualified and seasoned officers to fill current and future police officer positions. On September 5, 2023, the City entered into a Loan Agreement with Officer Michael Muscutt which provided $30,000 for a home purchased in San Luis Obispo County. The term of the loan is 15 years and accrues at an interest rate of 2% per year. Payment was to begin on the thirteenth month following the effective date; however, Officer Muscutt repaid the entirety of the loan when the home was sold during the fiscal year. There was no loaned amount outstanding as of June 30, 2025.

On May 16, 2023, the City entered into an agreement with Sunrise Villas, LP to construct 69 new low-income multi-family residential units located on Lot A of Chandler Ranch development. Commencing on the date of the note, and continuing throughout the term of the note, the outstanding principal balance of deferred fees accrues at a simple interest rate of 3.75% per year. A portion of the residual receipts received from the rental income shall be made to the City but is due and payable in full upon the 30th anniversary of this note. The total amount outstanding as of June 30, 2025, was $1,729,488.

On May 16, 2023, the City entered into an agreement with River Walk Terrace, LP to construct 79 new low-income multi-family residential units located near the Woodland Shopping Plaza. Commencing on the date of the note, and continuing throughout the term of the note, the outstanding principal balance of deferred fees accrues at a simple interest rate of 3.75% per year. A portion of the residual receipts received from the rental income shall be made to the City but is due and payable in full upon the 30th anniversary of this note. The total amount outstanding as of June 30, 2025, was $1,239,179.

Fund
Balance
July 1, 2024 Additions Deletions
Balance
June 30, 2025
General Fund $ 3,631,518 $ - $ 32,163 $ 3,599,355
Supplemental Sales Tax Fund 30,000 - 30,000 -
CDBG Fund 737,690 - 28,000 709,690
Cal Home Loan Fund 103,900 - 25,000 78,900
Transportation Facilities Fund 1,147,762 - - 1,147,762
Public Safety Facilities Fund 79,616 - 36,911 42,705
General Government Facilities Fund 475,381 - - 475,381
Parks and Recreation Facilities Fund 464,778 - - 464,778 Library Facilities Fund 153,362 - - 153,362
82

City of El Paso de Robles
Notes to the Basic Financial Statements
June 30, 2025
Fund
Balance
July 1, 2024 Additions Deletions
Balance
June 30, 2025
Water Fund $ 339,949 $ - $ - $ 339,949
Wastewater Fund 579,457 - - 579,457
Total loans receivable $ 7,743,413 $ - $ 152,074 $ 7,591,339 NOTE 6 – INTERFUND TRANSACTIONS
A. Advances Receivable and Payable
On November 2, 1993, the City entered into an agreement where General Fund resources were loaned to the Chandler Ranch and Olsen Beechwood Specific Plan Fund. Commencing on the date of the note, and continuing throughout the term of the note, the outstanding principal balance shall accrue at a compounded interest rate of LAIF, plus 1% per year. Total principal amount outstanding as of June 30, 2025, for Chandler Ranch was $1,130,537 and Olsen Beechwood was $687,115.

Total accrued interest outstanding as of June 30, 2025, for Chandler Ranch was $737,916 and Olsen Beechwood was $451,577.

On August 3, 2004, the City entered into an agreement where the General Fund resources were loaned to the Airport Road Project Study Report (PSR) Fund to review improvements to the intersection of Airport Road and Highway 46 East.

Commencing on the date of the note, and continuing throughout the term of the note, the outstanding principal balance shall accrue at a compounded interest rate of LAIF, plus 1% per year. Total amount outstanding as of June 30, 2025, was $153,222. Total accrued interest outstanding as of June 30, 2025, was $101,705.

On October 1, 2019, the City Council approved Resolution 19-106 where General Fund resources were loaned to the Parking Fund in an amount not-to-exceed $1.0 million to cover the initial start-up costs and infrastructure of the parking program (i.e., pay stations, parking signage, and vehicle license recognitions equipment and software). Commencing on the date of the note, and continuing throughout the term of the note, the outstanding principal balance shall accrue at a compounded interest rate of LAIF, plus 1% per year. Payments are made whenever there is positive cash flow received.

Total amount outstanding on June 30, 2025, was $663,482. Total accrued interest outstanding as of June 30, 2025, was $16,457.

B. Transfers Between Funds
With City Council approval, resources may be transferred from one City fund to another. These transfers are broken down into three categories: miscellaneous transfers, capital transfers, and cost allocation transfers.

Miscellaneous Transfers: The main purpose of miscellaneous transfers is to charge one fund for services provided by another fund. For FY 2024-25, there were two miscellaneous transfers: one for $106,000 from the American Rescue Plan Act Fund to the General Fund to cover the expenditures associated with El Camino Homeless Organization (ECHO) homeless shelter; and the other from the Landfill Closure, Postclosure, and Corrective Action Fund to the General Fund and the Solid Waste Fund to account for sanitation activity in a standalone enterprise fund moving forward.

