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Contract No: ________ For the Contract between the City of Richmond and
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EXHIBIT B
PAYMENT PROVISIONS
1. COMPENSATION TO CONTRACTOR:
a. Provided Contractor is not in default under this Contract, Contractor shall be compensated in the manner set forth herein.
b. All payments made pursuant to this Contract shall be subject to the Contract Payment Limit. The Payment Limit includes expenses (phones, photocopying, meals and travel, etc.). Invoices shall be adequately detailed, based on accurate records, and be in a form reasonably satisfactory to the City. Contractor may be required to provide back-up material upon request.
c. All City vendors receiving new contracts shall sign up to receive electronic payments through the City’s Automated Clearinghouse (ACH) payments service/provider.
2. SUBMISSION OF INVOICES:
Contractor shall submit timely invoices by email to
[email protected] and/or to the following address:
Attention: City of Richmond Finance/Account Payable
Project Manager: _______________________
P.O. Box 4046
Richmond, CA 94804
3. All invoices that are submitted by Contractor shall be subject to the approval of the City Project Manager, _______________________, before payments shall be authorized.
a. The City will pay invoice(s) within 45 days after completion of services to the City’s satisfaction. The City shall not pay late fees or interest.
b. All appropriate permits, certificates, and licenses, including a City business license shall be obtained and maintained for the duration of this Contract before any payment is authorized.
4. All insurance coverage required by this Contract shall be provided by the Contractor before this Contract is executed by the City. The insurance coverage required by this Contract shall be maintained by Contractor for the duration of this Contract and must be in place before any payment is authorized.
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EXHIBIT C
AUTHORIZED REPRESENTATIVES AND NOTICES
1. All required written notices shall be delivered: (i) by hand; or (ii) sent by registered, express, or certified mail, with return receipt requested or with delivery confirmation requested from the U.S. postal service; or (iii) sent by overnight or same day courier service at the party’s respective address listed in this Section.
2. Each notice shall be deemed to have been received on the earlier to occur of:
actual delivery or the date on which delivery is refused; or three (3) days after notice is deposited in the U.S. mail or with a courier service in the manner described above (Sundays and City holidays excepted).
3. Either party may, at any time, change its notice address (other than to a post office box address) by giving the other party three (3) days prior written notice of the new address.
4. All notices, demands, requests, or approvals from Contractor to the City shall be addressed to the City at:
City of Richmond
450 Civic Center Plaza
Richmond, CA 94804
Email: ________________________________________________
5. All notices, demands, requests, or approvals from the City to Contractor shall be addressed to Contractor at:
Attn:
Email: ________________________________________________ 588
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EXHIBIT D
GENERAL CONDITIONS
1. INDEPENDENT PARTIES:
Contractor hereby declares that Contractor is engaged as an independent business and Contractor agrees to perform the services as an independent contractor.
The manner and means of conducting the services and tasks are under the control of Contractor except to the extent they are limited by statute, rule or regulation and the express terms of this Contract. No civil service status or other right of employment will be acquired by virtue of Contractor’s services. None of the benefits provided by the City to its employees, including but not limited to unemployment insurance, workers’ compensation plans, vacation and sick leave, are available from the City to Contractor, its employees or agents. Deductions shall not be made for any state or federal taxes, FICA payments, PERS payments, or other purposes normally associated with an employer-employee relationship from any compensation due to Contractor. Payments of the above items, if required, are the responsibility of Contractor.
2. TIME IS OF THE ESSENCE:
Contractor and the City agree that time is of the essence regarding the performance of this Contract.
3. STANDARD OF CARE:
Contractor agrees to perform all services hereunder in a manner commensurate with the prevailing standards of like professionals or service Contractors, as applicable, in the San Francisco Bay Area and agrees that all services shall be performed by qualified and experienced personnel who are not employed by the City.
4. IMMIGRATION REFORM AND CONTROL ACT (IRCA):
Contractor assumes all responsibility for verifying the identity and employment authorization of all of its employees performing work hereunder, pursuant to all applicable IRCA or other federal, or state rules and regulations. Contractor shall indemnify, defend, and hold the City harmless from and against any loss, damage, liability, costs or expenses arising from any noncompliance of this provision by Contractor.
5. NON-DISCRIMINATION:
Consistent with the City’s policy and state and federal law that harassment and discrimination are unacceptable conduct, Contractor and its employees, contractors, and agents shall not harass or discriminate against any job applicant, City employee, or any other person on the basis of any kind of any statutorily (federal, state or local) protected class, including but not limited to: race, religious creed, color, national origin, ancestry, 589
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disability (both mental and physical) including HIV and AIDS, medical condition (e.g. cancer), genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, pregnancy, political affiliation, military and veteran status or legitimate union activities. Contractor agrees that any violation of this provision shall constitute a material breach of this Contract.
6. CITY PROPERTY:
a. Each and every report, draft, work product, map, record, applicable plans, drawings, calculation, data, specification, video, graphic, or any other material or document produced, prepared or caused to be prepared by Contractor pursuant to or in connection with this Contract shall be the exclusive property of the City.
b. Notwithstanding the foregoing, Contractor shall not be obligated to provide to City proprietary software or data which Contractor has developed or had developed for Contractor's own use; provided, however, that Contractor shall, pursuant to Section 11 below, indemnify, defend and hold the City harmless from and against any discovery or Public Records Act request seeking the disclosure of such proprietary software or data.
c. No report, information or other data given to or prepared or assembled by Contractor pursuant to this Contract shall be made available to any individual or organization by Contractor without prior approval of the City Manager or their designee.
d. Contractor shall, at such time and in such form as City Manager or their designee may require, furnish reports concerning the status of services and tasks required under this Contract.
7. RECORDS:
a. Contractor shall maintain complete and accurate records with respect to the services, tasks, work, documents and data in sufficient detail to permit an evaluation of Contractor’s performance under the Contract, as well as maintain books and records related to sales, costs, expenses, receipts and other such information required by the City that relate to the performance of the services and tasks under this Contract (collectively the “Records”).
b. All Records shall be maintained in accordance with generally accepted accounting principles and shall be clearly identified and readily accessible. Contractor shall provide free access to the Records to the representatives of the City or its designees during regular business hours upon reasonable prior notice. The City has the right to examine and audit the Records, and to make copies or transcripts therefrom as necessary, and to allow inspection of all proceedings and activities related to this Contract. Such Records, together with supporting documents, shall be kept separate from other documents and records and shall be maintained by Contractor for a period of five (5) years after receipt of final payment.
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c. If supplemental examination or audit of the Records is necessary due to concerns raised by the City’s preliminary examination or audit of records, and the City’s supplemental examination or audit of the records discloses a failure to adhere to appropriate internal financial controls, or other breach of this Contract or failure to act in good faith, then Contractor shall reimburse the City for all reasonable costs and expenses associated with the supplemental examination or audit.
8. PERMITS AND LICENSES:
Contractor, at its sole expense, shall obtain and maintain during the term of this Contract, all appropriate permits, certificates and licenses, including a City business license, required in connection with the performance of the services and tasks hereunder.
The failure to obtain such permits and licenses shall be a material breach of this Contract and grounds for immediate termination by City; provided, however, that City may waive the business license requirement in writing under unusual or extraordinary circumstances without necessitating any modification of this Contract to reflect such waiver.
9. TERMINATION:
a. Termination Without Default. Notwithstanding any provision herein to the contrary, the City may, in its sole and absolute discretion and without cause, terminate this Contract at any time prior to completion by Contractor of the project or services hereunder immediately upon transmission of written notice to Contractor as provided in Exhibit C “Authorized Representatives and Notices”.
b. Termination in the Event of Default. Should Contractor fail to perform any of its obligations hereunder, within the time and in the manner provided or otherwise violate any of the terms of this Contract, City may immediately terminate this Contract by giving written notice of such termination, stating the reasons for such termination. Contractor shall be compensated as provided in Exhibit B; provided, however, there shall be deducted from such amount the amount of damage, including attorney's fees, expert witness fees and costs, if any, sustained by City by virtue of Contractor's breach of this Contract. Additionally, in the event of such termination, the City may proceed with the work in any reasonable manner it chooses.
10. CONFLICT OF INTEREST:
Contractor acknowledges, represents and warrants that Contractor shall avoid all conflicts of interest (as defined under any federal, state or local statute, rule or regulation, or at common law) with respect to this Contract. Contractor further acknowledges, represents and warrants that no City official or employee has any economic interest, as defined in Title 2, California Code of Regulations §§ 18703.1 through 18703.5, with Contractor that would invalidate this Contract. Contractor acknowledges that in the event that Contractor shall be found by any judicial or administrative body to have any conflict of interest (as defined above) with respect to this Contract, all consideration received under 591
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this Contract shall be forfeited and returned to City forthwith. This provision shall survive the termination of this Contract for one (1) year.
11. HOLD HARMLESS:
a. To the fullest extent permitted by law, Contractor shall indemnify, defend (with counsel acceptable to the City) and hold harmless the City, its City Council, boards, commissions, officials, employees, agents and volunteers (“Indemnitees”) from and against any and all loss, damages, liability, obligations, claims, suits, judgments, costs and expenses whatsoever, including attorney’s fees and costs of litigation (“Claims”), arising from or in any manner connected to Contractor’s performance of its obligations under this Contract or failure to comply with any of its obligations under this Contract or out of the operations conducted by Contractor even if the City is found to have been negligent. If the Claims filed against Indemnitees allege negligence, recklessness or willful misconduct on the part of Contractor, Contractor shall have no right of reimbursement against Indemnitees for the costs of defense even if negligence, recklessness or willful misconduct is not found on the part of Contractor. Contractor shall not have any obligations to indemnify Indemnitees if the loss or damage is found to have resulted solely from the negligence or the willful misconduct of the City. The defense and indemnification obligations of this Contract are undertaken in addition to, and shall not in any way be limited by, the insurance obligations contained in this Contract.
b. This indemnification obligation shall survive this Contract and shall not be limited by any term of any insurance policy required under this Contract; provided however, that if this Contract is for design professional services, this indemnity provision is limited to claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the design professional (as defined in California Civil Code section 2782.8).
12. LIMITATIONS UPON SUBCONTRACTING AND ASSIGNMENT:
a. This Contract binds the heirs, successors, assigns and representatives of Contractor. The Contractor shall not enter into subcontracts for any work contemplated under this Contract and shall not assign this Contract, nor any portion hereof or monies due or to become due, without the prior written consent of the City Council or its designee.
b. Contractor shall not assign, sublease, hypothecate, or transfer this Contract, or any interest therein, directly or indirectly, by operation of law or otherwise, without prior written consent of the City Manager. Contractor shall submit a written request for consent to transfer to the City Manager at least thirty (30) days in advance of the desired transfer.
The City Manager or their designee may consent or reject such request in their sole and absolute discretion. Any attempt to do so without said consent shall be null and void, and any assignee, sublessee, hypothecate or transferee shall acquire no right or interest by reason of such attempted assignment, hypothecation or transfer. However, claims for 592
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money against the City under this Contract may be assigned by Contractor to a bank, trust company or other financial institution without prior written consent.
c. The sale, assignment, transfer or other disposition of any of the issued and outstanding capital stock of Contractor (if applicable), or of the interest of any general partner or joint venturer or syndicate member if Contractor is a partnership or joint- venture or syndicate, which shall result in a change of control of Contractor, shall be deemed an assignment. For this purpose, control shall mean fifty percent or more of the voting power or twenty-five percent or more of the assets of the corporation, partnership or joint-venture.
d. Only those persons and/or businesses whose names and resumés are attached to this Contract shall be used in the performance of this Contract. However, if after the start of this Contract, Contractor wishes to use sub-contractors, at no additional costs to the City, then Contractor shall submit a written request for consent to add sub- contractors including the names of the sub-contractors and the reasons for the request to the City Manager at least five (5) days in advance. The City Manager may consent or reject such requests in their sole and absolute discretion.
e. Each sub-contractor shall be required to furnish proof of workers’ compensation insurance and shall also be required to carry general, automobile and professional liability insurance (as applicable) in reasonable conformity to the insurance carried by Contractor.
f. In addition, any tasks or services performed by sub-contractors shall be subject to each provision of this Contract. Contractor shall include the following language in their Contract with any sub-contractor: “Sub-Contractors hired by Contractor agree to be bound to Contractor and the City in the same manner and to the same extent as Contractor is bound to the City.”
g. The requirements in this Section 12 shall not apply to persons who are merely providing materials, supplies, data or information that Contractor then analyzes and incorporates into its work product.
13. SAFETY:
a. Contractor acknowledges that the City is committed to the highest standards of workplace safety. Contractor will be solely and completely responsible for conditions of all vehicles owned or operated by Contractor, including the safety of all persons and property during performance of the services and tasks under this Contract.
Contractor shall assume sole and complete responsibility for the safety of Contractor's employees and any of subcontractor's employees This requirement will apply continuously and not be limited to normal working hours. In addition, Contractor will comply with all safety provisions in conformance with U.S. Department of Labor Occupational Safety and Health Act, any equivalent state law, and all other applicable 593
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federal, state, county and local laws, ordinances, codes, and any regulations that may be detailed in other parts of the Contract. Where any of these are in conflict, the more stringent requirements will be followed. Contractor’s failure to thoroughly familiarize itself with the aforementioned safety provisions will not relieve it from compliance with the obligations and penalties set forth herein.
b. Contractor will immediately notify the City (in no event less than 24 hours) of any incident of death, serious personal injury or substantial property damage that occurs in connection with the performance of this Contract. Contractor will promptly submit to the City a written report of all incidents that occur in connection with this Contract. This report must include the following information: (i) name and address of injured or deceased person(s); (ii) name and address of Contractor’s employee(s) involved in the incident; (iii) name and address of Contractor’s liability insurance carrier; (iv) a detailed description of the incident; and (v) a police report.
c. Contractor acknowledges that the City shall have the right to impose, at the City’s sole discretion, requirements that it deems are necessary to protect the health and safety of the City employees, residents, and visitors. Contractor agrees to comply with all such requirements, including, but not limited to, mandatory vaccinations, the use of personal protective equipment (e.g. masks), physical distancing, and health screenings.
Contractor also agrees to make available to the City, at the City’s request, records to demonstrate Contractor’s compliance with this Section.
14. INSURANCE:
Insurance requirements are set forth in Exhibit F to this Contract. Contractor shall abide by the insurance requirements set forth in said Exhibit F.
15. COMPLIANCE WITH ALL APPLICABLE LAWS:
a. During the term of this Contract, Contractor shall keep fully informed of all existing and future state and federal laws and all municipal ordinances and regulations of the City of Richmond which affect the manner in which the services or tasks are to be performed by Contractor, as well as all such orders and decrees of bodies or tribunals having any jurisdiction or authority over the same. Contractor shall comply with all applicable laws, state and federal and all ordinances, rules and regulations enacted or issued by the City. Compliance under this provision includes compliance with all provisions of the Richmond Municipal Code ("Municipal Code"), including Chapters 2.50,
2.52, 2.56, and 2.60, if applicable.
b. Contractor acknowledges that under § 2.60.070 of the Municipal Code ("Living Wage Ordinance"), Contractor is required to provide the City with documents and information verifying its compliance with the Living Wage Ordinance. Contractor shall notify each of its affected employees with regards to the wages that are required to be paid pursuant to the Living Wage Ordinance as prescribed in § 2.60.070 of the Municipal Code.
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c. Contractor shall comply with § 2.28.030 of the Municipal Code, obligating every Contractor or sub-Contractor under an agreement or sub-agreement with the City for public works, goods or services to refrain from discriminatory employment or practices on the basis of race, color, sex, sexual orientation, religious creed, national origin or ancestry of any employee, any applicant for employment or any potential sub-contractor.
d. Contractor acknowledges that the City’s Drug Free Workplace Policy, Violence in the Workplace Policy and the Policy Against Workplace Harassment, are available on the City’s website at http://www.ci.richmond.ca.us/workplacepolicies.
Contractor agrees to abide by the terms and conditions of said policies.
16. INTEGRATED CONTRACT:
The Recitals and exhibits are a material part of this Contract and are expressly incorporated herein. This Contract represents the full and complete understanding of every kind or nature whatsoever between the parties hereto, and all preliminary negotiations and agreements of whatsoever kind or nature are merged herein. No verbal agreement or implied covenant shall be held to vary the provisions hereof. Any modification of this Contract will be effective only by written execution signed by both the City and Contractor.
17. CONFLICTING PROVISIONS:
In the event of a conflict between these General Conditions and those of any Exhibit or attachment hereto, these General Conditions shall prevail; provided, however, that any Special Condition as set forth in Exhibit E shall prevail over these General Conditions. In the event of a conflict between the terms and conditions of any two or more Exhibits or attachments hereto, those prepared by City shall prevail over those prepared by the Contractor, and the terms and conditions preferred by the City shall prevail over those preferred by the Contractor.
18. FORCE MAJEURE:
Neither party hereto shall be considered in default in the performance of its obligations hereunder to the extent that the performance of such an obligation is prevented or delayed by reason of acts of God, strikes, boycotts, lock-outs, inability to procure materials not related to the price thereof, failure of power, restrictive governmental laws and regulations enacted after the date of this Contract, riots, civil unrest, acts of terrorism, insurrection, war, declaration of a state or national emergency or other reasons of a like nature not within the reasonable control of such party.
19. CONFLICT OF LAW:
This Contract shall be interpreted under, and enforced by the laws of the State of 595
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California without regard to any choice of law rules which may direct the application of laws of another jurisdiction. The Contract and obligations of the parties are subject to all valid laws, orders, rules, and regulations of the authorities having jurisdiction over this Contract (or the successors of those authorities). Any suits brought pursuant to this Contract shall be filed with the courts of the County of Contra Costa, State of California.
20. CLAIMS:
Any claim by Contractor against City hereunder shall be subject to Government Code §§ 800 et seq. The claims presentation provisions of said Act are hereby modified such that the presentation of all claims hereunder to the City shall be waived if not made within six months after accrual of the cause of action.
21. INTERPRETATION:
This Contract shall be interpreted as if drafted by both parties.
22. WARRANTY:
If any product is be provided to the City as part of this Contract, Contractor warrants as follows: Contractor possesses good title to the product and the right to transfer the product to City; the product shall be delivered to the City free from any security interest or other lien; the product meets any specifications contained herein; the product shall be free from material defects in materials and workmanship under normal use for a period of one (1) year from the date of delivery; and the product shall be fit for its intended purpose(s). Notwithstanding the foregoing, consumable and maintenance items (such as light bulbs and batteries) shall be warranted for a period of one hundred and eighty (180) days from the date of delivery. All repairs during the warranty period shall be promptly performed by Contractor, at Contractor's expense, including shipping.
23. SEVERABILITY:
In the event that any of the provisions or portions or applications thereof of this Contract are held to be unenforceable or invalid by any court of competent jurisdiction, City and Contractor shall negotiate an equitable adjustment in the provisions of the Contract with a view toward effecting the purpose of this Contract, and the validity and enforceability of the remaining provisions or portions or applications thereof, shall not be affected thereby.
24. AUTHORITY:
City warrants and represents that the signatory hereto (the Mayor of the City of Richmond or the City Manager) is duly authorized to enter into and execute this Contract on behalf of City. The party signing on behalf of Contractor warrants and represents that they are duly authorized to enter into and execute this Contract on behalf of Contractor, 596
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and shall be personally liable to City if they are not duly authorized to enter into and execute this Contract on behalf of Contractor.
25. WAIVER:
The waiver by City of any breach of any term or provision of this Contract shall not be construed as a waiver of any subsequent breach. Inspections or approvals, or statements by any officer, agent or employee of the City relating to the Contractor’s performance, or payment therefore, or any combination of these acts, shall not relieve the Contractor’s obligation to fulfill this Contract as prescribed; nor shall the City be thereby stopped from bringing any action for damages or enforcement arising from any failure to comply with any of the terms and conditions of this Contract.
26. COUNTERPARTS:
This Contract may be executed in any number of counterparts (including by fax, PDF, DocuSign, or other electronic means), each of which shall be deemed an original, but all of which shall constitute one and the same instrument.
27. SANCTUARY CITY CONTRACTING ORDINANCE (SCCO):
The Richmond Sanctuary City Contracting Ordinance No. 12-18 prohibits the City from granting and or retaining contracts with any person or entity that provides Data Broker or Extreme Vetting services to the U.S. Immigration and Customs Enforcement Division of the United States Department of Homeland Security (“ICE”). Contractor must submit the Sanctuary City Compliance Statement, attached hereto as Exhibit G. 597
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EXHIBIT E
SPECIAL CONDITIONS
The General Conditions are hereby amended to include the following modifications and/or provisions (if applicable, otherwise please state “NONE”):
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EXHIBIT F
INSURANCE PROVISIONS
☐ CHECK HERE IF RISK MANAGEMENT HAS APPROVED WAIVING INSURANCE REQUIREMENTS FOR THIS CONTRACT.
1. CERTIFICATES: Before the commencement of the terms of this Contract, and during the entire term of this Contract and any extension or modification thereof, Contractor shall furnish the City’s Risk Manager with certificates showing the type, amount, class of operations covered, effective dates and dates of expiration of insurance coverage in compliance with coverage requirements set forth by the City and incorporated herein.
Such certificates, which do not limit Contractor’s indemnification, shall also contain substantially the following statement:
“Should any of the above insurance covered by this certificate be canceled or coverage reduced before the expiration date thereof, the insurer affording coverage shall provide thirty (30) days’ advance written notice to the City of Richmond.
Attention: Risk Manager.”
Contractor shall maintain in force at all times during the performance of this Contract all appropriate coverage of insurance required by this Contract with an insurance company licensed to offer insurance business in the State of California with a current A.M. Best’s rating of no less than A:VII or Standard & Poor’s Rating (if rated) of at least BBB unless otherwise acceptable to the City. Contractor shall deliver updated insurance certificates to the City at the address set forth in Exhibit C prior to the expiration of the existing insurance certificate for the duration of the term of Contract.
Endorsements naming the City, its City Council, boards, commissions, officials, employees, agents, and volunteers as additional insured shall be submitted with the insurance certificates.
2. COVERAGE REQUIREMENTS: The City’s insurance requirements depend upon the type of service being provided and/or the provider. The City’s insurance requirements will fall into one of the following categories (unless otherwise provided by the City):
Consultants and Contractors – Type 1
Professional Services – Type 2
Environmental Risk/Hazardous Waste Material – Type 3
Lease of City Property – Type 4
Vendors, Suppliers, Small Grant Recipients & Nonprofit Organizations – Type 5 Transportation Providers – Type 6
Professional Services Pyrotechnics – Type 7
Cyber and I.T. Risks – Type 8
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The insurance requirements classification applicable to this Contract shall be attached to this Exhibit F and made a part hereof.
3. FAILURE TO SECURE: If Contractor at any time during the term hereof should fail to secure or maintain the foregoing insurance, the City shall be permitted to obtain such insurance in Contractor’s name or as an agent of Contractor and shall be compensated by Contractor for the costs of the insurance premiums at the maximum rate permitted by law and computed from the date written notice is received that the premiums have not been paid.
4. SUFFICIENCY OF INSURANCE: The insurance limits required by the City are not represented as being sufficient to protect Contractor. Contractor is advised to consult Contractor’s insurance broker to determine adequate coverage for Contractor. The coverage and limits shall be (1) the minimum coverage and limits specified in this Contract; or (2) the broader coverage and maximum limits of the coverage carried by or available to Contractor; whichever is greater.
INSERT INSURANCE REQUIREMENTS CLASSIFICATION APPLICABLE TO THIS CONTRACT: (IF NECESSARY, CONFIRM WITH RISK MANAGER)
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___ Exhibit F
___ Section 8
City of Richmond - Insurance Requirements – Type 1:
Consultants and Contractors
Type 1 – Page 1 of 4
Revised: September 2011
In all instances where a CONTRACTOR or its representatives will be conducting business and/or providing services, the City requires the following MINIMUM insurance requirements and limits.
CONTRACTOR shall procure and maintain for the duration of the contract, agreement, or other order for work, services or supplies, insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the work hereunder and the results of that work by the CONTRACTOR, its agents, representatives, employees or subcontractors. Maintenance of proper insurance coverage is a material element of the contract. Failure to maintain or renew coverage or to provide evidence of renewal may be treated by the City as a material breach of contract.
CONTRACTOR agrees that in the event of loss due to any of the perils for which it has agreed to provide Commercial General Liability insurance, CONTRACTOR shall look solely to its insurance for recovery. CONTRACTOR hereby grants to CITY, on behalf of any insurer providing Commercial General Liability insurance to either CONTRACTOR or CITY with respect to the services of CONSULTANT herein, a waiver of any right to subrogation which any such insurer of said CONTRACTOR may acquire against the CITY by virtue of the payment of any loss under such insurance.
Original, signed certificates and original, separate policy endorsements, naming the City as an additional insured for general liability, as well as a waiver of subrogation for Workers’ Compensation insurance, shall be received and approved by the City before any work may begin. However, failure to do so shall not operate as a waiver of these insurance requirements.
City reserves the right to modify or require additional coverages for specific risk exposures depending on scope of CONTRACTORS work.
Minimum coverage is detailed below. The policy limits of coverage shall be made available to the full limits of the policy.
The minimum limits stated herein shall not serve to reduce the policy limits of coverage of CONTRACTOR.
Minimum Scope of Insurance – the following forms shall be provided and coverage shall be at least as broad as the following:
1. Insurance Services Office Commercial General Liability coverage (ISO Occurrence Form CG 0001) including coverage for bodily and personal injury, property damage, and products and completed operations.
2. Insurance Services Office Automobile Liability coverage (ISO Form CA 0001, Code 1, Any Auto)
3. Original and Separate Additional Insured Endorsements for General Liability (ISO Form CG 20 10 11/85 or its equivalent) with primary and non-contributory language.
4. Workers’ Compensation Insurance as required by the State of California including Employer’s Liability coverage.
5. Original and Separate Waiver of Subrogation for Workers’ Compensation and Builder’s Risk/ Course of Construction Insurance.
6. Builder’s Risk/Course of Construction insurance covering all risks of loss less policy exclusions when the City of Richmond has a financial interest in the property. – (Only required for Construction Contracts involving property)
7. Contractor’s Pollution Liability (if applicable for Construction Contractors)
Required Coverage
Minimum Limits
Workers’ Compensation and
Employers’ Liability
Statutory limits as required by the State of California including $1 million Employers’ Liability per accident, per employee for bodily injury or disease.
If CONTRACTOR
is self-insured, provide a certificate of Permission to Self- Insure, signed by the California Department of Industrial Relations and Self- Insurance. If contractor is a sole proprietor (has no employees) than contractor must sign “Contractor Release of Liability” found at:
http://www.ci.richmond.ca.us/index.aspx?nid=61.
601
___ Exhibit F
___ Section 8
City of Richmond - Insurance Requirements – Type 1:
Consultants and Contractors
Type 1 – Page 2 of 4
Revised: September 2011
PROJECT COST R EQUIRED LIMIT
$0 - $5 million $2 million p/o
$5 million - $10 million $5 million p/o
Over $10 million $10 million p/o
Fireworks $5 million p/o
General Liability
(primary and excess limits
combined)
Includes coverage for bodily injury, personal injury, property damage and products and completed operations. The policy shall not exclude coverage for XCU perils (explosion, collapse, or damage to underground property).
If the policy includes a general aggregate, either the general aggregate shall apply separately to this project, service or location or the minimum required aggregate limit shall be twice the per occurrence limit ($4 million aggregate limit).
Policy shall be endorsed to name the City of Richmond as an additional insured per the conditions detailed below.
Automobile Liability $1,000,000 per occurrence for bodily injury and property damage.
Builders’ Risk/Course of
Construction – Covers property
under construction, repair or
renovation as well as equipment
and materials to be installed.
(Only required for Construction
Projects involving property and
equipment installation.)
Coverage shall include all risks of direct physical loss, excluding earthquake, for an amount equal to the full completed value of the covered structure or replacement value of alterations or additions, including soft costs and business interruption.
If the project does not involve new or major reconstruction, an Installation Floater may be acceptable. For such projects, a property installation floater shall be obtained that provides for the improvement, remodel, modification, alteration, conversion or adjustment to existing buildings, structures, processes, machinery and equipment. The Property Installation Floater shall provide property damage coverage for any building, structure, machinery or equipment damaged, impaired, broken or destroyed during the performance of the Work, including during transit, installation and testing at the City of Richmond’s site.
The City of Richmond shall be named as loss payee as its interest may appear. The insurer shall waive all rights of subrogation against City.
Contractor’s Pollution Liability (if
applicable)
Protects against:
unexpected/unintended release of
pollution resulting from contractors
covered operations such as:
HVAC, paving, carpentry, pipeline
& tank installation, drillers,
remediation contractors,
maintenance, mechanical,
demolition, excavation, grading,
street/road construction,
residential & commercial builders.
Same limits as General Liability.
Required Policy Conditions
A. M. Best Rating A:VII or Better. If the A.M. Best Rating falls below the required rating, CONTRACTOR must replace coverage immediately and provide notice to City.
Additional Insured Endorsement
Applicable to General Liability Coverage.
The City of Richmond, its officers, officials, employees, agents and volunteers are to be named as additional insureds for all liability arising out of the operations by or on behalf of the named insured, including but not limited to bodily injury, deaths and property damage or destruction arising in any respect directly or indirectly in the performance of this contract.
ISO form CG 20 10 (11/85) or its equivalent is required. The endorsement must not
exclude products and completed operations
coverage. If it does, then CG 20 37 (10/01) is also required. 602
___ Exhibit F
___ Section 8
City of Richmond - Insurance Requirements – Type 1:
Consultants and Contractors
Type 1 – Page 3 of 4
Revised: September 2011
Additional Insured Endorsement
(continued)
SAMPLE Endorsements can be found at
http://www.ci.richmond.ca.us/index.aspx?nid=61
Primary and Noncontributory The contractor’s insurance coverage must be primary coverage as it pertains to the City, its officers, officials, employees, agents and volunteers. Any insurance or self insurance maintained by the City is wholly separate from the insurance of the contractor and in no way relieves the contractor from its responsibility to provide insurance.
Waiver of Subrogation
Endorsement Form
Contractor’s insurer will provide a Waiver of Subrogation in favor of the City for Workers Compensation and Builder’s Risk/ Course of Construction coverage during the life of this contract.
SAMPLE Endorsements can be found at
http://www.ci.richmond.ca.us/index.aspx?nid=61
Deductibles and Self-Insured
Retentions
Any deductible or self-insured retention must be declared to and approved by the City. At the option of the City either the insurer shall reduce or eliminate such deductibles or self-insured retention as respects the City or the CONTRACTOR shall procure a financial guarantee in an amount equal to the deductible or self-insured retention guaranteeing payment of losses and related investigations, claims administration and defense expenses.
Contractor is responsible for satisfaction of the deductible and/or self-insured retention for each loss.
Loss Payable Endorsement (only
required when Builder’s Risk
and/or Course of Construction
Insurance is required.)
Applicable to Builder’s Risk/Course of Construction naming the City of Richmond as Loss Payee.
SURETY BONDS
(If a Public Works/Engineering
Project)
The Contractor shall provide:
1. A Bid bond
2. A Performance Bond
3. A Payment Bond
Umbrella/Excess Liability Policies
If an Umbrella or Excess Liability Policy is used to meet the liability limits, coverage shall be as broad as specified for underlying coverages and cover those insured in the underlying policies.
Claims-Made Policies
If any insurance policy is written on a claims-made form: 1) the retroactive date must be shown, and must be before the date of the contract or the beginning of contract work. 2) Insurance must be maintained and evidence of insurance must be provided for at least five (5) years after completion of the contract of work. 3) If coverage is canceled or non- renewed, and not replaced with another claims-made policy form with a retroactive date prior to the contract effective date, the Contractor must purchase an extended period coverage for a minimum of five (5) years after completion of contract work.
Subcontractors
CONTRACTOR
shall include all subcontractors as insured under its policies or shall furnish to the City for review and approval, separate certificates and endorsements for each subcontractor. All coverage for subcontractors shall be subject to all of the requirements stated herein.
CONTRACTOR agrees to defend and indemnify the City of Richmond for any damage resulting to it from failure of either CONTRACTOR or any subcontractor to take out or maintain the required insurance policies. The fact that insurance is obtained by CONTRACTOR, and/or CONTRACTOR’s subcontractors, will not be deemed to release or diminish the liability of CONTRACTOR, including, without limitation, liability under the indemnity provisions of this contract. Damages recoverable by CITY from CONTRACTOR or any third party will not be limited by the amount of the required insurance coverage.
603
___ Exhibit F
___ Section 8
City of Richmond - Insurance Requirements – Type 1:
Consultants and Contractors
Type 1 – Page 4 of 4
Revised: September 2011
Verification of Coverage
All original certificates and endorsements shall be received and approved by the City before work may begin . The City
of Richmond reserves the right to require complete, certified copies of all required insurance policies including endorsements affecting the coverage at any time.
Original insurance certificates and required policy endorsements shall be mailed, or delivered to the Designated Project Manager for the City of Richmond.
Insurance certificates and endorsements may be faxed to the Designated Project Manager. However, Contractor must mail the original certificates and endorsements to Designated Project Manager once faxed.
Continuous Coverage
CONTRACTOR shall maintain the required insurance for the life of the contract. Should the CONTRACTOR cease to have insurance as required during this time, all work by the CONTRACTOR pursuant to this agreement shall cease until insurance acceptable to the City is provided. In the event that CONTRACTOR fails to comply with the City’s insurance requirements, the City may take such action as it deems necessary to protect the City’s interests. Such action may include but is not limited to termination of the contract, withholding of payments, or other actions as the City deems appropriate.
If services or the scope of work extend beyond the expiration dates of the required insurance policies initially approved by the City, CONTRACTOR must provide updated certificates and endorsements indicating that the required coverage, terms and conditions are still in place. Renewal certificates and updated endorsements shall be mailed to the Designated Project Manager.
Cancellation
CONTRACTOR shall ensure that coverage shall not be cancelled, reduced or otherwise materially changed except after thirty (30) days’ prior written notice has been given to the City.
Reporting Requirements
Any failure to comply with reporting or other provisions of the policies including breaches of warranties shall not affect coverage provided to the City, its officers, officials, employees or volunteers.
Consistent with Public Policy
The insuring provisions, insofar as they may be judged to be against public policy shall be void and unenforceable only to the minimum extent necessary so that the remaining terms and provisions herein may be consistent with public policy and thus enforceable.
604
Contract No: ________ For the Contract between the City of Richmond and
_____________________________
EXHIBIT G
SANCTUARY CITY COMPLIANCE STATEMENT
The undersigned, (hereafter "Contractor"), has had an opportunity to review the requirements of City of Richmond Ordinance 12-18 (hereafter "Sanctuary City Contracting Ordinance" or “SCCO”).
Contractor understands and agrees that the City may choose with whom it will maintain business relations and may refrain from contracting with any person or entity that provides Data Broker or Extreme Vetting services to the U.S. Immigration and Customs Enforcement Division of the United States Department of Homeland Security (“ICE”). Contractor understands the meaning of the following terms used in the SCCO:
a. "Data Broker” means either of the following:
i. The collection of information, including personal information about consumers, from a wide variety of sources for the purposes of reselling such information to their customers, which include both private-sector business and government agencies;
ii. The aggregation of data that was collected for another purpose from that for which it is ultimately used.
b. “Extreme Vetting” means data mining, threat modeling, predictive risk analysis, or other similar services."
Contractor understands that it is not eligible to receive or retain a City contract if at the time the Contract is executed, or at any time during the term of the Contract, it provides Data Broker or Extreme Vetting services to ICE.
Contractor further understands and agrees that Contractor's failure to comply with the SCCO shall constitute a material default of the Contract and the City Manager may terminate the Contract and bar Contractor from bidding on future contracts with the City for five (5) years from the effective date of the contract termination.
By executing this statement, Contractor certifies that it complies with the requirements of the SCCO and that if at any time during the term of the Contract it ceases to comply, Contractor will promptly notify the City Manager in writing. Any person or entity who knowingly or willingly supplies false information in violation of the SCCO shall be guilty of a misdemeanor and subject to a $1,000 fine.
Based on the foregoing, the undersigned declares under penalty of perjury under the laws of the State of California that the foregoing is true and correct.
Printed Name: Title:
Signed: Date:
Business Entity:
605
February 4, 2025
Public Works
DATE: February 4, 2025
TO: Mayor Martinez and Members of the City Council
FROM:
Daniel Chavarria, PE, Director of Public Works
Robert Armijo, PE, Deputy Director of Public Works/City Engineer
Mike Owyang, EIT, Assistant Engineer
Subject:
Resolution to accept the construction of the Santa Rita Stabilization Project as complete and authorize Notice of Completion for the project.
FINANCIAL IMPACT: There is no financial impact.
PREVIOUS COUNCIL
ACTION:
10/24/2024
STATEMENT OF THE
ISSUE:
City staff recommends the City Council adopt the
Resolution to accept the construction of the Santa Rita Stabilization Project as complete, in accordance with
project plans, specifications, and contract documents.
RECOMMENDED ACTION:
ADOPT a resolution to accept the construction of the
Santa Rita Stabilization Project as complete and
AUTHORIZE the issuance of the Notice of Completion for
the Project and the release of bonds and retention
payment – (Mike Owyang 621-1363 / Robert Armijo 620-
5477 / Daniel Chavarria 620-5478)
DISCUSSION:
On October 24, 2023, City Council awarded a construction contract to Northwest Demolition, Inc. for the Santa Rita Stabilization Project in the amount not to exceed $715,500, with an additional contingency amount of $143,100. Budget was allocated for AGENDA
REPORT
606
February 4, 2025
this project on October 3, 2023. The scope of work included retaining wall, surface drainage facilities, fencing, and willow staking.
The project improvement plans were designed by Questa Engineering Corp.
Three change orders were executed as part of this project. The change orders entailed additional slope reconstruction, curb and gutter and roadway collapse mitigation, rock slope protection, lagging wall, and chain link fence.
Below is the status of the budget and project costs as follows:
A. Construction Contract Amount $715,500
B. Approved Change orders $191,485
C. Design, Construction Management, Inspection,
Project Management, Testing & Miscellaneous expenses $242,000
Total Project Cost $1,148,985
The City’s right-of-way and public roadway have been stabilized and the single point of ingress and egress to approximately 100 properties have been secured. The project has been completed within the available budget, within the time frame of the original contract plus the time extension given to the contractor.
Considering that all construction items have been completed, City staff is now recommending that the City Council accept this Project as complete and authorize City staff to release the bonds and retention payment.
DOCUMENTS ATTACHED:
Attachment 1 – Resolution
607
Reso. No. xx-25
RESOLUTION NO. xx-25
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RICHMOND,
CALIFORNIA, FOR THE ACCEPTANCE OF THE SANTA RITA ROAD
STABILIZATION PROJECT AS COMPLETE AND AUTHORIZE CITY STAFF TO
RELEASE THE BONDS AND RETENTION PAYMENT
WHEREAS, the City of Richmond City Council awarded a construction contract to Northwest Demolition, Inc. for the Santa Rita Stabilization Project in the amount not to exceed $715,500, with an additional contingency amount of $143,100 on October 24, 2023; and
WHEREAS, the budget for the project was allocated on October 3, 2023.; and
WHEREAS, The scope of work included retaining wall, surface drainage facilities installed, fencing, and willow staking.; and
WHEREAS, Three change orders were executed as part of this project. The change orders entailed additional slope reconstruction, curb and gutter and roadway collapse mitigation, rock slope protection, lagging wall, and chain link fence.
WHEREAS, the City’s right -of-way and public roadway has been stabilized and the single point of ingress and egress to approximately 100 properties has been secured. The project has been completed within the available budget, within the time frame of the original contract plus the time extension given to the contractor.
WHEREAS, the budget and project costs status are as follows:
A. Construction Contract Amount $715,500
B. Approved Change orders $191,485
C. Design, Construction Management, Inspection,
Project Management, Testing & Miscellaneous expenses $242,000 Total Project Cost $1,148,985
NOW, THEREFORE, BE IT RESOLVED that the City Council finds the above recitals are true and correct.
BE IT FURTHER RESOLVED that the City Council hereby accepts the construction of the Santa Rita Road Stabilization Project by Northwest Demolition, Inc ., as complete, authorizes the City Clerk to record the Notice of Completion with the Contra Costa County Recorder, and authorizes the City Engineer to release any applicable bonds and retention payments.
BE IT FURTHER RESOLVED that the City Council desig nates the City Clerk as the custodian of the documents and other materials which constitute the record o f proceedings upon which the decision herein is based. These documents may be found at the office of the City Clerk at the Richmond City Hall, 450 Civic Center Plaza, Richmond, California 94804.
*************************
I certify that the foregoing resolution was passed and adopted by the Council of the City of Richmond at a regular meeting thereof held February 4, 2025, by the following vote:
AYES:
NOES:
ABSTENTIONS:
ABSENT:
608
Reso. No. xx-25
CLERK OF THE CITY OF RICHMOND
(SEAL)
Approved:
Mayor
Approved as to form:
City Attorney
609
February 4, 2025
Public Works
DATE: February 4, 2025
TO: Mayor Martinez and Members of the City Council
FROM: Daniel Chavarria, PE, Director of Public Works
Robert Armijo PE, Deputy Director of Public Works/City
Engineer
Wendy Wellbrock, Senior Civil Engineer
Subject:
Union Pacific Railroad (UPRR) Preliminary Engineering
Agreement for the Transformative Climate Communities
(TCC) - Richmond Wellness Trail Phase 2 Project.
FINANCIAL IMPACT: The City has been awarded grant funding from the California Strategic Growth Council’s Transformative
Climate Communities (TCC) Round 4 Implementation
Grant. The Richmond Wellness Trail Phase 2 Project is
fully funded by the TCC Implementation Grant, including the $15,000 for the UPRR Preliminary Engineering
Agreement. Account String: 13761019-400201-16G12
PREVIOUS COUNCIL
ACTION:
June 21, 2022,
December 20, 2022
STATEMENT OF THE
ISSUE:
City staff is requesting adoption of a resolution
authorizing staff to execute a Union Pacific Railroad
(UPRR) Preliminary Engineer Agreement for a portion of
the Richmond Wellness Trail Phase 2 Project which will
affect railroad's track and UPRR right-of-way. UPRR
requires all work conducted by the City of Richmond
within the UPRR right-of-way to be subject to a
Preliminary Engineer Agreement for UPRR to collaborate
with City of Richmond on the conceptualization and
development of the project.
AGENDA
REPORT
610
February 4, 2025
RECOMMENDED ACTION:
ADOPT a resolution authorizing the Public Works Director and the City Engineer to execute a Union Pacific Railroad (UPRR) Preliminary Engineer Agreement for the
Transformative Climate Communities (TCC) – Richmond
Wellness Trail Phase 2 Project– Public Works Department (Robert Armijo 510-620-5477/Wendy Wellbrock 510-307-
8108).
DISCUSSION:
On October 27, 2022, the City of Richmond and its partners, Groundwork Richmond, GRID Alternatives, Rich City Rides, Trust for Public Land (TPL), and Urban Tilth were awarded a $35 million Transformative Climate Communities (TCC) Round 4 Implementation Grant by the California Strategic Growth Council (Attachment 3). The TCC Round 4 Implementation Grant will fund outreach, planning, design and construction phases for projects that can advance the Strategic Growth Council’s sustainable communities objectives, such as improving air quality, improving water quality, reducing greenhouse gas emissions, improving transportation and strengthening community resiliency to the impacts of climate change focused in three of Richmond’s most environmentally burdened neighborhoods – Coronado, Iron Triangle and Santa Fe, as identified by CalEnviroScreen.
One of the projects funded by the TCC Round 4 Implementation Grant is the Richmond Wellness Trail Phase 2 Project (Project). The City has contracted with Trust for Public Land to lead implementation of the Project. The Project is located on Marina Way South between Cutting Boulevard and the Richmond Ferry terminal and includes the development of protected cycle tracks and shaded pedestrian routes to provide a continuous route from the combined BART/Amtrak station to the Richmond Ferry terminal. Furthermore, the Project will include implementation of the City of Richmond's General Plan, Pedestrian Plan, and Bicycle Master Plan.
Key improvements under this Project include the construction of 1,400 feet of two-way Class IV cycle track and 3,500 feet of one-way cycle track, replacing a traffic signal at Cutting Boulevard and Wright Avenue, installing pedestrian and bicycle scale lighting along the Marina Way segment, and enhancing UPRR crossing at Marina Way South - including new signs, striping, paving, and detectable warning devices.
The proposed improvements at the UPRR crossing will require encroaching on the UPRR right-of-way. As such, UPRR is requiring the City to enter into a Preliminary Engineering Services Agreement (Agreement) to allow UPRR to review and provide services related to the City’s proposed plans, specifications, and construction of improvements at the Marina Way South crossing (Attachment 2).
Staff is recommending that the City Council authorize the Public Works Director and the City Engineer to execute the Agreement with UPRR for the TCC - Richmond Wellness Trail Phase 2 Project, in an amount not to exceed $15,000 (Attachment 1). The 611
February 4, 2025
Agreement is fully funded by the TCC Implementation Grant. The design phase of the Project commenced in June 2024, with completion expected by August 2026.
Construction is anticipated to begin in November 2026 and conclude by June 2027.
DOCUMENTS ATTACHED:
Attachment 1 – Resolution
Attachment 2 – Union Pacific Railroad Preliminary Engineering Services Agreement Attachment 3 – TCC Grant Award Letter Richmond
612
Reso. No. xx-25
DocID #35601v1
RESOLUTION NO. xx-25
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RICHMOND,
CALIFORNIA, AUTHORIZING THE PUBLIC WORKS DIRECTOR AND THE CITY
ENGINEER TO EXECUTE A PRELIMINARY ENGINEERING SERVICES
AGREEMENT WITH UNION PACIFIC RAILROAD (UPRR)
FOR THE TRANSFORMATIVE CLIMATE COMMUNITIES – RICHMOND
WELLNESS TRAIL PHASE 2 PROJECT.
WHEREAS, on October 27, 2022, the City of Richmond and its partners, Groundwork Richmond, GRID Alternatives, Rich City Rides, Trust for Public Land (TPL), and Urban Tilth were awarded a $35 million Transformative Climate Communities (TCC) Round 4 Implementation Grant by the California Strategic Growth Council; and
WHEREAS, the Richmond Wellness Trail Phase 2 Project is funded by the TCC Round 4 Implementation Grant. The Project is located on Marina Way South between Cutting Boulevard and the Richmond Ferry terminal and includes the development of protected cycle tracks and shaded pedestrian routes to provide a continuous route from the combined BART/Amtrak station to the Richmond Ferry terminal; and
WHEREAS, improvements include enhancements at the UPRR crossing at Marina Way South, and will require encroaching on the UPRR right-of-way. As such, UPRR is requiring the City to enter into a Preliminary Engineering Services Agreement (Agreement) to allow UPRR to review and provide services related to the City’s proposed plans, specifications, and construction of improvements at the Marina Way South crossing; and
WHEREAS, City staff recommends the City Council authorize the Public Works Director and the City Engineer to execute the Agreement and any amendments thereto in an amount not exceed $15,000. The Agreement is fully funded by the TCC Round 4 Implementation Grant; and
WHEREAS, by the agenda report (“Agenda Report”) accompanying this resolution the City Council has been provided with additional information upon which the findings and actions set forth in this Resolution are based.
NOW, THEREFORE, BE IT RESOLVED, that the City Council finds the above recitals are true and correct and have served, together with the Agenda Report, as the basis for the findings and actions set forth in this Resolution.
BE IT FURTHER RESOLVED, that the Public Works Director and the City Engineer are authorized to execute the Agreement and any amendments thereto for the Transformative Climate Communities – Richmond Wellness Trail Phase 2 Project in an amount not to exceed $15,000.
BE IT FURTHER RESOLVED , that the City Council designates the City Clerk as the custodian of the documents and other materials which constitute the record of proceedings upon which the decision herein is based. These documents may be found at the office of the City Clerk at the Richmond City Hall, 450 Civic Center Plaza, Richmond, California 94804.
*************************
I certify that the foregoing resolution was passed and adopted by the Council of the City of Richmond at a regular meeting thereof held February 4, 2025, by the following vote:
AYES:
NOES:
ABSTENTIONS:
613
Reso. No. xx-25
DocID #35601v1
ABSENT:
CLERK OF THE CITY OF RICHMOND
(SEAL)
Approved:
Mayor
Approved as to form:
City Attorney
614
1 UPRR REMS
Project 751656U
REIMBURSEMENT AGREEMENT
PRELIMINARY ENGINEERING SERVICES
Effective Date:
Estimate: $15,000.00
THIS REIMBURSEMENT AGREEMENT ( Agreement) is made and entered into as of the Effective Date , by and between UNION PACIFIC RAILROAD COMPANY, a Delaware corporation (Railroad), and CITY OF RICHMOND, CALIFORNIA (Agency).
RECITALS
A. Agency desires to initiate the project more particularly described on Exhibit A attached hereto (Project).
B. The Project will affect Railroad's track and right of way at or near the Project area more particularly described on Exhibit A.
C. Railroad agrees to collaborate with Agency on the conceptualization and development of the Project in accordance with the terms and conditions of this Agreement.
AGREEMENT
NOW THEREFORE, the parties hereto agree as follows:
1. Railroad, and/or its representatives, at Agency's sole cost and expense, agrees to perform (or shall cause a third -party consultant to perform on Railroad's behalf) the preliminary engineering services work described on Exhibit B attached hereto ( PE Work). Agency acknowledges and agrees that: (a) Railroad's review of any Project designs, plans and/or specifications, as part of the PE Work, is limited exclusively to potential impacts on existing and future Railroad facilities and operations; (b) Railroad makes no representations or warranties as to the validity, accuracy, legal compliance , or completeness of the PE Work; and (c) Agency's reliance on the PE Work is at Agency's own risk.
2. Notwithstanding the Estimate (Estimate), Agency agrees to reimburse Railroad and/or Railroad's third -party consultant, as applicable, for one hundred percent (100%) of all actual costs and expenses incurred for the PE Work. During the performance of the PE Work, Railroad will provide (and/or will cause its third-party consultant to provide) progressive billing to Agency based on actual costs in connection with the PE Work. Within sixty (60) days after completion of the PE Work, Railroad will submit (and/or will cause its third -party consultant to submit) a final billing to Agency for any balance owed for the PE Work. Agency shall pay Railroad (and/or its third -party consultant, as applicable) within thirty (30) days after Agency's receipt of any progressive and final bills submitted for the PE Work. Bills will be submitted to the Agency using the contact information provided on Exhibit C. Agency's obligation hereunder to reimburse Railroad (and/or its third-party consultant, as applicable) for the PE Work shall apply regardless whether Agency declines to proceed with the Project or Railroad elects not to approve the Project.
615
2 3. Agency acknowledges and agrees that Railroad may withhold its approval for the Project for any reason in its sole discretion, including without limitation, impacts to Railroad's safety, facilities, or operations. If Railroad approves the Project, Railroad will continue to work with Agency to develop final plans and specifications , and prepare material and force cost estimates for any Project related work performed by Railroad.
4. If the Project is approved by Railroad, Railroad shall prepare and forward to Agency a Construction and Maintenance Agreement (C&M Agreement) which shall provide the terms and conditions for the construction and ongoing maintenance of the Project. Unless otherwise expressly set forth in the C&M Agreement, the construction and maintenance of the Project shall be at no cost to Railroad. No const ruction work on the Project affecting Railroad's property or operations shall commence until the C&M Agreement is fi nalized and executed by Agency and Railroad.
5. Neither party shall assign this Agreement without the prior written consent of the other party, which consent shall not be unreasonably withheld, conditioned, or delayed.
6. No amendment or variation of the terms of this Agreement shall be valid unless made in writing and signed by the parties.
7. This Agreement sets forth the entire agreement between the parties regarding the Project and PE Work. To the extent that any terms or provisions of this Agreement regarding the PE Work are inconsistent with the terms or provisions set forth in any existing agreement related to the Project, such terms and provisions shall be deemed superseded by this Agreement to the extent of such inconsistency.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the Effective Date.
CITY OF RICHMOND, CALIFORNIA UNION PACIFIC RAILROAD COMPANY, a Delaware Corporation
Signature Signature
Amber Stoffels
Printed Name Printed Name
Manager I, Industry & Public Projects
Title Title
616
Exhibit A
Project Description and Location
Project Description
City of Richmond, California, proposes to reconfigure traffic lanes to implement a bike lane within the existing roadway, requiring on-site diagnostic meeting to determine any recommended improvements at the crossing referenced below.
Location
Martinez Sub
DOT
Crossing
Type Milepost Street Name
751656U Public 11.746 Marina Way South
617
Exhibit B
Scope of Project Services
Scope of work includes, but is not limited to the following
• Field diagnostic(s) and inspections
• Plan, specification, and construction review
• Project design
• Preparation of Project estimate for force account or other work performed by the Railroad
• Meetings and travel
618
Exhibit C
Billing Contact Information
Name Wendy Wellbrock
Title
Address 450 Civic Center Plaza, Richmond, CA 94804
Work Phone (510) 621-1612
Cell Phone
Email [email protected]
Agency
Project No.
619
Agenda Item # 6 ACTION
October 27, 2022
Subject: Transformative Climate Communities Program: Round 4 Implementation Grant Awards
Repor
ting Period: March – October 2022
Staff Lead: Sophie Young, TCC Program Manager
Recommended Action
Transformative Climate Communities (TCC) Staff recommend the Council award $94,165,510 in funding from the FY 2021-22 General Fund for the Round 4 TCC Program to the three (3) top- scoring proposals for the TCC Implementation Grant Program.
TCC Staff recommend the surplus funds of $10,834,490.00 support three (3) additional Round 4 Planning Grants ($815,804.58), as well as additional Round 5 Technical Assistance and a Pilot Project Development Grant ($10,018,685.42).
