Agenda packet, regular meeting — Patterson City Council, May 6, 2025 (part 2 of 2)

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 auditors’ report that includes our opinions.

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

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

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.

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 14, 2025, 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 14, 2025

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Packet Pg. 279 Attachment: 2024_Patterson, City of_AVA_FINAL (FY 23-24 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

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 2024, and the related notes to the financial statement, and have issued our report thereon dated March 14, 2025.

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.

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Packet Pg. 280 Attachment: 2024_Patterson, City of_AVA_FINAL (FY 23-24 Financial Reports) To the Honorable Mayor and Members of the City Council
of the City of Patterson
Patterson, California

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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 14, 2025

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Packet Pg. 281 Attachment: 2024_Patterson, City of_AVA_FINAL (FY 23-24 Financial Reports)

FINANCIAL STATEMENT
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Packet Pg. 283 Attachment: 2024_Patterson, City of_AVA_FINAL (FY 23-24 Financial Reports) REVENUES:

Registration fees $ 23,506
Total revenues 23,506
EXPENDITURES:

Personnel 11,240
Services and supplies 9,383
Major purchases 2,847
Total expenditures 23,470
Net change in fund balance 36
FUND BALANCE:

Beginning of year 30,621
End of year $ 30,657
City of Patterson
Abandoned Vehicle Abatement Program
Statement of Revenues, Expenditures, and Changes in Fund Balances For the Year Ended June 30, 2024
See accompanying Notes to the Financial Statement.
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Packet Pg. 285 Attachment: 2024_Patterson, City of_AVA_FINAL (FY 23-24 Financial Reports) 9 NOTES TO THE FINANCIAL STATEMENT

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Packet Pg. 287 Attachment: 2024_Patterson, City of_AVA_FINAL (FY 23-24 Financial Reports) City of Patterson
Abandoned Vehicle Abatement Program
Notes to the Financial Statement
For the Year Ended June 30, 2024
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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Packet Pg. 289 Attachment: 2024_Patterson, City of_AVA_FINAL (FY 23-24 Financial Reports) City of Patterson
Patterson, California
Single Audit and
Independent Auditors’ Reports
For the Year Ended June 30, 2024

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Packet Pg. 290 Attachment: 2024_Patterson, City of_Single Audit_FINAL Report_ (FY 23-24 Financial Reports) City of Patterson
Table of Contents
Page
Independent Auditors’ Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ................................................................... 1 Independent Auditors’ Report on Compliance for Each Major Federal Program, on Internal Control Over Compliance Required by the Uniform Guidance, and on Schedule of Expenditures of Federal Awards ..................................................................................... 3 Schedule of Expenditures of Federal Awards ............................................................................................................ 7 Notes to the Schedule of Expenditures of Federal Awards ........................................................................................ 9 Schedule of Findings and Questioned Costs ............................................................................................................ 10

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Packet Pg. 292 Attachment: 2024_Patterson, City of_Single Audit_FINAL Report_ (FY 23-24 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
Independent Auditors’ Report
To the Honorable Mayor and Members of 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 governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Patterson (the “City”), as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the City's basic financial statements and have issued our report thereon dated March 14, 2025.

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

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

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Packet Pg. 293 Attachment: 2024_Patterson, City of_Single Audit_FINAL Report_ (FY 23-24 Financial Reports) To the Honorable Mayor and Members of City Council
of the City of Patterson
Patterson, California

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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 14, 2025

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Packet Pg. 294 Attachment: 2024_Patterson, City of_Single Audit_FINAL Report_ (FY 23-24 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, 2024. 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, 2024.

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

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Packet Pg. 295 Attachment: 2024_Patterson, City of_Single Audit_FINAL Report_ (FY 23-24 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.

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Packet Pg. 296 Attachment: 2024_Patterson, City of_Single Audit_FINAL Report_ (FY 23-24 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, 2024, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements. We issued our report thereon dated March 14, 2025, 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 14, 2025

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Packet Pg. 298 Attachment: 2024_Patterson, City of_Single Audit_FINAL Report_ (FY 23-24 Financial Reports) City of Patterson
Schedule of Expenditures of Federal Awards
For the Year Ended June 30, 2024
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 Housing and Urban Development:

Community Development Block Grant - Entitlement Cluster:

Passed Through Stanilaus County:

Community Development Block Grant 14.218 N/A 42,531 $
Total Community Development Block Grant - Entitlement Cluster 42,531 Total U.S. Department of Housing and Urban Development 42,531 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) 171,461
Sperry Ave. Overlay Phase II 20.205 STPL-5244 (041) 84,652 Total Highway Planning and Construction Program 256,113 Total U.S. Department of Transportation 256,113
U.S. Department of Treasury:

Direct Program:

Coronavirus State and Local Fiscal Recovery Funds 21.027 NEU - CA0198 576,282 Total Coronavirus State and Local Fiscal Recovery Funds 576,282 Total U.S. Department of Treasury 576,282
U.S. Department of Homeland Security:

Direct Program:

Tactical Emergency Medical Services (TEMS) 97.044 EMW-2021-FG-06830 55,354 Total U.S. Department of Homeland Security 55,354
Total Expenditures of Federal Awards $ 930,280

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Packet Pg. 300 Attachment: 2024_Patterson, City of_Single Audit_FINAL Report_ (FY 23-24 Financial Reports) City of Patterson
Notes to the Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2024
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, 2024, 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.

7.2.c
Packet Pg. 301 Attachment: 2024_Patterson, City of_Single Audit_FINAL Report_ (FY 23-24 Financial Reports) City of Patterson
Schedule of Findings and Questioned Costs
For the Year Ended June 30, 2024
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 576,282 $ Total major program expenditures $ 576,282
Total expenditures of federal awards $ 930,280
Percent of total federal award expenditures 61.95%
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

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Packet Pg. 302 Attachment: 2024_Patterson, City of_Single Audit_FINAL Report_ (FY 23-24 Financial Reports) City of Patterson
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2024
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
No prior year financial statement findings were noted.

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, 2024.

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, 2023.

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Packet Pg. 304 Attachment: 2024_Patterson, City of_Single Audit_FINAL Report_ (FY 23-24 Financial Reports) City of Patterson
Transportation Development Act Fund
Patterson, California
Independent Auditors’ Reports
and Financial Statements
For the Year Ended June 30, 2024

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Packet Pg. 305 Attachment: 2024_Patterson, City of_TDA_FINAL (FY 23-24 Financial Reports) City of Patterson
Transportation Development Act Fund
For the Year Ended June 30, 2024
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. 307 Attachment: 2024_Patterson, City of_TDA_FINAL (FY 23-24 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 financial statements of the Transportation Development Act Fund (the “TDA Fund”) of the City of Patterson, California (the “City”) which comprise the balance sheet as of June 30, 2024 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, 2024, 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 audit. 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, 2024, 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. 308 Attachment: 2024_Patterson, City of_TDA_FINAL (FY 23-24 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 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.

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.

7.2.d
Packet Pg. 309 Attachment: 2024_Patterson, City of_TDA_FINAL (FY 23-24 Financial Reports) To the Honorable Mayor and Members of the City Council
of the City of Patterson
Patterson, California

Page 3 ends

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 14, 2025, 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 14, 2025

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Packet Pg. 311 Attachment: 2024_Patterson, City of_TDA_FINAL (FY 23-24 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, 2024, 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 14, 2025.

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.

