Agenda packet — Patterson City Council, May 7, 2024 (part 2 of 2)

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

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

Walnut Creek, California
March 28, 2024

9.1.b
Packet Pg. 297 Attachment: 2023_Patterson, City of_Single Audit_FINAL (FY 22-23 Financial Reports) 2121 North California Blvd., Suite 290
Walnut Creek, California 94596

REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM,

ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE

UNIFORM GUIDANCE, AND ON SCHEDULE OF EXPENDITURS OF FEDERAL AWARDS Independent Auditors’ Report
To the Honorable Mayor and Members of City Council
of the City of Patterson
Patterson, California
Report on Compliance for Each Major Federal Program
Opinion on Each Major Federal Program
We have audited City of Patterson, California’s (the “City”) compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on each of the City’s major federal programs for the year ended June 30, 2023. The City’s major federal programs are identified in the summary of auditors’ results section of the accompanying schedule of findings and questioned costs.

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

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

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

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

9.1.b
Packet Pg. 298 Attachment: 2023_Patterson, City of_Single Audit_FINAL (FY 22-23 Financial Reports) To the Honorable Mayor and Members of City Council
of the City of Patterson
Patterson, California

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4 Auditors’ Responsibilities for the Audit of Compliance Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists.

The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Noncompliance with the compliance requirements referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the City’s compliance with the requirements of each major federal program as a whole.

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

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

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

Our consideration of internal control over compliance was for the limited purpose described in the Auditors’ Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified.

9.1.b
Packet Pg. 299 Attachment: 2023_Patterson, City of_Single Audit_FINAL (FY 22-23 Financial Reports) To the Honorable Mayor and Members of City Council
of the City of Patterson
Patterson, California

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

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance.

Accordingly, this report is not suitable for any other purpose.

Report on Schedule of Expenditures of Federal Awards
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City, as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements. We issued our report thereon dated March 28, 2024, which contained unmodified opinions on those financial statements. Our audit was performed for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of the basic financial statements.

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

Walnut Creek, California
March 28, 2024

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Packet Pg. 301 Attachment: 2023_Patterson, City of_Single Audit_FINAL (FY 22-23 Financial Reports) City of Patterson
Schedule of Expenditures of Federal Awards
For the Year Ended June 30, 2023
See accompanying Notes to the Schedule of Expenditures of Federal Awards. 7 Assistance Grant
Federal Grantor/Passed through Grantor Listing Identification Federal Program Title Number Number Expenditures
U.S. Department of Transportation:

Highway Planning and Construction Program:

Passed Through State of California Department of Transportation:

Rogers Road DMC Bridge 20.205 BRLS-5244 (032) 151,789 $ Total Highway Planning and Construction Program 151,789 Total U.S. Department of Transportation 151,789
U.S. Department of Treasury:

Direct Program:

Coronavirus State and Local Fiscal Recovery Funds 21.027 NEU - CA0198 811,958 Total Coronavirus State and Local Fiscal Recovery Funds 811,958 Total U.S. Department of Treasury 811,958
U.S. Department of Homeland Security:

Direct Program:

Tactical Emergency Medical Services (TEMS) 97.044 EMW-2021-FG-06830 25,390 Total U.S. Department of Homeland Security 25,390
Total Expenditures of Federal Awards $ 989,137

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Packet Pg. 303 Attachment: 2023_Patterson, City of_Single Audit_FINAL (FY 22-23 Financial Reports) City of Patterson
Notes to the Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2023
9 Note 1 – Reporting Entity
The financial reporting entity consists of the primary government, City of Patterson (the “City”), organizations for which the primary government is financially accountable, and other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity’s financial statements to be misleading or incomplete.

Note 2 – Basis of Accounting
The various grant programs have been recorded within the general fund and special revenue funds of the City. The City utilizes the modified accrual method of accounting for the general fund and special revenue funds. The accompanying Schedule of Expenditures of Federal Awards (“Schedule”) is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Therefore, some amounts presented in the schedule may differ from amounts presented in, or used in, the preparation of the City’s basic financial statements.

Note 3 – Schedule of Expenditures of Federal Awards
The accompanying Schedule presents the activity of all federal financial assistance programs of the City Federal financial assistance received directly from federal agencies as well as federal financial assistance passed through the State of California is included in the Schedule. The Schedule was prepared from only the accounts of various grant programs and, therefore, does not present the financial position, change in fund balance, or results of operations of the City.

Note 4 – Subrecipients
During the fiscal year ended June 30, 2023, there were no amounts provided to subrecipients.

Note 5 – Indirect Cost Rate
The City has not elected to use the 10-percent de minimis indirect rate as allowed under the Uniform Guidance.

9.1.b
Packet Pg. 304 Attachment: 2023_Patterson, City of_Single Audit_FINAL (FY 22-23 Financial Reports) City of Patterson
Schedule of Findings and Questioned Costs
For the Year Ended June 30, 2023
10 Section I – Summary of Auditors’ Results
Financial Statements
Type of report the auditors issued on whether the financial statements audited were prepared in accordance with GAAP: Unmodified Internal control over financial reporting:
 Material weakness(es) identified? No
 Significant deficiency(ies) identified? None Reported Noncompliance material to financial statements noted? No Federal Awards
Internal control over major programs:
 Material weakness(es) identified? No
 Significant deficiency(ies) identified? None Reported Type of auditors’ report issued on compliance for major programs Unmodified Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)? No
Identification of major programs:

Assistance Listing Federal
Number Name of Federal Program or Cluster Expenditures

21.027 Coronavirus State and Local Fiscal Recovery Funds 811,958 $ Total major program expenditures $ 811,958
Total expenditures of federal awards $ 989,137
Percent of total federal award expenditures 82.09%
Dollar threshold used to distinguish between type A and type B programs $750,000 Auditee qualified as low-risk auditee in accordance with 2 CFR 200.520? No

9.1.b
Packet Pg. 305 Attachment: 2023_Patterson, City of_Single Audit_FINAL (FY 22-23 Financial Reports) City of Patterson
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2023
11 Section II – Financial Statements Findings
A. Current Year Findings – Financial Statement Audit
No current year financial statement findings were noted.

B. Prior Year Findings – Financial Statement Audit
Finding 2022-001 Delay in Financial Reporting
Criteria:

Management is responsible for providing timely and accurate financial information. Since the City has expended over $750,000 of expenditures of federal awards, Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award (Uniform Guidance), states the City is required to submit the Data Collection Form and the reporting package to the Federal Audit Clearinghouse and the State Controller’s Office, which includes the Single Audit Report of the City, within the earlier of 30 days after receipt of auditor’s report, or nine month after the end of the audit period.

Condition:

The City has experienced delays in the issuance of the 2022 Single Audit required under Uniform Guidance.

Status:

Finding was resolved during the year ended June 30, 2023.

Section III – Federal Award Findings
A. Current Year Findings and Questioned Costs – Major Federal Award Program Audit No findings or questioned costs were noted on the City’s major federal programs for the year ended June 30, 2023.

B. Prior Year Findings and Questioned Costs – Major Federal Award Program Audit No findings or questioned costs were noted on the City’s major federal programs for the year ended June 30, 2022.

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Packet Pg. 307 Attachment: 2023_Patterson, City of_Single Audit_FINAL (FY 22-23 Financial Reports) City of Patterson
Transportation Development Act Fund
Patterson, California
Independent Auditors’ Reports
and Financial Statements
For the Year Ended June 30, 2023

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Packet Pg. 308 Attachment: 2023_Patterson, City of_TDA_FINAL (FY 22-23 Financial Reports)

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Packet Pg. 309 Attachment: 2023_Patterson, City of_TDA_FINAL (FY 22-23 Financial Reports) City of Patterson
Transportation Development Act Fund
For the Year Ended June 30, 2023
Table of Contents
Page
Independent Auditors’ Report on Financial Statements .......................................................................................... 1 Independent Auditors’ Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards, and With the Statutes, Rules and Regulations of the California Transportation Development Act ..................................................... 5 Financial Statements:

Balance Sheet ........................................................................................................................................................... 7 Statement of Revenues, Expenditures, and Change in Fund Balance ...................................................................... 8 Notes to the Financial Statements ............................................................................................................................. 13

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Packet Pg. 311 Attachment: 2023_Patterson, City of_TDA_FINAL (FY 22-23 Financial Reports) 2121 North California Blvd., Suite 290
Walnut Creek, California 94596
INDEPENDENT AUDITORS’ REPORT
To the Honorable Mayor and Members of the City Council
of the City of Patterson
Patterson, California
Report on the Audit of the Financial Statements
Opinion
We have audited the accompanying balance sheet of the Transportation Development Act Fund (the “TDA Fund”) of the City of Patterson, California (the “City”) as of June 30, 2023 and the related statement of revenues, expenditures, and change in fund balance for the year then ended, and the related notes to the financial statements.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of TDA Fund as of June 30, 2023, and the respective changes in financial position thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

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

Emphasis of Matter
As discussed in Note 1, the financial statements present only the TDA Fund of the City and do not purport to, and do not present fairly the financial position of the City as of June 30, 2023, and change in its financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter.

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 TDA Fund’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.

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Packet Pg. 312 Attachment: 2023_Patterson, City of_TDA_FINAL (FY 22-23 Financial Reports) To the Honorable Mayor and Members of the City Council
of the City of Patterson
Patterson, California

Page 2 ends

2 Auditors’ Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an 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 auditing standards generally accepted in the United States of America and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with auditing standards generally accepted in the United States of America and Government Auditing Standards, we:
 Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.  Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the TDA Fund’s internal control. Accordingly, no such opinion is expressed.  Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.  Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the TDA Fund’s ability to continue as a going concern for a reasonable period of time.

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

Required Supplementary Information
Management has omitted the Management’s Discussion and Analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the financial statements. Such missing information, although not a part of the financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the financial statements in an appropriate operational, economic, or historical context. Our opinion on the financial statements is not affected by this missing information.

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Packet Pg. 313 Attachment: 2023_Patterson, City of_TDA_FINAL (FY 22-23 Financial Reports) To the Honorable Mayor and Members of the City Council
of the City of Patterson
Patterson, California

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3 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards and the Transportation Development Act, we have also issued our report dated March 28, 2024, on our consideration of the TDA Fund’s internal control over financial reporting and on our tests of its compliance with the statutes, rules, and regulations of the California Transportation Development Act. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the TDA Fund’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the TDA Fund’s internal control over financial reporting and compliance.

Walnut Creek, California
March 28, 2024

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Packet Pg. 315 Attachment: 2023_Patterson, City of_TDA_FINAL (FY 22-23 Financial Reports) 2121 North California Blvd., Suite 290
Walnut Creek, California 94596

REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND

OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN

ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS, AND WITH THE STATUTES, RULES

AND REGULATIONS OF THE CALIFORNIA TRANSPORTATION DEVELOPMENT ACT Independent Auditors’ Report
To the Honorable Mayor and Members of the City Council
of the City of Patterson
Patterson, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the Transportation Development Act Fund (the “TDA Fund”) of the City of Patterson, California (the “City”), as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the TDA Fund’s basic financial statements and have issued our report thereon dated March 28, 2024.

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

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

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that have not been identified.

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

9.1.c
Packet Pg. 316 Attachment: 2023_Patterson, City of_TDA_FINAL (FY 22-23 Financial Reports) To the Honorable Mayor and Members of the City Council
of the City of Patterson
Patterson, California

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6 Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s Transportation Development Act Fund financial statements are free from material misstatement, we performed tests of its compliance with the applicable statutes, rules and regulations of the Transportation Development Act and the allocation instructions and resolutions of the Stanislaus Council of Governments as required by Sections 6666 of Title 21, Division 3, Chapter 2, Article 5.5 of the California Code of Regulations, noncompliance with which could have a direct and material effect on the determination of financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards or the Transportation Development Act.

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

Walnut Creek, California
March 28, 2024

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Packet Pg. 317 Attachment: 2023_Patterson, City of_TDA_FINAL (FY 22-23 Financial Reports) LTF
Transportation
ASSETS
Cash and investments $ 277,341
Interest receivable 474
Total assets $ 277,815

LIABILITIES AND FUND BALANCE
LIABILITIES:

Unearned revenue $ 308,494
Total liabilities 308,494
FUND BALANCE:

Unrestricted (deficit) (30,679)
Total fund balance (deficit) (30,679)
Total liabilities and fund balance $ 277,815
City of Patterson
Transportation Development Act Fund
Balance Sheet
June 30, 2023
See accompanying Notes to the Basic Financial Statements. 7 9.1.c
Packet Pg. 318 Attachment: 2023_Patterson, City of_TDA_FINAL (FY 22-23 Financial Reports) LTF
Transportation
REVENUES:

Interest $ 1,838
Miscellaneous 1,000
Total revenues 2,838
OTHER FINANCING SOURCES (USES):

Transfers out (35,378)
Total other financing sources (uses) (35,378)
Net change in fund balance (32,540)
FUND BALANCE (DEFICIT):

Beginning of year, as restated (Note 6) 1,861
End of year $ (30,679)
City of Patterson
Transportation Development Act Fund
Statement of Revenues, Expenditures, and Change in Fund Balance For the Year Ended June 30, 2023
See accompanying Notes to the Basic Financial Statements. 8 9.1.c
Packet Pg. 319 Attachment: 2023_Patterson, City of_TDA_FINAL (FY 22-23 Financial Reports) 9 NOTES TO THE FINANCIAL STATEMENTS

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Packet Pg. 321 Attachment: 2023_Patterson, City of_TDA_FINAL (FY 22-23 Financial Reports) City of Patterson
Transportation Development Act Fund
Index to the Notes to the Financial Statements
For the Year Ended June 30, 2023
11 Note 1 – Summary of Significant Accounting Policies ............................................................................................. 13 A. The Reporting Entity .................................................................................................................................. 13 B. Fund Accounting......................................................................................................................................... 13 C. Basis of Accounting and Measurement Focus ............................................................................................ 13 D. Cash and Investments ................................................................................................................................. 13 E. Fund Balance .............................................................................................................................................. 13 F. Use of Estimates ......................................................................................................................................... 14 Note 2 – Cash and Investments ................................................................................................................................... 14 Note 3 – Unearned Revenue ........................................................................................................................................ 14 Note 4 – Transportation Development Act Compliance Requirements .................................................................. 14 Note 5 – Restrictions ..................................................................................................................................................... 14 Note 6 – Prior Period Adjustment .............................................................................................................................. 15 Note 7 – Deficit Fund Balance ..................................................................................................................................... 15

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Packet Pg. 323 Attachment: 2023_Patterson, City of_TDA_FINAL (FY 22-23 Financial Reports) City of Patterson
Transportation Development Act Fund
Notes to the Financial Statements
For the Year Ended June 30, 2023
13 Note 1 – Summary of Significant Accounting Policies
The accompanying financial statements are prepared from the accounts and financial transactions of the Transportation Development Act Fund (“TDA Fund”) of the City of Patterson, California (the “City”) and have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Governmental Accounting Standards Board (“GASB”) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The more significant of the City’s accounting policies applicable to the TDA Fund are described below.

A. The Reporting Entity
The City operates under a Council-Manager form of government and provides the following services as authorized: public safety (police, fire and civil defense), highway and streets, sanitation, health and social services, culture-recreation, education, public improvements, planning and zoning, and general administrative services. The City also provides water, garbage, and sewer service. It is governed by an elected five member council.

The financial statements of the TDA Fund are intended to present the financial position and changes in financial position of only those transactions attributable to the TDA Fund administered and disbursed by the City.

B. Fund Accounting
In accordance with Section 99400 (a) and (c) of the Transportation Development Act, monies are reported in the TDA Fund. The monies of the TDA Fund are the City’s share of the Transportation Development Act allocations that are legally restricted for specific purposes. The operation of this fund is accounted for as a “Special Revenue Fund” in a separate set of self-balancing accounts that comprise its assets, liabilities, fund balance, revenues, and expenditures.

C. Basis of Accounting and Measurement Focus
The TDA Fund’s financial statements include a balance sheet and a statement of revenues, expenditures and changes in fund balances. This fund is accounted for on a spending or “current financial resources” measurement focus and the modified accrual basis of accounting. Accordingly, only current assets and current liabilities are included on the balance sheet. The statement of revenues, expenditures and change in fund balance presents increases (revenue and other financing sources) and decreases (expenditures and other financing uses) in fund balance. Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expenditures of the current period. The City defines available to be within 60 days.

D. Cash and Investments
The Transportation Development Act Fund’s cash is pooled with the City’s internal investment pool. Cash equivalents are reported as cash and are considered to be cash on hand, demand deposits, and short-term investments with original maturity of three months or less from the date of acquisition.

E. Fund Balance
The City reports fund balance for governmental funds in specific classifications (nonspendable, restricted, committed, assigned, and unassigned), which creates a hierarchy primarily based on the extent to which the City is bound to the constraints on the specific purpose for which funds can be spent. The TDA fund only receives restricted revenues, therefore any remaining fund balance is restricted by nature of the revenue received.

9.1.c
Packet Pg. 324 Attachment: 2023_Patterson, City of_TDA_FINAL (FY 22-23 Financial Reports) City of Patterson
Transportation Development Act Fund
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2023
14 Note 1 – Summary of Significant Accounting Policies (Continued) F. Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosure. Accordingly, actual results could differ from those estimates.

Note 2 – Cash and Investments
The TDA Fund’s share of the City’s cash and investments at June 30, 2023 was $277,341.

Cash is deposited in the City’s internal investment pool, which is reported at fair value. The TDA Fund do not own specifically identifiable securities in the City’s pool. Interest income is allocated based on average cash balances.

Investment policies and associates risk factors applicable to the TDA Fund are those of the City and are included in the City’s basic financial statements.

Note 3 – Unearned Revenue
As of June 30, 2023, the balance of $297,142 is unearned revenue and consists of unspent funds of $297,142 of FY2016 Congestion Mitigation and Air Quality (CMAQ) Improvement funding and $11,352 of FY2015 NonMotorized Sidewalks funding.

Note 4 – Transportation Development Act Compliance Requirements Allocations and disbursements of the State Transit Assistance Fund and the Local Transportation Fund are made by the Stanislaus Council of Governments. Such allocations and disbursements are in accordance with written allocation instructions conveyed by the Stanislaus Council of Governments, the Transportation Development Act, and Section 6753 of the California Administrative Code.

Pursuant to Section 6750 (e) of the California Administrative Code, the Local Transportation Fund shall not be commingled with the State Transit Assistance Fund, or with any other revenues or funds of the regional entity, county, or operator. The Local Transportation Fund is maintained as a separate fund of the City.

Note 5 – Restrictions
Funds received pursuant to TDA Article 3 may only be used for pedestrian and bicycle projects.

Funds received pursuant to TDA Article 8e may only be used to pay for capital expenses incurred while contracting for transit services with profit making or non-profit companies for public transportation services as described in TDA Article 8e.

9.1.c
Packet Pg. 325 Attachment: 2023_Patterson, City of_TDA_FINAL (FY 22-23 Financial Reports) City of Patterson
Transportation Development Act Fund
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2023
15 Note 6 – Prior Period Adjustments
The City has updated their accounts receivable policy in determining the amounts to be uncollectible. This determination is reflective of a change in accounting principle related to the assessment of the collectability of accrued receivables. The result of this change increased beginning fund balance by $976.

Note 7 – Deficit Fund Balance
As of June 30, 2023, the Local Transportation Fund ended the year with a deficit fund of $30,679. The City plans to address the deficit through additional funding through intergovernmental revenue or transfers from the City’s General Fund.

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9.1.c
Packet Pg. 327 Attachment: 2023_Patterson, City of_TDA_FINAL (FY 22-23 Financial Reports) City of Patterson
Abandoned Vehicle Abatement Program
Patterson, California
Independent Auditors’ Reports
and Financial Statements
For the Year Ended June 30, 2023

9.1.d
Packet Pg. 328 Attachment: 2023_Patterson, City of_AVA_FINAL (FY 22-23 Financial Reports)

9.1.d
Packet Pg. 329 Attachment: 2023_Patterson, City of_AVA_FINAL (FY 22-23 Financial Reports) City of Patterson
Abandoned Vehicle Abatement Program
For the Year Ended June 30, 2023
Table of Contents
Page
Independent Auditors’ Report on Financial Statements .......................................................................................... 1 Independent Auditors’ Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards and the Abandoned Vehicle Abatement Program Handbook............................................................................ 3 Financial Statements:

Statement of Revenues, Expenditures, and Changes in Fund Balances ................................................................... 7 Notes to the Financial Statements ............................................................................................................................. 11

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Packet Pg. 331 Attachment: 2023_Patterson, City of_AVA_FINAL (FY 22-23 Financial Reports) INDEPENDENT AUDITORS’ REPORT
To the Honorable Mayor and Members of the City Council
of the City of Patterson
Patterson, California
Report on the Audit of the Financial Statements
Opinion
We have audited the accompanying Statement of Revenues, Expenditures and Changes in Fund Balance (the “Statement”) of the Abandoned Vehicle Abatement Program (the “Program”) of the City of Patterson, California (the “City”) as of and for the year ended June 30, 2023, and the related notes to the financial statement, as listed in the table of contents.

