City Council
259 N. Wilma Avenue
Ripon, CA 95366
MEMO
To: Honorable City Council
From: Lisa Roos, City Clerk & Finance Director
Date: 11/10/2025
Subject: Audited Financial Statements
RECOMMENDED ACTION:
Resolutions will be presented in December for acceptance of the City of Ripon Financial Statements and the Money Purchase Thrift Pension Plan Financial Statements and the Independent Auditors Reports for the fiscal year ending June 30, 2025.
BACKGROUND:
The City utilizes a number of funds to track revenue and expenses used to conduct the business of the various City departments. These funds are classified by three categories - “Operating Funds”, “Capital Funds”, and “Restricted Funds”. Attached is a flowchart showing each of these fund categories along with the breakdown of the different funds within each of these categories.
The City of Ripon’s Financial Statements and Independent Auditor’s Report as of June 30, 2025 has specific requirements and verbiage that must be used based upon auditing standards, which does not necessarily match the City’s day-to-day terminology. The terms used within the audit to refer to our funds are Governmental Funds, Proprietary Funds (also referred to as BusinessType Activities) and Fiduciary Funds. Below is a description of these funds and how they relate to our flowchart of fund categories.
Governmental Funds – Most of the City’s basic services are reported in governmental funds that focus on how money flows in and out of those funds and the balances left at year end that are available for spending. These funds are noted on our flowchart as General Fund Operating Funds, Capital Funds and also the Restricted Funds except for Redevelopment.
Proprietary Funds – The City charges customers for the services it provides.
Sometimes throughout the audit these funds are also noted as Business-Type Activities.
These funds are noted on our flowchart as Enterprise Operating Funds. Fiduciary Funds – These 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. These funds are our Successor Redevelopment Agency Funds noted on our flowchart under Restricted Funds.
The term “restricted” on our fund category flowchart and within the audit have different meanings. On our fund category flowchart, Restricted Funds are funds that we have restricted internally for different needs, as noted. In the audit, Restricted Funds are restricted because of constraints placed on the resources either externally imposed by creditors, grantors, contributors or laws or regulations of other governments, or imposed by law through constitutional provisions or enabling legislation. This may be because of grants or different funding sources that have not yet been expended.
DISCUSSION/ANALYSIS:
The audits for the City of Ripon and for the Money Purchase Thrift Pension Plan for the fiscal year ending June 30, 2025 were completed by Price Paige & Company. As noted in the audit communication letters, there were no significant audit findings, no difficulties encountered between the auditors and staff, and no disagreements between management and the auditors.
The audit communication letters also have verbiage that is required by new auditing standards.
These new standards require the auditors to disclose to the Governing Council areas they have identified as significant risks in the City. These areas were a point of focus for the auditors this year. As noted in the letter, the identification of such risks of material misstatements does not necessarily indicate that there were instances of error or omission.
This memorandum is to serve as a narrative overview and analysis of the financial activities of the City of Ripon for the fiscal year ending June 30, 2025. We encourage readers to consider the information presented here in conjunction with the information that is included in the financial audit.
Financial Highlights:
General Fund:
General Fund operating revenue increased by $981,074 (or 6%) as compared to the previous fiscal year.
General Fund operating expenses increased by $1,636,038 (or 11%) as compared to the previous fiscal year.