7.2.d
Packet Pg. 312 Attachment: 2024_Patterson, City of_TDA_FINAL (FY 23-24 Financial Reports) To the Honorable Mayor and Members of the City Council
of the City of Patterson
Patterson, California

Page 2 ends

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 14, 2025

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Packet Pg. 313 Attachment: 2024_Patterson, City of_TDA_FINAL (FY 23-24 Financial Reports) LTF
Transportation
ASSETS
Cash and investments $ 263,626
Interest receivable 2,471
Total assets $ 266,097

LIABILITIES AND FUND BALANCE
LIABILITIES:

Unearned revenue $ 308,495
Total liabilities 308,495
FUND BALANCE:

Unrestricted (deficit) (42,398)
Total fund balance (deficit) (42,398)
Total liabilities and fund balance $ 266,097
City of Patterson
Transportation Development Act Fund
Balance Sheet
June 30, 2024
See accompanying Notes to the Financial Statements.
7 7.2.d
Packet Pg. 314 Attachment: 2024_Patterson, City of_TDA_FINAL (FY 23-24 Financial Reports) LTF
Transportation
REVENUES:

Interest $ 8,481
Total revenues 8,481
OTHER FINANCING SOURCES (USES):

Transfers out (20,200)
Total other financing sources (uses) (20,200)
Net change in fund balance (11,719)
FUND BALANCE (DEFICIT):

Beginning of year (30,679)
End of year $ (42,398)
City of Patterson
Transportation Development Act Fund
Statement of Revenues, Expenditures, and Change in Fund Balance For the Year Ended June 30, 2024
See accompanying Notes to the Financial Statements.
8 7.2.d
Packet Pg. 315 Attachment: 2024_Patterson, City of_TDA_FINAL (FY 23-24 Financial Reports) 9 NOTES TO THE FINANCIAL STATEMENTS

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Packet Pg. 317 Attachment: 2024_Patterson, City of_TDA_FINAL (FY 23-24 Financial Reports) City of Patterson
Transportation Development Act Fund
Index to the Notes to the Financial Statements
For the Year Ended June 30, 2024
11 Page
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 – Deficit Fund Balance ..................................................................................................................................... 14

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Packet Pg. 319 Attachment: 2024_Patterson, City of_TDA_FINAL (FY 23-24 Financial Reports) City of Patterson
Transportation Development Act Fund
Notes to the Financial Statements
For the Year Ended June 30, 2024
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.

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Packet Pg. 320 Attachment: 2024_Patterson, City of_TDA_FINAL (FY 23-24 Financial Reports) City of Patterson
Transportation Development Act Fund
Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2024
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, 2024 was $263,626.

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, 2024, the balance of $308,495 is unearned revenue and consists of unspent funds of $297,143 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.

Note 6 – Deficit Fund Balance
As of June 30, 2024, the Local Transportation Fund ended the year with a deficit fund of $42,398. The City plans to address the deficit through additional funding through intergovernmental revenue or transfers from the City’s General Fund.

7.2.d
Packet Pg. 321 Attachment: 2024_Patterson, City of_TDA_FINAL (FY 23-24 Financial Reports)

CITY OF PATTERSON
Presentation to the City CouncilFor the Fiscal Year Ended June 30, 2024May 6, 2025

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Attachment: 2024 Patterson City Council Meeting (FY 23-24 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!

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Attachment: 2024 Patterson City Council Meeting (FY 23-24 Financial Reports) 3 Scope of Work

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Attachment: 2024 Patterson City Council Meeting (FY 23-24 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 – FY24/25
• Other Non-Audit Services
• Assistance in Preparing Financial Statements

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Attachment: 2024 Patterson City Council Meeting (FY 23-24 Financial Reports) 5 Required Communications (AU-C 260)

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Attachment: 2024 Patterson City Council Meeting (FY 23-24 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. 100, Accounting Changes and Error Corrections – an Amendment of GASB Statement No. 62
• Significant Estimates
• Fair Value on Investments• Depreciation on Capital Assets• Net Pension Liability• Net OPEB Liability

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Attachment: 2024 Patterson City Council Meeting (FY 23-24 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 – Commitments and Contingencies

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Attachment: 2024 Patterson City Council Meeting (FY 23-24 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.

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Attachment: 2024 Patterson City Council Meeting (FY 23-24 Financial Reports) 9 Audit Responsibilities

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Attachment: 2024 Patterson City Council Meeting (FY 23-24 Financial Reports) 10 Management Auditors
Responsible for preparation of the financial Perform the auditstatements 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 Present the financial statements in accordance with accounting principles generally accepted in the United States of America Communicate with “Those Charged with Governance”
Adopt sound accounting policies
Assess audit risk of internal control over financial reporting and compliance Establish and maintain internal controls over financial reporting and compliance Determine fairness presentation of the financial statements Provide evidence supporting the amounts and disclosures in the financial statements Prevent and detect fraud Render opinions Audit Responsibilities

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Attachment: 2024 Patterson City Council Meeting (FY 23-24 Financial Reports) 11 Approach to the Audit

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Attachment: 2024 Patterson City Council Meeting (FY 23-24 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

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Attachment: 2024 Patterson City Council Meeting (FY 23-24 Financial Reports) 13 OVERVIEW OF THE FINANCIAL STATEMENTS

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Attachment: 2024 Patterson City Council Meeting (FY 23-24 Financial Reports) 14 2024 2023 Change
Assets $ 180,598,431 202,025,263 $ 21,426,832 $
Deferred Outflows of Resources 6,266,891 6,427,990 161,099 Liabilities 91,598,089 98,145,591 6,547,502
Deferred Inflows of Resources 6,115,310 5,164,282 (951,028) Net Position:

Net investments in capital assets 67,129,360 67,681,454 (552,094) Restricted 28,261,493 14,864,418 13,397,075
Unrestricted 9,752,527 6,606,051 3,146,476
Total Net Position $ 83,218,328 105,143,380 $ 15,991,457 $ Net Position @ June 30
(Governmental Activities)

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Attachment: 2024 Patterson City Council Meeting (FY 23-24 Financial Reports) 15 2024 2023 Total
Program Revenues
Charges for services 10,934,845 $ 7,150,547 $ 3,784,298 $ Operating grants and contributions 5,561,697 3,200,329 2,361,368 Capital grants and contributions 4,449,223 9,699,274 (5,250,051) Total program revenues 20,050,150 20,945,765 895,615
Expenses $ 41,609,496 38,757,581 $ (2,851,915) $
Net Cost of Services (21,559,346) (17,811,816) 3,747,530 General Revenues 31,079,935 26,137,673 4,942,262
Transfers 2,723,338 2,939,075 (215,737)
Change in Net Position $ 7,517,402 15,991,457 $ 8,474,055 $ Change in Net Position
(Governmental Activities)

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Attachment: 2024 Patterson City Council Meeting (FY 23-24 Financial Reports) 16 2024 2023 Change
Assets $ 79,218,139 80,321,185 $ 1,103,046 $
Deferred Outflows of Resources 2,879,905 2,914,011 34,106 Liabilities 30,179,059 32,267,059 2,088,000
Deferred Inflows of Resources 3,443,738 2,955,174 (488,564) Net Position:

Net investments in capital assets 48,241,694 48,865,099 (623,405)Restricted 3,219,807 3,137,525 82,282Unrestricted (3,448,538) (3,527,377) 78,839 Total Net Position $ 48,475,247 48,012,963 $ (462,284) $ Net Position @ June 30
(Business-Type Activities)

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Attachment: 2024 Patterson City Council Meeting (FY 23-24 Financial Reports) 17 2024 2023 Total
Program Revenues
Charges for services 18,570,675 $ 16,829,284 $ 1,741,391 $ Capital grants and contributions 975,414 6,156,519 (5,181,105) Total program revenues 22,985,803 19,546,089 (3,439,714) Expenses $ 18,523,159 18,278,267 $ (244,892) $
Net Cost of Services 4,462,644 1,267,822 (3,194,822)
General Revenues 993,232 1,984,266 (991,034)
Transfers (2,723,338) (2,939,075) 215,737
Change in Net Position $ 3,507,835 (462,284) $ (3,970,119) $ Change in Net Position
(Business-Type Activities)

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Attachment: 2024 Patterson City Council Meeting (FY 23-24 Financial Reports) 18 2024 2023 Change
Assets $ 27,882,858 34,822,976 $ 6,940,118 $
Liabilities $ 9,470,771 10,346,209 $ 875,438 $
Deferred Inflows of Resources $ 248,924 210,074 $ (38,850) $ Fund Balance
Nonspendable 249,161 138,149 111,012Restricted 624,198 560,761 63,437Committed 10,759,106 9,838,576 920,530Assigned 7,449,656 6,236,338 1,213,318Unassigned 5,184,572 1,389,339 3,795,233 Total Fund Balance 18,163,163 24,266,693 6,103,530Total Liabilities, Deferred Inflows of Resources, and Fund Balance $ 27,882,858 34,822,976 $ 6,940,118 $ General Fund – Fund Balance @ June 30

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Attachment: 2024 Patterson City Council Meeting (FY 23-24 Financial Reports) 19 2024 2023 Change
Revenues $ 25,000,791 29,762,783 $ 4,761,992 $
Expenditures (26,748,476) (30,352,721) (3,604,245)
Revenues over Expenditures (1,747,685) (589,938) 1,157,747 Other Financing Sources and Uses 3,072,274 6,693,468 3,621,194 Change in Fund Balance $ 1,324,589 6,103,530 $ 4,778,941 $ General Fund – Change in Fund Balance