In our opinion, the Statement referred to above presents fairly, in all material respects, the revenues, expenditures and changes in fund balance of the program for the year ended June 30, 2023 in conformity with accounting principles generally accepted in the United States of America.

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

Emphasis of Matter
As described in Note 1, the Statement is intended to present only the results of operations of the Program of the City.

It does not purport to, and does not, present fairly the financial position of the City as of June 30, 2023, and change in fund balance for the year then ended in accordance with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter.

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 Program’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.

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Packet Pg. 332 Attachment: 2023_Patterson, City of_AVA_FINAL (FY 22-23 Financial Reports) To the Honorable Mayor and Members of the City Council
of the City of Patterson
Patterson, California

Page 2 ends

In performing an audit in accordance with auditing standards generally accepted in the United States of America and Government Auditing Standards, we:
 Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.  Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Program’s internal control. Accordingly, no such opinion is expressed.  Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.  Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Program’s ability to continue as a going concern for a reasonable period of time.

Other Reporting Required by Government Auditing Standards and the AVA Program Handbook In accordance with Government Auditing Standards and the AVA Program Handbook, we have also issued our report dated March 28, 2024, on our consideration of the Program’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is 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 and the AVA Program Handbook in considering the Program’s internal control over financial reporting and compliance.

Walnut Creek, California
March 28, 2024

9.1.d
Packet Pg. 333 Attachment: 2023_Patterson, City of_AVA_FINAL (FY 22-23 Financial Reports)

REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON

COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF

FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH

GOVERNMENT AUDITING STANDARDS AND

THE ABANDONED VEHICLE ABATEMENT PROGRAM HANDBOOK
Independent Auditors’ Report
To the Honorable Mayor and Members of the City Council
of the City of Patterson
Patterson, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America, the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, and certain provisions of the Abandoned Vehicle Abatement Program Handbook (AVA Program Handbook), the financial statement of the Abandoned Vehicle Abatement Program (the “Program”) of the City of Patterson, California (the “City”), for the year ended June 30 2023, and the related notes to the financial statement, and have issued our report thereon dated March 28, 2024.

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

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

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

9.1.d
Packet Pg. 334 Attachment: 2023_Patterson, City of_AVA_FINAL (FY 22-23 Financial Reports) To the Honorable Mayor and Members of the City Council
of the City of Patterson
Patterson, California

Page 2 ends

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

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

Walnut Creek, California
March 28, 2024

9.1.d
Packet Pg. 335 Attachment: 2023_Patterson, City of_AVA_FINAL (FY 22-23 Financial Reports)

FINANCIAL STATEMENTS
5 9.1.d
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6 9.1.d
Packet Pg. 337 Attachment: 2023_Patterson, City of_AVA_FINAL (FY 22-23 Financial Reports) REVENUES:

Registration fees $ 14,560
Total revenues 14,560
EXPENDITURES:

Personnel 9,293
Services and supplies 8,389
Total expenditures 17,682
Net change in fund balance (3,122)
FUND BALANCE:

Beginning of year 33,743
End of year $ 30,621
City of Patterson
Abandoned Vehicle Abatement Program
Statement of Revenues, Expenditures, and Changes in Fund Balances For the Year Ended June 30, 2023
See accompanying Notes to the Basic Financial Statement. 7 9.1.d
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8 9.1.d
Packet Pg. 339 Attachment: 2023_Patterson, City of_AVA_FINAL (FY 22-23 Financial Reports) 9 NOTES TO THE FINANCIAL STATEMENT

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Packet Pg. 341 Attachment: 2023_Patterson, City of_AVA_FINAL (FY 22-23 Financial Reports) City of Patterson
Abandoned Vehicle Abatement Program
Notes to the Financial Statement
For the Year Ended June 30, 2023
11 Note 1 – Summary of Significant Accounting Policies
The Statement of Revenues, Expenditures and Change in Fund Balance (the “Statement”) of the Abandoned Vehicle Abatement Program (the “Program”) of the City of Patterson, California (the “City), have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) as applied to governmental agencies. The Governmental Accounting Standards Board (“GASB”) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The more significant of the Program’s accounting policies are described below.

A. The Reporting Entity
The Abandoned Vehicle Abatement Program is a statewide program administered by the California Highway Patrol (CHP). The City administers and operates the local vehicle abatement program pursuant to Section 22710 of the Vehicle Code, Patterson Municipal City Code Section 10.24.010 et seq., and the Stanislaus Council of Governments (StanCOG) Abandoned Vehicle Program and Plan. Section 9250.7 of the Vehicle code establishes the funding source for the abatement of abandoned vehicles by a county-based Service Authority (the “Authority”), pursuant to the provisions of Section 22710 of the Vehicle Code. The Vehicle Code imposes a service fee of one dollar ($1) on vehicles registered to an owner with an address in the county that establishes the Authority. This fee is paid to the Department of Motor Vehicles (DMV) at the time of registration or renewal of registration. The DMV, after deducting its administrative costs, at least quarterly transmits the net amount collected to the State Controller’s Office (SCO) for deposit in the Abandoned Vehicle Trust Fund. All money in the fund is continuously appropriated to the SCO for allocation to an Authority that has an approved Program, and for payment of the administrative costs of the SCO. StanCOG, the Authority, distributes Program funds to participating entities based on the allocation determined in the Vehicle Abatement Services Agreement.

The Statement is intended to present the results of operations, and those program revenues and expenditures of the Program that are accounted for within the General Fund of the City. They are not intended to present the financial position or results of operations of the City as a whole.

B. Basis of Accounting and Measurement Focus
Basis of accounting refers to when revenues and expenditures/expenses are recognized in the accounts and reported in the financial statements.

Governmental funds are accounted for using the modified accrual basis of accounting and "current financial resources" measurement focus. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Revenues are recognized in the accounting period in which they become measurable and available. Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The Program’s accrual period is generally 60 days after fiscal year end. Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred.

C. Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

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9.1.d
Packet Pg. 343 Attachment: 2023_Patterson, City of_AVA_FINAL (FY 22-23 Financial Reports) 2121 North California Blvd., Suite 290
Walnut Creek, California 94596 March 28, 2024
To the Honorable Mayor and Members of the City Council
of the City of Patterson
Patterson, California
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Patterson, California (the “City”) for the year ended June 30, 2023. Professional standards require that we provide you with information about our responsibilities under auditing standards generally accepted in the United States of America, Government Auditing Standards, and the Uniform Guidance, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated May 1, 2023. Professional standards also require that we communicate the following information related to our audit.

Qualitative Aspects of Accounting Practices
Accounting Policies
Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 to the basic financial statements.  In May 2019, GASB issued Statement No. 91, Conduit Debt Obligations (GASB Statement No. 91), to provide a single method of reporting conduit debt obligations by issuers and eliminate diversity in practice associated with (1) commitments extended by issuers, (2) arrangements associated with conduit debt obligations, and (3) related note disclosures. This Statement achieves those objectives by clarifying the existing definition of a conduit debt obligation; establishing that a conduit debt obligation is not a liability of the issuer; establishing standards for accounting and financial reporting of additional commitments and voluntary commitments extended by issuers and arrangements associated with conduit debt obligations; and improving required note disclosures. Application of this statement did not have an effect on the City’s financial reporting for the fiscal year ending June 30, 2023.  In March 2020, GASB issued Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements. The primary objective of this Statement is to improve financial reporting by addressing issues related to public-private and public-public partnership arrangements (PPPs). As used in this Statement, a PPP is an arrangement in which a government (the transferor) contracts with an operator (a governmental or nongovernmental entity) to provide public services by conveying control of the right to operate or use a nonfinancial asset, such as infrastructure or other capital asset (the underlying PPP asset), for a period of time in an exchange or exchange-like transaction. Application of this statement did not have an effect on the City’s financial reporting for the fiscal year ending June 30, 2023.  In May 2020, GASB issued Statement No. 96, Subscription-Based Information Technology Arrangements.

This Statement provides guidance on the accounting and financial reporting for subscription-based information technology arrangements (SBITAs) for government end users (governments). This Statement (1) defines a SBITA; (2) establishes that a SBITA results in a right-to-use subscription asset—an intangible asset—and a corresponding subscription liability; (3) provides the capitalization criteria for outlays other than subscription payments, including implementation costs of a SBITA; and (4) requires note disclosures regarding a SBITA. To the extent relevant, the standards for SBITAs are based on the standards established in Statement No. 87, Leases, as amended. Application of this statement did not have an effect on the City’s financial reporting for the fiscal year ending June 30, 2023.

9.1.e
Packet Pg. 344 Attachment: 2023_City of Patterson ACFR AU-C 260 Letter_FINAL (FY 22-23 Financial Reports) To the Honorable Mayor and Members of the City Council
of the City of Patterson
Patterson, California

Page 2 ends

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

Accounting Estimates
Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the City’s financial statements were:
 Management’s estimate of the fair value of investments is based on information provided by the State of California, U.S. Treasury, and financial institutions. We agreed the fair value factor used in determining that it is reasonable in relation to the financial statements as a whole.  Management’s estimate of the depreciation on capital assets is based on the industry standard and past experience on actual useful life of the asset groups. We evaluated the key factors and assumptions used to develop the depreciation on capital assets in determining that it is reasonable in relation to the financial statements taken as a whole.
 Management’s estimate of the net other postemployment benefits (“OPEB”) liability is based on the actuarial valuation on total OPEB liability. We evaluated the key factors and assumptions used to develop the total OPEB liability in determining that it is reasonable in relation to the financial statements taken as a whole.
 Management’s estimate of the net pension liabilities is based on the proportionate share of actuarial valuation on total pension liability and the proportionate share of the fiduciary net position for CalPERS plans. We evaluated the key factors and assumptions used to develop the net pension liability in determining that it is reasonable in relation to the financial statements taken as a whole.

Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the financial statements were:
 Note 1 – Summary of Significant Accounting Policies
 Note 3 – Lease Receivable
 Note 13 – Pension Plans
 Note 14 – Other Postemployment Benefits
 Note 16 – Other Required Disclosures
 Note 19 – Prior Period Adjustments
 Note 20 – Commitments and Contingencies
The financial statement disclosures are neutral, consistent, and clear.

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

Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. There were no misstatements identified during our audit that management had to correct and none of the misstatements detected as a result of audit procedures were material, either individually or in the aggregate, to each opinion unit’s financial statements taken as a whole.

9.1.e
Packet Pg. 345 Attachment: 2023_City of Patterson ACFR AU-C 260 Letter_FINAL (FY 22-23 Financial Reports) To the Honorable Mayor and Members of the City Council
of the City of Patterson
Patterson, California

Page 3 ends

Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditors’ report.

We are pleased to report that no such disagreements arose during the course of our audit.

Management Representations
We have requested certain representations from management that are communicated to us in the management representation letter dated March 28, 2024.

Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the governmental unit’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts.

Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the governmental unit’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention.

Other Matters
We applied certain limited procedures to the Management’s Discussion and Analysis, Modified Approach to Reporting Street Pavement Costs, Budgetary Comparison Schedules, Schedules of Changes in Net Pension Liability and Related Ratios, Schedules of Contributions – Pension, and Schedule of Changes in Total OPEB Liability and Related Ratios, and Schedule of Contributions – OPEB, which are required supplementary information (“RSI”) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI.

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

We were not engaged to report on the Introductory and Statistical Sections, which accompany the financial statements but are not RSI. We did not audit or perform other procedures on this other information and we do not express an opinion or provide any assurance on it.

9.1.e
Packet Pg. 346 Attachment: 2023_City of Patterson ACFR AU-C 260 Letter_FINAL (FY 22-23 Financial Reports) To the Honorable Mayor and Members of the City Council
of the City of Patterson
Patterson, California

Page 4 ends

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

Very truly yours,
Walnut Creek, California

9.1.e
Packet Pg. 347 Attachment: 2023_City of Patterson ACFR AU-C 260 Letter_FINAL (FY 22-23 Financial Reports) City of Patterson
Patterson, California
Independent Accountants’ Report on
Agreed-Upon Procedures Applied to
Appropriations Limit Schedule
For the Year Ending June 30, 2024

9.1.f
Packet Pg. 348 Attachment: 2024_Patterson, City of_GANN_FINAL (FY 22-23 Financial Reports) 2121 North California Blvd., Suite 290
Walnut Creek, California 94596
INDEPENDENT ACCOUNTANTS’ REPORT ON

APPLYING AGREED-UPON PROCEDURES
To the Honorable Mayor and Members of City Council
of the City of Patterson
Patterson, California
We have performed the procedures enumerated below on the accompanying Appropriations Limit Schedule of the City of Patterson, California (the “City”) for the year ending June 30, 2024. The management at the City is responsible for the Appropriations Limit Schedule.

The City has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of meeting the requirements set forth in Section 1.5 of Article XIII-B of the California Constitution. The procedures, which were suggested by the League of California Cities and presented in the publication entitled Agreed-upon Procedures Applied to the Appropriations Limitation Prescribed by Article XIII-B of the California Constitution were performed solely to assist you in meeting the requirements. This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes.

The procedures and the associated findings are as follows:

1. We obtained the completed worksheets used by the City to calculate its appropriations limit for the year ending June 30, 2024, and compared the limit and annual calculation factors that were adopted by resolution of City Council. We also compared the population and inflation options that were selected by a recorded vote of the City Council.

Finding: No exceptions were noted as a result of our procedures.

2. For the accompanying Appropriations Limit Schedule, we added the prior year’s limit to the total adjustments, and compared the resulting amount to the current year’s limit.

Finding: No exceptions were noted as a result of our procedures.

3. We compared the current year information presented in the accompanying Appropriations Limit Schedule to corresponding information in worksheets used by the City.

Finding: No exceptions were noted as a result of our procedures.

4. We compared the appropriations limit presented in the accompanying Appropriations Limit Schedule to the appropriations limit adopted by the City Council.

Finding: No exceptions were noted as a result of our procedures.

9.1.f
Packet Pg. 349 Attachment: 2024_Patterson, City of_GANN_FINAL (FY 22-23 Financial Reports) To the Honorable Mayor and Members of City Council
of the City of Patterson
Patterson, California

Page 2 ends

2 We were engaged by the City to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the American Institute of Certified Public Accountants. We were not engaged to and did not conduct an examination or review engagement, the objective of which would be the expression of an opinion or conclusion, respective on the accompanying Appropriation Limit Schedule. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters have come to our attention that would have been reported to you.

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

This report is intended solely for the information and use of the City Council and management of the City and is not intended to be and should not be, used by anyone other than these specified parties. However, this report is a matter of public record and its distribution is not limited.

Walnut Creek, California
March 28, 2024

9.1.f
Packet Pg. 350 Attachment: 2024_Patterson, City of_GANN_FINAL (FY 22-23 Financial Reports) City of Patterson
Appropriations Limit Schedule
For the Year Ending June 30, 2024
3 Amount Source
A. Appropriations Limit FY 2022-2023 69,708,272 $ Prior year B. Calculation Factors:
1) Population increase % 1.0444 State Department of Finance 2) Inflation increase % 0.9949 State Department of Finance 3) Total adjustment % 1.0391 (B1*B2)
C. Annual Adjustment Increase 2,723,750 [A*(B3-1)]
D. Other Adjustments:
1) Loss responsibility (-) - N/A
2) Transfer to private (-) - N/A
3) Transfer to fees (-) - N/A
4) Assumed responsibility (+) - N/A
E. Total Adjustments 2,723,750 (C+D)
F. Appropriations Limit FY 2023-2024 72,432,022 $ (A+E) See accompanying Notes to Appropriations Limit Schedule.

9.1.f
Packet Pg. 351 Attachment: 2024_Patterson, City of_GANN_FINAL (FY 22-23 Financial Reports) City of Patterson
Notes to Appropriations Limit Schedule
For the Year Ending June 30, 2024
4 Note 1 – Purpose of Limited Procedures Review
Under Article XIIIB of the California Constitution (the Gann Spending Limitation Initiative), California governmental agencies are restricted as to the amount of annual appropriations from proceeds of taxes. Effective for years beginning on or after July 1, 1990, under Section 1.5 of Article XIIIB, the annual calculation of the appropriations limit is subject to a limited procedures review in connection with the annual audit.

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

Note 3 – Population Factors
A California governmental agency may use as its population factor either the annual percentage change of the jurisdiction’s own population or the annual percentage change in population of the county where the jurisdiction is located. The factor adopted by the City for the year 2023-2024 represents the annual percentage change in population for the City.

Note 4 – Inflation Factors
A California governmental agency may use as its inflation factor either the annual percentage change in the 4th quarter per capita personal income (which percentage is supplied by the State Department of Finance) or the percentage change in the local assessment roll from the preceding year due to the change of local nonresidential construction. The factor adopted by the City for the year 2023-2024 represents the percentage change in California per capita personal income.

Note 5 – Other Adjustments
A California government agency may be required to adjust its appropriations limit when certain events occur, such as the transfer of responsibility for municipal services to, or from, another government agency or private entity. The City had no such adjustments for the year 2023-2024.

9.1.f
Packet Pg. 352 Attachment: 2024_Patterson, City of_GANN_FINAL (FY 22-23 Financial Reports)

CITY OF PATTERSON
Presentation to the City Council
For the Fiscal Year Ended June 30, 2023
May 7, 2024

9.1.g
Packet Pg. 353 Attachment: 2022-23 Patterson Council Presentation (5.7.24) (FY 22-23 Financial Reports) 2 CONTENTS • Scope of Work • Required Communications (AU -C 260)
• Audit Responsibilities • Approach to the Audit • Overview of Financial Statements • Financial Indicators and Key Pension/OPEB Information • Audit Results – City • Audit Results – PPFA • Audit Results - WPFA • Thank You!

9.1.g
Packet Pg. 354 Attachment: 2022-23 Patterson Council Presentation (5.7.24) (FY 22-23 Financial Reports) 3 Scope of Work

9.1.g
Packet Pg. 355 Attachment: 2022-23 Patterson Council Presentation (5.7.24) (FY 22-23 Financial Reports) 4 Scope Of Work • Financial Audit • City of Patterson’s Annual Comprehensive Financial Report • Patterson Public Financing Authority Financial Statements • West Patterson Public Financing Authority Financial Statements • Single Audit (Uniform Guidance) • Compliance Examination Engagement Reports • Transportation Development Act Compliance • Abandoned Vehicle Abatement Program Compliance • Agreed-Upon Procedures Engagement Report • GANN Limit – FY23/24 • Other Non-Audit Services • Assistance in Preparing Financial Statements

9.1.g
Packet Pg. 356 Attachment: 2022-23 Patterson Council Presentation (5.7.24) (FY 22-23 Financial Reports) 5 Required Communications (AU-C 260)

9.1.g
Packet Pg. 357 Attachment: 2022-23 Patterson Council Presentation (5.7.24) (FY 22-23 Financial Reports) 6 Required Communications (AU-C 260)
• Significant Accounting Policies
• The City disclosed the summary of significant accounting policies in Note 1 to the financial statements.
• The City implemented GASB Statement No. 96, Subscription-Based Information Technology Arrangements (SBITAs)
• Significant Estimates
• Fair Value on Investments
• Depreciation on Capital Assets
• Net Pension Liability
• Net OPEB Liability

9.1.g
Packet Pg. 358 Attachment: 2022-23 Patterson Council Presentation (5.7.24) (FY 22-23 Financial Reports) 7 Required Communications (AU-C 260)
• Sensitive Disclosures
• Note 1 – Summary of Significant Accounting Policies
• Note 3 – Leases Receivable
• Note 13 – Pension Plans
• Note 14 – Other Postemployment Benefits
• Note 16 – Other Required Disclosures
• Note 19 – Prior Period Adjustments
• Note 20 – Commitments and Contingencies

9.1.g
Packet Pg. 359 Attachment: 2022-23 Patterson Council Presentation (5.7.24) (FY 22-23 Financial Reports) 8 Required Communications (AU-C 260)
• Misstatements
• There were no corrected or uncorrected misstatements reported. • Consultation with Other Accountants
• Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing and other matters. • Significant Difficulties
• We encountered no significant difficulties in dealing with management. • Disagreement with Management
• We did not have any disagreement with management in terms of accounting treatments nor audit procedures performed.