Summary
This Staff Report summarizes California Strategic Growth Council’s TCC Implementation Grant Program, the Round 4 Application Process, and TCC Staff award recommendations.
Attachments include the final application scores and application summaries and maps.
The TCC Round 4 NOFA made $105 million available for three (3) Implementation Grant awards at $35 million each. In Round 4, TCC received seven (7) applications from the Inland Empire, Central Valley, Los Angeles, and San Francisco Bay Area. Of the seven (7) applications, TCC Program Staff recommend three (3) for award at this time. Grantees will complete grant terms of approximately five (5) years. The Strategic Growth Council (SGC) requires awarded applicants to address issues identified during the application review and post-award consultation process, prior to executing grant agreements.
Staff recommends the surplus funds be allocated to additional Round 4 Planning Grants, Round 5 technical assistance, and a pilot project development grant type.
Background
On September 14, 2016, Governor Brown signed AB 2722 (Burke), which created the Transformative Climate Communities (TCC) Program, administered by the Strategic Growth Council, in partnership with the Department of Conservation (DOC) and other State agencies.
The TCC Program furthers the purposes of AB 32 (Nunez, Chapter 488, Statutes of 2006) and AB 2722 (Burke, Chapter 371, Statutes of 2016) by funding projects that reduce greenhouse gas (GHG) emissions through the development and implementation of neighborhood-level transformative climate community plans that include multiple, coordinated GHG emissions 620
ACTION: FY 2021-2022 TCC Implementation Grants Round 4 Agenda Item #6 October 27, 2022| Page 2 of 57
reduction projects that provide local economic, environmental, and health benefits to disadvantaged communities. Previous rounds of TCC funding (Rounds 1-3) were provided by Greenhouse Gas Reduction Fund (GGRF), an account established to receive Cap-and-Trade auction proceeds and direct towards GHG reducing projects through the California Climate Investments (CCI) program. For Rounds 4-6, funding of the TCC program is provided through the General Fund’s Climate Budget.
About the TCC Implementation Grant Program
The TCC Implementation Grant program funds neighborhood-level proposals that include multiple, coordinated projects that reduce greenhouse gas emissions, improve public health and the environment, and expand economic opportunity. For Round 4, eligible project strategies include:
• Equitable housing and
neighborhood development
• Land acquisition for affordable
housing
• Transit access and mobility
• Solar installation, energy efficiency,
and appliance electrification
• Water efficiency
• Recycling and waste management
• Urban greening and green
infrastructure
• Health and well-being
• Indoor air quality
• Community microgrids; and
• Brownfield redevelopment
Additionally, each proposal must include six (6) transformative elements: data collection and indicator tracking; community engagement; displacement avoidance; workforce development and economic opportunities; climate adaptation and resilience; and leverage funding. The program also has a number of policy priorities that are evaluated during the application process – these include: high speed rail connectivity; consistency with existing local land use and transportation plans; access to basic infrastructure, regional services, and job centers; air pollution reduction and mitigation policies; and prohousing policies.
TCC Round 4 Implementation Grant awards are awarded competitively among eligible disadvantaged community areas, as defined in the TCC Guidelines. Grantees will complete five- year terms.
Round 4 Application Process
The Council adopted the Round 4 TCC Program Guidelines (Guidelines) on February 24, 2022. A Technical Amendment on April 28, 2022, updated the guidelines to expand Lead Applicant eligibility, clarify requirements for tribal applicants, and make other minor clarifications. SGC released the Notice of Funding Availability (NOFA) to the public on March 8, 2022. Application Pre-proposals were due April 22, 2022. Applicants submitted Final Round 4 Implementation Grant applications by July 1, 2022. The NOFA made $105 million available for three (3) Implementation Grant awards at $35 million each.
621
ACTION: FY 2021-2022 TCC Implementation Grants Round 4 Agenda Item #6 October 27, 2022| Page 3 of 57
SGC received a total of seven (7) Implementation Grant applications, listed below:
City of Bakersfield: Building a Better Bakersfield
City of Coachella: Coachella Prospera
City of Indio: Polishing Jewel
City of Richmond: Richmond Rising
City of Stockton: Stockton Rising
Community Partners: South Los Angeles Eco-Lab
Porterville Unified School District: Creating Opportunities, Changing Lives TCC Technical Assistance
TCC and DOC staff hosted two public Round 4 Guidelines Webinars on November 19, 2021. The webinars provided an overview of the TCC Implementation and Planning Grants, new guidelines updates, and discussed the application process. The second presentation given on November 19th was provided entirely in Spanish. Recording of presentations and meeting materials were made available via the SGC website. TCC Program staff also hosted three (3) application workshops that provided further details on the application process. The first workshop, held on March 11, 2022, was intended as an all-audience application workshop and provided general background of the application process. The second and third workshops, held consecutively on March 18, 2022, included a specific focus on requirements for Disadvantaged Unincorporated Communities (DUCs) and Tribal Communities, respectively. All webinars provided an opportunity for questions in real time from participants. Meetings were recorded and made available via the SGC website. Additionally, TCC staff provided a geographic information system (GIS) mapping tool for interested applicants that included a walkthrough video tutorial for ways to identify potential project areas.
Application Technical Assistance
To support applicants from California’s most disadvantaged communities develop competitive applications, SGC provided Application Technical Assistance (TA) for all Implementation Grant Applicants and to Planning Grant Applicants from Disadvantaged Unincorporated and Tribal Communities. The firm Estolano Advisors coordinated a team of TA consultants to support TCC applicants in developing their project scope, calculating greenhouse gas emissions reductions, and developing a complete application. In order to match potential applicants with Application TA resources, TCC Staff required prospective applicants to complete an online survey by March 25, 2022, for Implementation Grants, and by May 16, 2022 for Planning Grants. TCC received 91 responses from prospective applicants. The Application TA providers conducted 50 intake calls with prospective applicants.
Application Review Process
All applications were evaluated through a multi-stage review process that included reviews by both TCC Program Staff (Program Staff) and an Interagency Review Panel (Panel). Program Staff included staff from the SGC and the Department of Conservation (DOC). Program Staff developed a scoring rubric for the implementation grants by using the scoring criteria listed in 622
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the TCC guidelines. Program Staff also developed detailed instructions on how to assign scores.
Panel members were selected to complete a holistic review of the applications, including the quality of the overall vision and integration.
Members of the Interagency Review Panel and Program Staff attended a site visit for each applicant. Site visits include presentations and tours of the proposed TCC project area led by lead applicants, co-applicants, residents, and other stakeholders.
After attending the site visits, Interagency Review Panel members sent their scores on the Objectives and Vision Section to the Program Staff. The Interagency Review Panel convened on one (1) day during a Final Deliberation meeting. Program Staff provided briefings on the proposed plans and projects. The Program Staff presented preliminary scores including average of reviewer scores of Objectives and Vision Section, as well as proposed staff scores for Capacity, Transformative Plans, and Projects to facilitate the deliberation. Additional information about the review process and scoring is available in Attachment A.
GHG Scoring
Applicants were required to identify at least three (3) projects with quantifiable GHG emission reductions that would be ready at the time of application. At least half of the requested funding must support projects with quantifiable GHG emission reductions. Applicants can earn up to ten (10) points for the Top 3 quantifiable projects ready at the time of application and up to ten (10) for total GHG reductions from all quantifiable projects. The final GHG scores are shown in Table 3. Additional information about GHG scoring and score breakdowns is available in Attachment A.
Final Application Scores
Table 3 shows the summarized combined scores for each application. Attachment B shows complete scores for each application.
Table 1: Summary of Final Application Scores
Score
category
Bakersfield Coachella Indio Porterville Richmond South LA Stockton Score 111.8 118.1 116 89.6 156 162.6 149.1
GHG
Reduction
Score
1.8 7.7 5.4 2.1 11.4 20 8.5
TOTAL
SCORE
113.6 125.8 121.4 91.7 167.4 182.6 157.6
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Recommended Awards
Program Staff recommends the Council approve three (3) awards to the top-scoring applicants of Community Partners, the City of Richmond, and the City of Stockton. These three proposals integrated a range of meaningful projects into unified, community-driven visions for transformation. These applicants demonstrated deep collaborative experience and capacity for executing the proposed projects and plans. However, TCC Program staff would like to note that each application put forth incredible proposals with transformational potential.
The three recommended Implementation Grant Awards total $94,165,510, leaving a surplus of $10,834,490 from the original NOFA of $105 million. Staff recommend surplus funds go towards two categories of uses: three (3) additional Round 4 Planning Grants. ($815,804.58), as well as additional Round 5 Technical Assistance and a Pilot Project Development Grant ($10,018,685.42)
Program Staff will work with the applicants not recommended for funding at this time to provide feedback on areas for improvement. Staff will also investigate connecting the applicants with other State agencies that can fund elements of the application.
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Award Recommendation 1: Community Partners: South Los Angeles Eco-Lab Award Amount: $35,000,000
Leverage Funding: $24,614,575
Co-Applicants:
• Community Partners
• SLATE-Z
• Trust South LA
• Strategic Actions for a Just Economy
(SAJE)
• Coalition Responsible Community
Development (CRCD)
• Streets LA
• Los Angeles Department of
Transportation (LADOT)
• LA Metro
• GRID Alternatives
• Tree People
• LA Neighborhood Land Trust (LANLT)
Projects:
• Western/Slauson First-Last Mile
Improvement Project
• South LA Stress-Free Connections
• Metro Free Monthly Pass Program
• LADOT EV Car Charging Stations
• LADOT EV Car Sharing Expansion
• LADOT E-Bike Library
• Single Family Home Solar
Installations
• Cool Pavement
• Cool Roofs
• Community Canopy Expansion
• School Greening
The South Los Angeles Eco-Lab focuses on “Economic Development through Climate Action.” Community residents, small businesses, CBOs, and public agencies will work to achieve the community’s vision for a socially inclusive, sustainable, green community resilient to climate change. The proposal is rooted in a multi-year planning process, driven by the LA Department of City Planning, SLATE-Z, and other CBOs. With support from a Round 2 TCC Planning grant, these organizations engaged in a participatory planning process that generated the South LA Climate Commons (SLACC) Plan. The plan identified the need for increased resident engagement in land use decisions, expanded access to jobs that pay living and family- sustaining wages, increased affordable housing and parks, and improved air quality and transportation—providing the foundation for the South LA Eco-Lab. South LA Eco-Lab's proposal includes 11 projects, derived from 5 strategies for creating green spaces, energy and water efficient infrastructure, and expansion of safe active travel and public transit all with the goal of enhancing public health, well-being, and environmental benefits.
The transformative plans are geared towards connecting, informing, and involving residents and small businesses in the proposed projects so that they benefit most from the infrastructure improvements and job opportunities. The proposal includes an ambitious community engagement plan, with partners engaging at least 50% of residents in the project area – 625
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reaching 42,500 unduplicated residents over 5 years (approximately 8,500 a year) through door knocking, phone and digital engagement, and in-person engagement events.
SAJE is responsible for displacement avoidance efforts, which include know-your-rights education for residential and commercial tenants, Tenant Action Clinics, eviction defense services, the creation of a Small Business Alliance, and technical assistance for small businesses.
The Workforce Development Plan focuses on underserved communities within the South LA Eco-Lab project area; the Coalition for Responsible Community Development (CRCD), Los Angeles Trade Technical College (LATTC), and GRID Alternatives will leverage their existing tools and training programs to prepare participants for careers including, solar installation, construction, tree planting, cool street paving, electric vehicle charging station installations and more.
Overall, the South LA Eco-Lab proposal represents a thoughtful and cohesive vision for the community, rooted in years of engagement and planning. The transformative elements are robust, and the applicants demonstrate the capacity to execute the grant.
Recommended conditions on award:
- Provide documentation that clarifies when certain leverage funds will be eligible within the TCC time frame.
- Clarify the proposed Workforce Development and Economic Opportunities staffing structure.
- Provide additional readiness documentation for projects including Projects 5 (LADOT EV Car Sharing Expansion), 6 (LADOT E-Bike Library), and 10 (Community Canopy). - Provide more details on implementing partners’ commitment to work towards long term funding solutions for projects including the LA Metro Free Monthly Pass Program. - Review opportunities for coordinated infrastructure improvements to increase resilience of active transportation and urban greening projects.
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Award Recommendation 2: City of Richmond: Richmond Rising Award Amount: $35,000,000 (Recommended); $34,413,431 (Requested) Leverage Funding: $17,342,527
Co-Applicants:
• City of Richmond
• Trust for Public Land
• Rich City Rides
• GRID Alternatives
• Urban Tilth
• Groundwork Richmond
Projects:
• Neighborhood Complete Streets
• Richmond Wellness Trail
• E-Bike Lending Library
• Resilient Homes for Healthy
Communities
• Basins of Relations
• Bosque del Barrio
• ADA Accessible Garden
• Orchard for All!
• Veggie RX
The Richmond Rising proposal is the result of years of stakeholder collaboration, including a TCC planning grant, to address environmental justice concerns in the Iron Triangle, Santa Fe, and Coronado neighborhoods that adjoin the historical heavy industrial zones in Richmond. The proposal aims to empower the city’s most marginalized communities through complete streets and affordable active transportation options; renewable energy resilient homes; water absorption and reuse; urban greening and cooling of neighborhoods; and enhanced food security for improved health and wellbeing.
The City, alongside five co-applicants, have collaborated over four years of planning and project work to develop the proposal’s objective and vision. This proposal’s Community Engagement Plan (CEP) draws upon direct ties to priority populations, as well as capacity through Richmond Rising Youth Fellows Program (annual paid fellowship for Black and Brown youth). Richmond Rising’s Displacement Avoidance Plan (DAP) includes a robust set of City programs and policies informed by quantitative data which complement the City’s existing work in developing, promoting, and passing policies and programs that address residential and business displacement. Although the proposal meets TCC Program Requirements, only .24% of the total budget (of maximum allowable 3%) was dedicated to the DAP. This amount was the result of a budgeting error caused by unclear language in the TCC Guidelines. The proposal also includes workforce development through solar installation basic training, as well as the RichmondWORKS city program which provides career skills training and supportive services.
Overall, Richmond Rising presents a strong vision for the Iron Triangle, Santa Fe, and Coronado neighborhoods informed by years of youth leadership, grassroots organizing, community engagement, and community planning. This vision is complimented by the applicant and co- applicants’ demonstrated capacity for executing the proposed plans and projects. 627
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Recommended conditions on award:
- Provide additional details on work plans, budgets, and staff capacity dedicated to the projects
- Strengthen long-term operations and maintenance plans for projects including urban greening.
- Revise Displacement Avoidance Plan (DAP) to address budget error and plans for community outreach and feedback and budget inclusion. Up to an additional $586,569 will be available for the DAP, increasing total award to $35,000,000, provided Richmond meets threshold requirements of 50% leverage funding.
- Consider mitigation measures to account for resilience to future climate change impacts on projects in low-lying coastal waterfronts, such as the Richmond Wellness Trail (Project 2).
- Provide additional details on project feasibility questions. - Provide readiness documentation for projects including Project 6, Bosque Del Barrio. - Provide additional details and possible modifications to Project 3, E-bike Lending Library to be consistent with program requirements.
- Work with TCC staff to determine whether additional implementing partners, such as Rich City Rides, need to be added to the Partnership Agreement; submit additional management and financial capacity documentation.
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Award Recommendation 3: City of Stockton, Stockton Rising Award Amount: $24,165,510
Leverage Funding: $12,400,490
Co-Applicants:
• City of Stockton
• Catholic Charities
• Edible Schoolyard Project
• Insight Garden Program
• Little Manila Rising
• GRID Alternatives
• Rising Sun Center for Opportunity
• San Joaquin Regional Transit District
• Public Health Advocates
Projects:
• McKinley Park Renovation
• Climate Careers – Energy
• Climate Careers – Water
• Single Family Solar Installations
• Multi-Family Solar Installations
• Urban Forest Renovation
• Edible Education on the Farm
• DAWN Project
• Hybrid Electric Bus Acquisition
In the Central Valley, Stockton sits at the intersection of pollution and social injustice. Stockton Rising is investing in environmental equity and the community’s aspirations for prosperous neighborhoods so that residents can benefit from lower utility bills, breathe cleaner air, and have access to workforce training and green sector jobs. Stockton Rising builds upon a TCC Round 3 Implementation Grant partial award
1, and incorporates projects from six (6) strategies:
transit access and mobility, energy efficiency and solar installation, water efficiency, urban greening and green infrastructure, health and well-being, and indoor air quality. Transformative Plans ensure implementation remains responsive to community needs, training and quality jobs are directed to Project Area residents, residents and small businesses aren’t displaced, and climate change risks are reduced for vulnerable populations and the TCC Project Area.
The applicant’s unique position as a past TCC Planning Grantee and current Implementation Grantee (R3 TCC Implementation Grant), paired with ongoing investments in the South Stockton area, indicate that the area is primed for transformative change. Furthermore, these
1 Stockton Rising received a partial TCC Round 3 Implementation Grant award due to impacts from the COVID- 19 pandemic and award conditions on the top scoring proposals. In Round 3, SGC was directed to award only up to 75% of the 2019-2020 appropriation, which was based on 2019-2020 cap-and-trade auction proceed projections.
In addition, the Council made a partial award to the second top scoring proposal from the City of Riverside, whose TCC proposal was partially awarded by SGC’s Affordable Housing and Sustainable Communities Program. Stockton requested $28,200,000 in Round 3 but was awarded $10,834,490 with the remaining budget appropriation and retained eligibility for a subsequent partial award in Round 4. 629
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ongoing initiatives demonstrate the applicant’s capacity to execute a TCC implementation grant. The proposal advances current community engagement efforts, enabling residents to become decision-makers, and allows the City to pursue recommendations from their Round 3 “Revised Displacement Avoidance Plan” that is facing budget constraints. The proposal also includes several opportunities for workforce development, from a summer youth program that feeds into pre-apprenticeship trades program to a tree maintenance program, and training for incarcerated and formerly incarcerated individuals.
Recommended conditions on award:
- Revise Workforce Development and Economic Opportunities Plan Task 2 to be consistent with TCC Program requirements.
- Strengthen long-term operations and maintenance plans for projects, including urban greening. Identify additional opportunity areas for the City to support long-term feasibility and maintenance.
- Review budget and community engagement details for Urban Forest Renovation project (Project 6).
- Provide additional budget details on Projects 2-5 (Climate Careers Energy, Climate Careers Water, Single-Family Solar, and Multi-Family Solar) and revise as necessary. - Review and strengthen the Displacement Avoidance Plan (DAP) to align with existing City DAP efforts and outline a process to integrate Round 3 efforts with a Round 4 award.
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Applications Not Recommended for Funding
City of Coachella: Coachella Prospera
Award Amount: $35,000,000
Leverage Amount: $111,515,105
Co-Applicants:
• Chelsea Investment Corporation
• GRID Alternatives Inland Empire
• Southern California Mountains
Foundation
• Desert Recreation District
• Greater Coachella Valley Chamber of
Commerce
• Alianza Coachella Valley
• The LEAP Institute
• Sunline Transit Agency
• University of California – Riverside
Projects:
• Equitable Housing: Woodspur
Apartments (Avenue 52nd Apts.)
• Coachella Energy for All
• Zero Emission Bus Purchases +
Route 12
• Wellness Hub
• Green Raiteros
• Coachella, Avenue 50 Pedestrian &
Bicycle Connectivity
• Urban Greening + Green
Infrastructure
Coachella Prospera envisions a more climate-resilient community, achieved by preserving its heritage, caring for its environment, creating a thriving community, transitioning to clean energy, and protecting its people, climate, air, and water. Coachella Prospera proposes seven (7) projects across five (5) of the eleven eligible TCC strategies – including one equitable housing project, one residential solar installation project, one active transportation project, one transit and rail access project, and one car-sharing and mobility project, one urban greening project, and one health and well-being project. However, the equitable housing project did not fully meet threshold requirements and the urban greening project did not include enough documentation to sufficiently evaluate. The projects proposed by the City are strong standalone projects, with demonstrated partner capacity and community need, yet the unified vision for the overall proposal, including how these projects connect and maximize benefits to residents within the TCC project area, is less defined.
The City’s Community Engagement Plan (CEP) and Community Stakeholder Structure (CSS) are facilitated by Alianza Coachella Valley, a local CBO with established working relationships in the community. The CSS includes all project partners, and the CEP narrative proposes a CSS platform with mechanisms to engage community members in project implementation, solicit feedback to inform projects, and maintain open communication. The City’s Displacement Avoidance Plan (DAP) involves hiring a consultant to develop a plan, with 4-8 workshops for 631
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residents and businesses to identify priorities. The DAP includes policies targeted at business retention, but no specific programs or policies to address residential displacement.
The Workforce Development and Economic Opportunities (WDEOP) proposal includes funding for the Greater Coachella Valley Chamber of Commerce to meet with local industry representatives and develop an educational platform to help businesses adapt to climate change. It also includes five different solar training programs from GRID Alternatives, including an on-the-job training program, year-long solar fellowships, a shared solar PV course from GRID Alternatives and College of the Desert, and a community volunteer program. The Urban Conservation Corps program would provide on-the-job training in urban forestry and conservation skills.
Prior to the site visit, Staff expressed concerns with the application’s completeness. The main Grantee Workbook did not contain the sufficient information to fully evaluate all proposal components, and the Summary Workbook did not contain the necessary information on leverage funding. Individual projects did not provide workbooks that contain proposed budgets and workplans, and/or readiness documentation demonstrating that proposed projects could be implemented along a certain timeline. The applicant did address many of these concerns during the site visit and demonstrated significant commitment, working relationships, and engagement with a diverse coalition of project partners.
Areas for Improvement
- Strategies were selected to address the challenges expressed by residents, but the proposal should create a more clearly unified vision for how the selected projects are integrated to have a transformative impact.
- Provide additional details on work plans and budgets, project documentation, and cost supporting documentation. Key information was missing from the application materials needed to determine feasibility, including budget and readiness details. - Specific mechanisms for resident involvement in decision-making should be clarified and captured in the Partnership Agreement.
- Community Engagement Plan requires additional clarity to address how outreach will be targeted to Project Area residents.
- Displacement Avoidance Plan (DAP) should propose programs and policies that address vulnerabilities that are priorities for residents and businesses. - The Workforce Development and Economic Opportunities Plan should clearly align proposed certifications with pathways to high-quality jobs for local residents within the project area.
- The Avenue 52 Housing Project requires additional detail about the site placement and plans to mitigate impacts from surrounding industrial uses. The project also requires additional detail on the Sustainable Transportation Improvements portion (walkway to downtown) to verify the proposed scope of work or project readiness required to meet AHSC threshold.
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City of Indio: Polishing Jewel
Award Amount: $33,334,022
Leverage Amount: $17,206,670
Co-Applicants
• GRID Alternatives • College of the Desert
Projects:
• Jewel Community Complete Streets
• Charging Jewel EV Stations
• Energy for All – Single-family
• Energy for All – Multi-family
• Greening Jewel
• Indio Sports Park Phase I & Phase II
The vision is well informed by community needs of ‘connection, health, and safety.’ The proposed projects seek to better connect the residents of the Jewel neighborhood—both physically through complete streets, and virtually through leverage- funded broadband improvements—while also providing community amenities and reducing the cost of living, via an accessible, multi-use greenspace and solar installations. These projects would respond to community needs identified through a previous TCC Planning Grant process; however, the proposal acknowledged significant challenges with respect to community engagement, as there are limited community-based organizations in the project area. While there is a demonstrated short- and long-term need for transformative elements (community engagement, displacement avoidance, workforce development and economic opportunity), the requested investments are small relative to the program cost caps and may not fully meet the community’s needs.
The Collaborative Stakeholder Structure (CSS) includes many of the features required under TCC, although the application has a relatively small number of co-applicants (2). The CSS involves a resident oversight committee, and Indio has gained experience with community engagement via a TCC R2 Planning Grant. Nevertheless, the Jewel community does not benefit from active community organizations. A TCC implementation grant may help develop such organizations-. The Displacement Avoidance Plan demonstrates good use of available data and resources to describe risks to households and businesses and proposes a multi-faceted approach to household and business displacement. However, the DAP is funded at only .3% of the total budget (of a maximum allowable of 3%) and the budget and workplan are not well- connected to the narrative. The Workforce Development and Economic Opportunities Plan (WDEOP) is focused exclusively on solar training and includes only .9% of the total budget (of a maximum allowable of 5%). The WDEOP includes eligible paid positions and certifications, but also an ineligible volunteer program. Additionally, there is little integration of the WDEOP with other proposed projects.
Although the application presented a strong vision for transformation and the proposed projects would meet the needs of the community, the accompanying transformative elements 633
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do not tie the projects together nor respond fully to the demonstrated needs of the community.
Areas for Improvement
- Provide additional details on work plans and budgets, and cost supporting documentation. Specify funds to build City staff capacity in addition to consultant staff.
Ensure work plans are connected to narratives and reflect all proposed aspects within narratives.
- Work tasks in the Workforce Development and Economic Opportunity Plan are primarily focused on solar training. Consider expanding scope and integrating workforce development with other proposed projects.
- Provide additional documentation and justification on the proposed turf and water use of the Greening Jewel project and the Indio Sports Field projects. Consider the resource efficiency of turf in the Indio Sports Park project and use in areas with programmed uses that require it versus do not require it.
- Consider how a TCC Community Engagement Plan could provide an avenue for development of community-based organizations. Provide additional details or documentation demonstrating existing successful partnership across co-applicants, and greater attempts and/or demonstration of community engagement, co-design, and shared decision-making power.
- Proposed activities in Displacement Avoidance Plan (DAP) should respond directly to the need for these services in the community.
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City of Bakersfield: Building a Better Bakersfield
Award Amount: $29,341,404
Leverage Amount: $20,222,878.30
Co-Applicants:
• Bakersfield Memorial Hospital
• Circle of Life Foundation
• County of Kern Employees Training
Resource Center
• CSU Bakersfield
• Golden Empire Transit
• GRID Alternatives
• Habitat for Humanity (Golden
Empire)
• Kern Community College
District/Bakersfield College
Projects:
• Route 46 Service Enhancement
• Downtown Circulator
• Chester Avenue Corridor
Enhancements
• 4th Street Active Transportation
Corridor
• 34th Street Revitalization
(Transportation)
• 34th St. Revitalization (Greening)
• F Street Complete Street
Improvements
• F Street Urban Greening
• GRID Alternatives Solar Installation
Collaborative
Building Better Bakersfield is envisioned to transform downtown and Southeast Bakersfield with interconnected improvements in transportation infrastructure, clean energy, and urban greening projects. It aims to improve connectivity and energy resilience for existing residents while simultaneously catalyzing further redevelopment of the downtown area. It would achieve this by expanding multi-modal transportation options in the area, connecting several nearby neighborhoods to the future High Speed Rail station as well as job and recreational centers.
Additionally, it would invest in new renewable energy throughout the project areas and urban landscaping along transportation corridors.
This plan creates a vision for the future of the downtown area from a transportation and connectivity perspective. However, concerns were raised by community members that these projects do not respond to community-identified needs – the plan appear to be projects adopted from former redevelopment plans that overlap with some community raised priorities rather than meeting the expressed needs of existing residents.
While the proposal’s Community Engagement Plan (CEP) outlines engagement activities to support the proposed projects with dedicated staff, support, and participation expenses; community groups have that were part of the planning grant have not continued to be partners in the implementation grant and some partners raised concerns about project priorities during 635
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the site visit. The Displacement Avoidance Plan (DAP) focuses on constructing new affordable housing units in the project area, as well as repairing and refurbishing existing homes. While affordable housing is an established need, the DAP lacks detail on creating programs and policies, and the activities to address displacement risks are not clearly outlined. Furthermore, the DAP includes the potentially ineligible costs of housing construction & land acquisition and has several feasibility concerns regarding project readiness, land acquisition, and CEQA approvals.
The proposed workforce development activities include four (4) On-the-Job training programs and two (2) training certification programs; one of these training programs is credentialed.
Areas for Improvement
- Note that the proposal’s relatively low total GHG reductions were due to the transit components (Downtown Connector Projects 1 & 2) adding roughly 2,000 MTCO2e.
Based on CARB’s review, project resulted in negative GHG emission reductions due to low reductions in passenger auto Vehicle Miles Traveled and moderate reductions in non-zero-emission transit vehicle VMT.
- Provide additional detail on the specific stakeholder groups that participated in project selection.
- Provide additional detail on how community members would be involved the Collaborative Stakeholder Structure’s decision-making processes and overall project implementation.
- Propose new, specific policies and practices that avoid residential and business displacement in the Displacement Avoidance Plan (DAP). Additionally, clarify target population for multi-unit buildings and their accessibility to Project Area residents. - Address long-term operations and maintenance beyond the grant term for proposed active transportation and urban greening projects.
- Provide additional details on work plans and budgets, project readiness, and cost supporting documentation.
- Revise species palette for urban greening components to utilize lower water use species.
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Porterville Unified School District: Creating Opportunities, Changing Lives Award Amount: $34,939,746 (some funds are for ineligible or incomplete projects) Leverage Amount: $22,780,890 (only $150,000 sufficiently documented) Co-Applicants:
• City of Porterville
• Tulare County of Governments
• Tulare County Regional Transit
Authority
• Climate Action Plan for Schools
(CAPS)
Projects:
• Clean Air for Every Classroom
• Solar Generation
• Pedestrian Improvements for Safe
Walking to School
• Zero Emissions Transportation
• Student Passes with Free Public
Transit
• Zero Waste Landscaping
• Tree Shaded Pathway
• Hydration Stations
• Energy Storage with Backup Power
for Porterville High School
The Porterville Unified School District proposal is part of a districtwide energy and sustainability initiative aimed at reducing GHG emissions, improving public/student health, reducing energy costs, reducing water consumption, and improving the quality of public education and community. While the TCC proposal does contain elements that would benefit the broader community, the focus of the proposal is the school system itself, rather than an inclusive, neighborhood-level plan for community transformation. The proposal includes ten projects covering seven TCC strategies that address community-identified priorities, particularly air quality and water efficiency. The proposal includes workforce development in the form of apprenticeship programs and paid internship programs and community engagement to incorporate the greater Porterville community and other stakeholders.
Despite the strength of individual components of the proposal and the significant achievements of the Lead and Co-Applicants, there are areas of concern with this proposal. The proposed projects represent the identified needs of the School District and school community and did not include a meaningful community engagement process with residents or organizations within the Project Area. The Collaborative Stakeholder Structure (CSS) includes five (5) organizations; however, it is inadequate in its current form and would need more detail to be compliant with TCC guidelines. Additionally, there are no local, community-based organizations in the CSS, and no funding allocated for meaningful resident participation to address this lack. The Community Engagement Plan also requires additional information and is relatively limited in scope. The plan includes insufficient feedback mechanisms from the broader community, and there is very limited direct participation of residents in the Collaborative Stakeholder Structure. The 637
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Displacement Avoidance Plan does not propose any new programs or policies, nor does it contain a workplan, budget, or any discussion of displacement avoidance for businesses.
PUSD does have a robust career-oriented Pathways Program for high school students, and the Workforce Development and Economic Opportunities Plan (WDEOP) builds on the success of this model. It includes two “Youth Apprenticeship Programs” in electric transportation and zero emission buildings; five internship programs for high school students to receive training while supporting implementation of proposed projects (in waste reduction, active transportation, sustainable landscaping, and community education); and summer work experiences for students. However, workforce development opportunities are only available to current high school students, and the internship and summer programs do not appear to result in industry- recognized credentials. The WDEOP workplan and budget also require additional detail.
Areas for Improvement
- Strengthen the plan for engaging residents outside of the school community to ensure that the project is truly transformative. Additional funding and resources allocated to community engagement could help support this expansion. - Improve mechanisms in the Collaborative Stakeholder Structure provides for direct oversight and collaborative governance by residents. Address all TCC Guidelines requirements for the Partnership Agreement.
- Ensure the Displacement Avoidance Plan proposes three (3) new policies and programs to avoid displacement of residents and businesses within the project area. - Provide additional details on work plans and budgets, project readiness, and cost supporting documentation. At least three quantifiable projects comprising at least 50% of the requested grant funds must meet all readiness requirements for the application to be eligible for award.
- Resolve discrepancies in leverage funding commitment. Provide documentation that sufficient leverage funds are available, committed, from stable sources, and that leverage projects are aligned with the TCC vision and will be spent within the allowed timeframe.
- Ensure all proposed projects are eligible under the TCC Guidelines.
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Next Steps
Following approval by the Council’s decision of Round 4 TCC Implementation Grant awards, Program Staff will enter a Post-award Consultation (PAC) phase with each awardee. Program Staff will work with the awardee to refine the submitted application materials to ensure they follow all administrative, statutory, and TCC program requirements. Awarded applications are subject to additional review, and awardees will be required to make modifications as noted in this staff report to align with program requirements, Interagency Review Panel recommendations, and Council direction.
Program Staff will work with awardees during the PAC phase to develop a grant agreement and review grant administration procedures according to the TCC Post-Award Consultation Policies.
Note that TCC Program Guidelines forbid award recipients from developing new projects during the PAC phase. Any project modifications will be subject to the program’s PAC policies. In addition, award recipients must work with an Evaluation Technical Assistance Provider approved by the State to finalize an Indicator Tracking Plan for the proposal and track data indicators related to the performance of the grant. All requested documentation and changes should be finalized within six (6) months following the Council’s decision and grant agreements executed by the end of 2023. TCC will make available Post-award Consultation Mini Grants to support awarded applicants with funding to bridge the six-month gap between award and grant execution. TCC Staff will work with awarded applicants soon after award to execute these support grants.
Finally, Program Staff will provide feedback to applicants that were not recommended for funding for funding in Round 4 TCC Implementation Grant funding. Staff will make available the opportunity to discuss the identified areas for improvement during one-on-one sessions with applicants.
Council Recommendation
Transformative Climate Communities (TCC) Staff recommend the Council award $94,165,510 in funding from the FY 2021-22 General Fund for the Round 4 TCC Program to the three (3) top- scoring proposals for the TCC Implementation Grant Program. TCC Staff recommend the surplus funds of $10,834,490.00 support three (3) additional Round 4 Planning Grants ($815,804.58), as well as additional Round 5 Technical Assistance and a Pilot Project Development Grant ($10,018,685.42).
Attachments
Attachment A: Application Review Process
Attachment B: Final Application Scores
Attachment C: Applications Overview
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Attachment A: Application Review Process
All applications were evaluated through a multi-stage review process that included reviews by both TCC Program Staff (Program Staff) and an Interagency Review Panel (Panel). Program Staff included staff from the SGC and the Department of Conservation (DOC). Program Staff developed a scoring rubric for the implementation grants by using the scoring criteria listed in the TCC guidelines. Program Staff also developed detailed instructions on how to assign scores.
Panel members were selected to complete a holistic review of the applications, including the quality of the overall vision and integration.
Members of the Interagency Review Panel and Program Staff attended a site visit for each applicant. Site visits include presentations and tours of the proposed TCC project area led by lead applicants, co-applicants, residents, and other stakeholders.
TCC Program Staff Review
• Completeness Check: Program Staff reviewed the submitted application materials for completeness. Applicants were notified if their application was incomplete and were given two (2) business days to resubmit any incomplete or missing materials. The complete application packages were then shared with Interagency Review Panelists. • Threshold Review: Program Staff conducted reviews of the program threshold requirements listed in TCC Guidelines. This included reviewing applications for eligible project areas, readiness thresholds, leverage documentation, indicator tracking plans, and workbook completeness. Program Staff did not make final point determinations but provided notes to the Panel on each of the threshold requirements. • Capacity, Transformative Plans, and Projects: Program Staff in collaboration with subject matter experts in other State Agencies, reviewed all Capacity, Transformative Plans, and Projects to evaluate their feasibility and compliance with the TCC Guidelines. Using the scoring rubric, Program Staff provided preliminary suggested scores for the Transformative Plans and Projects sections along with evaluation considerations to the Interagency Review Panel. Program Staff did not make final scoring determinations.
Interagency Review Panel
Program Staff invited reviewers from 15 agencies and departments to participate in the Interagency Review Panel. The 9-member Interagency Review Panel included members from the following agencies:
• California Department of Forestry and Fire Protection (CAL FIRE) • California Department of Transportation (Caltrans)
• California Department of Conservation
• California Natural Resources Agency
• California Department of Public Health
• California Workforce Development Board
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Interagency Review Panel members attended a training session to understand the program goals and review process. Each Interagency Review Panel member reviewed all 7 applications, as well as a Program Staff Summary Report that synthesized the staff evaluations of Capacity to Implement, the Transformative Plans, and Projects. Prior to the site visits, the Interagency Review Panel convened during a meeting to coordinate on the goals of each site visit and the major questions that Interagency Review Panel needed clarification on from applicants.
After attending the site visits, Interagency Review Panel members sent their scores on the Objectives and Vision Section to the Program Staff. The Interagency Review Panel convened on one (1) day during a Final Deliberation meeting. Program Staff provided briefings on the proposed plans and projects. The Program Staff presented preliminary scores including average of reviewer scores of Objectives and Vision Section, as well as proposed staff scores for Capacity, Transformative Plans, and Projects to facilitate the deliberation.
GHG Scoring
Applicants were required to identify at least three (3) projects with quantifiable GHG emission reductions that would be ready at the time of application. At least half of the requested funding must support projects with quantifiable GHG emission reductions. Applicants can earn up to ten (10) points for the Top 3 quantifiable projects ready at the time of application and up to ten (10) for total GHG reductions from all quantifiable projects.
Applicants with the highest GHG reduction estimate received full points in each category, and the others received points relative to the highest score. GHG reductions were determined using quantification methodologies developed by the California Air Resources Board (CARB). The Application Technical Assistance Provider calculated the estimated GHG emission reductions.
The estimated GHG emission reductions were reviewed and approved by CARB staff. The final GHG scores are shown in Table 2. Based on the reduction estimates, scores were allocated proportionally for each application.
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Table 2: Final GHG Scores for Top 3 Quantifiable & Ready Projects Applicant
Total GHG Emission
Reductions
(MTCO2e)
Relative %
(Based on top
score)
Points
(10 points)
Bakersfield 3,677 12 1.2
Coachella 11,756 37 3.7
Indio 8,584 27 2.7
Porterville 02 0 0
Richmond 17,553 55 5.5
South LA 31,650 100 10
Stockton 13,483 42 4.2
Table 3: Total GHG Emission Reduction Scores for All Quantifiable Projects Applicant
Total GHG Emission
Reductions
(MTCO2e)
Relative %
(Based on top
score)
Points
(10 points)
Bakersfield 1,8813 6 0.6
Coachella 12,728 40 4.0
Indio 8,584 27 2.7
Porterville 6,853 21 2.1
Richmond 18,781 59 5.9
South LA 31,954 100 10
Stockton 13,601 43 4.3
2 Porterville submitted three (3) projects for consideration as quantifiable and ready. However, these projects did not meet readiness threshold requirements.
3 The proposal’s relatively low total GHG reductions were due to the transit components (Downtown Connector Projects 1 & 2) adding roughly 2,000 MTCO2e. For further information, see applicant’s Areas for Improvement under “Applications Not Recommended for Funding”.
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Attachment B: Final Application Scores
Table 4: Application Summary Scores
Application Component Score
Available
Bakersfield Coachella Indio Porterville Richmond South
LA
Stockton
I. OBJECTIVES AND VISION 45 16.1 25.3 22.1 16.3 33.1 38.4 26.5 I.1. Vision for Transformation 20 14.33 16.58 15.67 14.17 19.67 18.42 18.00 I.2. Greenhouse Gas Emissions Reductions 20 1.8 7.7 5.4 2.1 11.4 20 8.5 I.3. Air Pollution Reduction and Mitigation 5 0 1 1 0 2 0 0 II. CAPACITY 30 22 22.5 20.5 17 26.88 30 26.5
II.1. Financial 10 9 7 9 7 8 10 10
II.2. Management and Organization 10 7 7 7.5 7 9.88 10 8 II.3. Collaborative Stakeholder Structure 10 6 8.5 4 3 9 10 8.5 III. TRANSFORMATIVE ELEMENTS 75 38 44 42.5 29 64 71 59
III.1. Community Engagement 30 14 22 13 8 27 29 29
III.2. Displacement Avoidance 15 7 6 9.5 4 14 15 11
III.3. Workforce Development/Economic
Opportunities
20 11 11 13 12 14 17 12
III.4. Climate Adaptation and Resiliency 10 6 5 7 5 9 10 7 IV. PROJECTS 50 34.4 33.0 36.3 29.4 43.4 40.2 42.6
IV.1. Project Design and Feasibility 30 19.67 17.29 19.67 15.80 27.22 24.18 25.33 IV.2. Implementation 20 14.78 15.71 16.67 13.60 16.22 16.00 17.22 V. PRO-HOUSING POLICY INCENTIVE 5 3 1 0 0 0 3 3
VI. COMPLETE SCORING CRITERIA 205 113.6 125.8 121.4 91. 7 167.34 182.6 157.6
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Table 5: Objectives and Vision Scores
Application Component Score
Available Bakersfield Coachella Indio Porterville Richmond South LA Stockton
1. Vision for Transformation 20 14.33 16.58 15.67 14.17 19.67 18.42 18.00
1.a. Vision Statement has been designed to meet the needs of the Project Area and achieve the TCC Program Objectives. 3 1.6 2.2 2.2 2.1 2.8 2.6 3.0
1.b. Strategies have been selected to effectively address the Vision Statement. 3 2.2 2.5 2.4 1.8 2.8 2.7 2.7
1.c. Projects and Transformative Elements are integrated to maximize benefits to the Project Area. 4 2.5 2.8 2.6 2.8 4.0 3.5 3.0
1.d. Proposed Projects demonstrate they provide benefits to priority populations as defined by CARB, CalEPA, CalEnviroScreen, and the TCC Program. (See: https://www.caclimateinvestments.ca.gov/priority- populations).
2 1.7 1.8 1.8 1.8 2.0 2.0 2.0
1.e. Project Area prioritizes investment in California’s most disadvantaged communities. 4 3.8 4.0 3.9 3.7 4.0 3.8 4.0
1.f. Applicant has provided a holistic, thoughtful description of the community resources, assets, and local characteristics that make the Project Area ready for transformation and able to achieve the Program Objectives. 4 2.7 3.3 2.8 1.9 4.0 3.8 3.3
2. Greenhouse Gas Emissions Reductions 20 1.8 7.7 5.4 2.1 11.4 20 8.5
2.a. GHG Emission reduction estimates for top three (3) Projects with highest GHG reduction potentials using CARB approved quantification methodologies that meet readiness requirements at time of Application submittal. 10 1.2 3.7 2.7 0.0 5.5 10.0 4.2
2.b. GHG Emission reduction estimates for all projects with CARB Quantification Methodology. 10 0.6 4.0 2.7 2.1 5.9 10.0 4.3
3. Air Pollution Reduction and Mitigation 5 0 1 1 0 2 0 0
3.a. Applicant has demonstrated substantial progress towards preventing, reducing, and mitigating existing sources of local air pollution through policy adoption, enforcement programs, land use planning, etc. 2 0.0 1.0 1.0 0.0 2.0 0.0 0
3.b. Applicant has proposed policies and programs that will make substantial progress towards preventing, reducing, and mitigating existing sources of pollution through TCC funded projects and strategies
3 0.0 0.0 0.0 0.0 0.0 0.0 0
I. OBJECTIVES AND VISION TOTALS 45 16.1 25.3 22.1 16.3 33.1 38.4 26.5 644
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Table 6: Capacity Scores
Application Component Score
Available Bakersfield Coachella Indio Porterville Richmond South LA Stockton
1. Financial 10 9 7 9 7 8 10 10
1.a. Lead Applicant demonstrates the experience, financial stability and capacity to manage program funds from multiple sources. 4 4 4 4 4 4 4 4
1.b. Co-applicants demonstrate the experience, financial stability and capacity to manage program funds from multiple sources. 4 3 2 3 2 2 4 4
1.c. The Proposal includes funding that meets the 50 percent (50%) leverage requirement. 2 2 1 2 1 2 2 2
2. Management and Organization 10 7 7 7.5 7 9.88 10 8
2.a. Lead Applicant demonstrates organizational capacity to implement the TCC Proposal (e.g., has experience managing similar programs and/or long-term grant implementation)
4 2 2 2.5 3 4 4 3
2.b. Co-applicants demonstrate the experience and organizational capacity to support Lead Applicant in implementation of the TCC Proposal.
4 3 3 3 2 3.88 4 3
2.c. Public agency partner(s) demonstrates a strong commitment to support the implementation of projects and policies included in the TCC Proposal.
2 2 2 2 2 2 2 2
3. Collaborative Stakeholder Structure 10 6 8.5 4 3 9 10 8.5
3.a. Lead Applicant and Co-applicants have established work history, sustained community engagement around climate change, and/or experience working with one or more of the following areas:
disadvantaged communities, housing and community development, economic development, environmental, and public health issues. 3 1 3 1 1 3 3 2.5
3.b. Collaborative Stakeholder Structure is composed of a diverse representation of residents and key stakeholders (e.g., labor unions, nonprofits, faith-based groups, community based organizations, academics, economic development institutions, workforce development groups, businesses, representatives from local School District, Community College District, and others).
4 3 3.5 2 1 4 4 3
3.c. A signed Partnership Agreement for the Collaborative Stakeholder Structure that includes all components listed in Section II.A.
3 2 2 1 1 2 3 3
II. CAPACITY TOTALS 30 22 22.5 20.5 17 26.88 30 26.5
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Table 7: Transformative Element Scores
Application Component Score
Available Bakersfield Coachella Indio Porterville Richmond South LA Stockton
1. Community Engagement 30 14 22 13 8 27 29 29
1.a. Proposal includes a detailed description of the mechanisms through which residents and key stakeholders were meaningfully involved in the development of the Vision Statement and selection of Strategies and Projects.
6 2 5 3 1 6 6 6
1.b. Community Engagement Plan includes detailed descriptions and timelines of diverse and appropriate community engagement activities that will be used throughout the duration of the grant, including how the public will remain engaged and informed. 6 4 4 3 2 5 6 5
1.c. Community Engagement Plan present an inclusive process to receive feedback from the community with diverse backgrounds. 6 3 6 2 1 5 6 6
1.d. Community Engagement is tied to a governance structure that presents the ways in which the community members from diverse backgrounds will be represented and the community concerns at large will be taken into consideration.
6 2 4 3 2 6 6 6
1.e. Work Plans include clear timelines, discrete tasks, and detailed deliverables. Budgets have adequate detail and demonstrate financial feasibility.
6 3 3 2 2 5 5 6
2. Displacement Avoidance 15 7 6 9.5 4 14 15 11
2.a. Includes comprehensive description of displacement vulnerability among existing households and small businesses. 3 2 1 2 1 3 3 2
2.b. Proposal includes programmatic activities for implementing of previously adopted policies that avoid displacement of existing households and small businesses.
3 2 1 2 1 3 3 2
2.c. Proposal includes activities to promote the adoption of new policies to avoid displacement that align with risks identified in vulnerability assessment.
3 1 1 2 1 2 3 2
2.d. Proposal includes a combination of short- and long-term policies. 3 1 1 2.5 1 3 3 3
2.e. Work Plans include clear timelines, discrete tasks, and detailed deliverables. Budgets have adequate detail and demonstrate financial feasibility.
3 1 2 1 0 3 3 2
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3. Workforce Development/Economic Opportunities 20 11 11 13 12 14 17 12
2.a. Explain how the Workforce Development and Economic Opportunities Plan will fund training that leads to career pathways and high-quality jobs for residents of the Project Area and individuals with employment barriers.
5 3 2 3 3 4 5 3
2.b. Explain how the Workforce Development and Economic Development Opportunities Plan will lead to the creation of high- quality jobs for residents of the Project Area and individuals with employment barriers in industries related to the Projects. 5 2 3 3 3 4 4 3
2.c. Proposal demonstrates how the plan addresses current and projected labor demand and skill needs in a net zero economy. 5 3 2 4 4 3 4 3
2.d. Work Plans include clear timelines, discrete tasks, and detailed deliverables. Budgets have adequate detail and demonstrate financial feasibility.
5 3 4 3 2 3 4 3
4. Climate Adaptation and Resiliency 10 6 5 7 5 9 10 7
4.a. Proposal describes the climate change risks and exposures within the Project Area. 2 1 1 2 1 2 2 2
4.b. Proposal analyzes the impact of climate change risks and exposures on both the community and built environment. 2 1 2 2 1 2 2 1
4.c. Proposal describes process to identify and prioritize actions for addressing risks for vulnerable populations and to increasing resilience of proposed infrastructure projects.
3 2 1 2 2 3 3 2
4.d. Proposal demonstrates how infrastructure investments will both contribute to community resilience and itself be resilient to future climate impacts
3 2 1 1 1 2 3 2
III. TRANSFORMATIVE ELEMENTS TOTALS 75 38 44 42.5 29 64 71 59
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Table 8: Project Scores (Averaged across all projects)
Application Component Score
Available Bakersfield Coachella Indio Porterville Richmond South LA Stockton
1. Project Design and Feasibility 30 19.67 17.29 19.67 15.80 27.22 24.18 25.33
1.a. Projects have been designed to meet the
community needs. This includes, but is not limited to,
appropriate scope, scale, components, etc.
5 3.6 4.4 4.2 3.2 4.6 4.4 4.7
1.b. Work Plans include clear timelines, discrete tasks, and detailed deliverables. Budgets have adequate
detail and demonstrate financial feasibility.
15 7.6 5.7 7.3 7.6 13.3 12.0 11.4
1.c. Readiness documentation (e.g., CEQA, site
control, permits) demonstrate that readiness has been
met at application or within one (1) year of grant
execution.
10 8.6 7.1 8.2 5 9.3 7.8 9.2
2. Implementation 20 14.78 15.71 16.67 13.60 16.22 16.00 17.22
2.a. Projects address climate adaptation and resiliency goals for the Project Area. 5 4.6 3.6 4.2 3.8 4.2 4.3 4.6
2.b. Projects provide multiple community benefits to the Project Area (e.g., education, ongoing engagement,
economic opportunities).
5 4.3 4.3 4.2 3.4 4.6 3.6 4.4
2.c. Applicant has identified potential negative impacts of each project (e.g., temporary relocation, disruption during construction, potential displacement) and
developed mitigation strategies and/or contingency
plans.
5 2.7 4.4 3.8 3.2 3.7 4.4 4.6
2.d. Projects include clear plans for long-term
operations and maintenance, including coordination
with appropriate responsible parties.
5 3.2 3.4 4.5 3.2 3.8 3.7 3.7
IV. PROJECTS TOTALS 50 34.4 33.0 36.3 29.4 43.4 40.2 42.6
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Table 9: Pro-Housing Policy Incentive Scores
Application Component Score
Available Bakersfield Coachella Indio Porterville Richmond South LA Stockton V.1. Pro-Housing Policy Incentive 5 3 1 0 0 0 3 3
V.1.a. Maximum points will be awarded to
a Project Area designated as a Prohousing
jurisdiction. Partial points are available to
Project Area jurisdictions that have applied
for, and are awaiting designation, and has
been determined by HCD to have adopted
VMT-reducing Prohousing criteria as listed
in Appendix D.
5 3 1 0 0 0 3 3
V. PRO-HOUSING POLICY
INCENTIVE 5 3 1 0 0 0 3 3
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Attachment C: Applications Overview
Building a Better Bakersfield
Project Title: Building a Better Bakersfield
Lead Applicant: City of Bakersfield
Co-Applicants: Bakersfield Memorial Hospital, Circle of Life Foundation, County of Kern Employees Training Resource Center, CSU Bakersfield, Golden Empire Transit, GRID Alternatives, Habitat for Humanity (Golden Empire), Kern Community College District/Bakersfield College, Caltrans (Leverage Projects Only) Grant Funds Requested: $29,341,404
Leverage Funding: $20,222,878.30
Project Area Size: 5 square miles
Project Area Population and Demographics: The project area is made up of five census tracts within Central and Southeast Bakersfield that is comprises a population of 24,402 residents of which 65% are Hispanic, 26% White and 15% Black. The median income for project area census tracts falls between 29%-64% the of the Kern County Median Income and 20%-45% of the statewide median income.
Description: Building Better Bakersfield is envisioned to transform Central and Southeast Bakersfield with interconnected improvements in transportation infrastructure, clean energy, and urban greening projects. It aims to improve quality of life for existing residents while simultaneously catalyzing further redevelopment of the downtown area.
The TCC funded projects and leverage build upon the existing urban fabric by increasing connectivity and enhancing primary corridors to facilitate a network which serves pedestrians, cyclists, and transit users. Further, programmatic investments in micro transit will bring another component of transit to the project area. The proposal’s transit access and mobility components will enhance the multi-modal framework connecting the area and providing a connection which services all road users.
The solar installation and urban greening components of the proposal signify the proposals vision of reinvestment in the built environment to facilitate a greener, more eco-friendly urban core.
Climate Adaptation and Resiliency: The proposed plan addresses four climate risks/exposures (extreme heat, water shortage, poor air quality, and wildfires) that affect Kern County.
Applicant describes how infrastructure projects will address climate risks and vulnerabilities and decrease GHG emissions. The projects proposed aim to further enhance the quality of life for 650
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residents in the area, reducing greenhouse gas emissions, and providing low-income families with renewable energy and a pathway to further economic growth by reducing utility costs.
TCC Funded Projects
Route 46 Service Enhancements: The project proposes expanded bus route 46 through the downtown area, enhancing connectivity to surrounding residential neighborhoods and community destinations. The proposal includes planning and evaluation of the expansion and the installation of pedestrian safety improvements.
Downtown Circulator: The project proposes establishing a new circulator bus route serving the TCC project area with service running every 15 minutes. This establishes a Shuttle type service for those that live, work, and access the TCC area and serves business such as Bakersfield City Hall, the Federal Courthouse, Beale Library, Marriott Hotel, and Rabobank Theater & Arena.