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Attachment: 2024 Patterson City Council Meeting (FY 23-24 Financial Reports) 20 Financial Indicators and Key Pension/OPEB Information

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Attachment: 2024 Patterson City Council Meeting (FY 23-24 Financial Reports) 21 2024 2023
Net Cost of Services $ 21,559,346 17,811,816 $
Less: Interest Expenses (3,962,077) (3,611,271)
17,597,269 14,200,545
Tax Revenues 20,779,758 20,779,758
Ratio 68.34% 84.68%
Net Cost of Services to Tax Revenues
(Governmental Activities)

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Attachment: 2024 Patterson City Council Meeting (FY 23-24 Financial Reports) 22 2024 2023
Unassigned Fund Balance 5,184,572 $ 1,389,339 $
Committed for Contingencies 10,759,106 9,838,576Available Fund Balance 11,227,915 15,943,678 Annual Expenditures 26,748,476 30,352,721
Ratio 52.53% 41.98%
Available Fund Balance to Annual Expenditures
(General Fund)

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Attachment: 2024 Patterson City Council Meeting (FY 23-24 Financial Reports) 23 Miscellaneous Safety
Plan Plan Total
Net Pension Liabilities/(Assets) @ 5.90% 14,932,284 $ 6,757,317 $ 21,689,601 $ Net Pension Liabilities/(Assets) @ 6.90% 9,037,628 $ 4,376,468 $ 13,414,096 $ Net Pension Liabilities/(Assets) @ 7.90% 4,185,821 $ 2,429,955 $ 6,615,776 $ Plan's Proportionate Share of theFiduciary Net Position as a Percentageof the Total Pension Liability 79.26% 74.78%Prior year 79.66% 75.57% Net Pension Liability Sensitivity Analysis

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Attachment: 2024 Patterson City Council Meeting (FY 23-24 Financial Reports) 24 OPEB
Net OPEB Liabilities @ 4.50% 9,117,032 $ Net OPEB Liabilities @ 5.50% 8,017,480 $ Net OPEB Liabilities @ 6.50% 7,087,091 $ Fiduciary Net Position as a Percentageof the Total OPEB Liability 11.39% Net OPEB Liability Sensitivity Analysis

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Attachment: 2024 Patterson City Council Meeting (FY 23-24 Financial Reports) 25 Audit Results - City

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Attachment: 2024 Patterson City Council Meeting (FY 23-24 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 (FY24/25) – Procedures performed without exception

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Attachment: 2024 Patterson City Council Meeting (FY 23-24 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

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Attachment: 2024 Patterson City Council Meeting (FY 23-24 Financial Reports) 28 Audit Results – Patterson Public Financing Authority

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Attachment: 2024 Patterson City Council Meeting (FY 23-24 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

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Attachment: 2024 Patterson City Council Meeting (FY 23-24 Financial Reports) 30 Audit Results – West Patterson Financing Authority

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Attachment: 2024 Patterson City Council Meeting (FY 23-24 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

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Attachment: 2024 Patterson City Council Meeting (FY 23-24 Financial Reports)

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Packet Pg. 353
Attachment: 2024 Patterson City Council Meeting (FY 23-24 Financial Reports) TO:

FROM:

BY:

PATTERSON PUBLIC FINANCING AUTHORITY

AGENDA REPORT
Chair Clauzel and Members of the Patterson Public Financing Authority Fernando Ulloa, Executive Director
Kevin Williams, Interim Finance Director
MEETING DATE: May 6, 2025
ITEM NO: 7.3
SUBJECT: Accept the Patterson Public Financing Authority’s 2023-24 Financial Audit Report.

RECOMMENDATION
Motion to Accept the Patterson Public Financing Authority’s 2023-24 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, 2024, 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 2023-24 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 $911,848 as of June 30,

7.3 Packet Pg. 354
2024, which changed $1,142,568 from the ending balance in the prior fiscal year.

The governmental fund balance in the Authority’s totaled approximately $61.6 million as of June 30, 2024, which was $3.3 million more than the ending balance in the prior fiscal year.

The difference between Government-wide Net position and governmental fund balance are the long-term liabilities that 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, 2024.

7.3 Packet Pg. 355
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, 2024

7.3.a
Packet Pg. 356 Attachment: 2024_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2023-24 Financial Audit Report) Patterson Public Financing Authority
(A Component Unit of the City of Patterson)
Basic Financial Statements
For the Year Ended June 30, 2024
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 ................................................................................................................................... 37 Budgetary Comparison Schedule:

PPFA 2013 Heartland Ranch Revenue Bonds ......................................................................................... 38 PPFA 2013 Authority Bonds ................................................................................................................... 39 PPFA 2023 Authority Bonds ................................................................................................................... 40

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7.3.a
Packet Pg. 358 Attachment: 2024_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2023-24 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, 2024, 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, 2024, 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 audit. 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.

7.3.a
Packet Pg. 359 Attachment: 2024_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2023-24 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.

7.3.a
Packet Pg. 360 Attachment: 2024_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2023-24 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 14, 2025, 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 14, 2025

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Packet Pg. 362 Attachment: 2024_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2023-24 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, 2024, 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 March 14, 2025.

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.

7.3.a
Packet Pg. 363 Attachment: 2024_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2023-24 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 14, 2025

7.3.a
Packet Pg. 364 Attachment: 2024_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2023-24 Financial Audit Report) BASIC FINANCIAL STATEMENTS 7

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Packet Pg. 366 Attachment: 2024_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2023-24 Financial Audit Report)

GOVERNMENT-WIDE FINANCIAL STATEMENTS
9 7.3.a
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10 7.3.a
Packet Pg. 368 Attachment: 2024_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2023-24 Financial Audit Report) Governmental
Activities
ASSETS
Current assets:

Cash and investments $ 928,197
Interest receivable 4,581
Prepaid items 247,426
Total current assets 1,180,204
Noncurrent assets:

Restricted cash and investments 5,023,043
Investments held in trust 55,869,678
Total noncurrent assets 60,892,721
Total assets 62,072,925

LIABILITIES
Current liabilities:

Accounts payable 10,301
Accrued interest payable 917,374
Due to City of Patterson 385,057
Due within one year:

Long-term debt 2,383,775
Total current liabilities 3,696,507
Noncurrent liabilities:

Due in more than one year:

Long-term debt 59,288,266
Total noncurrent liabilities 59,288,266
Total liabilities 62,984,773

NET POSITION (DEFICIT)
Unrestricted (deficit) (911,848)
Total net position (deficit) $ (911,848)
(A Component Unit of the City of Patterson)
Patterson Public Financing Authority
Statement of Net Position
June 30, 2024
See accompanying Notes to the Basic Financial Statements. 11 7.3.a
Packet Pg. 369 Attachment: 2024_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2023-24 Financial Audit Report) Net (Expense)
Revenue and
Changes in
Net Position
Governmental
Functions/Programs Expenses Activities
Governmental activities:

Interest and fiscal charges $ (4,128,549) 4,128,549 $
Total governmental activities (4,128,549) 4,128,549
Total primary government $ (4,128,549) 4,128,549
General revenues and contributions:

Intergovernmental revenue 2,102,725
Investment earnings 3,168,392
Total general revenues and contributions 5,271,117
Change in net position 1,142,568
Net Position (Deficit):

Beginning of year (2,054,416)
End of year $ (911,848)
For the Year Ended June 30, 2024
Patterson Public Financing Authority
Statement of Activities
(A Component Unit of the City of Patterson)
See accompanying Notes to the Basic Financial Statements. 12 7.3.a
Packet Pg. 370 Attachment: 2024_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2023-24 Financial Audit Report)

FUND FINANCIAL STATEMENTS
13 7.3.a
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14 7.3.a
Packet Pg. 372 Attachment: 2024_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2023-24 Financial Audit Report)