9.1.g
Packet Pg. 360 Attachment: 2022-23 Patterson Council Presentation (5.7.24) (FY 22-23 Financial Reports) 9 Audit Responsibilities

9.1.g
Packet Pg. 361 Attachment: 2022-23 Patterson Council Presentation (5.7.24) (FY 22-23 Financial Reports) 10 Management Auditors
Responsible for preparation of the financial
statements
Perform the audit
Present the financial statements in accordance with
accounting principles generally accepted in the
United States of America
Ensure the audit is in conformity with Auditing
Standards Generally Accepted in the United States
of America and standards applicable to Financial
Audits contained in Government Auditing Standards
Adopt sound accounting policies Communicate with “Those Charged with Governance”
Establish and maintain internal controls over
financial reporting and compliance
Assess audit risk of internal control over financial
reporting and compliance
Provide evidence supporting the amounts and
disclosures in the financial statements
Determine fairness presentation of the financial
statements
Prevent and detect fraud Render opinions
Audit Responsibilities 9.1.g
Packet Pg. 362 Attachment: 2022-23 Patterson Council Presentation (5.7.24) (FY 22-23 Financial Reports) 11 Approach to the Audit

9.1.g
Packet Pg. 363 Attachment: 2022-23 Patterson Council Presentation (5.7.24) (FY 22-23 Financial Reports) 12 The Pun Group’s Approach to the Audit
• Phase I – Detailed Planning
• Phase II – Risk Based Review of Internal
Controls Over Systems and Compliance
(Interim)
• Phase III – Validation and Testing of
Account Balances (Year-End)
• Phase IV – Review Financial Statements
and Issue Audit Opinions
Initiation
&
Planning
Meeting
Risk
Assessment,
Controls &
Review Entity
/ Environment
Assess,
Analyze,
and
Transaction
Testing
Reporting
& Project
Closure

9.1.g
Packet Pg. 364 Attachment: 2022-23 Patterson Council Presentation (5.7.24) (FY 22-23 Financial Reports) 13 OVERVIEW OF THE FINANCIAL

STATEMENTS

9.1.g
Packet Pg. 365 Attachment: 2022-23 Patterson Council Presentation (5.7.24) (FY 22-23 Financial Reports) 14 2023 2022 Change
Assets $ 180,598,431 $ 170,525,706 $ 10,072,725
Deferred Outflows of Resources 6,266,891 4,046,216 2,220,675 Liabilities 91,598,089 87,323,747 4,274,342
Deferred Inflows of Resources 6,115,310 4,029,847 2,085,463 Net Position:

Net investments in capital assets 67,681,454 61,241,920 6,439,534 Restricted 14,864,418 13,416,337 1,448,081
Unrestricted 6,606,051 8,560,071 (1,954,020)
Total Net Position $ 89,151,923 $ 83,218,328 $ 5,933,595 Net Position @ June 30
(Governmental Activities)

9.1.g
Packet Pg. 366 Attachment: 2022-23 Patterson Council Presentation (5.7.24) (FY 22-23 Financial Reports) 15 2023 2022 Total
Program Revenues
Charges for services $ 7,150,547 $ 6,952,335 $ 198,212
Operating grants and contributions 3,200,329 3,023,697 176,632 Capital grants and contributions 9,699,274 3,640,327 6,058,947 Total program revenues 20,050,150 13,616,359 6,433,791
Expenses $ 41,609,496 $ 30,045,527 $ 11,563,969
Net Cost of Services (21,559,346) (16,429,168) (5,130,178) General Revenues 26,137,673 23,671,605 2,466,068
Transfers 2,939,075 1,077,774 1,861,301
Change in Net Position $ 7,517,402 $ 8,320,211 $ (802,809) Change in Net Position
(Governmental Activities)

9.1.g
Packet Pg. 367 Attachment: 2022-23 Patterson Council Presentation (5.7.24) (FY 22-23 Financial Reports) 16 2023 2022 Change
Assets $ 79,218,139 $ 74,510,734 $ 4,707,405
Deferred Outflows of Resources 2,879,905 2,285,454 594,451 Liabilities 30,179,059 29,859,947 319,112
Deferred Inflows of Resources 3,443,738 1,968,829 1,474,909 Net Position:

Net investments in capital assets 48,865,099 36,458,905 12,406,194 Restricted 3,137,525 3,133,590 3,935
Unrestricted (3,527,377) 5,374,917 (8,902,294)
Total Net Position $ 48,475,247 $ 44,967,412 $ 3,507,835 Net Position @ June 30
(Business-Type Activities)

9.1.g
Packet Pg. 368 Attachment: 2022-23 Patterson Council Presentation (5.7.24) (FY 22-23 Financial Reports) 17 2023 2022 Total
Program Revenues
Charges for services $ 16,829,284 $ 15,350,376 $ 1,478,908 Operating grants and contributions - 7,449 (7,449)
Capital grants and contributions 6,156,519 81,253 6,075,266 Total program revenues 22,985,803 15,439,078 7,546,725
Expenses $ 18,523,159 $ 12,515,310 $ 6,007,849
Net Cost of Services 4,462,644 2,923,768 1,538,876
General Revenues 1,984,266 1,926,946 57,320
Transfers (2,939,075) (1,077,774) (1,861,301)
Change in Net Position $ 3,507,835 $ 3,772,940 $ (265,105) Change in Net Position
(Business-Type Activities)

9.1.g
Packet Pg. 369 Attachment: 2022-23 Patterson Council Presentation (5.7.24) (FY 22-23 Financial Reports) 18 2023 2022 Change
Assets $ 27,882,858 $ 24,696,515 $ 3,186,343
Liabilities $ 9,470,771 $ 6,052,072 $ 3,418,699
Deferred Inflows of Resources $ 248,924 $ 218,608 $ 30,316 Fund Balance
Nonspendable 138,149 138,586 (437)
Restricted 560,761 487,546 73,215
Committed 9,838,576 8,116,966 1,721,610
Assigned 6,236,338 5,098,499 1,137,839
Unassigned 1,389,339 4,584,238 (3,194,899)
Total Fund Balance 18,163,163 18,425,835 (262,672)
Total Liabilities, Deferred Inflows
of Resources, and Fund Balance $ 27,882,858 $ 24,696,515 $ 3,186,343 General Fund – Fund Balance @ June 30

9.1.g
Packet Pg. 370 Attachment: 2022-23 Patterson Council Presentation (5.7.24) (FY 22-23 Financial Reports) 19 2023 2022 Change
Revenues $ 25,000,791 $ 23,070,623 $ 1,930,168
Expenditures (26,748,476) (21,196,662) (5,551,814)
Revenues over Expenditures (1,747,685) 1,873,961 (3,621,646) Other Financing Sources and Uses 3,072,274 2,836,612 235,662 Change in Fund Balance $ 1,324,589 $ 4,710,573 $ (3,385,984) General Fund – Change in Fund Balance

9.1.g
Packet Pg. 371 Attachment: 2022-23 Patterson Council Presentation (5.7.24) (FY 22-23 Financial Reports) 20 Financial Indicators and
Key Pension/OPEB Information

9.1.g
Packet Pg. 372 Attachment: 2022-23 Patterson Council Presentation (5.7.24) (FY 22-23 Financial Reports) 21 2023 2022
Net Cost of Services $ 21,559,346 $ 16,429,168
Less: Interest Expenses (3,962,077) (4,090,033)
17,597,269 12,339,135
Tax Revenues 20,779,758 19,254,942
Ratio 84.68% 64.08%
Net Cost of Services to Tax Revenues
(Governmental Activities)

9.1.g
Packet Pg. 373 Attachment: 2022-23 Patterson Council Presentation (5.7.24) (FY 22-23 Financial Reports) 22 2023 2022
Unassigned Fund Balance $ 1,389,339 $ 4,584,238
Committed for Contingencies 9,838,576 8,116,966
Available Fund Balance 11,227,915 12,701,204
Annual Expenditures 26,748,476 21,196,662
Ratio 41.98% 59.92%
Available Fund Balance to Annual Expenditures
(General Fund)

9.1.g
Packet Pg. 374 Attachment: 2022-23 Patterson Council Presentation (5.7.24) (FY 22-23 Financial Reports) 23 Miscellaneous Safety
Plan Plan Total
Net Pension Liabilities/(Assets) @ 5.90% $ 13,385,200 $ 6,081,782 $ 19,466,982 Net Pension Liabilities/(Assets) @ 6.90% $ 8,013,797 $ 3,885,700 $ 11,899,497 Net Pension Liabilities/(Assets) @ 7.90% $ 3,594,466 $ 2,090,900 $ 5,685,366 Plan's Proportionate Share of the
Fiduciary Net Position as a Percentage
of the Total Pension Liability 79.66% 75.57%
Prior year 92.00% 87.45%
Net Pension Liability Sensitivity Analysis

9.1.g
Packet Pg. 375 Attachment: 2022-23 Patterson Council Presentation (5.7.24) (FY 22-23 Financial Reports) 24 OPEB
Net OPEB Liabilities @ 4.50% $ 8,651,477
Net OPEB Liabilities @ 5.50% $ 7,614,614
Net OPEB Liabilities @ 6.50% $ 6,737,498
Fiduciary Net Position as a Percentage
of the Total OPEB Liability 8.73%
Net OPEB Liability Sensitivity Analysis

9.1.g
Packet Pg. 376 Attachment: 2022-23 Patterson Council Presentation (5.7.24) (FY 22-23 Financial Reports) 25 Audit Results - City

9.1.g
Packet Pg. 377 Attachment: 2022-23 Patterson Council Presentation (5.7.24) (FY 22-23 Financial Reports) 26 Audit Results – City Audit
• Unmodified Opinions – By Opinion Unit
• Financial Statements are fairly presented in all material respects • In conformity with GAAP
• Significant accounting policies have been consistently applied • Estimates are reasonable
• Disclosures are properly reflected in the financial statements • Transportation Development Act Report – In Compliance • Abandoned Vehicle Abatement Program Report – In Compliance • Single Audit – Unmodified Opinions are issued to all Major Program(s) • The City complied, in all material respect, with the types of compliance requirements that could have a direct and material effect
• GANN Limit AUP Report (FY23/24) – Procedures performed without exception

9.1.g
Packet Pg. 378 Attachment: 2022-23 Patterson Council Presentation (5.7.24) (FY 22-23 Financial Reports) 27 Audit Results – City Audit
• Other Results
• No disagreement with Management
• No material weaknesses and/or significant deficiencies were identified in internal control over financial reporting
• No accounting issues
• No inappropriate activities were noted

9.1.g
Packet Pg. 379 Attachment: 2022-23 Patterson Council Presentation (5.7.24) (FY 22-23 Financial Reports) 28 Audit Results – Patterson Public Financing
Authority

9.1.g
Packet Pg. 380 Attachment: 2022-23 Patterson Council Presentation (5.7.24) (FY 22-23 Financial Reports) 29 Audit Results – PPFA Audit
• Opinion
• Unmodified Opinion
• Financial Statements are fairly presented in all material respect • Accounting policies have been consistently applied
• Estimates are reasonable
• Disclosures are properly reflected in the financial statements • Other Results
• No disagreement with Management
• No material weaknesses and/or significant deficiencies were identified in internal control over financial reporting
• No accounting issues
• No inappropriate activities were noted

9.1.g
Packet Pg. 381 Attachment: 2022-23 Patterson Council Presentation (5.7.24) (FY 22-23 Financial Reports) 30 Audit Results – West Patterson Financing
Authority

9.1.g
Packet Pg. 382 Attachment: 2022-23 Patterson Council Presentation (5.7.24) (FY 22-23 Financial Reports) 31 Audit Results – WPFA Audit
• Opinion
• Unmodified Opinion
• Financial Statements are fairly presented in all material respect • Accounting policies have been consistently applied
• Estimates are reasonable
• Disclosures are properly reflected in the financial statements • Other Results
• No disagreement with Management
• No material weaknesses and/or significant deficiencies were identified in internal control over financial reporting
• No accounting issues
• No inappropriate activities were noted

9.1.g
Packet Pg. 383 Attachment: 2022-23 Patterson Council Presentation (5.7.24) (FY 22-23 Financial Reports) HQ
- ORANGE COUNTY
200 E. Sandpointe Avenue
Suite 600
Santa Ana, CA 92707

SAN DIEGO
4365 Executive Drive
Suite 710
San Diego, CA 92121

BAY AREA
2121 North California Blvd.

Suite 290
Walnut Creek, CA 94596

LAS VEGAS
1050 Indigo Drive
Suite 110
Las Vegas, NV 89145

PHOENIX
4742 North 24th Street
Suite 300
Phoenix, AZ 85016
Engagement Partner:

Andrew Roth, CPA
Direct: 858-242-5102
[email protected]

9.1.g
Packet Pg. 384 Attachment: 2022-23 Patterson Council Presentation (5.7.24) (FY 22-23 Financial Reports)

PATTERSON PUBLIC FINANCING AUTHORITY

AGENDA REPORT
TO: Chair McCord and Members of the Patterson Public Financing Authority FROM: Ken Irwin, Executive Director
BY: Jennifer Riedeman, Finance Director
MEETING DATE: May 7, 2024
ITEM NO: 9.2
SUBJECT: Public Financing Authority’s 2022-23 Financial Audit Report

RECOMMENDATION
Accept the Patterson Public Financing Authority’s 2022-23 Financial Audit Report

BACKGROUND
The Patterson Public Financing Authority publishes financial statements presented in conformance with Generally Accepted Accounting Principles (GAAP). The financial statement was audited by the independent public accounting firm of The Pun Group, LLP, whose unmodified opinion is included within the financial section of the report. The unmodified opinion indicates that the financial statements present fairly the financial position of the Patterson Public Financing Authority as of June 30, 2023, and the results of operations, in accordance with generally accepted accounting principles.

As part of the audit, The Pun Group, LLP also reviewed and performed tests of the Authority’s internal accounting control procedures to determine if there are any material weaknesses or instances of non-compliance. Based on the audit, there is no instance of non-compliance.

The Patterson Public Financing Authority’s 2022-23 financial report is available on the City of Patterson’s website and is attached to this staff report.

Representative of The Pun Group, LLP will be present to discuss the audit and answer questions.

ANALYSIS
The Government-wide Net position in the Authority’s totaled a deficit of $2 million as of June 30, 2023, which changed $370,338 from the ending balance in the prior fiscal year.

9.2 Packet Pg. 385
The governmental fund balance in the Authority’s totaled approximately $58.3 million as of June 30, 2023, which was $2.2 million less than the ending balance in the prior fiscal year.

The difference between Government-wide Net position and governmental fund balance is the long-term liabilities are not due and payable in the current period and the interest payable on long-term debt does not require current financial resources and therefore are not reported in the governmental funds.

FISCAL IMPACT
Acceptance of this report does not affect the Authority’s budget or its financial condition. The report merely reflects an audit of the Authority’s financial records at June 30, 2023.

9.2 Packet Pg. 386
Patterson Public
Financing Authority
(A Component Unit of the City of Patterson)
Patterson, California
Basic Financial Statements
and Independent Auditors' Report
For the Year Ended June 30, 2023

9.2.a
Packet Pg. 387 Attachment: 2023_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2022-23 Financial Audit Report)

9.2.a
Packet Pg. 388 Attachment: 2023_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2022-23 Financial Audit Report) Patterson Public Financing Authority
(A Component Unit of the City of Patterson)
Basic Financial Statements
For the Year Ended June 30, 2023
Table of Contents
Page

FINANCIAL SECTION
Independent Auditors’ Report on Financial Statements ......................................................................................... 1 Independent Auditors’ Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ........................................................................ 5 Basic Financial Statements:

Government-Wide Financial Statements:

Statement of Net Position ............................................................................................................................... 11 Statement of Activities ................................................................................................................................... 12 Fund Financial Statements:

Governmental Fund Financial Statements:

Balance Sheet ................................................................................................................................................. 17 Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position ............................................................................... 18 Statement of Revenues, Expenditures and Changes in Fund Balances .......................................................... 19 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Government-Wide Statement of Activities and Changes in Net Position .............................................................................. 20 Notes to the Basic Financial Statements .................................................................................................................. 25 Required Supplementary Information (Unaudited):

Budgetary Information ................................................................................................................................... 39 Budgetary Comparison Schedule:

PPFA 2013 Heartland Ranch Revenue Bonds ......................................................................................... 40 PPFA 2013 Authority Bonds ................................................................................................................... 41

9.2.a
Packet Pg. 389 Attachment: 2023_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2022-23 Financial Audit Report) This page intentionally left blank.

9.2.a
Packet Pg. 390 Attachment: 2023_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2022-23 Financial Audit Report) 2121 North California Blvd., Suite 290
Walnut Creek, California 94596
Independent Auditors’ Report
To the Board of Directors
of the Patterson Public Financing Authority
Patterson, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities and each major fund of the Patterson Public Financing Authority (the “Authority”), a component unit of the City of Patterson, California (the “City”), as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the Authority’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, and each major fund of the Authority, as of June 30, 2023, and the respective changes in financial position thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

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

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 Authority’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.

9.2.a
Packet Pg. 391 Attachment: 2023_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2022-23 Financial Audit Report) To the Board of Directors
of the Patterson Public Financing Authority
Patterson, California

Page 2 ends

In performing an audit in accordance with auditing standards generally accepted in the United States of America and Government Auditing Standards, we:
 Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.  Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Authority’s internal control. Accordingly, no such opinion is expressed.  Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.  Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Authority’s ability to continue as a going concern for a reasonable period of time.

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Budgetary Comparison Schedules, as listed in the accompanying table of contents, be presented to supplement the basic financial statements.

Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

9.2.a
Packet Pg. 392 Attachment: 2023_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2022-23 Financial Audit Report) To the Board of Directors
of the Patterson Public Financing Authority
Patterson, California

Page 3 ends

3 Management has omitted the management’s discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 28, 2024, on our consideration of the Authority’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Authority’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Authority’s internal control over financial reporting and compliance.

Walnut Creek, California
March 28, 2024

9.2.a
Packet Pg. 393 Attachment: 2023_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2022-23 Financial Audit Report) 4 This page intentionally left blank.

9.2.a
Packet Pg. 394 Attachment: 2023_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2022-23 Financial Audit Report) 2121 North California Blvd., Suite 290
Walnut Creek, California 94596

REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND

OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN

ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Independent Auditors’ Report
To the Board of Directors
of the Patterson Public Financing Authority
Patterson, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities and each major fund of the Patterson Public Financing Authority (the “Authority”), a component unit of the City of Patterson, California (the “City”), as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise Authority’s basic financial statements, as listed in the table of contents, and have issued our report thereon dated March 28, 2024.