During the fiscal year ending June 30, 2025, a total of $1,541,176 was transferred from the General Fund. Transfers were made to the Street and Road Reserve Fund ($760,431), Department Capital Fund ($475,000), CNG Capital Reserve ($52,893), CalPERS Contingency Fund ($162,117) and for the December 2024 police officer, sergeant and dispatcher retention payment approved from the fiscal year 22-23 surplus ($90,735). The City’s share of CalPERS unfunded liability decreased minimally (2%) in the current fiscal year due to higher than normal returns. Not all employees of the City of Ripon participate in CalPERS, so the City’s unfunded liability is much less than other municipalities ($6,959,317 as of June 30, 2024 CalPERS Valuation Report). Since fiscal year 2017-18, $1,825,153 has been transferred to a CalPERS Contingency Fund and in fiscal year 2022-23 transferred into a Section 115 Trust. The current balance of the 115 Trust is $1,838,208. Additionally, a $250,000 prepayment towards the City’s unfunded accrued liability was made in fiscal year 2018-19
Street & Road Funds:
At the end of the fiscal year ending June 30, 2025, the fund balances of the Street & Road Operating Fund was $4,129,025; the Street & Road Reconstruction Fund1 was $1,894,872; and the Street & Road Reserve Fund2 was $3,831,520. The Street & Road Operating Fund balance decreased by $1,219,368 during fiscal year 2024-25. In FY 2021-22, SJCOG changed the policy regarding the use of Local Transportation Fund (LTF) revenue that impacts the City of Ripon. The City must allocate 25% of this revenue to transit related expenses. Based upon the timing of receiving these funds, the City of Ripon will have lower funds available by 25% in future years, beginning in FY 2022-23.
The following table is a summary of the Street & Road Operating Fund revenue and expenses for the fiscal year ending June 30, 2025 as compared to the previous fiscal year:
FY 2023-24 FY 2024-25
Operating Revenue $2,975,545 $2,003,665
Highway User Tax Account 459,848 487,153
Local Transportation Fund 1,596,187 329,206
Measure K Local Streets 459,431 490,741
Senate Bill 1 419,942 469,374
Street & Road Misc. Revenue1 40,137 227,191
Operating Expenses $638,238 $707,949
Street & Road Maintenance 254,144 357,916
Landscape Maintenance 353,624 310,104
Administration 25,728 26,775
Engineering 4,742 13,154
Capital Projects $395,165 $1,909,091
Transfer to Street & Road
Reconstruction Fund $1,148,585 $534,262
Transfer to Landscape Maintenance
Districts2 $71,731
Street & Road Operating Fund Ending
Balance $5,348,393 $4,129,025
1 Includes grant income in FY 2023-24 for the Stockton Ave Rehabilitation and in FY 2024-25 for the Stanislaus River Multi-Use Trail and the South of Main Projects.
2 In FY 2024-25, we began transferring Street & Roads funds to Landscape Maintenance Districts with deficits.
There is a large variance of LTF fund received from FY 2023-24 to FY 2024-25 due to the timing of when those funds were received. In FY 2023-24, LTF funds were received for the 2022-23 year and for part of 2023-24. In FY 2024-25, only the remaining part of the 2023-24 funds were received; the 2024-25 funds were not received until July 2025 (or the next fiscal year).
1 At the end of each fiscal year, half of the unused operating funds for the year are transferred to this fund to be used to fund reconstruction of existing roads.
2 At the end of each fiscal year, one-third of the General Fund surplus is transferred to this fund to be used to fund reconstruction of existing roads, as approved by the City Council. The following is a summary of major Street & Road capital expenses during the year ending June 30, 2025:
o $1,891,396 for the South of Main Rehabilitation Project o $822 for the Lower Stanislaus River Multi-Use Trail Project o $16,873 for Sidewalk Repairs
Enterprise Operating Funds:
At the end of the fiscal year ending June 30, 2025, the Enterprise Operating Funds had the following activity by source:
FY 2023-24 FY 2024-25
Fund Ending
Balance Income Expenses
Balance
Prior to
Transfer
Transfer
Final Ending
Balance
Water $926,514 $4,111,131 ($3,344,857) $1,692,788 ($766,274) $926,514 Sewer $697,426 $2,213,822 ($1,435,005) $1,476,243 ($778,817) $697,426 Garbage $211,230 $2,787,901 ($2,754,839) $244,292 ($33,062) $211,230 During fiscal year 2024-25, the Sewer Enterprise Operating Fund was able to transfer to the Sewer Enterprise Capital Fund more than the $741,000 recommended transfer by Tom Pavletic from Municipal Financial Services for future capital replacement.