GOVERNMENTAL FUND FINANCIAL STATEMENTS
15 7.3.a
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16 7.3.a
Packet Pg. 374 Attachment: 2024_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2023-24 Financial Audit Report) PPFA 2013 PPFA PPFA Total
Heartland Ranch 2013 Authority 2023 Authority Governmental Revenue Bonds Bonds Bonds Funds
ASSETS
Cash and investments 517,657 $ 385,057 $ 25,483 $ 928,197 $ Restricted cash and investments - - 5,023,043 5,023,043 Investments held in trust 879,340 - 54,990,338 55,869,678 Interest receivable 4,581 - - 4,581
Prepaid items - - 247,426 247,426
Due from other funds - - 192,931 192,931
Total assets $ 385,057 1,401,578 $ 60,479,221 $ 62,265,856 $

LIABILITIES AND FUND BALANCES
LIABILITIES:

Accounts payable - $ - $ 10,301 $ 10,301 $
Due to other funds 192,931 - - 192,931
Due to City of Patterson - 385,057 - 385,057
Total liabilities 385,057 192,931 10,301 588,289

FUND BALANCES
Nonspendable - - 247,426 247,426
Restricted for debt service 1,208,647 - 60,221,494 61,430,141 Total fund balances - 1,208,647 60,468,920 61,677,567
Total liabilities and fund balances $ 385,057 1,401,578 $ 60,479,221 $ 62,265,856 $ Patterson Public Financing Authority
Balance Sheet
Governmental Funds
June 30, 2024
(A Component Unit of the City of Patterson)
See accompanying Notes to the Basic Financial Statements. 17 7.3.a
Packet Pg. 375 Attachment: 2024_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2023-24 Financial Audit Report) Total fund balances of governmental funds $ 61,677,567
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. (917,374) 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 (61,672,041)
Net position (deficit) of governmental activities $ (911,848) Patterson Public Financing Authority
Reconciliation of the Governmental Funds
Balance Sheet to the Government-Wide Statement of Net Position June 30, 2024
(A Component Unit of the City of Patterson)
See accompanying Notes to the Basic Financial Statements. 18 7.3.a
Packet Pg. 376 Attachment: 2024_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2023-24 Financial Audit Report) PPFA 2013 PPFA PPFA Total
Heartland Ranch 2013 Authority 2023 Authority Governmental Revenue Bonds Bonds Bonds Funds
REVENUES:

Intergovernmental revenue 67,271 $ 2,028,290 $ 7,164 $ 2,102,725 $ Interest 84,676 1,419,724 1,663,992 3,168,392
Total revenues 3,448,014 151,947 1,671,156 5,271,117
EXPENDITURES:

Current:

General government - - 753,047 753,047
Debt service:

Principal 470,959 58,500,000 10,000 58,980,959
Interest and fiscal charges 110,177 1,637,496 1,471,095 3,218,768 Total expenditures 60,137,496 581,136 2,234,142 62,952,774

REVENUES OVER (UNDER)
EXPENDITURES (56,689,482) (429,189) (562,986) (57,681,657) OTHER FINANCING SOURCES (USES):

Proceeds from bond issuance - - 54,370,000 54,370,000
Bond premium received - - 6,617,848 6,617,848
Transfers in - - 44,058 44,058
Transfers out - (44,058) - (44,058)
Total financing sources (uses) (44,058) - 61,031,906 60,987,848 Net change in fund balances (56,733,540) (429,189) 60,468,920 3,306,191 FUND BALANCES (DEFICIT):

Beginning of year 1,637,836 56,733,540 - 58,371,376
End of year $ - 1,208,647 $ 60,468,920 $ 61,677,567 $
Patterson Public Financing Authority
Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds
For the Year Ended June 30, 2024
(A Component Unit of the City of Patterson)
See accompanying Notes to the Basic Financial Statements. 19 7.3.a
Packet Pg. 377 Attachment: 2024_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2023-24 Financial Audit Report) Net change in fund balances - total governmental funds: $ 3,306,191 Amounts reported for governmental activities in the Statement of Activities are different because:

Issuance of long-term liabilities provides current financial resources to governmental funds, but the issuance increased long-term liabilities in the Government-Wide Statement of Net Position.

Bonds payable (54,370,000)
Premium on bonds payable (6,617,848)
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 58,980,959
Amortization of bond discount (568,849)
Amortization of bond premium 220,595
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 191,520 Change in net position of governmental activities $ 1,142,568 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, 2024
(A Component Unit of the City of Patterson)
See accompanying Notes to the Basic Financial Statements. 20 7.3.a
Packet Pg. 378 Attachment: 2024_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2023-24 Financial Audit Report) 21 NOTES TO THE BASIC FINANCIAL STATEMENTS

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Packet Pg. 380 Attachment: 2024_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2023-24 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, 2024
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 B. Transfers To and From 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

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Packet Pg. 382 Attachment: 2024_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2023-24 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, 2024
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

7.3.a
Packet Pg. 383 Attachment: 2024_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2023-24 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, 2024
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.

PPFA 2023 Authority Bonds – This debt service fund is used to account for the debt service payments, investment income, and projects related to the 2023 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.

7.3.a
Packet Pg. 384 Attachment: 2024_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2023-24 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, 2024
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.

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, 2024.

7.3.a
Packet Pg. 385 Attachment: 2024_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2023-24 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, 2024
28 Note 1 – Summary of Significant Accounting Policies (Continued) F. Net Position (Continued)
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, 2024.

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
For the Authority’s fund financial statements, fund balances are categorized as follows:

Nonspendable – Items that cannot be spent because they are not in spendable form, such as prepaid items and inventories and long term receivables, or items that are legally or contractually required to be maintained intact, such as principal of an endowment or revolving loan funds.

Restricted – Restricted fund balances encompass the portion of net fund resources subject to externally enforceable legal restrictions. This includes externally imposed restrictions by creditors, such as through debt covenants, grantors, contributors, laws or regulations of other governments, as well as restrictions imposed by law through constitutional provisions or enabling legislation.

When expenditures are incurred for purposes where only unrestricted fund balances are available, the City uses the unrestricted resources in the following order: committed, assigned, and unassigned.

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, 2024:

Governmental
Activities
Cash and investments 928,197 $
Restricted cash and investments 5,023,043
Investments held in trust 55,869,678
Total cash and investments $ 61,820,918

7.3.a
Packet Pg. 386 Attachment: 2024_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2023-24 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, 2024
29 Note 2 – Cash and Investments (Continued)
Cash, cash equivalents, and investments, consisted of the following at June 30, 2024:

Investments:

Local obligation bonds 55,869,678 $
Money market mutual funds 5,023,043
Total investments 60,892,721
Total cash and investments $ 61,820,918
At June 30, 2024, 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, 2024:

Measurement
Fair Value Input
Investments:

Local obligation bonds 55,869,678 $ Level 2
Money market mutual funds 5,023,043 Uncategorized
Total investments $ 60,892,721
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, 2024. 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.

7.3.a
Packet Pg. 387 Attachment: 2024_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2023-24 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, 2024
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

7.3.a
Packet Pg. 388 Attachment: 2024_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2023-24 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, 2024
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, 2024:
12 Months
Fair Value or Less 1-5 Years 6-10 Years Thereafter
Investments:

Local obligation bonds 55,869,678 $ 14,508 $ - $ - $ 55,855,170 $ Money market mutual funds 5,023,043 5,023,043 - - -
Total investments $ 5,037,551 60,892,721 $ - $ - $ 55,855,170 $ 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 55,869,678 $ N/A Not rated Not rated Money market mutual funds 5,023,043 N/A AAAm Aaa-mf
Total investments $ 60,892,721
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, 2024:

Issuer Amount
West Patterson Financing Authority 55,869,678 $
Investment Type
Local obligation bonds

7.3.a
Packet Pg. 389 Attachment: 2024_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2023-24 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, 2024
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, 2024, was as follows:

Receivable Fund Payable Fund Amount Purpose
PPFA 2023 Authority Bonds PPFA 2013 Heartland Ranch Revenue Bonds 192,931 $ Overdrawn Cash B. Transfers To and From Other Funds
Transfers to and other funds for the year ended June 30, 2024, was as follows:

Transfer Out Transfer In Amount Purpose
PPFA 2013 Authority Bonds PPFA 2023 Authority Bonds 44,058 $ Reimbursement Note 4 – Due to City of Patterson
At June 30, 2024, the Authority owes the City in the amount of $385,057 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, 2024 is as follows:

Original Balance Balance Due Within Due In More
Issuance July 1, 2023 Additions Deletions June 30, 2024 One Year Than One Year Private Placement:

PPFA 2013 Heartland Ranch Revenue Bonds 4,963,568 $ 1,385,747 $ - $ (470,959) $ 914,788 $ 273,775 $ 641,013 $ PPFA 2013 Series A Revenue Bonds 67,190,000 53,265,000 - (53,265,000) - - - Less: Bond Discount (853,389) (568,849) - 568,849 - - - PPFA 2013 Series B Revenue Bonds 6,465,000 5,235,000 - (5,235,000) - - - PPFA 2023 Series A Revenue Bonds 54,370,000 - 54,370,000 (10,000) 54,360,000 2,110,000 52,250,000 Plus: Bond Premium 6,617,848 - 6,617,848 (220,595) 6,397,253 - 6,397,253 Total long-term debt $ 59,316,898 138,753,027 $ 60,987,848 $ (58,632,705) $ 61,672,041 $ 2,383,775 $ 59,288,266 $

7.3.a
Packet Pg. 390 Attachment: 2024_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2023-24 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, 2024
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, 2024, the outstanding balance of the 2013 Heartland Ranch Revenue bonds was $914,788.