Transfer In Transfer Out
General Fund $ 235,727 $ -
American Resue Plan Act Fund - 106,000
Landfill Closure, Post-closure, Correction Action Fund - 4,959,059 Solid Waste Fund 4,829,332 -
Total $ 5,065,059 $ 5,065,059
Capital Improvement Program Transfers: The main purpose of capital transfers is to keep capital projects in a central fund, regardless of funding source of the project. For FY 2024-25, capital transfers by project are shown on the following page:
83

City of El Paso de Robles
Notes to the Basic Financial Statements
June 30, 2025
Transfer In Transfer Out
Capital Projects Fund $ 14,869,060 $ -
General Fund
Road Maintenance Program - 4,891,664
ADA Transition Plan - 50,000
Downtown Parking Lot Improvements - 800,000
Mill Road Parallel Route/Annexation Feasibility - 500,000 Drainage Improvements at 13th and Riverside - 48,017
Library Refresh/Remodel - 233,500
Satellite Drainage Improvements - 175,000
South Vine Street Bridge - 1,197,305
Safety Center Roof Replacement - 1,185,955
Veteran’s Center Patio Shade Structure - 132,878
Various City Facility Repair & Improvements - 175,378
Supplemental Sales Tax Fund
Road Maintenance Program - 876,571
Fire Station No. 3 - 383,712
Fire Training Tower - 746,164
American Rescue Plan Act Fund
Sherwood Park Pickleball Courts - 1,546,937
Transit Fund
Huer Huero Creek Bridge - 294,490
South Vine Street Bridge - 255,493
Transportation Facilities Fund
Huer Huero Creek Bridge - 1,020,708
Serenade Pedestrian Improvements - 58,504
South Vine Street Bridge - 111,951
General Government Facilities Fund
City Hall/Library Remodel & Expansion - 184,833
Total $ 14,869,060 $ 14,869,060
Cost Allocation Transfers: Cost allocation transfers are utilized to charge enterprise and community facilities districts (CFDs) funds for central services provided by the General Fund. Cost allocation transfers by fund are identified below:

Transfer In Transfer Out
General Fund $ 1,212,170 $ -
CFD No. 2005-1 332,841
CFD No. 2022-2N 33,829
Water Fund - 404,100
Wastewater Fund - 380,200
Airport Fund - 48,900
Solid Waste Fund - 12,300
Total $ 1,212,170 $ 1,212,170
For Fiscal Year 2024-25, total interfund activity by fund is summarized as follows:

Transfer In Transfer Out
Major Governmental Funds:

General Fund $ 1,447,897 $ 9,389,697
Supplemental Sales Tax Fund - 2,006,447
Capital Projects Fund 14,869,060 -
Nonmajor Governmental Funds:

American Rescue Plan Act Fund - 1,652,937
Landfill Closure, Postclosure, Corrective Action Fund - 4,959,059 CFD No. 2005-1 Fund - 332,841
CFD No. 2022-2N Fund - 33,829
Transportation Facilities Fund - 1,191,163
General Government Facilities Fund - 184,833
84

City of El Paso de Robles
Notes to the Basic Financial Statements
June 30, 2025
Transfer In Transfer Out
Enterprise Funds:

Water Fund $ - $ 404,100
Wastewater Fund - 380,200
Airport Fund - 48,900
Solid Waste Fund 4,959,059 142,027
Transit Fund - 549,983
Total $ 21,276,016 $ 21,276,016
NOTE 7 – DEFERRED OUTFLOWS AND INFLOWS OF RESOURCES
On June 30, 2025, deferred outflows and inflows of resources, reported in the governmental fund financial statements, consisted of the following:

Deferred
Outflows of
Resources Deferred Inflows of Resources
Deferred
Interest
Expense
Unavailable
Revenues Leases Total
Major Governmental Funds:

General Fund $ - $ 5,251,941 $ 3,092,563 $ 8,344,504
Specific Plan Fund 1,189,493 - - -
Nonmajor Governmental Funds: 0
Community Development Block Grant Fund - 837,131 - 837,131 Cal Home Loan Program Fund - 128,607 - 128,607
Transportation Facilities Fund - 1,280,397 - 1,280,397
Public Safety Facilities Fund - 66,426 - 66,426
General Government Facilities Fund - 608,883 - 608,883
Parks and Recreation Facilities Fund - 557,503 - 557,503 Library Facilities Fund - 191,486 - 191,486
Airport Road PSR Fund 101,705 - - -
Total $ 1,291,198 $ 8,922,374 $ 3,092,563 $ 12,014,937
On June 30, 2025, deferred outflows and inflows of resources, reported on the Statement of Net Position, consisted of the following:

Governmental
Activities
Business-Type
Activities
Deferred Outflows of Resources:

Deferred loss of refunding bonds $ 130,452 $ -
Deferred Other Postemployment Benefits (OPEB) 596,071 165,831 Deferred pensions 20,670,462 2,339,371
Total deferred outflows of resources $ 21,396,985 $ 2,505,202 Deferred Inflows of Resources:

Deferred leases $ 3,092,563 $ 12,883,299
Deferred OPEB 3,986,398 1,109,023
Deferred pensions 814,509 35,773
Total deferred inflows of resources $ 7,893,470 $ 14,028,095 NOTE 8 – LONG-TERM DEBT
A. Compensated Absences
City employees accumulate earned, but unused vacation and other leave pay benefits, which can be converted to cash at termination of employment. Since no means exist to reasonably estimate the amounts that might be liquidated with current available financial resources, if any, they are reported as long-term debt on the Statement of Net Position. No expenditure is reported for these amounts in the fund statements. However, in the Statement of Activities the expenditure is allocated to each function based on usage. The balance of these benefits (payable in accordance with various collective bargaining agreements) on June 30, 2025, totals $3,346,126 for governmental activities and $446,545 for business-type activities.
85

City of El Paso de Robles
Notes to the Basic Financial Statements
June 30, 2025
B. Leases Payable
On August 1, 2017, the City entered into a 60-month lease agreement (City as lessee) for the use of building and improvements located at 821 Pine St, Unit A (also known as the “City Hall Annex”). On August 1, 2022, the term of the lease was extended for an additional two years. An initial lease liability was recorded on July 1, 2021, in the amount of $127,327 and as of June 30, 2025, with the additional term extension, the value of the lease liability is $120,101. The City is required to make monthly fixed payments of $8,452 and has an interest rate of 2.445%. The interest rate was determined by using the City’s incremental borrowing rate which uses municipal bond yields at the time the City entered into this agreement. The building’s estimated useful life exceeds the lease contract term, so the lease term was used to determine amortization expense. The value of the right-to-use leased asset as of June 30, 2025, was $510,961, with accumulated amortization of $401,336, resulting in a net value of $109,625. See Note 3 – Capital Assets for further detail.

On April 25, 2021, the City entered into a 24-month lease agreement (City as lessee) for the use of building and improvements located at 625 Riverside Avenue (also known as the “Corporation Yard”). On July 27, 2024, the term of the lease was extended for an additional three years. An initial lease liability was recorded on July 1, 2021, in the amount of $367,252 and as of June 30, 2025, the value of the lease liability is $388,428. The City is required to make monthly fixed payments of $13,000 and has an interest rate of 2.779%. The interest rate was determined by using the City’s incremental borrowing rate which uses municipal bond yields at the time the City entered into this agreement. The building’s estimated useful life exceeds the lease contract term, so the lease term was used to determine amortization expense. The value of the right-to-use leased asset as of June 30, 2025, was $888,157, with accumulated amortization of $526,422, resulting in a net value of $361,735. See Note 3 – Capital Assets for further detail.

The future minimum right-to-use lease payments are shown below:

Fiscal Year Ending
June 30 Principal Interest Total
2026 $ 275,324 $ 10,432 $ 285,756
2027 216,243 3,551 219,794
2028 16,962 38 17,000
Total $ 508,529 0 $ 14,021 0 $ 522,550
C. Subscription Based Information Technology Agreements On August 22, 2022, the City entered into a 36-month subscription agreement for the use of Desigo Software, an HVACrelated building management solution. An initial subscription liability was recorded on September 1, 2022, in the amount of $35,923 and as of June 30, 2025, the value of the lease liability was $0. The City was required to make annual payments of $7,385 and had an interest rate of 2.1843%. The interest rate was determined by using the City’s incremental borrowing rate which uses municipal bond yields at the time the City entered into this agreement. The value of the right-to-use subscription as of June 30, 2025, was $35,923, with accumulated amortization of $33,927, resulting in a net value of $1,996.

See Note 3 – Capital Assets for further detail.

On June 30, 2022, the City entered into a 48-month subscription agreement for the use of eScribe, a City Council agenda preparation software solution. An initial subscription liability was recorded on July 1, 2022, in the amount of $63,909 and as of June 30, 2025, the value of the lease liability is $17,753. The City is required to make annual payments of $18,090 and has an interest rate of 1.902%. The interest rate was determined by using the City’s incremental borrowing rate which uses municipal bond yields at the time the City entered into this agreement. The value of the right-to-use subscription as of June 30, 2025, was $63,909, with accumulated amortization of $47,932, resulting in a net value of $15,977. See Note 3 – Capital Assets for further detail.

On August 16, 2022, the City entered into a 60-month subscription agreement with Motorola Solutions for in-car video and audio recording equipment. An initial subscription liability was recorded in the amount of $123,900 and as of June 30, 2025, the value of the lease liability is $82,428. The City is required to make annual payments of $20,736 and has an interest rate of 2.99%. The interest rate was determined by using the City’s incremental borrowing rate which uses municipal bond 86