Chester Avenue Corridor Enhancements: Chester Avenue corridor improvements consists of median installation, landscaping, and irrigation modifications with recommendations from the approved plant/tree pallets from the master study, bike lane improvements, way finding signs, decorative lights, decorative banners, street furniture and various other amenities including complete streets concepts.
4 th Street Active Transportation Corridor: The project improves neighborhood connectivity to Downtown Bakersfield and make it safer to walk, bike, and public transit. Project deliverables includes 1.5 miles of class II bike lanes, new sidewalk installation, crosswalk improvements, bus stop improvements and installation of bike racks. These corridor improvements provide safe routes for walking, biking, or taking transit between residences, workplaces, commercial centers, and schools.
34 th Street Revitalization: The proposed project will reconstruct a segment of 34th Street to include bicycle lanes, landscaped pedestrian walkways, high visibility crosswalks, increased lighting, and bump outs at street intersections. Existing utilities will be relocated to provide space for benches for seating areas and landscaping to encourage bicycling and walking along the corridor. Bicycle parking and bicycle repair stations will be installed to tie into the bike lane network that leads to the Kern River Multi-use Trail and the future High-Speed Rail for easy commute by bicycle or bus.
F Street Greening and Complete Streets Improvements: The project proposed corridor improvements, increasing urban greening, and providing safety measures through pedestrian and bicycle infrastructure. Project deliverables will improve neighborhood connection to the downtown area for 1.1 miles, improve bus shelters, sidewalk repair and installation, install trees, lighting to encourage pedestrian usage, bike lanes, bike racks, sidewalk bulb outs, and high visibility crosswalks. The project will connect downtown Bakersfield to the future site of the High-Speed Rail Station
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GRID Alternatives Solar Installation Collaborative: The project proposes to install 188 kW of residential solar to forty (40) single family homes in the project area with an estimated average size of 4.7 kW per home. Qualifying residents for the systems are individuals and families that own their homes and fall under the 80% Average Median Income for the county in which they reside based on HUD income guidelines.
Community Engagement: The proposed Community Engagement Plan for the Bakersfield TCC project will include a variety of activities to meaningful engage residents and other community stakeholders directly related to implementation of the TCC funded projects within the Project Area. Community empowerment and community-led change is at the core of the TCC program.
Displacement Avoidance: The Displacement Avoidance Plan proposes preventing the displacement of low-income households and small businesses through the supply of new affordable housing in the Project Area. To avoid displacement of small businesses, the City proposed pursuing strategies to increase the availability of commercial space and community serving uses in new developments, though these were not funded parts of the proposed plan.
Workforce Development: The applicant proposes a strategic approach which include on the job training, work experience; educational programs including English as a Second Language classes, job search skills, job club, vocational training, career / technical program, job retention for up to 90 days post-employment, and providing supportive services that directly help participants succeed.
Collaborative Stakeholder Structure: The Building a Better Bakersfield Collaborative identifies an accountable, transparent, and inclusive process for engaging stakeholders.
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Building a Better Bakersfield: Project Area Map
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Coachella Prospera
Project Title: Coachella Prospera
Lead Applicant: City of Coachella
Co-Applicants: Chelsea Investment Corporation, GRID Alternatives Inland Empire, Southern California Mountains Foundation, Desert Recreation District, Greater Coachella Valley Chamber of Commerce, Alianza Coachella Valley, The LEAP Institute, Sunline Transit Agency, University of California – Riverside
Grant Funds Requested: $35,000,000
Leverage Funding: $111,515,105
Project Area Size: 5 square miles
Project Area Population and Demographics: With its close proximity to the U.S.-Mexico border, Coachella is rich in cultural heritage with 97.5% of its residents being of Hispanic origin. Coachella is home to more than 11,379 households of which 30.1% live in poverty. Of the 41,941 persons that reside in the City of Coachella, 27% have no access to affordable, accessible, comprehensive, and high-quality primary care services as well as dental, behavioral health, or other enabling services. Adult obesity in the Coachella Valley (27.49%) is above the state average (23.25%); youth obesity is particularly high in the region (34.90%) compared to Riverside County (28.85%) and California (29.82%). The income poverty rate is 18.6%; the asset poverty rate is 22.7%; unbanked households is 11.2%; liquid asset poverty rate is 46.8% and the number of households with zero net worth is 12.4%.
Description: The vision of Coachella Prospera is to create a more climate-resilient community by preserving our heritage, caring for our environment, creating a thriving community, transitioning to clean energy, and protecting our people, climate, air and water.
Climate Adaptation and Resiliency: The applicant identifies the communities most vulnerable to climate risks; children, the elderly, low-income communities, and communities of color, and extensively outlines how these climate risks impact each of these communities. The applicant also clearly explains how the identified climate risks will impact the built environment.
TCC Funded Projects
Equitable Housing: Woodspur Apartments
Mixed use affordable housing development with 115 units for families at 30-60% of AMI, with commercial space for the Urban Youth Conservation Corps (workforce development organization).
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Coachella Energy for All: The proposal will serve 150 income-qualified homes in the project area and serve the 52nd Avenue Apartments (once built). Direct savings to occupants, access to clean energy, home repairs and improvements, job training and placement.
Zero Emission Bus Purchases: The project includes the purchase of two (2) zero emission buses operating within a new transit route serving the project area. The proposed Route 12 will address the need for a dedicated transit service in the community and will provide a timed transfer connection to regional trunk Route 1 and Route 6 at the Coachella Transit Hub located in the City of Coachella.
Community Wellness Hub: Community Wellness Hub proposed will remove barriers and bridge gaps to help people access vital health and social resources, ensuring that all people can thrive. Through this project, the Desert Recreation District (DRD) is hoping to address Coachella's public health challenges: chronic disease, mental health conditions, substance use disorders, social isolation, food insecurity, gun violence and more. Park and recreation professionals will be focusing on solutions that address the root causes of health and social inequities to truly advance well-being.
Green Raiteros: The project proposes providing micro-mobility solutions through the Green Raiteros includes, 200 bicycles and bike clinics, community rides, and E-scooter fleet expansion.
The project will also develop an EV rideshare program for free or discounted rides to farmworker families for non-emergency medical, social service appointments, work, college/university, shopping for essential goods and enrichment activities.
Coachella, Avenue 50 Pedestrian: The proposed active transportation project includes an infill connection for alternative and multimodal transportation projects along Avenue 50. The project includes 2700 linear feet of sidewalk, 9400 linear feet of Class II bike lanes and provides a critical link between the regional trail system and the heart of Coachella in the downtown commercial and activity center, which includes City Hall, Senior Center, Library, Sunline Transit Hub, Parks, Schools, Low Income Housing, and commerce.
Urban Greening & Green Infrastructure: The proposed project would plant 227 trees and 500 plants within along Cesar Chavez St., Ave 52, Sunset Drive, and 3 neighborhood parks.
Community Engagement: The proposal includes creating an outreach and engagement to be vetted and informed by a Community Steering Community. They propose to create a community advisory committee, to develop a website and phone line for residents to learn about the program and provide input and will conduct community engagement activities for all of the proposed projects, including design charrettes, public workshops, and surveys.
Displacement Avoidance: The applicant proposes to hire a consultant to develop a Displacement Avoidance Plan analysis with residents and businesses to identify priorities. The plan includes policies targeted at business retention.
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Workforce Development: The WDEOP proposal includes funding for the Greater Coachella Valley Chamber of Commerce to meet with local industry representatives and develop an educational platform to help businesses to adapt to climate change. It also includes five different solar training programs, including an on-the-job training program, yearlong solar fellowships, a shared solar PV course, and a community volunteer program. The Urban Conservation Corps program would provide on-the-job training in urban forestry and conservation skills.
Collaborative Stakeholder Structure: The Collaborative Stakeholder Structure includes all project partners, with mechanisms to engage community members in project implementation, to solicit feedback to inform projects, and maintain open communication. 656
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Coachella Prospera: Project Area Map
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Polishing Jewel
Project Title: Polishing Jewel
Lead Applicant: City of Indio
Co-Applicants: GRID Alternatives, College of the Desert Grant Funds Requested: $33,334,022
Leverage Funding: $17,206,670
Project Area Size: 1.25 square miles
Project Area Population and Demographics: The Polishing Jewel Project Area located in Census Tract (CT) 6065045303, has a population of 3,035, and is designated as an SB 535 community, with 100% of the CT qualified as AB 1550 Disadvantaged and Low-Income Community and top 10% disadvantaged. According to CalEnviroScreen 3.0, with a 98% poverty ranking, and in the 98th percentile for unemployment, the Project Area is the most disadvantaged CT in Indio and the Coachella Valley, making it the greatest workforce development challenge in the region.
The CT has a 2020 median household income (MHI) of $26,362, significantly below the Indio MHI of $53,434. In addition, The CalEnviroScreen 3.0 noted that the Project Area CT is in the 91 st percentile for ozone; 72nd percentile for asthma; 92nd percentile for low birth rate; and 80th percentile cardiovascular.
Residents face several barriers preventing access to work and education. With nearly 93% of the residents being Hispanic, the barriers for the Project Area are language and educational attainment. Residents in the CT are primarily Hispanic and in the 96th percentile for linguistic isolation and 93rd percentile for education, with only 2.43% of the population over age 25 having earned a bachelor’s degree or higher. The City will ensure that the TCC projects are cognizant of those where linguistic isolation is a barrier. All material and correspondence will be provided in English and Spanish
Description: Proposed projects seek to better connect the neighborhood to the rest of the City (complete streets), provide accessible, multi-use greenspace (park project), and lower utility bills (solar homes). While there is a significant short- and long-term need for transformative elements (community engagement, displacement avoidance, workforce development and economic opportunity), the requested investments are small relative to the cost caps and may not fully meet the community’s needs. Additionally, the application relies heavily on yet-to-be- determined consultants for many projects, transformative elements, and grant administration.
Climate Adaptation and Resiliency: Complete Streets project, urban greening, and solar energy installations provide strong response to climate risks identified for community. Increasing urban greening will fight urban heat island while encouraging active transportation to reduce air 658
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pollution. Applicant provides a clear connection between the risks identified, the project area population and infrastructure, and proposed actions.
TCC Funded Projects:
Jewel Community Complete Streets: The project increases safety and empowers the Jewel Community to lead more active lifestyles with more opportunities to walk and bike and increases connectivity for the historically disadvantaged Jewel Community. The proposal includes 5 miles of sidewalks with 6 new and 23 enhanced ADA-compliant curb ramps and driveways; 26 new/updated crosswalks; 2 miles of Class III bikeways; grind and overlay of streets; upgraded streetlights with energy efficient LED; CV Link trailhead amenities; 13,440 SF of artistically designed shade structures; and Bigbelly solar smart waste and recycling units.
Charging Jewel EV Stations: The Charging Jewel EV Stations project will install four BEAM EV ARC™ 2020 electric vehicle (EV) charging stations for charging at eight ports: one (two ports) at North Jackson Park at the entrance to CV Link and three (six ports) at Indio Sports Park.
Energy for All: The proposal includes installation of up to 190kW-DC of solar photovoltaic systems on approximately 50 income-qualified households in single-family housing within the project area. These systems will save residents a combined total of $2,127,934 million dollars over the lifetime of the system.
Project partners will also install 253kW-DC of solar on two project area multi-family affordable developments, securing access to direct savings for renters and affordable housing service providers through clean energy.
Greening Jewel: The proposal includes planting of over 500 along City streets and in the Indio Sports Park. Street trees are intended to provide shading in residential areas and to compliment complete streets project.
Indio Sports Park – Phase I and II: The Indio Sports Park Project will construct a new sports park on approximately 52 acres of vacant land, in two phases. Design documents will be complete, and construction will install recreation features and amenities including sports fields and courts (tennis, basketball, soccer, volleyball, pickleball), splash pad, play structure, park lighting, restrooms, concession stand, walking trails, parking, fencing, benches, tables, and shade structures. A community garden will also be constructed.
Community Engagement: The engagement plan focuses on a broad scale of in person and virtual events to provide residents a range of levels of involvement. The five key avenues for participation are: the resident oversight committee, Annual Polishing Jewel Summit, project specific workshops, surveys, pop-up placemaking. These opportunities will be advertised through emails, flyers, canvasing, and updates to a bi-lingual project website. The City will seek to partner with local community benefit organizations, residents, and businesses to harness the lived experience and knowledge of residents and bolster these groups. 659
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Displacement Avoidance: The City is working with residents and businesses to ensure that new development is incremental, holistic, and benefitting current residents and existing businesses while creating a welcoming community for new residents and businesses to experience. The City will work with a consultant for residential outreach and with the Greater Coachella Valley Chamber of Commerce for business outreach.
Workforce Development: The Polishing Jewel TCC proposal will provide opportunity for Project Area residents to gain paid, hands-on employment. College of the Desert and GRID Alternatives will provide support access to certification programs to project area trainees. A key project goal is to match the renewable energy industry in the Coachella Valley with newly qualified trainees.
Collaborative Stakeholder Structure: The CSS includes a five-member Stakeholder Committee that will act as the governing body for the grant, which includes staff from the Lead applicant, one representative per co-applicant (two total), and a subsidiary Resident Oversight Committee (two members). The Resident Oversight Committee (ROC) will have a direct role in oversight and implementation.
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Polishing Jewel: Project Area Map
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Richmond Rising
Project Title: Richmond Rising
Lead Applicant: City of Richmond
Co-Applicants: City of Richmond, Trust for Public Land, Rich City Rides, GRID Alternatives, Urban Tilth, Groundwork Richmond
Grant Funds Requested: $35,000,000
Leverage Funding: $17,342,527
Project Area Size: 2.83 square miles
Project Area Population and Demographics: The Project Area is a densely populated community of color that is largely residential. Approximately 56% of the population is Hispanic/Latino, and 19% is Black. The average Median Household Income for the Census Block Groups that overlap the Project Area is $49,882, with lower-income households in the Iron Triangle, Santa Fe, and Coronado neighborhoods. When the census tracts that make up these residential neighborhoods are averaged, the area is in the 74th percentile for linguistic isolation, and the 81st percentile for poverty (CalEnviroScreen 4.0).
Description: The Richmond Rising proposal is the result of years of stakeholder collaboration to address environmental justice concerns in the Iron Triangle, Santa Fe, and Coronado neighborhoods that adjoin the historical heavy industrial zones in Richmond. This proposal includes projects in active transportation (closing gaps and expanding existing infrastructure), solar installation, water efficiency, urban greening, and health/well-being as they relate to food security and green space access. The proposal includes workforce development/skills training (particularly in solar installation), anti-displacement policies, and community engagement to adequately incorporate local concerns and vision.
Climate Adaptation and Resilience: Each of the proposed projects will increase the resilience of the Project Area, and help the community adapt to climate change, particularly threats of flooding, extreme heat, wildfires, and resulting poor air quality, and address climate justice issues. The projects together produce multiple co-benefits and help implement Richmond’s overall resilience goals.
TCC Funded Projects
Neighborhood Complete Streets: The Neighborhood Complete Streets project provides Richmond neighborhoods with valuable walking and bicycling connections to transit, cultural, commercial, and recreational destinations. It completes the active transportation elements for three projects within the project area: Harbor Way, Yellow Brick Road, and Harbour-8. 662
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Community outreach will be used to identify community needs in order to close gaps in the active transportation network and to increase safety.
Richmond Wellness Trail, Phase 2: Community-led project that will connect the City of Richmond’s historic downtown to the natural and historic features of its waterfront via Marina Way South, benefiting residents of low-income neighborhoods of the Project Area. The 2-mile trail will safely link pedestrians and bicyclists from the Richmond BART/Amtrak station to the ferry terminal to downtown San Francisco while providing critical access to community urban green space amenities.
E-Bike Lending Library: The E-Bike Lending Library supports the community's effort to improve Richmond's growing zero-carbon-based transportation infrastructure through two components:
(1) expansion of the City's current bike share program and infrastructure, administered through a partnership with Gotcha Bike, LLC; and (2) development of a new long-term E-bike share program. The E-Bike Lending Library builds upon a previous survey of community needs with more than 300 respondents and demonstrates strong understanding of community transportation needs and barriers.
Resilient Homes for Healthy Communities: Provides solar power, EV charging, energy efficiency measures, and appliance electrification alongside necessary home rehabilitation work to low- income families (approx. 250 residential properties), creating 875 kW of energy in the Project Area. Applicant intends to align with the CAP and feedback obtained in that engagement process.
Basins of Relations: Water Conservation program expansion will offer both training and services in the form of free laundry to landscape, drip irrigation and rainwater water catchment systems design and installation to 120 low-income homeowners within our project area, reducing urban water use while maintaining a high quality of life for local residents. The training will include certification and opportunities for employment to install these systems.
Bosque del Barrio: Involves two primary efforts: the first is planting 1,000 trees and installing supports in new locations; second, Groundwork Richmond will work alongside Pogo Park to install trees and stormwater planting for the Yellow Brick Road project. The project includes 19,836 SF of stormwater planters, 12,648 SF of pervious planting area, three years of monitoring and maintaining the trees, and outreach with local residents. Workforce development is also a portion of this project with 10 Urban Forestry Technicians who will be trained to implement the project, as well as Green Teams.
ADA Accessible Garden: First-of-its-kind ADA-safe garden designed for elderly and disabled residents as a result of the lead partner seeing at community gardening events that the ADA compliance minimum was still unsafe for those in wheelchairs and the elderly. An initial schematic design has been developed based on community feedback from regular senior and disabled community members/existing users of the space. The project will include an 663
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overarching community advisory board with plans for ongoing resident working groups to inform the design.
Orchard for All!: This project builds upon and responds to feedback from four years of Richmond’s Annual Fruit Tree Giveaway, where participants indicated they would like more support in properly planting and caring for the fruit trees they received. The program will give away 400 fruit trees annually, create a new youth employment/training program, and residents will donate a portion of the harvested fruit to be redistributed to families in need via a farm stand and Veggie RX boxes.
Veggie RX: Expansion of a pilot program to deliver fresh fruits and vegetables as a means of preventative and restorative medicine. The project is anchored by and implemented in partnership with the Lifelong Medical Center, including a train-the-trainer program for medical residents and community health workers as well as community workshops.
Community Engagement: Community engagement efforts lead through the Richmond Rising Youth Fellows Program. The Youth fellows will engage with Project Area residents to understand their climate justice concerns and priorities to inform TCC project implementation, co-lead community engagement for individual TCC projects in collaboration with TCC partners, and participate on the Collaborative Stakeholder Committee, with two voting seats. The information collected by fellows will also help guide a future Richmond Climate Action Plan update, charting the next suite of climate resilience needs in the community.
Displacement Avoidance: Proposal includes City programs and policies alongside detailed description of the approach towards displacement avoidance based on collected quantitative data. Proposal includes a tenant screening ordinance, community land trust feasibility, accessory dwelling unit toolkit, “buy local” campaign, and façade improvement pilot.
Workforce Development and Economic Opportunities: The proposal funds Career Navigators at RichmondWORKS city programs to provide career skills training and supportive services, with connections to training in construction, renewable energy, electrical, and hazardous waste removal, solar installation basic training, as well as project management courses.
Collaborative Stakeholder Structure: The proposed Collaborative Stakeholder Structure is composed of project area residents, non-profit organizations, and other local stakeholders.
There are detailed processes for lead applicant, partners and committee members for coordination and implementation of projects.
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Richmond Rising: Project Area Map
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Stockton Rising
Project Title: Stockton Rising
Lead Applicant: City of Stockton
Co-Applicants: Catholic Charities, Edible Schoolyard Project, Insight Garden Program, Little Manila Rising, GRID Alternatives, Rising Sun Center for Opportunity, San Joaquin Regional Transit District, Public Health Advocates
Grant Funds Requested: $24,165,510
Leverage Funding: $12,400,490
Project Area Size: 5 square miles
Project Area Population and Demographics: The five square mile Project Area intersects with 15 census tracks. The data from each census track was prorated based on the portion of the track within the Project Area boundary to provide more precise information for this application.
According to data provided by the CalEnviroScreen 3.0 tool, 93.1% and 100% of the Project Area fall within the top 10% and 25% of disadvantaged communities, respectively.
Furthermore, 93.1% of the Project Area falls within low-income communities per AB 1550. The proposed Project Area far exceeds the required thresholds of the grant, which highlights the significant need for substantial investment in climate change mitigation.
The Project Area is home to a diverse, economically disadvantaged population of over 28,000 residents. The American Community Survey (ACS), an ongoing survey of the population conducted by the U.S. Census Bureau that includes more information on socioeconomic factors, reports the median household income throughout the Project Area is extremely low – one census track reported only $15,527 per household – compared to California ($75,277) and Stockton ($51,318).
Description: In the Central Valley, Stockton sits at the intersection of pollution and social injustice. Stockton Rising is investing in environmental equity and the community’s aspirations for prosperous neighborhoods so that residents can benefit from lower utility bills, breathe cleaner air, and have access to workforce training and green sector jobs. Stockton Rising incorporates projects from six (6) strategies: transit access and mobility, energy efficiency and solar installation, water efficiency, urban greening and green infrastructure, health and well- being, and Indoor Air Quality. Transformative Plans ensure implementation remains responsive to community needs, training and quality jobs are directed to Project Area residents, residents and small businesses aren’t displaced, and climate change risks are reduced for vulnerable populations and the TCC Project Area.
Climate Adaptation and Resiliency: Stockton Rising proposes adaptation measures that build community resilience among vulnerable populations by promoting healthy built environments, 666
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reducing health vulnerabilities, and mitigating the consequences of rising temperatures.
Proposed projects form a mosaic of resiliency building measures and activities that will prepare the Project Area for the anticipated impacts of climate change.
TCC Funded Projects
McKinley Park Renovation: The proposed project seeks to restore the existing pool, playground, basketball courts, and baseball diamond. The project will also bring new features, such as soccer fields, futsal courts, a covered picnic area, and walking trails. In addition to the amenities, the project includes several sustainable components to be funded by TCC: 145 new trees (57 funded via TCC) and the parking lot reconstruction which will include Low Impact Development measures such as bioswales, bioretention, and permeable surface treatments.
Climate Careers Energy & Water: Project partners will hire 72 full-time and seasonal employees (48 being youth positions) through its Climate Careers program to provide Green House Calls to 425 low-income residents in the Project Area in 2023-2026. Eligible residents will have the opportunity to replace their old, inefficient appliances with more efficient models, all at no cost to the resident. Green House Calls deliver tangible savings in energy and water for residents, improving community resilience and saving residents money on their utility bills. The Climate Careers program promotes environmental literacy and offers professional development opportunities for young people through direct service to the community.
Energy for All: Project partners will install approximately 417 kilowatts (kW) of energy solutions benefitting qualified households in both single-family homes and multifamily units within the Project Area (PA) to reduce greenhouse gas (GHG) emissions while providing immediate and long-term direct utility savings for families. These installations will also support local workforce development through hands-on solar installation and job training.
Urban Forest Renovation: The project proposal includes removal of 500 existing stumps and planting of 1500 trees in parks, homes, and public right of way. Planting will be accomplished by tree services subcontractors hired through City of Stockton Public Works and community foresters recruited through green initiatives.
Edible Education on the Farm: The Edible Education on the Farm project will support residents of the project area with healthy food education opportunities through farm-based educational field trips and community wellness events while also providing essential access to healthy foods through a community-supported agriculture (CSA) model of distributing local, organic produce.
DAWN Program: The DAWN Program will utilize home visits conducted by a trained Community Health Worker (CHW) to distribute air purifiers and asthma remediation kits to improve indoor air and reduce exposure to asthma triggers. Indoor air quality education will be provided to 250 MediCal families with children under the age of 18 living in the project area. 667
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Hybrid Electric Bus Acquisition: The project proposes the expansion of the San Joaquin Regional Transit District fleet with one hybrid electric bus and expanded service on Route 576 in South Stockton.
Community Engagement: The Community Engagement Plan builds upon the work of the partners involved in the Rise Stockton and Stockton Rising coalitions to engage residents throughout the Project Area.
Displacement Avoidance: Round 4 funding will enable the applicant to pursue the recommendations identified in the Round 3 Displacement Avoidance Plan.
Workforce Development: The WDEOP will create high-quality jobs and develop training programs focused on the specific needs of Project Area residents. These include a summer youth program that feeds into a pre-apprenticeship trades program, a bus maintenance mechanic apprenticeship program, tree maintenance training, and a program for incarcerated individuals.
Collaborative Stakeholder Structure: The Stockton Collaborative Stakeholder Structure is comprised of community serving organizations, local government partners, stakeholders and residents committed to the equitable and sustainable development of South Stockton.
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Stockton Rising: Project Area Map
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South LA Eco-Lab
Project Title: South LA Eco Lab
Lead Applicant: Community Partners
Co-Applicants: SLATE-Z; Trust South LA; Strategic Actions for a Just Economy (SAJE); Coalition Responsible Community Development (CRCD); Streets LA; Los Angeles Department of Transportation (LADOT); LA Metro; GRID; Tree People; LA Neighborhood Land Trust (LANLT) Additional Subgrantees or Partners – CicLAvia, SCOPE, Los Angeles Trade Technical College, Los Angeles Cleantech Incubator, Climate Resolve
Funds Requested: $35,000,000
Leverage Funding: $24,614,575
Project Area Size: 3.92 square miles
Project Area Population and Demographics: The Project Area has a population of 85,095 with 81% Latinx, 17% African American, and 2% White or other. 60% of the population lives below the poverty level with the per capita income at $14,470. 33% are unemployed, 44% experience severe housing cost burdens, and 18% use active modes of transportation (walking, wheeling, and taking transit) to commute to/from work. Many Project Area residents are monolingual Spanish speakers.
California EPA has identified South Los Angeles as one of the most polluted areas in the state.
South Los Angeles has a long and damaging legacy of contaminated land and air pollution, largely due to freeways and industrial pollution impacting residential neighborhoods. Today, South Los Angeles has disproportionately high occurrences of asthma, diabetes, obesity, and heart disease, all of which can be linked to unhealthy environmental factors.
Description: The South Los Angeles Eco-Lab focuses on “Economic Development through Climate Action” to achieve the community’s vision for a socially inclusive, sustainable, green community resilient to climate change, in the heart of South Los Angeles. Transformative plans are geared to connecting, informing, and involving residents, small businesses and tenants in the proposed projects so that they benefit most from the infrastructure improvements and job opportunities. South LA Eco-Lab's proposal includes 11 projects, derived from 5 strategies for creating green spaces, energy and water efficient infrastructure, and expansion of safe active travel and public transit, to enhance public health, well-being, and environmental benefits.
Climate Adaptation and Resiliency: The Project Area is a: SB535 Disadvantaged Community, AB1550 low-income area, a high social sensitivity area in the LA County Climate Vulnerability Assessment and within the highest 13 percentiles of CalEnviroScreen 4.0 scores. All designations indicate considerable impacts from climate change risks (heat, drought, and 670
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wildfire smoke). Sensitivity, exposure, and capability to adapt are overlaid with limited access to benefits and burdensome environmental conditions.
TCC Funded Projects
Western/Slauson First-Last Mile Improvement Project: The project will consist of curb ramp upgrades, sidewalk improvements, tree planting, and pedestrian-level lighting along Western Avenue, Slauson Avenue and other project area streets in the approximately east half of the ½- mile radius of the Transit Station.
South LA Stress-Free Connections: The project includes improvements to 51st St., Budlong Ave, and Hoover St., including: 50 new speed humps; bike boxes and leading pedestrian intervals; and a two-way protected bike lane connecting east-west bike routes. They will connect users to protected bike lanes and paths along with the in-progress Rail-to-Rail active transportation corridor on the north side of Slauson Ave.
Metro Free Monthly Pass Program: Proposes to launch a “Metro Free Monthly Pass Program” for low-income students, seniors, and disabled residents within the designated project area.
The project will include: 45,255 passes for students (K-12 annual), 28,500 passes for senior and disabled residents; and 51,300 passes low-income monthly passes.
LADOT EV Car Charging Stations: This project will include the purchase and installation of sixteen (16) charging stations in four of the project area parks.
LADOT EV Car Sharing Expansion: This project is an expansion of the City of Los Angeles’s Electric Vehicle Car Share Program (BlueLA) which offers disadvantaged communities a clean transportation option. BlueLA facilitates essential trips to access employment, medical appointments, school, and groceries.
LADOT E-Bike Library: This project will double the scale of the City of Los Angeles E-Bike Library by purchasing an additional 250 e-bikes to address transportation, economic, and equity disparities.
Single Family Solar Installations: Project partners will install solar photovoltaics on single- family homes for low-income households earning no more than 80% of the area median income within the TCC project area. In total, GRID will install up to 480 kW-DC total of rooftop solar electric systems on an estimated 140 low-income households.
Cool Pavement: The Project proposes to install cool pavement on 15 lane miles of local streets (approximately 40 city blocks) to create a network of cool streets that will provide urban heat island mitigation, encourage walking, and create cool connections to local parks and schools.
Cool Roofs: The project proposes to install 84 cool roofs with smog-reducing technology on single-family homes for low-income households earning no more than 80% of the area median income within the TCC project area.
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Community Canopy Expansion: The Community Canopy project will involve the planting and care of 4,000 public trees and the distribution of 2,000 residential fruit/shade trees. The project will involve extensive community engagement that will engage more than 2,500 local community members. The project will consist of a local workforce program to hire and train individuals from the community to carry out project activities.
School Greening: The 52nd Street Elementary School Greening Project will create a new 2-acre green schoolyard at a Los Angeles Unified School District (LAUSD) elementary school. The project will plant 30 trees and install over 20,000 square feet of new California native habitat and green infrastructure swales to capture, slow, and clean run-off. Other features include an outdoor classroom, a new 20,000 square foot California native turf field with a permeable running track, seating areas, and an edible school garden.
Community Engagement: Approximately 85,000 individuals reside in the Project Area. Project Partners will collectively engage at least 50% of them within the grant period – reaching 42,500 unduplicated residents over 5 years through a multi-pronged approach including activities such as door knocking, phone and digital engagement, as well as in person events.
Displacement Avoidance: The strategies of the Displacement Avoidance Plan include know- your-rights education for residential and commercial tenants, Tenant Action Clinics, eviction defense services, the creation of a Small Business Alliance, and technical assistance for small businesses. Project partners will engage community members in advocacy efforts to create policies and programs that will improve housing security for vulnerable residents.
Workforce Development: The program focuses on underserved communities within the South LA Eco-Lab project area, providing the training, certifications, and on-the-job training program for high-quality jobs addressing climate resilience and economic disparities. Project partners will prepare participants for careers including, but not limited to, solar installation, construction, tree planting, cool street paving, electric vehicle charging station installations and more.
Collaborative Stakeholder Structure: The CSS is composed of a diverse representation, including: nonprofits, community-based organizations, academics, economic development institutions, workforce development groups, businesses, technical College/higher education, and resident recruitment planned. These groups have deep history in community engagement, climate change, disadvantaged communities, economic development, environmental and public health.
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South LA Eco-Lab: Project Area Map
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Creating Opportunities; Changing Lives
Project Title: Creating Opportunities; Changing Lives
Lead Applicant: Porterville Unified School District
Co-Applicants: City of Porterville, Tulare County Association of Governments, Tulare County Regional Transit Authority, Climate Action Pathways for Schools Grant Funds Requested: $34,939,746
Leverage Funding: $22,780,890
Project Area: 4.80 square miles
Population and Demographics:
Description: Porterville USD built this TCC grant proposal as the centerpiece of a districtwide energy and sustainability program aimed at reducing GHG emissions, improving public/student health, reducing energy costs, reducing water consumption, and overall improving the quality of public education and community. The plan includes 10 projects covering 7 TCC strategies, and are targeted at community wide needs, particularly air pollution reduction. The proposal includes workforce development in the form of apprenticeship programs and paid internship programs and community engagement to incorporate the greater Porterville community and other stakeholders.
Climate Adaptation and Resiliency: The climate risks facing the community of Porterville include increasing heat temperatures, the increase in number of excessive heat days, and the potential for increased length of dry spells in Porterville.
Environmental exposures faced in the community that will only be worsened with climate change include: particulate air pollution, ground level ozone pollution and contaminated drinking water. Across the State, Porterville ranks the high in these three environmental exposures.
TCC Funded Projects
Clean Air for Every Classroom: This project will include outside air ventilation systems in 414 classrooms, as well as complete HVAC replacements in 38 classrooms. The ventilation system will also recover energy.
Solar Generation: Installation of behind the meter solar photovoltaic systems across 14 total sites.
Pedestrian Improvements for Safe Walking to School: The project proposal includes 20 street and intersection improvements to create safer walking and biking routes to schools within the 674
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project area. The project will also fund educational and engagement programming to promote active transportation.
Zero Emissions Transportation: The project will replace 12 diesel buses and 3 gas-powered vans with electric equivalents, as well as construct charging infrastructure for the vehicles.
Student Passes with Free Public Transit: No accompanying documentation submitted with project.
Zero Waste: This project will create a model at three pilot schools on how to achieve zero waste using a three-bin waste separation system. Through this project an estimated 350 tons of organic material will be diverted from landfill and either composted or donated. The project will be supported by student interns,
Landscaping: This project will start a comprehensive water efficiency and stormwater management program for Porterville Unified School District and convert about 700,000 sq ft of grassy areas to drought tolerant alternatives with topographical features to reduce runoff.
Tree Shaded Pathway: This project will aim to lower the urban heat island effect and provide campus greening and shade through planting of trees. The proposal includes planting 141 trees across 12 campuses. Additionally, project partners will work with 7,100 students, their families, and other community members conducting tree planting events in the project area.
Community Engagement Plan: A Community Engagement Manager will build a network of connectivity between co-applicants and the greater Porterville community, including diverse residents, business owners, Tule River Tribal Members, PUSD staff and students, and community and faith based organizations.
Displacement Avoidance Plan: The City of Porterville has existing policies and programs to address the housing needs of residents. The City will continue to implement existing policies through the TCC implementation. The application did not propose new policies and programs.
Workforce Development: The plan goal is to provide skills training for students, preparing them for high skill, high pay jobs and to become environmental leaders in the community and throughout California. The proposal includes two Youth Apprenticeship Programs in electric transportation and zero emission buildings; and five internship programs for high school students to receive training while supporting implementation of the proposed TCC funded projects.
Collaborative Stakeholder Structure: The CSS includes representatives from each partner organization and one representative from a group of community residents.
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February 4, 2025
Finance Department
DATE: February 4, 2025
TO: Mayor Martinez and Members of the City Council
FROM: Nickie Mastay, Deputy City Manager, Internal Services Andrea Miller, Director of Finance
Mubeen Qader, Deputy Director of Finance
Jerry Chak, Accounting Manager
Subject: Annual Comprehensive Financial Report for the Fiscal Year Ended June 30, 2024
FINANCIAL IMPACT: There is no fiscal impact to receiving this report.
PREVIOUS COUNCIL
ACTION:
N/A
STATEMENT OF THE
ISSUE:
The City retains an independent auditor to annually
review and express an opinion regarding the accurate
representation of the City’s financial statements.
RECOMMENDED ACTION: RECEIVE a report on the City’s Annual Comprehensive Financial Report (ACFR) for Fiscal Year ended June 30,
2024 – Finance Department (Andrea Miller/Mubeen
Qader/Jerry Chak 510-620-6740).
AGENDA
REPORT
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February 4, 2025
DISCUSSION:
At the close of each fiscal year, the City engages an external auditor to audit its financial statements. The Annual Comprehensive Financial Report (ACFR), which contains the City of Richmond’s basic financial statements, auditor’s report, and important supplemental information, is intended to give the reader a comprehensive view of the City’s financial position and activities for the fiscal year ended June 30, 2024. The ACFR is prepared in accordance with Generally Accepted Accounting Principles (GAAP) for local governments as established by the Governmental Accounting Standards Board (GASB).
California Government Code Section 53891 requires every local government agency to submit a report of all financial transactions to the State Controller’s Office based on data from the audited financial statements prepared in accordance with GAAP, and that the report is audited by an independent firm of certified public accountants. Since the ACFR is audited by independent experts, the report provides additional assurance to the community that the City is being responsible stewards of tax dollars.
Consistent with sound fiscal management practices and prudent public policy, City staff is presenting the ACFR to City Council. The ACFR can be found on the City’s website at: City-of-Richmond-ACFR-FY2024.
Badawi & Associates has audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining funds information of the City for the fiscal year ended June 30, 2024, and the related notes to the financial statements. The auditors have rendered an unmodified opinion on the City’s financial statements for the fiscal year ended June 30, 2024, with a disclaimer of opinion for business-type activities as it relates to the Richmond Housing Authority (RHA) enterprise fund and the aggregate discretely presented component units, since the financial statements of the Richmond Housing Authority and RHA Properties, RHA Housing Corporation and RHA RAD LLC have not been audited for the year ended June 30, 2024.
The ACFR is organized into five (5) sections:
1. Introduction including the Transmittal Letter and Independent Auditor’s Report
2. Management’s Discussion and Analysis (MD&A)
3. Basic Financial Statements and Notes
4. Supplemental Information
5. Statistical Information
The MD&A section (pages 7-19) of the ACFR presents an overview and analysis of the City’s financial activities for the fiscal year ended June 30, 2024. Staff encourage readers to consider the information presented in this section in conjunction with additional information provided in the Transmittal Letter (pages v-xviii), the City’s Basic Financial Statements (pages 21-49), and notes to the financial statements (pages 51- 169).
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The Independent Auditor’s Report is included in the ACFR attached (Attachment 1 – Annual Comprehensive Financial Report, pages 1-5), below are the excerpts from the ACFR:
Unmodified Opinions
The auditors issued unmodified opinions on Governmental Activities, Major Governmental Funds, Port of Richmond, Municipal Sewer Fund and Aggregate Remaining Fund Information. This is the highest possible rating. “In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the General Fund, the Community Development and Loan Programs Special Revenue Fund, the Port of Richmond Enterprise Fund, the Municipal Sewer Enterprise Fund, and the aggregate remaining fund information of the City as of June 30, 2024, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.”
Basis for Unmodified Opinions
The audit was conducted in accordance with auditing standards generally accepted auditing standards in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. The responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of the report.
Disclaimer of Opinion
The auditors have issued a disclaimer of opinion on Business-Type Activities, Aggregated Discretely Presented Component Units and Richmond Housing Authority.
This is due to their inability to audit the information for the fiscal year ending June 30, 2024, pending completion of their audit of fiscal years ending June 30, 2020, 2021, 2022, and 2023. More specifically, the auditors stated, “Because of the significance of the matter described in the Basis for Disclaimer of Opinion paragraph, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on the financial statements of the business-type activities, Richmond Housing Authority Enterprise Fund, and the aggregate discretely presented component units of the City. Accordingly, we do not express an opinion on these financial statements.”
Basis for Disclaimer of Opinion
The financial statements of the Richmond Housing Authority and RHA Properties, RHA Housing Corporation, and RHA RAD, LLC have not been audited for the year ending June 30, 2024. The Richmond Housing Authority’s financial activities are included in the City’s basic financial statements as a major enterprise fund and represent 7.43 percent,
16.65 percent, and 6.54 percent of the assets, net position, and revenues, respectively, of the City’s business-type activities. The financial activities of the RHA Properties, RHA Housing Corporation, and RHA RAD, LLC are included in the City’s financial activities 679
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as discretely presented component units and represent the City’s only discretely presented component units.
Badawi & Associates is currently auditing RHA financials for the fiscal year ending June 30, 2020, and anticipates completing an additional fiscal year ending June 30, 2021, by the end of calendar year 2025.
Financial Highlights
General Fund
The General Fund is the primary operating fund of the City, and it is used to report the financial results of the daily operations of the City. In fiscal year 2023-24, the City’s General Fund revenues increased by $12.1 million or 5.8 percent to $218.7 million and expenditures increased by $18.6 million or 10.3 percent to $198.6 million. The total fund balance for the fiscal year increased by $13.1 million or 15.2 percent to $99.4 million.
The General Fund reported an unassigned fund balance of $65.3 million, an increase of $10.1 million or 18.3 percent from the prior year’s balance of $55.2 million.
Cash Reserve Policy
The City’s General Fund cash reserve policy requires the City to maintain a minimum year-end contingency reserve balance of 21 percent of next year’s budgeted General Fund expenditures, including transfers out of $52.3 million. As of June 30, 2024, the City’s cash reserve, which is a component of the unassigned fund balance, is $65.3 million or 26.2 percent.
POLICY SYNERGIES:
City Council Goals and Priorities Goal Area No. 5 – Strengthening the City’s internal infrastructure and process, specifically Goal No. 5.2 Improve Fiscal Responsibility.
DOCUMENTS ATTACHED:
Attachment 1 – City of Richmond Annual Comprehensive Financial Report (ACFR) for the year ended June 30, 2024
Attachment 2 – Presentation
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City of Richmond, California
Annual ComprehensiveFinancial Report
FOR THE YEAR ENDED JUNE 30, 2024
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City of Richmond
California
Financial Report
Fiscal Year Ended June 30, 2024
Prepared by the Finance Department
Andrea Miller
Director of Finance/Treasurer
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City of Richmond
Annual Comprehensive Financial Report
For the year ended June 30, 2024
Table of Contents
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INTRODUCTORY SECTION
Table of Contents ............................................................................................................................................................ i Letter of Transmittal ...................................................................................................................................................... v Organizational Chart .................................................................................................................................................. xix List of Elected and Appointed Officials .................................................................................................................... xx
FINANCIAL SECTION
Independent Auditor’s Report ................................................................................................................................... 1 Management’s Discussion and Analysis .................................................................................................................. 7 Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Position ................................................................................................... .................................. 26 Statement of Activities ..................................................................................................... ..................................... 28 Fund Financial Statements:
Governmental Fund Financial Statements:
Balance Sheet – Governmental Funds ......................................................................................... .................... 34 Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Position ................................................................................................. ............................. 35 Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds ............................................................................................. ..................... 36 Reconciliation of the Govern mental Funds Statement of Revenue, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities ...................................... 37 Proprietary Fund Financial Statements:
Statement of Net Position – Proprietary Funds .............................................................................. ............... 40 Statement of Revenues, Expenses and Changes in Fund
Net Position – Proprietary Funds .......................................................................................... ....................... 42 Statement of Cash Flows – Proprietary Funds ............................................................................................... 44 Fiduciary Fund Financial Statements:
Statement of Fiduciary Net Position – Fiduciary Funds ............................................................................... 48 Statement of Changes in Fiduciary Net Position – Fidu ciary Funds .......................................................... 49 Notes to Basic Financial Statements ................................................................................................................... 53685 City of Richmond
Annual Comprehensive Financial Report
For the year ended June 30, 2024
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Required Supplemental Information:
Budget and Budgetary Accounting ...................................................................................................................... 173 Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual:
General Fund ................................................................................................................ ....................................... 175 Community Development and Loan Programs Special Revenue Fund ..................................................... 176 American Rescue Plan Act Special Revenue Fund ......................................................................................... 177 Schedule of Changes in the Net Pension Liability and Related Ratios – Miscellaneous Plan ........................... 178 Schedule of Contributions – Miscellaneous Plan ........................................................................................................ 180 Schedule of Changes in the Net Pension Liability and Related Ratios – Safety Plan ....................................... 182 Schedule of Contributions – Safety Plan ............................................................................................................... 184 Schedule of Changes in the Net Pension Liability and Related Ratios:
General Pension Plan ..................................................................................................................................................... 186 Police and Firemen’s Pension Plan ........................................................................................... .......................... 188 Other Post-Employment Benefits Plan Schedules - OPEB Plan:
Schedule of Changes in the Net OPEB Liability and Related Ratios ........................................................... 190 Schedule of Plan Contributions .............................................................................................. ........................... 192 Schedule of Investment Returns .............................................................................................. .......................... 192 Other Post-Employment Benefits Plan Schedules - RPOA Plan:
Schedule of Changes in the Net OPEB Liability and Related Ratios ........................................................... 194 Schedule of Plan Contributions .............................................................................................. ........................... 195 Supplementary Information:
Combining and Individual Fund Statements and Schedules:
Combining Balance Sheet – Nonmajor Governmental Fund s ....................................................................... 202 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Governmental Funds ................................................................................ ....... 208 Schedules of Revenue, Expenditures, and Changes in Fund Balance – Budget and Actual:
Nonmajor Governmental Funds:
State Gas Tax Fund ......................................................................................................... ................................. 213 General Purpose Fund ....................................................................................................... .............................. 214 Paratransit Operations Fund ................................................................................................ .......................... 215 Employment and Training Fund ............................................................................................... .................... 216 Public Safety Fund ......................................................................................................... .................................. 217 Lighting and Landscaping Districts Fund .................................................................................... ................ 218 Developer Impact Fees Fund ................................................................................................. ......................... 219 Secured Pension Override Fund .............................................................................................. ...................... 220 Richmond Neighborhood Stabilization Corporation Fund ....................................................................... 221 Rent Program Fund .......................................................................................................... ............................... 222 Cost Recovery Fund ......................................................................................................... ................................ 223 Environmental and Community Investment Agreement Fund ................................................................ 224 Transformative Climate Grant Fund .......................................................................................... ................... 225 686
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Supplementary Information (Continued):
Combining and Individual Fund Statements and Schedules (Continued):
Encampment Resolution Grant Fund ........................................................................................... ................ 226 General Pension Fund ....................................................................................................... .............................. 227 Police and Firemen’s Pension Fund .......................................................................................... .................... 228 2022 Pension Obligation Bonds Fund ......................................................................................... .................. 229 General Debt Service Fund .................................................................................................. ........................... 230 Civic Center Debt Service Fund ............................................................................................. ........................ 231 General Capital Improvement Fund ........................................................................................... .................. 232 Measure C/J Fund ........................................................................................................... ................................ 233 Harbor Navigation Fund ..................................................................................................... ........................... 234 Combining Statements of Net Position – Nonmajor Enterprise Funds ........................................................... 236 Combining Statement of Revenues, Expenses and Changes in Fund Net Position – Nonmajor Enterprise Funds .............................................................................. ......... 237 Combining Statement of Cash Flows – Nonmajor Enterprise Funds ........................................................... 238 Combining Statement of Net Position – Internal Service Funds ................................................................... 240 Combining Statement of Revenues, Expenses and Changes in Net Position – Internal Service Funds ...................................................................................... ..................... 241 Combining Statement of Cash Flows – Internal Service Funds .................................................................... 242 Combining Statement of Fiduciary Net Position – Pension Trust Funds.................................................... 244 Combining Statement of Changes in Fiduciary Net Position – Pension Trust Funds ............................... 245 Combining Statement of Fiduciary Net Position – Private Purpose Trust Funds ...................................... 246 Combining Statement of Changes in Fiduciary Net Position – Private Purpose Trust Funds ................. 247 Sub-Combining Statement of Fiduciary Net Position –
Successor Agency to the Richmond Community Redevelopment Agency ............................................. 248 Sub-Combining Statement of Changes in Fiduciary Net Position – Successor Agency to the Richmond Community Redevelopment Agency ............................................. 250 Combining Statement of Fiduciary Net Position – Custodial Funds ........................................................... 254 Combining Statement of Changes in Fiduciary Net Position – Custodial Funds ...................................... 256 687
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STATISTICAL SECTION
Net Position by Component Last Ten Fiscal Years ................................................................................ ............ 264 Changes in Net Position Last Ten Fiscal Years ................................................................................................... 266 Fund Balances of Governmental Funds Last Ten Fiscal Years ......................................................................... 268 Changes in Fund Balance of Governmental Funds Last Ten Fiscal Years ...................................................... 270 Assessed and Estimated Actual Value of Taxable Property Last Ten Fiscal Years ....................................... 272 Property Tax Rates – All Overlapping Governments Last Ten Fiscal Years .................................................. 274 Principal Property Tax Payers Current Year and Nine Years Ago .................................................................. 276 Property Tax Levies and Collections Last Ten Fiscal Years .............................................................................. 277 Utility Users Tax Collections Last Ten Fiscal Years ........................................................................................... 278 Utility Users Tax Direct Rates On Charges For Services Last Ten Fiscal Years ............................................. 279 Top Ten Utility Users Taxpayers .............................................................................................. ............................ 280 Ratio of Outstanding Debt by Type Last Ten Fiscal Years ................................................................................ 281 Computation of Legal Bonded Debt Margin ...................................................................................................... 282 Revenue Bond Coverage 1999, 2006, 2008, 2010A, 2010B, 2017A, 2019A and 2019B Wastewater Revenue Bonds Last Ten Fiscal Years...................................................................... 283 Revenue Bond Coverage 1996, 1999, 2004, 2007 and 2009 Port Terminal Lease Revenue Bonds, Note and Point Potrero Lease Revenue Bonds Last Ten Fiscal Years ............................................. 284 Bonded Debt Pledged Revenue Coverage Tax Allocation Bonds and Refunding Bonds Last Ten Fiscal Years ................................................................................................. .............................. 285 General Bonded Debt Pension Obligation Bonds Last Ten Fiscal Years ........................................................ 286 Computation of Direct and Overlapping Debt .................................................................................................. 287 Demographic and Economic Statistics Last Ten Calendar Years ..................................................................... 288 Principal Employers Current Year and Nine Years Ago ................................................................................... 289 Full-Time Equivalent City Government Employees by Function Last Ten Fiscal Years .............................. 290 Operating Indicators by Function/Program Last Ten Fiscal Years ................................................................. 291 Capital Asset Statistics by Function/Program Last Ten Fiscal Years .............................................................. 292 688
FINANCE DEPARTMENT
450 CIVIC CENTER PLAZA
RICHMOND, CA 94804
(510) 620-6740
January 2, 2025
Citizens of the City of Richmond
The Honorable Mayor and
Members of the City Council
We are pleased to present the Annual Comprehensive Financial Report (ACFR) of the City of Richmond, California (City). The Finance Department has prepared this report to present the financial position and the results of the City’s operations for the fiscal year ended June 30, 202 4, and the cash flows of its proprietary fund types for the year then ended. The basic financial statements and supporting schedules have been prepared in compliance with Article IV, Section 1(b)3 of the City Charter, with California Government Code Sections 25250 and 25253, and in accordance with generally accepted accounting principles (GAAP) for local governments as established by the Governmental Accounting Standards Board (GASB).
This report consists of management’s representations concerning the finances of the City.
Consequently, management assumes full responsibility for the completeness and reliability of all the information presented in this report. To provide a reasonable basis for making these representations, management of the City has established a comprehensive internal control framework that is designed both to protect the government’s assets from loss, theft or misuse, and to compile sufficient reliable information for the preparation of the City’s financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the City’s comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement.
As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material aspects.
The City Council is required to adopt an initial budget for the fiscal year to be effective July 1, for the ensuing fiscal year. Budgeted expenditures are adopted through the passage of a resolution, which constitutes the maximum authorized expenditures for the fiscal year and cannot legally be exceeded except by subsequent amendments of the budget by the City Council. Expenditures are controlled at the fund level for all budgeted departments within the City, which means the level at which expenditures may not legally exceed the appropriations.
The City’s financial statements have been audited by an independent auditing firm of licensed certified public accountants. The objective of the independent audit was to provide reasonable assurance that the financial statements of the City for the fiscal year ended June 30, 2024, are free v
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of material misstatement. The independent audit involved examining evidence supporting the amounts and disclosures in the financial statements on a test basis ; assessing the accounting principles used and significant estimates made by management ; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion on the City’s financial statements for the fiscal year ended June 30, 2024, but with a disclaimer of opinion for business-type activities as it relates to the Richmond Housing Authority Enterprise Fund and the aggregate discretely presented component units, as the financial statements of the Richmond Housing Authority and RHA Properties, RHA Housing Corporation and RHA RAD LLC have not been audited for the year ended June 30, 2024. The Independent Auditors’ Report is presented as the first component of the Financial Section of this report.
Accounting standards require that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City’s MD&A can be found immediately following the report of the independent auditors.
The Reporting Entity and Its Services
As required by GAAP, these basic financial statements present the City and its component units, entities for which the City is considered to be financially accountable. Blended component units, although legally separate entities, are in substance part of the City’s operations; therefore, data from these units are combined with data of the City. Discretely presented component units, on the other hand, are reported in a separate column in the basic financial statements to emphasize their legal separateness and independent operations from the City. Each blended component unit has a year-end date of June 30. The City’s three discretely presented component units are RHA Properties, RHA Housing Corporation, and RHA RAD LLC.
The City’s component units and assessment districts are as follows: the Richmond Housing Authority, the Richmond Joint Powers Financing Authority, the Richmond Neighborhood Stabilization Corporation, the Richmond Surplus Property Authority and Harbor Navig ation, Country Club Vista, and Atlas Interchange Special Assessment Districts. The City also has one inactive component unit, Richmond Parking Authority.
Profile of the Government
The City of Richmond was chartered as a city in 1909, and is located 16 miles northeast of San Francisco, directly across San Francisco Bay. Richmond is on a peninsula separating San Francisco Bay (on the south) and San Pablo Bay (to the north), spanning 3 2 total miles of shoreline. The City's total area is 56.1 square miles, 33.8 of which is land area and 22.3 water area. Richmond is situated near major metropolitan cities and major new growth areas. San Francisco is within 35 minutes from Richmond by freeway; Oakland is 20 minutes; San Jose is approximately 60 minutes to the south; and Sacramento, the state capitol, is approximately 90 minutes to the east. Central Marin County is 15 minutes from Richmond directly across the Richmond -San Rafael Bridge.
Freeways provide direct access from Richmond to major new growth areas along Interstate 80 north and east to Vallejo, Fairfield, and Sacramento; along Interstate 680 in central Contra Costa vi
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County; and south along Interstate 880 to the San Jose area.
