City of Ripon | California
Financial Statements
For the Year Ended June 30, 2023
City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | FOR THE YEAR ENDED JUNE 30, 2023 Financial Statements
TABLE OF CONTENTS
PAGE
Independent Auditor’s Report ............................................................................................................................................ 1 Management’s Discussion and Analysis ............................................................................................................................. 5 Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net Position – Modified Cash Basis ...................................................................................................... 17 Statement of Activities – Modified Cash Basis ........................................................................................................... 18 Fund Financial Statements:
Governmental Funds:
Balance Sheet – Modified Cash Basis ................................................................................................................... 20 Statement of Revenues, Expenditures, and Changes in
Fund Balances – Modified Cash Basis ............................................................................................................... 21 Proprietary Funds:
Statement of Net Position – Modified Cash Basis ................................................................................................ 22 Statement of Revenues, Expenses and Changes in Fund
Net Position – Modified Cash Basis .................................................................................................................. 23 Fiduciary Funds:
Private Purpose Trust Fund:
Statement of Fiduciary Net Position – Modified Cash Basis ........................................................................ 24 Statement of Changes in Fiduciary Net Position – Modified Cash Basis ...................................................... 25 Notes to the Basic Financial Statements…………………………………………………………………………………………………………….………….27 Supplementary Information:
Non-Major Special Revenue Funds:
Combining Balance Sheet – Modified Cash Basis ........................................................................................................ 51 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Modified Cash Basis ...................................................................................................................... 56 Additional Information on the Successor Agency Trust Fund ........................................................................................... 61 City of Ripon - Draft Financial Statements - 2023
1 INDEPENDENT AUDITOR’S REPORT
To the Honorable Mayor and
Members of the City Council
City of Ripon, California
City of Ripon - Draft Financial Statements - 2023
2 INDEPENDENT AUDITOR’S REPORT PLACEHOLDER
City of Ripon - Draft Financial Statements - 2023
3 INDEPENDENT AUDITOR’S REPORT PLACEHOLDER
City of Ripon - Draft Financial Statements - 2023
4 MANAGEMENT’S DISCUSSION AND ANALYSIS
City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | JUNE 30, 2023
Management’s Discussion and Analysis
5 The purpose of the Management’s Discussion and Analysis is to provide a summary of the City’s financial activities for the fiscal year ended June 30, 2023. The City’s financial statements are presented on a modified cash basis of accounting, as described in the basis of accounting paragraphs noted on pages 6-7. Please read this management’s discussion and analysis in conjunction with the City’s financial statements that begin on page 18.
FINANCIAL HIGHLIGHTS
The net position of the City is the difference between total assets and total liabilities and includes restricted and unrestricted funds of both governmental and business-type activities. As summarized in Table 2 of this memorandum, the City’s assets exceeded its liabilities by $56,213,535 (net position) for the fiscal year ended June 30, 2023. This compares favorably to the previous year’s net position of $47,225,493. This increase includes (10%) of capital related debt, 70% of restricted funds and 40% of unrestricted funds. The net position for the fiscal year ended June 30, 2023 is comprised of the following:
Capital related debt of $5,860,000 represents debt recorded in the proprietary funds for capital assets. The debt is associated with the water and sewer enterprise funds. The City does not capitalize capital assets; therefore, this category solely reflects the debt. Capital related debt of $5,860,000 constitutes a negative net position. Restricted net position of $39,476,002 represents the funds restricted for public safety including Vehicle Abatement, Drug Seizure and Police Department Grants; street construction and maintenance, assessment districts, Development Related fees, and low- and moderate-income housing. Unrestricted net position of $22,597,533 represents the funds that are not otherwise restricted and may be committed or assigned based on priorities and/or policies established by the City Council.
Table 1 shows a summary of unrestricted funds:
TABLE 1
2023 2022
General Fund Reserves:
Sick Leave Contingency $ 419,276 $ 355,547
PERS Leave Contingency 1,370,535 1,135,397
Healthcare Contingency 217,233 209,025
Litigation Self-Insured Retention Contingency 651,698 627,075 Litigation/Natural Disaster Contingency 536,311 2,475,987 Operating Reserve 6,100,161 1,412,073
Subsequent Year Budget Deficit 3,344,729 -
Street and Road Reserve Fund 3,461,927 2,461,384
Street and Road Operations (544,904) -
General Capital Funds:
Parks and Recreation 3,957,241 881,429
CNG Station Capital Reserve 216,448 202,066
Department Capital Funds 2,391,461 1,526,512
Corporation Yard 1,882,705
Ripon Lighting Fund (21,343) -
Enterprise Funds * 1,214,120 1,392,537 *
Total Unrestricted Funds 22,597,533 $ 15,279,097 $
* Enterprise funds are considered unrestricted however, these must be used in accordance with the laws governing the City's various enterprise funds.
City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | JUNE 30, 2023
Management’s Discussion and Analysis
6 During the fiscal year ended June 30, 2019, City staff completed a Reserve Study and City Council approved a policy regarding reserve balances. These policies set goals for the General Fund Reserve, Sick Leave Contingency Reserve, CalPERS Reserve, Healthcare Deductible Reimbursement Reserve, Workers Compensation/Liability Self Insured Retention Reserve and the Natural Disaster/Litigation Reserve. These reserves were funded during the fiscal year ended June 30, 2019 through the budgeting process. These balances are reviewed annually to confirm the City is in compliance with the policies.
During the fiscal year ended June 30, 2019, City Council created a policy of transferring General Fund dollars to the Landscape Maintenance Districts at the end of the year that have an annual operating deficit and do not have a fund balance to cover the annual deficit. This analysis is completed at the end of the fiscal year and transfers are presented to the City Council for approval. For fiscal year ended June 30, 2023, $44,120 was transferred from the General Fund to five different Landscape Maintenance Districts to cover their deficit fund balances.
USING THIS ANNUAL REPORT
This annual report is presented in a format consistent with the presentation requirements of the Governmental Accounting Standards Board, as applicable to the City’s modified basis of accounting.
Report Components
This annual report consists of the following four parts:
1) Government-Wide Financial Statements. The Statement of Net Position and the Statement of Activities (on pages 18-19) provide information about the activities of the City government-wide (or as a whole) and present a longerterm view of the City’s finances. 2) Fund Financial Statements. Fund financial statements (beginning on page 21) focus on the individual parts of the City government. Fund financial statements also report the City’s operations in more detail than the governmentwide statements by providing information about the City’s most significant (major) funds. For governmental activities, these statements tell how these services were financed in the short term, as well as what remains for future spending. For proprietary activities, these statements offer short-term and long-term financial information about the activities, which the City operates like businesses, such as the water, sewer and refuse services. 3) Notes to the Financial Statements. The notes to the financial statements are an integral part of the governmentwide and fund financial statements and provide expanded explanation and detail regarding the information reported in the statements.
4) Supplementary Information. The annual report includes optional financial information, such as management’s discussion and analysis, combining statements for non-major funds (that are added together and shown in the fund financial statements in a single column) and additional information on the Successor Agency Trust Fund.
This other supplementary financial information is provided to address certain specific needs of various users of the City’s annual report.
Basis of Accounting
The City’s financial statements are presented based on a modified cash basis of accounting. This modified cash basis of accounting is a basis of accounting other than generally accepted accounting principles in the United States of America.
Basis of accounting is a reference to when financial events are recorded, such as the timing for recognizing revenues, expenses, and their related assets and liabilities. Under the City’s modified cash basis of accounting, revenues and expenses and certain related assets, liabilities, and deferred inflows and outflows are recorded when they result from cash transactions or events.
City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | JUNE 30, 2023
Management’s Discussion and Analysis
7 As a result of the use of this modified cash basis of accounting, certain assets and their related revenues (such as accounts receivable and revenue for billed or provided services not yet collected, and other accrued revenue and receivables) and certain liabilities and their related expenses or expenditures (such as accounts payable and expenses for goods or services received but not yet paid, and other accrued expenses and liabilities) are not recorded in these financial statements, with the exception of long-term liabilities arising from cash transactions. In addition, other economic assets, deferred outflows, liabilities, and deferred inflows that do not arise from a cash transaction or event (such as donated assets and postemployment benefit obligations) are not reported, and the measurement of reported assets and liabilities does not involve adjustment to fair value. Lastly, the City does not recognize its investment in capital assets in its Statement of Net Position. Therefore, when reviewing the financial information and discussion within this annual report, the reader should keep this in mind.
Reporting the City as a Whole
The City’s Reporting Entity Presentation
This annual report includes all activities for which the City of Ripon’s City Council is fiscally responsible.
City management considered all potential component units for inclusion in the reporting entity by applying the criteria set forth in accounting principles generally accepted in the United States of America. The City concluded that there are no potential component units which should be included in the reporting entity.
The Government-Wide Statement of Net Position and the Statement of Activities The government-wide financial statements are presented on pages 18 and 19. The Statement of Net Position and Statement of Activities report information about the City as a whole and its activities. These statements include all the City’s assets, liabilities, and deferred inflows and outflows resulting from the use of the modified cash basis of accounting, as further defined in the notes to the financial statements.
These two statements report the City’s net position and changes therein. The City’s net position, which is the difference among assets, deferred outflows, liabilities, and deferred inflows is one way to measure the City’s financial health or financial position. Over time, increases or decreases in the City’s net position are one indicator of whether its financial health is improving or deteriorating. Other nonfinancial factors should also be considered, such as changes in the City’s sales tax base and the condition of the City’s roads, to assess the overall health of the City. 1) Governmental activities. Most of the City’s basic services are reported here, including the general administration, police, streets, public works and recreation. Property taxes, sales and use taxes, charges for services, operating grants, and contributions finance most of these activities. 2) Business-type activities. The City charges a fee to customers to help it cover all or most of the cost of certain services it provides. The City’s water, sewer, and refuse service are reported here.
Reporting the City’s Most Significant Funds
The Fund Financial Statements
The City has three types of funds: governmental, proprietary and fiduciary, which are noted below. Some funds are required to be established by State law. However, the City Council establishes certain other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities for using certain taxes, grants, and other money.
City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | JUNE 30, 2023
Management’s Discussion and Analysis
8 Governmental Funds. Most of the City’s basic services are reported in governmental funds that focus on how money flows into and out of those funds and the balances left at year-end that are available for spending. These funds report the acquisition of capital assets and payments for debt principal as expenditures, not changes to asset and debt balances. The governmental fund statements provide a detailed short-term view of the City’s general government operations and the basic services it provides. The City uses the modified cash basis of accounting and, accordingly, there are no reconciling differences between the governmental activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds. The City considers the General Fund, Streets & Roads Fund, and Capital Project Fund to be its significant, or major, governmental funds.
All other governmental funds are aggregated in a single column titled “Non-major Special Revenue Funds.” Proprietary Funds. The City charges customers for the services it provides. These services are generally reported in proprietary funds. Proprietary funds are reported in the same way all activities are reported in the Statement of Net Position and Statement of Activities. For example, principal payments on long-term debt are recorded as a reduction to the liability. The City’s proprietary (enterprise) fund financial statements are essentially the same as the business-type activities we report in the government-wide financial statements. The City utilizes the modified cash basis of accounting and, accordingly, capital assets are not capitalized or depreciated. The City has three enterprise funds: Water, Sewer, and Refuse.
Fiduciary Funds. Private Purpose Trust Funds are established to serve as the custodian for assets held in a trustee or agency capacity for others and, therefore, cannot be used to support the City’s own programs. The City has one private purpose trust fund known as the Successor Agency Trust Fund which holds the assets and accounts for the activities related to the winding down of the former Redevelopment Agency.
Net Position – Modified Cash Basis
The City’s combined net position resulting from modified cash basis transactions or events increased from $47,225,493 to $56,213,535 between fiscal years 2022 and 2023. Looking at the net position and net expenses of governmental and business-type activities separately, governmental activities had a larger increase than business-type activities.
Table 2 on the following page shows a breakdown and comparison of these activities.
City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | JUNE 30, 2023
Management’s Discussion and Analysis
9 TABLE 2:
Total
Percentage
Change
2022 2023 2022 2023 2022 2023 2022-2023
Cash and investments $ 19,851,870 $ 32,092,438 $ 1,848,244 $ 1,834,670 $ 21,700,114 $ 33,927,108 56% Cash and investments - restricted 32,639,806 28,695,963 96 32,639,902 492 28,696,455 -12% Internal balances 442,133 634,124 (634,124) (442,133) - - 0% Total assets 61,230,534 53,125,800 1,214,216 1,393,029 54,340,016 62,623,563 15% Long-term liabilities:
Loan due to private-purpose trust funds 539,523 550,028 - - 539,523 550,028 2%Debt due within one year - - 715,000 740,000 715,000 740,000 3%Debt due in more than one year - - 5,860,000 5,120,000 5,860,000 5,120,000 -13% Total liabilities 550,028 539,523 6,575,000 5,860,000 7,114,523 6,410,028 -10% Capital related debt - - (6,575,000) (5,860,000) (6,575,000) (5,860,000) -11%Restricted for:
Public safety 184,461 189,848 - - 184,461 189,848 3%
Street construction and maintenance 3,934,333 4,724,596 - - 3,934,333 4,724,596 20%Assessment districts 270,601 337,421 - - 270,601 337,421 25%Capital outlay 24,289,622 24,168,796 - - 24,289,622 24,168,796 0%Mitigation fees 8,038,443 8,235,220 - - 8,038,443 8,235,220 2%Low and moderate income housing 1,803,840 1,819,629 - - 1,803,840 1,819,629 1%Debt service - - 96 492 96 492 413% Unrestricted 14,064,977 21,204,996 1,214,120 1,392,537 15,279,097 22,597,533 48% Total Net Position $ 52,586,277 60,680,506 $ (5,360,784) $ (4,466,971) $ 47,225,493 $ 56,213,535 $ 19% Governmental Activities Business-Type Activities Total
The net position of the City’s governmental activities increased 15.39% to $60,680,506. However, $39,475,510, of this amount is restricted regarding the purposes for which it can be used. Consequently, unrestricted amounts showed $21,204,996 at the end of this year. Unrestricted funds include funds that the Council has the ability to assign or commit based on the priorities and policies of the City Council and are summarized in Table 1 under Financial Highlights.