However, the Water and Garbage Enterprise Funds were only able to transfer the current year’s cash flow and not the recommended amounts of $1,100,000 and $280,000, respectively.
Enterprise Capital Funds:
The following is a summary of the fund balance of each Enterprise Capital account for fiscal year ending June 30, 2025, as compared to the previous fiscal year:
FY 2023-24 FY 2024-25
Fund Ending
Balance Income Expenses
Balance
Prior to
Transfer
Transfer
Final Ending
Balance
Water $7,906,602 $366,892 ($436,092) $7,837,402 $610,7271 $8,448,129 Sewer $1,154,620 $39,835 ($209,431) $985,024 $217,1422 $1,202,166 Sewer WWTP Reserve $1,896,707 $68,514 ($0) $1,965,221 $405,700 $2,370,921 Garbage $1,127,211 $62,880 ($528,733) $661,358 $33,062 $694,420 Storm Drain ($7,446) $61,963 ($26,252) $28,265 $0 $28,265 1 Water Enterprise Capital Fund Transfer includes $155,547 transferred to the Corporation Yard for additional expenditures at the end of the project.
2 Sewer Enterprise Capital Fund Transfer includes $155,975 transferred to the Corporation Yard for additional expenditures at the end of the project.
The following is a summary of major Enterprise Capital expenses during the year ending June 30, 2025:
Water Enterprise Capital Summary:
o $45,000 related to the Corporation Yard Project
o $66,000 for design of Well #3 Project
o $195,000 for evaluation and assessment of Well #9
o $14,000 for the South of Main Project
o $106,000 for ½ of service truck with hoist (paid by Water & Sewer Enterprise Capital Funds)
Sewer Enterprise Capital Summary:
o $45,000 related to the Corporation Yard Project
o $59,000 for the Percolation Pond Rehabilitation Project o $106,000 for ½ of service truck with hoist (paid by Water & Sewer Enterprise Capital Funds)
Garbage Enterprise Capital Summary:
o $481,000 for a new CNG garbage truck
o $38,000 for compost, as mandated by the State for us to purchase back what we have recycled
o $10,000 for replacement garbage cans
Storm Drain Enterprise Capital Summary:
o $26,000 related to the Corporation Yard Project
PFFP Capital Funds:
The following is a summary of the fund balance of each PFFP Capital Fund for fiscal year ending June 30, 2025, as compared to the previous fiscal year:
FY 2023-24 FY 2024-25
Fund Ending
Balance Income Expenses Transfers Final Ending Balance
Water $3,280,880 $741,778 ($31,753) $3,990,905
SSJID Connection Reserve $965,731 $212,416 ($0) $1,178,147 Garbage ($758,514) $82,752 ($27,158) ($702,920)
Wastewater $6,430,748 $577,920 ($0) $7,008,668
Storm Drain $2,736,394 $188,840 ($0) $2,925,234
Transportation $2,704,795 $668,645 ($0) $3,373,440
RTIF $1,710,560 $167,188 ($0) $1,877,748
Parks & Recreation $111,429 $976,156 ($202) $1,087,383
Police ($1,213,145) $19,822 ($44,047) ($1,237,370)
City Hall ($3,880,536) $77,257 ($139,959) ($3,943,238)
Corporation Yard $1,303,7401 $230,024 ($488,500) ($330,357) $714,9071 Library ($629,152) $30,537 ($22,705) ($621,320)
TOTAL $12,762,930 $15,651,584
1Balance differs from audited financial statements because audit refers to City’s transfers or balances as advances to and/or from other funds. The following is a summary of major PFFP capital expenses during the year ending June 30, 2025:
o $32,000 for the South County Water Project
o $488,000 for the Corporation Yard Project
The City advanced construction for the City Hall, Police Department and Library buildings and constructed each to a size that accommodates the future growth of the General Plan, which resulted in negative balances to these funds since fees from future growth have not yet been collected. With that, the revenue from this growth over the term of the buildout of the City’s general plan is necessary to relieve these negative balances. Goodwin & Associates re-evaluated the negative fund balances in 2017 to ensure that the PFFP development fees for these funds are sufficient to ensure that enough revenue is collected from the future growth within the City’s general plan.