Richmond’s population is 113,518. The population within a 30 -mile radius of Richmond is over
3.7 million and within a 70-mile radius is approximately 7.8 million. Richmond is located on the western shore of Contra Costa County, and it is the largest city in the "West County" region consisting of five cities: Richmond, El Cerrito, San Pablo, Hercules, and Pinole.
The City of Richmond provides a full range of municipal services, including police and fire protection, construction and maintenance of highways, streets and infrastructure, library services, storm water and municipal sewer systems, wastewater treatment facility, and the administration of recreational activities and cultural events. The City also operates the Richmond Memorial Convention Center and the Port of Richmond.
The City of Richmond operates under a Council-Manager form of government with six members elected at -large to alternating four -year terms and the Mayor elected at -large as the seventh member. The City Manager, appointed by the Mayor and Council, has authority to manage the administrative and fiscal operations of the City. In addition to the City Manager, the City Attorney and City Clerk are appointed by the Mayor and Council.
The mission of the City of Richmond is:
The City of Richmond provides services that enhance economic vitality, the environment, and the quality of life of our community.
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Factors Affecting Financial Condition
The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the City operates.
Local economy
The American Rescue Plan Act of 2021 (ARPA) was signed into law on March 11, 2021. The City’s allocated amount was $27.7 million received in two installments, $13.8 million in August 2021 and $13.8 million in August 2022. These funds have been allocated to programs that provide rent relief for those negatively impacted by COVID-19, assistance for the unhoused, community needs assessment, and community infrastructure improvements. The City expects to obligate all ARPA funds by December 31, 2024, and expend them by December 31, 2026.
Property Tax continues to see steady growth in FY2023-24 with actual General Fund Property Taxes increase by 4% compared to the previous year. More recently, the 202 3-2024 County Assessment Roll indicates growth of the Assessed Valuation (AV) at 6.77% for Secured Property Taxes, the main component in changes to secure property taxes year to year. While most properties in Richmond had a year-over-year increase of the 2% maximum allowed under Proposition 13, the major growth leading to the 6.77% AV change was driven by properties sold during the previous calendar year and the updated valuation of the Chevron Refinery by the County Assessor.
The City received $61.3 million in Sales Tax revenue, which is $5.8 million more than the previous fiscal year, an increase of 10.4% The most recent forecast from the City’s financial consultants, using the most likely scenarios, expects this trend to continue.
Measure U, which was approved by voters in November 2020, significantly changed the calculation for the Business License Tax. Measure U imposes a calculation based on Gross Receipts. This changed the tax calculation from being based on number of employees or location to a percentage of the business gross receipts. The business tax collected by the City will change with inflation, and with the number of businesses opening and closing. This will more closely tie to the local economy than in years past.
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Significant Events and Accomplishments
The City of Richmond is committed to providing excellent municipal services to its diverse residents and visitors. Highlights of the City’s activities and accomplishments for the fiscal year ended June 30, 2024, include the following:
Community Services
Library
• Increased attendance at library events by 18% in FY2023 -24, reaching 12,047 attendees, compared to FY2022-23.
• Visits to library locations increased by 43% in FY2023-24, 60,979 visitors, compared to FY2022-23.
• The library established a Library of Things collection: patrons can now borrow pickleball sets, hiking backpacks (with binoculars and hiking poles!), citizen science kits, and other useful items with their library cards. All for free!
• The library offered 619 free homework help sessions with trained tutors at the main and branch libraries, and 740 additional sessions were offered at May Valley and Shields-Reid community centers.
Literacy for Every Adult Program (LEAP)
• The Literacy for Every Adult Program (LEAP) gave 800 books to parents with children to build their home libraries. LEAP distributed 1,000 kits and non -book materials to support literacy.
• Library and LEAP partnered with Noll & Tam Architects, Contigo Communications, and Richmond Fund for Children and Youth to conduct community outreach regarding the $30 million renovation of the Richmond Main Library, resulting in valuable feedback about needed features and services.
• LEAP had 88 new enrollees in FY2023-24.
Office of Neighborhood Safety (ONS)
• The White House Office of Violence Prevention recognized ONS with a visit this year. In addition, ONS received two invitations to the White House. • No fellows have been lost to gun violence.
• The US Department of State brought a delegation of 25 from states across Mexico to do a round table discussion for their Security Exchange Program – Focused Deterrence. ix
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Recreation
• With support from the Department of Children and Families Grant, Camp Achieve Sites exceeded their goals of adding an average of 20 Middle School children to Camp Achieve enrollment, which formerly only served elementary-age children. • The Mobile Recreation Unit Trailer was activated by staff to serve the Richmond community at parks and special events, including the Marina Farmers Market and the Civic Center Farmers.
• Collaboratively engaged over 50 volunteers, two nonprofit organizations and other city departments in the renovation and beautification of Booker T. Anderson Community Center, in preparation for the grand reopening after being closed for four years due to a fire.
• Collaboratively organized and hosted 6 community paint days, engaging 580 volunteers over 1500 hours of service to paint a community mural in Parchester. • Increased program offerings for the seniors by adding three (3) new senior programs:
Senior Morning Circle Chat, Sit & Chat, Gardening, and the Joy of Living. • Recipient of a grant for the Outdoor Leadership program that allowed us to offer the following programs:
• Overnight Camping- San Luis Reservoir: Youth from Richmond participated overnight camps to San Luiz Reservoir. Camp equipment, (tents, sleeping bags, food, and games) were provided to participants at no cost. • Safari West: Forty-two Richmond residents went to the Safari West, Santa Rosa wildlife park and conservation center. Safari west promotes conservation and environmental education while imparting knowledge that helps everyone make well informed choices regarding the environment and wildlife conservation. • Family Bay Cruise: Twenty-two Richmond residents joined the Community Services- Recreation Division on a 3-hour educational family Bay Cruise on Wednesday October 16.
• Santa Cruz Beach Boardwalk: Fifty-five Richmond residents visited the Santa Cruz Beach Boardwalk amusement park. They participated in a variety of games and rides.
Richmond Fund for Children & Youth
• Completed the 2024 Community Needs Assessment and coordinated meaningful engagement with other 400 youth and parents and caregivers. • Finalized the fiscal year 2025-28 Strategic Investment Plan identifying the Core Needs Areas that the fund will be investing approximately $20 million over the next 3 years. • Hired two permanent employees in the Department of Children & Youth. • Management Analyst
• Community Service Technician
• Completed the mid-year third-party evaluation report of the Fund and initiated the subsequent year review.
• Established meaningful connections with other funders and anchor organizations to expand investment and capacity building.
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Transportation
• Replacement of Gas-Fueled Paratransit Vehicles with Electric Vans: The city completed the replacement of its aging gas-fueled paratransit fleet with state-of-the-art electric vans.
This transition has cut greenhouse gas emissions, with the intent of improv ing the reliability and accessibility of services for residents with mobility challenges. • Citywide maintenance of EV Charging Stations: Launched a comprehensive initiative to repair and upgrade aging chargers to ensure reliability. The program prioritizes high-usage locations and underserved areas, ensuring equitable access to EV infrastructure while maintaining the city’s commitment to sustainability.
• Zero-Emission Citywide Shuttle Services: The fully electric citywide shuttle service connects residential neighborhoods to downtown and employment hubs. The service achieved an increase in ridership within three months. Our plan is to continue to add stops to significantly reduce traffic congestion and carbon emissions. • Adoption of a Green Transportation Equity Policy: Researched methods to ensure that green transportation initiatives, including EV chargers and electric transit, benefit all residents equitably. Researched funding opportunities to assist with subsidizing c hargers in disadvantaged neighborhoods and continued fare reductions for low-income users. • Ongoing Partnership with Lyft and Uber for Paratransit Services: The city strengthened its partnership with Lyft and Uber to enhance paratransit service coverage. Through this collaboration, riders in the service area continue to benefit from on -demand access to transportation, filling gaps in traditional paratransit and improving service reliability for those with mobility needs.
• Recognition as a Green Transportation Leader: The city continues to implement adopted transportation plan i.e., First Mile / Last Mile plan; Ferry to Bridge plan, that both received a statewide recognition for its innovative approach to sustainable transportation, highlighting its electric fleet initiatives, shuttle programs, and inclusive partnerships. This recognition has encouraged further collaboration between public and private sectors to advance green mobility goal.
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Economic Development
Arts and Culture
• 5 artists for public art commissions at Shields Reid, encompassing mosaic tiles, murals, sculptures, and photos have completed after school projects mosaic tile, mural, architecture, photography and sculpture.
• Secured Richmond Arts and Culture Commission (RACC) approval to proceed with the Kennedy Park Art contract.
• Solicited new art sculpture projects, including a $100,000 Kennedy Park project and a $200,000 IMTT Developer project, with RACC recommendations set for December. • Finalized a $350,000 art contract to complete the Parchester Village Mural project. • Negotiated key details (copyright, insurance, permits) for the Allen Brothers mural and mosaic tile project, selecting both a muralist and tile artist. • Completed Neighborhood Public Art (NPA) Mini Grant contracts.
Business Development
• Supported the Economic Development Commission with organizing Taste of Richmond 2023 on July 15 at Civic Center Plaza, celebrating the city’s culinary diversity with offerings from local restaurants, caterers, and craft beer and wine producers. This annual event strengthened community connections and honored Richmond’s cultural heritage with live music from Bay Area DJs and artists. Following the event’s success, worked with the Economic Development Commission and Department to present to City Council, securing financial support for Taste of Richmond 2024 and introducing plans to expand the event into a week-long celebration, enhancing community impact and broadening promotion for local businesses.
• Launched the City of Richmond’s Cannabis Equity Program, verifying over 10 applicants as equity-eligible and collaborating with Planning, Community Development, and Code Enforcement to draft ordinance amendments aimed at fostering fairness in the cannabis industry and addressing the lasting impacts of the War on Drugs. The verified applicants are currently undergoing technical assistance, training, and business planning through our consulting provider, supporting their development as successful local cannab is entrepreneurs.
• Established a business assistance and outreach program with an online booking module, allowing community members to schedule in -person or virtual meetings with business development staff. This initiative provides opportunities to learn about Richmond, get guidance on starting a business, and discuss specific business needs. Additionally, over 50 business visits and tours conducted to connect directly with Richmond’s local businesses and provide targeted support.
• In partnership with the Employment and Training Department and local organizations, celebrated Richmond’s first Small Business Week, featuring a small business fair and other events that supported and showcased local entrepreneurs. • Began efforts on the $35 million Richmond Rising initiative, focusing on the development of a Buy Local Campaign and Facade Improvement Program as part of the Transformative Climate Communities Grant to enhance community businesses and prevent displacement. • Prepared to launch a partnership with Renaissance Entrepreneurship Center to provide technical assistance, capacity -building services, and $300 ,000 in small grants aimed at supporting businesses impacted by the COVID-19 pandemic. xii
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Environmental and Health Initiatives
• Completed 41 no-cost solar installations on low-income homes. • Launched outreach of the Virtual Powerplant Pilot (VPP) Program to GRID in partnership with MCE and Zero Net Energy (ZNE) Alliance to implement Richmond’s California Energy Commission grant; 50 Residential and 10 Commercial Richmond customers enrolled in VPP Program.
• Submitted pre-application for the $160,000 Energy Efficiency and Conservation Block Grant (EECBG) from the Department of Energy, application for the ~$28,000 CalRecycle Bottle and Can Grant, and application for the $650,000 Integrated Climate Adaptation and Resiliency Program (ICARP) Adaptation Planning Grant to update the City of Richmond’s Climate Action Plan, with a total of $838,000 applied for. • Completed settlement agreement with Pacific Gas and Electric (PG&E). Total additional revenue generation is estimated at $3.3M annually and one-time payment of $800,000. • Hosted litter clean-up events in Pullman, Unity Park, and the Santa Fe neighborhood with a total of 39 volunteers collecting 61 bags of litter.
• Started application for the $20 million EPA Community Change Grant to fund the "Electrify the Block" initiative, aimed at reducing greenhouse gas emissions and improving energy efficiency by electrifying homes in underserved Richmond communities.
Port of Richmond
• Continued Wharf removal project at Terminal 4, with wooden piles removed and shoreside and eel grass restoration underway.
• Increased Port Tariff Schedule by 6.2% percent, issued RFP for Basin 1 and finalized lease agreement that will increase revenue for the Port. • Submitted a comprehensive Port Report to City Council on operations, facilities, and economic opportunities for the Port of Richmond and initiated and completed third party financial and performance audit for Port of Richmond.
• Increased community outreach to Port businesses, organization and government entities including hosting a Port of Richmond Stakeholder Roundtable with Congressman John Garamendi.
• Completed painting the Riggers Loft historical buildings 1322 and 1325 Canal Blvd that houses the Port Admin office and other tenants.
• Completed milestones with the Port’s largest tenant, Auto Warehouse Company (AWC), in completing 15 -year bond payment that financed the Point Potrero Marine T erminal (PPMT), on-dock rail and other infrastructure improvements as well as having renewed the AWC lease for their first additional five-year term.
Real Estate
• Processed ten (10) Environmental Escrow Pay Packets totaling $438,950 in coordination with regulatory agencies, environmental consultants, and stakeholders. • Managed 47 Pt. Molate entry requests, including bat research, Golden Gate Bird Alliance Shore Clean-up, and raptor exercises, while overseeing volunteer work and reports for Pt.
Molate Beach Park.
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• Managed nine (9) deed -restricted environmental properties in Marina Bay, including preparations for Area FM as the last site requiring an environmental cap. • Organized and led three (3) Civic Center Campus Security Team meetings addressing tenant safety, security protocols, and First Amendment Audit actions, resulting in citywide training.
• Centralized Real Estate duties by coordinating with Recreation Staff to transfer lease development and management responsibilities, including PRAM at the Washington Field House.
• Division Manager elected as President of the San Francisco Bay Area Chapter of the International Right of Way Association and served as an International Director.
Richmond Housing Authority (RHA)
• Nevin Plaza rehabilitation kickoff celebration and construction commenced. • Completed Annual Plan and submitted Cost Allocation Plan to US Department of Housing and Urban Development (HUD) for review.
• Request for Proposals issued for the Disposition and Development of Nystrom Village. • Continued the implementation of the Public Housing Authority Recover y and Sustainability (PHARS) agreement between HUD, City of Richmond, and RHA. • Maintain and reposition RHA assets: Monitor Nevin Plaza rehabilitation construction and relocation process, enter into an agreement with a developer for Nystrom Village and begin the environmental review process, complete the transition of Public Housing u nits at Richmond Village to the Section 8 platform.
• Completed the City auditing process of RHA backlog of financial Audits for 2017, 2018, and 2019, and submitted to HUD unaudited financial data through 2023. xiv
698
Internal Services
Human Resources
• Implemented Citywide Class and Compensation study for SEIU 1021, IFPTE Mid Management, and Executive Management Unions.
• Completed successor MOU bargaining with the Richmond Police Management Association and the Richmond Fire Management Association. • Conducted facilitation and team-building sessions across multiple departments to enhance collaboration, improve communication, and strengthen relationships among team members.
• Successfully launched a comprehensive wellness program for the Fire.
Department, including counseling services and therapy dog visits. • Relaunched the employee recognition program to include service awards and introduction of recognition “Rosie-grams”.
• Implemented a new insurance tracking software (PINS) to effectively manage certificates Citywide and processed 602 certificates in 2023.
Information Technology
• The Information Technology Department Network staff upgraded the City’s Fire stations to fiber improving reliability and speed.
• The Information Technology Department Network staff worked with contractors to replace the legacy campus CCTV cameras with improved camera views. • IT/KCRT Department worked collaboratively with vendors and City staff to successfully upgrade the City Council Chambers audio/video systems including improved interactive in-person and hybrid meetings.
• The Information Technology Department worked collaboratively with the City Manager’s office, Mayor’s office, Economic Development Department, and IT to refresh the City’s website improving the ease of use for navigation and improved Americans with Disabilities Act (ADA) capabilities.
• The Information Technology Department modernized and managed the City’s enterprise Geographic Information System (GIS) system, Website and Social Media Management, Open Data System, and to provide efficient digital initiatives for process improvements. • The IT/KCRT Department designed over 170 billboard “Datanet” screens for the KCRT Government Television channel, and for social media publishing during the fiscal year 2024.
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Public Safety
Fire Department - Administration/Support
• Hosted a tour of the Richmond Fire Training Center which was attended by U.S.
Representative John Garamendi where the history of the site, current use, future plans, and request for funding was discussed (December 15, 2023).
• Continued to work on upgrading the Computer Aided Dispatch (CAD) system of the department.
• Initiated the design and acquisition process of new fire apparatus.
Fire Department- Office of Emergency Services
• Supported the City (co-applicant) and Pogo Park (main applicant) in securing $10 million grant from the State of California Strategic Growth Council in the first quarter of 2024 to develop Harbor Hall as a Community Resilience Hub in the Iron Triangle neighborhood. • Conducted the Spring 2024 CERT Academy and graduated 14 volunteers. • Successfully conducted an emergency evacuation drill at Brickyard Cove in Point Richmond in collaboration with the Richmond Police Department, CERT volunteers and other agencies (July 15, 2023).
• Hired an Emergency Services Manager to provide leadership to the City of Richmond and its residents through comprehensive emergency management, planning and preparedness (December 4, 2023).
Fire Department- Prevention
• Conducted 2,902 Very High Fire Hazard Severity Zone (VHFHSZ) inspections (July 2023- August 2023).
• Performed School State Mandated Inspections (West Contra Costa School District). • Conducted the Fire Inspector Promotional Assessment and promoted three (3) personnel to the rank of Fire Inspector.
• Installed Fire Danger Today Signs at Station 63, Station 68 and Point Richmond area.
Fire Department- Suppression
• Responded to 14,915 calls for service (July 2023 – June 2024). • Held an open house at Fire Station 63 in celebration of the National Fire Safety Week (October 14, 2023).
• Promoted one (1) Fire Engineer to the rank of Fire Captain. • Promoted eight (8) Firefighters to the rank of Fire Engineer. • The Fire Department together with the Richmond Police Department provided toys and food to 500 families during its annual toy drive (December 2023).
Fire Department- Training
• Appointed a Training Director to oversee the department's fire suppression, rescue, apparatus operations and EMS training program.
• Conducted a Fire Engineer Academy in preparation for the Fire Engineer Promotional Assessment.
• Commenced the Richmond -El Cerrito Joint Recruit Academy graduating eight (8) Richmond recruits and three (3) El Cerrito recruits.
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Police Department (RPD)
• The Richmond Police Department hosted over 600 community members at the police department for our annual “Cops and Goblins” Halloween open house. Richmond families were treated to a haunted house experience through the police department, trick-or-treating with RPD staff, a petting zoo, and a free BBQ lunch and ice cream dessert. Additionally, families were provided fresh fruits and vegetables courtesy of Urban Tilth. • RPD Police Officers and professional staff partnered with local faith -based non - profits and churches in the annual “Faith in Blue” event. RPD staff volunteered at the Bay Area Rescue Mission, preparing meals for mission residents and organizing donated clothes at the Rescue Mission’s donation warehouse. Additionally, Officers attended various church services the next day, where local pastors and congregations provided RPD staff with prayers and words of encouragement.
• The Richmond Police Department has emphasized employee mental health and wellness.
This year, personnel are now offered professional counseling services that are specifically geared towards the challenges and stressors faced in law enforcement, sleeping facilities so officers can take naps after or before extended shifts, opportunities to engage in physical activity in the department’s gym during breaks, and religious support offered by our department chaplains.
• The Richmond Police Department hosted its 5th cohort of the Community Police Academy, which provided 18 community members with an eight -week intensive deep dive into the inner workings of the Richmond Police Department and the services we provide. • The Richmond Police Department has a fully staffed parking enforcement unit, with two newly added positions to better serve our community's parking and traffic needs. xvii
701
Public Works
• New Hires: 25 New hires from January- December 2024.
• Paving Achievements: Slurry sealed 22 miles (400,000 square yards) and paved 2.33 miles (45,000 square yards).
• Weed Abatement: Abatement Division abated weeds from 100 locations (Includes city owned lots, alleyways, Richmond Parkway and public right of ways). The Parks and Landscaping Division spent over 17,000 hours–35% of total hours worked–clearing weeds from parks, medians, roadsides, fire trails, fire access roads, paper streets, and parking lots.
Lighting Improvements
• New Solar Lighting was installed at city hall plaza to light the managers parking lot. • Three (3) Solar lights have been installed on Castro Street between Hensley and Gertrude St. as part of the Solar Lighting pilot program.
• Installed replacement streetlights where streetlights had been missing due to knockdowns along Atlas Rd.
• Currently working to replace vandalized wiring on Cutting Blvd to re-energize the street lighting along the Cutting corridor.
Trash Cleanup
• Abatement tonnage: 2,856 tons
• Encampments: 285 tons from 114 locations.
Respectfully submitted,
Andrea Miller
Director of Finance/Treasurer
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Organizational Chart
xix
703
List of Elected and Appointed Officials
JU
NE 30, 2024
CI
TY COUNCIL
M
ayor ….................................................................................................................................................................................... Eduardo Martinez V
ice Mayor .......................................................................................................................................................................................... Claudia Jimenez C
ouncilmember …..................................................................................................................................................................................... Soheila Bana Councilmember …............................................................................................................................................................................. Gayle McLaughlin Councilmember …..................................................................................................................................................................................Doria Robinson C
ouncilmember ….......................................................................................................................................................................................Melvin Willis Councilmember …....................................................................................................................................................................................Cesar Zepeda
ADMINISTRATION AND EXECUTIVE MANAGEMENT
Ci
ty Manager ……………………….……………………………………………………………………………………………………………… Shasa Curl D
eputy City Manager, Community Services …........................................................................................................................... LaShonda White D
eputy City Manager, Internal Services …...................................................................................................................................... Nickie Mastay Ci
ty Attorney …................................................................................................................................................................................ Dave Aleshire City Clerk …................................................................................................................................................................................. Pamela Christian Director of Community Development ….............................................................................................................................................. Lina Velasco D
irector of Economic Development …………….……………………………………………………………………………………. Nannette Beacham D
irector of Finance …....................................................................................................................................................................... Andrea Miller D
irector of Information Technology …............................................................................................................................................... Sue Hartman D
irector of Human Resources ......…........................................................................................................................................... Sharrone Taylor D
irector of Public Works …......................................................................................................................................................... Daniel Chavarria C
hief of Police ............................................................................................................................................................................................ Bisa French F
ire Chief ...................................................................................................................................................................................................Aaron Osorio P
ort Director ….……………………………………………………………………………………………………................................... Charles Gerard xx
704
INDEPENDENT AUDITOR’S REPORT
To the Honorable Mayor and Members of the City Council
of the City of Richmond
Richmond, California
Report on the Audit of the Financial Statements
Disclaimer of Opinion and Unmodified Opinions
We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Richmond, California (City), as of and for the year ended June 30, 2024, and the related notes to the financial statements. We were engaged to audit the financial statements of the discretely presented component units as of and for the year ended June 30, 2024. These financial statements collectively comprise the City’s basic financial statements as listed in the table of contents.
Summary of Opinions
Opinion Unit Type of Opinion
Governmental Activities Unmodified
Business-Type Activities Disclaimer
Aggregate Discretely Presented Component Units Disclaimer Major Governmental Funds:
General Fund Unmodified
Community Development and Loan Programs Special Revenue Unmodified Major Enterprise Funds:
Richmond Housing Authority Disclaimer
Port of Richmond Unmodified
Municipal Sewer Unmodified
Aggregate Remaining Fund Information Unmodified
Disclaimer of Opinion on Business-Type Activities, Aggregated Discretely Presented Component Units and Richmond Housing Authority
Because of the significance of the matter described in the Basis for Disclaimer of Opinion paragraph, we have not been able to obtain sufficient appropriate audit ev idence to provide a basis for an audit opinion on the financial statements of the business-type activities, Richmond Housing Authority Enterprise Fund, and the aggregate discretely presented component units of the City. Accordingly, we do not express an opinion on these financial statements.
705
To the Honorable Mayor and Members of the City Council
of the City of Richmond
Richmond, California
2 Basis for Disclaimer of Opinion
The financial statements of the Richmond Hous ing Authority and RHA Properties, RHA Housing Corporation and RHA RAD LLC have not been audited for the year ended June 30, 2024. The Richmond Housing Authority’s financial activities are included in the City’s basic financial statements as a major enterprise fund and represent 7.43%, 16.65%, and 6.54% of the assets, net position, and revenues, respectively, of the City’s business-type activities. The financial activities of the RHA Properties, RHA Housing Corporation and RHA RAD LLC are included in the City’s financial activities as discretely presented component units and represent the City’s only discretely presented component units.
Unmodified Opinions on Governmental Activities , Major Governmental Funds, Port of Richmond, Municipal Sewer Fund and Aggregate Remaining Fund Information In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the General Fund, the Community Development and Loan Programs Special Revenue Fund, the Port of Richmond Enterprise Fund, the Municipal Sewer Enterprise Fund, and the aggregate remaining fund information of the City as of June 30, 2024, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Unmodified Opinions
We conducted our audit in accordance with auditing st andards generally accepted in the United States of America (GAAS) 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 Auditor’s 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.
Responsibilities of Management for the Financial Statements The City’s 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 re levant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
706
To the Honorable Mayor and Members of the City Council
of the City of Richmond
Richmond, California
3 Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS 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 GAAS, we:
x Exercise professional judgment and maintain professional skepticism throughout the audit. x 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. x Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed. x 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.
x Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control–related matters that we identified during the audit.
707
To the Honorable Mayor and Members of the City Council
of the City of Richmond
Richmond, California
4 Required Supplementary Information
Accounting principles generally accepted in the Unit ed States of America require that the management’s discussion and analysis, budgetary comparison in formation, and required pension and other post- employment benefits information on pages 7-19 and 175-195 be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basi c 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 meth ods of preparing the information and comparing the information for consistency with management’s response s to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Supplementary Information
Our audit was conducted for the purpose of forming opin ions on the financial statements that collectively comprise the City’s basic financial statements. The combining and individual nonmajor fund financial statements and schedule and budget comparison information of nonmajor governmental funds are presented for purposes of additional analysis and are not a required part of the basic financial statements.
The combining and individual nonmajor fund financial statements and schedule and budget comparison information of nonmajor governmental funds are the responsibility of management and were derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlyi ng 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 Unit ed States of America. In our opinion, the combining and individual nonmajor fund financial statements and schedule and budget comparison information of nonmajor governmental funds are fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Other Information
Management is responsible for the other information included in the annual report. The other information comprises the introductory section and statistical section but does not include the financial statements and our auditor's report thereon. Our opinions on the fina ncial statements do not cover the other information, and we do not express an opinion or any form of assu rance thereon. In connection with our audit of the financial statements, our responsibility is to read th e other information and consider whether a material inconsistency exists between the other information an d the financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. 708
5 To the Honorable Mayor and Members of the City Council of the City of Richmond
Richmond, California
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated January 2, 2025 on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial rep orting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of internal control over financial reporting or on compliance. That report is an integral part of an a udit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.
Badawi & Associates, CPAs
Berkeley, California
January 2, 2025
709
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710
7 MANAGEMENT’S DISCUSSION AND ANALYSIS
Fiscal Year Ended June 30, 2024
This narrative overview and analysis of the City of Richmond’s (City) Basic Financial Statements is for the fiscal year (FY) ended June 30, 2024. We encourage readers to consider the information presented here in conjunction with the accompanying transmittal letter, basic financial statements, and notes to the financial statements.
FINANCIAL HIGHLIGHTS
x The City’s total net position is $138.9 million, an incr ease of $67.3 million over the prior fiscal year.
Governmental activities are negative $14.4 million, an increase of $47.9 million which is mainly attributed to an increase of $35.8 million to Cash and investments; a nd $5.8 million in Capital assets.
Business-type activities are $153.3 million, an increase of $19.4 million which is mainly attributed to an increase of $30.6 million to total assets; as well as an increase of $11.2 million to total liabilities. x The liabilities and deferred inflows of the government al activities of the City exceeded its assets and deferred outflows at the close of FY2023-24 by $14.4 million (net deficit). Alternatively, the assets and deferred outflows of the business-type activities of the City exceeded its liabilities and deferred inflows by $153.3 million.
x As of June 30, 2024, the City’s unrestricted net deficit (governmental and business-type activities) totaled $366.5 million, a $4.1 million deficit incr ease from prior year. The unrestricted net deficits represent the net unfunded liabilities of the gove rnment. Over time, increases and decreases in this account will allow the reader to determine if the C ity’s condition is improving or deteriorating.
Restricted net position for governmental and busi ness-type activities increased by a net $30.1 million to $171.5 million.
x The City’s financial statements include a disclaimer of opinion on the financial statements of the Richmond Housing Authority Enterprise Fund (RHA), a blended component unit included in the City’s business-type activities, and three discretely presented component units, RHA Properties, RHA Housing Corporation, and RHA RAD LLC. As of June 30, 2024, the net position of RHA is $25.5 million, accounting for 16.7% of the City’s business-type activities. Additional information about the disclaimer of opinion can be found in the Independent Auditor’s Report. x The City’s General Fund cash reserve policy re quires the City to maintain a minimum year-end contingency reserve balance of 21% of next year’s budgeted General Fund expenditures including transfers out or $52.3 million. As of June 30, 2024, the City’s cash reserve, which is a component of the unassigned fund balance, is $65.3 million or 26.2%. x The Net Pension Liability of $377.8 million, represents the City’s unfunded pension obligation, increased by $8.2 million from $369.6 million. The City reports $63.4 million in the Other Post- Employment Benefit (OPEB) liability for this fiscal year, which is a decrease of $11.3 million from the $74.7 million obligation reported in the prior year.
x The City’s General Fund revenue and other financing sources (uses) exceeded expenditures by $13.1 million in FY2023-24. This is primarily attributable to general government, public safety, and public works expenditures being less than expectations for the year. Property tax, sales tax, and utility user tax revenues were in excess of expectations for the year.
711
8 OVERVIEW OF FINANCIAL STATEMENTS
The City’s basic financial statements are comprised of government-wide financial statements, fund financial statements, and notes to the financial stat ements. This report also contains other required supplementary information in addition to the basic financial statements.
Government-Wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview of the City’s finances, in a manner similar to private-sector business.
The Statement of Net Position presents information on all the City’s assets, deferred outflows of resources, liabilities, and deferred inflows of resources with the di fference between the four reported as net position.
Over time, increases or decreases in net position may se rve as a useful indicator of whether the financial position of the City is improving or deteriorating.
The Statement of Activities presents information showing how the government’s net position changed during the fiscal year. All changes in net position are re ported as soon as the underlying event giving rise to the change occurs, regardless of the timing of the related cash flows.
The government-wide financial statements distinguish f unctions of the City that are principally supported by taxes and grants, governmental activities, and business-type activities, which are intended to recover all or a significant portion of their costs through user fees and charges. The City’s activities include five blended component units, which consist of the Richmond Housing Authority, Richmond Joint Powers Financing Authority, Richmond Neighborhood Stabiliz ation Corporation, Richmond Surplus Property Authority, and Richmond Municipal Sewer District. Although legally separate, the City is financially accountable for the activities of these entities, which are therefore shown as blended as part of the primary government.
RHA Properties, RHA Housing Corporation, and RHA RAD LLC, while being lega lly separate entities, are included in the City's financial statement as di scretely presented componen t units for which the City bears financial responsibility.
The government-wide financial statements can be found on pages 26-29 of the financial report.
Fund Financial Statements
Fund Financial statements are designed to report info rmation about the groupings of related accounts that are used to maintain control over resources that have been segregated for specific activities or objectives.
The City uses fund accounting to ensure and demo nstrate compliance with finance-related legal requirements.
Governmental Funds – Governmental funds focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the FY2023-24. Such information may be useful in determining what financ ial resources are available in the near future to fund the City’s programs.
Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide fina ncial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund Balance Sheet and the governmental fund Statement of Revenues, Expenditures, and Changes in Fund Balances provide a reconciliation to facilitate the comparison between governmental funds and governmental activities.
712
9 The City has twenty-five governmental funds, of whic h four are considered majo r funds for presentation purposes. Each major fund is presented separately in the governmental fund Balance Sheet and in the governmental fund Statement of Revenues, Expenditures, and Changes in Fund Balances. The City’s four major funds are the General Fund, the Community Development and Loan Programs Special Revenue Fund, the American Rescue Plan Act Fund, and the General Capital Improvement Fund. The basic governmental fund financial statements can be found on pages 34-37 of the financial report. Data from the other twenty-one governmental funds are combined in to a single, aggregated presentation and reported separately on pages 202-212 of the financial report.
Proprietary Funds – Proprietary funds of the City are two types: (1) enterprise funds and (2) internal service funds. The City maintains six enterprise funds that provide the same type of information as the government- wide financial statements, only more detailed. The City maintains three internal service funds to account for its vehicle operations, risk management program, and compensated absences. The proprietary fund financial statements can be found on pages 40-45 and 236-242 of the financial report.
Fiduciary Funds – Fiduciary funds are used to account for r esources held for the benefit of third parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not availabl e to support the City’s own programs. The fiduciary funds for the City consist of Private-Purpose Trust Funds and Custodial Funds. The fiduciary funds financial statements for these funds can be found on pages 48-49 and 244-257 of the financial report.
The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 53-169 of the financial report.
713
10 GOVERNMENT-WIDE FINANCIAL ANALYSIS
Government-wide Net Position
This Comparative financial information includes long- term and short-term information about the City’s overall financial condition. The following table provides the reader with highlights of changes between the audited fiscal year and the prior fiscal year.
714
11 Government-wide Activities
The following table indicates changes in the net posi tion for governmental and business-type activities between the audited fiscal year and the previous fiscal year. 715
12 Governmental Activities
Net position of Governmental Activities at the beginning of FY2023-24 has been restated to $62.9 million.
Governmental activities increased the net position by $48.4 million, accounting for 71.4% of the City’s total increase in net position of $67.8 million, which includes Business –type Activities. Total revenues of $328.2 million exceeded total expenses of $278.7 million by $49.5 million. Revenues increased by $33.6 million or 11.4% from the prior year’s revenue of $294 .6 million primarily due to an increase in Taxes, Operating Grant, and Capital Grant revenues. Expenses increased $83.1 million or 42.5% from the prior year’s expenses of $195.6 million primarily due to an increase in salary and administrative expenses.
Business Type Activities
Business-type activities increased the City’s net position by $19.4 million Key factors contributing to the increase in business-type activities are as follows:
x The Richmond Housing Authority’s (RHA) net position increased by $500 thousand from the previous year’s amount of $25 million. This increase is attributed to the collection of past due tenant rent and payment agreements.
x The Port of Richmond’s (Port) net position increased by $7.4 million, an increase of 26% from the previous year’s amount of $29 million. This is attributed to the Port’s Tariff and Lease rate increases. x The Municipal Sewer fund’s net position increased by $9.7 million from the previous year’s amount of $70.5 million. This is attributed to an increase in service charges and interest income. x Other Enterprise fund’s net position increased by $1.7 million from the previous year’s amount of $9.2 million. This is attributed to an increase in service charges.
Net Program (Expenses) Revenues
Comparisons of the costs of services by functions fo r the City’s government-wide activities are shown in the preceding tables on page 11, along with the revenues used to cover the net expenses.
The following table details the net program costs for each of the governmental functions. 716
13 Total governmental activities expenses of $278.7 million were offset by $89.3 million in program revenues in FY2023-24. Program revenues are derived directly from the program itself or from parties outside the reporting government’s taxpayers or citizenry. They reduce the net cost of the function to be financed from the government’s general revenues. During the fiscal year, the net costs funded by the City’s general revenues were $190 million.
As reflected in the chart below, 38% of the gove rnmental program revenues came from Charges for Services, which includes licenses, permits, fees, fines, forfeitures, penalties, and several other revenues.
The remaining 62% of governmental program revenues came from Operating Grants and Capital Grants Contributions, which include restricted revenues su ch as Gas Tax, Transportation and Sales Tax, and Federal/State Grants.
General revenues are revenue not categorized as program revenues and includes property taxes, sales taxes, utility users’ tax, documentary transfer taxes, investment earnings, grants and contributions not related to specific programs and other miscellaneous general revenues. Total general revenues from governmental activities were $238.9 million in FY20 23-24. The three largest components of general revenues received were Property Taxes-current collections of $74.3 million, Sales Taxes of $61.3 million, and Utility User Taxes of $59.1 million. The following chart shows the City’s general revenues by source. 717
14 The following table details net program costs for business-type activities. Business-type activities revenue exceeded expenses by 14 million, as Municipal Sewer, the Port of Richmond, and other Enterprise Funds contributed net revenues of $7.7 million, $5.8 million, and $0.7 million respectively.
As reflected in the following pie chart, 94% of the business-type program revenues came from Charges for Services and the remaining 6% were derived from Operating Grants and Contributions. 718
15 FINANCIAL ANALYSIS OF THE CITY’S FUNDS
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.
Governmental Funds
The focus of the City’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City’s financial capacity.
At the end of the FY2023-24, the City’s governmental funds reported total fund balances of $241.5 million, an increase of $48.3 million, or 25% from prior year including an increase of $11.8 million from a prior period adjustment. Financial highlights for the City’s major funds are discussed below:
General Fund – The General Fund is the primary operating fund of the City. It is used to report the financial results of the daily operations of the City. The major revenue sources are utility u sers’ taxes, sales taxes, and property taxes. The major expenditures are salaries and administrative expenses.
The City’s general fund revenues increased by $12.1 million or 5.8% and expenditures increased by $18.6 million or 10.3%. The increase in revenues is primarily due to the increased collection of Property Taxes, Sales Taxes, and Utility User Taxes. Property taxes increased by $1.9 million or 3.6%. Sales taxes increased by $5.8 million or 10.4%. Utility User taxes increased by $4.4 million or 8.1%. The increase in expenditures is due to an increase in salaries and administrative expenses. Public safety expenditures increased by $13.2 million or 14.3%. Public works expenditures increased by $4.4 million or 16.1%. Cultural and recreational expenditures increased by $1.9 million or 18.3%.
At the end of the FY2023-24, the total fund balance increased by $13.1 million from the prior year to $99.4 million. The General Fund reported an unassigned f und balance of $65.3 millio n, an increase of $10.1 million from prior year’s balance of $55.2 million, of which the entire balance has been set aside for contingency.
Community Development and Loan Programs – This fund was established to account for the receipt of grant monies and the uses of Community Developm ent Block Grant, HOME Investment Partnership Program, and Neighborhood Stabilization Program. In conjunction with the dissolution of the Redevelopment Agency, this fund also accounts for the low- and moderate-income housing activities of the City as Housing Successor to the former Redevelo pment Agency’s low-income and moderate-income housing activities. As of June 30, 2024, fund bala nce is $34.7 million, which represents a $2.1 million increase from prior year’s fund balance of $32.6 million.
The American Rescue Plan Act Fund – This fund received $27.7 million in federal funding allocated to the City under the American Rescue Plan Act (ARPA) of 2021. These funds are designated to address the economic impacts of the COVID-19 pandemic and support a strong and equitable recovery through initiatives such as rent relief for those affected by COVID-19, assistance for the unhoused, small business support, and several infrastructure improvements. The City plans to obligate all funds by December 31, 2024, and expend these funds by December 31, 2026. In FY2023-24, total ARPA expenditures were $2.36 million in Capital Outlay and General Governmental expenditure categories. In Capital Outlay, significant projects with expenditures were Booker T. Anderson Community Center and Main Library Renovation. In the General Governmental expenditure category, significant programs were Tenant Protection – Rental Assistance and Employment & Training -Youthworks programs. 719
16 General Capital Improvement Fund – The General Capital Improvement Fund is used to track the City’s several capital improvement projects. In FY2023-24, there was a total of $17.58 million transferred from the General Fund for multiple capital projects. Major contributions were to projects such as Nevin Center and Recreation Community Center HVAC System improvement and Boorman Park Site Remediation and Revitalization projects.
Proprietary Funds
The City’s proprietary funds are enterprise and internal service funds. Proprietary funds provide the same type of information found in the government-wide financial statements but in more detail.
The City’s major enterprise funds are the Richmond Housing Authority, Port of Richmond, and Municipal Sewer.
Richmond Housing Authority – The Richmond Housing Authority (RHA) provides affordable housing for low and very low-income residents of Richmond through federally funded housing programs. RHA’s net position increased by $500 thousand to $25.5 million as of June 30, 2024.
The Port of Richmond – The Port of Richmond (Port) is a public enterprise established by the City and is administered as a department of the City. Operations include the marine terminal facilities and commercial property rentals. The Port’s net position increased by $7.4 million to $36.5 million as of June 30, 2024.
Municipal Sewer Fund – This fund is used to account for a variety of sewer service-related revenues and expenses. Municipal Sewer’s net position increased by $9.7 million to $80 million as of June 30, 2024.
GENERAL FUND BUDGETARY HIGHLIGHTS
The original adopted budget, excl uding transfers, bond premium and proceeds from sale of property, reflected $205.1 million in estimated revenues and $213.3 million in appropriations.
Budget adjustments reflect extensive analysis and updates arising from periodic review and Council approved amendments that occurred during the fiscal year.
The final revised budget includes $9 million increase in estimated revenues and $8.4 million increase in appropriations. Actual revenue of $218.7 million exce eds the revised revenue budget by $4.6 million, a variance of 2%. Key elements of the variances in revenues are discussed below.
Property taxes total $53.8 million, which exceeds the re vised budget by $1.6 million and original budget by $3.2 million. The increase stems from residual Redevelopment Property Tax Trust Fund (RPTTF) Recognized Obligation Payment Schedule (ROPS) receipts for the Successor Agency Residual and Pass- through revenue.
Sales taxes total $61.3 million, which exceeds the revi sed budget by $3.4 million and original budget by $4.6 million. This corresponds to increases in the regular sales tax and proportional increases in both half- cent sales tax measures.
Utility Users Tax (UUT) totals $59.1 million, whic h exceeds expectations by $1.2 million. The primary source of the increase is in tax collections from gas and electricity due to rate increases by Pacific Gas and Electric and higher than average gas and electric use.
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17 Licenses, permits and fees total $14.5 million, which exceeds the revised budget by $1.5 million, however, it was lower than the previous fiscal year by $1.4 mil lion. A significant part of this revenue stream is the Business License Tax. Richmond voters in 2020 approved Measure U which changed the way the business tax is calculated from based on number of employees to gross receipts. Additionally, it changed the due date where now all business licenses expire on December 31st of each year rather than the anniversary date of each business basis. This change in expiration date required some businesses to transition their expiration which in many cases meant they would pay both a prorat ed amount and a full amount in the first full year of Measure U. This caused the amount received for FY2 022-23 to be higher than the amount received in FY2023-24.
The final adjusted appropriations are $221.7 million, an increase of $8.4 million from the original adopted budget appropriation of $213.3 million. The increase is driven by additional appropriations in General Government and Public Safety. The final budget appropriation for transfers out is $35.9 million, an increase of $17.7 million. The increase is due to City Council approved allocations to several capital projects to appropriate fund balance above the minimum reserve level of 21 percent.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
The City’s investment in capital assets for its governmental and business-type activities as of June 30, 2024, amounted to $573.2 million, net of accumulated depreciation. Investment in capital assets includes land, construction in progress, buildings and improvemen ts, machinery and equipment, and infrastructure.
Details by type are shown in the following table.
The City’s infrastructure assets are recorded at th eir historical costs in the government-wide financial statements. Additional information about the City’s capital assets can be found in Note 6 on pages 86-90. 721
18 Debt Administration
Long Term Debt – The City’s total debt outstanding decreased $6.9 million to $423.3 million as of June 30, 2024. The decrease is due to the payoff of th e 2019B Point Potrero lease revenue bonds and the reissuance of the 2005 Pension Obligation bonds. Details by type are shown in the following table.
The City does not have any general obligation bonds as of June 30, 2024.
Economic Factors
The City’s economic base has recovered from the sl owdown related to the effects of the COVID-19 restrictions. As of January 1, 2024, Property values assessed by the County have increased by 6.77% over the prior year. Increase to the Assessed Valuation (AV) primarily stemmed from an increased valuation of the Chevron Refinery in Richmond. The Consumer Price Index (CPI) growth was 2.0% for most properties and there were significant property sales during the year, the refinery assessment by the County went from approximately $2.8 billion in FY2021-22, to $3.1 billion in FY2022-23. Redevelopment Property Tax Trust Fund (RPTTF) revenue from Recognized Obligation Payment Schedule (ROPS) payments have continued to increase over the years from $600 thousand in FY2015-16 to $12.5 million in FY2023-24. Sales Tax revenue has rebounded to above pre-pandemic levels. Sales Tax revenue was $47.7 million in FY2018-19, dipped down to $44.5 million in FY2019-20, rebounded to $49.0 million in FY2020-21, and has continued to increase year-over-year. In FY2023-24, Sales Tax revenue increased to $61.3 million.
Measure H
In November 2018, Richmond voters approved Measure H which called for a new tiered calculation for the Documentary Transfer Tax. The tax rate increases based on the sale price of the property. The rate of 0.70% did not change for sales under $1 million, but for sa les from $1 million and above, the rates changed according to the following table.
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19 Prior to the new tiered system, Documentary Transfer Tax has always been one of the most volatile of revenue streams for the City. A few sales can have a dramatic impact on the General Fund, and this has not changed as revenue fluctuates year-to-year. In FY2017-18, before the new tiered rate structure was established, the transfer tax collected totaled $6.5 million. In FY2018-19, the tax collected went up to $8.0 million. In FY2019-20, it went up modestly to $8.7 million. In FY2020-21, due to a few unusually large real-estate transactions, it increased significantly to $19.9 million. In FY2021-22, the Transfer Tax revenue decreased by $1.2 million to $18.6 million. In FY2022-23, the Transfer Tax revenue saw a significant dip of $8.2 million, or a decrease of 44%, with a total of $10.4 million in Transfer Tax. Finally, in FY2023-24, the Transfer Tax revenue saw another dip, this dip was $1.8 million, or a decrease of 18%, with a total of $8.6 million in Transfer Tax received.
Measure U
In November 2020, Richmond voters approved Measure U which significantly changed the calculation for the business license tax. This change d the tax calculation from being based on number of employees or location, to a percentage of the business’s gross receipts. The percentage charged varies based on both the type of business and the amount of gross receipts with the new rates ranging from 0.06% to 0.68% for businesses and 1.08% to 2.4% for rental properties. The new methodology brought in an additional $5.3 million for the City in FY2021-22, an increase of 168% compared to prior year, an additional $7.7 million in FY2022-23 with a total of $16.2 million, an increase of 91% over the previous year. In fiscal year 2024, revenue received totaled $14.5 million, a decrease of $1.7 million or 10.8%. This decrease was expected as businesses transitioned to the new business tax calculation methodology based on gross receipts and the updated expiration date of December 31
st of each year. This expiration date change called for some businesses that did not expire on December 31 st to make two payments during the fiscal year – one was a partial payment for 2023, and the other was the full payment for 2024.
The City continues to closely monitor revenue and expenditures through monthly variance reports to assure adherence to budget controls. Simultaneously, position control is strictly enforced, ensuring that any employee hired is moving into a funded position. For the upcoming fiscal year, staff is working to align the budget forecast with City Council priorities and Cali fornia State Auditor’s recommendations, review the City’s organizational structure, and provide recommended actions for fiscal sustainability.
This will include planning and addressing pension and Other Post-Employment Benefits (OPEB) funding and determining adequate reserve level per the Califo rnia State Auditor’s recommendation. Additionally, the City continues to analyze the structural integrity of all funds and identify additional cost reductions and efficiencies.
REQUESTS FOR INFORMATION
This financial report is designed to provide a genera l overview of the City’s finances for all its citizens, taxpayers, customers, investors, and creditors. Questions concerning any of the information provided in this report or requests for additional information should be addressed to the City of Richmond, Finance Department, 450 Civic Center Plaza, Richmond, CA 94804. Alternatively, you may send your inquiries via e-mail to [email protected].
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BASIC
FINANCIAL STATEMENTS
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GOVERNMENT-WIDE
FINANCIAL STATEMENTS
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City of Richmond
Statement of Net Position
June 30, 2024
Governmental Business-typ e
Activities Activities Total
ASSETS
Current assets:
Cash and investments 288,117,958$ 74,282,50 9$ 362,400,467 $ Restricted cash and investments 16,172,83 4 1,277,996 17,450,830 Receivables:
Accounts, net 16,488,921 7,039,055 23,527,97 6
Interest 453,030 110,260 563,290
Grants 21,910,422 2,207,54 1 24,117,963
Loans ---
Leases 49,607 4,602,252 4,651,85 9
Internal balances 12,221,772 (12,221,772 ) -
Prepaids and supplies 1,332,333 - 1,332,333
Total current assets 356,746,877 77,297,84 1 434,044,718 Noncurrent assets:
Due from developer - 10,221,743 10,221,743
Loans 49,385,008 - 49,385,008
Leases 769,389 57,174,107 57,943,49 6
Property held for resale 78,016 - 78,01 6
Capital assets:
Nondepreciable 85,587,572 127,414,145 213,001,717
Depreciable 779,834,628 359,266,195 1,139,100,823
Less accumulated depreciation (560,884,233) (218,003,647) (778,887,880) Total capital assets 304,537,967 268,676,693 573,214,66 0 Total noncurrent assets 354,770,38 0 336,072,543 690,842,923 Total assets 711,517,257 413,370,38 4 1,124,887,641
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows of resources - pension 89,223,332 1,872,788 91,096,12 0 Deferred outflows of resources - OPEB 1,168,751 6,282 1,175,033 Deferred charge on refunding 28,733,660 5,206,437 33,940,097 Total deferred outflows of resources 119,125,743 7,085,507 126,211,250
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities 20,881,225 19,815,70 4 40,696,929 Interest payable 4,551,857 2,234,22 0 6,786,077
Refundable deposits 1,701,428 457,31 9 2,158,747
Unearned revenue 43,672,357 - 43,672,357
Compensated absences - due within one year 6,437,81 4 124,998 6,562,812 Claims liabilities - due within one year 14,192,093 - 14,192,093 Long-term debt - due within one year 7,190,28 4 3,336,711 10,526,995 Total current liabilities 98,627,058 25,968,952 124,596,01 0 Noncurrent liabilities:
Unearned revenue - 2,384,505 2,384,505 Compensated absences 6,882,078 210,246 7,092,324 Claims liabilities 37,979,471 - 37,979,471 Long-term debt 243,466,037 169,277,488 412,743,525
Net pension liability 370,751,455 7,008,011 377,759,466 Net OPEB liability 60,965,350 2,478,673 63,444,023 Total noncurrent liabilities 720,044,391 181,358,923 901,403,314 Total liabilities 818,671,449 207,327,875 1,025,999,324
DEFERRED INFLOWS OF RESOURCES
Deferred inflows of resources - pension 5,835,462 198,175 6,033,637 Deferred inflows of resources - OPEB 19,772,291 297,961 20,070,252 Deferred inflows of resources - leases 794,245 59,316,497 60,110,742 Total deferred inflows of resources 26,401,998 59,812,633 86,214,631
NET POSITION
Net investment in capital assets 232,570,273 101,268,93 1 333,839,204 Restricted for:
Capital projects 50,752,521 - 50,752,52 1
Debt service 227,326 1,180,210 1,407,536
Housing and redevelopment 12,089,128 - 12,089,128
Community development projects 102,110,923 - 102,110,923 Pension plans 5,162,825 - 5,162,825
Total restricted 170,342,723 1,180,21
0 171,522,933
Unrestricted (417,343,443) 50,866,242 (366,477,201 )
(14,430,447)$ 153,315,383 $ 138,884,93 6$ Total net position Primary Government
See accompanying Notes to Basic Financial Statements
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RHA RHA Housin g RHA
Properties Corporation RAD LLC
-$ 125,427$ - $ ---
---
---
---
- - 15,510,00
0 ---
---
---
- 125,427 15,510,00 0
---
---
---
---
---
---
---
---
- 125,427 15,510,00
0 ---
---
---
- - - -- -
-- -
-- -
- 66,407 -
---
---
---
- 66,407 -
- - - - - - - - - ---
- - - - - - - - - - 66,407 - - - - - - - - - - ---
---
---
---
---
---
---
- 59,02
0 15,510,000
-$ 59,02 0$ 15,510,00 0$ Component Units
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City of Richmond
Statement of Activities
For the year ended June 30, 2024
Operating Capital
Charges for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions Total Primary Government:
Governmental activities:
General government 70,311,954 $ 25,343,470 $ 397,677 $ - $ 25,741,147$ Public safety 114,081,723 2,040,106 72,115 328,851 2,441,072 Public works 51,215,494 4,702,336 4,214,756 2,656,760 11,573,852 Community development 6,710,315 915,396 44,836,356 2,103,529 47,855,281 Cultural and recreational 12,963,405 921,946 802,056 - 1,724,002 Housing and redevelopment 3,441,920 - (36,200) - (36,200) Interest on long-term debt 19,980,774 - - - - Total governmental activities 278,705,585 33,923,254 50,286,760 5,089,140 89,299,154 Business-type activities:
Richmond Housing Authority 4,444,837 358,327 3,426,450 - 3,784,777 Port of Richmond 6,438,177 12,255,674 - - 12,255,674 Municipal Sewer 24,835,079 32,563,772 - - 32,563,772 Richmond Marina 213,335 529,539 - - 529,539 Storm Sewer 2,751,735 3,762,222 - - 3,762,222 Cable TV 898,308 922,077 - - 922,077 Total business-type activities 39,581,471 50,391,611 3,426,450 - 53,818,061 Total primary government 318,287,056$ 84,314,865 $ 53,713,210 $ 5,089,140 $ 143,117,215 $ Component units:
RHA Properties - - - - - RHA Housing Corporation 14,010 7,000 - - 7,000
RHA RAD LLC - - - - - Total component units 14,010$ 7,000 $ - $ - $ 7,000$ General Revenues:
Taxes:
Property taxes - current collections
Sales taxes
Utility user taxes
Documentary transfer taxes
Other taxes
Total taxes
Unrestricted intergovernmental
Use of money and property
Gain (loss) from sale of capital assets
Other
Transfers
Total general revenues and transfers
Change in net position
Net position - beginning of year
Prior period adjustments
Net position - beginning of year, as restated
Net position - end of year
Program Revenues
See accompanying Notes to Basic Financial Statements
28732
Governmental Business-Type RHA RHA Housing RHA
Activities Activities Total Properties Corporation RDA LLC (44,570,807)$ - $ (44,570,807)$ (111,640,651) - (111,640,651) (39,641,642) - (39,641,642) 41,144,966 - 41,144,966 (11,239,403) - (11,239,403) (3,478,120) - (3,478,120) (19,980,774) - (19,980,774) (189,406,431) - (189,406,431) - (660,060) (660,060) - 5,817,497 5,817,497 - 7,728,693 7,728,693 - 316,204 316,204 - 1,010,487 1,010,487 - 23,769 23,769 - 14,236,590 14,236,590 (189,406,431) 14,236,590 (175,169,841)
- - - - (7,010) -
- - - - (7,010) -
74,255,275 - 74,255,275 - - - 61,319,980 - 61,319,980 - 5,000 - 59,120,237 - 59,120,237 - - - 8,565,938 - 8,565,938 - - - 10,189,053 - 10,189,053 - - - 213,450,483 - 213,450,483 - 5,000 - 8,695,225 - 8,695,225 - - - 14,918,668 4,093,449 19,012,117 - - - 49,657 - 49,657 - - - 1,801,175 - 1,801,175 - - - (1,076,221) 1,076,221 - - - - 237,838,987 5,169,670 243,008,657 - 5,000 - 48,432,556 19,406,260 67,838,816 - (2,010) - (62,297,745) 133,860,589 71,562,844 - 61,030 15,510,000 (565,258) 48,534 (516,724) - - - (62,863,003) 133,909,123 71,046,120 - 61,030 15,510,000 (14,430,447)$ 153,315,383 $ 138,884,936 $ - $ 59,020$ 15,510,000$ Primary Government Component Units
Net (Expense) Revenue
and Changes in Net Position
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FUND
FINANCIAL STATEMENTS
Governmental Fund Financial Statements
Proprietary Fund Financial Statements
Fiduciary Fund Financial Statements
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GOVERNMENTAL FUND FINANCIAL STATEMENTS
The funds described below were determined t o be major governmental funds by the City in the current fiscal year.