City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | JUNE 30, 2023
Management’s Discussion and Analysis
10 Net Position – Modified Cash Basis
(10,000,000)
-
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,000
70,000,000
Governmental Business-Type
2022
2023
Changes from 2022 to 2023 reflect an increase of 19.03% in net position, an increase of 15.39% for governmental activities and an increase of 16.67% for business-type activities.
Changes in Net Position – Modified Cash Basis
For the year ended June 30, 2023, net position (resulting from modified cash basis transactions or events) changes are included in Table 3.
City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | JUNE 30, 2023
Management’s Discussion and Analysis
11 TABLE 3:
Total
Percentage
Change
2022 2023 2022 2023 2022 2023 2022-2023
RevenuesProgram revenues:
Charges for services 2,212,168 $ 3,350,038 $ 8,137,665 $ 8,334,445 $ 10,349,833 $ 11,684,483 $ 13% Operating grants and contributions 1,879,180 1,343,278 - - 1,879,180 1,343,278 -29% Capital grants and contributions 5,527,209 4,307,517 398,915 421,925 5,926,124 4,729,442 -20% General revenues
Taxes:
Property taxes 2,532,657 2,608,196 - - 2,532,657 2,608,196 3% Sales and use taxes 4,626,645 4,620,254 - - 4,626,645 4,620,254 0% Other 328,848 284,189 188,030 194,422 516,878 478,611 -7% Motor vehicle in lieu 1,809,713 1,911,505 - - 1,809,713 1,911,505 6% American rescue plan act 1,959,940 1,959,940 - - 1,959,940 1,959,940 0% Investment income 289,482 842,508 14,495 30,265 303,977 872,773 187% Miscellaneous 785,555 668,774 - - 668,774 785,555 17%
Total revenue 22,012,980 21,834,616 8,739,105 8,981,057 30,573,721 30,994,037 1% ExpensesAdministrative 71,133 78,702 - - 71,133 78,702 11% Legislative 3,616 3,681 - - 3,616 3,681 2%Police 7,805,549 8,857,224 - - 7,805,549 8,857,224 13%Streets and public works 1,937,767 1,768,042 - - 1,937,767 1,768,042 -9%Culture and recreation 2,238,190 2,273,477 - - 2,238,190 2,273,477 2%Community development 5,676 - - - 5,676 - -100%Redevelopment 216,357 212,988 - - 216,357 212,988 -2%Other 185,663 116,419 - - 116,419 185,663 59%Capital outlay 4,764,584 6,906,310 - - 6,906,310 4,764,584 -31%Water - - 1,984,104 2,133,579 1,984,104 2,133,579 8% Sewer - - 1,175,464 1,185,154 1,175,464 1,185,154 1%Refuse - - 2,309,682 2,300,395 2,309,682 2,300,395 0% Total expenses 19,301,017 18,144,361 5,469,250 5,619,128 24,770,267 23,763,489 -4% Excess (deficiency) before transfers 2,533,599 3,868,619 3,269,855 3,361,929 5,803,454 7,230,548 25% Transfers 2,468,116 2,445,237 (2,445,237) (2,468,116) - -Extraordinary item (see note 14) 1,757,494 - - - - 1,757,494 Increase in net position 8,094,229 4,978,836 824,618 893,813 5,803,454 8,988,042 55% Net position - beginning 47,607,441 52,586,277 (6,185,402) (5,360,784) 41,422,039 47,225,493 Net position - ending $ 60,680,506 52,586,277 $ (5,360,784) $ (4,466,971) $ 47,225,493 $ 56,213,535 $ Governmental Activities Business-Type Activities Total
City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | JUNE 30, 2023
Management’s Discussion and Analysis
12 Governmental Activities
The Statement of Activities format on page 19 of this report is significantly different from a typical Statement of Revenues, Expenses and Changes in Fund Balance. Expenses are listed in the first column, with revenues from that particular program reported to the right. The result is net (expense) revenue. This type of format highlights the relative financial burden of each of the functions on the City’s taxpayers. It also identifies how much each function draws from the general revenues or if it is self-financing through fees and grants or contributions. All other governmental revenues are reported as general. It is important to note that all taxes are classified as general revenue, even if restricted for a specific purpose.
For the year ended June 30, 2023, the City’s governmental activities sources and uses follow:
15%
6%
19%
12%
21%
1% 9%
9%
4% 4%
Sources of Funds for Governmental Activities
Charges for services
Operating grants and
contributions
Capital grants and contributions
Property taxes
Sales and use taxes
Other taxes
Motor vehicle in lieu
Amercian rescue plan act
Investment income
Miscellaneous
0.43%
0.02%
48.81%
9.74%
12.54%
0.00%
1.17%
1.02% 26.26%
Uses of Funds in Governmental Activities
Administrative
Legislative
Police
Streets and public works
Culture and recreation
Community development
Redevelopment
Other
Capital outlay
For the year ended June 30, 2023, total expenses for governmental activities resulting from modified cash basis transactions or events amounted to $18,144,361. Of these total expenses, taxpayers and other general revenues funded $13,012,147, and those directly benefiting from the program funded $5,650,795 from grants and other contributions, and $3,350,038 from charges for services.
Business-Type Activities
The business-type activities’ net revenue (expenses), before contributions and transfers, resulting from modified cash basis transactions or events follow: The water, sewer and refuse service activities reported net revenues (expenses) of $2,068,165, $1,053,735, and $240,029, respectively.
-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
Water Sewer Refuse
Business-type Activities Revenues and Expenses - Modified Cash Basis Revenues
Expenses
City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | JUNE 30, 2023
Management’s Discussion and Analysis
13 A FINANCIAL ANALYSIS OF THE CITY’S FUNDS
Certain funds experienced noteworthy changes from the prior year and are highlighted as follows:
General Fund:
Sales and use taxes were at $4.6 million for both fiscal year ending June 30, 2023. There was no significant change from the prior fiscal year. Development-related General Fund fees were conservatively budgeted at $250,000, but the amount actually received by the City was $597,296.
The City continues to receive the $250,000 administrative allowance for administering the winding-down of the Redevelopment Agency. At this time, it is not clear when the City would no longer be receiving this allowance. The City received approximately $1,900,000 of the second tranche of American Rescue Plan dollars during the fiscal year ending June 30, 2023. These funds were allocated by the City Council at the Strategic Planning meeting in March 2022 and part of the 2022/2023 budget.
Investment income increased from $289,000 to $843,000 from the prior fiscal year to the current fiscal year. This is a function to a unique time in the economy and we do not expect this to continue.
Street & Roads Special Revenue Fund:
The funds available for Street & Roads projects have increased over the last couple of years—as of June 30, 2023, the Street and Road Operating Fund balance is $3,361,688. This is largely as a result of receiving grants to fund the Stockton Avenue Rehabilitation project. The City is planning several large street and road rehabilitation projects over the next two years with an estimated construction cost of $4 million.
Capital Project Fund:
Capital Outlay expenditures decreased $2,141,726 from the prior year. Below is a list of major capital expenditures that were incurred during the current fiscal year:
o Corporation Yard Design and Construction - $1,006,000 o Dispatch Center Upgrades - $157,000 (partially reimbursed by City of Lathrop) o Council Chamber Upgrades – $14,000
o Upgrade to computer servers - $18,000
o Police Department expenditures including Range Improvements, Action Turning Targets, Virtual Reality Training, License Plate Readers, and Electronic Citations Program - $168,000; $21,000; $36,000; $84,000; and $46,000 respectively
o Police Vehicles (2) - $156,000
o Public Works Vehicles (1) – $36,000
o Equipment for Parks Maintenance - $122,000
o Drilling of Well #19 – $1,116,000
o Garbage Truck (1) - $399,000
o Senior Center Retrofit Project - $42,000
o Rehabilitation to Stockton Avenue – $291,000 (mostly grant funded) o Water, Sewer & Storm Drain expenses related to the Corporation Yard project - $66,000; $340,000; and $35,000; respectively.
City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | JUNE 30, 2023
Management’s Discussion and Analysis
14 Water, Sewer, and Refuse Funds:
The City continues to analyze its utility rates based upon a rate study that was completed in 2020. In accordance with Proposition 218, the City Council approved rate increases to occur over a 5-year period. The utility rate study projected increases to water, sewer, and refuse rates during fiscal year 2022/2023 of 2%, 4%, and 5%, respectively.
The City Council has directed staff to re-analyze the financial position of each Enterprise Fund each year to decide if any rate needs to be increased based upon the approved increases. During the current fiscal year, utility rates for water, sewer, and refuse increased as projected. There have been significant increases in refuse expenditures due to State mandates. Staff is tracking these increases to report to the City Council.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets – Modified Cash Basis
The City does not capitalize capital assets.
Long-Term Debt – Modified Cash Basis
At June 30, 2023, the City had $6,410,028 in long-term debt arising from modified cash basis transactions or events, compared with $7,114,523 at June 30, 2022. The following is a summary of the debt as of June 30, 2023:
Debt
Ending Balance:
June 30, 2023 Maturity Date
2011 Sewer Bonds $ 550,000 October 2025
2006 Water Revenue Bonds 4,055,000 October 2032
2012 Water Revenue Bonds 1,255,000 October 2027
Parks & Recreation loan to City and
Redevelopment Agency 550,028 Due on demand
Total $ 6,410,028
At June 30, 2023, the City’s Private-Purpose Trust Fund (Former Ripon Redevelopment Agency) had $19,556,098 in longterm debt arising from the modified cash basis transactions or events, compared with $19,780,805 at June 30, 2022. This debt is related to redevelopment tax allocation bonds. In 2020, this debt was refinanced to take advantage of a $832,000 savings. The City Council elected to structure the bond refinancing in order to receive this saving from 2021 to 2026. The savings from the bond refinancing will be transferred to the CalPERS 115 Trust.
ECONOMIC OUTLOOK AND MAJOR INITIATIVES
The City’s budget for the upcoming fiscal year ending June 30, 2024 is fairly consistent with the year ended June 30, 2023.
The City staffing levels for the year ending June 30, 2024 is expected to increase compared to the year ended June 30, 2023 due to the addition of a new dispatcher and CSO officer, plus two part-time maintenance positions for the recycling center.
The City’s Redevelopment Successor Agency expects to continue to receive the $250,000 administrative allowance for administering the winding-down of the Redevelopment Agency for the upcoming fiscal years, but is projected to be reduced or eliminated in the future.
City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | JUNE 30, 2023
Management’s Discussion and Analysis
15 The City continues to focus on mitigating the CalPERS unfunded accrued liability associated with the sworn police officer retirement plan, which was $6,549,253 as of the June 30, 2022 CalPERS Valuation Report. The City has transferred $1,339,369 to a section 115 Trust that allows the City to earn interest at a higher rate than what the City typically realizes.
Once these funds have been transferred to the section 115 Trust, the use of these funds is limited to payments to CalPERS for Normal Costs or paying down the unfunded liability. These funds will be used when there is a deficit in the City’s General FundIn addition, a $250,000 prepayment was made towards the City’s unfunded accrued liability in fiscal year ended June 30, 2018. It is important to continue to monitor CalPERS increasing rates and unfunded accrued liability.
During the fiscal year ending June 30, 2023, the City established a Section 115 trust to help mitigate these increases.
CONTACTING THE CITY’S FINANCIAL MANAGEMENT
This report is designed to provide our citizens, taxpayers, customers, and creditors with a general overview of the City’s finances and to demonstrate the City’s accountability for the money it receives. If you have questions about this report or need additional information, please contact the City Clerk’s Office at 259 N. Wilma Avenue, Ripon, California 95366, or telephone (209) 599-2108.