The annual debt service requirements are as follows:

Year Ending
June 30, Principal Interest Total
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 914,788 $ 61,043 $ 975,831 $
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 was 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 was 3.00 percent. Principal payments were 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. On March 1, 2024, the PPFA issued $54,370,000 of special tax revenue refunding bonds to refund the 2013 PPFA Series A and B Bonds. As a result, the 2013 PPFA Series A Bonds are considered defeased and the liability has been removed from the governmental activities column of the statement of net position. 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 was 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 was 5.875%.

Principal payments were 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. On March 1, 2024, the PPFA issued $54,370,000 of special tax revenue refunding bonds to refund the 2013 PPFA Series A and B Bonds. As a result, the 2013 PPFA Series B Bonds are considered defeased and the liability has been removed from the governmental activities column of the statement of net position.

7.3.a
Packet Pg. 391 Attachment: 2024_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2023-24 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, 2024
34 Note 5 – Long-Term Obligations (Continued)
A. Governmental Activities (Continued)
PPFA 2023 Series A Special Tax Revenue Refunding Bonds
On August 1, 2023, the Patterson Public Financing Authority issued $54,370,000 of special tax revenue refunding bonds (Series 2023 A) to refund the 2013 PPFA Series A Bonds and the 2013 PPFA Series B Bonds which had outstanding balances of $53,265,000 and $5,235,000, respectively. The bonds were sold with a net original issue premium of $6,617,848 and costs of issuance of $1,029,942 (including the underwriter’s discount, the fee for bond insurance and a surety fee for the reserve fund).

Interest on the bonds is payable semi-annually on March 1 and September 1 of each year through September 1, 2024, beginning on March 1, 2024. The interest rates on the bonds range from 2.790 to 3.890 percent.

Principal payments are due annually beginning on September 1, 2024. 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, 2024, the outstanding balance of the PPFA 2023 Series A Special Tax Revenue Refunding Bonds was $54,360,000.

The annual debt service requirements are as follows:

Year Ending
June 30, Principal Interest Total
2025 2,110,000 $ 2,665,250 $ 4,775,250 $
2026 2,395,000 2,552,625 4,947,625
2027 2,550,000 2,429,000 4,979,000
2028 2,685,000 2,298,125 4,983,125
2029 2,810,000 2,160,750 4,970,750
2030-2034 16,250,000 8,488,250 24,738,250
2035-2039 20,455,000 3,997,875 24,452,875
2040 5,105,000 127,625 5,232,625
Total 54,360,000 $ 24,719,500 $ 79,079,500 $
Note 6 – Other Required Disclosures
A. Unrestricted Net Position (Deficit)
At June 30, 2024, the Governmental Activities of the Authority had an unrestricted net deficit of $(911,848). The deficit will be eliminated through future secured revenues which will be used to pay outstanding debt.

7.3.a
Packet Pg. 392 Attachment: 2024_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2023-24 Financial Audit Report) 35 REQUIRED SUPPLEMENTARY INFORMATION (UNAUDITED)

7.3.a
Packet Pg. 393 Attachment: 2024_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2023-24 Financial Audit Report) 36 This page intentionally left blank.

7.3.a
Packet Pg. 394 Attachment: 2024_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2023-24 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, 2024
37 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, 2024 are disclosed in the notes to the financial statements. Appropriations for fiscal year 2024 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.

7.3.a
Packet Pg. 395 Attachment: 2024_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2023-24 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, 2024
38 Budgetary Comparison Schedule – PPFA 2013 Heartland Ranch Revenue Bonds Variance with
Final Budget
Favorable
Original Final Actual (Unfavorable)
REVENUES:

Intergovernmental revenue 513,864 $ 509,779 $ 67,271 $ (442,508) $ Interest 855 855 84,676 83,821
Total revenues 510,634 514,719 151,947 (358,687)
EXPENDITURES:

Debt service:

Principal 913,467 913,467 470,959 442,508
Interest and fiscal charges 110,177 110,177 110,177 -
Total expenditures 1,023,644 1,023,644 581,136 442,508

REVENUES OVER (UNDER)
EXPENDITURES (513,010) (508,925) (429,189) 83,821
Net change in fund balance $ (513,010) (508,925) $ (429,189) 83,821 $ FUND BALANCE:

Beginning of year 1,637,836
End of year $ 1,208,647
Budgeted Amounts

7.3.a
Packet Pg. 396 Attachment: 2024_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2023-24 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, 2024
39 Budgetary Comparison Schedule – PPFA 2013 Authority Bonds Variance with
Final Budget
Favorable
Original Final Actual (Unfavorable)
REVENUES:

Intergovernmental revenue - $ - $ 2,028,290 $ 2,028,290 $ Interest 3,533,614 3,533,614 1,419,724 (2,113,890)
Total revenues 3,533,614 3,533,614 3,448,014 (85,600)
EXPENDITURES:

Debt service:

Principal 2,035,000 2,035,000 58,500,000 (56,465,000)
Interest and fiscal charges 3,230,803 3,230,803 1,637,496 1,593,307 Total expenditures 5,265,803 5,265,803 60,137,496 (54,871,693)

REVENUES OVER (UNDER)
EXPENDITURES (1,732,189) (1,732,189) (56,689,482) (54,957,293) OTHER FINANCING SOURCES (USES):

Transfers out (779,180) (779,180) (44,058) 735,122
Total other financing sources (uses) (779,180) (779,180) (44,058) 735,122 Net change in fund balance $ (2,511,369) (2,511,369) $ (56,733,540) (54,222,171) $ FUND BALANCE:

Beginning of year 56,733,540
End of year $ -
Budgeted Amounts

7.3.a
Packet Pg. 397 Attachment: 2024_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2023-24 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, 2024
40 Budgetary Comparison Schedule – PPFA 2023 Authority Bonds Variance with
Final Budget
Favorable
Original Final Actual (Unfavorable)
REVENUES:

Intergovernmental revenue - $ 7,163 $ 7,164 $ 1 $
Interest - 119,899 1,663,992 1,544,093
Total revenues 127,062 - 1,671,156 1,544,094
EXPENDITURES:

Current:

General government - 1,029,942 753,047 276,895
Debt service:

Principal - 58,500,000 10,000 58,490,000
Interest and fiscal charges - 1,858,092 1,471,095 386,997 Total expenditures 61,388,034 - 2,234,142 59,153,892

REVENUES OVER (UNDER)
EXPENDITURES (61,260,972) - (562,986) 60,697,986
OTHER FINANCING SOURCES (USES):

Proceeds from bond issuance - 54,370,000 54,370,000 -
Bond premium received - 6,617,848 6,617,848 -
Transfers in - - 44,058 44,058
Total other financing sources (uses) 60,987,848 - 61,031,906 44,058 Net change in fund balance $ (273,124) - $ 60,468,920 60,742,044 $ FUND BALANCE:

Beginning of year -
End of year $ 60,468,920
Budgeted Amounts

7.3.a
Packet Pg. 398 Attachment: 2024_Patterson, City of_PPFA_FINAL (Public Financing Authority’s 2023-24 Financial Audit Report) TO:

FROM:

BY:

WEST PATTERSON FINANCING AUTHORITY

AGENDA REPORT
Chair Clauzel and Members of the West Patterson Financing Authority Fernando Ulloa, Executive Director
Kevin Williams, Interim Finance Director
MEETING DATE: May 6, 2025
ITEM NO: 7.4
SUBJECT: Accept the West Patterson Financing Authority’s 2023-24 Financial Audit Report.