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

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

9.2.a
Packet Pg. 395 Attachment: 2023_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2022-23 Financial Audit Report) To the Board of Directors
of the Patterson Public Financing Authority
Patterson, California

Page 2 ends

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

This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Authority’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Walnut Creek, California
March 28, 2024

9.2.a
Packet Pg. 396 Attachment: 2023_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2022-23 Financial Audit Report) BASIC FINANCIAL STATEMENTS 7

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Packet Pg. 398 Attachment: 2023_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2022-23 Financial Audit Report)

GOVERNMENT-WIDE FINANCIAL STATEMENTS
9 9.2.a
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10 9.2.a
Packet Pg. 400 Attachment: 2023_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2022-23 Financial Audit Report) Governmental
Activities
ASSETS
Current assets:

Interest receivable $ 864
Total current assets 864
Noncurrent assets:

Restricted cash and investments 587,522
Investments held in trust 58,223,997
Total noncurrent assets 58,811,519
Total assets 58,812,383

LIABILITIES
Current liabilities:

Accrued interest payable 1,108,894
Due to City of Patterson 441,007
Due within one year:

Long-term debt 2,500,959
Total current liabilities 4,050,860
Noncurrent liabilities:

Due in more than one year:

Long-term debt 56,815,939
Total noncurrent liabilities 56,815,939
Total liabilities 60,866,799

NET POSITION (DEFICIT)
Unrestricted (deficit) (2,054,416)
Total net position (deficit) $ (2,054,416)
(A Component Unit of the City of Patterson)
Patterson Public Financing Authority
Statement of Net Position
June 30, 2023
See accompanying Notes to the Basic Financial Statements. 11 9.2.a
Packet Pg. 401 Attachment: 2023_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2022-23 Financial Audit Report) Net (Expense)
Revenue and
Changes in
Net Position
Governmental
Functions/Programs Expenses Activities
Governmental activities:

Interest and fiscal charges $ (3,813,958) 3,813,958 $
Total governmental activities (3,813,958) 3,813,958
Total primary government $ (3,813,958) 3,813,958
General revenues and contributions:

Intergovernmental revenue 517,184
Investment earnings 3,667,112
Total general revenues and contributions 4,184,296
Changes in net position 370,338
Net Position (Deficit):

Beginning of year (2,424,754)
End of year $ (2,054,416)
For the Year Ended June 30, 2023
Patterson Public Financing Authority
Statement of Activities
(A Component Unit of the City of Patterson)
See accompanying Notes to the Basic Financial Statements. 12 9.2.a
Packet Pg. 402 Attachment: 2023_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2022-23 Financial Audit Report)

FUND FINANCIAL STATEMENTS
13 9.2.a
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14 9.2.a
Packet Pg. 404 Attachment: 2023_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2022-23 Financial Audit Report)

GOVERNMENTAL FUND FINANCIAL STATEMENTS
15 9.2.a
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16 9.2.a
Packet Pg. 406 Attachment: 2023_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2022-23 Financial Audit Report) PPFA 2013 PPFA Total
Heartland Ranch 2013 Authority Governmental
Revenue Bonds Bonds Funds
ASSETS
Restricted cash and investments - $ 587,522 $ 587,522 $ Investments held in trust 1,321,847 56,902,150 58,223,997 Interest receivable - 864 864
Due from other funds 756,132 - 756,132
Total assets $ 57,489,672 2,078,843 $ 59,568,515 $

LIABILITIES AND FUND BALANCES
LIABILITIES:

Due to other funds $ 756,132 - $ 756,132 $
Due to City of Patterson 441,007 - 441,007
Total liabilities 756,132 441,007 1,197,139

FUND BALANCES
Restricted for debt service 1,637,836 56,733,540 58,371,376 Total Fund Balances 56,733,540 1,637,836 58,371,376
Total Liabilities and Fund Balances $ 57,489,672 2,078,843 $ 59,568,515 $ Patterson Public Financing Authority
Balance Sheet
Governmental Funds
June 30, 2023
(A Component Unit of the City of Patterson)
See accompanying Notes to the Basic Financial Statements. 17 9.2.a
Packet Pg. 407 Attachment: 2023_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2022-23 Financial Audit Report) Total fund balances of governmental funds $ 58,371,376
Amounts reported for governmental activities in the Statement of Net Position are different because:

Interest payable on long-term debt does not require current financial resources. Therefore, interest payable is not reported as a liability in the Governmental Funds Balance Sheet. (1,108,894) Long-term liabilities are not due and payable in the current period and therefore are not reported in the Governmental Funds Balance Sheet.

Long-term debt (59,316,898)
Net position (deficit) of governmental activities $ (2,054,416) Patterson Public Financing Authority
Reconciliation of the Governmental Funds
Balance Sheet to the Government-Wide Statement of Net Position June 30, 2023
(A Component Unit of the City of Patterson)
See accompanying Notes to the Basic Financial Statements. 18 9.2.a
Packet Pg. 408 Attachment: 2023_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2022-23 Financial Audit Report) PPFA 2013 PPFA Total
Heartland Ranch 2013 Authority Governmental
Revenue Bonds Bonds Funds
REVENUES:

Intergovernmental revenue 517,184 $ - $ 517,184 $
Interest 3,568,846 98,266 3,667,112
Total revenues 3,568,846 615,450 4,184,296
EXPENDITURES:

Debt service:

Principal 2,105,000 462,628 2,567,628
Interest and fiscal charges 577,500 3,330,113 3,907,613 Total expenditures 5,435,113 1,040,128 6,475,241

REVENUES OVER (UNDER)
EXPENDITURES (1,866,267) (424,678) (2,290,945)
Net change in fund balances (1,866,267) (424,678) (2,290,945) FUND BALANCES:

Beginning of year 2,062,514 58,599,807 60,662,321
End of year $ 56,733,540 1,637,836 $ 58,371,376 $
Patterson Public Financing Authority
Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds
For the Year Ended June 30, 2023
(A Component Unit of the City of Patterson)
See accompanying Notes to the Basic Financial Statements. 19 9.2.a
Packet Pg. 409 Attachment: 2023_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2022-23 Financial Audit Report) Net change in fund balances - total governmental funds: $ (2,290,945) Amounts reported for governmental activities in the Statement of Activities are different because:

Repayment of long-term liabilities was an expenditures in governmental funds, but the repayment reduced long-term liabilities in the Government-Wide Statement of Net Position Principal payment of long-term debt 2,567,628
Amortization of bond discount (28,446)
Interest expenses on long-term debt was reported in the Government-Wide Statement of Activities, but it did not require the use of current financial resources. This amount represented the changes in accrued interest from prior year 122,101 Change in net position of governmental activities $ 370,338 Patterson Public Financing Authority
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities and Changes in Net Position For the Year Ended June 30, 2023
(A Component Unit of the City of Patterson)
See accompanying Notes to the Basic Financial Statements. 20 9.2.a
Packet Pg. 410 Attachment: 2023_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2022-23 Financial Audit Report) 21 NOTES TO THE BASIC FINANCIAL STATEMENTS

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Packet Pg. 411 Attachment: 2023_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2022-23 Financial Audit Report) 22 This page intentionally left blank.

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Packet Pg. 412 Attachment: 2023_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2022-23 Financial Audit Report) Patterson Public Financing Authority
(A Component Unit of the City of Patterson)
Index to the Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
23 Note 1 – Summary of Significant Accounting Policies ............................................................................................. 25 A. Financial Reporting Entity .......................................................................................................................... 25 B. Basis of Accounting and Measurement Focus ............................................................................................ 25 C. Cash and Investments ................................................................................................................................. 26 D. Restricted Cash and Investments ................................................................................................................ 27 E. Long-Term Debt ......................................................................................................................................... 27 F. Net Position ................................................................................................................................................ 27 G. Fund Balances ............................................................................................................................................. 28 H. Use of Estimates ......................................................................................................................................... 28 Note 2 – Cash and Investments .................................................................................................................................. 28 A. Cash Deposits ............................................................................................................................................. 29 B. Investments ................................................................................................................................................. 30 C. Risk Disclosures ......................................................................................................................................... 31 Note 3 – Interfund Transactions ................................................................................................................................. 32 A. Due From and To Other Funds ................................................................................................................... 32 Note 4 – Due to City of Patterson ............................................................................................................................... 32 Note 5 – Long-Term Obligations................................................................................................................................. 32 A. Governmental Activities ............................................................................................................................. 32 Note 6 – Other Required Disclosures .......................................................................................................................... 34 A. Unrestricted Net Position (Deficit) ............................................................................................................. 34 Note 7 – Subsequent Events ........................................................................................................................................ 34

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Packet Pg. 413 Attachment: 2023_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2022-23 Financial Audit Report) 24 This page intentionally left blank.

9.2.a
Packet Pg. 414 Attachment: 2023_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2022-23 Financial Audit Report) Patterson Public Financing Authority
(A Component Unit of the City of Patterson)
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
25 Note 1 – Summary of Significant Accounting Policies
The basic financial statements of the Patterson Public Financing Authority (the “Authority” or “PPFA”), a component unit of the City of Patterson, California (the “City”), have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) as applied to governmental agencies. The Governmental Accounting Standards Board (“GASB”) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The more significant of the Authority’s accounting policies are described below.

A. Financial Reporting Entity
The Authority was formed in 2001 pursuant to a joint exercise of powers agreement between the City and the former Redevelopment Agency of the City. The Authority is authorized to borrow money for the purpose of financing the acquisition of bonds, notes, and other obligations of, or for the purpose of making loans to, public entities, including the Authority and to provide financing for public capital improvements for lease to public entities, including the Authority. The members of the City Council also sit as the Board of Directors of the Authority.

B. Basis of Accounting and Measurement Focus
Fund Accounting
The accounts of the Authority 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, liabilities, fund equity, revenues, and expenditures or expenses as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purpose for which they are to be spent and the means by which spending activities are controlled.

Government–Wide Financial Statements
The Authority’s government-wide financial statements include a statement of net position and a statement of activities. These statements present summaries of governmental activities for the Authority.

These financial statements are presented on an “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all of the Authority’s assets and liabilities, including capital assets, as well as infrastructure assets, and long-term liabilities, are included in the accompanying statement of net position. The statement of activities presents changes in net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred.

Certain eliminations have been made in regards to interfund activities, payables and receivables. All internal balances in the statement of net position have been eliminated. The following interfund activities have been eliminated:
 Due from and to other funds

9.2.a
Packet Pg. 415 Attachment: 2023_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2022-23 Financial Audit Report) Patterson Public Financing Authority
(A Component Unit of the City of Patterson)
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
26 Note 1 – Summary of Significant Accounting Policies (Continued) B. Basis of Accounting and Measurement Focus (Continued) Governmental Fund Financial Statements
Governmental fund financial statements include a balance sheet and a statement of revenues, expenditures and changes in fund balances for all major governmental funds. An accompanying schedule is presented to reconcile and explain the differences in net position as presented in these statements to the net position presented in the government-wide financial statements. The Authority has presented all major funds that met the applicable criteria.

All governmental funds are accounted for on a spending or “current financial resources” measurement focus and the modified accrual basis of accounting. Accordingly, only current assets and current liabilities are included on the balance sheet. The statement of revenues, expenditures and changes in fund balances present increases (revenue and other financing sources) and decreases (expenditures and other financing uses) in fund balances.

Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expenditures of the current period.

The primary revenue sources, which have been treated as susceptible to accrual by the Authority is interest income. Certain indirect costs are included in program expenses reported for individual functions and activities.

Expenditures are recorded in the accounting period in which the related fund liability is incurred.

The reconciliation of the fund financial statements to the government-wide financial statements is provided to explain the differences.

Governmental funds of the Authority are outlined below:

PPFA 2013 Heartland Ranch Revenue Bonds – This debt service fund is used to account for the debt service payments, investment income, and projects related to the 2013 Heartland Ranch Revenue Bonds (“HR”).

PPFA 2013 Authority Bonds – This debt service fund is used to account for the debt service payments, investment income, and projects related to the 2013 Authority Bonds.

C. Cash and Investments
The Authority’s cash and investments considered to be cash equivalents, consist of cash on hand, demand deposits, and short-term investments with original maturity of three months or less from the date of acquisition. Cash and cash equivalents are combined with investments and reported as cash and investments. The Authority's cash and investments are held by the City in its pooled cash and investments, except for funds required to be held by fiscal agents under the provisions of bond indentures.

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 value is used as fair value for those securities for which market quotations are readily available.

Interest income earned on pooled cash and investments is allocated on an accounting period basis to the various funds based on the period-end cash and investment balances. Interest income from cash and investments with fiscal agents is credited directly to the related fund.

9.2.a
Packet Pg. 416 Attachment: 2023_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2022-23 Financial Audit Report) Patterson Public Financing Authority
(A Component Unit of the City of Patterson)
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
27 Note 1 – Summary of Significant Accounting Policies (Continued) C. Cash and Investments (Continued)
U.S. GAAP defines fair value, establishes a framework for measuring fair value and establishes disclosures about fair value measurement. Investments, unless otherwise specified, recorded at fair value in the Statements of Net Position, are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Levels of inputs are as follows:

Level 1 – Inputs are unadjusted, quoted prices for identical assets and liabilities in active markets at the measurement date.

Level 2 – Inputs other than quoted prices included in Level 1, that are observable for the assets or liabilities through corroboration with market data at the measurement date.

Level 3 – Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the assets or liabilities at the measurement date.

D. Restricted Cash and Investments
Certain restricted cash and investments are held by a fiscal agent for the redemption of bonded debt and for acquisition and construction of capital projects.

E. Long-Term Debt
In the government-wide financial statements, long-term liabilities and other long-term obligations are reported as liabilities in the applicable governmental activities Statement of Net Position. Initial issue bond premiums and discounts, are deferred and amortized over the life of the bonds using the straight-line method. The difference between the reacquisition price of refunding bonds and the net carrying amount of refunded debt (deferred amount on refunding) is amortized over the shorter of the lives of the refunding debt or remaining life of the refunded debt.

Bond issuance costs except for insurance, are expenses in the period incurred. Amortization of bond premiums or discounts, issuance costs, and deferred amounts on refunding is included in interest expense.

In the fund financial statements, governmental fund types recognize bond premiums, discounts, and issuance costs during the period issued. The face amount of debt issued is reported as other financing sources. Premiums received are reported as other financing sources, while discounts are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

F. Net Position
For government-wide financial statements, net position is categorized as follows:

Net Investment in Capital Assets – This component of net position consists of capital assets, net of accumulated depreciation and amortization, reduced by the outstanding balances of debt that are attributable to the acquisition, construction, or improvement of those assets. There is no net investment in capital assets as of June 30, 2023.

Restricted – This component of net position consists of restricted assets reduced by liabilities and deferred inflows of resources related to those assets. There is no restricted net position as of June 30, 2023.

9.2.a
Packet Pg. 417 Attachment: 2023_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2022-23 Financial Audit Report) Patterson Public Financing Authority
(A Component Unit of the City of Patterson)
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
28 Note 1 – Summary of Significant Accounting Policies (Continued) F. Net Position (Continued)
Unrestricted – This component of net position is the amount of the assets, deferred outflows of resources, liabilities, and deferred inflows of resources that are not included in the determination of net investment in capital assets or the restricted component of net position.

When expenses are incurred for purposes for which both restricted and unrestricted net position is available, the Authority’s policy is to apply restricted net position first.

G. Fund Balances
The City reports the fund balances for governmental funds in specific classifications (nonspendable, restricted, committed, assigned, and unassigned), which creates a hierarchy primarily based on the extent to which the City is bound to the constraints on the specific purpose for which funds can be spent. The Authority only receives restricted revenues, therefore any remaining fund balances are restricted by nature of the revenue received.

H. Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosure. Accordingly, actual results could differ from those estimates.

Note 2 – Cash and Investments
The following is a summary of pooled cash and investments and restricted cash and investments at June 30, 2023:

Governmental
Activities
Restricted cash and investments 587,522 $
Investments held in trust 58,223,997
Total cash and investments $ 58,811,519
Cash, cash equivalents, and investments, consisted of the following at June 30, 2023:

Investments:

Local obligation bonds 58,223,997 $
Money market mutual funds 587,522
Total investments 58,811,519
Total cash and investments $ 58,811,519

9.2.a
Packet Pg. 418 Attachment: 2023_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2022-23 Financial Audit Report) Patterson Public Financing Authority
(A Component Unit of the City of Patterson)
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
29 Note 2 – Cash and Investments (Continued)
At June 30, 2023, investments, are reported at fair value based on quoted market prices. The following table represents the fair value measurements of investments recognized in the accompanying Statement of Net Position measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at June 30, 2023:

Measurement
Fair Value Input
Investments:

Local obligation bonds 58,223,997 $ Level 2
Money market mutual funds 587,522 Uncategorized
Total investments $ 58,811,519
Valuation
Technique
Present Value of Expected
Future Cash Flows
Not applicable
A. Cash Deposits
The carrying amounts of the Authority’s pooled cash and investment with the City was $0 at June 30, 2023. The Authority pools its cash and investments of all funds with the City of Patterson, California to facilitate the management of cash and achieve the goal of obtaining the highest yield with the greatest safety and least risk. The pool is managed by the City Treasurer for investing, except for certain restricted funds and investments held in trust, which are held and invested by outside custodians through contractual agreements. These restricted funds include cash with fiscal agents. The total amount of which was collateralized or insured with securities held by the pledging financial institutions in the City’s name is discussed below.

Investments held in the City of Patterson's cash and investments pool are available on demand. Information regarding the City's cash and investment pools is described in the City's Comprehensive Annual Financial Report.

The California Government Code requires California banks and savings and loan associations to secure the City’s cash deposits by pledging securities as collateral. This Code states that collateral pledged in this manner shall have the effect of perfecting a security interest in such collateral superior to those of a general creditor. Thus, collateral for cash deposits is considered to be held in the City's name.

The market value of pledged securities must equal at least 110% of the City's cash deposits. California law also allows institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the City’s total cash deposits. The City may waive collateral requirements for cash deposits; however, the City has not waived the collateralization requirements.

9.2.a
Packet Pg. 419 Attachment: 2023_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2022-23 Financial Audit Report) Patterson Public Financing Authority
(A Component Unit of the City of Patterson)
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
30 Note 2 – Cash and Investments (Continued)
B. Investments
Investments Authorized by the California Code and the Authority’s Investments Policy The table below identifies the investment types that are authorized by the Authority's investment policy. This table does not address investments of debt proceeds held by bond trustees that are governed by the provisions of debt agreements of the Authority, rather than the general provisions of the California Government Code or the Authority's investment policy.

Maximum Maximum
Maximum Percentage of Investment in
Maturity Portfolio one Issuer
U.S. Treasury Obligation 5 years None None
U.S. Agency Securities 5 years None None
Certificates of Deposit 2 years None None
Local Agency Investment Fund (LAIF) N/A None None
Money Market Funds N/A None None
Annuities N/A None None
Mutual Funds N/A 5% None
Corporate Notes (Minimum rating of "AAA") 5 years 5% None Local Agency Bonds (Local obligation bonds) 5 years None None Authorized Investment Type
* The table is based on state law requirements or investment policy requirements, whichever is more restrictive.

Investments Authorized by Debt Agreements
Investment of debt issuances held by bond trustee are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the Authority's investment policy. The table below identifies the investment types that are authorized by bond trustee. The table also identifies certain provisions of these debt agreements that address interest rate risk, credit risk, and concentration of credit risk.

Maximum Maximum
Maximum Percentage of Investment in
Maturity Portfolio one Issuer
U.S. Treasury Obligation 5 years None None
U.S. Agency Securities 5 years None None
Certificates of Deposit 2 years None None
Local Agency Investment Fund (LAIF) None None None
Money Market Funds None None None
Annuities None None None
Mutual Funds None 5% None
Corporate Notes (Minimum rating of "AAA") 5 years 5% None Local Agency Bonds (Local obligation bonds) 5 years None None Authorized Investment Type

9.2.a
Packet Pg. 420 Attachment: 2023_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2022-23 Financial Audit Report) Patterson Public Financing Authority
(A Component Unit of the City of Patterson)
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
31 Note 2 – Cash and Investments (Continued)
C. Risk Disclosures
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the Authority's interest rate risk is mitigated is by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.

Information about the sensitivity of the fair values of the Authority's investments to market rate fluctuations is provided by the following table that shows the distribution of the Authority's investments by maturity as of June 30, 2023:
12 Months
Fair Value or Less 1-5 Years 6-10 Years Thereafter
Investments:

Local obligation bonds $ 442,508 58,223,997 $ 879,339 $ - $ 56,902,150 $ Money market mutual funds 587,522 587,522 - - -
Total investments $ 1,030,030 58,811,519 $ 879,339 $ - $ 56,902,150 $ Maturity
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the California Government Code or debt agreements, and the actual rating as of the fiscal year for each investment type.

Minimum
Legal
Fair Value Rating S&P Moody's
Investments:

Local obligation bonds $ N/A Not rated Not rated 58,223,997 Money market mutual funds 587,522 N/A AAAm Aaa-mf
Total investments $ 58,811,519
Credit Rating
Disclosures Relating to Concentration of Credit Risk
The Authority held the following investments in a single issuer (other than U.S. Treasury securities, external investment pools and mutual funds) that represented 5% or more of total Authority investment as of June 30, 2023:

Issuer Amount
West Patterson Financing Authority 58,223,997 $
Investment Type
Local obligation bonds

9.2.a
Packet Pg. 421 Attachment: 2023_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2022-23 Financial Audit Report) Patterson Public Financing Authority
(A Component Unit of the City of Patterson)
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
32 Note 2 – Cash and Investments (Continued)
C. Risk Disclosures (Continued)
Disclosures Relating to Custodial Credit Risk
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. None of the Authority’s investments was subject to custodial credit risk.

Note 3 – Interfund Transactions
A. Due From and To Other Funds
Due from and to other funds as of June 30, 2023, was as follows:

Receivable Fund Payable Fund Amount Purpose
PPFA 2013 Heartland Ranch Revenue Bonds PPFA 2013 Authority Bonds 756,132 $ Overdrawn Cash Note 4 – Due to City of Patterson
At June 30, 2023, the Authority owes the City in the amount of $441,007 to cover the cash overdrawn.