City of Ripon - Draft Financial Statements - 2023
16 BASIC FINANCIAL STATEMENTS
City of Ripon - Draft Financial Statements - 2023
17 GOVERNMENT-WIDE FINANCIAL STATEMENTS
City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | JUNE 30, 2023
Statement of Net Position – Modified Cash Basis
The notes to the basic financial statements are an integral part of this statement. 18 Governmental Business-Type
Activities Activities Total
ASSETS
Cash and investments 32,092,438 $ 1,834,670 $ 33,927,108 $ Cash and investments - restricted 28,695,963 492 28,696,455 Internal balances 442,133 (442,133) -
Total assets 61,230,534 1,393,029 62,623,563
LIABILITIES
Loan due to private-purpose trust funds 550,028 - 550,028 Long-term liabilities:
Debt due within one year - 740,000 740,000
Debt due in more than one year - 5,120,000 5,120,000
Total liabilities 550,028 5,860,000 6,410,028
NET POSITION
Capital related debt - (5,860,000) (5,860,000)
Restricted for:
Public safety 189,848 - 189,848
Street construction and maintenance 4,724,596 - 4,724,596 Assessment districts 337,421 - 337,421
Capital projects 24,168,796 - 24,168,796
Mitigation fees 8,235,220 - 8,235,220
Low and moderate income housing 1,819,629 - 1,819,629
Debt service - 492 492
Unrestricted 21,204,996 1,392,537 22,597,533
Total net position (deficit) 60,680,506 $ (4,466,971) $ 56,213,535 $ City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | FOR THE YEAR ENDED JUNE 30, 2023 Statement of Activities – Modified Cash Basis
The notes to the basic financial statements are an integral part of this statement. 19 Operating Capital
Charges for Grants and Grants and Governmental Business-Type Direct Indirect Total Services Contributions Contributions Activities Activities Total Functions/ProgramsGovernmental activities:
Administrative $ 1,695,900 $ (1,617,198) $ 78,702 $ 623,004 $ - $ 8,898 $ 553,200 $ - $ 553,200 Legislative 410,232 (406,551) 3,681 - - - (3,681) - (3,681) Police 7,546,197 1,311,027 8,857,224 1,389,093 189,574 (7,278,557) - (7,278,557) - Streets and public works 2,194,538 (426,496) 1,768,042 544,233 1,054,562 1,906,553 1,737,306 1,737,306 - Culture and recreation 2,021,862 251,615 2,273,477 805,093 - (1,468,384) - (1,468,384) - Community development - - - (11,385) - - (11,385) - (11,385)Redevelopment 212,988 212,988 - - - - (212,988) - (212,988) Other 158,134 27,529 185,663 - 99,142 - (86,521) - (86,521) Capital outlay 37,710 4,726,874 4,764,584 - - 2,392,066 (2,372,518) - (2,372,518) Total governmental activities 18,966,725 (822,364) 18,144,361 3,350,038 1,343,278 4,307,517 (9,143,528) - (9,143,528) Business-type activities:
Water 1,825,509 308,070 2,133,579 4,001,508 - 184,635 2,052,564 - 2,052,564 Sewer 1,010,420 174,734 1,185,154 1,810,243 - 222,920 - 848,009 848,009 Refuse 339,561 1,960,834 2,300,395 2,522,694 - 14,370 - 236,669 236,669 Total business-type activities 822,365 4,796,763 5,619,128 8,334,445 - 421,925 - 3,137,242 3,137,242 Total primary government $ 1 23,763,488 $ 23,763,489 $ 11,684,483 $ 1,343,278 $ 4,729,442 $ (9,143,528) 3,137,242 (6,006,286) General revenues:
Taxes:
Property taxes - 2,608,196 2,608,196
Sales and use taxes - 4,620,254 4,620,254Other 194,422 284,189 478,611 Motor vehicle in lieu - 1,911,505 1,911,505American rescue plan act - 1,959,940 1,959,940 Investment income 30,265 842,508 872,773Miscellaneous - 785,555 785,555 Extraordinary item - 1,757,494 1,757,494
Transfers (2,468,116) 2,468,116 -
Total general revenues and transfers (2,243,429) 17,237,757 14,994,328 Change in net position 8,094,229 893,813 8,988,042
Net position (deficit) - beginning 52,586,277 (5,360,784) 47,225,493 Net position (deficit) - ending $ (4,466,971) 60,680,506 $ 56,213,535 $ Expenses Program Revenues Net (Expense) Revenue and Changes in Net Position City of Ripon - Draft Financial Statements - 2023
20 FUND FINANCIAL STATEMENTS
City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | JUNE 30, 2023
Governmental Funds
Balance Sheet – Modified Cash Basis
The notes to the basic financial statements are an integral part of this statement. 21 Streets &
Roads Capital Non-Major Total
General Special Projects Special Revenue Governmental
Fund Revenue Fund Fund Funds Funds
ASSETS
Cash and investments $ 9,541,885 $ 3,631,688 $ 14,004,481 $ 4,914,384 $ 32,092,438 Cash and investments - restricted 4,549,295 24,146,668 - 28,695,963 - Advance to other funds - restricted - 5,695,402 688,804 - 6,384,206 Total assets $ 19,786,582 3,631,688 $ 38,839,953 $ 4,914,384 $ 67,172,607 $
LIABILITIES
Advances from other funds 246,671 $ - $ 5,695,402 $ - $ 5,942,073 $ Loan due to private-purpose trust funds - - 550,028 - 550,028 Total liabilities - 246,671 6,245,430 - 6,492,101
FUND BALANCES
Restricted for:
Public safety 189,848 - - - 189,848
Street construction and maintenance - 169,761 - 4,554,835 4,724,596 Assessment districts - - - 337,421 337,421
Capital projects:
Culture and recreation - - 60,000 22,128 82,128
Special assessment districts - - 1,286,098 - 1,286,098
Sewer projects - - 3,388,073 - 3,388,073
Water projects - - 7,763,007 - 7,763,007
Refuse projects - - 868,699 - 868,699
Public facilities financing plan - - 10,665,939 - 10,665,939 Other - - 114,852 - 114,852
Mitigation fees 8,235,220 - - - 8,235,220
Low and moderate income housing 1,819,629 - - - 1,819,629 Committed to:
Street construction and maintenance - 3,461,927 - - 3,461,927 Capital projects:
General government - - 2,099,154 - 2,099,154
Culture and recreation - - 3,957,241 - 3,957,241
General capital projects - - 2,391,460 - 2,391,460
Contingencies:
Sick leave 419,276 - - - 419,276
Retirement 1,370,535 - - 1,370,535 -
Healthcare 217,233 - - - 217,233
Liability self-insured retention 651,698 - - - 651,698
Litigation and natural disaster 536,311 - - - 536,311
Unassigned - 6,100,161 - - 6,100,161
Total fund balances 3,631,688 19,539,911 32,594,523 4,914,384 60,680,506 Total liabilities and fund balances $ 19,786,582 3,631,688 $ 38,839,953 $ 4,914,384 $ 67,172,607 $ City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | FOR THE YEAR ENDED JUNE 30, 2023 Governmental Funds
Statement of Revenues, Expenditures and Changes in Fund Balances – Modified Cash Basis The notes to the basic financial statements are an integral part of this statement. 22 Streets &
Roads Capital Non-Major Total
General Special Projects Special Revenue Governmental
Fund Revenue Fund Fund Funds Funds
REVENUES
Taxes 9,574,041 $ - $ - $ 42,706 $ 9,616,747 $
Assessments - - - 408,643 408,643
Licenses, permits and fees 2,070,371 - 1,029,505 - 3,099,876 Investment income 618,738 34,323 430,991 59,095 1,143,147 Intergovernmental revenue 1,996,743 1,072,910 80,229 1,860,399 5,010,281 Charges for services 2,273,570 6,938 - 1,952 2,282,460
Fines and forfeitures 137,860 - - - 137,860
Housing/loan program income 46,718 - - - 46,718
Contributions 4,209 - - - 4,209
Other 140,109 4,756 112,189 17,369 274,423
Total revenues 16,862,359 1,118,927 1,652,914 2,390,164 22,024,364
EXPENDITURES
General government:
Administration 1,695,900 - - - 1,695,900
Legislative 406,550 - - - 406,550
Public safety:
Police 7,546,197 - - - 7,546,197
Streets and public works:
Streets - 630,715 - 51,472 682,187
Planning 363,827 - - 4,999 368,826
Engineering 391,912 - - - 391,912
Building 393,588 - - - 393,588
Culture and recreation:
Library 71,784 - - - 71,784
Parks and recreation 1,884,406 - 10,506 - 1,894,912
Community Center 55,166 - - - 55,166
Community development - - - 47,424 47,424
Special assessment districts - - - 361,707 361,707
Redevelopment 212,988 - - - 212,988
Allocation to other department costs (1,041,869) 109,800 37,710 71,994 (822,365) Other 158,134 - - - 158,134
Capital outlay 12,904 275,466 4,402,465 - 4,690,835
Total expenditures 12,151,487 1,015,981 4,450,681 537,596 18,155,745 Excess (deficiency) of revenues over expenditures 4,710,872 102,946 (2,797,767) 1,852,568 3,868,619
OTHER FINANCING SOURCES (USES)
Operating transfers in - 1,612,262 7,957,205 44,120 9,613,587 Operating transfers out (5,957,538) - - (1,187,933) (7,145,471) Total other financing sources (uses) (5,957,538) 1,612,262 7,957,205 (1,143,813) 2,468,116 (1,246,666) 1,715,208 5,159,438 708,755 6,336,735
SPECIAL AND EXTRAORDINARY ITEMS
Special item - debt forgiveness (see note 14) 1,200,000 - (1,200,000) - - proceeds (see note 14) - - 1,757,494 - 1,757,494
Total special and extraordinary items 1,200,000 - 557,494 - 1,757,494 Net change in fund balances (46,666) 1,715,208 5,716,932 708,755 8,094,229 Fund balances - beginning 1,916,480 19,586,577 26,877,591 4,205,629 52,586,277 Fund balances - ending 19,539,911 $ 3,631,688 $ 32,594,523 $ 4,914,384 $ 60,680,506 $ Net change in fund balances before special and extraordinary items
Extraordinary item - transferred bond
City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | JUNE 30, 2023
Proprietary Funds
Statement of Net Position – Modified Cash Basis
The notes to the basic financial statements are an integral part of this statement. 23 Sewer Water Refuse
Enterprise Enterprise Enterprise
Fund Fund Fund Total
ASSETS
Current assets:
Cash and investments $ 697,413 $ 926,027 $ 211,230 $ 1,834,670 Cash and investments - restricted 492 - - 492
Total assets 697,413 926,519 211,230 1,835,162
LIABILITIES
Current liabilities:
Current portion of bonds payable 175,000 565,000 - 740,000 Noncurrent liabilities:
Advance from capital projects fund 442,133 - - 442,133
Noncurrent portion of bonds payable 4,745,000 375,000 - 5,120,000 Total liabilities 550,000 5,752,133 - 6,302,133
NET POSITION
Capital related debt (550,000) (5,310,000) - (5,860,000) Restricted for debt service - 492 - 492
Unrestricted 483,894 697,413 211,230 1,392,537
Total net position (deficit) 147,413 $ (4,825,614) $ 211,230 $ (4,466,971) $ City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | FOR THE YEAR ENDED JUNE 30, 2023 Proprietary Funds
Statement of Revenues, Expenses and Changes in Fund Net Position – Modified Cash Basis The notes to the basic financial statements are an integral part of this statement. 24 Sewer Water Refuse
Enterprise Enterprise Enterprise
Fund Fund Fund Total
Operating revenues:
Charges for services:
Sewer usage services $ 1,810,243 $ - $ 1,810,243 - $
Water revenue 4,001,508 - 4,001,508 -
Refuse revenue - - 2,522,694 2,522,694
Total operating revenues 1,810,243 4,001,508 2,522,694 8,334,445 Operating expenses:
Salaries and wages 327,831 513,285 639,016 1,480,132
Employee benefits 178,523 269,946 382,896 831,365
Professional services 110,318 37,754 10,077 158,149
Repairs and maintenance 124,184 145,194 131,975 401,353 Gas and oil 15,878 27,283 102,701 145,862
Utilities 133,717 386,255 8,117 528,089
Supplies 6,994 12,917 9,911 29,822
Conference expenses 1,438 659 1,817 3,914
Communications 3,491 62,227 4,816 70,534
Membership, dues, books, etc. 58,951 44,704 2,408 106,063 Postage 8,750 13,707 8,750 31,207
Refuse disposal - 607,572 - 607,572
Other 13,675 79,390 50,778 143,843
Allocation of other department costs 308,070 174,734 339,561 822,365 Total operating expenses 1,158,484 1,901,391 2,300,395 5,360,270 Operating income 651,759 2,100,117 222,299 2,974,175
Nonoperating revenues (expenses):
Contributions/developer fees 184,635 222,920 14,370 421,925 Assessments 194,422 - - 194,422
Interest revenue 11,304 15,601 3,360 30,265
Interest expense (26,670) (232,188) - (258,858)
Total nonoperating revenues (expenses) (31,952) 401,976 17,730 387,754 Net income before transfers 2,068,165 1,053,735 240,029 3,361,929 Operating transfers out (1,331,170) (896,920) (240,026) (2,468,116) Change in net position 156,815 736,995 3 893,813
Net position (deficit) - beginning (5,562,609) (9,402) 211,227 (5,360,784) Net position (deficit) - ending $ (4,825,614) 147,413 $ 211,230 $ (4,466,971) $ City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | JUNE 30, 2023
Fiduciary Funds – Private Purpose Trust Fund
Statement of Fiduciary Net Position – Modified Cash Basis The notes to the basic financial statements are an integral part of this statement. 25 Successor Agency
Private Purpose
Trust Fund
ASSETS
Cash and investments 4,717,262 $
Cash and investments - restricted 1,297,266
Loan due from capital projects fund 550,028
Total assets 6,564,556
LIABILITIES
Due to County of San Joaquin 1,297,266
Long-term liabilities:
Debt due in more than one year 19,556,098
Total liabilities 20,853,364
NET POSITION
Net position (deficit) held in trust for redevelopment
dissolution and other purposes (14,288,808) $
City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | FOR THE YEAR ENDED JUNE 30, 2023 Fiduciary Funds – Private Purpose Trust Fund
Statement of Changes in Fiduciary Net Position – Modified Cash Basis The notes to the basic financial statements are an integral part of this statement. 26 Successor Agency
Private Purpose
Trust Fund
ADDITIONS
Property taxes $ 779,361
Program income 83,960
Investment income 351,510
Total additions 1,214,831
DEDUCTIONS
General operating 259,089
Interest expense 660,300
Total deductions 919,389
EXTRAORDINARY GAIN (LOSS)
Transferred bond proceeds (see note 14) (1,757,494)
Change in fiduciary net position (1,462,052)
Total net position (deficit) - beginning (12,826,756)
Total net position (deficit) - ending (14,288,808) $
City of Ripon - Draft Financial Statements - 2023
27 NOTES TO THE BASIC FINANCIAL STATEMENTS
City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | JUNE 30, 2023
Notes to the Basic Financial Statements
28 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the City of Ripon, California (the City) are presented on the modified cash basis of accounting.