Individual nonmajor governmental funds may be found in the supplemental section.
The General Fund is used for all the general revenues of the City not specifically levied or collected for other City funds and the related expenditures. The General Fund accounts for all financial resources of a governmental unit which are not accounted for in another fund.
The Community Development and Loan Programs Special Revenue Fund accounts for the receipt of Community Development Block Grant, HOME Investment Partnership Program, and Neighborhood Stabilization Program grant monies and the use of the grants. The Fund also accounts for the low and moderate income housing activities of the City as Housing Successor to the former Redevelopment Agency. Related to the grant disallowed costs discussed in the notes to the financial statements, the City purchased certain loans that had previously been funded with Community Development Block Grant and HOME funds. The grants and loan programs are to be used to provide, within the City of Richmond, new affordable housing, improve existing conditions, assist homeless and disabled with housing, and to expand economic opportunities in business, and employment for low and moderate income residents.
American Rescue Plan Act Fund accounts for funding received from federal government in conjunction with the American Rescue Plan Act to provide resources to help turn the tide on the pandemic, address its economic fallout, and lay the foundation for a strong and equitable recovery.
General Capital Improvement Fund accounts for monies designated for capital improvement projects. 33737
City of Richmond
Balance Sheet
Governmental Funds
June 30, 2024
Community
Development American General Capital Othe r Total
General and Loan Rescue Plan Improvement Governmental Governmental Fund Program s Act Fund Fund Fund s Funds
ASSETS
Cash and investments 82,819,963$ 6,940,873 $ 23,206,096 $ 40,898,130 $ 69,405,159 $ 223,270,22 1$ Restricted cash and investments 2,205,685 2,689,963 - 97,543 11,179,643 16,172,834 Receivables:
Accounts, net 15,229,990 85,361 - - 1,173,570 16,488,921 Interest 144,777 11,046 37,858 52,650 106,97 1 353,302
Grants 18,127 25,526 - - 20,943,428 20,987,08 1
Loans 3,062,737 43,793,258 1,750,000 - 779,013 49,385,008 Leases 818,996 ---- 818,996
Due from other funds 3 , 3 1 5 , 9 7 3---- 3 , 3 1 5 , 9 7 3 Advances to other funds 1 2 , 1 4 4 , 8 6 2---- 1 2 , 1 4 4 , 8 6 2 Property held for resale - 78,016 - - - 78,016
Prepaids and supplies 793,356 - - - 319,297 1,112,653
Total assets 120,554,466 53,624,043 24,993,954 41,048,323 103,907,081 344,127,867
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities:
Accounts payable and accrued liabilities 9,678,649 33,758 794,722 1,052,152 7,380,307 18,939,588 Refundable deposits 443,857 - - - 1,257,57 1 1,701,428
Due to other funds ---- 3 , 2 3 9 , 0 6 3 3 , 2 3 9 , 0 6 3 Unearned revenue 7,829,593 - 20,769,592 - 15,073,172 43,672,357 Total liabilities 17,952,099 33,758 21,564,314 1,052,152 26,950,113 67,552,436 Deferred inflows of resources:
Unavailable revenue 2,385,463 18,907,347 - - 12,974,588 34,267,398 Leases related 794,245 ---- 794,245
Total deferred inflows of resources 3,179,708 18,907,347 - - 12,974,588 35,061,643 Fund Balances:
Nonspendable 1 3 , 6 3 8 , 2 1 8---- 1 3 , 6 3 8 , 2 1 8 Restricted 10,667,506 34,682,938 1,679,640 39,996,17 1 68,768,576 155,794,83 1 C o m m i t t e d 3 , 7 4 8 , 5 6 6---- 3 , 7 4 8 , 5 6 6 Assigned 6,106,044 - 1,750,000 - - 7,856,044
Unassigned 65,262,325 - - - (4,786,196
) 60,476,129
Total fund balances 99,422,659 34,682,938 3,429,640 39,996,171 63,982,380 241,513,788 Total liabilities, deferred inflows
of resources, and fund balances 120,554,466$ 53,624,043 $ 24,993,954 $ 41,048,323 $ 103,907,081 $ 344,127,867 $ See accompanying Notes to Basic Financial Statements
34738
Total Fund Balances - Total Governmental Funds 241,513,788$ Capital assets used in governmental activities were not current financial resources.
Therefore, they were not reported in the Governmental Funds Balance Sheet. Except for the internal service funds reported below, the capital assets were adjusted as follows:
Government-
Wide Statement
of Net Position
Internal Service
Funds Total
Nondepreciabl
e 85,587,572$ (5,459,255 )$ 80,128,317
Depreciable, net 218,950,395 (11,038,097 ) 207,912,298
Total capital assets 304,537,967$ (16,497,352 )$ 288,040,615 Internal service funds were used by management to charge the costs of certain activities, such as insurance, to individual funds. The assets and liabilities of the Internal service funds were included in governmental activities in the Government- Wide Statement of Net Position. 26,088,128
Unavailabl
e revenues recorded in th e fund financial statement s resulting from activities in which revenues were earned but were not available are reclassified as revenues in the Government-Wide Financial Statements. 34,267,398 In th
e Government-Wide Financial Statements, deferred employer contributions for pension and OPEB, certain differences between actuarial estimates and actual results, and other adjustments resulting from changes in assumptions and benefits are deferred in the current year.
Deferred outflows of resources related to pension 88,946,919 Deferred outflows of resources related to OPEB 1,167,892 Deferred inflows of resources related to pension (5,806,213 )
Deferred inflows of resources related to OPEB (19,731,567) Long-term liabilities were not due and payable in the current period. Therefore, they were not reported in the Governmental Funds Balance Sheet.
Government-
Wide Statement
of Net Position
Internal Service
Funds Total
Compensated absences - due within one year (6,437,814) $ 4,549 $ (6,433,265)$ Interest payable (4,551,857) 5,874 (4,545,983) Long-term debt - due within one year (7,190,284) 283,146 (6,907,138) Compensated absences - due in more than one year (6,882,078) 8,477 (6,873,601) Long-term debt - due in more than one year (243,466,037) 918,646 (242,547,391) Deferred charge on refunding 28,733,660 - 28,733,660 Net pension liability/asset (370,751,455) 1,034,345 (369,717,110) Net OPEB liability (60,965,350) 338,771 (60,626,579)
Total long-term liabilities (671,511,215)$ 2,593,808 $ (668,917,407 ) Net Position of Governmental Activities (14,430,447)$
City of Richmond
Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position
June 30, 2024
Amounts reported for governmental activities in the statement of net position are different because:
See accompanying Notes to Basic Financial Statements
35739
City of Richmond
Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds
For the year ended June 30, 2024
Community
Development American General Capital Other Total
General and Loan Rescue Plan Improvement Governmental Governmental Fund Program s Act Fund Fund Fund s Funds
REVENUES:
Property taxes 53,802,373 $ - $ - $ - $ 29,004,973$ 82,807,346 $ Sales taxes 61,319,980 - - - - 61,319,980 Utility user taxes 59,120,237 - - - - 59,120,237 Other taxes 18,754,991 - - - - 18,754,991 Licenses, permits and fees 14,519,981 938,531 - - 12,355,479 27,813,991 Fines, forfeitures and penalties 229,936 - - - 9,443 239,379 Use of money and property 4,058,357 572,224 1,144,072 1,197,428 4,378,204 11,350,285 Intergovernmental 641,157 161,266 2,358,952 - 44,348,273 47,509,648 Charges for services 4,948,584 - - - 8,240,936 13,189,520 Rent 864,042 - - - - 864,042 Other 432,808 1,066,843 - 300,001 29,725 1,829,377 Total revenues 218,692,446 2,738,864 3,503,024 1,497,429 98,367,033 324,798,796 EXPENDITURES:
Current:
General government 43,654,447 2,338 1,013,839 633,832 23,126,329 68,430,785 Public safety 105,663,918 - - - 4,402,434 110,066,352 Public works 32,133,919 - 40,263 2,413,026 14,672,476 49,259,684 Community development - 440,901 - - 6,941,428 7,382,329 Cultural and recreational 12,187,647 - - - 1,321,390 13,509,037 Housing and redevelopment - 259,103 - - 3,215,403 3,474,506 Capital outlay 1,032,495 - 1,304,850 882,591 9,600,348 12,820,284 Debt service:
Principal 3,826,278 - - - 3,865,000 7,691,278 Interest and fiscal charges 141,405 - - - 15,327,428 15,468,833 Total expenditures 198,640,109 702,342 2,358,952 3,929,449 82,472,236 288,103,088
REVENUES OVER (UNDER)
EXPENDITURES 20,052,337 2,036,522 1,144,072 (2,432,020) 15,894,797 36,695,708 OTHER FINANCING SOURCES (USES):
Proceeds from sale of property 6,299 35,239 - - 8,120 49,658 Transfers in 21,637,505 - - 18,819,926 17,759,579 58,217,010 Transfers out (28,585,425) - - - (29,893,824) (58,479,249) Total other financing sources (uses) (6,941,621) 35,239 - 18,819,926 (12,126,125) (212,581) Net change in fund balances 13,110,716 2,071,761 1,144,072 16,387,906 3,768,672 36,483,127 FUND BALANCES (DEFICITS):
Beginning of year 86,311,943 32,611,177 2,285,568 - 72,002,432 193,211,120 Prior period adjustments - - - 23,608,265 (11,788,724) 11,819,541 Beginning of year, as restated 86,311,943 32,611,177 2,285,568 23,608,265 60,213,708 205,030,661 End of year 99,422,659$ 34,682,938 $ 3,429,640 $ 39,996,17 1$ 63,982,380 $ 241,513,788 $ See accompanying Notes to Basic Financial Statements
36740
City of Richmond
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Government-Wide Statement of Activities For the year ended June 30, 2024
Net Change in Fund Balances - Total Governmental Funds 36,483,127$ Governmental funds reported capital outlay as expenditures. However, in the Government-Wide Statement of Activities, the cost of those assets was allocated over their estimated lives as depreciation expense. This was the amount of capital assets recorded in the current period, net of the amount related to internal service funds. 12,477,021
Depreciation expens e on capital asset s was reported in th e Government-Wide Statement of Activities , but did not require the use of current financial resources. Therefore, depreciation expense was not reported as expenditures in the governmental funds, net of the amount related to internal service funds. (13,686,306) Gain on sale of assets are not recorded in the governmental funds since the assets are not recorded there but they are recorded in the government-wide 49,658
Proceed from sal e assets are recorded in th e governmental fund s but th e gain o r loss is recorded in th e government-wide (49,658)
Accrued compensated leave payments were reported as expenditures in the governmental funds, however expense is recognized in the Government-Wide Statement of Activities based on earned leave accruals. (1,742,772) Debt proceeds provide current financial resource s to governmental funds , but issuing debt increased long- term liabilities in the Government-Wide Statement of Net Position. Repayment of debt was an expenditure in governmental funds, but the repayment reduced long-term liabilities in the Government-Wide Statement of Net Position.
Lon
g-term debt repayments 7,691,278
Amortization of deferred loss on refunding (1,512,298)
Amortization of bonds premium 863,438
Interest on long-term debt i s recognized as an expenditure in the governmental funds when it is due. In the statement of activities, interest expense is recognized as the interest accrues, regardless of when it is due.
The difference between interest expense paid and interest accrued was: (3,810,734) Current year employer pension and OPEB contribution s are recorded as expenditures in the governmental funds, however, these amounts are reported as a deferred outflow of resources in the Government-Wide Statement of Net Position. 38,154,001
Pension expens e is reported in th e Government-Wide Statement of Activitie s does not requir e the use of current financial resources, and therefore is not reported as expenditures in governmental funds. (50,571,997) OPEB expens e is reported in th e Government-Wide Statement of Activitie s does not requir e the use of current financial resources, and therefore is not reported as expenditures in governmental funds. 16,334,041 Unavailable revenues recorded in th e fund financial statement s resulting from activities in which revenues were earned but were not available are reclassified as revenues in the Government-Wide Financial Statements. 961,290
Internal service funds were used by management to charge the costs of certain activities, such as insurance and fleet management, to individual funds. The net revenue of the internal service funds was reported with governmental activities. 6,792,467
Change in Net Position of Governmental Activities 48,432,556$ Amounts reported for governmental activities in the Government-Wide Statement of Activities were different because:
See accompanying Notes to Basic Financial Statements
37741
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38742
PROPRIETARY FUND FINANCIAL STATEMENTS
Proprietary funds account for operations financed and operated in a manner similar to a private business enterprise.
The intent of the City is that most of the cost of providing goods and services be financed primarily through user charges.
The concept of major funds extends to proprietary funds. The City has identified the funds below as major proprietary funds in the current fiscal year.
Generally accepted accounting principles do not provide for the disclosure of budget versus actual comparisons regarding proprietary funds that are major.
The
Richmond Housing Authority fund accounts for all funds provided by the Department of Housin g and Urban Development (HUD) to assist low income families in obtaining decent, safe and sanitary housing.
The Port of Richmond fund accounts for all financial transactions relating to the City-owned marine terminal facilities and commercial property rentals.
The Municipal Sewer fund account s for all financial transaction s relating to the Cit y's Wastewater Collection and Treatment. Services are on a user charge basis to residents and business owners located in Richmond. 39743
City of Richmond
Statement of Net Position
Proprietary Funds
For the year ended June 30, 2024
Richmond Housing Port of Municipal Other Enter prise
Authority Richmond Sewer Funds
ASSETS
Current assets:
Cash and investments 3,280,169 $ 16,508,586 $ 48,754,14 1$ 5,739,613 $ Restricted cash and investments 97,786 - 1,088,890 91,320 Receivables:
Accounts, net 627,448 6,017,414 87,392 306,80 1
Interest - 22,406 78,569 9,285
Grants 1,011,583 - - 1,195,958
Leases - 4,486,723 - 115,529
Prepaids - - - -
Total current assets 5,016,986 27,035,129 50,008,992 7,458,506 Noncurrent assets:
Receivables:
Due from developer 10,221,743 - - -
Lease receivables - 52,059,432 - 5,114,675
Capital assets:
Nondepreciable 1,708,686 5,060,950 113,981,637 6,662,872 Depreciable 44,836,474 87,500,286 191,344,030 35,585,405 Less accumulated depreciation (30,158,605) (66,446,416) (87,669,945) (33,728,681) Net capital assets 16,386,555 26,114,820 217,655,722 8,519,596 Total noncurrent assets 26,608,298 78,174,252 217,655,722 13,634,27 1 Total assets 31,625,284 105,209,38 1 267,664,714 21,092,777
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows of resources - pension 434,566 257,025 773,500 407,697 Deferred outflows of resources - OPEB 1,717 744 2,304 1,517 Deferred charge on refunding - - 5,206,437 -
Total deferred outflows of resources 436,283 257,769 5,982,24 1 409,214
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities 1,372,968 380,97 1 17,179,741 882,024 Interest payable - - 2,150,979 83,24 1
Due to other funds - - - 76,910
Refundable de
posits 123,575 238,423 - 95,32 1
Unearned revenue 1,814,047 534,178 36,280 -
Compensated absences - current 24,970 6,522 59,665 33,84 1 Claims payable - current - - - -
Long-term debt - current - - 3,220,704 116,007
Total current liabilities 3, 335,560 1,160,094 22,647,369 1,287,344 Noncurrent liabilities:
Advances from other funds - 12,144,862 - -
Compensated absences 66,793 25,064 75,476 42,913
Claims payable ----
Long-term debt 700,000 - 166,675,535 1,901,953
Net pension liability 1,626,157 961,792 2,894,454 1,525,608 Net OPEB liability 677,542 293,60 1 909,035 598,495
Total noncurrent liabilities 3,070,492 13,425,319 170,554,500 4,068,969 Total liabilities 6,406,052 14,585,413 193,201,869 5,356,313
DEFERRED INFLOWS OF RESOURCES
Deferred inflows of resources - pension 45,986 27,198 81,850 43,14 1 Deferred inflows of resources - OPEB 81,447 35,294 109,275 71,945 Deferred inflows of resources - leases - 54,226,652 - 5,089,845 Total deferred inflows of resources 127,433 54,289,144 191,125 5,204,93 1
NET POSITION (DEFICIT)
Net investment in capital assets 15,686,555 26,114,820 52,965,920 6,501,636 Restricted for debt service - - 1,088,890 91,320
Unrestricted 9,841,527 10,477,773 26,199,15 1 4,347,791 Total net position 25,528,082$ 36,592,593 $ 80,253,96 1$ 10,940,747 $ Business-type Activities
See accompanying Notes to Basic Financial Statements.
40744
Governmental
Activities
Total Enterprise Internal Service
Funds Funds
74,282,509$ 64,847,737 $
1,277,996 -
7,039,055 -
110,260 99,728
2,207,541 923,341
4,602,252 -
- 219,680
89,519,613 66,090,486
10,221,743 -
57,174,107 -
127,414,145 5,459,255
359,266,195 34,915,889
(218,003,647) (23,877,792)
268,676,693 16,497,352
336,072,543 16,497,352
425,592,156 82,587,838
1,872,788 276,413
6,282 859
5,206,437 -
7,085,507 277,272
19,815,704 1,941,637
2,234,220 5,874
76,910 -
457,319 -
2,384,505 -
124,998 4,549
- 14,192,093
3,336,71
1 283,146
28,430,367 16,427,299
12,144,862 -
210,246 8,477
- 37,979,47 1
169,277,488 918,646
7,008,011 1,034,345
2,478,673 338,77 1
191,119,280 40,279,710
219,549,647 56,707,009
198,175 29,249
297,961 40,724
59,316,497 -
59,812,633 69,973
101,268,931 15,295,560
1,180,210 -
50,866,242 10,792,568
153,315,383$ 26,088,128 $
41745
City of Richmond
Statement of Revenues, Expenses and Changes in Fund Net Position Proprietary Funds
For the year ended June 30, 2024
Richmond Housing Port of Municipal Other Enterprise
Authority Richmond Sewe r Funds
OPERATING REVENUES:
Rental 281,436 $ 7,075,222 $ - $ 168,642$ Service charges 42,817 883,05 1 32,563,772 4,678,415
Lease income - 4,297,40 1 - 366,78 1
Other 34,074 - - -
Total operating revenues 358,327 12,255,674 32,563,772 5,213,838 OPERATING EXPENSES:
Salaries and benefits 1,059,433 1,012,653 2,462,823 624,922 General and administrative 1,153,986 2,164,379 13,687,154 2,181,525 Maintenance 901,117 13,384 152,206 758,622
Depreciation - 3,467,194 3,967,42 1 217,345
Claims losses ----
Other 1,330,301 (2,906) 9,150 (10,388)
Total operating expenses 4,444,837 6,654,704 20,278,754 3,772,026 OPERATING INCOME (LOSS) (4,086,510) 5,600,970 12,285,018 1,441,812 NONOPERATING REVENUES (EXPENSES):
Interest income 58 1,646,990 1,983,850 462,55 1
Grants 3,426,450 - - -
Interest expense - 216,527 (4,556,325) (91,352)
Total nonoperating revenues (expenses) 3,426,508 1,863,517 (2,572,475) 371,199 Income (loss) before
contributions and transfers (660,002) 7,464,487 9,712,543 1,813,011 CONTRIBUTIONS AND TRANSFERS:
Transfers in 1,162,999 - - -
T r a n s f e r s o u t --- (86,778)
Total contributions and transfers 1,162,999 - - (86,778) Change in net position 502,997 7,464,487 9,712,543 1,726,233 NET POSITION:
Beginning of year 24,976,551 29,128,106 70,541,418 9,214,514 Prior period adjustments 48,534 - - -
Beginning of year, as restated 25,025,085 29,128,106 70,541,418 9,214,514 End of year 25,528,082$ 36,592,593 $ 80,253,96 1$ 10,940,747 $ Business-type Activities
See accompanying Notes to Basic Financial Statements.
42746
Governmental
Activities
Total Enterprise Internal Service
Funds Funds
7,525,300$ - $
38,168,055 30,217,57 1
4,664,182 -
34,074 -
50,391,611 30,217,571
5,159,831 2,279,343
19,187,044 2,612,725
1,825,329 1,433,080
7,651,960 2,023,873
- 16,614,347
1,326,15
7 28
35,150,321 24,963,396
15,241,290 5,254,175
4,093,449 2,715,032
3,426,450 (310,411)
(4,431,150) (52,347)
3,088,749 2,352,274
18,330,039 7,606,449
1,162,999 426,018
(86,778) (1,240,000)
1,076,221 (813,982)
19,406,260 6,792,467
133,860,589 19,295,66 1
48,534 -
133,909,123 19,295,66 1
153,315,383$ 26,088,128 $
43747
City of Richmond
Statement of Cash Flows
Proprietary Funds
For the year ended June 30, 2024
Richmond Housing Port of Municipal Other Enter prise
Authority Richmond Sewer Funds
CASH FLOWS FROM OPERATING ACTIVITIES:
Receipts from customers/interfund services 342,012 $ 11,374,102 $ 32,578,163 $ 3,506,455 $ Payments to suppliers (4,221,897) (1,947,079) (3,726,647) (2,509,100) Payments to employees (1,141,295) (654,232) (2,100,101) (1,022,533) Insurance premiums and claims paid ----
Net cash provided by (used in) operating activities (5,021,180) 8,772,791 26,751,415 (25,178)
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES:
Interfund receipts (payments) - (340,508) - 76,910
Receipts from other governments 3,426,450 - - -
Transfers in 1,162,999 - - -
Transfers out - - -
(86,778)
Net cash provided by (used in)
noncapital financing activities 4,589,449 (340,508) - (9,868)
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:
Grant receipts - - - -
Acquisition of capital assets - (123,789) (27,485,327) (1,870,502) Issuance of long-term debt - - 10,661,464 -
Principal payments on capital debt - (4,060,000) (2,815,000) (200,579) Principal payments on lease -- (271,203) -
Interest paid - (208,779) (5,258,061) (95,930)
Net cash provided by (used in)
capital and related financing activities - (4,392,568) (25,168,127) (2,167,011) CASH FLOWS FROM INVESTING ACTIVITIES:
Interest 58 1,641,876 1,990,305 466,728 Net cash provided by (used in) investing activities 58 1,641,876 1,990,305 466,728 Net cash flows (431,673) 5,681,591 3,573,593 (1,735,329) CASH AND INVESTMENTS - Beginning of year 3,809,628 10,826,995 46,269,438 7,566,262 CASH AND INVESTMENTS - End of year 3,377,955$ 16,508,586 $ 49,843,03 1$ 5,830,933 $
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Operating income (loss) (4,086,510) $ 5,600,970 $ 12,285,018 $ 1,441,812 $ Adjustments to reconcile operating income (loss) to
net cash provided by (used in) operating activities:
Depreciation expense - 3,467,194 3,967,421 217,345 Changes in assets and liabilities:
Receivables, net (16,315) (130,402) 14,391 (1,059,223) Prepaids and other assets - - - - Accounts payable and accrued liabilities (839,380) 227,778 10,121,863 417,209 Refundable deposits 2,887 - - 3,450 Unearned revenue - 2,272 - (591,867) Compensated absences payable 24,509 8,515 42,975 14,070 Claims payable - - - - Net pension liability and deferred outflows/inflows ( 354,057) 191,618 603,186 (112,391) Net OPEB liability and deferred outflows/inflows 247,686 158,288 (283,439) (299,290) Lease receivable and deferred outflows/inflows - (753,442) - (56,293) Net cash provided by (used in) operating activities (5,021,180)$ 8,772,791 $ 26,751,415 $ (25,178) $ Business-type Activities
See accompanying Notes to Basic Financial Statements
44748
Governmental
Activities
Total Enterprise Internal Service
Funds Funds
47,800,732$ 30,217,57 1$
(12,404,723) (3,846,753)
(4,918,161) (2,681,942)
- (14,124,469)
30,477,848 9,564,407
(263,598) -
3,426,450 -
1,162,999 426,018
(86,778) (1,240,000)
4,239,073 (813,982)
- 1,291,464
(29,479,618) (9,029,275)
10,661,464 -
(7,075,579) (272,340)
(271,203) -
(5,562,770) (53,678)
(31,727,706) (8,063,829)
4,098,967 2,727,085
4,098,967 2,727,085
7,088,182 3,413,681
68,472,323 61,434,056
75,560,505$ 64,847,737 $
15,241,290$ 5,254,175 $
7,651,960 2,023,873
(1,191,549) -
- (219,680)
9,927,470 418,760
6,337 -
(589,595) -
90,069 (59,123)
- 2,489,878
328,356 (71,540)
(176,755) (271,936)
(809,735) -
30,477,848$ 9,564,407 $
45749
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46750
FIDUCIARY FUND FINANCIAL STATEMENTS
Fiduciary funds are presented separately from the Government-Wide and Fund financial statements.
Trust funds are used to account for assets held by the City as a trustee agent for individuals, private organizations, or other governments.
Custodial funds are used to account for assets held by the City as an agent for individuals, private organizations, or other governments.
The financial activities of the Trust and Custodial funds are excluded from the City-wide financial statements, but are presented in separate Fiduciary Fund financial statements. 47751
City of Richmond
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2024
Private-Purpose
Trust Funds Custodial Funds
ASSETS
Cash and investments 9,776,691 $ 5,781,738 $ Restricted cash and investments 16,127,761 849,154 Accounts receivable 854 - Interest receivable 2,530 9,030 Prepaids and other assets 4,997,462 - Total assets 30,905,298 6,639,922
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows of resources - deferred loss on refunding 301,218 - Total deferred outflows of resources 301,218 -
LIABILITIES
Accounts payable and accrued liabilities 113,029 3,147
Interest payable 446,519 -
Long-term debt:
Due within one year 6,855,000 -
Due in more than one year 32,647,830 -
Total liabilities 40,062,378 3,147 NET POSITION:
Held in trust for other governments (8,855,862) - Restricted for individuals, organizations, and other governments - 6,636,775 Total net position (8,855,862)$ 6,636,775 $ See accompanying Notes to Basic Financial Statements.
48752
City of Richmond
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the year ended June 30, 2024
Pension Private-Purpose
Trust Funds Trust Funds Custodial Funds
ADDITIONS:
Property taxes -$ 10,171,374$ 1,046,160 $ Contributions to trust - employers - - 184,764 Net investment income:
Interest income - 910,081 313,455 Transfers from other funds - - - Gain from sale of property - 357,223 - Total additions - 11,438,678 1,544,379 DEDUCTIONS:
Community development - 1,219,365 - Payments in accordance with trust agreements - 273,544 - Interest and fiscal charges - 1,566,348 881,287 Other - - 1,230,434 Total deductions - 3,059,257 2,111,721 Change in net position - 8,379,421 (567,342) NET POSITION:
Beginning of year 11,040,528 (17,235,283) 7,204,117 Prior Period Adjustments (11,040,528) - - Beginning of year, restated - (17,235,283) 7,204,117 End of year -$ (8,855,862)$ 6,636,775 $ See accompanying Notes to Basic Financial Statements.
49753
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50754
51 NOTES TO BASIC
FINANCIAL STATEMENTS
755
52 This page intentionally left blank.
756
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
53 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The basic financial statements of the City of Richmond , California (City) have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to governmental agencies. The Governmental Accounting Standards Boards (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting princi ples. The City’s significant accounting policies are described below.
A. Financial Reporting Entity
The City was incorporated in 1905 under the laws of the State of Ca lifornia and adopted its charter in 1909. The City operates under a Council-Manager form of government and provides the following services to its citizens as authorized by its charter: police and fire protection, planning and community development, streets and roads, parks and recreation library, sewage treatment, drainage and capital projects. In addition, the City has a port, marina, municipal and storm sewer enterprises, a housing authority, a joint powers financing authority, and a parking authority which is inactive.
The accompanying basic financial statements present the financial activity of the City, which is the primary government presented, along with the financ ial activities of its component units, which are entities for which the City is financially accountable. Although they are separate legal entities, blended component units are in substance part of the City’s operations and are reported as an integral part of the City’s financial statements. The discretely presented component unit, on the other hand, is reported in a separate column in the basic financial statements to emphasize it is legally separate from the government.
Primary Government
The financial statements of the primary government of the City include the activities of the City as well as the Richmond Housing Authority, the Richmond Joint Powers Financing Authority, the Richmond Neighborhood Stabilization Corporation, the Richmond Parking Authority, the Richmond Municipal Sewer District, and the Richmond Surplus Property Authority all of which are controlled by and dependent on the City. While these are separate legal entities, their financial ac tivities are integral to those of the City. Their financial activities have been aggregated and merged (termed “blended”) with those of the primary government of the City in the accompanying financial statements.
Blended Component Units
Richmond Housing Authority (Housing Authority) – Formed in 1941 as a separate legal entity under the provisions of the Housing Act of 1937, the Housing Authority was established to use funds provided by the Department of Housing and Urban Development (HUD) to rehabilitate local deteriorated housing and to subsidize low-income families in obtaining decent, safe, and sanitary housing needs.
Although the Housing Authority is a separate legal entity, it is an integral part of the City. The City exercises significant financial and management control over the Housing Authority and members of City Council serve as the governing board of the Housing Authority. The financial statements of the Housing Authority are included in the City’s basic financial statements as an enterprise fund. Separate financial statements for the Housing Authority may be obtained by contacting the Richmond Housing Authority, 450 Civic Center Plaza 2
nd Floor, Richmond, California 94804.
757
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
54 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued A. Financial Reporting Entity, Continued
Blended Component Units, Continued
Richmond Joint Powers Financing Authority (JPFA) – A joint exercise of powers authority formed on December 1, 1989, by and between the City and the former Redevelopment Agency, the JPFA was created to assist the City, the Redevelopment Agency, and other local public agencies in financing and refinancing capital improvements and working capital pursuant to the Marks-Roos Local Bond Pooling Act of 1985. The JPFA is authorized to purchase obligations of the City, Redevelopment Agency, and other local public agencies.
Although the JPFA is a separate legal entity, it is an integral part of the City. The City exercises significant financial and management control over the JPFA and the members of the City Council serve as the Board of Directors. The operations of the JPFA are included in the City’s basic financial statements as a debt service fund. Separate financial statements for the JPFA may be obtained by contacting Finance Department, City of Richmond, 450 Civic Center Plaza, Richmond, California 94804.
Richmond Neighborhood Stabilization Corporation (RNSC) – A California nonprofit public benefit Corporation formed in July 2009 by the City and the former Redevelopment Agency under the laws of the State of California. The Corporation was organize d for the purpose of administering and operating the City’s Neighborhood Stabilization Program (NSP), which includes purchasing, developing, financing, rehabilitating, land ba nking and/or demolishing blighted properties and foreclosed or abandoned properties utilizing the NSP funds or other public and private funding sources, and assisting the City and the Agency in providing affordable ho me ownership opportunities for households of low and moderate income by facilitating the financing ne cessary for the sale and resale of deed-restricted affordable ownership units to low and moderate income households at affordable costs, and other similar functions.
The Corporation is governed by a board of directors consisting of the City Manager, the Finance Director, and five other City and Housing Authority Directors. Although the RNSC is a separate legal entity, it is an integral part of the City. The City exercises significant financial and management control over the RNSC and members of the Board of Directors are appointed by City Council and City management has operational responsibility for the RNSC. The operatio ns of the RNSC are included in the Cit y’s basic financial statements as a special revenue fund. Separate financial statements for the RNSC may be obtained by contacting the Finance Department under RNSC, City of Richmond, 450 Civic Center Plaza, Richmond, California 94804.
Richmond Surplus Property Authority – Formed to become the owner of certain property declared surplus by the U.S. Government, the Authority is a separa te legal entity but it is an integral part of the City. The City exercises significant financial and management control over the Authority and members of the City Council serve as the governing board of the Authority. The Authority was reactivated in fiscal year 2011 to facilitate certain Port of Richmond transactions. The financial activities of the Authority are included in the Port of Richmond Enterprise Fund. Separate financial statements are not issued for the Authority.
758
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
55 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued A. Financial Reporting Entity, Continued
Blended Component Units, Continued
Richmond Parking Authority (Parking Authority) – Formed in 1975 pursuant to the provisions of California statutes for the purpose of financing the construction of off-street parking facilities. Although the Parking Authority is a separate legal entity, it is an integral part of the City. The City exercises significant financial and management control over the Parking Authority and members of the City Council serve as the governing board of the Parking Authority. The Parking Authority is inactive.
Richmond Municipal Sewer District (RMSD) – The Richmond Municipal Sewer District (RMSD) was established on September 17, 1956, pursuant to the Municipal Sewer District Act of 1911. It encompasses approximately fourteen square miles of the City of Richmond. The district was formed to provide “wastewater collection and treatment for the residents and businesses located in the central part of the City of Richmond”.
The RMSD contracts the operation and maintenance of the Wastewater Treatment Plant and the Sanitary Sewer Collection System to Veolia Water North America (formerly US Filter). However, the City of Richmond still maintains complete ownership of all the assets for both the wastewater treatment plant and the collection system.
The district is a separate legal entity, but it is an in tegral part of the City. The City exercises significant financial and management control over the district and members of the City Council serve as the governing board of the district. The financial activities of the district are included in the Municipal Sewer Enterprise Fund. Separate financial statements are not issued for the district.
Discretely Presented Component Units
RHA Properties – A joint powers agreement between the City and the Housing Authority formed in 2004 for the purpose of owning and managing the operations of an affordable housing residential complex known as The Hilltop at Westridge Apartments in the City, dedicated to the needs of elderly persons.
The City and the Housing Authority funded the acquisition of this complex through the issuance of debt.
The City and Housing Authority exercise signific ant financial and management control over RHA Properties and appoint members of the Board of Di rectors, however RHA Properties manages its own programs separate from the City or the Housing Authority. Therefore, the financial activities of RHA Properties are discretely presented in the RHA Properties Component Unit column of the Statement of Net Position and the Statement of Activities.
759
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
56 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued A. Financial Reporting Entity, Continued
Discretely Presented Component Units, Continued
RHA Housing Corporation – RHA Housing Corporation was incorporated and registered on January 26, 2004 as a California nonprofit public benefit corporation to benefit and support the RHA with respect to the Easter Hill development. RHA Housing Corporation entered into RAD Conversion redevelopment activities and it acts as the sole and managing member of RHA RAD LLC. The Corporation’s fiscal year ends on December 31. The City and Housing Author ity exercise significant financial and management control over RHA Housing Corporation and appoint members of the Board of Directors, however RHA Housing Corporation manages its own programs separate from the City or the Housing Authority.
Therefore, the financial activities of RHA Housing Corporation are discretely presented in the RHA Housing Corporation Component Unit column of the Statement of Net Position and the Statement of Activities. Separate financial statements for RHA Housing Corporation may be obtained by contacting the Richmond Housing Authority, 450 Civic Center Plaza 2 nd Floor, Richmond, California 94804.
RHA RAD LLC – A California limited liability company was formed on July 11, 2013 by RHA Housing Corporation, the sole and managing member. The company is operated exclusively to further the tax exempt charitable purposes of the sole and managi ng member to provide affordable housing for low- income persons where no adequate housing exists for such persons, and to own and operate housing for the benefit of low-income persons who are in need of affordable, decent, safe and sanitary housing and related services, where an inadequate supply of hous ing exists for such persons. The City and Housing Authority exercise significant financial and management control over RHA RAD LLC and RHA Housing Corporation is the sole member of RHA RAD LLC, however RHA RAD LLC manages its own programs separate from the City or the Housing Authority. Therefore, the financial activities of RHA RAD LLC are discretely presented in the RHA RAD LLC Component Unit column of the Statement of Net Position and the Statement of Activities. Separate financial statements for RHA RAD LLC may be obtained by contacting the Richmond Housing Authority, 450 Civic Center Plaza 2 nd Floor, Richmond, California
94804.
In order for the Authority to proceed in its participation into the RAD Program as discussed in Note 18, RHA RAD LLC shall act as the managing general partner of RHA RAD Housing Partnership LP.
B. Basis of Accounting and Measurement Focus
The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for in a separate set of self-balancing accounts that comprise its assets, liabilities, defe rred outflows/inflows of resources, fund equity, revenues, and expenditures or expenses. City 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.
760
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
57 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued B. Basis of Accounting and Measurement Focus, Continued Government-Wide Financial Statements
The Government-Wide Financial Statements include a Statement of Net Position and a Statement of Activities. These statements present summaries of Governmental and Business-Type Activities for the City accompanied by a total column. Governmental activities generally are financed through taxes, intergovernmental revenues, and other non-exchange transactions. Business-type activities are financed in whole or in part by fees charged to external parties. Fiduciary activities of the City are not included in these statements; they are presented separately.
The Statement of Activities presents a comparison between direct expenses and program revenues for each segment of the business-type activities of the City and for each function of the City’s governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Program revenues include (a) charges paid by the recipients of goods or services offered by the programs, (b) grants and contributions that are restricted to meeting the operational needs of a particular prog ram and (c) fees, grants and contributions that are restricted to financing the acquisition or construction of capital assets. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.
The Government-wide financial statements are presented on an “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all of the City’s assets, deferred outflows/inflows of resources and liabilities, includ ing capital assets as well as infrastructure assets and long-term liabilities, are included in the Statement of Net Position. The Statement of Activities presents all the City’s revenues, expenses and other 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 except those representing balances between the governmental activities and the business-type activities, which are presented as internal balances and eliminated in the total column. In the Statement of Activities, internal service fund transactions have been eliminated. However, transactions between governmental and business-type activities have not been eliminated. The following interfund activities have been eliminated:
x Due to/from other funds
x Advances to/from other funds
x Transfers in/out
The City applies all applicable GASB pronou ncements including all NCGA Statements and Interpretations currently in effect.
761
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
58 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 and in the aggregate for all non-major 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.
All governmental funds are accounted for on the “current financial resources” measurement focus and the modified accrual basis of accounting. Accordingl y, only current assets and current liabilities are included on the Balance Sheets. The Statement of Revenues, Expenditures and Changes in Fund Balances presents increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets.
Under the modified accrual basis of accounting, reve nues are recognized in the accounting period in which they become both measurable and available to finance expenditures of the current period.
Accordingly, revenues are recorded when received su ch as business licenses and fines and penalties in cash, except that revenues subject to accrual (generally ninety days after the fiscal year-end) are recognized when due. The primary revenue sources wh ich have been treated as susceptible to accrual by the City are property taxes, sales taxes, transient occupancy taxes, franchise taxes, certain other intergovernmental revenues, and earnings on investments. Expenditures are recorded in the accounting period in which the related fund liability is incurred also generally ninety days after the fiscal year end.
Reconciliations of the Fund Financial Statements to the Government-Wide Financial Statements are provided to explain the differences between the two approaches.
The City reports the following major governmental funds in the accompanying financial statements:
General Fund – the General Fund is used for all the general revenues of the City not specifically levied or collected for other City funds and the related expenditures. The General Fund accounts for all financial resources of a governmental unit which are not accounted for in another fund.
Community Development and Loan Programs Special Revenue Fund – accounts for the receipt of Community Development Block Grant, HOME Investment Partnership Program, and Neighborhood Stabilization Program grant monies and the use of the grants. The Fund also accounts for the low and moderate income housing activities of the City as Housing Successor to the former Redevelopment Agency. Related to the grant disallowed costs discussed in Note 4, the City purchased certain loans that had previously been funded with Community Development Block Grant and HOME funds. The grants and loan programs are to be used to provid e, within the City of Richmond, new affordable housing, improve existing housing conditions, assi st homeless and disabled with housing, and to expand economic opportunities in business and employment for low and moderate income residents.
American Plan Rescue Plan Act Fund – accounts for funding received from federal government in conjunction with the American Rescue Plan Act to provide resources to help turn the tide on the pandemic, address its economic fallout, and lay the foundation for a strong and equitable recovery.
General Capital Improvement Fund – accounts fo r monies designated for capital improvement projects.
762
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
59 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued B. Basis of Accounting and Measurement Focus, Continued Proprietary Fund Financial Statements
Proprietary Fund Financial Statements include a Statement of Net Position, a Statement of Revenues, Expenses and Changes in Fund Net Position, and a Statement of Cash Flows for each major proprietary fund and in the aggregate for all non-major funds. A column representing internal service funds is also presented in these statements. However, internal service balances and activities have been combined with the governmental activities in the Government-Wide Financial Statements.
Proprietary funds are accounted for using the “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all assets, liabili ties and deferred outflows/inflows of resources (whether current or non-current) are included on the Statement of Net Position. The Statement of Revenues, Expenses and Changes in Fund Net Position presents increases (revenues) and decreases (expenses) in total net position.
Under the accrual basis of accounting, revenues are re cognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred, regardless of when cash changes hands.
Operating revenues in the proprietary funds are those revenues that are generated from the primary operations of the fund. All other revenues are reported as non-operating revenues. Operating expenses are those expenses that are essential to the primar y operations of the fund. All other expenses are reported as non-operating expenses.
The City reports the following major enterprise funds as proprietary funds of the City:
Richmond Housing Authority – This fund accounts for all funds provided by the Department of Housing and Urban Development (HUD) to assist low income families in obtaining decent, safe and sanitary housing.
Port of Richmond – This fund accounts for all financial transactions relating to the City-owned marine terminal facilities and commercial property rentals.
Municipal Sewer – This fund accounts for all financia l transactions relating to the City’s Wastewater Collection and Treatment. Services are on a user charge basis to residents and business owners located in Richmond.
The City also reports the following proprietary fund type:
Internal Service Funds – The funds account for insurance reserves, equipment services and replacement and compensated absences all of whic h are provided to other departments on a cost- reimbursement basis.
763
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
60 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued B. Basis of Accounting and Measurement Focus, Continued Fiduciary Fund Financial Statements
Fiduciary Fund Financial Statements include a Statem ent of Fiduciary Net Position, and a Statement of Changes in Fiduciary Net Position. The City’s Fiduciary funds represent Private-Purpose Trust funds and Custodial funds. Custodial funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. Private-Purpose Trust funds are accounted for on an economic resources measurement focus under the accrual basis of accounting.
The City reports the following fiduciary fund types:
Trust Funds - The Pt. Molate Private-Purpose Trust Fund is used to account for assets held by the City as an agent for the U.S. Navy and a private developer for the cleanup of Point Molate as discussed in Note 18. The Successor Agency to the Richmo nd Community Redevelopment Agency Private- Purpose Trust Fund was established as of February 1, 2012 to account for the activities of the Successor Agency to the former Richmond Community Redeve lopment Agency as discussed in Note 19. The financial activities of the Trust Funds are exclud ed from the Government-wide financial statements, but are presented in the separate Fiduciary Fund financial statements.
Custodial Funds – These funds are used to account for assets held by the City as an agent for individuals, private organizations, and other governments, including special assessment districts within the City and non-public organizations. The financial activities of these funds are excluded from the government-wide financial statement, but are presented in separate Fiduciary Fund financial statements.
C. Cash and Investments
The City maintains a cash and investments pool that is available for use by all funds. Each fund’s portion of this pool is displayed as cash and investments on the balance sheet for governmental funds and the statements of net position for proprietary and fiduciary funds. Investments are stated at fair value.
In accordance with GASB Statement No. 40, Deposit and Investment Disclosures (Amendment of GASB Statement No. 3) , certain disclosure requirements for deposits and investment risks were made in the following areas:
x Interest Rate Risk
x Credit Risk
o Overall
o Custodial Credit Risk
o Concentrations of Credit Risk
In addition, other disclosures are specified including use of certain methods to present deposits and investments, highly sensitive investments, credit quality at year-end, and other disclosures. 764
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
61 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued C. Cash and Investments, Continued
In accordance with GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, highly liquid money 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. The City categorizes the fair value measurements of its investments based on the hierarchy established by generally accepted accounting principles. The fair va lue hierarchy, which has three levels, is based on the valuation inputs used to measure an asset’s fair value: Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; and Level 3 inputs are significant unobservable inputs. The City did not ha ve any investments measured using Level 3 inputs as of June 30, 2024.
The City participates in an investment pool managed by the State of California entitled Local Agency Investment Fund (LAIF) which has invested a portion of the pooled funds in Structured Notes and Asset- Backed Securities. LAIF’s investments are subject to credit risk with the full faith and credit of the State of California collateralizing these investments. In addition, these Structured Notes and Asset-Backed Securities are subject to market risk as to the change in interest rates.
Cash equivalents are considered amounts in demand deposits and short-term investments with a maturity date within three months of the date ac quired by the City and are presented as “cash and investments” in the accompanying basic financial statements.
For the purpose of the statement of cash flows, the City considers all pooled cash and investments (consisting of cash and investments and restricted cash and investments) held by the City as cash and cash equivalents because the pool is used essentially as a demand deposit account from the standpoint of the funds. The City also considers all non-pooled cash and investments (consisting of cash with fiscal agent and restricted cash and investments held by fiscal agent) as cash and cash equivalents because investments meet the criteria for cash and equivalents defined above.
D. Prepaids and Supplies
Certain payments to vendors reflect costs applicable to future fiscal years and are recorded as prepaid items in both government-wide and fund financial stat ements. The cost of prepaid items is recorded as expenditures/expenses when consumed, rather than when purchased. Prepaid items in governmental funds are equally offset by nonspendable fund bal ance which indicates that they do not constitute available spendable resources even though they are a component of net current assets.
Supplies are valued at cost using the weighted average method. Supplies of the governmental funds consist of expendable supplies held for consumption. The cost is recorded as an expenditure in the governmental funds at the time individual inventor y items are consumed rather than when purchased.
Reported governmental fund inventories are equa lly offset by nonspendable fund balance which indicates that they do not constitute available spendable resources even though they are a component of net current assets.
765
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
62 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued E. Capital Assets
Capital assets are valued at historical cost or at estimated acquisition value on the date donated. If actual historical costs are not available, assets have been valued at approximate historical cost. The City’s policy is to capitalize assets costing at least $5,000, and th e Housing Authority’s policy is to capitalize assets costing at least $1,000. Depreciation is recorded on a straight-line basis over the following estimated useful lives:
Infrastructure includes streets systems, parks and recreation lands and improvement systems, storm water collection systems, and buildings combined wi th site amenities such as parking and landscaped areas used by the City in the conduct of its business. Each major infrastructure system is divided into subsystems. For example, the street system includes pavement, curbs and gutters, sidewalks, medians, streetlights, traffic control devices such as signs, signals and pavement markings, landscaping and land.
In the case of the initial capitalization of general infrastructure assets reported by governmental activities, the City chose to include all such items regardless of their acquisition date or amount.
Net interest costs incurred during the construction of capital assets for the business-type and proprietary funds are capitalized as part of the asset’s cost.
F. Property Held for Resale
Property held for resale is accounted for at the lower of cost or net realizable value or agreed upon sales price if a disposition agreement has been made with a developer.
The City received five properties for resale in fiscal year 2013 with a book value of $573,822 from the acceptance of a deed in lieu of foreclosure on the pr operty related to developer defaults on prior loans under the Richmond Neighborhood Stabilization loan program discussed in Note 4. These properties were rehabilitated during fiscal years 2014 and 2015 increasing the carrying value by a total of $749,716 and $39,303, respectively. In fiscal year 2014, the Ci ty received an additional four properties with a carrying value of $648,238. Six properties were sold in fiscal year 2016, the remaining two properties held for resale had a book value of $671,255 as of June 30 , 2017. In fiscal year 2018, one property was sold during the year, and the carrying value of the one remaining property held for resale was $78,016 as of June 30, 2024.
766
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
63 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued G. Property Taxes
The State of California’s Constitution limits the co mbined maximum property tax rate on any given property to 1% of its assessed value except for vo ter approved incremental property taxes. Assessed value equals purchase price and may be adjusted by no more than 2% per year unless the property is modified, sold, or transferred. The State Legislature distributes property tax receipts from among the counties, cities, school districts, and other districts.
Contra Costa County assesses properties and bills for and collects property taxes as follows:
The term “unsecured” refers to taxes on personal pr operty other than land and buildings. These taxes are secured by liens on the property being taxed. Pr operty taxes levied are recorded as revenue in the fiscal year of levy.
H. Deferred Outflows/Inflows of Resources
In addition to assets, the statement of net position or balance sheet report a separate section for deferred outflows of resources. This separate financial st atement element, deferred outflows of resources, represents a consumption of net assets that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until th en. The first item that qualifies for reporting in this category is the deferred charge on refunding re ported in the statement of net position. A deferred charge on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. The City also has deferred outflows of resources related to pensions and OPEB as discussed in Notes 12 and 14.
In addition to liabilities, the statement of net position or balance sheet report a separate section for deferred inflows of resources. This separate financia l statement element, deferred inflows of resources, represents an acquisition of net assets or fund bala nce that applies to a future period(s) and so will not b e r e c o g n i z e d a s a n i n f l o w o f r e s o u r c e s ( r e v e n u e ) until that time. The first item which qualifies for reporting in this category arises only under a modified accrual basis of accounting. Accordingly, the item, unavailable revenue, is only reported in the governmental funds balance sheet. The governmental funds report unavailable revenues from three sources: lo ans receivable, grants receivable and interest on interfund advances. See Note 9 for further discussion. The City also has deferred inflows of resources related to leases, pensions and OPEB as discussed in Note 5, Notes 12 and 14. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. 767
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
64 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued I. Net Position and Fund Balances
Net Position
In the City-wide financial statements, Net Position is classified as follows:
N e t I n v e s t m e n t i n C a p i t a l A s s e t s – T h i s a m o u n t consists of capital assets net of accumulated depreciation plus deferred outflows of resources associated with the refunding of related capital debt, reduced by outstanding debt that was used for the acquisition, construction, or improvement of these capital assets.
Restricted Net Position – This amount is restricted by external creditors, grantors, contributors, laws or regulations of other governments. In addition, net position restricted for pension benefits are restricted as a result of enabling legislation.
Unrestricted Net Position – This amount is all net po sition that does not meet the definition of “net investment in capital assets” or “restricted net position.” When an expense is incurred for purposes for which both restricted and unrestricted net position are available, the City’s policy is to apply restricted net position first.
Fund Balances
Governmental fund balances represent the net current assets of each fund. Net current assets generally represent a fund’s cash and receivables, less its liabilities.
The City’s fund balances are classified based on spending constraints imposed on the use of resources.
For programs with multiple funding sources, the City prioritizes and expends funds in the following order: Restricted, Committed, Assigned, and Unassigned. Each category in the following hierarchy is ranked according to the degree of spending constraint:
Nonspendable represents balances set aside to indi cate items do not represent available, spendable resources even though they are a component of assets. Fund balances required to be maintained intact, such as Permanent Funds, and assets not expected to be converted to cash, such as prepaids, interfund advances and notes receivable are included. However, if proceeds realized from the sale or collection of nonspendable assets are restricted, committed or assigned, then nonspendable amounts are required to be presented as a component of the applicable category.
Restricted fund balances have external restrictions imposed by creditors, grantors, contributors, laws, regulations, or enabling legislation which requires the resources to be used only for a specific purpose.
Committed fund balances have constraints imposed by formal action of the City Council which may be altered only by the same formal action of the City Council. The highest level of formal action of the City Council is an Ordinance.
768
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
65 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued I. Net Position and Fund Balances, Continued
Assigned fund balances are amounts constrained by the City’s intent to be used for a specific purpose, but are neither restricted nor committed. Intent is expressed by the City Council or its designee, the Finance Director, and may be changed at the discretion of the City Council or its designee, during the budget approval process or via budget amendments in accordance with the City’s adopted budget policy. This category includes encumbrances; nonspe ndables, when it is the City’s intent to use proceeds or collections for a specific purpose, and residual fund balances, if any, of Special Revenue, Capital Projects and Debt Service Funds which have not been restricted or committed.