Note 5 – Long-Term Obligations
A. Governmental Activities
Summary of changes in long-term liabilities for the governmental activities for the year ended June 30, 2023 is as follows:

Original Balance Balance Due Within Due In More
Issuance July 1, 2022 Additions Deletions June 30, 2023 One Year Than One Year Private Placement:

PPFA 2013 Heartland Ranch Revenue Bonds 4,963,568 $ 1,848,375 $ - $ (462,628) $ 1,385,747 $ 470,959 $ 914,788 $ PPFA 2013 Series A Revenue Bonds 67,190,000 55,195,000 - (1,930,000) 53,265,000 1,855,000 51,410,000 Less: Bond Discount (853,389) (597,295) - 28,446 (568,849) - (568,849) PPFA 2013 Series B Revenue Bonds 6,465,000 5,410,000 - (175,000) 5,235,000 175,000 5,060,000 Total long-term debt $ 61,856,080 77,765,179 $ - $ (2,539,182) $ 59,316,898 $ 2,500,959 $ 56,815,939 $

9.2.a
Packet Pg. 422 Attachment: 2023_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2022-23 Financial Audit Report) Patterson Public Financing Authority
(A Component Unit of the City of Patterson)
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
33 Note 5 – Long-Term Obligations (Continued)
A. Governmental Activities (Continued)
2013 Heartland Ranch Revenue Bonds
On July 30, 2013, the Authority issued $4,963,568 of revenue refunding bonds (Series 2013 Heartland Ranch Revenue Bonds) to repay, in part, the principal of the Authority's 2002 Heartland Ranch Revenue Bonds. Interest on the bonds is payable semi-annually on March 2 and September 2 of each year through September 2, 2027, beginning on March 2, 2014. The interest rate on the bonds is 3.73 percent. Principal payments are due annually beginning on September 2, 2014. At June 30, 2023, the outstanding balance of the 2013 Heartland Ranch Revenue bonds was $1,385,747.

The annual debt service requirements are as follows:

Year Ending
June 30, Principal Interest Total
2024 470,959 $ 42,905 $ 513,864 $
2025 273,775 29,016 302,791
2026 284,557 18,603 303,160
2027 174,771 10,036 184,807
2028 181,685 3,388 185,073
Total 1,385,747 $ 103,948 $ 1,489,695 $
2013 PPFA Series A Bonds
On August 14, 2013, the PPFA issued $67,190,000 of special tax refunding bonds (Senior Series 2013A) to purchase, in part, the 2013-A1, 2013-A2, and 2013-B special tax bonds issued by the WPFA. The bonds were issued with an original issue discount of $853,389. Interest on the bonds is payable semi-annually on March 1 and September 1 of each year through September 1, 2039, beginning on March 1, 2014. The interest rates on the bonds is 3.00 percent. Principal payments are due annually beginning on September 1, 2014. The bonds are secured by a first pledge of the investment revenues and funds on deposit in the Bond Fund, Reserve Fund, and Special Tax Fund. At June 30, 2023, the outstanding balance of the 2013 PPFA Series A bonds was $53,265,000.

The annual debt service requirements are as follows:

Year Ending
June 30, Principal Interest Total
2024 1,855,000 $ 2,927,800 $ $ 4,782,800
2025 2,020,000 2,825,819 4,845,819
2026 2,190,000 2,715,044 4,905,044
2027 2,340,000 2,595,869 4,935,869
2028 2,465,000 2,463,300 4,928,300
2028-2032 14,495,000 10,144,681 24,639,681
2033-2037 18,280,000 5,564,275 23,844,275
2038-2040 9,620,000 565,225 10,185,225
Total 53,265,000 $ 29,802,013 $ 83,067,013 $

9.2.a
Packet Pg. 423 Attachment: 2023_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2022-23 Financial Audit Report) Patterson Public Financing Authority
(A Component Unit of the City of Patterson)
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
34 Note 5 – Long-Term Obligations (Continued)
A. Governmental Activities (Continued)
2013 PPFA Series B Bonds
On August 14, 2013, the PPFA issued $6,465,000 of special tax refunding bonds (Subordinate Series 2013B) to purchase, in part, the 2013-A1, 2013-A2, and 2013-B special tax bonds issued by the West Patterson Financing Authority. Interest on the bonds is payable semi-annually on March 1 and September 1 of each year through September 1, 2039, beginning on March 1, 2014. The interest rate on the bonds is 5.875%.

Principal payments are due annually beginning on September 1, 2014. The bonds are secured by a first pledge of the investment revenues and funds on deposit in the Bond Fund, Reserve Fund, and Special Tax Fund. At June 30, 2023, the outstanding balance of the 2013 PPFA Series B bonds was $5,235,000.

The annual debt service requirements are as follows:

Year Ending
June 30, Principal Interest Total
2024 175,000 $ 303,003 $ $ 478,003
2025 190,000 292,281 482,281
2026 210,000 280,531 490,531
2027 225,000 267,753 492,753
2028 240,000 253,800 493,800
2029-2033 1,420,000 1,036,056 2,456,056
2034-2038 1,825,000 566,203 2,391,203
2039-2040 950,000 57,134 1,007,134
Total 5,235,000 $ 3,056,761 $ 8,291,761 $
Note 6 – Other Required Disclosures
A. Unrestricted Net Position (Deficit)
At June 30, 2023, the Governmental Activities of the Authority had an unrestricted net deficit of $(1,997,524).

The deficit will be eliminated through future secured revenues which will be used to pay outstanding debt.

Note 7 – Subsequent Events
A. Patterson Public Financing Authority Special Tax Revenue Refunding Bonds Series 2023 The Patterson Public Financing Authority (the “Authority”), 2023 Refunding Special Tax Revenue Bonds (the “2023 Bonds”) are being issued to refund two series of bonds issued in 2013, the Patterson Public Financing Authority, Revenue Bonds, Senior Series 2013A (the “2013 Senior Bonds”) issued in the amount of $67,190,000 and outstanding in the amount of $53,265,000, the Patterson Public Financing Authority, Revenue Bonds, Subordinate Series 2013B (the “2013 Subordinate Bonds”) issued in the amount of $6,465,000 and currently outstanding in the amount of $5,235,000 (collectively, with the 2013 Senior Bonds, the “2013 Bonds”) and to provide project funds in the amount of $5,000,000 to facilitate a portion of the financing for the City’s Emergency Operations Center.

9.2.a
Packet Pg. 424 Attachment: 2023_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2022-23 Financial Audit Report) Patterson Public Financing Authority
(A Component Unit of the City of Patterson)
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
35 Note 7 – Subsequent Events (Continued)
A. Patterson Public Financing Authority Special Tax Revenue Refunding Bonds Series 2023 (Continued) Since 2001, the Local Agency issued two series of notes and seven series of bonds on behalf of CFD 2001-1 to finance infrastructure improvements for CFD 2001-1. Concurrent with the issuance of the 2013 Bonds, the Local Agency issued Special Tax Refunding Bonds, Series 2001-A-1 currently outstanding in the amount of $29,540,762, Special Tax Refunding Bonds, Series 2001-A-2 currently outstanding in the amount of $23,885,232 and Special Tax Bonds, Series 2013-B currently outstanding in the amount of $3,476,156 (collectively the “Local Obligations”). The Local Obligations refunded all the outstanding bonds issued by the Local Agency on behalf of CFD 2001-1. The Authority issued the 2013 Bonds to purchase the Local Obligations.

The 2023 Bonds are expected to be issued in the amount of $58,895,000 with interest rates at 5.00% with yields ranging from 3.26 to 3.85%. The “all-in” true interest cost of the Bonds is currently estimated to be 3.845% reflecting all the costs associated with issuing the 2023 Bonds. Currently it is estimated that the costs of issuance will be $400,000 and the underwriter will charge an underwriter’s discount in the amount of $294,475 or 0.50% of the estimated par amount of $58,895,000. The underwriter’s discount is based on the percentage of the amount issued and may vary higher or lower depending on the final size of the issuance. The 2013 Bonds have a final maturity of September 1, 2039 and the 2023 Bonds will have the same final maturity of September 1, 2039, so there is no extension of the term.

The property owners pay their property tax bills each year a portion of which are the CFD 2001-1 special taxes. The special taxes are collected by the County and used to pay debt service on the Local Obligations. The debt service from the Local Obligations is then used to provide cash flow to pay the debt service first to the 2013 Senior Bonds at approximately 1.10 times debt service coverage each year and secondly to the 2013 Subordinate Bonds at approximately 1.00 times debt service coverage each year. There are approximately $5,837,452 of total anticipated property owner savings over the life of the 2023 Bonds. The annual savings of approximately $364,341 per year can be credited back to property owners on subsequent years property tax bills resulting in average annual savings of approximately $156 per parcel per year, beginning in tax year 2024/25.

9.2.a
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9.2.a
Packet Pg. 426 Attachment: 2023_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2022-23 Financial Audit Report) 37 REQUIRED SUPPLEMENTARY INFORMATION (UNAUDITED)

9.2.a
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9.2.a
Packet Pg. 428 Attachment: 2023_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2022-23 Financial Audit Report) Patterson Public Financing Authority
(A Component Unit of the City of Patterson)
Required Supplementary Information (Unaudited)
For the Year Ended June 30, 2023
39 Budgetary Information
The Authority maintains budgetary controls in order to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City Council. The Authority maintains an encumbrance accounting system to provide management with information regarding obligations against appropriations. Budgetary compliance is based on expenditures during the period (U.S.GAAP), rather than expenditures and encumbrances (non-GAAP).

Because appropriations lapse at June 30, encumbrances outstanding at June 30, 2023 are disclosed in the notes to the financial statements. Appropriations for fiscal year 2023 will provide authority to complete those transactions.

The Authority is required by its municipal code to adopt an annual budget on or before June 30 for the ensuing fiscal year. From the effective date of the budget, the amounts become the "annual appropriated budget".

The following procedures are performed by the Authority in establishing the budgetary data reflected in the financial statements:

1. The Finance Director submits a preliminary budget by June 30 of each year to Board of Directors. This allows the Authority to continue normal operations until the final budget is adopted in July. The operating budget includes proposed expenditures and the means of financing them.

2. Public hearings are conducted to obtain taxpayers' comments.

3. The appropriated budget is prepared by fund, department, and division. The government department heads may make transfers of appropriation within a department. Transfers of appropriations between departments requires approval of the City Manager. The legal level of budgetary control (i.e., the level at which expenditures may not legally exceed appropriations) is the fund level.

4. The budget is legally adopted through the passage of a council resolution.

5. The Board of Directors may amend the budget by resolution during the fiscal year. The City Manager may transfer appropriations from one program, activity, or object to another within the same fund. All appropriations lapse at the end of the fiscal year to the extent they have not been expended. Capital project funds are based on a project time frame, rather than a fiscal year "operating" time frame reappropriating unused appropriations from year to year until project completion.

6. A budget review is presented to the City Council by the City Manager mid-year and approved additions or changes are legally adopted through Council resolution.

7. Formal budgetary integration is employed as a management control device during the year for the funds.

8. Budgets for the funds are adopted on a basis consistent with United States generally accepted accounting principles.

9.2.a
Packet Pg. 429 Attachment: 2023_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2022-23 Financial Audit Report) Patterson Public Financing Authority
(A Component Unit of the City of Patterson)
Required Supplementary Information (Unaudited) (Continued) For the Year Ended June 30, 2023
40 Budgetary Comparison Schedule – PPFA 2013 HR Revenue Bonds Variance with
Final Budget
Favorable
Original Final Actual (Unfavorable)
REVENUES:

Intergovernmental revenue 522,944 $ 517,184 $ 517,184 $ - $ Interest 1,907 1,907 98,266 96,359
Total revenues 519,091 524,851 615,450 96,359
EXPENDITURES:

Debt service:

Principal 487,152 487,152 462,628 24,524
Interest and fiscal charges 552,978 574,978 577,500 (2,522) Total expenditures 1,062,130 1,040,130 1,040,128 22,002

REVENUES OVER (UNDER)
EXPENDITURES (543,039) (515,279) (424,678) 118,361
Net change in fund balance $ (543,039) (515,279) $ (424,678) 118,361 $ FUND BALANCE:

Beginning of year 2,062,514
End of year $ 1,637,836
Budgeted Amounts

9.2.a
Packet Pg. 430 Attachment: 2023_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2022-23 Financial Audit Report) Patterson Public Financing Authority
(A Component Unit of the City of Patterson)
Required Supplementary Information (Unaudited) (Continued) For the Year Ended June 30, 2023
41 Budgetary Comparison Schedule – PPFA 2013 Authority Bonds Variance with
Final Budget
Favorable
Original Final Actual (Unfavorable)
REVENUES:

Interest 3,532,777 $ 3,532,777 $ 3,568,846 $ 36,069 $
Total revenues 3,532,777 3,532,777 3,568,846 36,069
EXPENDITURES:

Debt service:

Principal 1,930,000 1,930,000 2,105,000 (175,000)
Interest and fiscal charges 4,333,741 4,512,741 3,330,113 1,182,628 Total expenditures 6,442,741 6,263,741 5,435,113 1,007,628 Net change in fund balance $ (2,909,964) (2,730,964) $ (1,866,267) 1,043,697 $ FUND BALANCE:

Beginning of year 58,599,807
End of year $ 56,733,540
Budgeted Amounts

9.2.a
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9.2.a
Packet Pg. 432 Attachment: 2023_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2022-23 Financial Audit Report)

WEST PATTERSON FINANCING AUTHORITY

AGENDA REPORT
TO: Chair McCord and Members of the West Patterson Financing Authority FROM: Ken Irwin, Executive Director
BY: Jennifer Riedeman, Finance Director
MEETING DATE: May 7, 2024
ITEM NO: 9.3
SUBJECT: West Patterson Financing Authority’s 2022-23 Financial Audit Report

RECOMMENDATION
Accept the West Patterson Financing Authority’s 2022-23 Financial Audit Report

BACKGROUND
The West Patterson Financing Authority publishes financial statements presented in conformance with Generally Accepted Accounting Principles (GAAP). The financial statements were audited by the independent public accounting firm of The Pun Group, LLP, whose unmodified opinion is included within the financial section of the report. The unmodified opinion indicates that the financial statements present fairly the financial position of the West Patterson Financing Authority as of June 30, 2023, and the results of operations, in accordance with generally accepted accounting principles.

The West Patterson Financing Authority’s 2022-23 financial report is available on the City of Patterson’s website and is attached to this staff report.

Representative of The Pun Group, LLP will be present to discuss the audit and answer questions.

ANALYSIS
The Government-wide Net position in the Authority’s totaled a deficit of $59 million as of June 30, 2023, which changed $278,459 from the ending balance in the prior fiscal year.

9.3 Packet Pg. 433
The governmental fund balance in the Authority’s totaled $25.2 million as of June 30, 2023, which was $2.4 million more than the ending balance in the prior fiscal year.

9.3 Packet Pg. 434
West Patterson
Financing Authority
Patterson, California
Basic Financial Statements
and Independent Auditors' Report
For the Year Ended June 30, 2023

9.3.a
Packet Pg. 435 Attachment: 2023_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2022-23 Financial Audit Report)

9.3.a
Packet Pg. 436 Attachment: 2023_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2022-23 Financial Audit Report) West Patterson Financing Authority
Basic Financial Statements
For the Year Ended June 30, 2023
Table of Contents
Page

Government-Wide Financial Statements:

Governmental Fund Financial Statements:

Balance Sheet ................................................................................................................................................. 17 Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position ............................................................................... 18 Statement of Revenues, Expenditures, and Changes in Fund Balance .......................................................... 19 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities ............................................................................................................................. 20 Notes to the Basic Financial Statements .................................................................................................................. 25 Required Supplementary Information (Unaudited):

Budgetary Information ................................................................................................................................... 41 Budgetary Comparison Schedule:

CFD 2005-1 Special Tax Bonds .............................................................................................................. 42 CFD 2015-1 Special Tax Bonds .............................................................................................................. 43 CFD 2018-1 Special Tax Bonds .............................................................................................................. 44

9.3.a
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9.3.a
Packet Pg. 438 Attachment: 2023_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2022-23 Financial Audit Report) 2121 North California Blvd., Suite 290
Walnut Creek, California 94596
INDEPENDENT AUDITORS’ REPORT
To the Board of Directors
of the West Patterson Financing Authority
Patterson, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities and each major fund of the West Patterson Financing Authority (the “Authority”) as of and for the year ended June 30, 2023, and the related notes to the basic financial statements, which collectively comprise the Authority’s basic financial statements as listed in the table of contents.

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

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 Authority’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.

9.3.a
Packet Pg. 439 Attachment: 2023_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2022-23 Financial Audit Report) To the Board of Directors
of the West Patterson Financing Authority
Patterson, California

Page 2 ends

In performing an audit in accordance with auditing standards generally accepted in the United States of America and Government Auditing Standards, we:
 Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.  Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Authority’s internal control. Accordingly, no such opinion is expressed.  Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.  Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Authority’s ability to continue as a going concern for a reasonable period of time.

9.3.a
Packet Pg. 440 Attachment: 2023_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2022-23 Financial Audit Report) To the Board of Directors
of the West Patterson Financing Authority
Patterson, California

Page 3 ends

Walnut Creek, California
March 28, 2024

9.3.a
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9.3.a
Packet Pg. 442 Attachment: 2023_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2022-23 Financial Audit Report) 2121 North California Blvd., Suite 290
Walnut Creek, California 94596

REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND

OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN

ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Independent Auditors’ Report
To the Board of Directors
of the West Patterson Financing Authority
Patterson, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities and each major fund of the West Patterson Financing Authority (the “Authority”) as of and for the year ended June 30, 2023, and the related notes to the basic financial statements, which collectively comprise Authority’s basic financial statements and have issued our report thereon dated March 28, 2024.

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

9.3.a
Packet Pg. 443 Attachment: 2023_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2022-23 Financial Audit Report) To the Board of Directors
of the West Patterson Financing Authority
Patterson, California

Page 2 ends

Walnut Creek, California
March 28, 2024

9.3.a
Packet Pg. 444 Attachment: 2023_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2022-23 Financial Audit Report) BASIC FINANCIAL STATEMENTS 7

9.3.a
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9.3.a
Packet Pg. 446 Attachment: 2023_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2022-23 Financial Audit Report)

GOVERNMENT-WIDE FINANCIAL STATEMENTS
9 9.3.a
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10 9.3.a
Packet Pg. 448 Attachment: 2023_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2022-23 Financial Audit Report) Governmental
Activities
ASSETS
Current assets:

Cash $ 9,961,901
Accounts receivable 280
Intergovernmental receivable 57,838
Interest receivable 21,092
Total current assets 10,041,111
Noncurrent assets:

Notes receivable - noncurrent 975,361
Restricted cash and investments 14,227,860
Total noncurrent assets 15,203,221
Total assets 25,244,332

LIABILITIES
Current liabilities:

Accounts payable 37,198
Accrued interest payable 1,515,061
Due to City of Patterson 52,587
Due within one year:

Long-term debt 2,054,209
Total current liabilities 3,659,055
Noncurrent liabilities:

Due in more than one year:

Long-term debt 80,639,162
Total noncurrent liabilities 80,639,162
Total liabilities 84,298,217

NET POSITION (DEFICIT)
Restricted for debt service 14,227,860
Unrestricted (deficit) (73,281,745)
Total net position (deficit) $ (59,053,885)
West Patterson Financing Authority
Statement of Net Position
June 30, 2023
See accompanying Notes to the Basic Financial Statements. 11 9.3.a
Packet Pg. 449 Attachment: 2023_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2022-23 Financial Audit Report) Revenue and
Changes in
Net Position
Governmental
Functions/Programs Expenses Activities
Governmental activities:

General government $ (1,783,228) 1,783,228 $
Interest and fiscal charges (4,600,979) 4,600,979
Total governmental activities (6,384,207) 6,384,207
Total primary government $ (6,384,207) 6,384,207
General revenues:

Assessment fee 7,188,760
Investment earnings 608,357
Capital contributions to the City of Patterson (1,691,369) Total general revenues 6,105,748
Changes in net position (278,459)
Net Position (Deficit):

Beginning of year, as restated (Note 7) (58,775,426)
End of year $ (59,053,885)
For the Year Ended June 30, 2023
Net (Expense)
West Patterson Financing Authority
Statement of Activities
See accompanying Notes to the Basic Financial Statements. 12 9.3.a
Packet Pg. 450 Attachment: 2023_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2022-23 Financial Audit Report)

FUND FINANCIAL STATEMENTS
13 9.3.a
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14 9.3.a
Packet Pg. 452 Attachment: 2023_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2022-23 Financial Audit Report)

GOVERNMENTAL FUND FINANCIAL STATEMENTS
15 9.3.a
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16 9.3.a
Packet Pg. 454 Attachment: 2023_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2022-23 Financial Audit Report) CFD 2001-1 CFD 2005-1 CFD 2015-1 CFD 2018-1 Total
Special Tax Special Tax Special Tax Special Tax Governmental Bonds Bonds Bonds Bonds Funds
ASSETS
Cash 6,596,701 $ 2,271,547 $ - $ 1,093,653 $ $ 9,961,901 Restricted cash and investments 670,340 8,343,976 429,821 4,783,723 14,227,860 Accounts receivable 280 - - - 280
Intergovernmental receivable 54,024 2,879 - 935 57,838
Interest receivable 15,342 3,881 - 1,869 21,092
Notes receivable 975,361 - - - 975,361
Total assets $ 8,312,048 $ 10,622,283 $ 429,821 $ 5,880,180 $ 25,244,332

LIABILITIES, DEFERRED INFLOWS

OF RESOURCES, AND FUND BALANCES
LIABILITIES:

Accounts payable $ 37,198 $ - $ - $ - 37,198 $
Due to City of Patterson - - 52,587 - 52,587
Total liabilities 37,198 - 52,587 - 89,785
DEFERRED INFLOWS OF RESOURCES:

Unavailable revenue 4,350 - - - 4,350
Total deferred inflows of resources 4,350 - - - 4,350
FUND BALANCES:

Restricted for debt service 8,270,500 10,622,283 377,234 5,880,180 25,150,197 Total fund balances 8,270,500 10,622,283 377,234 5,880,180 25,150,197 Total liabilities, deferred inflows
of resources, and fund balance $ 10,622,283 8,312,048 $ 429,821 $ 5,880,180 $ 25,239,982 $ West Patterson Financing Authority
Balance Sheet
Governmental Funds
June 30, 2023
See accompanying Notes to the Basic Financial Statements. 17 9.3.a
Packet Pg. 455 Attachment: 2023_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2022-23 Financial Audit Report) Total fund balances of governmental funds $ 25,150,197
Amounts reported for governmental activities in the Statement of Net Position are different because:

Interest payable on long-term debt does not require current financial resources. Therefore, interest payable is not reported as a liability in the Governmental Funds Balance Sheet. (1,515,061) Unavailable revenues reported on the Governmental Fund Financial Statements resulting from activities in which revenues were earned but were not available are reclassified as revenues in the Government-Wide Financial Statements. 4,350 Long-term liabilities are not due and payable in the current period and therefore are not reported in the Governmental Funds Balance Sheet.