The modified cash basis of accounting differs from accounting principles generally accepted in the United States of America (GAAP). Generally accepted accounting principles include all relevant Governmental Accounting Standards Board (GASB) pronouncements.
A. Financial Reporting Entity
The City was incorporated on November 27, 1945, under the general laws of the State of California. The City operates under a Council-Manager form of government consisting of five elected council members including the Mayor and a city council appointed City Manager. The City provides the following services as authorized by its charter: public safety, sanitation, water utility, street maintenance, community development, library, parks and recreation, and general administrative services.
B. Individual Component Unit Disclosures
There are no entities which meet the Governmental Accounting Standards Board (GASB) Statement No. 14, as amended by GASB Statement No. 39 and GASB Statement No. 61 criteria for discrete disclosure within these basic financial statements.
C. Basis of Presentation
The government-wide financial statements (i.e. Statement of Net Position and Statement of Activities) display information about the primary government (the City). These statements include the financial activities of the overall City government, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. These statements distinguish between the governmental and business-type activities of the City. 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.
The Statement of Activities presents a comparison between direct and indirect 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. Indirect expenses are allocated to functions based on the relativity of direct expenses by department.
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 program 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.
Fund financial statements of the reporting entity are organized into funds, each of which is considered to be a separate accounting entity. Each fund is accounted for by providing a separate set of self-balancing accounts that constitutes its assets, liabilities, fund equity, revenues, and expenditures/expenses. Funds are organized into three major categories:
governmental, proprietary and fiduciary. An emphasis is placed on major funds within the governmental and proprietary categories. A fund is considered major if it is the primary operating fund of the City or meets the following criteria:
Total assets, liabilities, revenues, or expenditures/expenses of that individual governmental or enterprise fund are at least 10 percent of the corresponding total for all funds of that category or type, and Total assets, liabilities, or expenditures/expenses of the individual governmental or enterprise fund are at least 5 percent of the corresponding total for all governmental and enterprise funds combined.
City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | JUNE 30, 2023
Notes to the Basic Financial Statements
29 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Basis of Presentation (Continued)
The funds of the financial reporting entity are described below:
Governmental Funds
The General Fund is the primary operating fund of the City and is always classified as a major fund. It is used to account for all activities except those legally or administratively required to be accounted for in other funds.
Special Revenue Funds are used to account for the proceeds of the specified revenue sources that are either legally restricted to expenditures for specified purposes or designated to finance particular functions or activities of the City. The reporting entity includes the following special revenue fund, which is reported as a major fund.
Streets and Road Fund – Accounts for revenues and expenditures for streets and roads related maintenance and construction.
Capital Projects Funds are used to account for resources restricted or designated for the acquisition or construction of specific capital projects or items. The reporting entity includes the following capital projects fund, of which is reported as a major fund.
Capital Projects Fund – Accounts for contributions and specific revenues and transfers from other City funds and expenditures for various capital projects as the City Council may designate.
Proprietary Funds
Enterprise Funds are used to account for business-like activities provided to the general public. These activities are financed primarily by user charges, and the measurement of financial activity focuses on net income measurement similar to the private sector. The reporting entity includes the following enterprise funds: water, sewer, and refuse funds; all of which qualify as major funds.
Sewer Fund – Accounts for activities associated with operating and maintaining the City’s sewer and surface drainage system. All activities necessary to provide such services are accounted for in this fund, including administration, operations, capital improvements, maintenance, financing and related debt service, and billing and collection.
Water Fund – Accounts for the provision of water services to residents of the City. All activities necessary to provide such services are accounted for in this fund, including administration, operations, capital improvements, maintenance, financing and related debt service, and billing and collection.
Refuse Fund – Accounts for the provision of refuse collection services to residents of the City. All activities necessary to provide such services are accounted for in this fund, including administration, operations, capital improvements, maintenance, financing and related debt service, and billing and collection.
Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Non-operating revenues, such as subsidies and investment earnings, result from non-exchange transactions or ancillary activities. Contributions/developer fees are reported separately and represent capital contributions charged by the City. Operating expenses are those expenses essential to the primary operations of the fund. All other expenses are reported as non-operating expenses.
City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | JUNE 30, 2023
Notes to the Basic Financial Statements
30 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Basis of Presentation (Continued)
Fiduciary Funds
Fiduciary Funds are established to serve as the custodian for assets held in a trustee or agency capacity for others and, therefore, cannot be used to support the City’s own programs. The reporting entity includes one private-purpose trust fund.
Successor Agency Trust Fund – Accounts for activities related to the servicing of debt of the former Redevelopment Agency.
Measurement Focus
In the Government-Wide Statement of Net Position and Statement of Activities, both governmental and business-like activities are presented using the economic resources measurement focus, within the limitations of the modified cash basis of accounting, as defined below.
In the fund financial statements, the “current financial resources” measurement focus or the “economic resources” measurement focus, as applied to the modified cash basis of accounting, is used as appropriate:
All governmental funds utilize a “current financial resources” measurement focus. Only current financial assets and liabilities are generally included on their balance sheets. The operating statements present sources and uses of available spendable financial resources during a given period. These funds use fund balance as their measure of available spendable financial resources at the end of the period.
The proprietary fund utilizes an “economic resources” measurement focus. The accounting objectives of this measurement focus are the determination of operating income, changes in net assets (or cost recovery), and financial position. All assets and liabilities (whether current or noncurrent, financial, or nonfinancial) associated with their activities are reported. Proprietary fund equity is classified as net position.
The fiduciary fund utilizes an “economic resources” measurement focus. The accounting objectives of this measurement focus are the determination of additions, deductions, changes in net position, and financial position.
All assets and liabilities (whether current or noncurrent, financial, or nonfinancial) associated with their activities are reported. Fiduciary fund equity is classified as net position.
Basis of Accounting
In the Government-Wide Statement of Net Position and Statement of Activities, and the fund financial statements, governmental and business-like activities are presented using a modified cash basis of accounting. This is a basis of accounting other than accounting principles generally accepted in the United States of America (GAAP) as established by the Governmental Accounting Standards Board. The basis of accounting involves modification to the cash basis of accounting to report in the statement of net position cash transactions that result in an obligation that covers a period greater than the period in which the cash transaction occurred. Accordingly, long-term liabilities arising from cash transactions have been reported in the Statement of Net Position.
City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | JUNE 30, 2023
Notes to the Basic Financial Statements
31 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Basis of Presentation (Continued)
Basis of Accounting (Continued)
This modified cash basis of accounting differs from GAAP primarily because certain assets and their related revenues (such as accounts receivable and revenue for billed or provided services not yet collected, and other accrued revenue and receivables) and certain liabilities and their related expenses or expenditures (such as accounts payable and expenses for goods or services received but not yet paid, and other accrued expenses and liabilities) are not recorded in these financial statements, with the exception of long-term liabilities arising from cash transactions. In addition, other economic assets, deferred outflows, liabilities, and deferred inflows that do not arise from a cash transaction or event (such as donated assets and postemployment benefit obligations) are not reported, and the measurement of reported assets and liabilities does not involve adjustment to fair value. Lastly, the City does not recognize its investment in capital assets in its Statement of Net Position.
If the City utilized the basis of accounting recognized as generally accepted, the fund financial statements for governmental funds would use the modified accrual basis of accounting, while the fund financial statements for proprietary and fiduciary fund types would use the accrual basis of accounting. All government-wide financials would be presented on the accrual basis of accounting.
Cash, Cash Equivalents and Investments
For the purpose of financial reporting, “cash and cash equivalents” includes all demand and savings accounts and certificates of deposit or short-term investments with an original maturity date of three months or less. This also includes deposits with the State of California Local Agency Investment Fund (LAIF) and trust account investments in open-ended mutual fund shares.
The City has adopted GASB statement No. 72, Fair Value Measurement and Application; investments are measured at fair value on a recurring basis, when required. Recurring fair value measurements are those that GASB Statement require or permit in the statement of net position at the end of each reporting period.
Restricted cash and investments includes proceeds from the 2012 refunding water revenue bonds and the 2006 water revenue bonds which are restricted for expansion of the wastewater treatment plant, upgrade of water facilities and for repayment of bonds. Additionally, proceeds from 2020 tax allocation refunding bonds are restricted for various capital projects and for payment of bonds. Restricted cash and investments also include proceeds from grants for which the funds have not been expended.
Long-term Debt
All long-term debt arising from cash basis transactions to be repaid from governmental and business-type resources is reported as liabilities in the government-wide financial statements.
Long-term debt arising from cash basis transactions of governmental funds is not reported as liabilities in the fund financial statements. The debt proceeds are reported as other financing sources and payment of principal and interest reported as expenditures. The accounting for proprietary funds is the same in the fund financial statements as the treatment in the government-wide financial statements.
City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | JUNE 30, 2023
Notes to the Basic Financial Statements
32 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Basis of Presentation (Continued)
Equity Classification
Equity in the government-wide statements is classified as net position and displayed in three components:
Capital related debt – Consists of the outstanding balances of any bonds, mortgages, notes or other borrowings that are attributable to the acquisition, construction, or improvements of capital assets.
Restricted – Consists of restricted assets reduced by liabilities with restriction constraints placed on the use either by external groups such as creditors, grantors, contributors, or laws and regulations of other governments; or law through constitutional provisions or enabling legislation.
Unrestricted – Net amount of assets and liabilities that are not scheduled in the determination of net investment in capital assets on the restricted component of net position.
It is the City’s policy to first use restricted net resources prior to the use of unrestricted net resources when an expense is incurred for purposes for which both restricted and unrestricted net resources are available.
In the fund financial statements, fund balance for governmental funds is reported in classifications that comprise a hierarchy based primarily on the extent to which the City is bound to honor constraints on the specific purpose for which amounts in the funds can be spent. Fund balance is reported in five components: non-spendable, restricted, committed, assigned and unassigned.
Nonspendable – Amounts that cannot be spent because they are either not in spendable form or legally or contractually required to be maintained intact.
Restricted – Amounts constrained regarding the use from restrictions externally imposed by creditors, grantors, contributors, or laws or regulations of other governments or by restrictions imposed by law through constitutional provisions or enabling legislation.
Committed – Amounts constrained regarding use for specific purposes pursuant to requirements imposed by formal action of the City’s highest level of decision-making authority.
Assigned – Amounts constrained by the City’s intent to be used for specific purposes but are neither restricted nor committed. The authority of assigning fund balance is expressed by the City Council, City manager or their designee as established in the City’s Fund Balance Policy.
Unassigned – Amounts that have not been restricted, committed or assigned to specific purposes within the General Fund. The General Fund is the only fund that reports a positive unassigned fund balance amount. Other governmental funds besides the General Fund can only report a negative unassigned fund balance amount.
When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, then unrestricted resources (committed, assigned and unassigned) as they are needed. When unrestricted resources (committed, assigned and unassigned) are available for use, it is the City’s policy to use committed resources first, then assigned, and then unassigned as they are needed.
Proprietary fund equity is classified the same as in the government-wide financial statements.
City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | JUNE 30, 2023
Notes to the Basic Financial Statements
33 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Basis of Presentation (Continued)
Internal and Interfund Balances and Activities
In the process of aggregating the financial information for the Government-Wide Statement of Net Position and Statement of Activities, some amounts reported as interfund activity and balances in the fund financial statements have been eliminated or reclassified.
Interfund activity, if any, within and among the governmental, proprietary, and fiduciary fund categories is reported as follows in the fund financial statements:
Interfund loans and advances – Amounts provided with a requirement for repayment are reported as interfund receivables and payables.