RECOMMENDATION
Motion to Accept the West Patterson Financing Authority’s 2023-24 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, 2024, and the results of operations, in accordance with generally accepted accounting principles.

The West Patterson Financing Authority’s 2023-24 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 $63 million as of June

7.4 Packet Pg. 399
30, 2024, which decreased $4 million from the ending balance in the prior fiscal year.

The governmental fund balance in the Authority’s totaled $29.8 million as of June 30, 2024, which was $4.6 million more than the ending balance in the prior fiscal year.

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

7.4 Packet Pg. 400
West Patterson
Financing Authority
Patterson, California
Basic Financial Statements
and Independent Auditors' Report
For the Year Ended June 30, 2024

7.4.a
Packet Pg. 401 Attachment: 2024_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2023-24 Financial Audit Report) West Patterson Financing Authority
Basic Financial Statements
For the Year Ended June 30, 2024
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 2001-1 Special Tax Bonds .............................................................................................................. 42 CFD 2005-1 Special Tax Bonds .............................................................................................................. 43 CFD 2015-1 Special Tax Bonds .............................................................................................................. 44 CFD 2018-1 Special Tax Bonds .............................................................................................................. 45

7.4.a
Packet Pg. 402 Attachment: 2024_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2023-24 Financial Audit Report) This page intentionally left blank.

7.4.a
Packet Pg. 403 Attachment: 2024_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2023-24 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, 2024, 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.

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Packet Pg. 404 Attachment: 2024_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2023-24 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.

7.4.a
Packet Pg. 405 Attachment: 2024_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2023-24 Financial Audit Report) To the Board of Directors
of the West Patterson Financing Authority
Patterson, California

Page 3 ends

Walnut Creek, California
March 14, 2025

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Packet Pg. 407 Attachment: 2024_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2023-24 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, 2024, 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 14, 2025.

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.

7.4.a
Packet Pg. 408 Attachment: 2024_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2023-24 Financial Audit Report) To the Board of Directors
of the West Patterson Financing Authority
Patterson, California

Page 2 ends

Walnut Creek, California
March 14, 2025

7.4.a
Packet Pg. 409 Attachment: 2024_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2023-24 Financial Audit Report) BASIC FINANCIAL STATEMENTS 7

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Packet Pg. 411 Attachment: 2024_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2023-24 Financial Audit Report)

GOVERNMENT-WIDE FINANCIAL STATEMENTS
9 7.4.a
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10 7.4.a
Packet Pg. 413 Attachment: 2024_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2023-24 Financial Audit Report) Governmental
Activities
ASSETS
Current assets:

Cash $ 8,014,974
Intergovernmental receivable 259,943
Interest receivable 100,325
Total current assets 8,375,242
Noncurrent assets:

Notes receivable - noncurrent 956,413
Restricted cash and investments 25,072,562
Total noncurrent assets 26,028,975
Total assets 34,404,217

LIABILITIES
Current liabilities:

Accounts payable 10,009
Accrued interest payable 1,656,744
Due to City of Patterson 4,552,336
Due within one year:

Long-term debt 2,274,259
Total current liabilities 8,493,348
Noncurrent liabilities:

Due in more than one year:

Long-term debt 89,221,970
Total noncurrent liabilities 89,221,970
Total liabilities 97,715,318

NET POSITION (DEFICIT)
Restricted for debt service 25,072,562
Unrestricted (deficit) (88,383,663)
Total net position (deficit) $ (63,311,101)
West Patterson Financing Authority
Statement of Net Position
June 30, 2024
See accompanying Notes to the Basic Financial Statements. 11 7.4.a
Packet Pg. 414 Attachment: 2024_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2023-24 Financial Audit Report) Revenue and
Changes in
Net Position
Governmental
Functions/Programs Expenses Activities
Governmental activities:

General government $ (6,117,111) 6,117,111 $
Interest and fiscal charges (4,809,984) 4,809,984
Total governmental activities (10,927,095) 10,927,095
Total primary government $ (10,927,095) 10,927,095
General revenues:

Assessment fee 7,595,743
Investment earnings 1,109,507
Capital contributions to the City of Patterson (2,035,371) Total general revenues 6,669,879
Changes in net position (4,257,216)
Net Position (Deficit):

Beginning of year (59,053,885)
End of year $ (63,311,101)
For the Year Ended June 30, 2024
Net (Expense)
West Patterson Financing Authority
Statement of Activities
See accompanying Notes to the Basic Financial Statements. 12 7.4.a
Packet Pg. 415 Attachment: 2024_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2023-24 Financial Audit Report)

FUND FINANCIAL STATEMENTS
13 7.4.a
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14 7.4.a
Packet Pg. 417 Attachment: 2024_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2023-24 Financial Audit Report)

GOVERNMENTAL FUND FINANCIAL STATEMENTS
15 7.4.a
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16 7.4.a
Packet Pg. 419 Attachment: 2024_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2023-24 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 5,675,328 $ 2,339,646 $ - $ - $ 8,014,974 $
Restricted cash and investments 213,104 8,755,786 429,721 15,673,951 25,072,562 Accounts receivable - - - - -
Intergovernmental receivable 86,392 133,576 - 39,975 259,943 Interest receivable 78,273 22,052 - - 100,325
Notes receivable 956,413 - - - 956,413
Total assets $ 11,251,060 7,009,510 $ 429,721 $ 15,713,926 $ 34,404,217 $

LIABILITIES, DEFERRED INFLOWS

OF RESOURCES, AND FUND BALANCES
LIABILITIES:

Accounts payable - $ 5,050 $ 3,130 $ 1,829 $ 10,009 $
Due to City of Patterson - - 47,815 4,504,521 4,552,336 Total liabilities 5,050 - 50,945 4,506,350 4,562,345
FUND BALANCES:

Restricted for debt service 7,009,510 11,246,010 378,776 11,207,576 29,841,872 Total fund balances 11,246,010 7,009,510 378,776 11,207,576 29,841,872 Total liabilities, deferred inflows
of resources, and fund balance $ 11,251,060 7,009,510 $ 429,721 $ 15,713,926 $ 34,404,217 $ West Patterson Financing Authority
Balance Sheet
Governmental Funds
June 30, 2024
See accompanying Notes to the Basic Financial Statements. 17 7.4.a
Packet Pg. 420 Attachment: 2024_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2023-24 Financial Audit Report) Total fund balances of governmental funds $ 29,841,872
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. (1,656,744) 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 (91,496,229)
Net position (deficit) of governmental activities $ (63,311,101) West Patterson Financing Authority
Reconciliation of the Governmental Funds
Balance Sheet to the Government-Wide Statement of Net Position June 30, 2024
See accompanying Notes to the Basic Financial Statements. 18 7.4.a
Packet Pg. 421 Attachment: 2024_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2023-24 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 5,466,153 $ 1,134,574 $ 299,088 $ 700,278 $ 7,600,093 $ Interest 257,018 479,240 777 372,472 1,109,507
Total revenues 1,613,814 5,723,171 299,865 1,072,750 8,709,600 EXPENDITURES:

General administration 567 11,550 7,985 6,023,656 6,043,758 Project payments 73,353 - - - 73,353
Debt service:

Principal 1,911,812 135,000 50,000 30,000 2,126,812
Interest and fiscal charges 3,205,484 657,225 240,338 593,674 4,696,721 Total expenditures 803,775 5,191,216 298,323 6,647,330 12,940,644

REVENUES OVER (UNDER)
EXPENDITURES 810,039 531,955 1,542 (5,574,580) (4,231,044) OTHER FINANCING SOURCES (USES):

Proceeds from issuance of debt - - - 10,905,000 10,905,000 Capital contributions to the City of Patterson (1,792,945) (186,312) - (56,114) (2,035,371) Total other financing sources (uses) (186,312) (1,792,945) - 10,901,976 8,922,719 Net change in fund balances 623,727 (1,260,990) 1,542 5,327,396 4,691,675 FUND BALANCES:

Beginning of year 8,270,500 10,622,283 377,234 5,880,180 25,150,197 End of year $ 11,246,010 7,009,510 $ 378,776 $ 11,207,576 $ 29,841,872 $ West Patterson Financing Authority
Statement of Revenues, Expenditures, and Changes in Fund Balance Governmental Funds
For the Year Ended June 30, 2024
See accompanying Notes to the Basic Financial Statements. 19 7.4.a
Packet Pg. 422 Attachment: 2024_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2023-24 Financial Audit Report) Net change in fund balances - total governmental funds: $ 4,691,675 Amounts reported for governmental activities in the Statement of Activities are different because:

Issuance of long-term liabilities provides current financial resources to governmental funds, but the issuance increased long-term liabilities in the Government-Wide Statement of Net Position.