Debt Obligations:
In 2011, the Ripon Redevelopment Agency loaned the Parks and Recreation PFFP Fund $3.3 million to construct the Mistlin Softball Fields. The loan repayment was made with half the Parks and Recreation PFFP fees collected since the loan was made. As of March 30, 2020, the total loan amount has been collected, of which $1,689,238 will remain with the City and $534,846 will be returned to the State to be distributed to the various taxing entities at some point in the future. Until the funds are returned, this amount will continue to show as a liability in the table below.
At the end of the fiscal year ending June 30, 2025, the City’s total debt obligation was $29,139,894. This balance is summarized in the table below:
Debt Balance @
6/30/24
Additions in
FY 24/25
Paid in
FY 24/25
Ending Balance
@ 6/30/25
2011 Sewer Bonds $375,000 $185,000 $190,000
2006 Water Revenue Bonds $3,725,000 $345,000 $3,380,000 2012 Water Revenue Bonds $1,020,000 $245,000 $775,000
2020 Redevelopment Bonds $19,331,391 $224,707 $19,106,684 Loan due to Department of
Finance1
$550,028 ($15,182) $0 $534,846
Water Surcharge Installation
Project; repaid by surcharges
collected until 2025
$249,464 $89,764 $159,700
City Loan to Corp Yard
Project
$5,691,444 $56,914 $175,923
+$578,771
$4,993,664
TOTAL $30,942,327 $41,732 $1,844,165 $29,139,894
1 This was originally a loan from the Redevelopment Agency to the Parks & Recreation Capital Fund that was to be paid back with Capital fees collected. As of February 2020, all the funds were collected to pay back the entire loan. However, the Department of Finance has not yet requested their money, so this $534,846 balance continues to be listed on the City’s financial statements as a liability.
Economic Development Incentive Program:
In May 2017, through Resolution 17-22, the City Council adopted an Economic Development Incentive Program to stimulate private sector investment in sales tax producing development in Ripon with the goal of retaining and growing the tax structure and jobs that are essential to maintaining a high quality of life for Ripon residents. At the end of the fiscal year ending June 30, 2025, the City’s outstanding Economic Incentives were $1,285,692. This balance is summarized in the table below:
Business Original
Incentive
Balance @
6/30/24
Tax received to
offset incentive in
FY 24/25
Ending
Balance @
6/30/25
JKB Living $655,417 $481,256 $47,903 $433,353
Happy Daze RV $1,311,746 $1,046,897 $194,558 $852,339
TownePlace Suites by Marriott1 $416,426
TOTAL $1,528,153 $242,461 $1,285,692
1 In 2021/2022, the City Council approved this incentive plan, but TownePlace Suites by Marriott has not taken advantage of it yet.
Money Purchase Thrift Pension Plan (Non-PERS Retirement Plan):
The audit for the Money Purchase Thrift Pension Plan Financial Statements is also attached for review. The net position available for benefits increased $1,082,405 during fiscal year ending June 30, 2025. During fiscal year ending June 30, 2025, the Plan had a large amount of benefits paid out to participants due to rollovers or distributions of 12 employees compared to 2 in fiscal year ending June 30, 2024.
Attachments:
1. Budget Category Reporting Summary
2. Fund Balances 2025.06.30
3. 2025.06.30 RIPON Audit Committee Letter
4. 2025.06.30 RIPON Govt Auditing Standards Report
5. 2025.06.30 RIPON Financial Statements
6. 2025.06.30 RIPON PENSION Audit Committee Letter
7. 2025.06.30 RIPON PENSION Financial Statements