Interfund services – Sales or purchases of goods and services between funds are reported as revenues and expenditures/expenses.
Interfund reimbursements – Repayments from funds responsible for certain expenditures/expenses to the funds that initially paid for them are not reported as reimbursements but as adjustments to expenditures/expenses in the respective funds.
Interfund transfers – Flow of assets from one fund to another where repayment is not expected are reported as transfers in and out.
Interfund activity and balances, if any, are eliminated or reclassified in the government-wide statements as follows:
Internal balances – Amounts reported in the fund financial statements as interfund receivables and payables are eliminated in the governmental and business-type activities columns of the Statement of Net Position, except for the net residual amounts due between governmental and business-type activities, which are reported as Internal Balances.
Internal activities – Amounts reported as interfund transfers in the fund financial statements are eliminated in the Government-Wide Statement of Activities except for the net amount of transfers between governmental and business-type activities. The effects of interfund services between funds, if any, are not eliminated in the Statement of Activities.
Minimum Fund Balance Policy
The City’s fiscal policy requires the City to maintain a General Fund reserve of 35% of the current year’s budgeted General Fund annual expenditures for cash flow purposes.
Use of Estimates
The preparation of financial statements in conformity with the modified cash basis of accounting described in Note 1 used by the City requires management to make estimates and assumptions that affect certain reported amounts and disclosures; accordingly, actual results could differ from those estimates.
City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | JUNE 30, 2023
Notes to the Basic Financial Statements
34 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Basis of Presentation (Continued)
Budgetary Accounting
The City does not adopt an appropriated budget and is not required to adopt such a budget by law. However, the City does adopt a non-appropriated budget annually which is approved by the City Council. The budget for all governmental and proprietary funds is on the cash basis of accounting.
Property Taxes
Property taxes in the State of California are administered for all local agencies at the county level, and consist of secured, unsecured, and utility tax rolls. The following is a summary of major policies and practices relating to property taxes:
Property valuations are established by the Assessor of the County of San Joaquin for the secured and unsecured property tax rolls; the utility property tax rolls are valued by the State Board of Equalization. Under the provisions of Article XIIIA of the State Constitution (Proposition 13 adopted by voters on June 6, 1978) properties are assessed at 100% of full value.
From this base of assessment, subsequent annual increases in valuation are limited to a maximum of 2%. However, increases to full value are allowed for property improvements or upon change in ownership. Personal property is excluded from these limitations and is subject to annual reappraisal.
Tax levies are limited to 1% of full value which results in a tax rate of $1.00 per $100 assessed valuation, under the provisions of Proposition 13. Tax rates for voter-approved indebtedness are excluded from this limitation.
Tax levy dates are attached annually on January 1 proceeding the fiscal year for which the taxes are levied. The fiscal year begins July 1 and ends June 30 of the following year. Taxes are levied on both real and unsecured personal property, as it exists at that time. Liens against real estate, as well as the tax on personal property, are not relieved by subsequent renewal or change in ownership.
Tax collections are the responsibility of the county tax collector. Taxes and assessments on secured and utility rolls, which constitute a lien against the property, may be paid in two installments. The first is due on November 1 of the fiscal year and is delinquent if not paid by December 10. The second is due on March 1 of the fiscal year and is delinquent if not paid by April 10. Unsecured personal property taxes do not constitute a lien against real property unless the taxes become delinquent. Payment must be made in one installment, which is delinquent if not paid by August 31 of the fiscal year.
Significant penalties are imposed by the county for late payments.
The County of San Joaquin levies bills and collects property taxes and special assessments for the City. Property taxes levied are recorded as revenue when received, in the fiscal year of the levy, due to the adoption of the “alternate method of property tax distribution”, known as the Teeter Plan, by the City of Ripon and the County of San Joaquin. The Teeter Plan authorizes the Auditor/Controller of the County of San Joaquin to allocate 100 percent of the secured property taxes billed, but not yet paid. The County of San Joaquin remits tax monies to the City in three installments as follows:
50 percent remitted in December
45 percent remitted in April
5 percent remitted in June
City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | JUNE 30, 2023
Notes to the Basic Financial Statements
35 NOTE 2 – CASH AND INVESTMENTS
Cash and investments as of June 30, 2023 are classified in the accompanying financial statements as follows:
Statement of Net Position:
Governmental and proprietary funds:
Cash and investments 33,927,108 $
Cash and investments - restricted 28,696,455
Total governmental and proprietary funds 62,623,563
Fiduciary funds:
Cash and investments 4,717,262
Cash and investments - restricted 1,297,266
Total fiduciary funds 6,014,528
Total cash and investments 68,638,091 $
Cash and investments as of June 30, 2023 consisted of the following:
Cash on hand $ 1,300
Deposits with financial institutions 98,999
Investments 68,537,792
Total cash and investments $ 68,638,091
The City maintains a cash and investment pool that is available for use by all funds. Each fund type’s portion of this pool is displayed on the Statement of Net Position and Balance Sheet as “cash and investments”. California statutes authorize cities to invest idle or surplus funds in a variety of credit instruments as provided for in the California Government Code Section 53600.
The Government Code and the City of Ripon Investment Policy allow investments in the following instruments:
Maximum Authorized Required
Maturity Limit % Rating
Local Agency Bonds 5 years None None
U.S. Treasury Bills, Notes or Bonds 5 years None None
State Registered Warrants, Notes or Bonds 5 years None None Notes and Bonds of Other Local California Agencies 5 years None None U.S. Agencies 5 years None None
Bankers Acceptances 180 days 40% None
Prime Commercial Paper 270 days 15% or 30% A1/P1
Negotiable Certificates of Deposit 5 years 30% None
Repurchase and Reverse Purchase Agreements 1 yr/92 days None/20% None Medium Term Corporate Notes 5 years 30% A
Money Market Mutual Funds 5 years 15% 2-AAA
Collateralized Bank Deposits 5 years None None
Mortgage Pass-Through Securities 5 years 20% AA
Local Agency Investment Fund (LAIF) N/A None None
County Pooled Investment Funds N/A None None
Supranational Obligations 5 years 30% AA
Funds Held Under the Terms of a Trust Indenture
Indenture or Other Contract * * *
* Such funds may be invested according to the provisions of those indentures or agreements.
Investment Type
City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | JUNE 30, 2023
Notes to the Basic Financial Statements
36 NOTE 2 – CASH AND INVESTMENTS (Continued)
A. Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment.
Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer-term investments and by timing cash flows from maturities as necessary to provide the cash flow and liquidity needed for operations.
Information about the sensitivity of the fair values of the City’s investments (including investments held by bond trustee) to market interest rate fluctuations is provided by the following table that shows the distribution of the City’s investments by maturity:
Total 12 Months
Cost Fair Value or Less
LAIF $ 5,425,782 $ 5,343,465 $ 5,343,465
CSJVRMA Pool 31,896,620 30,662,375 30,662,375
CAMP 30,010,803 30,010,803 30,010,803
US Bank - Section 115 Trust 1,204,096 1,204,096 1,204,096 Held by Bond Trustees:
Money Market Funds 491 491 491
Total 68,537,792 $ 67,221,230 $ 67,221,230 $
Investment Type
B. Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment.
This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the California Government Code, the City’s investment policy, or debt agreements, and the actual rating as of fiscal year-end for each investment type.
Minimum
Fair Legal
Amount Value Rating Not Rated
LAIF $ 5,425,782 $ 5,343,465 N/A $ 5,343,465
CSJVRMA Pool 31,896,620 30,662,375 * N/A 30,662,375
CAMP Term Investments 30,010,803 ** N/A 30,010,803 30,010,803 US Bank - Section 115 Trust 1,204,096 1,204,096 N/A 1,204,096 Held by Bond Trustees:
Money Market Funds 491 491 N/A 491
Total 68,537,792 $ 67,221,230 $ N/A $ 67,221,230
* Average rating of portfolio AA/Aa1
** Average rating of portfolio AAAf
Investment Type
City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | JUNE 30, 2023
Notes to the Basic Financial Statements
37 NOTE 2 – CASH AND INVESTMENTS (Continued)
C. Concentration of Credit Risk
The investment policy of the City contains limitations on the amount that can be invested in certain types of investments.
The City’s investments are concentrated in external investment pools which are not subject to investment limits.
Custodial credit risk for deposits is the risk that, in the event of failure of a depository financial institution, a government will not be able to recover its deposit or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial risk for deposits or investments, other than the following provisions for deposits. The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits.
As of June 30, 2023, none of the City’s deposits with financial institutions were in excess of federal depository insurance limits.
D. Investment in State Investment Pool
Although the City did not participate in any securities lending transactions or enter into any reverse repurchase agreements during the year, the City does have an investment in the California Local Agency Investment Fund (LAIF) with fair value in the amount of $5,343,465. The total amount invested by all public agencies in the LAIF is $25,677,325,266.
The Local Investment Advisory Board (Board) has oversight responsibility for the LAIF. The Board consists of five members as designated by state statute. The value of the pool shares in the LAIF, which may be withdrawn, is determined on an amortized cost basis, which is different than the fair value of the City’s portion in the pool. Included in the LAIF’s Investment Portfolio are United States Treasury and federal agency securities, International Bank for Reconstruction and Development federal agency floating rate debentures, bank notes, certificates of deposit, commercial paper, corporate floaters and bonds, time deposits, and California Assembly Bill 55 and State of California General Fund loans. Participant’s equity in the LAIF is determined by the dollar amount at the participant’s deposits, adjusted for withdrawals and distributed investment income. Accordingly, LAIF is not an investment type that can be categorized in any particular level in the fair value hierarchy. The State Treasurer’s investment policy for the LAIF and separately issued financial statements for the LAIF are available at https://www.treasurer.ca.gov/pmia-laif/pmia/index.asp E. Central San Joaquin Valley Risk Management Authority Pool The City maintains an investment of $31,896,620 in the Central San Joaquin Valley Risk Management Authority (CSJVRMA) Pool as of June 30, 2023. The total amount invested by all participants in the pool is $155,777,363. The value of the pool shares which may be withdrawn is determined on an amortized cost basis, which is different than the fair value of the City’s portion in the pool. The fair value of the City’s share of the pool is determined monthly and is $30,662,375 as of June 30, 2023. As the investment in CSJVRMA is presented at amortized costs, they are not an investment type that can be categorized in any level in the fair value hierarchy. The pool is not registered with the Securities Exchange Commission; however, it is managed by a registered investment advisor. Participation in the pool is voluntary. The pool’s average maturity is 2.75 years, and the average rating is AA/Aa1. The pool consists of 49% Securities of U.S. Government Agencies, 27% U.S. Corporate Obligations and 24% other. The pool complies with the City’s investment policy.
City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | JUNE 30, 2023
Notes to the Basic Financial Statements
38 NOTE 2 – CASH AND INVESTMENTS (Continued)
F. US Bank – Section 115 Trust
The City maintains a total investment of $1,204,096 in the US Bank Section 115 trust (115 Trust). The investment in the 115 Trust consists of mutual funds, index funds, money market funds and cash holdings for which identical assets are not found within active markets. These investments have been classified as level 2 within the fair value hierarchy.
G. Investment in California Asset Management Program
The City maintains a total investment of $30,010,803 in the California Asset Management Program (CAMP) as of June 30, 2023. CAMP is a California Joint Powers Authority established in 1989 to provide California public agencies with professional investment services. The City’s investment in CAMP Term offerings include fixed-term, fixed rate of returns based on a pool of open-market securities, such as mutual funds, index funds, money market funds and cash holdings. As a result, these investments have been classified as level 2 within the fair value hierarchy.
NOTE 3 – INTERFUND TRANSACTIONS
Interfund transactions consist of the following:
A. Transfers Between Funds
Resources may be transferred from one City fund to another with Council approval. Transfers between funds during the year ended June 30, 2023 were as follows:
Transfers In Transfers Out
Major Governmental Funds:
General Fund $ 5,957,538 - $
Streets and Roads Special Revenue Fund 1,612,262 -
Capital Projects Fund 7,957,205 -
Major Proprietary Funds:
Sewer Enterprise 896,920 -
Water Enterprise 1,331,170 -
Refuse Enterprise 240,026 -
Non-Major Special Revenue Funds:
2103 Fund 250,431 -
2105 Fund 175,424 -
2106 Fund - 67,255
2107.5 Fund - 4,041
SB1 Street & Road Tax Fund - 42,218
COG/LTF Fund 648,564 -
Dutch Meadows Fund 7,291 -
Country Woods Fund 6,133 -
Farmland Estates Fund 4,283 -
Main Street Landscape Fund 26,267 -
Alexandra Landscape Fund - 146
Total interfund transfers 9,613,587 $ 9,613,587 $
Fund
City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | JUNE 30, 2023
Notes to the Basic Financial Statements
39 NOTE 3 – INTERFUND TRANSACTIONS (Continued)
A. Transfers Between Funds (Continued)
In general, the City uses interfund transfers to:
Transfer unrestricted revenues collected in the General Fund to help finance various programs and capital projects accounted for in other funds.
Transfer unrestricted revenues collected in the General Fund to help cover excess expenditures over revenues accounted for in other funds.