Unassigned fund balance represents residual amounts that have not been restricted, committed, or assigned. This includes the residual general fund balance and residual fund deficits, if any, of other governmental funds.
J. Compensated Absences
Compensated absences comprise unused vacation and certain other compensated time off, which are accrued and charged to expense as earned. Govern mental funds include only amounts that have matured, while their long-term liabilities are recorded in the Statement of Net Position.
K. Bond Issuance Costs, Original Issue Discounts and Premiums and Deferred Charge on Refunding For proprietary fund types, bond premiums and disc ounts are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Any differences between proprietary refunded debt and the debt issued to refund it, called a deferred charge on refunding, is amortized over the remaining life of either the refunded debt or the refunding debt, whichever is shorter. The defe rred charge on refunding is reported as a deferred inflow or outflow of resources, as applicable. Bond issuance costs, other than prepaid insurance, are expensed in the year incurred.
L. Pension
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City’s California Public Employees’ Retirement System (CalPERS) and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this purpose, benefit payments (inc luding refunds of employee contributions) are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value.
M. Other Post Employment Benefits (OPEB)
For purposes of measuring the net OPEB liability, de ferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the City’s OPEB Plans and additions to/deductions from the OPEB Plan’s fiduciary net position have been determined on the same basis as they are reported by the CalPERS Trust and the PARS Trust. For this purpose, benefit payments are recognized when cu rrently due and payable in accordance with the benefit terms. Investments are reported at fair value.
769
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
66 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued N. Use of Estimates
The preparation of financial statements in conformi ty with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
2. CASH AND INVESTMENTS
The City maintains a cash and investment pool for a ll funds. Certain restricted funds that are held and invested by independent outside custodians through contractual agreements are not pooled. These restricted funds include cash and investment held by trustees. Interest income earned on pooled cash and investments is allocated 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 funds.
The following is a summary of cash and investments at June 30, 2024:
A. Classification
Cash and investments at June 30, 2024 consist of the following:
Primary Government:
Local Agency Investment Funds (LAIF) 70,769,777 $
CalTrust Short-Term Fund 216,908,058
CalTrust Medium-Term Fund 91,320
PARS Pension Plan Investment 2,205,685
Wellington Trust Company Mutual Fund (Police and Firemen's Plan) 9,719,501 Money Market Mutual Funds (U.S. Securities) 78,006,722
Held by Trustee:
Money Market Mutual Funds (U.S. Securities) 14,188,513
Guaranteed Investment Contracts 625,001
Total investments 392,514,577
Cash in banks and on hand - Primary Government 19,872,064 Cash in banks - RHA 125,427
Total cash on hand and deposits 19,997,491
Total cash and investments 412,512,068 $
770
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
67 2. CASH AND INVESTMENTS, Continued
B. Deposits
The carrying amount of the City’s cash deposit was $19,997,491 at June 30, 2024. Bank balances before reconciling items were a positive amount of $25,964,6 46 at June 30, 2024. The City’s cash deposit was fully insured up to $250,000 by the Federal Deposit Insurance Corporation (FDIC). The remaining amount was collateralized with securities held by pledging the financial institutions.
The California Government Code (Code) Section 53652 requires California banks and savings and loan associations to secure the City’s cash deposits by pl edging securities as collateral. The 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 cons idered to be held in the City’s name.
The fair 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.
C. Investments Authorized by the Code and the City’s Investment Policy Under the provisions of the City’s Investment Polic y, and in accordance with California Government Code, the following investments are authorized:
Investments are stated at fair value using the aggreg ate method in all funds, resulting in the following investment income in all funds for the year ended June 30, 2024:
771
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
68 2. CASH AND INVESTMENTS, Continued
C. Investments Authorized by the Code and the City’s Investment Policy, Continued The City’s portfolio value fluctuates in an inverse relationship to any change in interest rate. Accordingly, if interest rates rise, the portfolio value will decline. If interest rates fall, the portfolio value will rise. The portfolio for year-end reporting purposes is treated as if it were all sold. Therefore, fund balance must reflect the portfolio’s change in value. These po rtfolio value changes are unrealized unless sold.
Generally, the City’s practice is to buy and hold investments until maturity dates. Consequently, the City’s investments are carried at fair value.
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by Code Section 16429 under the oversight of the Treasurer of the State of California. The City’s investments with LAIF at June 30, 2024 include a portion of the pool funds invested in Structured Notes and Asset-Backed Securities. These investments included the following:
Structured Notes are debt securities (other than asset-backed securities) whose cash flow characteristics (coupon rate, redemption amount, or stated maturity) depend upon one or more indices and/or have embedded forwards or options.
Asset-Backed Securities, the bulk of which are mortgage backed securities, entitle their purchasers to receive a share of the cash flows from a pool of assets such as principal and interest repayments from a pool of mortgages (such as collateralized mortgage obligations) or credit card receivables.
At June 30, 2024, the City had $70,769,777 invested in LAIF, which had invested 3.00% of the pool investment funds in Structured Notes and Asset-Backed Securities as compared to 2.78% in the previous year. The LAIF fair value factor of 0.996316042 was used to calculate the fair value of the investments in LAIF.
The City reports its investment in CalTrust at the fair value amount provided by CalTrust, which is the same as the value of the pool shares. The balance in the Short-Term Fund is available for withdrawal on demand and the balance in the Medium-Term Fund is available for withdrawal upon two days’ notice, and is based on the accounting records maintained by CalTrust. Included in CalTrust’s investment portfolio are: United States Treasury Notes, Bills, Bonds or Certificates of Indebtedness; registered state warrants or treasury notes or bonds; California local agency bonds, notes, warrants or other indebtedness; federal agency or United States government-sponsored enterprise obligations; bankers acceptances; commercial paper; negotiable certificates of deposit; repurchase agreements; medium-term notes; money market mutual funds; notes, bonds or other obligation secured by a first priority security interest in securities authorized under Government Code Section 53651; and mortgage passthrough securities, collateralized mortgage obligations, and other asset – backed securities. CalTrust’s Short-Term Fund has a target portfolio duration of 0 to 2 ye ars and CalTrust’s Medium-Term Fund has a target portfolio duration of 1 to 3 years. At June 30, 2024 the Short-Term Fund investments matured in an average of 0.87 years and the Medium-Term Fund investments matured in an average of 2.38 years. 772
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
69 2. CASH AND INVESTMENTS, Continued
C. Investments Authorized by the Code and the City’s Investment Policy, Continued Prohibited Investments
Under the City’s Investment Policy, the City imposed restrictions on investments. The City cannot invest in any funds in inverse floaters, range notes, or interest only Separate Trading of Registered Interest and Principal of Securities (STRIPS) that are derived from a pool of mortgages, or in any security that could result in zero interest accrual if held to maturity (other than money market mutual funds). It is the City’s policy not to invest in companies involved in the manufacturing of tobacco and tobacco-related products.
The City will not investment any funds in international financial instruments that benefited from slavery, in Fossil Fuel companies, or in stocks, bonds, securi ties, or other obligations issued by provider of Data Broker or Extreme Vetting services to United States Immigration and Customs Enforcement (ICE).
D. Investments Authorized by Debt Issues and Lease Agreements Under the terms of the City’s and Authority’s debt issues and lease agreements, the City are subject to various restrictions in the type, maturity and credit ratings of investments of the unspent proceeds of these issues. These restrictions are generally no more restrictive than those listed above regarding investment of the City’s funds. In addition, some bond indentures authorize investments in guaranteed investment contracts and investment agreements with maturity dates that coincide with the applicable debt maturities. At June 30, 2024, the City was in compliance with the terms of all these restrictions.
E. Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Normally, 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 the City manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations. 773
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
70 2. CASH AND INVESTMENTS, Continued
E. Interest Rate Risk, Continued
Information about the sensitivity of the fair values of the City’s investments (including investments held by bond trustees) to market interest rate fluctuations is provided by the following table that shows the distribution of the City’s investments by maturity or earliest call date:
12 months 13 to 24 25 to 60 More than 60
or Less Months Months Months Total
Primary Government:
Local Agency Investment Funds (LAIF) 70,769,777 $ - $ - $ - $ 70,769,777$ CalTrust Short-Term Fund 216,908,058 - - - 216,908,058 CalTrust Medium-Term Fund 91,320 - - - 91,320 PARS Pension Plan Investment 2,205,685 - - 2,205,685 Wellington Trust Company Mutual Fund (Police
and Firemen's Plan) 9,719,501 - - - 9,719,501 Money Market Mutual Funds (U.S. Securities) 78,006,722 - - - 78,006,722 Held by Trustee:
Money Market Mutual Funds (U.S. Securities) 14,188,513 - - - 14,188,513 Guaranteed Investment Contracts - 625,001 - - 625,001 Total Investments 391,889,576 $ 625,001 $ - $ - $ 392,514,577 Cash in banks and on hand - Primary Government 19,872,064 Cash in banks - RHA Housing Corporation 125,427
Total Cash and Investments 412,512,068$
Remainin g Maturity (in Months)
774
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
71 2. CASH AND INVESTMENTS, Continued
F. Credit Risk
Credit risk is the risk that an issuer of an investme nt 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 actual rating at June 30, 2024 for each investment type:
G. Custodial Credit Risk
For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the City will not be able to recover the value of its in vestments or collateral securities that are in the possession of an outside party. None of the City’s investments were subject to custodial credit risk for the current year.
H. Fair Value Hierarchy
The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure fair value of the assets. Level 1 inputs are quoted prices in an active market for identical assets; Level 2 inputs are significant other observable inputs; and Level 3 inputs are significant unobservable inputs. 775
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
72 2. CASH AND INVESTMENTS, Continued
I. Fair Value Hierarchy, Continued
The following is a summary of the fair value hierarchy of the fair value of investments of the City as of June 30, 2024:
I. Concentration of Credit Risk
The City had no significant investments in the securities of any individual issuers, other than U.S.
Treasury securities, investment pools and money market funds at June 30, 2024.
3. INTERFUND TRANSACTIONS
A. Due To/From Other Funds
Due to/from other fund balances arise in the normal course of business and represent short-term borrowings occurring as a result of expenditures wh ich are paid prior to the receipt of revenues. These balances are expected to be repaid shortly after the end of the fiscal year when revenues are received.
The amount for due from one fund to another at June 30, 2024 were as follows:
776
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
73 3. INTERFUND TRANSACTIONS, Continued
B. Advances To/From Other Funds
At June 30, 2024 the funds below had made advances which were not expected to be repaid within the next year.
In fiscal year 2006 the General Fund established repayment terms for its advance of $17,139,855 to the Port of Richmond Enterprise Fund to assist the Port with various lease transactions and other projects.
The advance did not bear interest for the first three years; the next five years it bore an interest rate of 4%, with the balance payable on or before June 30, 2015. The advance repayment terms were amended in October 2013, effective June 30, 2013, to convert th e accrued unpaid interest of $745,119 to principal and reduce the advance balance by $842,877, and the advance no longer bears interest. Annual principal payments of $150,000 are due beginning June 30, 2014 through June 30, 2066, with a final principal payment of $32,593 due on June 30, 2067, and in addition to those payments, the annual berthing cost of the vessel Red Oak Victory at the Port that is to be paid by the General Fund will instead offset and reduce the principal balance of the advance based on an established rental schedule. Historical rental payments from August 2004 to June 30, 2012 totaling $842,877 were applied to the principal balance of the loan as of June 30, 2013. Another provision of the amended agreement provides that upon the sale of any Port property, including Terminal One and Terminal Four, the proceeds from the sale are to be used to repay and reduce the principal balance of the advance. The balance of the advance as of June 30, 2024 is $12,144,862.
C. Transfers In/Out
With Council approval, resources may be transferred from one City fund to another. The purpose of the majority of the transfers is to move General Fund resources to provide funding for capital projects and an annual subsidy to non-major governmental funds, as well fund debt service. Transfers between funds during the fiscal year ended June 30, 2024 were as follows:
General
Advances from Other Fun d Fund Total
Port of Richmond 12,144,862 $ 12,144,862 $ Total 12,144,862$ 12,144,862 $
Advances to Other Funds
777
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
74 3. INTERFUND TRANSACTIONS, Continued
C. Transfers In/Out, Continued
None of these transfers were unusual or non-recurring in nature.
4. NOTES AND LOANS RECEIVABLE
At June 30, 2024, notes and loans receivable consisted of the following:
778
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
75 4. NOTES AND LOANS RECEIVABLE, Continued
RHA RAD Project
In December 2014, the General Fund loaned $700,000 to the Richmond Housing Authority Enterprise Fund for predevelopment costs related to the Triangle Court and Friendship Manor Rental Assistance Demonstration (RAD) Projects.
In December 2015, the loan agreement was replaced and the City entered into an amended agreement to loan $5,400,000 to the RHA Housing Corporation for the furtherance of the development of the RAD Projects as discussed in Note 18. Funding for the loan was revised in fiscal year 2018 and is as follows: $700,000 from the City’s General Fund, $3,600,000 from housing-in-lieu funds, and $1,100,000 from the Housing Successor funds. The housing-in-lieu funds and Housing Successor Funds are included in the Community Development and Loan Programs Fund. RHA Housing Corporatio n assigned the loan agreement and associated obligations to RHA RAD Housing Partners L.P. on Dece mber 22, 2015 upon closing of the financing for the rehabilitation of the RAD projects. See Note 18 for addi tional information related to the RAD projects. The loan is secured by a leasehold deed of trust, assignment of rents and security agreement. The loan bears simple interest of 1% and the loan is repayable from residual receipts, as defined in the loan agreement, starting May 1 of the year after issuance of the Cert ificate of Completion, and unpaid principal and accrued interest is due December 1, 2070. As noted above, $700,000 of the General Fund loan was disbursed in December 2014 and the balance at June 30, 2024, including accrued interest, was $766,528. As of June 30, 2024, $5,034,119 of the funds had been drawn down from the Housing Successor Community Development and Loan Programs Fund.
Deferred Loans
Deferred loans are granted to low and moderate income families to assist them in purchasing their homes.
Emergency repair loans not exceeding $10,000 funded by the HOME Investment Partnership Program (HIPP) are provided to low income families in Richmond to assist them in rehabilitating their existing housing units.
These loans are required to be repaid over a period of 15 years to 30 years.
During fiscal year 2019, the City’s General Fund purchased a portion of the deferred loans in the amount of $353,335 and the loans were transferred to the General Fund. As of June 30, 2024, the outstanding loan amount is $221,335. In addition, as of June 30, 2024, $2,832,010 of the funds had been drawn down from the CDBG & Home Program Fund and $633,126 from the Successor Housing Agency Fund.
Scattered Site Infill Housing Development (Infill Phase II) Under a loan agreement dated September 30, 2010, the City loaned Community Housing Development Corporation of North Richmond $1,198,013 to fund construction of 36 townhomes to be made available for very-low and low income households. Funding for the loan was as follows: $602,556 in HOME funds, $266,000 in CDBG funds and $329,457 in CDBG-R. Alth ough the developer has not drawn down all of the proceeds from the HOME funds portion of the loan , the Department of Housing and Urban Development (HUD) has indicated that future drawdowns will not be reimbursed by the grantor. Related to the grant disallowed costs discussed in Note 17, during fiscal year 2018 the City purchased $1,331,709 of the loan balance that had previously been funded with Community Development Block Grant and HOME funds. 779
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
76 4. NOTES AND LOANS RECEIVABLE, Continued
Scattered Site Infill Housing Development (Infill Phase II), Continued During fiscal year 2019, the City’s General Fund purchased the loan balance in the amount of $1,099,594 and the loan and accrued interest of $265,104 were transferred to the General Fund.
The current funding was for predevelopment activities in conjunction with the construction and development of the townhomes. The loan is secured by a deed of trust on the property. The outstanding balance of the loan bears simple interest at the rate of 3% per year. The pa yment of principal and interest is deferred and due at the end of the term due September 30, 2065. As of June 30, 2024, $1,529,817, which includes accrued interest of $430,223 had been drawn down on the loan.
Nevin Court Homeowner Development Project
In May 2005, the City entered into an agreement with Community Housing and Development Corporation of North Richmond (Development), in the original amount of $227,000 to construct and develop 10 single family homes for low and moderate income households. The agreement was amended in November 2008, to increase the loan to $377,000. In fiscal year 2010, the Development drew down $343,839, in fiscal year 2016 an additional $21,453 was drawn, and the outstanding balance of the loan is $490,203, which includes accrued interest of $124,911. The loan bears interest of 3% per year and the unpaid balance is due in November 2063.
During fiscal year 2019, the City’s General Fund purchased the loan balance in the amount of $365,292 and the loan and accrued interest of $124,911 were transferred to the General Fund. As of June 30, 2024, $545,057, which includes accrued interest of $179,765, had been drawn down on the loan.
Richmond Neighborhood Stabilization Loans
The Richmond Neighborhood Stabilization Corporatio n (RNSC) operates a residential rehabilitation loan program financed by Department of Housing and Urban Development grants that have passed through the City under its Neighborhood Stabilization Program (NSP 1) and additional allocation under the third round of funding referred to as (NSP3). The program prov ides affordable home ow nership opportunities for households of low and moderate income by facilit ating the development financing necessary for the purchase, rehabilitation, and resale of deed-restricted affordable ownership units. During fiscal year 2014, the City foreclosed on seven of the loans with a carrying value of $780,153 and reacquired the properties which have been recorded as property held for resale as disc ussed in Note 2. As of June 30, 2024, the total balance of outstanding loans for NSP1 was $779,013 and no NSP3 loans had been issued. Loans are payable upon the resale of improved properties.
Home Improvement Program Loans
“Silent second” mortgage loans are provided to low and moderate income first time homebuyers as gap financing to provide the minimum amount needed to close the gap between the primary lender’s requirements and the borrower’s ability to pay down payments or closing costs.
Home improvement program loans include amortized loans to assist low income families in Richmond in the improvement of their homes. The interest rates for these loans range from 0% to 3% and are payable over a period of 15 to 30 years.
780
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
77 4. NOTES AND LOANS RECEIVABLE, Continued
Rental Rehabilitation Loans
Rental Rehabilitation Loans help make rental units affordable to low and very low income housing families.
Loans assist private and non-profit owners in purchasing and rehabilitating existing multifamily housing units.
The Carquinez Project
Under a loan agreement dated Nove mber 14, 2008, the former Redevelopment Agency loaned Carquinez Associates, L.P. $1,000,000 to fund rehabilitation of a five-story buildin g, with 36 apartm ents housing low- income seniors. On August 23, 2010 the agreement was amended to provide the Developer with a total amount of $1,301,000. Funding for the loan is as follows: $1,152,510 funded by Series 2007 Bonds and $148,900 funded by CDBG. Repayments on the loan are to be made from residual receipts as defined in the agreement.
The loan does not bear interest, and the unpaid pr incipal balance is due in November 2043. With the dissolution of the Redevelopment Agency as discussed in Note 19, the City agreed to become the successor to the Redevelopment Agency’s housing activities and as a result City, as Housing Successor, assumed the loans receivable of the Redevelopment Agency’s Lo w and Moderate Income Housing Fund, including the balance of the Carquinez loan as of February 1, 2012.
Creely Avenue Housing Rehabilitation (Arbors)
On September 15, 2006, the former Redevelopment Agency and the City loaned Arbors Preservation Limited Partnership the amount of $2,558,557, to construct ex tremely low, very low and low income rental housing units and a new community room on Creely Avenue. On October 31, 2008, the loan was amended to provide the developer a total loan amount of $3,208,113. Funding for the loan is as follows: $2,160,282 in HOME funds, $103,377 in CDBG funds and $1,594,057 in 2007 Series B bond funds. Although the developer has not drawn down all of the proceeds from the HOME funds portio n of the loan, the Department of Housing and Urban Development (HUD) has indicated that future drawdown s will not be reimbursed by the grantor. The loan bears simple interest at the rate of 3% per year. All un paid principal and interest on the loan is due on April 29, 2063. With the dissolution of the Redevelopment Ag ency as discussed in Note 19, the City agreed to become the successor to the Redevelopment Agency’s housing activities and as a result the City, as Housing Successor, assumed the loans receivable of the Redevelopment Agency’s Low and Moderate Income Housing Fund, including the balance of the Arbors loan as of February 1, 2012. 781
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
78 4. NOTES AND LOANS RECEIVABLE, Continued
Lillie Mae Jones Project
On January 19, 2010, the former Redevelopment Agency and the City entered into an agreement with Lillie Mae Jones Plaza, L.P. and the Community Housing De velopment Corporation of North Richmond to loan $3,119,000 to construct and provide 26 housing units to very low and low income households. Funding for the loan is as follows: $1,081,291 in HOME funds, $84,000 in Section 108 funds and $1,953,709 in 2007 Series B bonds. Although the developer has not drawn down all of the proceeds of the HOME funds portion of the loan, HUD has indicated that future drawdowns will not be reimbursed by the grantor. The loan bears an interest rate of 3% per year and repayments on the loan are to be made from residual receipts as defined in the agreement. All unpaid principal and accrued interest is due in January 2065. The agreement was amended in November 2011, due to securing a $293,884 loan from County of Contra Costa with Mental Health Services Act, which specifies that two units are required to be available to and occupied by Mental Health Services Act Eligible Tenants pursuant to the County Regulatory Agreement with Lillie Mae Jones Plaza, L.P. With the dissolution of the Redevelopment Agency as discussed in Note 19, the City agreed to become the successor to the Redevelopment Agency’s housing activities and as a result the City, as Housing Successor, assumed the loans receivable of the Redevelopment Agency’s Low and Moderate Income Housing Fund, including the balance of the Lillie Mae Jones loan as of February 1, 2012. As of June 30, 2024, Lillie Mae Jones has drawn down $2,996,592.
Greater Richmond Interfaith Program
The loan agreement date was on June 20, 2005. The bo rrower shall use the Loan funds for development and related soft costs that are eligible under the applicable CDBG and HOME regulations, and consistent with the approved development budget. In addition, the borrower shall submit to the City’s Community and Economic Development Department a copy of the Constr uction Plans for the Development. As of June 30, 2024, Greater Richmond Interface Program has drawn down $1,261,040.
CALHome Program
The CALHome loan program provides housing assistance to Richmond residents to assist with first-time homeowner down payments or rehabilitation projects fo r owner-occupied homes. The loans are secured by deeds of trust on the properties. Principal and interest on the loans are deferred for 30 years, unless otherwise specified in the promissory note. With the dissolution of the Redevelopment Agency as discussed in Note 19, the CALHome loan program that was funded with gran t funds is now administered by the City effective February 1, 2012.
Housing Successor Loans
With the dissolution of the Redevelopment Agency as discussed in Note 19, the City agreed to become the successor to the Redevelopment Agency’s housing activi ties and as a result City, as Housing Successor, assumed the loans receivable of the Redevelopment Agency’s Low and Moderate Income Housing Fund, including the balance of certain loans discussed above and all of the loans below as of February 1, 2012. 782
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
79 4. NOTES AND LOANS RECEIVABLE, Continued
Miraflores Loan
Under an amended loan agreement dated June 21, 20 11, the City agreed to loan Community Housing Development Corporation of North Richmond and Eden Housing, Inc., $1,465,000 to fund the construction of 110 senior housing units for low and moderate income residents. Fu nding for the loan is as follows:
$449,000 in CDBG funds, $925,000 in HOME funds, and $91,000 Redevelopment Agency Low and Moderate Income Housing Fund funds. Although the developer has not drawn down all of the proceeds of the HOME funds portion of the loan, HUD has indicated that future drawdowns will not be reimbursed by the grantor.
Related to the grant disallowed costs by HUD in previous years, the City purchased $1,208,258 of the loan balance that had previously been funded by CDBG an d HOME funds and the loans were transferred to the Housing Successor. With the dissolution of the Redevelopment Agency as discussed in Note 19, the portion of the Miraflores loan that was funded by the Redevelopment Agency’s Low and Moderate Income Housing Fund was assumed by the City as Housing Successor.
The loan does not bear interest and the unpaid princi pal balance was due September 22, 2015, unless it was converted to a permanent loan. The loan was converted in to a permanent loan on June 25, 2015. In addition to the converted permanent loan, the Housing Successor approved an additional predevelopment loan in the amount of $1,500,000. As of June 30, 2024, $3,472,661 of the loan had been drawn down.
MacDonald Place Senior Housing
On June 26, 2007, the former Redevelopment Agency agreed to loan MacDonald Housing Partners, L.P., and Richmond Labor and Love Community Development Corporation the amount of $4,720,000, to construct senior housing units, a management office, small meeting rooms and ancillary retail use, and a separate space for community services. The loan’s principal is due 57 years from the date of disbursement. The loan bears simple of interest of 2% per year payable from any re sidual receipts available from the prior calendar year with an additional 1% per year, but only to the extent that funds are available to pay such contingent interest from the Agency’s share of residual receipts, as defined in the agreement.
Silent Second Mortgage Loans
Loans were provided to qualifying individuals for the difference between the amount received by the individuals who qualified for low and moderate income housing loans and the amount needed to purchase the homes. The loans are to be forgiven in the future if the property owners do not sell or refinance the property.
Chesley Avenue Mutual Housing Development
On December 1, 2003, the former Redevelopment Agency loaned Chesley Avenue Limited Partnership the amount of $4,741,492, which includes accrued interest of $1,272,798 to construct very low and low income housing units. The loan’s principal is due in 2058; interest is payable starting May 1, 2006, at the rate of 2% per annum or in the amount of 95% of any residual receipts remaining from the prior year, whichever is less.
As of June 30, 2024, $6,448,915, which includes accrue d interest of $1,707,423, had been drawn down on the loan.
783
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
80 4. NOTES AND LOANS RECEIVABLE, Continued
Easter Hill Project
The loan from the former Redevelopment Agency to Easter Hill Development, L.P. is providing financial assistance in the development of the Easter Hill Proj ect. The Easter Hill Project consists of single and multifamily home components. Easter Hill Development, L.P. shall use the loan to pay for predevelopment, acquisition and construction costs. The outstanding balance of the loan bears simple interest at the rate of 2% per year. Repayments on the loan are to be made from residual receipts as defined in the agreement. All unpaid principal and accrued interest on the loan is due February 1, 2069.
Nevin Plaza I, L.P.
On March 1, 2023, the City entered into an agreement wi th Navin Plaza I, L.P., in the amount of $3,500,000, which includes $1,750,000 to evidence developer’s obligation to repay th e portion of the loan funded with Coronavirus State and Local Fiscal Recovery Funds provided to the City through the American Rescue Plan Act of 2021 and $1,750,000 with City Affordable Housing Impact Fee Funds. The loan bears interest of 3% per year, the entire outstanding principal balance of the loan together with accrued interest. The maturity date, which is the earlier of the 55
th anniversary of the date upon which the city building department issue its sign off on its final inspection following completion of rehabilitation of the project and the 57th anniversary of the date of the notes.
5. LEASES RECEIVABLE
At June 30, 2024, leases receivable consisted of the following:
784
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
81 5. LEASES RECEIVABLE, Continued
Alcatraz Cruises
On October 15, 2021, the City entered into a lease as Lessor for the use of Basin 4 and half of Basin 3 at Point Potrero Marine Terminal and the lease end date was on October 14, 2036. An initial lease receivable was recorded in the amount of $2,559,422 on July 1, 2021. As of June 30, 2024, the value of the lease receivable is $2,142,661. The lessee is required to make monthly fixed payments of $15,000.00, with step payment increase to $15,600 from October 15, 2026 to October 14, 2031 and 4% annual increase from October 15, 2031 to October 14, 2036. The lease has an interest rate of 1.2480%. The value of the deferred inflow of resources as of June 30, 2024 was $2,096,830, and the City recognized lease revenue of $170,628 during the fiscal year. The lessee has 2 extension option(s), each for 60 months.
California Oils
On July 1, 2016, the City entered into a lease as Less or for the use of Terminal 2 at 1145 Harbour Way South and the lease end date was on June 30, 2026. An initial lease receivable was recorded in the amount of $2,449,191 on July 1, 2021. As of June 30, 2024, the value of the lease receivable is $1,043,060. The lessee is required to make monthly fixed payments of $38,868, wi th step payment increase to $40,810.54 from July 1, 2022 to June 30, 2023 and 3% monthly increase from July 1, 2023 to June 30, 2026. The lease has an interest rate of 1.0590%. The value of the deferred inflow of re sources as of June 30, 2024 was $979,676 and the City recognized lease revenue of $489,838 during the fiscal year.
Foss Maritime
On October 1, 2012, the City entered into a lease as Le ssor for the use of Basin 1 and Finger Pier 2 at Point Potrero Marine Terminal and the lease end date was on February 29, 2028. An initial lease receivable was recorded in the amount of $2,806,842 on July 1, 2021. As of June 30, 2024, the value of the lease receivable is $1,013,802. The lessee is required to make monthly fixed payments of $21,430 from March 1, 2023 to April 30, 2023, $22,501 from May 1, 2023 to April 30, 2024, and 3% annual increase from May 1, 2024 to February 29, 2028. The lease has an interest rate of 2.6820%. The value of the deferred inflow of resources as of June 30, 2024 was $978,005, and the City recognized lease revenue of $266,729 during the fiscal year. The lessee has 1 extension option(s), each for 60 months.
MSRC
On July 1, 2023, Richmond, CA entered into a lease as lessor for the use of Finger Pier 1 at 1314 Canal Boulevard and the lease end date was on June 30, 2043. An initial lease receivable was recorded in the amount of $7,623,365 on July 1, 2023. As of June 30, 2024, the value of the lease receivable is $7,481,416. The lessee is required to made monthly fixed payments of $33,022.23, with step payment increase to $34,178.01 from July 1, 2024 to June 30, 2025. The lease has an interest rate of 3.6790%. The value of the deferred inflow of resources as of June 30, 2024 was $7,242,196, and Richmond, CA recognized lease revenue of $381,168 during the fiscal year.
785
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
82 5. LEASES RECEIVABLE, Continued
Nematode
On July 1, 2020, the City entered into a lease as Lesso r for the use of Terminal 4 at 1950 Stenmark Drive and the lease end date was on June 30, 2025. An initial leas e receivable was recorded in the amount of $719,233.
As of June 30, 2024, the value of the lease receivable is $489,588. The lessee is required to make monthly fixed payments of $6,816.50. The lease has an interest rate of 0.8930%. The value of the deferred inflow of resources as of June 30, 2024 was $479,488, and the City recognized lease revenue of $79,915 during the fiscal year. The lessee has 1 extension option(s), each for 60 months.
NRC
On October 1, 2017, the City entered into a lease as Lessor for the use of Basin 3 at 1337 Canal Boulevard and the lease end date was on September 30, 2027. An init ial lease receivable was recorded in the amount of $414,304 on July 1, 2021. As of June 30, 2024, the value of the lease receivable is $229,755. The lessee is required to make monthly fixed payments of $5,000, with step payment increase to $5,300 from October 1, 2022 to September 30, 2023 and 4% annual increase from Octo ber 1, 2023 to September 30, 2027. The lease has an interest rate of 0.3870%. The value of the deferred inflow of resources as of June 30, 2024 was $215,438, and the City recognized lease revenue of $66,289 during the fiscal year. The lessee has 1 extension option(s), each for 60 months.
Point San Pablo
On June 1, 2023, the City entered into a lease as Lessor for the use of Terminal 4 at 1950 Stenmark Drive and the lease end date was on May 31, 2029. An initial lease receivable was recorded in the amount of $62,787 on June 1, 2023. As of June 30, 2024, the value of the lease receivable is $53,864. The lessee is required to make monthly fixed payments of $786, with step payment increase to $842 from June 1, 2024 to May 31, 2025 and 7% annual increase from June 1, 2025 to May 31, 2029. The lease has an interest rate of 2.3260%. The value of the deferred inflow of resources as of June 30, 2024 was $51,450, and the City recognized lease revenue of $10,464 during the fiscal year. The lessee has 5 extension option(s), each for 12 months.
PRAM
On September 1, 2019, the City entered into a lease as Lessor for the use of The Washington Field House at 110 East Richmond Avenue and the lease end date was on August 31, 2024. An initial lease receivable was recorded in the amount of $10,333.79 on July 1, 2021. As of June 30, 2024, the value of the lease receivable is $550. The lessee is required to make monthly fixed payments of $275.00. The lease has an interest rate of
0.7270%. The value of the deferred inflow of resources as of June 30, 2024 was $544, and the City recognized lease revenue of $3,263 during the fiscal year.
786
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
83 5. LEASES RECEIVABLE, Continued
Richmond Art Center
On July 1, 2017, the City entered into a lease as Lessor for the use of The Art Center buildings at 2540 and 2544 Barrett Avenue and the lease end date was on June 30, 2067. An initial lease receivable was recorded in the amount of $807,820.53 on July 1, 2021. As of June 30, 2024, the value of the lease receivable is $779,412.
The lessee is required to make monthly fixed payments of $2,344, with step payment increase to $2,503 from July 1, 2022 to June 30, 2067. The lease has an interest rate of 2.5830%. The value of the deferred inflow of resources as of June 30, 2024 was $755,137, and the City recognized lease revenue of $17,561 during the fiscal year.
Richmond Bay Marina – Re – assigned to SHM MBYH LLC
On July 1, 2000, the City entered into a lease as Lessor for the use of the land at 1340 Marina Way South and the lease end date was on June 30, 2055. An initial lease receivable was recorded in the amount of $5,534,412.78 on July 1, 2021. As of June 30, 2024, the va lue of the lease receivable is $5,183,454. The lessee is required to make quarterly fixed payments of $60,876. The lease has an interest rate of 2.5830%. The value of the deferred inflow of resources as of June 30, 2024 was $5,046,082, and the City recognized lease revenue of $162,777 during the fiscal year.
Terminal Three Partners – Re-assigned to IV1 1411 Harbor Way S. Owners LLC On December 15, 2020, the City entered into a lease as Lessor for the use of Terminal 3 at 1411 Harbour Way South and the lease end date was on December 14, 2086. An initial lease receivable was recorded in the amount of $39,376,061.50 on July 1, 2021. As of June 30, 2024, the value of the lease receivable is $39,273,095.
The lessee is required to make monthly fixed payments of $36,667, with step payment increase to $38,133 from July 1, 2022 to June 30, 2023 and 2% annual increase from July 1, 2023 to December 14, 2086. The lease has an interest rate of 1.1000%. The value of the defe rred inflow of resources as of June 30, 2024 was $37,571,353, and the City recognized lease revenue of $601,569 during the fiscal year. The lessee has 4 extension option(s), each for 120 months.
Dutra
On June 1, 2017, the City entered into a lease as Lessor for the use of Basin 2, Basin 3 and the structure at 1319 Canal Boulevard and the lease end date was on May 31, 2032. An initial lease receivable was recorded in the amount of $2,393,510.09 on July 1, 2021. As of June 30, 2024, the value of the lease receivable is $1,797,553. The lessee is required to make monthly fixed payments of $16,500.00, with step payment increase to $17,160 from June 1, 2022 to May 31, 2023 and 2% annual increase from June 1, 2023 to May 31, 2032. The lease has an interest rate of 0.3160%. The value of the deferred inflow of resources as of June 30, 2024 was $1,735,752 and the City recognized lease revenue of $219,253 during the fiscal year. The lessee has 2 extension option(s), each for 60 months. 787
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
84 5. LEASES RECEIVABLE, Continued
YWCA
On July 1, 2015, the City entered into a lease as Lessor for the use of the building at 3230 MacDonald Avenue and the lease end date was on June 30, 2025. An init ial lease receivable was re corded in the amount of $127,360.86 on July 1, 2021. As of June 30, 2024, the value of the lease receivable is $32,244. The lessee is required to make monthly fixed payments of $2,700.00. The lease has an interest rate of 0.8930. The value of the deferred inflow of resources as of June 30, 2024 was $31,840, and the City recognized lease revenue of $31,840 during the fiscal year.
AWC
On May 1, 2009, the City entered into a lease as Lessor for the use of the land at 1311 Canal Boulevard and the lease end date was on December 31, 2024. An init ial lease receivable was recorded in the amount of $20,135,248.98 on July 1, 2021. As of June 30, 2024, the value of the lease receivable is $3,021,360. The lessee is required to make annual fixed payments of $5,718,800.00, with a fixed increase to $5,833,350 from July 1, 2022 to June 30, 2023 and $5,950,800 from July 1, 2023 to June 30, 2024. The lease has an interest rate of 0.8930%.
The value of the deferred inflow of resources as of June 30, 2024 was $2,876,464, and the City recognized lease revenue of $5,752,928 during the fiscal year.
Garamendi
On January 3, 2023, the City entered into a lease as Lessor for the use of the office space located at 440 Civic Plaza and the lease end date was on January 2, 2025. An initial lease receivable was recorded in the amount of $26,677 on January 3, 2023. As of June 30, 2024, the value of the lease receivable is $6,791. The lessee is required to make monthly fixed payments of $1,141. Th e lease has an interest rate of 2.7070%. The value of the deferred inflow of resources as of June 30, 2024 was $6,725, and the City recognized lease revenue of $13,302 during the fiscal year.
Watershed Nursery
On December 17, 2019, the City entered into a lease as Lessor for the use of 601 Canal Blvd Suite A and the lease end date was on December 18, 2031. An initial lease receivable was recorded in the amount of $55,493 on July 1, 2022. As of June 30, 2024, the value of the lease receivable is $46,750. The lessee is required to make monthly fixed payments of $480. The lease has an interest rate of 2.8420%. The value of the deferred inflow of resources as of June 30, 2024 was $43,763, and the City recognized lease revenue of $5,865 during the fiscal year.
788
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
85 5. LEASES RECEIVABLE, Continued
The future revenue payments as of June 30, 2024, are as follows:
Year Ending
June 30, Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest 2025 8,999 $ 1,158 $ 550 $ 1 $ 10,022$ 20,014 $ 110,682 $ 132,822 $ 44,306 $ 431,781 $ 209,218 $ 5,378 $ 2026 9,929 939 - - 10,284 19,752 113,568 129,936 54,366 431,243 214,179 4,710 2027 10,931 697 - - 10,552 19,483 116,530 126,974 64,728 430,593 219,240 4,026 2028 12,011 432 - - 10,828 19,208 119,570 123,934 75,400 429,827 224,406 3,325 2029 11,994 140 11,111 18,925 122,688 120,816 86,389 428,943 229,677 2,609 2030-2034 - - - - 60,067 90,112 663,141 554,379 608,418 2,127,026 700,833 3,355 2035-2039 - - - - 68,339 81,840 754,249 463,271 935,219 2,084,932 - - 2040-2044 - - - - 77,749 72,430 857,874 359,646 1,310,924 2,023,567 - - 2045-2049 - - - - 88,455 61,723 975,736 241,784 1,741,464 1,940,083 - - 2050-2054 - - - - 100,636 49,543 1,109,791 107,729 2,233,436 1,831,290 - - 2055-2059 - - - - 114,494 35,685 239,625 3,881 2,794,173 1,693,613 - - 2060-2064 - - - - 130,260 19,919 - - 3,431,824 1,523,054 - - 2065-2069 - - - - 86,615 3,492 - - 4,155,443 1,315,143 - - 2070-2074 - - - - - - - - 4,975,085 1,064,883 - - 2075-2079 - - - - - - - - 5,901,916 766,698 - - 2080-2084 - - - - - - - - 6,948,327 414,361 - - 2085-2089 - - - - - - - - 3,911,677 56,257 - - Total 53,864$ 3,366 $ 550 $ 1 $ 779,412$ 512,126 $ 5,183,454 $ 2,365,172 $ 39,273,095 $ 18,993,294 $ 1,797,553 $ 23,403 $ PRAM Richmond Art Center Richmond Bay Marina Terminal Three Partners DutraPoint San Pablo Year Ending
June 30, Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest 2025 32,244 $ 156 $ 3,021,360$ 13,490 $ 6,791 $ 54 $ 4,847 $ 1,267 $ 4,651,859$ 942,402 $ 2026 - - - - - - 5,235 1,124 1,674,743 903,146 2027 - - - - - - 5,643 970 1,211,024 878,560 2028 - - - - - - 6,074 804 1,117,347 855,851 2029 - - - - - - 6,527 626 944,794 837,744 2030-2034 - - - - - - 18,424 695 4,563,307 3,916,114 2035-2039 - - - - - - - - 4,561,690 3,366,595 2040-2044 - - - - - - - - 4,931,634 2,666,733 2045-2049 - - - - - - - - 2,805,655 2,243,590 2050-2054 - - - - - - - - 3,443,863 1,988,562 2055-2059 - - - - - - - - 3,148,292 1,733,179 2060-2064 - - - - - - - - 3,562,084 1,542,973 2065-2069 - - - - - - - - 4,242,058 1,318,635 2070-2074 - - - - - - - - 4,975,085 1,064,883 2075-2079 - - - - - - - - 5,901,916 766,698 2080-2084 - - - - - - - - 6,948,327 414,361 2085-2089 - - - - - - - - 3,911,677 56,257 Total 32,244$ 156 $ 3,021,360$ 13,490 $ 6,791 $ 54 $ 46,750$ 5,486 $ 62,595,355$ 25,496,283 $ YWCA TotalAWC Garamendi Watershed Nursery
789
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
86 6. CAPITAL ASSETS
The following is a summary of capital assets for governmental activities:
Balance at Balance at
July 1, 2023 Additions Retirements Transfers Adjustment June 30, 2024 Governmental Activities
Capital assets not being depreciated:
Land 24,634,683 $ - $ - $ - $ - $ 24,634,683$ Construction in progress 46,446,200 17,610,682 - (3,103,993) - 60,952,889 Total capital assets not being depreciated 71,080,883 17,610,682 - (3,103,993) - 85,587,572 Capital assets being depreciated:
Buildings and improvements 157,794,660 - - - - 157,794,660 Machinery and equipment 56,924,052 3,900,383 (698,871) 2,864,138 - 62,989,702 Land improvements and infrastructure 547,534,722 - - 239,855 - 547,774,577 Total capital assets being depreciated 762,253,434 3,900,383 (698,871) 3,103,993 - 768,558,939 Less accumulated depreciation for:
Buildings and improvements (58,689,696) (3,635,162) - - - (62,324,858) Machinery and equipment (44,688,005) (2,666,960) 694,102 - - (46,660,863) Land improvements and infrastructure (437,604,220) (6,353,601) - - - (443,957,821) Total accumulated depreciation (540,981,921) (12,655,723) 694,102 - - (552,943,542) Capital asset being depreciated, net 221,271,513 (8,755,340) (4,769) 3,103,993 - 215,615,397 Capital assets being amortized:
Leased buildings and improvements 6,690,416 - - - - 6,690,416 Subscription based I.T. agreeemnts 4,585,273 - - - - 4,585,273 Total capital assets being amortized 11,275,689 - - - - 11,275,689 Less accumulated amortization for:
Leased buildings and improvements (3,823,094) (1,911,547) - - - (5,734,641) Subscription based I.T. agreeemnts (1,063,141) (1,142,909) - - - (2,206,050) Total accumulated amortization (4,886,235) (3,054,456) - - - (7,940,691) Capital assets being amortized, net 6,389,454 (3,054,456) - - - 3,334,998 Governmental activity capital assets, net 298,741,850 $ 5,800,886 $ (4,769) $ - $ - $ 304,537,967$ 790
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
87 6. CAPITAL ASSETS, Continued
Governmental activities depreciation expenses for ca pital assets and amortization expense for lease assets charged to functions and programs based on their usage of the related assets. The amounts allocated to each function or program for the year ended June 30, 2024 were as follows:
Lease Asset
Dicon Fiberoptics
On January 1, 2020, the City entered into a lease as Lessee for the use of DiCon Fiberoptics’ Building and the lease end date was on December 31, 2024. The City is required to make monthly fixed payments of $152,298, with step payment increase to $156,735 from January 1, 2022 to December 31, 2022 and 3% annual increase from January 1, 2023 to December 31, 2024. The lease has an interest rate of 0.3160%. The value of the right to use asset as of June 30, 2024 of $6,690,416 with accumulated amortization of $5,734,641. The City has 3 extension option(s), each for 12 months.
Subscription Based Information Technology Arrangements
Cobalt
On May 1, 2017, the City entered into a subscription for the use of Cobalt RMS Software and the lease end date was on June 30, 2027. The City is required to make annual fixed payments of $360,000 until June 30, 2023, and $200,000 from July 1, 2023 to June 30, 2027. The subscription has an interest rate of 2.5360%. The value of the right to use asset as of June 30, 2024 of $1,111,743 with accumulated amortization of $444,697. There are no options to extend the arrangement or purchase the software. eScribe
On April 27, 2021, the City entered into a subscription for the use of eScribe and the lease end date was on April 26, 2026. The City is required to make annual fixed payments of $47,242 with 5% annual increase. The subscription has an interest rate of 2.4450%. The value of the right to use asset as of June 30, 2024 of $158,237 with accumulated amortization of $82,799. The City has 1 extension option(s), each for 60 months. 791
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
88 6. CAPITAL ASSETS, Continued
GovInvest
On March 6, 2023, the City entered into a subscription for the use of GovInvest, Inc and the lease end date was on June 30, 2026. The City is required to make fixed payments of $26,400 until June 30, 2023 and $80,000 from July 1, 2023 to June 30, 2026. The subscription has an interest rate of 2.7960%. The value of the right to use asset as of June 30, 2024 of $267,729 with accumulated amortization of $106,419. The City has 1 extension option(s), each for 12 months.
Public Safety Systems Data
On November 1, 2021, the City entered into a subscripti on for the use of Public Safety Systems Data and the lease end date was on October 31, 2026. The City is required to make fixed payments of $219,500. The subscription has an interest rate of 2.4450%. The value of the right to use asset as of June 30, 2024 of $840,217 with accumulated amortization of $387,793. There are no options to extend the arrangement or purchase the software.
RippleWorx
On January 1, 2023, the City entered into a 36-month subscription for the use of RippleWorx. The City is required to make annual fixed payments of $50,000.00. The subscription has an interest rate of 2.7960%. The value of the right to use asset as of June 30, 2024 of $149,276 with accumulated amortization of $74,638. There are no options to extend the arrangement or purchase the software.
ShotSpotter
On July 1, 2021, the City entered into a subscription for the use of ShotSpotter Subscription and the lease end date was on June 30, 2026. The City is required to make fixed payments of $203,907 until June 30, 2023 and $214,101 from July 1, 2023 to June 30, 2026. The subscription has an interest rate of 2.4450%. The value of the right to use asset as of June 30, 2024 of $816,036 with accumulated amortization of $408,018. There are no options to extend the arrangement or purchase the software.
Tyler Technologies
On July 1, 2019, the City entered into a subscription for the use of Tyler Technologies and the lease end date was on June 30, 2024. The City is required to make fixed payments of $120,000. The subscription has an interest rate of 2.1940%. The value of the right to use asset as of June 30, 2024 of $237,424 with accumulated amortization of $237,424. There are no options to extend the arrangement or purchase the software.
Microsoft
On September 29, 2020, the City entered into a subscription for the use of Microsoft and the lease end date was on October 28, 2026. the City is required to make fixed payments of $140,021 until September 28, 2023 and $227,425 from September 29, 2023 to October 28, 2026. The subscription has an interest rate of 1.8500%.
The value of the right to use asset as of June 30, 2024 of $1,004,611 with accumulated amortization of $464,262.
The City has 1 extension option(s), each for 36 months. 792
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
89 6. CAPITAL ASSETS, Continued
The following is a summary of capital assets for business-type activities:
Balance at Balance at
July 1, 2023 Additions Retirements Transfers Adjustments June 30, 2024 Business-type Activities
Capital assets not being depreciated:
Land 7,195,986 $ - $ - $ - $ - $ 7,195,986$ Construction in progress 90,738,540 29,479,619 - - - 120,218,159 Total capital assets not being depreciated 97,934,526 29,479,619 - - - 127,414,145 Capital assets being depreciated:
Buildings and improvements 79,908,481 - - - - 79,908,481 Machinery and equipment 18,931,015 - - - - 18,931,015 Infrastructure 259,038,020 - - - - 259,038,020 Total capital assets being depreciated 357,877,516 - - - - 357,877,516 Less accumulated depreciation for:
Buildings and improvements (58,519,174) (740,263) - - (3) (59,259,440) Machinery and equipment (16,089,915) (681,284) - - - (16,771,199) Infrastructure (135,091,725) (5,883,328) - - - (140,975,053) Total accumulated depreciation (209,700,814) (7,304,875) - - (3) (217,005,692) Capital asset being depreciated, net 148,176,702 (7,304,875) - - (3) 140,871,824 Capital assets being amortized:
Leased land and improvements 1,172,173 - - - - 1,172,173 Leased machinery and equipments 216,506 - - - - 216,506 Total Capital assets being amortized 1,388,679 - - - - 1,388,679 Less accumulated amortization for:
Leased land and improvements (520,966) (260,483) - - - (781,449) Leased machinery and equipments (129,904) (86,602) - - - (216,506) Total accumulated amortization (650,870) (347,085) - - - (997,955) Capital assets being amortized, net 737,809 (347,085) - - - 390,724 Business-type activity capital assets, net 246,849,037 $ 21,827,659 $ - $ - $ (3) $ 268,676,693$ 793
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
90 6. CAPITAL ASSETS, Continued
Business-type activities depreciation expenses for capital assets allocated to each program for the year ended June 30, 2024 were as follows:
Lease Asset
West County Wastewater District
On January 1, 2010, the City entered into a lease as Lessee for the use of West County Wastewater District’s land and the lease end date was on December 31, 2025. The City is required to make annually fixed payments of $153,000, with 3% annual increase from January 1, 2013 to December 31, 2017 and 6% annual increase from January 1, 2018 to December 31, 2025. The lease has an in terest rate of 1.0590%. The value of the right to use asset as of June 30, 2024 of $1,172,173 with accumulated amortization of $781,449.
Owen Equipment – Water Resource Rec Dept
On March 1, 2022, the City entered into a lease as Lessee for the use of Owen Equipment and the lease end date was on February 29, 2024. The City is required to make monthly fixed payments of $11,212. The lease has an interest rate of 0.3800%. The value of the righ t to use asset as of June 30, 2024 of $256,921 with accumulated amortization of $256,921.
794
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
91 7. COMPENSATED ABSENCES PAYABLE
Changes in compensated absence liabilities for the year ended June 30, 2024 were as follows:
The long-term portion of governmental activities co mpensated absences is liquidated primarily by the General Fund. Compensated absences for business-type activities are liquidated by the fund that has recorded the liability.
8. LONG-TERM DEBT
A. Governmental Activities
Following is a summary of governmental activities long-term debt transactions during the fiscal year ended June 30, 2024:
Bonds Payable
Bonds payable at June 30, 2024 consisted of the following:
795
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
92 8. LONG-TERM DEBT, Continued
A. Governmental Activities, Continued
1999 Series A City of Richmond Taxable Limi ted Obligation Pension Bonds – Original Issue $36,280,000
The bonds were issued to fund a portion of the unfunded accrued actuarial liability in the City’s pension plans together with the prepayment of certain pension benefit costs of the Beneficiaries and to pay the costs of issuance associated with the issuance of the bonds. Interest rates vary from 6.37% to a maximum of 7.39% and are payable semiannually on February 1, and August 1. The term bonds consist of $8,960,000 due August 1, 2020 with an interest rate of 7.57% and $3,435,000 due August 1, 2029 with an interest rate of 7.62%. The bonds are payable from certain pension tax override revenues received by the City from a special tax pursuant to City Council Ordinance 9-99 adopted by the City Council on March 30, 1999. On September 1, 2022, using funds on hand , net proceeds of $2,368,563 were deposited in an irrevocable trust with an escrow agent to provide fu nds for the future debt services payments on the Series 1999 Bonds. As a result, the 1999 Bonds are considered defeasance and the liability for those bonds have been removed from the Statement of Net Position. As of June 30, 2024, the outstanding balance of the defeasance of bond was $0. The bonds were paid off in fiscal year 2024. 796 City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
93 8. LONG-TERM DEBT, Continued
A. Governmental Activities, Continued
Richmond Joint Powers Financing Authority Lease Revenue Bonds, Series 2016 – Original Issue - $28,390,000
On February 1, 2016, the Authority issued Series 2016 Lease Revenue Bonds in the amount of $28,390,000. The proceeds from the Bonds were used to pay the obligations of the City related to the termination of the interest rate swap agreement and the option on swap agreement (swaption) related to the Authority’s Series 2009 Lease Revenue Refunding Bonds and to pay the costs associated with the issuance of the Series 2016 Bonds. On February 3, 2016 the interest rate swap agreement and the swaption related to the Series 2009 Bonds were terminated with a swap termination payment of $28,554,000.
The Bonds bear interest rates of 4.00% to 5.50%. Principal payments are due annually on November 1 through 2037 and semi-annual interest payments are due May 1 and November 1 commencing on May 1, 2016.
At June 30, 2024, the 2016 Bonds consisted of the following:
The annual debt service requirements are as follows:
797
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
94 8. LONG-TERM DEBT, Continued
A. Governmental Activities, Continued
Richmond Joint Powers Financing Authority Lease Revenue Bonds, Series 2019A – Original Issue - $63,970,000
The Series 2019A Bonds are being issued to: redeem $77,315,000 outstanding principal amount of the Authority’s Lease Revenue Refunding Bonds (Civic Ce nter Project) Series 2009, purchase a reserve facility for deposit into the reserve account established for the Series 2019A Bonds, fund a deposit into the Interest Account within the Revenue Fund to capitalize a portion of the interest due on May 1, 2020, and pay costs associated with the issuance of the Series 2019A Bonds. The Bonds are payable solely from, and secured solely by, Revenues of the Authority, cons isting primarily of Base Rental Payments to be received by the Authority from the City of Richmond under a Facility Lease, dated as of August 1, 2019, by and between the City and the Authority, for the right to use and the occupancy of certain real property and facilities. The Series 2019A Bonds will mature on November 1 annually commencing November 1, 2020. Interest on the Series 2019A Bonds is payable at the rate of 5% on November 1 and May 1 of each year, commencing May 1, 2020. The refunding resulted in an overall debt service savings of $29,893,316.