Long-term debt (82,693,371)
Net position (deficit) of governmental activities $ (59,053,885) West Patterson Financing Authority
Reconciliation of the Governmental Funds
Balance Sheet to the Government-Wide Statement of Net Position June 30, 2023
See accompanying Notes to the Basic Financial Statements. 18 9.3.a
Packet Pg. 456 Attachment: 2023_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2022-23 Financial Audit Report) CFD 2001-1 CFD 2005-1 CFD 2015-1 CFD 2018-1 Total
Special Tax Special Tax Special Tax Special Tax Governmental Bonds Bonds Bonds Bonds Funds
REVENUES:

Assessment fee 5,440,668 $ 952,011 $ 304,319 $ 487,412 $ 7,184,410 $ Interest 188,994 265,721 1,173 152,469 608,357
Total revenues 1,217,732 5,629,662 305,492 639,881 7,792,767 EXPENDITURES:

General administration 568 11,055 6,785 21,716 40,124
Project payments 1,743,104 - - - 1,743,104
Debt service:

Principal 1,905,629 140,000 40,000 50,000 2,135,629
Interest and fiscal charges 3,532,980 662,010 242,588 175,850 4,613,428 Total expenditures 813,065 7,182,281 289,373 247,566 8,532,285

REVENUES OVER (UNDER)
EXPENDITURES 404,667 (1,552,619) 16,119 392,315 (739,518) OTHER FINANCING SOURCES (USES):

Capital contributions to the City of Patterson - (1,399,030) - (292,339) (1,691,369) Total other financing sources (uses) (1,399,030) - - (292,339) (1,691,369) Net change in fund balances (994,363) (1,552,619) 16,119 99,976 (2,430,887) FUND BALANCES:

Beginning of year, as restated (Note 7) 9,823,119 11,616,646 361,115 5,780,204 27,581,084 End of year $ 10,622,283 8,270,500 $ 377,234 $ 5,880,180 $ 25,150,197 $ West Patterson Financing Authority
Statement of Revenues, Expenditures, and Changes in Fund Balance Governmental Funds
For the Year Ended June 30, 2023
See accompanying Notes to the Basic Financial Statements. 19 9.3.a
Packet Pg. 457 Attachment: 2023_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2022-23 Financial Audit Report) Net change in fund balances - total governmental funds: $ (2,430,887) Amounts reported for governmental activities in the Statement of Activities are different because:

Revenues in the Government-Wide Statement of Activities that do not provide current financial resources and are not reported as revenue in the governmental funds. 4,350
Repayment of long-term liabilities was an expenditures in governmental funds, but the repayment reduced long-term liabilities in the Government-Wide Statement of Net Position Principal payment of long-term debt 2,135,629
Amortization of bond premium and discount 7,191
Interest expenses on long-term debt was reported in the Government-Wide Statement of Activities, but it did not require the use of current financial resources. This amount represented the changes in accrued interest from prior year 5,258 Change in net position of governmental activities $ (278,459) West Patterson Financing Authority
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities For the Year Ended June 30, 2023
See accompanying Notes to the Basic Financial Statements. 20 9.3.a
Packet Pg. 458 Attachment: 2023_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2022-23 Financial Audit Report) 21 NOTES TO THE BASIC FINANCIAL STATEMENTS

9.3.a
Packet Pg. 459 Attachment: 2023_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2022-23 Financial Audit Report) 22 This page intentionally left blank.

9.3.a
Packet Pg. 460 Attachment: 2023_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2022-23 Financial Audit Report) West Patterson Financing Authority
Index to the Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
23 Note 1 – Summary of Significant Accounting Policies .............................................................................................. 25 A. Financial Reporting Entity .......................................................................................................................... 25 B. Basis of Accounting and Measurement Focus ............................................................................................ 25 C. Cash and Investments ................................................................................................................................. 26 D. Restricted Cash and Investments ................................................................................................................ 27 E. Receivables ................................................................................................................................................. 27 F. Long-Term Debt ......................................................................................................................................... 27 G. Special Tax ................................................................................................................................................. 27 H. Net Position ................................................................................................................................................ 28 I. Fund Balances ............................................................................................................................................. 28 J. Use of Estimates ......................................................................................................................................... 28 Note 2 – Cash and Investments ................................................................................................................................... 28 A. Cash Deposits ............................................................................................................................................. 29 B. Investments ................................................................................................................................................. 30 C. Risk Disclosures ......................................................................................................................................... 31 Note 3 – Notes Receivable ............................................................................................................................................ 32 Note 4 – Due to City of Patterson ................................................................................................................................ 32 Note 5 – Long-Term Debt ............................................................................................................................................ 32 Note 6 – Other Required Disclosures .......................................................................................................................... 37 A. Unrestricted Net Position (Deficit) ............................................................................................................. 37 Note 7 – Prior Period Adjustment .............................................................................................................................. 37 A. Government-Wide Financial Statements .................................................................................................... 37 B. Governmental Fund Financial Statements .................................................................................................. 37 Note 8 – Subsequent Events ......................................................................................................................................... 38

9.3.a
Packet Pg. 461 Attachment: 2023_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2022-23 Financial Audit Report) 24 This page intentionally left blank.

9.3.a
Packet Pg. 462 Attachment: 2023_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2022-23 Financial Audit Report) West Patterson Financing Authority
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
25 Note 1 – Summary of Significant Accounting Policies
The basic financial statements of the West Patterson Financing Authority (the “Authority” or “WPFA”) have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) as applied to governmental agencies. The Governmental Accounting Standards Board (“GASB”) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The more significant of the Authority’s accounting policies are described below.

A. Financial Reporting Entity
The Authority was formed in 2001 pursuant to a joint exercise of powers agreement between the City of Patterson, California (the “City”) and the former Redevelopment Agency of the City. The primary activity of the Authority is issuing special tax bonds on behalf of the West Patterson Financing Authority Community Facilities District No. 2001-1 (Public Improvements). The proceeds of the special tax bonds are used to finance the costs of certain engineering, design, construction and other expenses related to public infrastructure improvements.

On October 18, 2005, pursuant to Resolution No. 2005-04 of the Board of Directors of the Authority founded its Community Facilities District No. 2005-1 (West Patterson Business Park) and authorized special tax levies therein.

On June 2, 2015 pursuant to Resolution No.2015-03 of the Board of Directors of the Authority founded its Community Facilities District No. 2015-1 (Arambel-KND) and authorized special tax levies therein.

On October 16, 2018 pursuant to Resolution No. 2018-04 of the Board of Directors of the Authority founded its Community Facilities District No. 2018-1 (Villages of Patterson) and authorized special tax levies therein.

The financial activities of the Authority are included in the City’s custodial funds.

Certain eliminations have been made in regards to interfund activities, payables and receivables. All internal balances in the statement of net position have been eliminated.

9.3.a
Packet Pg. 463 Attachment: 2023_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2022-23 Financial Audit Report) West Patterson Financing Authority
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
26 Note 1 – Summary of Significant Accounting Policies (Continued) B. Basis of Accounting and Measurement Focus (Continued) Governmental Fund Financial Statements
Governmental fund financial statements include a balance sheet and a statement of revenues, expenditures and changes in fund balances for all major governmental funds. An accompanying schedule is presented to reconcile and explain the differences in net position as presented in these statements to the net position presented in the government-wide financial statements. The Authority has presented all of its funds as major funds.

Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expenditures of the current period.

The primary revenue sources, which have been treated as susceptible to accrual by the Authority is assessments and interest income. Certain indirect costs are included in program expenses reported for individual functions and activities. Expenditures are recorded in the accounting period in which the related fund liability is incurred.

The reconciliation of the fund financial statements to the government-wide financial statements is provided to explain the differences.

Governmental funds of the Authority are outlined below:

CFD 2001-1 Special Tax Bonds – This debt service fund is used to account for the debt service payments, investment income, and projects related to the 2013 Special Tax Bonds.

CFD 2005-1 Special Tax Bonds - This debt service fund is used to account for the debt service payments, investment income, and projects related to the Community Facilities District 2005-1 (West Patterson Business Park) Special Tax Bonds.

CFD 2015-1 Special Tax Bonds - This debt service fund is used to account for the debt service payments, investment income, and projects related to the Community Facilities District 2015-1 (Arambel-KND) Special Tax Bonds.

CFD 2018-1 Special Tax Bonds - This debt service fund is used to account for the debt service payments, investment income, and projects related to the Community Facilities District 2018-1 (Villages of Patterson) Special Tax Bonds.

C. Cash and Investments
The Authority’s cash and investments considered to be cash equivalents, consist of cash on hand, demand deposits, and short-term investments with original maturity of three months or less from the date of acquisition. Cash and cash equivalents are combined with investments and reported as Cash and Investments. The Authority's cash and investments are held by the City in its pooled cash and investments, except for funds required to be held by fiscal agents under the provisions of bond indentures.

9.3.a
Packet Pg. 464 Attachment: 2023_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2022-23 Financial Audit Report) West Patterson Financing Authority
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
27 Note 1 – Summary of Significant Accounting Policies (Continued) C. Cash and Investments (Continued)
Interest income earned on pooled cash and investments is allocated on an accounting period basis to the various funds based on the period-end cash and investment balances. Interest income from cash and investments with fiscal agents is credited directly to the related fund.

D. Restricted Cash and Investments
Certain restricted cash and investments are held by a fiscal agent for the redemption of bonded debt and for acquisition and construction of capital projects.

E. Receivables
Receivables include such items as assessments, interest, notes, and miscellaneous accounts receivable. No allowance for doubtful accounts has been established, as the Authority believes all amounts are considered collectible in the normal course of business.

F. Long-Term Debt
In the government-wide financial statements long-term liabilities and other long-term obligations are reported as liabilities in the applicable governmental activities Statement of Net Position. Initial issue bond premiums and discounts, are deferred and amortized over the life of the bonds using the straight-line method. The difference between the reacquisition price of refunding bonds and the net carrying amount of refunded debt (deferred amount on refunding) is amortized over the shorter of the lives of the refunding debt or remaining life of the refunded debt.

G. Special Tax
The Community Facilities Districts established by the Authority are authorized to levy special taxes annually on real property located within the Community Facilities Districts. The County of Stanislaus levies, bills, and collects the special property taxes for the Authority. The County of Stanislaus remits Community Facilities District special taxes collected on the County tax roll to the Authority in three installments during the months of December, April, and July.

Tax collections of special taxes on the County tax roll are the responsibility of the County Tax Collector. Taxes and assessments on secured and utility rolls which constitute a lien against the property, are levied and payable in two installments; the first is due November 1 of the fiscal year and is delinquent if not paid by December 10; and the second is due on March 1 of the fiscal year and is delinquent if not paid by April 10. Significant penalties are imposed under State law for late payment.

Tax levy dates are attached annually on January 1 preceding the fiscal year for which the taxes are levied. The fiscal year begins July 1 and ends June 30 of the following year. Taxes are levied on real property, as it exists at that time. Liens against real estate are not relieved by subsequent renewal or change in ownership.

9.3.a
Packet Pg. 465 Attachment: 2023_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2022-23 Financial Audit Report) West Patterson Financing Authority
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
28 Note 1 – Summary of Significant Accounting Policies (Continued) G. Special Tax (Continued)
In order to collect delinquent special tax levies, the Authority may conduct foreclosure actions against the property on which the special taxes are levied. In some cases, the Authority will "strip" the delinquent special tax amount from the County ad valorem tax roll, and proceed to enforce the payment of the special taxes itself through collection efforts including possible judicial foreclosure.

H. Net Position
For government-wide financial statements, net position is categorized as follows:

Net Investment in Capital Assets – This component of net position consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of debt that are attributable to the acquisition, construction, or improvement of those assets. There is no net investment in capital assets as of June 30, 2023.

Restricted – This component of net position consists of restricted assets reduced by liabilities and deferred inflows of resources related to those assets.

Unrestricted – This component of net position is the amount of the assets, deferred outflows of resources, liabilities, and deferred inflows of resources that are not included in the determination of net investment in capital assets or the restricted component of net position.

When expenses are incurred for purposes for which both restricted and unrestricted net position is available, the Authority’s policy is to apply restricted net position first.

I. Fund Balances
The Authority reports the fund balances for governmental funds in specific classifications (nonspendable, restricted, committed, assigned, and unassigned), which creates a hierarchy primarily based on the extent to which the Authority is bound to the constraints on the specific purpose for which funds can be spent. The Authority only receive restricted revenues; therefore, any remaining fund balances are restricted by nature of the revenue received.

J. Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosure. Accordingly, actual results could differ from those estimates.

Note 2 – Cash and Investments
The following is a summary of pooled cash and investments and restricted cash and investments at June 30, 2023:

Governmental
Activities
Cash and investments 9,961,901 $
Restricted cash and investments with fiscal agents 14,227,860 Total cash and investments $ 24,189,761

9.3.a
Packet Pg. 466 Attachment: 2023_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2022-23 Financial Audit Report) West Patterson Financing Authority
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
29 Note 2 – Cash and Investments (Continued)
Cash, cash equivalents, and investments, consisted of the following at June 30, 2023:

Cash and cash equivalents:

Pooled cash with the City of Patterson 9,961,901 $
Total cash and cash equivalents 9,961,901
Investments:

Money market mutual funds 14,227,860
Total investments 14,227,860
Total cash and investments $ 24,189,761
At June 30, 2023, investments, are reported at fair value based on quoted market prices. The following table represents the fair value measurements of investments recognized in the accompanying Statement of Net Position measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at June 30, 2023:

Measurement Valuation
Fair Value Input Technique
Investments:

Money market mutual funds 14,227,860 $ Uncategorized N/A Total investments $ 14,227,860
A. Cash Deposits
The carrying amounts of the Authority’s pooled cash and investment with the City was $9,961,901 at June 30, 2023. The Authority pools its cash and investments of all funds with the City to facilitate the management of cash and achieve the goal of obtaining the highest yield with the greatest safety and least risk. The pool is managed by the City Treasurer for investing, except for certain restricted funds and investments held in trust, which are held and invested by outside custodians through contractual agreements. These restricted funds include cash with fiscal agents. The total amount of which was collateralized or insured with securities held by the pledging financial institutions in the City’s name is discussed below.

9.3.a
Packet Pg. 467 Attachment: 2023_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2022-23 Financial Audit Report) West Patterson Financing Authority
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
30 Note 2 – Cash and Investments (Continued)
B. Investments
Investments Authorized by the California Code and the Authority’s Investments Policy The table below identifies the investment types that are authorized by the Authority's investment policy. This table does not address investments of debt proceeds held by bond trustees that are governed by the provisions of debt agreements of the Authority, rather than the general provisions of the California Government Code or the Authority's investment policy.

Maximum Maximum
Maximum Percentage of Investment in
Maturity Portfolio one Issuer
U.S. Treasury Obligation 5 years None None
U.S. Agency Securities 5 years None None
Certificates of Deposit 2 years None None
Local Agency Investment Fund (LAIF) None None None
Money Market Funds None None None
Annuities None None None
Mutual Funds None 5% None
Corporate Notes (Minimum rating of "AAA") 5 years 5% None Local Agency Bonds (Local obligation bonds) 5 years None None Authorized Investment Type

9.3.a
Packet Pg. 468 Attachment: 2023_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2022-23 Financial Audit Report) West Patterson Financing Authority
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
31 Note 2 – Cash and Investments (Continued)
C. Risk Disclosures
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the Authority's interest rate risk is mitigated is by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.

Maturity
12 Months
Fair Value or Less
Investments:

Money market mutual funds 14,227,860 $ 14,227,860 $
Total investments $ 14,227,860 14,227,860 $
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the California Government Code or debt agreements, and the actual rating as of the fiscal year for each investment type.

Minimum
Legal
Fair Value Rating S&P Moody's
Investments:

Money market mutual funds 14,227,860 $ N/A AAAm Aaa-mf
Total investments $ 14,227,860
Credit Rating
Disclosures Relating to Concentration of Credit Risk
The Authority complies with the limitations on the amount that can be invested in any one issuer as stipulated by the California Government Code. The Authority held no investments in a single issuer (other than external investment pools and mutual funds) that represented 5% or more of total Authority investment as of June 30, 2023.

Disclosures Relating to Custodial Credit Risk
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. None of the Authority’s investments was subject to custodial credit risk.

9.3.a
Packet Pg. 469 Attachment: 2023_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2022-23 Financial Audit Report) West Patterson Financing Authority
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
32 Note 3 – Notes Receivable
On November 7, 2017, the Patterson City Council adopted Ordinance No. 806 to establish a Cannabis Business Pilot Program, which allows for the regulation of cannabis businesses with the City. On December 5, 2017, the Authority entered into a development agreement with a developer to improve, develop, and use real property to operate a cannabis dispensary in the City. As part of the development agreement, the developer issued a promissory note to the Authority for $1,045,000 with an annual interest rate of 5% commencing with the developer’s start of business. The developer agreed to pay the Authority a monthly payment of $5,610 (including principal and interest) through July 2024 with a balloon payment of $898,124 due on August 1, 2024. At June 30, 2023, the outstanding balance of the note receivable was $975,361.

Note 4 – Due to City of Patterson
At June 30, 2023, the Authority owes the City in the amount of $52,587 to cover the cash overdrawn in CFD 2015-1.