Fund operations (move revenues from the funds that collect them to the funds that statute or budget requires to expend them)
Fund interdepartmental cost reimbursement
Fund capital projects
The effect of the interfund activity has been eliminated from the government-wide financial statements.
B. Internal Balances
Advances To/From Other Funds
During the year ended June 30, 2014, the City Council passed a resolution authorizing the installation of water meters on all water customer connections known as the Water Meter Implementation Program. This resolution called for the recovery of costs related to the installation project over the period of ten years through an additional charge to customers known as a “Water Meter Surcharge” fee. To pay for the cost of the project, City Council authorized expenditures from the Capital Projects Fund with the understanding, and legal requirement, that the Water Enterprise Fund will reimburse the expenditures incurred by the Capital Projects Fund from the revenues received from the newly implement Water Meter Surcharge fee. The City anticipates collections from this revenue source to be approximately $193,000 in each fiscal year. During the year ended June 30, 2023 the Water Enterprise Fund collected approximately $191,992 in water meter surcharges which was subsequently paid back to the capital projects fund. As of June 30, 2023 the balance owed from the Water Enterprise Fund to the Capital Projects Fund was $442,133.
During the year ended June 30, 2020, City Council passed a resolution authorizing an agreement with a local business in which the City would pay for certain capital improvements to a City owned recreation facility which would then be rented by the business. These capital expenditures were paid for by the Capital Projects Fund on behalf of the General Fund with the expectation that these costs would be recovered over a ten-year period through rent proceeds received from the tenant. During the year ended June 30, 2023, the General Fund collected $113,250 in facilities rent which was subsequently paid back to the Capital Projects Fund, in addition to debt forgiveness (as described in note 14) of $1,200,000 as approved by City Council. As of June 30, 2023 the balance owed from the General Fund to the Capital Projects fund was $246,671.
During the year ended June 30, 2023, the City Council passed a resolution authorizing an advance between the General Fund and the Capital Project Fund for the purposes of capital needs related to future planned capital projects (Corporation Yard Project). Total funds advanced from the General Fund to the Capital Project fund during the year totaled $5,687,300 and accrue simple interest at a rate of 1%. The loan is expected to be repaid with eligible developer fees collected by the Capital Project Fund. As of June 30, 2023 the total advance related to this agreement was $5,695,402.
City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | JUNE 30, 2023
Notes to the Basic Financial Statements
40 NOTE 4 – LOAN DUE TO PRIVATE-PURPOSE TRUST FUND
In 2011, the City entered into a loan agreement between the Redevelopment Agency and the City of Ripon (City). The City shall repay the Redevelopment Agency, the principal sum of up to five million dollars ($5,000,000) and pay interest on the outstanding balance of said sum at the rate of 0.4625% (the LAIF rate as of December 2010) for the first year.
Thereafter, at the end of each calendar year, the interest rate may be reset according to the December LAIF rate (2.07% at December 2022). A minimum of fifty percent (50%) of all development impact (PFFP) paid in connection with building activity of the City for the same calendar year shall be applied towards the loan. Only after the interest accrued for that calendar year has been paid, shall the outstanding balance be reduced. The full payment of principal and interest outstanding was due as of February 1, 2016; however, the City has only partially repaid the total balance owed and continues to work with the Department of Finance to settle the liability.
As of February 1, 2012, the Redevelopment Agency was dissolved, and the assets and activities of the Redevelopment Agency were transferred to a private-purpose trust fund (Successor Agency Trust).
NOTE 5 – LONG-TERM DEBT
The City incurs long-term debt to finance projects or purchase assets which will have useful lives equal to or greater than the related debt.
In governmental fund types, debt discounts and issuance costs are recognized in the current period. Debt discounts and issuance costs incurred by proprietary fund types have also been recorded in the period incurred in accordance with the modified cash basis of accounting.
A. Current Year Transactions and Balances
The City’s debt issues and transactions are summarized below and discussed in further detail thereafter:
Original Balance Balance Current
Amount June 30, 2022 Additions Reductions June 30, 2023 Year Business-Type Activities
2011 Refunding Revenue
Bonds (Sewer) $ 2,195,000 $ 720,000 $ 170,000 - $ $ 550,000 $ 175,000 2006 Revenue Bonds
(Water) 7,845,000 4,370,000 315,000 - 4,055,000 330,000 2012 Refunding Revenue
Bonds (Water) 1,485,000 3,350,000 - 230,000 1,255,000 235,000 Total 13,390,000 $ 6,575,000 $ - $ 715,000 $ 5,860,000 $ 740,000 $ B. Revenue Bonds
Enterprise fund long-term debt outstanding as of June 30, 2023 consisted of the following:
In 2011, the City entered into an Installment Purchase Agreement with Bank of America Leasing to refund the City’s portion of the California Statewide Communities Development Authority Water and Wastewater Revenue Bonds (Pooled Financing Program) Series 1999A. The original borrowing was $2,195,000. The bonds are secured by a pledge of net revenues of the Sewer Enterprise Fund. The Sewer Enterprise Fund is required to establish user fees and rates that will yield net revenues equal to at least 1.2 times the annual debt service. Principal payments are due annually on October 1.
Interest payments are payable semi-annually on April 1 and October 1. In the event the City fails to make prompt payment, the Trustee may declare the entire unpaid balance immediately due.
City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | JUNE 30, 2023
Notes to the Basic Financial Statements
41 NOTE 5 – LONG-TERM DEBT (Continued)
B. Revenue Bonds (Continued)
In August 2006, the City issued $7,845,000 California Statewide Communities Development Authority Water Revenue Bonds Series 2006C. The bonds are secured by a pledge of net revenues of the Water Enterprise Fund. The Water Enterprise Fund is required to establish user fees and rates that will yield net revenues equal to at least 1.2 times the annual debt service. Principal payments are due annually on October 1. Interest payments are payable semi-annually on April 1 and October 1. In the event the City fails to make prompt payment, the Trustee may declare the entire unpaid balance immediately due.
In September 2012, the City entered into an agreement with Union Bank, N.A. to refund the City’s portion of the California Statewide Community Development Authority Water and Wastewater Revenue Bonds (Pooled Financing Agreement) Series 2002A. The original borrowing was $3,350,000. The bonds are secured by a pledge of net revenues of the Water Enterprise Fund. The Water Enterprise Fund is required to establish user fees and rates that will yield net revenues equal to at least 1.2 times the annual debt service. Principal payments are due annually on October 1. Interest payments are payable semi-annually on April 1 and October 1. In the event the City fails to make prompt payment, the Trustee may declare the entire unpaid balance immediately due.
All debts recorded by the City have been evaluated and are neither direct financing nor direct borrowings, under GASB 88.
Debt Outstanding as of June 30, 2023 consisted of the following:
Interest Amounts
Rate Maturity Date Issued Outstanding
Business-Type Activities
Enterprise Fund Bonds
2011 Refunding Wastewater Revenue
Bonds (Sewer):
Term Bonds 4.20% October 1, 2025 2,195,000 $ 550,000 $
2006 Revenue Bonds (Water):
Term Bonds 4.50% October 1, 2027 2,120,000 1,805,000
Term Bonds 4.50% October 1, 2032 2,250,000 2,250,000
Subtotal 4,370,000 4,055,000
2012 Refunding Revenue Bonds (Water):
Serial Bonds 2.00%-3.375% October 1, 2027 3,350,000 1,255,000 Total 9,915,000 $ 5,860,000 $
Annual future debt service requirements are shown below for all long-term debt:
For the Years
Ending June 30 Principal Interest
2024 $ 740,000 $ 237,981
2025 775,000 208,371
2026 800,000 177,390
2027 635,000 149,069
2028 660,000 123,497
2029-2032 312,750 2,250,000
Total 5,860,000 $ 1,209,058 $
City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | JUNE 30, 2023
Notes to the Basic Financial Statements
42 NOTE 6 – DEFICIT NET POSITION AND FUND BALANCES
A. Fund Balance and Net Position Deficits
Major Funds
The Water Enterprise Fund had a net position deficit of $4,815,614 at June 30, 2023. This deficit is due to debt financing and is expected to be offset in the future from the receipts of revenues from charges for services and construction permits and the repayment of said debt.
NOTE 7 – EMPLOYEE RETIREMENT SYSTEMS
A. Defined Contribution Plan
The City provides pension benefits for all of its permanent full-time employees, who completed six consecutive months of employment, through the City of Ripon Money Purchase Thrift Pension Plan (the Contribution Plan), a defined contribution plan, with the exception of public safety officers. On April 4, 1990, the public safety officers elected to participate in the California Public Employees Retirement System. In a defined contribution plan, benefits depend solely on amounts contributed to the plan plus investment earnings. As of June 30, 2023, there were 76 plan members. The Contribution Plan provisions, and contribution requirements are established and may be amended by the City Council.
The City contributes 10% of the total compensation of all participants who agree to contribute 5% of their compensation to the plan. The City entered into a Memorandum of Understanding with the Union representing its employees which requires the City to “pick up” the 5% employee contribution. All such contributions are designated as employee contributions and are fully vested. The Contribution Plan also allows additional employee contributions up to 6.6% of annual compensation, and the City will match such contributions at a 50% rate up to 3.3% of the qualified employee’s annual compensation.
The trust agreement provides that each participant directs the investments held in his/her individual account.
Participants are immediately vested in their contributions plus actual earnings thereon. The City’s contributions for each employee and interest allocated to the employee’s account are fully vested after six years of continuous service. City contributions for, and interest forfeited by, employees who leave employment before six years of service are redistributed to all participants based on salary and vesting levels with the exception of the additional contributions up to
6.6% of annual compensation referenced above, which are immediately fully vested.
The City’s total payroll in fiscal year 2023 was $7,339,795. The City’s contributions were calculated using the base salary amount of $4,106,408 for employees participating in the City’s defined contribution plan. The total employee and employer contributions for the year ended June 30, 2023 were $426,786 and $521,373, respectively. The employee and employer contributions represented 10.39% and 12.70% of covered payroll, respectively.
The Contribution Plan’s investments are reported at fair value in the separately issued plan financial Statements. The methods used to measure fair value may produce an amount that may not be indicative of net realizable value or reflective future fair values. Furthermore, although the Contribution Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | JUNE 30, 2023
Notes to the Basic Financial Statements
43 NOTE 7 – EMPLOYEE RETIREMENT SYSTEMS (Continued)
A. Defined Contribution Plan (Continued)
The fair value measurement accounting literature establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy consists of three broad levels: Level 1 inputs consist of unadjusted quoted prices in active markets for identical assets and have the highest priority; Level 2 inputs are from other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly; and Level 3 inputs are unobservable and have the lowest priority. The Contribution Plan uses appropriate valuation techniques based on the available inputs to measure the fair value of its investments. When available, the Contribution Plan measures fair value using Level 1 inputs because they generally provide the most reliable evidence of fair value. Level 3 inputs were used only when Level 1 or Level 2 inputs were not available.
The following table sets forth, by level within the fair value hierarchy, the Plan’s investments at fair value as of June 30, 2023:
Level 1 Level 2 Level 3 Total
U.S. Government Securities $ 1,262,370 - $ - $ 1,262,370 $ Corporate Obligations - - - -
Mutual Funds 10,027,486 - 10,027,486 -
Common and Preferred stock 1,120,371 - 1,120,371 -
Real Estate Investment Trusts - 72,494 - 72,494
Total 72,494 $ 12,410,227 $ - $ 12,482,721 $
Assets at Fair Value as of June 30, 2023
B. California Public Employees Retirement System
Plan Descriptions
All public safety officers are eligible to participate in the City’s Safety Employee Pension Plan (the Plan), a cost-sharing multiple employer defined benefit pension plan administered by the California Public Employees’ Retirement System (CalPERS). Benefit provisions under the plan 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 Benefit, or the Optional Settlement 2W Death Benefit.
The cost-of-living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.
City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | JUNE 30, 2023
Notes to the Basic Financial Statements
44 NOTE 7 – EMPLOYEE RETIREMENT SYSTEMS (Continued)
B. California Public Employees Retirement System (Continued) Benefits Provided (Continued)
The Plans’ provisions and benefits in effect at June 30, 2023 are summarized as follows:
Prior to January 1, 2012 through On or after
Hire date January 1, 2012 December 31, 2012 January 1, 2013 Benefit formula 3% @ 50 3% @ 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
Monthly benefits, as a % of eligible compensation 3.000% 2.400% to 3.000% 2.000% to 2.700% Required employee contribution rates 9.000% 9.000% 13.750% Required employer contribution rates 25.650% 22.830% 13.540% Safety
Contributions
Section 20814c of the California Public Employees’ 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 basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees.
For the year ended June 30, 2023, the contributions recognized as part of pension expense totaled $805,138.
NOTE 8 – DEFERRED COMPENSATION PLAN AND TRUST
The City offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The Plan, available to all City employees, permits them to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency.
All amounts of compensation deferred under the plan, all property and rights purchased with those amounts, and all income attributable to those amounts, property, or rights (until paid or made available to the employee or other beneficiary) are solely the property and rights of the employees. Accordingly, the plan/trust assets have been excluded from the City’s reported assets.