Bonds payable (10,905,000)
Premium on bonds payable (53,090)
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 2,126,812
Amortization of bond premium and discount 28,420
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. (141,683) Change in net position of governmental activities $ (4,257,216) 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, 2024
See accompanying Notes to the Basic Financial Statements. 20 7.4.a
Packet Pg. 423 Attachment: 2024_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2023-24 Financial Audit Report) 21 NOTES TO THE BASIC FINANCIAL STATEMENTS

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Packet Pg. 425 Attachment: 2024_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2023-24 Financial Audit Report) West Patterson Financing Authority
Index to the Notes to the Basic Financial Statements
For the Year Ended June 30, 2024
23 Page
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

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Packet Pg. 427 Attachment: 2024_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2023-24 Financial Audit Report) West Patterson Financing Authority
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024
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.

7.4.a
Packet Pg. 428 Attachment: 2024_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2023-24 Financial Audit Report) West Patterson Financing Authority
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
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.

7.4.a
Packet Pg. 429 Attachment: 2024_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2023-24 Financial Audit Report) West Patterson Financing Authority
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
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.

7.4.a
Packet Pg. 430 Attachment: 2024_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2023-24 Financial Audit Report) West Patterson Financing Authority
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
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, 2024.

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

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, 2024:

Governmental
Activities
Cash and investments 8,014,974 $
Restricted cash and investments with fiscal agents 25,072,562 Total cash and investments $ 33,087,536

7.4.a
Packet Pg. 431 Attachment: 2024_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2023-24 Financial Audit Report) West Patterson Financing Authority
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
29 Note 2 – Cash and Investments (Continued)
Cash, cash equivalents, and investments, consisted of the following at June 30, 2024:

Cash and cash equivalents:

Pooled cash with the City of Patterson 8,014,974 $
Total cash and cash equivalents 8,014,974
Investments:

Money market mutual funds 25,072,562
Total investments 25,072,562
Total cash and investments $ 33,087,536
At June 30, 2024, 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, 2024:

Measurement Valuation
Fair Value Input Technique
Investments:

Money market mutual funds 25,072,562 $ Uncategorized N/A Total investments $ 25,072,562
A. Cash Deposits
The carrying amounts of the Authority’s pooled cash and investment with the City was $8,943,171 at June 30, 2024. 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.

7.4.a
Packet Pg. 432 Attachment: 2024_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2023-24 Financial Audit Report) West Patterson Financing Authority
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
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

7.4.a
Packet Pg. 433 Attachment: 2024_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2023-24 Financial Audit Report) West Patterson Financing Authority
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
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 25,072,562 $ 25,072,562 $
Total investments $ 25,072,562 25,072,562 $
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 25,072,562 $ N/A AAAm Aaa-mf
Total investments $ 25,072,562
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, 2024.

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.

7.4.a
Packet Pg. 434 Attachment: 2024_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2023-24 Financial Audit Report) West Patterson Financing Authority
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
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, 2024, the outstanding balance of the note receivable was $956,413.

Note 4 – Due to City of Patterson
At June 30, 2024, the Authority owes the City in the amount of $47,815 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, 2024 is as follows:

Original Balance Balance Due Within Due In More
Issuance July 1, 2023 Additions Deletions June 30, 2024 One Year Than One Year Public Offering:

CFD 2001-1 Series:

Series 2013 A-1 Special Tax Bonds 35,714,049 $ 29,540,762 $ - $ (864,780) $ 28,675,982 $ 905,275 $ 27,770,707 $ Series 2013 A-2 Special Tax Bonds 29,486,669 23,885,233 - (925,885) 22,959,348 994,555 21,964,793 Series 2013 B Special Tax Bonds 4,353,803 3,476,156 - (121,147) 3,355,009 124,429 3,230,580 CFD 2005-1 West Patterson Business Park Series:

Series 2015 Special Tax Bonds 9,630,000 9,050,000 - (130,000) 8,920,000 145,000 8,775,000 Less: bond discount (302,797) (214,471) - 12,606 (201,865) - (201,865) Series 2021 Special Tax Bonds 6,800,000 6,775,000 - (5,000) 6,770,000 10,000 6,760,000 Add: bond premium 680,313 668,974 - (22,677) 646,297 - 646,297 CFD 2015-1 Arambel-KND Special Tax Bonds 4,775,000 4,610,000 - (50,000) 4,560,000 60,000 4,500,000 Add: bond premium 10,861 8,327 - (362) 7,965 - 7,965
CFD 2018-1 Villages of Patterson Special Tax Bonds 4,465,000 4,415,000 - (30,000) 4,385,000 35,000 4,350,000 Add: bond premium 486,498 478,390 - (16,217) 462,173 - 462,173 CFD 2018-1 2024 Bonds (2nd bond tranche) 10,905,000 - 10,905,000 - 10,905,000 - 10,905,000 Add: bond premium 53,090 - 53,090 (1,770) 51,320 - 51,320 Total long-term debt $ 82,693,371 107,057,486 $ 10,958,090 $ (2,155,232) $ 91,496,229 $ 2,274,259 $ 89,221,970 $ 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, 2024 was $28,713,701.

7.4.a
Packet Pg. 435 Attachment: 2024_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2023-24 Financial Audit Report) West Patterson Financing Authority
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
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
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 1,121,312 1,354,347 2,475,659
2030-2034 6,290,081 5,766,661 12,056,742
2035-2039 12,452,957 3,268,289 15,721,246
2040 4,795,015 134,740 4,929,755
Total 28,713,701 $ 16,541,127 $ 45,254,828 $
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, 2024 was $22,989,799.

The annual debt service requirements are as follows:

Year Ending
June 30, Principal Interest Total
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 1,419,658 1,169,443 2,589,101
2030-2034 8,905,618 4,201,837 13,107,455
2035-2039 7,674,544 1,449,159 9,123,703
2040 402,038 13,287 415,325
Total 22,989,799 $ 12,339,608 $ 35,329,407 $
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, 2024 was $3,359,442.

7.4.a
Packet Pg. 436 Attachment: 2024_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2023-24 Financial Audit Report) West Patterson Financing Authority
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
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
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 160,737 180,440 341,177
2030-2034 977,812 722,312 1,700,124
2035-2039 1,346,615 341,316 1,687,931
2040 325,003 10,741 335,744
Total 3,359,442 $ 2,073,333 $ 5,432,775 $
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, 2024 was $8,920,000.

The annual debt service requirements are as follows:

Year Ending
June 30, Principal Interest Total
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 215,000 361,469 576,469
2030-2034 1,410,000 1,704,069 3,114,069
2035-2039 2,100,000 1,265,353 3,365,353
2040-2044 3,005,000 696,263 3,701,263
2045-2046 1,510,000 69,075 1,579,075
Total 8,920,000 $ 5,615,761 $ 14,535,761 $

7.4.a
Packet Pg. 437 Attachment: 2024_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2023-24 Financial Audit Report) West Patterson Financing Authority
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
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, 2024 was $6,770,000.

The annual debt service requirements are as follows:

Year Ending
June 30, Principal Interest Total
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
2029 35,000 260,669 295,669
2030-2034 275,000 1,287,706 1,562,706
2035-2039 490,000 1,231,744 1,721,744
2040-2044 785,000 1,105,900 1,890,900
2045-2049 3,830,000 755,600 4,585,600
2050 1,280,000 25,600 1,305,600
Total 6,770,000 $ 5,715,576 $ 12,485,576 $
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, 2024 was $4,560,000.

7.4.a
Packet Pg. 438 Attachment: 2024_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2023-24 Financial Audit Report) West Patterson Financing Authority
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
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
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 95,000 221,944 316,944
2030-2034 680,000 1,015,350 1,695,350
2035-2039 1,070,000 787,500 1,857,500
2040-2044 1,600,000 441,000 2,041,000
2045-2046 830,000 44,363 874,363
Total 4,560,000 $ 3,439,746 $ 7,999,746 $
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, 2024 was $4,385,000.