Note 5 – Long-Term Debt
The Authority issued each of the respective bonds and notes on behalf of CFD 2001-1, CFD 2005-1, CFD 2015-1, and 2018-1. Summary of changes in long-term liabilities for the governmental activities for the year ended June 30, 2023 is as follows:

Original Balance Balance Due Within Due In More
Issuance July 1, 2022 Additions Deletions June 30, 2023 One Year Than One Year Public Offering:

CFD 2001-1 Series:

Series 2013 A-1 Special Tax Bonds 35,714,049 $ 30,434,898 $ - $ (894,136) $ 29,540,762 $ 827,061 $ 28,713,701 $ Series 2013 A-2 Special Tax Bonds 29,486,669 24,776,210 - (890,977) 23,885,233 895,434 22,989,799 Series 2013 B Special Tax Bonds 4,353,803 3,596,672 - (120,516) 3,476,156 116,714 3,359,442 CFD 2005-1 West Patterson Business Park Series:

Series 2015 Special Tax Bonds 9,630,000 9,165,000 - (115,000) 9,050,000 130,000 8,920,000 Less: bond discount (302,797) (227,089) - 12,618 (214,471) - (214,471) Series 2021 Special Tax Bonds 6,800,000 6,800,000 - (25,000) 6,775,000 5,000 6,770,000 Add: bond premium 680,313 680,313 - (11,339) 668,974 - 668,974 CFD 2015-1 Arambel-KND Special Tax Bonds 4,775,000 4,650,000 - (40,000) 4,610,000 50,000 4,560,000 Add: bond premium 10,861 8,689 - (362) 8,327 - 8,327
CFD 2018-1 Villages of Patterson Special Tax Bonds 4,465,000 4,465,000 - (50,000) 4,415,000 30,000 4,385,000 Add: bond premium 486,498 486,498 - (8,108) 478,390 - 478,390 Total long-term debt $ 84,836,191 96,099,396 $ - $ (2,142,820) $ 82,693,371 $ 2,054,209 $ 80,639,162 $ Special Tax Refunding Bonds, Series 2013-A-1
On August 14, 2013, the Authority issued $35,714,049 of special tax refunding bonds (Series 2013-A-1) to repay, in part, the principal of the Authority's Special Tax Bond Series 2002-A, 2003-A, 2003-B, 2004-A, 2004-B, 2009-A, and 2009-B. Interest on the bonds is payable semi-annually on March 1 and September 1 of each year through September 1, 2039, beginning on March 1, 2014. The interest rate on the bonds is 5.62%. Principal payments are due annually beginning on September 1, 2014. The bonds are secured by a first pledge of the special tax revenues and funds on deposit in the Bond Fund, Reserve Fund, and Special Tax Fund. The outstanding balance of the Series 2013- A-1 bonds at June 30, 2023 was $29,540,762.

9.3.a
Packet Pg. 470 Attachment: 2023_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2022-23 Financial Audit Report) West Patterson Financing Authority
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
33 Note 5 – Long-Term Debt (Continued)
Special Tax Refunding Bonds, Series 2013-A-1 (Continued) The annual debt service requirements are as follows:

Year Ending
June 30, Principal Interest Total
2024 827,061 $ 1,636,950 $ 2,464,011 $
2025 905,275 1,588,272 2,493,547
2026 991,727 1,534,966 2,526,693
2027 1,062,705 1,477,236 2,539,941
2028 1,094,629 1,416,615 2,511,244
2029-2033 6,006,045 6,112,183 12,118,228
2034-2038 10,807,117 3,921,897 14,729,014
2039-2040 7,846,203 489,958 8,336,161
Total 29,540,762 $ 18,178,078 $ 47,718,840 $
Special Tax Refunding Bonds, Series 2013-A-2
On August 14, 2013, the Authority issued $29,486,669 of special tax refunding bonds (Series 2013-A-2) to repay, in part, the principal of the Authority's Special Tax Bond Series 2002-A, 2003-A, 2003-B, 2004-A, 2004-B, 2009-A, and 2009-B. Interest on the bonds is payable semi-annually on March 1 and September 1 of each year through September 1, 2039, beginning on March 1, 2014. The interest rate on the bonds is 6.61%. Principal payments are due annually beginning on September 1, 2014. The bonds are secured by a first pledge of the special tax revenues and funds on deposit in the Bond Fund, Reserve Fund, and Special Tax Fund. The outstanding balance of the Series 2013- A-2 bonds at June 30, 2023 was $23,885,233.

The annual debt service requirements are as follows:

Year Ending
June 30, Principal Interest Total
2024 895,434 $ 1,549,219 $ 2,444,653 $
2025 994,555 1,486,756 2,481,311
2026 1,096,572 1,417,644 2,514,216
2027 1,192,165 1,342,001 2,534,166
2028 1,304,649 1,259,481 2,564,130
2029-2033 8,471,501 4,776,151 13,247,652
2034-2038 7,836,290 1,961,792 9,798,082
2039-2040 2,094,067 95,784 2,189,851
Total 23,885,233 $ 13,888,828 $ 37,774,061 $
Special Tax Refunding Bonds, Series 2013-B
On August 14, 2013, the Authority issued $4,353,803 of special tax refunding bonds (Series 2013-B) to repay, in part, the principal of the Authority's Special Tax Bond Series 2002-A, 2003-A, 2003-B, 2004-A, 2004-B, 2009-A, and 2009- B. Interest on the bonds is payable semi-annually on March 1 and September 1 of each year through September 1, 2039, beginning on March 1, 2014. The interest rate on the bonds is 6.61%. Principal payments are due annually beginning on September 1, 2014. The bonds are secured by a first pledge of the special tax revenues and funds on deposit in the Bond Fund, Reserve Fund, and Special Tax Fund. The outstanding balance of the Series 2013-A-1 bonds at June 30, 2023 was $3,476,156.

9.3.a
Packet Pg. 471 Attachment: 2023_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2022-23 Financial Audit Report) West Patterson Financing Authority
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
34 Note 5 – Long-Term Debt (Continued)
Special Tax Refunding Bonds, Series 2013-B (Continued)
The annual debt service requirements are as follows:

Year Ending
June 30, Principal Interest Total
2024 116,714 $ 225,917 $ 342,631 $
2025 124,429 217,947 342,376
2026 132,653 209,450 342,103
2027 141,423 200,392 341,815
2028 150,770 190,735 341,505
2029-2033 917,187 784,942 1,702,129
2034-2038 1,263,125 427,568 1,690,693
2039-2040 629,855 42,299 672,154
Total 3,476,156 $ 2,299,250 $ 5,775,406 $
Community Facilities District No. 2005-1 (West Patterson Business Park) Special Tax Bonds, Series 2015 On September 29, 2015, the Authority issued $9,630,000 of special tax refunding bonds (Series 2015) to finance a portion of the costs of acquiring and constructing certain public infrastructure improvements necessary for development of property within the District. The bonds were issued with an original issue discount of $302,797. Interest on the bonds is payable semi-annually on March 1 and September 1 of each year through September 1, 2045, beginning on March 1, 2016. The bonds bear interest ranging from 2.00% to 4.50%. Principal payments are due annually beginning on September 1, 2016. The bonds are secured by a first pledge of the special tax revenues and funds on deposit in the Bond Fund, Reserve Fund, and Special Tax Fund. The outstanding balance of the CFD 2005-1 Special Tax bonds at June 30, 2023 was $9,050,000.

The annual debt service requirements are as follows:

Year Ending
June 30, Principal Interest Total
2024 130,000 $ 394,419 $ 524,419 $
2025 145,000 389,263 534,263
2026 160,000 383,544 543,544
2027 180,000 377,056 557,056
2028 195,000 369,669 564,669
2029-2033 1,295,000 1,704,069 2,999,069
2034-2038 1,945,000 1,355,228 3,300,228
2039-2043 2,805,000 826,988 3,631,988
2044-2046 2,195,000 152,438 2,347,438
Total 9,050,000 $ 5,952,673 $ 15,002,673 $

9.3.a
Packet Pg. 472 Attachment: 2023_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2022-23 Financial Audit Report) West Patterson Financing Authority
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
35 Note 5 – Long-Term Debt (Continued)
Community Facilities District 2005-1 (West Patterson Business Park) Special Tax Bonds, Series 2021 In December 2021, the West Patterson Financing Authority issued $6,800,000 Community Facilities District No. 2005-1 (West Patterson Business Park) Special Tax Bonds, Series 2021 (“CFD 2005-1 Series 2021”). The CFD 2005-1 Series 2021 bonds were sold as non-rated securities and have a final maturity date of 2049. The CFD 2005-1 Series 2021 bonds are being issued to (i) construct and acquire certain public facilities of benefit to the District, (ii) provide for the establishment of a reserve fund, and (iii) pay the costs of issuance of the 2021 Bonds. The bonds were issued with an original issue premium of $680,313. Interest on the CFD 2005-1 Series 2021 bonds is payable semiannually on March 1 and September 1 of each year, commencing March 1, 2022. Principal on the 2021 Bonds is payable annually beginning September 1, 2022 and each year thereafter until September 1, 2049. The outstanding balance of the CFD 2005-1 Series 2021 bonds at June 30, 2022 was $6,775,000.

The annual debt service requirements are as follows:

Year Ending
June 30, Principal Interest Total
2024 5,000 262,806 267,806 $
2025 10,000 262,638 272,638
2026 15,000 262,356 277,356
2027 20,000 261,963 281,963
2028 30,000 261,400 291,400
2028-2032 240,000 1,293,500 1,533,500
2033-2037 440,000 1,248,419 1,688,419
2038-2043 720,000 1,136,000 1,856,000
2043-2047 2,810,000 888,400 3,698,400
2048-2050 2,485,000 100,900 2,585,900
Total 6,775,000 $ 5,978,382 $ 12,753,382 $
Community Facilities District No. 2015-1 (Arambel-KND) Special Tax Bonds On September 29, 2015, the Authority issued $4,775,000 of special tax refunding bonds (Series 2015) to finance a portion of the costs of acquiring and constructing certain public infrastructure improvements necessary for development of property within the District. The bonds were issued with an original issue premium of $10,861. Interest on the bonds is payable semi-annually on March 1 and September 1 of each year through September 1, 2045, beginning on March 1, 2016. The bonds bear interest ranging from 5.00% to 5.25%. Principal payments are due annually beginning on September 1, 2016. The bonds are secured by a first pledge of the special tax revenues and funds on deposit in the Bond Fund, Reserve Fund, and Special Tax Fund. The outstanding balance of the CFD 2015-1 Special Tax bonds at June 30, 2023 was $4,610,000.

9.3.a
Packet Pg. 473 Attachment: 2023_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2022-23 Financial Audit Report) West Patterson Financing Authority
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
36 Note 5 – Long-Term Debt (Continued)
Community Facilities District No. 2015-1 (Arambel-KND) Special Tax Bonds (Continued) The annual debt service requirements are as follows:

Year Ending
June 30, Principal Interest Total
2024 50,000 $ 240,338 $ 290,338 $
2025 60,000 237,588 297,588
2026 65,000 234,463 299,463
2027 75,000 230,869 305,869
2028 85,000 226,669 311,669
2029-2033 610,000 1,049,213 1,659,213
2034-2038 985,000 841,444 1,826,444
2039-2043 1,480,000 521,850 2,001,850
2044-2046 1,200,000 97,650 1,297,650
Total 4,610,000 $ 3,680,084 $ 8,290,084 $
Community Facilities District 2018-1 (Villages of Patterson) Special Tax Bonds, Series 2021 On October 27, 2021 the West Patterson Financing Authority issued $4,465,000 Community Facilities District No. 2018-1 (Villages of Patterson) Special Tax Bonds, Series 2021 (“CFD 2018-1 Series 2021”). The bonds were issued with an original issue premium of $486,498. The bonds were sold as non-rated securities, have a final maturity date of 2051 with coupons ranging from 3.00% to 4.00% and yields ranging from 1.51% to 2.74%. The CFD 2018-1 Series 2021 bonds were issued to (i) construct and acquire certain public facilities of benefit to the district, (ii) provide for the establishment of a reserve fund, and (iii) pay the costs of issuance of the CFD 2018-1 Series 2021 bonds. Interest on the Bonds is payable semiannually on March 1 and September 1 of each year, commencing March 1, 2022.

Principal on the CFD 2018-1 Series 2021 bonds is payable annually beginning September 1, 2022 and each year thereafter until September 1, 2051. The outstanding balance of the CFD 2018-1 Series 2021 bonds at June 30, 2022 was $4,415,000.

The annual debt service requirements are as follows:

Year Ending
June 30, Principal Interest Total
2024 30,000 $ 174,650 $ 204,650 $
2025 35,000 173,675 208,675
2026 40,000 172,550 212,550
2027 45,000 171,275 216,275
2028 50,000 169,600 219,600
2029-2033 355,000 810,500 1,165,500
2034-2038 575,000 718,500 1,293,500
2039-2043 845,000 577,500 1,422,500
2044-2048 1,180,000 376,400 1,556,400
2049-2052 1,260,000 104,800 1,364,800
Total 4,415,000 $ 3,449,450 $ 7,864,450 $

9.3.a
Packet Pg. 474 Attachment: 2023_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2022-23 Financial Audit Report) West Patterson Financing Authority
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
37 Note 6 – Other Required Disclosures
A. Unrestricted Net Position (Deficit)
At June 30, 2023, the Governmental Activities of the Authority had an unrestricted net deficit of $(73,456,826).

The deficit will be eliminated through future secured revenues which will be used to pay outstanding debt.

Note 7 – Prior Period Adjustments
The Authority’s beginning fund balance and net position have been restated to reflect the cumulative effect of prior year adjustments to correct the accounting treatment of reimbursable expenditures and their related accounts receivable. Previously, the Authority posted costs deemed to be reimbursable directly to either an accounts receivable account or a deposit account depending on the nature of the cost. These reimbursable costs were only recognized as expenditures if it was unlikely that the Authority would receive reimbursement for them. In order to increase financial transparency, the Authority now recognizes these expenditures at the time the actual costs are incurred, and an offsetting receivable is recorded. A summary of the restatements as of June 30, 2023 are as follows:

A. Government-Wide Financial Statements
The beginning net position at July 1, 2022 of the Government-Wide Financial Statements was restated as follows:

Governmental
Activities
Net position, as previously reported, at July 1, 2022 (58,706,243) $ To correct error in accounting for accounts receivable (69,183) Net position at July 1, 2022, as restated (58,775,426) $ B. Governmental Fund Financial Statements
The beginning fund balance at July 1, 2022 of the Governmental Fund Financial Statements was restated as follows:

CFD 2018-1
Special Tax
Bonds
Net position, as previously reported, at July 1, 2022 5,849,387 $ To correct error in accounting for accounts receivable (69,183) Net position at July 1, 2022, as restated 5,780,204 $

9.3.a
Packet Pg. 475 Attachment: 2023_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2022-23 Financial Audit Report) West Patterson Financing Authority
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
38 Note 8 – Subsequent Events
A. Patterson Public Financing Authority Special Tax Revenue Refunding Bonds Series 2023 The Patterson Public Financing Authority (the “Authority”), 2023 Refunding Special Tax Revenue Bonds (the “2023 Bonds”) are being issued to refund two series of bonds issued in 2013, the Patterson Public Financing Authority, Revenue Bonds, Senior Series 2013A (the “2013 Senior Bonds”) issued in the amount of $67,190,000 and outstanding in the amount of $53,265,000, the Patterson Public Financing Authority, Revenue Bonds, Subordinate Series 2013B (the “2013 Subordinate Bonds”) issued in the amount of $6,465,000 and currently outstanding in the amount of $5,235,000 (collectively, with the 2013 Senior Bonds, the “2013 Bonds”) and to provide project funds in the amount of $5,000,000 to facilitate a portion of the financing for the City’s Emergency Operations Center.

Since 2001, the Local Agency issued two series of notes and seven series of bonds on behalf of CFD 2001-1 to finance infrastructure improvements for CFD 2001-1. Concurrent with the issuance of the 2013 Bonds, the Local Agency issued Special Tax Refunding Bonds, Series 2001-A-1 currently outstanding in the amount of $29,540,762, Special Tax Refunding Bonds, Series 2001-A-2 currently outstanding in the amount of $23,885,232 and Special Tax Bonds, Series 2013-B currently outstanding in the amount of $3,476,156 (collectively the “Local Obligations”). The Local Obligations refunded all the outstanding bonds issued by the Local Agency on behalf of CFD 2001-1. The Authority issued the 2013 Bonds to purchase the Local Obligations.

The property owners pay their property tax bills each year a portion of which are the CFD 2001-1 special taxes.

The special taxes are collected by the County and used to pay debt service on the Local Obligations. The debt service from the Local Obligations is then used to provide cash flow to pay the debt service first to the 2013 Senior Bonds at approximately 1.10 times debt service coverage each year and secondly to the 2013 Subordinate Bonds at approximately 1.00 times debt service coverage each year. There are approximately $5,837,452 of total anticipated property owner savings over the life of the 2023 Bonds. The annual savings of approximately $364,341 per year can be credited back to property owners on subsequent years property tax bills resulting in average annual savings of approximately $156 per parcel per year, beginning in tax year 2024/25.

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Packet Pg. 476 Attachment: 2023_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2022-23 Financial Audit Report) 39 REQUIRED SUPPLEMENTARY INFORMATION

9.3.a
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Packet Pg. 478 Attachment: 2023_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2022-23 Financial Audit Report) Western Patterson Financing Authority
Required Supplementary Information (Unaudited)
For the Year Ended June 30, 2023
41 Budgetary Information
The Authority maintains budgetary controls in order to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City Council. The Authority maintains an encumbrance accounting system to provide management with information regarding obligations against appropriations. Budgetary compliance is based on expenditures during the period (U.S.GAAP), rather than expenditures and encumbrances (non-GAAP).

The following procedures are performed by the Authority in establishing the budgetary data reflected in the financial statements:

2. Public hearings are conducted to obtain taxpayers' comments.

4. The budget is legally adopted through the passage of a council resolution.

6. A budget review is presented to the City Council by the City Manager mid-year and approved additions or changes are legally adopted through Council resolution.

7. Formal budgetary integration is employed as a management control device during the year for the funds.

8. Budgets for the funds are adopted on a basis consistent with United States generally accepted accounting principles.

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Packet Pg. 479 Attachment: 2023_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2022-23 Financial Audit Report) West Patterson Financing Authority
Required Supplementary Information (Unaudited) (Continued) For the Year Ended June 30, 2023
42 Budgetary Comparison Schedule – CFD 2001-1 Special Tax Bonds Variance with
Final Budget
Favorable
Original Final Actual (Unfavorable)
REVENUES:

Assessment fee 6,806,284 $ 6,806,284 $ 5,440,668 $ (1,365,616) $ Interest 72,530 72,530 188,994 116,464
Total revenues 6,878,814 6,878,814 5,629,662 (1,249,152) EXPENDITURES:

General administration 587 587 568 19
Project payments 2,000,000 2,000,000 1,743,104 256,896
Debt service:

Principal 1,730,557 1,730,557 1,905,629 (175,072)
Interest and fiscal charges 3,540,831 3,540,831 3,532,980 7,851 Total expenditures 7,271,975 7,271,975 7,182,281 89,694 Net change in fund balance $ (393,161) (393,161) $ (1,552,619) (1,159,458) $ FUND BALANCE:

Beginning of year 9,823,119
End of year $ 8,270,500
Budgeted Amounts

9.3.a
Packet Pg. 480 Attachment: 2023_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2022-23 Financial Audit Report) West Patterson Financing Authority
Required Supplementary Information (Unaudited) (Continued) For the Year Ended June 30, 2023
43 Budgetary Comparison Schedule – CFD 2005-1 Special Tax Bonds Variance with
Final Budget
Favorable
Original Final Actual (Unfavorable)
REVENUES:

Assessment fee 764,466 $ 764,466 $ 952,011 $ 187,545 $
Interest 11,448 11,448 265,721 254,273
Total revenues 775,914 775,914 1,217,732 441,818
EXPENDITURES:

General administration 22,578 22,578 11,055 11,523
Debt service:

Principal 140,000 140,000 140,000 -
Interest and fiscal charges 662,013 662,013 662,010 3
Total expenditures 824,591 824,591 813,065 11,526

REVENUES OVER (UNDER)
EXPENDITURES (48,677) (48,677) 404,667 453,344
OTHER FINANCING SOURCES (USES):

Capital contributions to the City of Patterson - (1,399,030) (1,399,030) - Total other financing sources (uses) (1,399,030) - (1,399,030) - Net change in fund balance $ (1,447,707) (48,677) $ (994,363) 453,344 $ FUND BALANCE:

Beginning of year 11,616,646
End of year $ 10,622,283
Budgeted Amounts

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Packet Pg. 481 Attachment: 2023_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2022-23 Financial Audit Report) West Patterson Financing Authority
Required Supplementary Information (Unaudited) (Continued) For the Year Ended June 30, 2023
44 Budgetary Comparison Schedule – CFD 2015-1 Special Tax Bonds Variance with
Final Budget
Favorable
Original Final Actual (Unfavorable)
REVENUES:

Assessment fee 336,350 $ 336,350 $ 304,319 $ (32,031) $ Interest 550 550 1,173 623
Total revenues 336,900 336,900 305,492 (31,408)
EXPENDITURES:

General administration 13,050 13,050 6,785 6,265
Debt service:

Principal 40,000 40,000 40,000 -
Interest and fiscal charges 243,588 243,588 242,588 1,000 Total expenditures 296,638 296,638 289,373 7,265
Net change in fund balance $ 40,262 40,262 $ 16,119 (24,143) $ FUND BALANCE:

Beginning of year 361,115
End of year $ 377,234
Budgeted Amounts

9.3.a
Packet Pg. 482 Attachment: 2023_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2022-23 Financial Audit Report) West Patterson Financing Authority
Required Supplementary Information (Unaudited) (Continued) For the Year Ended June 30, 2023
45 Budgetary Comparison Schedule – CFD 2018-1 Special Tax Bonds Variance with
Final Budget
Favorable
Original Final Actual (Unfavorable)
REVENUES:

Assessment fee 109,686 $ 109,686 $ 487,412 $ 377,726 $
Interest 626 626 152,469 151,843
Total revenues 110,312 110,312 639,881 529,569
EXPENDITURES:

General administration 41,793 41,793 21,716 20,077
Debt service:

Principal 50,000 50,000 50,000 -
Interest and fiscal charges 175,850 175,850 175,850 -
Total expenditures 267,643 267,643 247,566 20,077

REVENUES OVER (UNDER)
EXPENDITURES (157,331) (157,331) 392,315 549,646
OTHER FINANCING SOURCES (USES):

Capital contributions to the City of Patterson - (292,339) (292,339) - Total other financing sources (uses) (292,339) - (292,339) - Net change in fund balance $ (449,670) (157,331) $ 99,976 549,646 $ FUND BALANCE:

Beginning of year 5,780,204
End of year $ 5,880,180
Budgeted Amounts

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Packet Pg. 484 Attachment: 2023_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2022-23 Financial Audit Report) City Council Agenda Report
TO: Mayor Clauzel and Members of the City Council
FROM: Ken Irwin, City Manager
BY: Ken Irwin, City Manager
MEETING DATE: May 7, 2024
ITEM NO: 10.1
SUBJECT: Adopt the City’s 2024 - 2028 Strategic Plan.