NOTE 9 – RISK MANAGEMENT
The City is exposed to various risks of loss related to torts, errors and omissions and injuries to employees. The City participates in a pooled liability program for general liability and workers compensation through the Central San Joaquin Valley Risk Management Authority (the Authority). The pooled liability program is an insurance pool provided through the deposits of approximately 58 member cities. The Authority is not an insurance company and does not charge a premium for coverage. Audited financial statements are available from the Central San Joaquin Valley Risk Management Authority at 1750 Creekside Oaks Drive, Suite, 200, Sacramento, CA 95833.
City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | JUNE 30, 2023
Notes to the Basic Financial Statements
45 NOTE 9 – RISK MANAGEMENT (Continued)
A. General Liability
The liability coverage provided by the Authority is completely self-insured by its member cities and all losses and related costs are shared among the other member cities in the pool above the City’s retained limit of $50,000 for the fiscal year ended June 30, 2023. The Authority determines the amount of risk each member city brings to the pool and calculates a relative risk distribution factor. As part of the retrospective adjustment process, at the time the respective program year is closed, any surplus will be refunded to the City and net deficits will be billed to the City. The City financial statements are prepared on the modified cash basis of accounting and, accordingly, a liability for net fund deficits, if any, on open program years have not been recorded. Disbursements to the Authority for general liability coverage during the year ended June 30, 2023 were $364,736.
B. Workers’ Compensation
The workers’ compensation coverage is provided by the Authority through a pooling feature which requires the member cities to self-insure a portion of each claim. Sharing of the risk is accomplished by forming pooled layers above the member city’s retained limit of $50,000 for the fiscal year ended June 30, 2023. As part of the retrospective adjustment process, at the time the respective program year is closed any surplus will be refunded to the City and net deficits will be billed to the City. The Pooled Workers’ Compensation Program participates in Local Agency Workers’ Compensation Joint Powers Authority (LAWCX).
Members of LAWCX risk share the layer between $2,000,000 and $5,000,000 (most recent information). Effective July 1, 2003, LAWCX joined the California State Association of Counties Excess Insurance Authority (CSAC EIA), a joint powers authority comprised of a number of individual public entities and other joint power authorities. CSAC EIA provides coverage above $5,000,000. The City’s financial statements are prepared on the modified cash basis of accounting and, accordingly, a liability for net fund deficits, if any, on open program years have not been recorded. Disbursements to the Authority for workers’ compensation coverage during the year ended June 30, 2023 were $559,948.
NOTE 10 – CONTINGENCIES
A. Grant Program Involvement
In the normal course of operations, the City participates in various federal or state grant/loan programs from year to year.
The grant/loan programs are often subject to additional audits by agents of the granting or loaning agency, the purpose of which is to ensure compliance with the specific conditions of the grant or loan. Any liability or reimbursement that may arise as a result of these audits cannot be reasonably determined at this time, although it is believed the amount, if any, would not be material.
B. General Liability
The City is subject to litigation arising from the normal course of business. In the opinion of the City attorney there is no pending litigation which is likely to have a material adverse effect on the financial position of the City.
NOTE 11 – REVENUE LIMITATIONS IMPOSED BY CALIFORNIA PROPOSITION 218 Proposition 218, which was approved by the voters in November 1996, regulates the City’s ability to impose, increase, and extend taxes, assessments and fees. Any new increased or extended taxes, assessments and fees subject to the provisions of Proposition 218 require voter approval before they can be implemented. Additionally, Proposition 218 provides that these taxes, assessments and fees are subject to the voter initiative process and may be rescinded in the future years by the voters.
City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | JUNE 30, 2023
Notes to the Basic Financial Statements
46 NOTE 12 – SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X 26 (“the Bill”) that provides for the dissolution of all redevelopment agencies in the State of California. This action impacted the reporting entity of the City of Ripon that previously had reported a redevelopment agency within the reporting entity of the City as a blended component unit.
The Bill provides that upon dissolution of a redevelopment agency, either the city or another unit of local government will agree to serve as the “successor agency” to hold the assets until they are distributed to other units of state and local governments. On January 17, 2012, the City Council elected to become the Successor Agency for the former redevelopment agency in accordance with the Bill as part of City Resolution Number 12-7.
After enactment of the law, which occurred on June 28, 2011, redevelopment agencies in the State of California cannot enter into new projects, obligations or commitments. Subject to the control of a newly established oversight board, remaining assets can only be used to pay enforceable obligations in existence at the date of dissolution (including the completion of any unfinished projects that were subject to legally enforceable contractual commitments).
In future fiscal years, successor agencies will only be allocated revenue in the amount that is necessary to pay the estimated annual installment payments on enforceable obligations of the former redevelopment agency until all enforceable obligations of the prior redevelopment agency have been paid in full and all assets have been liquidated.
The Bill directs the State Controller of the State of California to review the propriety of any transfers of assets between redevelopment agencies and other public bodies that occurred after January 1, 2011. If the public body that received such transfers is not contractually committed to a third party for the expenditure or encumbrance of those assets, the State Controller is required to order the available assets to be transferred to the public body designated as the successor agency by the Bill.
In accordance with the timeline set forth in the Bill (as modified by the California Supreme Court on December 29, 2011) all redevelopment agencies in the State of California were dissolved and ceased to operate as a legal entity as of February 1, 2012.
After the date of dissolution, the assets and activities of the dissolved redevelopment agency are reported as fiduciary funds (private-purpose trust funds) in the financial statements of the City.
In addition, the former Ripon Redevelopment Agency transferred all housing rights, powers, assets, liabilities, duties and obligations to the Housing Authority of the County of San Joaquin by operation of law, on February 1, 2012. The Housing Authority has chosen not to take any action on this transfer because it does not believe it is obligated to accept the housing functions previously performed by the former Ripon Redevelopment Agency. The City’s position on this issue is not a position of settled law and there is uncertainty regarding this issue. It is reasonably possible that a legal determination may be made at a later date by an appropriate judicial authority that would resolve this issue. Currently the remaining housing assets and loan portfolios are currently administered by the City of Ripon until a final resolution is determined. The activity of the housing assets of the former Ripon Redevelopment Agency are also reported as fiduciary funds (private-purpose trust funds) in the financial statements of the City.
City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | JUNE 30, 2023
Notes to the Basic Financial Statements
47 NOTE 12 – SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY (Continued) A. Long-Term Debt
The Successor Agency’s debt issues and transactions are summarized below and discussed in detail thereafter:
Original Balance Balance
Amount June 30, 2022 Additions Reductions June 30, 2023 Current Fiduciary Fund
Former Redevelopment
Agency of the City of Ripon
2020 Tax Allocation
Refunding Bonds 16,560,000 $ 16,560,000 $ - $ - $ 16,560,000 $ - $ Premiums 3,595,317 3,220,805 - 224,707 2,996,098 -
Total 20,155,317 $ 19,780,805 $ - $ 224,707 $ 19,556,098 $ - $ B. Tax Allocation Bonds
In 2020, the Successor Agency to the Former Redevelopment Agency of the City of Ripon issued Tax allocation Refunding Bonds in the amount of $16,560,000 to refund the 2003, 2005, and 2007 series Tax Allocation Bonds previously issued by the Former Redevelopment Agency. This was done to take advantage of lower interest rates and to save on future debt service payments. Total debt service payments were reduced by $3,339,938. As a result, the 2003, 2005, and 2007 series Tax Allocation Bonds are considered fully defeased as of June 30, 2020. The 2020 bonds mature beginning on November 1, 2025 through 2036 and include variable rates of interest from 3%-4%. Those bonds maturing on or before November 1, 2030 are not subject to optional redemption prior to maturity and those maturing after November 1, 2030 are subject to redemption at the option of the Successor Agency on any date on or after November 1, 2030. Payments on the bonds are due biannually on May 1 and November 1 beginning on May 1, 2021. There is a provision whereby if the Successor Agency is unable to make payment or does not comply with bond covenants the Trustee may and shall at the written direction of the Owners of not less than a majority in aggregate principal amount of bonds at that time outstanding, declare the principal of all bonds outstanding and the accrued interest thereon to be due and payable immediately. The 2020 Tax Allocation Refunding Bonds are secured by a pledge of Tax Revenues derived from the Project Area and moneys in certain funds held under the bond indenture.
Fiduciary Fund debt outstanding as of June 30, 2023 consists of the following:
Interest Rate Maturity Date Amounts Issued Outstanding
Former Redevelopment
Agency of the City of Ripon
2020 Tax Allocation Bonds
Serial Bonds 3.00% Nov. 1, 2025 $ 210,000 210,000 $
Term Bonds 4.00% Nov. 1, 2036 16,350,000 16,350,000
Total $ 16,560,000 16,560,000 $
Fiduciary Fund
City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | JUNE 30, 2023
Notes to the Basic Financial Statements
48 NOTE 12 – SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY (Continued) B. Tax Allocation Bonds (Continued)
Annual debt service requirements are shown below for fiduciary fund long-term debt:
For the Years
Ending June 30 Principal Interest
2024 $ - $ 660,300
2025 - 660,300
2026 210,000 657,150
2027 880,000 636,400
2028 1,340,000 592,000
2029-2033 7,565,000 2,092,900
2034-2037 6,565,000 529,900
Total 16,560,000 $ 5,828,950 $
Fiduciary Activities
NOTE 13 – PUBLIC FACILITIES FINANCING PLAN
The City collects fees from various developers in accordance with its Public Facilities Financing Plan (PFFP) that is restricted to be used for fund infrastructure needed to support growth in the City. The PFFP fees are collected to fund specific facility types, which include transportation, water, wastewater, storm drain, parks and recreation, library, administration, police, and corporation yard facilities. Additional other non PFFP fees are collected, including garbage, mitigation and building permit fees, each of which is also restricted for specific purposes. Each of these funds, which are maintained in the City’s Capital Projects Fund, are required to be accounted for separately.
There are a number of PFFP funds with negative balances, which was a result of advancing certain infrastructure projects ahead of collecting the necessary funds. These negative balances, which were borrowed from other PFFP funds and restricted funds with positive balances, continue to be tracked and are charged with interest expense that are applied to the funds with positive balances.
During the most recent PFFP fee update, a consultant evaluated the funds with negative balances and determined that the fees, as currently established, allows the City to collect sufficient revenue from future development to reimburse the funds with negative balances within the timeframe of the remainder of the City’s General Plan.
The following includes the City’s PFFP fund balances for the year ended June 30, 2023:
Balance Balance
June 30, 2022 Revenue Expenditures Transfers June 30, 2023 Water $ 2,794,361 $ 186,686 $ - $ 2,981,047 - $
SSJID Connection Reserve 818,384 53,492 - 871,876 -
Garbage (663,608) 14,370 (106,204) (755,442) -
Wastewater 5,380,469 305,278 - 5,685,747 -
Storm Drainage 2,280,059 135,788 - 2,415,847 -
Transportation 1,224,927 637,618 (18,757) 1,843,788 -
Regional Transportation Impact Fee 1,310,681 304,122 - 1,614,803 - Parks and Recreation 1,202,796 42,855 (1,200,000) - 45,651 Police Station (1,197,518) 22,424 (17,940) (1,193,034) - City Hall (3,794,552) 46,833 (56,974) (3,804,693) -
Corporation Yard 445,063 124,439 (751,448) 1,757,494 1,575,548 Library 1,076 (607,129) (9,146) - (615,199)
Total balances by facility type $ 1,874,981 9,193,933 $ (960,469) $ 557,494 $ 10,665,939 $ Facility Type
City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | JUNE 30, 2023
Notes to the Basic Financial Statements
49 NOTE 14 – SPECIAL AND EXTRAORDINARY ITEMS
A. Special Item – Debt Forgiveness
During the year ended June 30, 2023, the City Council passed a resolution to forgive a portion of the advance between the City’s Capital Project fund and General fund in the amount of $1,200,000. This advance, as described at note 3, was originally made for the purposes of a Parks & Recreation capital project and was subsequently backfilled utilizing resources previously existing within the Capital Project fund that were eligible for this purpose.
B. Extraordinary Item – Transferred Bond Proceeds
In accordance with the timeline set forth in ABX1 26 (as modified by the California Supreme Court on December 29, 2011) all redevelopment agencies in the State of California were dissolved and ceased to operate as legal entities as of February 1, 2012. Upon approval of the Redevelopment Agency’s Long-Range Property Management Plan (LRPMP), designated assets were transferred to the Successor Agency Private Purpose Trust Fund or City, dependent on the approved use noted in the approved LRPMP. During the year ended June 30, 2023, City management identified that bond proceeds held within the Successor Agency Private Purpose Trust Fund were improperly accounted for as an asset of the Redevelopment agency during the initial LRPMP. With guidance from the City’s legal counsel, these funds, previously accounted for as unspent bond proceeds, were determined to have been spent on the original eligible purpose of the bonds within the City’s Capital Project fund prior to the dissolution of the redevelopment agency. Accordingly, these assets have been transferred to the City’s Capital Project Fund in the amount of $1,757,494 during the year ended June 30, 2023.