The net present value of the debt service savings is called an economic gain and amounted to $25,000,596.
At June 30, 2024, the 2019A Bonds consisted of the following:
The annual debt service requirements are as follows:
798
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
95 8. LONG-TERM DEBT, Continued
A. Governmental Activities, Continued
Pension Funding Bond Series 2022 (Refunding) – Amount $154,140,000 Taxable Pension Refunding Bonds, Series 2022 was issued under an Indenture, dated November 1, 2005, as supplemented by the First Supplemental Indenture, dated as of September 1, 2022 both by and between the City and U.S. Bank Trust Company, National Association, as trustee refund all of the City’s outstanding Taxable Pension Funding Bonds, Series 2005 B-1 Bonds and Taxable Pension Funding Bonds, Series 2005 B-2, pay interest rate swap termination fees as described herein, and pay the costs of issuance related to the Series 2022 Bonds.
The Series 2022 Bonds accrue interest from the date of delivery thereof and are payable semiannually on January 15 and July 15 of each year, commencing July 15, 2023. The refunding resulted in an overall debt service increase of $35.3 million over the term of the debt. The net present value of the debt service savings is called an economic gain and amounted to approximately $10.2 million.
The annual debt service requirements are as follows:
Loans Payable
Loans payable from direct borrowing at June 30, 2024 consisted of the following:
California Energy Commission Phase 1 – Original Amount $621,558 On April 22, 2013, the City entered into a direct borrowing loan agreement with the California Energy Commission in the amount of $621,558. The purpose of the loan is to provide funding for the replacement of street lighting with new LED lights. The loan bear s a 3% interest rate and is due in semi-annual payments in December and June through December 2025.
799
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
96 8. LONG-TERM DEBT, Continued
A. Governmental Activities, Continued
California Energy Commission Phase 1 – Original Amount $621,558, Continued The annual debt service requirements on the loan are as follows:
California Energy Commission Phase 2 – Original Amount $1,239,036 During fiscal year 2015, the City entered into a direct borrowing loan agreement with the California Energy Commission in the amount of $1,239,036. The purpose of the loan is to provide funding for the replacement of street lighting with new LED lights. The loan bears interest at 1% and is due in semi- annual payments in December and June through June 2030.
The annual debt service requirements on the loan are as follows:
Financed Purchases
Financed purchases payable from direct borrowing at June 30, 2024 consisted of the following:
800
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
97 8. LONG-TERM DEBT, Continued
A. Governmental Activities, Continued
Qualified Energy Conservation – Original Amount $1,052,526 On December 22, 2010 the City entered into a direct borrowing financed purchase with Bank of America in the amount of $1,052,526 to finance the purchase and installation of energy conservation equipment at various City-owned buildings. The City received an allocation of the national Qualified Energy Conservation Bond which includes a direct subsidy from the United States Treasury for the interest payable on the bonds under the Hiring Incentives to Restore Employment Act (HIRE Act). The subsidy will be payable on or about the date that the City makes its debt service payments and is equal to 59.79% of the interest payable on the purchase. The subsidy received in fiscal year 2024 was $8,774. The purchase bears interest at a rate of 6.79% and principal and interest payments are due semi-annually each June 15 and December 15 commencing on December 15, 2011 through June 15, 2026.
The annual debt service requirements on the financed purchase are as follows:
Richmond Joint Powers Financing Authority Recovery Zone Economic Development – Original Amount $1,316,000
On December 22, 2010 the Authority entered into a direct borrowing financed purchase with Bank of America in the amount of $1,316,000 to finance the improvements to three of the City’s fire stations and a senior center. The City agreed to use the three fire stations to the Authority in exchange for payments in the amount of the debt. The Authority received the proceeds under an allocation of the National Recovery Zone Economic Development Bonds under the American Recovery and Reinvestment Act of 2009, which includes a direct subsidy from the United States Treasury for the interest payable on the Bonds. The subsidy will be payable on or about the date that the Authority makes its debt service payments and is equal to 45% of the interest payable on the lease upon filing of a request by the Authority. The total subsidy received in fiscal year 2024 was $6,739. The lease bears interest at a rate of
6.50% and principal and interest payments on th e lease are due semi-annually each June 15 and December 15, commencing on June 15, 2011, through 2026.
The annual debt service requirements on the financed purchase are as follows:
801
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
98 8. LONG-TERM DEBT, Continued
A. Governmental Activities, Continued
Street Light - Original Amount $4,641,936
On July 31, 2013 the City entered into a direct bo rrowing financed purchase agreement with Bank of America in the amount of $4,641,936 to finance the purchase of streetlights and the associated upgrade costs. The purchase bears an interest rate of 2.55%. Principal and interest payments on the purchase are due semi-annually on each October 30 and April 30 commencing on April 30, 2014 through October 30, 2026.
The annual debt service requirements on the financed purchase are as follows:
Holman Capital Corporation #5 – Fire Apparatus Equipment Lease - Original Amount $2,687,645 On May 17, 2018 the City entered into a direct bo rrowing financed purchase agreement with Holman Capital Corporation in the amount of $2,687,645 to finance the purchase of one Spartan Ladder Truck and two Spartan Pumper Trucks, which are pledged as collateral for the purchase. The purchase bears an interest rate of 3.91%. Principal and interest payments on the purchase are due quarterly on each August 17, November 17, February 17, and May 17 commencing on August 17, 2018 through May 17, 2028.
The annual debt service requirements on the financed purchase are as follows: 802 City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
99 8. LONG-TERM DEBT, Continued
A. Governmental Activities, Continued
Lease Liability (Dicon Fiberoptics)
On January 1, 2020, the City entered into a lease as Lessee for the use of Dicon Fiberoptics and the lease end date was on December 31, 2024. An initial lease liability was recorded in the amount of $6,690,416 on July 1, 2021. As of June 30, 2024, the value of the lease liability is $996,762. The City is required to make monthly fixed payments of $152,298, with step payment increase to $156,735 from January 1, 2022 to December 31, 2022 and 3% annual increase from January 1, 2023 to December 31, 2024. The lease has an interest rate of 0.3160%.
At June 30, 2024, the aggregate maturities of the governmental lease liability were as follows:
Subscription Based Information Technology Arrangements (SBITA) At June 30, 2024, SBITA liabilities consisted of the following:
803
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
100
8. LONG-TERM DEBT, Continued
A. Governmental Activities, Continued
Cobalt
On May 1, 2017, the City entered into a subscription for the use of Cobalt RMS Software and the lease end date was on June 30, 2027. An initial subscription liability was recorded in the amount of $1,111,743 on July 1, 2022. As of June 30, 2024, the value of the subscription liability is $570,807. The City is required to make annual fixed payments of $360,000 until June 30, 2023, and $200,000 from July 1, 2023 to June 30, 2027. The subscription has an interest rate of 2.5360%.
At June 30, 2024, the aggregate maturities of the SBITA were as follows:
eScribe
On April 27, 2021, the City entered into a subscription for the use of eScribe and the lease end date was on April 26, 2026. An initial subscription liability was recorded in the amount of $142,427 on July 1, 2022.
As of June 30, 2024, the value of the subscription liability is $50,843. The City is required to make annual fixed payments of $47,242 with 5% annual increase. The subscription has an interest rate of 2.4450%.
At June 30, 2024, the aggregate maturities of the SBITA were as follows:
804
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
101
8. LONG-TERM DEBT, Continued
A. Governmental Activities, Continued
GovInvest
On March 6, 2023, the City entered into a subscription for the use of GovInvest, Inc and the lease end date was on June 30, 2026. An initial subscription liability was recorded in th e amount of $257,729 on July 1, 2022. As of June 30, 2024, the value of the subscription liability is $153,531. The City is required to make fixed payments of $26,400 until June 30, 2023 and $80,000 from July 1, 2023 to June 30, 2026. The subscription has an interest rate of 2.7960%.
At June 30, 2024, the aggregate maturities of the SBITA were as follows:
Public Safety Systems Data
On November 1, 2021, the City entered into a subscription for the use of Public Safety Systems Data and the lease end date was on October 31, 2026. An initia l subscription liability was recorded in the amount of $840,217 on July 1, 2022. As of June 30, 2024, the value of the subscription liability is $423,409. The City is required to make fixed payments of $219,500. The subscription has an interest rate of 2.4450%.
At June 30, 2024, the aggregate maturities of the SBITA were as follows:
805
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
102
8. LONG-TERM DEBT, Continued
A. Governmental Activities, Continued
RippleWorx
On January 1, 2023, the City entered into a 36-month subscription for the use of RippleWorx. An initial subscription liability was recorded in the amount of $144,276 on July 1, 2022. As of June 30, 2024, the value of the subscription liability is $48,640. The Ci ty is required to make annual fixed payments of $50,000. The subscription has an interest rate of 2.7960%.
At June 30, 2024, the aggregate maturities of the SBITA were as follows:
ShotSpotter
On July 1, 2021, the City entered into a subscription for the use of ShotSpotter Subscription and the lease end date was on June 30, 2026. An initial subscripti on liability was recorded in the amount of $816,036 on July 1, 2022. As of June 30, 2024, the value of the subscription liability is $412,994. The City is required to make fixed payments of $203,907 until June 30, 2023 and $214,101 from July 1, 2023 to June 30, 2026.
The subscription has an interest rate of 2.4450%.
At June 30, 2024, the aggregate maturities of the SBITA were as follows:
Tyler Technologies
On July 1, 2019, the City entered into a subscription for the use of Tyler Technologies and the lease end date was on June 30, 2024. An initial subscription liability was recorded in th e amount of $237,424 on July 1, 2022. As of June 30, 2024, the value of the subscription liability is $0. The City is required to make fixed payments of $120,000. The subscription has an interest rate of 2.1940%. The lease paid off in fiscal year 2024. 806
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
103
8. LONG-TERM DEBT, Continued
A. Governmental Activities, Continued
Microsoft
On September 29, 2020, the City entered into a subscription for the use of Microsoft and the lease end date was on October 28, 2026. An initial subscription liability was recorded in the amount of $1,004,611 on July 1, 2022. As of June 30, 2024, the value of the subscription liability is $657,787. The City is required to make fixed payments of $140,021 until September 28, 2023 and $227,425 from September 29, 2023 to October 28, 2026. The subscription has an interest rate of 1.8500%.
At June 30, 2024, the aggregate maturities of the SBITA were as follows:
B. Business-Type Activities
The following is a summary of long-term debt of business-type activities during the fiscal year ended June 30, 2024:
Bonds payable at June 30, 2024 consisted of the following:
For the Years
Ending June 30, Principal Interest Total
2025 215,256 $ 12,169 $ 227,425 $ 2026 219,238 8,187 227,425 2027 223,293 4,131 227,424 Total 657,787 $ 24,487 $ 682,274 $ 807
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
104
8. LONG-TERM DEBT, Continued
B. Business-Type Activities, Continued
Richmond Joint Powers Financing Authority Point Potrero Lease Revenue Bonds, Series 2019B – Original Issue ($20,580,000)
The Series 2019B Bonds are being issued to: (i) defease and redeem on a current basis all of the Authority’s $26,830,000 outstanding Point Potrero Lease Revenue Bonds, Series 2009A and (ii) pay certain costs associated with the issuance of the Series 2019B Bonds. The Series 2019B Bonds are payable solely from, and secured solely by, Revenues of the Authority, cons isting primarily of Base Rental Payments to be received by the Authority from the City under a Facility Lease, dated as of August 1, 2019, by and between the City of Richmond and the Authority, for the right to use and the possession of certain real property and facilities, consisting of Wharves No. 7 and 8 at the Point Potrero Marine Terminal of the Port of Richmond. The amount of the Base Rental Payments is calculated to be sufficient to pay principal of and interest on the Series 2019B Bonds when due. Interest on the Series 2019B Bonds is payable on May 1 and November 1 of each year, commencing November 1, 2019. The refunding resulted in an overall debt service savings of $4,351,195. The net pr esent value of the debt se rvice savings is called an economic gain and amounted to $4,177,680. The bonds were paid off during fiscal year 2024.
Richmond Wastewater Revenue Bonds, Series 2017A – Original Issue $33,530,000 On July 19, 2017 the City issued Series 2017A Wast ewater Revenue Bonds in the amount of $33,530,000.
The proceeds from the Bonds were used to finance improvements to the City’s wastewater collection, treatment and disposal system and to refund all of the City’s outstanding Wastewater Revenue Refunding Bonds, Series 2006A. Principal payments are due annually on August 1. Interest rates on the Bonds range from 2% to 5.25% and payments are due semiannually on August 1 and February 1 beginning February 1, 2018. The bonds mature on August 1, 2047.
At June 30, 2024 the Series 2017A Bonds consisted of:
808
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
105
8. LONG-TERM DEBT, Continued
B. Business-Type Activities, Continued
Richmond Wastewater Revenue Bonds, Series 2017A – Original Issue $33,530,000, Continued The annual debt service requirements on the 2017A Bonds are as follows:
Richmond Wastewater Revenue Bond Series 2019A and Wastewater Revenue Refunding Bonds, Series 2019B – Original Issue Series 2019A ($22,510,000) and Series 2019B ($66,075,000) On June 26, 2019 the City issued Series 2019A Wastewater Revenue Bonds and the 2019B Wastewater Revenue Refunding Bonds in the amounts of $22,510,000 and $66,075,000, respectively. The proceeds from the 2019A Bonds were used to finance improvements to the City’s wastewater collection, treatment and disposal system. The proceeds from the 2019B Bonds were used to refund all of the City’s outstanding Wastewater Revenue Refunding Bonds, Se ries 2008A, and to partially refund and defease the City’s outstanding Wastewater Revenue Refunding Bonds, Series 2010B. The outstanding balance of the defeased 2010B Bonds was $36,480,000 at June 30, 2019. Principal payments are due annually on August 1. Interest rates on the Bonds range from 3% to 5% and payments are due semiannually on August 1 and February 1 beginning February 1, 2020. The refunding resulted in an overall debt service savings of $6,799,507. The net present value of the debt service savings is called an economic gain and amounted to $4,738,022. The bonds mature on August 1, 2049.
At June 30, 2024 the Series 2019A Bonds consisted of:
809
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
106
8. LONG-TERM DEBT, Continued
B. Business-Type Activities, Continued
Richmond Wastewater Revenue Bond Series 2019A and Wastewater Revenue Refunding Bonds, Series 2019B – Original Issue Series 2019A ($22,510,000) and Series 2019B ($66,075,000), Continued The annual debt service requirements on the 2019A Bonds are as follows:
At June 30, 2024 the Series 2019B Bonds consisted of:
The annual debt service requirements on the 2019B Bonds are as follows:
810
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
107
8. LONG-TERM DEBT, Continued
B. Business-Type Activities, Continued
Pledge of Wastewater Revenues
The City has pledged future wastewater customer revenues, net of specified operating expenses, to repay the 2017A, 2019A and 2019B Bonds through 2050. The Municipal Sewer Enterprise Fund’s total principal and interest remaining to be paid on the bonds is $190,858,013. The Municipal Sewer Enterprise Fund’s principal and interest paid for the current year, an d total customer net revenues were $8,073,061 and $18,236,289, respectively.
Notes and Loans Payable – Direct Borrowing
Notes and loans payable at June 30, 2024, consisted of the following:
California Department of Boating and Waterways
The City has four direct borrowing loan agreements with the California Department of Boating and Waterways for total borrowings of $3,772,278. Proceeds from the loans were used to finance marina construction projects. The loans bear interest at rates ranging from 4.5% to 7.9% and are due in annual installments through August 2042. The total amount outstanding at June 30, 2024 was $2,017,960.
The annual debt service requirements on these loans are as follows:
811
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
108
8. LONG-TERM DEBT, Continued
B. Business-Type Activities, Continued
RHA RAD Housing Partners, LP Promissory Note
On December 17, 2014, the Housing Authority’s Component Unit, RHA Housing Corporation, entered into an agreement with the City and promised to pay the City a principal amount of $700,000, plus accrued interest. The proceeds of the Note were then loaned from RHA Housing Corporation to the Housing Authority to finance acquisitions and development of the properties undergoing rehabilitation work in conjunction with a RAD conversion (Friendship Manor/Triangle Court). On December 22, 2015, the official closing of the RAD conversion took place, at which time the Note was assigned to a newly created entity, RHA RAD Housing Partners, L.P. The Note payable to the City was assigned from RHA Corporation to RHA RAD Housing Partners, L.P. al ong with a note receivable from the Housing Authority. The principle balance shall bear 1% simple interest. The term of the Note shall expire fifty- five years after. The balance of the promissory note at June 30, 2019 was $700,000.
In fiscal year 2015, the City had advanced the $700 ,000 to the Richmond Hous ing Authority Enterprise Fund, however, in fiscal year 2016 that loan was assigned to RHA RAD Housing Partners L.P. as discussed in Note 4. Therefore, the Richmond Housing Authority Enterprise Fund now owes this amount to RHA RAD Housing Partners L.P. and the interfund advance was converted to long-term debt in fiscal year 2016. The repayment schedule is not available.
California State Loan
Based on resolution Nos. 2019-0031 and 2019-0064, the City Council approved the California State Loan agreement between the City of Richmond and the California State Water Resources Control Board for a $50 million loan for the Water Resource Recovery Facility Project. The principal is paid over 30 years and the applicable interest rate was set at 1.4%. As of June 30, 2024, the City had partially drawn down the loan and had an outstanding principal balance of $42,584,727. 812
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
109
8. LONG-TERM DEBT, Continued
B. Business-Type Activities, Continued
California State Loan, Continued
The annual debt service requirements on the loan is as follows:
Lease Liability
At June 30, 2024 Lease Liabilities consisted of the following:
813
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
110
8. LONG-TERM DEBT, Continued
B. Business-Type Activities, Continued
West County Wastewater District
On January 1, 2010, the City entered into a lease as Lessee for the use of West County Wastewater District and the lease end date was on December 31, 2025. An initial lease liability was recorded in the amount of $1,172,173 on July 1, 2021. As of June 30, 2024, the value of the lease liability is $290,704. The city is required to make annually fixed payments of $153,000, with 3% annual increase from January 1, 2013 to December 31, 2017 and 6% annual increase from January 1, 2018 to December 31, 2025. The lease has an interest rate of 1.0590%.
At June 30, 2024, the maturities of the lease liability were as follows:
Owen Equipment
On March 1, 2022, the City entered into a lease as Lessee for the use of Owen Equipment and the lease end date was on February 29, 2024. An initial lease li ability was recorded in the amount of $223,496 on July 1, 2022. As of June 30, 2024, the value of the lease liability is $0. The City is required to make monthly fixed payments of $11,212. The lease has an interest rate of 0.3800%. The lease was paid off in fiscal year 2024.
814
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
111
8. LONG-TERM DEBT, Continued
C. Events of Default, Termination Events and Subjective Acceleration Clauses Below is a summary of certain events of defaul t and termination events with finance related consequences, along with the subjective acceleration clauses, as applicable, for all of the City’s outstanding long-term debt obligations. Each agreement may contain additional events of default, termination events or other subjective acceleration clauses. (A) If the City fails to pay debt service when due, the delinquent principal and interest is due and payable immediately. If the City files for reorganization under bankruptcy laws, the aggregate outstanding principal balance and accrued interest are immediately due and payable. (B) If the City fails to pay rental payable when due or the Authority fails to pay debt service when due, the delinquent principal and interest is due and pa yable immediately. In the event of default, the Authority has the option to exercise the right of en try and re-entry upon the leased property, including the right to re-lease the property if the City does not pay the delinquent rent.
Events of default Termination events Subjective
with finance-related with finance-related acceleration
consequences consequences clauses
Governmental Activities
Bonds Payable
Series 2022 Taxable Pension Refunding Bonds (A) N/A (A) JPFA Lease Revenue Bonds - 2016 (B) (B) N/A
JPFA Lease Revenue Bonds - 2019 (B) (B) N/A
Loans Payable
California Energy Commission Loan #1 (C) (C) (C)
California Energy Commission Loan #2 (C) (C) (C)
California State Loan (L) (L) (L)
Capital Leases
Qualified Energy Conservation Lease (D) (D) N/A
JPFA Recovery Zone Economic Development Lease (E) (E) N/A Street Light Capital Lease (G) (G) N/A
Holman Capital Corporation Lease #5 (H) (H) N/A
Business-Type Activities
Bonds Payable
Wastewater Revenue Bonds Series 2017A (A) N/A (A)
Wastewater Revenue Bonds Series 2019A (I) N/A (I)
Wastewater Revenue Bonds Series 2019B (I) N/A (I)
Notes and Loans Payable
California Department of Boating and Waterways (J) (J) (J) RHA RAD Housing Partners L.P. Promissory Note (K) (K) (K) 815
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
112
8. LONG-TERM DEBT, Continued
C. Events of Default, Termination Events an d Subjective Acceleration Clauses, Continued (C) Events of default include the failure to comply wi th any of the terms in the loan agreement, failure to pay principal or interest when due, failure of the City to undertake in a timely way the activities for which said Loan Agreement was executed, failure of the City to obtain prior written Commission approval before undertaking a change in the scope of the activities for which said Loan Agreement was executed, or the City becoming insolvent or bankrupt. On the occurrence of any event of default, the Commission may declare all or any portion of the pr incipal and accrued interest on the loan to be immediately due and payable. If the City fails to comply with the terms of the loan agreement, the Commission may declare the agreement to have be en breached and be released from any further performance.
(D) Events of default include: (a) Failure to (i) pay any rental payment or other payment required to be paid under the agreement within 10 days after the date when due or (ii) maintain insurance as required; (b) failure to observe and perform any covenant, cond ition or agreement for a period of 30 days after written notice; (c) any false, incorrect or misleading statements, representations or warranties made by the City pursuant to the agreement; (d) any default occurs under any other agreement for borrowing money, lease financing of property; (e) the City files becomes insolvent or files for bankruptcy. In the event of default, the lessor has the right to take various steps, including take possession of the equipment or accelerate the repayment of the principal and outstanding interest. (E) If the City fails to pay lease payments when due or observe other covenants in the lease agreement within thirty days of the written notice of the failure, the outstanding balances are due and payable immediately. If the City files for reorganization under bankruptcy laws, the aggregate outstanding principal balance and accrued interest are immediately due and payable. In the event of default, the Authority has the option to exercise the right of en try and re-entry upon the leased property, including the right to re-lease the property if the City does not pay the delinquent lease payments. (F) If the City fails to pay lease payments when due or observe other covenants in the lease agreement within thirty days of the written notice of the failure, the outstanding balances are due and payable immediately. If the City files for reorganization under bankruptcy laws, the aggregate outstanding principal balance and accrued interest are immediately due and payable. (G) If the City fails to pay lease payments when du e or observe other covenants in the lease agreement, the outstanding balances are due and payable immediately. If the City files for reorganization under bankruptcy laws, the aggregate outstanding principal balance and accrued interest are immediately due and payable. Upon events of default, the Energy Commission may terminate the Agreement upon five days written notice to the City.
(H) If the City fails to pay lease payments when due or observe other covenants in the lease agreement within thirty days of the written notice of the failure, the outstanding balances are due and payable immediately. If the City files for reorganization under bankruptcy laws, the aggregate outstanding principal balance and accrued interest are immediately due and payable. In the event of default, the Lessor has the option to exercise the right of entry and re-entry upon the leased property, including the right to re-lease the property if the City does not pay the delinquent lease payments. 816
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
113
8. LONG-TERM DEBT, Continued
C. Events of Default, Termination Events an d Subjective Acceleration Clauses, Continued (I) If the City fails to pay debt service when due, the delinquent principal and interest is due and payable immediately. If the City files for reorganization under bankruptcy laws, the aggregate outstanding principal balance and accrued interest are immediately due and payable. In the event of default, the City is required to transfer all Net Revenues held by the City to the Trustee, except as noted in the Indenture of Trust.
(J) If the City fails to pay debt service when due, the delinquent principal and interest is due and payable immediately. If the City files for reorganization under bankruptcy laws, the aggregate outstanding principal balance and accrued intere st are immediately due and payable. In the event of default, the Department of Boating and Waterways has the op tion to declare all unperformed obligations immediately due and payable without further demand or notice to the City. (K) Events of default include the failure to repay th e principal and any interest on the loan within ten days of receipt of written notice that such payment is due pursuant to the loan documents, breach of covenants included in the loan documents, or becomi ng insolvent or bankrupt. In the event of default, the principal and accrued interest are immediately due and payable. (L) If the State Water Board Division determines that an event of default has occurred, the city may be required, upon demand, immediately to do each of the following: (1) Return to the State Water Board any grant or principal forgiveness amounts received pursuant to the agreement (2) Accelerate the payment of any principal owed under the agreement, all of which shall be immediately due and payable (3) Pay interest at the highest legal rate on all of the forgoing (4) Pay an additional payments. In addition, the Division may enforces its right under the agreement by any judicial proceeding, terminates the agreement, and receives reimbursement from the city.
D. Special Assessment Debt Without City Commitment
Special assessment districts have been established in various parts of the City to provide improvements to properties located in those districts. Properties in these districts are assessed for the cost of improvements; these assessments are payable solely by property owners over the term of the debt issued to finance these improvements. The City is not legall y or morally obligated to pay these debts or be the purchaser of last resort of any foreclosed properties in these special assessment districts, nor is it obligated to advance City funds to repay these debts in the event of default by any of these districts. At June 30, 2024, the balances of these Districts’ outstanding debt were as follows:
Richmond JPFA Reassessment Revenue Refunding Bonds, Series 2016 (Country Club Vista) $4,335,000 E. Conduit Debt
The City has assisted private-sector entities by spon soring their issuance of debt for purposes the City deems to be in the public interest. These debt issues are secured solely by the property financed by the debt. The City is not legally or morally obligated to pa y these debts or be the purchaser of last resort of any foreclosed properties secured by these debts, nor is it obligated to advance City funds to repay these debts in the event of default by any of these issuer s. At June 30, 2024, the balance of this issuers’ outstanding debt was as follows:
Richmond Community Foundation, Richmond Housing Rehabilitation Program, Social Impact Bonds, Taxable Series 2015A $3,000,000 817
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
114
9. UNAVAILABLE AND UNEARNED REVENUE
At June 30, 2024, the following unavailable revenues were recorded in the Fund Financial Statements because the funds were not available to finance expenditures of the current period:
At June 30, 2024, the following unearned revenues were recorded in the City-wide financial statements on the Statement of Net Position:
818
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
115
10. FUND BALANCE AND NET POSITION
A. Fund Balance Classification
Detailed classifications of the City’s fund balances, as of June 30, 2024, are below:
819
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
116
10. FUND BALANCE AND NET POSITION, Continued
B. Cash Reserve Policy
In fiscal year 2023, the City Council updated the fu nd balance policy to require the City to maintain a year-end contingency reserve balance of a minimum of 21% of the next year’s budgeted General Fund expenditures including transfer out. This is the minimum needed to maintain the City’s creditworthiness and to adequately provide for economic and legislative uncertainties, cash flow needs and contingencies.
A policy based upon percentage assures that the reserve will remain a prudent cushion as the City’s budgets grow over time.
City Council approval is required before any cash can be withdrawn from the reserve fund. The Council shall have the discretion to use the reserve for one-time emergencies only and not to be used for ongoing expenditures. At the time of City Council approval of any use of reserves, a stabilization policy laying out the plans for restoration of reserves must be simultaneously put in place and approved by City Council.
The City’s cash reserve as of June 30, 2024, which is a component of unassigned fund balance of the General Fund, is $65,262,325, which is approximately 26.22% of fiscal year 2024-25 budgeted General Fund expenditures including transfers out. As the City experiences net revenue gains in future years, the reserve balance must continue to be maintained at a minimum of 21% of tota l expenditures, following the stabilization policy, in order to allow the City to build up its capacity to handle future short term economic downturns or emergencies with minimal to no impact to City services.
C. Deficit Fund Balances and Accumulated Deficits
At June 30, 2024, the following funds had deficit fu nd balance or deficit net position, which will be eliminated by future revenues:
D. Restatement of Net Position
During 2024, the City recorded the following prior period adjustments:
(1) Error Correction to RHA - During fiscal year 2024, the City continued to reconcile the activities of the Richmond Housing Authority. As a result, beginnin g net position in the Richmond Housing Authority Enterprise Fund has been restated to correct the prior year accounts payable and expenses related to the payment of IRS tax penalties. The City didn’t record the payment of outstanding RHA IRS tax penalties properly, therefore, the accounts payable were overstated by $48,534 and net position were understated by $48,534 for the fiscal year ended June 30, 2023.
820
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
117
10. FUND BALANCE AND NET POSITION, Continued
D. Restatement of Net Position, Continued
(2) Error correction to Richmond Neighborhood Stabilization Corporation Fund - Beginning fund balance of the Richmond Neighborhood Stabilization Corporation fund was restated due to the reclassification of prior year deferred inflows of resources to fund balance. The City recorded expenditures when issued the loan s in the past and recorded deferred inflows of resources and loan receivables when put those loans on the book. So an adjustment was necessary to properly restate the deferred inflows of resources. Therefore, deferred inflows of resources, were overstated by $779,013, and fund balances were understated by $779,013 for the fiscal year ended June 30, 2023. (3) Error correction to Pension Trust Funds – Beginning net position of the pension trust funds was restated due to the two trust funds were determined to be revocable and thus not qualified to be reported as fiduciary funds. All items on the statement of fiduciary net position and statement of changes in fiduciary net position should have been reported as part of the governmental funds section with fund balances restricted for the General Pension Plan and Police and Firemen’s Pension Plans. The net position of the fiduciary funds was overstated by $11,040,528, the fund balance of the general fund was understated by $11,040,528 and the net position of the governmental activities was understated by $11,040,528 for the fiscal year ended June 30, 2023.
(4) Error correction to the General Pension Plan and Po lice and Firemen’s Pension Plan – In prior years, these two plans were determined to be in irrevocable trusts and thus the actuary considered those as part of the net pension assets balances according to GASB 68. However, this year, the City determined that those two trusts were not irrevocable trusts thus not qualified to be reported as fiduciary funds.
T h e r e f o r e , t h e d e f e r r e d o u t f l o w o f r e s o u r c e s w e r e o v e r s t a t e d b y $ 1 1 0 , 9 5 6 , n e t p e n s i o n a s s e t s w e r e overstated by $11,494,830, and net position of the governmental activities were overstated by $11,605,786 for the fiscal year ended June 30, 2023.
(5) Change in Reporting Entity – The General Capital Improvement Fund moved from nonmajor to a major fund.
821
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
118
11. EXPENDITURES IN EXCESS OF APPROPRIATIONS
The following funds incurred departmental expenditures in excess of appropriations. 822
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
119
12. DEFINED BENEFIT PENSION PLANS
The following is a summary of the City’s pension plan amounts for the year ended June 30, 2024:
A. California Public Employees’ Retirement System Pension Plans I. General Information about the CalPERS Pension Plan
Plan Descriptions – All qualified permanent and probationary employees are eligible to participate in the City’s separate Safety (police and fire) and Misce llaneous (all other) Plans, agent multiple-employer defined benefit pension plans admi nistered by CalPERS, which acts as a common investment and administrative agent for its participating member employers. Benefit provisions under the Plans are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.
Benefits Provided – CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries.
Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor B e n e f i t , o r t h e O p t i o n a l S e t t l e m e n t 2 W D e a t h Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.
823
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
120
12. DEFINED BENEFIT PENSION PLANS, Continued
A. California Public Employees’ Retirement System Pension Plans, Continued I. General Information about the CalPERS Pension Plan, Continued The City’s employees hired on or before December 31, 2012 participate in the Miscellaneous Plan under the 2.7% @ 55 Benefit Formula or the Safety Plan under the 3.0% @ 50 (Police) or 3.0% @ 55 (Fire) Benefit Formula. The Pension Reform Act of 2013 (PEPRA), Assembly Bill 340, is applicable to employees new to CalPERS and hired after December 31, 2012. The City’s employees hired on or after January 1, 2013 participate under the Miscellaneous Plan 2.0% @ 62 Benefit Formula or the 2.7% @ 57 (Police and Fire) Benefit Formula.
The Plans’ provisions and benefits in effect at June 30, 2024, are summarized as follows:
Hire date
Prior to
January 1, 2013
On or after
January 1, 2013
Benefit formula 2.7% @ 55 2.0% @ 62
Benefit vesting schedule 5 years service 5 years service Benefit payments monthly for life monthly for life
Retirement age 50 - 55 52 - 67
Monthl
y benefits, as a % of eli gible compensatio 2.0% to 2.7% 1.0% to 2.5% Required employee contribution rates 8.00% 8.25%
Required employer contribution rates 13.89% 13.89%
Required UAL Contribution
Safety - Police Safety - Fire Safety - Police and Fire
Prior to Prior to On or after
Hire date January 1, 2013 January 1, 2013 January 01, 2013 Benefit formula 3.0% @ 50 3.0% @ 55 2.7% @ 57
Benefit vesting schedule 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life Retirement age 50 50 - 55 50 - 57
Monthl
y benefits, as a % of eli gible compensatio 3.00% 2.4% to 3.0% 2.0% to 2.7% Required employee contribution rates 9.00%* 9.00%* 13.00% Required employer contribution rates 22.86% 22.86% 22.86% Required UAL Contribution
* Effective July 1, 2015, Safety (Police and Fire) employees hired prior to January 1, 2013 pay 3% of the employer's required contribution. Therefore, the required employer contribution rate is 18.07% and required employee contribution rate is 12%.
Miscellaneou
s
$ 9,627,906
$ 16,078,787
824
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
121
12. DEFINED BENEFIT PENSION PLANS, Continued
A. California Public Employees’ Retirement System Pension Plans, Continued I. General Information about the CalPERS Pension Plan, Continued Beginning in fiscal year 2016, CalPERS collects employ er contributions for each Plan as a percentage of payroll for the normal cost portion as noted in the rates above and as a dollar amount for contributions toward the unfunded liability (UAL). The dollar amounts are billed on a monthly basis or can be prepaid in advance before July 31
st to receive a savings of approximately 3%. In fiscal year 2022, the City started to prepay the unfunded liability on an annual basis. The City’s required contributions for the unfunded liability in the Miscellaneous and Safety Plans were $9,627,906and $16,078,787 respectively, as noted in the tables above.
Employees Covered – As of the June 30, 2022 actuarial valuation date and the June 30, 2023 measurement date, the following employees were covered by the benefit terms for each Plan:
As of June 30, 2024, the City had 427 active employees in the Miscellaneous Plan and 184 active employees in the Safety Plan.
Contributions – Section 20814(c) of the California Public Em ployees’ Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for both Plans are determined annually on an actuarial b a s i s a s o f J u n e 3 0 b y C a l P E R S . T h e a c t u a r i a l l y determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to fi nance any unfunded accrued liability. The City is required to contribute the difference between the ac tuarially determined rate and the contribution rate of employees.
Contributions for the measurement period were $14,445,711 for the Miscellaneous Plan and $21,904,607 for the Safety Plan.
II. Net Pension Liability
The City’s net pension liability for each Plan is meas ured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of each Plan is measured as of June 30, 2023, using an annual actuarial valuation as of June 30, 202 2 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is shown below. 825
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
122
12. DEFINED BENEFIT PENSION PLANS, Continued
A. California Public Employees’ Retirement System Pension Plans, Continued II. Net Pension Liability, Continued
Actuarial Assumptions – For the measurement period ended June 30, 2023, the total pension liabilities were determined by the June 30, 2022 total pension liability. The June 30, 2023 total pension liabilities were based on the following actuarial methods and assumptions:
The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2022 valuation were based on the results of 2022 actuarial experience study for the period 2001 to 2019. Further details of the Experience Study can be found on the CalPERS website.
Discount Rate – The discount rate used to measure the total pension liability for each Plan was 6.90%.
The projection of cash flows used to determine the discount rate for each Plan assumed that contributions from all plan members in the Public Employees Reti rement Fund (PERF) will be made at the current member contribution rates and that contributions fr om employers will be made at statutorily required rates, actuarially determ i n e d . B a s e d o n t h o s e a s s u m p t i o n s , e a c h P l a n ’ s f i d u c i a r y n e t p o s i t i o n w a s projected to be available to make all projected future benefit payments of current plan members for all plans in the PERF. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability for each Plan.
The long-term expected rate of return on pension plan investments was determined using a building- block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. 826
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
123
12. DEFINED BENEFIT PENSION PLANS, Continued
A. California Public Employees’ Retirement System Pension Plans, Continued II. Net Pension Liability, Continued
In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Such cash flows were developed assuming that both members and employers will make their required contributions on time and as scheduled in all future years. Using historical returns of all the funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block approach. Using the expected nominal returns for both short-term and long- term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses.
The table below reflects the long-term expected real rate of return by asset class. The rate of return was calculated using the capital market assumptions ap plied to determine the discount rate and asset allocation. These geometric rates of return are net of administrative expenses. (1) An expected inflation of 2.50% used for this period. (2) Figures are based on the 2021 Asset Liability Management study 827
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
124
12. DEFINED BENEFIT PENSION PLANS, Continued
A. California Public Employees’ Retirement System Pension Plans, Continued II. Net Pension Liability, Continued
The changes in the Net Pension Liability as of the June 30, 2023 Measurement Date for each Plan follows:
Miscellaneous Plan:
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability/(Asset)
Balance at June 30, 2022 Measurement Date 537,090,947 $ 401,499,873 $ 135,591,074 $ Changes in the year:
Service cost 6,722,126 - 6,722,126 Interest on the total pension liability 35,674,633 - 35,674,633 Differences between actual and
expected experience (7,762,052) - (7,762,052) Changes in assumptions - - - Changes in benefit terms 632,505 - 632,505 Net Plan to plan resource movement - - - Contribution - employer - 14,445,711 (14,445,711) Contribution - employees - 2,219,977 (2,219,977) Net investment income - 24,467,157 (24,467,157) Administrative expenses - (295,244) 295,244 Benefit payments, including refunds of
employee contributions (32,597,551) (32,597,551) - Net changes 2,669,661 8,240,050 (5,570,389) Balance at June 30, 2023 Measurement Date 539,760,608 $ 409,739,923 $ 130,020,685 $ Safety Plan:
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability/(Asset)
Balance at June 30, 2022 Measurement Date 740,207,934 $ 506,185,809 $ 234,022,125 $ Changes in the year:
Service cost 9,411,150 - 9,411,150 Interest on the total pension liability 50,102,721 - 50,102,721 Differences between actual and
expected experience 3,695,356 - 3,695,356 Changes in assumptions - - - Changes in benefit terms 272,955 - 272,955 Net Plan to plan resource movement - - - Contribution - employer - 21,904,607 (21,904,607) Contribution - employees - 3,028,664 (3,028,664) Net investment income - 31,057,913 (31,057,913) Administrative expenses - (372,225) 372,225 Benefit payments, including refunds of
employee contributions (45,510,872) (45,510,872) - Net changes 17,971,310 10,108,087 7,863,223 Balance at June 30, 2023 Measurement Date 758,179,244 $ 516,293,896 $ 241,885,348 $ Totals - Miscellaneous and Safety Plans 1,297,939,852 $ 926,033,819 $ 371,906,033 $ Increase (Decrease)
Increase (Decrease)
828
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
125
12. DEFINED BENEFIT PENSION PLANS, Continued
A. California Public Employees’ Retirement System Pension Plans, Continued II. Net Pension Liability, Continued
Sensitivity of the Net Pension Liability to Changes in the Discount Rate – The following presents the net pension liability of the City for each Plan, calculated using the discount rate for each Plan, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is 1- percentage point lower or 1-percentage point higher than the current rate:
Pension Plan Fiduciary Net Position – Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.
III. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions For the year ended June 30, 2024, the City recognized pension expense of $49,977,852. At June 30, 2024, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
Miscellaneous Plan Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date 15,401,749$ - $ Differences between Expected and Actual Experience - (3,676,761) Net Differences between Projected and Actual
Earnings on Pension Plan Investments 19,344,367 - Total 34,746,116 $ (3,676,761) $
829
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
126
12. DEFINED BENEFIT PENSION PLANS, Continued
A. California Public Employees’ Retirement System Pension Plans, Continued III. Pension Expenses and Deferred Outflows/Inflo ws of Resources Related to Pensions, Continued $38,000,115 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2025. Other amounts reported as deferred outflo ws of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
IV. Pension Funding Policy & Section 115 Trust
In an effort to reduce Unfunded Actuarially Accrued Liabilities (“UAL”) of the City’s pension plan, the City Council approved to establish a supplemental 115 Trust account on July 19, 2022. On June 27, 2023, the City adopted a Pension funding policy to place 10% of each year-end operating surplus (Total Actual Revenues minus Total Actual Expenditures, includin g Transfers In and Transfers Out) in the General Fund in excess of the City’s Cash Reserve Policy into the Trust. The primary objectives of the policy are to: 1) Address the increasing annual employer required UAL contributions due to variance in actual experience versus CalPERS actuarial assumptions including investment returns. 2)Prefunding the Trust Fund account can help the City improve its UAL fu nding ratio faster. 3)Provide budgetary flexibility during challenging budget years or to “smooth” payment spikes that could cause financial stress on the City.
830
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
127
12. DEFINED BENEFIT PENSION PLANS, Continued
B. Other City Pension Plans
I. Plan Descriptions and Funding Policies
The City administers two single-employer pension pl ans which are not considered to be funded as defined by GASB No. 67 and 68. These are the General Pension Plan and Police and Firemen’s Pension Plan (collectively, the “Plans”). The General Pension Plan, a defined benefit pension plan, covers three former City employees (or their beneficiaries) not co vered by CalPERS, all of whom have retired. The Police and Firemen’s Pension Plan, a defined benefit pension plan, covers twelve retired police and fire personnel (or their beneficiaries) employed prior to October 1964. Benefit provisions for the Plans are established by City Ordinance. No separate financial statements are issued for the Plans.
The City established the Secured Pension Override Special Revenue Fund to which proceeds of a special incremental property tax levy voted by the citizens of the City of Richmond are credited for the payment of benefits under the City’s pension plans. The incremental property tax revenue received for the year ended June 30, 2024 was $27,165,722 and the Ci ty used the funds to pay General Pension Plan contributions of $0.
Police and Firemen’s Pension Plan – Funding for the Plan is provided from the Secured Pension Override Special Revenue Fund. Employees were vested after five years of service. Members of the Plan are allowed normal retirement benefits after 25 or more continuous years of service. The City is required under its charter to contribute the remaining amounts necessary to fund the Plan using the entry age- normal actuarial method as specified by Ordinance. Management of the Plan is vested in the Pension Board which consists of seven members: the Mayor, City Manager, Director of Finance, two members appointed by the Mayor, with the concurrence of four members of the City Council, each of whom shall be and remain a resident of the City in order to be a member of the Board and serve a term of five years, one representative of the Police Department and one representative of the Fire Department. The Plan is closed to new members. Retirement benefits for Plan members are calculated as one-half of the annual salary attached to the rank or position held by th e retiree one year prior to the date of retirement.
Surviving spouses receive 100% of the retiree’s pension. Benefit terms provide for annual cost-of-living adjustments to each member’s retirement allowance subsequent to the member’s retirement date. The annual adjustments are an increase each year for change s in the salary attached to the retiree’s rank in the year before retirement.
831
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
128
12. DEFINED BENEFIT PENSION PLANS, Continued
B. Other City Pension Plans, Continued
I. Plan Descriptions and Funding Policies, Continued
General Pension Plan – Retirement and other benefits are paid from the assets of the Plan and from related investment earnings. The City is required under its charter to contribute the remaining amounts necessary to fund the Plan using the entry age-normal actuarial method as specified by Ordinance.
Management of the Plan is vested in the General Pension Board which consists of seven members: the Mayor, City Manager, Director of Finance, two members appointed by the Mayor, with the concurrence of five members of the City Council, each of whom shall be and remain a resident of the City in order to be a member of the Board and serve a term of five years, and two members to be elected every five years by secret ballot vote of the rank and file of Plan employees and of Plan employees who have retired and are receiving pensions from the Plan. Four members of the General Pension Board are to be concurred in by four members.
The Plan is closed to new members. Retirement benefi ts for Plan members are calculated as one-half of the average annual salary attached to the position held by the retiree during the three years prior to the date of retirement. Surviving spouses receive 100% of the retiree’s pension. Benefit terms provide for annual cost-of-living adjustments to each member’s retirement allowance subsequent to the member’s retirement date. The annual adjustments are an automatic increase of 2% per year. City Council may grant additional increases of up to 3% per year to bring the total increase in a given year to 5%.
II. Significant Accounting Policies
City contributions for all plans are recognized when due and the City has made a formal commitment to provide contributions. Benefit payments and refunds are recognized when due and payable in accordance with the terms of the Plan. Administrative costs for all plans, except the investment management fees of the Police and Fireman’s Pension Plan, are paid by the City’s General Fund. The investment management fees are financed through inve stment earnings. Assets are valued at fair value based on available market information obtained from independent sources. 832
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
129
12. DEFINED BENEFIT PENSION PLANS, Continued
B. Other City Pension Plans, Continued
III. Net Pension Liability of the Plans
The components of the net pension liability of the City for each of the Plans is the total pension liability, less each Plan’s fiduciary net position.
Actuarial Assumptions. The total pension liability for each plan as of June 30, 2024 was determined based on June 30, 2024 actuarial valuations. The following actuarial assumptions applied to all periods included in the measurement:
Mortality rates were based on the California PERS Mortality Table in its 2021 experience study (based on CalPERS 2000-2019 experience).
Discount Rates. The discount rates used to measure the total pension liability for the Police and Firemen’s Pension Plan and General Pension Plan were 3.97% and 3.97%, respectively, as of June 30, 2024 and 5.50% and 3.25%, respectively, as of June 30, 2023. The discount rate used for the total pension liability is based on the Fidelity 20-Year Municipal GO AA Index as of the measurement date.
Changes in Assumptions – The discount rate was changed from 3.86% to 3.97% based on the Fidelity 20- year municipal GO AA Index.
833
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
130
12. DEFINED BENEFIT PENSION PLANS, Continued
B. Other City Pension Plans, Continued
IV. Changes in the Net Pension Liability of Each Plan
The net pension liability of each Plan is measured as of June 30, 2024 as follows:
Police and Firemen's Plan:
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability/(Asset)
Balance at June 30, 2023 6,156,088 $ - $ 6,156,088$ Changes in the year:
Interest on the total pension liability 221,136 - 221,136 Differences between actual and expected experience - - - Changes in assumptions Changes in benefit terms (27,985) - (27,985) Contribution - City - 854,345 (854,345) Contribution - employer - - - Contribution - employees - - - Net investment income - - - Other deductions - -
Benefit payments, including member contribution refunds (854,345) (854,345) - Net changes (661,194) - (661,194) Balance at June 30, 2024 5,494,894 $ - $ 5,494,894$ Plan fiduciary net position as a percentage of the total pension liability 0.00% General Pension Plan:
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability/(Asset)
Balance at June 30, 2023 594,126 $ - $ 594,126$ Changes in the year:
Interest on the total pension liability 18,066 - 18,066 Differences between actual and expected experience - - - Changes in assumptions Changes in benefit terms (1,445) - (1,445) Contribution - City - 252,208 (252,208) Contribution - employer - - - Contribution - employees - - - Net investment income - - - Benefit payments, including refunds of employee contributions (252,208) (252,208) - Net changes (235,587) - (235,587) Balance at June 30, 2024 358,539 $ - $ 358,539$ Plan fiduciary net position as a percentage of the total pension liability 0.00% Increase (Decrease)
Increase (Decrease)
834
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
131
12. DEFINED BENEFIT PENSION PLANS, Continued
B. Other City Pension Plans, Continued
IV. Changes in the Net Pension Li ability of Each Plan, Continued Sensitivity of the Net Pension Liability to Changes in the Discount Rate. The following presents the net pension liability of the City for each of the Plans, calculated using the discount rate as well as what the City’s net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower or 1-percentage-point higher than the current rate:
V. Actuarially Determined Contributions
As of the June 30, 2024, actuarial valuations used to calculate the actuarially determined contributions (ADC) for each Plan, the ADC’s were determined using the entry-age normal cost method and the assumptions in Note 12B above.
For the Police and Firemen’s Pension Plan, the City’s contribution policy is to annually contribute an amount equal to (1) amortization of the unfunded liability as a level-dollar over a 10-year closed period as of July 1, 2013, plus (2) future gains and losses amortized over the same period, but not less than five years. Over the past five years, the City has contributed an average of 100% of the Actuarially Determined Contribution.
For the General Pension Plan, the City’s contribution policy is to annually contribute an amount equal to (1) amortization of the unfunded liability as a level-dollar over a 6-year closed period as of July 1, 2013, plus (2) future gains and losses amortized over the same period, but not less than five years. Over the past five years, the City has contributed an average of 102% of the Actuarially Determined Contribution.
The Actuarially Determined Contribution and the actual contributions for each Plan for the year ended June 30, 2024 are presented below:
835
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
132
12. DEFINED BENEFIT PENSION PLANS, Continued
B. Other City Pension Plans, Continued
VI. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions For the year ended June 30, 2024, the City recognized pension expense for each of the Plans as follows:
VII. PARS Defined Contribution Plan
Effective July 1, 2014, the City contracted with the Public Agency Retirement System (PARS), to sponsor a Section PARS 457 FICA Alternative Retirement Plan created in accordance with IRC Sections 3121(b) (7) (F) and 457(b), which is a qualified defined contribu tion pension plan covering all eligible part-time, seasonal and temporary employees of the City on that date and hired thereafter.
The Plan requires these employees to contribute 6.2% and the City to contribute 1.3% of the employees pay plus administration costs. The City’s required contributions of $32,123 and the employees’ required contributions of $153,113 were made during the fiscal year ended June 30, 2024. 836
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
133
13. ASSETS SET ASIDE FOR POLICE AND FIREMEN’S PENSION PLANS At June 30, 2024 the assets the City set aside to pay for the pension benefits as shown below. The value of the assets were valued at fair value. Those assets are not in an irrevocable trust thus not considered as part of the net pension liabilities balances of the pension plans.
Investment Policies
The General Pension and Police and Firemen’s Pension Pl a n s ’ p o l i c i e s i n r e g a r d t o t h e a l l o c a t i o n o f invested assets is established by the City Charter and may be amended by Resolution of the respective Boards. The Plans allow investments in the following:
(a) In investments which are authorized by General law for savings banks. (b) In investments other than those specified in su bdivision (a) hereof, including, but not limited to, corporate bonds and securities, common stocks, preferred stocks, investments in real estate and investment trusts, provided that the total amount invested pursuant to this subdivision shall not exceed 50% of the total amount of funds invested pursuant to this section, and provided further that the following conditions are met:
(1) Any stocks or other corporate securities, in wh ich funds are invested, except stocks of banks, insurance companies or mutual funds, shall be registered on a national securities exchange as provided by the Federal Securities Exchange Act.
(2) The total amount invested in common and preferre d stocks shall not exceed at cost at the time of purchase 25% of the total amount invested pursuant to this section. (3) The total amount invested in the common and preferred stocks of any one company shall not exceed at cost of the time of purchase 2% of the total amount invested pursuant to this section and shall not exceed 5% of the outstanding preferred or common stock of that company. (4) No funds shall be invested in the common stocks of any company unless it has paid cash dividends on such stocks in eight of the ten years immediately preceding its purchase by the Board. (5) No funds shall be invested in the stocks or other securities of any company other than a bank or insurance company unless it has assets of at least one hundred million dollars ($100,000,000), or in the stocks or other securities of a bank or insurance company unless it has assets of at least fifty million dollars ($50,000,000).
(6) The total amount invested in real estate and other than real estate owned by or leased to the City of Richmond, which amount may include land, buildings, land and buildings or real estate loans, shall not exceed 25% of the total amount invested pursua nt to this section and such investments shall be restricted to first trust deeds which are insured by the Federal Housing Administration or which are guaranteed by the Veterans Administration.
837
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
134
14. OTHER POSTEMPLOYMENT BENEFITS
The following is a summary of the City’s OPEB amounts for the year ended June 30, 2024:
A. General Information about the City’s Other Post Employment Benefit (OPEB) Plans Plan Description - In order to qualify for postemployment medical and dental benefits an employee must retire from the City and maintain enrollment in one of the City’s eligible health plans. The City pays a portion of the CalPERS premiums for retirees and their dependents that vary by employment classification. In addition, the following eligibility rules and contribution requirements apply for future retirees, followed by current retirees. The City has two plans:
City OPEB Plan
The City is the Plan administrator, while PARS admi nisters the investment trust. The City OPEB Plan does not issue separate financial statements. PARS issues a publicly available financial report that includes financial statements and required suppleme ntary information. That report may be obtained from Public Agency Retirement Services, 4350 Von Karman Avenue, Suite 100, Newport Beach, CA, 92660.