RECOMMENDATION
Motion to Adopt the City’s 2024 - 2028 Strategic Plan.

BACKGROUND
A strategic plan is a comprehensive road map that outlines an organization’s long-term goals, objectives, and actions required to achieve them. It is a forward-looking document that guides decision-making and resource allocation, ensuring all efforts align with the organization’s mission and vision. In fiscal year 2017, the Patterson City Council approved the 2017 - 2021 Patterson Strategic Plan; setting a course of action to effectively administer services and projects through established goals, objectives, and strategies.

The 2017-2021 Strategic Plan was completed by Moss Adams LLP and has served the city well but required an update to stay current with the City Council’s goals and priorities.

ANALYSIS
The Strategic Plan Update began in July 2023 and has now reached its final stage of completion.

The plan included a comprehensive input and review process to ensure alignment with city priorities and goals, including:
· Gathering input from City Council members through interviews and review of draft plans.
· Engaging City staff through interviews, group work sessions, and review of draft plans.

10.1 Packet Pg. 485
· Soliciting community input through stakeholder interviews, community surveys, and presentations.

After conducting numerous outreach initiatives and incorporating invaluable feedback from the City Council, staff, and the community into the final draft plan, we now request approval of the plan for adoption by the City Council.

FISCAL IMPACT
There is no fiscal impact as a result of this report. All costs associated with the development of the Strategic Plan Update have been included in the approved fiscal year 2023-24 budget. Any project done as a result of the plan will be included in future fiscal year budgets or brought back to City Council for necessary budget approval as needed.

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CITY OF PATTERSON
Strategic Plan
2024-2028

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Packet Pg. 487 Attachment: City of Patterson Strategic Plan.Final. 3.21.24_v2 (2024-2028 Strategic Plan) 0 WELCOME
Dear City of Patterson Community Members,
As we look towards the future, the City’s leadership, staff, and community members have come together to collaboratively develop this strategic plan, which will steer our actions over the next five years. This plan builds upon the City’s previous strategic plan and outlines our future goals, as well as describes the strategies we'll use to address the evolving needs of our community in the coming five years.

The plan is organized into the following sections:
• Strategic Framework: Mission, Vision, and Values
• Strategic Goals
o Goal 1: Economic Development and Community Amenities
o Goal 2: Community Livability and Quality of Life
o Goal 3: Infrastructure and the Built Environment
o Goal 4: Financial Stability
o Goal 5: Efficient and Effective Government
• Appendix A: Annual Planning Cycle
We’d like to express gratitude to all who contributed their input, helping mold this plan into a valuable tool that will guide us to a promising future for the City of Patterson.

Michael Clauzel
Mayor
Ken Irwin
City Manager
Shivaugn Alves
Council Member, District A
Jessica Romero
Council Member, District B
Dominic Farinha
Council Member, District C
Carlos Roque
Council Member, District D

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Packet Pg. 488 Attachment: City of Patterson Strategic Plan.Final. 3.21.24_v2 (2024-2028 Strategic Plan) City of Patterson Strategic Plan | 1

STRATEGIC FRAMEWORK
Our strategic plan is grounded in our vision for the community in the future, our mission as a City, and the organizational values that we strive to uphold.

OUR VISION
Patterson is a friendly, safe, and vibrant city that embraces its small-town spirit while fostering sustainable growth.

OUR MISSION
Provide excellent City services that help our community members thrive. We strive to encourage economic opportunities, ensure public safety, provide attractive amenities, and cultivate a diverse and welcoming community.

OUR VALUES
Accountable
We are honest, professional, and reliable. We take responsibility for our actions and communicate openly with each other and the community.

Collaborative
Our team is our strength. We are intentional in our communications and understand that working together empowers our alignment and leveraging each other’s perspectives.

Community-Centered
We are dedicated to engaging with our community, seeking their input on key decisions, and fostering strong partnerships with our stakeholders to provide meaningful services.

Future Forward
Our commitment to the future drives us to constantly explore innovative solutions that guarantee the city's financial and environmental sustainability, while meeting the current and future needs of our community.

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STRATEGIC GOALS
With input from City Council, staff, and community members, we have set the following strategic goals to guide our work for the next five years.

In the following section we have listed each goal area, along with the specific objectives and priority actions the City intends to take to accomplish each goal.

Economic Development and Community Amenities
Promote a diverse and resilient economy that encourages sustainable growth, attracts and retains businesses, and offers quality employment opportunities to residents.

Community Livability and Quality of Life
Create a great place to live by ensuring safe neighborhoods, increasing emergency preparedness, and supporting access to housing and healthcare.

Infrastructure and the Built Environment
Develop and maintain physical city infrastructure that supports sustainable growth.

Financial Stability
Ensure the City has adequate and sustainable financial funding to deliver high-quality services to residents by maximizing revenue and ensuring transparency in all facets of the City's financial management.

Efficient and Effective Government
Deliver high-quality services by streamlining government operations and investing in people, technology, and community engagement.

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Goal 1:

Economic Development and Community
Amenities
Promote a diverse and resilient economy that encourages sustainable growth, attracts and retains businesses, and offers quality employment opportunities to residents.

OBJECTIVES & ACTIONS

1.1 Expand the local economy by supporting local businesses and attracting new enterprises to the City.

A. Develop and implement a comprehensive Economic Development Plan that provides a vision and framework for attracting new businesses and supporting existing businesses. Activities may include:
• Creating incentives to attract retail locations and restaurants. • Creating local and regional economic development partnerships to promote the area.
• Exploring options to increase the diversity of job opportunities within our Commercial and Industrial Park areas.
• Providing educational and partnership resources to help incubate new businesses and support entrepreneurship.
• Providing resources and/or support to existing businesses to help them grow and expand.

B. Implement an online permitting portal to better support local developers, businesses, and community members.

1.2 Transform the downtown area into a vibrant, economically thriving, and culturally rich hub that attracts residents, visitors, and businesses.

A. Continue efforts on the downtown beautification program.

B. Continue current efforts to finalize and adopt the Downtown Revitalization Plan.

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C. Identify financing mechanisms to support the implementation of the Downtown Revitalization Plan work.

D. Update Community Design Guidelines.

1.3 Increase tourism to support local businesses.

A. Develop a tourism strategy that promotes the community's unique attractions and amenities to visitors and encourages them to spend more time in the City.

1.4 Invest in partnerships.

A. Increase collaboration and coordination efforts with the school district to expand recreational opportunities for young people.

PERFORMANCE INDICATORS
• Retail sales tax revenue
• Number of businesses within the City limits
• Increase in total jobs created
• Percentage of occupied downtown commercial space
• New commercial and residential permit dollar volume
• Transient Occupancy Taxes revenue

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Goal 2:

Community Livability and Quality of Life
Create a great place to live by ensuring safe neighborhoods, increasing emergency preparedness, and supporting access to housing and healthcare.

OBJECTIVES & ACTIONS

2.1 Maintain and expand public safety services.

A. Perform analysis to both determine feasibility, potential costs and benefits of developing internal police department. As part of this analysis, identify and select criteria (ex: population size, City funding levels, etc.) on which to base the timing of this decision.

B. Explore options to expand law enforcement presence in the City via the current partnership with the Stanislaus County Sheriff's Department.

C. Take steps to improve Fire, Police, and Emergency Medical Services response times.

D. Continue efforts to build the downtown Public Safety Center.

2.2 Expand residents’ capacity to prepare and respond to a major emergency or natural disaster.

A. Continue efforts to update the 2017 Emergency Response Plan.

B. Strengthen partnerships with regional agencies to improve coordination and response times during emergencies.

C. Review, improve, and document internal City emergency management practices.

2.3 Expand access to healthcare.

A. Participate in efforts to attract a 24/7 healthcare facility to the City.

B. Explore options to create a center for children in crises.

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2.4 Work with business partners to provide an adequate supply of housing that is affordable and accessible for current and future generations.

A. Update the City’s Housing Element.

B. Continue supporting the private sector’s efforts to develop housing for all socioeconomic groups.

2.5 Continue efforts to cultivate partnerships and seek solutions to address homelessness.

A. Continue to strengthen coordination and relationships with community partners like the Stanislaus Homeless Alliance, Cambridge Academies, and H.O.S.T. to address homelessness.

B. Explore options to decrease barriers to entry within current shelters and/or create mid- or low-barrier homeless shelters within the community.

PERFORMANCE INDICATORS
• Average police and fire response time
• Number of Property crimes
• Number of Violent crimes
• Traffic accidents/fatalities per 1,000 residents
• Median annual household income
• Number of affordable housing units permitted compared to the Regional Housing Needs Assessment
• Annual point in time count of unhoused individuals

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Goal 3:

Infrastructure and the Built Environment
Develop and maintain physical city infrastructure that supports sustainable growth.

OBJECTIVES & ACTIONS

3.1 Develop and implement plans to identify, prioritize, and fund infrastructure projects.

A. Develop a long-range (5-10 year) capital improvement plan to support strategic prioritization of city resources.

B. Continue efforts to identify financing mechanisms to support the implementation of the City’s current master plans. Plans include the Water Master Plan, Sanitary Sewer Management Plan, Parks and Recreation Master Plan, Storm Drainage Master Plan, Urban Forestry Master Plan, Transportation Master Plan, and Road Safety Plan.

3.2 Reduce the negative impacts of traffic and improve the quality of roads within the City.

A. Continue efforts to implement the Traffic Master Plan.

B. Continue the design efforts for the I-5 Interchange project to improve traffic circulation and expand communication to the public about this project to ensure transparency.

C. Explore options to increase road maintenance funding.

3.3 Develop and enhance parks and recreational facilities to better serve residents.

A. Continue efforts to construct the Community Complex, Aquatic Center, and Centennial Park to meet the recreation needs of residents.

B. Increase efforts to secure funding for public amenities via grants, public/private partnerships, and/or tax measures.

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3.4 Continue to actively seek and implement solutions to water quality issues.

A. Ensure the City continues to meet Chromium 6 water quality regulations and continue efforts to plan for future Maximum Contaminant Level reductions.

B. Prioritize implementation of the Wastewater Treatment Expansion Plan.

3.5 Maintain aging City infrastructure and assets.

A. Perform a facilities assessment and develop a deferred maintenance plan to create a comprehensive and prioritized picture of City infrastructure maintenance needs.

B. Establish a City-wide fleet replacement fund.

PERFORMANCE INDICATORS
• Increase in asset conditions ratings for streets and fleet • Increase in miles of trails, sidewalks, and bike lanes maintained by the City • Wastewater treatment plant capacity usage
• Percent of work orders completed biannually

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Goal 4:

OBJECTIVES & ACTIONS

4.1 Increase revenue to strengthen the City’s long-term financial position.

A. Explore options to increase tax revenue. Options may include tax measures, increasing the Transient Occupancy Tax or sales tax revenue via economic development activities, creating a special tax district, and/or other means.

B. Continue efforts to review and update the City’s impact fees and updated every three to five years.

C. Develop and diversify the City’s grant funding portfolio to increase the percentage of services funded by external sources.

D. Update and implement fee study recommendations.

4.2 Create and strengthen reserve funds to ensure long-term sustainability of City resources.

A. Develop a long-term capital reserve/asset management funding policy for maintaining and replacing infrastructure assets that is aligned with the City’s deferred maintenance plan (see Goal 3).

4.3 Improve internal financial processes.

A. Document and evaluate the current collection and write off process to identify opportunities to increase the consistency and effectiveness of operations across all departments that collect fees.

B. Fully implement the City’s cost allocation plan.

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C. Update financial policies and procedures to modernize processes (see Efficient and Effective Government section for more details).

PERFORMANCE INDICATORS
• Diversity of revenue sources
• Percent of revenue from grants
• Operating costs/budget ratio
• Revenue and expenditures per capita
• Credit rating
• Reserve fund levels
• Unfunded pension liability as a percentage of General Fund Budget

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Goal 5:

Efficient and Effective Government
Deliver high-quality services by streamlining government operations and investing in people, technology, and community engagement.

OBJECTIVES & ACTIONS

5.1 Recruit and retain highly-qualified staff.

A. Ensure competitive salaries and benefits by continuing the practice of reviewing classification and compensation every three to five years and making appropriate adjustments as needed and when possible.

B. Expand career development opportunities for staff. Activities may include:
• Exploring the option of instituting an employee mentoring program that pairs new staff with seasoned mentors.
• Establishing annual career development plans for staff members that identify professional development goals and to prepare for future opportunities. • Creating a formalized staff training and development program, with a focus on increasing management skills for supervisors. Trainings can be provided either in-house or through a third-party.

C. Strive to conduct periodic employee engagement surveys to track engagement.

5.2 Increase the efficiency of operations by investing in technology and improving processes.

A. Continue to update cybersecurity infrastructure and staffing resources.

B. Establish policies to facilitate the implementation of broadband infrastructure.

C. Explore options to accept online credit card payments for all City services and/or programs.

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D. Review and update policies and procedures to ensure they are aligned with modern standards. High priority policy topic areas include cash handling, credit cards, emergency preparedness, purchasing, records retention, and travel.

E. Continue efforts to digitize all City documents in an effort to move toward paperless operations.

5.3 Leverage planning and a data-driven approach to ensure City activities are strategic.

A. Develop annual department work plans based on the Strategic Plan and the City’s budget.

B. Develop a process to monitor Patterson population growth in comparison to needed services (public safety, housing, etc.).

5.4 Provide appropriate support to City Council and other governance groups.

A. Providing consistent onboarding and training to Council, board, commission, and committee members.

B. Develop a governance handbook.

C. Continue developing processes and resources to orient potential Council candidates to the role.

5.5 Build community connectivity and increase public trust in City government by focusing on community engagement.

A. Continue efforts to improve and expand communication with residents by utilizing social media and cultivating a City presence at community events.

B. Continue to support City boards, commissions, and committees as a vital source of resident feedback.

C. Proactively pursue, and incorporate, resident input into all major planning efforts.

D. Explore options to establish an annual community survey to track residential concerns over time and ensure that services are consistent with community needs.

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Packet Pg. 500 Attachment: City of Patterson Strategic Plan.Final. 3.21.24_v2 (2024-2028 Strategic Plan) City of Patterson Strategic Plan | 13

PERFORMANCE INDICATORS
• City staff position vacancy rate
• Annual employee turnover rate
• Percent of digitized City documents
• Social media engagement, reach and impressions, sentiment, and followers

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Packet Pg. 501 Attachment: City of Patterson Strategic Plan.Final. 3.21.24_v2 (2024-2028 Strategic Plan) City of Patterson Strategic Plan | 14
APPENDIX A: ANNUAL PLANNING CYCLE
Each year, the City’s
management team will review
the Strategic Plan and select
specific objectives and actions
they believe will be critical to
focus on for the upcoming
year. These priorities will then
be reviewed, edited, and
approved by City Council.

Once priorities have been
established, the City’s
management team will
develop a high-level
implementation plan to
identify specific actions,
timelines, and responsible
parties. At the end of the year,
the City’s management team
will report on progress to City
Council.

The general timeline will be as follows:

October
• Finance Department prepares and disseminates Budget Calendar for upcoming year
November
• Finance Department sends out CIP Master Listing for Department Head review and update
December - January
• Department Heads review current year activity and prepare Mid-Year Budget Requests and updates.
• City Manager reviews and approved Mid-Year Budget Requests Council select
key priorities
(objectives/
action) for the
year
Budget
development
Management
implementation
Management
reports on
annual
progress
Management
recommends
key priorities
(objectives/
action) for the
year

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January
• Finance Department presents Mid-Year Budget to Council for approval • Department Heads prepare revenue estimates and expenditure budgets for the following fiscal year and submit proposals to City Manager for review and approval.
• Management selects Strategic Plan objectives/actions for implementation in the following fiscal year and brings the proposal to City Council for review and approval
• Management reports to City Council on progress toward the strategic priorities from the previous six months (July-December) April
• City Council reviews and amends the draft budget
May
• Management presents proposed budget requests to Council as a Budget Workshop
June
• City Council approves budget for the following year
July-August
• Based on budget allocations and emergent needs, management develops a high-level implementation plan that describes actions, related timelines, and responsible parties
• Management reports to City Council on progress toward the strategic priorities from the previous six months (January-June)
October
• The planning cycle begins again

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Packet Pg. 503 Attachment: City of Patterson Strategic Plan.Final. 3.21.24_v2 (2024-2028 Strategic Plan) City of Patterson Strategic Plan | 16

ACKNOWLEDGEMENTS
Thank you to everyone who dedicated time and provided valuable input during the development of this strategic plan, including:
• City of Patterson Community Members
• City of Patterson City Council
• City of Patterson Management and Staff
Prepared by Moss Adams LLP

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Packet Pg. 504 Attachment: City of Patterson Strategic Plan.Final. 3.21.24_v2 (2024-2028 Strategic Plan) City Council Agenda Report
TO: Mayor Clauzel and Members of the City Council
FROM: Ken Irwin, City Manager
BY: Aracely Alegre, City Clerk
MEETING DATE: May 7, 2024
ITEM NO: 11.A.1
SUBJECT: Motion to Appoint/Reappoint Two (2) Members to the Planning Commission for the Term of Feb. 2024 - 2026 (Mayor Clauzel)

RECOMMENDATION
Motion to Appoint/Reappoint Two (2) Members to the Planning Commission for the Term of Feb. 2024 - 2026 (Mayor Clauzel)

BACKGROUND
The following applications were received and hereto attached:

1. Benjamin Crocker

2. Sarah Mejia

3. Renita Alexander

4. Gladys Carillo

5. Manjinder Singh

6. Kanwabir Chima

7. Abe Maciel

8. Dianna Anderson

9. Israel Blanco

10. Ron West

11.A.1
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Planning Commission
Monday, April 15, 2024
Interview Panel
City Council Members: Mayor Michael Clauzel and Councilmember Farinha

TIME CANDIDATE
9:25 – 9:45 a.m. Benjamin Crocker
5-minute break
9:50 – 10:10 a.m. Sarah Mejia
5-minute break
10:15 – 10:35 a.m. Renita Alexander
5-minute break
10:40 – 11:00 a.m. Gladys Carillo
5-minute break
11:05 – 11:25 a.m. Manjinder Singh
5-minute break
11:30 – 11:50 a.m. Kanwarbir Chima
5-minute break/Lunch
1:00 – 1:20 p.m. Abe Maciel (Zoom)
5-minute break/
1:25 – 1:45 p.m. Dianna Anderson (Zoom)
5-minute break
1:50 – 2:10 p.m. Israel Blanco
5-minute break/Lunch
2:15 – 2:35 p.m. Ron West
5-minute break/Lunch
Planning Commission has two (2) open seats for
appointment or reappointment. All seats are two-year terms.

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Patterson City CouncilMay 7, 2024

Patterson City Council
May 7, 2024