The annual debt service requirements are as follows:

Year Ending
June 30, Principal Interest Total
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 55,000 167,500 222,500
2030-2034 395,000 795,500 1,190,500
2035-2039 625,000 694,500 1,319,500
2040-2044 905,000 542,500 1,447,500
2045-2049 1,260,000 327,600 1,587,600
2050-2052 975,000 60,100 1,035,100
Total 4,385,000 $ 3,274,800 $ 7,659,800 $

7.4.a
Packet Pg. 439 Attachment: 2024_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2023-24 Financial Audit Report) West Patterson Financing Authority
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
37 Note 5 – Long-Term Debt (Continued)
Community Facilities District 2018-1 (Villages of Patterson) Special Tax Bonds, Series 2024 On February 22, 2024 the West Patterson Financing Authority issued $10,905,000 Community Facilities District No. 2018-1 (Villages of Patterson) Special Tax Bonds, Series 2024 (“CFD 2018-1 Series 2024”). The bonds were issued with an original issue premium of $53,090. The bonds were sold as non-rated securities, have a final maturity date of 2054 with coupons ranging from 4.375% to 5.00% and yields ranging from 3.81% to 4.82%. The CFD 2018-1 Series 2024 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 2024 bonds. Interest on the Bonds is payable semiannually on March 1 and September 1 of each year, commencing September 1, 2024. Principal on the CFD 2018-1 Series 2024 bonds is payable annually beginning September 1, 2025 and each year thereafter until September 1, 2054. The outstanding balance of the CFD 2018-1 Series 2024 bonds at June 30, 2024 was $10,905,000.

Year Ending
June 30, Principal Interest Total
2025 - $ 538,119 $ 538,119 $
2026 10,000 524,744 534,744
2027 20,000 523,994 543,994
2028 35,000 522,619 557,619
2029 50,000 520,494 570,494
2030-2034 460,000 2,546,969 3,006,969
2035-2039 930,000 2,375,469 3,305,469
2040-2044 1,560,000 2,083,031 3,643,031
2045-2049 2,375,000 1,646,172 4,021,172
2050-2054 4,195,000 923,519 5,118,519
2055 1,270,000 31,750 1,301,750
Total 10,905,000 $ 12,236,880 $ 23,141,880 $

7.4.a
Packet Pg. 440 Attachment: 2024_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2023-24 Financial Audit Report) 38 This page intentionally left blank.

7.4.a
Packet Pg. 441 Attachment: 2024_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2023-24 Financial Audit Report) 39 REQUIRED SUPPLEMENTARY INFORMATION

7.4.a
Packet Pg. 442 Attachment: 2024_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2023-24 Financial Audit Report) 40 This page intentionally left blank.

7.4.a
Packet Pg. 443 Attachment: 2024_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2023-24 Financial Audit Report) Western Patterson Financing Authority
Required Supplementary Information (Unaudited)
For the Year Ended June 30, 2024
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.

7.4.a
Packet Pg. 444 Attachment: 2024_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2023-24 Financial Audit Report) West Patterson Financing Authority
Required Supplementary Information (Unaudited) (Continued) For the Year Ended June 30, 2024
42 Budgetary Comparison Schedule – CFD 2001-1 Special Tax Bonds Variance with
Final Budget
Favorable
Original Final Actual (Unfavorable)
REVENUES:

Assessment fee 5,572,899 $ 5,572,899 $ 5,466,153 $ (106,746) $ Interest 63,853 63,853 257,018 193,165
Total revenues 5,636,752 5,636,752 5,723,171 86,419
EXPENDITURES:

General administration 589 589 567 22
Project payments - 42,763 73,353 (30,590)
Debt service:

Principal 1,844,870 1,844,870 1,911,812 (66,942)
Interest and fiscal charges 3,430,747 3,430,747 3,205,484 225,263 Total expenditures 5,318,969 5,276,206 5,191,216 127,753 Net change in fund balance $ 317,783 360,546 $ (1,260,990) (1,578,773) $ FUND BALANCE:

Beginning of year 8,270,500
End of year $ 7,009,510
Budgeted Amounts

7.4.a
Packet Pg. 445 Attachment: 2024_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2023-24 Financial Audit Report) West Patterson Financing Authority
Required Supplementary Information (Unaudited) (Continued) For the Year Ended June 30, 2024
43 Budgetary Comparison Schedule – CFD 2005-1 Special Tax Bonds Variance with
Final Budget
Favorable
Original Final Actual (Unfavorable)
REVENUES:

Assessment fee 1,115,787 $ 1,115,787 $ 1,134,574 $ 18,787 $ Interest 10,260 10,260 479,240 468,980
Total revenues 1,126,047 1,126,047 1,613,814 487,767
EXPENDITURES:

General administration 25,752 25,752 11,550 14,202
Debt service:

Principal 135,000 135,000 135,000 -
Interest and fiscal charges 657,225 657,225 657,225 -
Total expenditures 817,977 817,977 803,775 14,202

REVENUES OVER (UNDER)
EXPENDITURES 308,070 308,070 810,039 501,969
OTHER FINANCING SOURCES (USES):

Capital contributions to the City of Patterson - (186,312) (186,312) - Total other financing sources (uses) (186,312) - (186,312) - Net change in fund balance $ 121,758 308,070 $ 623,727 501,969 $ FUND BALANCE:

Beginning of year 10,622,283
End of year $ 11,246,010
Budgeted Amounts

7.4.a
Packet Pg. 446 Attachment: 2024_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2023-24 Financial Audit Report) West Patterson Financing Authority
Required Supplementary Information (Unaudited) (Continued) For the Year Ended June 30, 2024
44 Budgetary Comparison Schedule – CFD 2015-1 Special Tax Bonds Variance with
Final Budget
Favorable
Original Final Actual (Unfavorable)
REVENUES:

Assessment fee 335,994 $ 335,994 $ 299,088 $ (36,906) $ Interest 385 385 777 392
Total revenues 336,379 336,379 299,865 (36,514)
EXPENDITURES:

General administration 14,350 14,111 7,985 6,126
Debt service:

Principal 50,000 50,000 50,000 -
Interest and fiscal charges 241,588 241,588 240,338 1,250 Total expenditures 305,699 305,938 298,323 7,376
Net change in fund balance $ 30,680 30,441 $ 1,542 (29,138) $ FUND BALANCE:

Beginning of year 377,234
End of year $ 378,776
Budgeted Amounts

7.4.a
Packet Pg. 447 Attachment: 2024_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2023-24 Financial Audit Report) West Patterson Financing Authority
Required Supplementary Information (Unaudited) (Continued) For the Year Ended June 30, 2024
45 Budgetary Comparison Schedule – CFD 2018-1 Special Tax Bonds Variance with
Final Budget
Favorable
Original Final Actual (Unfavorable)
REVENUES:

Assessment fee 539,814 $ 539,814 $ 700,278 $ 160,464 $
Interest 4,265 4,265 372,472 368,207
Total revenues 544,079 544,079 1,072,750 528,671
EXPENDITURES:

General administration 53,879 6,053,879 6,023,656 30,223 Debt service:

Principal 30,000 30,000 30,000 -
Interest and fiscal charges 174,650 618,231 593,674 24,557 Total expenditures 6,702,110 258,529 6,647,330 54,780

REVENUES OVER (UNDER)
EXPENDITURES (6,158,031) 285,550 (5,574,580) 583,451
OTHER FINANCING SOURCES (USES):

Capital contributions to the City of Patterson - 10,905,000 10,905,000 - Capital contributions to the City of Patterson - (56,114) (56,114) - Total other financing sources (uses) 10,848,886 - 10,848,886 - Net change in fund balance $ 4,690,855 285,550 $ 5,274,306 583,451 $ FUND BALANCE:

Beginning of year 5,880,180
End of year $ 11,154,486
Budgeted Amounts

7.4.a
Packet Pg. 448 Attachment: 2024_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2023-24 Financial Audit Report) 46 This page intentionally left blank.

7.4.a
Packet Pg. 449 Attachment: 2024_Patterson, City of_WPFA_FINAL (West Patterson Financing Authority’s 2023-24 Financial Audit Report)

Patterson City CouncilMay 6, 2025

Patterson City Council
May 6, 2025