RPOA OPEB Plan
The City of Richmond’s Police Officers Association (RPOA) Plan was established during fiscal year 2019 and the RPOA OPEB Plan joined the California Employers’ Retiree Benefit Trust (CERBT), an agent multiple-employer plan administered by CALPERS, co nsisting of an aggregation of single- employer plans. RPOA members who were actively employed as of January 1, 2017 transferred from the City OPEB Plan to the RPOA OPEB Plan. The CERBT issues a publicly available financial report that includes financial statements and required supplementary info rmation. That report may be obtained from the California Public Employees’ Retirement System, CERBT, P.O. Box 942703, Sacramento, CA 94229-2703. 838
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
135
14. OTHER POSTEMPLOYMENT BENEFITS, Continued
A. General Information about the City’s Other Post Employment Benefit (OPEB) Plans, Continued A summary of the City OPEB Plan provisions follows:
Classification Eligibility (Age / Service Years)
Monthly Premium Paid by City Before/After Medicare
Eligibility
Employee Monthly
Contribution (1)
SEIU Local 1021 Service Retirement:
50/20, 51/18, 52/16, 53/14,
54/12, 55/10
Disability Retirement: any
age/10 years service
Retiree only or surviving spouse: the lesser of $435 and medical premium Retiree +1 or more: the lesser of $567
and medical premium
Plus PEMHCA Minimum
Retired on or after 7/1/1995: Reimbursement allowed
towards non-PERS plans
None
IFPTE, Miscellaneous Executive
Management, City Council
Service Retirement: Same as
SEIU
Retiree only or surviving spouse: the lesser of $435 and medical premium Retiree +1 or more: the lesser of $567
and medical premium
Plus PEMHCA Minimum
Effective 1/1/2017: $50
Effective 1/1/2018: $100
Fire Local 188 35/15 Percentage of premium (medical premium minus PEMHCA minimum) for retiree / dependents/surviving
spouse up to premium for coverage. Percentage is 80%,
increased to 90% after 15 years of service and 100% after 25 years of service. Total City contribution, excluding PEMHCA minimum, is capped at Kaiser non- Medicare
eligible premium for coverage selected.
Plus PEMHCA minimum
Effective 1/1/2017: $200
Effective 1/1/2018: $300
Effective 7/1/2019: $400
Fire Management and Fire
Executive Management
35/15 Percentage of premium (medical premium minus
PEMHCA minimum) for retiree/dependents/surviving
spouse up to premium for coverage. Percentage is 80%,
increased to 90% after 15 years of service and 100% after 25 years of service. Total City contribution, excluding PEMHCA minimum, is capped at Kaiser non-Medicare
eligible premium for coverage selected.
Plus PEMHCA minimum
Effective 1/1/2017: $200
Effective 1/1/2018: $300
Effective 7/1/2019: $400
Police Widows Death in line of duty Full premium of medical, dental and vision None Police Management and Police
Executive Management
50/20, 51/18, 52/16, 53/14,
54/12, 55/10
Service includes non City
service Minimum 5 years City
Service
Percentage of premium (medical premium minus
PEMHCA minimum) for retiree/dependents/surviving
spouse up to Kaiser (1) (Pre Medicare) and 2nd highest
premium plan (post Medicare). Percentage is 65% after
10 years of service, increased to 75% after 20 years of service, and 100% after 25 years of service.
Effective 7/1/2017: $300
Effective 7/1/2018: $425
Effective 7/1/2019: $525
839
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
136
14. OTHER POSTEMPLOYMENT BENEFITS, Continued
A. General Information about the City’s Other Post Employment Benefit (OPEB) Plans, Continued 840
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
137
14. OTHER POSTEMPLOYMENT BENEFITS, Continued
A. General Information about the City’s Other Post Employment Benefit (OPEB) Plans, Continued 841
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
138
14. OTHER POSTEMPLOYMENT BENEFITS, Continued
A. General Information about the City’s Other Post Employment Benefit (OPEB) Plans, Continued A summary of the RPOA OPEB Plan provisions follows:
Classification Subgroup
Retired on or after 7/1/2008
Retired between 1/1/1995 (1) and
6/30/2008
Plan Provisions for Current Retirees (Continued)
1) The City did provide medical premium benefits with single and 2-party caps for Police Management that retired prior to January 1, 1995, and as of June 30, 2020 there were two retirees receiving such benefits
Police Management and Police
Executive Management
Monthly Premium Reimbursement Before/After Medicare Eligibility Same as future retirees
Percentage of premium (medical premium minus PEMHCA minimum) for retiree/dependents/surviving spouse. Percentage is 65% for 10-19 years of service, increased to 75% after 20 years of service, and 100% after 27 years of service.
Retired after 1/1/2007 - Reimbursement capped at Kaiser premium, excluding the PEMHCA minimum, for pre-Medicare and 2nd highest premium plan for post- Medicare for coverage selected
Retired on or before 1/1/2007 - Reimbursement capped at 2nd highest premium plan, excluding the PEMHCA minimum, for coverage selected
Retired on or after 7/1/1995: Reimbursement allowed towards non-PERS plans NOTE: PEMHCA is billed to employers for all CalPERS medical plans. if a member is not enrolled in a PERS plan the employer is not billed. 842
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
139
14. OTHER POSTEMPLOYMENT BENEFITS, Continued
A. General Information about the City’s Other Post Employment Benefit (OPEB) Plans, Continued For retirees eligible to continue health benefits, but failing to meet the criterion in the tables above, the City pays the Public Employees Medical and Hospital Care Act (PEMHCA) minimum, which is $157 in 2024.
City OPEB Plan Membership – As described above, Plan membership varies based on different employee bargaining groups. As of the June 30, 2023 valuation date, membership in the City OPEB Plan consisted of the following:
RPOA Plan Membership – As of the June 30, 2023 valuation date, membership in the RPOA OPEB Plan consisted of the following:
B. Funding Policy and Actuarial Assumptions
City OPEB Plan
Funding Policy – During the year ended June 30, 20 08, the City joined the Public Agencies Post- Retirement Health Care Defined Benefit Plan, an agen t multiple employer trust administered by Public Agency Retirement Services (PARS). The balance in the City’s PARS trust account as of June 30, 2024 was $49,695,446.
The City’s policy is to partially prefund these benefits by accumulating assets with PARS discussed above along with making pay-as-you-go payments pursuant to Resolution No. 52-06 of June 27, 2006. In July 2016, the City adopted its initial funding policy that requires the City to contribute 50% of year-end General Fund surplus in excess of the City’s minimum required reserve level into the PARS account. In an effort to pay down the unfunded liability, in Ja nuary 2022, the City adopted an additional funding policy that required the City to contribute 50% of any one-time General Fund revenues. Per the adopted policy, the City made a onetime contribution from FY2022 year surplus into the PARS account totaling $5,309,139 in Fiscal Year 2023. In June 2023, the City updated the funding policy for additional contributions. Per the current policy the City shall place 10% of year-end operating surplus in the General Fund in excess of the City’s minimum required reserve level into the Trust accounts. 843
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
140
14. OTHER POSTEMPLOYMENT BENEFITS, Continued
B. Funding Policy and Actuarial Assumptions, Continued
RPOA OPEB Plan
A new Richmond Police Officers Association (RPOA) contract was implemented on January 17, 2017.
The new RPOA plan includes members who were actively employed as of the January 17, 2017 contract date. The RPOA members were transferred from the OPEB Plan to the new RPOA OPEB Plan during fiscal year 2024.
Funding Policy – The RPOA plan has assets designated for OPEB. These assets are invested in California Employers' Retiree Benefit Trust (CERBT) Strategy 2, which is a qualified irrevocable trust. Contributions to the CERBT account fall under the same policy as stated under the City OPEB plan. Per the surplus contribution policy, the City made a one-time contribution from the FY2022 year surplus into the CERBT account totaling $793,320 in FY2023. Benefit payments are not expected to be made from the trust in the near future. The City currently pays the annual retiree benefit payments using its general assets plus the annual active member contributions.
The balance in the CERBT trust account was $11,881,174 as of June 30, 2024.
Actuarial Assumptions – The total OPEB liability for each plan was determined by an actuarial valuation as of June 30, 2023 rolled forward to June 30, 2024 using standard update procedures. The City OPEB plan valuation used the following actuarial assu mptions applied to all periods included in the measurement, unless otherwise specified:
Actuarial Assumptions
Valuation Date June 30, 2023
Measurement Date June 30, 2024
Actuarial Cost Method Entry Age Normal Cost, level percent of pay Actuarial Assumptions:
Discount Rate 6.25%
Inflation 2.50%
CPI Medical Care 3.50%
Payroll Growth 3.00%
Investment Rate of Return 6.25%
Mortality Based on assumptions for Public Agency Miscellaneous, Police and Fire members published in the 2021 CalPERS Experience Study.
Healthcare Cost Trend Rates:
Health - Not Medicare Eligible 7.60% for FY2024, gradually decreasing over several decades to an ultimate rate of 3.90% in FY2076 and later years
Health - Medicare Eligible 5.10% for 2020, 5.10% fo r 2021, 4.70% for 2022, 4.70% for 2023, 5.10% for 2024,
5.10% for 2025, 5.00% for 2026-2027, 4.9% for 2028-2034 and tranitionin g to
ultimate rate of 3.90% in 2076 and further years
Dental To increase 3.25% annually
Vision To increase 2.00% annually
844
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
141
14. OTHER POSTEMPLOYMENT BENEFITS, Continued
B. Funding Policy and Actuarial Assumptions, Continued
The RPOA OPEB Plan valuation used the following actuarial assumptions applied to all periods included in the measurement, unless otherwise specified:
Discount rate – The discount rate used to measure the total City OPEB liability was 6.25% for the City OPEB Plan and 5.75% for the RPOA OPEB Plan. The projection of cash flows used to determine the discount rate assumed that City contributions will be made at rates equal to the actuarially determined contribution rates. Based on those assumptions, the City OPEB plan’s fiduciary net position was projected to be available to make all projected fu ture benefit payments of current plan members.
T h e r e f o r e , t h e l o n g t e r m e x p e c t e d r a t e o f r e t u r n o n C i t y O P E B p l a n i n v e s t m e n t s w a s a p p l i e d t o a l l periods of projected benefit payments to determine the total City OPEB liability.
Generally accepted accounting principles require that the liability discount rate be the single rate that reflects the following:
A. The long-term expected rate of return on City OPEB plan investments that are expected to be used to finance the payment of benefits, to the extent that (1) the City OPEB plan’s fiduciary net position is projected to be sufficient to make pr ojected benefit payments and (2) City OPEB plan assets are expected to be invested using a strategy to achieve that return; and Actuarial Assumptions
Valuation Date June 30, 2023
Measurement Date June 30, 2024
Actuarial Cost Method Entry Age Normal Cost, level percent of pay Actuarial Assumptions:
Discount Rate 5.75%
Inflation 2.50%
CPI Medical Care 3.50%
Payroll Growth 3.00%
Investment Rate of Return 5.75%
Mortality Based on assumptions for Public A gency Miscellaneous, Police and Fire members published in the 2021 CalPERS Experience Study.
Healthcare Cost Trend Rates:
Health - Not Medicare Eligible 7.60% for FY2024, gradually decreasing over several decades to an ultimate rate of 3.90% in FY2076 and later years
Health - Medicare Eligible 5.10% for 2020, 5.10% fo r 2021, 4.70% for 2022, 4.70% for 2023, 5.10% for 2024,
5.10% for 2025, 5.00% for 2026-2027, 4.9% for 2028-2034 and tranitioning to ultimate rate of 3.90% in 2076 and further years
Dental To increase 3.25% annually
Vision To increase 2.00% annually
845
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
142
14. OTHER POSTEMPLOYMENT BENEFITS, Continued
B. Funding Policy and Actuarial Assumptions, Continued
B. A yield or index rate for 20-year, tax-exempt general obligation municipal bonds with an average rating of AA/Aa or higher (or equivalent quality on another rating scale), to the extent that the conditions in A. are not met. The municipal bond rate source used as of June 30, 2023 the Fidelity 20-Year General Obligation AA Municipal Bond Index.
Changes of assumptions since the prior actuarial valuation for the City OPEB Plan were:
x The long-term investment return assumption was changed from 6.00% to 6.25% based on updated capital market assumptions.
x The discount rate was changed from 6.00% to 6.25% based on updated expectations of long-term returns on trust assets and 20-year municipal bond rates. x An underlying wage growth rate was changed fr om 3.00% to 3.00% per year based on a revised understanding of the CalPERS assumption.
x The CPI medical rate was changed from 3.50% to 3.75%. x The mortality assumption was changed from 2017 CalPERS Experience to 2021. x The Healthcare Cost Trend Rates were changed fr om 7.6% to 6.7% and the ultimate rate from
3.9% to 3.9%
x The dental rate was changed from 3.25% to 3.25% and the vision from 2% to 2%.
City OPEB Plan
Rate of Return – For the year ended June 30, 2024, the annual money-weighted rate of return on City OPEB Trust Fund investments, net of City OPEB plan investment expense, for the City OPEB Plan was 13.18%.
The money weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested.
Investment Policy – PARS offers different investment portfolios as part of the investment vehicle. The City invests in the “Balanced/Moderately Aggressive Hig hmark PLUS” portfolio; the primary goal of the Highmark Plus portfolio is growth of principal and income. The major portions of the assets are invested in the equity securities and market fluctuations are expected. The portfolio is constructed to control risk through three layers of diversification as follows:
Investments of the City OPEB Trust Fund at June 30 , 2024 consisted of $41,321,443 invested in mutual funds.
846
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
143
14. OTHER POSTEMPLOYMENT BENEFITS, Continued
B. Funding Policy and Actuarial Assumptions, Continued
The long-term expected rate of return on City OPEB Plan investments was determined using a building- block method in which best-estimates of expected future real rates of return (expected returns, net of City OPEB Plan investment expense and inflation) are developed for each major asset class. The weighted asset class estimates are combined with the inflation and investment expense assumptions to produce the portfolio long-term expected rate of return. The target allocation for the City OPEB Plan’s asset allocation as of the measurement date are summarized in the following table:
RPOA OPEB Plan
Rate of Return – The long-term expected rate of return on RPOA OPEB Plan investments was determined using a building-block method in which best-estimates of expected future real rates of return (expected returns, net of RPOA OPEB Plan investment expense and inflation) are developed for each major asset class. The weighted asset class estimates are comb ined with the inflation and investment expense assumptions to produce the portfolio long-term expected rate of return.
Investment Policy – The target allocation for the RPOA OPEB Plan’s asset allocation as of the measurement date are summarized in the following table:
847
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
144
14. OTHER POSTEMPLOYMENT BENEFITS, Continued
C. Changes in Net OPEB Liability
The changes in the net OPEB liability for the City OPEB Plan is as follows:
848
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
145
14. OTHER POSTEMPLOYMENT BENEFITS, Continued
C. Changes in Net OPEB Liability, Continued
The changes in the net OPEB liability for the RPOA OPEB Plan is as follows:
D. Sensitivity of the Net OPEB Liability to Changes in the Discount Rate and Healthcare Cost Trend Rates The following presents the net OPEB liability of both plans, as well as what the net OPEB liabilities would be if it were calculated using the discount rate th at is 1-percentage-point lo wer or 1-percentage point higher than the current discount rate:
849
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
146
14. OTHER POSTEMPLOYMENT BENEFITS, Continued
D. Sensitivity of the Net OPEB Liability to Changes in the Discount Rate and Healthcare Cost Trend Rates, Continued
The following presents the net OPEB liability of both Plans, as well as what the net OPEB liabilities would b e i f i t w e r e c a l c u l a t e d u s i n g h e a l t h c a r e c o s t t r e n d r a t e s t h a t a r e 1 - p e r c e n t a g e - p o i n t l o w e r o r 1 - percentage-point higher than the current healthcare cost trend rates:
E. OPEB Expense and Deferred Outflows/In flows of Resources Related to OPEB For the year ended June 30, 2024, the City recognized OPEB expense on the City OPEB Plan and RPOA OPEB Plan of ($5,116,434) and ($745,575), respecti vely. At June 30, 2024, the City reported deferred outflows and inflows of resources related to OPEB from the following sources:
850
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
147
14. OTHER POSTEMPLOYMENT BENEFITS, Continued
E. OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB, Continued Amounts reported as deferred outflows of resources and deferred inflows of resources related to the City OPEB Plan and RPOA OPEB Plan will be recognized as part of OPEB expense as follows:
15. DEFERRED COMPENSATION PLAN
City employees may defer a portion of their compensation under a City sponsored deferred compensation plan created in accordance with Internal Revenue Code Section 457. Under this plan, participants’ contributions are made as pre-tax deductions and are not subject to taxation until the funds are distributed to them. Distributions may be made only at termination, retirement, death or in an emergency as defined by the plan.
The laws governing deferred compensation plan assets require plan assets to be held by a Trust for the exclusive benefit of plan participants and their beneficiaries. Since the assets held under this plan are not the City’s property and are not subject to claims by general creditors of the City, they have been excluded from these financial statements.
851
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
148
16. RISK MANAGEMENT
The City is exposed to various risks of loss related to theft of, damage to, and destruction of assets; general liability; errors and omissions; injuries to employees; natural disasters; and inverse condemnation. The City began self-insuring its workers’ compensation in 1976. In July 2009 the City joined the California Joint Powers Risk Management Authority (CJPRMA) for general liab ility and employment practices coverage. In April 2009 the City joined the California State Association of Counties Excess Insurance Authority (CSAC EIA) for worker’s compensation insurance. The City has chosen to establish a risk financing internal service fund where assets are accumulated for claim settlements and expenses associated with the above risks of loss up to certain limits.
Excess coverage for the risk categories excluding inverse condemnation is provided by policies with various commercial insurance carriers. Self-insurance and insurance company limits are as follows:
CJPRMA
The CJPRMA provides coverage against the following types of loss risks under the terms of a joint powers agreement with the City as follows:
Once the self-insured retention is exhausted on each claim, CJPRMA becomes responsible for payment of future expenses related to the claim. The City paid co ntributions of $3,287,835 for the year ended June 30, 2024. Actual surpluses or losses are shared accordin g to a formula developed from overall loss costs and spread to member entities on a percentage basis after a retrospective rating.
Audited financial statements for the CJPRMA are available from CJPRMA, 3201 Doolan Road, Suite 285, Livermore, CA 94551.
852
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
149
16. RISK MANAGEMENT, Continued
CSAC-EIA
C S A C - E I A i s a p u b l i c e n t i t y r i s k p o o l o f c i t i e s a nd counties within California. The CSAC-EIA provides workers’ compensation coverage up to the statutory lim it and the City retains a self-insured retention of $750,000. Loss contingency reserves established by the CSAC-EIA are funded by contributions from member agencies. The City pays an annual contribution to the CSAC-EIA, which includes its pro-rata share of excess insurance premiums, charges for pooled risk, claims adjusting and legal costs, and administrative and other costs to operate the risk pool. The City paid contributions of $540,822 for the year ended June 30, 2024. CSAC- EIA provides insurance through the pool up to a cert ain level, beyond which group purchased commercial excess insurance is obtained. CSAC-E IA is currently fully funded. No provision has been made on these financial statements for liabilities related to possible additional assessments.
Audited financial statements for CSAC-EIA are availabl e from CSAC-EIA, 75 Iron Point Circle, Suite 200, Folsom, CA 95630.
Housing Authority Insurance Group
The Housing Authority is exposed to various risks of loss related to torts: theft, damage, and destruction of assets; errors and omissions; injuries to employees and natural disaster. The Authority joined together with other entities and participates in the Housing Authority Insurance Group, a public entity risk pool currently operating as a common risk management and insurance program for its member entities. The purpose of the Housing Authority Insurance Group is to spread the adverse effects of losses among the member entities and to purchase excess insurance as a group, thereby reducing its cost.
The Authority pays annual premiums to Housing Au thority Insurance Group for its property damage insurance as follows:
All of the Housing Authority properties are included in the general liability coverage under the CJPRMA program.
Liability for Self-Insured Claims
The City records a liability to reflect an actuarial estimate of ultimate uninsured losses for both general liability claims (including property damage claims ) and workers’ compensation claims. The estimated liability for workers’ compensation claims and general liability claims is based on case reserves and include amounts for claims incurred but not reported (IBNR), and is recorded in the Insurance Reserves Internal Service Fund. At June 30, 2024, the estimated claims pa yable of $52,171,564 consisting of reserves for both reported and IBNR losses, as well as allocated loss adjustment expenses, have been recorded in the Insurance Reserves Internal Service Fund. The claims payable are reported at their present value using expected future investment yield assumptions of 3% and an 80% confidence level. The undiscounted claims totaled $48,024,215 at June 30, 2024. Changes in the claims liabilities for the years ended June 30, 2024 and 2023 were as follows:
853
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
150
16. RISK MANAGEMENT, Continued
For the years ended June 30, 2024, 2023 and 2022 the amount of settlements did not exceed insurance coverage.
17. SEGMENT INFORMATION FOR ENTERPRISE FUNDS
The City’s non-major enterprise funds include the following:
x Richmond Marina Fund – Marina operations and maintenance, including berth rentals and use of marina facilities.
x Storm Sewer Fund – Storm sewer management and urban runoff control. x Cable TV Fund – Administration and enforcement of the franchise agreements with two cable television systems, management of a municipal cable channel, departmental video services, media and public information, and telecommunications planning. 854
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
151
17. SEGMENT INFORMATION FOR ENTERPRISE FUNDS, Continued Fiscal 2024 condensed financial information for the Richmond Marina Enterprise Fund is as follows:
Condensed Statement of Net Position
Assets:
Current assets 5,602,34 6$
Lease receivables 5,183,454
Capital assets 1,264,87
0 Total assets 12,050,67 0
Liabilities :
Current liabilities 293,369
Long-term liabilities 1,901,953
Total liabilities 2,195,32 2
Deferred inflows of resources :
Deferred inflows of resources - leases 5,046,08 2
Net position :
Net investment in capital assets (753,090)
Restricted for debt service 91,32 0
Unrestricted 5,471,03 6
Total net positio n 4,809,266$
Condensed Statement of Revenues, Expenses
and Changes in Net Position
Operating revenues:
Rental 162,777 $
Lease income 366,76 2
Operating expenses:
General and administrative (37,833)
Depreciation (84,278)
Operating income 407,42 8
Nonoperatin g revenues (expenses):
Interest income 374,87 8
Interest expense (91,224)
Income (Loss) Before Contributions and Transfers 691,08 2 Transfers out (86,778)
Change in net positio n 604,304
Beginning net positio n 4,204,962
Ending net positio n 4,809,266$
Condensed Statement of Cash Flows
Net cash provided (used) by:
Operating activities 447,464 $
Noncapital and related financin g activities (86,778)
Capital and related financin g activities (206,813)
Investing activities 375,219
Net increase 529,09 2
Beginning cash and investments 4,978,80 1
Ending cash and investments 5,507,893 $
855
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
152
18. COMMITMENTS AND CONTINGENCIES
A. Construction Commitments
The City’s future commitments under construction and other projects totaled approximately $197.7 million at June 30, 2024 for various projects.
B. Litigation
The City is involved in various claims and litigation resulting from its normal operations. The ultimate outcome of these matters is not presently determinable. In City management’s opinion these matters will not have a significant adverse effect on the City’s or RHA Properties’ financial position, except for what is noted below:
In March 2012, a developer and Native American Tr ibe (“Tribe”) (collectively, “Developer”) filed a complaint in federal court against the United States of America, two individuals, and the City contending breach of contract related to a Land Disposition Agreement (LDA) between the Developer and the City for the development of a portion of Point Molate (a pproximately 80 acres) for a specific use. The Developer sought damages of $30 million as well as lost profits of over $750 million. The City disputed the allegations and contended that the LDA did not commit the Developer or the City to develop the property for the specific use and that the Developer’s right to move forward with the development was subject to various federal approvals. The City received a favorable judgement on the matter, but an appeal by the Developer resulted in the Ninth Circ uit reversing the decision. The plaintiffs filed an amended complaint.
Under the terms of the judgment, amended in August 2019, future proceeds from the sale of the property will be shared equally between the City and the Developer.
Under the amended judgment, the City was required to and did engage a new developer for Point Molate (“SunCal”). After the City approved the Project and California Environmental Quality Act (“CEQA”)- required Environmental Impact Report (“EIR”) for development, enviro nmental rights groups challenged and appealed the certification of EIR. In November 2023, the appellate court set aside the EIR and all “project related approvals” impacting two pending actions. Neither the City, SunCal, nor the Tribe acted to correct the CEQA differences.
Thereafter, the City found that SunCal failed to qualify to purchase the Property, and in accordance with the Amended Federal Judgment, the City transferred the Property to the Tribe. For several years the Tribe searched for a new developer but when the State, through the Coastal Conservancy Commission, provided $36M in park open space funding, the Tribe reached a letter of intent (“LOI”) and purchased agreement with the East Bay Regional Park District (“District”) providing for a sale in January 2025.
Pursuant to that Sale, the City gives up to a 50% share of sale proceeds under the Amended judgment and there are mutual waives.
856
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
153
18. COMMITMENTS AND CONTINGENCIES, Continued
B. Litigation, Continued
While it appears that all matters under the Federal Ju dgment are satisfied, SunCal filed a separate legal action against the City, asserting the City interfered with their Point Molate project. While the subject contracts were set aside based on the CEQA ruling, and therefore the agreements at issue were invalidated, the new developer continues to press litigation claiming over $70 million in damages which the City denies. The City no longer owns the subject property; the Tribe obtained title in 2022 under the Amended Judgment and is now conveying to District. Su nCal sought to enjoin the transfer to the Tribe but the Court refused to issue the injunction. The City may be negatively impacted should the court rule in favor of the SunCal. As stated, significant dama ges are sought, but the City has strong defenses including no demages contract clauses and the succe ssful CEQA challenge. However, any such impact cannot be determined at this time, especially given the CEQA ruling.
C. Grant Programs
The City participates in several federal and State grant programs. These programs are subject to further examination by the grantors and the amount, if any, of expenditures which may be disallowed by the granting agencies cannot be determined at this time, except as noted under Grant Programs – Disallowed Costs below.
D. Housing Authority – Easter Hill Project
The Authority participates in a number of federally assisted grant programs, principal of which are the Low Income Public Housing Program and the HOPE VI Re vitalization Grant. It is possible that at some future date, it may be determined that the Authority is not in compliance with applicable grant requirements. The amounts, if any, of expenditures which may be disallowed by the granting agencies cannot be determined at this time, although the Au thority does not expect such disallowed amounts, if any, to materially affect the financial statements.
In June 2000, the Richmond Housing Authority received a $35 million grant (HOPE VI Grant) from the U.S. Department of Housing and Urban Development (“HUD”) for the revitalization of the former Easter Hill Public Housing Project. The original Easter Hill site, owned by the Richmond Housing Authority, included 300 units on 21 acres in the Cortez/Stege neighborhood of Richmond.
The California Tax Credit Committee, City of Richmond, Bank of America, Silicon Valley, Federal Home Loan Bank, California Housing Finance Agency, th e Richmond Housing Authori ty along with the $35 million dollar HUD grant financed this $120 million revitalization effort. Physical costs are estimated to be approximately $108 million and lif e services, relocation, acquisition, administrative and other costs are estimated to be approximately $12 million. The physical development includes approximately 320 rental and homeownership units to replace the 300 rent al units originally at the site and 273 remaining units at the time of grant approval. Amenities at th e revitalized site include a pool and a 5,000 square feet community room with facilities for an after school program, computer center, gymnasium and conference room.
857
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
154
18. COMMITMENTS AND CONTINGENCIES , Continued
D. Housing Authority – Easter Hill Project, Continued In addition, pursuant to the same agreement, the Authority is entitled to receive reimbursement for certain costs it has incurred in development of thes e projects. Upon completion of the project, the Authority recorded $14,276,909, representing reimbursement from the developer which had been recorded in the accompanying financial statements as due from developer. The balance outstanding as of June 30, 2024 is $8,696,355.
In 2002, the Authority chose the development team of McCormack Baron Salazar, Inc. and Em Johnson Interest, Inc. to develop the site. Em Johnson Interest has developed the 82 homeownership units affordable to low, moderate and market rate buyers. McCormack Baron was charged with the development of 300 rental units, affordable to ho useholds 60% or below the area median income for Contra Costa County.
Thus far, all new construction rental units at the former Easter Hill site have been developed. Thirty-six rehab rental units at the site have been constructed. The remaining 202 rental units at the site have been leased. Similarly, all 82 homeownership units at the former Easter Hill and Cortez sites have been constructed. All homeownership units have been sold.
E. Point Molate – Pollution Remediation
In September 2008, the City entered into an Early Transfer Cooperative Agreement (ETCA) with the United States Department of the Navy the (Navy) to facilitate the transfer of 41 acres of property that was formerly the Naval Fuel Depot Point Molate (P oint Molate). The ETCA identifies certain known pollution issues with the property, and the Navy is the responsible party. However, under the provisions of the ETCA, the Navy advanced $28 million to the City representing the estimated cost of cleanup, and the City committed to manage the project. Any pollution found that was not caused by the Navy’s use of the land is to be paid by the City, however, as of June 30, 2024, no additional pollution has been identified.
The City also entered into an agreement in September 2008 with a Developer to sell approximately 134 acres of land located on Point Molate along with the 41 acres of which the Navy is to transfer to the City.
The Developer is to complete the cleanup on behalf of the City in accordance with the requirements of the ETCA. The City committed to pass-through the funds received from the Navy to the Developer.
In April 2010, the City and Developer entered into an agreement to establish a fiscal agent escrow account to maintain the funds held for the remediation of Po int Molate. The funds advanced by the Navy are to be held in escrow with a fiscal agent and the agent is responsible for disbursing funds to the Developer as costs are incurred. The terms of the agreement are ef fective until a certificate of completion is issued for the remediation of the property.
Under the terms of the agreements with the Navy and the Developer, the City does not retain responsibility for the cleanup of the known pollution. The City is merely acting as a pass-thru of the grant funds from the Navy to the Developer and the activities for the project are reported in the Pt. Molate Private-Purpose Trust Fund.
858
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
155
18. COMMITMENTS AND CONTINGENCIES , Continued
E. Point Molate – Pollution Remediation, Continued
In September 2008, the City entered into an Early Transfer Cooperative Agreement (ETCA) with the United States Department of the Navy the (Navy) to facilitate the transfer of 41 acres of property that was formerly the Naval Fuel Depot Point Molate (P oint Molate). The ETCA identifies certain known pollution issues with the property, and the Navy is the responsible party. However, under the provisions of the ETCA, the Navy advanced $28 million to the City representing the estimated cost of cleanup, and the City committed to manage the project. Any pollution found that was not caused by the Navy’s use of the land is to be paid by the City, however, as of June 30, 2024, no additional pollution has been identified.
The City also entered into an agreement in September 2008 with a Developer to sell approximately 134 acres of land located on Point Molate along with the 41 acres of which the Navy is to transfer to the City.
The Developer is to complete the cleanup on behalf of the City in accordance with the requirements of the ETCA. The City committed to pass-through the funds received from the Navy to the Developer.
In April 2010, the City and Developer entered into an agreement to establish a fiscal agent escrow account to maintain the funds held for the remediation of Po int Molate. The funds advanced by the Navy are to be held in escrow with a fiscal agent and the agent is responsible for disbursing funds to the Developer as costs are incurred. The terms of the agreement are ef fective until a certificate of completion is issued for the remediation of the property.
Under the terms of the agreements with the Navy and the Developer, the City does not retain responsibility for the cleanup of the known pollution. The City is merely acting as a pass-thru of the grant funds from the Navy to the Developer and the activities for the project are reported in the Pt. Molate Private-Purpose Trust Fund.
F. Other – Major Taxpayer
In fiscal year 2009, a major business license taxpayer filed a complaint challenging the legality of Measure T, a voter initiative that took ef fect on January 1, 2009. Measure T amended the City’s business license tax calculation for manufacturers. Although the City believed Measure T to be lawful, the court ruled on December 17, 2009 that the tax was unconstitutional. The court ruled in favor of the business license taxpayer awarding a refund of the $20.5 million Measure T taxes paid. The City filed an appeal, however in May 2010 the taxpayer and the City entered into a settlement agreement in order to achieve certainty in the tax revenue that the City will receive from the taxpayer over the next 15 years. The agreement provides for annual payments from the taxpayer rangin g from $4 million to $13 million starting July 1, 2011, with payments totaling $114 million. In addition, the agreement incorporated the prior settlement of a dispute over fiscal year 2006, 2007 and 2008 utility user’s taxes totaling $28 million that was paid in four installments beginning in fiscal year 2009. Payments totaling $110 million were received under the settlement agreements in fiscal years 2011 through 2024.
In fiscal year 2015, the City entered into an Environmental Community Investment Agreement (ECIA) with the same taxpayer that provides for funding to the City and other community agencies totaling $80 million over the next ten years. During fiscal year 2024, the City received $4 million that is restricted for use on pre-approved projects, and the City has received $5 million of Guaranteed Payments and $75 million of Contingent Payments to date.
859
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
156
18. COMMITMENTS AND CONTINGENCIES, Continued
F. Other – Mayor Taxpayer, Continued
In August 2024, the City adopted a resolution that removed from the November 5, 2024, ballot a proposed business license tax on oil refining and a resoluti on that approved a tax settlement agreement between the City and the same business license taxpayer. With the tax settlement agreement, the taxpayer agreed to pay $550 million over the next ten years beginning in fiscal year 2026.
G. Housing Authority Rental Assistance Demonstration
RHA Rental Assistance Demonstration (“RAD”) Program conversion of the Friendship Manor and Triangle Court public housing sites occurred during the 2016 calendar year (includes both the 2015 and 2016 fiscal years). The RAD project consists of 156 units of Public Housing will that were converted to non-profit ownership with Section 8-Project Based Voucher rental subsidy on the two separate properties; all 156 units, except for three units (two are reserved for onsite managers and one for a manager's office), will be used to house low-income residents.
On October 8, 2015, the Department of Housing and Urban Development (HUD) issued and executed the RAD Conversion Commitment (RCC) which represents the agreed upon and approved terms of the RAD conversion transaction.
On November 18, 2015, California Tax Credit Alloca tion Committee made a preliminary reservation of federal tax credits in the amount of $1,228,999 accommodated upon executing Tax-Exempt Bond Project to raise funding in the amount of $36.7 million, the approximate estimated cost of the RAD project; of which $16.5 million shall be provided by a third-party Tax Credit investor.
The Authority has partnered with the John Stewart Company and The Richman Group to form a Limited Partnership, RHA RAD Housing Partners L.P., that will complete the conversion, manage the property and own the buildings. The Authority will relinquish the land via a long term ground lease.
In furtherance of the finances provided by the Autho rity, the City of Richmond loaned $5.4 million to RHA RAD Housing Partners L.P. that will be repaid in 55 years and accrues interest at a rate of 1%. The loan was initially signed with RHA Housing Corporation and then it was transferred and reassigned to RHA RAD Housing Partners L.P., as discussed in Note 4.
After the property is placed in service and receives approval of the 8609 documents from the State of California, the Authority will split a developer fee of $2.5 million with its general partner John Stewart Company (70%/30%). The project was converted to permanent financing on June 6, 2019.
RHA RAD Housing Partners L.P. will also receive $732,557 in Public Housing and Capital Improvement funds throughout the January 1, 2016 – December 31, 2016 calendar year to cover the RAD Housing Assistance Program (HAP) Voucher commitments of subsidy for the low income housing units at the two developments. The terms of this requirement are consistent with Notice 2012-32 of the Rental Assistance Demonstration program which requires RAD conversions that close after November 30th of the calendar year to be funded out of Public Housing and Capital Fund Programs until the next calendar year, at which time the Developments will be funded with Section 8 Housing Choice RAD Vouchers. 860
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
157
18. COMMITMENTS AND CONTINGENCIES, Continued
G. Housing Authority Rental Assistance Demonstration, Continued In a transaction related to the RAD project during the fiscal year ended June 30, 2016, the Richmond Housing Authority transferred capital assets to RHA RAD LLC, which then sold the capital assets to RHA RAD Housing Partners LP with a carrying value of $14,358,255 in return for two loans receivable in the amounts of $8,891,500 and $5,618,500. These loans are to be repaid in 55 years and bear annual interest rates of 3.5%.
H. Marina Bay – Pollution Remediation
The Successor Agency owned a group of land tracts collectively referenced as the “Nine Deed Restricted Properties.” The Successor Agency was named as a responsible party at these sites under a Voluntary Cleanup Agreement with the State Department of Toxic Substances Control (DTSC) to conduct pollution monitoring and remediation. However, the Succes sor Agency received approval from the DOF to transfer the properties and their maintenance to the City on June 30, 2016. Therefore, the City is now the responsible party at the sites. These nine properties sit within the larger Marina Bay development site. A Remediation Action Plan (RAP) was prepared for Marina Bay in 1993 and included references to each of the Deed Restricted Properties. Eight of the nine deed restricted properties are subject to an Operations & Maintenance (O&M) Plan. The O&M Plans require annual inspections of the cap material and reporting of the findings to DTSC. The O&M Plans also require that a five-year review report be prepared and submitted to DTSC. The five-year review reports describe the inspection and maintenance activities that were performed over the previous five years. The annual inspection costs are estimated at $15,500, with the five year review estimated at $41,000 (this cost includes revising a previously submitted work plan, conducting the review, and preparing the report). The monitoring costs over a five-year period are estimated at $135,000. Additionally, costs for enviro nmental consultation to address DTSC concerns at the nine deed the nine deed restricted properties are estimated at $15,000 annually.
The RAP was subsequently amended in 2008 to address Area T, one of the Nine Deed Restricted Properties. The amended RAP subjects the site to groundwater sampling and analysis. The approximate annual costs for the existing groundwater sampling and analysis program is approximately $30,100. The known pollution at this site are petroleum hydrocarbons dissolved in groundwater. Active remediation was conducted from September 2008 through June 2 020 by the former Redevelopment Agency and the Successor Agency and the active remediation has been successful at removing a layer of petroleum hydrocarbons on the groundwater. However, the groundwater impacted with dissolved petroleum hydrocarbons is located in close proximity to the Ma rina Bay harbor. It is anticipated that DTSC will request that the Successor Agency submit a work plan describing the methods to petroleum hydrocarbons at Area T. Groundwater impacted by dissolved petroleum hydrocarbons is anticipated to be required by DTSC. The Successor Agency requested that its consultant prepare a feasibility study and cost analysis to conduct such remediation. The preliminary cost estimate to implement the groundwater remediation program is estimated at $135,000. A plan to maintain the cap on Area T will be prepared and the cost for this plan is $7,500. This preliminar y estimate has not been accrued as a liability in the City’s Statement of Net Position. This estimate is also subject to change from price increases or reductions, technology, and changes in applicable laws or regulations. 861
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
158
18. COMMITMENTS AND CONTINGENCIES, Continued
H. Marina Bay – Pollution Remediation, Continued
A Covenant to Restrict Use of Property for Area FM, also one of the Nine Deed Restricted Properties, was recorded on March 21, 2005. As described in the deed restriction, the remedial alternative for Area FM includes installing and maintaining a temporary 1-foot-thick soil cap over the property as an interim measure; the final cap will consist of hardscape including commercial buildings, roadways, and parking areas. The deed restriction also requires the preparation of an O&M Plan. According to a DTSC- approved Remedial Design and Implementation Plan (RDIP) for Area FM, the proposed permanent cap will be implemented during site redevelopment activities and will consist of building foundations and slabs, paved walkways and parking areas, landscaping and other features constructed over the site. Site redevelopment has yet to occur, the interim temp orary cap has not been implemented, and the O&M Plan has yet to be prepared for Area FM. DTSC is requiring the City to construct the temporary cap on Area FM. The City is preparing to construct a te mporary asphalt cap to minimize surface water runoff and reduce routine maintenance and prepared a Work Plan Amendment for Construction of Temporary Asphalt Cap. Upon approval by DTSC, the City will in stall the temporary cap. The cost to prepare the planning documents, conduct observation, documentation, and reporting of the cap installation, as well as preparation of an O&M Plan is $176,800. The esti mate cost to construct the temporary cap can’t be made at this time.
DTSC has also requested that the City provide documentation of the dredging conducted within the Marina Bay harbor. The cost to prepare the document is $1,500. DTSC has also requested that the City prepare and implement a work plan to conduct a supplemental subsurface investigation at Area FM. The scope of work includes: (1) installing and sampling groundwater monitoring wells; (2) installing and sampling soil vapor probes; and (3) soil sampling. The cost to perform the supplemental investigation is not known at the time. Additionally, DTSC has requested that the City submit a real estate title report for Area FM.
I. Encumbrances
The City uses an encumbrance system as an extension of normal budgetary accounting for governmental funds. Under this system, purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that po rtion of applicable appropriations. Encumbrances outstanding at year-end are recorded as restricted, committed or assigned fund balance, depending on the classification of the resources to be used to li quidate the encumbrance, since they do not constitute expenditures or liabilities. Outstanding encumbrances at year-end are automatically reappropriated for the following year. Unencumbered and unexpended appropriations lapse at year-end. Encumbrances outstanding as of June 30, 2024 were as listed below:
862
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
159
19. REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR AGENCY ACTIVITIES A. Redevelopment Dissolution
The State of California adopted ABx1 26 on June 28, 2011, amended by AB1484 on June 27, 2012, which suspended all new redevelopment activities except for limited specified activities as of that date and dissolved redevelopment agencies on January 31, 2012.
The suspension provisions prohibit all redevelopment agencies from a wide range of activities, including incurring new indebtedness or obligations, entering into or modifying agreements or contracts, acquiring or disposing of real property, taking actions to adopt or amend redevelopment plans and other similar actions, except actions required by law or to carry out existing enforceable obligations, as defined in ABx1
26. ABx1 26 and AB1484 created three regulatory authorities, the Successor Agency Oversight Board, State Controller and Department of Finance (DOF), to review former Agency’s asset transfers, obligation payments and wind down activities. ABx1 26 specif ically directs the State Controller to review the activities of all redevelopment agencies to determin e whether an asset transfer between an agency and any public agency occurred on or after January 1, 2011. If an asset transfer did occur and the public agency that received the asset is not contractually committed to a third party for the expenditure or encumbrance of the asset, the legislation purports to require the State Controller to order the asset returned to the Redevelopment Agency or, on or af ter February 1, 2012, to the Successor Agency. The State Controller’s Office completed its asset transfer review in November 2013 and the State ordered the return of certain assets to the Successor Agency to the Redevelopment Agency. The City complied with certain aspects of the State’s order during fiscal year 2013 by returning applicable capital assets to the Successor Agency and the Oversight Board retroactively approved other prior transfers to the City and the State has indicated that no further action is nece ssary. The State also ordered the return of assets previously transferred to the City as Housing Successor totaling $16,460,848, because the transfer of the housing assets had not been approved by the Oversight Board. The Oversight Board adopted a Resolution on February 25, 2014 retroactively ap proving the transfer of the loans to the Housing Successor.
Effective January 31, 2012, the Redevelopment Ag ency was dissolved. Certain assets of the Redevelopment Agency Low and Moderate Income Housing Fund were distributed to a Housing Successor; and the remaining Redevelopment Agency assets and liabilities were distributed to a Successor Agency.
Under the provisions of AB 1484, the City can elect to become the Housing Successor and retain the housing assets. The City elected to become the Housing Successor and on February 1, 2012, certain housing assets were transferred to the City’s Low and Moderate Income Housing Fund which is included in the Community Development and Loan Programs Special Revenue Fund. The activities of the Housing Successor are reported in the Low and Moderate Income Housing Asset Fund as the City has control of those assets, which may be used in accordance with the low and moderate income housing provisions of California Redevelopment Law.
863
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
160
19. REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR AGENCY ACTIVITIES, Continued
A. Redevelopment Dissolution, Continued
T h e C i t y a l s o e l e c t e d t o b e c o m e t h e S u c c e s s o r A g e n c y a n d o n F e b r u a r y 1 , 2 0 1 2 t h e R e d e v e l o p m e n t Agency’s remaining assets were distributed to and liabilities were assumed by the Successor Agency.
ABx1 26 requires the establishment of an Oversigh t Board to oversee the activities of the Successor Agency and one was established in April 2012. As of July 1, 2018, Contra Costa County has formed a county-wide Oversight Board to oversee the activiti es of all Successor Agencies within the County, including Richmond. The activities of the Successor Agency are subject to review and approval of the Oversight Board, which is comprised of seven members, including one member of City Council and one former Redevelopment Agency employee appointed by the Mayor.
AB1484 required the Successor Agency to complete two due diligence reviews – one for the low and moderate income housing assets of the Successor Agency (Housing DDR), and a second for all other balances of the Successor Agency (Non-housing DDR) . The due diligence reviews were to calculate the balance of unencumbered balances as of June 30, 2012 available to be remitted to the County for disbursement to taxing entities. The Successor Agency submitted both due diligence reviews to the State Department of Finance for review and approval. The Department of Finance approved the Housing DDR, after making an adjustment, and the Successor Agency remitted the unencumbered balance of $4,067,242 to the County in November 2014. The Department of Finance approved the Non-housing DDR in D ecem ber 20 1 4, a nd no fund s we re re quire d to be remit ted to th e C o unt y. Th e Success or Age ncy received a Finding of Completion on December 9, 2014.
The activities of the Successor Agency are reported in the Successor Agency to the Richmond Community Redevelopment Agency Private-Purpose Trust Fund as the activities are under the control of the Oversight Board. The City provides administrative services to the Successor Agency to wind down the affairs of the former Redevelopment Agency.
Cash and investments of the Successor Agency as of June 30, 2024 are discussed in Note 2 above.
Information presented in the follow ing footnotes represents other assets and liabilities of the Successor Agency as of June 30, 2024.
864
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
161
19. REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR AGENCY ACTIVITIES, Continued
B. Capital Assets
The Successor Agency assumed the non-housing capital assets of the Redevelopment Agency as of February 1, 2012. All capital assets are valued at hist orical cost or estimated historical cost if actual historical cost is not available. Contributed capital assets are valued at their estimated fair market value on the date contributed. The Successor Agency’s poli cy is to capitalize all a ssets with costs exceeding certain minimum thresholds and with useful lives exceeding two years.
C. Long-term Obligations
The following is a summary of long-term debt transactions during the year ended June 30, 2024:
Bonds Payable
Bonds payable at June 30, 2024 consisted of the following:
1998 Harbour Redevelopment Project Tax Allocati on Refunding Bonds Series A – Original Issue $21,862,779
The bonds were issued by the Agency to refinance a portion of the 1991 Harbour Redevelopment Project Tax Allocation Refunding Bonds, refinance certain lo ans from the City to the Agency, which were used by the City to finance certain publicly owned capita l projects, finance certain redevelopment activities within the Harbour Redevelopment Project Area, fund a reserve account and pay certain costs of issuance of the 1998 bonds. The bonds mature annually th rough 2023, in amounts ranging from $50,000 to $1,130,000. Interest rates vary from 3.5% to a maximum of 5.2% and are payable semiannually on January 1 and July 1. The bonds are secured by a pledge of tax revenues derived from taxable property within the Harbour Project Area. On March 27, 2014, the Agency issued the Successor Agency to the Richmond Community Redevelopment Agency Refunding Bond s 2014 Series A & B which resulted in the defeasance of the outstanding balance of the current interest portion of the bonds in the amount of $9,180,000. The bond was paid off in fiscal year 2024.
865
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
162
19. REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR AGENCY ACTIVITIES, Continued
C. Long-term Obligations, Continued
Richmond Community Redevelopment Agency Subordinate Tax Allocation Bonds Series 2007A and Series B - Original Issue Series A $65,400,000, Series B $9,772,622 On July 12, 2007 the Redevelopment Agency issued Series 2007A Subordinate Tax Allocation Bonds in the amount of $65,400,000. The proceeds from the Bonds were used to pay the amount of $22,000,000 to the City to assist with the financing of the Civic Center Project, and to fund other Redevelopment Agency projects.
The 2007A Subordinate Tax Allocation Bonds were issu ed as variable auction rate bonds with interest calculated every thirty-five days, however, the Ag ency entered into a 29-year interest rate swap agreement for the entire amount of its 2007A Subordinate Tax Allocation Bonds. In fiscal year 2010 the Agency experienced a significant decline in tax increment revenue. In order to bring debt service in line with current revenues and maintain compliance with the required 1.4:1 tax increment to debt service coverage ratio, the Agency suspended a number of projects originally funded by the 2007A Bonds and applied approximately $36 million of the unspent 2007A proceeds and other available funds along with the proceeds from the issuance of the Subordinate Tax Allocation Refunding Bonds, Series 2010A to refund the outstanding balance of the 2007A Bonds. As part of the issuance of the 2010A Bonds, the interest rate swap agreement associated with the 2007A Bonds was amended and restated as discussed with the Series 2010A Bonds below.
On July 12, 2007 the Redevelopment Agency issued Series 2007B Housing Set-Aside Subordinate Tax Allocation Capital Appreciation Bonds in the amount of $9,772,622 at interest rates ranging from 5.57% to 6.40%. The proceeds from the 2007B Bonds will be used to finance certain low and moderate income housing activities of the Redevelopment Agency. Th e 2007B Bonds mature annually through 2037, in amounts ranging from $465,000 to $2,020,000. The 2007B Bonds are secured by a pledge of subordinated housing and non-housing tax revenues.
866
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
163
19. REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR AGENCY ACTIVITIES, Continued
C. Long-term Obligations, Continued
Richmond Community Redevelopment Agency Subordinate Tax Allocation Bonds Series 2007A and Series B - Original Issue Series A $65,400,000, Series B $9,772,622, Continued At June 30, 2024, the 2007B Bonds consisted of the following:
The annual debt service requirements on the 2007B Bonds are as follows:
Successor Agency to the Richmond Community Redevelopment Agency Refunding Bonds 2014 Series A & B – Original Issue Amounts $25,795,000 and $1,655,000, respectively The 2014 A & B Bonds were issued on March 27, 2014 by the Successor Agency to the Richmond Community Redevelopment Agency. The proceeds of the Bonds, together with other available funds, were used to refund and defease the outstanding balance of the current interest portion of the 1998 Harbour Redevelopment Project Tax Allocation Refunding Bonds Series A, and the outstanding balances of the Richmond Joint Powers Financing Authority Tax Allocation Revenue Bonds Series 2000 A & B and Richmond Joint Powers Financing Authority Tax Allocation Revenue Bonds Series 2003A. Interest rates range from 1.40% to 5.00% and is payable semiannually on March 1 and September 1. The 2014A Bonds mature annually on each September 1 through 2025 while the 2014B Bonds mature annually on each September 1 through 2018. Both Bonds are secured by a pledge of Redevelopment Property Tax Trust Fund revenues. The outstanding balances of the defeased debt as of June 30, 2024 were as follows:
867
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
164
19. REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR AGENCY ACTIVITIES, Continued
C. Long-term Obligations, Continued
Successor Agency to the Richmond Community Redevelopment Agency Refunding Bonds 2014 Series A & B – Original Issue Amounts $25,795,000 and $1,655,000, respectively, Continued At June 30, 2024, the 2014 A & B Bonds consisted of the following:
The annual debt service requirements on the A & B bonds are as follows:
Successor Agency to the Richmond Community Redevelopment Agency Refunding Bonds 2021 Series A & B – Original Issue Amounts $15,070,000 and $2,665,000, respectively On December 18, 2020, the Redevelopment Agency issued Series 2020A&B Community Redevelopment Agency Refunding Bonds. The proceeds was used to repay a portion of the obligations of the Successor Agency under a Loan Agreement (Housing), dated as of October 1, 2004, by and between the Former Agency and the Richmond Joint Powers Financing Authority that secures payment of the Richmond Joint Powers Financing Authority Housing Set-Aside Tax Allocation Revenue Bonds, Series 2004B (Tax- Exempt) in the outstanding principal amount of $720,000, and refund the $21,625,000 outstanding principal amount of Richmond Community Redevelopment Agency Subordinate Tax Allocation Refunding Bonds (Merged Project Areas), 2010 Series A (the “2010A Bonds” and, together with the 2004 Loan Agreement, the “Prior Obligations”).
The Series 2021 Refunding Bonds will each be issued as fully registered Bonds and, when delivered, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”). DTC will act as securities depository for the Series 2021 Refunding Bonds, as more fully described in APPENDIX G. The Series 2021 Refundin g Bonds will be dated the date of delivery and issued in registered form in denominations of $5,000 or any integral multiple of $5,000 and will mature on September 1 of each year in the amounts as set forth on the inside cover page. Interest on the Series 2021 Refunding Bonds will be payable on each Ma rch 1 and September 1, commencing September 1, 2021.
868
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
165
19. REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR AGENCY ACTIVITIES, Continued
C. Long-term Obligations, Continued
Successor Agency to the Richmond Community Redevelopment Agency Refunding Bonds 2021 Series A & B – Original Issue Amounts $15,070,000 and $2,665,000, respectively, Continued At June 30, 2024, the bond premium consisted of the following:
The annual debt service requirements on the A & B bonds are as follows:
Loans Payable
The Richmond Joint Powers Financing Authority (Authority) has issued the Bonds listed below to assist in financing the Agency’s operations. The Authority has retained reserve amounts required under the respective Bond indentures and loaned the net proceeds of these Bond issues to the Agency. The Authority is responsible for paying principal and inte rest on the Bonds; the Agency is responsible for making payments to the Authority in the amounts shown below.
The outstanding balances of loans payable to the Authority at June 30, 2024 came from the Bond issues listed below:
869
City of Richmond
Notes to Basic Financial Statements
For the Year Ended June 30, 2024
166
19. REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR AGENCY ACTIVITIES, Continued
C. Long-term Obligations, Continued
Loan from the Authority dated August 1, 2003
In 2003, the Authority issued 2003 Tax Allocation Revenue Bonds Series A and Series B in the original amount of $28,580,000. The net proceeds of the bond issue were loaned to the Agency to provide funding for certain capital improvements and to repay the Ci ty of Richmond $18,000,000 in partial payment of prior obligations. Under the terms of the loan agre ement between the Agency and the Authority dated August 1, 2003, repayment of the loan is being made from certain tax increment revenues derived from taxable property within the Post-2004 Limit Area pledged by the Agency for the purpose of loan repayment. On March 27, 2014, the Agency issued the Successor Agency to the Richmond Community Redevelopment Agency Refunding Bonds 2014 Seri es A & B which resulted in the refunding and defeasance of the outstanding balance of the 2003 Series A Bonds in the amount of $12,910,000, as discussed above.