City of Ripon - Draft Financial Statements - 2023
50 SUPPLEMENTARY INFORMATION
City of Ripon - Draft Financial Statements - 2023
51 NON-MAJOR SPECIAL REVENUE FUNDS
City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | JUNE 30, 2023
Non-Major Special Revenue Funds
Combining Balance Sheet – Modified Cash Basis
52 HUTA HUTA HUTA HUTA HUTA
2103 2105 2106 2107 2107.5
Fund Fund Fund Fund Fund
ASSETS
Cash and investments - $ - $ 92,819 $ 653,293 $ - $
Total assets - $ - $ 92,819 $ 653,293 $ - $
LIABILITIES
Due to other funds - $ - $ - $ - $ - $
Total liabilities - - - - -
FUND BALANCES
Restricted for:
Street construction and maintenance - - 92,819 653,293 - Assessment districts - - - - -
Capital projects - - - - -
Unassigned - - - - -
Total fund balances - - 92,819 653,293 -
Total liabilities and fund balances - $ - $ 92,819 $ 653,293 $ - $ City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | JUNE 30, 2023
Non-Major Special Revenue Funds
Combining Balance Sheet – Modified Cash Basis (Continued) 53 SB1 Street &
Road Tax Measure K COG/LTF STA/BUS CDBG
Fund Fund Fund Fund Fund
ASSETS
Cash and investments 532,006 $ 3,266,632 $ 10,085 $ 22,128 $ - $ Total assets 532,006 $ 3,266,632 $ 10,085 $ 22,128 $ - $
LIABILITIES
Due to other funds - $ - $ - $ - $ - $
Total liabilities - - - - -
FUND BALANCES
Restricted for:
Street construction and maintenance 532,006 3,266,632 10,085 - - Assessment districts - - - - -
Capital projects - - - 22,128 -
Unassigned - - - - -
Total fund balances 532,006 3,266,632 10,085 22,128 -
Total liabilities and fund balances 532,006 $ 3,266,632 $ 10,085 $ 22,128 $ - $ City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | JUNE 30, 2023
Non-Major Special Revenue Funds
Combining Balance Sheet – Modified Cash Basis (Continued) 54 Dutch Country Farmland Jacob's Carolina's
Meadows Woods Estates Landing Landscape
Fund Fund Fund Fund Fund
ASSETS
Cash and investments $ - - $ - $ 22,058 $ 28,419 $
Total assets - $ - $ - $ 22,058 $ 28,419 $
LIABILITIES
Due to other funds - $ - $ - $ - $ - $
Total liabilities - - - - -
FUND BALANCES
Restricted for:
Street construction and maintenance - - - - -
Assessment districts - - - 22,058 28,419
Capital projects - - - - -
Unassigned - - - - -
Total fund balances - - - 22,058 28,419
Total liabilities and fund balances - $ - $ - $ 22,058 $ 28,419 $ City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | JUNE 30, 2023
Non-Major Special Revenue Funds
Combining Balance Sheet – Modified Cash Basis (Continued) 55 Boesch/
Kingery Main Street Vineyards Alexandra
Assessment Landscape Cornerstone I Landscape Landscape
Fund Fund Fund Fund Fund
ASSETS
Cash and investments 15,780 $ - $ 85,194 $ 142,454 $ - $ Total assets 15,780 $ - $ 85,194 $ 142,454 $ - $
LIABILITIES
Due to other funds - $ - $ - $ - $ - $
Total liabilities - - - - -
FUND BALANCES
Restricted for:
Street construction and maintenance - - - - -
Assessment districts 15,780 - 85,194 142,454 -
Capital projects - - - - -
Unassigned - - - - -
Total fund balances 15,780 - 85,194 142,454 -
Total liabilities and fund balances 15,780 $ - $ 85,194 $ 142,454 $ - $ City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | JUNE 30, 2023
Non-Major Special Revenue Funds
Combining Balance Sheet – Modified Cash Basis (Continued) 56 Total
Ripon Non-Major
Lighting Special Revenue
Fund Funds
ASSETS
Cash and investments 43,515 $ 4,914,384 $
Total assets 43,515 $ 4,914,384 $
LIABILITIES
Due to other funds - $ - $
Total liabilities - -
FUND BALANCES
Restricted for:
Street construction and maintenance - 4,554,835
Assessment districts 43,515 337,421
Capital projects - 22,128
Unassigned - -
Total fund balances 43,515 4,914,384
Total liabilities and fund balances (deficit) 43,515 $ 4,914,384 $ City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | FOR THE YEAR ENDED JUNE 30, 2023 Non-Major Governmental Funds
Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Modified Cash Basis 57 HUTA HUTA HUTA HUTA HUTA
2103 2105 2106 2107 2107.5
Fund Fund Fund Fund Fund
REVENUES
Taxes $ - $ - $ - $ - $ -
Assessments - - - - -
Investment income 2,541 1,779 1,623 6,627 41
Intergovernmental revenue 126,733 90,410 58,681 123,223 4,000 Charges for services - - - - -
Other - - - - -
Total revenues 129,274 92,189 60,304 129,850 4,041
EXPENDITURES
Streets and public works:
Streets - - - - -
Planning - - - - -
Community development - - - - -
Special assessment districts - - - - -
Allocation to other department costs - - - - -
Total expenditures - - - - -
Excess (deficiency) of revenues over expenditures 129,274 92,189 60,304 129,850 4,041
OTHER FINANCING SOURCES (USES)
Operating transfers in - - - - -
Operating transfers out (250,431) (175,424) (67,255) - (4,041) Total other financing sources (uses) (250,431) (175,424) (67,255) - (4,041) Net change in fund balances (121,157) (83,235) (6,951) 129,850 - Fund balances (deficit) - beginning 83,235 121,157 99,770 523,443 - Fund balances (deficit) - ending - $ - $ 92,819 $ 653,293 $ - $ City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | FOR THE YEAR ENDED JUNE 30, 2023 Non-Major Governmental Funds
Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Modified Cash Basis (Continued) 58 SB1 Streets &
Road Tax Measure K COG/LTF STA/BUS CDBG
Fund Fund Fund Fund Fund
REVENUES
Taxes $ - $ - $ - $ - $ -
Assessments - - - - -
Investment income 5,825 33,139 6,682 838 -
Intergovernmental revenue 350,367 376,504 620,260 57,798 52,423 Charges for services - - - 1,952 -
Other - - - - -
Total revenues 409,643 356,192 626,942 60,588 52,423
EXPENDITURES
Streets and public works:
Streets - - - 51,472 -
Planning - - - - 4,999
Community development - - - - 47,424
Special assessment districts - - - - -
Allocation to other department costs - - - 9,026 -
Total expenditures - - - 60,498 52,423
Excess (deficiency) of revenues over expenditures 356,192 409,643 626,942 90 -
OTHER FINANCING SOURCES (USES)
Operating transfers in - - - - -
Operating transfers out (42,218) - (648,564) - -
Total other financing sources (uses) (42,218) - (648,564) - - Net change in fund balances 313,974 409,643 (21,622) 90 - Fund balances (deficit) - beginning 2,856,989 218,032 31,707 22,038 - Fund balances (deficit) - ending 532,006 $ 3,266,632 $ 10,085 $ 22,128 $ - $ City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | FOR THE YEAR ENDED JUNE 30, 2023 Non-Major Governmental Funds
Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Modified Cash Basis (Continued) 59 Dutch Country Farmland Jacob's Carolina's
Meadows Woods Estates Landing Landscape
Fund Fund Fund Fund Fund
REVENUES
Taxes $ - $ - $ - $ - $ -
Assessments 4,540 7,810 3,352 5,701 12,644
Investment income - - - - -
Intergovernmental revenue - - - - -
Charges for services - - - - -
Other - - - - -
Total revenues 7,810 4,540 3,352 5,701 12,644
EXPENDITURES
Streets and public works:
Streets - - - - -
Planning - - - - -
Community development - - - - -
Special assessment districts 10,076 11,876 6,503 5,462 5,921 Allocation to other department costs 1,754 2,067 1,132 951 1,031 Total expenditures 13,943 11,830 7,635 6,413 6,952
Excess (deficiency) of revenues over expenditures (7,291) (6,133) (4,283) (712) 5,692
OTHER FINANCING SOURCES (USES)
Operating transfers in 7,291 6,133 4,283 - -
Operating transfers out - - - - -
Total other financing sources (uses) 7,291 6,133 4,283 - - Net change in fund balances - - - (712) 5,692
Fund balances (deficit) - beginning - - - 22,770 22,727 Fund balances (deficit) - ending - $ - $ - $ 22,058 $ 28,419 $ City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | FOR THE YEAR ENDED JUNE 30, 2023 Non-Major Governmental Funds
Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Modified Cash Basis (Continued) 60 Boesch/
Kingery Main Street Vineyards Alexandra
Assessment Landscape Cornerstone I Landscape Landscape
Fund Fund Fund Fund Fund
REVENUES
Taxes $ - $ - $ - $ - $ -
Assessments 6,061 10,481 14,080 64,939 5,056
Investment income - - - - -
Intergovernmental revenue - - - - -
Charges for services - - - - -
Other - - - - -
Total revenues 6,061 10,481 14,080 64,939 5,056
EXPENDITURES
Streets and public works:
Streets - - - - -
Planning - - - - -
Community development - - - - -
Special assessment districts 11,125 31,299 10,782 34,078 5,304 Allocation to other department costs 1,937 5,449 1,877 5,932 923 Total expenditures 13,062 36,748 12,659 40,010 6,227
Excess (deficiency) of revenues over expenditures (7,001) (26,267) 1,421 24,929 (1,171)
OTHER FINANCING SOURCES (USES)
Operating transfers in - 26,267 - - 146
Operating transfers out - - - - -
Total other financing sources (uses) - 26,267 - - 146
Net change in fund balances (7,001) - 1,421 24,929 (1,025) Fund balances (deficit) - beginning - 22,781 83,773 117,525 1,025 Fund balances (deficit) - ending 15,780 $ - $ 85,194 $ 142,454 $ - $ City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON, CALIFORNIA | FOR THE YEAR ENDED JUNE 30, 2023 Non-Major Governmental Funds
Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Modified Cash Basis (Continued) 61 Total
Ripon Non-Major
Lighting Special Revenue
Fund Funds
REVENUES
Taxes $ 42,706 $ 42,706
Assessments 273,979 408,643
Investment income - 59,095
Intergovernmental revenue - 1,860,399
Charges for services - 1,952
Other 17,369 17,369
Total revenues 334,054 2,390,164
EXPENDITURES
Streets and public works:
Streets - 51,472
Planning - 4,999
Community development - 47,424
Special assessment districts 229,281 361,707
Allocation to other department costs 39,915 71,994
Total expenditures 269,196 537,596
Excess (deficiency) of revenues over expenditures 64,858 1,852,568
OTHER FINANCING SOURCES (USES)
Operating transfers in - 44,120
Operating transfers out - (1,187,933)
Total other financing sources (uses) - (1,143,813)
Net change in fund balances 64,858 708,755
Fund balances (deficit) - beginning 4,205,629 (21,343)
Fund balances (deficit) - ending 43,515 $ 4,914,384 $
City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON | JUNE 30, 2023
Additional Information on the Successor Agency Trust Fund 62 The following information is presented to supplement the basic financial statements and provides additional information about the Successor Agency Trust Fund. The information includes: the Statement of Fiduciary Net Position and the Statement of Changes in Fiduciary Net Position in accordance with generally accepted accounting principles as of and for the year ended June 30, 2023. Accordingly, the fiduciary fund financial statements utilize the accrual basis of accounting.
For additional information on the Successor Agency Trust Fund, refer to the notes to the City’s basic financial statements.
STATEMENT OF FIDUCIARY NET POSITION
PRIVATE-PURPOSE TRUST FUND
JUNE 30, 2023
Successor Agency
Private Purpose
Trust Fund
ASSETS
Cash and investments 4,717,262 $
Cash and investments - restricted 1,297,266
Interest receivable 4,154
Prepaid bond insurance 113,851
Loan due from capital projects fund 550,028
Total assets 6,682,561
LIABILITIES
Interest payable 100,050
Due to County of San Joaquin 1,297,266
Long-term liabilities
Debt due in more than one year 19,556,098
Total liabilities 20,953,414
NET POSITION
Net position (deficit) held in trust for redevelopment
dissolution and other purposes $ (14,270,853)
City of Ripon - Draft Financial Statements - 2023
CITY OF RIPON | JUNE 30, 2023
Additional Information on the Successor Agency Trust Fund (Continued) 63 STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
PRIVATE-PURPOSE TRUST FUND
FOR THE YEAR ENDED JUNE 30, 2023
Successor Agency
Private Purpose
Trust Fund
ADDITIONS
Property taxes $ 779,361
Program income 83,960
Investment income 353,631
Total additions 1,216,952
DEDUCTIONS
General operating 259,089
Interest expense 668,839
Total deductions 927,928
EXTRAORDINARY GAIN (LOSS)
Transferred bond proceeds (see note 14) (1,757,494)
Net increase (decrease) in fiduciary net position (1,468,470) Total net position - beginning (12,802,383)
Total net position - ending $ (14,270,853)
City of Ripon - Draft Financial Statements - 2023